Cooper v Moloney (No 5)

Case [2012] SASC 211

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Civil)

COOPER v MOLONEY (NO 5)

[2012] SASC 211

Judgment of The Honourable Justice Blue

15 November 2012

BANKRUPTCY - BANKRUPTCY COURTS - JURISDICTION AND POWERS OF COURT - GENERALLY

PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - JURISDICTION AND GENERALLY

PROCEDURE - COURTS AND JUDGES GENERALLY - COURTS - CONCURRENT JURISDICTION OF DIFFERENT COURTS - TRANSFER OF PROCEEDINGS UNDER CROSS-VESTING LEGISLATION

Mr Cooper is an undischarged bankrupt. He sues for debts allegedly due to him after the commencement of his bankruptcy and for a declaration that after the commencement of his bankruptcy he entered into a ten year lease.  The defendants, the Moloneys, contend that the claims by Mr Cooper against the Moloneys vest in his bankruptcy trustee as after-aqcuired property and that  Mr Cooper has no standing to bring them. 

Mr Cooper contends that this Court has no jurisdiction to determine his standing and seeks an order pursuant to section 5 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (SA) transferring the actions to the Federal Court of Australia.

Held

1.      There being no dispute between Mr Cooper and his bankruptcy trustee as to Mr Cooper’s entitlement to bring the claims, the Supreme Court has jurisdiction to hear and determine the actions and in the course of doing so to determine as between Mr Cooper and the Moloneys the question of Mr Cooper’s standing to bring them [at 70-76].

2.      The interests of justice dictate that the actions be heard and determined in the Supreme Court and not be transferred to the Federal Court of Australia [at 79-84].

3.      Orders made that:

a. the issue whether this Court is deprived of jurisdiction to hear and determine the actions by the operation of section 27 of the Bankruptcy Act 1966 (Cth) be determined by way of separate trial pursuant to Rule 211 of the Supreme Court Civil Rules 2006 (SA);

b.      it be adjudged on that trial that this Court has jurisdiction to hear and determine the actions;

c.       the application to transfer the actions to the Federal Court of Australia be dismissed.

Bankruptcy Act 1966 (Cth) s 18, s 21, s 27, s 31(1) s 43(1), s 55, s 56C, s 58(1)(b), s 60, s 72, s 75, s 78, s 81, s 82, s 104, s 109, s 116(1)(a), s 120, s 121, s 122, s 134, s 136, s 138, s 139J(a), s 139P, s 139S, s 139W, s 139U, s 139ZQ, s 139ZR, s 139V, s 145, s 146, s 147, s 153B, s 157, s 165, s 167, s 169, s 1; Jurisdiction of Courts (Cross-vesting) Act 1987 (SA) s 5; Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) s 27; Bankruptcy Act 1924 (UK) s 21, s 105(1); Bankruptcy Act 1869 (UK) s 59, s 72; Bankruptcy Act 1883  (UK) ; Bankruptcy Act 1890  (UK); Bankruptcy Act 1914  (UK) s 105(1); Insolvency Act 1986  (UK); Supreme Court Civil Rules 2006  (SA) r 211, referred to.
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AGLC
Cooper v Moloney (No 5) [2012] SASC 211
Case
[2012] SASC 211
Decision Date

CaseChat Overview and Summary

In the Supreme Court of South Australia, Brendan Moloney and Brian Moloney, together with Hampden Park Pty Ltd, brought actions against Mr Cooper, who was previously a trustee of the T & A Holdings Trust and is now bankrupt. The dispute centres on the existence and terms of contracts and dealings between the parties, particularly concerning the lease of certain farm sheds and machinery. The court was tasked with determining whether the case should be transferred to the Federal Court of Australia under the Jurisdiction of Courts (Cross-vesting) Act 1987 (SA).

The primary legal issue before the court was whether the actions should be transferred to the Federal Court of Australia. The court had to consider the applicability of section 5 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (SA) and whether the interests of justice dictated that the case should remain in the Supreme Court of South Australia. Additionally, the court needed to determine if the Bankruptcy Act 1966 (Cth) deprived the Supreme Court of its jurisdiction over the matter.

