[2016] HCA 2
Cirillo & Cirillo (No 4) [2022] FedCFamC1F 208
Director of Public Prosecutions v Walters (2015) 49 VR 356
[2015] VSCA 303
Djime v Kearnes [2019] VSC 117
Fencott v Muller (1983) 152 CLR 570
[1983] HCA 12
Gett v Tabet (2009) 254 ALR 504
[2009] NSWCA 76
In the marriage of Warby (2001) 166 FLR 319
Source
Original judgment source is linked above.
Catchwords
[2016] HCA 2
Cirillo & Cirillo (No 4) [2022] FedCFamC1F 208
Director of Public Prosecutions v Walters (2015) 49 VR 356[2015] VSCA 303
Djime v Kearnes [2019] VSC 117
Fencott v Muller (1983) 152 CLR 570[1983] HCA 12
Gett v Tabet (2009) 254 ALR 504[2009] NSWCA 76
In the marriage of Warby (2001) 166 FLR 319[2000] NSWCA 353
Kuligowski v Metrobus (2004) 220 CLR 363
[2004] HCA 34
La Macchia v Minister for Primary Industries & Energy (1992) 110 ALR 201
[1992] FCA 673
Mustac v Medical Board of Western Australia [2007] WASCA 128
Nevins v Urwin (2022) 64 Fam LR 640
[2022] FedCFamC1A 57
Nezovic v Immigration and Multicultural and Indigenous Affairs (No 2) (2003) 133 FCR 190
Ex parte McNally (1999) 198 CLR 511
[1999] HCA 27
Rizeq v Western Australia (2017) 262 CLR 1
[2017] HCA 23
Stack v Coast Securities (No 9) Pty Limited (1983) 154 CLR 261
[1983] HCA 36
Taylor v Owners - Strata Plan No 11564 (2014) 253 CLR 531
[2014] HCA 9
Thiess v Collector of Customs (2014) 250 CLR 664
[2014] HCA 12
Tomasevic v Travaglini: (2007) 17 VR 100
[2007] VSC 337
Valceski v Valceski (2007) 70 NSWLR 36
Judgment (22 paragraphs)
[1]
Porter & Porter [2022] FedCFamC1F 102
Re Wakim; Ex parte McNally (1999) 198 CLR 511; [1999] HCA 27
Rizeq v Western Australia (2017) 262 CLR 1; [2017] HCA 23
Stack v Coast Securities (No 9) Pty Limited (1983) 154 CLR 261; [1983] HCA 36
Taylor v Owners - Strata Plan No 11564 (2014) 253 CLR 531; [2014] HCA 9
Thiess v Collector of Customs (2014) 250 CLR 664; [2014] HCA 12
Tomasevic v Travaglini: (2007) 17 VR 100; [2007] VSC 337
Valceski v Valceski (2007) 70 NSWLR 36; [2007] NSWSC 440
Vaughan v Frost [2010] NSWSC 492
Wurz bht NSW Trustee & Guardian v Elawaad [2022] NSWSC 1404
Category: Procedural rulings
Parties: John Emanuel Comino (First Plaintiff)
Matina Comino (Second Plaintiff)
Alfa Insurance Brokers Pty Ltd (Third Plaintiff)
Efi Kremetis (First Defendant)
Gregory Comino (Second Defendant)
Representation: Counsel:
Ms P Lowson (Plaintiffs)
Mr D Neggo (First Defendant)
Mr J Isackson (Second Defendant)
The first defendant, by amended notice of motion filed in Court on 25 October 2022, seeks an order for the transfer of proceedings (2021/353072) from this Court to the Federal Circuit and Family Court of Australia (Division 1). The application is made under s 5(1)(b)(ii)(C) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW) and s 5(1)(b)(i) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth).
The plaintiffs and second defendant oppose the transfer.
[4]
Background
I will deal with the background matters across three parts: first, a brief summary of the competing claims; secondly, an overview of the Supreme Court proceedings; and, thirdly, an overview of the family law proceedings.
[5]
A brief summary of the competing claims
Efi Kremetis ('the first defendant') and Gregory Comino ('the second defendant') were formerly married. They married in January 2005, but separated in March 2020. They have 2 children - twins born in January 2007. They are now seeking a divorce, and are involved in proceedings in the Federal Circuit and Family Court of Australia (Division 1) ('the FCFCOA'). Those proceedings were commenced on 2 September 2020 by the second defendant in the Family Court of Australia (second defendant's submissions at [3]).
Put simply, there are two broad issues involved in the FCFCOA proceedings: first, parenting orders are sought; secondly, orders for the distribution of assets of the marriage. The assets of the marriage involve a sub-issue - being, whether a number of loans from the second defendant's parents, and a business owned by them (of which the second defendant is a director), were made: the second defendant alleges this, but the first defendant denies it.
The loans to which reference have been made are sought to be recovered by the plaintiffs - being the parents of the second defendant, and Alpha Insurance Brokers Pty Ltd ('the company'). They commenced proceedings in this Court seeking to recover monies under nine separate loans: see the Further Amended Statement of Claim filed on 10 May 2022 ('the FASOC'). In total, the parents, and the company, seek to recover from the first and second defendants the amount of $833,201 plus interest - at the time of filing that pleading, the amount of $140,425 was claimed as interest. I will now outline that claim in some more detail.
[6]
The Supreme Court proceedings
The parents and the company initially commenced proceedings to recover money said to be loaned to either the first and second defendant, or the first defendant on her own, by way of Commercial List Statement filed 13 December 2021. That pleading was substituted, on that day, by the filing of an Amended Statement of Claim. As I mentioned, above, the FASOC - the current pleading - was filed on 10 May 2022.
Each of the loans that form part of the claim were said to have been agreed (at least in part) during conversations involving the plaintiffs and the first and second defendants. Those loans alleged in the FASOC are as follows:
1. The January 2004 loan: the loan, in the amount of $200,000.00, is alleged to have been formed in conversations on 27 January 2004: par 11, FASOC. The parents, by letter of demand dated 7 September 2021, made a demand of the second defendant for its repayment: par 14, FASOC.
2. The September 2012 loan: the loan, in the amount of $20,000.00, is alleged to have been formed in conversations on 20 September 2012, but reduced to writing on 30 October 2012: par 23, FASOC. The parents, by letter of demand dated 7 September 2021, made a demand of the first and second defendant for its repayment: par 26, FASOC.
3. The July 2013 loan: the loan, in the amount of $200,000.00, is alleged to have been formed in conversations in July 2013, but, at least partly, was reduced to writing in the form of a deed of loan executed on 12 July 2013: pars 36 and 37, FASOC. The parents, by letter of demand dated 7 September 2021, made a demand of the first and second defendant for its repayment: par 39, FASOC.
4. The July 2014 loan: the loan, in the amount of $20,000.00, is alleged to have been formed in conversations on or around 3 July 2014: par 49, FASOC. The parents, by letter of demand dated 7 September 2021, made a demand of the first and second defendant for its repayment: par 52, FASOC.
