Xylander & Xylander (No 2)
[2025] FedCFamC1F 8
•16 January 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Xylander & Xylander (No 2) [2025] FedCFamC1F 8
File number: SYC 5938 of 2024 Judgment of: SCHONELL J Date of judgment: 16 January 2025 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Transfer of proceedings from Federal Circuit and Family Court of Australia (Division 1) to Supreme Court of NSW – Ex tempore – Order made for transfer of proceedings. Legislation: Australian Securities and Investments Commission Act 2001 (Cth)
Family Law Act 1975 (Cth) Pt VIII
Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) s 5(4)
Cases cited: Edwards v Hyundai Motors Company Australia Pty Ltd; Sims v Kia Australia Pty Ltd [2023] FCA 1113
Peros v Irons [2024] FCA 902
Xylander & Xylander [2024] FedCFamC1F 550
Division: Division 1 First Instance Number of paragraphs: 19 Date of hearing: 16 January 2024 Place: Sydney Counsel for the Applicant: Mr Crossland Solicitor for the Applicant: Jake McKinley Pty Ltd The First, Second and Third Respondents: Did not participate ORDERS
SYC 5938 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR XYLANDER
Applicant
AND: MS XYLANDER
First Respondent
MS B XYLANDER
Second Respondent
MR C XYLANDER
Third Respondent
ORDER MADE BY:
SCHONELL J
DATE OF ORDER:
16 JANUARY 2024
THE COURT ORDERS THAT:
1.The proceedings in the Federal Circuit and Family Court of Australia (Division 1) proceeding no. SYC5938/2024 (FCFCOA proceedings) be transferred to the Supreme Court of New South Wales proceeding no. …, pursuant to section 5(4) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth).
2.Costs of the FCFCOA proceedings to date and of this application to be costs in the cause.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Xylander & Xylander has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
SCHONELL J:
The husband and wife are engaged in Part VIII proceedings in this court following the breakdown in August 2022 of their 50-year marriage.
The proceedings were commenced by the husband seeking orders against the first respondent, his wife, and the second and third respondents, two of his adult children.
The husband contends that there has been, before the litigation commenced, a failure by the wife to comply with the pre-action procedures, and subsequent to the commencement, a failure to comply with orders and directions.
The background to the parties’ dispute in this court is set out briefly in the reasons for judgment of Austin J in Xylander & Xylander [2024] FedCFamC1F 550 wherein his Honour set aside a Financial Agreement and made orders for the respondents to give disclosure. In his Honour’s Reasons for judgment, he records as follows:
20The FA may be set aside if it was obtained by fraud (s 90K(1)(a)), it is void, voidable or unenforceable (ss 90K(1)(b) and 90KA), or a party to it acted unconscionably (s 90K(1)(e)). In this case, the FA was procured by the wife unconscionably, if not fraudulently, and it is void on account of it being a sham. It purports to be executed by the husband when it was not.
21The FA is not saved by the third respondent’s execution of it, supposedly on the husband’s behalf, because the power of attorney under the authority of which he purported to act was itself forged and therefore a sham. The husband did not sign it either.
22Even if the husband had executed the power of attorney, the Powers of Attorney Act 2003 (NSW) did not empower the third respondent to execute the FA for and on behalf of the husband for two reasons. First, an attorney is not permitted to execute any document conferring a benefit upon a third party unless the power of attorney expressly authorises it (s 13). The power of attorney did not expressly empower the third respondent to execute the FA, conferring a substantial financial benefit upon the second respondent. Secondly, the third respondent was only empowered to execute instruments on behalf of the husband using his own signature as the appointed attorney (s 43), but if the third respondent did sign the FA he did not sign it in that way.
23The FA is therefore set aside, which axiomatically means it is not binding upon the spouses.
The husband contends before me that the respondents did not fully comply with all of the orders made by his Honour.
As a consequence of the failure to comply, on 14 October 2024, a Senior Judicial Registrar of this court made orders listing the matter in the Defaulters List before me at 9.30am on 14 November 2024. The orders made by the Senior Judicial Registrar provided as follows:
Defaulter’s List
1.All parties and the legal representative with the day-to-day conduct of the matter shall appear in person before the Honourable Justice Schonell in the Defaulters’ List at 9.30am on 14 November 2024.
2.Not less than 7 days prior to the date referred to in Order 1 above, the Applicant and the Respondents are to file and serve an affidavit of not more than 3 pages explaining the reasons for non-compliance as follows:
a)Neither the first, second or third respondents have complied with order 3 made on 2 September 2024, where no Response to Initiating Application has been filed.
b)The applicant has not complied with order 4 made on 2 September 2024, by filing an Amended Initiating Application.
c)Neither party has complied with orders 5 and/or 6 of the orders made on 2 September 2024, by filing their Undertakings as to disclosure and/or Affidavit as to disclosure noting that the Court is informed that the applicant’s Undertaking shall be filed today.
