Valceski v Valceski

Valceski v Valceski - [2007] NSWSC 440 - NSWSC 2007 case summary — Zoe

[7]

Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559 Balnaves & Balnaves (1988) 12 Fam LR 488; FLC 91-952 Benlair Pty Ltd v Terrigal Grosvenor Lodge Pty Ltd [2006] NSWSC 339 Bankinvest AG v Seabrook (1988) 14 NSWLR 711 Baumgartner v Baumgartner (1987) 164 CLR 137 BHP Billiton Ltd v Schultz (2004) 221 CLR 400 Bishop & Bishop (2003) 30 Fam LR 108; FLC 93-144 Bourke v State Bank of New South Wales (1988) 22 FCR 378 British American Tobacco Australia Ltd v Gordon [2007] NSWSC 230 C & C: C (Accrued Jurisdiction) (2001) 28 Fam LR 253; FLC 93-076 Cheers v Entercorp Finance Pty Ltd [1999] FCA 1475 CSR Limited v Cigna Insurance Australia Ltd (1997) 189 CLR 345 Dibeek Holdings Pty Ltd v Notaras (1997) 141 FLR 364 Fencott v Muller (1983) 152 CLR 570; 57 ALJR 317 Gould & Gould (1993) 17 Fam LR 156; FLC 92-434 Global Technology Australasia Ltd v Bank of Queensland Ltd [2001] VSC 230 Ireland & Ireland; Collier (1986) 11 Fam LR 104; FLC 91-731 Johnson Tiles Pty Ltd v Esso Australia Ltd (200) 104 FCR 564 Kenda v Johnson (1992) 15 Fam LR 369; (1993) FLC 92-331 Lawson & Lawson; Wallmans (1999) FLC 92-874 CASES CITED : Lederer & Hunt [2007] FamCA 55 Lye & Lye (1983) 8 Fam LR 999; FLC 91-324 Mackay & Mackay (1984) 9 Fam LR 850; FLC 91-573 Moran & Moran (1994) 18 Fam LR 534; FLC 92-559 Oceanic Sun Line Special Shipping Co v Fay (1988) 165 CLR 197 Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 403 Pegasus Leasing Ltd v Cadoroll Pty Ltd (1996) 59 FCR 152 Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 Prince & Prince (1984) 9 Fam LR 481; FLC 91-501 R v Bevan; Ex parte Elias & Gordon (1942) 66 CLR 452 R v Ross-Jones; Ex parte Beaumont (1979) 141 CLR 504; FLC 90-606 Rayhill & Lewis (Family Court of Australia, O'Ryan J, 8 March 2005, unreported) Re Chapman & Jansen (1990) 13 Fam LR 853; FLC 92-139 Re Wakim; Ex Parte McNally (1999) 198 CLR 511 Smith & Smith (No 2) (1985) 10 Fam LR 283; FLC 91-604 Smith v Smith (No 3) (1986) 161 CLR 217; (1986) FLC 91-732 Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261; 57 ALJR 731 Wade-Ferrell & Wade-Ferrell; Read (2001) 27 Fam LR 484; FLC 93-069 Warby & Warby (2001) 28 Fam LR 443; (2002) FLC 93-091 Young v Lalic (2006) 197 FLR 27; [2006] NSWSC 18 (CTH) House of Representatives, Second Reading Speech (Hansard), vol. 163, 10 November 1988, at p2840

[19]

9 Bobby and Betty separated a month later, on 7 February 2006. Six weeks after their separation, on 28 March 2006, Betty lodged caveats in respect of both McArthur Parade and Lutana Place, claiming an "equitable interest arising from both financial and non-financial contributions to the acquisition and conservation of the land". [Given that McArthur Parade was purchased and the home on it constructed long before their marriage, it is unlikely that the caveat could be sustained by a trust of the type described in Baumgartner v Baumgartner (1987) 164 CLR 137, and Betty would probably be dependent upon the adjustive property jurisdiction of the Family Court under (CTH) Family Law Act 1975, s 79, for any interest in the property]. Although signed on 28 March 2006, the caveats were apparently not lodged until 3 April 2006, and meanwhile, by transfer dated 27 March 2006 and apparently registered on 3 April 2006, before the caveat was registered later on the same day, Bobby transferred a half of his remaining quarter-interest in Lutana Place to Mile, thereby depleting his assets to the potential prejudice of any claim against them by Betty. 10 On or about 4 April 2006, Betty filed her application for parenting orders and financial adjustment in the Family Court. For present purposes, Betty contends that the joint matrimonial estate comprises: · McArthur Parade; · Bobby's interest in Lutana Place; · Two motor vehicles; · Bobby's shares in Bluescope Steel; · Bobby's bank accounts; · Bobby's superannuation with Bluescope Steel Superannuation Fund; · Betty's superannuation entitlement with ARF Superannuation Fund. 11 Bobby filed a response and financial statement on 29 May 2006. A conciliation conference on 8 August 2006 was unsuccessful, and directions were made for the preparation of the matter for hearing, with a pre-trial conference being appointed for 29 November 2006, and Bobby and Betty agreeing to the appointment of a single expert to value both the McArthur Parade and the Lutana Place properties. Bobby has made default in compliance with the directions, which required that both parties file their affidavits by 14 November. But at least up to that point, no issue appears to have been raised by Bobby that he was not beneficially entitled to the whole of McArthur Parade.

