Bourdon v Outridge

Supreme Court of NSW|2006-05-22|Before: White J

CITATION : Bourdon v Outridge [2006] NSWSC 491 This decision has been amended. Please see the end of the judgment for a list of the amendments.

DECISION : Order that the proceedings be dismissed. That order is made without prejudice to any right of the plaintiff to file, or to seek leave to file, a cross-claim or amended defence in District Court proceedings at Lismore No 3 of 2004. Order that the plaintiff pay the defendant's costs of these proceedings

CATCHWORDS : PRACTICE AND PROCEDURE - Plaintiff and defendant involved in proceedings pursuant to Property (Relationships) Act 1984 (NSW) in District Court of New South Wales - Plaintiff brought proceedings covering same subject matter in Supreme Court of New South Wales claiming beneficial interest under a trust - Whether institution of Supreme Court proceedings an abuse of process or contrary to s 56 Civil Procedure Act 2005 (NSW) - Whether institution of Supreme Court proceedings justified by absence of jurisdiction on part of District Court - - PRACTICE AND PROCEDURE - District Court - Jurisdiction - Jurisdiction of District Court in Equity Proceedings pursuant to s 134(1)(g) District Court Act 1973 (NSW) - Jurisdiction of District Court to make order for financial adjustment under s 20 Property (Relationships) Act - Monetary jurisdictional limit of District Court in proceedings pursuant to s 20 Property (Relationships) Act - Consent jurisdiction of District Court pursuant to s 51 District Court Act - PRACTICE AND PROCEDURE - Application by plaintiff to transfer District Court proceedings to Supreme Court - Application dismissed.

Property (Relationships) Act 1984 (NSW) LEGISLATION CITED : Civil Procedure Act 2005 (NSW) District Court Act 1973 (NSW) Uniform Civil Procedure Rules 2005 (NSW)

Jones v Grech (2001) 27 Fam LR 711 CASES CITED : Evans v Marmont (1992) 42 NSWLR 70 Hughes v Egger [2005] NSWSC 18

Keith Richard Bourdon PARTIES : v Mary Louise Outridge

COUNSEL : Plaintiff: N A Confos (solr) Defendant: P Livingstone

SOLICITORS : Plaintiff: Mark Griffith & Bova Defendant: N/A

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION DUTY JUDGE LIST

2282/06 Keith Richard Bourdon v Mary Louise Outridge JUDGMENT 1 HIS HONOUR: This is an application that proceedings 3/2004, filed in the District Court at Lismore, be transferred to this Court, and that the defendant in those proceedings, who is the plaintiff in these proceedings, be given leave to file an amended defence to that action. The application is brought by a notice of motion filed on 7 April 2006. 2 On 6 January 2004 the present defendant, Ms Outridge, commenced the proceedings in the District Court to which I have referred. In those proceedings she seeks orders under section 20 of the Property (Relationships) Act 1984 (NSW) adjusting the interests of her and the present plaintiff, Mr Bourdon, with respect to their property. Her statement of claim was amended on 2 March 2004. 3 It is common ground that in 1997 the parties jointly purchased a property at 104 Lagoon Street, Narrabeen. In her amended statement of claim Ms Outridge claims an order that Mr Bourdon pay to her 50 percent of the value of the Narrabeen property, or, alternatively, she seeks orders that the property be sold and the net proceeds of sale be divided equally between the parties. 4 She also seeks other orders in relation to the parties' property. She alleges that the Narrabeen property had a value of $600,000 at the date the parties separated, namely, on her case, 6 January 2002. 5 On 7 May 2004, Mr Bourdon filed a defence in the District Court proceedings. In his defence he sought his own substantive relief under the Act. He claimed, amongst other things, that Ms Outridge should be required to transfer to him her interest in the property at Narrabeen on payment to her of $50,000. 6 On 22 November 2005, at a directions hearing in the District Court proceedings, Mr Bourdon's solicitors first raised with Ms Outridge's solicitors their intention to seek a transfer of those proceedings to this Court. No steps were taken to this end in the existing District Court proceedings. Instead, on 7 April 2006, Mr Bourdon commenced separate proceedings in this Court together with the notice of motion with which I am now dealing. 7 The substantive proceedings commenced in this Court have been commenced by statement of claim. They cover the same subject matter as the proceedings in the District Court. 8 In his statement of claim Mr Bourdon seeks, amongst other things, a declaration that he is the beneficial owner of the Narrabeen property and that the defendant, Ms Outridge, holds her interest in that property on trust for him. Alternatively, he seeks a declaration that Ms Outridge holds her interest in the Narrabeen property on trust for him as to 92.5%, and as to 7.5% for herself. Consequential orders are sought in relation to those declarations, which would require Ms Outridge to transfer her interest in the property to Mr Bourdon, either outright, or on payment to her of a sum equivalent to 7.5% of the value of that property. 9 It seems that claims are also made under s 20 of the Property (Relationships) Act for the same relief. It may be that Mr Bourdon also claims in the alternative that he is beneficially entitled to 92.5% of whatever interest Ms Outridge has in the property: possibly 92.5% of 50%. However, these complications need not detain us. 10 By his notice of motion, Mr Bourdon also seeks leave to file an amended defence in the District Court proceedings. The proposed amended defence would, amongst other things, delete Mr Bourdon's claim for substantive relief by way of defence and include a paragraph that Mr Bourdon seeks orders set forth in the cross-claim filed by him. There is no evidence of any cross-claim having yet been filed, but I presume the cross-claim which is referred to would be the statement of claim filed in this Court. 11 Section 19 of the Property (Relationships) Act provides: "In proceedings for an order under this Part, a court shall, so far as is practicable, make such orders as will finally determine the financial relationships between the parties to a domestic relationship and avoid further proceedings between them."

