Kovacs, Dorothy --- "After the Fall: Recovering Property Jurisdiction in the Family Court in the Post Cross-vesting Era" [2001] MelbULawRw 3; (2001) 25(1) Melbourne University Law Review 58
After The Fall: Recovering Property Jurisdiction In The Family Court In The Post Cross-Vesting Era
DOROTHY KOVACS[∗]
[The High Court’s decision in Re Wakim; Ex parte McNally has brought about the position that the Family Court of Australia can no longer determine claims which are not brought in federal jurisdiction. It has, however, clarified the content of the accrued jurisdiction of federal courts, although at the time of writing it is not conclusively established that the Family Court enjoys accrued jurisdiction. This article examines some of the implications of these developments for the conduct of property proceedings, including proceedings involving third parties, in family law matters. The author suggests that more use might be made of the declarations power in the Family Law Act 1975 (Cth) and that the Commonwealth Parliament should directly confer on the Court the power to dispense remedies involving companies which rely on the corporations power in the Constitution. She also points out that the State Supreme Courts may play an important role in family law matters by utilising the powers they retain under the cross-vesting legislation.]
INTRODUCTION
For more than a decade, the availability of cross-vested jurisdiction to the Family Court of Australia has contributed to the stagnation of other possible sources of jurisdiction, including the accrued jurisdiction, on which the Family Court might otherwise rely. The loss of cross-vested State jurisdiction as a consequence of the decision of the High Court in Re Wakim; Ex parte McNally[1] has resulted in serious deficiencies and uncertainty in the jurisdiction of the Family Court. It is proposed in this article to examine some of the implications of the decision in Re Wakim, and to consider what property jurisdiction remains for the Family Court and in family law proceedings in other courts in the post cross-vesting era.
It is argued that some of the jurisdiction which was lost with the demise of the cross-vesting of State jurisdiction may be retrieved by resorting to the accrued jurisdiction of the Family Court, particularly in the context of the power to make declarations of title to property pursuant to s 78 of the Family Law Act 1975 (Cth) (‘the Act’). It is further argued that the Family Court can use some of the powers that it exercised under the Corporations Law by federal legislation conferring those powers in the Act.
I will now examine cross-vested jurisdiction and accrued jurisdiction.
A Cross-Vested Jurisdiction
The legislatures of the Commonwealth and the States and Territories each enacted a Jurisdiction of Courts (Cross-Vesting) Act between 1987 and 1993.[2] These Acts implemented a scheme whereby the superior federal courts acquired, in addition to their own federal jurisdiction, the jurisdiction of the State and Territories’ Supreme Courts, and the Supreme Courts acquired the jurisdiction of the Family Court of Australia and the Federal Court of Australia. While the scheme was in operation, the State Cross-Vesting Acts conferred on the Family Court the whole of the civil jurisdiction of the State Supreme Courts.[3] Arguments in relation to cross-vesting rarely turned on whether the Family Court or a Supreme Court had cross-vested jurisdiction. They were confined to whether the court in which a matter had commenced should exercise the cross-vested jurisdiction in relation to the matter or whether, consistently with the objectives of the scheme as set out in the preambles of the various Cross-Vesting Acts, that court should transfer the proceeding to another court which was involved in the scheme.[4] While the scheme was fully operational, the courts to which it applied enjoyed almost unbridled powers to determine cases ‘where there are jurisdictional uncertainties and ... a real need to have matters tried together in the one court.’[5]
During this time, the Family Court was able to determine a variety of ‘State’ issues in proceedings between married parties whose disputes under the Act were brought before the Court. Thus, the wife in Kennon and Kennon[6] and the wife in Marando and Marando[7] were able to ventilate civil claims for damages for assaults perpetrated during the marriage in the same proceedings as their claims for property and maintenance under the Act. Similarly, in Re Q[8] and in W and W, R and G (by their next friend P intervenor),[9] children brought civil claims for damages for sexual abuse against their fathers while the Family Court was seised of jurisdiction to determine financial disputes arising under the Act between their married parents.
In property proceedings between married parties, the Family Court utilised its cross-vested jurisdiction to determine issues involving third parties whose interests were bound up with the property of the parties to the marriage. For example, in Wright v Adams,[10] the Court determined the equitable interest of the wife’s mother where the legal title to land was registered in the names of the parties to the marriage. In In the Marriage of Toohey,[11] the Court made a declaration of the equitable interests of the wife where the legal title to property was registered in the name of the husband’s parents. The Family Court also exercised its cross-vested jurisdiction to determine the interests of arm’s-length third parties in the property of the marriage, including the title of the Official Trustee in Bankruptcy in Balnaves v Balnaves,[12] Re Sabri; Ex parte Brien v Sabri[13] and Donovan v Official Trustee,[14] and the bank in Westpac Bank Corp v Grace.[15]
Unmarried litigants also benefited from the bountiful jurisdiction of the Family Court. State Supreme Courts frequently transferred to the Family Court State matters involving unmarried litigants where there was a family law component. For example, in Lambert v Dean,[16] the New South Wales Supreme Court transferred to the Family Court proceedings for severance of a joint tenancy in a property. The proceedings were between the applicant and her parents, who were also in dispute in the Family Court concerning a child of the applicant.
The existence of child proceedings in the Family Court also enabled the Court to determine the property rights of parents who were de facto cohabitants in cases such as D v L,[17] Kemp v King,[18] Reitsema v Reitsema,[19] Re Broman-Clarke,[20] McKean v Page[21] and Hallinan v Witynski.[22]
B Accrued Jurisdiction
The accrued jurisdiction of federal courts derives from s 76(ii) of the Australian Constitution whereby the Commonwealth Parliament may make laws conferring original jurisdiction on the High Court ‘in any matter ... arising under any laws made by the Parliament.’[23] By virtue of s 77 of the Constitution, such jurisdiction may be conferred upon a federal court, including the Family Court. It is now established ‘beyond doubt’[24] by decisions of the High Court, including Fencott v Muller,[25] Stack v Coast Securities (No 9) Pty Ltd[26] and Re Wakim, that the Constitution grants the Federal Parliament the power ‘to give authority to federal courts to decide the whole of a single justiciable controversy of which a federal issue forms an integral part.’[27] This potentially extends the power of the Family Court beyond the jurisdiction literally conferred upon it by the Act, when non-federal issues, for example common law and State law issues, constitute part of the matter in question. The decisions of the High Court also establish that
the grant of jurisdiction to determine ‘a matter carries with it jurisdiction to determine the whole matter, and that “a matter” is a justiciable controversy which must either be constituted by or must include a claim arising under a federal law but which may also include another cause of action arising under another law, provided it is attached to and is not severable from the former claim.’[28]
In Re Wakim, the High Court reiterated that the jurisdiction of a federal court is not ‘restricted to the determination of the federal claim or cause of action in the proceeding, but extends beyond that to the litigious or justiciable controversy between parties of which the federal claim or cause of action forms part.’[29] A federal court can hear the non-federal components of a claim provided that the federal and State issues are ‘within the scope of one controversy and thus within the ambit of a matter’ within s 76(ii) of the Constitution.[30]
The High Court in Abebe v Commonwealth; Re Minister for Immigration and Multicultural Affairs said that ‘a matter’ involves a ‘determination of rights, duties, liabilities and obligations in a legal proceeding’.[31] It is not a legal proceeding but rather the subject matter for determination in the proceeding. It is wide enough to include any subject matter, ‘but only to the extent that the relevant rights, duties and liabilities are enforceable in the federal or State court which has jurisdiction to hear the matter.’[32] However, s 77(i) of the Constitution does not require the Parliament to define the jurisdiction of a federal court ‘by reference to the totality of rights, powers, privileges and duties which arise under the law or state of affairs which come within s 75 or s 76 and which is to be the basis of the federal court’s jurisdiction.[33]
The plaintiff in Abebe argued that the Commonwealth Parliament could not truncate the jurisdiction of the Federal Court to review decisions of the Refugee Review Tribunal under the Migration Act 1958 (Cth) by purporting to give the Court jurisdiction with respect to only part of a matter under s 77 of the Constitution. The majority of the High Court rejected the plaintiff’s argument but it circumscribed the notion of a ‘matter’ by pointing out that the existence of a matter comprehends the existence of a remedy to enforce the substantive right, duty or liability, and that the person claiming the remedy must have standing to enforce it.[34] It followed that, as different courts may provide different remedies, the same legal controversy can give rise to separate matters.[35] However, the unavailability of some remedies in a given court and the fact that the Parliament has conferred jurisdiction on a court to deal with only part of the subject matter does not alter the fact that the Parliament has defined the jurisdiction of a court with respect to ‘a matter’.[36]
In Abebe, Gleeson CJ and McHugh J held that the Federal Court has accrued jurisdiction with respect to a matter which enables it ‘to determine all questions which form part of that matter including questions which would not be federal in nature and which ... the Federal Court would not have jurisdiction to determine if they had arisen in separate proceedings.’[37] However, it does not follow from this that a law giving a federal court jurisdiction ‘will be invalid if it purports to prevent that court from determining every issue, federal and non-federal, which rest[s] upon a common substratum of facts.’[38]
Abebe enables the Federal Court in its accrued jurisdiction to determine rights, duties and obligations in a legal proceeding that is only partly within its jurisdiction, and even when it deals with only part of a matter, provided that some remedy is available and the claimant has standing to enforce that remedy.