[30]

21 Moreover, it may well not be more appropriate that the relevant proceeding be determined by the proposed transferee court if it is seriously arguable that it does not have jurisdiction to do so, when the transferor court undoubtedly has jurisdiction. In Benlair Pty Ltd v Terrigal Grosvenor Lodge Pty Ltd [2006] NSWSC 339, Nicholas J considered an application to transfer proceedings to the Family Court under s 5(1). Benlair's sole director and shareholder was Mrs Klumper. Her husband Mr Klumper had been a director of Terrigal Lodge, and its current directors were his children of a previous marriage, who - together with a trustee for the children of his marriage to Mrs Klumper - were the shareholders. Mr Klumper had, on 2 April 2003, commenced proceedings for financial adjustment against Mrs Klumper in the Family Court. Benlair commenced the Supreme Court proceedings on 23 December 2005, claiming a declaration that Terrigal Lodge held certain land on trust for, or subject to an equitable charge in favour of, Benlair. By a response filed in the Family Court proceedings on 10 March 2006, Mrs Klumper joined Terrigal Lodge, Mr Klumper's children, and two other companies. Benlair was not a party to the Family Court proceedings, although Mrs Klumper proposed to join it as a party should the Supreme Court proceeding be transferred to the Family Court. Accordingly, the Supreme Court proceeding was not one between the parties to a marriage, nor one between a party to a marriage and a third party (although it might be said that it was practically that, because the plaintiff was the wife's "alter ego", she being its sole shareholder and director). 22 Benlair argued that there was a substantial commonality of issues in both sets of proceedings, and that having regard to the interests of justice they should all appropriately be dealt with by the Family Court. Terrigal Lodge submitted that the Supreme Court proceeding concerned only Benlair's claim for equitable relief against it, to which the Family Law Act had no application and in respect of which the Family Court had no jurisdiction. Nicholas J held that it was not in the interests of justice to transfer the proceeding from a court, the jurisdiction of which was not in doubt, to a court whose jurisdiction was arguable and uncertain, and which, if jurisdiction were found to be lacking, would have to return it to the Supreme Court: [56] The defendant has argued that the Family Court has no jurisdiction to determine the proceeding. The plaintiff submitted that there is jurisdiction, but if there is a dispute it should be left to the Family Court to decide. Presumably, if the Family Court found that it had no jurisdiction to deal with the plaintiff's claims it would remit the proceeding back to this Court. [57] As the matter presently stands, I find it highly likely that if the proceeding is transferred a contested issue of jurisdiction will be raised for determination. Although I express no view as to the probable outcome, at present I am unpersuaded of the Family Court's jurisdiction to determine the proceeding. I find it difficult to accept that this Court would readily conclude that it was in the interests of justice to transfer a proceeding from a court whose jurisdiction was agreed to one whose jurisdiction would be challenged and would have to be decided. [58] Accordingly, in my opinion considerations of the interests of justice preclude the finding that it is more appropriate that the proceeding be determined by the Family Court. It is presently in an appropriate court, the jurisdiction of which is not in doubt. It cannot be in the interests of justice to transfer the proceeding to a court whose jurisdiction is arguable and uncertain, and which, if jurisdiction is found to be lacking, will remit it back to this Court. To make a transfer order in these circumstances would be inconsistent with the statutory purpose to ensure that proceedings are always dealt with by the most appropriate court. In my opinion the proceeding may be tried more suitably for the interests of the parties to it and the ends of justice in this Court rather than the Family Court. An illustration of the difficulties which can arise in such circumstances is provided by Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 403. Mr and Mrs Rayhill had separated and were engaged in proceedings in the Family Court. Children of Mrs Rayhill's previous marriage (to Mr Lewis) (and a company in which they claimed to hold, or be beneficially entitled to shares, and of which their mother was a director) initiated proceedings in the Supreme Court for equitable relief, claiming that they were beneficially entitled to property acquired by their mother in her own name or applied for her own benefit, allegedly in breach of trusts said to have been originally established by her and their father Mr Lewis, or in breach of her director's duties, and that Mr Rayhill had aided, abetted, counselled or procured those breaches. The Supreme Court proceedings were transferred to the Family Court, to proceed with the matrimonial proceedings, but eventually the husband took an objection to jurisdiction. O'Ryan J held that the Family Court did not have jurisdiction to entertain the transferred proceedings, on the basis that they were neither proceedings under the (CTH) Corporations Act 2001, nor fell within the accrued jurisdiction of the Family Court, and alternatively that even if the court had jurisdiction, it would have been appropriate to transfer them to the Supreme Court [Rayhill & Rayhill; Lewis (Family Court of Australia, O'Ryan J, 8 March 2005, unreported)]. Eventually, all proceedings, including the matrimonial proceedings, were transferred to the Supreme Court, as the court which unquestionably had jurisdiction. 23 However, this case is distinguishable from Benlair and from Paris King, in at least two respects. First, unlike Benlair, the present equity suit is between the parties to a marriage and third parties, both parties to the marriage being parties to the equity suit. Secondly, in the matrimonial proceedings, Betty seeks a declaration that Mick and Angelina have no legal or equitable interest in McArthur Parade - presumably under Family Law Act, s 78, which gives that court power, in proceedings between parties to a marriage, to declare the existing rights and title of a party vis-à-vis a third party in property - which is the mirror image of the relief that Mick and Angelina seek in this Court.

