Manson v Della-Bosca & Anor

ex tempore Judgment 1The present dispute relates to the breakdown of the marriage of the plaintiff Mr Adrian Manson and the first defendant Dr Roxanne Della-Bosca. Dr Della-Bosca has formed a new permanent relationship with the second defendant, Mr Christopher Tilley. In March of this year Dr Della-Bosca and Mr Tilley completed the purchase of a property at Bangor. The agreement to buy the property had been made some time earlier at the end of 2013 and they settled the purchase under threat of a notice to complete. 2The purchase money for the purchase came partly from the sale of the former home of Dr Della-Bosca and Mr Manson at Oatley. They owned that house as joint tenants. A figure just short of $400,000 from the proceeds of that sale was utilised to complete the purchase at Bangor. The balance of the money, a figure over $700,000 is held in a solicitor's trust account. Mr Manson has been unable to access those funds because Dr Della-Bosca will not authorise the release of the moneys to him. 3The balance of the purchase money for the Bangor property came from the sale of shares which were solely in Dr Della-Bosca's name. Dr Della-Bosca says that those shares, although acquired through the efforts of both her and Mr Manson during the course of the marriage were given to her beneficially during the marriage as "compensation". 4Mr Manson says that it was an arrangement of convenience that the shares were put in the name of Dr Della-Bosca when in fact they both were beneficially entitled to them. There was no compensation. 5In the period leading up to the completion of the purchase of the Bangor property, Dr Della-Bosca, who was then legally represented, and Mr Manson, who has continued to be legally represented, attempted to agree on a settlement of the financial affairs and property matters arising out of their marriage. 6The parties are in dispute about whether such an agreement was made. It seems on the evidence before me that at least in principle an agreement for the apportionment of the property was arrived at by 10 March 2014 but it was contemplated by the parties that that agreement would be the subject of a written agreement in the form of consent orders to be filed in the Family Court. 7Dr Della-Bosca took the view that a binding agreement had been arrived at which was effective to settle their differences. Mr Manson took the view that no final agreement was arrived at because the consent orders in which the agreement was to be consummated were unsigned. Dr Della-Bosca has since signed them. 8Dr Della-Bosca has attached the proposed orders in the Family Court as signed by her to her affidavit read today as annexure FD6. 9A notation to the consent orders is in the following terms: As far as possible pursuant to s 81 of the Family Law Act 1975 the parties intend these orders to finally determine the financial relationship between them and to avoid further proceedings between them. 10As I have said the plaintiff did not sign the orders, rather he has filed a further initiating application in the Family Court on 17 June 2014 for the determination by that court of a division of their marital property. 11The portion of the proceeds of sale of the Oatley property referred to in the consent orders as being payable to Dr Della-Bosca was paid out to her and used for the completion of the purchase of the Bangor property, as I have said. 12The balance which was Mr Manson's putative entitlement, again as I have said, remains held in the solicitor's trust account on trust for him. 13Mr Manson asserts that he had a joint interest in the Oatley property and claims a joint interest in the shares that were sold. Consequently he claims an interest arising from a constructive, or resulting, trust in the Bangor property. To protect that interest he lodged a caveat on 15 July 2014. In that caveat he claims an equitable interest in the property because, and I am paraphrasing, the property was purchased from the joint resources I have identified. 14In terms of the estate claimed, the caveat asserts the following: equitable interest in the land held by the registered proprietors on constructive trust for the caveator in a share proportional to the caveator's contribution. 15Dr Della-Bosca and Mr Tilley caused the Registrar-General to issue a notice to Mr Manson under the provisions of s 74J Real Property Act 1900 (NSW), generally referred to as a lapsing notice. That notice informed Mr Manson that unless he, before the expiry of twenty-one days after the date of service of the notice, obtained from this court an order extending the operation of the caveat, the caveat would lapse in accordance with s 74J(4) of the Act. Under s 74K of the Act the caveator served with such a notice may apply to this court for an order extending the operation of the caveat and powers of the court are expressed in s 74K(2) in the following way: Subject to subsection (3), on the hearing of an application made under subsection (1), the Supreme Court may, if satisfied that the caveator's claim has or may have substance, make an order extending the operation of the caveat concerned for such period as is specified in the order or until the further order of that Court, or may make such other orders as it thinks fit, but, if that Court is not so satisfied, it shall dismiss the application. Sub-section 3 has no application to the circumstances of the present case. It is common ground between the parties that unless I make an order under s 74K(2) the caveat will lapse on 27 August 2014. 16By summons filed on 18 August Mr Manson seeks principal relief being a declaration that the first and second defendants hold the Bangor property on trust for the plaintiff or in the alternative for the plaintiff and the first defendant and an order that the second defendant, Mr Tilley do all acts and things necessary to transfer to the plaintiff his right, title and interest in the Bangor property. 17I understand from the evidence led by Dr Della-Bosca, and from the argument that she addressed on behalf of both herself and, with my leave, Mr Tilley, that she and Mr Tilley accept that Mr Tilley did not make a financial contribution to the purchase of the property. Although, the affidavit evidence I have read certainly demonstrates that he has made a very substantial non-financial contribution since the property was purchased. 