While the position of the Federal Court of Australia is clear, that of the Family Court is not. The Family Court may well enjoy accrued jurisdiction deriving from its status as a federal court. However, the Family Court’s accrued jurisdiction has never been conclusively established.
II DOES THE FAMILY COURT HAVE ACCRUED JURISDICTION?
In the years prior to the introduction of cross-vesting, the Family Court considered the question of whether it had accrued jurisdiction on a number of occasions, but never resolved the issue. In both In the Marriage of Prince[39] and In the Marriage of McKay,[40] the Full Court of the Family Court could not resolve the rights of the parties to a marriage without first addressing those of a third party creditor.
Fogarty J in Prince expressed the problem in these terms:
Speaking generally, although the Family Court is a federal court and a superior court of record (s 21), it is a Court established by the parliament for a specific purpose — namely the resolution of disputes between the parties to a marriage or former marriage arising out of that relationship ... I regard the court as being a Court primarily established for the purpose of determining disputes of the type to which I have referred.[41]
The creditor’s position had to be resolved elsewhere unless the Family Court could rely on its accrued jurisdiction. In McKay, the remedies available under the Act were sought to be extended by invoking the accrued jurisdiction. Strauss J observed that the Federal Court had been constructed as a court of law and equity.[42] By contrast, the Family Court had no general jurisdiction to award damages and it had no general equitable jurisdiction.[43] Indeed, s 31(1)(a) of the Act confined the Family Court to the hearing of ‘matters arising under this Act ... in respect of which matrimonial causes are instituted ... under this Act’ as a consequence of the Family Law (Amendment) Act 1983 (Cth).[44]
Strauss J in McKay considered that in s 31(1)(a) of the Act the word ‘matters’ refers to matters arising in proceedings for remedies which the Court has power to grant.[45] In McKay, the Court was asked to use its accrued jurisdiction to set aside a mortgage fraudulently granted by the husband to a finance company, a remedy which was outside its normal purview. The Full Court held that the question of the validity of the mortgage was severable from the matters between the husband and wife, so that in any event accrued jurisdiction would not be attracted.[46] However, Strauss J in McKay found that the inability of the Court to grant the remedy sought by the wife led to the conclusion that the Family Court had no accrued jurisdiction.[47] It is submitted that the majority reasoning in Abebe would remove the basis for this objection.
A similar approach to that in McKay is apparent in the judgment of the Full Court of the Family Court in In the Marriage of Smith (No 2).[48] The question arose whether the Family Court might invoke its accrued jurisdiction to approve an agreement not to apply for family provision. This power was conferred on the Supreme Court by the Family Provision Act 1982 (NSW). The wording of the New South Wales legislation was held by the Full Court of the Family Court, and by the High Court in Smith v Smith,[49] to exclude the power of the Family Court to approve the agreement in question. As a member of the Full Court, Fogarty J considered that the Family Court’s lack of jurisdiction to make determinations which adversely affect the rights of a third party clashed with the need for accrued jurisdiction in appropriate circumstances to affect the rights of third parties.[50] It was ultimately not necessary to decide whether the Family Court had accrued jurisdiction because on any view the approval of the agreement under State law was a matter severable from the matrimonial cause which was before the Family Court. However, members of the High Court suggested that ‘matters’ in s 31(1)(a) of the Act were restricted to matters for which the Court had the power to grant a remedy.[51] This was at odds with the concept of a ‘matter’ under s 76(ii) of the Constitution. The latter was widely interpreted as
a justiciable controversy which must either be constituted by or must include a claim arising under a federal law but which may also include another cause of action arising under another law provided it is attached to and is not severable from the former claim.[52]
Accordingly, the fact that there were several restrictions in the Act on the powers of the Court caused the High Court in Smith v Smith to doubt whether the Family Court had accrued jurisdiction.[53] Again, the majority reasoning in Abebe would appear to overcome that doubt.
Sir Anthony Mason, writing extra-curially in May 1988, expressed a ‘doubt whether the accrued jurisdiction is of much significance in ... family law given the existing structure of the Family Law Act 1975’[54] and observed that s 78(3) of the Act, which precluded declarations made by the Family Court in proceedings between parties to a marriage from binding third parties, constituted a substantial obstacle.[55] However, it is noteworthy that since that time s 78(3) has in fact been repealed.[56]
Aitken argued in 1989 that, contrary to the judgments of Fogarty and Strauss JJ referred to above, s 31(1)(a) of the Act was the basis for the accrued jurisdiction.[57] Aitken concluded that there was no logical basis in a constitutional sense to distinguish between the accrued jurisdiction of the Federal Court and that of the Family Court and that the judgments which were restrictive of the jurisdiction of the Family Court had failed to distinguish between power and jurisdiction.[58]
Indeed, several judgments in the Family Court favour the view that the Family Court does enjoy accrued jurisdiction. Nygh J in McKay[59] and Evatt CJ in Prince[60] considered that the jurisdiction existed to determine a third party aspect in those cases (although, on the facts in both cases, the non-federal claim was not considered to be severable from the federal claim). Nygh J pointed out that to read s 31(1)(a) of the Act as being of a narrower scope than s 76(ii) of the Constitution in its reference to ‘matters’ was to confine the meaning of the term in the Act to a matrimonial cause.[61]
In In the Marriage of Ireland,[62] Lindenmayer J considered that the Family Court had accrued jurisdiction to entertain a foreshadowed application by the husband for the sale of a business, and division of the proceeds between the husband and the wife where a third party (the wife’s son by a former marriage) claimed to be the owner of the business. Lindenmayer J held that the determination of the son’s claim (which was the non-federal claim) was essential to the determination of the claims as between the husband and wife.[63] Lindenmayer J concluded that at that time (1986) there was ‘no majority decision of any Full Court on the point which is binding upon me’,[64] but that the accrued jurisdiction did exist. Thus it was appropriate for the Family Court to determine the third party’s claim, provided that it was ‘not merely ... convenient to deal with the issue, but the determination of the non-federal issue involving the third party must be a central part of the controversy.’[65] Lindenmayer J differentiated between jurisdiction and power and concluded that the Family Court would have the necessary power to make an order sought by the husband to the effect that the third party had no legal or equitable interest in the business, and that such an order would be binding not only upon the wife but also upon the third party. Ultimately, however, Lindenmayer J did not exercise that power because the third party’s proceedings were under way in the Supreme Court. Consequently, his Honour found that:
[I]t would better serve the ends of swift and inexpensive justice if the proceedings in the Supreme Court of Queensland in relation to the title to the business were allowed to go forward to conclusion before the proceedings for property settlement between the husband and wife are heard and determined.[66]
In Ireland, Lindenmayer J considered that the third party aspect was not problematic because the Court was not depriving a third party of a right but indeed was acknowledging the third party’s rights in the proceedings between the husband and the wife. Accordingly, no difficulty arose within the ambit of the rules that the High Court had spelt out in Ascot Investments Pty Ltd v Harper[67] which limited the jurisdiction where third parties’ rights were at issue. Moreover, it may be pointed out that, in every case in which the accrued jurisdiction was denied because of the presence of a third party, the third party was an unwilling participant in the proceedings.[68]
Indeed, Fogarty J, who was in important respects opposed to the Full Court having accrued jurisdiction, pointed out in Prince that while third parties were generally not bound by determinations of the Family Court, nevertheless there were
obvious exceptions to that within the legislation itself. In addition, different considerations may apply where a third party takes part in the proceedings ... Also power exists to make some orders of a temporary or interim nature affecting third parties.[69]
Lindenmayer J in Ireland considered that a declaration of title to property as between the husband and wife would bind the third party ‘through the doctrine of issue estoppel.’[70] The presence of s 78(3), however, caused Lindenmayer J to ‘entertain some doubt’ as to whether the Family Court could make a declaration of title to the business as between the husband and the third party.[71]
There the matter rested for over a decade because cross-vesting relegated the issue of accrued jurisdiction to something of an academic exercise. The question of accrued jurisdiction in the Federal Court has now been revisited and resolved by the High Court in Re Wakim. However, the position of the Family Court at the date of writing remains unresolved.