[34]

The issues in the matrimonial proceedings 27 In the matrimonial proceedings, so far as they relate to financial matters, the ultimate issue is what if any alteration should be made to the interests of Bobby and Betty in their property. It is well established that in such proceedings a three stage approach is applicable: first, the identification and valuation of the pool of property of the parties; secondly, the identification, evaluation and balancing of the parties' respective contributions of the types referred to in s 79(4), being financial and non-financial, direct and indirect contributions to the acquisition, conservation and improvement of their property, and contributions to the welfare of their family (including in the capacity as homemaker and parent); and thirdly, the determination of what adjustment is required to the contribution-based assessment having regard to the matters referred to in Family Law Act, s 75(2) - which relate generally to the respective means and needs of the parties - to produce a just and equitable result. 28 Accordingly, the first step in property adjustment under Family Law Act, s 79, is the identification and valuation of the property of the parties. This necessarily involves determining the extent of any interest which either of the matrimonial parties has in property vis-à-vis a third party, or whether a matrimonial party is indebted to (or is a creditor of) a third party. Thus in the present case, in order to identify and value the net matrimonial estate, it will be necessary to determine the extent of Bobby's (and Betty's) beneficial interest in McArthur Parade - the obverse of which is the extent of any beneficial interest of Mick and Angelina in that property. As has been seen, the issues in the equity suit impinge directly on the quantum of Bobby's estate; accordingly, the net matrimonial estate - and the quantum of any property adjustment - will be affected by whether the February 2004 deed and transfer are valid and effective, and (whether or not the deed is valid) by whether (as the statutory declaration suggests) the property was always Bobby's beneficial property exclusively, and by the extent of any equitable interest that subsists in Mick.

[36]

30 Moreover, beyond merely resolving the issue for the purpose of the s 79 proceedings, the Family Court may, under s 78, make a declaration as to the existing title or rights, if any, that a party has in respect of property [Moran & Moran (1994) 18 Fam LR 534; (1995) FLC ¶92-559]. The declaration sought in par 3 of Betty's Amended Application in the Family Proceedings is presumably sought pursuant to s 78. Section 78(1) authorises that Court, in proceedings between the parties to a marriage with respect to existing title or rights in respect of property, to declare the title or rights, if any, that a party has in respect of property. On its face, this is not limited to the rights of each matrimonial party vis-à-vis the other, but embraces the rights of one (or both) spouses vis-à-vis a third party. Section 78(2) then authorises consequential orders to give effect to the declaration. Formerly, s 78(3) provided that such a declaration was binding on the parties to a marriage but not on any other person [Balnaves & Balnaves (1988) 12 Fam LR 488; FLC ¶91-952]. However, s 78(3) was repealed by the (CTH) Law and Justice Legislation Amendment Act 1988, s 39, in respect of proceedings instituted after its commencement. In the Second Reading Speech [Representatives (Hansard), 10 November 1988, p2840], the Attorney-General said that its repeal would enable the Court, in appropriate cases, to make orders that are binding on third parties as well as the parties to a marriage. The Attorney pointed to the fact that many family law property disputes involved adjudication of the rights of parties to a marriage as between themselves and third parties, who could intervene, but might not be bound because of s 78(3), the repeal of which would overcome the frustration for the Court and the third parties in being unable to make binding determinations about the existence and extent of the rights and liabilities of the third parties. An additional reason for its repeal - but not the prime, let alone only, reason - was to ensure that the cross-vesting scheme in its then form had full effect in relation to the Family Court.

