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[2003] FamCA 240
appellant. Appeal allowed; leave granted to join DK Bishop & Co Pty Ltd (as trustee of The Bishop Family Trust), the partnership DK Bishop & Co, Donald Keith Bishop, Yvonne Phyllis Bishop and The Bishop Land...
The Full Court allowed the wife's interlocutory appeal from Dawe J's refusal to join the husband's parents and related trusts/companies to ongoing property proceedings under s 79. The Court held the Family Court has accrued jurisdiction to determine non-federal claims that are attached to the matrimonial property controversy; where the parties' finances are so intermingled that the parties' asset pool cannot be ascertained without resolving disputes involving those third parties, joinder is appropriate. On the uncontested facts and lack of opposition, the Full Court found the trial Judge erred in declining joinder and ordered the specified parties to be joined.
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1,707 words · generated 28/06/2026
This appeal concerned an interlocutory application in part-heard s 79 matrimonial property proceedings. The wife sought to join the husband's parents and several related entities (the partnership DK Bishop & Co; DK Bishop & Co Pty Ltd as trustee of The Bishop Family Trust; The Bishop Land Trust, and potentially other family trusts) to the Family Court proceedings. The relief sought against those third parties was principally the taking of accounts and declarations to clarify monies owing between the family trusts, partnership and the husband and wife, and in one respect (later abandoned) orders relating to limiting bank security, and a discrete request to sell a vehicle held by a trust (paras 1–3, 11–17, 39–41).
Dawe J dismissed the wife's joinder application (paras 3, 18–26). The wife appealed; leave to appeal was required because the order was interlocutory (s 94AA), and the Full Court heard the matter. The Full Court granted leave and allowed the appeal, ordering joinder of DK Bishop & Co Pty Ltd as trustee of The Bishop Family Trust, the partnership DK Bishop & Co, Donald Keith Bishop and Yvonne Phyllis Bishop, and The Bishop Land Trust (paras 5–6, 43–46). The Full Court concluded that the trial judge had erred in principle by failing adequately to consider the full gamut of factors relevant to the Court's accrued jurisdiction, and that refusal to join worked a substantial injustice given the intermingled financial affairs (paras 35–44).
Two linked legal questions drove the decision:
Was leave to appeal appropriate? The Full Court applied the established interlocutory appeal test (Rutherford and authorities): there must be an error of principle and the decision must impose substantial injustice (para 6). The Court found both elements present because the trial Judge's reasoning contained a significant error of principle in handling accrued jurisdiction and the wife's inability to join relevant third parties would substantially prejudice her capacity to ascertain the property pool for s 79 orders (paras 5–6, 43–44).
Should the Family Court exercise its accrued jurisdiction to join third parties? The Court began by restating the nature and tests for accrued jurisdiction. It accepted that the Family Court, being a federal court, can exercise accrued jurisdiction to decide state-law or non-federal matters where they are integral to the federal controversy (paras 13, 34). The jurisprudential test requires an evaluative judgment whether the federal and non-federal claims form a single justiciable controversy; factors to be taken into account include what the parties have done, their relationships, the laws applying to their conduct, whether the claims are attached and non-severable, whether they arise out of a common sub-stratum of facts, and whether the Family Court can grant appropriate remedies (paras 13, 34–35, citing Warby and Warby).
The trial judge focused mainly on severability and whether the Court could resolve the matrimonial property without resolving the third-party disputes (paras 21–26). The Full Court accepted that severability/common sub-stratum are important, but held the trial judge neglected to analyse the first, second, third and sixth indicia from Warby, in particular, the intimate interrelationship of the parties' finances, the positions and conduct of the parties and the adequacy of Family Court remedies (paras 35–41). On the undisputed factual material, the Full Court concluded the parties' and the proposed third parties' financial affairs were so intertwined that it was impossible to ascertain the parties' net assets and liabilities without determining the accounts and claims involving the third parties (paras 36–37, 43–44). Given the lack of opposition by the proposed joinees at the trial and appeal, the Court concluded a judge should be slow to refuse joinder where it is necessary for the Court to perform its principal s 79 function (paras 38, 43).
Before: The Family Court's ability to exercise accrued jurisdiction had been the subject of debate. The Full Court cited authorities (Philip Morris, Stack, Fencott, Re Wakim) that established the concept of accrued jurisdiction in federal courts, and earlier Family Court authorities debating whether that extended to the Family Court (para 13). Warby and Warby established clear guidance that the Family Court may exercise accrued jurisdiction where appropriate and set out the relevant indicia for assessing such an issue (para 34).
After: Bishop v Bishop applies Warby and the broader principles coherently to joinder applications in property cases. It emphasises that trial judges must assess all Warby indicia, not merely severability/common sub-stratum, and that where financial intermingling makes it impossible to determine the s 79 pool without resolving third-party disputes, the Family Court should exercise accrued jurisdiction and permit joinder (paras 34–37, 43). The case reinforces that leave to appeal will be given where a trial judge's narrow focus on severability causes substantial injustice.
"There must be an error of principle demonstrated and the decision appealed from must impose a substantial injustice on one of the parties." (para 6)
"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..." (para 21, quoting Fencott)
"The purpose of exercising accrued jurisdiction is to enable the Court to deal with a single justiciable controversy. This does not mean a single justiciable issue." (para 37)
"Given the intermingling of the affairs of the parties...we are of the view that this was a case in which it was proper to have allowed the joinder..." (para 43)
This authority is engaged where:
By contrast, where the third-party dispute is an entirely arms-length commercial dispute with a public lending authority and the Family Court is plainly an inappropriate forum, accrued jurisdiction may not be appropriate (paras 32–33).
