Douglas v Kik; Douglas v Kekatos

Supreme Court of NSW|2020-08-13|Before: Rothman J

R. Allsop (Applicants) S. Levitt (Respondent)

S. Levitt (Plaintiff) D. Lloyd (Defendant ) File Number(s): 2016/103090; 2020/219354

Background

The applicants were appointed as a trustee (Ms Kik) and the appointor (Mr James) of the Capital Protected Trust (hereinafter "CPT"), pursuant to the provisions of a will of the late Stanley Edward Douglas made on 4 May 2011. The plaintiffs in the Supreme Court Proceedings, Zeta Douglas and Marea Gilbert, were also appointed as trustees. Stanley Douglas passed away on 2 December 2011. On 5 June 2018, Zeta Douglas died.
On 6 June 2013, Mr James purported to exercise power as the appointor to remove Ms Marea Gilbert and then Ms Zeta Douglas as trustees of the CPT. Mr James also purported to appoint himself and the respondent, Ms Trudy Douglas, his former wife, who is the sister of Ms Gilbert and daughter of Ms Zeta Douglas, as trustees, in place of the plaintiffs. According to the material before the Court, Mr James acted, in so doing, on the basis of legal advice provided by Mr Samuel Roberts of Roberts Legal Pty Ltd.
As a consequence of that conduct, Ms Gilbert and Ms Zeta Douglas commenced proceedings in the Supreme Court of New South Wales (NSWSC 2014/107434; hereinafter "the Trustee Proceedings") challenging their removal as trustees, on the basis that Mr James did not have the power to do as he purported to do. On 7 May 2014, 23 February 2015 and 12 March 2015, Ms Trudy Douglas, Ms Kik and Mr James resolved in writing that a total of $145,000 be paid from the CPT for defence of the Trustee Proceedings and, thereafter, to fund the subsequent, unsuccessful appeal in the Court of Appeal (NSWCA 2015/118223).
On 25 March 2015, McDougall J, of this Court, declared that, on the true construction of the will of Stanley Douglas, the appointor (Mr James) had no power to remove and appoint trustees to the CPT.
On 22 July 2015, McDougall J ordered Ms Kik, Mr James and Ms Trudy Douglas to pay the plaintiffs' costs on an indemnity basis and declared that they were not entitled to be indemnified from the CPT for the costs they incurred in the Trustee Proceedings, between 7 March 2014 and 12 March 2015. Ms Trudy Douglas, Mr James and Ms Kik were jointly and severally liable for costs.
On 5 April 2016, the proceedings currently before the Court were commenced by Ms Zeta Douglas and Ms Gilbert against the applicants, seeking orders that monies paid from the CPT for the legal costs of Ms Kik, Mr James and Ms Trudy Douglas (an amount of $155,814.60) be repaid. According to the applicants' written submissions ("AWS") at [14], the Statement of Claim has been "finalised".
On 5 April 2016, Ms Kik and Mr James filed a cross-claim, seeking contribution from Ms Trudy Douglas, the first cross-defendant and respondent on the Motion, in respect of the following: 1. The amount to be repaid to the CPT; 2. The legal costs owing to the plaintiffs in the Trustee Proceedings and the appeal therefrom; and 3. The legal costs owing to the solicitor acting for the defendants in those proceedings (Mr Kekatos).
On 11 October 2016, Sackar J, of this Court, ordered that Mr James and Ms Kik repay $145,000 to the CPT. [1]
On or about 8 November 2016, Ms Kik caused $177,400 to be paid to the CPT on her own behalf and on behalf of Mr James.
The cross-claim also alleged that Roberts Legal Pty Ltd (the second cross-defendant), the solicitors who advised Mr James that he was empowered to remove and appoint trustees, had provided negligent advice. On 28 May 2019, the proceedings against Roberts Legal were dismissed by consent, with Roberts Legal paying the applicants $206,000.

Family Court Proceedings (SYC 2100 of 2016)

On 7 April 2016, Mr James filed an Initiating Application in the Family Court (SYC 16/2100). The respondent to those proceedings is Ms Trudy Douglas, as mentioned, Mr James' former wife.
In those proceedings, Mr James seeks property alteration orders under s 79 of the Family Law Act 1975 (Cth). As already mentioned, the Family Court proceedings are set down for final hearing for two weeks commencing 31 May 2021.

