Secretary, Department of Social Services & Commonwealth of Australia v Francesco Cassaniti and Maria Cassaniti

Background

1. The parties largely do not dispute either the relevant facts or the applicable law. As indicated the applicants filed their motion in the Supreme Court proceedings, which proceedings were settled just before they were due to be heard before me in this Court in March and April this year. The Supreme Court proceedings concerned a dispute between, on the one hand, trustee companies Newton Road WP Pty Ltd and George Street Windsor Pty Ltd, and on the other hand various creditors of Sam and Patricia Cassaniti and other members of the Cassaniti family. The subject of the dispute was the ownership of two properties held under the Real Property Act 1900 and located respectively on Newton Road, Wetherill Park ("the Wetherill Park Property") and George Street, Windsor ("the Windsor Property").

The Cassanitis' Legal Ownership of the Properties

1. The parties at least agree on the state of the Register over time concerning the title of the properties the subject of the AAT proceedings. From May 1987 the Cassanitis were the joint registered proprietors of a 25% share in the Wetherill Park Property, until August 2014 when Newton Road WP Pty Limited became the registered proprietor of that share. And from June 1988 the Cassanitis were the joint registered proprietors of a 15% share in the Windsor Property, until December 2012 when trustees for sale were appointed pursuant to Conveyancing Act 1919, s 66G(1) over that property, following which in October 2014 the whole title to the Windsor Property was registered in Windsor Pty Limited's name.
2. And on the present motion the applicants also seek declarations regarding a third property which they claim the Cassanitis owned during the relevant period. This was a property located on Old Leumeah Road, Leumeah ("the Leumeah Property"). From February 1986 the Cassanitis were the registered proprietors of a 50% share in the Leumeah Property, until August 2014 when Leumeah (NSW) Pty Limited became the registered proprietor of the Leumeah Property.

The Cassanitis' Equitable Ownership of the Properties

1. The parties' dispute in the AAT proceedings relates to certain deeds of transfer which the Cassanitis allege they executed in the early-to-mid-1990s in relation to the Wetherill Park Property, the Windsor Property and the Leumeah Property (together, "the Properties"). The Cassanitis claim that they executed these deeds of transfer, thereby transferring their equitable interest in each Property to a different unit trust, and thereafter held the legal title to each Property only as bare trustees. They claim they transferred their equitable interests: 1. in the Wetherill Park Property in July 1994 to the Trustee of the Newton Road Unit Trust 2. in the Windsor Property in July 1994 to the Trustee of the Windsor Unit Trust; and 3. in the Leumeah Property in September 1993 to the Trustee of the Leumeah Unit Trust.
2. The applicants dispute that Mr and Mrs Cassaniti transferred their equitable interests in the Properties as described. The applicants first dispute that the Cassanitis in fact executed the deeds in 1993 and 1994, and they secondly dispute that the alleged transfers could have the legal effect for which the Cassanitis claim. They submit that the transfers could not, and did not, transfer the Cassanitis' legal interests in the Properties to the respective unit trusts, or to anyone, at any relevant time. They also claim that the deeds were of no force or effect from the dates of their purported signing and were legal nullities.
3. When the Supreme Court proceedings settled, this Court made certain orders by consent on 30 March 2015, and then entered final orders disposing of the proceedings on 2 April 2015 ("the Final Orders"). The Final Orders included declarations that: 1. The Wetherill Park Property is and has been since 1 July 1994, property of the Newton Road Unit Trust; and 2. The Windsor Park Property is and has been since 1 July 1994, property of the Windsor Unit Trust.
4. The Leumeah Property did not feature in the Supreme Court proceedings, and no declaration was sought or made about it. As earlier indicated, neither the Secretary nor the Commonwealth (the applicants on the motion) were parties to the Supreme Court proceedings. Nor were their potential interests in the present issues brought to the Court's attention on either 30 March or 2 April 2015.
5. The legal and equitable ownership of the Properties is a central issue in the District Court proceedings and the AAT proceedings.
6. The Court's declarations in the Supreme Court proceedings were based on the evidence advanced in those proceedings. Before the Supreme Court proceedings settled, on 30 March Mr Ashurst SC in his opening submissions for Mr and Mrs Cassaniti took the Court through the complex evidence in the proceedings, including evidence of the trust deeds relevant to the declarations the Court made in the Final Orders. Mr Ashurst SC explained in relation to the Wetherill Park and Windsor Properties' deeds of transfer: "After the transfers were executed, the transfers were not registered until July 2014, and Mr David Cassaniti will tell you that Sam Cassaniti was left responsible for arranging the paperwork to ensure that the trust interests were registered and that he simply did not get around to doing it."
7. But Mr Ashurst SC noted in his submissions that there was "an additional problem" in relation to the Wetherill Park Property, which was that the original deed of trust relating to that property had been lost. The Cassanitis' counsel explained that a replica of that deed had been made and: "[…] re‑dated April 1994. It is the next document, the document at page 201 and it is the replica of the original Wetherill Park Trust Deed, known as the Newton Road [Unit] Trust. It was entered into on 1 July 1994. The signatories, if your Honour goes to page 221, David Cassaniti and Sam Cassaniti." He further submitted: "We say that is the authentic Newton Road deed of trust. We call the persons who signed it and unless your Honour finds that all of them are lying to your Honour or alternatively were back in July 1994 deliberately creating a sham document, then we say that establishes the trust interests in this property and the fact that Mr Sam Cassaniti may (a), have not got the document registered as he should have, and (b), we will come to it in due course, made certain warranties in respect of this property when orders under the Proceeds of Crime Act were made, are relevant, this property was and remains at all times trust property."
8. Mr Ashurst SC submitted that the original deed in respect of the Windsor Property had not been lost, and that the Cassanitis relied upon that deed as evidence in the Supreme Court proceedings. The Court had the opportunity of reviewing the evidence to which Mr Ashurst SC referred in submissions.

