Federal Court of Australia

Brushe (Trustee) v Leach, in the matter of Leach (Bankrupt) [2026] FCA 1242

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application filed by the respondent on 12 May 2026 (Transfer Application) seeking to transfer the proceeding to the Federal Circuit and Family Court of Australia (Division 1) pursuant to s 35A(1) of the Bankruptcy Act 1966 (Cth) is dismissed.

2.    The costs of the Transfer Application be the parties’ costs in the cause.

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

REASONS FOR JUDGMENT

MEAGHER J

introduction

1    By an interlocutory application (Transfer Application) filed on 12 May 2026, Mrs Christine Leach, the respondent in this proceeding (Respondent), seeks that the proceeding be transferred to Division 1 of the Federal Circuit and Family Court of Australia (FCFCOA) pursuant to s 35A of the Bankruptcy Act 1966 (Cth).

2    The applicant is the trustee in bankruptcy (Trustee) of Mr Christopher Leach (Bankrupt), the Respondent’s husband, and was appointed on 17 April 2025. The Trustee commenced the substantive proceeding by an originating application filed on 6 November 2025 (Originating Application), in which he seeks the following relief in respect of certain property located in Wollstonecraft, New South Wales (Property), of which the Respondent is the sole registered owner:

(1)    Declarations that the Trustee holds a beneficial interest in the Property under a resulting trust, and that the Respondent holds her sole legal interest in the Property on resulting trust for the Trustee and herself as tenants in common, in proportion to their contributions to the Property.

(2)    Further or in the alternative, declarations that the Trustee holds a beneficial interest in the Property under an implied trust, and that the Respondent holds her sole legal interest in the Property on implied trust for the Trustee and herself as tenants in common, in proportion to their contributions to the Property.

(3)    Further or in the alternative, declarations that the Trustee holds a beneficial interest in the Property under a constructive trust, and that the Respondent holds her sole legal interest in the Property on constructive trust for the Trustee and herself as tenants in common, in proportion to their contributions to the Property.

(4)    Pursuant to s 66G of the Conveyancing Act 1919 (NSW) or alternatively pursuant to the Court’s inherent power:

(a)    There be a trustee appointed for the sale of the Property (Sale Trustee).

(b)    The Property vest in the Sale Trustee subject to encumbrances affecting the entirety, but free from encumbrances affecting any undivided shares, to sell the Property and stand possessed of the net proceeds of sale.

3    The contributions alleged and referred to above at [2](1) – (3) are the purchase price and associated costs of acquiring the Property, three loan agreements with the Commonwealth Bank of Australia, and the upkeep and maintenance of the Property. The Respondent’s evidence is that the Property was purchased for the purpose of ensuring that the Respondent had a home which she owned and controlled for her and for the child of the marriage with the Bankrupt.

4    Since the Trustee’s filing of the Originating Application, on 6 March 2026 the Respondent filed a defence, and on 16 April 2026 the Trustee filed a reply. Subject to resolving outstanding disputes of discovery, and any applications for non-party discovery, the next steps in the proceeding are the filing of evidence and the conduct of any mediation.

5    The Trustee opposes the Transfer Application.

Materials relied on

6    The Respondent relies on the following:

(1)    The Transfer Application.

(2)    Affidavits of Mr Brown sworn on 12 May 2026 (First Brown Affidavit) and 14 May 2026.

(3)    Written submissions filed on 18 June 2026.

7    The Trustee relies on the following:

(1)    An affidavit of Ms Moles affirmed on 2 July 2026 (Moles Affidavit).

(2)    Written submissions filed on 2 July 2026.

8    At the hearing of the Transfer Application, the Respondent made several substantial submissions which included submissions on new issues. The Trustee was given the opportunity to file written submissions in reply to the new issues raised, which he declined on the basis that he was able to respond to those issues orally.

Bases for the Transfer Application

9    As will be discussed in more detail below, the Respondent’s bases for the Transfer Application are that:

(1)    This Court lacks jurisdiction to determine the Originating Application, because the proceeding is a “matrimonial cause” under the Family Law Act 1975 (Cth), and by virtue of ss 8(1) and 39 of the Family Law Act, it may only be instituted in Division 2 of the FCFCOA or in the Supreme Court of a State or a Territory.

(2)    Had the Trustee correctly commenced the proceeding in Division 2 of the FCFCOA, it would still have been open to the Respondent to seek that the proceeding be transferred to Division 1 of the FCFCOA under s 35A(2A) of the Bankruptcy Act.

(3)    Alternatively, even if this Court does have jurisdiction, the most efficient way to resolve the dispute is for the proceeding to be transferred to Division 1 of the FCFCOA.

10    The Trustee’s bases for opposing the Transfer Application are that:

(1)    This Court has jurisdiction to hear and determine the proceeding.

(2)    In any event, a transfer to Division 1 of the FCFCOA is not appropriate where:

(a)    There is no parallel proceeding presently on foot.

(b)    The central issue can be resolved by this Court, and any issues which the Respondent wishes to agitate further are contingent claims which may never arise.

(c)    The relief which the Respondent proposes to seek in Division 1 of the FCFCOA will not, in any event, be granted.

(d)    Granting the Transfer Application would cause significant delay.

11    For the reasons which follow, the Transfer Application is refused.

Legislation and applicable Principles

Applications to transfer proceedings under s 35A of the Bankruptcy Act 1966 (Cth)

12    Section 35A of the Bankruptcy Act provides as follows:

35A    Transfer of proceedings to Federal Circuit and Family Court of Australia (Division 1)

(1)     If a proceeding is pending in the Federal Court, the Federal Court may, on the application of a party to the proceeding or of its own motion, transfer the proceeding to the Federal Circuit and Family Court of Australia (Division 1).

…

(3)     Subject to subsection (4), where a proceeding is transferred to the Federal Circuit and Family Court of Australia (Division 1):

(a)     the Court has jurisdiction to hear and determine the proceeding;

(b)     the Court also has jurisdiction to hear and determine matters not otherwise within its jurisdiction (whether by virtue of paragraph (a) or otherwise):

(i)     that are associated with matters arising in the proceeding; or

(ii)     that, apart from subsection 32(1) of the Federal Court of Australia Act 1976, the Federal Court would have had jurisdiction to hear and determine in the proceeding;

(c)     the Court may, in and in relation to the proceeding:

(i)     grant such remedies;

(ii)     make orders of such kinds; and

(iii)     issue, and direct the issue of, writs of such kinds;

as the Federal Court could have granted, made, issued or directed the issue of, as the case may be, in and in relation to the proceeding;

(d)     remedies, orders and writs granted, made or issued by the Court in and in relation to the proceeding have effect, and may be enforced by the Court, as if they had been granted, made or issued by the Federal Court;

(e)     appeals lie from judgments of the Court given in and in relation to the proceeding as if the judgments were judgments of the Federal Court constituted by a single Judge, and do not otherwise lie; and

(f)     subject to paragraphs (a) to (e) (inclusive), this Act, the Federal Court of Australia Act 1976, and other laws of the Commonwealth, apply in and in relation to the proceeding as if:

(i)     a reference to the Federal Court (other than in the expression “the Court or a Judge”) included a reference to the Federal Circuit and Family Court of Australia (Division 1);

(ii)     a reference to a Judge of the Federal Court (other than in the expression “the Court or a Judge”) included a reference to a Judge of the Federal Circuit and Family Court of Australia (Division 1);

(iii)     a reference to the expression “the Court or a Judge” when used in relation to the Federal Court included a reference to a Judge of the Federal Circuit and Family Court of Australia (Division 1) sitting in Chambers;

(iv)     a reference to a Registrar included a reference to a Registrar of the Federal Circuit and Family Court of Australia (Division 1); and

(v)     any other necessary changes were made.

…

13    Section 35A of the Bankruptcy Act confers a discretion on the Court. A paramount consideration in an application under s 35A of the Bankruptcy Act is the efficient disposition of all claims for relief and related issues: Horne (Trustee), in the matter of Tebb (Bankrupt) v Tebb [2013] FCA 585 at [21]. It is undesirable for related litigation to be conducted in parallel in separate courts; rather, the more efficient, less time-consuming and less costly course of action is for issues in two courts with substantial overlap to be resolved in the one court: Beaman v Bond [2013] FCA 534; 212 FCR 350 at [31]. A factor relevant to exercising the discretion contained in s 35A of the Bankruptcy Act is any potential cost savings: Combis v Jensen (No 2) [2009] FCA 1383; 181 FCR 178 at [62].

The jurisdiction of this Court and the Federal Circuit and Family Court of Australia

14    Sections 27 and 35 of the Bankruptcy Act are as follows:

27     Bankruptcy courts

(1) The Federal Court and the Federal Circuit and Family Court of Australia (Division 2) have concurrent jurisdiction in bankruptcy, and that jurisdiction is exclusive of the jurisdiction of all courts other than:

(a)     the jurisdiction of the High Court under section 75 of the Constitution; or

(b)     the jurisdiction of the Federal Circuit and Family Court of Australia (Division 1) under section 35 or 35A of this Act.

