First Plaintiff v Defendants

[2012] VSC 57

Supreme Court of Victoria|2012-02-28|Before: Pagone J

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Source facts

Court

Supreme Court of Victoria

Decision date

2012-02-28

Before

Pagone J

Source

Original judgment source is linked above.

Judgment (88 paragraphs)

[1]

1 Two defendants in this proceeding seek to have certain claims set aside, stayed or transferred to the Family Court of Australia. Their applications arise in proceedings in which the plaintiffs seek declaratory orders that three other defendants (who do not challenge the proceedings) do not have beneficial interests in certain loan accounts and that they otherwise hold any beneficial interests in those accounts on behalf of the first and second plaintiffs. The plaintiffs issued their proceeding on 22 December 2011 which was first listed for directions on 3 February 2012. At that hearing counsel for two defendants indicated that the competency of the proceedings would be challenged and that they would otherwise seek to have them cross-vested to the Family Court. Directions were made on that occasion for any summons by those defendants to be heard on 20 February 2012 and no other orders were made for the filing of defences or other interlocutory processes pending the issue of the proposed summons and their determination. The only formal pleading in the proceeding thus far is the plaintiffs' statement of claim.

[2]

2 The issues for present determination arise in the broader context of matrimonial disputes between four of the defendants. The first defendant ("Mr Adam Priester") is the former husband of the fourth defendant ("Ms Jacqueline Lew"), and the second defendant ("Ms Sarah Nowoweiski") is the former wife of the fifth defendant ("Mr Steven Lew"). Each formerly married couple have separate proceedings in the Family Court for determination, amongst other things, of property claims against each other. A claim in each of the two Family Court proceedings concerns the beneficial entitlement to amounts in loan accounts of a trust of which the third plaintiff, S Lew Custodians Pty Ltd ("SLC"), is the trustee.

[28]

A consideration of these matters, including those in Main-Road Property Group Pty Ltd v Pelligra & Sons,[14] point overwhelmingly to the favourable exercise of the discretion to permit joinder of the three claims as brought. On any view the evidence to be led in each of the three claims is likely to be the same in key respects. The facts pleaded include details of the one common trust and of its one common management and control over the relevant period. It will be essential to the evidence concerning each of the three alleged agreements for Mr Solomon Lew to explain the background said to have given rise to the three agreements alleged to have occurred in 1999 with each of his three children. Critical to that evidence will be the credibility of Mr Solomon Lew and, to that extent, it is likely that he would be cross-examined in what would otherwise be at least two of the potentially three proceedings. It is likely that such cross-examination in each of the proceedings, if conducted separately, would concern not only the existence of the particular agreement relevant to the one proceeding but also his testimony concerning the background and objectives to be secured by what he contends to have been the proposal put to, and adopted by, each of his three children. It is generally not desirable that there should be such cross-examination in more than one proceeding. It is generally undesirable to create the possibility that evidence might not fully be tested in the one proceeding or to leave open the possibility of inconsistent findings in different proceedings. Parties and witnesses should not be given opportunities for different testing of evidence on different occasions or the benefit of seeing how one set of practitioners perform in one proceeding before testing credibility in another proceeding at another time. The evidence of Mr Solomon Lew's taxation concerns, the advice he received, the development of the trust proposal and the nature of the steps taken to implement it are matters said to be probative of whether he in fact had the conversations that he alleges to have had with each of his three children.[15]

[30]

14 It has been said that the basic principle in determining whether to exercise the discretion to grant leave for proceedings to be joined is that the court "should take whatever course seems to be the most conducive to a just resolution of the disputes between the parties" but in doing so be "affirmatively satisfied that joinder is unlikely to result in unfairness to any party" having regard "to practical matters".[18] It was submitted for Ms Sarah Nowoweiski that joinder would be unfair and inexpedient to her because (a) discrete and irrelevant matters in relation to the alleged arrangements with her former husband's sister and brother would overbear such material as would be common to the claims, and (b) that her claims ought to be transferred to the Family Court which is seized of the issues. Similarly, the submissions for Mr Adam Priester under the heading "Reasons for Transfer Here" raised some matters which are also relevant to whether joinder of the proceedings should be allowed. Mostly the submissions on his behalf under that heading related to "which jurisdiction [was]" more appropriate but in that context there were some matters which might fairly be said to raise "practical matters" of expediency relevant to doing justice between the parties. One was the submission that a consequence of joinder (or more particularly of not transferring part of a proceeding to the Family Court whether before or after joinder) was that Mr Adam Priester might lose the benefit of an order that his former wife pay his costs of the Family Court proceeding. I will return to these considerations when dealing separately with whether I should order the transfer of any part of the joint proceeding to the Family Court. In the context of deciding whether the proceedings ought otherwise to be joined, however, it is my view that it would not be unfair or inexpedient for the proceedings to be joined except in relation to the possibility that Mr Adam Priester and Ms Sarah Nowoweiski might be exposed to substantial legal costs that they might otherwise not have had to pay themselves in the Family Court. The grant of leave sought by the plaintiffs is discretionary and the parties accepted that the Court has power to impose conditions upon the grant of leave. In that regard counsel for the plaintiffs gave an undertaking to the Court that, as a condition for the grant of leave to join the proceedings, the statement of claim would be amended to delete the claim for costs against Mr Adam Priester and Ms Sarah Nowoweiski and that the third plaintiff would pay the costs of all parties to the litigation on a party/party basis subject to any ruling of the trial judge.

