Ristic v Maroti [2014] VSC 29

4 In his affidavit, the plaintiff deposes that he lived in the Wiranga Road property until September 2011. This property was sold on 9 September 2011 and the net proceeds of sale were $137,338.88. This sum was lodged in the trust account of solicitors, Anderson Partners, at the request of Apple Conveyancing, who acted for the plaintiff on the sale. The reason for the funds being lodged in the Anderson Partners trust account was that the defendant, prior to sale, claimed an interest in the proceeds from the sale and lodged a caveat over the property. The parties agreed that the caveat would be withdrawn to permit settlement to proceed, conditional upon the proceeds being placed in the Anderson Partners trust account.

5 Exhibited to the affidavit of Mr Ristic is an affidavit of Alyssa Underwood, principal of Anderson Partners, dated 20 December 2012. Ms Underwood deposes that in the period September 2011 to October 2012, the defendant was represented by two firms of solicitors, Patrick Cash & Associates, followed by Lily Safarewicz. Ms Underwood states in the affidavit that Ms Safarewicz, on 12 October 2012, advised that she no longer acted for the defendant. Ms Underwood then deposes to direct contact with the defendant, asking for permission to release the funds to the plaintiff. The defendant, Ms Underwood states, was disconnected; "she couldn't really care less about the moneys being distributed in a timely fashion"; she did not agree to the moneys being placed in an interest bearing account or "anywhere at all"; and she "would not be issuing any proceedings to have the funds disbursed". It was as a consequence of this conversation with the defendant that Ms Underwood made application to lodge the net sum ($136,142.92 after deduction of costs) from the sale of the Wiranga Road property in this Court. The funds were duly paid into Court.

6 Correspondence exhibited to the plaintiff's affidavit between solicitors acting for the parties shows the defendant has maintained a claim to up to 50% of the proceeds of the sale of the Wiranga Road property.

7 On return of the plaintiff's originating motion before Lansdowne AsJ on 20 August 2013, the plaintiff was ordered to inform the defendant of his application for payment of the proceeds of the sale of the Wiranga Road property to himself. At a further hearing on 17 September 2013, Mrs Maroti was ordered to be joined as a defendant to the originating motion. It was further ordered that $13,646.71 be paid from the funds held in Court to the plaintiff because of his impecuniosity. I note Mr McIntyre, the current solicitor for the defendant, is recorded as appearing on behalf of the defendant at the hearing of 17 September 2013.

8 The matter was listed for hearing after 6 November 2013 at a date to be fixed and the defendant was ordered to file any affidavit material by 16 October 2013.

9 The defendant did file an affidavit on 16 October 2013, in which the defendant disputes the five month relationship alleged by the plaintiff. The defendant alleges that the relationship with the plaintiff had commenced in February 2005 and continued on and off until May 2011. The defendant deposes that over this period, from time to time she lent the plaintiff money, that he lived with her without contribution to household expenses and, when he lost his driving licence, she in fact assisted by driving him for purposes of his employment. The defendant sought a distribution from the funds held in Court based on: "our relationship, the duration of the same and the contributions I made to the relationship as well as the history of abuse".

10 The plaintiff, in a further affidavit in response to that of the defendant, denies any indebtedness, denies the length of the relationship alleged by the defendant, and denies any abuse.

11 This proceeding is listed for hearing on 13 March 2014.

12 The plaintiff, late last year, made a further application for a 10% interim release of funds from the moneys held in Court, again because of his impecuniosity. That application was heard by Lansdowne AsJ on 17 December 2013. Mr McIntyre appeared for the defendant. Her Honour ordered a "further interim distribution of $7,000, there being three months to the trial date of this proceeding". The payment, her Honour ordered, was to be taken into account on the making of final orders for payment out of the funds in Court.

13 Mr McIntyre, on 17 December 2013, made oral application to vacate the hearing date and stay the proceeding pending the determination of an application instituted by the defendant in the Family Court on 27 November 2013. The oral application was refused by Lansdowne AsJ. The orders to that effect record in 'Other Matters' that the defendant provided no explanation as to why the Family Court application had only recently been made and that there was no evidence before her Honour of a confirmed hearing date in the Family Court. Her Honour refused the application, without prejudice to the ability of the defendant to renew such application if so advised.

14 It is this background that gives rise to the application to cross-vest this proceeding to the Family Court. The application came before me in the Practice Court on 23 January 2014. The application was supported by an affidavit of the defendant's solicitor, Mr McIntyre, sworn 8 January 2014. This affidavit exhibited the Family Court application of the defendant against the plaintiff. In those proceedings, the defendant alleges a de facto relationship between 2006 to May 2011.

15 Mr McIntyre, in submissions before me, was unable to provide any explanation as to why the defendant did not commence Family Court proceedings prior to 27 November 2013.

16 I adjourned this matter to permit the defendant to provide the Court with some information as to the anticipated time it would take the Family Court to hear her application upon the basis it was contested. Mr McIntyre provided an affidavit dated 24 January 2014 in which he deposes that his inquiries with a Registrar of the Family Court on 24 January indicated that the defendant's application may be heard within five to eight months.

17 Mr McIntyre submits that the Family Court is the more appropriate venue for the resolution of the issues between the parties, that the same witnesses are involved in both proceedings, that there is potential for inconsistent outcomes, and that the Family Court has wide powers and discretion pursuant to ss 75(2) and 90 of the Family Law Act 1975 (Cth) which permit the Family Court to take into account a party's contribution to a de facto relationship in the adjustment of property interests between such parties.

