SH:z vom 07.11.2014 - TSV Nordschwansen-Karby

FAMILY COURT OF AUSTRALIA
JESS AND ORS & JESS AND ORS
[2014] FamCAFC 227
FAMILY LAW – APPEAL – INJUNCTIONS – Where the first respondent
commenced property settlement proceedings in the Family Court of Australia in
which she sought to set aside a Declaration of Trust and a Deed of Settlement by
which earlier proceedings in the Family Court and the Supreme Court of Victoria had
been compromised – Where an anti-anti-suit injunction had been granted restraining
the appellants from commencing proceedings in the Supreme Court of Victoria to
restrain the first respondent from continuing the proceedings in the Family Court –
Whether the injunction finally determined the forum for the dispute – The injunction
does not prevent a transfer of the proceedings under the cross-vesting regime – The
injunction does no more than temporarily restrain proceedings being commenced to
prevent the continuation of the proceedings in the Family Court, and was designed
only to allow the Family Court to determine whether the proceedings should be
summarily dismissed, stayed or transferred to the Supreme Court.
FAMILY LAW – APPEAL – LEAVE TO APPEAL – The Full Court of the Family
Court has traditionally required an applicant for leave to appeal to demonstrate an
error of principle and/or a substantial injustice – Whether the Full Court should
instead adopt the test enunciated in Bienstein v Bienstein (2003) 195 ALR 225 and
applied in the Full Court of the Federal Court – Matter discussed but left open for
later consideration – Leave to appeal should be refused on either test.
Judiciary Act 1903 (Cth), s 34(2)
Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth), s 4(1), s 5(4)
Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170
Anisminic Ltd v Foreign Compensation Commission (1968) 2 QB 862
Bienstein v Bienstein (2003) 195 ALR 225
Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397
Fitzpatrick & Fitzpatrick [2005] FamCA 497
Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564
Kirk v Industrial Court (NSW) (2010) 239 CLR 531
Re Wakim; Ex parte McNally (1999) 198 CLR 511
Rutherford and Rutherford (1991) FLC 92-255
Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238
Samsung Electronics Co Limited v Apple Inc [2013] FCAFC 138
[2014] FamCAFC 227
Coversheet and Orders Page 1
1ST TO 10TH APPELLANTS:
Mr Jess Jnr and others
1ST RESPONDENT:
Ms Jess
2ND RESPONDENT:
Mr Jess
3RD TO 20TH RESPONDENTS:
H Company and others
FILE NUMBER:
MLF
3444
of
2006
APPEAL NUMBER:
SOA
74
of
2013
DATE DELIVERED:
27 November 2014
PLACE DELIVERED:
Perth
PLACE HEARD:
Melbourne
JUDGMENT OF:
Bryant CJ, Thackray &
Ainslie-Wallace JJ
HEARING DATE:
30 June 2014 – last written
submission 18 July 2014
LOWER COURT JURISDICTION:
Family Court of Australia
LOWER COURT JUDGMENT DATE:
5 November 2013
LOWER COURT MNC:
[2013] FamCA 863
REPRESENTATION
COUNSEL FOR THE APPELLANTS:
Mr Waller QC &
Mr Mereine
SOLICITOR FOR THE APPELLANTS:
HWL Ebsworth Lawyers
COUNSEL FOR THE 1ST RESPONDENT:
Mr Glick QC &
Ms Vohra
SOLICITOR FOR THE 1ST RESPONDENT:
Kenna Teasdale Lawyers
[2014] FamCAFC 227
Coversheet and Orders Page 2
COUNSEL FOR THE 2ND RESPONDENT:
Mr McCormick
SOLICITOR FOR THE 2ND RESPONDENT:
Goldsmiths Lawyers
COUNSEL FOR THE 3RD TO 20TH
RESPONDENTS:
Unrepresented
SOLICITOR FOR THE 3RD TO 20TH
RESPONDENTS:
Unrepresented
ORDERS
(1)
The application for leave to appeal contained in the Notice of Appeal filed on
18 November 2013 and amended on 11 July 2014 be dismissed.
(2)
The application in an appeal to adduce further evidence filed on 27 June 2014
be dismissed.
(3)
Each party be at liberty, within 21 days of the date of these orders, to make an
application for costs incurred in relation to the application for leave to appeal,
by filing written submissions in support of the application and serving them on
the party or parties against whom costs are sought.
(4)
The party or parties against whom an order for costs is sought have 21 days
from service in which to make written submissions in answer thereto, by filing
such submissions and serving them on the other party.
(5)
Within seven days of service of such responding submissions, the party or
parties seeking costs be at liberty to reply by filing written submissions and
serving them on the other party.
(6)
Each party endorse on the cover sheet of each submission concerning costs the
date on which a copy of the submission was served on the other party.
IT IS NOTED that publication of this judgment by this Court under the pseudonym
Jess and Ors & Jess and Ors has been approved by the Chief Justice pursuant to
s 121(9)(g) of the Family Law Act 1975 (Cth).
[2014] FamCAFC 227
Coversheet and Orders Page 3
THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE
Appeal Number: SOA 74 of 2013
File Number: MLF 3444 of 2006
Mr Jess Jr and others
1st to 10th Appellants
And
Ms Jess
1st Respondent
And
Mr Jess
2nd Respondent
And
H Company and others
3rd to 20th Respondents
REASONS FOR JUDGMENT
Introduction
1.
This is an application for leave to appeal and, if leave is granted, an appeal
against an injunction granted by Berman J on 5 November 2013.
2.