5. The June 2018 loan: the loan, in the amount of $100,000.00, is alleged to have been formed in conversations on or around 28 June 2018: par 61, FASOC. The parents, by letter of demand dated 7 September 2021, made a demand of the second defendant for its repayment: par 67, FASOC.
6. The May 2019 loan: the loan, in the amount of $200,000.00, is alleged to have been formed in conversations on or around 8 May 2019, but at least partly was reduced to writing in the form of a deed of loan dated 6 May 2019: par 76, FASOC. The parents, by letter of demand dated 7 September 2021, made a demand of the first and second defendant for its repayment: par 82, FASOC.
7. The September 2019 loan: the loan, in the amount of $500,000.00, is alleged to have been formed in conversations in around September 2019: par 92, FASOC. The parents, by letter of demand dated 7 September 2021, made a demand of the first and second defendant for its repayment: par 95, FASOC.
8. The June 2020 loan: the loan, in the amount of $50,000.00 is alleged to have been formed in conversations in June 2020 made between the parents and the second defendant only: par 92, FASOC. The parents, by letter of demand dated 7 September 2021, made a demand of the second defendant for its repayment: par 107, FASOC.
9. The company loan: the loan, in the amount of $53,201.98 is alleged to have been formed in conversations in July 2013 - or, possibly, between July 2013 and October 2020 - made between the parents and the first and second defendants, with the amount claimed representing the premium that was paid to insure the business run by them: par 117, FASOC. The parents, by letter of demand dated 7 September 2021, made a demand of the first and second defendant for its repayment: par 121, FASOC.
[7]
The family law proceedings
Putting to one side any issues relating to custody and parenting, the family law proceedings involve the parties seeking what was described, in the Amended Initiating Application filed by the second defendant on 29 January 2021, as: "financial (property and/or maintenance) orders". Paragraph 18 of that Application was expressed (under a heading 'Property Orders'): "That the husband and that the wife shall within 90 days do all acts and sign all documents necessary to distribute the pool of assets available for distribution equally between the parties". (This part of the application picked up s 79 of the Family Law Act 1975 (Cth) - a section that deals with: 'Alteration of property interests').
Self-evidently, any orders made for the distribution of assets of the marriage necessarily include a determination of the assets and liabilities of the first and second defendant. The loans that are the subject of the proceedings in this Court are directly relevant to that issue. This is apparent from the narrative (see [8]ff, above), but also acknowledged as such in the material filed in the FCFCOA - namely:
1. The Amended Initiating Application filed by the second defendant on 29 January 2021 records in 'Part O Additional Information': "10. The parties have obtained from time to time funds from the husband's parents. The loans are as set out in the attached table". The table is then set out in the Application.
2. The second defendant, in a statement filed on 5 August 2021 in the FCFCOA, identified in pars 29-41 (and the Table that follows those paragraphs) his evidence directed to what he described as: "Loans from my parents".
To be clear, the table that was attached to the Amended Initiating Application and the statement that the second defendant filed on 5 August 2021 (and the evidence within that statement, to which reference has been made) aligns with the claim that is made by the plaintiffs in the proceedings in this Court. The amount identified in the family law proceedings, and the amount claimed in the Supreme Court proceedings, is essentially the same: there is potentially a slight, but insignificant, difference. The amount of $826,400 was identified in the family law proceedings as being owed to the plaintiffs, whereas in the Supreme Court proceedings the amount of $833,201 is claimed. (The difference appears to be related to the company loan - where there is a difference of approximately $6,000. Nothing turns on this).
[8]
The cross-vesting legislation
Section 5 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW) ('the NSW Act') provides:
5 Transfer of proceedings
(1) Where:
(a) a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Supreme Court, and
(b) it appears to the Supreme Court that:
(i) (Repealed)
(ii) having regard to:
(A) whether, in the opinion of the Supreme Court, apart from any law of the Commonwealth or another State relating to cross-vesting of jurisdiction and apart from any accrued jurisdiction of the Federal Court or the Family Court, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the Supreme Court and capable of being instituted in the Federal Court or the Family Court,
(B) the extent to which, in the opinion of the Supreme Court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the Commonwealth and not within the jurisdiction of the Supreme Court apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction, and
(C) the interests of justice,
it is more appropriate that the relevant proceeding be determined by the Federal Court or the Family Court, as the case may be,
(iii) …
the Supreme Court shall transfer the relevant proceeding to the Federal Court or the Family Court, as the case may be.
It should be noted that the section refers to the Family Court, and not the Federal Circuit and Family Court of Australia (Division 1). The plaintiffs argue that this "omission" has the substantive effect of precluding the transfer of the proceedings to the Division 1 Court. I address this argument later in these reasons: see [21]ff, below.
In an application to transfer proceedings from this Court to the Federal or Family Court, there are three matters to consider under s 5(1)(b)(ii) of the NSW Act: first, whether the relevant proceedings (but for cross-vesting and accrued jurisdiction) would have been incapable of being instituted in this Court and capable of being instituted in the Family Court; secondly, the extent to which matters for determination arise under a law of the Commonwealth and are not otherwise within the jurisdiction of this court; and, thirdly, the interests of justice: Valceski v Valceski (2007) 70 NSWLR 36; [2007] NSWSC 440 at [19] (Brereton J) ('Valcesksi'). As to this last matter, the organising principles are outlined later: see [70]ff, below.
[9]
The legal impediments to transfer: the plaintiffs' arguments
The plaintiffs argued that two matters precluded transfer of the Supreme Court proceedings. First, it was submitted that the reference in s 5(1)(b) of the NSW Act to the Family Court - rather than identify the FCFCOA (Division 1) - had the consequence that transfer was not available under that provision: the submission appeared to be that although the Family Court had not been abolished, a "new" and "different" court had been created. Secondly, even if that were not so, it was submitted that the FCFCOA Division 1 Court does not have jurisdiction to deal with the subject matter of the Supreme Court proceedings (hereafter 'the debt claim') - at the very least it was arguable that it did not: a matter that was argued to stand against the 'interests of justice', and thus any transfer.
I will deal with these arguments in order. Before doing so I will set out the relevant statutory provisions that were relied upon by the parties.
[10]
The Federal Circuit and Family Court of Australia Act 2021: the relevant provisions
The focus of the parties' submissions was on s 8 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (the 'FCFCOA Act'). That section provides:
8 Federal Circuit and Family Court of Australia
(1) The federal court known immediately before the commencement day as the Family Court of Australia is continued in existence as the Federal Circuit and Family Court of Australia (Division 1).
(2) The federal court known immediately before the commencement day as the Federal Circuit Court of Australia is continued in existence as the Federal Circuit and Family Court of Australia (Division 2).
Note: The Parliament may create federal courts under Chapter III of the Constitution.