Bishop v Bishop applies and extends Warby by insisting on a holistic, fact-sensitive application of the indicia for accrued jurisdiction. The Full Court emphasised practical justice: when the property pool cannot be ascertained without resolving third-party claims, joinder is appropriate. The case will be relied on by practitioners where parties seek to join related family entities to s 79 proceedings, especially where there is little or no opposition. It also signals appellate courts will scrutinise trial judges who narrowly apply severability tests without assessing the full Warby indicia (paras 34–38).
Practitioners should use Bishop to argue for joinder where documented transfers, trust appointments and on-lending suggest the matrimonial asset pool is entangled with third-party corporate or trust structures, and to resist attempts by trial judges to dismiss joinder on the ground that certain issues are 'severable' without close analysis of relationships, conduct and remedial capacity (paras 35–41, 43).
Limits of Family Court as forum for complex third-party commercial disputes: The Full Court recognised circumstances where the Family Court would be an inappropriate forum, notably where the dispute is an arms-length commercial one involving a public bank, but did not set precise boundaries. Practical criteria to demarcate when the Family Court must decline accrued jurisdiction remain case-sensitive (paras 32–33).
The scope of remedies the Family Court can grant for joined non-federal claims: The Court observed that some relief sought (for example compelling sale and replacement of a vehicle held by a trust) might be beyond its power (para 40). The extent to which the Family Court can fashion effective remedies between parties and third parties, and whether such orders will be enforceable or merely declaratory in inter partes proceedings, may require further clarification on a case-by-case basis.
Interaction with issue estoppel and later State proceedings: The Full Court noted that findings in inter partes Family Court proceedings may operate as issue estoppel in subsequent State proceedings (para 40). How that operates practically, especially where joinder leads to findings against entities not ordinarily within the Family Court's usual remit, could be the subject of subsequent litigation.
Discretion versus definition in accrued jurisdiction: The judgment reiterates the tension in authorities between describing accrued jurisdiction as discretionary and treating the question as one of defining the 'matter'. Although Bishop follows an evaluative approach, future cases may further refine whether the discretion to decline jurisdiction is exceptional or an inherent part of the evaluative exercise (paras 27–31).
Conclusion
Bishop v Bishop is a practical, fact-driven Full Court decision reinforcing that the Family Court should exercise its accrued jurisdiction where doing so is necessary to determine the s 79 property pool. The decision underscores the need to assess all Warby indicia, not only severability, and to be cautious about refusing joinder where financial affairs are intermingled and no real opposition exists. Practitioners should rely on this authority when seeking joinder of family entities in complex matrimonial property matters, while remaining mindful of the residual limits of the Family Court as an appropriate forum for certain commercial disputes.
OF THE FAMILY COURT OF AUSTRALIA Appeal No SA62L of 2002
APPEARANCES: Ms Pyke of Counsel, instructed by Deegan Bedson, Solicitors, Level 4, 22 Grenfell Street, Adelaide, SA 5000, appeared on behalf of the Appellant Wife.
No appearance by or on behalf of the Respondent Husband.
CATCHWORDS: PROPERTY - ascertainment of property pool - parties involved in farming ventures with husband's parents and associated entities - third party issues -accrued jurisdiction - joinder application - whether facts raise one justiciable controversy - whether joinder appropriate
Appeal allowed. Leave granted to join the third parties.
1. In the midst of part-heard property proceedings between a husband and wife, the wife sought to join, as respondents to the proceedings, the husband's parents and two associated entities.
• that accounts be taken and declarations made, the effect of which would be to clarify the financial position of the husband and the wife;
• an order requiring that the husband, his parents and one of their companies to sign documents that would limit the extent of security given to a lending authority over real property belonging to the husband and the wife;
• an order that she be at liberty to sell a motor vehicle belonging to one of the entities (a discretionary trust) and apply such proceeds to purchase another motor vehicle.
3. On 11 June 2002 Dawe J heard argument on the wife's application and, in a reserved judgment delivered on 28 June 2002 dismissed such application.
4. This judgment deals with the wife's application for leave to appeal against that dismissal and the appeal itself.
5. Section 94AA of the Family Law Act and Regulation 15A of the Family Law Regulations mandate that leave is required to appeal from an interlocutory decree other than a decree in relation a child welfare matter.
6. The principles to be applied in determining whether leave to appeal should be granted are clearly set out by the Full Court in Rutherford and Rutherford (1991) FLC 92-255 and have been oft repeated. There must be an error of principle demonstrated and the decision appealed from must impose a substantial injustice on one of the parties. It matters not for present purposes whether these tests are to be applied cumulatively or disjunctively as discussed in the joint judgment of Gibbs CJ and Aickin, Wilson and Brennan JJ in Adam P Brown Male Fashions Pty. Ltd. v. Philip Morris Inc. [1981] HCA 39; (1981) 148 CLR 170 at 177. For reasons that will become apparent we are of the view that, on the facts of this case, leave should be granted. There has been a significant error of principle and the decision works "a substantial injustice" upon the wife.