12 It is a necessary consequence of s 19 that the claims and counterclaims of the parties to a domestic relationship should, so far as is practicable, be resolved at the one time, and in the one court. Prima facie, the institution of new proceedings in the Supreme Court is an abuse of process. It is contrary to the dictates of s 56 of the Civil Procedure Act 2005 (NSW) that parties to civil proceedings are under a duty to assist the Court to further the overriding purpose of that Act to facilitate the just, quick and cheap resolution of the real issues in the proceedings. 13 As I understand it, Mr Bourdon's justification for bringing proceedings in this Court, and the original ground upon which the application for the transfer of the District Court proceedings to this Court was brought, is that he contends that the District Court has no jurisdiction to make the declarations and the orders sought in the statement of claim in the Supreme Court proceedings. This is so, it was contended, because the declarations and orders sought in these proceedings invoke the Court's equitable jurisdiction. It was submitted that the District Court had no jurisdiction with respect to those claims. 14 This argument was not supported by reference to the provisions of the relevant legislation. Section 134 of the District Court Act 1973 (NSW) provides: " 134 Jurisdiction in Equity Proceedings (1) The Court shall have the same jurisdiction as the Supreme Court, and may exercise all the powers and authority of the Supreme Court, in proceedings for:

... (g) any application under the Property (Relationships) Act 1984 ...

(3) In any proceedings pursuant to subsection (1)(g) the Court has no power to make an order for financial adjustment under Part 3 of the Property (Relationships) Act 1984 that will or may result in the amount of the adjustment so made exceeding $250,000."

15 The question then is whether the District Court would have jurisdiction pursuant to paragraph 134(1)(g) to make the declarations and orders sought in relation to the parties' existing beneficial interests in the Narrabeen property. The second question is whether it would have jurisdiction to make an order for financial adjustment under s 20 of the Property (Relationships) Act as sought in the statement of claim or whether such an adjustment would be of a value exceeding $250,000. 16 Sections 7 and 8 of the Property (Relationships) Act provide: "7. Other rights of parties to relationship not affected by this Act Nothing in this Act derogates from or affects any right of a party to a domestic relationship to apply for any remedy or relief under any other Act or any other law.

Declaration of Interests in Property (1) Without limiting the generality of section 7, in proceedings between parties to a domestic relationship with respect to existing title or rights in respect of property, a court may declare the title or rights, if any, that either party to the relationship has in respect of the property.

(2) Where a court makes a declaration under subsection (1), it may make consequential orders to give effect to the declaration, including:

(3) An order under this section is binding on the parties to the relationship but not on any other person."