Although the meaning of the injunction is controversial, we have concluded
that it did no more than temporarily restrain action being taken in another court
to prevent the continuation of proceedings in the Family Court, and was
designed only to allow the Family Court the opportunity to determine any
application for the proceedings to be summarily dismissed, stayed or
transferred to the Supreme Court of Victoria.
The parties to the appeal and the shift in their alliances
3.
The injunction was directed against the first appellant, Mr Jess Jnr, and 26
other individuals and corporations associated with him. Mr Jess Jnr and nine
[2014] FamCAFC 227
Reasons Page 1
others bound by the injunction join in this appeal. We will call them “the
appellants” (save when it is necessary to refer to Mr Jess Jnr individually).
4.
Ms Jess, the first respondent in this appeal, was previously married to Mr Jess,
the second respondent. Although they are divorced, it will be convenient to
refer to them as “the husband” and “the wife” respectively.
5.
The husband is the father of Mr Jess Jnr. Many years ago, in proceedings in the
Family Court and the Supreme Court of Victoria, the husband and Mr Jess Jnr
contended that valuable assets owned by the husband were held on trust for Mr
Jess Jnr pursuant to a Declaration of Trust. The wife asserted that the
Declaration of Trust was a sham. The controversy was resolved in 2009 by a
Deed of Settlement, which acknowledged Mr Jess Jnr’s ownership of the
assets.
6.
In fresh proceedings commenced by the wife in 2013, the Family Court was
advised that the husband now concedes that the Declaration of Trust was a
sham. He joins with the wife in opposing the appeal; the sole stated purpose of
which is to permit the appellants to apply in the Supreme Court of Victoria for
an injunction to prevent the wife prosecuting that part of her application in the
Family Court that seeks to impugn the Declaration of Trust.
The earlier proceedings
7.
The wife’s original application pursuant to the Family Law Act 1975 (Cth)
(“the Act”) was commenced in the Family Court in December 2006.
8.
In July 2007, Mr Jess Jnr commenced proceedings in the Supreme Court
seeking relief against the husband and the wife in respect of the Declaration of
Trust said to have been made in his favour by the husband in 2002. The wife
contested those proceedings and applied in the Family Court to join Mr Jess Jr
(and others) in the proceedings there.
9.
In October 2007, the wife sought an order in the Family Court that Mr Jess Jnr
do everything necessary to transfer the Supreme Court proceedings to the
Family Court. In January 2008, Brown J dismissed that application and also
dismissed the application seeking to join Mr Jess Jnr in the Family Court
proceedings.
10.
Although not referred to in the course of argument before us, Brown J observed
in her reasons that it was open to the wife to apply in the Supreme Court to
have the proceedings transferred to the Family Court. In July 2008, the wife
duly applied for an order that the proceedings be transferred to the Family
Court pursuant to the Jurisdiction of Courts (Cross Vesting) Act 1987 (Cth)
(“the cross-vesting legislation”). That application was dismissed.
11.
The Supreme Court proceedings were then listed for trial in September 2009,
but the matter settled on the eve of the trial. The settlement encompassed the
proceedings in the Supreme Court and those in the Family Court. The Deed of
[2014] FamCAFC 227
Reasons Page 2
Settlement contained a covenant that the wife would make no further claim
against Mr Jess Jnr (and his associates) based upon any fact or circumstance
existing as at the date of the settlement. Consent orders were made in the
Family Court dividing the property of the husband and the wife, and a Binding
Financial Agreement was signed dealing with spousal maintenance.
The present proceedings
12.
On 3 September 2013, the wife filed a new application in the Family Court,
naming Mr Jess Jnr as second respondent and others associated with him as the
third to 29th respondents. The orders sought by the wife were recorded by the
primary judge in his reasons as follows:
(1)
(2)
That pursuant to Section 106B of the Act:
(a)
The Deed of Declaration of Trust purportedly made on 28
February 2002 be set aside and/declared [sic] a sham;
(b)
The Deed of Settlement executed by the Husband, the
Wife and the Second to Twenty-Eighth Respondents on 20
September 2009 be set aside.
That pursuant to Section 90K (1) of the Act (Family Law Act 1975)
the Binding Financial Agreement between the Husband and the
Wife dated 20 September 2009 be set aside by reason of:
(a)
Fraud pursuant to Section 90K (1) (b);
(b)
Being void, voidable or unenforceable pursuant to Section
90K (1) (b); or
(c)
The Husband’s unconscionable conduct pursuant to
Section 90K (1) (e).
(3)
That pursuant to Section 79A (1) (a) of the Act the orders made by
this Honourable Court on 24 September 2009 be set aside and by
reason of the miscarriage of justice constituted by fraud and the
giving of false evidence by the Husband.
(4)
That this Honourable Court make orders for property adjustment as
between the Husband and the Wife on the basis of the Husband’s
property interests consequential to paragraphs 1, 2 and 3 above.
(5)
That the First, Second, Fourth, Thirteenth and Twenty-Ninth
Respondents pay the Applicant the costs of and incidental to this
proceeding on an indemnity basis.
(6)
Such further and other orders as this Honourable Court deems
appropriate.
[2014] FamCAFC 227
Reasons Page 3
13.
The wife’s application was mentioned before Cronin J on 10 September 2013.
At that hearing, the appellants’ advisors informed the wife’s advisors that their
clients intended to institute proceedings in the Supreme Court to restrain the
wife from continuing the Family Court proceedings. The wife immediately
made an oral application seeking to restrain the appellants from this course of
action, but Cronin J required a formal application to be filed.
14.
On 10 September 2013, the application was filed seeking orders as follows:
15.
1.
That pending the Hearing and determination by this Honourable
Court of the challenge to its jurisdiction, the 2nd, 4th – 29th
Respondents be and are hereby restrained from commencing or
pursuing proceedings in any other Court to restrain the wife
continuing with this proceeding.