The District Court Proceedings and the AAT Proceedings

1. The background to the District Court proceedings and the AAT proceedings may be shortly stated. In July 1994 Mr and Mrs Cassaniti applied for and were granted by the Secretary (or the Secretary's predecessor) respectively an old age pension and a wives pension. In April 2011 the Secretary cancelled the Cassanitis' pensions on the basis that when they applied for them in 1994 they held assets (and in 2011 continued to hold assets) in excess of the assets test limits in the Social Security Act 1991 (Cth), including their holdings as registered proprietors of the Leumeah Property, the Wetherill Park Property and the Windsor Property. Based on the Secretary's decision, on 25 July 2013 the Commonwealth certified that Francesco owed $164,020.96 as a debt to the Commonwealth and Maria Cassaniti owed $163,156.46 as a debt to the Commonwealth, each in respect of money they received by way of pensions, pursuant to Social Security (Administration) Act 1999 (Cth), s 240.
2. In August 2013 the Commonwealth commenced the District Court Proceedings (numbered 2013/245282 and 2013/245275) to recover those certified debts from the Cassanitis. In response the Cassanitis applied for a review of the Secretary's decision to the Social Security Appeals Tribunal ("the SSAT"). The SSAT affirmed the Secretary's decision to cancel the pensions and to recover the debts as certified. In its 20 August 2014 Reasons for Decision, the SSAT found that: "Mr and Mrs Cassaniti were at all relevant times part-owners of the Windsor, Wetherill Park and Leumeah properties"; and "therefore the total value of the assets held by Mr and Mrs Cassaniti in the period … far exceeded the relevant asset test limits at all times. Because of their assets the rate of pension payable to them was nil."
3. The Cassanitis filed applications to the AAT for review of the SSAT's decision in September 2014, thus commencing the AAT proceedings (numbered 2014/4507, 2014/4509, 2014/4510 and 2014/4511). The AAT proceedings are currently awaiting listing for hearing.
4. The parties agree that the AAT is vested with jurisdiction to review the SSAT's decision and to make a determination as to the assets held by the Cassanitis for the purpose of determining pension entitlements.
5. But during April 2015, the Secretary, the first applicant, was corresponding with the Cassanitis regarding the AAT proceedings. The Secretary interpreted that correspondence as meaning that the Cassanitis would contend that the declarations made in the Final Orders in the Supreme Court proceedings were binding on the AAT in its determination of the issues in the AAT proceedings. The Secretary challenged that proposition in correspondence. But the Secretary's challenge went without response from the Cassanitis. So the applicants decided to file their present motion in these proceedings.

The Notice of Motion

1. The applicants' notice of motion, filed on 11 May 2015, seeks orders ("the Proposed Orders") in relation to the declarations in the Final Orders regarding the Properties. The first Proposed Order is as follows: "1 The Court's declaration dated 30 March 2015 that 'the property situated at and known as 158 Newton Road, Wetherill Park NSW (4/739906) (Newton Road Property) is, and has been since about 1 July 1994, property of the Newton Road Unit Trust (Newton Road Trust)': (a) is only binding as between the parties to these proceedings 2014/001422284, 2014/123830 and 2012/226668; (b) is not binding on the Administrative Appeal Tribunal in proceedings 2014/4507, 2014/4509 and 2014/4510-4511, or on the parties in those proceedings Francesco Cassaniti, Maria Cassaniti and the Secretary, Department of Social Services; and (c) is not binding on the District Court of New South Wales in proceedings 2013/245282 and 2013/245275, or on the parties in those proceedings the Commonwealth of Australia represented by the Department of Human Services, Francesco Cassaniti and Maria Cassaniti."
2. The second Proposed Order asks for equivalent orders as they apply to the declarations made regarding the Windsor Property. The third Proposed Order mistakenly asks for equivalent orders as they might apply to declarations regarding the Leumeah Property. But as mentioned earlier the Final Orders in fact include no such declarations regarding the Leumeah Property. The applicants seek their costs of the notice of motion.
3. In summary, the Proposed Orders seek declarations that the Final Orders are: 1. "only binding as between the parties" to the Supreme Court proceedings; and 2. "not binding" on the applicants, the AAT and the District Court of NSW (which were not party to the Supreme Court proceedings); or on Frank and Maria Cassaniti (who were parties to the Supreme Court proceedings).

