Olsen v. Olsen [2012] NSWSC 540

THE APPLICATION BEFORE ME 15By Amended Notice of Motion filed in Court on 21st May 2012, the applicant seeks interlocutory relief including a cross-vesting order transferring the proceedings to the Family Court of Australia, Sydney Registry, an order that she be joined as a defendant to the proceedings and, alternatively, a stay of the proceedings until further order, presumably with the intent that the Family Court proceedings be finalised first. 16Mr. Cutler does not oppose the applicant's joinder (MFI 2 p. 2 [6]) and I propose to make that order whether or not I am satisfied, by reference to the interests of justice, that it is more appropriate that the Family Court of Australia determine these proceedings. 17Mr. Cutler opposes the cross-vesting order on a number of bases, including, but by no means limited to, the ground that it is seriously arguable that the Family Court does not have jurisdiction to entertain these proceedings in the circumstances of this case: Valceski v. Valceski (2007) 70 NSWLR 36 at [24]. 18I should also point out that Mr. Cutler argues (MFI 2 p. 2 [5]) that even if the registered mortgage could be successfully impugned the facts for which the plaintiff contends, if accepted following a trial, justify the conclusion that the plaintiff is entitled to an equitable mortgage or other equitable interest and relief accordingly: see Elias and Elias Pty Ltd Atf the Elias Family Trust v Antoun Toufic Chidiac and ors [2010] NSWSC 1364 per Brereton J. Mr Cutler acknowledges amendment - perhaps extensive - of the statement of claim will be required to bring forward a claim for equitable relief on that basis.

CROSS-VESTING 19Although the applicant invokes both the Federal and State legislation, on the presentation of the argument by, and the joinder of issue between, the parties, there is no difference in substance of approach required. Indeed the arguments addressed to me, certainly as I understood them, based themselves firmly on the text of the State legislation. Section 5(1) was invoked. It was common ground that neither criteria (A) or (B) suggested that the Family Court was the more appropriate forum, and the applicant's case depended upon criterion (C), whether having regard to ... the interest of justice, it is more appropriate that the proceedings in this Court be determined by the Family Court of Australia. 20Ms. Weisske argued, and Mr. Cutler accepted, that the exercise of power under the legislation did not involve persuasion by reference to an onus of proof: BHP Billiton Ltd v. Schulz (2004) 221 CLR 400 at 437 [71] per Gummow J. 21Mr. Cutler argued that I had a discretion, but Ms. Weisske, correctly in my judgment, contended rather that the Court had a duty which must be discharged if the statutory conditions for its exercise were satisfied: BHP Billiton at page 434-5 [63] per Gummow J. As the plurality in judgment in BHP Billiton makes clear at 421[14]: 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. 22The question about the Family Court's jurisdiction is logically anterior to the question whether the Family Court is the more appropriate forum. Section 5(9) of the Cross-Vesting legislation is in the following terms: Nothing in this Section confers on a Court jurisdiction that the Court would not otherwise have. 23With respect to learned Counsel for the plaintiff, his argument about jurisdiction was not developed in any detail before me, it being put simply as follows: A further complicating factor which sets this case apart from Valceski and Elias is that David Olsen's agreement with his son and his purchase (and renovation) of the Randwick property predates the marriage of his son to Ms. Lord. At that time (in 1988) the Family Court had not jurisdiction in respect of the property of de facto couples. 24Mr. Cutler does not question the present jurisdiction of the Family Court in regard to de facto couples. 25As posed by Brereton J. in Valceski at 44[24] the question is whether it is seriously arguable that the Family Court does not have jurisdiction to entertain the equity suit in the circumstances of this case. I accept Ms. Weisske's submission that, although no question of onus arises, it is incumbent upon the party calling the transferee court's jurisdiction into question to bring forward a detailed argument supporting that position. Whatever might be the outer limits of the Family Court's jurisdiction, given that it is common ground that the applicant's application in the Family Court calls into question the validity of the mortgage, and seeks to have it set aside, it is not seriously arguable that that matter is beyond the federal court's jurisdiction. 26To put the matter in positive terms, the Family Court undoubtedly has jurisdiction to entertain the applicant's application under s.106B. Although this power is not invoked, s.78 Family Law Act 1975 (Cth) empowers that Court to declare the title or rights, if any, that the party has in respect of ... property. Notably under s.78(2) the Family court has power to make consequential orders including orders as to the sale or partition and interim or permanent orders as to possession of the property. And these powers are in addition to the wide powers conferred by s.79 as between the parties to the marriage. 