2.
That the 2nd, 4th – 29th Respondents pay the wife’s costs of and
incidental to this Application …
The application was heard by Berman J in September 2013. After argument
spread over three (part) days, judgment was reserved.
The orders and their proper interpretation
16.
The orders the subject of this appeal were made on 5 November 2013. As their
interpretation is controversial, it is important we set them out in full:
1.
That pending the hearing and determination by this Honourable
Court of the challenge to its jurisdiction, the Second, Fourth and
Twenty-Ninth Respondents be and are hereby restrained from
commencing or pursuing proceedings in any other court to restrain
the Wife continuing with this proceeding.
2.
The extent to which the Second, Fourth to Twenty-Ninth
Respondents pay the Wife’s costs of and incidental to this
application is reserved.
17.
It will be seen that the orders closely follow those proposed by the wife.
Although no mention was made of it during argument, it can be accepted that
the word “and” in the second line of Order 1 is an error. The intention clearly
was to use the word “to” (in the same way as in Order 2), albeit there would
still remain a minor grammatical infelicity. Nothing turns on this error.
18.
The controversy about the meaning of Order 1 emerged in oral argument at the
hearing before us, during which senior counsel for the appellants contended
(appeal transcript, 30 June 2014, p 13):
… in determining the effect of the order made by Berman J … this court
needs to look at the substance of that order rather than its form, and as a
matter of substance, we say the anti anti-suit injunction made by Berman J
was effectively a final determination by the Family Court as to where the
dispute in relation to the deed of declaration of trust is to be litigated.
[2014] FamCAFC 227
Reasons Page 4
19.
It became apparent that this interpretation of the order effectively constituted a
further complaint in its own right, which had the potential to have an impact on
the question of whether leave to appeal should be granted and also on the merit
of the appeal itself. Accordingly, at the conclusion of argument, the appellants
were given permission to file an amended Notice of Appeal.
20.
The amended Notice was duly filed on 11 July 2014, containing the following
additional ground (original emphasis):
9.
Ninth Ground – No jurisdiction argument “pending”
9.1
The primary judge erred in law and fact by restraining the
Appellants “pending the hearing of the determination by this
Honourable Court of the challenge to its jurisdiction” as such an
order was inconsistent with:
(a)
the manner in which the application was brought by, and argued on
behalf of, the wife;
(b)
the fact that the Appellants at no stage challenged the Family
Court’s jurisdiction or asserted that the Family Court lacked
jurisdiction;
(c)
the finding by the primary judge in paragraph 108 of the Reasons
that “[t]here is no suggestion on behalf of [the appellants] that the
wife is not entitled to bring proceedings in the Family Court in
respect of the relief that she seeks”; and
(d)
its practical effect of finally determining where the dispute in
relation to the Deed of Declaration of Trust is to be litigated.
9.2
The order restraining the Appellants ought not to have been
prefaced by the words “That pending the hearing of the
determination by this Honourable Court of the challenge to its
jurisdiction” as no such challenge was pending for determination.
21.
It is conceded that the appellants at no time contended that the Family Court
lacked jurisdiction to determine the wife’s claim. Certainly, the primary judge
was under no misapprehension on this point, as can be seen at [108] of his
reasons, which is recited in Ground 9.1(c). Since there was no challenge to the
Court’s authority to decide the dispute, the question arises as to what was
meant by the word “jurisdiction” in the prefatory words to Order 1, which are
challenged by Ground 9.2.
22.
As has been observed by Mr Mark Leeming (now Justice Leeming of the New
South Wales Court of Appeal) in Authority To Decide – The Law of Jurisdiction
in Australia, The Federation Press, Sydney, 2012, p 1: the word “jurisdiction”,
when used in the strict sense, means “authority to decide”, but is also used in
other senses, “some relating to geography, some to persons and procedures,
[2014] FamCAFC 227
Reasons Page 5
others to constitutional and judicial structures and powers”. As Lord Diplock
noted in Anisminic Ltd v Foreign Compensation Commission (1968) 2 QB 862
at 889, because the word “is used in a variety of senses [it] takes its colour
from its context”. This view was cited with approval by the majority of the
High Court in Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 570 [63].
23.
We therefore accept the submission of senior counsel for the wife that the order
sought to be impugned in this appeal must be understood in the context of the
debate between the parties and should be interpreted in the way in which it
was, or should have been, understood by the parties. This, in turn, requires
consideration of how the argument unfolded before Berman J.
24.
At a very early point in the argument, senior counsel for the wife made the
following remarks, which we consider “set the scene” for the hearing before
Berman J (transcript, 12 September 2013, p 6):
MR GLICK: … Now, when this matter came before Cronin J on Tuesday
of this week, for reasons which we need not detain the court about, the
applicant wife understood that there would be a challenge to the
jurisdiction of this honourable court to hear and determine the whole of
the controversy, that is to say, those parts of the controversy, it being one
controversy, a single controversy which affected the relevant respondents.
We understood that and so we’ve prepared minutes of order which in
effect, your Honour, contain these two integers, first, an order by the court
that the relevant respondents not interfere with part of our critical
evidence to prove the fraud, that is, the computer systems.
I will come to the evidence in a moment, your Honour, and secondly,
procedural directions for the setting down of any challenge to jurisdiction
or any application pursuant to the Uniform Australian Cross-Vesting
legislation which would seek a – whether on a Voth principle, that is,
forum non conveniens or any other principle, a transfer of a part of the
controversy to the Supreme Court of Victoria. My friend Mr Brown said
he was instructed not to agree to those procedural steps because instead he
told Cronin J he proposed to bring in the Supreme Court of Victoria an
anti-suit injunction aimed at the wife directing the wife by order, not of
this court, but of a foreign court – the Supreme Court – not to take any
further steps in this litigation.