Professional negligence proceedings

On 27 July 2020, Ms Trudy Douglas filed a Summons, in this Court, commencing proceedings for damages for negligence, being proceedings, in the Professional Negligence List, against Jim Kekatos of Kekatos Family Lawyers. These are the proceedings, mention of which has already been made in these proceedings, which is sought to be heard together with the Motion for cross-vesting.
Mr Kekatos, as stated, was the solicitor for the applicants and, purportedly, the respondent, in the Trustee Proceedings and then on appeal therefrom. In short, the respondent alleges that she never instructed Mr Kekatos. She seeks orders that Mr Kekatos be made liable for costs orders made against her in those proceedings.
Although only marginally relevant, the respondent submits that acting without instructions is serious misconduct, as that term is used in s 99 of the Civil Procedure Act 2005 (NSW). The relevance of that latter aspect is unclear. On its face, s 99 of the Civil Procedure Act may not give rise to a separate cause of action. Nevertheless, if, as suggested, Mr Kekatos appeared without instructions, it may have been, at least, a breach of warranty of authority.
The affidavits in these proceedings, albeit at an interlocutory stage, assert that the respondent, Ms Douglas, was unaware of the proceedings before McDougall J; did not give evidence; nor otherwise take part in the proceedings.
Further, the respondent alleges that Mr Kekatos filed an appeal, purportedly on her behalf, without her consent or knowledge. On 22 February 2016, the respondent attended the Court of Appeal hearing and handed up a Notice of Removal of Solicitor and her appeal was then dismissed, with no order as to costs.
The respondent notes that the plaintiffs in the Trustee Proceedings before McDougall J did not seek a costs order against her. Nevertheless, a costs order was made against her, and Mr Kekatos has not sought to enforce his invoices against her.
Finally, the respondent notes that the applicants have not accounted to her for the sum they received from Roberts Legal in settlement of that aspect of the cross-claim.