[46]

39 Thus, when a federal court is invested with federal jurisdiction, it is also invested with the power to determine non-federal aspects of a justiciable controversy which involves the exercise of its federal jurisdiction, provided that the non-federal aspects of the controversy form an integral part of the same controversy [Stack v Coast Securities]. The scope of the "matter" in respect of which a federal court has jurisdiction is described by the ambit of the justiciable controversy. There is but a single matter, and the non-federal claims are within the accrued jurisdiction, where the different claims arise out of "common transactions and facts" or "a common substratum of facts" [Philip Morris, 512 (Mason J)], notwithstanding that the facts upon which the claims depend "do not wholly coincide" [Fencott v Muller, 607 (Mason, Murphy, Brennan and Deane JJ); Re Wakim, 586 [141]]; or where different claims are so related that the determination of one is essential to the determination of the other [Philip Morris, 512 (Mason J)]; or 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 [Re Wakim, 586 [141]]. However, it must always be borne in mind that the ultimate question is not the existence of each of the several suggested indicia, but whether there is in substance a single justiciable controversy. In Stack v Coast Securities (at 294), it was put in the following terms: In this, as in other cases, the recurrent problem is to identify what it is that falls within the Federal Court's accrued jurisdiction. The majority judgment in Fencott v Muller provides assistance in reaching an answer: What is and what is not part of the one controversy depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct and relationship. The scope of a 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.

[52]

45 Next, it was suggested that while accrued jurisdiction is consistent with the broad jurisdiction vested in the Federal Court of Australia, it is not consistent with the limited and specialised jurisdiction of the Family Court [see Mackay & Mackay, 79,629-79,634; Smith & Smith (No 2), 79,908-79,909]. This is not an adequate distinction. Each of the Federal Court and the Family Court depend for their jurisdiction on laws of the Parliament which vest in them jurisdiction in respect of specified classes of "matters". The accrual of jurisdiction depends upon the scope of the justiciable controversy which constitutes the matter in respect of which jurisdiction is invoked. It can make no difference in the application of that principle whether a Court is invested with jurisdiction in respect of matters arising under only one law (such as the Family Law Act), or under multiple laws (such as the (CTH) Bankruptcy Act 1966, the (CTH) Copyright Act 1968 and the (CTH) Trade Practices Act 1974). In this respect it is essential to note that the Family Court is given jurisdiction in matters arising under the Family Law Act, in respect of which matrimonial causes are instituted - as distinct from simply being given jurisdiction in matrimonial causes: s 31(1)(a). With respect to those - including Strauss J - who have suggested otherwise, the suggestion that the meaning of "matter" is affected by the context in which it appears is wrong. The context is that of a Commonwealth Act conferring jurisdiction on a federal court, using a term which in that context is taken from the Constitution, is well-known, is the subject of extensive judicial consideration in the High Court, and is well understood. It has been used repeatedly by the Commonwealth Parliament in statutes to confer jurisdiction on federal courts. Its meaning is plain and well-established - a "justiciable controversy". To think that Parliament meant something different in using that term in the Family Law Act is just not tenable.

[56]

49 In C & C; C (Accrued Jurisdiction) (2001) 28 Fam LR 253; FLC ¶93-076, the husband and wife commenced to cohabit in 1974, married in 1979, and separated in 1994. From about 1976, they lived on a property of which the registered proprietors were the husband and the third party as joint tenants. Neither of the spouses nor the third party had any other property of significance. The wife, claiming a beneficial interest in the property, applied for orders that the property be sold and that from the proceeds the third party receive one-fifth, and the remaining four-fifths be divided 65% to the wife and 35% to the husband. In response, the husband sought orders that he and the wife each receive 40% of the net proceeds, and the third party 20%. The third party sought orders that he receive 50% of the proceeds, plus a further sum representing a debt owed to him by the husband, and that the remainder be paid to the husband and the wife. The husband supported the wife's claim to a beneficial interest in the property and maintained that there was an agreement between himself, the wife and the third party to that effect; the third party denied any such agreement and asserted that at all times he and the husband were the sole legal and beneficial owners. In holding that these issues could be resolved in the accrued jurisdiction of the Family Court, Jerrard J reasoned as follows. First, as the third party on any account had at least a 20% beneficial interest in the property and on his account a 50% beneficial interest, in determining the matrimonial cause between the husband and the wife, the court was obliged to enter into the question of the extent to which each of them had a beneficial interest in the property, and accordingly the extent to which the third party had such an interest. Secondly - given that the husband's only asset of value was his interest in the property, the wife's only asset of value was her claimed interest in the property, and the third party's only asset of value was his claimed interest in the property - that there was one justiciable controversy between those three people, namely who it was who had the beneficial ownership of the property and in what proportions; that the claims of the husband and wife that they had 80% of the beneficial interest between them had a common sub-stratum of fact with the third party's claim that he had at all times a 50% interest; and, moreover, that it was necessary to establish what were the beneficial interests in the property in order to determine what property there was for division between the husband and the wife, so it could be said that it was necessary to determine the non-federal dispute (between the husband and the wife on the one hand, and the third party on the other) in determining the federal dispute (being the matrimonial cause between the husband and the wife as to division of their property). On the authority of Re Wakim and Stack v Coast Securities, the non-federal claim therefore fell within the accrued jurisdiction of the court. Thirdly, insofar as the existence and exercise of accrued jurisdiction was concerned, there was no reason for distinguishing the federal Family Court from any other federal court. In my respectful view, that reasoning is compelling and correct.

