FEDERAL COURT OF AUSTRALIA

Beaman v Bond, in the matter of an authority under section 188 of the Bankruptcy Act 1966 (Cth) signed by Craig David Bond [2013] FCA 534

In the matter of an authority under section 188 of the Bankruptcy Act 1966 (Cth) signed by Craig David Bond

THE COURT ORDERS THAT:

1.    This proceeding, including the first respondent’s interlocutory application for summary dismissal, be cross-vested to the Family Court of Western Australia.

2.    Costs of this proceeding be reserved to that Court.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

In the matter of an authority under section 188 of the Bankruptcy Act 1966 (Cth) signed by Craig David Bond

REASONS FOR JUDGMENT

1    Ms Dianne Beaman and Mr Craig Bond have been engaged in litigation in the Family Court of Western Australia (Family Court) since March 2010 following breakdown of their de facto relationship. Since then, Ms Beaman has been actively pursuing various causes of action and forms of financial relief in that Court despite having the benefit of a financial agreement which each of them signed in 2006. That agreement is challenged due to inadequate disclosure of Mr Bond’s assets. That inadequacy is now accepted by Mr Bond.

2    Between them they have already spent hundreds of thousands of dollars in legal fees over issues concerning, amongst other things, Mr Bond’s correct asset position. There have been numerous applications, orders, hearings and rulings. A recent judgment indicates that the rate of progress has been retarded due to the Family Court not being confident about Mr Bond’s true asset position which was described as being ‘opaque’. In the same judgment Crisford J observed (at [34] and [46]):

34    I accept the submissions of Ms Beaman’s senior counsel, Mr Dowding [SC], that the number and type of entities Mr Bond is associated with, especially those operating off-shore, are far from consistent with what he says is his stated asset position. The affidavit material provided by Mr Bond is often vague in the description of his assets and the operation of them. There is limited clear information about how assets have been disposed of and whether any funds were realised from the disposition.

…

46    Given the apparent lack of disclosure in the BFA, Ms Beaman holds a healthy scepticism about what she has presently been provided. The Court accepts that it does not give a complete picture of Mr Bond’s financial position. It does not yet enable a court to identify the parties’ assets and liabilities.

3    Last month Mr Bond sought to enter into a Personal Insolvency Agreement (PIA) under Pt X of the Bankruptcy Act 1966 (Cth) (BA). The second respondents (the trustees) were appointed trustees of his affairs for that purpose following Mr Bond’s execution on 11 April of an authority under s 188 BA. On 15 April the trustees accepted their appointment and executed the controlling trustee authority.

4    Since an urgent preliminary hearing of this matter last Monday, a meeting of creditors held the following day approved the arrangement that Mr Bond proposed. By far the largest creditor is an entity controlled by his brother. In the Family Court, Ms Beaman has already challenged the validity of that particular liability. That is one of the matters to be assessed at trial in that Court.

5    The assets and liabilities listed for the trustees and Mr Bond’s creditors do not make provision for property entitlements that Ms Beaman may now or potentially have under family law legislation, which entitlements she has been attempting to pursue in the Family Court for over three years. Ms Beaman therefore wishes, in substance, to set aside the PIA in whole or in part. In effect, she contends it is a sham. She applies for the property the subject of the PIA to be released from the trustees’ control. Of particular focus is a valuable residential property in London.

6    Ms Beaman’s challenge is under s 208 BA which provides:

208    Termination of control of debtor’s property by the Court

The Court may make an order releasing the debtor’s property from control under this Division if:

(a)    an interested person applies to the Court for such an order; and

(b)    the Court is satisfied that special circumstances justify it making the order.

7    Undertakings were given to this Court last Monday by Mr Bond and the trustees not to execute the PIA until further order of this or the Family Court.

8    In order to challenge the PIA Ms Beaman has been required to invoke the jurisdiction of this Court because it has, together with the Federal Circuit Court of Australia (formerly the Federal Magistrates Court of Australia) (the Federal Circuit Court), exclusive bankruptcy jurisdiction under s 27 BA.

9    Ms Beaman seeks to have this application promptly cross-vested to the Family Court where the entire asset and liability position of both parties is already under detailed analysis.

10    There are presently two applications before me. One is Ms Beaman’s opposed application to cross-vest these proceedings to the Family Court. The other is Mr Bond’s opposed application to summarily dismiss her s 208 proceeding.

