Alexanderson v Adamson [2021] QDC 108

• [4] On the 18th of February 2021, the respondent filed a claim and statement of claim in the Southport District Court seeking to recover what is said to be a debt owed by the applicant to the respondent in the amount of $200,000. The statement of claim alleges that, pursuant to a written loan agreement entered into on 24 November 2017, the applicant lent the respondent the sum of $100,000 repayable on or before 23 November 2020. It further alleges that another agreement was entered into between the parties on 13 December 2017 in which the respondent advanced the applicant the further sum of $100,000 to be repaid by 13 December 2020. It is uncontroversial that the respondent has demanded payments and the applicant has failed to pay the alleged loan moneys.
• [5] On 22 March 2021, the applicant filed a conditional notice of intention to defend setting out, amongst other things, that he is the estranged husband of the respondent's daughter, Petea, that he and Petea were married on 18 November 1995 and that they separated on a final basis in October 2018. The applicant contends that he has commenced proceedings in the Federal Circuit Court of Australia seeking orders for the division of property from his relationship with Petea.
• [6] The conditional notice of intention to defend sets out that the respondent has been joined as a respondent in the Family Law proceedings and the applicant has also sought a declaration that the disputed money was a gift by the respondent to Petea and the applicant and that, as result, those moneys are not due and payable by him. By paragraph 6 of the conditional notice of intention to defend the applicant then maintained that:

"...having regard to the nature and circumstances of the advance of the Disputed Monies, including the relationship between the relevant parties and the terms on which the advances were made, that this is a matrimonial matter and that the appropriate jurisdiction to determine whether there is an obligation to repay the Disputed monies is the Federal Circuit Court of Australia exercising its powers pursuant to the Family Law Act 1975."

• [7] It is uncontroversial that the District Court proceedings were filed first in time. The respondent's case as pleaded and characterised on her behalf before me is a relatively straightforward debt recovery claim supported by two agreements. But, given the matters raised by the applicant, it is apparent it is not so straightforward. The affidavit material and submissions filed on behalf of the applicant develop the applicant's case as summarised in the conditional notice of intention to defend, to show that, at least from his perspective, the facts are not as the respondent suggests.
• [8] The applicant swears that the loan agreements, which I accept are short and perfunctory, do not record all of the terms of the agreement between the applicant and the respondent. The applicant swears that the agreement was that the respondent would advance the moneys to him unbeknown to his wife Petea, at least at the time, because the family were encountering some personal and financial difficulties. The applicant's case is that documents were signed to recognise the amounts advanced but that the moneys were a gift during the respondent's lifetime and would only come to account in the realisation or administration of the respondent's estate on her death.
• [9] I pause to note that the respondent is in her late 70s but there is no evidence of any concerning health issues. It is uncontroversial that the moneys were paid to the joint account of the applicant and his then-wife and that the second loan agreement refers to the borrower as the applicant and Petea. The applicant's evidence is that the moneys were also applied to the payment of expenses associated with Petea's horse business as well as family expenses.
• [10] On 11 September 2020, which was the last business day before the matrimonial home settled and which was before the commencement of these proceedings, the respondent's solicitors wrote to the purchasers of the former matrimonial home, which was in Petea's name, alleging that the respondent and Petea's father, Barry, were creditors of Petea. This is somewhat inconsistent with either party's case and, I accept, was rather curious given that the respondent did not include her daughter Petea as a defendant to the District Court proceedings.
• [11] An irrevocable authority signed by Petea to pay a total of $550,000 of the purchase price was provided to the purchasers. This sum included the $200,000, which is accepted by the respondent as being the same monies that is the subject of the District Court claim. This irrevocable authority was only withdrawn when it was pointed out by Petea's family law solicitors that the payment would breach the prior undertaking given to hold the sale proceeds pending determination of the property settlement.