…

35     Jurisdiction of the Federal Circuit and Family Court of Australia (Division 1) in bankruptcy where trustee is a party to property settlement or spousal maintenance proceedings etc.

(1)     If, at a particular time:

(a)     a party to a marriage is a bankrupt; and

(b)     the trustee of the bankrupt’s estate is:

(i)     a party to property settlement proceedings in relation to either or both of the parties to the marriage; or

(ii)     an applicant under section 79A of the Family Law Act 1975 for the variation or setting aside of an order made under section 79 of that Act in property settlement proceedings in relation to either or both of the parties to the marriage; or

(iia)    an applicant for an order under subsection 90K(1) or (3) of the Family Law Act 1975 in relation to the setting aside of a financial agreement of the parties to the marriage; or

(iii)    a party to spousal maintenance proceedings in relation to the maintenance of a party to the marriage;

then, at and after that time, the Federal Circuit and Family Court of Australia (Division 1) has jurisdiction in bankruptcy in relation to any matter connected with, or arising out of, the bankruptcy of the bankrupt.

…

(3) In this section:

property settlement proceedings has the same meaning as in the Family Law Act 1975.

…

15    The following expressions are defined in s 4 of the Family Law Act:

property settlement proceedings means:

(a)     in relation to the parties to a marriage—proceedings with respect to:

(i)     the property of the parties or either of them; or

(ii) the vested bankruptcy property in relation to a bankrupt party to the marriage; or

…

…

matrimonial cause means:

…

(cb)    proceedings between:

(i)     a party to a marriage; and

(ii)    the bankruptcy trustee of a bankrupt party to the marriage;

with respect to any vested bankruptcy property in relation to the bankrupt party, being proceedings:

(iii) arising out of the marital relationship; or

(iv) in relation to concurrent, pending or completed divorce or validity of marriage proceedings between the parties to the marriage; or

(v) in relation to the divorce of the parties to the marriage, the annulment of the marriage or the legal separation of the parties to the marriage, being a divorce, annulment or legal separation effected in accordance with the law of an overseas jurisdiction, where that divorce, annulment or legal separation is recognised as valid in Australia under section 104; or

…

vested bankruptcy property, in relation to a bankrupt, means property of the bankrupt that has vested in the bankruptcy trustee under the Bankruptcy Act 1966. For this purpose, property has the same meaning as in the Bankruptcy Act 1966.

16    Section 8(1) of the Family Law Act provides as follows:

8    Supersession of existing laws

(1)     After the commencement of this Act, proceedings by way of a matrimonial cause shall not be instituted except under this Act.

…

17    Section 39 of the Family Law Act provides as follows:

39     Jurisdiction in matrimonial causes

(1)     Subject to this Part, a matrimonial cause may be instituted under this Act:

(a)    in the Federal Circuit and Family Court of Australia (Division 2); or

(b) in the Supreme Court of a State or a Territory.

…

Vesting of property in the trustee in bankruptcy

18    Section 58 of the Bankruptcy Act provides as follows:

58    Vesting of property upon bankruptcy—general rule

(1)    Subject to this Act, where a debtor becomes a bankrupt:

(a)    the property of the bankrupt, not being after-acquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee; and

(b)    after-acquired property of the bankrupt vests, as soon as it is acquired by, or devolves on, the bankrupt, in the Official Trustee or, if a registered trustee is the trustee of the estate of the bankrupt, in that registered trustee.

…

Alteration of interests by the Federal Circuit and Family Court of Australia (Division 1)

19    Sections 78 and 79 of the Family Law Act provide as follows:

78    Declaration of interests in property

(1)    In proceedings between the parties to a marriage with respect to existing title or rights in respect of property, the court may declare the title or rights, if any, that a party has in respect of the property.

(2)    Where a court makes a declaration under subsection (1), it may make consequential orders to give effect to the declaration, including orders as to sale or partition and interim or permanent orders as to possession.

79    Alteration of property interests

Orders in property settlement proceedings

(1)     In property settlement proceedings, the court may, subject to subsection (6), make such order as it considers appropriate:

(a)     in the case of proceedings with respect to the property of the parties to the marriage or either of them—altering the interests of the parties to the marriage in the property; or

(b)     in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage—altering the interests of the bankruptcy trustee in the vested bankruptcy property;

including:

(c)     an order for a settlement of property in substitution for any interest in the property; and

(d)     an order requiring:

(i)     either or both of the parties to the marriage; or

(ii)     the relevant bankruptcy trustee (if any);

to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.

Note: Subsection (6) relates to property that is a companion animal.

(2)     The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

…

20    Section 79(3) – (5) sets out how the Court is to determine what order (if any) should be made under this section in property settlement proceedings. Only the FCFCOA has jurisdiction to determine applications brought under ss 78 and 79 of the Family Law Act: Allen (Trustee) v Huangfu, in the matter of the bankrupt estate of Zhang [2026] FCA 533 at [25].

submissions

The Court’s jurisdiction in this proceeding

Respondent’s submissions

21    The Respondent submits that the Court lacks jurisdiction in this proceeding. Her starting point is section 27 of the Bankruptcy Act which confers concurrent jurisdiction in bankruptcy on this Court and Division 2 of the FCFCOA, which she notes is exclusive of all other courts save for the High Court’s jurisdiction and that of Division 1 of the FCFCOA under ss 35 and 35A of the Bankruptcy Act. She then refers to s 35(1) of the Bankruptcy Act which confers on Division 1 of the FCFCOA, jurisdiction in bankruptcy in relation to matters connected with or arising out of, relevantly, the bankruptcy of a bankrupt who is a party to a marriage, where the trustee of the bankrupt’s estate is a party to property settlement proceedings in relation to either or both of the parties to the marriage.

22    In oral submissions, the Respondent relies on Hankin v Nankervis [2018] FCCA 2075; 335 FLR 314, where Judge Kelly considered the relevant legislative provisions as they applied at the time when the Federal Circuit Court and the Family Court were bifurcated. She relies on the statements at [69] – [77], emphasising [77], where his Honour quoted the following from the Revised Explanatory Memorandum to the Bankruptcy and Family Law Legislation Amendment Bill 2005, which inserted paragraph (cb) into the definition of “matrimonial cause” under s 4 of the Family Law Act:

…

12. From a family law perspective, the legal ownership of property does not always reflect the non-financial contribution of the parties to the marriage. The special interest of the non-bankrupt spouse in the marital property created through both financial and non-financial contributions, which may be recognised by the Family Court in exercising its discretion to alter property interests, is not expressly recognised under the Bankruptcy Act.

13. Different outcomes result depending upon the order in which events occur (those events including separation, bankruptcy and distribution of property by the trustee in bankruptcy).

14. The amendments proposed in this Bill will address these issues by clarifying the rights of the bankruptcy trustee and the non-bankrupt spouse. Generally, the amendments will enable concurrent bankruptcy and family law proceedings to be brought together to ensure all the issues are dealt with at the same time.

(Emphasis of Judge Kelly.)

23    She further relies on the following statement of McKerracher J in Commissioner of Taxation v Bosanac (No 6) [2020] FCA 339 at [23]:

It is noted that a declaration between parties to a marriage as to their existing rights in property falls within the meaning of ‘matrimonial cause’ and is therefore a matter exclusively within the jurisdiction of the Family Court.

24    She summarises, by her oral submissions, her contention as to the “mechanism” for the proceeding (being a “matrimonial cause”) to progress:

(1)    The Trustee must commence in Division 2 of the FCFCOA, in accordance with ss 8 and 39 of the Family Law Act.

(2)    If appropriate, Division 2 of the FCFCOA may transfer the proceeding up to Division 1 of the FCFCOA, pursuant to s 35A(2A) of the Bankruptcy Act.

(3)    Alternatively, if this Court retains jurisdiction over bankruptcy matters (i.e., for proceedings which are not matrimonial causes), those matters may be commenced in this Court.

(4)    In the circumstance mentioned in (3) above, the Court ought, under s 35A of the Bankruptcy Act, transfer the proceeding to Division 1 of the FCFCOA which would be able to exercise bankruptcy jurisdiction by virtue of s 35 of the Bankruptcy Act.

25    In her oral reply submissions, the Respondent states that s 27 of the Bankruptcy Act complements s 8 of the Family Law Act, because s 8 confers an exclusive jurisdiction in respect of matrimonial causes, and s 27 of the Bankruptcy Act recognises the situation “where there is exclusive jurisdiction or the need to transfer to a court that would not otherwise have that jurisdiction in Division 1 [of the FCFCOA] from the Federal Court in the provisions that we’ve previously examined”.

