First Plaintiff Second Plaintiff v First Defendant Second Defendant

14 The day on which the application by Laree Jane was filed in the Family Court, was the day before the order for costs was made by Sifris J, and the second day of a trial in the Federal Court of Australia[5] before Besanko J, in which Bob Jane Corporation was applicant and Robert Jane was one of a number of respondents. The respondents did not participate in the trial. The trial judge described Robert Jane as the 'key figure in the respondents' camp ...'

15 In the Federal Court proceeding, the applicant alleged infringements of its trademarks, passing off and misleading or deceptive conduct and sought injunctive and declaratory relief. The trial took place on 2 and 3 September 2013, and judgment was delivered on 26 November 2013. A raft of injunctions was granted, and costs ordered against the respondents, some on an indemnity basis. The costs have been assessed by the applicant at $682,001. A bill of costs has been prepared, filed and served.

16 The plaintiffs in this proceeding relied on the sequence of events surrounding the assignment and transfer. No evidence was adduced by Laree Jane in this proceeding to explain the timing of her application, initiated in the Family Court on 3 September 2013, more than 3 years after she became aware of relevant facts on which she now relies to support her application. The significance of these events is a matter for trial.

17 On 13 September 2013, Robert Jane authorised the assignment and transfer that were later recorded in the Deed of Assignment and Transfer of Land, both dated 17 September 2013. Under the assignment, Laree Jane was to receive the proceeds payable as a result of the compulsory acquisition of land. The assignment was expressed to have been made 'as a further partial property settlement to Laree Madonna Jane with love and affection'. Under the proposed transfer, Robert Jane would transfer to Laree Jane parcels that had not been compulsorily acquired. The transfer was made 'as a further partial property settlement to Laree Madonna Jane with love and affection'.

18 The plaintiffs alleged, and advanced some evidence, that on 16 September 2013, a Mercedes Benz sedan S500 and a Holden station wagon were transferred by Robert Jane into the name of Laree Jane. They alleged that the value of the Mercedes Benz was between $253,900 and $274,974, and the value of the Holden station wagon was between $38,490 and $59,790. Company records were said to indicate that the motor vehicles had been registered in the name of Robert Jane prior to the transfers.

19 On 17 September 2013, Robert Jane and Laree Jane executed the Deed of Assignment and Transfer of Land, which reflect the assignment and transfer authorised on 13 September 2013.

20 On 9 October 2013, following the order for costs made by Sifris J, the plaintiffs filed and served a summons for taxation and a bill of costs in the sum of $640,928.09. On 18 October 2013, the plaintiffs filed an Originating Motion in which they sought freezing orders under r 37A of the Supreme Court (General Civil Procedure) Rules 2005, in aid of recovery of their costs. Orders were first made on 22 October 2013. On 28 October 2013, the freezing orders were extended until 22 November 2013, and Laree Jane was joined as a defendant.

21 At the hearing on 28 October 2013, Robert Jane revealed the existence of the Deed of Assignment. He also filed an affidavit in which he declared assets valued at a little over $10,000, comprised mostly of personal items, and a liability of $28,000. This proceeding was commenced a few days later.

22 The numerous proceedings in the Family Court, the proceeding in the Federal Court and the proceedings in this Court mentioned above are by no means an exhaustive list of recent litigation involving the Jane family and entities. There are two more relevant proceedings in this Court, both brought by the Commissioner of Taxation against Robert Jane. In one proceeding, the Commissioner claims an excess of $80 million, and in another, a little over $1 million. It has been said that the assessments supporting the larger claim are predicated on the validity of the Declaration of Trust under which the units in the Unit Trust were transferred to the beneficial ownership of Rodney Jane. A summons for final judgment, issued by the Deputy Commissioner, has been adjourned from time to time. The summons is scheduled for directions on 2 May 2014. These liabilities are mentioned because they are evidence of other creditors of Robert Jane, not represented in this proceeding.

23 The application by Robert Jane to transfer this proceeding to the Family Court is supported by Laree Jane. It is made pursuant to s 5 of the Jurisdiction of Courts (Crossvesting) Act 1987 (Vic). The relevant parts of s 5 provide:

(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 -

(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

it is more appropriate that the relevant proceeding be determined by the Federal Court or the Family Court, as the case may be -

the Supreme Court shall transfer the relevant proceeding to the Federal Court or the Family Court, as the case may be.

24 In most applications of this kind, the Court is not concerned with the jurisdiction of the alternate courts to hear and determine the proceeding. In most instances, the question before the court concerns the 'nuts and bolts' of a trial in order to assess the interests of justice.