3.Not less than 7 days prior to the date referred to in Order 1 above, each party is to file and serve:
a)a Minute of Final Orders sought; and
b)a Minute of any orders proposed to progress the matter to timely resolution including details of how any associated costs are to be met; and
c)an Affidavit of Service.
The husband complied with the orders, the respondents did not. In his affidavit filed 8 November 2024, the husband says as follows:
14.The Respondents have not filed any material to date despite them being granted extensions to do so and continuing to be represented in these proceedings. My preference had been for the Respondents to file their material so I could be provided with an explanation for the transactions entered into by them.
15.In circumstances where the Respondents have not filed material and provided only limited disclosure, I consider I am placed in a difficult position in finalising my relief sought as I am required to issue further subpoenas to clarify the assets held by the Respondents and the use made by them of the loans obtained by them against the [Suburb D] property. I consider I would be disadvantaged if I was required to finalise my application prior to completing my enquiries in relation to the Respondents' financial positions.
On 18 November 2024, the husband appeared with his solicitor before me. The first respondent’s solicitor appeared as a courtesy to the Court but indicated that he held no instructions. In view of the failure by the respondents to comply, this court made the following directions:
1.The matter is listed for hearing before me on an undefended basis at 10.00 am on Thursday, 16 January 2025.
2.The applicant is to file and serve any affidavit on which he intends to rely no later than 4.00 pm on 6 December 2024.
3.The applicant is to file and serve a Case Outline in relation to the undefended hearing by no later than 4.00 pm on 9 January 2025.
On 15 January 2025, the husband filed an Application in a Proceeding seeking the following relief:
1.Order that the proceedings in the Federal Circuit and Family Court of Australia (Division 1) proceeding no. SYC5938/2024 (FCFCOA proceedings) be transferred to the Supreme Court of New South Wales proceeding no. …], pursuant to section 5(4) of the Jurisdiction of Courts (Cross-Vesting Act 1987 (Cth).
2.Costs of the FCFCOA proceedings to date and of this application to be costs in the cause.
His solicitor’s affidavit in support says the following:
3.Our office also acts on [Mr Xylander's] behalf in relation to proceedings before the Supreme Court of New South Wales (proceeding no. […]) ("SC proceedings").
4.The first, second and third respondents are the defendants named in the SC proceedings.
SC proceedings
5.[In late] 2024, our office and Counsel, Ashley Crossland, appeared before Meek J in the Supreme Court of New South Wales Duty List, and freezing orders were made in respect of the defendants’ assets. The matter was relisted [a short time later].
6.During this event, Meek J was informed about the FCFCOA proceedings and the upcoming hearing on 16 January 2025. Meek J was also informed about the applicant's intention to make an application to transfer the FCFCOA proceedings to the Supreme Court of New South Wales.
7.Orders were made to file and serve various documents, including a summons, notice of motion, affidavit of [Mr Xylander], Exhibit, Submissions, copies of notices of address for service (marked " P-1"), and Reasons for Judgment of Austin J dated 19 August 2024 (marked " P-2").
8.On 19 December 2024, those documents were personally served upon the respondents. A copy was also sent via email to [M Lawyers], using the email provided in the notice of address for service filed on behalf of the respondents.
9.[In late] 2024, our office and Counsel appeared before Peden J for directions in the Supreme Court of New South Wales Vacation List. At this event, the respondents had not yet complied with previous orders to produce an affidavit.
10.The respondents explained that they were unable to complete that without the assistance of legal advice. Our counsel indicated that there would be prejudice suffered by a long delay in obtaining that information, in case a variation of the freezing orders might be required. Orders were made to extend the time to produce affidavits until 20 January 2025, and the matter was relisted [for early] 2025.
11.Our office has not yet received any affidavits from the respondents following the orders made on 24 December 2024.
(Reference to annexures omitted)
Before the Supreme Court of NSW there are proceedings commenced by summons by the husband seeking relief against the same respondents as in the proceedings before this court. Relief is sought under provisions of the Australian Securities and Investments Commission Act 2001 (Cth), restitution, contentions giving rise to an asserted constructive trust, equitable compensation and common law damages.
The husband appeared today represented by his solicitor and counsel. There was no appearance for any of the respondents.
I am satisfied in circumstances where the respondents have chronically failed to comply with directions that I should proceed in their absence.