A The Decision in Re Wakim: Gains in Accrued Jurisdiction
In Re Wakim,[72] the first-named applicant had obtained a substantial judgment in an action in the Supreme Court of New South Wales for damages for personal injury suffered in the course of his employment. The defendant to the Supreme Court proceedings, Mr Nader, became bankrupt and Mr Wakim became a substantial creditor in the bankruptcy. In June 1997, the Official Trustee brought proceedings in the Supreme Court of New South Wales seeking a dissolution of the partnership between Mr Nader and his wife but, on the advice of the solicitors and of senior counsel, the Official Trustee discontinued the partnership proceedings against Mrs Nader. Mr Wakim’s case was that the Official Trustee and Messrs McNally (their legal representatives), by discontinuing the proceedings, had decreased the amount recoverable by Mr Wakim against the bankrupt defendant. Mr Wakim brought proceedings in the Federal Court for negligence against the Official Trustee and an action under s 176 of the Bankruptcy Act 1966 (Cth) against the Official Trustee for loss incurred because of a breach of duty. He also proceeded in negligence against the legal representatives. The legal representatives challenged the jurisdiction of the Federal Court to hear Mr Wakim’s proceedings against them on the basis that they were proceedings in State jurisdiction and that the Federal Court had no relevant jurisdiction to determine them. They argued that the proceedings did not fall within the accrued jurisdiction of the Federal Court. The exercise of jurisdiction by the Federal Court would therefore stand or fall on the validity of the cross-vesting legislation, which the legal representatives now also challenged.
In the result, on the appropriate tests of accrued jurisdiction, Gummow and Hayne JJ (with whom Gleeson CJ and Gaudron J agreed) considered that the proceedings against the legal representatives, despite arising under State law and common law, were within the accrued jurisdiction of the Federal Court and the legal representatives’ application for prohibition was dismissed with costs.[73] Gummow and Hayne JJ found that the non-federal claims and the federal claim against the Official Trustee were within the scope of one controversy and thus within the ambit of a ‘matter’. Mr Wakim’s claims all arose out of a single set of transactions; they were all aspects of the conduct of the claim against the partner of Mr Wakim’s employer.
McHugh J held, albeit with some reluctance, that the applicants had failed to show that their cases did not fall within the accrued jurisdiction of the Federal Court.[74] Callinan J considered that the accrued jurisdiction did not apply because there were separate matters involved in the federal and non-federal claims.[75] Kirby J did not allude to the question as he was of the view that the cross-vesting scheme was valid.
The majority approach to the accrued jurisdiction in Re Wakim is a generous one. Applying the test in Fencott,[76] their Honours considered that it is ultimately
a matter of impression and of practical judgment whether a non-federal claim and a federal claim ... are within the scope of one controversy and thus within the ambit of a matter. ... There is but a single matter if different claims arise out of common transactions and facts or a common substratum of facts ... So too, there is but one matter where different claims are so related that the determination of one is essential to the determination of the other, as, for example, in the case of third party proceedings or where there are alternative claims for the same damage and the determination of one will render the other otiose or necessitate its determination.[77]
Conversely, claims which are ‘completely disparate’, ‘completely separate and distinct’ or ‘distinct and unrelated’ are not part of the same matter.[78] Often,
if proceedings were tried in different courts, there could be conflicting findings made on one or more issues ... indicating that there is a single matter. By contrast if the federal proceedings could not have been joined in one proceeding, it is ‘difficult’ to regard them as one matter.[79]
On the facts in Re Wakim, ‘the bringing of three separate proceedings and joining of different parties in each of those proceedings would ordinarily suggest ... that there is more than one matter.’[80] However, ‘the identification of the justiciable controversy ... is not determined only by ... there being separate proceedings by different parties in the one court.’[81] The ‘central task is to identify the justiciable controversy. In civil proceedings that will ordinarily require close attention to the pleadings (if any) and to the factual basis of each claim.’[82] In Re Wakim, the fact that the legal representatives had been joined after the proceedings were commenced against the Official Trustee did not preclude there being a single matter; ‘neither the differences in the present procedural history nor the absence of any claim by the Official Trustee against [the legal representatives] determines the question whether there is a single controversy.’[83]
The majority concluded that the proceedings in Re Wakim arose out of one set of events.
Of most significance is ... that the damage which Mr Wakim alleges he has suffered as a result of ... various breaches of duty by the Official Trustee, the solicitors and [senior counsel] is, in each case, the loss of what he might have recovered in the bankruptcy had the claims against Mrs Nader been prosecuted differently.[84]
Accordingly, in Re Wakim a majority of the High Court took a broad view of the concept of a ‘matter’ for the purposes of determining when non-federal claims might be heard in the Federal Court of Australia. Lucarelli identifies the factors to be considered by the court as being:
(a) what the parties have done; (b) the relationship between or among the parties; (c) the laws which attach rights or liabilities to the conduct and relationship of the parties; (d) whether the different claims arise out of the same substratum of facts; and (e) whether the different claims are so related that the determination of one is essential to the determination of the other.[85]
Since Re Wakim, the position of the Family Court has been considered in Lawson v Lawson.[86] The wife had brought a cross-vested claim for damages against the husband’s solicitors together with proceedings against the husband in the Family Court under s 79 of the Act.[87] Lindenmayer J found that the non-federal claim against the husband’s solicitors was severable from the s 79 proceedings between the husband and wife so that, on the tests, the accrued jurisdiction did not apply. Lindenmayer J was not required to determine the issue, but remained
content to assume, without deciding, that in a proper case this Court, no less than the Federal Court, has accrued jurisdiction to determine the non-federal aspects of a single justiciable controversy which also involves a federal issue which is within the Court’s primary jurisdiction conferred by the Act.[88]
The benefits of so finding are immediately obvious if one considers the facts in Friis v Friis.[89] The Family Court was required to determine applications by a husband and wife to set aside a deed entered into by the wife whereby she gave land away to third parties. The bases for so doing included s 85 of the Act, along with undue influence and unconscionable conduct, which are common law or State law grounds.[90] Jerrard J in the Family Court made the orders sought by the applicants on the basis of unconscionable conduct by the third parties. Upon an appeal by the third parties which came before the Queensland Court of Appeal in the circumstances set out in Part III below, McPherson JA noted that ‘[i]f the Family Court does have accrued jurisdiction then, Jerrard J almost certainly was invested with power to make the declarations and orders which he did.’[91]
Given other developments, including the repeal in 1987 of s 78(3) of the Act,[92] one might now anticipate that the High Court will extend the accrued jurisdiction to the Family Court of Australia and that the accrued jurisdiction can do at least some of the work which was previously the province of cross-vesting. It may be some time before the question arises in the context of a fact situation which a court will agree includes a non-federal aspect as part of the ‘matter’.[93]
B The Decision in Re Wakim: Losses in Cross-Vested Jurisdiction
In Re Wakim, four proceedings were heard together by the High Court. They all involved a challenge to ss 4(2) and 9 of the State Cross-Vesting Acts and s 9 of the Commonwealth Cross-Vesting Act. A challenge was also made to s 51 of the Corporations Act 1989 (Cth) which conferred jurisdiction on the Federal Court of Australia and the State Supreme Courts under the Corporations Law of the Australian Capital Territory, and to s 56 of the Corporations Act 1989 (Cth) which allowed the Federal Court and the Family Court to exercise jurisdiction with respect to matters arising under the Corporations Law of a State.
