Consideration of Valceski
20All parties referred to Valceski v Valceski [2007] NSWSC 440; 70 NSWLR 36. Valceski is instructive as it involves the transfer of proceedings from this Court to the Family Court.
21The brief facts in Valceski are that the defendants Boban Valceski ("Bobby") and Beti Valceski ("Betty") were estranged husband and wife, with Betty instituting proceedings between them in the Family Court seeking parenting orders and financial adjustment. Their property, the subject of those proceedings, included their former matrimonial home. Bobby had been the sole registered proprietor, as a result of a transfer pursuant to a deed between his father Micko Valceski ("Mick"), Bobby and Betty. Under the deed Mick agreed to transfer to Bobby all Mick's right, title and interest in the matrimonial home, in consideration of which Betty agreed that she would continue to acknowledge the contributions made to the home by Mick and would treat Bobby as beneficially owning only a just and equitable share of the home proportionate to his actual contributions. In the equity suit brought in the Supreme Court, Mick sought to set aside the deed and transfer on the grounds of non est factum, misrepresentation, mistake, unconscionability, undue influence and the Contracts Review Act. Betty sought an order that the equity suit be transferred to the Family Court of Australia, to be consolidated with the matrimonial proceedings between her and Bobby.
22In Valceski Brereton J outlined the considerations specified in s 5(1)(b)(ii) of the Cross-Vesting Act as:
"[19] Accordingly, in an application for transfer of proceedings from the Supreme Court to the Family Court, s 5(1)(b)(ii) specifies three relevant considerations, namely:
· Whether (but for cross-vesting and accrued jurisdiction) the relevant proceeding would have been incapable of being instituted in the Supreme Court and capable of being instituted in the Family Court;
· The extent to which the matters for determination in the relevant proceeding arise under a law of the Commonwealth and are not otherwise within the jurisdiction of the Supreme Court;
· The interests of justice."
23In relation to the accrued jurisdiction of the Family Court, Brereton J in Valceski stated:
"[36] However, s 78 does not of itself confer jurisdiction to declare void the February 2004 deed and transfer void, or to set them aside, or to compel a retransfer to Mick, at general law or under the Contracts Review Act. Such relief could be granted by the Family Court only if state jurisdiction accrues to it in the circumstances of this case.
[59] Accordingly, the Family Court has accrued jurisdiction, just as does the Federal Court and the High Court, to determine the whole of a justiciable controversy, even though some aspects of it may involve State and not federal law. So long as the controversy arises under the Family Law Act, it need not be limited to it. Once seized of jurisdiction in respect of a matter arising under the Family Law Act - pursuant to Family Law Act s 31(1)(a) - the jurisdiction of the Court extends to the whole of the matter, that is to say, the justiciable controversy, even though its determination requires the application of State law. While there may be a discretion to decline to exercise accrued jurisdiction, it will be an exceptional case in which that discretion can properly be exercised so that the whole of a justiciable controversy is not resolved in the one court."
24In Valceski, Brereton J continued at [60] - [69]:
"There is accrued jurisdiction in this case
[60] The equity suit and the matrimonial proceedings share a common substratum of facts, notwithstanding that the underlying facts of each do not wholly coincide - in that while the matrimonial proceedings involve wider and additional issues, the facts that underlie the equity suit are a subset of those that underlie the matrimonial proceedings. The issues of the validity of the February 2004 deed and transfer, and the beneficial interests in McArthur Parade as between Bobby on the one hand and Mick (and possibly Angelina) on the other, are common to both proceedings. Those issues would arise in the s 79 proceedings even if they were not directly raised by order 3 sought in the Wife's Amended Application: their resolution is an essential step in the first stage of the s 79 exercise. C & C, Wade-Ferrell, Warby and Bishop show that where it is necessary in the exercise of its s 79 jurisdiction for the Family Court to decide whether property is that of a party to the marriage or of a third party, the Court may in its accrued jurisdiction determine that issue so as to bind that third party. In this case the position is all the stronger, because Betty's claim in the matrimonial proceedings for a declaration under s 78 is the mirror image of the relief claimed by Mick and Angelina in the equity suit. It is obvious on the face of the declaration sought in par 3 of her Amended Application that it is the antithesis of what Mick and Angelina seek in the Supreme Court. Betty's s 78 claim in the Family Court shares an identical substratum with Mick and Angelina's claim in the equity suit.
