JOHN FELL in his personal capacity and in his capacity as Trustee of the FELL FAMILY TRUST

PAUL FELL in his personal capacity and in his capacity as Trustee of the FELL FAMILY TRUST

BRENDA EILEEN ALFELD in her personal capacity and in her capacity as Trustee of the FELL FAMILY TRUST

Practice and procedure - Proceedings in Family Court - Whether proceedings in Supreme Court were related - Whether Family Court more appropriate - Whether in the interests of justice that matters be determined by Family Court

Jurisdiction of Courts (Cross-vesting) Act 1987 (WA), s 5

1 BEECH J: This is the plaintiff's application for a transfer of the proceedings pending in this Court to the Family Court of Western Australia. The application is made under s 5(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (WA). Relevantly, s 5(4)(b) provides three alternative paths to the grant of a transfer of the relevant proceedings.

2 The first is that which appears from subpar (i), and that is, relevantly, where the proceeding in this Court is related to a proceeding in the State Family Court and it is more appropriate that the proceeding in this Court be determined by the State Family Court.

3 Although some reference was made in argument to subpar (ii), I will pass over that limb as, for reasons which will emerge, it is unnecessary to refer to it. The third alternative path to a transfer is subpar (iii) which is in terms that it is "otherwise in the interests of justice" that the proceeding in this Court be determined by the State Family Court.

4 The provisions of s 5 have been explained by the High Court in the decision in BHP Billiton Ltd v Schultz [2004] HCA 61; (2004) 221 CLR 400. Some propositions are authoritatively established by that decision.

5 First, it will be otherwise in the interests of justice within the meaning of subpar (iii) for (here) the State Family Court to hear the case if that court is the more appropriate court for the determination of the relevant proceedings: BHP Billiton Ltd at [14] and [77].

6 Next, the fact that proceedings have been commenced in this Court is not a matter of any weight. In other words, there is no presumption in favour of a forum chosen by a plaintiff. See BHP Billiton Ltd at [25].

7 Thirdly, the questions that emerge on an application of this kind are simply whether the statutory criteria are made out. In other words, there is no separate discretion to be exercised. If the evaluative judgment is made either that it is in the interests of justice within subpar (iii) or that it is more appropriate within subpar (i), then a transfer must be made: BHP Billiton Ltd at [14] and [63].

8 Finally, in applying the cross-vesting legislation, what is involved is a nuts and bolts management decision as to which court is more appropriate in the interests of justice. See BHP Billiton Ltd at [13], citing the New South Wales Court of Appeal decision in Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 713 - 714.

9 The issues in this application arise in the following way. The plaintiff has commenced proceedings against her former husband for a property settlement under s 79 of the Family Law Act 1975 (Cth). Those proceedings are in the Family Court of Western Australia.

10 In this Court, the plaintiff has commenced proceedings claiming an interest by way of constructive trust over property that is held by the now three defendants. It is common cause that those defendants hold the property in their capacity as trustees of a trust.

11 The claim that is made is of a conventional kind, namely, for a constructive trust founded upon what may be described as an equity arising by estoppel. It is pleaded that the plaintiff and her husband were told that they would become the owners of the relevant property, where they lived for many years, and that on the faith of that understanding, the plaintiff has acted in various ways.

12 The first question for consideration is whether the proceedings in this Court are "related to" the proceedings in the Family Court, within the meaning of that term in s 5(4)(b)(i). I am satisfied that they are, essentially for the reasons which emerge from the decisions referred to by counsel, in particular Hoddell v Hoddell Pty Ltd [1999] WASC 156 at [22] - [24] and Armstrong v Armstrong [2004] WASC 121 at [52] - [56]. In order that proceedings be "related", they need to have a sufficient nexus or association that that conclusion can be drawn. In both Hoddell and in Armstrong, the connection which led to that conclusion is one which is also present in this case. The result of the proceedings in this Court will affect the available property the subject of the Family Court proceedings.