The High Court held that, although the Federal Court could hear the application brought by Mr Wakim, the remaining applications did not fall within the accrued jurisdiction of the Federal Court. Accordingly, they depended for their survival on the exercise by the Federal Court of cross-vested State powers. The High Court (with Kirby J dissenting) found that the States had no power, with or without the consent of the Parliament of the Commonwealth, to invest State jurisdiction or judicial power in federal courts. The settled doctrine of the High Court remained that Chapter III of the Constitution exhaustively defines the ‘matters’ that might be the subject of the judicial power of the Commonwealth as well as the matters in respect of which the Parliament of the Commonwealth may invest jurisdiction in the federal courts which it creates. The irresistible conclusion was that Chapter III ‘authorises the Parliament of the Commonwealth to create federal courts but only for the purpose of exercising jurisdiction with respect to the matters specified in ss 75 and 76 of the Constitution.’[94]
III TAKING CLAIMS UNDER
THE FAMILY LAW ACT 1975 (CTH) TO THE SUPREME COURT? UTILISING WHAT IS
LEFT OF
CROSS-VESTING
The consequence of Re Wakim is that the Family Court cannot determine matters arising under State law by relying on the cross-vesting legislation. Furthermore, decisions of the Family Court were invalid to the extent that they relied on the cross-vesting laws to determine matters that did not arise under federal law. However, the Commonwealth Cross-Vesting Act and the State Cross-Vesting Acts are not impugned in so far as the Commonwealth legislation confers Commonwealth jurisdiction on State courts. The Family Court of Western Australia, having been created under State law, and not under Chapter III of the Constitution, remains unaffected by the decision of the High Court. The cross-vesting of jurisdiction between Supreme Courts of the various States is likewise unaffected by the decision. Accordingly, the State Supreme Courts may continue to exercise original jurisdiction in matters of State law as well as under federal law. It may therefore be appropriate to cross-vest matters under the Act which also involve substantial State law claims into the State Supreme Courts.
Thus, in cases such as D v L[95] and Reitsema v Reitsema,[96] litigants who are not parties to a marriage and who would otherwise be compelled to bring child proceedings in the Family Court and their property claims in the State court system, may elect to bring the child components of the claim under the Act, together with State property proceedings, in the Supreme Court. A litigant in the Family Court may now apply to that court to transfer child proceedings to the State Supreme Court, and indeed the Family Court may of its own motion transfer child proceedings to the Supreme Court where the substantial dispute between the parties would appear to be in the State jurisdiction[97] or where there are jurisdictional uncertainties.[98]
In Friis, the wife was persuaded by relatives of the husband (‘the third parties’) to make a gift to them by deed of two farming lots of land (on conditions which are not relevant to the present discussion). The husband commenced proceedings in the Family Court seeking orders under s 85 of the Act setting aside the dispositions in favour of the third parties. Later, both the husband and the wife sought orders against the third parties under State law alleging undue influence and/or unconscionable conduct by the third parties in respect of the deed. Jerrard J in the Family Court made orders and declarations in relation to the setting aside of the deed on the unconscionability ground.[99] He purported to exercise cross-vested jurisdiction when he did so, under s 4 of the Queensland State Cross-Vesting Act.[100] As a result of Re Wakim, he could not have validly exercised cross-vested jurisdiction. However, if the exercise of the power to set aside the deed on the ground of unconscionable conduct by the third parties could be supported as an exercise of the accrued jurisdiction of the Family Court, Jerrard J’s orders would be valid notwithstanding that he attributed the exercise of his powers to the cross-vesting of jurisdiction.[101]
The third parties subsequently appealed against the decision of Jerrard J and in accordance with s 7 of the Commonwealth Cross-Vesting Act they brought their appeal in the Full Court of the Family Court. The Full Court considered the appeal after Re Wakim was decided and might have, at that point, determined whether Jerrard J’s orders could be upheld as an exercise of accrued jurisdiction. However, the Full Court did not decide this question because the parties undertook a different course and the question was transferred to the Court of Appeal of the Supreme Court of Queensland.[102] The Queensland Court of Appeal canvassed whether ‘[o]n the face of it, questions of undue influence and unconscionability would appear to be completely absorbed in or comprehended by the accrued jurisdiction of the Family Court’.[103] The Court of Appeal declined to resolve that question on the basis that it was for the Family Court, rather than for the Court of Appeal, to determine the matter of its own jurisdiction.[104] However, it was pointed out that if
in fact and in law there is an area of jurisdiction which, in consequence of ... Re Wakim, is vested solely in the Supreme Court, the only rational way of ensuring that the whole appeal ... is heard and determined as a single matter might be [for the Family Court] to make an order ... transferring the whole of that proceeding or matter to this court ... which is not touched by the decision in Re Wakim.[105]
The grounds for ordering a transfer are established in decisions on s 5(4) of the Commonwealth and State Cross-Vesting Acts.[106]
The advantage of this course was clear in Friis. The Court of Appeal could only know what aspects of the competing claims were within the jurisdiction of the Family Court after this had been clarified by the Family Court. The numerous referrals back and forth could be avoided by transferring the federal claims, including any accrued components, to the Supreme Court. Indeed, McPherson JA, in the Court of Appeal, pointed out that it was ‘essential to the parties, who have no interest in the niceties of jurisdiction, that the appeal should if possible be dealt with as an integrated whole in one court, rather than piecemeal in two.’[107]
In Friis, the third parties had originally appealed to the Full Court of the Family Court and the legal representative of the husband (the husband having died during the course of the proceedings) also filed a notice of appeal. The High Court handed down the decision in Re Wakim before the appeals were heard. The appellants sought to cure the defects which were now apparent in the decision of Jerrard J by seeking an order from the Court of Appeal of the Supreme Court of Queensland under the Federal Courts (State Jurisdiction) Act 1999 (Qld) (‘the Queensland Act’). That Act was one of the measures enacted by the States to enable Supreme Courts to validate orders made by federal courts purporting to exercise the State power conferred on them before Re Wakim was decided. Under s 11 of the Queensland Act, the Court of Appeal could declare that those parts of an appeal which had been brought to the Full Court of the Family Court in excess of jurisdiction be treated as an appeal to the Queensland Court of Appeal. The Court of Appeal could only make the order in relation to those parts; in other words, if any part of the proceedings in the Family Court, either under State law or the common law, could be supported by the accrued jurisdiction of the Family Court, s 11 of the Queensland Act would not allow the Supreme Court to validate that part.[108] Appeals from decisions of the Family Court exercising its proper jurisdiction, including its accrued jurisdiction (if any), had to be brought in the Full Court of the Family Court. Only in cases where the Supreme Court could declare an ineffective judgment could an appeal lie to the Supreme Court of Queensland Court of Appeal pursuant to s 7(2) of the Queensland Act. The Court of Appeal had first to identify the ‘ineffective’ part of the judgment. In respect of those components of the Family Court judgment which could be supported by the accrued jurisdiction, an appeal could only be heard by the Full Court of the Family Court. The outcome in Friis remains unknown pending a decision by the Full Court of the Family Court qualifying a determination under the Queensland Act by that Full Court on 8 November 1999, which was made by consent of the parties, to the effect that the Family Court has ‘no jurisdiction to hear and determine so much of the appeal as relates to a state matter.’[109]
Appeals from a decision of a Supreme Court hearing a cross-vested federal claim will need to be taken to the Court of Appeal of the relevant Supreme Court or to the Full Court of the Family Court depending on the subject matter of the appeal. Section 7 of the State and Commonwealth Cross-Vesting Acts provides for all appeals involving matters arising under the Act to be determined by the Full Court of the Family Court. It seems that this includes appeals relating to determinations made in the accrued jurisdiction of the Family Court. However, the Family Court cannot, after Re Wakim, validly determine State law aspects which are outside the accrued jurisdiction. Therefore s 7 would appear to be invalid to that extent and appeals on the federal law aspects will need to proceed to the Full Court of the Family Court, while the State Supreme Courts will need to determine appeals on State aspects. The majority reasoning in Abebe would appear, moreover, to support a view that there is no constitutional impediment to splitting appeals in this manner because the jurisdiction of a federal court to review decisions can validly be limited.
