Wurz bht NSW Trustee & Guardian v Elawaad

[2022] NSWSC 1404

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Wurz bht NSW Trustee & Guardian v Elawaad [2022] NSWSC 1404

Hearing dates:

7 October 2022

Date of orders:

19 October 2022

Decision date:

19 October 2022

Jurisdiction:

Equity

Before:

Henry J

Decision:

Proceedings to be transferred to the Federal Circuit and Family Court of Australia (Division 1). See paragraph [75].

Catchwords:

PRACTICE AND PROCEDURE – where applicant and defendant are parties to de facto financial cause proceedings in Federal Circuit and Family Court of Australia (Division 1) – whether applicant should be joined to these proceedings – whether proceedings should be transferred to the Federal Circuit and Family Court of Australia (Division 1) pursuant to Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW), s 5(1) – where matrimonial home is a subject of claims in these proceedings by the plaintiff, who is not a party to the de facto relationship – where determination of claims in these proceedings an essential aspect of determination of the de facto financial cause proceedings – joinder made – cross-vesting order made  

Legislation Cited:

Civil Procedure Act 2005 (NSW)Family Law Act 1975 (Cth)

Federal Circuit and Family Court of Australia Act 2021 (Cth)

Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth)

Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Aviani v Loh (No 2) [2022] NSWSC 1148

Bankinvest AG v Seabrook (1988) 14 NSWLR 711

BHP Billiton Ltd v Schultz (2004) 221 CLR 400; [2004] HCA 61

Bishop & Bishop (2003) 30 Fam LR 108; FLC 93-144

C & C: C (Accrued Jurisdiction) (2001) 28 Fam LR 253; FLC 93-076

In the Marriage of Smith (No 2) (1985) 81 FLR 251

Morris v Morris [1982] 1 NSWLR 61

Mulhall v Hartnell (1988) 91 FLR 240; (1988) FLC 91-947

Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd; (1981) 148 CLR 547

Re Wakim; Ex parte McNally (1999) 198 CLR 511; [1999] HCA 27

Sapir v Sapir (No 2) (1989) 13 Fam LR 362; (1989) FLC 92-047

Singh v Khan [2021] NSWCA 281

Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261; [1983] HCA 36

Valceski v Valceski (2007) 70 NSWLR 36; [2007] NSWSC 440

Wade-Ferrell & Wade-Ferrell; Read (2001) 27 Fam LR 484; FLC 93-069

Warby & Warby (2001) 28 Fam LR 443; (2002) FLC 93-091

Yu v Wang [2021] NSWSC 1280

Texts Cited:

Justice Brereton, “Third Parties: Invited Guests or Gate Crashers?” (2008) 22 AJFL 197

Category:

Procedural rulings

Parties:

Diane Mary Wurz bht NSW Trustee & Guardian (Plaintiff)
Ahmed Moustafa Elsayed Elawaad (Defendant)
Lina Tretiak (Applicant)

Representation:

Counsel:
K. Burke (Plaintiff)
J. Mee (Applicant)

Solicitors:
Chamberlains Lawyers (Plaintiff)
VL Macri Lawyers (Defendant)
Hikma Legal (Applicant)

File Number(s):

2021/00104312

Publication restriction:

Nil

JUDGMENT

1. In these proceedings, the plaintiff, Diane Mary Wurz by her tutor, the New South Wales Trustee & Guardian (NSWTG), claims that she is the victim of elder financial abuse by the defendant, Ahmed Elawaad, and seeks a variety of relief, including a declaration of trust or charge over Mr Elawaad’s property in West Hoxton, NSW (the West Hoxton property).

2. Mr Elawaad and his former de facto wife, Lina Tretiak, are parties to proceedings in the Federal Circuit and Family Court of Australia (FCFCA) (PAC1160/2021) that Ms Tretiak commenced last year seeking a division of property assets, which includes the West Hoxton property (FCFCA proceedings).

3. By her notice of motion filed on 13 September 2022 (and as amended on 4 October 2022), Ms Tretiak seeks to be joined as a defendant to these proceedings pursuant to Part 6, Division 5 of the Uniform Civil Procedure Rules 2005 (NSW), a cross-vesting order transferring these proceedings to the FCFCA pursuant to s 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW) (NSW Cross-Vesting Act) and, alternatively, a stay of these proceedings until such time as the FCFCA proceedings have been determined on a final basis or until Ms Tretiak’s application to join Ms Wurz has been determined on a final basis.

4. Ms Wurz and Mr Elawaad do not oppose Ms Tretiak’s joinder in these proceedings (T1.36-37, T28.1-7, T38.40-41). They accept, appropriately in my view, that Ms Tretiak is an interested party and a necessary defendant to Ms Wurz’s claim for proprietary relief given Ms Tretiak has filed a caveat claiming an equitable interest in the West Hoxton property.

5. However, Ms Wurz and Mr Elawaad oppose the other relief sought. Thus, the issues for determination are whether this Court should grant the cross-vesting order and, if not, whether these proceedings should be stayed until final determination of the FCFCA proceedings or Ms Tretiak’s FCFCA joinder application.