That announcement by my learned friend caused me to tell his Honour, ore
tenus, so to speak, that the appropriate way of managing it now accepted
under Australian principles, particularly in the federal system, is for us to
bring what is sometimes referred to as an anti-anti-suit injunction, and I
will come to the authorities on it, your Honour, because we would submit
that the courts in Australia have said that at the heart of the federal system,
of which the federal, state and family courts are a part, is the idea of
comity, and if there be a challenge to the propriety of a proceeding, in a
court in the federation of Australia, the propriety ought to be followed,
[2014] FamCAFC 227
Reasons Page 6
applications should be made challenging jurisdiction, or applications ought
to be made pursuant to the Cross-vesting Act for a transfer.
25.
A little later in his submissions, senior counsel for the wife said (transcript,
12 September 2013, p 12):
MR GLICK: … There is no assertion surprisingly, because we anticipated
it, that the Family Court does not have jurisdiction to hear and determine
the whole of the controversy. It is not put that your Honour does not have
jurisdiction.
26.
There was then an exchange during which Berman J advised that Cronin J had
set aside at least two days in the week commencing 7 October 2013 to deal
with any procedural or other issues the parties wished to have determined
relating to the litigation (transcript, 12 September 2013, pp 14-15).
27.
Immediately after this discussion, senior counsel for the wife said (transcript,
12 September 2013, p 15):
MR GLICK: … There’s – and your Honour will see – you will see that
there is no claim of a lack of jurisdiction yet brought, which is significant,
although they are entitled to bring it and the Family Court is used to such
applications, your Honour. Indeed, one knows after the Junghans [sic]
litigation that the Family Court should be the repository – I beg your
pardon, should be the court which determines the limits of its own
jurisdiction.
28.
Later, senior counsel said (transcript, 12 September 2013, p 23):
MR GLICK: … So Cronin J’s proposal to hear applications on 7 October,
we can use that time. If our friends wish to raise some jurisdiction,
transfer, strikeout, summary dismissal, that’s within – the controversy can
be raised and dealt with by the authority of this court where the litigation
is presently.
29.
During submissions at the resumed hearing on 18 September 2013, and without
demur from counsel, Berman J said (transcript, 18 September 2013, p 16):
HIS HONOUR: It may be a matter that I don’t need to worry about
because Cronin J on 7 October is likely to deal with the procedural and
jurisdictional and other matters …
30.
On the third day of the argument, senior counsel for the wife again alluded to
applications that might still be made by the appellants (transcript, 24 September
2013, p 20):
Now, every act, fact, matter, circumstance and thing raised by my friend
which diminishes the strength of my case can be argued here in the
ordinary and proper course. They can bring a summary dismissal
application. They can go in front of Cronin J and say “the case is weak
[2014] FamCAFC 227
Reasons Page 7
and you should dismiss it summarily”. They can go in front of Cronin J
and say “your Honour should transfer it”.
31.
When argument finally concluded, Berman J said he hoped he would be able to
deliver judgment before the hearing scheduled for 7 October 2013, although he
acknowledged “that’s becoming more and more uncertain” (transcript,
24 September 2013, p 24). When reserving his decision, his Honour obtained
an assurance from the appellants that proceedings would not be taken
elsewhere until he had delivered judgment.
32.
In light of this background, we have no hesitation in accepting the submission
of the wife that when Berman J granted the injunction “pending the hearing of
the determination by this Honourable Court of the challenge to its jurisdiction”,
he had in mind all of the possibilities in this gauntlet thrown down by senior
counsel for the wife (transcript, 24 September 2013, p 21):
If you say that this court should not hear it because of jurisdiction, bring
your application to say there’s no jurisdiction. If you say this court should
not hear it because it’s a not convenient forum and there should be a
transfer, bring your application. If you say this court should not hear it
because you want to stay it for other reasons, bring your application.
33.
It follows that we reject the submission, now encapsulated in Ground 9.1(d),
that Order 1 had the “practical effect of finally determining where the dispute
in relation to the Deed of Declaration of Trust is to be litigated”. The order
only temporarily prevented institution of any proceedings in another court
designed to prevent the wife continuing her proceedings in the Family Court.
34.
Contrary to their argument, nothing in Order 1 prevented the appellants from
commencing whatever proceedings they deemed fit in the Supreme Court, for
example, as senior counsel for the wife suggested, a declaration that the Deed
of Settlement is valid and binding. Since it is not for the wife to advise the
appellants about options, it was no answer for their senior counsel to respond
by saying (appeal transcript, 30 June 2014, p 75):
For us to rush off to – if our learned friend is saying that we can go to court
and commence a proceeding seeking now to claim declaratory relief about
the validity of a declaration of trust, we’re not aware that that had been
raised earlier. I think this is the first time that that suggestion has been
made.
35.
All litigation options were left open to the appellants, except (and then only
temporarily) endeavouring to enlist the aid of another court to prevent the wife
continuing with her claim in the Family Court, until such time as the Family
Court had itself determined whether it would hear the matter. In particular, all
of the options mentioned by senior counsel for the wife were available. It was
for the appellants to decide whether to avail themselves of those options. The
fact they have elected not to do so is not relevant to the merit of their appeal.
[2014] FamCAFC 227
Reasons Page 8
The cross-vesting misconception
36.
The centrepiece of the argument advanced by senior counsel for the appellants
was that Order 1 prevented the appellants from relying upon the cross-vesting
legislation in order to have the dispute heard in the Supreme Court of Victoria.