13 That being so, the question then arises as to whether it is more appropriate that the proceedings in this Court be determined by the Family Court of Western Australia. In the light of the decision in BHP Billiton Ltd, that question is in turn closely aligned to the question arising under subpar (iii), as to whether it is otherwise in the interests of justice that the proceedings be determined by the Family Court of Western Australia.

14 In support of her application, the plaintiff, by her senior counsel, pointed to the overlap which it is said will occur between issues which arise in relation to these proceedings on the one hand and the proceedings in the Family Court on the other. It is said that there will be overlap in questions which arise and there will also be duplication as to evidence. Whether that is so can, I think, be approached by postulating the situation in the event that the proceedings remained in this Court and were successfully concluded in favour of the plaintiff.

15 In order for that to have occurred, there will necessarily have been evidence relating to the conduct of the parties, in particular with respect to the property in question in these proceedings. If it is decided by this Court that the plaintiff has a beneficial interest in the property, then questions will arise for the determination of the Family Court, in the proceedings in that court under s 79 of the Family Law Act, as to the contributions made by the parties in respect of that property and in respect of the marriage generally.

16 It was submitted on behalf of the defendant that the Family Court could simply proceed on the basis of the findings made by the Supreme Court, it being accepted that there would be questions of contribution which would fall for determination by the Family Court. However it is far from clear to me that that would be a satisfactory way for the Family Court to proceed. It is plain that there is a different notion of contribution which arises, on the one hand, in the course of equity proceedings in this Court and, on the other hand, in proceedings in the Family Court. To my mind, there is a very real prospect, if not a likelihood, that the Family Court might be required to re-hear evidence, which may be substantial, in order to determine questions of contribution that arise under s 79 of the Family Law Act. That seems to me to be a factor of some significance in the determination of whether it is more appropriate, and whether it is in the interests of justice, that the Family Court determine these proceedings.

17 Various cases have been referred to by counsel. The circumstances of each of the cases and the reasoning in them are helpfully summarised in Armstrong at [57] - [71]. I have borne in mind the consideration of the factors that emerges from those cases but in the end, and I think this was common ground, where the interests of justice lie and which court is more appropriate will depend upon an analysis of all the circumstances of each individual case. Thus none of those cases controls the approach to be taken in this case.

18 The defendants have pointed to some matters which, in their submission, militate against an order for transfer being made. Dealing with them in the order in which they emerged in oral argument, I begin with the question of the rights of the beneficiaries.

19 The rights of the beneficiaries under the deed of trust were advanced as giving rise to two relevant factors. The first of them is the potential for beneficiaries to wish to join in the proceedings. No steps have at this stage been taken, it appears, for any beneficiary to join in the proceedings, but beneficiaries would be at liberty to make an application of that kind. It seems to me they would equally be at liberty to make that application, to join the proceedings, in the event that these proceedings were transferred to the Family Court. That much I understood to be accepted by counsel for the defendants.

20 What counsel for the defendants said in this context was that the beneficiaries should be permitted to have their rights determined by this Court and not by the Family Court, this Court having a longstanding equitable jurisdiction, whereas the Family Court was described as a "purpose-built court", clearly meaning a court exercising jurisdiction under the Family Law Act.

21 In my opinion, while perhaps relevant, that is not a matter to which great weight is to be attached.

22 In Hoddell at [33], Murray J observed that he placed little weight upon the consideration that the resolution of claims for equitable interests in property is a traditional and central aspect of the equitable jurisdiction of the Supreme Court. That observation was cited with evident approval in Armstrong at [57].

23 Counsel for the defendants submitted that that comment should be understood as applicable only to the equitable claims there in question, whereas here additional and in some respects different equitable claims could be made, in particular by beneficiaries. However, I do not think that the nature of the equitable claims alters the approach to be taken. It seems to me that for the same reasons that Murray J placed little weight upon such a consideration in the setting of that case, little weight is to be placed upon it in this case.

24 It was then said on behalf of the defendants that there needs to be a triable issue on the merits of the claim made in these proceedings before it would be in the interests of justice or appropriate to transfer the proceedings and that there is no triable issue in those proceedings.

25 The nature of the transfer application is, I think, such that a court ought be cautious before determining, in a summary way, in the setting of such an application, that the proceedings before it so lack merit that there is no triable issue, so that the power of transfer should not be exercised.

26 As I understood the submissions for the defendants, there was said to be an absence of a triable issue in the proceedings before this Court for two reasons. First, while it was accepted that claims of proprietary estoppel are a well-established species of ground for equitable relief which may extend to a constructive trust, it was submitted that there was nothing in the plaintiff's case that showed any relevant detriment.

27 In that respect, it is pointed out on behalf of the defendants that the services said by the plaintiff to have been provided were services to a business owned not by the trust (which is the owner of the relevant property) but rather to a business owned by the husband.

28 In this context, it is, of course, not for me now to determine whether the plaintiff's claim will succeed, or is likely to succeed, but only to consider whether triable issues are raised. In my opinion, that services were provided to a business not owned by the trust is not necessarily fatal to a claim of the kind which the plaintiff seeks to make in this case. In a proprietary estoppel case, detrimental reliance upon an assumption is capable of arising from acts not directly benefiting property owned by a defendant. In my opinion, I am unable, on the necessarily less than full material that is now before me, to come to the conclusion there is no triable issue on this basis.

29 The second strand of the argument that there is no triable issue relates to the position of beneficiaries under the deed of trust. (This was the second respect in which the rights of beneficiaries under the trust were relied upon by the defendants.) It was submitted that even if a claim were otherwise arguably established, it was clear that no claim on the part of the plaintiff could lie so as to defeat the interests of those other beneficiaries, distinct from the three named defendants.

30 In my opinion, that is not a basis on which I can decide at this stage that there is no triable issue.

31 That is so taking into account several matters. First, the point raised, if it were a good point, would not, it seems to me, necessarily defeat the plaintiff's claim entirely. If it were successful, it might be a matter which the non-trustee beneficiaries could raise but the trustee beneficiaries themselves would not (as was conceded by their counsel) be able to raise it. So in that way it would, if successful, seem to be a partial rather than complete answer to the claims made by the plaintiff.

32 In any case, in my opinion, I am not in a position to make, in effect, a summary determination that the rights of the non-trustee beneficiaries necessarily trump any equity which the plaintiff might have, arising from the claim she makes.

33 In that respect, I would refer to two matters. First, cl 2 of the trust deed, to which my attention was drawn by senior counsel for the plaintiff, would seem, arguably at least, to be capable of meaning that the trustees may not have been in breach of trust in circumstances in which they acted so as to give rise to the plaintiff's equity, because it appears to have been open to the trustees to advance capital in favour of classes of people, including the plaintiff and her former husband.

34 In any case and secondly, whether beneficiaries could rely upon the argument of the kind advanced by counsel for the defendants would be capable of being affected by further facts. Ultimately that appeared to be accepted by counsel for the defendants, who pointed out that no such further facts were before me. From that I was invited by the defendants to proceed on the basis that no further facts will emerge in due course. Bearing in mind the interlocutory nature of this application it would, in my opinion, be inappropriate to proceed on that basis.

35 So for those reasons, I reject the defendants' contention that there is an absence of a triable issue in respect of the claim that is made by the plaintiff and that a transfer should be declined for that reason.

36 I return then to the question of whether it is appropriate and, or alternatively, otherwise in the interests of justice that these proceedings be determined by the Family Court of Western Australia. In my opinion, it is more appropriate and in the interests of justice that that occur.

37 I say that taking into account the matters to which I adverted earlier, in particular the overlap or potential overlap in the issues and evidence which are relevant in each proceeding, the potential for duplication in relation to evidence and the cost, inconvenience and delay that that involves.

38 For those reasons I will order that these proceedings be transferred to the Family Court of Western Australia.