25 Robert Jane did not direct much attention to the existence of a common substratum of fact, or the convenience of witnesses and other 'nuts and bolts' matters that might assist in identifying the more appropriate forum. In his affidavit sworn 18 December 2013, his solicitor, Gary David Goldsmith, sought to explain the connection between the issues in this proceeding and the proceeding in the Family Court. He pointed out that Robert Jane had pleaded by way of defence, that the Deed of Assignment was described as part of a matrimonial property settlement. Mr Goldsmith referred to paragraphs 11 and 13 of Robert Jane's defence. Those paragraphs refer to the statements mentioned earlier, that the consideration for the transfer was 'breakdown of marriage' and the assignment was expressed to have been 'a further partial property settlement to Laree Madonna Jane with love and affection'.

26 In her defence in this proceeding, Laree Jane alleged:

1. ... that the Transfer was made for good and valid consideration in part satisfaction and part compromise of the relief sought by the second defendant against Bob Jane in the Family Court proceedings commenced by her against Bob Jane and others and referred to in paragraph 4(3) above.

1. ... that the Deed of Assignment was made for good and valid consideration in part satisfaction and part compromise of the relief sought by the second defendant against Bob Jane in the Family Court proceedings commenced by her against Bob Jane and others and referred to in paragraph 4(e) above.

1. (c) had no notice of an intent by Bob Jane to defraud his creditors at the time of the alienation of property constituted by the Transfer and Deed of Assignment; and

(d) by reason thereof and by reason of the claims made by her and relief sought in the Family Court proceedings referred to in paragraph 4(e) above section 172(1) of the Property Law Act 1958 (Vic) does not extend to the alienations of property alleged by the plaintiffs and the second defendant relies on section 172(3) of the Property Law Act 1958 (Vic).

27 In his affidavit, Mr Goldsmith seemed to rely upon three additional factors to support the transfer application, in addition to the matters pleaded by way of defence. First, that the Family Court proceedings will determine the pool and distribution of assets as between the former husband and wife; second, the Family Court has already fixed a trial date for the proceeding initiated in that court, while the Supreme Court has not a trial date for this proceeding; and third, the issues in the Family Court significantly overlap with the issues in the Supreme Court proceeding.

28 The plaintiffs contended that this proceeding could not have been instituted in the Family Court. They submitted that the Family Court did not have original jurisdiction in relation to an application made under s 172 of the Property Law Act, and that it was at least arguable that the Family Court would decline to exercise any accrued jurisdiction.

29 The plaintiffs relied on the definition of 'financial agreement' in s 4 of the Family Law Act to confine the operation of s 90K(1)(aa) to the particular agreements made under ss 90B, 90C, or 90D. They contended, correctly in my view, that the Deed of Assignment and the Transfer of Land made on 17 September 2013, were not 'financial agreements' and thus not amenable to an order made under s 90K(1)(aa) of the Family Law Act, which provides:

a party to the agreement entered into the agreement:

(i) for the purpose, or for purposes that included the purpose, of defrauding or defeating a creditor or creditors of the party; or

(ii) with reckless disregard of the interests of a creditor or creditors of the party; ...

30 The plaintiffs argued that ss 90B and 90C only concerned agreements made before marriage and during marriage respectively, and that s 90D could have no application, because at the time of the assignments in September 2013, the parties were 'spouse parties to (another) binding agreement' - namely, that made on 20 September 2009. Furthermore, the Deed of Assignment and the Transfer of Land were not expressed to have been made under s 90D, as was required.

31 Robert Jane contended that the Family Court had original jurisdiction to decide the issues in this proceeding, because of the provisions in s 106B of the Family Law Act. Subsection (1) provides:

In proceedings under this Act, the court may set aside or restrain the making of an instrument or disposition by or on behalf of, or by direction or in the interest of, a party, which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order.[6]

32 The scope of s 106B, to authorise a determination of this proceeding, was not fully argued. I am inclined to the view, however, that the provisions do not. They have been characterised as 'antiavoidance' provisions, empowering the court to overturn or prevent transactions that may be designed to frustrate court orders and the proper adjudication of matters under the Act. It is plainly directed to a proceeding or order under the Act. The evident purpose of the provision is to maintain the integrity of the process of the court. The assignment and transfer have not been, and cannot be readily characterised as calculated to defeat an existing order in a proceeding under the Family Law Act.