37.
With respect to learned counsel, this argument proceeds on an erroneous
interpretation of s 5(4) of the cross-vesting legislation, which provides (original
emphasis):
(4)
[2014] FamCAFC 227
Where:
(a)
a proceeding (in this subsection referred to as the relevant
proceeding) is pending in the Federal Court or the Family
Court (in this subsection referred to as the first court); and
(b)
it appears to the first court that:
(i)
the relevant proceeding arises out of, or is
related to, another proceeding pending in the
Supreme Court of a State or Territory and it is
more appropriate that the relevant proceeding be
determined by that Supreme Court;
(ii)
having regard to:
(A)
whether, in the opinion of the first
court, the relevant proceeding or a
substantial part of it would have been
incapable of being instituted in that
court, apart from this Act and any law
of the Australian Capital Territory or
the Northern Territory relating to cross
vesting of jurisdiction; and
(B)
whether, in the opinion of the first
court, the relevant proceeding or a
substantial part of it would have been
capable of being instituted in the
Supreme Court of a State or Territory,
apart from this Act and any law of a
State or Territory relating to cross
vesting of jurisdiction; and
(C)
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
Reasons Page 9
of a law of the State or Territory
referred to in sub-subparagraph (B)
and not within the jurisdiction of the
first court apart from this Act and any
law of the Australian Capital Territory
or the Northern Territory relating to
cross vesting of jurisdiction; and
(D)
the interests of justice;
it is more appropriate that the relevant
proceeding be determined by that Supreme
Court; or
(iii)
it is otherwise in the interests of justice that the
relevant proceeding be determined by the
Supreme Court of a State or Territory;
the first court shall transfer the relevant proceeding to that Supreme
Court.
38.
In summary, senior counsel for the appellants initially submitted that the
legislation only permitted the Family Court to transfer proceedings to the
Supreme Court if there were already proceedings on foot in the Supreme Court,
and that Order 1 prevented the institution of proceedings in the Supreme Court.
Both propositions are incorrect. The first because of s 5(4)(b)(iii) of the crossvesting legislation, and the second for reasons we have already given.
39.
When we enquired why the appellants could not seek an order in the Family
Court for transfer of the proceedings, senior counsel for the appellants
responded that “the more appropriate means to proceed is through the crossvesting legislation”, which he thought was not available, as appears from the
following passage (appeal transcript, 30 June 2014, pp 17-18):
MR WALLER: … Mr Glick may be speaking of what he anticipated could
have happened, to the extent that he talks about a challenge to the
jurisdiction, or an application under the cross-vesting legislation, we say
that simply is not available and is inconsistent with the application he was
running, which was to shut us out of going to the Supreme Court. So he
can’t say, “On the one hand, there will be a cross-vesting application, but
by the way, I’m going to stop you going to the Supreme Court, which
would give you the underlying basis to make such an application.”
That’s why we say, to all intents and purposes, the anti-suit injunction
granted by Berman J was final in determining the venue for the
determination of the declaration of trust issue. And unless and until it is set
aside, we are without the procedural remedies that we would otherwise
have available to us.
[2014] FamCAFC 227
Reasons Page 10
40.
Senior counsel for the appellants also submitted that “at no time during his oral
submissions [in the hearing below] did Mr Glick submit that the anti-suit
injunction that he was seeking was limited in time or purpose. In other words,
it was a final injunction designed to forever shut out [Mr Jess Jnr] from going
to the Supreme Court of Victoria”. With respect, that submission cannot be
sustained in light of the passages from the transcript extracted above.
41.
At another point in his argument, senior counsel for the appellants submitted
that it was open to the wife (but not the appellants) to seek to transfer the entire
proceedings to the Supreme Court, since “as a matter of principle, the Supreme
Court might also have jurisdiction under the cross-vesting Act to deal with any
jurisdiction that’s currently vested in the Family Court”. That the Supreme
Court could also deal with the entire dispute is undeniable (by virtue, inter alia,
of s 4(1) of the cross-vesting legislation), but it is not correct that only the wife
was permitted to seek an order for transfer to the Supreme Court.
42.
Although senior counsel for the wife explained the true meaning of s 5(4) of
the cross-vesting legislation in his oral submissions, senior counsel for the
appellants declined to withdraw his earlier submissions. He maintained that the
terms of Order 1 restricted the appellants’ access to remedies available under
the cross-vesting legislation. In further advancing this argument, senior
counsel for the appellants said (appeal transcript, 30 June 2014, p 75):
MR WALLER: … In relation to the transfer, the cross-vesting legislation,
your Honours, we say that my learned friend has focused squarely on (iii)
of the subsection 5(4).
By not allowing us to go the Supreme Court, he, on his submission, would
require us to fit within (iii) to not give us the opportunity to fit within (i) or
(ii). Therefore, the question of the more appropriate jurisdiction, or the
more appropriate court to deal with the matter would not be a matter that
would be considered necessarily under (iii). We’re not convinced that the
submission that my learned friend has made about (iii) is correct, that this
court can simply transfer cold, as it were, a proceeding and present it on the
doorstep of the prothonotary of the Supreme Court without any proceeding
being pending in that court
That was not something we understood from any of the written
submissions that we received, but if that were right, it would mean, in any
event, that we are denied by what has been done the possibility of
proceeding under (i) or (ii) of that subsection.
… we can only get a right to transfer out of the Act and we’re not
suggesting that the court wouldn’t have jurisdiction to deal with it, but
we’re saying that we are denied the possibility of seeking to have it
transferred under another subsection if we’re forced into subsection [(iii)].
In relation to the - - -
[2014] FamCAFC 227
Reasons Page 11
BRYANT CJ: Sorry. And the disadvantage of that would be what?