6. Ms Tretiak’s notice of motion also seeks various alternative transfer and stay orders in relation to those parts of these proceedings that concern Ms Wurz’s claim for proprietary relief in respect of the West Hoxton property which she did not press at the hearing.

7. In support of her application, Ms Tretiak relies on her affidavits affirmed on 5 September 2022 and 30 September 2022. Ms Wurz relies on the affidavits of Gary Victor Patterson sworn 4 October 2022 and Tiffany Pamela Lau affirmed 30 September 2022. Mr Elawaad did not read any evidence. Each of the parties rely on written submissions that were supplemented by oral submissions at the hearing.

Background facts

8. The following background facts are summarised from the evidence and the parties’ submissions. They should not be taken to be findings on any disputed issue of fact.

Ms Tretiak and Mr Elawaad

9. Ms Tretiak and Mr Elawaad were married (although not under Australian law) through an Islamic marriage ceremony in December 1999 and were together until 30 May 2015. There are two adult children of the relationship, a son 22 years of age and a 20 year old daughter.

10. According to Ms Tretiak, she and Mr Elawaad had minimal matrimonial assets at the commencement of their relationship. In early 2002, with assistance from Ms Tretiak’s father providing funds for the deposit, they purchased a property in Preston in Mr Elawaad’s name only and lived it in at as their matrimonial home.

11. Ms Tretiak says that, in about the end of 2013 to early 2014, they purchased the West Hoxton property with funds provided by Ms Tretiak’s father for the deposit of $80,000 (which Ms Tretiak understands has been repaid) and the sale proceeds of the Preston property. As with the Preston property, the West Hoxton property was put into the name of Mr Elawaad only. She says that in 2014, they also purchased a fruit shop business in Liverpool. According to Ms Wurz’s submissions, in 2013, the fruit shop business was purchased for $85,000 by Mr Elawaad using funds provided by Ms Wurz, which Mr Elawaad promised to pay back, and the business was sold in October 2017 for approximately $275,000.

12. Ms Tretiak deposes that during her relationship with Mr Elawaad, she carried out all the household duties, was the children’s primary caretaker and worked in the fruit shop business, although would sometimes not get paid. She also deposes that during the marriage, Mr Elawaad was abusive (including physically and financially).

13. Ms Tretiak and Mr Elawaad separated on 30 May 2015 but continued living in the West Hoxton property until a violent incident occurred on 7 June 2015. She moved into rented accommodation with her daughter with the assistance of a domestic violence accommodation service. Ms Tretiak understands that Mr Elawaad remained living at the West Hoxton property with their son.

Ms Wurz and Mr Elawaad

14. Ms Wurz is 81 years of age. Mr Elawaad is 56 years of age. It is not clear when Ms Wurz and Mr Elawaad met and when their relationship (of whatever description) commenced.

15. Mr Elawaad says they first met in around 2000, when he was working at a fruit and vegetable shop where Ms Wurz was a customer, and that they commenced a close personal relationship in 2003, at which time Mr Elawaad was “residing with his parents” at Preston. Ms Tretiak’s and Ms Wurz’s submissions refer to evidence given in the NSW Civil and Administrative Tribunal (NCAT) to the effect that, in 2017, Ms Wurz had known Mr Elawaad for seven years and he was described as a “partner or boyfriend”.

16. In around 2016, Ms Wurz separated from her husband. It appears that, shortly after, Mr Elawaad moved into Ms Wurz’s then marital home in Paddington.

17. In February 2017, Ms Wurz received $1.8 million into her ANZ bank account, from the sale proceeds of the Paddington property. Around that time, Ms Wurz commenced residing with Mr Elawaad at the West Hoxton property, taking her personal belongings with her, which included two motor vehicles, jewellery, antiques and other possessions.

18. In around March 2017, Ms Wurz and Mr Elawaad moved into a rental property at Cannes Hill to enable renovations to be undertaken to the West Hoxton property. Mr Elawaad says that the renovations were undertaken because Ms Wurz was not happy with the condition of the West Hoxton property. It is alleged that Ms Wurz paid 12 months’ rent on the Cannes Hill property (of $38,000) in advance.

19. On 16 August 2017, Ms Wurz was admitted to hospital with confusion, dementia and malnutrition, amongst other medical conditions. On 26 September 2017, she was discharged from hospital to a nursing home (dementia unit) and in December 2017, relocated to a nursing home in Victoria to be closer to her sisters where she currently resides.

20. On 17 November 2017, the NSWTG were appointed Ms Wurz’s financial guardians by NCAT. The NSWTG took steps to identify and investigate the different bank accounts held by Ms Wurz and an unknown bank account into which funds had been transferred from a joint bank account that had been established in the names of Ms Wurz and Mr Elawaad. It is alleged that significant sums of money were transferred from Ms Wurz’s account to the joint account and then to Mr Elawaad’s own account for Mr Elawaad’s own use and benefit and without Ms Wurz’s consent. The submissions assert that Ms Wurz does not remember signing any joint account documents and that Mr Elawaad’s contends that all funds transferred by Ms Wurz were done freely and voluntarily.

