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1 Mr Arkady Shtrambrandt and Mrs Elena Shtrambrandt were previously married and are now divorced. In the course of their marriage a number of properties were acquired by them and by a company, Fenedisto Pty Ltd, which is the trustee of a unit trust. The following properties are in issue in the proceedings. First, two properties and an accessory title in Cole Street, Brighton. The Cole Street properties are owned by Fenedisto. Second, a property in Curraweena Road, Caulfield. This property is owned jointly by Mr and Mrs Shtrambrandt. Third, a property in Brighton Road, Elwood. This property is owned jointly by Mr and Mrs Shtrambrandt, apparently on trust for their son, Loryan.

2 There were contested property division proceedings between Mr and Mrs Shtrambrandt in the Family Court of Australia ("the Family Court proceeding"). Mr Isaac Brott initially represented Mrs Shtrambrandt in those proceedings; and also in relation to other proceedings in this Court commenced by Mrs Shtrambrandt against her former husband and related entities.

3 The Family Court made orders on 19 January 2000 in the Family Court proceedings restraining both Mr and Mrs Shtrambrandt from dealing with their assets.

4 On 7 December 2000, Mrs Shtrambrandt signed a costs agreement with Mr Brott relating to the Family Court proceedings. The costs agreement contains a charging clause, under which Mrs Shtrambrandt granted a charge over her assets to Mr Brott to secure payment of her legal costs. It may be that, by granting this charge, Mrs Shtrambrandt acted in contravention of the Family Court restraining orders. However, that would not appear to make the charging clause void or voidable. Any breach of the restraining orders is a matter for the Family Court, if the issue ever arises in that Court.

5 In 2004 and 2005 Mr Brott, acting pursuant to the charging clause in the costs agreement, lodged caveats over the properties in issue.

6 In early 2005, Mr Shtrambrandt withdrew her instructions to Mr Brott to act for her and engaged alternative solicitors. Thereafter, a settlement of the property disputes between Mr and Mrs Shtrambrandt was negotiated and a binding financial agreement was signed by them. Under the binding financial agreement, amongst other things, Mrs Shtrambrandt agreed to transfer to Mr Shtrambrandt all of her unit holding in the Fenedisto Unit Trust and her interest as joint proprietor of the Curraweena Road property. Further, Mr and Mrs Shtrambrandt acknowledged that they held the Brighton Road property on trust for their son, Loryan, and it was agreed to transfer that property to him.

7 Although Mrs Shtrambrandt signed a transfer of her interest in the Curraweena Road property to Mr Shtrambrandt in 2005, that transfer was only lodged in the last day or so. This was because the previous mortgagee lost the duplicate title. In any event, that transfer has not been registered and the caveat lodged by Mr Brott prevents this occurring.

8 Mr Brott's costs of acting for Mrs Shtrambrandt have not all been paid.

9 Disputes having arisen as to the validity of the caveats, Mr Brott commenced proceedings in this Court ("the Brott proceeding") seeking declarations that he has a caveatable interest in the properties. The defendants to these proceedings include Mr and Mrs Shtrambrandt, their son, Loryan, and Fenedisto.

10 In response to the Brott proceeding, Mr Shtrambrandt and Fenedisto brought separate proceedings under s. 90(3) of the Transfer of Land Act 1958 (Vic) for removal of the caveats.

11 In November 2005, I heard and determined, as part of that proceeding, an application by Fenedisto to remove the caveats and notices of action by the Registrar of Titles over the Cole Street properties. I granted the application, subject to certain conditions.[1] Those conditions have the effect that, from any sale of the Cole Street properties, the amount of Mr Brott's costs of acting for Mrs Shtrambrandt in the Family Court be paid into trust pending the outcome of the Brott proceeding.

12 Mr Shtrambrandt now applies, as part of his proceeding, to remove the caveat over the Curraweena Road property. He has sworn that he has debts he wishes to pay and that he wishes to proceed with a commercial transaction. He requires money for these purposes. He wishes to raise that money from a sale or mortgage of the Curraweena Road property. Mr Brott's caveat prevents this.

13 Mr Shtrambrandt concedes that there is a serious question to be tried as to the existence of a caveatable interest by Mr Brott in the Curraweena Road property. However, it was submitted on his behalf that the balance of convenience overwhelmingly points in favour of removing the caveat to enable Mr Shtrambrandt to deal with the property. This is because Mr Shtrambrandt offers, as a condition of the caveat being removed, to give undertakings and to submit to orders against him which will have the effect that any sale or borrowing upon the security of the property will result in one-half of the net proceeds of sale or borrowing being placed in trust pending the hearing and determination of Mr Brott's claims.