7. Before setting out the background to this dispute it is significant to observe that neither the husband nor the other parties sought to be joined have appeared before us in this appeal. They have not filed any submissions in opposition to the appeal. That was the same position taken by them before the trial Judge. At trial Mr Lindsay, Counsel on behalf of the proposed third parties said that their position was:
"...if your Honour is satisfied there is jurisdiction in the court to make the orders [sought]...we don't want to be heard on it...there's nothing we want to put to your Honour.":
8. Mr Jordan on behalf of the husband adopted the same position as Mr Lindsay.
9. The husband and the wife each filed an affidavit in the property proceedings in accordance with the provisions of Order 30 of the Family Law Rules. In his affidavit the husband asserted the following matters and facts that appear to us to be relevant:
• The husband was born in January 1961. He is one of three siblings and the only son of Donald Keith Bishop and Yvonne Phyllis Bishop.
• The husband's father's family had been farming in the Boolerooo Centre area of South Australia for 120 years. His grandfather had purchased a 700 acre property known as "The Home Property".
• In 1966 the husband's parents purchased a 280-acre property known as "The Pinery Property" and in 1967 they purchased an 1,100-acre property known as "The Plain Property".
• The husband's parents operated a farming business in a partnership known as "DK Bishop & Co" which was established in 1966. The husband became a partner in 1978 when aged 17.
• In 1979 when aged 18 the husband purchased a property known as "Murray Town Number 1" for $112,000 principally financed by a Commonwealth Development Bank loan.
• The parties married in October 1984. They resided at Murray Town Number 1 between 1984 and 1988.
• Early in the marriage the wife was made a partner of the farming partnership DK Bishop & Co.
• Murray Town Number 1 was used as security for loans from the Primary Industry Bank of Australia Ltd (PIBA).
• In November 1984 the husband and the wife jointly purchased Murray Town Number 2 (also known as Hollitts) for $215,000 principally financed by a loan from the ANZ Bank. It formed part of the land farmed by DK Bishop & Co and was used to provide mortgage security for a loan in favour of PIBA.
• The husband and the wife had three children Chloe born April 1987, Abby born November 1988 and Jess born March 1992.
• In 1988 the husband, the wife and their children moved to The Home Property and the husband's parents moved to Murray Town Number 1. In August 1998 the parties separated, with the wife and children leaving The Home Property.
• During the marriage the farming partnership operated over lands owned by the husband, the wife and the husband's parents. There was no direct payment of rental from the partnership to the respective owners of the property. The income of the partnership was divided equally between all the partners.
• In November 1995 the husband's parents established the Bishop Land Trust. DK Bishop & Co Pty Ltd, a company where the husband, the wife and the husband's parents were directors, was appointed as trustee of that trust. The husband's parents were the appointors of the trust and together with the husband and the wife they were among the class of potential beneficiaries. The husband's parents transferred the three properties registered in their name, being The Home Property, The Pinery Property and The Plain Property, to the trust.
• In the financial year ending 30 June 1997 the Bishop Family Trust was established with DK Bishop & Co Pty Ltd as trustee. The partnership DK Bishop & Co was dissolved and all of the assets of the partnership were transferred to the Bishop Family Trust. Amongst the beneficiaries are the husband, the wife, the husband's parents and the parties' children.
• In November 1996 the husband established the Malcolm Bishop Land Trust. The husband was the appointor of the trust and the husband and the wife were its trustees. That trust acquired farming properties known as Slee's in 1996 and Brandon's in 1997 for a total of $637,000. PIBA lent the money to the Bishop Family Trust who on lent the money to the Malcolm Bishop Land Trust.
• The winding up of the partnership and the transfer of its assets to the Bishop Family Trust resulted in various book entries concerning the asserted indebtedness of the parties to either the partnership or the family trust.
10. In her affidavit in support of her application to join the husband's parents and their relevant entities in the proceedings the wife asserted that the partnership ceased to trade in June 1998 and that the capital accounts of the parties were not in deficit at any time after June 1996.
11. The wife further deposed that on 8 September 2000 her solicitors received a letter from Andersons Solicitors, which in so far as is relevant read as follows:
"I act for Donald Keith Bishop and Yvonne Phillis (sic) Bishop, who are the parents-in-law of Alexia Jean Bishop.
I understand that your firm acts on behalf of Alexia Jean Bishop.
I also act for D K Bishop & Co Pty Ltd ACN 071 363 543 of 116 Greenhill Road, Unley in its capacity as trustee of The Bishop Family Trust.
I note that Donald Keith Bishop, Yvonne Phillis (sic) Bishop, your client and her husband Malcolm Donald Bishop were the partners in the partnership known as 'D K Bishop & Co' as at the 30th June 1996.
I advise that as at the 30th June 1996 there was due by your client to the partnership known as 'DK Bishop & Co' the sum of $143,237.22, as evidenced by the Financial Statements of the partnership of D K Bishop & Co for the year ended 30th June 1997, an extract of which is enclosed (*).
I advise that in addition to the above sum there was also due by Malcolm Donald Bishop, the husband of your client, to the partnership known as 'D K Bishop & Co Pty Ltd' (sic) the sum of $180,579.79, as also evidenced by the Financial Statements of 'D K Bishop & Co Pty Ltd' (sic) attached.
I am informed that each of the above debts due by your client and her husband are substantially attributable to payments made in connection with the purchase of land either solely by Malcolm Bishop or jointly by your client and her husband.