Vested bankruptcy property

26    In her written submissions, the Respondent characterises the Trustee’s position as being that the Property has vested in him pursuant to s 58 of the Bankruptcy Act. This characterisation is premised on those parts of the Trustee’s statement of claim filed on 6 November 2025 in which the Trustee asserts that the Bankrupt held an equitable interest in the Property by no later than 16 August 2011, which the Trustee says vested in him on and from 17 April 2025. The Respondent thus characterises the purpose of this proceeding as the Trustee “seek[ing] to recover property that has vested in the [T]rustee at the commencement of the bankruptcy being property that would (on the [Trustee’s] view) otherwise have been available to distribute to creditors”. She relies in this regard on the statements of the Court in Official Trustee in Bankruptcy v Galanis [2017] FamCAFC 20; 318 FLR 22 at [49] – [50]. In these circumstances, the Respondent submits that the Property is “vested bankruptcy property” as defined in s 4 of the Family Law Act.

27    In oral submissions, the Respondent refers to the types of trust asserted by the Trustee in his statement of claim, contending that on at least three of the types of trust asserted by him, there is vested property from the date that the Trustee “assumed” the Bankrupt’s property under s 58 of the Bankruptcy Act. She supports this by reference to the proposition that the equitable interests asserted are not created by the Court’s order; rather, the Court’s declaration gives effect to the operation of law giving rise to such an interest, from the date that the interest arises. The Respondent relies on the following authorities for this proposition: Tamer v Official Trustee in Bankruptcy [2016] NSWSC 680 at [33]; Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 at 714 – 715.

28    The Respondent submits that, even if a remedial rather than institutional constructive trust were found to exist, Deane J’s analysis in Muschinski v Dodds [1985] HCA 78; 160 CLR 583 establishes that such a trust may operate retrospectively. She further appears to submit that, once the facts establish a remedial constructive trust—as she contends they do here—the Trustee’s vested property interest arises from those circumstances, rather than from the Court’s order. She relies on Lawrence, in the matter of Ozifin Tech Pty Ltd (in liq) v AGM Markets Pty Ltd (in liq) [2022] FCA 1478 at [147] – [177].

Arising out of the marital relationship

29    The Respondent submits that the proceeding is therefore a “matrimonial cause” under s 4 of the Family Law Act because (1) it is “with respect to any vested bankruptcy property in relation to the bankrupt party” (2) it is between a party to the marriage (the Respondent) and the bankruptcy trustee of a bankrupt party to the marriage (the Trustee) and (3) the proceeding is one “arising out of the marital relationship”, on the basis that “had the Respondent not been married to [the Bankrupt] she would have had no involvement in the proceedings, nor would the Property have been purchased”.

30    As to (3) above, the Respondent submits that the characterisation of the proceeding as “arising out of the marital relationship” is consistent with authority, referring to Hankin. The Respondent also cites West v West [2007] FMCAfam 681; 38 Fam LR 431 at [33] – [37] for the proposition that the Court can determine disputes in proceedings between a wife and her husband’s trustee in bankruptcy with respect to any vested bankruptcy property, as the proceedings arose out of the marital relationship. In oral submissions, she contends that the language of the legislation, and the above-cited cases, do not require the parties to have separated in order for the proceeding to be considered a matrimonial cause, relying on Hankin at [96]; West at [1].

31    In oral submissions, the Respondent states that the fact that she and the Bankrupt are still married does not weaken the conclusion that the proceeding arises out of the marital relationship, given that the Respondent having the sole legal title to the Property was irrespective of what occurred in the marriage, but that as the parties were still married, a fortiori the security of her title to the Property was “paramount to the strength of that marital relationship” and “speaks in favour of the proceedings arising out of the marital relationship”. She resists a characterisation that the proceeding arises out of some commercial transaction between the Respondent and the Bankrupt. She further submits orally that absent a requirement that the parties have separated, “the other factors are comfortably satisfied”, relying on Dougherty v Dougherty [1987] HCA 33; 163 CLR 278 at 286. She submits that the marital relationship was “central to the acquisition of” the Property.

32    The Respondent therefore by her written submissions contends that the consequence of the proceeding being a “matrimonial cause” is that because of s 8(1) of the Family Law Act, it may only be instituted in either Division 2 of the FCFCOA or in the Supreme Court of a State or Territory. She submits that this Court therefore lacks jurisdiction.

33    The Respondent concedes that the remarks of Besanko J in Macks v Edge [2006] FCA 1077; 156 FCR 302 at [41] may be against her. In that case, in the context of a claim by the trustee in bankruptcy of the respondent’s former spouse, his Honour considered a transfer application made by the respondent under s 35A of the Bankruptcy Act: at [1]. The trustee’s claims in that case were that transfers of property by the bankrupt to the respondent were void under ss 120 or 121 of the Bankruptcy Act: at [7] – [10]. The respondent had subsequently commenced a proceeding in the Family Court of Australia seeking, inter alia, orders altering the interests of the trustee in bankruptcy’s interest in the bankrupt’s property that may vest in the trustee: at [14]. At [41], his Honour stated as follows:

It follows from what I have said that the first issue in proceedings between the trustee and Mrs Edge is whether the trustee’s claim under the provisions of the Bankruptcy Act ought to be upheld. If the trustee is successful then Mrs Edge may make an application against the trustee under s 79(1) of the Family Law Act, with respect to the freehold property, leasehold property and speedboat, seeking an order “altering the interests of the bankruptcy trustee in the vested bankruptcy property”. It seems to me that that is the substance of any proceedings she may bring in the Family Court. Her claim is in a sense a contingent claim in that it only becomes relevant if the trustee’s claim is successful. If the trustee is unsuccessful then Mrs Edge’s claim falls away because there is no relevant vested bankruptcy property. Should the trustee be successful, the Family Court has the power to alter the interests of the trustee in the vested bankruptcy property.

    (Emphasis added.)

34    The Respondent submits that this case is distinguishable on the basis that because the trustee relied on ss 120 and 121 of the Bankruptcy Act, “[t]here could be no ‘vested bankruptcy property’ in that situation unless the trustee prevailed at hearing and voided the transactions”. Here, by contrast, the Trustee claims that the Property has already vested in him by virtue of s 58 of the Bankruptcy Act. By her oral submissions, the Respondent also submits that Macks predated the “comprehensive reforms” to the Bankruptcy Act and the Family Law Act.

Trustee’s submissions

35    The Trustee submits that s 35 of the Bankruptcy Act, which enables Division 1 of the FCFCOA to exercise jurisdiction in particular matters concerned with bankruptcy, is a facultative provision which does not alter this Court’s jurisdiction under s 27 of the Bankruptcy Act. In oral submissions, he contends that s 27(1)(b) of the Bankruptcy Act does not, by conferring jurisdiction on Division 1 of the FCFCOA, “cut[] down” this Court’s jurisdiction in bankruptcy.

36    He then submits that this Court has jurisdiction to hear and determine the proceeding under s 27(1) of the Bankruptcy Act, which jurisdiction is not affected by ss 4 or 8 of the Family Law Act. He characterises the issue as framed by the Respondent as being whether the proceeding is a “matrimonial cause” under s 4 of the Family Law Act.

37    The Trustee’s first submission in this regard is that the proceeding is not with respect to “vested bankruptcy property”, on the basis that while the Trustee may allege that the Bankrupt’s property has vested in him under s 58 of the Bankruptcy Act, whether any interest in the Property has vested in him is an issue to be determined in this proceeding. Therefore, “it cannot yet be said that the Property is ‘vested bankruptcy property’”. The Trustee submits that the proceeding is analogous to Macks, on the basis that if the Trustee is unsuccessful, any proposed claim by the Respondent in Division 1 of the FCFCOA falls away: see at [41]. Further, Macks is analogous as until the conclusion of the proceeding, it cannot be said that the Trustee has an interest in the Property, such that it is “vested bankruptcy property”, particularly where a remedial constructive trust is sought. On the authority of Macks, the Trustee submits orally that the classification of the trust (if any) on which the Property is said to be held is not determinative of the Transfer Application, given that no finding has yet been made about whether the Property is held on trust.

38    By his oral submissions, the Trustee notes that in Macks, there needed to be a finding that the relevant transactions were voidable, as a result of which consequential relief would be granted. On this basis, the fact that the present proceeding might involve trusts does not alter the analysis in Macks as it applies here. He refers to [38] – [39] of Macks, where Besanko J noted, without deciding, the issue of when there are “proceedings with respect to vested bankruptcy property” in the context of a party seeking declarations that transfers are void pursuant to ss 120 and 121 of the Bankruptcy Act. His Honour went on to reject a submission that the trustee in bankruptcy in that case had incorrectly commenced the proceeding in this Court because, whilst the Family Court (as it was then), had jurisdiction to alter the trustee’s rights with respect to “vested bankruptcy property”, this Court retained jurisdiction to determine the prior question of whether the transfers were void under ss 120 and 121 of the Bankruptcy Act. The Trustee states that acceptance of the Respondent’s case would have “quite wide-reaching consequences”, being that Division 1 of the FCFCOA, rather than Division 2 of the FCFCOA or this Court, would have jurisdiction over every claim in bankruptcy involving a husband and wife.