27Without seeking to decide any such question in the context of this interlocutory application, there is clearly a likely genuine issue about whether the events and circumstances surrounding the registration of the mortgage in April 2012 are an attempt to defeat the applicant's claim in the Family Court. Obviously, I cannot decide whether or not this is so in the present context. But that is certainly a matter the Family Court itself is fully empowered to decide at a final hearing. 28Brereton J's decision in Valceski at 48[37] to 57[59] amply and thoroughly chartered and detailed the accrued jurisdiction of the Family Court. I will not repeat that task. In Jackson v. Mylan [2012] NSWSC 552 at [34] - [36], I attempted to summarise the relevant considerations to determine whether a federal court enjoys accrued jurisdiction in relation to any State aspect of a justiciable controversy, from Bereton J's analysis, as follows: 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 partes, of which the federal claim or cause action forms a part. 35. By reference to Wakim Brereton J said at p. 49[40]: The identification of the justiciable controversy was not to be determined only by the consideration of there being separate proceedings and different parties in one Court. The central task was to identify the justiciable controversy, which would ordinarily require close attention to the pleadings and the factual basis of each claim. 36. In Wakim at page 587 [145] Gummow and Hayne JJ said: If the "matter" is to be identified from what the parties allege and how they conduct the proceeding ... and if the "justiciable controversy" refers (in part, at least) to the factual dispute between them, there is no warrant for holding that federal jurisdiction ends as soon as a new party (against whom no federal claim is made) is added. 29I also think it apposite to set out the passage from Fencott v. Muller (1983) 152 CLR 570 at 608, highlighted by Brereton J at 49[39] of Valceski: What is and what is not part of the one controversy depends on what the parties have done, the relationship between or among them and the laws which attach rights or liabilities to their conduct and relationship. The scope of the controversy which constitutes a matter is not ascertained merely by reference to the proceedings which a party may institute, but may be illuminated by the conduct of those proceedings and especially by the pleadings in which the issues in controversy are defined and the claims for relief are set out. But in the end, it is a matter of impression and of practical judgment whether a non-federal claim and a federal claim joined in a proceeding are within the scope of one controversy and thus within the ambit of a matter. 30I have formed a strong impression as a matter of practical judgment that the present plaintiff's non-federal claim is within the scope of the controversy between the applicant and the defendant about their matrimonial financial relations. I am fortified in this view by what I regard as a very salient feature of the genesis of the plaintiff's proceedings. Notwithstanding what the plaintiff's solicitor deposes the evidence of the plaintiff will be at any hearing about the inception of the defendant's liability, the legal formalisation of the transaction by way of signed mortgage in registrable form, the payment of stamp duty and the registration of the dealing did not occur, on any objective view, until the marriage of the applicant and the defendant had broken down and battle lines had been drawn as to their financial relationship. This finding establishes the accrued jurisdiction of the Family Court, the availability of which cannot seriously be doubted: Valceski at 57[59]. 31The same consideration to my mind points clearly to the Family Court as a more appropriate forum, in the interests of justice. Mr Cutler argues, by reference to Young v. Lalic (2006) 197 FLR 27, that this Court has all the necessary jurisdiction of the Family Court of Australia in matrimonial causes pursuant to the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) to settle the whole of this dispute: see Young at 36[37] - 38[42]. As Brereton J pointed out in Young this jurisdiction does not depend upon the making of a cross-vesting order by the Family Court: the Supreme Courts are simply invested, by the Commonwealth Cross-Vesting Act, with the jurisdiction of the Family Court, notwithstanding the previous exclusivity of the jurisdiction of that Court (Young at 38[42]). 32However, as his Honour's remarks make clear, the question of jurisdiction is distinct from the question posed by s.5 of the cross-vesting legislation as to the more appropriate forum. 