Corbett v Nguyen

Judgment

1. BASTEN JA: There is an issue before the Court as to the fate of the appeal in these proceedings which, on one view at least, involve potential interference with an order of the Family Court of Australia. The three parties to the proceedings in this Court are Avelina Corbett (appellant), her former husband, James Edmund Corbett (second respondent), and Mr Ai Nhon Nguyen (first respondent). There is a dispute as to whether the former matrimonial home transferred to Ms Corbett pursuant to consent orders in the Family Court of Australia is available as property of Mr Corbett, against which Mr Nguyen could enforce a debt owed to him by Mr Corbett.
2. Mr Nguyen commenced proceedings in the Equity Division, which sought in part to set aside orders made in the Family Court as part of the Corbetts' property settlement under s 79 of the Family Law Act 1975 (Cth). The trial judge, Parker J, made such orders. On 10 May 2018 Ms Corbett filed an appeal in this Court from the orders made in the Equity Division on 12 April and entered on 19 April 2018. The proceedings in this Court thus involve a matter arising from an order made under the Family Law Act.
3. There being a matter arising from an order under the Family Law Act, s 7(5) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) relevantly provides that only the Full Court of the Family Court has jurisdiction to determine an appeal. In fact, Ms Corbett commenced an appeal in that Court, belatedly, on 12 July 2019, but only from orders made in the Equity Division on 19 June 2019. It is clear that this Court lacks jurisdiction to hear the appeal. The question is whether the proceedings pending in this Court can be transferred to the Full Court of the Family Court, or whether they must be dismissed. The jurisdiction of this Court was considered recently in two cases, Grace v Grace [1] and Eberstaller v Poulos. [2]
4. On 19 July 2019 Ms Corbett filed a notice of motion in this Court seeking an order that the proceedings be transferred to the Full Court of the Family Court. Mr Nguyen consented to such an order; Mr Corbett filed a submitting appearance.
5. At the commencement of the hearing Mr Herzfeld (for Ms Corbett) indicated that he now sought a different approach from the consent orders which had been signed by the parties on 31 July 2019. The issue which he identified arose from the fact that, in accordance with the reasoning of the Court in Eberstaller, it was not open for this Court to transfer a matter to the Family Court under s 7(7) in circumstances where it had not commenced to hear the proceedings.
6. Whether or not that was in fact the situation in Eberstaller, where three judges were sitting to hear the appeal, it is clear that in this case there has been no commencement of the hearing of the appeal in any form. It is therefore correct in the sense accepted in Eberstaller at [27] that the appeal had not commenced to be heard and therefore s 7(7) was not engaged.
7. The reasoning in Eberstaller goes one step further; it states that the effect of s 7(5), although expressed to be subject to s 7(7), is to deny jurisdiction to this Court in circumstances where there is a matter arising under a relevant federal law. The argument accepted in Eberstaller, based on Fencott v Muller, [3] was that where any part of the proceedings arose under a federal law, the whole of the claim was a matter in federal jurisdiction and the jurisdiction of this Court was not engaged.
8. Eberstaller was decided before the recent decision of the High Court in Rizeq v Western Australia, [4] but as the parties correctly accept it is not a matter for the Court as presently constituted to consider whether the reasoning in Eberstaller should be reconsidered in the light of that decision.
9. I accept that I should apply the reasoning in Eberstaller with the consequence that the only substantive order which is available in this court is that the appeal be dismissed. There remains a question as to what steps should be taken with respect to costs.
10. As recently as 31 July 2019 the position of the parties was that it was open for this Court to transfer the appeal to the Full Court of the Family Court and in that circumstance the costs of the proceedings in this Court be reserved for determination by the Full Court of the Family Court. In circumstances where it is now accepted that the transfer is not available the respondent says that he should have his costs of the proceedings in this Court if they are to be dismissed. The appellant describes that application as adventitious.