CROSS-VESTING APPLICATION

11    Section 35B BA provides a specific mechanism for the transfer of bankruptcy proceedings to the Family Court. The parties are agreed that there is no jurisdiction in that Court to accept a transfer and resolve issues which arise in a proceeding which is a ‘de facto financial clause’ as that expression is defined under the Family Court Act 1975 (Cth) (the Family Court Act) due to the exception set out in s 35B(1A) BA. It is unnecessary to consider that question in light of my intended disposition of the application.

12    Section  5(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) (the Cross-vesting Act) and s 3(2) of the Cross-vesting Act respectively provide:

5    Transfer of proceedings

…

(4)    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 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.

…

3    Interpretation and application

…

(2)    A reference in this Act, other than a reference in subsection 4(1), 5(3) or 7(4), to the Supreme Court of a State includes, if there is a State Family Court of that State, a reference to that State Family Court.

…

(emphasis added to key elements)

13    The respondents, in opposing cross-vesting, make the point that the Family Court does not have the necessary bankruptcy jurisdiction for the purpose of examining the issues raised in this particular application.

14    The respondents contend that because of the exclusive jurisdiction in this and the Federal Circuit Court under s 27 BA, jurisdiction in bankruptcy cannot be exercised by State courts other than by virtue of a s 35A BA transfer. They rely upon Meriton Apartments Pty Ltd v Industrial Court of New South Wales (2008) 171 FCR 380 (at [4], [7], [156]-[157], [171]-[172] and [196]). However, Meriton was not concerned with cross-vesting but whether the Industrial Court of New South Wales had jurisdiction in bankruptcy. It did not, due to the exclusivity under s 27. It was unsuccessfully argued that s 39(2) of the Judiciary Act 1903 (Cth) (Judiciary Act) which vests State courts with federal jurisdiction would overcome the problem. This was rejected as s 39(2) of the Judiciary Act, a general provision, could not ‘outflank’ the specific provision in s 27. No reliance is placed on s 39(2) of the Judiciary Act in this case and nor would it be appropriate.

15    The trustees submit that:

[T]he exclusive jurisdiction in bankruptcy and special provisions as to transfer – which evince a Parliamentary intention that only certain proceedings in bankruptcy can be transferred to the … Family Court – cannot be eroded by a sidewind. But that is what [Ms Beaman] seeks.

16    If this submission is directed to a contention that in exercising a discretion under the Cross-Vesting Act, the scheme under the BA would be taken into account, then I would accept that argument. But nothing in the provisions of the BA purported to repeal any part of the Cross-Vesting Act. The Cross-Vesting Act provides its own specific and reasonably prescriptive list of matters to be taken into account before matters are cross-vested. These considerations clearly go beyond those under the BA transfer provisions where the discretion is at large provided of course, exercised judicially.

17    The two can sit side by side and this intent is reflected in the passage contained in the Explanatory Memorandum at [29.1] to the Bankruptcy Legislation Amendment Bill 1996 introducing s 27 BA where it was said.

The Supreme Courts will be able to deal with bankruptcy matters under the Jurisdiction of Courts (Cross Vesting) Act 1987, but in general, as at present, bankruptcy proceedings will only be capable of being initiated in the Federal Court. A similar memorandum was provided to the House of Representatives.

(emphasis added)

18    If Parliament’s intention had been to preclude cross-vesting of Bankruptcy matters (as distinct from transferring them) that intention would have been directly at odds with the clear language in the Explanatory Memorandum. No intent to that effect has been identified in any other Explanatory Memorandum such as that accompanying the introduction of the transfer scheme.

19    Moreover and significantly it would have required or at least be expected to find clear expression in s 4(4) of the Cross-Vesting Act. It is not to be found amongst the description of matters which are excluded in that sub-section (see [22] below).

20    As the express terms of the Preamble to the Cross-vesting Act recognise, the very purpose of that legislation is to ensure that matters that would, apart from that Act, be within the jurisdiction of the transferring court may be dealt with in the court cross-vested with the jurisdiction.