[31]

15 With the condition upon the payment of costs I am satisfied that permitting the joinder of the proceedings nunc pro tunc is the most conducive course to do justice between the parties without unfairness to any party having regard to practical matters. Joinder of the three proceedings in this Court will permit the question of the beneficial entitlement alleged to arise under the three agreements to be authoritatively determined as a matter of general law. The one proceeding to determine those issues may be contrasted with the alternative urged on behalf of Mr Adam Priester and Ms Sarah Nowoweiski, namely, that in each of the separate proceedings they would each separately have determined their family law claim to any property including any claim as against Mr Solomon Lew and Mrs Rose Lew. I was informed that those claims would be heard by different judges at very different times. One proceeding is expected to be heard in May 2012 but the other, I was told, was unlikely to be heard for some eighteen months. The evidence before me is that the determination of the plaintiffs' claims, namely that the distributions by the trust to the Lew children are held beneficially for Mr Solomon Lew and Mrs Rose Lew, can be heard expeditiously and conveniently in the one proceeding at the one time. The parties to the Family Court proceedings would then have a judicial determination of a discrete issue to be taken into account by the respective judges in each of the Family Court proceedings. At one point counsel for Mr Adam Priester appeared to submit that any judicial determination by this Court would be irrelevant to the Family Court proceeding and not binding on the parties to those proceedings. I do not accept that submission[19] but, even if it were correct, a determination by this Court of the common law rights of the parties would be a factor for the Family Court to take into account in the broad jurisdiction of that Court in dealing with the rights of the parties to a marriage. It is hard to imagine, for example, that the Family Court would not take into account a declaration contrary to the plaintiffs' claims if they were not established in this Court. In that hypothetical event it would be hard to see how the plaintiffs or the relevant Lew children could maintain a claim in the Family Court inconsistently with a declaration they had sought and failed to obtain in this Court.

[48]

26 These considerations are sufficient to decline the respective applications for transfer of the proceeding to the Family Court. There were some additional reasons in the submissions for Mr Adam Priester put in favour of the transfer he sought to which I have not made specific reference. Nine headings appeared in the submissions filed on his behalf as reasons for the transfer. I have dealt with most of them during the course of my reasons above. The headings included such matters as the alleged lack of utility, expensiveness, inefficiency and wastefulness of the proceeding being maintained in this Court. Many of the nine headings overlap and raise general considerations such as comity and proper administration of justice which, in the end, point in neither specific direction. Indeed, some of the considerations were stated with such generality as to be difficult to apply or to see in which way they might tend in this instance. Thus, for example, it was said that the parties to a Family Court proceeding, unlike the parties to a Supreme Court proceeding, had the benefit of extensive protections under s 121 of the Family Law Act 1975 (Cth) protecting the privacy and confidentiality of the parties to the matrimonial proceedings. The section undoubtedly applies and confers a valuable protection but it is difficult to see in what meaningful way that part of the proceeding sought to be cross-vested on Mr Adam Priester's application would significantly detract from or undermine the protections. The section would undoubtedly continue to apply to all other matters which should be dealt with in the Family Court proceeding apart from that part dealing with the enforceability of an alleged agreement under general law. The submission also took no account of this Court's wide powers to protect the confidentiality, privacy and legitimate forensic rights afforded under law. In an appropriate case this Court can make orders in a proceeding to ensure that any rights otherwise available under s 121 of the Family Law Act 1975 (Cth) are not inappropriately lost. It was also asserted that the parties might be "hamstrung" by the Harman principle because of "an inability to put all relevant evidence before the Supreme Court" in order that the issues be properly ventilated. However, no particulars were identified of anything upon which the implied undertaking might actually apply beyond the general statement of a possibility. Furthermore, there was no consideration of how the Harman principle might apply to restrict the authority of this Court to compel production of documents or the subpoena of witnesses as part of its own processes.[40] It was also contended that the Family Court had "a unique power to make "Barro Orders" - ordering that one spouse provide the other with funding to conduct their side of the matrimonial proceeding". In relation to Mr Adam Priester such an order was made in September last year. However, this Court has power to permit the joinder of the proceedings upon conditions and those conditions can include that a party pay the costs of another. Such a condition is appropriate in this case where the plaintiffs seek to maintain an agreement which, if successful, will defeat what might otherwise be thought to have been a reasonable expectation of strangers to the agreement whose interests may be defeated if that agreement is upheld. It might also be appropriate on the separate basis of ensuring that the court has before it the true controverters to the claim which might not otherwise be adequately tested or might conceivably not be tested by the parties with greatest interest that it be tested.