11. Even had it been possible to transfer the appeal, there might have been a question as to whether an application for costs in this Court could be transferred with the appeal. That is no longer possible. Mr Herzfeld suggested it may be possible to cross‑vest the costs application which is now under consideration. That is not an attractive proposition for two reasons. One is that it requires a separate operation of the Cross-Vesting Act which I do not think has been adequately considered - certainly it was not addressed in submissions. Secondly, the question about the costs in this Court are very much a matter to be determined by this Court and it is not a situation in which this Court would readily, even if it could, invite the Full Court of the Family Court to determine that matter. That course should not be taken.
12. The question then becomes whether the costs in this Court should abide the outcome of the proceedings in the Family Court. There are two alternatives to that proposition. One is that the appellant pay the respondent's costs in this Court, which is what the respondent seeks; the final possibility is that each party bear his or her own costs of the proceedings in this Court.
13. The appellant identifies the fact that under r 51.41 of Uniform Civil Procedure Rules 2005 (NSW), the order that costs follow the event may not necessarily follow in circumstances where the respondent to an appeal in respect of which the court is not competent has failed to bring an objection to the competency of the proceedings.
14. Mr Tregenza (for Mr Nguyen) says that the rule is not engaged because the issue was originally raised by the Registrar and the question of a notice of motion taking objection to the competency of the appeal therefore did not arise. He says also that the basic challenge raised by Mr Nguyen originally was that the transfer from Mr Corbett into the joint names of himself and his then wife was made without consideration and was made for the wholly inappropriate purpose of denying him the opportunity to recover his debt from property held by Mr Corbett.
15. I am not satisfied that either of those concerns should properly affect the outcome of the costs application. With respect to the engagement of r 51.41, there clearly was an opportunity when the respondent's attention had been drawn to the issue by the Registrar for him to have taken an objection to competency, entirely appropriately. The reason why it was not made, no doubt, was that both parties took the same view that this Court would not be hearing the appeal.
16. With respect to the second matter it is futile to say that there was an earlier transaction transferring property which was the separate subject of proceedings brought by Mr Nguyen in the Equity Division. It would not have been possible to retransfer the property to undo the voluntary transfer without consideration to Ms Corbett, without undoing the later order made by the Family Court. Accordingly I am of the view that this Court will have to determine the application of the rule and also the respective applications for costs.
17. The possibilities do not suggest that, in circumstances where as recently as a week ago the respondent was willing to have the costs abide the outcome in the Family Court, he should obtain a different outcome as to costs because the proceedings are now to be dismissed rather than transferred. The respondent himself did not identify the need for an order in that form. His abandonment of his recent agreement as to costs is not a matter that should be overlooked. The question then is whether the costs should abide the outcome of the Family Court proceedings, or whether this Court should dispose of the matter finally on the basis that each party bear its own costs.
18. The last option has its attractions. There may be complexity in the former possibility, depending on what is decided in the Family Court. Further, no doubt there have been not insignificant costs which have already accrued in relation to the proceedings in this Court. It is true that those costs will have been incurred because of the false step taken by the appellant initially in commencing proceedings in this Court. There is a degree of uncertainty in making costs here abide the outcome of the Family Court.
19. On the other hand the recent agreement would have allowed the costs to abide the outcome of the appeal in the Family Court. There is then the opportunity for the party entitled to its costs of the appeal to recover all those costs. That in the end seems to me to be the appropriate outcome. Using the terms adopted by the appellant, to which no objection was taken, I propose to order that the costs abide the outcome of the proceedings in the Family Court.
20. Accordingly the Court makes the following orders. 1. That the appeal in matter 2018/147433 be dismissed. 2. That the costs of the proceedings in this court abide the outcome of the appellate proceedings in the Full Court of the Family Court of Australia in relation to the matters, the subject of the hearing in the Equity Division.

Endnotes

1. (2014) 85 NSWLR 688; [2014] NSWCA 86.
2. (2014) 87 NSWLR 394; [2014] NSWCA 211.
3. (1983) 152 CLR 570; [1983] HCA 12.
4. (2017) 262 CLR 1; [2017] HCA 23. 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: 07 August 2019