21    The purpose of s 4(3) of the Cross-vesting Act is to recognise that proceedings should be conducted in the most appropriate court and if necessary to clothe that court with sufficient jurisdiction in order to complete those proceedings. Section 4(3) of the Cross-Vesting Act provides as follows:

4    Additional jurisdiction of certain courts

…

(3)    Where a proceeding is transferred to the Federal Court, the Family Court or a State Family Court of a State, that court has, by virtue of this subsection, jurisdiction with respect to so many of the matters for determination in the proceeding as that court would not have apart from this subsection.

…

(emphasis added)

22    In addition to the specific reference in s 4(3) of the Cross-vesting Act, the fact that s 4(4) expressly excludes the cross-vesting of certain federal matters, namely, Conciliation and Arbitration, Fair Work, Native Title and certain anti-competitive provisions of the Competition and Consumer Act 2010 (Cth), reinforces the conclusion that federal Parliament did not intend to preclude the power to cross-vest cases other than those there specified. Bankruptcy is not in that category.

23    The effect of s 3(2) of the Cross-vesting Act is to treat the Family Court, for the purposes of a transfer application, as the Supreme Court of Western Australia: see Mitchell v McGillivray (2001) 107 FCR 161 and McCormack v Newburg Enterprises Pty Ltd [2002] FCA 457.

24    Upon transfer from this Court pursuant to the Cross-vesting Act, the Family Court obtains jurisdiction to determine the whole of the proceeding that was in this Court: see McCormack (at [11]). It exercises this Court’s federal jurisdiction only in the matter transferred.

25    However, there is a particular consideration arising in the case of bankruptcy. The present proceeding is a ‘special federal matter’ by virtue of the definition of that expression in s 3(1) of the Cross-vesting Act which includes as a ‘special federal matter’, a matter arising under Commonwealth legislation over which a State court would not have jurisdiction. I will address the ‘special federal matter’ considerations in [37] and following, below.

Discretion to cross-vest

26    Remembering that a ‘State Supreme Court’ includes the Family Court for these purposes, there is no doubt that this proceeding is related to the proceeding in the Family Court for the purposes of s 5(4)(b)(i) of the Cross-vesting Act. The question is whether it is more appropriate for the Family Court to determine this application (for subpara (i)) or otherwise in the interests of justice (subpara (iii)) to transfer this proceeding to the Family Court. Those matters can be considered together.

27    It has been observed in the context of s 35A BA transfers that the fact that a dispute is related to property proceedings in a Family Court in which the nature and extent of assets (and interests therein) and liabilities, income and expenditure require determination, has been a strong factor favouring transfer from this Court: see the authorities collected by Collier J in Combis v Jensen (No 2) (2009) 181 FCR 178 (at [58]) and Ross v Jones; in the matter of McCloskey [2001] FCA 797 (at [8]-[9]) per Stone J.

28    The respondents contend that the following discretionary matters militate against the transfer:

    Unlike Re Sabri; Ex parte Sabri v Brien (1995) 60 FCR 131, the present application in this Court does not involve proceedings as to property as between a trustee in bankruptcy and the bankrupt’s former spouse which may conflict with matrimonial property proceedings in a family court. Rather, it is a distinct application which is solely concerned with whether the property of the debtor should be released from control so that Pt X no longer exists.

    There is no inconsistency, or the appearance of inconsistency, between orders made in the Family Court and any orders granting or refusing a s 208 BA application: see Re Boscolo; Ex parte Botany Council (1996) 62 FCR 397 (at 400).

    There is nothing to suggest the Family Court is better equipped than this Court to hear the s 208 BA application. To the contrary, the application is exclusively concerning with matters of bankruptcy law; it does not involve any aspects of family or de facto law. The specialised expertise of the Family Court is irrelevant to the proper determination of the s 208 BA application.

    The question of whether the Family Court has the necessary jurisdiction in bankruptcy may remain live in the proceedings if they are heard by the Family Court. That will unnecessarily prolong and complicate the proceedings. It is in the interests of the parties and creditors that the issue be avoided by having this Court – which undoubtedly has jurisdiction in bankruptcy – determine the application forthwith.

29    The respondents argue that the guiding consideration ought to be which forum will resolve the dispute as quickly, inexpensively and efficiently as possible.

30    As to these contentions, it is true that Ms Beaman’s s 208 application raises a confined point but determination of that point may well require a detailed examination of Mr Bond’s asset position in order to form a view as to the bona fides of his PIA. That examination is precisely what the Family Court has been focussed upon for over three years.