Consideration

1. The applicants and the Cassanitis have agreed that the Final Orders made by this Court in the Supreme Court proceedings are only binding on the parties to those proceedings and not on the present applicants, as the present applicants were not parties to those proceedings. That agreement correctly reflects applicable law: Australasian Oil Exploration Ltd v Lachberg (1958) 101 CLR 119 ("Australasian Oil Exploration") at 133-134.
2. The applicants contended that, despite the parties' agreement that the Final Orders were not binding on the applicants in the AAT proceedings, the applicants still had jurisdiction to seek the Proposed Orders on this motion because they were persons affected by the Final Orders. The applicants contended that they were affected on two bases. First, they contended that until 15 May 2015, and specifically on 11 May when the applicants filed the motion, the Cassanitis had unambiguously asserted that the Final Orders affected the Secretary in the AAT proceedings. Secondly, the applicants contended that the Cassanitis have continued to assert that the Final Orders are relevant to or may have a commanding influence on the determination of the remaining issues in the AAT proceedings, or at the very least have not acknowledged that they are irrelevant to those proceedings.
3. These reasons consider the merits of the applicants' notice of motion by reference to the following issues: 1. Whether the applicants have jurisdiction to seek the Proposed Orders: 1. since the applicants are not parties to the Supreme Court proceedings; and 2. whether the applicants should therefore be joined to the proceedings so that they may seek the Proposed Orders; 1. Whether the Supreme Court of New South Wales has jurisdiction to make declarations as to what matters will or will not be binding on the AAT; and 2. Whether the Court should exercise its discretion to make the Proposed Orders, if it has jurisdiction to do so.

(1) Whether the Applicants have Jurisdiction to seek the Proposed Orders

1. The Court has the power to make declarations regarding the correct interpretation of its previous orders: Blanch (t/a Hicksons) v British American Tobacco Australia Services Ltd (2005) 62 NSWLR 653; [2005] NSWSC 241 ("Blanch"). That is, in a sense, what the applicants ask for here. They stress that they do not seek to vary the Final Orders, and concede that were that the case they would be out of time to do so. Uniform Civil Procedure Rules 2005 ("UCPR"), r 36.16 provides that the Court may only vary or set aside its judgments or orders at a party's application if the party files a notice of motion to do so within 14 days of the date of the judgment or orders.
2. But the Cassanitis oppose the applicants' motion seeking the Proposed Orders in two complementary ways. Their first way is to contend that the applicants, who were not parties to the Supreme Court proceedings, cannot seek declarations in the proceedings. The applicants did not accept that non-parties could not seek declarations in proceedings. But they nevertheless applied in the alternative, should no power to make declarations in favour of non-parties be found to exist, to be joined as parties to the proceedings to overcome the defect. The Cassanitis' second argument was therefore fielded to deal with this development: they further contended that the applicants should not be joined to the Supreme Court proceedings, as they are not directly affected in the proceedings.

Whether the Court may make declarations in favour of a non-party to the proceedings