APPLICABLE LAW
In Edwards v Hyundai Motors Company Australia Pty Ltd; Sims v Kia Australia Pty Ltd [2023] FCA 1113 Bromwich J identified the applicable principles governing such a transfer to be as follows:
11.The main question to be determined on a transfer application under s 5(4) of the Act is where the balance lies in properly serving the interests of justice, and with there being no presumption favouring any party of no onus to be discharged: Amalia Investments Ltd v Virgtel Global Networks NV (No 2) [2011] FCA 1270; 198 FCR 248 at [34] and [40] and Civil & Civic Corporation Pty Ltd v Nova Builders Pty Ltd [2022] FCA 1515 at [12]. It is therefore sufficient that it be demonstrated that the SCV be the more appropriate or natural forum in all the circumstances: BHP Billiton Ltd v Schultz [2004] HCA 61; 221 CLR 400 at [14] (reproduced in Gleeson at [15]); Valceski v Valceski [2007] NSWSC 440; 70 NSWLR 36 at [69] (reproduced in Gleeson at [20]).
12.A threshold issue in s 5(4)(b)(i) of the Act is whether there is some causal element, such as commonality of facts or parties, so as to render the proceedings in the different courts able to be characterised as associated, connected or related. That may or may not be sufficient: Commissioner of Taxation v Residence Riverside Proprietary Limited as Trustee for the D&J Discretionary Trust and as Trustee for the D&J Investment Trust [2013] FCA 720 at [13]- [14]. In Residence Riverside at [17], it was observed that it will be generally relevant to the question of the interests of justice to consider such things as the stage of the proceedings in each court, the nature of the proceedings, any commonality or diversity of parties, the risk of conflicting outcomes if the transfer does not take place, any available cost-benefit analysis, the potential risk of an unnecessary drain on public resources (including judicial) and whether either court has any advantage in terms of expertise.
13.The power of transfer must be exercised whenever it appears that it is in the interests of justice that it be exercised, and it is not necessary that the existing court be clearly inappropriate: Schultz at [10]. If one court is shown to be more appropriate than the other, however so slightly, transfer to the more appropriate court is mandatory: Valceski at [70]. The court which was the initial choice does not need to justify not exercising jurisdiction: Schultz at [25].
While in Peros v Irons [2024] FCA 902 Derrington J identified the relevant principles to be as follows:
21.The assessment as to whether or not a proceeding should be transferred under the Cross-vesting Act calls for 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: BHP Billiton Ltd v Schultz (2004) 221 CLR 400, 420 – 421 [13] (BHP v Schultz), citing Bankinvest AG v Seabrook (1988) 14 NSWLR 711, 713 – 714. If it appears to the Court that it is in the interests of justice that the proceeding be determined by another court, there is a statutory requirement to exercise the power of transfer: BHP v Schultz at 421 [14].
22.There is no presumption in favour of or against any party and no party carries any onus: Amalia Investments Ltd v Virgtel Global Networks NV (No 2) [2011] FCA 1270; (2011) 198 FCR 248, 256 [40] (Amalia Investments); Civil & Civic Corporation Pty Ltd v Nova Builders Pty Ltd [2022] FCA 1515 [12] (Civil & Civic). Broadly speaking, the Court is required to decide “where the balance lies in properly serving the interests of justice in each case”: Civil & Civic [12], citing Amalia Investments at 255 [34].
23.For the purposes of s 5(4)(b)(i) of the Cross-vesting Act, two proceedings are related if they are “associated or connected”, such as where a substantial common question arises in both proceedings, or where the facts and circumstances in the two proceedings appear to be intertwined: see Civil & Civic [13]; Amalia Investments at 256 [41] and the authorities cited therein.
24.For the purposes of ss 5(4)(b)(ii)(D) and (iii), the factors that will generally be relevant to determining whether a transfer is in the interests of justice are: the stage of proceedings for each; the commonality or diversity of the parties; the nature of the proceedings; the commonality or diversity of the issues; the risk of conflicting findings of fact or conflicting orders; a cost benefit analysis; the potential unnecessary drain on judicial and other public and private resources; and whether there is any particular judicial expertise residing in one court or the other: Civil & Civic [14].
I respectfully adopt their Honour’s reasoning.
DISPOSITION
I am satisfied that it is in the interests of justice that the proceedings before this Court be transferred to the Supreme Court of NSW. There is a commonality of parties across both proceedings. Having the proceedings heard in one court rather than two will result in a just resolution of the controversy between the parties more quickly, efficiently, and inexpensively than it would if there were to remain in essence two parallel proceedings.
There is to a degree a commonality of legal and factual issue in both proceedings. The Supreme Court of NSW has jurisdiction to hear the matter under Pt VIII of the Family Law Act 1975 (Cth) and all of the proceedings are at an early stage.
For these reasons, I propose to make the orders sought by the husband.
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Schonell. Associate:
Dated: 16 January 2024
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