18 Why the defendant changed tack to issue Family Court proceedings is unexplained. In fact, upon the application before Lansdowne AsJ on 17 December 2013, Mr McIntyre indicated the plaintiff would potentially make submissions concerning the parties' contribution to the de facto relationship and the consequent entitlement of the defendant to funds held in Court based on the provisions of the Relationships Act 2008. In answer to a question from her Honour, Mr McIntyre stated as follows:

It is not simply a case of an equitable interest in these proceedings, your Honour. At the final hearing I will be addressing your Honour in relation to the provisions of the Relationships Act and how they apply.

Mr McIntyre went on to agree with her Honour that the Relationships Act provided for a "broader" consideration of a de facto relationship, ie the contribution made to the relationship could be considered even if the relationship was for a period of time less than two years. The existence of the relationship for two years would, according to Mr McIntyre, be a "threshold" issue to determine if the Family Court had jurisdiction in this matter. Mr McIntyre further submitted to her Honour that if the requirements for jurisdiction of the Family Court were not met, "this Court ... then has jurisdiction under the Relationships Act to make an adjustment to property".

19 Mr McIntyre, in his affidavit in support of this application dated 8 January 2014, deposed as follows:

1. At the directions hearing in this Court, I made submissions to her Honour in support of our client's application, and I quoted sections from the Relationships Act 2008 (Vic) ("the RA").
2. During the course of submissions, and in her reasoning, her Honour determined that the RA did not apply in the current case as the application made by the plaintiff is one that is possibly affected by the defendant's interest in equity in the funds in court, and is not an application for relief under the RA.
3. The parties may be disadvantaged by not having their circumstances properly taken into account, as they would be under the FLA, and there is a risk that any division ordered by this Court would not be just and equitable within the meaning of the FLA.

20 In fact, Lansdowne J did not determine that the Relationships Act did not apply in the current proceedings. What her Honour said was as follows:

I can tell you now I won't be hearing any submission based on the Relationships Act unless there is an application on foot.

21 There is no material before the court to explain why an application under the Relationships Act in the current proceedings has not been issued and pursued. Mr McIntyre, in his submissions on 17 December 2013, recognised that, using his words, there could be an "adjustment to property" under the Relationships Act.

22 The principles with respect to determination of cross-vesting applications were considered by the High Court in BHP Billiton Limited v Schultz.[1] Gleeson CJ, McHugh and Heydon JJ there dealt with the terminology of s 5 and interests of justice:

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 court ... It is both necessary and sufficient that, in the interests of justice, the second court is more appropriate.[2]

23 Mr McIntyre referred me to two authorities in which proceedings involving matrimonial property which had been instituted in State Supreme Courts were cross-vested to the Family Court - the decision of Brereton J in Valceski v Valceski,[3] and that of Warren CJ in Kosmopoulos v Kosmopoulos.[4]

24 There are significant differences in the factual circumstances of the cases cited and those in this proceeding. In both Valceski and Kosmopoulos, the Family Court proceedings were issued prior to the Supreme Court proceedings, both proceedings involved "third parties", ie parties who claimed an interest in the property under dispute who were not husband and wife and thus the potential for conflicting findings between the two Courts was heightened because of the wide range of disputes.

25 Weighing up the various factors, I am of the view that it is not "in the interests of justice" that this proceeding be transferred to the Family Court or that the Family Court is the "more appropriate" forum. There are a number of factors that lead to such conclusion.

26 The net funds the subject of this proceeding have been held either in trust or by the Court for a period now of over two years. The plaintiff is impecunious. It is important these matters concerning the distribution of the funds are dealt with as soon as possible.

27 The proceeding is set down for hearing on 14 March 2014, with materials upon which the parties will rely at the hearing already filed. The Family Court matter is based on the application at this stage alleging only a de facto relationship without any other particulars or supporting materials and it is expected to be at least five to eight months from a hearing date in that Court.

28 No reason for the delay in issuing Family Court proceedings was provided at the hearing of this application. The defendant in fact was unable to provide any explanation in answer to the direct question for reasons for the delay.

29 The submission of the defendant's solicitor to me concerning the alleged refusal of Lansdowne AsJ to entertain an application on behalf of the defendant based on the Relationships Act is misconceived. Her Honour did not determine that the Relationships Act did not apply to this proceeding. Her Honour quite properly informed the defendant's solicitor she would not hear any submission based on the Relationships Act unless there was an application on foot.

30 There has been no explanation from the defendant as to why such application has not been issued in the current proceeding. There was no submission on the part of the defendant that provisions of the Relationships Act would deny or restrict any remedy the defendant seeks. Indeed, as Mr McIntyre submitted on 17 December 2013 to Lansdowne AsJ, provisions of the Relationships Act specifically provide for adjustment of property interests having regard to the contributions of a partner to the relationship.[5] Further, the defendant recognised that if the plaintiff's evidence as to the length of time of the relationship were accepted, the Family Court would lack jurisdiction and the defendant would seek redress pursuant to the Relationships Act in this Court. It appears this Court was to be in some way or another a potential backstop to the Family Court application.

31 If Mr McIntyre misunderstood her Honour, as appears to be the case, there is a simple remedy, to issue an application pursuant to the Relationships Act in the current proceeding based on the defendant's alleged contribution to the de facto relationship with the plaintiff.

32 I conclude that it is not in the interests of justice that this matter be transferred to the Family Court. I refuse the application.

[1] [2004] HCA 61; (2004) 221 CLR 400.

[3] [2007] NSWSC 440.

[4] [2008] VSC 402.

[5] See Relationships Act s 45(1)(b), (c).