[57]

50 In Warby, the Full Family Court held that the Family Court had an accrued jurisdiction. The matter came before the Full Court by way of a case stated which directly raised the question whether the Family Court had an accrued jurisdiction and if so its extent and the circumstances in which it should be exercised. The facts bear some resemblance to those of the present case. In about 1982, the wife had purchased a property with her father as tenants-in-common. The wife and her father made contributions to the purchase price, in amounts which were disputed by the husband, and there was a mortgage to a bank. Subsequently, in about 1984 or 1985, the husband and the wife commenced cohabitation in the property. In the late 1980s, the wife's father paid a sum of money to the bank which discharged the mortgage. At about the same time, there was an agreement entered into (a) according to the wife, between the wife and the wife's father for repayment to the him of the sum paid to discharge the mortgage, or (b) according to the husband, between the parties and the wife's father for repayment to him of an amount by periodic payments to extinguish his equity in the property. The parties were married in 1989, and in about 1992 the repayments pursuant to the agreement were completed. The husband asserted, and the wife denied, that he assisted the wife in making them. The husband also claimed to have made various improvements to the property, and to have contributed his earnings from employment towards the mortgage and in reduction of the debt to the wife's father pursuant to the agreement, which the wife also denied. The parties separated in about 1994 and the marriage was dissolved in 1998. The wife's father and the wife remained the registered proprietors as tenants-in-common. The husband sought a declaration that the wife's father held his interest in the property upon trust for the husband and/or wife, or alternatively subject to an equitable charge in their favour, or alternatively recovery of the amounts paid to discharge the mortgage and under the agreement. He also sought orders pursuant to s 79 against the wife. He filed an interlocutory application seeking an order joining the wife's father (and, somewhat curiously, but presumably to flag the basis for the application) a declaration that such proceedings were within the accrued jurisdiction of the Court. Upon case stated, the Full Court held: · That the Family Court's jurisdiction is not restricted to the determination of the family law claim but (by way of accrued jurisdiction) extends beyond to the whole litigious and justiciable controversy of which the family law claim forms part - including those parts of it that arise under or are governed by State law, common law or equity, and whether between the parties to a marriage or between a spouse (or spouses) and a third party. · That relevant to whether the Family Court would exercise the court's accrued jurisdiction were what the parties had done, the relationships between or among them, the laws which attach rights or liabilities to their conduct and relationships, whether the claims are part of a single justiciable question (and in determining that question, whether the claims are "attached" and not "severable" or "disparate"), whether the claims are non-severable from a matrimonial cause and arise out of a common substratum of facts, and whether the court has the power to grant appropriate remedies in respect of the "attached" claims.

[63]

92 The discretionary character of the accrued jurisdiction was the subject of observation by Gummow and Hayne JJ in Re Wakim; Ex parte McNally when they noted the alignment of the processes for defining the accrued jurisdiction and for deciding whether or not to exercise it which had emerged from the joint judgment in Stack . Their Honours said: It is not clear what principles or criteria would inform the exercise of a discretion of this kind. It may be that the better view is that the references to "discretion" are not intended to convey more than that difficult questions of fact and degree will arise in such issues - questions about which reasonable minds may well differ. It is, however, not necessary to decide what is meant by the references to discretion in this context. (588) As a matter of logic, it is an evaluative rather than discretionary approach which must be applied in determining the content of the Court's accrued jurisdiction. No doubt there is a functional, as distinct from conceptual, convergence as assessment of the scope of the jurisdiction will involve consideration of matters of convenience particularly when deciding whether the federal claim is to be regarded as a substantial part of the controversy - Fencott v Muller at 609 quoted above. But as a matter of language the process of definition of the content of the jurisdiction logically precedes the discretion about whether to exercise the jurisdiction properly defined. And in my opinion that is how this Court, consistently with the language used by the High Court should continue to treat discretion. In doing so, it would be bound to take the functional approach indicated in the judgments of the High Court to which reference has been made. 54 In Australian Securities and Investments Commission v Edensor Nominees Pty Ltd, in the context of whether there was a discretion to refuse to entertain the State claim, Gleeson CJ, Gaudron and Gummow JJ, with whom Hayne and Callinan JJ generally agreed, said (at 585-586), in a passage also cited by the Full Family Court in Bishop: 52. ... First, while there are various claims, in these cases there is but one 'matter' in the constitutional sense and the court in question either does or does not have jurisdiction in respect of it. Moreover, in Re Wakim , Gummow and Hayne JJ (with whom Gleeson CJ and Gaudron J agreed generally) expressed doubts as to what was meant by statements in some of the cases that the 'accrued jurisdiction' was 'discretionary' rather than 'mandatory'. Ordinarily, questions of abuse of process, forum non conveniens and the like aside, jurisdiction conferred upon a court is to be exercised.