It is also relevant to note s 6 of the FCFCOA Act - headed 'Simplified outline of this Act' - which relevantly provides:
The federal court known as the Family Court of Australia continues in existence as the Federal Circuit and Family Court of Australia (Division 1). The Court consists of the Chief Justice, the Deputy Chief Justice, Senior Judges and other Judges. The Court has original jurisdiction in matters that are the subject of family law or child support proceedings transferred from the Federal Circuit and Family Court of Australia (Division 2) or as conferred by another law of the Commonwealth, and has appellate jurisdiction in family law and child support matters.
The federal court known as the Federal Circuit Court of Australia continues in existence as the Federal Circuit and Family Court of Australia (Division 2). The Court consists of the Chief Judge, 2 Deputy Chief Judges and other Judges. The Court has original jurisdiction in general federal law matters, as well as family law and child support matters.
[11]
The reference to 'Family Court' in s 5(1)(b) of the NSW Act
As I have earlier noted, the plaintiffs - ultimately - submitted that "there is no 'Family Court' to which to transfer proceedings" (plaintiffs' submissions dated 8 November 2022 at [2]). The argument appeared to be that although the Family Court was not abolished and continued "in existence" as the FCFCOA (Division 1) Court, it was "not merely a change in name"; rather, a "different" court been created, that was a "new court" (plaintiffs' submissions dated 7 November 2022 at [16]). The plaintiffs submitted "that the Division 1 Court is a different court to the Family Court, not a 'non-existent Court'…" (underlining in original) (plaintiffs' submissions dated 28 November 2022 at [18]). The submission, at least implicitly, accepted that if there was simply a change of name in the court, that an order under s 5(1)(b) of the NSW Act could be made: no contrary submission was put.
The issue presented is one of statutory construction, involving the "construction of the words the legislature has enacted" - in the first instance, s 8(1) of the FCFCOA Act: Taylor v Owners - Strata Plan No 11564 (2014) 253 CLR 531; [2014] HCA 9 at [39] ('Taylor'). The emphasis upon the descriptors "new" and "different" tended to distract attention from this task.
The starting point is s 8(1) of the FCFCOA Act. The meaning given to that provision - its construction - begins, and ends, with the words which Parliament has used, having regard to context and objectively discerned purpose: Thiess v Collector of Customs (2014) 250 CLR 664; [2014] HCA 12 at [22]-[23]; Taylor at [65].
In my view, the meaning of this provision is clear: the provision effects a change of name of the Family Court of Australia, but otherwise that Court was preserved - albeit, through other provisions, the original jurisdiction differs. That construction accords with what is described in the 'simplified outline' in s 6 of the FCFCOA Act - viz., the "federal court known as the Family Court of Australia continues in existence as the Federal Circuit and Family Court of Australia (Division 1)". Put another way, as the first defendant submitted, what the "plaintiffs refer to as the Family Court of Australia is … the Division 1 Court" (emphasis in original - submissions dated 22 November 2022 at 3).
[12]
Serious doubt about 'accrued jurisdiction'
The parties accepted (a) that the family law proceedings were before the Division 1 Court; and (b) that the Division 1 Court did not have (nor the Family Court before the amendments) original jurisdiction in connection with the debt claim. However, the plaintiffs argued that there was "a reasonable doubt about the existence of any accrued jurisdiction" to determine the debt claim and, accordingly, it was not in the interests of justice to transfer the proceedings where the "jurisdiction of the transfer record is contested" (plaintiffs submissions dated 28 November 2022 at [43] and [46]).
The plaintiffs' submissions were framed by reference to accrued jurisdiction, and it is convenient to deal with the submission described in that way. Nevertheless, it is noted that in Rizeq v Western Australia (2017) 262 CLR 1; [2017] HCA 23 at [55] it was said that "the imprecision the term introduces into the word 'jurisdiction' means that the term is best avoided. There is but one matter and that matter is entirely within federal jurisdiction, as distinct from State jurisdiction".
For the reasons that follow, I am unpersuaded that it is seriously arguable that the Division 1 Court does not have accrued jurisdiction. Nor do I accept that simply because one party 'contests' the jurisdiction of the 'transferee court', that transfer in the present circumstances is precluded.
[13]
Accrued jurisdiction
Accrued jurisdiction permits a federal court to resolve an entire dispute before it, even if part of the dispute is governed by non-federal law, provided the non-federal aspects of the controversy form an integral part of the federal issue: Fencott v Muller (1983) 152 CLR 570, 608; [1983] HCA 12 ('Fencott'); Stack v Coast Securities (No 9) Pty Limited (1983) 154 CLR 261, 294; [1983] HCA 36. In those circumstances there is considered to be a single justiciable controversy. The task is to identify whether one exists here.
That task turns on whether the differing claims "arise out of common transactions and facts" or "a common substratum of facts", notwithstanding that the facts upon which the claims depend "do not wholly coincide": Re Wakim; Ex parte McNally (1999) 198 CLR 511; [1999] HCA 27 at [140].
In Fencott, the process of identification of the matter was framed in these terms:
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.
The enquiry has, as the above passage from Fencott makes clear, an evaluative element: CGU Insurance Limited v Blakeley (2016) 259 CLR 339; [2016] HCA 2 at [30].
[14]
Discussion
When the matter was first listed before me, the plaintiffs conceded that there was accrued jurisdiction. However, the day prior to the resumed hearing, in written submissions served, the plaintiffs resiled from this concession - on the basis that "no actual authority has been cited by the [first] defendant that demonstrates the application of the accrued jurisdiction to a matter cross vested from a state jurisdiction" (plaintiffs' submissions dated 7 November 2022 at [52]).
The matter thus arises for consideration. It should be noted, however, that the parties accepted that the Division 1 Court could exercise accrued jurisdiction: In the marriage of Warby (2001) 166 FLR 319; [2001] FamCA 1469 [79] Notwithstanding, however, the plaintiffs argued that the debt proceedings were 'severable' or 'distinct and unrelated', in the sense of being insufficiently connected to attract accrued jurisdiction. The basis for this submission appeared to involve the argument that not only were the Supreme Court proceedings "severable from and separate to the Division one court proceedings", but that the evidence was insufficient for the Court to conclude otherwise. I do not accept these submissions.
As I have earlier noted, the Division 1 Court has original jurisdiction in connection with the proceedings currently before it. And, within those proceedings is a claim, under s 79 of the Family Law Act 1975 for 'Alteration of property interests'.
The two proceedings involve, as I have earlier found, considerable overlap: see [12]-[14], above and [73] and [78], below. The federal issues cannot be decided without determination of the debt question - as the first defendant submitted and second defendant (properly) accepted. In addition to what is there set out, not only does the first defendant deny the loans but: (a) there is evidence that the 'loans' were created as a means to minimise the second defendant's wages and distributions (from the third plaintiff) to avoid paying the second defendant's first wife child support, an allegation that at least implicitly involves the first and second plaintiffs (affidavit of the first defendant sworn 10 August 2021 at [16]); and (b) the first defendant maintains that, to the extent that she signed any documents recording the existence of 'loans' from one or other of the plaintiffs, she was coerced into doing so by the second defendant's threats and conduct (affidavit of the first defendant sworn 26 October 2020 at [65]ff).
