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Transfer of proceeding from the Supreme Court of QLD to the Federal Circuit Court of Australia

Not too long ago, in early 2019, we made submissions to the Supreme Court of Queensland on whether a proceeding should be transferred to the Federal Circuit Court of Australia (an independent Federal Court under the Australian Constitution) under s 5(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987?


We were successful on the fruits of our labour.


It all started in or about October of 2018 when our client, Mrs “X”, (“the Caveator”) caused to be lodged a series of four (4) caveats against the interest in land of “Y Pty Ltd” (“the Caveatee”) claiming a constructive trust and/or an equitable interest in same as a result of a constructive trust stemming from contributions of the Caveator and her husband, Mr “Z” (a director of the Caveatee), from their matrimonial pool towards the acquisition of the said land.


In very early November of 2018, the Caveator caused to be sent by unregistered post a notice to the Caveatee under s 126(2) of the Land Titles Act 1975 (Qld) (“the Land Titles Act”).


That same month, the Caveator caused to be lodged by way of general request with the Registrar of Titles Queensland the issuing of the said notice.


The solicitors for the Caveatee duly received that said notice.


Shortly thereafter, the Caveatee caused to be filed an amended proceeding in the Federal Circuit Court of Australia seeking, amongst other things, joinder of the Caveatee and a declaration of an equitable interest in the properties, which at that time, was the subject of an Originating Application to the Supreme Court of Queensland.


As stated, the Caveatee commenced a proceeding in  by Originating Application against the Caveator in the Supreme Court of Queensland in which it claimed, amongst other things, that the four (4) caveats had been lodged or continued without reasonable cause and therefore the caveats should be removed under s 127 of the Land Titles Act together with an Order for compensation under s 130 of that Act.   


In response, the Caveator caused us to file an Application seeking interlocutory relief in the Supreme Court of Queensland, namely that the proceeding be transferred and that question be decided before trial pursuant to rule 483 of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”).


TRANSFER OF PROCEEDING


The pending proceeding in the Federal Circuit Court of Australia between the Caveator, her husband and the Caveatee as a third party raised the question of contributions from a matrimonial pool towards acquisition of land held in the name of the Caveatee. In turn, that question would likely result in the pool of property to be considered as forming part of the matrimonial pool between the Caveator and her husband to be enlarged and therefore it was submitted that it was appropriate to transfer the action to the Federal Circuit Court of Australia (a Federal Court under the Australian Constitution) so that the subject of the action could be considered in conjunction with the matters that were likely to be raised (and duly were) in that family law dispute.


Pursuant to s 5 of the Jurisdiction of Courts (Cross-vesting) Act 1987, the Supreme Court of Queensland must transfer a relevant proceeding to a State Family Court (or Federal Court vested with such jurisdiction) if it appears that:

(i) the relevant proceeding arises out of, or is related to, another proceeding pending in the Federal Court or the Family Court and it is more appropriate that the relevant proceeding be determined by the Federal Court or the Family Court; (ii) having regard to: (A) whether, in the opinion of the first court, apart from this Act and any law of a State relating to cross-vesting of jurisdiction and apart from any accrued jurisdiction of the Federal Court or the Family Court, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in the Federal Court or the Family Court; (B) the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the Commonwealth and not within the jurisdiction of the first court apart from this Act and any law of a State relating to cross-vesting of jurisdiction; and (C) in the interests of justice it is more appropriate that the relevant proceeding be determined by the Federal Court or the Family Court, as the case may be; or (iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Federal Court or the Family Court...

In the present case which we were dealing with, it was accepted that the criteria must be established in s 5(i), (ii) and (iii) of the Jurisdiction of Courts (Cross-vesting) Act 1987. If satisfied, it would result in the requirement that the Supreme Court of Queensland must Order the transfer of the proceeding to a Federal Court (in this case the Federal Circuit Court of Australia) or a Family Court.[1]


It was further submitted by us that irrespective of the requirement above, there is board discretion in the criterion to decide if the transfer should take place, which is:[2]


(a) set out in (i) of the provision, which requires this Court to determine if the matter is a “related proceeding” and whether “it is appropriate” to effect the transfer;


(b) set out in (ii) of the provision, which requires this Court to look at whether the proceeding was incapable of being brought into this Court including matters arising under the Commonwealth and therefore not within the jurisdiction of this Court and the subsequent “interest of justice”;


(c) set out in (iii) of the provisions, which requires this Court to determine the ambit of “in the interest of justice” in a particular case.


If you are not already aware or your curiosity is getting the better of you, the principles espoused by the Jurisdiction of Courts (Cross-vesting) Act 1987 require the party seeking a transfer to evidence that the proceeding is “related to” a present course of action. This principle has been discussed in several cases. In Re Hamilton-Irvine and the Companies Act 1985,[3] Beaumont J in the Supreme Court of Norfolk Island (at page 17) accepted that the primary meaning of "related" was "associated; connected". He considered that, in the case before him, there needed to be a nexus or association between the two sets of proceedings in order to show that they were "related".


In Hoddell v Hoddell Pty Ltd,[4] Murray J referred to the meaning of the expressions adopted by Beaumont J in Re Hamilton-Irvine and again accepted them as apposite. On this occasion, his Honour, however, took the contrary view on the material facts before him concerning the relatedness of proceedings. In Hoddell, the plaintiff sought a declaration that she had an equitable interest in the former matrimonial home which was built on land registered in the name of the first defendant company. Murray J considered that the two sets of proceedings were subsequently related in the relevant sense. Perhaps something similar to the case we had before us.


Similarly, in Fox Enterprises Pty Ltd v Fox,[5] a Family Court proceeding was brought by a wife in which she claimed to be joint owner of residential property. In the Supreme Court, a company claimed an interest by way of constructive trust as a result of its contributions, which it alleged it had made for improvements to that property. The wife was a shareholder in the said company. The other shareholders and directors were her husband and his then de facto spouse. Williams J, at 449, found:

The issues to be determined primarily relate to the matrimonial affairs of the parties and involve the question as to what extent the interests of the former husband and wife in the subject property are diminished because of an interest held by a company in which at all material times they were the sole directors and shareholders.

In Valceski v Valceski,[6] Brereton J considered the application the Jurisdiction of Court Cross-vesting Act 1987 to matters involving dispute about matrimonial property. Brereton’s J considerations, which were also summarised in Jackson v Mylan[7] and Manson v Della -Bosca & Anor[8] included (footnotes removed):


(a)  when a Federal law confers jurisdiction on a court in respect of a matter, the jurisdiction extends to authorise the determination of the whole matter;


(b)  a matter is a "justiciable controversy" which may involve the determination of both Federal and State law, once federal jurisdiction is attracted, a federal court is armed with full authority essential for the complete adjudication of the "matter" and not merely the federal aspect of it. This is the origin of "accrued jurisdiction";


(c)  the authority to determine non-federal aspects of a justiciable controversy requires that "non-federal aspects" of the controversy form an integral part of it; the last requirement will be satisfied where the different claims, federal and non-federal arise out of "common transactions and facts" or a "common substratum of facts" notwithstanding that the facts upon which the claims depend "do not wholly coincide";


(d) an important consideration is whether different claims are so related that the determination of one is essential to the determination of the other;