I advise that notwithstanding the transfer of the assets of the partnership of D K Bishop & Co to D K Bishop & Co Pty Ltd (as trustee of The Bishop Family Trust), that each of the above debts is still outstanding.
My clients hereby give your client notice they require repayment by your client of the aforesaid sum of $143,237.22.
I am forwarding a similar letter to Chapman & Associates, the solicitors for Malcolm Humphris (sic)."
12. Then, on 9 January 2002, a further letter was written by Andersons to Deegan Bedson, which included this statement:
"I advise that unless payment of the sum of $143,237.22 due by your client to my clients is made to my clients by Friday the 8th February 2002 or satisfactory arrangements for repayment of that sum to my clients are agreed between our respective clients by Friday the 8th February 2002 that I have instructions to institute legal proceedings against your client for recovery of this sum."
13. The wife further deposed that as at 30 June 2000 $1,038,987 was due and owing to PIBA by DK Bishop & Co Pty Ltd. The husband and the wife collaterally secured the borrowings of The Bishop Family Trust from PIBA. Brandon's and Slee's were sold pursuant to an interlocutory order and the net proceeds of sale of $419,068.14 were to be applied in reduction of loans to PIBA.
14. In addition to the sale of Brandon's and Slee's, after separation the parties sold both Murray Town Number 1 and Hollitt's. These sales generated $539,289.41 in net proceeds. Those monies were paid to PIBA in reduction of collateral security.
15. The wife asserted that almost $1 million has been paid to PIBA from properties that belonged to the husband or the husband and the wife. She further asserted that those funds were approximately $400,000 more than the parties' indebtedness to PIBA, the necessary implication being that The Bishop Family Trust has received the benefit of the reduction in its liabilities at the expense of the parties.
16. The wife asserted that in order to ascertain the totality of the property available for distribution as between the husband and the wife in the proceedings before the Court, it was necessary to determine the extent to which there is any validity in the claims on behalf of the husband's parents and their associated entities that the parties were indebted to them. It was further necessary to determine the wife's claim as to the extent to which those associated entities were indebted to the parties.
17. She further asserted that the financial affairs of herself, the husband, his parents and the associated entities were so intertwined that it was impossible to work out the necessary facts required by the Family Court to carry out its role without unravelling the same facts in the apparent disputes between the husband's parents, their associated entities and the parties.
18. Her Honour summarised the facts relevant to the application before her in the following manner (emphasis added):
"6. The factual basis for the wife's application is set out in her affidavit sworn on 3 May 2002.
7. The properties of the parties were purchased through an entity called the Malcolm Bishop Land Trust. The husband was the Appointor of this trust, and the husband and the wife are trustees.
8. To finance the acquisition of these properties monies were borrowed from the Bishop Family Trust, of which the trustee is DK Bishop & Co Pty Ltd. The directors of this trustee company are the husband and his parents. The debt that the Malcolm Bishop Land Trust owes to the Bishop Family Trust was alleged to be $565,568.43 as at 30th June 2000. There was nothing alleged to be owing to the partnership by the husband and the wife in the accounts as at 30 June 1996.
9. It appears that DK Bishop & Co Pty Ltd (through the Bishop Family Trust) also borrowed monies from the Primary Industry Banking Association (PIBA) to facilitate the running of the farm and other enterprises. The Bishop Family Trust then on-lent these moneys to the husband and the wife. However the Bishop Family Trust then borrowed further amounts from PIBA in relation to transactions which were separate from the husband and the wife. To secure the totality of borrowing, PIBA then took security over properties belonging to both the husband and wife, the husband, the Malcolm Bishop Land Trust, and the husband's parents.
10. The wife then outlines in her affidavit that she has now received two Notices of Demand from the husband's parents for monies they allege are owed to the partnership by both the husband and the wife.
11. The wife therefore seeks to join the above named parties and seeks accounting and declarations as to the monies owing by and to these other parties."
19. Whilst this summary is to be praised for its simplicity, it does not do justice to the complicated factual matrix and the history of family and commercial dealings that occurred between the parties to the marriage and the parties sought to be joined to the proceedings.
20. Her Honour identified the primary issue before her as follows:
"12. The main issue that needs to be determined on this application is whether this is the kind of situation in which the Court should exercise its accrued jurisdiction to allow the wife to join the proposed parties to the part heard s.79 proceedings."
21. Her Honour then referred to the series of authorities that established the existence and nature of accrued jurisdiction both in the Federal Court and this Court:
"13. It has been determined that the Federal Court of Australia is invested with accrued jurisdiction: Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457; Stack v Coast Securities (No 9) Pty Ltd [1983] HCA 36; (1983) 154 CLR 261; Fencott v Muller (1983) 152 CLR 570; Re Wakim; Ex Parte McNally & Ors (1999) 198 CLR 511. There has been some debate as to whether this power extends to the Family Court of Australia; Ferrall and McTaggart & Ors v Blyton [2000] FamCA 1442; (2000) FLC 93-054; C and C and C: Accrued Jurisdiction [2001] FamCA 459; (2001) FLC 93-076; Wade-Ferrell and Wade-Ferrell and Read [2001] FamCA 138; (2001) FLC 93-069. This Court is provided with assistance by the recent Full Court decision of Warby and Warby [2001] FamCA 1469; , where it was determined that there was no reason to distinguish the Family Court from any other federal Court on this issue. This means that the Family Court, by virtue of it being invested with federal jurisdiction, also has the power to determine non-federal aspects of any justiciable controversy which involves the exercise of its federal jurisdiction, provided that the they form an integral part of the federal issue.