21. In December 2017, the NSWTG arranged for Ms Wurz to lodge a caveat over the West Hoxton property, which was not recorded on title due to an irregularity. On or about 16 August 2018, a further caveat was lodged over the West Hoxton property by NSWTG, but this appears to have lapsed, following a notice issued by Mr Elawaad.

22. In mid-2019, bankruptcy proceedings were commenced against Mr Elawaad by an unrelated third party. The NSWTG filed an affidavit on behalf of Ms Wurz in the bankruptcy proceedings claiming support creditor status and seeking recovery of Ms Wurz’s personal property and her funds.

The FCFCA proceedings

23. In late February 2021, Ms Tretiak became aware that Mr Elawaad wanted to sell the West Hoxton property. On 2 March 2021, she lodged a caveat claiming an equitable interest in the property arising from “financial and non-financial contributions during the course of the marriage”.

24. On 5 March 2021, Ms Tretiak initiated the FCFCA proceedings against Mr Elawaad.

25. In the FCFCA proceedings, Ms Tretiak seeks a just and equitable distribution of property assets pursuant to s 90SM of the Family Law Act 1975 (Cth) (Family Law Act), of 65% for Ms Tretiak and 35% for Mr Elawaad. Ms Tretiak’s submissions identify the West Hoxton property as the primary asset of their relationship and describes it as their matrimonial home. At the hearing, Ms Tretiak’s counsel informed the Court that, although not framed as such, she understands Ms Tretiak’s claim in the FCFCA proceedings to be based on a constructive trust arising from her contributions, which is supported by the terms of Ms Tretiak’s caveat on title (T16.6-9).

26. On 14 June 2022, the FCFCA made a declaration that Ms Tretiak and Mr Elawaad were in a de facto relationship between 1999 and 30 May 2015 and an order restraining Mr Elawaad from dealing with, disposing of, or further encumbering any real estate he owned, including the West Hoxton property.

27. On 12 August 2022, Ms Tretiak became aware of these proceedings from documents her solicitors received from Mr Elawaad relating to financial disclosure pursuant to the FCFCA rules. Subsequently, on 5 September 2022, Ms Tretiak amended her application in the FCFCA proceedings seeking to join Ms Wurz to them, which application is listed for hearing on 21 October 2022. Ms Wurz had indicated that she opposed that joinder although, at the hearing, she accepted that her instructions to oppose might change as a result of issues raised at the hearing before me (T50.29-33).

28. The FCFCA proceedings, which are now being conducted in the FCFCA (Division 1) (Division 1 Court), have been listed for a four-day final hearing, commencing on 28 November 2022.

These proceedings

29. In early March 2021, NSWTG was advised that Mr Elawaad had placed the West Hoxton property on the market and lodged another caveat over the property, which was withdrawn by the Registry on 28 April 2021.

30. On 21 March 2021, Ms Wurz’s solicitors wrote to Mr Elawaad’s solicitor and sought repayment of $200,000 that was loaned to Mr Elawaad by Ms Wurz and repayment of $2.57 million of Ms Wurz’s funds.

31. On 15 April 2021, Ms Wurz commenced these proceedings by statement of claim. At that time, no proprietary relief was sought by Ms Wurz in relation to the West Hoxton property.

32. According to Ms Wurz’s submissions, the NSWTG was unaware of the existence of Ms Tretiak and her children when the proceedings were commenced. She refers to an affidavit served by Mr Elawaad in these proceedings on 21 March 2022, which she says did not disclose the following: that Ms Tretiak and he had two children and had been in a de facto relationship between 1999 and 2015; that the Preston property was his matrimonial home where he had lived in with Ms Tretiak, as opposed to his parents; that he was divorced or separated from Ms Tretiak; that Ms Tretiak had commenced proceedings in the FCFCA seeking division of the property (which included the West Hoxton property); and that he had a son that lived with him in the West Hoxton property.

33. It appears that in June 2021, Ms Wurz (through her solicitor) became aware that Mr Elawaad’s “de facto wife” was claiming an interest in the West Hoxton property and, by February 2022, that Ms Tretiak had commenced the FCFCA proceedings.