MR WALLER: Well, it might be a different test that’s applied; a harder
test than the more appropriate forum. In other words, otherwise in the
interests of justice suggests that nothing else applies, so is it otherwise in
the interests of justice. Well, if we don’t have the ability to raise there’s
something else, then we’re on a narrower footing to seek to have it
transferred.
43.
With respect to senior counsel, these submissions are also misconceived for at
least two reasons.
44.
First, if senior counsel was right in contending there would be some advantage
to the appellants to “fit within” s 5(4)(b)(i), then, as we have already observed,
there was nothing to prevent them from instituting proceedings in the Supreme
Court – provided they did not seek to restrain the wife from continuing with the
proceedings in the Family Court. Thus for example, the appellants could
pursue the relief they have already foreshadowed seeking in the Supreme
Court, namely an order that the wife indemnify them in relation to the claims
brought in the Family Court.
45.
Secondly, s 5(4)(b)(ii) presents a much higher hurdle for the appellants than
s 5(4)(b)(iii), since it requires consideration not only of the “interests of
justice”, which is the sole factor in s 5(4)(b)(iii), but three other factors, two of
which the appellants could not satisfy. The factors in ss 5(4)(b)(ii)(A) and (C)
cannot be satisfied because it is properly conceded that the Family Court has
jurisdiction to deal with the entire dispute – and this capacity to resolve the
controversy could not, in any way, be derived from the cross-vesting
legislation: Re Wakim; Ex parte McNally (1999) 198 CLR 511.
46.
For these reasons, we consider that the appellants’ remedies under the crossvesting legislation remain unaffected by the terms of Order 1, and thus the
foundation of their argument falls away. In our view, if it is contended that the
Family Court is not the appropriate forum, an application should be made
under the cross-vesting legislation, which according to its own Preamble is
designed to provide a mechanism by which proceedings “instituted in a court
that is not the appropriate court … will be transferred to the appropriate court”.
Leave to appeal – test to be applied
47.
It is common ground that the order impugned is “a prescribed decree” within
the meaning of s 94AA of the Act, and leave to appeal is therefore required.
48.
During oral argument, we raised the question of the proper test to be applied in
considering whether to grant leave to appeal. We did so because we recognise
that the test traditionally used in this Court differs from that applied, inter alia,
in the Full Court of the Federal Court of Australia.
[2014] FamCAFC 227
Reasons Page 12
49.
As the topic had not been addressed, we invited the parties to provide
supplementary written submissions. Very helpful submissions were received
from the appellants, the wife and the husband.
50.
The wife argued that in order to obtain leave to appeal, the appellants needed to
establish an error of principle and/or a substantial injustice. In so contending,
she relied on Rutherford and Rutherford (1991) FLC 92-255 and Adam P
Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170. We
accept that these authorities have traditionally been relied upon in this Court in
determining applications for leave to appeal.
51.
The appellants contended that the traditional test should no longer apply. They
argued that the question “should generally be whether, in all the circumstances
of the case, the decision is attended by sufficient doubt to warrant it being
reconsidered on appeal and whether substantial injustice would result if leave
were refused supposing the decision to be wrong”. The appellants nevertheless
accepted that the test “should not be applied as if it were some ‘hard and fast
rule’ and each case must be considered on its merits” (original emphasis).
52.
In support of their argument, the appellants relied upon Bienstein v Bienstein
(2003) 195 ALR 225 at 231 [29], where McHugh, Kirby and Callinan JJ said:
The principles that govern the grant of leave to appeal are well established.
An applicant for leave must establish that the decision in question is
attended with sufficient doubt to warrant the grant of leave. The applicant
must also show that substantial injustice will result from a refusal of leave
to appeal.
53.
We note that these remarks were made in relation to the operation of s 34(2) of
the Judiciary Act 1903 (Cth), which deals with appeals against an interlocutory
judgment of a justice exercising the original jurisdiction of the High Court, and
we accept, of course, that different considerations might apply to an application
for leave to appeal such a judgment. However, the appellants also relied on
Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238, where it was
said by the Full Court of the Federal Court (following decisions such as Décor
Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-400).
26
[2014] FamCAFC 227
In this Court, it is well established that the relevant test (or “litmus
test”) for whether leave to appeal from an interlocutory judgment
will be granted, comprises the following two integers:
(1)
Whether, in all the circumstances of the case, the decision
is attended by sufficient doubt to warrant its being
reconsidered by the Full Court; and
(2)
Whether substantial injustice would result if leave were
refused supposing the decision to be wrong.
Reasons Page 13
54.
The issue was revisited in Samsung Electronics Co Limited v Apple Inc [2013]
FCAFC 138, where the Full Court of the Federal Court said (original
emphasis):
18
The questions traditionally asked when considering whether leave to
appeal should be granted have been repeatedly phrased in terms of:
(a)
whether in all the circumstances the judgment of the
primary judge is attended by sufficient doubt to warrant it
being reconsidered by the Full Court; and
(b)
whether substantial injustice would result if leave were
refused supposing the decision to be wrong.
See: Decor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397
at 398-9 per Sheppard, Burchett and Heerey JJ. The discretion
conferred by s 24(1A), it was there said, was an “unfettered
discretion” conferred in “unqualified terms”.
19
The very width of the discretion and the prudence in not seeking to
confine the manner in which it is to be exercised is a necessary
corollary of the myriad of interlocutory decisions which may be
made – ranging from interlocutory decisions affecting the
substantive rights of parties (and effectively being final orders) to
matters of practice and procedure (including decisions to extend
time, the granting or refusal of adjournments and the filing of
evidence). The different character of interlocutory decisions which
may be made and the different factual and forensic circumstances in
play when such decisions are made nevertheless have occasioned a
different emphasis from one judgment to another upon one
particular factor or factors rather than others.