1. The applicants' argument that their application for declaratory relief is within jurisdiction relies upon this Court's inherent power as a superior court to grant declaratory relief: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 ("Ainsworth") at 581; Telstra Corp Ltd v AAPT Pty Ltd [1999] NSWSC 853 at [55]. The applicants argue that the declaratory remedy can be used to pronounce determinations as to rights and obligations, including the making of declarations as to the powers of inferior courts, tribunals or statutory decision makers: Bacon v Rose [1972] 2 NSWLR 793; Donges v Ratcliffe [1975] 1 NSWLR 501; Maksimovic v Walsh [1983] 2 NSWLR 656; Commonwealth Bank of Australia v Hattersby (2001) 51 NSWLR 333; [2001] NSWSC 60.
2. The applicants rely upon the many authorities to the effect that a superior court's power to make declarations is fettered only by its discretion. In Hanson v Radcliffe Urban District Council (1922) 2 Ch 490 at 507, Lord Sterndale MR found that "the power of the Court to make a declaration, where it is a question of defining the rights of two parties, is almost unlimited; I might say only limited by its own discretion". Similarly, Lord Radcliffe said in Ibeneweka v Egbuna [1964] 1 WLR 219 at 225: "After all, it is doubtful if there is more of principle involved than the undoubted truth that the power to grant a declaration should be exercised with a proper sense of responsibility and a full realisation that judicial pronouncements ought not to be issued unless there are circumstances that call for their making. Beyond that there is no legal restriction on the award of a declaration." Gibbs J cited both of those statements with approval in Forster v Jododex Australia Pty Ltd (1972) 127 CLR 441 ("Forster") at 437-8, adding that: "It is neither possible nor desirable to fetter the broad discretion given by s 10 by laying down rules as to the manner of its exercise. It does, however, seem to me that the Scottish rules summarized by Lord Dunedin in Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd. (1921) 2 AC 438, at p 448, should in general be satisfied before the discretion is exercised in favour of making a declaration : 'The question must be a real and not a theoretical question; the person raising it must have a real interest to raise it; he must be able to secure a proper contradictor, that is to say, someone presently existing who has a true interest to oppose the declaration sought.' Beyond that, however, little guidance can be given."
3. The applicants sought to establish that an almost limitless power exists for this Court to make declarations, including declarations in favour of entities that are not parties to proceedings, and then to establish that the facts of this matter are such that this Court ought to exercise its declaration power to make such an order. But recent decisions show that the Forster factors, which guide a court's discretion as to whether to grant a declaration, are also relevant to the question of the court's jurisdiction to grant declaratory relief: JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (5th ed 2014, LexisNexis Butterworths) at [19-125]. For example, in Truth About Motorways Pty Ltd v Macquarie [2000] HCA 11; 200 CLR 591 at [52], Gaudron J considered the rule that "a declaration cannot be made if it will produce no foreseeable consequences for the parties" and observed that "[t]hat is not simply a matter of discretion". Similarly, Mason CJ and Dawson, Toohey and Gaudron JJ held in Ainsworth at 581-582 that the power to grant declaratory relief: "[…] is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have 'a real interest' and relief will not be granted if the question 'is purely hypothetical', if relief is 'claimed in relation to circumstances that [have] not occurred and might never happen' or if 'the Court's declaration will produce no foreseeable consequences for the parties."
4. None of the authorities to which the applicants referred the Court considered an applicant who was not a party to some proceedings applying for declarations in those proceedings. But despite the breadth of the Court's power to make declaratory orders in proceedings, it cannot extend to making declaratory orders in favour of a non-party. The purpose of a declaratory order is to produce a decisive statement of the law, the relevant facts, or the application of the law to the relevant facts, which will be binding upon the parties to the proceedings in which the declaration is made. The declaration is res judicata and binds the parties to the proceeding forever, subject only to a right of appeal: International General Electric Co of New York Ltd v Customs and Excise Commissioners [1962] Ch 784 at 789 per Upjohn LJ. An applicant cannot have jurisdiction to seek a declaration in proceedings which would not be binding upon it as a non-party. The requirement that the person seeking the declaration have a real interest in the relief means that for the court to have the power to consider the declaration, the applicant must be a party to the proceedings.
5. And that conclusion is consistent with the learned authors' comments in RP Meagher, JD Heydon, MJ Leeming, Meagher, Gummow & Lehane's Equity: Doctrines and Remedies (4th ed 2002, Butterworths LexisNexis) at [19-155] regarding an unreported case in which the Court of Appeal considered whether a non-party may seek declarations in a proceeding. The authors comment upon the decision of Handley, Cole and Beazley JJA in Offe v Tenancies Tribunal of New South Wales (Court of Appeal (NSW), 29 October 1997, unrep) as follows: "One would not have thought that it required judicial authority to decide the point, but Offe v Tenancies Tribunal of New South Wales, a decision of the New South Wales Court of Appeal, decided that a declaration could not be made at the instance of a person who was not entitled to participate in the proceedings." (Citation omitted).
6. Having anticipated this challenge, the applicants also applied to be joined as the 14th and 15th defendants in the Supreme Court proceedings so that they might have their declarations as parties.

Whether the Court should join the applicants as parties to the proceedings so that they may apply for their declarations