34. Ms Wurz’s claims against Mr Elawaad in these proceedings are set out in her amended statement of claim filed on 26 September 2022. In summary, Ms Wurz alleges that:

1. in February 2017, she entered into an agreement with Mr Elawaad to advance to him the sum of $200,000 in return for a charge on the West Hoxton property, which amount has not been repaid;

2. between April 2017 and November 2017, a total of $1,855,067.32 was withdrawn from Ms Wurz’s bank account, an amount of $1,855,340.05 was deposited into a bank account held jointly by Ms Wurz and Mr Elawaad (which required only one signature for transactions), and the amount of $2,257,291.18 was transferred from the parties’ joint account into an account in Mr Elawaad’s name, of which $373,000 was transferred after Ms Wurz was admitted into hospital;

3. the bank transfers into Mr Elawaad’s account were unknown to Ms Wurz and made through the exertion of undue influence and unconscionable conduct;

4. an amount owing on the West Hoxton property, of $625,711, has been paid in full from Ms Wurz’s funds; and

5. Mr Elawaad has retained Ms Wurz’s two motor vehicles and possessions at the West Hoxton property despite demands that they be returned.

35. Ms Wurz claims equitable relief on grounds of undue influence, unconscionable conduct, unjust enrichment and money had and received and seeks an order for an account, declaratory relief by way of constructive trust over the West Hoxton property to the value of $1,198,711 or the imposition of a charge for that amount, equitable compensation, judgment in the sum of $2,257,291.18 and an order that Mr Elawaad return to her all her chattels and goods which are in his possession and control. According to her submissions, the basis for Ms Wurz’s constructive trust claim is that Mr Elawaad’s conduct attracts the intervention of equity as the circumstances are established to satisfy the “demands of justice and good conscience”: Morris v Morris [1982] 1 NSWLR 61 at 64.

36. By his defence filed on 20 July 2021, Mr Elawaad denies that Ms Wurz has an equitable interest in the West Hoxton property, claims that Ms Wurz purchased the Lexus motor vehicle for him in about 2010 (and that he has had exclusive possession or use of it since that time), and otherwise denies the allegations and opposes the relief sought by Ms Wurz.

37. On 14 July 2022, these proceedings were set down for final hearing before me on 24 and 25 October 2022.

38. Ms Tretiak’s notice of motion, the subject of these reasons, was filed on 13 September 2022, and amended on 4 October 2022.

Should a cross-vesting order be made?

39. Section 5(1) of the NSW Cross-Vesting Act relevantly provides that:

(1)    Where:

(a)    a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Supreme Court, and

(b)    it appears to the Supreme Court that:

(i)    (Repealed)

(ii)    having regard to:

(A)    whether, in the opinion of the Supreme Court, apart from any law of the Commonwealth or another State relating to cross-vesting of jurisdiction and apart from any accrued jurisdiction of the Federal Court or the Family Court, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the Supreme Court and capable of being instituted in the Federal Court or the Family Court,

(B)     the extent to which, in the opinion of the Supreme Court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the Commonwealth and not within the jurisdiction of the Supreme Court apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction, and

(C)    the interests of justice,

it is more appropriate that the relevant proceeding be determined by the Federal Court or the Family Court, as the case may be,

(iii)    (Repealed)

the Supreme Court shall transfer the relevant proceeding to the Federal Court or the Family Court, as the case may be.

40. The reference in s 5(1) to the “Family Court” has not been amended to reflect the enactment of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (FCFCA Act) that took effect on 1 September 2021 and which, amongst other changes, provides that the Family Court of Australia is now known as the Division 1 Court (a superior court of record and a court of law and equity) and the Federal Circuit Court is now known as the Federal Circuit and Family Court of Australia (Division 2) (Division 2 Court; a court of record and a court of law and equity): FCFCA Act, ss 8(1)-(2), 9(1) and 10(1). However, as Meek J observed in Aviani v Loh (No 2) [2022] NSWSC 1148 (Aviani v Loh) at [222], by reference to various statutory provisions, including s 8(1) of the FCFCA Act, the reference to Family Court in s 5(1) of the NSW Cross-Vesting Act is to be read as the Division 1 Court.

41. Thus, as the FCFCA proceedings are in the Division 1 Court, subject to satisfying the conditions of s 5(1) of the NSW Cross-Vesting Act (including that the Division 1 Court has jurisdiction to deal with these proceedings), there is no impediment to this Court transferring these proceedings to the Division 1 Court. This is different to the position in Yu v Wang [2021] NSWSC 1280, a case in which the relevant FCFCA proceedings were commenced in the court that is now known as the Division 2 Court. In that case, Beech-Jones CJ in CL observed, at [18], that there is no express power of transfer conferred under the NSW Cross-Vesting Act in respect of the Division 2 Court, a matter which seems to be “an unfortunate omission”.

40. In support of her application, Ms Tretiak submits that the FCFCA is the most appropriate court to deal with these proceedings as the two sets of proceedings involve competing claimed equitable interests in the West Hoxton property. She accepts that, other than claims for competing equitable interests, the issues in the two sets of proceedings appear to be fairly distinct, although both involve Mr Elawaad and will include questions regarding his character, conduct and financial affairs. However, she contends that it is undesirable for the competing claims and issues relating to priority of interest to be decided by different courts, with the prospect of potentially different outcomes. She submits that the most sensible course is for one court to determine all issues, and that court should be the FCFCA.