33 In the alternative, Robert Jane contended that, on any view, the Family Court would have accrued jurisdiction to determine all of the issues in this proceeding. He relied substantially on Valceski v Valceski,[7] a decision of Brereton J in the Supreme Court of New South Wales. In that case, his Honour dealt at length with the accrued jurisdiction of the Family Court, in the context of an application for the transfer of a proceeding to the Family Court from the Supreme Court of New South Wales. The wife had instituted a proceeding in the Family Court for parenting orders and financial adjustment. The property the subject of the proceeding included the former matrimonial home. The husband was the sole registered proprietor. The husband's interest had been acquired, in part, as a result of a transfer from his father. The husband's father was the plaintiff in the Supreme Court proceeding, in which he sought orders setting aside the transfer on the grounds of non est factum, misrepresentation, mistake, unconscionability, undue influence under the Contracts Review Act 1980. He sought a declaration as to the equitable interests of the various parties in the property, arising from their respective contributions to the purchase price and improvements.

34 In Valceski, the wife applied to have the equity suit transferred to the Family Court, to be consolidated with the matrimonial proceeding between her and the husband. Brereton J identified the issues in the matrimonial proceeding as follows:[8]

In the matrimonial proceedings, so far as they relate to financial matters, the ultimate issue is what if any alteration should be made to the interests of Bobby and Betty in their property. It is well established that in such proceedings a three stage approach is applicable: first, the identification and valuation of the pool of property of the parties; secondly, the identification, evaluation and balancing of the parties' respective contributions of the types referred to in s 79(4), being financial and nonfinancial, direct and indirect contributions to the acquisition, conservation and improvement of their property, and contributions to the welfare of their family (including in the capacity as homemaker and parent); and thirdly, the determination of what adjustment is required to the contributionbased assessment having regard to the matters referred to in the Family Law Act (Cth), s 75(2) - which relate generally to the respective means and needs of the parties - to produce a just and equitable result.

...

Thus, as in many cases under the Family Law Act (Cth), s 79, it will be necessary to determine if property held by a third party is beneficially property of a party, or if property held by a spouse is not beneficially that party's property. In such cases there is no reason why - if, in the context of a dispute between husband and wife as to property, an issue arises as to whether the parties or either of them have a beneficial interest in property legally owned by a third party, or do not have a beneficial interest in property held in their own names, or as to the extent of any such interest - the Family Court cannot resolve that issue. It frequently must, and does. It is part of the process of identifying the pool of property of the parties to the marriage, which is available for division between them.

...

For the foregoing reasons, in my opinion it is not seriously arguable that, in proceedings between parties to a marriage, the Family Court cannot declare the rights and title of a spouse party visàvis a third party so as to bind the third party. It follows that it is not seriously arguable that the Family Court does not have jurisdiction to entertain and determine Betty's application for a declaration as to the extent of Bobby's interest, if any, in McArthur Parade, which in substance if not in form is what claim 3 in her amended application seeks.

... The claim in the equity suit forms part of the justiciable controversy in respect of which the matrimonial proceedings have been brought. Accordingly, there is but one justiciable controversy; and the Family Court has accrued jurisdiction in respect of so much of that controversy as does not fall within its ordinary jurisdiction.

36 The plaintiffs advanced five reasons why this Court ought to conclude, for the purpose of this application, that the Family Court did not have accrued jurisdiction to hear and determine all of the issues in this proceeding. First, the definition of 'financial agreement', employed in s 90K of the Family Law Act, evidenced a legislative intention that the Family Court had only limited scope to set aside agreements, confined to those specifically identified and defined. To that contention might be added the operation of s 106B (1) of the Family Law Act, prescribing certain other circumstances in which a power to set aside a transaction might be exercised. The plaintiffs argued, in effect, that having made specific and limited provision under which the Family Court might set aside agreements, the legislature did not intend that the Family Court should embark upon an investigation into a transaction under s 172 of the Property Law Act.

37 I am not persuaded by that contention. The basis upon which the jurisdiction of a court may be extended to deal with the whole of a single judiciable controversy is not to be confined by reference to the conferral of specific statutory jurisdiction. The suggestion that there might exist such an implied limitation was dealt with in Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd[10] and Re Wakim.[11] In Valceski, Brereton J said:[12]

It has also been suggested that, if the Family Court has an accrued jurisdiction, it is a narrow one. With respect, it is difficult to understand what this means. The scope of the accrued jurisdiction depends upon the scope of the single justiciable controversy. If the same substratum of facts gives rise to a wide range of disputes, some federal and some not, they are all within the accrued jurisdiction.