...
[64] In Warby, the Full Family Court said:
93. In the present case there is a single property that is central to the parties' controversy. The Family Court cannot determine and settle the property of the parties without determining the relative beneficial interests of the parties to the marriage and the wife's father in the property. It is not to the point that a State court could make orders as to the dispute between the parties to the marriage and the wife's father, and that the Family Court of Australia could then determine the Family Law dispute between the parties to the marriage. It is enough to say that even taking the narrow view of accrued jurisdiction represented by Wilson J's judgment in Phillip Morris, in this case "the federal question could not be resolved without the determination of the non federal question". The Family Court of Australia must ascertain as a first step the property pool of the parties available for distribution.
[65] That statement is equally apposite here. 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.
...
[69] ... The question is simply whether, assuming that the jurisdiction of the transferor court has been regularly invoked, it is in the interests of justice that the proceedings be heard and determined in the transferee court, there being a statutory obligation to transfer the proceedings to that court whenever it appears to be in the interests of justice to do so - for which purpose it is both necessary and sufficient that the transferee court be the 'more appropriate' forum: ..."
25Brereton J, in Valceski, also discussed the intervention of third parties in marriage disputes. At [77] and [85] his Honour stated:
"[77] ... That is not to suggest that they are not entitled to do so, but where strangers to a marriage use the occasion of its demise to assert a right against the property of one or other (or both) of the spouses, they cannot reasonably complain if they become entwined in the matrimonial dispute. Third parties who intervene in matrimonial disputes in this way - especially associates, such as parents and private companies, of one or other of the spouses - cannot complain if their dispute is treated as part of the larger matrimonial dispute which it normally is. Where third parties who assert rights against matrimonial property do so concurrently with pending matrimonial property proceedings, it will ordinarily be appropriate for those issues to be resolved in the matrimonial proceedings, and for the third party to join in those proceedings for that purpose, rather than to commence separate litigation, in another court, which almost inevitably results in duplication of evidence, issues, time and costs.
...
[85] ... If as a matter of principle the effect of this decision is that third parties who, in the context of a marriage breakdown, assert rights against matrimonial property, should join in existing matrimonial proceedings rather than commence separate litigation, then the beneficial result is that all issues are litigated only once and only in one court, the risks and costs of duplication and inconsistency are avoided, and forum-shopping and collateral litigation is discouraged. Third parties - especially associates, such as parents or children or private companies, of one or other of the spouses - who use the occasion of the demise of a marriage to assert a right against the property of one or other (or both) of them, cannot reasonably complain if their claim is treated as part of the larger matrimonial dispute in the context of which it arises."
26Recently, in Manson v Della-Bosca [2014] NSWSC 1232 at [24] Campbell J referred to his earlier decision in Jackson v Mylan (2012) 263 FLR 148 at 156 [34] where he helpfully distilled the considerations set out in Valceski. His Honour's summary is as follows:
"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."
27As to whether these proceedings should be cross-vested, Sandy Street argued that the issues in dispute in this Court have arisen out of the matrimonial relationship and that this subject matter is to be dealt with by the Family Court under section 90AE of the Family Law Act 1975 (Cth).
28Sally Street did not oppose the transfer of the proceedings to the Family Court. She submitted that in light of the observations of Brereton J in Valceski, it is "inevitable" that the proceedings be transferred. She submitted that the s 90AE application has the consequence that these proceedings ought be transferred to the Family Court. This is because it would seem that justice would be best done by one Court to resolve the whole justiciable controversy and to avoid duplication and inconsistency.
29Counsel for Helen McDonald submitted firstly, that this Court has no power to transfer the judgment to the Family Court as the judgment is an order of this Court, not a proceeding; secondly, there is no accrued jurisdiction; thirdly, that this Court is the more appropriate Court; and finally, that this Court should determine the debt issue and then cross-vest the proceedings. The first issue is a preliminary one, so I will refer to it at the outset.