Summary of evidence and submissions

The applicants' evidence comes from the affidavits of David James, sworn 31 May 2019; and Janina Kik, sworn 31 May 2019.
Essentially, the applicants rely upon the proposition that each of the two proceedings sought to be heard together under the cross-vesting application will involve the determination of whether Ms Trudy Douglas was obliged or is obliged to contribute to the monies owed by Ms Kik and Mr James. The nature of that question, as it arises in the Supreme Court proceedings, has already been outlined.
The issue arises in the Family Court proceedings because property alteration proceedings require the Family Court to identify the value, nature and species of the matrimonial property. It also permits the Family Court to deal with debts that have been incurred during the course of the relationship and the contribution of each of the parties to the Family Court proceedings to that debt.
Further, the applicants allege that any monies paid to the Estate of the late Zeta Kathleen Douglas, pursuant to outstanding costs orders against the applicants and Ms Trudy Douglas, will form part of the Estate. As a beneficiary of the Estate, Ms Trudy Douglas' entitlement will then form part of the matrimonial pool available for distribution and/or alteration in the Family Court proceedings.
The applicants seek to consolidate these proceedings for the following reasons: 1. To minimise costs; 2. To ensure the parties are not cross-examined in respect of the same issues twice; and 3. To prevent the inconvenience of needing to make applications to rely on documents produced in the Family Court proceedings in the Supreme Court Proceedings.
While not raised, there are suppression and secrecy provisions relating to the Family Court proceedings which may render the production of documents (and the naming of parties) more difficult.
Further, the Applicants' Written Submissions at [51] assert that, if Ms Trudy Douglas were given access to the monies, which she expects to receive following the grant of probate, the money will be dissipated. As a consequence, it is said that Mr James' rights in these proceedings to seek contribution from Ms Trudy Douglas will be rendered nugatory.
The respondent relies upon the affidavits of Trudy Douglas (who at certain times was described as Trudy James, being her married name), dated 16 November 2018 (which verifies the Defence to the cross-claim); 24 January 2020; 27 July 2020 (in support of the Summons filed on the same date); 11 August 2020; and 29 August 2019. Exhibits TD1, TD2 and TD3 are exhibits to one or other of those affidavits and are relied upon by the respondent.
The respondent opposed the application to transfer proceedings to the Family Court. The respondent submits that the Court is required to find or be satisfied that it is "more appropriate" that the proceedings be determined by the Family Court, having regard to the interests of justice, and the Court should not be so satisfied.
Essentially, the respondent submits that, whether the respondent, Ms Trudy Douglas, is required to contribute to repayments to the CPT, is an issue that it is not in the interests of justice to be heard in the Family Court, because: 1. The issue does not raise any issue of family law; 2. Ms Kik, who allegedly made the repayment to the CPT, and Mr Kekatos, are not parties to the Family Court proceedings; 3. This issue is a discrete issue for which issue estoppel would arise, if it were decided by the Supreme Court, and, as a result, there is unlikely to be any duplication of evidence, at least on that issue, if the proceedings are not transferred; and 4. The issue does not share a substratum of fact with the Family Court proceedings.
The entire dispute, according to the respondent, relates to the liability of the respondent to contribute to legal costs incurred by various parties in the Supreme Court, not the Family Court. Therefore, it is submitted that the proceeding should remain before the Supreme Court.
In relation to the question of whether the respondent is required to contribute to the fees of Mr Kekatos, the respondent has submitted that: 1. It raises issues concerning the professional negligence of Mr Kekatos (which issues are the subject of the Summons Proceedings). The respondent submits that the appropriate forum for those issues is the Professional Negligence List of the Supreme Court. 2. Mr Kekatos is an officer of the Supreme Court and, as such, the proceedings ought to remain in Supreme Court, as the Court has an inherent jurisdiction over its officers and is therefore the natural forum.
Further, the respondent submits that the transfer would decrease the efficiency of the Family Court proceedings and increase the costs of the other parties involved in those proceedings. The respondent notes that, at the last mention of the Family Court proceedings, Deputy Chief Justice McClelland raised concerns about the expense and complexity of the existing proceedings and all parties were ordered to file and serve notices stating the costs that they had incurred to date and the expected costs moving forward.