[15]
Judicial comity: the decisions of this Court on s 5(1)(b) and its reference to 'Family Court'
As it happens, the issue of construction raised by the plaintiffs in connection with s 5(1)(b) of the NSW Act was considered in two decisions of this Court: Aviani v Loh (No 2) [2022] NSWSC 1148 at [222] (Meek J) ('Aviani') and Wurz bht NSW Trustee & Guardian v Elawaad [2022] NSWSC 1404 at [40] (Henry J) ('Wurz').
The parties argued that the matter on the basis that the holding of Meek J in Aviani was obiter, but that the holding of Henry J in Wurz formed part of the ratio decidendi (plaintiffs' submissions dated 7 November 2022 at [22]; first defendant's submissions dated 22 November 2022 at [45]). I have approached this issue on that basis.
The first defendant submitted that, in those circumstances, as a matter of judicial comity, I was obliged to follow these decisions unless I was satisfied that the decisions were plainly or clearly wrong. The first defendant further submitted however that these decisions were not only not of that character, but the decisions were correct.
I accept each of these submissions. In what follows I briefly explain the rule of practice that obliges me to follow these decisions (specifically, the decision in Wurz) in those circumstances and, thereafter, explain the conclusion that I have reached - viz., to follow that decision.
[16]
Judicial comity: the rule of practice
It is well established that a judge of this Court should follow an earlier decision of another judge unless of the view that it is plainly wrong. In Mustac v Medical Board of Western Australia [2007] WASCA 128 ('Mustac') the rule was described as one of practice (at [38]):
The practice of judicial comity is, of course, distinct from, but related to, the doctrine of precedent (or stare decisis) which compels each court in a judicial hierarchy to follow and apply decisions of any court higher in that hierarchy on questions of law. The practice of judicial comity applies to augment that doctrine by creating a non-binding practice applicable to decisions of courts of co-ordinate jurisdiction, or as between a court in one judicial hierarchy, and a court at the same or a higher level in another judicial hierarchy, and provides that questions of law should usually (but not always) be determined the same way.
In Nezovic v Immigration and Multicultural and Indigenous Affairs (No 2) (2003) 133 FCR 190; [2003] FCA 1263, French J explained the rationale for the rule, and the exception to it, in these terms (at [52]):
Judicial comity does not merely advance mutual politeness between judges of the same or coordinate jurisdictions. It supports the authority of the courts and confidence in the law by the value it places upon consistency in judicial decision-making and mutual respect between judges. Where questions of law and in particular statutory construction are concerned, the view that a judge who has taken one view of the law or a statute is "clearly wrong" is not lightly to be adopted having regard to the choices that so often confront the courts particularly in the area of statutory construction. As I observed in Hicks, where a serious doubt arises on the part of one judge about the correctness of the law as stated by another in a matter of importance, it may be desirable for a case to be stated by the Full Court for early resolution of the question.
See also La Macchia v Minister for Primary Industries & Energy (1992) 110 ALR 201; [1992] FCA 673 [5]; In the matter of Glenvine Pty Limited (in liquidation) [2020] NSWSC 866 at [48]; Anderson v Canaccord Genuity Financial Ltd [2022] NSWSC 58 at [1745]-[1746].
Three further matters should be noted. First, the "practice is limited to questions of law, and has no application to questions of fact": Mustac at [46]. Here, there is no doubt that the issue of construction raised is of the requisite character so as to be within the rule. Secondly, the rule does not override the fundamental duty of the trial judge to decide the case albeit that that process involves consideration of, and proper regard being given to, the previous judgment: Tomasevic v Travaglini: (2007) 17 VR 100; [2007] VSC 337 at [21]-[22]. Thirdly, in relation to the exception to the rule - satisfaction that the decision was plainly wrong or clearly wrong - it directs attention to the quality of the error or the level of conviction of error that must be perceived before declining to follow earlier decision: Gett v Tabet (2009) 254 ALR 504; [2009] NSWCA 76 at [283]-[294].
[17]
The decisions in Aviani and Wurz
In light of the way the matter was argued (see [58], above) it is only necessary to refer to the key conclusions reached in Aviani and Wurz in connection with the issue of construction.
In Aviani, Meek J addressed the issue in these terms (at [221]-[222]):
[221] I note that the NSW Cross-vesting Act has not been amended in light of the enactment of the FCFCA. There are still references within the NSW Cross-vesting Act to the Family Court: ss 3, 5.
[222] However, by reference to a number of statutory provisions including s 8(1) FCFCA (above), s 53(1) Interpretation Act 1987 (NSW), s 25B(1) of the Acts Interpretation Act 1901 (Cth), clauses 1 & 6 of Sch 5 to the Federal Circuit and Family Court of Australia (Consequential Amendments and Transitional Provisions) Act 2021 (Cth), the reference to "Family Court" in s 5(1) of the NSW Jurisdiction of Courts Act must be read as "Federal Circuit and Family Court of Australia (Division 1)".
In Wurz, Henry J addressed the issue in these terms (at [40]-[41])
[40] The reference in s 5(1) to the "Family Court" has not been amended to reflect the enactment of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (FCFCA Act) that took effect on 1 September 2021 and which, amongst other changes, provides that the Family Court of Australia is now known as the Division 1 Court (a superior court of record and a court of law and equity) and the Federal Circuit Court is now known as the Federal Circuit and Family Court of Australia (Division 2) (Division 2 Court; a court of record and a court of law and equity): FCFCA Act, ss 8(1)-(2), 9(1) and 10(1). However, as Meek J observed in Aviani v Loh (No 2) [2022] NSWSC 1148 (Aviani v Loh) at [222], by reference to various statutory provisions, including s 8(1) of the FCFCA Act, the reference to Family Court in s 5(1) of the NSW Cross-Vesting Act is to be read as the Division 1 Court.
[41] Thus, as the FCFCA proceedings are in the Division 1 Court, subject to satisfying the conditions of s 5(1) of the NSW Cross-Vesting Act (including that the Division 1 Court has jurisdiction to deal with these proceedings), there is no impediment to this Court transferring these proceedings to the Division 1 Court…
As I noted above at [58], the plaintiffs submitted that the holding of Meek J was obiter - a submission that the first defendant did not seek to challenge (first defendant's submissions dated 22 November 2022 at [45]). It is unnecessary to consider whether that is so (nor to give detailed consideration to the requirement, for the rule of practice to be engaged, for the 'question of law' to represent part of the ratio decidendi of the case: see Djime v Kearnes [2019] VSC 117 at [121]). That is because, in relation to the holding of Henry J, the plaintiffs accepted that it did form part of the ratio decidendi of the case. Nevertheless, the plaintiffs simply submitted that it was "wrong", albeit without squarely addressing why the decision was "clearly wrong", nor the state of satisfaction necessary to reach that conclusion.