'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 relationships. 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.'(Fencott v Muller (supra) at 608)"
22. Her Honour thereafter restated the question she had earlier identified for herself in her paragraph 12 where she said:
"20. The real question to be determined is whether this is a circumstance in which the Court should exercise its accrued jurisdiction? The wife uses the recent Full Court case of Warby and Warby (supra) as authority for the granting of the application."
(a) Whether the claims are part of a single justiciable controversy and in determining that question whether the claims are 'attached' and not 'severable' or 'disparate'
21. This dispute does not concern a single asset of the parties, but extends to a group of properties owned by different entities. This does not suggest that the matters are part of a single controversy. The question here becomes can the federal question be resolved without the determination of the non-federal question? In this situation it is clear that the Court can determine and settle the property of the parties (as it had already begun doing) without the granting of this application, and that there are more appropriate forums for the determination of the other matters.
22. The orders sought by the wife are framed broadly. The wife says that the orders sought are of the type, range and quality sought daily in the Family Court and many of them can be made pursuant to s.78 Family Law Act in any event. I disagree. The nature of these orders suggests an entirely more complex scenario."
"Common Sub-stratum of Facts
(b) Whether the claims are non-severable from a matrimonial cause and arise out of a common sub-stratum of facts"
her Honour said that the fact that, during the currency of the proceedings, it became obvious that PIBA were taking more security than that which the wife believed was proper was "a separate issue".
25. In response to the submission from the wife that she would suffer hardship and be forced to take separate actions in different courts, her Honour said that the inconvenience of having to go to different courts to obtain the required information was not an argument which could or should invoke the accrued jurisdiction of the Court.
26. Whilst there was a connection between the facts in dispute between the wife and the third parties it did not, in the reasons of her Honour, form part of a common sub-stratum of facts between the wife and the husband. Her Honour concluded that the issues and proceedings sought to be litigated between the wife and the various third parties were "severable and not integral parts of the matrimonial property proceedings".
27. As the cases talk of it being "a matter of impression and of practical judgment" whether or not a case attracts accrued jurisdiction we recognise that different judicial minds might reach different conclusions on common facts. Thus the answer to a question of whether or not a case attracts accrued jurisdiction is akin to the exercise of judicial discretion. However it is an exercise of judicial discretion that leads itself to ready scrutiny by an appellate court. It is not a discretion that turns upon the unique position of a trial judge. Even where a case clearly attracts accrued jurisdiction there is still a discretion in the Court as to whether to exercise that jurisdiction.
28. We think it useful to set out the discussion on this issue by French J, with whom Beaumont and Finkelstein JJ agreed, in Johnson Tiles Pty Ltd v Esso Australia Ltd [2000] FCA 1572). We see no reason to depart from his Honour's approach where he said under the heading The Discretionary Character of the Accrued Jurisdiction...":
"90 The exercise of the accrued jurisdiction has been described as discretionary. In Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd at 475, Barwick CJ said, without elaboration:
'This exercise of this jurisdiction which for want of a better term I shall call "accrued" jurisdiction is discretionary and not mandatory, though it will be obligatory to exercise the federal jurisdiction which has been attracted in relation to the matter.'
Barwick CJ went on to say of the discretion which he had identified:
'But, I would add that there would need to be very good reasons why a court which could resolve the whole matter should refuse or fail to do so. Generally speaking, one would expect that a court, once its federal jurisdiction is excited or attracted, would proceed to resolve the whole matter in relation to which federal jurisdiction had been attracted.' (475-476)
The notion of a federal jurisdiction concurrent with that exercised by State courts and exercisable subject to the Court's discretion is not novel. In diversity jurisdiction under section 75(iv) of the Constitution the High Court could decline to adjudicate if the matter were more appropriately dealt with by a State court which had concurrent jurisdiction by virtue of s 39(2) of the Judiciary Act 1903 - R v Langdon; Ex parte Langdon [1953] HCA 66; (1953) 88 CLR 158 at 161 and 163 (Taylor J) and see the discussion by Lindell, Duty to Exercise Judicial Review in Zines (ed ) Commentaries on the Australian Constitution, Butterworths (1977) pp 151-157 and Lindell, The Justiciability of Political Questions: Recent Developments, in Lee and Winterton (eds), Australian Constitutional Perspectives, LBC (1992) pp 218-223. The law relating to choice of forum and forum non-conveniens in Australia also supplies examples of circumstances in which a court having jurisdiction in a matter may nevertheless decline to exercise that jurisdiction where the court decides it is 'a clearly inappropriate forum' - Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538 at 559. In the joint judgment in that case however the discretion to decline jurisdiction was put as an exception to a general rule:
'Granted that there is an obligation on the domestic courts of this country to exercise jurisdiction which is conferred upon them - a matter on which the majority in [Oceanic Sun Line Special Shipping Co Inc v Fay [1988] HCA 32; (1988) 165 CLR 197] was united - it does not extend to cases where it is established that the forum is clearly inappropriate.' (559)
And in rejecting the approach taken by the House of Lords in Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460, their Honours said:
'To say, in line with the Spiliada approach, that the selected forum is justified in refraining from exercising its jurisdiction when it concludes no more than that another available and competent forum is more appropriate is to acknowledge that a court can decline to perform its obligation to exercise jurisdiction even though it is an appropriate or not inappropriate court. That proposition is by no means easy to sustain as a matter of legal principle, though we acknowledge that the argument deriving from the obligation to exercise jurisdiction has less force in its application to cases falling within the extended jurisdiction where the plaintiff is required to obtain leave to serve outside the jurisdiction. The court then has a discretion to exercise and in exercising that discretion it may have regard to appropriate forum considerations.'