39    The Trustee’s second submission in this regard is that the Respondent has not established that the proceeding is one “arising out of the marital relationship”. The Trustee says that the Respondent has not addressed the significance of the Respondent and the Bankrupt still being married, and whether this affects the purported characterisation of the proceeding as one “arising out of the relationship”. The Trustee seeks to distinguish Hankin and West on the basis that neither case involved couples who had not separated, nor did they address whether the relevant property had vested in the trustee in bankruptcy. The Trustee seeks to characterise this proceeding as one instead “arising from a commercial dealing”.

40    Third, the Trustee casts doubt on the Respondent’s submission that ss 4 and 8 of the Family Law Act have “cut down” this Court’s “broad jurisdiction in bankruptcy under s 27 of the Bankruptcy Act”. The Trustee submits that clear, express words would be required to do so, in light of the presumption that legislation does not withdraw or limit a conferral of jurisdiction on the courts without express words or necessary implication, relying on Shergold v Tanner [2002] HCA 19; 209 CLR 126 at [34] and Herzfeld and Prince, Interpretation (2nd ed, Thomson Reuters, 2020) at [9.670]. Further, the Trustee submits, relying on Owners of Ship Shin Kobe Marui v Empire Shipping Co Inc [1994] HCA 54; 181 CLR 404 at 421 and Herzfeld and Prince at [9.700] that a conferral of jurisdiction is to be construed as liberally as its terms permit. In his oral submissions, the Trustee submits that nothing in ss 4 or 8 of the Family Law Act is of sufficient clarity to justify restricting the conferral of bankruptcy jurisdiction on this Court by s 27(1) of the Bankruptcy Act.

41    He submits further by his written submissions that none of the cases cited by the Respondent suggest that ss 4 and 8 of the Family Law Act were intended to deprive this Court of jurisdiction under s 27 of the Bankruptcy Act. The Trustee in this regard refers to the following passage in Macks at [39]:

At the same time, there is nothing to suggest that this Court does not have jurisdiction over the trustee’s claim and I reject the submission that the trustee has issued proceedings in the wrong court. The Family Court has jurisdiction to alter the trustee’s rights with respect to vested bankruptcy property, but this Court retains jurisdiction to determine the prior questions of whether the transfers are void because they fall within the provisions of ss 120 or 121.

The efficient resolution of the proceeding

Respondent’s submissions in chief

42    The Respondent submits that the most efficient resolution of this proceeding involves transferring the proceeding to Division 1 of the FCFCOA. In support of this alternative basis for the Transfer Application, the Respondent refers to the First Brown Affidavit, where Mr Brown deposes that the Respondent wishes to seek, among other things, relief under s 78, or alternatively s 79, of the Family Law Act to the effect that the entire equitable interest in the Property vests solely in the Respondent. To that affidavit an application dated 11 May 2026 (Respondent’s Proposed Application or Proposed Application) is annexed, which seeks, inter alia, the following relief:

1.    A declaration under s 30(1)(b) of the Bankruptcy Act 1966 (Cth) and/or s 78 of the Family Law Act 1975 (Cth) that the entire equitable interest in [the Property] is vested solely in the Applicant.

2.    In the alternative, an order under s 79(1)(b) of the Family Law Act 1975 (Cth) altering any (if any is found) equitable interest of the Respondent in the Property such that the entire equitable interest vests solely in the Applicant.

43    Mr Brown deposes to having been unable, on 10 and 11 May 2026, to file the Respondent’s Proposed Application in the FCFCOA on the basis that “the proceedings are yet to be transferred to” Division 1 of the FCFCOA. An email dated 11 May 2026 from the Registry of that Court refers Mr Brown to [2.1] of the Family Law Practice Direction: Bankruptcy Act proceedings, which is in the following terms:

2.1 Where family law proceedings are listed in the FCFCOA (Division 1) and a party to a marriage or de facto relationship is a bankrupt, a party may seek orders under the Bankruptcy Act in relation to any matter connected with, or arising out of, the bankruptcy, if the trustee of the bankrupt’s estate is:

a.    a party to property settlement proceedings or maintenance proceedings between the parties to the marriage or relationship;

b.     an applicant under sections 79A or 90SN of the Family Law Act seeking to set aside or vary property settlement orders made between the parties to the marriage or relationship; or

c.     an applicant under subsections 90K(1) or (3) or subsections 90UM(1) or (6) of the Family Law Act seeking to set aside a financial agreement of the parties to the marriage or relationship.

44    The Registry’s email is as follows:

A Registrar has advised that the Bankruptcy – Application lodged at the Family Court of Australia is unable to be accepted for filing. As there are no Family Court matter on foot.

Please see the following the Family Law Practice Direction: Bankruptcy Act proceedings, paragraph 2.1 indicates that the application may only be made where there are current family law proceedings listed in FCFCOA (Division 1). Paragraph 2.1 indicates “where family law proceedings are listed in the FCFCOA (Division 1). and a party to a marriage or de factor [sic] relationship is bankrupt...”.

As it appears the matter is still listed in the General Federal Law division, and yet to be transferred, as per below, then the Application cannot be accepted for filing in the Family Law division.

(Original emphasis, errors in original.)

45    The Respondent, by her oral submissions, characterises the Proposed Application as having been “declined until this application is heard and so we would then know whether there is an accompanying bankruptcy proceeding”. She also notes that she intends to file the Proposed Application “irrespective of the outcome” of the Transfer Application. She therefore submits that the Court can be confident that there will be proceedings in either Division 1 or 2 of the FCFCOA.

46    The Respondent submits by her written submissions that the considerations relevant to the relief sought under ss 78 and 79(1)(b) of the Family Law Act will “encompass and go beyond the factors the subject of anticipated evidence in the claims under the” Bankruptcy Act, and on this basis that it is more efficient for Division 1 of the FCFCOA to resolve both the Trustee’s claims under the Bankruptcy Act and the Respondent’s claims under the Family Law Act. This will also avoid duplication in the preparation of lay evidence, which the Respondent notes has not yet been filed in this Court. In oral submissions, she adds that there is a risk of issue estoppel if the matter remains in this Court. She additionally submits that the Bankrupt would have standing to seek an adjustment under s 79 of the Family Law Act, based on “whatever interest the [Trustee] is found to have” if the substantive proceeding were to remain in this Court. She submits that she intends to file the Proposed Application on the basis that the Trustee will be present in such an application.

47    The Respondent refers to Macks at [42] and Combis at [60] – [61]. In Macks, Besanko J held, on balance, that the proceeding should not be transferred to the Family Court, in circumstances where the proceeding was nearly ready for hearing and involved concise issues, and the respondent’s claim against the trustee was “contingent” in the sense that if the trustee was unsuccessful in this Court, there would be no need for the respondent to pursue her claim in the Family Court. The Respondent notes that in Macks, the ability of Division 1 of the FCFCOA to hear and determine both claims was a “powerful” reason in favour of transferring the proceeding. Further, she notes the passage in Combis where the Court held that a submission that all matters relevant to the claims be heard in one Court “ha[d] merit”. The Respondent submits that the decisive factor in refusing to transfer the proceeding in Macks was that the proceeding was “nearly ready for hearing”, whereas she says that this is not the case here. The Respondent orally submits that the proceeding is “at a very early stage”, and that the relevant question is not whether there is a matter on foot in Division 2 of the FCFCOA; rather, the question is whether a proceeding will be on foot. The Respondent additionally refers in written submissions to Horne, where at [19] – [20] Bromberg J considered it desirable that the Court avoid overlap in evidence leading to the duplication of evidence in two different courts, especially where the proceeding was not advanced, and this Court could not dispose of the need for a proceeding in the Family Court. She submits that these considerations “apply forcefully to this case”.

Trustee’s written submissions

48    The Trustee submits that the circumstances in this proceeding point against the Transfer Application being granted.

49    First, the Trustee notes that no proceeding has been filed in Division 1 of the FCFCOA and submits that this circumstance alone warrants the Transfer Application being dismissed, as there is no question of efficient conduct of parallel proceedings. The Trustee refers to the evidence regarding the Respondent’s Proposed Application in the Brown Affidavit and states that there is real doubt as to whether it will ever be accepted for filing. In oral submissions, he notes that no undertaking is given that it will be filed. The Trustee submits further, by his written submissions, that the respondent is “seek[ing] to fragment the determination of the present proceeding, and increase the complexity and cost”, contrary to ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and s 35A of the Bankruptcy Act, in circumstances where the issues can be resolved in the present proceeding.