[18]
The legal principles: the interests of justice
The authorities dealing with the residual provision (viz., the "interests of justice") are well-established. Relevantly, they may be summarised as follows:
1. The determination of whether it is in the "interests of justice" under s 5(2)(b)(iii) for proceedings to be transferred depends on what is the "more appropriate" forum for those proceedings without any particular emphasis in favour of the forum selected by the plaintiff: James Hardie & Company Pty Limited v Barry (2000) 50 NSWLR 357; [2000] NSWCA 353 at [87] ('Barry'); BHP Billiton Limited v Schultz (2004) 221 CLR 400; [2004] HCA 61 at [14] and [25]. ('Schultz'). This last matter is sometimes expressed to the effect that there is no principle in the application of the Act that the jurisdiction chosen by the plaintiff and regularly invoked is not lightly to be overridden: Schultz at [25].
2. Although it has been suggested that there is strictly no onus upon either party to persuade the Court to transfer the proceedings or not, the better view is that the applicant for transfer has to persuade the Court to make the order it seeks: Barry at 380 [100]. That is, unless "it appears" that the proceedings should be determined in another court, "the court does not have power under the act to transfer the proceedings. To that extent it may be said that an applicant assumes some onus of persuasion": Irwin v State of Queensland [2011] VSC 291 at 14.
3. The Court must make a "management decision as to which Court, in the pursuit of the interests of justice, is the more appropriate to hear and determine the substantive dispute": Bankinvest AG v Seabrook (1988) 14 NSWLR 711, 714 ('Bankinvest'); Barry at [87]; Schultz at [14] and [63]. Put slightly differently, the interests of justice are "concerned with the question of which jurisdiction is better placed to determine a dispute between the parties from a practical point of view": Opes Prime Stockbroking Ltd (In Liq) (Scheme Administrators Appointed) v Stevens [2014] NSWSC 659 at [25].
4. Rather than the selection of the most advantageous, or least disadvantageous, forum for one of the parties, the "interests of justice" are to be judged by objective factors to facilitate identification of the "natural forum", in which it might be expected that the dispute would fall to be resolved, with its concomitant juridical advantages and disadvantages for each party: Valceski at [69].
5. The interests of justice include a range of matters such as the governing law, forensic advantages and disadvantages, balance of convenience to the parties and the witnesses and convenience to the Court system: Barry at [95].
6. If "it appears" that one court is more appropriate than the other, however so slightly, then a transfer to the more appropriate court is mandatory; no question of discretion arises: Valceski at [70].
[19]
Consideration: the interests of justice
The critical question is whether "it appears" that it is otherwise in the interests of justice that the Supreme Court proceedings be determined by it, rather than the FCFCOA (Division) 1 Court. If that conclusion be reached, then there is no discretion: the proceedings must be transferred to that court.
Each case turns on its own facts in making this determination - a determination that is "not encumbered by encrustation of judge made pronouncements of principles to be applied when considering making a transfer order"; rather (as noted above), it involves a "'nuts and bolts' management decision as to which court, in the pursuit of the interests of justice, is the more appropriate to hear determine the substantive dispute": Bankinvest at 714.
Before addressing the matters argued to inform the interests of justice in this case (and my findings on them), a number of matters should be noted. First, the parties accepted that the first defendant's motion should be determined by reference to the residual provision in s 5(1)(b)(ii)(C) of the NSW Act (subject to the legal issues earlier identified). Secondly, as to s 5(1)(a) of the NSW Act, self-evidently that section is satisfied, and no party submitted otherwise. Thirdly, as to s 5(1)(b)(ii)(A) and (B) of the NSW Act, no arguments were directed to these paragraphs - but neither admits to positive answers favourable to the second defendant. Nevertheless, findings to that effect do not (and were not argued) to preclude a transfer order if the interests of justice favour the transfer: Valceski at [67]-[68]; Burman v Zillman [2017] NSWSC 229 at [13]-[14].
The first defendant's overarching argument, in support of the transfer of proceedings, was that there was a sufficient commonality of issues in both sets of proceedings such that the interests of justice require that they should all be appropriately dealt with in one proceeding and by the one court - the FCFCOA (Division 1) Court. More specifically, the first defendant argued that the subject matter of the Supreme Court proceedings (what was described in submissions as 'the debt claim') was a significant, and common, group of issues arising in both proceedings. Those issues included whether the loans were made; if so whether they are repayable and, by whom. These last issues also include questions about the manner in which some of these loans were entered, including whether the first defendant's entry into such loans was vitiated by the conduct of the second defendant: see [9], above; affidavit of the first defendant sworn 26 October 2020 at [65]ff.
[20]
The Commonwealth Act
The plaintiffs argued that the transfer could not occur by reason of s 5(9) of the Commonwealth Act if the NSW Act did not permit the transfer to the Division 1 Court (plaintiffs' submissions dated 7 November 2022 at [38]-[43]). In light of the conclusion earlier reached, this argument falls away.
The plaintiffs also submitted that an order under the Commonwealth Act was precluded by s 9(1) of that Act. The conclusion was argued to result from the reference in the NSW Act to the 'Family Court'; this 'failure' was said to 'vitiate' s 5(1) of the NSW Act with the effect that no order can be made under the NSW Act: s 9(1) of the Commonwealth Act: was submitted to 'prevent' the first defendant from relying on the Commonwealth Act in lieu of the NSW Act. This submission is, of course, premised on a constructional conclusion opposite to the one that I have reached. This argument also falls away.
In the circumstances outlined, therefore, an order under the Commonwealth Act appears unnecessary. Nevertheless, if the first defendant presses for such an order, I will make one.
[21]
Orders
For these reasons, I make the following orders:
1. Order, pursuant to s 5(1)(b)(ii)(C) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW), that the proceedings (2021/353072) be transferred to the Federal Circuit and Family Court of Australia (Division 1), Sydney Registry.
2. Order that the costs of the parties in this court, other than the costs of this notice of motion, be reserved to the Federal Circuit and Family Court of Australia (Division 1).
3. Order that the plaintiffs and second defendant pay the first defendant's costs of, and incidental to, this notice of motion (excluding any costs thrown away by the filing of the amended notice of motion filed in court on 25 October 2022, in respect of which make no order as to costs).
[22]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 02 February 2023
Parties
Applicant/Plaintiff:
Comino
Respondent/Defendant:
Kremetis & Anor
Legislation Cited (9)
Family Court of Australia (Consequential Amendments and Transitional Provisions) Act 2021(Cth)
The first defendant filed, on 2 August 2022, a defence to the FASOC that, in effect, contests the characterisation of the transfers as loans and, in relation to the January 2004, September 2012, July 2013 and July 2014 loans (see [8(1)]-[8(4)], above), alleges that recovery is barred by s 14 of the Limitation Act 1969 (NSW): par 128. The first defendant has also raised a question about whether any consent she has given to a number of documents that she is alleged to have signed is vitiated by reason of (to put it neutrally) conduct of the second defendant: see, for example, pars 23 and 36.