1. The Cassanitis resisted the applicants' joinder application on the basis that it would serve no utility. The Cassanitis accept that the Court has the power to permit the applicants to be joined as parties to the proceedings under UCPR, r 6.27, which provides that "A person who is not a party may apply to the court to be joined as a party, either as a plaintiff or defendant." The test for whether the Court will order that a person be joined to proceedings is found in UCPR, r 6.24, which provides that: "If the court considers that a person ought to have been joined as a party, or is a person whose joinder as a party is necessary to the determination of all matters in dispute in any proceedings, the court may order that the person be joined as a party."
2. Rule 6.24 firstly directs the court to the joinder of a "proper" party, and secondly to a "necessary" party, although those concepts overlap: Re Raejoe Pty Limited [2012] NSWSC 1457 at [6] per Black J. The courts have recognised the guiding question in respect to the joinder of a party as being "Will his rights against or liabilities to any party to the action in respect of the subject matter of the action be directly affected by any order which may be made in the action?": Pegang Mining Co Ltd v Choong Sam [1969] 2 MLJ 52 at 56, per Lord Diplock. The answer to the question involves matters of degree and ultimately judgment, having regard to the practical realities of the case, and the nature and value of the rights or liabilities that are said to be affected; joinder should not be ordered where the effect of the proceedings on the non-party can be characterised as only indirect or consequential: News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 525. It appears that if a person's rights or liabilities are so directly affected by a proceeding that they are a necessary party, they are entitled to joinder, rather than being limited merely to seeking the favourable exercise of a discretion to be joined: John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; 241 CLR 1 ("John Alexander's") at [137].
3. The Cassanitis persuasively argued that the applicants should not be joined to the proceedings for the purposes of pursuing their declarations. They say that the applicants' rights and liabilities are not directly affected by the proceedings for two reasons.
4. First, the Cassanitis say that the applicants' joinder would be self-defeating. If the purpose of the applicant's joinder was to seek a declaration establishing that they were not bound by the Final Orders, that purpose would be thwarted once they were joined as parties to the proceeding and so became bound by the declarations that had already been made in them. Ashurst SC for the Cassanitis put it this way in his oral submissions: "There is simply no utility to be joined to proceedings, which may have the effect of making you bound by those orders, simply to get a declaration that you are not bound by those orders, which was the position you were in before you applied to be bound." To that the applicants reply that, once joined to the proceedings, they would not necessarily be bound by declarations made prior to their joinder, and even if that were the effect of the joinder the Court could craft orders to exclude the applicants from the binding effect of the Final Orders. But crafting orders that amend the Final Orders to specify upon which parties they are binding does not appear to be a course open to the Court, bearing in mind the strict time limit for varying orders in UCPR, r 36.16. Moreover, joining the applicants to the Supreme Court proceedings merely for the purpose of redrafting the Final Orders to state expressly what would be the legal effect of the orders in any case is a course that lacks utility. But the strength of the Cassanitis' second contention makes it unnecessary to decide this point.
5. The Cassanitis secondly disputed that there was any basis for the joinder of the applicants because the Final Orders do not directly affect (or indeed affect at all) any of the applicants' rights or liabilities: John Alexander's. They argued that the applicants are strangers to the litigation, and such they are not affected by the Final Orders. Further, the applicants seek no substantive relief from the Court, only an order that they are not bound by the Final Orders, to which no one seeks to bind them.
6. The applicants agree that they are not bound by the Final Orders in the Supreme Court proceedings. However they claim to have a "real and substantial interest" in the Final Orders because of the way that they allege the Cassanitis have threatened to use those orders in the AAT proceedings. They seek the Proposed Orders defensively in order to nullify that threat. The applicants claim that at the time they filed the present notice of motion, the Cassanitis' position was that the Final Orders were binding on the AAT, and that even after the Cassanitis abandoned that position after the motion was filed they continued to submit that the declarations were relevant to the determination of the AAT proceedings. The applicants say that is enough to warrant their joinder in these proceedings for the purpose of this Court making the Proposed Orders. To understand the applicants' position, it is necessary to consider the correspondence between the parties in more detail.
7. The Secretary filed submissions before the AAT contending that the Properties were owned by the Cassanitis, and that the Cassanitis had not transferred away their equitable or legal interests in the Properties. The applicants contended that the deeds purportedly signed in relation to the equitable interests in the Properties could not have had the effect that the Cassanitis claimed they had, and that in any case they were not genuine.
8. It is worth outlining at some length the basis for the Secretary's contention in the AAT proceedings that the deeds of transfer were neither effective nor genuine. Those reasons were not referred to by counsel for any of the parties to the Supreme Court proceedings.

The Genuineness of the Deeds

1. As to whether the deeds are genuine, the Secretary notes the following. On 5 March 2014, Sam Cassaniti, the son of Francesco and Maria Cassaniti, sent an email to the Commonweath's solicitors in the District Court proceedings attaching an affidavit sworn on the same day. That affidavit refers to the deeds of transfer for the Leumeah Property and the Wetherill Park Property, and the deeds establishing the trusts to which the Cassanitis' interests in those properties were said to be transferred. Sam Cassaniti deposed to having executed each of those deeds on the dates shown on the deeds. The deed establishing the Newton Road Unit Trust, the trust to which the Cassanitis' equitable interest in the Wetherill Park Property was allegedly transferred, bears the same date as the deed of transfer for the Wetherill Park Property, namely, 1 July 1994.
2. However, clause 13.1 of the deed establishing that trust, contained in Sam's email, contained a reference to the Corporations Act 2001 (Cth). That Act did not commence until 15 July 2001. The Secretary's case is that because of this error Sam Cassaniti's affidavit attaching copies of the deeds could not have attached a true copy of a deed that Sam Cassaniti executed in 1994 to establish the Newton Road Unit Trust.
3. The next day, on 6 March 2014, Sam Cassaniti wrote to the Commonwealth's solicitors attaching a new affidavit that he had sworn on that day. He asked the solicitors to "please discard the affidavit of 5 March 2014". The new affidavit attached another deed establishing the Newton Road Unit Trust dated 1 July 1994. But clause 13.1 of this deed referred to the Companies Act 1981, and included some formatting differences from the deed attached to Sam Cassaniti's affidavit sworn the previous day.
4. In an affidavit dated 27 March 2015 Sam Cassaniti deposed to preparing "replicas" of the trust documents based upon information including the dates of execution and parties to the documents, the unit holdings set out in the relevant deeds of transfer, and the content of the documents in the other, original unit trust documents, which were "prepared from the same form of precedent". However in his 5 March 2014 affidavit Sam Cassaniti had deposed that annexure C to that affidavit was "a copy of the deed establishing the Newton Road Unit Trust"; he had not referred to the document as a replica.
5. The Secretary contends that Sam Cassaniti realised his error overnight on 5 March, and naively attempted to rectify his error on 6 March 2014 as though his affidavit dated 5 March 2014 did not exist. The Secretary says in its statement of facts and contentions in the AAT proceedings that "this small but significant slip on Sam Cassaniti's part on 5 March 2014 with the first version of the deed casts substantial doubt on the genuineness of all of the trust documents filed in the District Court proceedings, and in these AAT proceedings". The Secretary continues, "Mr and Mrs Cassaniti and various other family members have falsely sworn affidavits saying that they signed the trust documents on the dates they bear, but it is likely that the documents were not created until 5 and 6 March 2014".