14 It was submitted on behalf of Mr Brott that the balance of convenience favours the continuance of the caveat pending the hearing and determination of his proceeding. At the outset, it was submitted that the appropriate court to deal with the question of whether the caveat should be removed was the Family Court of Australia, and that a separate application by Mrs Shtrambrandt to transfer the proceedings in this Court to the Family Court of Australia should be granted. That cross-vesting application was argued before me at the same time as I heard argument on Mr Shtrambrandt's application to remove the Curraweena Road caveat. For reasons which I will give, the cross-vesting application will be refused.

15 It was submitted on behalf of Mr Brott that the balance of convenience favoured continuance of the caveat for a number of reasons.

16 First, it was submitted that Mr Shtrambrandt had not shown any actual need to deal with the Curraweena Road property. All that could be pointed to was a general wish to access Mr Shtrambrandt's equity in the property. It was submitted that general statements of desire by Mr Shtrambrandt to enter into an unspecified commercial transaction were not good enough; and that this was especially so in circumstances where Mr Shtrambrandt, through his company Fenedisto, obtained urgent removal of the Cole Street caveats last year to enable a scheduled auction to proceed. However, the Cole Street properties remain unsold having been passed in at auction.

17 I do not think that this factor justifies the maintenance of the caveat in the light of the undertaking and orders proposed by Mr Shtrambrandt to protect any interest of Mr Brott in the property. Mr Brott's interest is, if established, only as good as Mrs Shtrambrandt's interest in the property. That interest is to a one-half share of the property. Further, the factual basis of the submission has been overstated. Mr Shtrambrandt has sworn to debts which he wishes to pay and has given some general detail about the proposed business venture in which he wishes to invest.

18 Second, it was submitted that the interest of Mrs Shtrambrandt in the Curraweena Road property may, notwithstanding the binding financial agreement under which she agreed to transfer her interest as joint proprietor to Mr Shtrambrandt, become greater than that of a joint proprietor in the future. This is because Mrs Shtrambrandt has recently taken proceedings in the Family Court to set aside the binding financial agreement[2] and seeking orders for an equitable division of property between her and her ex-husband. Further, in those Family Court proceedings, Mrs Shtrambrandt seeks interlocutory injunctions restraining Mr Shtrambrandt from dealing with, amongst other things, the Cole Street properties and the Curraweena Road property.

19 It was submitted that final orders in the Family Court may possibly include an order giving Mrs Shtrambrandt ownership of the whole, or an increased portion, of the Curraweena Road property. Given this possibility, which could have the effect of increasing the value of Mr Brott's security, it was submitted that I should allow the caveat to remain. In this regard, it was submitted that the affidavit material filed on behalf of Mrs Shtrambrandt and Mr Brott demonstrated fraudulent non-disclosure by Mr Shtrambrandt of his assets in the course of the Family Court proceedings and that, therefore, there was a likelihood that the Family Court will make interlocutory orders restraining Mr Shtrambrandt from dealing with his assets pending the hearing and determination of Mrs Shtrambrandt's application to set aside the binding financial agreement and for final property division orders.

20 In my view, the answer to those submissions is that they are based on matters for the Family Court to determine. However, recognising the possibility that the Family Court may think it appropriate to grant interlocutory restraining orders, I am of the view that it is appropriate to stay the operation of any order I make for removal of the caveat. This will allow Mr Shtrambrandt, or Mr Brott if he desires, a reasonable opportunity within which to apply to the Family Court for restraining orders against Mr Shtrambrandt. In this regard, I note that it was submitted that Mr Brott has, under s. 90K(3) of the Family Law Act 1975 (Cth), a sufficient interest to bring his own proceedings in the Family Court to set aside the binding financial agreement.

21 I say nothing about the merits of the allegations of fraudulent non-disclosure of assets made against Mr Shtrambrandt, about the merits of the application to set aside the binding financial agreement or as to whether Mr Brott has standing to apply in the Family Court to set aside the binding financial agreement. These are all matters for the Family Court.

22 Third, it was submitted that the balance of convenience was against the removal of the caveat because Mr Shtrambrandt had acted fraudulently in understating his assets in connection with the Family Court proceedings. On this basis, it was submitted that it was not likely that Mr Shtrambrandt would comply with the postulated undertaking and orders; or at least there was a substantial risk that he may not do so. In my view, this submission should not be entertained. It would require me to enter into the issues now placed before the Family Court by Mrs Shtrambrandt, and which Mr Brott may himself agitate in that court. If the Family Court forms the view that the undertaking and orders do not provide adequate security for Mr Brott's, or Mrs Shtrambrandt's, interests then the Family Court has power to make restraining orders against Mr Shtrambrandt to protect the subject-matter of the litigation before it. Indeed, Mrs Shtrambrandt has already made such an application for interlocutory restraining orders and it was submitted by her counsel that such orders are likely to be made by the Family Court.