The second defendant filed, on 9 September 2022, a defence to the FASOC. The grounds upon which the second defendant seeks to defend the plaintiffs' claims are unclear - he largely appears to admit the existence of the loans, and their non-repayment. Further, at least upon my reading of the defence, the second defendant admits indebtedness as the plaintiffs allege. This may be illustrated by reference to the 2004 loan.
In relation to that loan, in the FASOC, the plaintiffs allege that "in breach of the January 2004 agreement the second defendant has not paid the first loan amount, or any part thereof, to the plaintiffs" (par 15) and, further, in consequence, that by "reason of the second defendant's breach the first and second plaintiffs have suffered loss and damage in the sum of $200,000" (par 16). The second defendant expressly admits these paragraphs: defence, par 10. It is not obvious why the plaintiffs have not sought to have judgment entered on this - and other - admissions. There may well be some possible reason (putting to one side the parent-son relationship), and as the matter was not the subject of substantive submissions by any party (aside from the plaintiffs', who noted that the "second defendant essentially admits the loans", I will not pursue the matter further).
Having sketched those facts, I will next set out the legislation and, in doing so, identify a threshold issue raised by the plaintiffs that is said to preclude the relief that the first defendant seeks.
Section 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) ('the Cth Act') provides:
(1) Where:
(a) a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Supreme Court of a State or Territory (in this subsection referred to as the first court); and
(b) it appears to the first court that:
(i) the relevant proceeding arises out of, or is related to, another proceeding pending in the Federal Court or the Federal Circuit and Family Court of Australia (Division 1) and it is more appropriate that the relevant proceeding be determined by the Federal Court or the Federal Circuit and Family Court of Australia (Division 1);
(ii) having regard to:
(A) whether, in the opinion of the first court, apart from this Act and any law of a State relating to cross‑vesting of jurisdiction and apart from any accrued jurisdiction of the Federal Court or the Federal Circuit and Family Court of Australia (Division 1), the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in the Federal Court or the Federal Circuit and Family Court of Australia (Division 1);
(B) the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the Commonwealth and not within the jurisdiction of the first court apart from this Act and any law of a State relating to cross‑vesting of jurisdiction; and
(C) the interests of justice;
it is more appropriate that the relevant proceeding be determined by the Federal Court or the Federal Circuit and Family Court of Australia (Division 1), as the case may be; or
(iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Federal Court or the Federal Circuit and Family Court of Australia (Division 1);
the first court shall transfer the relevant proceeding to the Federal Court or the Federal Circuit and Family Court of Australia (Division 1), as the case may be.
As is apparent, s 5(1)(b) refers not to the Family Court (as the NSW Act does), but to the FCFCOA (Division 1).
The plaintiffs' argument did not engage with the language of s 8(1) (nor refer to s 6) - in particular, why the text of the provision (notably, the words "continued in existence") does not achieve that outcome - namely, continue the existence of the Family Court, but rename it.
The plaintiffs sought to buttress their arguments in two ways: first, by reliance upon the 'Note' to s 8; and, secondly, by contending that the alteration of the original jurisdiction formerly vested on the Family Court supported the "new court" argument.
In relation to the 'Note' to s 8, the plaintiffs submitted that the 'Note' "suggests that a new court has been created" (plaintiffs' submissions dated 8 November 2022 at [4]). I do not accept this submission.
By its terms (see [23], above), the 'Note' does not do so: it merely records that there exists a power in the Parliament to create federal courts (being s 71 of the Constitution). It does not suggest, as the plaintiffs have, that it has done so. Furthermore, although it may be accepted that the 'Note' forms part of the Act (s 13(1) of the Acts Interpretation Act 1901 (Cth)), and thus may be used as an aid to the construction of the section to which it relates, it does not govern the text of the provision: "it is subordinate to the substantive provisions of which it is merely explanatory or illustrative": Director of Public Prosecutions v Walters (2015) 49 VR 356; [2015] VSCA 303 at [50] ('Walters'). In the event of conflict between a note and the text of the statute to which it relates, the text prevails: Walters at [51]-[52]. Here there is no conflict: the Note does not, in my view, directly deal with the subject matter of s 8 of the FCFCOA Act.
In relation to the alteration in the original jurisdiction, so far as I understand the argument, it appeared to be that because the original jurisdiction of the FCFCOA Division 1 Court is different to the original jurisdiction of the Family Court that had the consequence of creating the "new" and "different" court (plaintiffs' submissions dated 7 November 2022 at [12] and 16).
There is no doubt that the original jurisdiction conferred upon what was the Family Court differs to the original jurisdiction conferred upon the Division 1 Court. These changes are fully covered in the decision of the FCFCOA (Division 1 Appellate Jurisdiction) in Nevins v Urwin (2022) 64 Fam LR 640; [2022] FedCFamC1A 57 at [15]-[22] ('Nevins'). In short (relevantly): (a) the original jurisdiction of the Family Court in relation to matrimonial causes conferred on it, by s 31 of the Family Law Act 1975 (Cth), was repealed by the Family Court of Australia (Consequential Amendments and Transitional Provisions) Act 2021 (Cth); and (b) the original jurisdiction of the Division 1 Court was conferred by ss 25(1)(a)-(c) of the FCFCOA Act - essentially matters transferred to it from the Division 2 Court and jurisdiction conferred upon it by other Acts.
Two further matters from Nevins should be noted. The first is that the Court confirmed its own jurisdiction over cases that were pending in the Family Court as at 1 September 2021 - cases they described "the legacy cases": at [5] and [9]. (The parties accepted that the family law proceedings between the first and second defendants was a case of that kind). The second is that the removal of the original jurisdiction, and its more limited investiture in connection with family law matters transferred to it from the Division 2 Court, was to achieve an objective of the statutory reforms - namely to provide a "'single point of entry into the family law jurisdiction', requiring all initiating process to be filed in Division 2, but enabling the transfer to Division 1 of all causes of action more appropriately determined by it as the superior court of record": at [4]. The purpose was not the creation of a "new" and "different" court.
The plaintiffs focused upon the fact that the original jurisdiction had changed (undoubtedly it has) and fixed upon this to further submit that the alteration in jurisdiction supported the conclusion advocated; quite why the necessary corollary to the alteration in original jurisdiction is that a new and different court has been created was not explained. On what the plaintiffs submit has occurred, the Family Court although it "continues in existence", is now but an empty shell: it has no jurisdiction conferred upon it; it is conferred on the Division 1 Court.