The respondent submits that the transfer would likely result in the vacation of the existing hearing, listed, as already stated, for two weeks commencing 31 May 2021.
The respondent also submits that the applicants could have commenced the cross-claim in the Family Court proceedings, but chose to commence in the Supreme Court.
On 7 August 2020, the applicants filed submissions in reply which it is necessary to summarise. First, the applicants point to the purpose of the cross-vesting legislation, one, at least, if not the primary, purpose of which is the avoidance of a multiplicity of proceedings.
Cross-vesting the proceedings will also minimise legal expenses of at least some of the parties to these various proceedings and will overcome any risk of an inconsistency in the treatment of Ms Trudy Douglas' obligation to contribute monies to the debt of Ms Kik and Mr James, in the findings made by the Family Court, on the one hand, and the Supreme Court, on the other hand. It will also ensure that cross-examination does not occur twice.
Relevantly, the applicants also submit that the proceedings in the Supreme Court (leaving aside the Summons Proceedings) share the same substratum of facts as the Family Court proceedings. Perhaps, even the Summons Proceedings share the same substratum. This is based upon the following facts as evidenced in the affidavits.
If, as is alleged, Mr James contributed to the acquisition of monies in the Estate of the late Stanley Edward Douglas, which, in turn, forms part of the estate of the late Zeta Kathleen Douglas, there are resulting trust issues that give rise to property in the hands of Mr James. Since the proceedings in the Family Court involve applications under s 79 of the Family Law Act and the respondent is Ms Trudy Douglas, the respective property of both Mr James and Ms Douglas is a matter that, relevantly, is required to be determined by the Family Court.
As a consequence, the Family Court is required to determine whether Mr James is a beneficial owner, as a result of a resulting or constructive trust to part of the Estate of the late Zeta Kathleen Douglas.
Further, monies paid to the Estate, pursuant to the costs orders, whether as a result of the success or failure of the proceedings against Mr Kekatos, will form part of the assets and/or liabilities of one or other of the parties to the Family Court proceedings. Ms Trudy Douglas' entitlement to the Estate, or part thereof, will be a matter, necessarily, that forms part of the consideration as part of the matrimonial pool available for distribution in the Family Court proceedings.
Secondly, it is alleged, in reply, that the Family Court is the "more appropriate" court on the basis of the authorities referred to in the reply submissions.
Thirdly, the applicants rely upon the "finality" of the Family Court proceedings and the fact that they have been set down for final hearing commencing 31 May 2021, in contrast to the proceedings commenced by Ms Trudy Douglas, which have not yet been set a hearing date.
Lastly, it is said that the issues of the property and the relative rights to property of both Mr James and Ms Trudy Douglas form part of the larger justiciable controversy that underpins the Family Court proceedings.
As a result of the nature of the proceedings, Mr Kekatos was given notice of the Motions (and the Summons) and filed an outline of submissions on 12 August 2020. For obvious reasons flowing from the chronology already recited, Mr Kekatos only received that notice sometime after 31 July 2020. He opposes the transfer of the proceedings involving him to the Family Court, largely for the reasons articulated on behalf of Ms Trudy Douglas. He relies upon the affidavit of Michael Thornell dated 13 August 2020, together with exhibit MKT-1.
The written submissions do not seem to deal expressly with the joinder of the Summons Proceedings with the existing Supreme Court Proceedings, which are the subject of the Motion. There may be good reason for that.
It is open to the Court to cross-vest the Supreme Court Proceedings, but not the Summons Proceedings. It is the Summons Proceedings that involve Mr Kekatos.
The submissions of Mr Kekatos raise a number of substantial issues relating to the claim in the Summons Proceedings. First, if it be professional negligence, then commencement by Summons is most inappropriate. Secondly, the Summons does not express any cause of action upon which it relies. Thirdly, there does not seem to be, at least at the time of hearing, any damage suffered by Ms Trudy Douglas, as a result of the conduct of Mr Kekatos. Other issues are raised.

Principles on cross-vesting

The principles that apply to cross-vesting applications are now well settled. The Court, as presently constituted, has, itself, summarised those principles in a number of cases. In Evans Deakin Industries Pty Ltd t/as EDI RAIL v AMACA Pty Limited (Formerly James Hardie & Coy Pty Ltd) [2] , the Court was required to look at the principles and to summarise them. It did so by reference to previous reasons for judgment issued by the Court, as presently constituted.
It is necessary to return to the relevant provisions of the Act, which, most relevantly for the purposes of these proceedings, is s 5(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW), which is in the following terms: 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) (Repealed) the Supreme Court shall transfer the relevant proceeding to the Federal Court or the Family Court, as the case may be.
Plainly, the test prescribed by the New South Wales (and Commonwealth) legislature is whether it is "more appropriate" that the relevant proceeding be determined by, in this case, the Family Court. If the Court is satisfied that it is more appropriate, the Court must transfer the relevant proceeding to the Family Court.
In Evans Deakin, supra, the principles were summarised in the following way: "[4]. The principles to be applied were dealt with by the Court, as presently constituted, in Skandar (aka Makari) v BSM Group Pty Ltd (as trustee for the BSM Discretionary Trust) [2017] NSWSC 610, in which I set out the following principles: "[19] The principles to be applied in relation to the operation of the Act are well known and well established: see BHP Billiton Ltd v Schultz (2004) 221 CLR 400; [2004] HCA 61. The plurality judgment (Gleeson CJ, McHugh and Heydon JJ) at [14] sets out the principles in the following way: '[14] In the context of the Cross-vesting Act, one is not concerned with the problem of a court, with a prima facie duty to exercise a jurisdiction that has been regularly invoked, asking whether it is justified in refusing to perform that duty. Rather, the court is required by statute to ensure that cases are heard in the forum dictated by the interests of justice. An application for transfer under s 5 of the Cross-vesting Act is brought upon the hypothesis that the jurisdiction of the court to which the application is made has been regularly invoked. If it appears to that court that it is in the interests of justice that the proceedings be determined by another designated court, then the first court "shall transfer" the proceedings to that other court. There is a statutory requirement to exercise the power of transfer whenever it appears that it is in the interests of justice that it should be exercised. It is not necessary that it should appear that the first court is a "clearly inappropriate" forum. It is both necessary and sufficient that, in the interests of justice, the second court is more appropriate.' [20] Also instructive on the question is the passage at [77] of BHP Billiton, supra, in the reasons for judgment of Gummow J, in which his Honour discusses, amongst other issues, the terms 'the interests of justice' and 'otherwise in the interests of justice'. [21] As has been expressed on a number of occasions and in various decisions, the scheme embodied in the Act and its counterparts in the Commonwealth and other States does away with the previous requirements of the common law that hindered the efficient resolution of justiciable controversies between parties and imposed a relatively heavy onus on persons seeking a transfer from the court in which proceedings were initiated. [22] Now, rather than requiring a moving party to show that the court is an inconvenient forum, it is necessary only to show that the tribunal to which the proceedings are to be transferred is a 'more appropriate' tribunal or that the proceedings are more appropriately dealt with in the transferee tribunal as distinct from continuing in the court in which they have been commenced." [5]. In BHP Billiton Ltd v Schultz (2004) 221 CLR 400; [2004] HCA 61, the High Court outlined a number of relevant factors, which are capable of being summarised in the following way: 1. The location of the tort; 2. The residence of the parties, or, in the case of a corporation, where it carries on its business; 3. The convenience of the parties or witnesses; 4. The law governing the proceedings, which, necessarily, relates to criterion (1) above; 5. The experience of a court to provide an efficient and speedy trial; and 6. The condition of the parties, relevantly, in personal injury cases such as if the parties' life expectancy requires speedy resolution. [6]. The foregoing list is not exhaustive and the factors will, necessarily, vary from proceeding to proceeding, but all factors going to where "the interest of justice" lies are relevant to the consideration of transfer. … [8]. Cases considering the provisions of the Act set out principles, but the application of the Act in other proceedings, while informative, must be considered carefully, because each case depends on the individual facts and circumstances pertaining thereto. It is, as stated, the principles and factors already outlined, which must be considered in order to determine the most appropriate place according to the interests of justice. … [23]. I accept that the term "interests of justice" necessarily includes justice to all parties. Further, it is incompatible with notions of justice and equality before the law to apply the Act in a way that favours one party to litigation over others. [24]. Further, Evans Deakin relies upon the comments of Spigelman CJ in James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357 at 361 [7]; [2000] NSWCA 535, which is in the following terms: "[7] To determine which court is, in the interests of justice, the appropriate court, it is necessary to inquire, in the case of a tort, as to what is the place of the tort. Indeed, in the context of administering the co-operative national scheme in the Jurisdiction of Courts (Cross-vesting) Act, where the place of the tort and the residence of the parties coincide, this will generally be determinative of the issue of 'appropriate court', although other factors may need to be assessed in the process of determining where the interests of justice lie." … [43]. It seems to be not in the interests of justice to bifurcate the proceedings in the manner that would necessarily follow from transferring this aspect of the proceedings to the Queensland Supreme Court. A major purpose, if not the primary purpose, of the cross vesting scheme, implemented by the Commonwealth and each of the States, is that there should not be a multiplicity of proceedings. [44]. A multiplicity of proceedings is not only inefficient, it is liable to create injustice and inconsistency in approach in the one justiciable controversy."
I adhere to the views there expressed. Evans Deakin, was a case involving the commission of a tort where the lex loci delicti was Queensland and the law to be applied was the law of Queensland. As stated in Evans Deakin, the principles have general application, but their relevance to particular cases will vary dramatically.
In many respects, the submissions on behalf of Ms Trudy Douglas have concentrated on the detail and lost sight of the overall justiciable controversy. Whether Ms Trudy Douglas is held to be liable to contribute or not contribute and whether Ms Trudy Douglas is successful or not successful against Mr Kekatos, the amounts involved in the dispute will, necessarily, be amounts that will need to be considered by the Family Court in the determination of the proceedings before it.
The Family Court has jurisdiction and is the specialist court established for the purpose of determining the respective rights of parties to a relationship that is subject to appropriate proceedings before that court.
Necessarily, in proceedings such as the present ones, those respective rights include the jurisdiction conferred on the Family Court under Part VIII of the Family Law Act. The Family Law Act gives the Family Court power to determine appropriate maintenance; [3] including such order as it thinks proper. [4]
In dealing with the orders that are appropriate in determining the rights of each party to a relationship separation or dispute, the Family Court is expressly required to take into account: the income, property and financial resources of each party; [5] the commitments of each of the parties that are necessary to enable the party to support himself or herself; [6] the standard of living that, for each such party, is, in all the circumstances, reasonable; [7] and the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant. [8]
The jurisdiction of the Family Court includes the capacity to declare the property interests of each respective party to the former relationship [9] and, most relevantly for present purposes, entitles the Court to alter the property interests of each party. [10]
In so doing, the Family Court has the jurisdiction to alter the interest in property of either one or both of the parties to the marriage; to transfer property from one party to another; and to do so in circumstances where it is satisfied that, in all the circumstances, it is just and equitable to make the order.
In considering the alteration of property, the Family Court takes into account the financial contributions made directly or indirectly by each of the parties to the marriage; other contributions to the marriage; the effect of any proposed order on earning capacity; and all of the matters, some of which have been referred to above, in s 75(2) of the Family Law Act.
Further, by the provisions of s 79(10) of the Family Law Act, creditors to any party to Family Court proceedings are entitled to become a party to the Family Court proceedings, as can any other person whose interest would be affected by the making of a property alteration order.
If the foregoing is not sufficiently extensive, it should be made clear that the provisions of the Family Law Act prescribe that the orders made relating to property override any other written or unwritten law of the State or Commonwealth and any provision in any trust deed or financial agreement. [11]
Further, the orders that may be made include orders against a creditor to one or other of the parties to the marriage, which would involve the substitution of a different party in relation to any such debt or in relation to any relevant asset. [12] The debts of any party to the Family Court proceedings are matters that are included within the property that is to be considered by the Family Court, as are the assets and family trust arrangements.
The proposition, put on behalf of Ms Trudy Douglas, that the issues raised by Ms Trudy Douglas in the Supreme Court proceedings do not involve "the same substratum of facts" as are involved in the Family Court proceedings, is, on the basis of the foregoing aspects of the Family Court proceedings, untenable. Were there an arguable case in that respect, different issues would arise as to the question of the merits. This is because, in the absence of the same substratum of facts, the Family Court may not be able to be a court that has jurisdiction to hear and determine the issues. [13]

Consideration of the merits

I am mindful of the comments, reported to the Court by the parties that emanated from the learned Deputy Chief Justice of the Family Court of Australia, Justice McClelland. The amount of time, effort and resources (including costs) that have been expended in relation to this family dispute (including the matrimonial dispute) seems to be without warrant and disproportionate. Any step that would ameliorate the growing costs in this litigation would be in the interests of justice and, even though some may not recognise it, in the interests of the parties.
Technically, this Court has the jurisdiction to deal with the whole of the justiciable controversy, including the family dispute. No party suggests that the Supreme Court should cross-vest the proceedings in the Family Court to it. Nor is that a matter contemplated by the Court, as presently constituted.
The proceedings in the Family Court are set down, for final hearing, commencing 31 May 2021. This Court should do nothing that would interfere with the expeditious and timely resolution of the issues between the parties to that proceeding.
Each of the courts, on the face of the material already presented, is a court that is capable of dealing with all of the matters in dispute, with the possible exception of the proceedings involving Mr Kekatos, which, on their face, do not seem to relate to any aspect of the justiciable controversy that otherwise exists.
Enlarging the nature of the proceedings before the Family Court may, although I have serious doubts that it would, occasion the vacation of the hearing dates. That is a suggestion made on behalf of Ms Trudy Douglas. While I do not accept that the enlarging of the proceedings to include the issues in the Supreme Court Proceeding should or could have that effect, it is a factor to which the Court has some, albeit minor, regard.
As earlier stated, in discussing the principles associated with cross-vesting applications, the fundamental purpose of the scheme that applies by operation of Commonwealth and State legislation, is to avoid, as much as possible, a multiplicity of proceedings relating to the same or similar subject matters.
The avoidance of a multiplicity of proceedings must be one of the fundamental and primary aspects of the interests of justice. Where only one proceeding is on foot, then that issue does not arise. The only issue then becomes which is the more appropriate forum to hear that proceeding.
On the other hand, where, as here, there are a number of proceedings, the Court must consider the avoidance of a multiplicity of proceedings as a matter that involves the interests of justice and informs the determination of which of the courts in which those proceedings are being heard is the "more appropriate" forum for any particular proceeding, or all of them.
It is necessary to reiterate or detail the issues in each of the proceedings. As is obvious from the foregoing, the issues before the Family Court primarily concern the adjustment of the property interests and rights of Mr James and Ms Trudy Douglas. The proceedings in the Supreme Court, initially, were commenced by Zeta Douglas and Marea Gilbert against Ms Kik and Mr James. That principal proceeding has terminated.
That which is remaining in those proceedings is the cross-claim in which Ms Kik and Mr James are proceeding against Ms Trudy Douglas and Roberts Legal. As against Roberts Legal, the proceedings have resolved.
Thus, the only remaining aspect of the Supreme Court Proceedings is the cross-claim between Ms Kik and Mr James against Ms Trudy Douglas. The subject matter of those proceeding is, in so far as it involves Ms Douglas, whether she should be required to contribute to the repayments to the CPT and to costs of the Trustee Proceedings. Ms Douglas was ordered to pay costs by McDougall J, it is said in error. I am not yet satisfied that it was an error, but there is a real possibility of error.
Whatever be the outcome of those proceedings, the amount of money that is said to be owed or that may be paid, as a consequence of any order, is, clearly, an asset of Ms Trudy Douglas or Mr James. It should be pointed out that the CPT is a trust, for which at least some of the beneficiaries are the family of the late Stanley Edward Douglas, which includes Trudy Douglas.
The proceedings taken by Ms Trudy Douglas against Mr Kekatos could, it would seem, have been a second cross-claim to the Supreme Court proceedings. There is some merit in hearing the Summons Proceedings together with the Supreme Court Proceedings. However, the issues are different, albeit there will be some overlap in the evidence.
There can be no doubt that whatever is owed by Ms Trudy Douglas, if anything, as a result of the proceedings referred to as the Supreme Court Proceedings, that property and/or debt is a matter that will be the subject of consideration in the Family Court proceedings, as either an asset or debt of one of the parties thereto.
The same cannot necessarily be said of any matters arising out of the proceedings in relation to Mr Kekatos. Were it not for the proceedings in relation to Mr Kekatos, I would have no hesitation in cross-vesting the proceedings in this Court commenced by Ms Kik and Mr James against Ms Trudy Douglas.
I have some doubt that the issue raised in the proceedings between Ms Trudy Douglas and Mr Kekatos is an issue that is within the same substratum of facts as the Family Court proceedings, even though, were Ms Douglas to succeed in those proceedings, that amount of money would be brought to bear in the adjustment, if any, of the property rights of the parties in the Family Court proceedings.
Further, there is good reason to have the proceedings involving Mr Kekatos and the proceedings commenced by Ms Kik and Mr James heard together. Each proceeding concerns the circumstances of the proceedings before McDougall J and the subsequent appeal, or, more accurately, the effect and result of those earlier proceedings.
Were the Court not to cross-vest the proceedings in this Court to the Family Court, there is a possibility of conflicting results, which, necessarily, would not give rise to any form of estoppel, at least in relation to Mr Kekatos, because of the different parties.
Lastly, it is only a minor aspect of these proceedings that one or other of the persons may need to be cross-examined on more than one occasion. While that is an inconvenience, it is hardly a matter that is crucial in the determination of the interests of justice.
If the Supreme Court were to continue to hear the proceedings currently before it, it would seem to be in the interests of justice that those proceedings be expedited and determined before the proceedings in the Family Court commence. They would need to be determined far enough in advance of the commencement of the Family Court proceedings that the parties could factor any result into the issues then before the Family Court.
The assessments that have been put to the Court, which I do not consider to be accurate, suggest that the proceedings currently before the Supreme Court should take a short time. It seems, on the material that I have already seen, that the proceedings in this Court, being both the proceedings involving Mr Kekatos and the proceedings commenced by Ms Kik and Mr James, should take, if they were heard together about three days. That assessment assumes the proceedings would be run competently.
Ultimately, as can be seen from the discussion above, the determination of the interests of justice is, in those circumstances, a difficult choice and the determination of which of one course or another should be ordered is an extremely fine line.
It seems, on the material before the Court, that there are three possible courses. The first course is to dismiss the application for cross-vesting. If that course were followed, the interests of justice would be served best by both Supreme Court proceedings, probably at the same time, concluding before the commencement of the Family Court proceedings.
The second course is to cross-vest each of the Supreme Court proceedings to be heard together with the Family Court proceedings, at which time a single judicial officer will be able to deal with all the issues between the parties. The difficulty with that course is, as I earlier intimated, that there may be serious questions about whether the Family Court has jurisdiction to deal with the proceedings involving Mr Kekatos, as distinct from dealing with the result thereof.
The third course that is available to the Court is to cross-vest the proceedings commenced by Ms Kik and Mr James against Ms Trudy Douglas and to leave, for separate consideration, on an expedited basis, the proceedings taken by Ms Trudy Douglas against Mr Kekatos. That third course has the following benefits: it does not add significantly to the parties or issues that are before the Family Court; it would not seem to warrant the vacation of the dates already set down in May and June 2021 by the Family Court; and it would remove any proceedings involving Ms Kik and Mr James from this Court.
The only remaining proceedings in this Court would then involve Ms Trudy Douglas and Mr Kekatos on the confined issue of whether Mr Kekatos, a party independent and separate from the CPT and the justiciable controversy involving the marriage, owes Ms Douglas damages.
The difficulty with the last mentioned course, which, on one view, seems to be the most convenient, is that the Court may take a view in those proceedings that no damage has been occasioned, which view would not take account of the result of the proceedings, were they successful, taken by Ms Kik and Mr James. Those latter proceedings would not be determined, except and until the Family Court proceedings were resolved.
Ultimately, it seems that the difficulty is resolved by two primary considerations: the amelioration of additional costs; and the removal of any conflict or possible conflict in results on an issue that is relevant to different proceedings.
In all the circumstances, and on fine balance, the Court makes the following orders: 1. Motion of 31 May 2019 of Ms Janina Kik and Mr David Anthony James seeking cross-vesting orders be dismissed; 2. The first cross-claim in proceedings 2016/00103090, being proceedings in which Ms Janina Kik and Mr David Anthony James seek damages against Ms Trudy Douglas, be heard together with proceedings 2020/00219354 commenced by Ms Trudy Douglas, seeking orders against Mr Jim Kekatos. The evidence in this Court in matter number 2020/00219354 and matter number 2016/00103090 be evidence in each other proceedings. 3. The proceedings in this court be expedited and subject to special case management by Rothman J. The Supreme Court proceedings referred to above are listed for Directions before Rothman J on Friday, 4 December 2020 at 9:30 AM. 4. The costs of and incidental to the motions shall be costs in the substantive proceedings to which they relate. 5. Leave is reserved to any party to apply for any special or different order as to costs which shall be made within three days of the date of this judgment by short written submission. Any party affected by any such application may reply to the said application by short written submission within three days of the receipt of the application. Any such application will be dealt with on the papers.

Endnotes

Affidavit of Trudy Douglas of 27 July 2020 at [26].
Evans Deakin Industries Pty Ltd t/as EDI RAIL v AMACA Pty Limited (Formerly James Hardie & Coy Pty Ltd) [2020] NSWSC 149.
Family Law Act, s 72, but bearing in mind the object of ending the financial interdependence of the parties.
Family Law Act, s 74.
Family Law Act, s 75(2)(b).
Family Law Act, s 75(2)(d).
Family Law Act, s 75(2)(g).
Family Law Act, s 75(2)(ha).
Family Law Act, s 78.
Family Law Act, s 79.
Family Law Act, s 90AC.
Family Law Act, s 90AE.
Re Wakim; Ex parte McNally (1999) 198 CLR 511; [1999] HCA 27. 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: 03 December 2020

Jurisdiction of Court (Cross-vesting) Act 1987(NSW)

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