[66]

57 It is in any event difficult to conceive of proper grounds for declining to exercise jurisdiction in respect of part of a single justiciable controversy. As Barwick CJ added in Philip Morris (at 475-476): But, I would add that there would need to be very good reasons why a court which could resolve the whole matter should refuse or fail to do so. Generally speaking, one would expect that a court, once its federal jurisdiction is excited or attracted, would proceed to resolve the whole matter in relation to which federal jurisdiction had been attracted. 58 In Bishop, the Full Family Court, applying Warby, allowed an appeal from a primary judge's discretionary refusal to exercise accrued jurisdiction: 35. As indicated by that Full Court, the Family Court of Australia has accrued jurisdiction. The issues to be determined as to whether or not it is appropriate to exercise the jurisdiction generally would involve the consideration of six issues listed above. We read her Honour's reasons for judgment as having paid considerable attention to the fourth and fifth of the issues to be determined, but having neglected to consider properly and evaluate issues one, two, three and six, all of which are appropriate to bring to bear in determining whether or not to allow the joinder of parties to enable the accrued jurisdiction claims to go forth. 36. In this case there can be no doubt that the financial affairs of the husband and the wife are and have been intimately interwoven into the financial affairs of the parties sought to be joined. It is impossible to determine the issues as to the parties' financial affairs without unravelling them. 37. The purpose of exercising accrued jurisdiction is to enable the Court to deal with a single justiciable controversy. This does not mean a single justiciable issue. The present case makes it obvious that there may be many issues but one broad controversy, that being as to what part of the assets of all of the parties is subject to the making of orders of this Court under s 79. The reason why the jurisdiction is exercised is to enable the real issues to be determined between the parties, the underlying purpose being to do justice between them. In applying the tests laid down in Warby, these matters should be borne in mind by judges who are called upon to exercise the jurisdiction. 38. In cases where all that is sought is the joinder of parties, particularly where there is no opposition to it, a judge hearing an application for joinder should be very slow to refuse it. When it comes to the making of final orders different considerations obviously apply, as by that time it will be much clearer as to which issues need to be determined to make appropriate orders under s 79. The reason and purpose for making orders involving third parties should nevertheless be kept firmly in mind.

[75]