It is useful to return to the decision in Nevins because, in my view, it provides no support for the plaintiffs' "new Chapter III court" submission. The principal issue in Nevins concerned whether the Division 1 Court retained original jurisdiction to hear and determine proceedings which were pending previously in the Family Court before 1 September 2021 (being the date of commencement of the FCFCOA Act and the Federal Circuit and Family Court of Australia (Consequential Amendments and Transitional Provisions) Act 2021 (Cth)). In the course of determining this issue, the Court (Alstergren CJ, McClelland DCJ, Austin, Bennett and Cleary JJ) said of these statutory reforms (at [2]):
The Family Court of Australia ("the FCoA") and the Federal Circuit Court of Australia ("the FCC") were both preserved as federal courts by the reforms, but their respective names were changed to the Federal Circuit and Family Court of Australia (Division 1) ("Division 1") and the Federal Circuit and Family Court of Australia (Division 2) ("Division 2").
The decision in Nevin, by its terms, clearly supports the construction of s 8(1) that I have accepted. So too do other decisions of the Division 1 Court. For example, in Cirillo & Cirillo (No 4) [2022] FedCFamC1F 208 ('Cirillo'), Aldridge J, when dealing with the same issue of jurisdiction as that identified in Nevins, said the following at [19]:
It is plain that the legislature did not intend to deprive the Court of jurisdiction in matters already filed in it that had not been the subject of transfer from Division 2. This is because the Family Court of Australia continued in operation, albeit under a new name, with the clear intention that it would continue to operate as a superior court of record…
I note that "the reasoning of Aldridge J and his conclusions" in Cirillo were followed by Harper J in Brogden & Brogden [2022] FedCFamC1F 218 at [21]. There are other decisions (unsurprisingly) of the Division 1 Court to the same effect; that is, hold that s 8 of the FCFCOA Act continues the existence of the two federal courts, but renames them: see, for example, Porter & Porter [2022] FedCFamC1F 102 at [61].
The plaintiffs drew attention to what the Court in Nevins held at [11] - namely:
The questions posed by the stated case entail consideration of whether or not, by reason of the proclamation of federal legislation, a superior court of record established under Ch III of the Constitution is still seized of the jurisdiction it formerly possessed.
The plaintiffs pointed to the Court's use of the word "still" arguing that it raised a question about whether the Court was "referring to the establishment of the Division 1 Court" or the Family Court (I add: in my view, it is clearly the latter); thereafter submitted that although "the Family Court of Australia was not abolished - it 'continues in existence'", the continued existence of that Court "by itself does not mean that a superior court of record (Division 1) was not 'established' under Chapter III of the Constitution by the FCFCOA Act" (plaintiffs' submissions dated 7 November 2022 at [11]). Nor, respectfully, does it mean that one was. In my view, it is not helpful to reframe the issue for construction in this way. Nothing in the decision in Nevin is supportive of what the plaintiffs have argued.
The plaintiffs submitted that the effect of the construction contended for by the first defendant meant that "no Act in any jurisdiction would need to be consequentially amended to reflect the reformed Federal Circuit and Family Court" and that "the idea that a Commonwealth Act can effectively amend state legislation without consideration by or assent of a State Parliament is a fundamental flaw in the first defendant's reasoning" (plaintiffs' submissions dated 28 November 2022 at [8]). I do not accept this submission. In my view no part of the first defendant's submissions can be characterised this way. The first defendant's essential submission was no more than that the Family Court has been preserved, but renamed.
To return to the language of s 5(1)(b) of the NSW Act, where that section refers to the Family Court, it is referring to the court whose existence is continued, but renamed as the FCFCOA Division 1 Court. That conclusion accords with other decisions of this Court, referred to at [61]ff, below. The plaintiffs, as I earlier noted, did not argue that if that conclusion were reached, then transfer could not occur - subject, of course, to their other argument about the absence of 'accrued jurisdiction', as well as a conclusion that it was in the interests of justice that a transfer occur.
In my view, as "a matter of impression and practical judgment", it is beyond argument that the 'alteration of property interests' determination cannot occur without the Court determining the existence and extent of any alleged indebtedness of the defendants to the plaintiffs in the alleged loans. It is the ultimate issue in the Supreme Court proceedings, and a key issue in the family law proceedings: Valceski at [61]. As the first defendant submitted, the "determination of the 'Debt Claim' is essential to the Matrimonial Causes Matter" (first defendant's submissions dated 22 November 2022 at [16]). That submission is entirely consistent with what was held in Valceski at [60] - viz:
…where it is necessary in the exercise of its s 79 jurisdiction for the Family Court to decide whether property is that of a party to the marriage or of a third party, the Court may in its accrued jurisdiction determine that issue so as to bind that third party.
It follows, therefore, in my view, that the differing claims do "arise out of common transactions and facts" or "a common substratum of facts", and thus are to be considered a single justiciable controversy - with the effect that there is accrued jurisdiction in the Division 1 Court.
Given the view that I have reached in relation to the issue of construction, it is unnecessary to pursue this last matter further. That is because I do not consider the decision in Wurz to be clearly wrong; rather, with respect, I consider it to be clearly correct, for the reasons I have given.
Thus, in addition to being satisfied as to the correct approach, as a matter of comity, I propose to follow the decision in Wurz.
The second defendant has largely - and in my view correctly - accepted as much. The second defendant accepted that the family law proceedings involve issues that included the "extent of the first and second defendants' individual and joint liabilities of the defendants, including funds which are alleged to be payable to the plaintiffs in [the Supreme Court] proceedings" (second defendants' submissions at 4 and [10]).
On the other hand, the plaintiffs have submitted that there was "no obvious connection between the subject matter" of the Supreme Court proceedings and the family law proceedings (submissions at [27]). I do not accept this submission.
I am satisfied (and find) that there is, as the first defendant submitted (and the second defendant accepted), a clear set of issues that arise in both proceedings. That follows, in my view, from the analysis of the issues discussed earlier: see [7]-[14], above.
Nevertheless, once it is recognised that the same issue is sought to be litigated in two courts, it "is usually inappropriate, if not vexatious, that the same issue be litigated in two different courts, and, within the federal system…": Valceski at [76]; Vaughan v Frost [2010] NSWSC 492 ('Vaughan') at [14]-[16]; Burman at [23]. The critical issue, therefore, distils to whether the interests of justice favour one court deciding all issues in dispute arising out of the separation of the first and second defendant.
The second defendant argued that the Supreme Court proceedings (to be clear, having two sets of proceedings) would have a "minimal impact" on the family law proceedings, and would in fact "simplify those proceedings" - it being submitted that this would occur because there would "be one less issue to be determined" in the family law proceedings (submissions at [1]-[12] and [14]). The plaintiffs made similar submissions (submissions dated 5 October 2022 at 18 and (b)). In my view, these submissions oversimplify the position.