20
In the context of considering whether to grant or refuse leave to
appeal from interlocutory decisions as to matters of practice and
procedure, it has accordingly been long recognised that a “tight
rein” should be exercised: National Mutual Holdings Pty Ltd v
Sentry Corp (1988) 19 FCR 155 at 161. The Full Court there
reaffirmed the principles governing the circumstances in which
appellate courts would interfere in the exercise of the discretion of
primary judges in respect to interlocutory orders. In so doing, the
Full Court cited with approval the following observations of Gibbs
CJ, Aickin, Wilson and Brennan JJ in Adam P Brown Male
Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177:
Nor is there any serious dispute between the parties that
appellate courts exercise particular caution in reviewing
decisions pertaining to practice and procedure. Counsel for
Brown urged that specific cumulative bars operate to guide
appellate courts in the discharge of that task. Not only must
[2014] FamCAFC 227
Reasons Page 14
there be error of principle, but the decision appealed from
must work a substantial injustice to one of the parties. The
opposing view is that such criteria are to be expressed
disjunctively ... For ourselves, we believe it to be
unnecessary and indeed unwise to lay down rigid and
exhaustive criteria. The circumstances of different cases are
infinitely various. We would merely repeat, with approval,
the oft-cited statement of Sir Frederick Jordan in Re the Will
of F B Gilbert (dec) [(1946) 46 SR (NSW) 318 at 323]:
“... I am of the opinion that, ... there is a material
difference between an exercise of discretion on a
point of practice or procedure and an exercise of
discretion which determines substantive rights. In the
former class of case, if a tight rein were not kept upon
interference with the orders of Judges of first
instance, the result would be disastrous to the proper
administration of justice. The disposal of cases could
be delayed interminably, and costs heaped up
indefinitely, if a litigant with a long purse or a
litigious disposition could, at will, in effect transfer
all exercises of discretion in interlocutory
applications from a Judge in Chambers to a Court of
Appeal.”
And as Gummow J also observed in Bomanite Pty Ltd v Slatex Corp
Aust Pty Ltd (1991) 32 FCR 379 at 387:
It is not a matter of saying that the discretion miscarried
because the result strikes one as perhaps harsh or perhaps
one might have exercised the discretion differently. It is not
enough that the judges composing the appellate court
consider that, if they had been in the position of the primary
judge, they would have taken a different course.
It has further been recognised that greater scrutiny should be given
to those interlocutory decisions which go to the ability of a party to
advance its case for resolution: United States Tobacco Co v Minister
for Consumer Affairs (1988) 20 FCR 520 at 532.
21
[2014] FamCAFC 227
On occasions a Full Court will entertain an application for leave to
appeal together with the appeal itself, particularly where the hearing
of an application for leave and the appeal itself canvass much the
same factual and legal territory. On some occasions, following such
a course, leave may be either refused or leave may be granted and
the appeal either allowed or dismissed. Whatever course is followed
will largely depend upon the issues presented and the judgment of
the individual Judges constituting the Full Court. No constraint
should be placed upon the ability of a Full Court to proceed in such
Reasons Page 15
manner as it considers best serves the interests of justice. But no
encouragement should be given to a course whereby the statutory
requirement to first obtain leave can be subverted and relegated to
an unnecessary distraction from a consideration of the arguments
sought to be raised on appeal.
55.
The appellants correctly observe that the test applied in the Federal Court is
tempered by the proposition that “[i]f the practical effect of the relevant
interlocutory decision is to finally determine the rights of the parties, a prima
facie case exists for granting leave to appeal”: Samsung Electronics Co Ltd v
Apple Inc (2011) 217 FCR 238 at 250 [31], and see also Johnson Tiles Pty Ltd v
Esso Australia Pty Ltd (2000) 104 FCR 564 at 584 [43].
56.
The appellants also submitted that (original emphasis):
… recognising that there is no “hard and fast” rule, the principles generally
governing the grant of leave to appeal an interlocutory decision in this
Court should at least be the same as those applied in other Courts
exercising Federal jurisdiction, particularly in relation to proceedings that
concern commercial transactions.
57.
In response, the wife contended that the appellants had set out the principles
without fully considering the relevant policy considerations. It was submitted
that the two considerations, namely “error of principle” and “injustice” are not
mutually exclusive; that “treating the ‘disjunctive’ or ‘conjunctive’ analyses as
a binary divide is apt to confuse the overlapping nature of the two
considerations”; and that each consideration informs the other such that “a
disjunctive approach is theoretically and practically impossible”.
58.
We do not understand the appellants to argue there ought to be a “disjunctive”
analysis of the two considerations; save where the practical effect of the order
is such as to finally determine the rights of the parties (in which case they
submit that a conclusion that the decision is “attended by sufficient doubt”
would provide a prima facie case for granting leave to appeal). Apart from that
type of case, the test propounded by the appellants, by its own terms, is a
conjunctive test which makes it necessary to show that a “substantial injustice”
would result if leave to appeal were refused.
59.
We are attracted to the formulation of the test used in the Full Court of the
Federal Court for four primary reasons.
60.
First, it has not been suggested there is anything in the legislative framework to
suggest there is any logical basis for different approaches to be applied in the
two courts. In our view, it is desirable there should be a uniform approach in
federal intermediate appellate courts.
61.
Secondly, there are many cases where a judge may have expressed himself or
herself in a way which constitutes an “error of principle”, but nevertheless has
[2014] FamCAFC 227
Reasons Page 16
arrived at a result which itself is not attended by “sufficient doubt” as to
warrant a full blown appeal on an interlocutory issue.