• [12] UCPR r 16(g) expressly states that the court may stay a proceeding. The respondent submitted that the rule is not applicable where jurisdiction has been properly founded or exists. The respondent submitted that the Court's relevant power to order a stay is instead found in s 69(2)(c) of the District Court Act 1967.
• [13] I accept that an express power to order a stay under s 69(2)(c) is contained in the District Court Act 1967. But I do not accept the respondent's submission that UCPR r 16(g) only applies where jurisdiction has not been properly founded. Rule 16, which appears under the heading Setting Aside Originating Process, appears in Chapter 2 of the UCPR which is entitled Starting Proceedings. The reference in r 16 to a proceeding in want of jurisdiction expressly exists at subparagraph (a), not subparagraph (g) on which the applicant relies. Given that the subparagraphs are separated by the word 'or', as a matter of statutory interpretation, and on a plain reading of the rule, I am satisfied that r 16(g) contemplates an application for stay under r 16(g) may be one premised on a challenge to the forum where there are said to be parallel proceedings on foot, such as in this instance. I am therefore satisfied that this Court has express power to order a stay, whether under r 16(g) or the District Court Act. It follows that I need not discuss or rely on any inherent power that this court has as a court of inferior jurisdiction.
• [14] Before moving to consider the appropriate test, it is necessary for me to address the respondent's preliminary submission that the conditional notice of intention to defend is ineffective as a means of challenging the forum chosen by the respondent; that is, the District Court. For reasons which I will come to, I accept that the test referred to in the conditional notice of defence, of whether the Family Court is the appropriate jurisdiction, is not the correct test in this case. But I do not accept the respondent's submission that the filing of a conditional notice to defend by the applicant in this matter was otherwise misconceived.
• [15] As the High Court determined in Voth v Manildra Flower Mills [1990] HCA 55; [1990] 171 CLR 538, a stay can be granted where the defendant can show that the selected forum is 'clearly inappropriate'. With reference to Voth, the annotations to the UCPR r 144 observe that a conditional notice of intention to defend is probably still required as such an application may be thought to be a challenge to the jurisdiction of the court and the orders which may be made under r 16 include a stay of proceedings. I accept that this reasoning is supported by the authorities and is correct on a plain reading of the UCPR r 16 and r 144.

• [16] The applicant submitted that the factors set out in Sterling Pharmaceuticals v Boots Pty Ltd [1992] FCA 72; [1992] 34 FCR 287 at 291 provide the criteria by which I should determine the application. In contrast, the respondent submitted that the appropriate test is set out by the High Court in Voth to the effect that a stay should only be granted if the applicant can show that the selected forum, here the District Court of Queensland at Southport, is the "clearly inappropriate forum".
• [17] In the decision of Sterling Pharmaceuticals the Court rejected the submission that the Voth principles were applicable in a case where a temporary stay is sought pending determination of other parallel proceedings. This reasoning was accepted by the majority in Henry v Henry [1996] HCA 51; [1996] 185 CLR 571 at 590. It follows that the Voth criteria must be applied in cases where a permanent stay of proceedings is sought, while the criteria in Sterling Pharmaceuticals apply where the stay sought is temporary. This analysis is supported by the learned authors of M. Davies, A. S. Bell, P. L. G. Brereton and M. Douglas in Nygh's Conflict of Laws in Australia, 10th Edition at p 222.
• [18] Accordingly, I sought submissions from the applicant as to whether a temporary or permanent stay is sought. By paragraph 15 of the further submissions the applicant now submits as follows:

"The stay sought in relation to the present District Court proceeding is directed towards staying them pending the determination of the Family Court proceedings. The question of a stay being permanent or temporary, to some degree is illusionary to this application because the Court, pursuant to UCPR rule 16(i), has the ability to make any order that it thinks appropriate in the circumstances."

"Any stay as ordered could provide for re-enlivenment in the event, for example, if the Family Court proceedings were discontinued and the issue of the indebtedness of the defendant and his wife remained unresolved.

Rule 16(i) could enable the Court to provide a stay upon terms for example to cure any prejudice to the Plaintiff."

• [20] I reject the applicant's submission that "the question of stay being permanent or temporary to some degree is illusionary to this application...". As Lockhart J observed in Sterling Pharmaceuticals:

"There is obviously a substantial difference between a motion for a permanent stay or dismissal of a proceeding and a motion for a temporary stay or lengthy adjournment of a case. The Court remains in full control of the proceeding before it when is stayed only temporarily or where, as I propose, the proceeding will be stood out of the list for a substantial time."

