Zhang v Deng
[2019] NZHC 2531
•7 October 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2017-404-002911
[2019] NZHC 2531
UNDER the Land Transfer Act 1952 BETWEEN
CHENG ZHANG
Plaintiff
AND
FANG DENG
Defendant
Hearing: 14 August 2019 Appearances:
A Fisher QC for Plaintiff E Telle for Defendant
Judgment:
7 October 2019
JUDGMENT OF ASSOCIATE JUDGE P J ANDREW
Solicitors:
Jesse & Associates, Auckland Loo & Koo, Auckland
ZHANG v DENG [2019] NZHC 2531 [4 October 2019]
Introduction
[1] In 2011, the parties separated after 33 years of marriage. They are currently engaged in relationship property litigation in the Family Court.
[2] At issue in these High Court proceedings is a property at Nixon Road, Taupaki, purchased by the plaintiff (the husband) in 2013 and after separation. He sues the defendant (the wife) pursuant to s 146 of the Land Transfer Act (LTA) 1952, claiming compensation for what he alleges was the lodging of a notice of claim against the property without reasonable cause.
[3] The wife has filed an appearance under protest to jurisdiction contending that the proper forum for the determination of the husband’s compensation claim is the Family Court. She says that the Nixon Road property is relationship property. She also seeks to strike out or stay these High Court proceedings on the grounds that they are an abuse of process when the same parties involved in the same subject matter are currently engaged in proceedings in a different court.
[4] The husband now seeks to set aside the protest, pursuant to r 5.49 of the High Court Rules 2016, contending that the property at issue is not relationship property (it was purchased post-separation) or a transaction between spouses. The Family Court, so he says, has no jurisdiction and it is only the High Court that can hear his compensation claim.
[5]The critical issues I must determine are:
(a)Whether this Court has jurisdiction to determine the claim under s 146 of the Land Transfer Act 1952; and
(b)Whether the Court should grant a stay of proceedings pending determination of all outstanding and interrelated issues in the Family Court.
Relevant legal principles
Protest to jurisdiction
[6] Rule 5.49(5) of the High Court Rules provides that at anytime after an appearance stating a defendant’s objection to jurisdiction has been filed, the plaintiff may apply to the Court by interlocutory application to set aside the appearance.
[7]Rule 5.49(6) then provides:
The court hearing an application under subclause (3) or (5) must, –
(a)if it is satisfied that it has no jurisdiction to hear and determine the proceeding, dismiss the proceeding; and
(b)if it does not dismiss the proceeding under paragraph (a), set aside the appearance.
[8] In the context of r 5.49, the jurisdiction which is the subject of protest is the entitlement of a court to entertain a suit.1 In Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd, the Supreme Court held that assessing the competence of the Court to decide the dispute is a proper function of r 5.49.2
[9] Rule 5.49 only concerns whether jurisdiction exists, not whether a parallel jurisdiction is better suited to determining the issues.3
Strike-out/stay
[10]Rule 15.1(1) of the High Court Rules provides:
15.1 Dismissing or staying all or part of proceeding
(1)The court may strike out all or part of a pleading if it –
(a)discloses no reasonably arguable cause of action, defence, or case appropriate to the nature of the pleading; or
(b)is likely to cause prejudice or delay; or
(c)is frivolous or vexatious; or
1 Young v Attorney-General [2018] NZCA 307, [2018] 3 NZLR 827 at [24].
2 Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd [2012] NZSC 94, [2013] 1 NZLR 804 at [23].
3 See New Zealand Law Society v Deliu [2014] NZHC 2467, [2015] 2 NZLR 224 [40]–[45].
(d)is otherwise an abuse of the process of the court.
[11] Rule 15.1(1)(b), the prejudice or delay ground, requires an element of impropriety and abuse of the Court’s processes.4
[12] Rule 15.1(3) provides that instead of striking out all or part of a pleading, the Court may stay the proceedings on conditions that are considered just.