The court concluded that the interests of justice required the actions to be heard and determined in the Supreme Court of South Australia. It found that the dispute was complex and involved detailed questions of fact and law that were best suited to be resolved in the state court. The court noted that the Bankruptcy Act 1966 (Cth) did not deprive the Supreme Court of jurisdiction over the matter, and therefore, the application to transfer the actions to the Federal Court of Australia was dismissed. The court ordered that the question of jurisdiction under the Bankruptcy Act be determined by way of a separate trial.

Orders

Orders of the court

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Background

Background to the litigation

Mr Cooper seeks an order pursuant to section 5 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (SA) transferring the actions to the Federal Court of Australia.Background factsThe parties At material times, Brendan Moloney, Brian Moloney and Hampden Park Pty Ltd (“Hampden Park”) owned adjoining lots of farmland situated three kilometres out of Maitland, South Australia. The total area of the three lots (collectively “the Moloney land”) was approximately 550 hectares. Brian Moloney was the sole director of Hampden Park. Gortmore Proprietors was a partnership comprising Brian, Brendan and Helen Moloney. Gortmore Proprietors carried on the farming activities undertaken on the farming land, principally cereal and pulse cropping. Mr Cooper is involved in the repair, maintenance and construction of farming machinery and equipment. Prior to August 2009, he was trustee of the T & A Holdings Trust. On 26 August 2009, he was made bankrupt. Mrs Cooper replaced Mr Cooper as trustee around that time. As at September 2009, Mr Cooper was involved in a farming machinery and equipment workshop business in Moonta. This business was conducted by the trustee of the T & A Holdings Trust. There is a dispute whether Mr Cooper told Brendan Moloney (“Mr Moloney”) of this or whether Mr Moloney believed that Mr Cooper carried on the business in his own right under the name “T & A Holdings”.The dealings Mr Cooper and Mr Moloney had a number of communications and dealings between late 2009 and early 2011. There are fundamental disputes between them concerning the existence, nature and terms of the dealings and communications. There is a lack of clarity on the material before me as to the identity of the party or parties on each side of such dealings as did occur. Most contracts alleged by one side are denied by the other side. There is a lack of clarity whether any given contract was entered into by Mr Cooper on his own behalf or on behalf of the trustee of the T & A Holdings Trust or on behalf of Rothmore ALT Engineering. Similarly, there is a lack of clarity whether any given contract was entered into by Mr Moloney on his own behalf or on behalf of Gortmore Proprietors or Hampden Park. I refer in neutral terms to “Mr Cooper” to designate Mr Cooper and/or any other persons or entities on his side and to “the Moloneys” (as above) to designate Mr Moloney and/or any other persons or entities on his side. In February 2010, Mr Cooper moved equipment and materials from the Moonta workshop to a shed or sheds on Hampden Park’s land. Mr Cooper’s case is that on 28 December 2009 he entered into an oral contract with Mr Moloney as agent for Hampden Park under which it was agreed that Hampden Park would lease to Mr Cooper the shearing shed, the storage shed and part of the machinery shed together with access to the adjoining yard on its land (collectively “the sheds”) for 10 years at a rent of $100 per week per shed. The Moloneys’ case is that there was no such discussion and no contract. Their case is that Mr Moloney told Mr Cooper that he could store items in the shearing shed on a temporary basis while he found premises to replace the Moonta workshop premises and that this discussion occurred in January 2010.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

In all of the circumstances, the interests of justice plainly dictate that the actions be heard and determined in this Court and not be transferred to the Federal Court of Australia.Conclusion I order that the issue whether this Court is deprived of jurisdiction to hear and determine the actions by the operation of section 27 of the Bankruptcy Act be determined by way of separate trial pursuant to Rule 211 of the Supreme Court Civil Rules 2006 (SA). On that trial, I adjudge that this Court has jurisdiction to hear and determine the actions. I dismiss the application to transfer the actions to the Federal Court of Australia pursuant to section 5 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (SA). I will hear the parties as to the precise orders to be made.

Ratio Decidendi

Legal Principle Established

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