41. Ms Tretiak submits that the FCFCA has the jurisdiction to determine the matters in these proceedings, on the basis of its accrued jurisdiction which extends to determining the whole of the justiciable controversy, referring to Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd; (1981) 148 CLR 547; Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261; [1983] HCA 36; In the Marriage of Smith (No 2) (1985) 81 FLR 251; and Singh v Khan [2021] NSWCA 281. Having regard to the nature of the relief claimed in respect of the West Hoxton property, Ms Tretiak submits that the claimed competing interests ought to be regarded as part of such a single controversy: Re Wakim; ex parte McNally (1999) 198 CLR 511; [1999] HCA 27 at [141]; Fencott v Muller (1983) 152 CLR 570 at 607; [1983] HCA 12; Valceski v Valceski (2007) 70 NSWLR 36; [2007] NSWSC 440 (Valceski v Valceski). Ms Tretiak also submits that the FCFCA also has power under s 90SL of the Family Law Act to make declarations as to the existing title or rights of a party to a de facto property proceeding which, together with the FCFCA’s accrued jurisdiction, would be sufficient to determine the existing equitable interests and questions of priority between Ms Tretiak and Ms Wurz.

42. In opposing the cross-vesting application, Ms Wurz argued that it is seriously arguable that the FCFCA does not have jurisdiction to hear and determine Ms Wurz’s claims in these proceedings as the factual grounds on which they are based are quite distinct and relate to a different time period than that in respect of which Ms Tretiak’s claim is based. She contends that the FCFCA does not have jurisdiction to approve any settlement (if one is reached), which is required pursuant to s 76(3) of the Civil Procedure Act 2005 (NSW) as Ms Wurz is represented by a tutor in this case. She also contends that there is doubt as to whether the FCFCA has power under the Part VIIIAA jurisdiction, specifically, s 90AE of the Family Law Act, to make an order binding her as a third party.

43. Mr Elawaad supports Ms Wurz’s submissions. In his written submissions, he contended that the facts in these proceedings are not so interwoven with the FCFCA proceedings that they need to be heard and determined together and these proceedings ought to be determined first, with the consequence that the “matrimonial pool” available for distribution will then be quantified and the FCFCA proceedings can then move forward.

Consideration and determination

46. Turning to the elements of s 5(1) of the NSW Cross-Vesting Act, the “relevant” proceedings are these proceedings for the purposes of that section.

47. There is no dispute that these proceedings would not have been incapable of being commenced in this Court or that they would have been incapable of being instituted in the FCFCA jurisdiction, but for any cross-vesting law or accrued jurisdiction: NSW Cross-Vesting Act, s 5(1)(b)(ii)(A). There is also no dispute that the matters for determination in these proceedings do not arise under or involve questions as to the application, interpretation, or validity of a Commonwealth law: NSW Cross-Vesting Act, s 5(1)(b)(ii)(B).

48. The parties accepted that the application should be determined by reference to s 5(1)(b)(ii)(C), namely, whether it is in the interests of justice for these proceedings to be transferred to the Division 1 Court.

49. In determining where the interests of justice lie, the court considers and identifies the “natural forum” for the “relevant proceeding”, which involves a “nuts and bolts” management decision as to which court, in the “pursuit of the interests of justice”, is more appropriate to hear and determine the substantive dispute. The interests of justice are not the same as the interest of one party. In identifying the most appropriate forum, relevant considerations include the costs and efficient management of the proceedings in the respective jurisdictions and the “connecting factors”, so that judged objectively, it might be expected that the dispute would fall to be resolved in that forum, with concomitant judicial advantages and disadvantages for each party: Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 714 and 728; Valceski v Valceski at [69] citing BHP Billiton Ltd v Schultz (2004) 221 CLR 400; [2004] HCA 61 at [14], [18]-[19] and [63].

50. It is a requirement for a cross-vesting order, and logically anterior to the question of whether the FCFCA is the most appropriate forum, that the transferee court (in this case, the FCFCA Division 1 Court) has jurisdiction to deal with these proceedings: Valceski v Valceski at [20] – [21]. The question of jurisdiction requires the court to consider the issues which are likely to arise in the respective sets of proceedings.

51. In Valceski v Valceski, Brereton J (as his Honour then was) observed that the accrued jurisdiction of the Family Court was not to be narrowly confined or restrictive (at [40]), in accordance with authorities after the High Court’s decision in Re Wakim; Ex parte McNally (1999) 198 CLR 511; [1999] HCA 27. His Honour stated, at [39] and [81]:

“[39] Thus, when a federal court is invested with federal jurisdiction, it is also invested with the power to determine non-federal aspects of a justiciable controversy which involves the exercise of its federal jurisdiction, provided that the non-federal aspects of the controversy form an integral part of the same controversy: Stack v Coast Securities (No 9). The scope of the “matter” in respect of which a federal court has jurisdiction is described by the ambit of the justiciable controversy. There is but a single matter, and the non-federal claims are within the accrued jurisdiction, where the different claims arise out of “common transactions and facts” or “a common substratum of facts” (Philip Morris Inc (at 512 per Mason J)), notwithstanding that the facts upon which the claims depend “do not wholly coincide” (Fencott v Muller (at 607 per Mason J, Murphy J, Brennan J and Deane J); Re Wakim (at 586 [141])); or where different claims are so related that the determination of one is essential to the determination of the other (Philip Morris Inc (at 512 per Mason J)); or where, if the proceedings were tried in different courts, there could be conflicting findings made on one or more issues common to the two proceedings (Re Wakim (at 586 [141])). However, it must always be borne in mind that the ultimate question is not the existence of each of the several suggested indicia, but whether there is in substance a single justiciable controversy. In Stack v Coast Securities (No 9) (at 294), it was put in the following terms:

“In this, as in other cases, the recurrent problem is to identify what it is that falls within the Federal Court’s accrued jurisdiction. The majority judgment in Fencott v Muller ((1983) 152 CLR, at p. 608) provides assistance in reaching an answer: What is and what is not part of the one controversy depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct and relationship. The scope of a controversy which constitutes a matter is not ascertained merely by reference to the proceedings which a party may institute, but may be illuminated by the conduct of those proceedings and especially by the pleadings in which the issues in controversy are defined and the claims for relief are set out. But in the end, it is a matter of impression and of practical judgment whether a non-federal claim and a federal claim joined in a proceeding are within the scope of one controversy and thus within the ambit of a matter.’

…

[81] It is now established that the Family Court has accrued jurisdiction, so that where there is a single justiciable controversy which includes (but extends beyond) a matrimonial cause, that court has jurisdiction in respect of the whole matter including those aspects which fall to be determined under State law. This is typically so where in the course of s 79 proceedings, an issue arises as to the entitlement of a spouse to property, vis-à-vis a third party.”

52. Ms Wurz claims against Mr Elawaad are not based on a de facto relationship and they arise, in the main, out of a substratum of facts that are distinct from those on which Ms Tretiak’s claims are likely to be based, with a focus on events post-2015, after Mr Elawaad and Ms Tretiak had separated, such as the opening of the joint accounts, transfers of money and the use to which Ms Wurz’s funds were put and her capacity at the time. Ms Wurz had also had no dealings with Ms Tretiak. There is some force to Ms Wurz’s submission that the jurisdiction invoked by the claims she makes falls clearly within that which is routinely exercised by this Division of the Court and that there is not a complete overlap between the substratum of facts in these and the FCFCA proceedings.

53. I am, however, not persuaded by Ms Wurz’s submissions that there is a serious doubt as to the jurisdiction of the Division 1 Court to deal with her claim.

54. It is common ground that questions will arise in these and in the FCFCA proceedings concerning Ms Wurz’s and Ms Tretiak’s competing claims to equitable interests in the West Hoxton property. The subject matter of Ms Wurz’s claims for declaratory relief of a constructive trust or charge in these proceedings is to the same property about which Ms Tretiak makes claims. In that sense, the West Hoxton property and the rights (and liabilities) of Ms Wurz, Ms Tretiak and Mr Elawaad in relation to it are matters that are central to both sets of proceedings.

55. In determining Ms Tretiak’s claims in the FCFCA proceedings, in which she seeks 65% of the “matrimonial” assets, that Court will be required to determine whether she has a beneficial interest in the West Hoxton property, although I note that declaratory relief to that effect has not yet been sought in the FCFCA proceedings. In doing so, that Court will need to hear evidence and make findings of fact as to who holds beneficial interests in the West Hoxton property and, having made those findings, make any orders that the Court considers appropriate, just and equitable (if any), including to change or alter the respective interests of Ms Tretiak and Mr Elawaad in relation to that property and in respect of any other assets of the relationship. The first step in that process will be to determine what property is that of the parties to the de facto relationship or of a third party, in this case Ms Wurz. Just as that Court will need to consider the extent of Ms Tretiak’s claimed interests in the property and Mr Elawaad’s assets (which includes the West Hoxton property), it will also need to consider the extent to which Ms Wurz has an interest in the West Hoxton property and any other assets that Mr Elawaad claims to own in respect of which she also makes a claim (for example, the Lexus motor vehicle).

56. In other words, the resolution of the issue of the competing interests in the West Hoxton property and any other assets which Mr Elawaad claims are his is an essential step in the FCFCA proceedings. Where it is necessary in the exercise of the Division 1 Court’s jurisdiction to decide whether property is that of a party to the de facto relationship or of a third party, the Court may in its accrued jurisdiction determine that issue so as to bind the third party: Valceski v Valceski at [60], citing C & C: C (Accrued Jurisdiction) (2001) 28 Fam LR 253; FLC 93-07; Wade-Ferrell & Wade-Ferrell; Read (2001) 27 Fam LR 484; FLC 93-069; Warby & Warby (2001) 28 Fam LR 443; (2002) FLC 93-091 and Bishop & Bishop (2003) 30 Fam LR 108; FLC 93-144.