IV THE DECLARATIONS POWER
Section 78 of the Act enables the Family Court to make declarations as to title in property proceedings in accordance with the general law of property, including any relevant State laws. This provision has been under-utilised in the past. Originally it was thought that a declaration under s 78 could only be used as a preliminary step to invoking the jurisdiction to alter interests in property under s 79.[110] Moreover, the presence of s 78(3), which provided that ‘an order under this section is binding on the parties to the marriage but not on any other person’, added to the perception that it was pointless to invoke the declarations power.[111] However, with time, it has been appreciated that a declaration can be made under s 78 even after time has expired for instituting s 79 proceedings without leave,[112] and even after a party has been made bankrupt.[113]
Section 78 may in the future provide the necessary interface for federal proceedings and non-federal aspects of a claim to be regarded as a single matter. Section 78(3) was repealed by Parliament in 1987 to avoid an impediment to cross-vesting.[114] Its repeal may nevertheless be of assistance in developing the jurisdiction of the Family Court with respect to third parties, and in particular it may assist in the development of the accrued jurisdiction of the Family Court. The Family Court’s power to declare rights in accordance with the general law may make it attractive to parties to a marriage to ventilate claims in that court which may have otherwise been brought in the State courts. This may avoid duplication of proceedings and expense.
In Catlin and Kent,[115] for example, the husband had remarried. There were proceedings between the husband and his former wife which concerned property which he now owned jointly with his second wife. The Court could not at that time resolve the interests of the second wife because of s 78(3). The repeal of s 78(3) may make it appropriate for the Court now to finally determine the second wife’s interest.
However, the Court has thus far taken a conservative view of the scope of s 78 despite the repeal of sub-s (3). In In the Marriage of Moran,[116] the wife brought an application under s 79A of the Act to set aside property orders made by the Family Court.[117] In her s 79A proceedings, the applicant alleged that her husband had failed to disclose his real ownership of assets which were ostensibly owned by a third party. She sought a declaration that the assets were owned by her husband. Bulley J acceded to her application but he did so only on the basis that the wife did not seek consequential orders in relation to the assets themselves but only sought to enlarge her share of the other property of the husband. Bulley J considered that the decision in In the Marriage of Lanceley[118] was authority for the proposition that a declaration as between the husband and the wife would not bind the third party.[119] The Court in Moran did not consider the effect of the repeal of s 78(3).
In Moore v Hendler,[120] the wife claimed that the husband had withdrawn money from his superannuation fund and given it to his brother-in-law who had used it to purchase a mobile home. The wife sought a declaration under s 78 that the money provided by the husband was the property of the parties to the marriage. The trial judge made a declaration that the brother-in-law held $25 000 on trust for the husband and the wife.[121] The brother-in-law appealed. He denied the existence of a trust and asserted a gift of the monies to him by the husband. The Full Court found that, in accordance with the law of trusts, the wife had no beneficial interest in the money which had come from the husband’s superannuation and compensation monies. Moreover, the Full Court held that the Family Court had no relevant jurisdiction to make a declaration against the brother-in-law and that the repeal of s 78(3) did not affect that conclusion.[122]
The wife in Moore v Hendler was granted leave to amend her application to include an order under s 85 setting aside the disposition between the husband and the brother-in-law so the Court was not required to resolve the s 78 aspect. However, it may be observed that, had the husband colluded with the brother-in-law and given him monies from a joint account of the husband and the wife, the brother-in-law might be said to have received the money subject to a constructive trust in respect of the wife’s share.[123] Such a trust might properly have been declared in favour of the wife using s 78 and it is submitted that the brother-in-law would be bound by the declaration. It is further submitted that the accrued jurisdiction would supply the necessary additional power to resolve the State component of the wife’s claim, which required the determination of the question of ownership of the money. The resolution of that question as between the husband and the wife and the brother-in-law would arguably constitute a single matter within the relevant test of accrued jurisdiction.[124]
The decision of the Full Court in In the Marriage of Wagstaff[125] might now be justified on a similar basis. In that case, the wife and her second husband had purchased a property in their joint names using funds partly derived from the proceeds of her property settlement with her first husband. Pursuant to that settlement, the funds were the subject of a deed binding her to hold them on trust for the children of the first marriage. The first husband, who was the father of the children of the first marriage, intervened in the proceedings in the second marriage seeking orders under s 78 to protect the children’s interest in property purchased in the second marriage. The Full Court effectively resolved the children’s entitlements by declaring their interests at equity. The wife and her second husband were held to be accountable to the children; the trust funds for the children were represented by 87.74% of the purchase price of the present property, so that the children were entitled to that proportion of the sale price of that property after deduction of the mortgage and other payments that had been made by the wife and her second husband.[126] The children were not, however, entitled to an occupation rent because they had enjoyed the benefit of maintenance and repairs made by the wife and the second husband.[127]
The Full Court in In the Marriage of Wagstaff did not enter into a discussion of the limits of s 78 but again it is submitted that the decision can be supported as an exercise of the accrued jurisdiction, the determination of the wife’s interest in the property as against that of the children of the first marriage being part of a single matter. The children would have standing to enforce the declaration of their interests on the basis that the accrued jurisdiction carries with it the power to make the necessary orders to make the jurisdiction effective.[128]
Nygh J in Af Petersen and Af Petersen[129] utilised the power in s 78 to determine the property interests as between the parties to the marriage and the husband’s father in circumstances where monies owed to the father were secured by a mortgage over the property owned by the husband and the wife. Nygh J decided that the wife’s claim would prevail over that of the father and that the father could recoup his debt against the property remaining with the husband, in part because the history of transactions between the parties led the Court to conclude that the father became interested in enforcing the debt only when the marriage broke down.[130] The determination of the position of the father might now be supported by reliance on the accrued jurisdiction of the Court. A significant difference between the determination of the third party claim utilising the accrued jurisdiction on the one hand, and taking the third party claim ‘into account’ in establishing the size of the property pool under s 79 of the Act is that, in the latter instance, the Court retains the freedom that was exercised for the wife’s benefit in Af Petersen and Af Petersen to disregard a debt — a freedom which was reiterated by Elliott J in Hannah and Hannah; Tozer and Tozer[131] and by the Full Court in Biltoft and Biltoft.[132] In the former case, the determination of the claim of the third party leaves no room for the exercise of a discretion concerning the extent to which it is taken into account in the proceedings under the Act.