Factual background
[13]The parties immigrated to New Zealand from China in 2001.
[14] In his affidavit filed in the Family Court, the husband describes himself as a high-risk property investor. He says that his investment strategy has always been to acquire properties for long-term capital gain:5
6. … I find appropriate properties and then source appropriate funding to enable settlement. As each property increases in value, I use the resulting equity as security for the next purchase. I generally look for fellow investors to enter joint enterprises with me. As I do not have a regular income, when arranging finance, I tend to borrow more money than is required to purchase my share of any property. In this way, I have funds available to meet the interest payments which accrue. This is a high-risk approach, but I am comfortable with it. …
[15] The husband says that the first property he purchased in New Zealand was a property in Pakuranga, purchased in 2002. In 2003, a property at 23 Brigham Creek Road, Whenuapai, was purchased in the husband’s name for $578,000.
[16] In 2006, a property at 2848 Kaipara Coast Highway, Helensville, was purchased in the husband’s name for the sum of $540,000. In 2008, a property at 77 Nobilo Road, Huapai, was purchased in the husband’s name for the sum of
$3,300,000. At the time the parties separated in 2011, the wife lodged notices of claim over a number of properties including those at Brigham Creek Road and Nobilo Road.
4 Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2013] NZCA 53, [2013] 2 NZLR 679 at [89].
5 Further Affidavit of Cheng Zhang (sworn 6 November 2018) re FAM-2017-090-348.
[17] In 2013, the property at 123 Nixon Road, Taupaki, was purchased in the husband’s name in the sum of $768,000. In his Notice of Opposition to the wife’s application for stay and strike-out (dated 8 April 2018), the husband says the Nixon Road property is not relationship property and that the purchase price of $768,000 was funded by way of a bank loan of $614,000 from the ANZ Bank and private loans of
$188,000 from Mr Tong Biao Yan (which included additional funds for costs). The loan from ANZ was secured against 123 Nixon Road.
[18] In 2014, the husband sold the Nobilo Road property for $13,800,000 and received a $1,000,000 deposit.
[19] In December 2016, the husband signed an agreement for sale and purchase of 111 Waitakere Road and paid a deposit of $145,000, which he said he obtained from Catherine Chao through a finance broker. The Waitakere Road property is the subject of the husband’s claim for compensation under s 146 of the Land Transfer Act 1952. The husband says that the purchase of Waitakere Road was to be financed through a mortgage with a finance broker and secured against the Nixon Road property. In January 2017, the wife filed an application in the Family Court for the division of relationship property and issued notices of claim under s 42 of the Property (Relationships) Act 1976 (PRA) over the Nobilo and Brigham Creek properties.
[20] The settlement for the purchase of 111 Waitakere Road was to take place in May 2017 but the husband did not settle at that time and was served with a settlement notice requiring him to settle by 30 June 2017.
[21] On 22 June 2017, the wife lodged a notice of claim pursuant to s 42(2) of the PRA over the Nixon Road property.
[22] In late June/early July 2017, settlement discussions took place between the parties’ solicitors in which the husband’s solicitors proposed that the notice of claim on 123 Nixon Road be lifted and then re-registered in order to allow the purchase of the Waitakere Road property to proceed to settlement.
[23] In July 2017, the husband filed an application to lapse the notices of claim over the Brigham and Nixon Road properties.
[24] On 5 July 2017, the vendor of 111 Waitakere Road cancelled the contract with the husband for the purchase of the property. The deposit the husband says he lost, of
$145,000, forms part of the basis of his claim for compensation under s 146 of the LTA 1952.
[25] On 11 August 2017, the Family Court, by consent, made orders sustaining the notice of claim over 123 Nixon Road and over 77 Nobilo Road. The orders were made in response to a joint memorandum of counsel dated 11 August 2017.
[26] On 25 September 2017, Ms Chao filed proceedings in this Court against the husband, contending that he was in breach of his obligations to pay a term loan agreement to her for the principal sum of $358,000. The Statement of Claim alleged that the borrowings at issue would be secured by way of a mortgage to be registered against the husband borrower’s half-share interest in the property at 77 Nobilo Road.
