Sammons v Eykelenkamp

Judgment 1These are my reasons for holding that the District Court has jurisdiction to hear these proceedings. 2The plaintiff and defendant are parties to an application for adjustment of property pursuant to s 20 Property (Relationships) Act 1984 (NSW) ("the Act"). The parties have lived in a domestic relationship for 16 years. There is one child to the relationship, who is currently aged 16 years. 3Before I commence to hear the application, the plaintiff seeks a ruling as to the jurisdiction of this court, by reason of the interaction of s 51 District Court Act 1973 (NSW) with s 20 of the Act. The size of the asset pool is an essential issue in the steps the court must take when determining claims under the Act. Evans v Marmont (1997) 42 NSWLR 70 identifies these steps as follows: (a) Identification and valuation of the asset pool; (b) Identification of the contributions of each of the parties; (c) The making of an order which is just and equitable, having regard to those contributions. 4The court can only adjust interests with respect to the property of the parties to the relationship, or either of them, pursuant to ss 20(1)(a) and 20(1)(b) of the Act. Section 38(1) also empowers the court in this regard to make a wide range of orders, ranging from the sale or transfer of property to the distribution of the proceeds of sale in such proportion as the court may consider just and equitable. It is not always necessary to determine the parties' beneficial ownership of all property, as Gleeson CJ and McLelland CJ in Eq noted in Evans v Marmont at 84E. 5Counsel for the plaintiff points out that jurisdictional issues may arise where the asset pool for which orders must be made exceeds $250,000. Section 51 of the District Court Act 1973 (NSW) provides: " 51 Consent jurisdiction (1) This section applies to an action or cross-claim that, but for this section, the Court would not have jurisdiction to hear and dispose of by reason only of the fact that the amount claimed exceeds the jurisdictional limit of the Court as at the time the action was commenced. (2) The Court has, and may exercise, jurisdiction to hear and dispose of an action or cross-claim to which this section applies: (a) if a party to the action or cross-claim files a memorandum of consent in respect of the action or cross-claim, or (b) if no objection to the Court's jurisdiction has been raised by any of the parties prior to 3 months before the trial of the action commences. (3) For the purposes of subsection (1): (a) the jurisdictional limit of the Court in relation to an action commenced before 1 July 1993 is taken to be $100,000, and (b) the jurisdictional limit of the Court in relation to an action commenced on or after 1 July 1993 but before 18 July 1997 is taken to be $250,000. (4) The maximum amount for which judgment may be given in relation to an action or cross-claim that is dealt with pursuant to subsection (2) (b) is an amount equivalent to 50 per cent above the jurisdictional limit of the Court as at the time the action was commenced. (5) This section does not apply in relation to an action referred to in section 44(1)(c). (6) Nothing in this section limits the operation of section 140 of the Civil Procedure Act 2005 . (7) In this section, "memorandum of consent" in relation to an action or cross-claim means a document signed by each party to the action or cross-claim, or the party's Australian legal practitioner, in which it is stated that each of those parties consents to the action or cross-claim being tried in the Court and is aware that, unless the document is filed, the Court will not have jurisdiction to dispose of the action or cross-claim." 6The notes to s 51 in the Uniform Civil Procedure at [DCA s 51.15] provide as follows: " [DCA s 51.15] Jurisdiction in Equity proceedings The definition of jurisdictional limits in s 51(3) suggests that the section is not intended to apply to aspects of the court's jurisdiction that derive from other specific provisions of the Act - for example the miscellaneous jurisdiction provided for in ss 132 - 9. Consistent with that view, the present section would not permit orders to be made in excess of the jurisdictional limit of the District Court in relation to adjustment of interest pursuant to s 20 Property (Relationships) Act 1984: Bourdon v Outridge [2006] NSWSC 491; BC200604067at [25] per White J, 22 May 2006." 7This means that the monetary limit of the District Court in Property (Relationships) Act proceedings, as set out in s 134(3) District Court Act 1973 (NSW) is $250,000, and the parties cannot consent to this figure being increased. 8The parties have both drawn this preliminary issue to my attention, as well as the review of the implications of this restriction by White J in Bourdon v Outridge [2006] NSWSC 491. I am asked to make a ruling as to whether this court has jurisdiction in the event (as seems likely) that the assets of the parties exceed $250,000. 9The facts in Bourdon v Outridge were as follows. Ms Outridge commenced proceedings in the District Court seeking property settlement orders pursuant to s 20. At a directions hearing in the District Court, the solicitors for Mr Bourdon advised they intended to seek a transfer of proceedings to the Supreme Court. Mr Bourdon then commenced separate proceedings in the Supreme Court, together with a notice of motion, which then came before White J. Mr Bourdon's application for transfer was brought on the erroneous basis that the District Court had no jurisdiction to make declarations and orders, but during the hearing the applicant raised a second question, namely whether there was power to make an order for financial adjustment under s 20 where the adjustment would be of a value exceeding $250,000. 