In Wright,[133] in proceedings under s 79 of the Act between the husband and the wife in relation to a holiday property, the wife joined her mother as a second respondent. The wife sought a declaration under s 78 that the husband and the wife held one third of the property on trust for the mother. The mother had paid for the construction of additions to the holiday property and had lived there for several years. Moss J observed that the mother was not properly joined as a respondent because the wife sought no relief against her and he considered that if the mother claimed an interest in the property she ought to have initiated a separate cross-vested claim.[134] Accordingly, Moss J held that there was no claim for the mother properly before the Court.[135] However, he proceeded in dicta to consider what would have been the outcome of such a claim.[136]
The facts in Wright illustrate the benefits of utilising s 78 of the Act to declare the rights of parties to the marriage vis-à-vis the third party provided that the accrued jurisdiction makes this possible. Had the mother in Wright made an investment in the property in circumstances which gave rise to a trust, then it is submitted that in the process of declaring the interest of the husband and the wife in the property the Court could declare as part of a single matter the interest of the mother. This would avoid the need for a separate determination of the mother’s interest in a State court. Moreover, it may be observed that even members of the Family Court, who have been disinclined to find that the Court had accrued jurisdiction, have carved out an exception for the case of a third party who takes part in the proceedings by obtaining leave to intervene or leave to be heard.[137]
In Balnaves, the husband became bankrupt after the wife had instituted proceedings under s 79 of the Act. The trial judge held that the wife could not continue her action under s 79 after the bankruptcy because the husband’s property vested in the trustee. However, the trial judge accepted the wife’s argument that ‘the jurisdiction of the Family Court under s 78 continued quite independently of the husband’s bankruptcy’[138] and on the husband’s appeal, the Full Court had ‘no reason to doubt that [sic] correctness of that view.’[139] The wife was in fact permitted to continue proceedings under ss 78, 85 and 85A of the Act after the bankruptcy.[140] Accordingly, the declaration made by the Family Court was expected to an extent to bind the Official Trustee, thus opening up the prospects for an expanded use of s 78 as a basis for the exercise of the accrued jurisdiction. The wife had also sought a declaration pursuant to s 78, or pursuant to the accrued jurisdiction, that a named company held its title to certain real property in trust for the Balnaves Family Trust and an order, also pursuant to the accrued jurisdiction, that the named company transfer its interest to the trustee of that trust. The trial judge in Balnaves refused to make the orders sought by the wife because they involved the making of a declaration against the named company.[141] The Full Court agreed that s 78 did not extend to the making of declarations and consequential orders in relation to the rights of the two third parties in that case.[142] Section 78(3) in effect presented ‘an insuperable obstacle’[143] to the orders sought by the wife.
The Full Court in Balnaves was not required to resolve the extent of the accrued jurisdiction of the Family Court because
it clearly could not have application here. Not the least of the difficulties ... is that the necessary connection, namely that the federal and non-federal issues be ‘aspects of a single matter’ or arise ‘out of a common substratum of facts’ ... is lacking here. It is also unnecessary ... to consider the extent to which any accrued or pendent jurisdiction attaching to this court is curtailed by the express words of s 78.[144]
It is submitted that, if the primary application of the wife in Balnaves had been for a declaration that the husband was the equitable owner of property to which the legal title was in the name of a third party,[145] then, applying the majority reasoning in Re Wakim, it may be said that the same relief is sought against the husband and against the third party so that the test of the single matter is established and accrued jurisdiction would be available. The majority of the High Court pointed out that the mere presence of a new party does not prevent a finding that there is a single justiciable controversy for the purposes of Chapter III of the Constitution:
[T]here is no basis in principle for concluding that there can never be accrued jurisdiction where a new party is joined ... [T]here is no warrant for holding that federal jurisdiction ends as soon as a new party (against whom no federal claim is made) is added.[146]
However, there are many circumstances in which it will be difficult to know whether s 78 will help or whether, on the relevant tests, accrued jurisdiction will apply. In Lanceley, the husband owed amounts to creditors which exceeded the value of the assets of the marriage. The wife sought to quarantine assets from creditors by asking the Family Court for a declaration that the husband held one half of his interest in the matrimonial home on trust for her and that he held two other properties to which the legal title was registered in his sole name on trust for them both as tenants in common in equal shares. The parties had not separated at the date of the trial and the husband filed no material at the hearing and did not oppose the wife’s application. The wife’s proceedings were not directed to resolving any issue between the parties but were taken for the collateral purpose of giving the wife an advantage over the husband’s creditors. The two principal creditors of the husband had not been served with the proceedings or received notice of them. The Court noted that the declaration was an equitable remedy and that, applying equitable principles, it was not appropriate to grant a declaration where there was no proper contradictor to the wife’s application.[147] It was further urged upon the Court that ‘although a declaration would not be legally binding upon interested non-parties there is no legal mechanism available to them by which they could subsequently challenge the declaration and it would thus be effectively binding upon them.’[148]
It is submitted that, even if the creditors had been served in Lanceley, unless they had some (secured) interest in the property which was the subject of the wife’s application, for example by virtue of a mortgage or a charge in their favour, the creditors’ claim would be severable from the Act claims between the husband and the wife and the accrued jurisdiction would not assist. In that event, the Family Court would need to decide whether to adjourn the proceedings between the husband and wife pending the hearing of the creditors’ claim, as it did in Re Bailey and Bailey[149] and Prince,[150] or whether it would determine the wife’s application regardless of the creditors’ claim.[151]
Toohey[152] presents a similar problem. In that case, the husband and wife owned no property at law. The wife applied for an order under s 79 against the husband. The jurisdiction of the Family Court under s 79 depended on the Court first declaring that the parties to the marriage had an equitable interest in property which they had transferred to the husband’s parents and to a trust associated with the husband’s family (‘the third parties’). McCall J was required to declare the trusts against the third parties in favour of the husband and wife in order to establish an asset pool for the parties on which to found the proceedings under s 79. McCall J found that the third parties had acquired the assets in circumstances in which it was unconscionable to deny that the husband and wife had an interest in the property and that the third parties held the property on trust for the husband and wife. The wife’s application against the third parties was brought in the Family Court under the New South Wales cross-vesting legislation. With the demise of the relevant part of that legislation, it may now be necessary for the proceedings against the third parties to be instituted in the State courts to determine the equitable entitlement of the husband and wife before instituting proceedings in the Family Court because, applying the test in Fencott, the action against the third parties is probably ‘another cause of action arising under another law’ and it is difficult to argue that the State claim is ‘not severable from the federal claim.’[153]
Barblett J in Carvill and Carvill[154] considered a situation which was not dissimilar to Toohey. The legal title to the real property in issue between the parties resided in the father of the husband. The husband had a right to commence proceedings for a judgment in equity against his father which he did not intend to exercise. Barblett J held that the right of the husband was a chose in action which conformed with the definition of property under the Act.[155] That right could be transferred to the wife and then prosecuted by her in the State courts. Barblett J made an order in those terms and also ordered that the wife hold the fruits of any action on trust for herself and her husband.[156]
The question whether proceedings like those in Carvill and Carvill might be entertained under the accrued jurisdiction of the Family Court will in future be determined by the test of whether a ‘matter’ constitutes a single justiciable controversy established by the High Court in Re Wakim. In the event that this is found to be the case, it should be pointed out that the exercise of the accrued jurisdiction is not a matter for the discretion of the Court. Lindenmayer J appeared to assume that there was a discretion and he considered the factors in the exercise of the discretion in Ireland.[157] Nygh J appears to have made a similar assumption in McKay.[158] However, the majority of the High Court in Re Wakim explained that
there may be some difficulty in analysing the question as one of ‘discretion’ ... 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.[159]
It may be noted that in Lawson v Lawson, Lindenmayer J was again invited to exercise a discretion but he was not required to determine that issue.[160]
V CORPORATIONS LAW MATTERS
As presently constituted, the Corporations Law is effected by the Corporations Act 1989 (Cth) which in s 82 sets out the Corporations Law of the Australian Capital Territory and the Corporations Acts which were enacted during 1989 and 1990 by the various States. Section 51A of the Corporations Act 1989 (Cth) confers jurisdiction on the Family Court with respect to civil matters arising under the Corporations Law of the Australian Capital Territory. Section 56 enabled the Family Court to exercise the jurisdiction conferred on it by the State Acts by virtue of the cross-vesting provisions. As a consequence of Re Wakim, the Federal Court and the Family Court can no longer exercise the State power and the Corporations Law will need to be completely recast. Fortunately, this may be addressed by the States referring their powers under s 51(xxxvii) of the Constitution to the Federal Parliament in relation to the Corporations Law. At the time of writing, the Commonwealth, New South Wales, Victoria, Queensland and Western Australia had reached an agreement in respect of referral of powers.[161]
The Family Court had significant powers available to it under the Corporations Law which could be invoked by parties to a marriage in proceedings which involved family companies. The Court could issue a statutory notice pursuant to s 459E to call up a loan account, which it did in Hannes v MJH Pty Ltd[162] and Roff v Aqua Distributors Pty Ltd.[163] It could make an order under s 247A allowing an applicant to inspect the books of the company and under s 290 enforcing the right of a director to have access to financial records. The Court had extensive powers in s 264AA to grant relief for conduct which was oppressive or unfairly prejudicial and using s 461 it could order a company to be wound up on the application of a shareholder or a creditor. These powers have been lost in so far as they relied on the cross-vesting of jurisdiction under the Corporations Law.