50    Second, the Trustee submits that the issues in the Respondent’s Proposed Application can be resolved in the present proceeding, because the central issue of whether the “entire equitable interest” in the Property is vested solely in the Respondent will be resolved by this Court. If the Trustee fails to assert the trust on which the Property is allegedly held, then the Respondent will be the “sole absolute owner of the Property”. The Trustee submits that the Transfer Application is accordingly contrary to ss 37M and 37N of the FCA Act where the efficient resolution of the proceeding may obviate the need for any proceeding in Division 1 of the FCFCOA.

51    Further, the Trustee submits that any relief sought under s 79 of the Family Law Act is contingent, by analogy with Macks at [41], and not a basis for the proceeding to be transferred. He contends in any event that it will likely be determined in the present proceeding, which will consider the parties’ respective contributions to the acquisition, maintenance and upkeep of the Property.

52    Third, the Trustee submits that the relief in the Respondent’s Proposed Application would not be granted in any event and therefore lacks utility. He submits that the orders to the effect that the entire equitable interest in the Property be held to be vested in the Respondent are misconceived “as a matter of equitable principle, and would not be made”. The Trustee’s starting point in this regard is that the Respondent holds legal title to the Property. He refers to Commissioner of Stamp Duties (Qld) v Livingston (1964) 112 CLR 12, where Viscount Radcliffe at 22 stated:

… When the whole right of property is in a person, as it is in an executor, there is no need to distinguish between the legal and equitable interest in that property, any more than there is for the property of a full beneficial owner. What matters is that the Court will control the executor in the use of his rights over assets that come to him in that capacity; but it will do it by the enforcement of remedies which do not involve the admission or recognition of equitable rights of property in those assets. Equity in fact calls into existence and protects equitable rights and interests in property only where their recognition has been found to be required in order to give effect to its doctrines.

53    He then refers to DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) [1980] 1 NSWLR 510, where Hope JA at 519 stated, “an absolute owner in fee simple does not hold two estates, a legal estate and an equitable estate. He holds only the legal estate, with all the rights and incidents that attach to that estate”. He submits that if the Trustee is unable to establish that the Property is held on trust, no separate equitable interest will arise; thus, even if the Respondent succeeded in establishing her case for relief under ss 78 and 79 of the Family Law Act in Division 1 of the FCFCOA, the form of relief sought in the Respondent’s Proposed Application would not be granted.

54    Fourth, the Trustee submits that Division 1 of the FCFCOA would not likely grant relief under s 79 of the Family Law Act because, inter alia, the Respondent would have difficulty establishing that it is “just and equitable” to make the orders sought where there is an intact relationship. In support of this proposition, the Trustee refers to Stanford v Stanford [2012] HCA 52; 247 CLR 108, which concerned an intact relationship. At [44], French CJ, Hayne, Kiefel and Bell JJ stated as follows:

When, as in this case, the separation of the parties is not voluntary, the bare fact of separation does not demonstrate that the husband and wife have any reason to alter the property interests that lie behind whatever common use they may have made of assets when they were able to and did live together. Common use of some assets may very well continue, as it did here when the husband made provision for the wife’s care and accommodation. Past arrangements that the parties have made about their property interests on the assumption, expressed or implicit, that those arrangements were sufficient and appropriate during the continuance of their marriage are not necessarily falsified. If both parties are competent, it can still be assumed that any necessary or desirable adjustment can be made to their property interests consensually. And if one of the parties has become incompetent it is not to be assumed that the other party lacks the will and ability to make those necessary or desirable adjustments.

55    Finally, the Trustee submits that the Transfer Application would likely delay the resolution of this proceeding, as the matter, which is at a relatively advanced stage, would have to recommence. In the Moles Affidavit, Ms Moles refers to the FCFCOA’s Central Practice Direction which at [5.3] provides as follows:

The listing pathway will involve the following events:

…

(g)     subject to the parties complying with relevant orders and directions, a Final Hearing will be listed on a date earlier than 12 months from the date of filing; and

(h)     the Courts will endeavour to deliver judgment within 3 months of completion of the trial.

56    She further deposes that in her experience, a proceeding of this nature might take between 12 and 24 months to proceed from filing to a final hearing and judgment delivery.

57    In his oral submissions, the Trustee notes that the Transfer Application was not brought until a case management hearing to deal with disputes about disclosure, after the proceeding was “somewhat advanced”. No explanation is offered by the Respondent regarding the delay.

Respondent’s reply submissions

58    The Respondent, by her oral submissions, contends in response to the Trustee’s written submissions that it is appropriate to transfer the proceeding because, even if the Trustee is recognised as having an equitable interest in the Property, Division 1 of the FCFCOA will be able to take into account additional factors which may reduce such an interest. In this regard, the Bankrupt himself might rely on such factors in seeking an adjustment: see Masih & El Saeid (No 2) [2023] FedCFamC1F 939 at [77], [83]. The Respondent emphasises the “clear intention on the uncontradicted evidence” that claims for adjustments will be filed regardless of the outcome of the Transfer Application, and therefore the Trustee “will be in another set of proceedings in any event”. She reiterates that, given that broader factors can be taken into account in such a proceeding, there is a risk of conflicting findings and issue estoppels. As to the breadth of factors to be taken into account under ss 78 and 79 of the Family Law Act when compared to those to be considered in “trust factors”, she refers to NSW Trustee and Guardian v Togias [2022] NSWCA 225; 110 NSWLR 86 at [147] – [151].

59    The Respondent also contends that s 35A(1) of the Bankruptcy Act does not require a proceeding to already be pending in Division 1 of the FCFCOA, and submits that by reason of the “uncontradicted evidence” in the First Brown Affidavit, “there’s no real doubt that Division 1 would accept [the Respondent’s] filing once this transfer application is determined because it changes the character of what is sought to be done, whether it’s linked with the bankruptcy proceedings”.

60    She also relies on Allen at [53] – [56], where the availability of a substantive hearing of the matter in this Court removed a “significant practical consideration that might have otherwise favoured transfer” and therefore facilitated the efficient resolution of the proceeding. She contrasts that authority on the basis that this proceeding is not close to a hearing. Further, as to the Trustee’s submission that granting the Transfer Application will delay the proceeding being resolved, the Respondent submits that the transfer may, in fact, shorten the proceeding. In relation to the evidence in the Moles Affidavit regarding the expected length of time before the matter might be heard in the FCFCOA, she submits that this may support the Transfer Application given that (1) the FCFCOA may need to wait until this proceeding is determined before hearing the Proposed Application, and (2) if the Transfer Application is granted, case management may manage both matters together and expedite the proceeding: see Allen at [50].

61    As to the Trustee’s submission that the relief sought in the Respondent’s Proposed Application would not be granted and lacks utility, the Respondent submits that this Court should not take account of that submission, as the proceeding is at too early a stage for it to be considered, and in any event the Court would be speculating as to what relief might be granted in Division 2 of the FCFCOA.

62    Finally, the Respondent refers to the following examples of cases where, in her submission, transfers have been refused primarily because of a hearing occurring imminently in this Court, where otherwise there would have been a forensic advantage in having all the issues determined together: see Naudi and Reid as Trustees of the Bankrupt Estate of Albarouki v Albarouki [2018] FCCA 1295 at [18] – [19]; Bosanac at [29], [35]; Federal Commissioner of Taxation v Residence Riverside Proprietary Ltd (as Trustee for the D&J Discretionary Trust and as Trustee for the D&J Investment Trust) [2013] FCA 720; 95 ATR 86 at [18]; Horne at [21]; Sievers v Sievers [2015] FCCA 3326 at [23](a); Combis at [60] – [62].

63    At the conclusion of the hearing of the Transfer Application, the Respondent’s counsel gave, on his instructor’s instructions, the undertaking that the Respondent’s Proposed Application would be filed in the FCFCOA.

consideration

Jurisdiction

64    The Court’s “first duty” is to determine whether it has jurisdiction to make the orders sought: Federated Engine Drivers and Firemen’s Association of Australasia v Broken Hill Pty Co Ltd [1911] HCA 31; 12 CLR 398 at 415 (Griffith CJ); Truthful Endeavour Pty Ltd v Condon [2015] FCAFC 70; 233 FCR 174 at [32] (Allsop CJ, Katzmann and Gleeson JJ). Even if the parties do not raise the issue of the Court’s jurisdiction, it is competent and proper for the Court to do so: see Official Trustee in Bankruptcy v Nedlands Pty Ltd (In liq) [2000] FCA 599; 99 FCR 554 at [14]. The implied jurisdiction of a court includes the authority to decide whether its jurisdiction has been validly invoked: New South Wales v Kable [2013] HCA 26; 252 CLR 118 at [31].