[27] In December 2017, the husband filed these proceedings, seeking compensation under s 146 of the LTA 1952 in the sum of $354,000. The substance of his claim is that the wife did not have due cause to lodge the Notice of Claim over the Nixon Road property and as a result of her doing so he was unable to secure purchase of the Waitakere Road property because he could not register a mortgage over the Nixon Road property.
[28] In late 2017, the husband filed an application to dissolve the marriage and it was subsequently dissolved.
[29] On 31 January 2018, the High Court made orders charging the Brigham Creek Road, Nobilo Road and Nixon Road properties with payment of the amount of
$454,512.88, being the amount for which Ms Chao had obtained judgment against the husband. The charging orders were subsequently registered against all three properties.
[30] In an interlocutory decision dated 17 May 2018, her Honour Judge Pidwell made orders for discovery in the Family Court proceedings but declined to make an order requiring the wife to pay security for costs.6 Her Honour noted that the alleged relationship property pool of assets includes, inter alia:7
(a)A share in the sale proceeds of 77 Nobilo Road, which has been sold for $13,800,000. The borrowings secured against it was approximately
$2,000,000. Settlement has not yet occurred, however, the respondent (the husband) appears to have received $1,000,000 from the deposit. His share is either 50 per cent of the net sale or 10 per cent of the net sale as he alleges other parties have a beneficial interest in that property.
(b)The Brigham Creek Road property which is still owned by the respondent (the husband) in his sole name.
(c)The Nixon Road property owned by the respondent (the husband) but purchased post-separation.
[31]Judge Pidwell continued that:
[40] The combined value of the parties’ relationship property is estimated to be worth millions of dollars. After 33 years of marriage, the applicant wife [Ms Deng] has a clear claim. The starting point for the Court is to determine what property the parties had at the date of separation, and then rely on the date of hearing valuation of that property.
(footnotes omitted)
[32] Her Honour also concluded that the Nobilo Road property was purchased during the parties’ marriage and sold after separation and is therefore prima facie relationship property pursuant to s 8(e) of the PRA.
[33] On 12 June 2018, the parties filed a joint memorandum agreeing to stay these High Court proceedings with leave reserved to the parties to apply for the stay to be
6 Deng v Zhang [2018] NZFC 3653.
7 At [14].
removed if the Family Court is not able to decide the matters at issue in these proceedings. Orders were made by consent by Lang J on 13 June 2018.
[34] On 8 August 2018, a further joint memorandum of counsel was filed. Counsel recorded their agreement as follows:
4. Counsel agree that in all likelihood the issues the subject of these [s 146] proceedings [in the High Court] will be dealt with in the course of the Family Court proceeding. However, in the unlikely event that they are not, counsel agree that in the meantime this proceeding can be stayed for a further six months to 10 February 2019. In support of this approach counsel refers to the Yeoman decision.8 A copy of that decision is filed together with this memorandum for the Court’s convenience.
(emphasis added)
[35] The Family Court proceedings have not yet been set down for trial but are ready for a date to be allocated. A standby judicial settlement conference was scheduled for August 2019.
Analysis and decision
Application to set aside protest to jurisdiction
[36] In her Amended Notice of Opposition (dated 28 March 2019), the wife contends that:9
(a)The issue, the subject of this proceeding, falls within the exclusive jurisdiction of the Family Court;
(b)The property, the subject of this claim, is relationship property;
(c)The husband has already specifically raised this issue as part of the Family Court proceedings, which have been afoot in the Family Court at Waitakere since June 2017;
8 Yeoman v Public Trust Ltd [2011] NZFLR 753 (HC).
9 Defendant’s Amended Notice of Opposition to the Plaintiff’s Application to Set Aside the Protest to Jurisdiction (dated 28 March 2019).