31    I accept Ms Beaman’s submissions that:

    The situation in this case under s 208 BA is not that different from an annulment application under s 153B BA. In each case there are creditors involved. However in Re Sharpe, John Lawrence Ex Parte Powell, Kerrie Patricia v Donnelly, Max Christopher [1996] FCA 896 Lindgren J transferred a proceeding from this Court to the Family Court pursuant to s 35A BA.

    It is undesirable for related litigation to be conducted in parallel in separate courts: McCormack (at [11]). It is more efficient, less time consuming and less costly for issues in two courts, which substantially overlap, to be resolved in the one court: Matyear v Prismex Technologies Pty Ltd (2006) 60 ACSR 210 (at [23]-[24]) per Barrett J.

    It is not uncommon for issues under the Corporations Act 2001 (Cth) (CA) to arise in proceedings under the Family Law Act. Family courts are well equipped to deal with disputes between parties as to the future conduct, ownership and control of a company: see Matyear (at [23]) per Barrett J. The principle underlying that approach applies as much to the BA as to the CA.

32    Findings as to the genuineness of the PIA could cut across the Family Court’s jurisdiction as it would necessarily involve an inquiry as to Mr Bond’s assets. Doing so could raise a risk as to inconsistency of findings in the two courts. The only reason Ms Beaman has brought this proceeding to cross-vest those issues, effectively, ‘back’ to the Family Court is because of this Court’s exclusive jurisdiction in bankruptcy.

33    The respondents have raised issues of potential delay in the Family Court but there is no reason why the interests of the creditors under the PIA should be preferred to the potential interests of Ms Beaman in that Court.

34    Secondly, there is every reason to think that if parties do jointly cooperate for a swift resolution of matters, that such an outcome may be achieved in the Family Court as with any other court whether by judicial determination or settlement. It would be a singular affront to the Family Court to suggest that it was less able or may take longer than another court to resolve the property issues presently under consideration. That sort of business is part of its core jurisdiction. I should emphasise that delay, if any, to date in that Court does not appear to be delay on the part of Ms Beaman or on the part of the Court.

35    The Family Court proceedings have ensued for three years. There is a real risk of prejudice to Ms Beaman in that her prospective entitlements under family court legislation, if any, may not be of any value if the PIA is executed. In contrast, the existing rights of the creditors remain as they presently are until further order.

36    But for the ‘special federal matter’ consideration, in my view this would be a compelling case for cross-vesting. The factors in favour of doing so are overwhelmingly persuasive. The only question is the extent to which that conclusion may be affected by the fact that the s 208 application is a ‘special federal matter’.

A special federal matter

37    Section 77(ii) of the Constitution entitles federal Parliament to make laws defining the extent to which the jurisdiction of any federal court shall be exclusive of that which belongs to or is invested in the courts of the States. Section 27 BA is such a provision. As counsel for the trustees notes there are numerous other examples including:

(1)    Australian Human Rights Commission Act 1986 (Cth) s 49C(2)

(2)    Commonwealth Serum Laboratories Act 1961 (Cth) s 19Y

(3)    Defence Act 1903 (Cth) s 72R(3)

(4)    Designs Act 2003 (Cth) s 83(2)

(5)    Fisheries Management Act 1991 (Cth) s 167A(3)

(6)    Native Title Act 1993 (Cth) s 81

(7)    Patents Act 1990 (Cth) s 154(2)

(8)    Plant Breeder’s Rights Act 1994 (Cth) s 56(1) and s 56(2)

38    The importance of exclusive jurisdiction has been identified on many occasions. Murphy J in Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261 said (at 300):

If exclusive jurisdiction were abandoned and the jurisdiction of the Federal Court were vested also in State courts the benefits of a specialised court would be eroded. Also, because the jurisdiction of the Federal Court and State Courts would overlap over the whole area of the federal jurisdiction, conflicts of jurisdiction would extend across the whole area, not only between the Federal Court and State courts but between courts of one State and those of others and sometimes even between different courts of a State.