The Effectiveness of the Deeds

1. The Secretary also contended that even if they were found to be genuine, the relevant deeds could not be effective to transfer the equitable interests of the Cassanitis in the Properties as the Cassanitis contend and as the declarations in the Final Orders assume. The applicants in their submissions on this motion, which for the most part reproduce their submissions in the AAT proceedings, put it in this way: "The attempt to transfer Mr and Mrs Cassaniti's registered interests in the Windsor Property by the deed dated 15 July 1994 was legally ineffective. The Windsor Property was at all material times Torrens title. The only way that Mr and Mrs Cassaniti's registered interests could be transferred to the trustee, or to any transferee, was to register a transfer of the title in accordance with the Real Property Act 1900 (NSW). The registration of a transfer of the title is not, as the author of the 'Deed of Transfer Cassaniti Unit Trust' dated 15 July 1994 apparently believed, merely to register an actual transfer of title that occurred on 15 July 1994. Rather, registration of a transfer of the title was the only way in which Mr and Mrs Cassaniti's legal interest in the land could have been transferred. … It follows that each of the [deeds of transfer for the Properties] did not transfer Mr and Mrs Cassaniti's legal interests in the respective properties on the dates of the three Deeds. … Mr and Mrs Cassaniti have said in affidavits dated 30 January 2015 in the AAT proceedings that the three Deeds created a trust in the three properties. The argument seems to be that Mr and Mrs Cassaniti held their legal interests in trust from the respective dates of the three Deeds of transfer pending registration of transfers under the Real Property Act 1900. To the extent that Mr and Mrs Cassaniti are advancing that argument, the argument is unsustainable. The three Deeds do not purport to create a trust, and cannot be interpreted as creating a trust. Instead, the three Deeds refer to pre-existing deeds creating trusts. Even if it was Mr and Mrs Cassaniti's intention to create a trust by signing the three Deeds, that intention has no legal force or effect. A trust of land must comply with statutory requirements based on the Statute of Frauds 1677. In New South Wales, this requirement for writing is in section 23C of the Conveyancing Act 1919. The three Deeds do not satisfy section 23C."
2. Based upon this reasoning, the applicants invite the Court to take the view that each of the three deeds of transfer was a legal nullity from its respective date because the deeds were executed under the common mistake that they would be effective to transfer ownership in the Properties when they in law could not. That conclusion, the applicants say, would provide a strong reason for the Court to exercise its discretion to make the declarations that it seeks in the form of the Proposed Orders.
3. This was the Secretary's position when the Cassanitis wrote to the Secretary asserting the significance of the declarations in the Final Orders of the Supreme Court proceedings.