(d)The husband consented to a notice of claim pursuant to the PRA remaining registered over the Nixon Road property;
(e)The husband has submitted to the jurisdiction of the Family Court; and
(f)If this claim was allowed to proceed in this Court, it will or may result in two trials with some of the same witnesses and which could lead to different factual findings.
[37] There are also allegations of oppression and abuse of process, but those matters are more appropriately dealt with in relation to the application for stay – the second issue which I address below.
Jurisdiction to hear the s 146 Land Transfer Act 1952 claim for compensation
[38] The cause of action in this proceeding is of course a statutory based one, arising under s 146 of the LTA 1952. That section, whilst in force at the time the relevant events took place, has been replaced by s 148 of the Land Transfer Act (LTA) 2017. It is clear from the scheme of the LTA 2017, and in particular the definition of court in s 5 (as applied to s 148(2) of the LTA 2017), that a claim for compensation for the lodging of an improper caveat against dealings must now be heard and determined in this Court – the High Court has exclusive jurisdiction for claims under s 148 of the LTA 2017. Therefore, if this proceeding been brought under the LTA 2017, the Family Court would not have jurisdiction to hear the husband’s claim for compensation.
[39] The critical issue then arises as to whether in relation to claims under s 146 of the LTA 1952, this Court has jurisdiction, whether exclusive or concurrent. If it does, the application to set aside must be granted. The statutory scheme of the LTA 1952 is not identical with that of the LTA 2017; there is no equivalent provision in s 146 of the LTA 1952 to that contained in s 148(2) of the LTA 2017, which expressly provides that a claim for compensation must be heard and determined by this Court.
[40] Section 148(2) of the LTA 2017 states that a “claim for compensation must be heard and determined by the court”. By contrast, s 146(2) of the LTA 1952 provides that “such compensation … shall be recoverable in an action at law”, and there is no
mention of any specific court. Instead, the section uses the general term “action at law”. On the face of the wording, the section does not confer exclusive jurisdiction on any one court or tribunal.
[41] There is little guidance to be obtained from either the legislative history or the Parliamentary debates as to why there has been a change in wording; whether it was intended to put the matter beyond doubt or to restrict, for the first time, the jurisdiction to this Court, is far from clear.
[42] I incline to the view that under the LTA 1952 both this Court and the District Court have jurisdiction to hear claims for compensation. However, I do not need to determine whether that is so. The crucial point is, that the Family Court does not have exclusive jurisdiction and this Court clearly does have jurisdiction. Indeed, I doubt whether the Family Court has any jurisdiction to hear compensation claims under s
146. The Family Court is of course a creature of statute and has jurisdiction only over those matters conferred by statute.10
[43] A compensation claim under s 146 of the LTA 1952 is a separate, stand-alone statutory cause of action. It is a separate issue from whether the Nixon Road property is relationship property and, in many cases, claims under s 146 (or indeed under s 148(2) of the LA 2017) will not involve relationship property or family-related transactions at all.
[44] In my view, there is no basis at all for reading the words of s 146 to conclude that this Court has no jurisdiction; it clearly does. This Court has an original jurisdiction for all civil proceedings, subject to any statutory provisions conferring exclusive jurisdiction on some other court or tribunal.11 There would need to be very clear statutory wording to conclude that this Court lacked jurisdiction. I therefore conclude that this Court does have jurisdiction under s 146 of the LTA 1952 to hear the husband’s claim for compensation. I reject the wife’s submission that it is only the Family Court that has jurisdiction to entertain such a claim. It follows, therefore,
10 Yeoman v Public Trust Ltd, above n 8, at [24].
11 At [54].
that the husband’s application to set aside the wife’s protest to jurisdiction must be granted.