39    Although State courts are invested with federal jurisdiction pursuant to s 39(2) of the Judiciary Act, to the extent that exclusive jurisdiction in this Court has been identified in specific legislation such as those provisions listed above at [33], it may be taken that the subsequent specific acts of Parliament have impliedly repealed the earlier more general provisions. In Ferdinands v Commissioner for Public Employment (2006) 225 CLR 130 Gummow and Hayne JJ noted (at [18]) (footnotes omitted):

18    It has long been recognised that even though one statute does not expressly repeal an earlier statute, the later statute must be read as impliedly repealing the earlier, if the two are inconsistent. Inconsistency lies at the root of this principle. But, as Isaacs J pointed out in 1907, "[i]t is very hard to formulate a rule which will apply to every case of implied repeal". There are, however, two cardinal considerations. First, as Gaudron J said in Saraswati v The Queen, "[t]here must be very strong grounds to support [the] implication, for there is a general presumption that the legislature intended that both provisions should operate". Secondly, deciding whether there is such inconsistency ("contrariety" or "repugnancy" ) that the two cannot stand or live together (or cannot be "reconciled" ) requires the construction of, and close attention to, the particular provisions in question.

40    There seems little doubt that Ms Beaman’s s 208 BA application constitutes a special federal matter as defined in s 3(1) of the Cross-vesting Act. It is a matter which is within the original jurisdiction of this Court by virtue of s 39B of the Judiciary Act and is a matter in respect of which the Supreme Court of a State or Territory would not, apart from this Act, have jurisdiction. This accords with the view expressed obiter in Porteous v Donnelly (Trustee), in the matter of Hancock (deceased) (2003) 200 ALR 274 by Stone J (at [25]) and by Scott J in Pridmore v Magenta Nominees Pty Ltd [1998] WASC 318. A tentative obiter view was expressed to the contrary, one month earlier to Pridmore by Mansfield J in In the Estate of Killington, Gary Milton Ex Parte Chisholm, Philip Anthony v The Official Trustee of the estate of Killington, Gary Milton [1998] FCA 1474. This case does not appear to have been drawn to the attention of Scott J. But, in any event, I accept there is force in the argument raised for the trustees that the exclusivity conferred upon this Court in s 27 BA impliedly repeals s 39(2) of the Judiciary Act to the extent of the BA. This approach appears to conform with the analysis in Meriton (at [4], [7], [156]-[157], [171]-[172] and [196]).

41    All that said, as Stone J points out in Porteous (at [25]) and the parties agree, the fact a bankruptcy matter is a special federal matter is simply something that the Court should ‘have regard to … in considering whether to make a cross-vesting order’. That is clearly so as the rider to the definition in s 3(1) expressly contemplates the conferral of jurisdiction in a special federal matter. Unlike those special federal matters specifically identified at s 4(4) of the Cross-vesting Act, there is no legislative proscription against cross-vesting. Further, it cannot be thought that the cross-vesting of a special federal matter is contrary to Parliament’s intent. The explanatory memorandum to the exclusive jurisdiction conferred on the Federal Court in bankruptcy does not prevent State courts hearing bankruptcy matters that are cross vested to them. However such matters must be initiated in either the Federal Court of Australia or the Federal Circuit Court.

42    Notwithstanding this, it is necessary or at least desirable to take into account what is likely to happen if the matter is cross-vested.

43    In that regard s 6 relevantly provides:

6    Special federal matters: general rules

(1)    If:

(a)    a matter for determination in a proceeding that is pending in the Supreme Court of a State or Territory is a special federal matter; and

(b)    the court does not make an order under subsection (3) in respect of the matter;

the court must transfer the proceeding in accordance with this section to the Federal Court or a court mentioned in paragraph (2)(b).

…

(3)    The Supreme Court may order that the proceeding be determined by that court if it is satisfied that there are special reasons for doing so in the particular circumstances of the proceeding other than reasons relevant to the convenience of the parties.

(4)    Before making an order under subsection (3), the court must be satisfied that:

(a)    a written notice specifying the nature of the special federal matter has been given to the Attorney-General of the Commonwealth and the Attorney-General of the State or Territory where the proceeding is pending; and

(b)    a reasonable time has elapsed since the giving of the notice for the Attorneys-General to consider whether submissions to the court should be made in relation to the proceeding.

…

(6)    In considering whether there are special reasons for the purposes of subsection (3), the court must:

(a)    have regard to the general rule that special federal matters should be heard by the Federal Court or a court mentioned in paragraph (2)(b), whichever is appropriate in the particular case; and

(b)    take into account any submission made in relation to the proceeding by an Attorney-General mentioned in subsection (4).