57. The two proceedings are related in the sense that the determination of the claims in one is essential to the determination of the other, as ascertaining the parties competing interests in the West Hoxton property, the extent of Mr Elawaad’s assets and whether he is indebted to Ms Wurz are essential aspects of determining the pool of divisible property, and thus the resolution of the de facto financial cause, and need to be determined before the FCFCA proceedings can be resolved. The “federal question” raised in the FCFCA proceedings cannot be resolved without determination of the non-federal issues raised by Ms Wurz’s claims (Valceski v Valceski at [61] and [64]), a matter that was effectively conceded by Ms Wurz’s counsel during final submissions.

58. I am also satisfied that if the two proceedings were tried in different courts, there could be conflicting findings on one or more issues common to them, such as in relation to the extent of Ms Tretiak’s interest in the West Hoxton property, whether it is subject to a charge in favour of Ms Wurz and whether the Lexus motor vehicle is an asset of Mr Elawaad’s, subject to any issue estoppels that might arise. There was no contention to the contrary.

59. It follows, in my view, that Ms Wurz’s claims in relation to the West Hoxton property and her other property which Mr Elawaad asserts re his (and presumably claims as part of his assets) form part of the justiciable controversy in respect of which the FCFCA proceedings have been brought. I do not think it is seriously arguable that the FCFCA Division 1 Court would not have accrued jurisdiction in respect the issues in these proceedings to the extent that controversy as does not fall within its ordinary jurisdiction: Valceksi v Valceski at [65].

60. I am also not persuaded by Ms Wurz’s submission that the FCFCA does not have jurisdiction in relation to the approval of any settlement. Section 4(3) of the Jurisdiction of Court (Cross-Vesting) Act 1987 (Cth) (Cth Cross-Vesting Act) provides that:

4(3)   Where a proceeding is transferred to the Federal Court, the Federal Circuit and Family Court of Australia (Division 1) or a State Family Court of a State, that court has, by virtue of this subsection, jurisdiction with respect to so many of the matters for determination in the proceeding as that court would not have apart from this subsection.

61. Further, ss 29 and 43 of the FCFCA Act provide:

29    Jurisdiction in associated matters

To the extent that the Constitution permits, jurisdiction is conferred on the Federal Circuit and Family Court of Australia (Division 1) in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Federal Circuit and Family Court of Australia (Division 1) is invoked.

43    Determination of matter completely and finally

In every matter before the Federal Circuit and Family Court of Australia (Division 1), the Court must grant, either:

(a) absolutely; or

(b) on such terms and conditions as the Court thinks just;

all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by a party in the matter, so that, as far as possible:

(c) all matters in controversy between the parties may be completely and finally determined; and

(d) all multiplicity of proceedings concerning any of those matters may be avoided.

62. While the latter provisions do not confer jurisdiction, they empower the FCFCA to grant appropriate relief in a case which is properly within jurisdiction: Aviani v Loh at [229].

63. In any event, if I am wrong to conclude that the FCFCA does not have the power to approve a settlement in accordance with s 76(3) of the CPA, an application could be made to this Court for approval in the event that a settlement involving all parties actually occurs prior to any final hearing and determination of the parties’ claims.

64. Ms Wurz’s contention that the FCFCA may not have the power to make orders binding her as a third party, relied on the observations of Brereton JA in his paper “Third Parties: Invited Guests or Gate Crashers?” (paper delivered to the 13th National Family Law Conference Adelaide, South Australia, 6–11 April 2008) (Third Parties), at page 21, that the Explanatory Memorandum “suggests that s 90AE is intended to only apply to the procedural rights of the third party and not to extinguish or modify the underlying substantive property rights of the third party”. However, Brereton JA also went onto say that “the section itself does not contain any such limitation”. In any event, the terms of ss 29 and 43 of the FCFCA Act seem to me to deal with any doubts as to the power of the Division 1 Court to grant the appropriate relief. Accordingly, I accept Ms Tretiak’s submission that the Division 1 Court would be in a position to deal with the issues that arise in the proceedings pending in this Court.

65. Ms Wurz submits that this Court is the natural forum for determination of her claims as they raise issues, such as the question of her cognitive status and legal incapacity and the competing equitable interests and priorities in relation to the West Hoxton property, which Judges of this court regularly consider. She submits that there is a potential for Ms Wurz to be disadvantaged if these proceedings are transferred as the issues in relation to the de facto financial cause claims will likely take considerably longer to determine than her claim (noting that the hearing is set down on 24 and 25 October 2022), and will probably expose her to the incurrence of further unforeseen legal costs. In her submissions, she argued that the Supreme Court has plenary jurisdiction to hear and determine all matters, including matrimonial (and de facto) causes (referring to Third Parties: at 35-37; Sapir v Sapir (No 2) (1989) 13 Fam LR 362; (1989) FLC 92-047; Mulhall v Hartnell (1988) 91 FLR 240; (1988) FLC 91-947) and, in all the circumstances, it is appropriate that the Supreme Court hears and determines these proceedings, including Ms Tretiak’s competing claim to an equitable interest in the West Hoxton property.