Stay of proceedings
[45] This Court has a discretionary power to stay proceedings. The power is confirmed by r 15.1(3) of the High Court Rules. The Court also retains an inherent jurisdiction to stay proceedings.12 The discretionary power under r 15.1(3) to stay instead of striking out must be informed by the considerations in r 15.1(1).13
[46] One of the grounds for a stay of proceedings is that the proceeding is otherwise an abuse of the process of the Court.14 In considering this issue, Venning J in Danone Asia Pacific Holdings Pte Ltd v Fonterra Co-operative Group Ltd held that:15
[37] … Abuse of process [under r 15.1(3)] is not limited to the rather narrow tort of abuse of process but can apply to proceedings which, although not inconsistent with the literal application of procedural rules, are nevertheless “manifestly” or “seriously” unfair to a party. It will, for example, be an abuse of process to issue duplicate proceedings involving the same parties.
…
[54] … Parties do not enjoy an unfettered right to access to the Courts; rather, the Court is entitled to impose procedures that are appropriate in the circumstances [such as staying the proceedings] having regard to the nature and content of the litigation as a whole.
[55] The jurisdiction to do so, however, should only be exercised in rare and compelling circumstances. There must be a real risk of unfairness or oppression to the defendant if the proceedings were allowed to continue. Considerations of cost, convenience and the interests of justice must weigh in favour of a stay. The onus is on the applicant …
[56] In determining whether such circumstances exist in the present case it is necessary to consider in more detail the relationship between the parties to the proceeding[s] … and, in particular, the claims in the … proceedings and the issues they raise, together with other relevant factors such as issue estoppel, the risk of inconsistent findings, delay and cost.
(footnotes omitted) (emphasis added)
12 Danone Asia Pacific Holdings Pte Ltd v Fonterra Co-operative Group Ltd [2014] NZHC 1681 at [33]; aff’d [2014] NZCA 536.
13 Danone (HC), above n 12, at [34]; and High Court Rules 2016, r 15.1(4).
14 Rule 15.1(1)(d).
15 Danone (HC), above n 122.
[47] Venning J granted a temporary stay of the High Court proceeding. The Court of Appeal upheld the granting of a stay and commented that:16
[19] … our decision not to amend the terms of the temporary stay [does not] … deprive [the party] of its right to access the courts. [The party’s] High Court proceeding has not be struck out or stayed permanently. It has only been stayed on a temporary basis pending expeditious resolution of the [concurrent proceedings].
[48] In considering the issues that arise in both proceedings, I accept that there is some merit to Antonia Fisher QC’s submission, for the husband, that the s 146 compensation claim is a discrete and separate matter. She contended that the wife’s claim that the Nixon Rd property is relationship property is a weak one. The parties separated in 2011 and the Nixon Rd property was not acquired until 2013. The division of property for the purposes of the PRA is to be determined as at the date of separation.
[49] At best, Ms Fisher contended, the Family Court might make an order under s 17 of the PRA, which allows the Court to make an order for compensation if a separate property has been sustained by the application of relationship property.
[50] However, the status of the Nixon Road property is at issue in both the Family Court and these proceedings, and the evidence that it was acquired by the husband with his own funds and without recourse to relationship property is challenged by the wife. In the circumstances and given the tension in the evidence presented by the husband as to how the purchase of Nixon Road was funded, it is understandable that the wife wishes to test the evidence on this issue. I also not that the Nixon Road property was one of a number of properties acquired by the husband in his own name (that seems to have been the case throughout the whole marriage) and there does seem, arguably, to have been a pattern of his leveraging off and using relationship property for his high-risk property investments.
[51] A determination that the Nixon Road property is relationship property would likely mean that the husband’s claim for compensation in this Court would fail. On the other hand, it does not necessarily follow that a decision that the Nixon Road
16 Danone (CA), above n 122.
property was not relationship property means that the wife did not have reasonable cause to lodge the notice of claim at issue. In my view, it is arguable on the facts and evidence before me (including the findings of Judge Pidwell in the Family Court decision of 17 May 2018) that, even if Nixon Road is not relationship property, the wife, and her legal advisers, did act with reasonable cause. Judge Pidwell found that the wife comes from a traditional Chinese background and appears to have little business experience. She had a high-risk, active property investor husband who purchased all properties in his own name and used relationship property as security for acquiring his property investments. She was at considerable disadvantage in preparing relationship property proceedings. It is thus arguable that she did act with good cause, namely to protect her interests, in placing the Notices of Claim over all of the husband’s properties.