The Correspondence Between the Secretary and the Cassanitis

1. On 27 March 2015 Sparke Helmore, the solicitors for the Secretary, wrote to the Registrar of the AAT applying for orders that the Cassanitis' applications for review be dismissed. Sparke Helmore sent a copy of that correspondence to the Cassanitis. The Secretary applied for a dismissal firstly for procedural reasons and secondly and more importantly because the applications were "frivolous or vexatious" and the Cassanitis had "no real prospects of success in a substantive hearing". This was in part because the Secretary alleged that the deeds relating to the Properties were forgeries.
2. The solicitors for the Cassanitis, Kemp Strang, wrote back to the Secretary's solicitors on 8 April 2015, inviting the Secretary to withdraw the application for dismissal, saying: "We wholly reject that our client's review is frivolous, vexatious or without a real prospect of success. Our clients will oppose any application brought to dismiss this matter. We advise that on Monday, 30 March 2015 the New South Wales Supreme Court in [the Supreme Court proceedings] made declarations, inter alia, that: [The Wetherill Park Property] is, and has been since 1 July 1994, property of the Newton Road Unit Trust; and [The Windsor Property] is, and has been since 1 July 1994, the property of the Windsor Unit Trust. We will forward a copy of these orders shortly. The transfer of our clients' interest in [the Leumeah Property] to the Leumeah Unit Trust occurred on 1 September 1993 on similar terms as the transfers of our clients' interests in [the Wetherill Park Property and the Windsor Property] to the aforementioned trusts. In consideration of the above, we consider that the Administrative Appeals Tribunal will determine that our clients' former interests in [the Properties] were not assets within the definition of subsection 11(1) of the Social Security Act 1991 (Cth) when our clients were granted pensions on 28 July 1994." Kemp Strang finished the letter by inviting the Secretary to agree to present the AAT jointly with the Cassanitis' position as to the ownership of the Properties, and to recalculate the value of the Cassanitis' assets on that basis. That is, in effect the Secretary was invited to withdraw its position.
3. On 10 April 2015, Sparke Helmore emailed the Official Trustee in Bankruptcy, copying in Kemp Strang. The email related to the Final Orders, a copy of which Kemp Strang had sent. Sparke Helmore indicated their concerns that the Final Orders might have "unintended consequences" with respect to the AAT proceedings and the District Court proceedings, because "Kemp Strang say in their letter that the AAT proceedings should be immediately resolved in Mr and Mrs Cassaniti's favour in view of the Supreme Court declarations made on 30 March 2015". Some confusion appears to have occurred about the date of the Final Orders because the sealed copy of the Final Orders was partly in typed form, marked 'A', and partly handwritten, marked 'B'. Only the first page of the handwritten part bears the Court's seal, while one of the relevant declarations was on the second page, which does not bear the Court's seal.
4. On 13 April 2015, Kemp Strang responded to that email saying that "the effect of the declarations made in the Supreme Court proceedings in the Administrative Appeal Tribunal Proceedings […] will be a matter of evidence, legal submission and argument, should your client continue with its application, notwithstanding the weight of evidence against it". The email then attached a copy of the transcript from the Supreme Court proceedings, in which Mr Ashurst SC on behalf of the Cassanitis and the trustees of the Newton Road Unit Trust and the Windsor Unit Trust took the Court through the evidence before the Court made the Final Orders.
5. Sparke Helmore wrote back on 15 April 2015, essentially asking Kemp Strang to clarify whether it was their position that the Final Orders were binding on the parties to the AAT proceedings and to the District Court proceedings. If not, the email continued, it would be appropriate for the Secretary to apply to this Court to clarify the situation.
6. Kemp Strang did not reply to Sparke Helmore's 15 April 2015 email.
7. In the absence of a reply, on 11 May 2015, Sparke Helmore filed the present motion.
8. On 14 May 2015, in response to the applicants filing the notice of motion, Kemp Strang wrote again to Sparke Helmore, and affirmatively denied that the Secretary was bound by the Final Orders in the Supreme Court proceedings. In part, that letter said: "We do not understand why your client considers that it is necessary to approach the Supreme Court for orders that the declarations in the Supreme Court Proceedings are not binding on your client, the AAT or the District Court. If your client is concerned that it is bound by the declarations in the sense that it is estopped from asserting that the [Properties] were not trust properties in the proceedings currently before the AAT or the District Court, that concern is misconceived." Kemp Strang then referred to the principle in Australasian Oil Exploration and continued: "The issue before the AAT is whether Frank and Maria Cassaniti are entitled to an old age pension. […] Your client can present its case in relation to any beneficial interest it asserts that Frank and Maria have in respect of the properties, and the AAT is competent to make a decision in respect of Frank and Maria's entitlements. […] Frank and Maria have no equitable interest in the properties, a fact that was accepted by all parties to the litigation, and by the Supreme Court in making the declarations sought. Notwithstanding the Supreme Court being satisfied that the properties were trust properties, you client continues to assert that Frank and Maria's case in the AAT […] is frivolous and vexations, and further that the declarations of trust and the transfers of property are fraudulent, despite having called no evidence in support of that claim."

Consideration

1. The Cassanitis' correspondence, outlined above, cannot be read in its final form on 14 May 2015 as contending that the Final Orders of this Court were binding upon the AAT and the parties to its proceedings. Kemp Strang's 8 April 2015 letter referred to the Final Orders for the apparent purpose of showing that there was at least some evidentiary substance to the position that the Cassanitis had taken before the AAT, in order to deflect the Secretary's claim that their position was frivolous or vexatious. Kemp Strang's invitation to the Secretary to accept the Cassanitis' version of the ownership of the Properties is an unexceptional invitation to settle proceedings in inter partes correspondence preceding a hearing, and cannot be read as implying that the AAT would have been bound to come to the Cassanitis' position due to the orders of another court.
2. But the Cassanitis' contention on 13 April 2015 that the effect of the Final Orders would be a matter for "evidence, legal submission and argument" in the AAT proceedings is on less certain ground: that position is potentially inconsistent with the principle in Australasian Oil Exploration Ltd and stands in tension with the Cassanitis' later concession that the declarations were not binding upon non-parties to the litigation. The content of the Final Orders could not itself be relevant to the findings of the AAT: this appears to be the more sustainable position that the Cassanitis have taken since 14 May 2015. It is unclear what "evidence, legal submission and argument" the Cassanitis could have put to the contrary, as they foreshadowed a month earlier on 13 April.
3. But the question is whether a party is directly affected by a proceeding or whether it is not. When submissions are made in one proceeding about the effect of orders in a second proceeding, the submissions themselves have no legal effect. They cannot of themselves make the non-party directly affected by the second proceeding. Although the Cassanitis incorrectly stated that the effect of the Final Orders in the AAT proceedings would be a matter for "evidence, legal submission and argument", as a matter of law, the Final Orders in the Supreme Court proceedings never affected the applicants' rights or liabilities, as they were never parties to those proceedings. So the applicants have no entitlement to be joined in the Supreme Court proceedings.
4. There is no jurisdiction for the Court to make declaratory orders in these proceedings in favour of the applicants, who are not parties to the proceedings and who should not be joined as parties to the proceedings. Both as at the time that the notice of motion was filed seeking the Proposed Orders, and as at the date of this judgment, the Court lacked and lacks the necessary jurisdiction to make the declaratory orders sought for the reasons given.