18I observe, although it is of no moment legally, there is nothing unusual about a couple who have formed a strong and permanent commitment to each other sharing their property. I digress. 19The summons also seeks two important interlocutory orders which I am dealing with today. The first is an order pursuant to s 74K of the Act, as I have explained, extending the life of the caveat in the interim. The second is an order that I transfer the proceedings under the provisions of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) to be determined by the Family Court of Australia with proceedings number SYC737/2014. 20Dr Della-Bosca and Mr Tilley oppose the first order but I did not understand them to strenuously oppose the second. In any event I give my reasons in respect of both. 21I am satisfied from the affidavit evidence of Mr Manson to the level appropriate on an interlocutory application that the interest he asserts in the Bangor property by way of a constructive trust is fairly arguable. In saying this, I would not want it to be thought that I regarded it any higher than that. It would be irrelevant for me to express any firmer view than that, either way. I also wish to acknowledge the force of the arguments put forward by Dr Della-Bosca in relation to whether the parties arrived at an agreement in March of this year. However, I accept that agreement, as Mr Othen of counsel who appeared for Mr Manson argued, does not comply with the provision of the Family Law Act 1975 which may exclude the broad powers of that court in respect of the property of a marriage. 22That is not the end of the inquiry. For I accept that it is fairly arguable that in completing the Bangor purchase in March, Dr Della-Bosca and Mr Tilley relied upon a representation that had committed themselves to the purchase at an earlier time, it may be fairly arguable in context that there is a defence of estoppel by representation available to them. These are all questions for a final hearing. I make these comments to make it clear that I am by no means satisfied one way or the other who will win this litigation when it goes to trial. Rather I am satisfied as is so often the case, on the basis of the preliminary material available to me, that there is some merit on both sides of the argument. 23Before dealing with the extension of the caveat under s 74K I think it appropriate that I consider the cross vesting application, because it will, I think, at least determine in part the nature of the order I should make if I am satisfied that Mr Manson's claim "may have substance" for the purpose of making an interim order. 24The application of the jurisdiction of Cross Vesting Act to matters involving disputes about marital property was fully considered by Brereton J in Valceski v Valceski (2007) 70 NSWLR 36. His Honour's conclusions were summarised by me in Jackson v Mylan (2012) 263 FLR 148 at 156 [34]: I draw the following considerations from Brereton J's analysis. I have omitted his Honour's citations: (a) When a Federal law confers jurisdiction on a court in respect of a matter, the jurisdiction extends to authorise the determination of the whole matter; (b) A matter is a "justiciable controversy" which may involve the determination of both Federal and State law, once federal jurisdiction is attracted, a federal court is armed with full authority essential for the complete adjudication of the "matter" and not merely the federal aspect of it. This is the origin of "accrued jurisdiction"; (c) The authority to determine non-federal aspects of a justiciable controversy requires that "non-federal aspects" of the controversy form an integral part of it; the last requirement will be satisfied where the different claims, federal and non-federal arise out of "common transactions and facts" or a "common substratum of facts" notwithstanding that the facts upon which the claims depend "do not wholly coincide"; (d) An important consideration is whether different claims are so related that the determination of one is essential to the determination of the other; (e) Likewise where if the proceedings were tried in different courts there could be conflicting findings made on one or more issues common to the two proceedings; (f) The jurisdiction of the Federal Court extends beyond the determination of the federal claim to the litigious or justiciable controversy between the parties, of which the federal claim or cause action forms a part. 25The last requirement will be satisfied where different claims, Federal and non-Federal arise out of common transactions or fact or a common substratum of facts notwithstanding the facts upon which the plaintiff depends do not wholly coincide. 26It is apparent to me that so far as the question of whether Mr Manson has an interest in the Bangor property both this court and the Family Court have jurisdiction. The Family Court has power under the Family Law Act to declare the rights and interests of the parties to the property, even if that did not extend to property acquired after the breakdown of the relationship, which I think it does. 27The dispute about the Bangor property, it seems to me, arises out of the same substratum of facts as the overall dispute relating to how property should be divided between Mr Manson and Dr Della-Bosca following the breakdown of their marriage. 28It is not lost on me that Dr Della-Bosca and Mr Tilley wish to assert cross claims based largely upon their view of the legal effect of the negotiations for agreement in March 2014. To the extent to which questions about that may not be within Federal jurisdiction they also arise out of the same substratum of facts and in my judgment would be within the accrued or pendant jurisdiction of the Family Court of Australia. In any event, and certainly to the extent to which I would be prepared to make an order under the cross vesting legislation, that Court would have jurisdiction to determine the matter. 