[52] Orders under s 17 of the PRA (and/or orders under s 9(4)(c) of that Act), together with the husband’s ultimate consent to the Notice of Claim being sustained over the Nixon Road property (albeit after the sale of Waitakere Road fell through), might also have some bearing on the “reasonable cause” issue under s 146 of the LTA 1952. There is substantial overlap between the extant Family Court proceedings and the issues before this Court.
[53] In all the circumstances, while this High Court proceeding is a separate matter from the Family Court proceeding, the matters at issue in both proceedings are, in my view, sufficiently connected so that it would be unrealistic to divorce them and to determine then in tandem without reference to each other. Venning J reached the same conclusion in Danone Asia Pacific Holdings Pte Ltd.17
[54] Against that background, it is also necessary to address whether, having regard to considerations of costs, convenience and the interests of justice, there would be a real risk of unfairness or oppression to the wife if these proceedings were allowed to continue in advance of determination of the related Family Court proceedings.
[55] The Family Court clearly has jurisdiction to determine whether the Nixon Road property is relationship property or not. It is already seized of that issue
17 Danone (HC), above n 12, at [96].
and those proceedings are ready to go to trial. In my view, the Family Court is best placed to determine this critical issue. If the Nixon Road property is relationship property, then the Family Court has exclusive jurisdiction to divide the property under ss 22 or 25 of the PRA, albeit no jurisdiction to determine the s 146 claim.
[56] The parties were married for 33 years and according to the judgment of Judge Pidwell, the combined value of the relationship property is estimated to be “millions of dollars”. As already noted, the evidence suggests that there is a substantial degree of interconnection between all of the properties at issue. In the circumstances, it would make good sense for the Family Court to determine all the relationship property and family law related issues in advance of the s 146 claim and leaving the parties to assess, against the background of any Family Court judgment, whether the s 146 claim (very much a subsidiary issue between the parties) should proceed.
[57] The good sense of staying these proceedings pending determination of all outstanding matters in the Family Court has already been recognised by counsel in these proceedings. I have already noted that on 8 August 2018 in a joint memorandum of counsel, they recorded their agreement that “in all likelihood the issues the subject of these [High Court] proceedings will be dealt with in the course of the Family Court proceedings”. In that memorandum, the parties agreed to this proceeding being stayed for a further six months to 10 February 2019.
[58] I reject the submission of Ms Fisher that, with the benefit of hindsight, the husband’s consent to that memorandum may have been a mistake. It was a sensible proposal to consent to and there has been no material change in circumstances to suggest that the matter should be re-appraised.
[59] In my view, there would be a real risk of unfairness to the wife if these proceedings were allowed to continue at the same time or in tandem with the Family Court proceedings. There is a risk of inconsistent findings and for the wife, who is impecunious with no assets in her name and in receipt of a sickness benefit,18 the considerations of cost, convenience and the interests of justice must weigh heavily in
18 Deng v Zhang (FC), above n 6, at [2].
favour of a stay. I note that Judge Pidwell held, in her decision of 17 May 2018, that the husband’s application in the Family Court requiring the wife to pay security for costs was ill-founded and oppressive.19
[60] In reaching my conclusion that the proceedings should be stayed, I would also observe that, on the evidence before me, the husband’s s 146 claim for compensation is not a compelling one. There is a great deal of evidence directly related to matters in dispute in the Family Court that needs to be tested and determined. The purpose of a s 42 notice of claim is to protect the non-owning spouse, so that their claim or rights are not defeated, pending resolution of the substantive property relationship issues.