33In my opinion, particularly with regard to the current state of the pleadings in this Court, the Family Court is the "natural forum", as that expression has been explained in BHP Billiton at 423 [19], in which objectively judged it might be expected that [this] dispute would fall to be resolved, with its concomitant judicial advantages and disadvantages for each party, whatever they may be: Valceski at 60[69] citing British American Tobacco v Gordon [2007] NSWSC 230 at [47] per Brereton J. In my judgment, objectively judged, it would be expected that this dispute, arising as it does out of the breakdown in the marriage of the applicant and the defendant albeit with the controversy extending to the wider familial relationship, would fall to be resolved in the Family Court of Australia. 34Mr. Cutler, in reliance upon the affidavit of his instructing solicitor, pointed out that because of the pressures in the Family Court resolution by judicial determination, if necessary, would taken longer than in this Court. This was relied upon as delay and as a significant factor indicating that in the interests of justice it was not more appropriate that the proceedings be determined by the federal court. Delay, may of course, be a factor of some significance in an application of this type, especially, as the plurality put it in BHP Billiton at 423[19], cross-vesting applications involve a kind of case management. It is certainly true that matters in the Possession List of the Common Law Division of this Court are dealt with with as much dispatch as the circumstances of the particular case allow. However, I am not persuaded that any longer lead-time to determination in the Family Court is in truth delay in the context of the present case. 35The loan said to be secured by what may have been originally an equitable mortgage created by the deposit of the Certificate of Title is said to have been advanced, as I have said, partly in 1988, and partly in 1990. The written acknowledgment expresses the loan to be repayable "on demand". Like Vaughan v. Frost [2010] NSW SC 492, decided by White J, the plaintiff waited until there was a breakdown in the .... matrimonial relationship before bringing [the] claim. (Vaughan at [28]). Again, as in Vaughan, there is no evidence that the plaintiff ever asserted any entitlement to the applicant, his daughter-in-law over the more than two decades during which the loan agreement was said to subsist. Indeed, the evidence before me is to the contrary. Other than the breakdown in the marriage of the defendant and the applicant, there is no change in circumstance which accounts for the timing of the proceedings in this Court. In all the circumstances I do not regard any additional time that might be taken in the Family Court to countervail the other factors to which I have referred. 36Nor does it make any difference if, as Ms. Weisske has foreshadowed, once the applicant is joined as a defendant to the State proceedings, defences are raised under the Limitation Act 1969 (NSW). State limitation laws provide a good example of the very type of State law that will be "picked up" by s.79 of the Judiciary Act 1903 (Cth), in the absence of a general federal limitation law, to operate as a "surrogate federal law" in the exercise of federal jurisdiction: Kruger v The Commonwealth of Australia (1997) 190 CLR 1 at 140; ASIC v. Edensor Nominees Pty Ltd (2001) 204 CLR 559 at 593[72]; Commonwealth of Australia v Mewett (1997) 191 CLR 471 at 553 - 556. 37For these reasons, I am satisfied, having regard to the interests of justice, that it is more appropriate that these proceedings be determined by the Family Court of Australia. 38Given the conclusion I have reached, I think it better that any amendment of the statement of claim necessary to broaden the ambit of the plaintiff's claim occur during case management in the Family Court of Australia and accordingly I make no order in that regard. It makes no difference to what I have said about jurisdiction whether the plaintiff's asserted mortgage is legal or equitable. 39Ms. Wiesske indicated that the applicant reserves the right to make submissions as to costs following my determination. It is for this reason that I have made Order 4 below. 40My orders are: (1)Pursuant to r. 6.24(2) Uniform Civil Procedure Rules 2005, order that the applicant Julianne Lord be added as a defendant in the proceedings. (2)Pursuant to Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW), S.5(1)(b) order that the proceedings numbered 2012/117181 be transferred to the Family Court of Australia, Sydney Registry to proceed with proceeding no. SYC 2584/12. (3)Order that the plaintiff pay the applicant's costs of the motion. (4)Reserve leave to the parties to apply either forthwith or by arrangement with my associate within three days to vary or set aside the costs order, at the risk as to costs of the party making such application. (5)The stay previously ordered is continued until further order of the Family Court of Australia, but only as to any application by the plaintiff for default or summary judgment.

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