10White J noted at [19]-[20]: "[19] In applications under the Property (Relationships) Act it is not always necessary for a court to determine the beneficial ownership of the property of the parties before making an adjustment order under s 20. An inquiry into beneficial ownership may be subsumed in the wider inquiry under s 20(1). On the other hand, the Court may determine the parties' beneficial interests in property in such proceedings before deciding whether it is necessary to make any adjustment order, and before deciding what adjustment order, if any, should be made. ( Jones v Grech (2001) 27 Fam LR 711 at 722-723; Evans v Marmont (1992) 42 NSWLR 70 at 84; and Hughes v Egger [2005] NSWSC 18 at [100]-[101]). [20] An application for an order adjusting the interests of the parties to a domestic relationship is a proceeding " with respect to " their existing title or rights in respect of their property. In my view, it is clear that under s 8 of the Property (Relationships) Act and s 134(1) of the District Court Act , the District Court would have jurisdiction to make the declarations sought by Mr Bourdon in the proceedings in this Court, or otherwise to make declarations as to the parties' beneficial interests in the Narrabeen property. The District Court would also have jurisdiction under s 38 of the Property (Relationships) Act to make appropriate consequential orders to give effect to the declarations made as to the title or rights of the parties to the relationship in respect of the Narrabeen property. The monetary limit in s 134(3) of the District Court Act is not applicable to the exercise by the District Court of jurisdiction under para 134(1)(g) of the District Court Act and s 8 of the Property (Relationships) Act to declare the existing title or rights of the parties to the relationship in respect of the Narrabeen property." 11Counsel for the defendant, who supported the plaintiff's application, points out that White J went on to explain at [25] that the consent of the parties would not cure the problem: "I do not consider that the provision of a consent under s 51 of that Act would expand the jurisdictional limit of the District Court to entertain Mr Bourdon's application for an adjustment order under s 20 of the Property (Relationships) Act. The section applies where the Court would not have jurisdiction, by reason only of the fact that the amount claimed exceeds the jurisdictional limit of that Court when the action was commenced. The section assumes that when judgment is given the amount for which judgment is given does not exceed the jurisdictional limit of the Court. Accordingly, I do not consider that the preparedness of Ms Outridge to consent to the District Court having unlimited jurisdiction to deal with Mr Bourdon's claim under s 20 of the Act is an answer to the alternative ground upon which the application for transfer of the proceedings is brought." 12Ultimately White J determined the issues before him on the basis of multiplicity of proceedings amounting to abuse of process, which is not the case here, but his Honour's statements as to the strict interpretation of the jurisdictional limit, and the inability of the parties to consent, have not been the subject of challenge or criticism in the last five years. Bourdon v Outridge has been cited with approval, albeit on other issues, in Haley v Perkins [2010] NSWSC 1091 at [74], where Hallen AsJ noted that it was necessary to determine the parties' beneficial interests in before deciding what adjustment order, if any, should be made, citing Bourdon v Outridge and Evans v Marmont . 13The parties submit to me that the District Court has equitable jurisdiction to make declarations with respect to the property of the parties and consequential orders to effect the declaration as sought by the plaintiff in the amended statement of claim, and draws my attention to statements to this effect by White J at [25]. 14Looking at the three-tier process set out in Evans v Marmont , it is apparent that the identity and value of the asset pool (and for that matter, the value of the contributions of the parties) may well exceed the jurisdictional limit of $250,000 for one or both of the parties, but the crucial issue is the amount which is the subject of a "financial adjustment" order. It is submitted that what White J has effectively held is that the judgment in any "financial adjustment" (as opposed to property the subject of declarations or where no order is required) must not exceed the monetary jurisdictional limit of $250,000. As the adjustment sought by the plaintiff is $95,000, and the defendant seeks no financial adjustment orders, the parties submit the court therefore has jurisdiction to entertain the applications of both parties. 15The question is whether declarations as to existing ownership of property amount to a form of financial adjustment. The parties submit that any judgment would be for an amount which "does not exceed the jurisdictional limit of the court" ( Bourdon at [25]) and that this financial limit, as opposed to property the subject of declarations as to continuing ownership, falls within the jurisdictional limit. Alternatively, the parties could adopt the course proposed by Ms Outridge, as set out in [22] of Bourdon , namely, not to seek orders beyond the financial adjustment sum sought. 16I have examined other judgments of this court, such as Howard v Trosse [2008] NSWDC 328 (orders sought for $250,000 adjustment concerning property worth more than $1 million) and Weeden v Burke [2008] NSWDC 148 (application for 50% adjustment of net asset pool of $382,655). Although the issue of jurisdiction is not raised in these judgments, it would appear that this Court has a practice of entertaining claims where orders for financial adjustment may be made where the amount in the actual orders is less than $250,000. 17Noting the assurances of both parties that they have tailored the claim so as to avoid exceeding the jurisdictional limit, I am satisfied that this court has jurisdiction.