66. As to delay, the two sets of proceedings were commenced within a month of each other and are both well progressed, with dates having been allocated for final hearings this year. Irrespective of whether these proceedings are transferred or not, it is inevitable that there would be some delay in these proceedings. As Ms Wurz accepted at the hearing, even if these proceedings remain to be determined in this Court, the hearing dates of 24 and 25 October 2022 will need to be vacated in circumstances where Ms Tretiak is to be joined and will need time to file evidence in response and by way of defence to Ms Wurz’s proprietary claims to the West Hoxton property.

67. In my view, it would be undesirable for the parties to remain in two separate and significantly overlapping proceedings. Indeed, it was common ground at the hearing, that it would be preferable for the issues raised by each claim to be heard and determined together by one court. Any duplication would likely lead to additional costs for all parties, most particularly Ms Wurz and Ms Tretiak (noting that the evidence suggests they are not well funded), and would give rise to the risk of conflicting findings that I have already referred to.

68. There is also an issue that the Court raised with counsel at the hearing as to whether this Court has jurisdiction to determine de facto financial causes following the enactment of the FCFCA Act and the amendments to ss 39A and 39B of the Family Law Act. As Meek J observed in Aviani v Loh at [230]-[245], there are serious doubts that this Court has jurisdiction to determine de facto financial causes as there is a question as to whether s 39A(5) of the Family Law Act deprives this Court of jurisdiction to hear and determine them. Having regard to s 25 of the FCFCA Act (which provides that the Division 1 Court has original jurisdiction if family law proceedings have been transferred to that Court) and s 4(1) of the Cth Cross-Vesting Act (which invests this Court with federal jurisdiction with respect to a civil matter of which the Division 1 Court has jurisdiction), the position in this case might be different as it relates to a de facto financial cause that is being heard and determined by the Division 1 Court. However, and was accepted by counsel for Ms Wurz and Ms Tretiak, the position of this Court’s jurisdiction to determine Ms Tretiak’s claims to an interest in the West Hoxton property (which is founded on her de facto financial cause) remains unclear and there is some doubt as to whether it does.

62. It is also a significant factor that no party suggested that the FCFCA proceedings should be transferred to this Court, nor was there any application before me to do so.

63. It may be that transferring these proceedings to the Division 1 Court will have the effect of delaying, to some extent, the determination of Ms Wurz’s claim. It may also mean that she would need to participate in proceedings that contain a number of issues about which she has little or no concern. Although, if these proceedings continue in this Court, the same may be said about the position of Ms Tretiak.

64. I acknowledge the force of Ms Wurz’s arguments, particularly as the proceedings in both courts are well-advanced, Ms Tretiak and Ms Wurz did not know of the other’s existence for some time and, according to the evidence, are not well-funded. However, on balance, I am not persuaded that there is no significant overlap between the issues in these proceedings and those to be decided in the FCFCA proceedings or that Ms Wurz’s claims in these proceedings involve a discrete issue capable of being determined in this Court alone.

65. In Valceski v Valceski, Brereton J (as his Honour then was) said at [76] that it is usually inappropriate, if not vexatious, for the same issues to be litigated in two different Courts and the fact that one Court can resolve the whole of a controversy and the other cannot, will usually indicate that the former is the more appropriate Court.

66. Taking all the circumstances into account, I consider that the interests of justice, including efficiency and expense, would be best served by having all the issues between the parties determined in the one court and that the Division 1 Court is the most appropriate court for the determination of those matters. Ultimately, the question of Ms Wurz’s interest in the West Hoxton property and her claims to other assets which Mr Elawaad contends he owns should, in my view, be determined under the umbrella of the issue of de facto property in the Division 1 Court.

67. It follows that I will order that these proceedings be transferred to the Division 1 Court to be heard with Ms Tretiak’s FCFCA claims and the issue of a stay of these proceedings does not arise for determination.

68. For these reasons, I make the following orders:

1. Leave be granted for the applicant, Lina Tretiak, to be joined to these proceedings pursuant to Part 6, Division 5 of the Uniform Civil Procedure Rules 2005 (NSW):

1. as an interested party for the purposes of this application; and

2. as a necessary defendant to any claim for any proprietary relief in respect of the property in folio identifier 201/847823 known as 24 Greenway Drive, West Hoxton NSW 2171.

2. Pursuant to s 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW), these proceedings be transferred to the Federal Circuit and Family Court of Australia (Division 1) and they be heard together with proceedings PAC1160/2021 in that Court.

3. Vacate the hearing of these proceedings that are listed to commence on 24 October 2022 for two days.

4. Direct the parties to file and serve a short outline of submissions on costs within 7 days (if costs cannot be agreed), with that issue to be dealt with on the papers.

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Amendments

20 October 2022 - Burge changed to Burke

Decision last updated: 17 November 2022