Campbell v Brazel - [2016] NSWSC 198

Supreme Court

New South Wales

Medium Neutral Citation: Campbell v Brazel [2016] NSWSC 198
Hearing dates: 3 March 2016
Date of orders: 04 March 2016
Decision date: 04 March 2016
Jurisdiction: Common Law
Before: Fagan J
Decision:
1. The plaintiffs’ notice of motion filed 13 August 2015 is dismissed.

2. These proceedings are declared incompetent and a nullity.

3. The plaintiffs are to pay the defendants’ costs from the filing of the defendants’ notice of motion on 26 February 2015.
4. The costs to be paid by the plaintiffs under order 3 to the defendants are to be on the indemnity basis on and from 16 April 2015.
Catchwords:
PRACTICE AND PROCEDURE – civil – lack of standing to sue – cause of action vested in trustee in bankruptcy at time of commencement – assignment of cause of action to plaintiffs after commencement – proceedings a nullity

PRACTICE AND PROCEDURE – civil – amendment – proceedings not curable by amendment to plead assignment of cause of action after commencement – Civil Procedure Act 2005 (NSW), ss 64, 65
BANKRUPTCY – vesting of cause of action in trustee – no revesting upon discharge of bankrupt – Bankruptcy Act 1966 (Cth) – ss 58, 129AA, 149
Legislation Cited: Bankruptcy Act 1966 (Cth)
Civil Procedure Act 2005 (NSW)
Corporations Act 2001 (Cth)
Limitation Act 1969 (NSW)
Cases Cited: Chahwan v Euphoric Pty Ltd [2008] NSWCA 52
Chahwan v Euphoric Pty Ltd [2009] NSWSC 805, (2009) 73 ACSR 252
Darrington v Caldeck (1990) 20 NSWLR 212
Deveigne v Askar [2007] NSWCA 45
D’Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1
Foss v Harbottle (1843) 2 Hare 461; 67 ER 189
Marshall v DG Sundin & Co Pty Ltd (1989) 16 NSWLR 463
Samootin v Shea [2010] NSWCA 371
Category: Principal judgment
Parties: Gregory William Campbell (1st Plaintiff)
Jennifer Campbell (2nd Plaintiff)
Geoffrey Ronald Brazel (1st Defendant)
Peter Gerard Moore (2nd Defendant)
Joseph McCarthy(3rd Defendant)
Representation:
Counsel:
Mr H W Somerville (Plaintiffs)
Mr G P Craddock SC (Defendants)
Solicitors:
Mr R Brown, Stacks Goudkamp (Plaintiffs)
Ms K Kumar, HWL Ebsworth Lawyers (Defendants)

File Number(s): 2014/219954
Publication restriction: Nil

Judgment

The plaintiffs claim that their former solicitors, the defendants, breached common law and contractual duties owed to them in connection with the defence of proceedings brought against the plaintiffs by the assignees of Raine & Horne Queensland Pty Ltd in 2008 (“Raine & Horne”).
The defendants’ negligence and breach of contract is said to have resulted in the plaintiffs suffering default judgment against themselves followed by bankruptcy.
After they had been discharged from bankruptcy on 7 May 2012 the plaintiffs commenced this action against the defendants for damages by filing the statement of claim herein on 25 July 2014. The defendants say that the plaintiffs had no title to the pleaded causes of action at the time they commenced; that standing to sue was solely with the plaintiffs’ trustees in bankruptcy and that in consequence the proceedings are incompetent…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Campbell v Brazel

Details

AGLC: Campbell v Brazel [2016] NSWSC 198
Case: [2016] NSWSC 198
Decision Date: 04 March 2016

CaseChat Overview and Summary

The case of Campbell v Brazel involved the plaintiffs, Campbell and another, who sought to bring an action against the defendant, Brazel. The dispute arose from a cause of action that was originally vested in a bankrupt at the time the proceedings were commenced. The plaintiffs, however, claimed that they had been assigned the cause of action after the commencement of the action. The matter was heard in the Supreme Court of New South Wales.

The court was required to decide whether the plaintiffs had standing to bring the action, given that the cause of action was vested in a trustee in bankruptcy at the time the proceedings were initiated. A further issue was whether the proceedings could be cured by an amendment to the pleadings to include the assignment of the cause of action after the action was commenced. The court also considered the effect of the vesting of the cause of action in the trustee in bankruptcy and whether it could be reversed upon the discharge of the bankrupt.

The court found that the plaintiffs did not have standing to bring the action as the cause of action was vested in the trustee in bankruptcy at the time the proceedings were commenced. The court held that proceedings could not be cured by an amendment to the pleadings after the action was commenced, pursuant to sections 64 and 65 of the Civil Procedure Act 2005 (NSW). The court also determined that the vesting of the cause of action in the trustee in bankruptcy did not revest upon the discharge of the bankrupt, in accordance with sections 58, 129AA, and 149 of the Bankruptcy Act 1966 (Cth). The court consequently held that the proceedings were a nullity.

The final order of the court was that the plaintiffs' action be dismissed as a nullity, with no order as to costs.

Orders