It is true that the 'debt claim' is but a part of the overall dispute; however, contrary to what was, in effect, submitted by the plaintiffs, this is not a distinct and confined issue. That conclusion follows, in my view, because the issues raised in the 'debt claim' form part of a larger question raised by the second defendant's application seeking 'alteration of property interests' between the defendants. Put another way, resolution of what the second defendant argued was the third issue in the 'alteration of property interests' (see [75], above) would not be decided in a vacuum but, at a minimum, in the context of the first and second one. It is also because litigation - at least not this litigation, which the plaintiffs have described as a "war of attrition"- cannot be neatly dissected in this way. Issues of fact - not merely ultimate ones, but simple and intermediate ones - commonly, indeed usually, overlap. There is no reason to think that this case would be any different.
Further, there is no reason to think that the overlap would end there. That this is so, in my view, is plain not only in light of the evidence of the first defendant in her affidavit (sworn 26 October 2020 at [65]ff), but also because the debt claims are said to be formed, at least in part, by conversations - some of which occurred over 18 years ago - and, as I have earlier said, questions about whether the first defendant's entry into some of the agreements was vitiated by the conduct of the second defendant entered have been raised. Additionally, the evidence of the first defendant, in her affidavit sworn 10 August 2021, raises a question about the true character of the loans, and whether they were designed to minimise the 'family law' claim against the second defendant by his former wife: at [16]. In connection with these issues, and in the proceedings more generally, it is not too difficult to envisage that questions of reliability and, quite likely, credibility will loom large. I consider there to be a very real risk of different judges forming different views of parts of the evidence, and the credibility and reliability of witnesses. Matters of that kind would not, of course, be the subject of issue estoppels (nor were they argued to be): Kuligowski v Metrobus (2004) 220 CLR 363; [2004] HCA 34 [21].
It was also argued that, in substance, the plaintiffs should not be compelled to become involved in the (larger) family law dispute. I do not accept this submission. It is, I think, reasonable to infer that the breakdown of the marriage has prompted the commencement of the Supreme Court proceedings by the plaintiffs. In my view, what was said in Valceski (at [77]) applies here:
…where strangers to a marriage use the occasion of its demise to assert a right against the property of one or other (or both) of the spouses, they cannot reasonably complain if they become entwined in the matrimonial dispute. Third parties who intervene in matrimonial disputes in this way - especially associates, such as parents and private companies, of one or other of the spouses - cannot complain if their dispute is treated as part of the larger matrimonial dispute which it normally is.
The plaintiffs submitted that the age of the first and second plaintiffs - 89 and 84 - as well as their overall health and general considerations of delay favoured the debt claim remaining in this Court. The related submission was that an earlier hearing date in this Court was more likely. Although these are important matters, I am not persuaded that they point to a different outcome, for the following reasons.
First, in terms of the allocation of the hearing date in this Court, whilst I accept that, generally speaking, a hearing date would be available this year, the reality is that it would not be until very late in 2023. It would certainly not be, as was argued, "in the first quarter" of 2023. That necessarily follows from the fact that no evidence by any party has been served, nor was there any evidence directed to when it might be. Further, whether the matter would be necessarily allocated a date in that broader range would turn on the ability of the parties to prepare their evidence in a timely way. It would also depend, to a degree, on the likely duration of any hearing. Unsurprisingly, the estimates of the parties as to the likely duration of any hearing varied - quite markedly: the plaintiffs submitted that it was a three day case, whereas the first defendant submitted that the hearing would most likely be five days (John Biggs affidavit affirmed 16 August 2022 at [15]). It is unnecessary to pursue this last matter further. Without the evidence being served, and most likely a statement of issues prepared by the parties, I consider that any estimate of the duration of any hearing of less than five days would be unsafe. Further, more generally, I do not consider it is possible to make anything more than a qualified finding that a hearing date in late 2023 remains possible.
Secondly, the submission assumed that there would necessarily be a hearing of the debt claim in this Court a significant period of time before a hearing in the family law proceedings. Although I am inclined to find that the hearing in this Court would be before the hearing in the Division 1 Court, I am not prepared to find (and do not) that it would be a significant period of time before the hearing in that Court. There are too many variables, in my view, to enable a more precise finding to be made, as I have pointed out above, and as I next explain.
Thirdly, the evidence about when the matter might possibly be allocated a hearing date in the Division 1 Court conflicted. The solicitor for the first defendant deposed to the fact that matters can be listed for hearing in that Court, in her experience, "before all the foreshadowed expert evidence has been prepared" and it was not unusual for that Court to "allocate dates for a final hearing whilst also simultaneously making orders to prepare the proceedings for that hearing"- including orders in connection with the preparation of expert evidence (affidavit of Tara Hercok affirmed 8 November 2022 at [5]). Ms Hercok then set out an example of a matter where that occurred. She also deposed to the fact that since the amendments in September 2021 (referred to earlier in these reasons) the "Court has been very proactive in allocating hearing dates where possible to move proceedings through to final determination": at [6]. On the other hand, the solicitor for the second defendant has deposed to her experience being that "the Court will not allocate final hearing dates until the expert reports have been released to all parties and considered by them" (affidavit of Carolyn Monk sworn 27 October 2022 at [6]). The evidence may be reconciled on the basis that the experience of each was different. Thus, having regard to the evidence of Ms Hercok, I am satisfied that a hearing date can be allocated to the matter before expert evidence is finalised, and that there is no practice of that Court precluding this. Whether that would occur, of course, is a matter for that Court.
Fourthly, and following on from the above matters, the delay is not inevitably as pronounced as the plaintiff and second defendant submit. If the matter proceeds in the way that they argue - that is, with separate proceedings - that most likely would result in the family law proceedings having to await the disposition of the Supreme Court proceedings, including any appeal.
Fifthly, the fact is that it is the plaintiffs that have delayed commencing proceedings for recovery of the monies - some of which, as I have earlier noted, the plaintiffs contend arose out of a loan in 2004.
In relation to costs, the plaintiffs and second defendant argued that costs would be saved by keeping the proceedings separate, whereas the first defendant submitted that they would be increased, potentially significantly so. The solicitor for the first defendant provided an estimate of the costs referable, in his opinion, to the Supreme Court proceedings (John Biggs affidavit affirmed 16 August 2022 at [12]-[15]). In my view it is unnecessary to descend into any detail about the likely increase in costs of having two, rather than one, proceeding determining the issues. That is because it is, in my view, preferable for the entire dispute to be determined in a single proceeding and that to do so will inevitably reduce the costs for all parties. That finding is consistent with what was held in Vaughan (at [13]):
… when the position of all parties is taken into account the general principle is, and experience teaches, that a single proceeding dealing with all issues is likely to minimise the overall burden of costs for all parties. If proceedings continue separately the defendants will be required to incur costs on matters of which there will be duplication.
See also Valceski at [77]; Burman at [21]-[22].
In my view the natural forum for the dispute is the FCFCOA (Division 1) Court, and the interests of justice favour the entire dispute being determined in that Court.