38 Second, the plaintiffs contended that an application under s 172 of the Property Law Act was not solely for the benefit of the plaintiffs. The proceeding enures to the benefit of creditors. There are third parties who have a real interest in the outcome. This contention seemed to be no more than an extension of the 'implied limitation' argument, although it drew an important distinction between the purpose and scope of the various provisions.

39 Third, the plaintiffs contended that while the second plaintiff, Port 471, was entitled to bring the proceeding under s 172 of the Property Law Act, it is in no way connected to any issue in the Family Court proceeding. This seems yet another facet of the same point.

40 Fourth, the plaintiffs submitted that this proceeding had been brought by them to support their ability to recover on an order of this Court in their favour. It is uniquely connected with this jurisdiction and the integrity of orders made in this Court. They are at risk of an unsatisfied order for costs, because Robert Jane has disposed of his assets to defeat the order.

41 Fifth, they contended that the questions for determination in this proceeding did not share a common substratum of fact with the proceeding in the Family Court. If I understood that contention correctly, the plaintiffs contended that this proceeding is not part of a single justiciable controversy.

42 On the question of accrued jurisdiction, only the last contention has merit. That is not to say that the other matters are not relevant to the broader assessment of the interests of justice. The nature of the proceeding in the Family Court and the claim in the equity suit under consideration in Valceski, are to be contrasted with the two proceedings under consideration on this application. The point of connection between the proceeding in the Family Court and in this Court is best defined by reference to the need to identify the pool of property that Laree Jane would have readjusted, if she succeeds in her application to set aside the Declaration of Trust, the Deed of Settlement, the Binding Financial Agreement and the orders made by the Family Court on 24 September 2009. But the trial, to commence on 16 June 2014, is not concerned with any adjustment of property rights. There is no justiciable question, presently before the Family Court, that involves the threestep process mentioned by Brereton J in Valceski. Until the Deed of Settlement, Binding Financial Agreement and related court orders are set aside, the adjustment of property rights between Robert Jane and Laree Jane is final.

43 The issues for adjudication in the Family Court in the forthcoming trial (validity of agreements and orders) do not share a common substratum with the issues in this proceeding (purpose of the assignment and transfer). The determination of this proceeding is not essential to the determination of any issue in the forthcoming trial in the Family Court. This proceeding is not now, and may never become, part of any justiciable controversy in the Family Court. This Court is being asked to transfer a proceeding to the Family Court which may never need to be determined by it.

44 There is not a single controversy in the Family Court to which the issues in this proceeding form part. While it cannot be said that a Family Court would not take a different view of its accrued jurisdiction, there is at least a real question as to whether it would be extended to resolve this proceeding, which is fundamentally concerned with the interests of creditors of Robert Jane, unrelated to, and unnecessary for the determination of questions of validity and enforceability, to be determined in the Family Court before any readjustment of property rights can be contemplated.

45 Paragraphs (A), (B) and (C) under s 5(1)(b)(ii) of the Crossvesting Act prescribe the matters to which this Court must have regard when considering an application for transfer. In relation to para (A), I am satisfied that this proceeding could not have been commenced in the Family Court within its original jurisdiction. There is also a real question as to whether this proceeding could have been instituted in the Family Court, in reliance on accrued jurisdiction, until such time as the Deed of Settlement and the Binding Financial Agreement have been set aside. At present, there is no such justiciable issue before the Family Court.

46 There is uncertainty surrounding the validity of the Deed of Settlement and Binding Financial Agreement. The scope of the forthcoming trial is limited to those issues. There may be appeals. There is a complete lack of utility in the Family Court deciding this case in the immediate future. There is also the unusual feature of a common position of the former husband and wife against the interests of creditors of Robert Jane. In my opinion, the jurisdictional factor (A), to which I must have regard, makes it more appropriate that this proceeding be decided promptly in this Court. But that is not the end of the enquiry.

47 The next matter (B), to which I must have regard, is the extent to which the matters for determination in this 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 this Court, apart from the operation of the Crossvesting Act. I am satisfied that this proceeding is within the original jurisdiction of this Court. It does not involve the application, interpretation, or validity of the law of the Commonwealth.

48 Finally, this Court is to have regard to factor (C), the interests of justice. The approach to be taken is now well settled. The principles were authoritatively decided by the High Court in BHP Billiton Ltd v Schultz.[13] They were summarised by Robson J in Irwin v State of Queensland.[14] I do not propose to recite each of the principles. Many overlap. It is sufficient for present purposes to note that they include the following:

(b) It is not necessary that it should appear that the first court is a "clearly inappropriate" forum. It is both necessary and sufficient that it appears that, in the interests of justice, the second court is more appropriate than the first court.