• [21] The crux of the applicant's case, as expressed in the conditional notice of intention to defend, the affidavit material, and at least in the first set of submissions filed on his behalf is that the issue about whether the $200,000 was a loan or a gift to the applicant or the applicant and his wife, should proceed in the Family Court and not the District Court thus rendering the District Court proceeding unnecessary or redundant. But the reality and effect of the applicant's submission is the applicant is seeking a permanent stay, not a temporary stay as he now suggests.
• [22] It follows that the applicant's submission that the stay is only sought pending the determination of the Family Court proceedings and that the District Court proceedings could be subsequently re-enlivened does not bear scrutiny. The whole point of the application is that there is no need for these District Court proceedings to be on foot and that the issue can be determined or resolved in the Family Court jurisdiction. The applicant's analysis of the factors for my consideration sought to emphasise that the issues to be tried between the parties in both proceedings on foot are the same and that the existence of the District Court proceedings are oppressive or vexatious for this reason. To suggest now as they do, for example, that the Family Court proceedings could be discontinued and the issue of the indebtedness will remain unresolved such that the District Court proceedings could be enlivened, is most speculative and unlikely and flies in the face of all the applicant's arguments before me.
• [23] I do not accept that this is a temporary stay. That submission seems to be an attempt to maintain that the Sterling Pharmaceuticals factors apply. It follows that I accept the respondent's submission that the applicable test is that articulated by the High Court in the decision of Voth.

• [24] The respondent's submissions do not set out what the Voth test is in detailed terms but do accept that there will be circumstances where a plaintiff's choice of forum is oppressive or vexatious to a defendant and in such a case the court will have the power to stay. In Voth the High Court held (at page 141) that an Australian court should only decline jurisdiction that has been regularly invoked if it is satisfied that the forum is "clearly inappropriate" by reference to the factors outlined by Deane J in Oceanic Sunline Special Shipping Inc v Fay [1988] HCA 32; [1988] 165 CLR 197 at 247 to 248. Relevantly, Deane J observed in that case (at 247 to 248):

"The power to stay proceedings should only be exercised in a clear case and the onus lies on the defendant to satisfy the local court in which the particular proceedings have been instituted that is so inappropriate a forum for their determination that their continuation would be oppressive and vexatious to him."

• [25] The majority in Voth accepted that the inquiry to be conducted by the primary judge is not one of weighing those factors that point towards a stay against those that point away or of weighing one forum against the other. Instead, the inquiry requires me to assess whether the factors indicate that the forum court, here the District Court of Queensland, is clearly inappropriate. The subsequent cases have accepted that this is a high hurdle and that the onus rests squarely on the applicant (see, for example, Regie Nationale des Usines Renault SA v Zhang [2002] HCA 10; [2002] 210 CLR 491 and Puttick v Tenon Limited [2008] HCA 54; [2008] 238 CLR 265).
• [26] The applicant's submissions are largely premised on the assumption that the inquiry that I should undertake is a weighing up of the suitability of the two forums. That is, for the reasons I have already given, not correct. From what I can best discern the applicant's argument that the District Court proceedings are designed really to harass or embarrass the applicant is premised on what occurred in the lead up to the settlement of the sale of the former matrimonial home.

• [27] There are several circumstances in this case that are relevant to determining whether, in accordance with the Voth test, the District Court of Queensland is a clearly inappropriate forum. First, the applicant contended the District Court proceedings were filed first. The applicant points me to the observations of Dawson, McHugh and Gummow, and Gaudron JJ in Henry that:

"It is prima facie vexatious and oppressive in the strict sense of those terms to commence a second or subsequent action in the courts of this country if an action is already pending with respect to the matter in issue."

• [28] This authority does not support any argument that the District Court proceedings are clearly inappropriate. Indeed, it is the Family Court proceedings that would be the subject of the presumption identified in Henry. In this respect it is immaterial, in my view, that, as the applicant submits, the District Court proceedings have not progressed past the filing of a claim and statement of claim and only have a combined length of six pages.
• [29] Secondly, I am satisfied that the District Court has jurisdiction to hear the matter. Under the Voth test, as I have already observed, it is not open to me to weigh one forum against the other. The inquiry is not which is more appropriate, yet their Honours noted in Voth at 32 that:

"The availability of relief in a foreign forum will always be a relevant factor in deciding whether or not the local forum is a clearly inappropriate one."