…

(emphasis added)

44    If Ms Beaman’s s 208 application is cross-vested to the Family Court, for that Court to be seized of jurisdiction in that matter it would have to make an order under s 6(3) of the Cross-vesting Act, failing which, it would be obliged by virtue of s 6(1)(b) to transfer the proceeding back to this Court. This scenario clearly would not be consistent with the objects under s 37M of the Federal Court of Australia Act 1976 (Cth) (FCA) or in the general interests of justice.

45    Whether the Family Court would conclude that there were special reasons for determining Ms Beaman’s application in that Court is entirely a matter for the Family Court but if I were of the view that it was improbable that it would do so, it would be a poor exercise of discretion to cross-vest a special federal matter only in the expectation that it would return.

46    It seems to me that I need to form a broad impression as to whether it would be likely that the Family Court would transfer the cross-vested s 208 application back to this Court. The respondents made oral submissions on the obligation to issue notices in s 6(4) of the Cross-vesting Act but this is a common place occurrence. There is no reason to think that the issuing of notices would deter the Family Court from considering matters in s 6(3).

47    The matters identified in s 6(3) are special reasons for determining the s 208 application in that Court rather than transferring it back to this Court ‘in the particular circumstances of the proceeding’ (emphasis added) other than reasons relevant to the convenience of the parties. I emphasise the passage ‘in the particular circumstances of the proceeding’ as it is necessary to have strong regard to the very substantial investment in time, cost and public resources used in advancing the Family Court proceedings between Ms Beaman and Mr Bond to the present point. Examples of ‘special reasons’ for s 6(3) of the Cross-vesting Act appear in Overlook v Foxtel [2001] NSWSC 682 per Hunter J (at [6]) and in P1 v Australian Crime Commission [2012] SASC 229 per Gray J (at [60]-[61]). In Overlook, Hunter J found special reasons existed, other than reasons relevant to the convenience of the parties, where the issue comprising the special federal matter was raised at a time when proceedings were fixed for hearing about six weeks after argument on the transfer application and five weeks after the date of judgment and at a time when the matter was ready for hearing and estimated to occupy two weeks of the Court’s time. The special federal matter was only one of several principal issues in the proceedings, the remainder involving the exercise of State jurisdiction. See also 21st Century Promotions v Telstra Corporation Ltd [1998] SASC 6929 per Debelle J (at [7]).

48    Of course, circumstances may change as the matter evolves but, at present, it seems to me substantially more likely than not that the Family Court would be satisfied that it should retain the s 208 application for reasons which may include the following:

(a)    The s 208 dispute is in reality one relatively small, albeit important, aspect of a very substantial property dispute between the parties in the Family Court. That larger dispute has received close attention by judges of that Court who have become familiar with the background circumstances, corporate and trust structures, financial positions of the parties and a myriad of other evidentiary factors capable of being relevant in deciding the question of whether or not Mr Bond’s decision to enter into a PIA was genuine or was an abuse of Pt X BA. Assessing the bona fides of transactions and ascertaining the correct asset positions of parties are part of the daily fare on the Family Court’s menu. In the present case, the investigative process has included the issuing of subpoenas to a number of persons and entities thought to be able to shed light on Mr Bond’s correct asset position. Rightly or wrongly, it is the case that all that activity has ground to a halt as a result of the steps leading to the proposed execution of the PIA.

(b)    The particular question for determination under s 208 is narrow, as the parties are all agreed. That is, was the proposed entry into the PIA genuine or an abuse of Pt X BA? It may have been entirely necessary and genuine as Mr Bond contends or the opposite as Ms Beaman argues.

(c)    The considerable investment in advancing the Family Court proceedings to this point may be frustrated if the PIA is executed and given effect. Specifically, more than $4 million of Mr Bond’s alleged debts are owed to trust companies controlled by family members, the legitimacy of which are under challenge in the Family Court by Ms Beaman who contends (rightly or wrongly) that Mr Bond’s financial position is far healthier than it is suggested on the statement of assets and liabilities provided to the trustees and the creditors or to that court. Further, Ms Beaman would not be entitled to the full benefit of an order in her favour for costs and disbursements in the sum of $100,000 to pursue further financial inquires.