65    However, while the duty is expressed as a “first duty”, there may be instances where it is appropriate for the Court, in its discretion, to defer the determination of jurisdiction until the trial, provided that after having heard the entire case, the Court determines whether it has jurisdiction: Khatri v Price [1999] FCA 1289; 95 FCR 287 at [14]. The duty does not require the Court to determine any dispute concerning jurisdiction as a preliminary issue: Australian Securities and Investments Commission v Provide Nominees Pty Ltd [2023] FCA 1137; 170 ACSR 576 at [33]; SunshineLoans Pty Ltd v Australian Securities and Investments Commission [2023] FCA 707 at [61] – [62]. As Murphy J stated in Civil Air Operations Officers Association of Australia v Airservices Australia [2020] FCA 1665 at [31]:

… Ultimately, it is for the Court to determine, in the interests of justice, the time at which and the manner in which a jurisdictional issue is to be determined: Bray v F Hoffman-La Roche Ltd [2002] FCA 243; (2002) 118 FCR 1 at [185] – [187], Merkel J following Katz J in Khatri v Price [1999] FCA 1289; (1999) 95 FCR 287 at [14].

Vested bankruptcy property

66    The first issue going to the Court’s jurisdiction is whether the proceeding is a “matrimonial cause” for the purposes of the definition of that phrase in s 4(cb) of the Family Law Act. If the proceeding is a “matrimonial cause”, then it must be considered whether ss 4 and 8 of the Family Law Act operate to limit this Court’s jurisdiction in bankruptcy. Determining whether the proceeding is a “matrimonial cause” requires determining, firstly, whether the proceeding is with respect to any “vested bankruptcy property” in relation to the Bankrupt and whether the proceeding is one “arising out of the marital relationship”.

67    For the following reasons, I am not persuaded on the basis of the arguments advanced or the evidence before me that the Court does not have jurisdiction to determine the proceeding.

68    First, it may be accepted that one of the purposes of the Trustee in this proceeding is to recover property that would otherwise have been available to be distributed to creditors. However, the mere commencement and prosecution of this proceeding do not of themselves render the Property “vested bankruptcy property”. In this regard, the Respondent’s reliance on the statements of the Full Family Court in Galanis (see above at [26]) is misplaced. At [49] – [50], the Court stated as follows:

The purpose of setting aside a financial agreement at the behest of a trustee in bankruptcy is to seek to recover property that would otherwise have been available to that trustee to distribute to creditors. That property can consist only of property that vested in the trustee at the commencement of the bankruptcy or was acquired by or devolved upon the bankrupt prior to his or her discharge from bankruptcy. The trustee has no interest in any property of a bankrupt acquired after discharge.

These factors lend support to the view that the use of the word “bankrupt” in definition (cb) is not otiose but is intended to have adjectival force so as to limit the phrase “bankrupt party” to meaning an undischarged bankrupt. This is the effect of the amendments to the sections dealing with maintenance and property applications, which were enacted at the same time. This construction is supported by the provisions of the Bankruptcy Act, which vest property held by the bankrupt at the time of his or her bankruptcy as well as property that is acquired whilst the bankrupt is an undischarged bankrupt.

69    It would appear that the Respondent relies upon [49] to the effect that, once a trustee in bankruptcy seeks to “recover property that would otherwise have been available to that trustee to distribute to creditors”, then automatically that property is to be treated as “vested bankruptcy property”. A plain reading of that paragraph and the passage in which it is located is sufficient to show that the Court was not making a connection between the type of claim brought by a trustee in bankruptcy and the treatment of the property subject to the claim as “vested bankruptcy property”. Rather, the Court was noting the categories of property which the trustee in bankruptcy might seek to recover when setting aside a financial agreement: namely, property that vested in the trustee in bankruptcy at the commencement of the bankruptcy, or property acquired by or devolved upon the bankrupt prior to being discharged from bankruptcy: at [49]. However, the Court noted these categories of property in support of its construction of the word “bankrupt” in paragraph (cb) of the definition of “matrimonial cause” under s 4 of the Family Law Act, as being limited to an undischarged bankrupt: see [45] – [57]. I do not read this passage as expressing any view on when property is to be characterised as “vested bankruptcy property”. In any event, the meaning of “vested bankruptcy property” was not in issue in that case: at [1], [19], [32], [38]. The mere fact that, in the Respondent’s words, the Trustee asserts that “the Property has vested in him pursuant to section 58 of the [Bankruptcy Act]”, does not render the Property “vested bankruptcy property” for the purpose of paragraph (cb) of the definition of “matrimonial cause” under s 4 of the Family Law Act.

70    Second, I do not accept the Respondent’s submission that Macks is distinguishable from the present proceeding in regard to the Court’s jurisdiction to determine the proceeding. Besanko J’s decision that this Court had jurisdiction in determining the question of whether the transfers in that case were void under ss 120 or 121 of the Bankruptcy Act, applies equally to the question of whether the Trustee has a beneficial interest in the Property by way of (if any) a resulting, implied or constructive trust, and the respondent holds her sole legal interest in the Property on a resulting, implied or constructive trust. His Honour plainly considered that determining the claims under ss 120 and 121 of the Bankruptcy Act was a step anterior to the alteration of the trustee’s rights in any “vested bankruptcy property”, and was within this Court’s jurisdiction. So much is evident from [39], where his Honour stated:

At the same time, there is nothing to suggest that this Court does not have jurisdiction over the trustee’s claim and I reject the submission that the trustee has issued proceedings in the wrong court. The Family Court has jurisdiction to alter the trustee’s rights with respect to vested bankruptcy property, but this Court retains jurisdiction to determine the prior questions of whether the transfers are void because they fall within the provisions of s 120 or s 121 [of the Bankruptcy Act].

(Emphasis added.)

71    It may be inferred that his Honour’s use of the phrase “prior question” indicated that he did not consider the proceeding to (yet) concern “vested bankruptcy property”. This is supported by his Honour’s view that if the trustee was unsuccessful in his claim, then there was “no relevant vested bankruptcy property”: at [41]. Nothing in his Honour’s reasoning can be seen as excluding from the Court’s jurisdiction the making of declarations as to equitable interests in property, even if the relevant equitable interest arose prior to the date of the declaration. The ability of Division 1 of the FCFCOA to alter the Trustee’s rights with respect to any “vested bankruptcy property” (in the event that the Trustee is successful in his Originating Application) depends on the prior determination of the Trustee’s Originating Application and the existence of any “vested bankruptcy property”. As the Trustee submits, if it is unsuccessful in its Originating Application, there will be, and will have been, no relevant “vested bankruptcy property” and the Respondent’s Proposed Application will fall away: compare Macks at [41]. Contrary to the Respondent’s submissions, therefore, no relevant distinction exists between this proceeding and Macks. As already set out in [69], the mere fact that the Trustee may assert that an interest in the Property has already vested in him by virtue of s 58 of the Bankruptcy Act does not mean that the Property is “vested bankruptcy property”.

72    Third, in the alternative to the above conclusion reached regarding Macks, I am not willing to conclude, on the basis of untested evidence, that the Court does not have jurisdiction. Neither the Respondent nor the Trustee referred me to Jess & Jess (No 7) [2023] FedCFamC1F 291, which I consider to be instructive as regards the approach to be taken in the Transfer Application regarding jurisdiction in the event that Macks is not determinative of the issue. In that case, Wilson J considered, in the context of a property adjustment proceeding in Division 1 of the FCFCOA, an application by the “represented third parties” in that proceeding, which included the deceased husband’s son, to summarily dismiss a cross-claim brought by the interveners, the trustees in bankruptcy of the deceased husband: at [2]. The represented third parties’ claim was that at all relevant times, the son was the holder of units in a unit trust: at [7]. They argued that the trustees did not presently assert that immediately prior to his death, the husband held any units in the unit trust in his own name, and that they were unable to demonstrate, at this point in time, that they were seized of property formerly owned by the husband, which vested in the trustees by virtue of the husband’s bankruptcy: at [7]. On this basis, they argued that Division 1 of the FCFCOA had no jurisdiction to hear and determine the intervenors’ claim in the property adjustment proceeding, unless and until the trustees demonstrated that the cross-claim was a “matrimonial cause” within the meaning of s 4(cb) of the Family Law Act: at [7], [50]. Rather, as the units were vested in the son, not the bankrupt, the jurisdiction under s 79(1)(b) of the Family Law Act was not enlivened: at [7]. The argument focused on whether the trustee’s claim in relation to a deed of declaration of trust, a settlement deed and a transfer instrument (impugned document) were “with respect to any vested bankrupt property … arising out of the marital relationship”: at [31].

73    At [55], Wilson J noted that the represented third parties placed “heavy reliance” on the trustees’ pleading by which they sought orders “that the units vest ‘with retrospective effect’ and that ownership of the units ‘be recorded to be held in the names of the trustees, with retrospective effect’”. Their submission was that the trustees’ pleas to recording their ownership retrospectively “effectively amounted to a concession that the trustees do not presently have vested property in the units”.