29I am conscious of course that questions arising under Pt 7A of the Real Property Act 1900 (NSW) dealing with caveats are questions arising wholly, if I may put it this way, in State jurisdiction. However in Jackson I set this out at [41] to [42] in my judgment: ... the Federal Court has accrued jurisdiction to determine the State proceeding. It follows from what I have said, about the closely interwoven matrix of fact from which the proceedings arise that there is but a single "justiciable controversy". Although the claims are different because they are sourced from State and Federal law respectively, they arise out of "common transactions and facts" or a common "substratum of facts". The determination of the facts essential to decide one claim necessarily decides the other. And as there is an identity, at the factual level, of office holders, membership, funding and assets of the State Union and the Federal Branch the risk of conflicting findings, and accordingly inconsistent judgements, if the State and Federal claims are determined separately, is real. For the reasons I have expressed, it matters not that the State proceeding involves the State Union as a party bringing a claim based wholly on a State Act. ... The present plaintiff's proceedings seek different relief, but the issues raised and the facts necessary to be established will overlap, in my judgment, to a high degree with those to be established in the other proceedings. 30Although the context of the present case is very different, the same considerations apply, especially the risk of inconsistent judgments if purely State matters are dealt with in this Court and the family property dispute is resolved in the Family Court. Moreover the issues which each party will seek to ventilate and the evidence that will be lead in both proceedings, if they proceed separately, will be identical. 31As I have said, it is only the issue about the caveat which is a purely State matter. However, the caveat is in truth a means to an end, that is to protect the interests of the caveator, here Mr Manson, until the claim is finally adjudicated on by a properly constituted court. 32In exercising the powers conferred under the cross vesting legislation, I bear in mind the width of this court's power. It is sufficient but it appears to be "otherwise in the interests of justice", to adopt the words of the legislation, that the orders should be made. 33In BHP Billiton v Schultz (2004) 221 CLR 400 Gleeson CJ, McHugh and Heydon JJ said the following at [14]: In the context of the Cross-vesting Act, one 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. An application for transfer under s 5 of the Cross-vesting Act is brought upon the hypothesis that the jurisdiction of the court to which the application is made has been regularly invoked. If it appears to that court that it is in the interests of justice that the proceedings be determined by another designated court, then the first court "shall transfer" the proceedings to that other court. There is a statutory requirement to exercise the power of transfer whenever it appears that it is in the interests of justice that it should be exercised. It is not necessary that it should appear that the first court is a "clearly inappropriate" forum. It is both necessary and sufficient that, in the interests of justice, the second court is more appropriate. 34It seems to me that strictly speaking this court could only resolve part of the judiciable controversy between the parties and that the interests of justice require that I transfer the proceedings to the Family Court, which in my judgment is a more appropriate court, because it can resolve the whole of the dispute. Case management considerations suggest that greater efficiencies would be achieved in the interests of the parties, and in the broader interests of the administration of justice, if one court dealt with the whole of the dispute. 35In due course I will make an order transferring the proceedings. On the evidence there is a hearing in the matter fixed for 20 October 2014. From what I have been told from the bar table it may be unlikely that other than the parenting issues could be dealt with on that day. 36Certainly case management procedures in the Family Court would be well attuned to bringing the property dispute to finality with appropriate efficiency. 37Given the nature of the issues, and what I regard as the fairly arguable position of each of the parties, I remain satisfied, in terms of s 74K, that Mr Manson's claim to an interest in the Bangor property "may have substance" and I will make an order extending the caveat. 38During the course of argument I raised with Mr Othen whether the so called Palmer v Wiley (1906) 23 WN (NSW) 90 line of cases still represented the law in New South Wales with regards to particularisation of a caveat (See Beca Developments Pty Ltd v Idameneo (No 92) Pty Ltd (1990) 21 NSWLR 459 at 467 to 468 by Clarke JA.) That line of cases was summarised by Holland J in Kerrabee Park Pty Ltd v Daley (1978) 2 NSWLR 222 at 231 as establishing that a caveat to comply with the provisions "must disclose a caveatable interest, and the quantity of the estate or interest claimed, and how he claims it." 39It seems to me that the second of these conditions was not satisfied in this case because the quantum of the estate, the claim by Mr Manson is not set out in the body of the caveat. 40Mr Othen has drawn my attention to Schedule 3 Real Property Regulation 2008 (NSW) which sets out the formal requirements of a caveat. cl [10] is in the following terms: It is not necessary to specify: (a) whether the estate or interest claimed is legal or equitable, or (b) the quantum of the estate or interest claimed (except as provided in items 4 and 5), or (c) how the estate or interest claimed ranks in priority with other estates and interests in the land. 41It seems to me that para (b) of that clause alters the legal effect the Palmer v Wiley line of authority so that the law in New South Wales more closely accords with that previously stated in other States: that it was unnecessary to specify the quantum of the estate. The excepted matters do not apply in this case. 42Having accepted Mr Othen's argument I am satisfied that the caveat sufficiently complies and I think it appropriate that when I make orders transferring the proceedings to the Family Court that I extend the caveat until further order of that court. 43My orders are: (1)Pursuant to s 5(1)(b) of the Jurisdiction of Court (Cross Vesting Act 1987 (NSW) order that the proceedings be transferred to the Family Court of Australia to be case managed and heard with proceedings number SYC737/2014. (2)Pursuant to s 74K(2) Real Property Act 1900 caveat number A1739867 is extended until the further order of the Family Court of Australia. (3)I reserve all questions of costs to the discretion of the Family Court of Australia upon the final determination of the proceedings in that court.