67 As to the first - whether the relevant proceeding would but for cross-vesting and accrued jurisdiction have been incapable of being instituted in the Supreme Court and capable of being instituted in the Family Court - the equity suit was plainly capable of being instituted in the Supreme Court. The jurisdiction of the Supreme Court to entertain it does not depend on any law relating to cross-vesting. But for the pendency of Betty's application in the Family Court, no question of the proceedings being brought in the Family Court would have arisen. As the matrimonial proceedings were already pending when the equity suit were instituted, the proceedings could also have been instituted in the Family Court, but only in reliance on accrued jurisdiction. Accordingly, this factor suggests that the Supreme Court is more appropriate. 68 As to the second - the extent to which the matters for determination in the relevant proceeding arise under a law of the Commonwealth and are not otherwise within the jurisdiction of the Supreme Court - the matters for determination in the equity suit do not arise under or involve questions as to the application or validity of a Commonwealth law, and are within the jurisdiction of the Supreme Court in any event. This factor therefore also suggests that the Supreme Court is the more appropriate. 69 That leaves to the third factor, the interests of justice. The question is simply whether, assuming that the jurisdiction of the transferor court has been regularly invoked, it is in the interests of justice that the proceedings be heard and determined in the transferee court, there being a statutory obligation to transfer the proceedings to that court whenever it appears to be in the interests of justice to do so - for which purpose it is both necessary and sufficient that the transferee court be the "more appropriate" forum [BHP Billiton Ltd v Schultz (2004) 221 CLR 400, 421 [14], 434-5 [63]]. In identifying the "more appropriate forum", relevant considerations include the cost and efficiency of proceedings in the respective jurisdictions, and the "connecting factors" described by Lord Goff in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460, 478 - including matters of convenience and expense such as availability of witnesses, the places where the parties respectively reside or carry on business, and the law governing the relevant transaction [BHP v Schultz, 422 [18]]. Consideration of relevant connecting factors may identify a "natural forum" [BHP v Schultz, 423 [19]; cf British American Tobacco Australia Ltd v Gordon [2007] NSWSC 230, [44]]. As Schultz makes clear, the interests of justice concern those of both parties, and rather than the selection of the most advantageous, or least disadvantageous, forum for one of them, the "interests of justice" are to be judged by more objective factors, such as facilitate identification of the "natural forum", in which objectively judged it might be expected that the dispute would fall to be resolved, with its concomitant juridical advantages and disadvantages for each party, whatever they may be [cf British American Tobacco v Gordon, [47]]. 70 I reject the submission, advanced on behalf of Bobby, that the applicant for a transfer bears some onus or has to show some good reason for disturbing the plaintiffs' initial choice of venue, or that the plaintiff's choice of court is to be given weight; despite earlier suggestions to that effect [Global Technology Australasia Limited v Bank of Queensland [2001] VSC 230; Bourke v State Bank of New South Wales (1988) 22 FCR 378; Kenda v Johnson (1992) 15 Fam LR 369, (1993) FLC ¶92-331, 79,505; Re Chapman & Jansen (1990) 13 Fam LR 853, FLC 92-139; Bankinvest AG v Seabrook (1988) 14 NSWLR 711], it is now established that an applicant for a transfer bears no burden of persuasion or onus of proof [BHP v Schultz at 437 [71]; Bankinvest AG v Seabrook, 727], and no particular significance attends the plaintiff's original choice of forum [BHP v Schultz, 425-6 [26]-[27], 439 [77]; British American Tobacco v Gordon, [43]]. It is only if both courts are equally appropriate that the initial choice will have significance; if one is more appropriate than the other, however so slightly, a transfer to the more appropriate court is mandatory. 71 The present is not a case in which geographical or local connection or the availability and convenience of witnesses is of significance; whether in the Supreme Court or the Family Court, the proceedings would likely be heard in Sydney, or possibly in Wollongong; neither court offers any advantage over the other in this respect. 72 Contrary to the submissions for Bobby, I do not accept that in the circumstances of this case the provision of the February 2004 deed, that it shall be governed by the laws of New South Wales, is significant: it relates to choice of law and not choice of court, and either court can equally apply the law of New South Wales. Insofar as it applies the general law, the Family Court sitting in New South Wales will apply the general law of New South Wales. This provision does not assist in identifying, in the present context, which court is the natural or more appropriate forum. 73 Nor is the professed inexpertise of Mick and Angelina's lawyers in the Family Court a matter of moment, particularly since the appropriateness of the Family Court as the forum had been raised from the outset of their intervention, and that they will be required to respond to Betty's amended application in the matrimonial proceedings in any event. A party cannot dictate the appropriateness of a forum by selection of particular lawyers. 74 Nor is the expected time to hearing a factor that favours retaining the equity suit in this court in this case, though it may be influential in some. There is evidence that, if transferred to the Family Court, the consolidated proceedings are not likely to be allocated a hearing date before about November 2007. If I could be confident that the equity suit could be heard and determined before then, without disrupting the preparation and progress of the matrimonial proceedings, then there might be more to be said in favour of determining them in this Court, although considerations of duplication would still point in the other direction. But the equity suit is unlikely to be heard in this court significantly before November 2007, and if the Family Court did not restrain their prosecution, it would probably adjourn the matrimonial proceedings until after their determination, further delaying the ultimate resolution of issues in the matrimonial proceedings between Bobby and Betty. 75 However, it is significant, in identifying the "more appropriate forum" for the equity suit, that the factual context for both proceedings significantly overlaps: the relief claimed by Mick and Angelina in these proceedings involves not only an examination of the circumstances of the 24 February 2004 transactions, but also of the respective contributions of the parties to the acquisition and improvement of McArthur Parade, which will also be an issue in the matrimonial proceedings. Were Mick and Angelina's claim limited to one to set aside the 2004 transactions, the evidence and issues would be within a relatively narrow compass which could be addressed without being revisited in the matrimonial proceedings. However, their claim for a declaration as to the beneficial interests in McArthur Parade will require an examination of the respective contributions of the parties to McArthur Parade, which will inevitably overlap the second stage of the property adjustment proceedings in the Family Court. No issue estoppel would preclude the revisitation of this matter in the matrimonial proceedings, because, if this court were to resolve the beneficial interests in McArthur Parade between Mick (and Angelina) and Bobby, by reference to their contributions to its acquisition and improvement, the Family Court would nonetheless have to consider and evaluate the contributions made by and on behalf of Bobby and Betty to the acquisition ,conservation and improvement of all their property, including but not limited to McArthur Parade, and taking into account contributions (including to other properties, and to the welfare of the family), which would not be relevant to the equity suit, in addition to those which this court would consider in the equity suit. This would result in much duplication of evidence, and some of issues for determination, which would be avoided if both proceedings were determined by the one court. 76 Only the Family Court can resolve the whole controversy without duplication of evidence and issues. The issues in the equity suit are a subset of those in the matrimonial proceedings: they are an aspect of the larger dispute already being litigated in the Family Court to which Mick and Angelina are now parties. The involvement of Mick and Angelina in the matrimonial proceedings is now inevitable as they have been joined, and would in any event be witnesses; and unless transferred by the Family Court - which no party has proposed - the s 78 application will remain part of the matrimonial proceedings and will be litigated in the Family Court. Declining to transfer the equity suit to the Family Court will not alter that position - although the Family Court might in those circumstances (but might not) adjourn the matrimonial proceedings until the equity suit has been resolved in this court, or transfer the whole of the matrimonial proceedings to this court. While both courts could (as a matter of jurisdiction) entertain and determine the whole justiciable controversy - as the Supreme Court has cross-vested jurisdiction in matters under the Family Law Act [Young v Lalic (2006) 197 FLR 27; [2006] NSWSC 18, [37]-[48]] - nonetheless no party has suggested or proposed that in this case this Court exercise its cross-vested family law jurisdiction: Betty proposes that the whole controversy be heard and determined in the Family Court, whereas Bobby, Mick and Angelina wish the equity suit to be determined in this court, and the matrimonial proceeding in the Family Court. This has the practical consequence that the larger controversy must be determined in the Family Court, because it is not open to this Court to make an order compelling the transfer of the Family proceeding to this Court, and assuming (without deciding) that this Court could - in pursuance of its implied power to protect its own processes and proceedings, and/or in exercise of equitable jurisdiction to restrain proceedings which are, according to principles of equity, vexatious or oppressive - restrain a party from prosecuting proceedings in a federal court [cf CSR Limited v Cigna Insurance Australia Ltd (1997) 189 CLR 345], no question of doing so could arise in this case, where Betty's proceedings were instituted first in time, in a clearly appropriate forum, which can resolve the whole controversy. On the other hand, it would be open to the Family Court to restrain Mick and Angelina from prosecuting the equity suit in this Court, although the power to do so would not lightly be exercised [cf Lederer & Hunt [2007] FamCA 55]. Such anti-suit injunctions are more readily granted within the confines of the federal system, than where proceedings have been issued in a foreign court and a local court [Dibeek Holdings Pty Ltd v Notaras (1997) 141 FLR 364, 373-374]. The present is a case where exactly the same issue will be litigated in two local courts: one of federal and one of State jurisdiction. It is usually inappropriate, if not vexatious, that the same issue be litigated in two different courts, and, within the federal system, it is sufficient to support an injunction that the test of inappropriateness be satisfied [Dibeek Holdings Pty Ltd v Notaras, 373, 374]. Pegasus Leasing Ltd v Cadoroll Pty Ltd (1996) 59 FCR 152 would support the grant of an injunction in the context of the instant case: in order to determine the respective extent of Bobby's and Mick's beneficial interests in the property, the evidence will be duplicated in each proceeding, and there is a real possibility that the two courts might reach different conclusions on that very question. Accordingly, in the present case, for practical purposes only the Family Court can resolve the whole controversy. The fact that one court can resolve the whole justiciable controversy and the other cannot will usually indicate that the former is the more appropriate court, although there may be exceptional cases - corresponding with those in which the federal court would as a matter of discretion decline to exercise accrued jurisdiction - in which that might not be so.