74    The factual circumstances outlined above are the converse of this proceeding: in Jess, the argument was that Division 1 of the FCFCOA had no jurisdiction because the relevant property was not “vested bankruptcy property”; here, the argument is that the Court has no jurisdiction because, subject to the other elements of the definition of “matrimonial cause” under paragraph (cb) being satisfied, the Property is “vested bankruptcy property”.

75    Wilson J at [16], relied on the Full Family Court’s decision in Yunghanns v Yunghanns (1999) 24 Fam LR 400 at [109], which in turn relied on the High Court’s observations in DMW v CGW [1982] HCA 73; 151 CLR 491 at 507 – 511, and R v Ross-Jones; Ex parte Green [1984] HCA 82; 156 CLR 185 at 202, 212 – 214. His Honour there distinguished between “jurisdictional facts”, being “essential facts upon which the exercise of [the Court’s] jurisdiction to make the orders sought ultimately depends”, and “adjudicational facts”, being the “facts the existence of which it is necessary to establish in order to entitle the applicant (subject to discretionary considerations) to an exercise” of the Court’s jurisdiction. At [18], Wilson J stated as follows:

… jurisdictional facts must be found ahead of finding adjudicational facts, although the finding of adjudicational facts may take place immediately following the finding of jurisdictional facts in a contested debate. That may even be at trial.

76    His Honour identified, at [41], the difficulty that arises where the jurisdictional facts are comprised of disputed facts, and considered that “[a]ccording to conventional orthodoxy, contested facts are determined at trial”. The status of the deed of declaration of trust, the instrument of transfer, and the deed of settlement remained “highly contentious documents, as to not only the circumstances of the creation and entry into each but also as to their legal effect and validity”: at [47].

77    At [75], his Honour stated as follows:

Accepting that the trustees’ cross claim depended on an affirmative response to the question whether the vested bankruptcy property is presently held by the trustees, it seemed to me that this court can only give that answer once it makes findings of fact or addresses issues of mixed fact and law in order to determine its own jurisdiction. That approach is consistent with conventional orthodoxy in R v Federal Court of Australia; ex parte WA National Football League [[1979] HCA 6; 143 CLR 190], DMW v CGW and R v Ross-Jones; ex parte Green.

(Emphasis added.)

78    His Honour considered that it did “not lie in the mouths of the represented third parties” to contend that the Court had no jurisdiction, on the basis that bankruptcy property did not vest in the trustees, in circumstances where the facts leading up to and including the execution of the impugned documents were contested, and there was a legal argument about whether the husband retained a bare right that had passed to the trustees, and whether it was to be construed as being property: at [76]. His Honour referred to his duty to “enquire into and make findings of fact on which jurisdiction … is based”, and was unwilling to conclude, on the basis of untested evidence, that there was no jurisdiction to permit the trustees’ cross-claim to proceed: at [79] – [80]. For completeness, at [78], his Honour considered it contrary to public policy to deny jurisdiction where the alleged want of jurisdiction was occasioned by acts described as being fraudulently committed by one or more parties asserting a lack of jurisdiction: at [78].

79    While noting that Jess concerned, inter alia, an application for summary dismissal, rather than an application to transfer the proceeding, I consider that his Honour’s approach to jurisdiction is applicable to the Transfer Application. Here, as in Jess, determining whether the proceeding is with respect to “vested bankruptcy property” will require the Court to consider the issues raised by the Originating Application, which in turn will require it to make findings of fact or address issues of mixed fact and law: see Jess at [75]. By analogy to the position taken by his Honour at [76], it is not for the Respondent to say that the Court has no jurisdiction, where factual and legal issues allegedly giving rise to the interests asserted in the Originating Application are contested as between the parties. In this regard, it is surprising that the Respondent should, by her defence, deny that the Bankrupt has any equitable interest in the Property, which interest she also denies has vested in the Trustee, yet for the purposes of the Transfer Application rely on the Trustee’s position and say that “the Property is ‘vested bankruptcy property’ as defined in s 4” of the Family Law Act.

80    In light of the Court’s duty to “enquire into and make findings of fact on which jurisdiction … is based”, and in the alternative to finding that Macks is not distinguishable, I am not willing to conclude, on the basis of the evidence before me thus far in the proceeding, that the Court does not have jurisdiction on the basis that the Property is “vested bankruptcy property”. A conclusion about whether the proceeding is with respect to “vested bankruptcy property” is properly the subject of a final hearing of the Originating Application. Accordingly, the issue of whether any declaration of trust would give rise to an equitable interest from the date that the interest is declared to have arisen or from the date of the declaration (if the Trustee is successful in his Originating Application) does not arise in the context of the Transfer Application.

Proceedings arising out of the marital relationship

81    As I have found that the reasoning in Macks applies to this proceeding such that the Court has jurisdiction to determine the issues raised in the Originating Application, or alternatively that the current state of the proceeding is not a proper juncture at which to conclude whether or not the Property is “vested bankruptcy property”, the question of whether the proceeding is one “arising out of the marital relationship” does not arise for consideration. This element is a necessary but not a sufficient condition for the proceeding to be a “matrimonial cause” under s 4 of the Family Law Act. Accordingly, it is also not necessary to consider whether ss 4 and 8 of the Family Law Act operate to “cut down” this Court’s jurisdiction in bankruptcy. For completeness, however, the Respondent’s reliance on Bosanac at [23] (see above at [23]) does not appear to answer the question of whether this Court has jurisdiction, given that that passage appears to form part of McKerracher J’s summary of the submissions in that case, rather than a statement of principle.

The efficient disposition of this proceeding

82    As to the second basis for the Transfer Application, I am not satisfied that the most efficient disposition of the proceeding is for it to be transferred to Division 1 of the FCFCOA.

83    First, I am unpersuaded by the Respondent’s submissions regarding the Proposed Application and her characterisation of the effect of the email of the Registry of Division 1 of the FCFCOA. [2.1] of the Family Law Practice Direction provides that a party to a proceeding referred to in that paragraph may seek orders under the Bankruptcy Act in relation to any matter “connected with, or arising out of, the bankruptcy”, if the trustee in bankruptcy is, relevantly, a party to property settlement proceedings or maintenance proceedings between the parties to the marriage or relationship. The email of the Registry of that Court, supported by that paragraph of the Family Law Practice Direction, states that the Proposed Application can only be accepted for filing if there is a matter on foot in Division 1 of the FCFCOA. The last paragraph of that email indicates that the Proposed Application would only be accepted for filing if this proceeding were transferred. The Respondent, however, characterises that email as being that the Proposed Application has been “declined until [the Transfer Application] is heard”.

84    I am not persuaded that the Registry of Division 1 of the FCFCOA was awaiting the outcome of the Transfer Application, before accepting the Respondent’s Proposed Application, regardless of that outcome. Rather, the Proposed Application could only be accepted if the Transfer Application is successful. Therefore, while it may be accepted that it is not necessary for there to currently be a parallel proceeding in Division 1 of the FCFCOA for the purposes of an application to transfer a proceeding pursuant to s 35A of the Bankruptcy Act, I do not consider that this assists the Respondent. The Respondent submits that the relevant question is whether a proceeding will be on foot. But regardless of the “uncontradicted evidence” that the Proposed Application will be “filed” regardless of the outcome of the Transfer Application, or the Respondent’s undertaking to that effect, as the Trustee submits, there is real doubt, on the basis of the above correspondence and the Family Law Practice Direction, as to whether it will be accepted for filing. Therefore, I reject the Respondent’s submission that the Court can be “confident” that there will be a proceeding in Division 1 of the FCFCOA. The desirability of the Court hearing both the claims under the Bankruptcy Act and any claims under the Family Law Act (referred to below), therefore does not arise because there will not, on the evidence before me, be a parallel proceeding on foot in Division 1 of the FCFCOA.

85    Second, I am not persuaded that the fact that the range of considerations arising from the relief sought in the Respondent’s Proposed Application will “encompass and go beyond the factors the subject of anticipated evidence in the claims under the” Bankruptcy Act, requires the proceeding to be transferred. While the portions of Macks, Combis and Horne referenced at [47] recognise the desirability of the same court hearing and determining both the claims under the Bankruptcy Act and any claims under the Family Law Act, I consider that, on the authority of Macks, the proceeding should remain in this Court. As noted above, I do not consider the analysis in Macks to be distinguishable. Rather, as in Macks, the relief sought in the Respondent’s Proposed Application is a “contingent claim”, in that it only becomes relevant in the event of the Trustee succeeding in establishing the relief sought in the Originating Application: at [41]. On that analysis, it is not apparent that there will be a need for multiple claims to be determined, and therefore the desirability of multiple claims being determined in the same Court does not weigh heavily in considering whether the proceeding should be transferred.