• [30] Given the recent decision of Chang v Yung [2021] QDC 68 I requested further submissions from the parties in relation to whether the Family Court has exclusive jurisdiction over this proceeding. The applicant's submissions do not seriously, in my view, suggest that this is the case and do not persuasively argue so. What the applicant submitted is that the overarching dispute arises from and is integrally involved in the matrimonial relationship between him and his former wife and his mother-in-law.
• [31] Whilst I accept that this is not necessarily a straightforward debt recovery matter and there may be the need to join the applicant's former wife, Petea, the issues are discrete, and the District Court clearly has jurisdiction in relation to this dispute. Even if Petea is joined as a party it is not a matter within the exclusive jurisdiction in terms of the Family Law Act. In Henry it was observed at 589 that:

"Voth is not authority for the proposition that [t]he selected forum will not be seen as inappropriate if it is fairly arguable that the substantive law of the forum is applicable in the determination of the rights and liabilities of the parties. Rather, it was said in the majority judgment that "the substantive law of the forum is a very significant factor in the exercise of the court's discretion, but the court should not focus upon that factor to the exclusion of all others"

• [32] It follows that the fact that the District Court can hear the matter is persuasive that it is not a "clearly inappropriate forum" although it is not necessarily decisive.
• [33] Thirdly, the applicant submits that:

"Having regard to the actions of the Respondent which include asserting that she is a creditor of Petea and attempting to redirect funds from the purchaser of the former matrimonial home, it would be open to the Court to find that the District Court proceedings are vexatious and/or an abuse of process."

• [34] The applicant submitted that the respondent's alleged duplicity raises the question of the proceedings being an abuse of process designed to advantage the respondent's daughter and to vex the applicant.
• [35] I do not accept the respondent's submission that these circumstances alone characterise the District Court proceedings as oppressive or vexatious for several reasons. The applicant submitted that the family law proceeding is uncomplicated and should proceed to mediation within six months of the first return date of 20 July 2021 or hearing by the end of 2022. There is some tension in this submission because it overlooks that the family law proceeding is perhaps more complicated by this dispute about the moneys being a loan or gift. The applicant points to a double up of time and costs and expense but the submission is difficult to understand. The work required to have the issues about the moneys determined will in reality, in my view, only need to be undertaken once.
• [36] Ultimately, if the applicant is successful in showing that the moneys are not a loan repayable on demand by him (I accept the respondent's case is inconsistent with her actions in having her daughter sign an irrevocable authority in the way she did) then there will be no prejudice to the applicant as he will likely obtain a costs order against the respondent in this case. On the material before me there is no concern from the applicant's perspective that any consequential costs order could not be met by the respondent. And if there are concerns, applications can be made.
• [37] In my view, contrary to the submission of the applicant, the interests of justice warrant this Court determining the discrete issue of the characterisation of these moneys away from the fray of the Family Court proceeding. It follows that I do not accept that the District Court proceedings are oppressive. I accept that the applicant advised the respondent right from the outset of the demand and prior to both proceedings being commenced that the funds advanced by her were a gift and were part of the matrimonial dispute and that any attempt to recover those funds he would be left with no option but to commence Family Law proceedings, join her as a party and seek a determination as to whether those funds were repayable.
• [38] The fact the respondent got in first, so to speak, does not make her actions vexatious or the proceedings oppressive. The applicant might prefer to have, or consider it more convenient to have, the issues about the moneys ventilated in the Federal Circuit Court but, as I have said, the test is not whether the appropriate jurisdiction is that of the Federal Circuit Court. It follows that I'm not satisfied that the District Court of Queensland at Southport is a clearly inappropriate forum.