[80]

83 In those circumstances, it is not seriously open to doubt that the Family Court has jurisdiction to determine and declare the beneficial interests in McArthur Parade, and incidental thereto the validity of the February 2004 deed and transfer. 84 While the matrimonial dispute is a more extensive one, covering considerably wider ground, than the dispute in the equity suit, with the consequence that a transfer would require Mick and Angelina to be involved in a much larger piece of litigation than would be the case if the equity suit were to remain in this court, nonetheless the natural forum for the equity suit in the context of this case is the Family Court, because: · the factual context of both proceedings significantly overlaps, and there would be much duplication of evidence, and some of issues for determination, unless both proceedings are determined by the one court; · for practical purposes, only the Family Court can resolve the whole controversy; · the equity suit arises out of the breakdown of the marriage, and the resolution of the issues in the equity suit is a necessary incident to the resolution of issues in the matrimonial proceedings. 85 In my opinion, justice can best be done by the one court resolving the whole justiciable controversy, in order to avoid both duplication and inconsistency. In the present context, the Family Court is the more appropriate court for that purpose, because the larger controversy, of which the smaller forms part, is a matter properly and primarily in the jurisdiction of the Family Court. It follows that the proceedings must be transferred to the Family Court. If as a matter of principle the effect of this decision is that third parties who, in the context of a marriage breakdown, assert rights against matrimonial property, should join in existing matrimonial proceedings rather than commence separate litigation, then the beneficial result is that all issues are litigated only once and only in one court, the risks and costs of duplication and inconsistency are avoided, and forum-shopping and collateral litigation is discouraged. Third parties - especially associates, such as parents or children or private companies, of one or other of the spouses - who use the occasion of the demise of a marriage to assert a right against the property of one or other (or both) of them, cannot reasonably complain if their claim is treated as part of the larger matrimonial dispute in the context of which it arises. 86 My orders are: (1) Pursuant to Jurisdiction of Courts (Cross-Vesting) Act , s 5(1)(b), order that the proceedings be transferred to the Family Court of Australia, Sydney Registry.

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