As Lindell comments in Lee and Winterton (op cit) at 221, the existence of a duty to exercise jurisdiction does not preclude the existence of exceptions based on the availability of a more appropriate alternative court as it does not deprive a litigant of access to a court altogether. While Voth and Oceanic Sun Line were concerned with the exercise of jurisdiction by an Australian domestic court in the case where a foreign court would also have jurisdiction, the propositions for which Voth is now authority grow out of the general principle recognised in both cases that a court having jurisdiction has an obligation to exercise it. The circumstances in which it may decline that obligation are exceptional. That is also consistent with the approach taken by Barwick CJ in the passage already cited from his judgment in Philip Morris.
91 The application of the discretion in relation to accrued jurisdiction is complicated by a functional overlap, apparent from the cases, between definition of the content of the jurisdiction and the discretion whether to exercise it. The joint judgment of Mason, Brennan and Deane JJ in Stack v Coast Securities (No 9) Pty Ltd [1983] HCA 36; (1983) 154 CLR 261 at 294, discussed the approach to the definition of accrued jurisdiction enunciated in Fencott v Muller at 608. That approach involved the application of 'impression and practical judgment' in deciding whether a federal and non-federal claim are within the ambit of the one controversy or matter before the Court. The joint judgment in Stack commented at 294:
'Barwick CJ in Philip Morris had expressed a similar idea, stating that the exercise of the accrued jurisdiction "is discretionary and not mandatory". In expressing this opinion, Barwick CJ expressly acknowledged that the Federal Court had a discretion to allow the non-federal claim to be determined in a State court.'
Their Honours seemed to treat the evaluative assessment of the scope of the accrued jurisdiction in a particular case as overlapping with the determination whether it should or should not be exercised in that case. This appearance is reinforced by the subsequent proposition, in the joint judgment, that in exercising the discretion the Federal Court will have regard to the considerations mentioned in Fencott v Muller. The latter case had to do with the scope of the accrued jurisdiction.
92 The discretionary character of the accrued jurisdiction was the subject of observation by Gummow and Hayne JJ in Re Wakim; Ex parte McNally when they noted the alignment of the processes for defining the accrued jurisdiction and for deciding whether or not to exercise it which had emerged from the joint judgment in Stack. Their Honours said:
'It is not clear what principles or criteria would inform the exercise of a discretion of this kind. It may be that the better view is that the references to "discretion" are not intended to convey more than that difficult questions of fact and degree will arise in such issues - questions about which reasonable minds may well differ. It is, however, not necessary to decide what is meant by the references to discretion in this context.' (588)
As a matter of logic, it is an evaluative rather than discretionary approach which must be applied in determining the content of the Court's accrued jurisdiction. No doubt there is a functional, as distinct from conceptual, convergence as assessment of the scope of the jurisdiction will involve consideration of matters of convenience particularly when deciding whether the federal claim is to be regarded as a substantial part of the controversy - Fencott v Muller at 609 quoted above. But as a matter of language the process of definition of the content of the jurisdiction logically precedes the discretion about whether to exercise the jurisdiction properly defined. And in my opinion that is how this Court, consistently with the language used by the High Court should continue to treat discretion. In doing so, it would be bound to take the functional approach indicated in the judgments of the High Court to which reference has been made."
29. The High Court examined some issues of accrued jurisdiction in Australian Securities and Investments Commission v Edensor Nominees Pty Ltd; Edensor N (2001) 204 CLR 559. At issue was the jurisdiction and power of the Federal Court to make orders inter partes where the Federal Court properly seised of a Federal matter sought to grant additional relief between the same parties arising under a State law that gave jurisdiction to a State court. When discussing the existence of any discretion to refuse to entertain the State claim Gleeson CJ, Gaudron and Gummow JJ, with whom Hayne and Callinan JJ generally agreed said (footnotes omitted):
"52. ...First, while there are various claims, in these cases there is but one 'matter' in the constitutional sense and the court in question either does or does not have jurisdiction in respect of it. Moreover, in Re Wakim, Gummow and Hayne JJ (with whom Gleeson CJ and Gaudron J agreed generally) expressed doubts as to what was meant by statements in some of the cases that the 'accrued jurisdiction' was 'discretionary' rather than 'mandatory'. Ordinarily, questions of abuse of process, forum non conveniens and the like aside, jurisdiction conferred upon a court is to be exercised."
"As Gleeson CJ, Gaudron and Gummow JJ point out, reference to 'accrued jurisdiction' in a case where federal jurisdiction is attracted because of the identity of a party may distract attention from the central question, which is to identify the relevant 'matter': the controversy which is to be quelled. As their Honours say, ordinarily, questions of abuse of process, forum non conveniens and the like aside, jurisdiction conferred upon a court is to be exercised. References to 'accrued jurisdiction' being 'discretionary' are apt to mislead."