(2) Whether the Supreme Court of New South Wales has jurisdiction to make declarations as to what matters will be binding on the AAT

1. Even if the applicants were entitled to seek declarations in the Supreme Court proceedings, the applicants conceded in argument that this Court has no power to make a declaration as to what matters are binding on the AAT, a federal tribunal.
2. The applicants did not identify the basis upon which they had claimed this Court could make an order in respect of the AAT, an administrative body created by a Commonwealth statute. The powers of the AAT are set out in the Administrative Appeals Tribunal Act 1975 (Cth) ("AAT Act"). Section 43 of that Act sets out the AAT's powers to review decisions. Neither the powers of the AAT, nor the powers of the Secretary under the Social Security Act, can be exercised by this Court.
3. Also, this Court has no supervisory jurisdiction over the AAT. Only a Commonwealth statute can confer such jurisdiction. The AAT Act provides the Federal Court of Australia with that jurisdiction. Section 44 of the AAT Act provides that a party may appeal to the Federal Court in respect of a decision of the AAT on a question of law. Section 45 of the AAT Act provides that the AAT may refer a question of law arising in a proceeding to the Federal Court of Australia for determination.
4. The Federal Court may also have jurisdiction pursuant to Judiciary Act 1903 (Cth), s 39B, however this Court has no jurisdiction in respect of s 39B matters unless a successful application is made under Jurisdiction of Courts (Cross Vesting) Act 1987 (Cth), s 6(3) to vest it with jurisdiction. If the Proposed Orders involved a matter under s 39B, the resolution of that issue would be a "special federal matter" within the meaning of Jurisdiction of Courts (Cross Vesting) Act, s 3(1).
5. For those reasons, if the question whether the Final Orders of this Court are binding on the AAT were a live issue between the parties, the proper forum for the resolution of that issue would be the AAT, or the Federal Court upon referral of the issue pursuant to AAT Act, s 45. This Court, as the applicants correctly conceded, has no jurisdiction to make the Proposed Orders sought regarding what matters are binding upon the AAT, that is, Proposed Orders 1(b), 2(b) and 3(b).

(3) Whether the Court should have exercised its discretion to make the Proposed Orders, if it did have jurisdiction to do so

1. It is not necessary to decide this issue, given the Court's finding that it does not have jurisdiction to make the declaratory orders sought in relation to non-parties. However, even if the applicants had successfully applied to be joined as parties to the proceedings, I would not have been inclined to make the Proposed Orders for the following reasons.
2. Firstly, the Proposed Orders are in a form inconsistent with that for which the applicants argued orally, and would not solve any legal controversy between the parties. The Proposed Orders address whether the declarations in the Final Orders are 'binding' or 'not binding' on various persons. But because of the parties' agreement that the Final Orders were only binding on the parties to the Supreme Court proceedings, the applicants referred in argument to the significance of the Final Orders in terms of whether they were 'relevant', 'influential' or 'important' to the AAT in its proceedings.
3. Secondly, once the applicants had extracted the explicit concession from the Cassanitis that they did not consider the Final Orders could be binding upon the AAT or the applicants, there was no utility to the applicants pursuing their notice of motion on a fully contested hearing. To grant the relief sought would not have furthered the overarching purpose of the Civil Procedure Act, identified in s 56, which is "to facilitate the just, quick and cheap resolution of the real issues in the proceedings". Where parties are ad idem as to an issue and a declaration will serve no purpose, as was the case here, the Court should not encourage the incurring of legal costs to pursue that declaration.
4. That accords with Mason J's warning about this jurisdiction, that no declarations should be made where such declarations "will produce no foreseeable consequences for the parties": Gardner v Dairy Industry Authority (NSW) (1977) 52 ALJR 180 at 188. Whether or not the declarations in the Proposed Orders are made, the AAT proceedings and District Court proceedings will proceed in the same way, with those tribunals considering the evidence and the legal principles that these parties do not dispute. Therefore there is no foreseeable consequence to the Proposed Orders sought, and they should not be granted.

Conclusion

1. For the reasons given the Court will dismiss the applicants' notice of motion. The question of costs is complicated by the fact that until the motion had been filed the respondents appeared to be inferring an unsustainable position about the effect of the Final Orders. Subject to hearing any argument on the matter, the costs order that suggests itself in these circumstances is one that each party bear their and its own costs of the motion. If any party wishes to contend for a different position, that party can do so by notifying my Associate within 7 days requesting that the matter be relisted for that purpose. But any such argument will be at the parties' further risk as to costs.
2. The orders of the Court therefore will be: 1. Dismiss the applicants' notice of motion; 2. Order each party to bear their or its own costs of the proceedings. 3. Order (2) will be stayed for 7 days to allow the parties to decide whether to argue for a variation to Order (2).

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 28 October 2015