17 Subsection 20(1) provides that on an application by a party to a domestic relationship for an order to adjust interest with respect to the property of the parties to a relationship, or either of them, a court may make an order adjusting the interests of the parties in the property as seems just and equitable, having regard to the matters specified in s 20(1)(a) and (b). 18 Subsection 38(1) empowers a court exercising jurisdiction under the Act to make a wide range of orders, including an order for the transfer of property, an order for sale of property and the distribution of the proceeds of sale in such proportions as the Court thinks fit, an order that any necessary instrument be executed as is necessary to enable an order to be carried out effectively, and any other order, whether or not of the same nature as those mentioned in the other paragraphs of subs 38(1), which the Court thinks is necessary in order to do justice (s 38(1)(a)(b)(c) and (k)). 19 In applications under the Property (Relationships) Act it is not always necessary for a court to determine the beneficial ownership of the property of the parties before making an adjustment order under s 20. An inquiry into beneficial ownership may be subsumed in the wider inquiry under subs 20(1). On the other hand, the Court may determine the parties' beneficial interests in property in such proceedings before deciding whether it is necessary to make any adjustment order, and before deciding what adjustment order, if any, should be made. (Jones v Grech (2001) 27 Fam LR 711 at 722-723; Evans v Marmont (1992) 42 NSWLR 70 at 84; and Hughes v Egger [2005] NSWSC 18 at [100]-[101]). 20 An application for an order adjusting the interests of the parties to a domestic relationship is a proceeding "with respect to" their existing title or rights in respect of their property. In my view, it is clear that under s 8 of the Property (Relationships) Act and subs 134(1) of the District Court Act, the District Court would have jurisdiction to make the declarations sought by Mr Bourdon in the proceedings in this Court, or otherwise to make declarations as to the parties' beneficial interests in the Narrabeen property. The District Court would also have jurisdiction under s 38 of the Property (Relationships) Act to make appropriate consequential orders to give effect to the declarations made as to the title or rights of the parties to the relationship in respect of the Narrabeen property. The monetary limit in subs 134(3) of the District Court Act is not applicable to the exercise by the District Court of jurisdiction under paragraph 134(1)(g) of the District Court Act and s 8 of the Property (Relationships) Act to declare the existing title or rights of the parties to the relationship in respect of the Narrabeen property. 21 As the application was initially presented, this conclusion would be sufficient to dispose of it. However, after I had reserved my judgment on the application over morning tea, the plaintiff sought to re-open to tender a valuation of the Narrabeen property, which had been served on him by Ms Outridge. The valuation is dated 25 October 2004 and values the Narrabeen property at $875,000. This valuation does not affect the District Court's jurisdiction to declare the beneficial interests in the property. However, it would affect the claims made, both by Ms Outridge and by Mr Bourdon for orders under s 20 of the Property (Relationships) Act adjusting the interests of the parties in the property. 22 For her part, counsel for Ms Outridge said that she would not seek orders in the District Court beyond its monetary jurisdictional limit. Counsel for Ms Outridge also said that she would consent to the District Court exercising jurisdiction on Mr Bourdon's claim in excess of the Court's jurisdictional limit of $250,000. Counsel referred to s 51 of the District Court Act and submitted that upon such consent being given, the Court would have jurisdiction to make orders under section 20 of the Property (Relationships) Act to the full extent sought by Mr Bourdon in his statement of claim. 23 Subsection 51(2) of the District Court Act provides: "(2) The Court has, and may exercise, jurisdiction to hear and dispose of an action or cross-claim to which this section applies:

(a) if a party to the action or cross-claim files a memorandum of consent in respect of the action or cross-claim ... ".