(c) The Court 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.

(f) It is inapt to speak of an applicant for an order for transfer as bearing a burden of persuasion analogous to an onus of proof. Rather the jurisdiction must be exercised when "it appears" to the court that "it is in the interests of justice" that the proceeding be determined in the Supreme Court of another State or Territory rather than the court of where the proceeding has been issued. Unless it so appears, 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.

(g) The court should adopt what has been described as a "nuts and bolts" management decision as to which court, in the pursuit of the interests of justice, is more appropriate to hear and determine the substantive dispute.

(h) The appropriate court is the natural forum as determined by connecting factors to that forum.

(o) The plaintiff's choice of forum by itself is not a relevant connecting factor.

(p) Each case depends on its own particular facts.

(q) The list of connecting factors is impossible to state exhaustively. Equally the weight to be given to each factor must vary from case to case.

49 The factors to which regard must be had under s 5(1)(b)(ii), when deciding which court is more appropriate, necessarily involve overlapping considerations. A consideration of the interests of justice is, of course, predicated on the assumption that the jurisdiction of this Court was regularly invoked and that it was capable of being instituted in the Family Court. It follows, from the foregoing reasons, that there is a real question as to whether the proceeding is capable of being instituted in the Family Court, at least at this time. But assuming for present purposes that a determination of the issues in this proceeding were to fall within the accrued jurisdiction of the Family Court (because a readjustment of property interests might be made in future if the challenged agreements are set aside) the uncertainty surrounding that aspect, the likely delay in the hearing and determination of this proceeding in the Family Court, and prospect of appeals, are surely matters that go to the interests of justice. There is also the understandable disinclination of the former husband and wife to disturb the status quo in relation to the assignment and transfer in the Family Court.

50 The former husband and wife are parties to the assignment and transfer, which was made after the Family Court proceeding had been commenced. They have a common interest in supporting the validity of the assignment and transfer against creditors, and have evinced an intention to do so. The primary respondent in the Family Court is the assignor/transferor, and yet he is the primary applicant for transfer. He has no interest in an early determination of this proceeding, if at all. Nor is there any apparent utility for Laree Jane, who supports the application, in pressing for a determination. They will be strongly disinclined to disturb the assignment and transfer.

51 Robert Jane sought to develop his contention that the interests of justice required that this proceeding be transferred to the Family Court, by reference to passages in Valceski and Kosmopoulos v Kosmopoulos,[15] contending that the analysis undertaken by the Chief Justice in Kosmopoulos applied to this case. I interpolate that Robert Jane would contend that at some point it may become necessary for the Family Court to readjust property interests. In that event, ownership of the property the subject matter of this proceeding will be considered in order to establish the pool. That was the thrust of Mr Goldsmith's affidavit.

52 The substratum of fact in this proceeding does not overlap with the substratum of fact in the Family Court proceeding. This proceeding is to protect the interests of creditors. In the Family Court, the applicant challenges the validity of agreements and court orders. The claim made by the plaintiffs in this proceeding has no connection with the claims, contentions and issues in the Family Court proceeding.

53 If this proceeding were to be transferred to the Family Court, it is unlikely that it would be heard and determined at the same time as the threshold questions raised in Laree Jane's application. There would be no utility in any such determination until after the Deed of Settlement and the Binding Financial Agreement had been set aside, if ever. In the meantime, the position of the plaintiffs in this proceeding, and other creditors of Robert Jane, would be left in a state of limbo as to his capacity to meet his debts.

54 The parties in this proceeding were informed that a trial could commence on 11 March 2014 on an estimate of two to three days. In my view, the interests of justice are best served by an early determination of this proceeding in this Court.

[1] [2008] VSC 341.

[2] Relevant extracts from a draft statement of claim are recited in the Reasons for Judgment of Berman J in the Family Court of Australia 5 November 2013 at paras 14 to 19.

[4] [2013] VSC 406.

[5] (2013) FCA 1255.

[7] [2007] NSWSC 440; 70 NSWLR 36.

[8] [2007] NSWSC 440; 70 NSWLR 36 [27], [29], [34] citations omitted.

[9] [2007] NSWSC 440 [65].

[10] (1981) 148 CLR 457.

[11] [1999] HCA 27; (1999) 198 CLR 511.

[13] [2004] HCA 61; (2004) 221 CLR 400.

[14] [2011] VSC 291, [14] citations omitted.

[15] [2008] VSC 402.