23 Fourth, I was informed during argument that Mrs Shtrambrandt has, in the last day or so, lodged her own caveat over the Curraweena Road property. This caveat, if it remains on the title, will in any event prevent Mr Shtrambrandt dealing with the property. In my view, the existence of this caveat is not relevant to the balance of convenience concerning the removal of Mr Brott's caveat. If such a caveat has been lodged by Mrs Shtrambrandt, then it will take effect. If an application is made to remove it, the Court will deal with that application.

24 For the above reasons, I conclude that the balance of convenience favours the removal of Mr Brott's caveat on the giving of the undertaking and orders proposed by Mr Shtrambrandt. However, as I have indicated, Mr Brott and Mrs Shtrambrandt should be given the opportunity to apply in the Family Court for restraining orders against Mr Shtrambrandt. I will accordingly stay the operation of my orders removing the caveat until 5 pm on 8 November 2006, a period of 21 clear days from today.

25 It was submitted on behalf of Mr Shtrambrandt that, as the price of the undertaking and orders proposed by him, I should require a cross-undertaking from Mr Brott that he will pay any damage suffered by Mr Shtrambrandt by reason of that undertaking and orders. In my view, such an undertaking is not appropriate or necessary and I will not require it. If Mr Brott is ultimately found to have lodged his caveat without reasonable cause, then the Court can order that he pay compensation under s. 118 of the Transfer of Land Act.

26 Next, I will consider the application by Mrs Shtrambrandt, supported by Mr Brott, for the proceedings in this Court to be transferred to the Family Court under s. 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth). In BHP Billiton Ltd v Schultz[3] the High Court emphasised that a transfer will only be ordered under this statutory provision where it is in the interests of justice to do so.

27 In my view, it is not in the interests of justice that the proceedings in this Court be transferred to the Family Court, for the following reasons.

28 First, Mr Brott chose to issue his proceeding, which was issued first, in this Court. Likewise, the proceedings commenced by Fenedisto and Mr Shtrambrandt for removal of the caveats were correctly brought in this Court. Both claims in this Court are well advanced and are nearing the stage of being set down for trial.

29 Second, although the Family Court can make orders requiring parties to withdraw caveats and, in default of such orders being complied with, an officer of the Family Court can sign the necessary documents to give effect to the orders[4], it is only this Court which can order that the Registrar of Titles remove the caveats.

30 Third, I do not accept the submission made on behalf of Mrs Shtrambrandt that the Family Court has exclusive jurisdiction over the matters in dispute in the proceedings in this Court. This is not "a dispute about a [family law] bill of costs" in the sense discussed by Fogarty J in Weiss v Barker Gosling.[5]

31 I accept that matters of quantum of costs in a family law matter must, of course, be determined by the Family Court. However, the quantum of the costs which Mr Brott seeks from Mrs Shtrambrandt in relation to the earlier proceeding in the Family Court are not in issue in this case. Mrs Shtrambrandt has not challenged the itemised bill of costs delivered to her by Mr Brott for these services.

32 This case concerns the validity of the charging clause, as between Mr Brott and persons who are strangers to the costs agreement, namely, Mr Shtrambrandt, his son Loryan, and Fenedisto. Mrs Shtrambrandt has not appeared or contested Mr Brott's claims in this Court in any way. Further, Mrs Shtrambrandt has made no claim in the Family Court to set aside the charging clause or any other part of the costs agreement. Nor has any such claim been made in the Family Court by Mr Shtrambrandt, his son Loryan or Fenedisto. In these circumstances, this Court should proceed to determine the issues between the parties on the basis that there is a valid costs agreement between Mr Brott and Mrs Shtrambrandt which is at least capable of giving Mr Brott the rights which he claims.

33 Fourth, at the time the cross-vesting application was argued before me Mr Brott was maintaining in his proceeding an allegation that, by entering into the binding financial agreement, Mr and Mrs Shtrambrandt (together with their son Loryan) engaged in a wrongful conspiracy for the predominant purpose of depriving Mr Brott from having lawful recourse to the real and personal property of Mrs Shtrambrandt for the payment of his costs. This aspect of Mr Brott's proceeding raised an entirely different issue than the issues raised by Mrs Shtrambrandt in her Family Court proceedings to set aside the binding financial agreement. Mrs Shtrambrandt's claim is based upon fraudulent non-disclosure of assets or unconscionable conduct by Mr Shtrambrandt. However, it is unnecessary to consider this matter further. Since the cross-vesting application was argued, Mr Brott has abandoned his conspiracy claims in this Court.

34 For the above reasons, the application to transfer the proceedings in this Court to the Family Court of Australia will be dismissed.