24 Subsection 51(1) provides: "5 1 Consent Jurisdiction (1) This section applies to an action or cross-claim that, but for this section, the Court would not have jurisdiction to hear and dispose of by reason only of the fact that the amount claimed exceeds the jurisdictional limit of the Court as at the time the action was commenced ." Subsection 51(3) specifies what are to be taken as the jurisdictional limits of the District Court in actions commenced before 1 July 1993, and in actions commenced after that date but before 18 July 1997. 25 I do not consider that the provision of a consent under s 51 of that Act would expand the jurisdictional limit of the District Court to entertain Mr Bourdon's application for an adjustment order under s 20 of the Property (Relationships) Act. The section applies where the Court would not have jurisdiction, by reason only of the fact that the amount claimed exceeds the jurisdictional limit of that Court when the action was commenced. The section assumes that when judgment is given the amount for which judgment is given does not exceed the jurisdictional limit of the Court. Accordingly, I do not consider that the preparedness of Ms Outridge to consent to the District Court having unlimited jurisdiction to deal with Mr Bourdon's claim under s 20 of the Act is an answer to the alternative ground upon which the application for transfer of the proceedings is brought. 26 The question remains, however, whether an order should be made as sought by Mr Bourdon for the transfer of the proceedings. The appropriate course for Mr Bourdon to have taken when he wished to amend, was to have sought the leave of the District Court to file an amended defence and cross-claim in the District Court proceedings, and to have applied to the District Court for those proceedings to be transferred to this Court. Such an application could appropriately be made under subs 11(2) of the Property (Relationships) Act. 27 Alternatively, it would have been open to Mr Bourdon to apply to this Court under s 140 of the Civil Procedure Act for an order that the proceedings be transferred to the Supreme Court. 28 The present application is brought pursuant to s 140 of the Civil Procedure Act, but it is brought in circumstances where Mr Bourdon has caused proceedings to be proliferated by instituting new proceedings in this Court which deal with the same subject matter as the existing proceedings. If Mr Bourdon brought a cross-claim in the District Court proceedings which was in excess of that Court's jurisdiction, it is very likely that an order for transfer of the entire District Court proceedings would be made to this Court. 29 However, there may be discretionary grounds upon which the District Court could refuse an application by Mr Bourdon to amend his defence and to file a cross-claim. I express no opinion as to whether or not it would be a proper exercise of the District Court's power to refuse Mr Bourdon leave to file a cross-claim seeking the relief sought in the statement of claim filed in these proceedings. It is sufficient to say there may be grounds upon which such leave might be refused. They may include the lateness with which the application is brought. It would seem also that Mr Bourdon would require leave pursuant to subs 18(3) of the Property (Relationships) Act in relation to such a cross-claim, at least insofar as it seeks orders which went beyond the orders foreshadowed in his defence. 30 Again, although I express no opinion as to whether it would be an appropriate course for the District Court to take, it may be that that Court would consider it appropriate to determine as a preliminary issue whether leave should be granted under s 18 of the Property (Relationships) Act for the making of such claims more than two years after the relationship had ceased. 31 In my view, the plaintiff should not obtain any procedural advantage by having brought the present proceedings in this Court which he would not have had had he proceeded as he ought to have done in the District Court. I am conscious that if the present application for a transfer is dismissed, the result may simply be that there are further proceedings in the District Court, which will in due course lead to those proceedings being transferred to this Court. However, it would be wrong to assume what the outcome of any such applications in the District Court would be, and it would be wrong for the plaintiff to obtain procedural advantages by proceeding in the way in which he has. 32 For these reasons, I dismiss the plaintiff's notice of motion of 7 April 2006. I should add that the question of the amendment of the defence in the District Court proceedings is also a matter which should appropriately be dealt with in that Court. I will hear the parties on costs, and I will hear the plaintiff as to whether the existing proceedings in this Court should be dismissed as an abuse of process, or whether they should be transferred to the District Court under s 11 of the Property (Relationships) Act.

COUNSEL ADDRESSED 33 The question then arises as to how the current proceedings should be dealt with. In particular, whether the statement of claim should be dismissed as an abuse of process, or whether the current Supreme Court proceedings should be transferred to the District Court pursuant to subs 11(1) of the Property (Relationships) Act to be dealt with in that Court. 34 If the proceedings are dismissed as an abuse of process, it will be without prejudice to the right of the plaintiff in this Court to seek leave, to the extent leave may be required, to file a cross-claim in the District Court proceedings. For reasons I have given, I consider that the institution of the second set of proceedings covering the same subject matter as the proceedings in the District Court was an abuse of process, and was contrary to the requirements of s 19 of the Property (Relationships) Act. 35 There may be discretionary reasons why the District Court might refuse leave for the current plaintiff to file a cross-claim in the District Court proceedings. If there are such good reasons, the transfer of the existing Supreme Court proceedings to the District Court might embarrass the proper resolution of such issues in the District Court. 36 Accordingly, I order that the proceedings be dismissed. That order is made without prejudice to any right of the plaintiff to file, or to seek leave to file, a cross-claim or amended defence in District Court proceedings 3/2004 at Lismore. I order that the plaintiff pay the defendant's costs of these proceedings. ******

07/06/2006 - Addition of catchwords - Paragraph(s) 0 08/06/2006 - Incorrect counsel named for defendant - corrected. - Paragraph(s) 0

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(2001) 27 Fam LR 711

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