Plaintiffs v Defendants

Supreme Court of Victoria|2008-09-29|Before: WARREN CJ

1 I have before me an application to transfer proceedings in this court to the Family Court of Australia pursuant to the Jurisdiction of Courts (Cross-Vesting) Act 1987.

2 It is necessary to set out the background circumstances.

3 The first defendant, Vasilios Kosmopoulos and the second defendant Stavroula Vrionis were married on 15 January 2000. They lived together until October 2005 and it is said that thereafter they separated.

4 For the purposes of the proceedings in this court it is necessary to set out in a little detail circumstances relating to the acquisition of a property in 1993. The plaintiffs, Dimitrios Kosmopoulos and Stavroula Kosmopoulos, are the parents of the first defendant and parents-in-law of the second defendant.

5 In 1993, the plaintiffs and the first defendant purchased a property at 3 Tuhan Street, Chadstone as tenants in common in equal shares. Subsequently, in 1997, the plaintiffs agreed to transfer their interest in the Tuhan Street property to the first defendant for an agreed amount.

6 In breach of an agreement between those parties, it was alleged the first defendant failed to pay monies due to the plaintiffs.

7 Subsequently, the plaintiffs and the first defendant entered into an agreement whereby the first defendant agreed the plaintiffs had contributed an amount to the Tuhan Street property. The plaintiffs owned a two-thirds interest in that property and that the first defendant held the plaintiffs' interest on trust for and on behalf of the plaintiffs.

8 In October 2001, the first defendant entered into a contract to purchase the property at 56 Bowen Street, Malvern East.

9 In December 2001, the first defendant sold the Tuhan Street property. At that time the value of the plaintiffs' interest was approximately $206,000. The plaintiffs allege in the proceedings in this court that in December 2001, they and the first defendant entered into an agreement that the plaintiffs would contribute 43 percent of the purchase price to the purchase of the Bowen Street property, that the title in that property would be transferred to the first and second defendants, and that those defendants would hold the plaintiffs' beneficial interest on trust for and on behalf of the plaintiffs until such time as the Bowen Street property was sold.

10 Subsequently, after the defendants separated, a caveat was lodged by the plaintiffs on the title to the Bowen Street property on 13 January 2006. On 19 January 2007, the first defendant issued proceedings in the Family Court of Australia seeking that the second defendant, as wife, transfer to the first defendant, as husband, all her right, title and interest in the Bowen Street property and that the first defendant, as husband, indemnify the second defendant, as wife, in relation to the loan to his parents, the plaintiffs.

11 Subsequently, on 16 June 2008, the plaintiffs issued proceedings in this court seeking a declaration that they had a caveatable interest in the Bowen Street property and further, a declaration that the defendants hold the title to a forty-three hundredths share of the Bowen Street property on trust for and on behalf of the plaintiffs.

12 The second defendant applies in this court to transfer the Supreme Court proceeding to the Family Court of Australia pursuant to section 5(2) of the Jurisdiction of Courts (Cross-Vesting) Act 1987.

13 The arguments put forward in support of the application are essentially three-fold. Firstly, the property that is the subject of the dispute in this court will in all likelihood form an essential component of the property that will be the subject of the dispute in the Family Court. In essence it is submitted that the determination of the entitlement and proportions to such entitlements of the Bowen Street property will affect the property determination to be made in the Family Court.

14 The second matter relied upon is that the accrued jurisdiction of the Family Court is such that it is appropriate in all the prevailing circumstances that it be seized of all matters, that is the caveat proceedings in the Supreme Court as well as the other matters before the Family Court at this time.

15 The third point argued on behalf of the second defendant in support of the application is that it is in the interests of justice that the Supreme Court proceeding be transferred to the Family Court so as to avoid any inconsistencies in the outcome of the separate cases in the two courts and to ensure that the one court is seized of all matters.

16 Relevantly, many of these issues have been considered in the Supreme Court of New South Wales in Valceski v Valceski.[1]

17 For present purposes the facts in the New South Wales case bear a striking similarity to the facts before this court. The principles that arise in these sorts of circumstances were carefully considered by Brereton J. His Honour made a number of important points through the course of his judgment. First, that the outcome of the suit would directly impact on the quantum of the estate of the relevant party. The same issue in my view potentially arises in the present matter.