(d)    Given that the challenge as to these liabilities has been on foot for some time, Ms Beaman would be significantly disadvantaged as she would have to attempt to ‘claw back’ funds distributed by the trustees to creditors under the PIA, specifically the proceeds from the sale of the London property. This would be a very challenging task judging by the difficulty experienced in progress in identifying those matters at this stage.

(e)    In addition, Ms Beaman points to the following matters:

    the Family Court has said that Mr Bond is a ‘man of means’ (counsel’s phrase);

    there is material to suggest that Bond related parties have covered Mr Bond’s expenses in the past;

    most of the ‘big ticket’ creditors listed in the statement of affairs are Bond related parties (counsel’s expression);

    the statement of affairs contains admissions against interest by Mr Bond as to why he signed the authority under s 188 BA – i.e. the Family Court proceedings and the $100,000 (which the Family Court implicitly accepted Mr Bond had the capacity to pay);

    the timing of the signing of the authority under s 188 BA vis-À-vis significant forensic losses which Mr Bond has suffered in the Family Court suggest that those losses prompted the signing of the authority; and

    Mr Bond has not deposed to any demands having been made on him by any Bond related parties listed in his statement of affairs.

49    While some of these six matters are overstated (as Mr Bond correctly submits) it is nevertheless clear that the Family Court considers there is more to Mr Bond’s asset position than he has revealed or been able to reveal so far. (To some extent it has accepted that he has had difficulty himself in identifying the full extent of his assets and interests.) It is also true to say that there is no evidence of any demands having been made by family members. One possibility may be that the Family Court takes the view that Mr Bond’s financial misfortune appears to have emerged somewhat suddenly.

50    The totality of those considerations leads me to the conclusion that even taking into account that Ms Beaman’s s 208 application is a special federal matter, it is both more appropriate and in the interests of justice that it be cross-vested to the Family Court. In arriving at this conclusion I have not ignored the intent of Parliament reflected in the exclusion in s 35B(1A) BA to a transfer under the BA. As noted however, this would apply to a transfer under s 35A BA which does not require consideration of all the matters to be addressed under the Cross-Vesting Act. I give greater weight to the particular circumstances of this case to the matters set out in the Cross-Vesting Act.

SHOULD THE S 208 APPLICATION BE SUMMARILY DISMISSED?

51    I turn to Mr Bond’s summary dismissal application.

52    Mr Bond needs to establish for s 31A FCA that there are no substantial prospects of success in both aspects of Ms Beaman’s application. It is common ground that Ms Beaman needs to show ‘special circumstances’ to obtain the benefit of an order removing the London property or any other asset from the trustees’ control pursuant to s 208 BA. It appeared that she may raise an argument that s 35B(1A) BA, which provides that s 35A BA does not apply to the Family Court of Western Australia in relation to a de facto financial clause – unlike in the Family Court of Australia, that this may constitute a special circumstance for the purposes of s 208 BA. It is not clear that this contention is now pursued. The substantive aspect of the application by Ms Beaman is that she contends that it should be inferred that the PIA was entered into by Mr Bond without his genuinely wishing to enter into a PIA and that he is in fact simply engaging in an abuse of Pt X BA. Mr Bond expressly denies this on oath. There is no way I can decide this contest at this stage.

53    I will leave the first technical argument for the moment. On the second, there is such a significant body of material (hundreds of pages, if not thousands) already amassed in the Family Court, some of which has been reproduced for this proceeding, that it would be impossible to resolve on the papers and against authority to purport to do so given the inevitability that issues of credit must arise.

54    I note the persuasive argument by counsel for Mr Bond as to the paucity of evidence to support the inference at this stage but I am not convinced that will necessarily remain the position or that the claim is sufficiently weak to summarily dismiss it. However, rather than refuse Mr Bond’s dismissal application and, consistently with my earlier ruling, that application will be part of the cross-vesting to the Family Court. Again, that Court is in a better position to consider the application against all of the background circumstances. These may well be relevant to the question of summary dismissal.

55    Although Ms Beaman has succeeded on the cross-vesting argument, until determination of Mr Bond’s summary dismissal application, if it is pursued in the Family Court, costs of that application should be reserved to be determined by the Family Court. I therefore order that:

1.    This proceeding, including the first respondent’s interlocutory application for summary dismissal, be cross-vested to the Family Court of Western Australia.

2.    Costs of this proceeding be reserved to that Court.

Associate:

Dated:    31 May 2013