Alternative - if the stay sought is properly characterised as temporary

• [39] Even if I am wrong about my characterisation of the application as a permanent stay to the effect that the Sterling Pharmaceuticals test applies, I am of the view that even on that test the stay application should be dismissed.
• [40] The inquiry involved in that test, in contrast to the Voth test, is to weigh up the two available forums according to the criteria set out at paragraph 20 of the Sterling Pharmaceuticals decision, which include:
  • which proceeding was commenced first;
  • whether the determination of one proceeding was likely to have a material effect on the other; public interest;
  • the undesirability of two courts competing to see which of them determines common facts first;
  • a consideration of circumstances relating to witnesses;
  • whether work done on pleadings, particulars, discovery, interrogatories and preparation might be wasted;
  • the undesirability of substantial waste of time and effort if it becomes a common practice to bring actions in two courts involving substantially the same issues;
  • how far advanced proceedings are in each court; that the law should strive against the bringing of multiple proceedings in relation to similar issues;
  • generally balancing the advantages and disadvantage to each party.
• [41] The first factor weighs in favour of the District Court proceedings which were commenced first in time. The remaining factors, in my view, can be divided into three categories: the convenience of the parties; the potential for waste of time and effort; and the public interest in avoiding parallel proceedings.
• [42] The first category contemplates, as is the situation in many applications of this kind, that the witnesses and parties may be located somewhere other than in proximity to the forum court. This is not the case here. Because the consideration is between a State Court and the Federal Court in the same state, the convenience of the parties, in my view, does not weigh one way or the other.
• [43] In considering the second category, neither proceeding is, on the facts, particularly advanced in relation to the common issues between them. I do not accept, as the applicant submits, that there will be more work to be done in preparing for the proceedings if both continue. This is for the reasons I have already discussed about the work needing to be done regardless of whether both proceedings continue or not.
• [44] The applicant referred to the observation of Wootten J in McMahon v Gould [1982] 7 ACLR 202, cited with approval by the Queensland Court of Appeal in White v Australian Securities Investments Commission [2013] QCA 357, and which the Applicant says forms part of the line of authorities stemming from Sterling Pharmaceuticals. The observations of the Court in that case were as follows:

"Prima facie a Plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the Court. It is a grave matter to interfere with this entitlement by a stay of proceedings which requires justification on proper grounds."

• [45] It follows that to consider this category of consideration as weighing in favour of a stay I must be satisfied that there would be a significant multiplication of the preparatory work required. I do not accept this to be the case. By the applicant's own submission there is a substantial overlap in the issues on foot in each proceeding and, for the reasons already stated, witnesses are equally available in relation to each proceeding. I am therefore of the view that the second category of consideration, that is, the potential for waste of time and effort does not weigh in favour of the District Court proceedings being stayed.
• [46] In relation to the third category, I accept unequivocally that there is public interest in avoiding parallel proceedings and all of the ambiguities that can potentially arise from them. But in this case the District Court proceeding concern a discrete issue of the characterisation of moneys as a gift or a loan. The Federal Circuit Court proceeding, which the applicant has subsequently brought, includes a determination of that issue but in the broader context of all of the Family Law matters to be resolved between the applicant and his former wife. So the respondent to the current proceeding is technically only involved in part of that overall dispute. There is significant potential for benefit, in my view, in the issue of the characterisation of the loan or gift being resolved in this Court independently. There is nothing to suggest that the consequences of whatever order may be made by the District Court cannot be dealt with in the Family Court proceeding. The issue will then not need, hopefully, to be part of the Family Court determination.
• [47] On any realistic view, as a matter of common sense and knowledge given the backlog in the Federal Circuit Court, those proceedings will likely be determined at a later point than this proceeding. If they do happen to settle or are resolved earlier in time I would imagine that such a settlement would sensibly include the realisation of the issue of these moneys. If that happens I would expect that the District Court proceedings could be discontinued. For these reasons I am of the view that the third category of consideration, the public interest in avoiding parallel proceedings and the interests of justice in this case do not necessitate the granting of a stay.
• [48] Therefore, if I am incorrect in my categorisation of the stay as being a permanent one and it is properly characterised as temporary, I remain satisfied that the application should be dismissed.

• [49] I therefore order that the application for a stay be dismissed.