31. The cases frequently seen in this Court are more likely to require the determination of "State" issues involving third parties than issues between the parties themselves. Sections 78,79 and 114 of the Family Law Act provide the Court with a very wide jurisdiction to determine property disputes between parties to a marriage arising out of their marital relationship. There is rarely need to approach the matter by adopting any additional jurisdiction to resolve such disputes. Frequently however, as in this case, the extent of the parties' wealth and the pool of assets and financial resources, net of liabilities, cannot be ascertained without determination of disputes involving third parties.
32. Warby v Warby [2001] FamCA 1469; (2002) FLC 93-091; (2001) 28 Fam LR 443 provides a classic example. A married couple needed the assistance of a parent to acquire the matrimonial home. That parent became a registered proprietor of the property. The extent of the parties' equity in the property was in issue and had to be determined before the Court could properly exercise s 79 power. There seemed little reason why the Court ought to decline jurisdiction. On the other hand the dispute that clouds the extent of a party's wealth may be an arms length commercial one between that party and a public lending authority such as a bank. The Family Court may be an entirely inappropriate forum to decide that dispute.
33. We think some caution and a very careful examination of the facts needs to be exercised before applying the general notion that if a court has jurisdiction it ought exercise it when dealing with claims involving third parties in family law cases. That caution having been said, if, as in this case, the facts support the exercise of accrued jurisdiction, the Court ought not to shy away from it. It is a very important and necessary part of the Court's powers.
34. The matters that a judge of this Court should give consideration to in determining whether a case attracts the Court's accrued jurisdiction were extensively discussed in the recent decision of Warby. There the Full Court (cor Nicholson CJ, Finn and Stickland JJ) dealt with a case stated that asked whether the Family Court had any accrued jurisdiction and if so the circumstances when that jurisdiction might be attracted and exercised. Their Honours said:
"79. We have formed the view that as a matter of law, the Family Court of Australia is not restricted to the determination of a family law claim or proceeding; it may exercise accrued jurisdiction to determine the non-federal aspects of a justiciable controversy of which the family law claim or cause of action forms a part. The factual circumstances of the case will determine whether the jurisdiction arises and whether it is appropriate to exercise the jurisdiction.
...
90. The husband in his submissions has correctly identified from the authorities the matters appropriate to be taken into account in determining whether the Family Court of Australia will exercise its accrued jurisdiction. We agree those matters are the relevant indicia, criteria, factors and considerations. They are as follows:
1. what the parties have done;
2. the relationships between or among them;
3. the laws which attach rights or liabilities to their conduct and relationships;
4. whether the claims are part of a single justiciable controversy and in determining that question whether the claims are 'attached' and not 'severable' or 'disparate'; and
5. whether the claims are non-severable from a matrimonial cause and arise out of a common sub-stratum of facts.
91. We consider that a court's assessment of these matters will allow it to determine whether it should exercise its accrued jurisdiction. As the authorities indicate, a rigid filter is difficult to define without close inspection of the particular facts and we would not wish to create an exhaustive definition which must be applied beyond the circumstances posited in this case.
...
93. In the present case there is a single property that is central to the parties' controversy. The Family Court cannot determine and settle the property of the parties without determining the relative beneficial interests of the parties to the marriage and the wife's father in the property. It is not to the point that a State court could make orders as to the dispute between the parties to the marriage and the wife's father, and that the Family Court of Australia could then determine the family law dispute between the parties to the marriage. It is enough to say that even taking the narrow view of accrued jurisdiction represented by Wilson J's judgment in Philip Morris, in this case 'the federal question could not be resolved without the determination of the non-federal question'. The Family Court of Australia must ascertain as a first step the property pool of the parties available for distribution.
94. We consider that in the present case the accrued jurisdiction of the Family Court of Australia is available to determine the matter. Whether or not the accrued jurisdiction is exercised depends upon the orders sought.
95. ...
Relevant to whether the Family Court of Australia will exercise the Court's accrued jurisdiction in the circumstances posited in question 1 are:
1. what the parties have done;
2. the relationships between or among them;
3. the laws which attach rights or liabilities to their conduct and relationships;
4. whether the claims are part of a single justiciable controversy and in determining that question whether the claims are 'attached' and not 'severable' or 'disparate';
5. whether the claims are non-severable from a matrimonial cause and arise out of a common sub-stratum of facts; and
6. whether the Court has the power to grant appropriate remedies in respect of the 'attached' claims."
35. As indicated by that Full Court, the Family Court of Australia has accrued jurisdiction. The issues to be determined as to whether or not it is appropriate to exercise the jurisdiction generally would involve the consideration of six issues listed above. We read her Honour's reasons for judgment as having paid considerable attention to the fourth and fifth of the issues to be determined, but having neglected to consider properly and evaluate issues one, two, three and six, all of which are appropriate to bring to bear in determining whether or not to allow the joinder of parties to enable the accrued jurisdiction claims to go forth.
36. In this case there can be no doubt that the financial affairs of the husband and the wife are and have been intimately interwoven into the financial affairs of the parties sought to be joined. It is impossible to determine the issues as to the parties' financial affairs without unravelling them.
37. The purpose of exercising accrued jurisdiction is to enable the Court to deal with a single justiciable controversy. This does not mean a single justiciable issue. The present case makes it obvious that there may be many issues but one broad controversy, that being as to what part of the assets of all of the parties is subject to the making of orders of this Court under s 79. The reason why the jurisdiction is exercised is to enable the real issues to be determined between the parties, the underlying purpose being to do justice between them. In applying the tests laid down in Warby, these matters should be borne in mind by judges who are called upon to exercise the jurisdiction.