However, there is no reason why the Commonwealth cannot exercise its power pursuant to s 51(xx) of the Constitution to make laws with respect to ‘foreign corporations and trading or financial corporations formed within the limits of the Commonwealth’, to enable the Family Court to dispense those remedies in proceedings between parties to a marriage. The corporations power is a broad one, a principal limitation being that it extends only to existing corporations because the Commonwealth cannot legislate with respect to the incorporation of a company.[164] There seems to be no reason why the Family Court could not be the recipient of the powers in respect of corporations lost to it by the demise of cross-vesting by legislation of the Federal Parliament conferring those powers directly in the Act.
VI CONCLUSION
The decision of the High Court in Re Wakim requires practitioners in family law to revisit issues that have been dormant for more than a decade. Cases will inevitably arise where matters impacting on third parties and where other aspects of State jurisdiction will present themselves in the course of the determination of property proceedings under the Act. I have argued that practitioners should on occasions take federal claims to the State Supreme Courts by utilising what is left of the cross-vesting scheme after the decision in Re Wakim. In addition, the accrued jurisdiction will become important and it is to be hoped that the reluctance of the Family Court and the High Court to attribute accrued jurisdiction to the Family Court, which was a feature of the decisions prior to the cross-vesting legislation, can now be overcome. It has also been argued that there is now scope for the declarations power to extend to the determination of rights of parties to a marriage in property in which third parties may also have an interest and that s 78 may properly be invoked to determine both the federal and non-federal aspects of the matter. Finally, it has been suggested that valuable remedies under the Corporations Law which have been lost as a result of the dismantling of the State–federal compact can be recovered by legislation of the Commonwealth Parliament directly conferring on the Family Court the appropriate powers under the Corporations Law.
[∗] LLB (Melb), LLM, PhD (Monash); Associate Professor, Faculty of Law, Monash University; Barrister and Solicitor of the Supreme Court of Victoria.
[1] (1999) 198 CLR 511 (‘Re Wakim’).
[2] Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) (‘Commonwealth Cross-Vesting Act’); Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic); Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW); Jurisdiction of Courts (Cross-Vesting) Act 1987 (Qld); Jurisdiction of Courts (Cross-Vesting) Act 1987 (SA); Jurisdiction of Courts (Cross-Vesting) Act 1987 (Tas); Jurisdiction of Courts (Cross-Vesting) Act 1987 (WA); Jurisdiction of Courts (Cross-Vesting) Act 1987 (NT); Jurisdiction of Courts (Cross-Vesting) Act 1993 (ACT) (prior to 1993, the Commonwealth Cross-Vesting Act applied in the Australian Capital Territory). The Acts of the States and Territories will be referred to as the ‘State Cross-Vesting Acts’.
[3] Chapman v Jansen (1990) 13 Fam LR 853.
[4] See, eg, the discussion by Nygh J in Re Staples and McCall (1989) 13 Fam LR 279, 281.
[5] Explanatory Memorandum, Jurisdiction of Courts (Cross-Vesting) Bill 1986 (Cth) [6].
[7] [1997] FamCA 9; (1997) 21 Fam LR 841.
[8] [1994] FamCA 158; [1995] FLC 92-565.
[9] [1994] FamCA 34; (1994) 17 Fam LR 751.
[10] (1997) 22 Fam LR 89 (‘Wright’).
[11] (1991) 14 Fam LR 843 (‘Toohey’).
[12] [1988] FamCA 6; (1988) 12 Fam LR 488 (‘Balnaves’).
[13] [1996] FamCA 154; [1997] FLC 92-732.
[14] [1996] FamCA 58; (1996) 20 Fam LR 802.
[18] [1996] FamCA 24; (1996) 20 Fam LR 280.
[20] [1989] FamCA 47; (1990) 13 Fam LR 676.
[21] [1999] FamCA 577; (1999) 25 Fam LR 15.
[22] [1999] FamCA 1127; (1999) 25 Fam LR 647.
[23] Emphasis added.
[24] Lawson v Lawson [1999] FamCA 1635; [1999] FLC 92-874, 86,375 (Lindenmayer J).
[25] (1983) 152 CLR 570 (‘Fencott’).
[26] [1983] HCA 36; (1983) 154 CLR 261.
[27] Lawson v Lawson [1999] FamCA 1635; [1999] FLC 92-874, 86,375 (Lindenmayer J, quoting the High Court in Stack v Coast Securities (No 9) Pty Ltd [1983] HCA 36; (1983) 154 CLR 261, 293 (Mason, Brennan and Deane JJ)).
[28] Smith v Smith (1986) 161 CLR 217, 237 (Gibbs CJ, Wilson and Dawson JJ, quoting Fencott (1983) 152 CLR 570, 606).
[29] (1999) 198 CLR 511, 583–4 (Gummow and Hayne JJ, Gleeson CJ and Gaudron J agreeing).
[30] Ibid.
[31] [1999] HCA 14; (1999) 197 CLR 510, 524 (Gleeson CJ and McHugh J) (‘Abebe’).
[32] Ibid 524–5.
[33] Ibid 526.
[34] Ibid 528. The majority comprised Gleeson CJ and McHugh, Kirby and Callinan JJ. Gaudron, Gummow and Hayne JJ dissented.
[35] Ibid 529.
[36] Ibid 530.
[37] Ibid 533, quoting Stack v Coast Securities (No 9) Pty Ltd [1983] HCA 36; (1983) 154 CLR 261, 278 (Gibbs CJ).
[38] Ibid 533–4.
[39] [1984] FamCA 7; (1984) 9 Fam LR 481, 494−5 (‘Prince’).
[40] [1984] FamCA 46; (1984) 9 Fam LR 850 (‘McKay’).
[41] [1984] FamCA 7; (1984) 9 Fam LR 481, 496.
[42] [1984] FamCA 46; (1984) 9 Fam LR 850, 862.
[43] Ibid 862−3.
[44] Ibid 863.
[45] Ibid.
[46] Ibid 856−7 (Nygh J), 858 (Fogarty J).
[47] Ibid 863−4.
[48] [1985] FamCA 16; (1985) 10 Fam LR 283.
[50] In the Marriage of Smith (No 2) [1985] FamCA 16; (1985) 10 Fam LR 283, 306, citing Ascot Investment Pty Ltd v Harper (1981) 148 CLR 337 and Re Ross-Jones; Ex parte Green (1984) 9 Fam LR 888.
[51] Smith v Smith (1986) 161 CLR 217, 238−40 (Gibbs CJ, Wilson and Dawson JJ), 252 (Mason, Brennan and Deane JJ).
[52] Ibid 237 (Gibbs CJ, Wilson and Dawson JJ, quoting Fencott (1983) 152 CLR 570, 606 (Mason, Murphy, Brennan and Deane JJ)).
[53] (1986) 161 CLR 217, 237−8 (Gibbs CJ, Wilson and Dawson JJ).
[54] Sir Anthony Mason, ‘Family Law — Some Constitutional and Appellate Perspectives’ (1988) 3(4) Australian Family Lawyer 6, 8.
[55] Ibid 10.
[56] Law and Justice Legislation Amendment Act 1988 (Cth) s 39.
[57] L Aitken, ‘The Accrued and Associated Jurisdiction of the Family Court’ (1989) 3 Australian Journal of Family Law 101.
[58] Ibid 113.
[59] [1984] FamCA 46; (1984) 9 Fam LR 850, 854–5.
[60] [1984] FamCA 7; (1984) 9 Fam LR 481, 488.
[61] McKay [1984] FamCA 46; (1984) 9 Fam LR 850, 854–5.
[62] [1986] FamCA 45; (1986) 11 Fam LR 104 (‘Ireland’).
[63] Ibid 121−3.
[64] Ibid 121.
[65] Ibid 123, quoting McKay [1984] FamCA 46; (1984) 9 Fam LR 850, 856.
[66] Ireland [1986] FamCA 45; (1986) 11 Fam LR 104, 127.
[68] See Prince [1984] FamCA 7; (1984) 9 Fam LR 481; McKay [1984] FamCA 46; (1984) 9 Fam LR 850; Lawson v Lawson [1999] FamCA 1635; [1999] FLC 92-874.
[69] [1984] FamCA 7; (1984) 9 Fam LR 481, 494–5.
[70] [1986] FamCA 45; (1986) 11 Fam LR 104, 127.
[71] Ibid.
[72] (1999) 198 CLR 511.
[73] Ibid 587−8.
[74] Ibid 563−4, where his Honour stated that, although he was ‘sceptical as to whether there is a single controversy in this matter’, he was ‘not prepared to say on the materials before us that the matter is outside the jurisdiction of the Federal Court.’
[75] Ibid 627−8.
[77] Re Wakim (1999) 198 CLR 511, 585−6 (citations omitted).
[78] Ibid.
[79] Ibid 586.
[80] Ibid 584–5.
[81] Ibid 585.
[82] Ibid.
[83] Ibid.
[84] Ibid 587–8.
[85] Nunzio Lucarelli, ‘Re Wakim: Cross-Vesting and Back Again’ (1999) 110 Victorian Bar News 23, 24.
[86] [1999] FamCA 1635; [1999] FLC 92-874.
[87] Section 79 enables the Court to alter the property interests of the parties to a marriage. The Court may make an order which is ‘just and equitable’.
[88] Lawson v Lawson [1999] FamCA 1635; [1999] FLC 92-874, 86,375.
[89] [2000] QCA 62; (2000) 26 Fam LR 205 (‘Friis’).
[90] Section 85 confers on the Court the power to set aside or restrain the making of an instrument or disposition which is likely to defeat an order under the Act. It was recently re-enacted as s 106B: see Family Law Amendment Act 2000 (Cth) sch 3.
[91] Friis [2000] QCA 62; (2000) 26 Fam LR 205, 207.
[92] Law and Justice Legislation Amendment Act 1988 (Cth) s 39.
[93] In Ferrall v Blyton [2000] FamCA 1442; (2000) 27 Fam LR 178, the Full Court considered that it was reasonably arguable that the Family Court had accrued jurisdiction but the Court was only required to consider whether the trial judge should have summarily dismissed the husband’s application which relied on the accrued jurisdiction.
[94] Re Wakim (1999) 198 CLR 511, 557 (Gummow and Hayne JJ, Gleeson CJ, Gaudron, McHugh and Callinan JJ agreeing).
[97] See the discussion of the grounds for transfer in Dorothy Kovacs, Family Property Proceedings in Australia (1992) 39–69.
[98] Explanatory Memorandum, Jurisdiction of Courts (Cross-Vesting) Bill 1986 (Cth) [6].
[99] See Friis [2000] QCA 62; (2000) 26 Fam LR 205, 205.
[100] Ibid 215 (Williams J).
[101] Ibid.
[102] See below n 108 and accompanying text.
[103] Friis [2000] QCA 62; (2000) 26 Fam LR 205, 210 (McPherson JA).
[104] Ibid.
[105] Ibid 210–11.
[106] See, eg, Chapman v Jansen (1990) 13 Fam LR 853; Kenda v Johnson [1993] FLC 92-331.
[107] Friis [2000] QCA 62; (2000) 26 Fam LR 205, 210.
[108] Ibid 209–11, 215.
[109] Ibid 205.
[110] Good and Good [1982] FamCA 47; (1982) 8 Fam LR 354.
[111] It has been accepted in recent years that s 78 is a ‘stand alone’ power: see, eg, Moore v Hendler (1992) 15 Fam LR 770.
[112] See s 44(3) of the Act and Catlin and Kent [1986] FamCA 53; (1986) 11 Fam LR 639.
[113] Balnaves [1988] FamCA 6; (1988) 12 Fam LR 488.
[114] Law and Justice Legislation Amendment Act 1988 (Cth) s 39.
[115] [1986] FamCA 53; (1986) 11 Fam LR 639.
[116] [1994] FamCA 111; (1994) 18 Fam LR 534 (‘Moran’).
[117] Section 79A confers the power to set aside a property order on grounds which include duress associated with the obtaining of the order.
[118] [1994] FamCA 94; (1994) 18 Fam LR 71 (‘Lanceley’).
[119] Moran [1994] FamCA 111; (1994) 18 Fam LR 534, 540.
[121] Ibid 771.
[122] Ibid 772, 775–7.
[123] See Barnes v Addy [1874] UKLawRpCh 20; (1874) 9 Ch App 244.
[124] See above nn 76–82 and accompanying text.
[126] Ibid 87.
[127] Ibid.
[128] In the Marriage of Smith (No 2) [1985] FamCA 16; (1985) 10 Fam LR 283, 284–5.
[129] [1981] FamCA 50; [1981] FLC 91-095.
[130] Ibid 76,668–70.
[132] [1995] FamCAFC 45; (1995) 19 Fam LR 82.
[134] Ibid 90.
[135] Ibid.
[136] Ibid 90–6. Moss J found that the mother had enjoyed full value for her expenditure by her years of occupation of the extensions to the property such that it was not unconscionable to now deny her an interest in the property.
[137] See Prince [1984] FamCA 7; (1984) 9 Fam LR 481, 490–9 (Fogarty J); McKay [1984] FamCA 46; (1984) 9 Fam LR 850, 854 (Strauss J).
[138] Balnaves [1988] FamCA 6; (1988) 12 Fam LR 488, 490.
[139] Ibid.
[140] Section 85A enables the Court to vary ante-nuptial and post-nuptial settlements.
[141] [1988] FamCA 6; (1988) 12 Fam LR 488, 492.
[142] Ibid.
[143] Ibid.
[144] Ibid.
[145] Cf Moran [1994] FamCA 111; (1994) 18 Fam LR 534.
[146] Re Wakim (1999) 198 CLR 511, 587 (Gummow and Hayne JJ, Gleeson CJ and Gaudron J agreeing).
[147] Lanceley [1994] FamCA 94; (1994) 18 Fam LR 71, 80–6, 90–1.
[148] Ibid 87.
[149] [1989] FamCA 45; (1990) 13 Fam LR 652.
[150] [1984] FamCA 7; (1984) 9 Fam LR 481, 494–5.
[151] See Hannah and Hannah; Tozer and Tozer (1989) 13 Fam LR 531.
[153] (1983) 152 CLR 570, 606.
[154] (1984) 9 Fam LR 1055.
[155] Ibid 1056–7.
[156] Ibid 1058–9.
[157] [1986] FamCA 45; (1986) 11 Fam LR 104, 123–5.
[158] [1984] FamCA 46; (1984) 9 Fam LR 850, 852–3.
[159] (1999) 198 CLR 511, 587.
[160] [1999] FamCA 1635; [1999] FLC 92-874, 86,374, 86,377.
[161] NSW and Vic have introduced legislation to give effect to the referral, while Qld and WA have agreed in principle to follow suit: Daryl Williams, Attorney-General, and Joe Hockey, Minister for Financial Services and Regulation, Corporations Agreement, Press Release (23 March 2001).
[164] New South Wales v Commonwealth (1990) 169 CLR 482.