86    As in Macks, whether the transfer is appropriate depends on the exercise of the Court’s discretion: at [42]. As noted above, there is real doubt as to whether the Respondent’s Proposed Application will be accepted for filing. Additionally, while this proceeding is not yet ready for hearing, it is not “at a very early stage”, as the Respondent submits. The pleadings have closed (compare Combis at [62]), though evidence in relation to the Originating Application has not been led. The proceeding has, however, been subject to delay owing to (1) difficulties experienced by the Trustee in serving the Respondent, and (2) the Respondent opposing the Trustee’s application for discovery, which she ultimately conceded.

(1)    As to (1), the matter was allocated to my docket on 19 November 2025, and on 28 November 2025 the Trustee was advised that a first case management hearing was listed on 4 December 2025. On 2 December 2025, the Trustee indicated difficulties serving the Respondent, and on this basis the first case management hearing was adjourned to 5 February 2026. On 4 February 2026, after the Trustee indicated further difficulties serving the Respondent, the first case management hearing was converted into a hearing of an application for substituted service. Later on 4 February 2026, the Respondent’s representatives indicated that they had instructions to act for her. On this basis, the first case management hearing proceeded on 5 February 2026. At that first case management hearing, the Respondent “reserved [her] rights” in regard to any transfer application.

(2)    As to (2), correspondence regarding the Trustee’s application for discovery is annexed to affidavits of Mr Tiplady filed on 9 March 2026 and of Ms Morcus filed on 18 March 2026. Between 19 and 27 February 2026, the parties exchanged correspondence regarding the documents which the Trustee sought by way of discovery in the proceeding. The Respondent’s correspondence in that time did not substantively address the Trustee’s request for disclosure. On 9 March 2026 the Trustee filed an application for discovery pursuant to r 20.13 of the Rules. Correspondence between the parties spanning 10 to 18 March 2026 indicates that between 10 and 13 March 2026, there was some agreement regarding the categories of discovery sought by the Trustee, with the balance to be dealt with by the Court. Ultimately, by email dated 16 March 2026, the Respondent agreed to discover documents responsive to all the categories sought by the Trustee. An interlocutory hearing was held on 18 March 2026 in which orders for discovery were made. The matter was also listed for a case management hearing on 15 May 2026. The Transfer Application was filed on 12 May 2026.

87    In circumstances where the stage at which the proceeding finds itself is, to some extent, a product of the way the Respondent has participated in the proceeding, it would be an odd result if the Respondent were able to benefit from the stage of the proceeding as a factor supporting the Court’s exercise of its discretion in her favour in the Transfer Application.

88    Further, contrary to what appears to be the Respondent’s submission, the mere fact that a hearing is not yet listed in this proceeding is not determinative. To the extent that she submits that a hearing being listed in this Court is relevant to whether the proceeding should be transferred, that is accepted. However, the cases referred to at [62] do not support the proposition advanced that the relevant refusal to transfer the proceeding was premised primarily on a hearing being listed imminently in this Court. The fact that a hearing has not yet been listed in this proceeding is only a factor to be considered when determining how the proceeding can most efficiently be disposed of. Additionally, the fact that all issues can be disposed of in the same court is similarly a factor to be considered in the context of a transfer application.

89    In Naudi and Reid, the Court’s focus on whether a trial had been listed was primarily directed to the respondent’s delay in making an application that the proceeding be transferred, with the effect that any prejudice suffered by the respondent by a refusal to transfer the proceeding was to be borne by her: at [15] – [19]. In Bosanac, the Court considered that it was “relevant” that hearing dates had been set four months prior to the second respondent filing the transfer application, and that it was common ground that the proceeding would be resolved in this Court “substantially earlier than in the Family Court”: at [35]. However, that factor was considered against the backdrop of the Court having found that the “mere possibility” of the second respondent seeking an order pursuant to s 79 of the Family Law Act was insufficient to conclude that it was “more appropriate” for the subject matter of the dispute in this Court to be determined by the Family Court, when this Court had been seized of the matter for several years, and had programmed it to hearing within a matter of weeks: at [33]. Further, the second respondent’s right to seek relief under s 79 of the Family Law Act would remain intact regardless of the determination of the proceeding in this Court: at [34], [36].

90    In Residence Riverside, the Court had determined that the proceeding in this Court did not “arise out of”, nor was it “related to”, a proceeding in the Family Court of Western Australia, under s 5(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth): at [12] – [15]. It then considered (assuming, contrary to the above, that the “threshold” question was answered affirmatively) whether a transfer was “in the interests of justice”: at [16]. The availability of a short hearing within a few months was one of the factors to be taken into account: at [17] – [18]. However, the key consideration that appeared to influence the Court’s decision was that this Court could determine a “discrete but novel question” regarding the Commissioner of Taxation’s power, “on a point previously untested”, and that there “may be merit in that issue being first considered in this court which deals frequently with tax disputes involving the Commissioner rather than in the … Family Court [of Western Australia]”: at [20] – [21].

91    In Horne, the transfer application was heard at the same time as the first directions hearing: at [1]. The proceeding concerned, inter alia, the extent of the interest of the first respondent (the applicant in the transfer application) in certain property, as part of the primary relief sought by the trustees in bankruptcy of the first respondent’s husband: at [5]. The first respondent sought orders against the trustees, including pursuant to s 79(1) of the Family Law Act: at [8]. At [16], the Court considered that “issues of efficiency, economy and comity” raised by the first respondent were “persuasive factors” supporting transfer. These included the avoidance of costs caused by an overlap in litigation between the same parties, and the potential appearance of conflict between orders of multiple courts: at [13]. At [20], the Court distinguished Macks on the basis that the proceeding was not advanced, and the Court was unable to obviate the need for the proceeding to be pursued in the Family Court. At [21], the Court considered that “paramount” among the relevant considerations was the Family Court’s “capacity … to resolve all claims for relief and, in doing so, exercise case management powers which will permit the efficient disposition of related issues”. While it might be said that the lack of a hearing being listed in this matter facilitated the matter being transferred, it cannot be said, based on this authority, that a refusal of a transfer would be premised primarily on a hearing already being listed. In any event, the Court considered there to be no way to avoid a proceeding being brought in the Family Court.

92    The relevant portion of Sievers to which the Respondent directed me (namely [23](a)) is authority for the proposition that it is “inappropriate that this Court should take a step which may have an adverse effect on proceedings in the Family Court when the Family Court would have, following transfer, jurisdiction to consider and decide the issue itself”, and that “[i]n most cases, it would be thought that all issues would be best addressed in one set of proceedings”. However, a primary reason for ordering that the proceeding be transferred was that the determination of a creditor’s petition would have a material effect on the progress of a proceeding already commenced in the Family Court involving the same parties, and therefore, the interests in the administration of justice required the matter to be transferred: at [21] – [23].

93    The statements of the Court in Combis at [62] suggest that the fact of there being no hearing listed in the proceeding sought to be transferred, and the fact of there being overlap, were merely factors which supported it being transferred. However, I note that in Combis, the pleadings had not yet closed and the proceeding was “not nearly ready for hearing”. Finally, the Respondent’s reliance on Allen in this regard is misplaced. In that case, the “factors for and against transfer [were] finely balanced”: at [48]. The fact that a hearing was available in this Court was only a factor falling for consideration in the context of the transfer application: at [55] – [56].

94    Fourth, I am persuaded by the Trustee’s submission, made in reliance on both the depositions in the Moles Affidavit and the FCFCOA’s Central Practice Direction, that granting the Transfer Application would further delay the resolution of the proceeding. The Respondent’s submission that transferring the proceeding will, rather, speed up the proceeding, proceeds on the premise that the Respondent’s Proposed Application will arise for consideration; however, as noted above, this claim is “contingent” on the Trustee succeeding in the Originating Application. If the proceeding is transferred then, regardless of whether the trustee is successful in the Originating Application, the proceeding will, on the evidence in the Moles Affidavit and the FCFCOA’s Central Practice Direction, take between 12 and 24 months. However, if the proceeding remains in this Court, there is a chance that the entire dispute will be disposed of earlier if the Trustee is unsuccessful in the Originating Application. Thus, allowing for the uncertainty in the outcome of the Originating Application, a comparison of the above possible scenarios suggests that the most efficient resolution of the proceeding is for it to remain in this Court.

95    Finally, I do not think it appropriate for this Court to engage with the Trustee’s submissions that the relief sought in the Respondent’s Proposed Application would not be granted and lacks utility, or that Division 1 of the FCFCOA would not grant relief under s 79 of the Family Law Act because, inter alia, the Respondent would have difficulty establishing that it is “just and equitable”. To do so would be to prejudge the outcome of any application in that Court, in circumstances where it is unclear if such issues will even arise.

conclusion

96    The Transfer Application should be dismissed.

97    The Respondent submits that, whatever the outcome of the Transfer Application, costs should be reserved. The Trustee seeks his costs of the Transfer Application. While the Trustee has been successful in the Transfer Application, I consider that costs should be in the cause. If the Trustee does not succeed in the Originating Application, then costs would likely follow the event: see Bosanac at [37].

Associate:

Dated:    27 August 2026