HEADNOTE
[This headnote is not to be read as part of the judgment]
Mr Tang and Ms Guan are husband and wife, who claim to be separated although they continue to live together in the matrimonial property (the Oatlands property). On 1 September 2021, they purported to enter into a binding financial agreement (the BFA), in accordance with s 90C of the Family Law Act 1975 (Cth). The BFA provided for the transfer to Ms Guan of Mr Tang's interest in the Oatlands property, of which they were previously joint tenants.
On the day before the entry into the BFA, Schmidt AJ had entered judgment for Mr Li against Mr Tang in the sum of $1,909,356.39. Mr Li, unaware of the BFA, proceeded to register a writ of execution against the Oatlands property. Several weeks later, Mr Tang filed for bankruptcy and a trustee in bankruptcy was appointed. In March 2022, Ms Guan and the trustee entered into a deed of settlement and release (the Settlement Deed) pursuant to which the trustee agreed to transfer Mr Tang's interest in the Oatlands property to Ms Guan for a consideration of $135,000. This amount was subsequently paid. On 21 April 2022, Ms Guan instituted proceedings in the Supreme Court seeking the removal of the writ of execution registered against the Oatlands property by Mr Li.
On 20 May 2022, Mr Li instituted proceedings in the Federal Circuit and Family Court of Australia (FCFCOA) seeking leave to commence proceedings against the trustee in bankruptcy. Leave has since been granted. In those proceedings, Mr Li seeks orders pursuant to ss 90K(1)(aa) and 90K(3) of the Family Law Act, with the intention of setting aside or overcoming the transfer of Mr Tang's interest in the Oatlands property to Ms Guan. Also on 20 May 2022, Mr Li filed a notice of motion in the Supreme Court (since amended) seeking an order that Ms Guan be restrained from dealing with Mr Tang's interest in the Oatlands property (the freezing order). On 15 June 2022, Cavanagh J granted the freezing order sought.
In opposing the orders sought before the primary judge, Ms Guan submitted that Mr Li did not have reasonable prospects of succeeding in his claim in the FCFCOA, as s 90K of the Family Law Act did not confer jurisdiction on the FCFCOA to set aside the Settlement Deed (as distinct from the BFA). In relation this issue, the primary judge said in his reasons for judgment that he was not satisfied that there was no reasonable argument that orders setting aside the Settlement Deed could be obtained in the FCFCOA. His Honour then proceeded to make the freezing order.
Ms Guan now seeks leave to appeal from the decision of the primary judge. The Draft Notice of Appeal relevantly included the following grounds:
"1 The primary judge erred in finding that Family Law Act 1975, s 90K(3) conferred jurisdiction on the Federal Circuit and Family Court of Australia to set aside the Settlement Deed (J[62]).
2 The primary judge erred in failing to take into account the following matters in determining whether he could, and should, grant an asset preservation order:
a. whether the respondent had established an arguable case to set aside the Settlement Deed;
b. the strength of any such case;
…
6 The primary judge ought to have held that:
a. the respondent had not established an arguable case to set aside the Settlement Deed or, if he had, that such a case was weak…"
At the outset of the hearing, counsel for Ms Guan indicated that his client did not press ground 1 of the Draft Notice of Appeal.
Mr Li contended that this Court had no jurisdiction to hear the application for leave to appeal by reason of s 7(5) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth). The effect of that sub-section, for present purposes, is that where a matter for determination in a proceeding by way of appeal is a matter arising under the Family Law Act, any appeal lies to the Full Court of the FCFCOA and cannot be brought in this Court.
These reasons for judgment concern only the preliminary question of whether this Court is competent to hear the application for leave to appeal.
The Court held (Bell CJ, Ward P and Meagher JA agreeing):
1. The matters sought to be raised by grounds 2(a), 2(b) and 6(a) of the Draft Notice of Appeal were not matters for determination arising under the Family Law Act. These proposed grounds of appeal do not require the determination of a right or duty owing its existence to the Family Law Act, or which depends on that Act for its enforcement, even if and to the extent that they may involve some interpretation of s 90K of the Act. Accordingly, they did not deprive the Court of Appeal of jurisdiction by reason of s 7(5) of the Jurisdiction of Courts (Cross-Vesting) Act: [52]-[60] (Bell CJ); [63] (Ward P); [64] (Meagher JA).
Boensch (as trustee of the Boensch Trust) v Pascoe (2016) 349 ALR 193; [2016] NSWCA 191; Bramco Electronics Pty Ltd v ATF Mining Electrics Pty Ltd (2013) 86 NSWLR 115; [2013] NSWCA 392; Grace v Grace (2014) 85 NSWLR 688; [2014] NSWCA 86; Karlsson v Griffith University (2020) 103 NSWLR 131; [2020] NSWCA 176; R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141; [1945] HCA 50; CGU Insurance Limited v Blakeley (2016) 259 CLR 339; [2016] HCA 2; Anderson v Eric Anderson Radio & TV Pty Ltd (1965) 114 CLR 20; [1965] HCA 61; Felton v Mulligan (1971) 124 CLR 367; [1972] HCA 39; Collins v Charles Marshall Pty Ltd (1955) 92 CLR 529 at 537; [1955] HCA 44, considered.
1. It may be accepted that, in disposing of ground 6(a), it would be necessary for the Court to form a view about whether the interpretation of s 90K(3) sought by Mr Li in the FCFCOA was reasonably open. However, to do so is not to determine a matter arising under s 90K(3) of the Family Law Act: [55]-[56] (Bell CJ); [63] (Ward P); [64] (Meagher JA).
Anderson v Eric Anderson Radio & TV Pty Ltd (1965) 114 CLR 20; [1965] HCA 61; PT Bayan Resources TBK v BCBC Singapore Pte Ltd (2015) 258 CLR 1; [2015] HCA 36, considered.