62.
Thirdly, the two “integers” are applied conjunctively, whereas the question of
whether the test used in the Family Court is conjunctive or disjunctive has been
left open: Fitzpatrick & Fitzpatrick [2005] FamCA 497 at [28] and [29]. The
conjunctive approach raises the bar and, in our view, supports the policy
considerations which led French J (as he then was) to say that “[t]he time and
resources of the Court and the parties should not lightly be taken up with
appeals about decisions in connection with proceedings which do not finally
determine the rights of the parties”: Johnson Tiles Pty Ltd v Esso Australia Pty
Ltd at 583 [42]. This is an increasingly important consideration as the Court
attempts to deal with the large number of appeals coming before it.
63.
Fourthly, ensuring the first limb of the test is directed to the outcome at first
instance, rather than to the path by which that outcome was reached, will keep
the focus firmly fixed on the real issue – i.e. whether there is a realistic
prospect of the decision being reversed if the appeal proceeds.
64.
The present case provides a good example of how sometimes, in an application
for leave to appeal, the search for the forest can be sidetracked by a close
inspection of the trees. In saying this, we find merit in the proposition of senior
counsel for the wife that it is necessary “to bring this case back to Earth,
because the submissions have overworked what was essentially a very narrow
point before his Honour”.
65.
The arguments that were traversed in searching for an “error of principle” arose
out of more than seven pages of grounds of appeal, dealing, inter alia, with
whether the jurisdiction had been exercised “with caution”, whether relevant
principles had been considered separately and whether the primary judge was
right in considering the appellants were “apprehensive” about the outcome of
the litigation following the husband’s “purported confession”. It is difficult to
be critical of the approach adopted when the test is whether there has been an
“error of principle”; whereas there would have been more scope for criticism if
the question was whether the decision itself was attended by sufficient – or
indeed any – doubt.
66.
Although we have expressed our attraction to departing from the traditional
formulation of the test in applications for leave to appeal, we are reluctant to
adopt a new formulation for the purposes of disposing of the present matter.
Our reluctance stems not only from the way in which the issue has been
canvassed (i.e. by way of written submissions after the conclusion of the oral
argument), but also because we recognise we are being asked to depart from an
approach that has been applied by this Court over many years. We think that
final determination of the issue is best left for another day when it can be fully
considered by a court as an integral part of the matter before it.
[2014] FamCAFC 227
Reasons Page 17
Leave to appeal should be refused
67.
In their written submissions dealing with the test to be applied, the appellants
maintained that “the practical effect [of] the primary judge’s decision finally
determined the forum for the dispute … such that a prima facie case exists for
granting leave to appeal”. However, for reasons already given, we reject the
proposition that the decision finally determined the forum.
68.
As senior counsel for the wife stressed, the prescribed Notice of Appeal
required the appellants to “state briefly the facts relied on in support of the
application for leave to appeal and which establish an error of principle or a
substantial injustice”. The only facts relied upon were stated as follows:
1.
The primary judge erred in law and fact in granting the wife’s
application to restrain the Appellants from commencing or pursuing
proceedings in any other court to restrain the wife continuing the
proceedings in the Family Court.
2
The decision causes the Appellants substantial injustice as they are
prevented from validly commencing a proceeding in the Supreme
Court of Victoria to enforce a compromise of a claim that was
originally before the Supreme Court of Victoria in the period from
July 2007 to September 2009.
69.
The first “fact” relied upon does nothing more than state the effect of Order 1.
The second “fact” does not accurately describe the effect of Order 1, as there is
nothing to prevent the appellants from commencing proceedings in the
Supreme Court of Victoria, nor is there anything to prevent them from asking
the Family Court to enforce the terms of the earlier compromise.
70.
At all times, it has been available to the appellants to seek to have the Family
Court proceedings stayed, summarily dismissed or transferred to the Supreme
Court. It has also been open to them to commence proceedings in the Supreme
Court (provided Order 1 is not breached), and in particular to seek the only
substantive relief they have foreshadowed, namely an order that the wife
indemnify them in relation to the claims she has brought in the Family Court.
What is not open to the appellants is to seek to rely upon hardship occasioned
by their election to appeal, rather than to follow other remedies available.
71.
Having concluded that the appellants have not demonstrated any injustice
arising from the order impugned (and that the practical effect of the order is not
such as to finally determine their rights), we would not be prepared to grant
leave, even if we were persuaded the primary judge erred in some aspects of
his reasoning. In order to determine whether there was such error, we would
need to consider in detail the extensive grounds of appeal – an exercise which
would be entirely disproportionate and defeat the purpose of requiring leave to
appeal. We can say, however, that we were not persuaded that the decision
[2014] FamCAFC 227
Reasons Page 18
itself was attended by doubt, since it seems to us to have been an entirely
appropriate exercise of a court’s power to protect the integrity of its processes.
72.
The application for leave to appeal will therefore be dismissed.
Application to adduce further evidence
73.
Given the decision we have reached, it is unnecessary to consider the husband’s
application to adduce further evidence. That application will also be dismissed.
Costs
74.
Although we commenced taking submissions on costs in accordance with our
usual practice, we were then advised there had been “without prejudice”
correspondence passing between the parties which would be relevant to the
question of costs. In those circumstances, we did not complete hearing
argument and will lay down a timetable for the filing of written submissions.
I certify that the preceding seventy-four (74) paragraphs are a true copy of the
reasons for judgment of the Honourable Full Court delivered on
27 November 2014.
Associate:
Date:
27 November 2014
[2014] FamCAFC 227
Reasons Page 19

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