18 Secondly, in order to identify and value the net matrimonial estate it would be necessary to determine the extent of the interests of the married parties in the relevant property. Again I observe a similar situation arises here.

19 Thirdly, it was necessary to determine if property held by a third party was in fact beneficially the property of a party or the property of a spouse. Again I observe that an analogous situation arises here albeit with respect to a 43 percent interest that is claimed.

20 Fourthly, his Honour considered that relief could be granted under the relevant provisions, in particular s 106B and s 78 of the Family Law Act against third parties as part of the ordinary federal jurisdiction of the Family Court without being within the definition of a matrimonial cause. Again I observe that the same situation potentially applies here.

21 Fifthly, the essential principle is when a Federal Court is vested with jurisdiction in respect of a "matter" that arises under federal law, then it has jurisdiction in respect of the whole "matter". I observe the same principle applies in this case.

22 Sixthly it was observed that the same substratum of facts gave rise to a wide range of disputes, some federal and some not, but they were all within the accrued jurisdiction. I observe that in the present case the same substratum of facts essentially applies albeit it with some additional components.

23 Seventh, there was a risk that if the two proceedings, namely the New South Wales Supreme Court proceeding and the Family Court proceeding were tried in different courts, there could be a conflicting finding made on one or more issues common to the two proceedings. The same circumstance, in my view, potentially could arise in the present case.

24 Next, it was considered that in identifying which was the "more appropriate forum" it was necessary to take into account that the factual context for both proceedings significantly overlapped. The same circumstance in my view applies here. There will be similar witnesses and evidence given in both the Supreme Court proceeding and the Family Court proceeding if the matter is not cross-vested.

25 Finally it was determined that taking account of all matters, it was in the interests of justice that the proceeding be transferred to the Family Court, to use the words of Brereton J, '[i]n my opinion, justice can best be done by the one court resolving the whole justiciable controversy in order to avoid both duplication and inconsistency.' [2]

26 The principles with respect to determination of cross-vesting applications were considered by the High Court in BHP Billiton Limited v Schultz & Others.[3] Essentially the court there dealt with the question of the assessment of the interests of justice and the emphasis if any to be taken or favoured with respect to a respondent's choice of forum. That matter does not arise here. However, the assessment of the interests of justice is significant.

27 Before turning to that matter, I note that in some respects a relevant judgment was delivered recently by Hansen J in Jane v Jane.[4] In that proceeding, Hansen J refused an application to cross-vest a proceeding to the Family Court. The issue in that case was not a caveat proceeding as here, rather it was a claim with respect to units known as the Bob Jane Unit Trust. Ultimately on the facts of that matter Hansen J was satisfied on the application that the facts were discrete matters that would be determined in the Supreme Court and would not impact on the Family Court proceeding. As distinct from the facts in Valceski and the present matter, the property did not potentially form part of the property that would be the subject of determination by the Family Court in the Family Court proceedings. In my view for that reason the judgment of Hansen J in Jane v Jane is distinguishable from the present circumstances and importantly from the judgment in Valceski. Indeed, Hansen J formed that view in the course of considering the judgment of Brereton J in Valceski.

28 Weighing up all matters and taking account of the principles expressed in Valceski v Valceski, I am of the view that there is a compelling and persuasive argument that the proceedings in this court should be cross-vested to the Family Court. I form that view on the basis of the similarity between the circumstances and principles as approached by Brereton J and those that arise in the present case.

29 Furthermore, I note that in the interests of comity, it is desirable that the judgment in Valceski be followed particularly given its relevance and similarity to the present circumstances.

30 Ultimately I conclude that it is in the interests of justice that one court deal with all justiciable controversy between the parties in order to avoid duplication and inconsistency. Accordingly, I will grant the application.

Courts (Cross-Vesting) Act 1987

At a glance

Court

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Before

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Judgment (34 paragraphs)

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Legislation Cited (1)

Cases Cited (2)