The term “claim to interest” in s 42 is not to be narrowly or strictly defined.20
[61] A memorandum (dated 3 September 2019) filed by Edwin Telle, for the wife, provides further support for my finding that considerations of convenience and the interests of justice favour the grant of a stay.21
[62] The husband contends that he obtained the deposit of $145,000, which he paid for the Waitakere Road property (and which he seeks to recover from the wife), by way of loan from Ms Chao. In his memorandum, Mr Telle has referred to proceedings in this Court, Chao v Zhang, and judgment being obtained by Ms Chao against the husband, which resulted in a charging order being placed against the Brigham Creek Road property (relationship property).22 Mr Telle contends that Ms Chao was repaid the sum of $487,000 when the Brigham Creek Road property was re-financed in 2018. That is said to have resulted in Ms Chao’s charging order being discharged. Mr Telle contends that the wife therefore has already paid half of the debt and claim the subject of these High Court proceedings, with her share of relationship property. He argues that if it is found that the wife acted unreasonably when she lodged the Notice of Claim over the Nixon Road property (presumably because the Family Court had determined that it is not relationship property), then an adjustment for the other half of the debt
19 Deng v Zhang (FC), above n 6.
20 Arrow Farms Ltd v Jackson (1991) 7 FRNZ 561 (HC) at 565.
21 Memorandum of Counsel for the Defendant in Relation to Hearing 14 August 2019 (dated 3 September 2019).
22 Chao v Zhang HC CIV-2017-404-2215. The full citation for this decision was not provided.
which has been paid out the husband’s share of relationship (Brigham Creek Road) can simply be ordered in favour of the husband by the Family Court.
[63] There is further support for the approach I am taking, of staying these High Court proceedings, in the decision of Associate Judge Bell in Yeoman v Public Trust Ltd.23 In that case, there were PRA and Family Protection Act 1955 proceedings in the Family Court and proceedings brought by the plaintiff widow in the High Court in relation to the assets said to be held by a family trust and which the plaintiff widow contended could not be included in the assets of the estate of the deceased and which could not be the subject of division orders under the PRA. The judgment of Associate Judge Bell deals comprehensively with the jurisdiction of the Family Court and what he described as its inventory-taking function in determining the status of property. In granting a stay of the High Court proceedings, Associate Judge Bell held that the plaintiff widow’s application for a declaration in respect of the two properties said to be held on trust was an abuse of procedure because it sought relief which was part of the relief she sought against the same defendant in the Family Court proceedings.
[64] I acknowledge that the facts of this case are different and that in principle a s 146 claim is a separate, stand-alone statutory cause of action which the Family Court ultimately has no jurisdiction to determine. However, as emphasised above, there is substantial overlap between the two proceedings and the concerns identified by Associate Judge Bell of splitting matters between courts adding to expense, delay and complexity (and are thus to be avoided) clearly apply to the circumstances here.
[65] Finally, I note that my decision to stay these proceedings does not deprive the husband of his right of access to the court. I am not striking out or permanently staying the proceedings but granting them on a temporary basis pending expeditious resolution of the concurrent Family Court proceedings.
[66] For all these reasons I therefore grant the wife’s application for stay of proceedings on the terms set out below. The threshold of “rare and compelling circumstances” has been made out.
23 Yeoman v Public Trust Ltd, above n 8.
Result
[67] The plaintiff’s application to set aside the protest to jurisdiction is granted. This Court does have jurisdiction to determine the husband’s s 146 compensation claim.
[68] The defendant wife’s application for a stay of proceedings is granted. These proceedings are stayed pending determination of all outstanding issues before the Family Court in proceedings FAM-2017-090-348 or further order of this Court. The stay is granted on the condition that the wife expeditiously prosecutes the Family Court proceedings.
[69] Leave is granted to the parties to seek a removal or variation of the stay, if there is a relevant change of circumstances.
[70] As to costs, I am of the preliminary view that costs should lie where they fall. Both parties have had a measure of success and the husband’s position on the stay application was not without merit.
[71] If the parties cannot agree on costs, then submissions are to be filed within 14 days.
Associate Judge P J Andrew
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