38. In cases where all that is sought is the joinder of parties, particularly where there is no opposition to it, a judge hearing an application for joinder should be very slow to refuse it. When it comes to the making of final orders different considerations obviously apply, as by that time it will be much clearer as to which issues need to be determined to make appropriate orders under s 79. The reason and purpose for making orders involving third parties should nevertheless be kept firmly in mind.
39. In her Notice of Appeal the wife indicates that she wishes to amend the relief sought against the additional parties so as to seek (emphasis added):
"(a) An accounting and declaration as to the monies due and owing by the Malcolm Bishop Land Trust to the Bishop Family Trust as at the 30th June 2000.
(b) An accounting and declaration as to the monies due and owing by the Malcolm Bishop Land Trust to the Bishop Family Trust as at the 30th June 2001.
(c) An accounting and declaration as to the monies owing by the Bishop Family Trust to the husband, the wife and the Malcolm Bishop Family Trust upon settlement of the sale of the properties known as Brandons and Slees and PIBA exercising their collateral security.
(d) An accounting in respect of monies works and labours contributed by the husband and the wife for and towards improvements, maintenance, and renovation of the property known as the Home Block AND a declaration that the Bishop Land Trust holds such property in trust for the husband and the wife in such proportions to reflect the sums of money, work and endeavours contributed by them to the said Home Block.
(e) That DK Bishop & Co Pty Ltd as trustee of the Bishop Family Trust do pay to the husband and the wife in their personal capacity and as trustee of the Malcolm Bishop Land Trust such [sums] as are due and owing to them pursuant to the aforesaid declaration.
(f) A declaration that the husband and wife were not indebted to the partnership DK Bishop & Co as at the 30th June 1997 and the [30]th June 1998 and are not currently indebted to the partnership.
(g) A declaration that the husband and the wife are not indebted to Donald Keith Bishop and Yvonne Phyllis Bishop or either of them in respect of the partnership KD (sic) Bishop & Co or at all.
(h) That the wife be at liberty to sell the Toyota Landcruiser currently in her possession, the property of DK Bishop & Co Pty Ltd as Trustees of the and to apply the proceeds thereof to the purchase of another vehicle."
40. The relief sought by and large is the taking of accounts and the declaration of liabilities and responsibilities. In proceedings inter partes the findings made may presumably act as an issue estoppel in any further proceedings that may have to be brought in State Courts to give effect to the disputes between the parties. The only relief sought by the wife against the third parties which would appear to be beyond the power of the Court to grant an appropriate remedy is the relief sought in respect of the sale of the motor vehicle and its replacement with another. The relief sought against the company and the husband's parents, requiring them to execute documents limiting the security taken by PIBA appears to have been abandoned.
41. When her Honour came to deal with the preliminary issue raised in these proceedings she was then asked to determine whether it was, or was not, appropriate to join the named parties. Her Honour was not requested to grant the relief sought. We think the time for carefully investigating what final relief should have been then granted in the circumstances of this case had yet to arise. Providing the factual or financial inter-relationship between the other parties was such that it was likely to be necessary to involve them in the proceedings within this Court then, in our view, it was appropriate for her Honour to have then joined such other named and related parties. In particular this would be the case if it was a step necessary for the Court to determine the quantum of net assets and liabilities of the husband and wife and generally their financial circumstances.
42. The question her answer posed was whether this case presented "the kind of situation in which the Court should exercise its accrued jurisdiction". We think the answer to that question clearly is "Yes" on the uncontested facts presented in this case.
43. Given the intermingling of the affairs of the parties, given the lack of opposition to the joinder of the parties, given the necessity to determine issues between all of the parties in order for the Court to exercise its principal jurisdiction in the property proceedings, we are of the view that this was a case in which it was proper to have allowed the joinder of the parties as sought by the wife.
44. Her Honour said in paragraph 21 of her reasons for judgment
"...In this situation it is clear that the Court can determine and settle the property of the parties (as it had already begun doing) without the granting of this application..."
We reach the opposite conclusion to her Honour on that point. It appears to us impossible to ascertain the extent of the parties' assets and liabilities without delving into the issues raised by the wife in her claims against the various parties now to be joined to the litigation.
45. Accordingly, at the conclusion of the hearing we made orders granting leave and allowing the appeal. We gave the wife leave to join
• DK Bishop & Co Pty Ltd as trustee of the Bishop Family Trust
• Donald Keith Bishop and Yvonne Phyllis Bishop and
It will probably be appropriate to join the Malcolm Bishop Family Trust as well but as no order to that effect was sought, none was made.
46. We granted the wife a certificate under s 9 of the Federal Proceedings (Costs) Act 1981.
BISHOP
BISHOP
(1981) 148 CLR 170
(1981) 148 CLR 457
(1983) 154 CLR 261
(1983) 152 CLR 570
(1999) 198 CLR 511
(1953) 88 CLR 158
(1990) 171 CLR 538
(1988) 165 CLR 197
(2001) 204 CLR 559
(2001) 28 Fam LR 443
Appeal allowed; leave granted to join DK Bishop & Co Pty Ltd (as trustee of The Bishop Family Trust), the partnership DK Bishop & Co, Donald Keith Bishop, Yvonne Phyllis Bishop and The Bishop Land Trust; certificate of costs granted (paras 43-46).
14. In order to determine the circumstances in which the accrued jurisdiction should be invoked the High Court has provided assistance: