Cooper v Moloney (No 5)
[2012] SASC 211
•15 November 2012
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.
Ellis v Silber (1872) LR 8 Ch App 83; Geia v Palm Island Aboriginal Council [1999] QCA 389; [2001] 1 Qd R 245; Macchia v The Public Trustee [2008] WASCA 241; Meriton Appartments Pty Ltd v Industrial Court of New South Wales [2008] FCAFC 172; (2008) 171 FCR 380, applied.
Kison v Papasian [1994] SASC 4476; (1994) 61 SASR 567; Forshaw v Thompson [1992] FCA 182; (1992) 35 FCR 329; Mulkerrins v PricewaterhouseCoopers [2003] UKHL 41; [2003] 1 WLR 1937; Scott v Bagshaw FCA 816; (2000) 99 FCR 573; Sutherland v Brien [1999] NSWSC 155; (1999) 149 FLR 321, discussed.
Australian Securities Commission v Malborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485; Malborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485; Coates v Charles Porter & Sons Pty Ltd 2 ACSR 733; Cummings v Claremont Petroleum NL [1996] HCA 19; (1996) 185 CLR 124; Denbe (as Trustee in Bankruptcy of Estate of SS Wing Tam) v Shum [2002] QSC 117; Farah Constructions Pty ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89; Federal Commissioner of Taxation v Official Receiver [1956] FCA 24; (1956) 95 CLR 300; Official Receiver [1956] FCA 24; (1956) 95 CLR 300; Morris v Maroudas [1986] FCA 406; (1986) 12 FCR 346; NA Kratzmann Pty Ltd (in liq) v Tucker (No 1) [1966] HCA 72; (1966) 123 CLR 257; Re Dingle; Westpac Banking Corporation v Worrell [1993] FCA 619; (1993) 47 FCR 478; Re Gillies; Ex parte Official Trustee in Bankruptcy v Gillies [1993] FCA 289; (1993) 42 FCR 571; Re Sharp; Ex parte Donnelly [1998] FCA 6; (1998) 80 FCR 536; Williams v Lloyd; Re Williams [1934] HCA 1; (1934) 50 CLR 341, considered.
COOPER v MOLONEY (NO 5)
[2012] SASC 211Civil: Interlocutory
BLUE J: In action number 413 of 2012 (“the Trespass Action”), Hampden Park Pty Ltd sues Mr Cooper for trespass to land, effectively seeking eviction and damages. Mr Cooper defends the action on the basis, and counterclaims for a declaration, that he is entitled to quiet enjoyment of the land pursuant to a 10 year oral lease.
In action number 1707 of 2011 (“the Debt Action”), Mr Cooper sues Gortmore Proprietors (a partnership of Brendan Moloney, Brian Moloney[1] and Helen Moloney) for a debt of $661,747[2] for work and labour done pursuant to three oral contracts. He sues Brendan Moloney, Brian Moloney and Hampden Park Pty Ltd for restitution by reason of unjust enrichment in the same amount.[3] A counterclaim is brought against Mr Cooper for damages for breach of four oral contracts.
[1] Brian Moloney died earlier this year. It is proposed that his executors be joined as parties in his stead.
[2] All dollar figures quoted herein are rounded and are exclusive of GST.
[3] Mr Cooper claims, and the defendants in that action deny, that he also sues to enforce a worker’s lien. That matter is not presently relevant and can be put to one side for present purposes.
I refer to one or more of Gortmore Proprietors, Hampden Park Pty Ltd and Brendan, Brian and Helen Moloney collectively as “the Moloneys”.
Mr Cooper is an undischarged bankrupt. He was made bankrupt on 26 August 2009.
The Moloneys contend that Mr Cooper has no standing to bring the claim in the Debt Action or the counterclaim in the Trespass Action because he is an undischarged bankrupt and the choses in action and any lease vest in his bankruptcy trustee. In turn, Mr Cooper contends that the Federal Court of Australia and Federal Magistrates Court have exclusive jurisdiction to determine his standing and that this Court does not have jurisdiction to decide that question and hence to determine the actions. The parties invite me to determine the issue of jurisdiction by separate preliminary trial under Rule 211 of the Supreme Court Civil Rules 2006 (SA).
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 facts
The 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.
Mr Cooper’s case is that he entered into three separate oral contracts with Mr Moloney acting as agent for Gortmore Proprietors:
1. on 28 December 2009 to undertake certain work at $80 per hour and for an associate to undertake work at an agreed hourly rate;
2. on 1 February 2010 to undertake certain work at $80 per hour and for associates to undertake work at agreed hourly rates;
3. in December 2010 to harvest the crop on the Moloney land for $450 per hour and for Mr Cooper and associates to undertake incidental work at agreed hourly rates.
Mr Cooper’s case is that the collective amount due for work done pursuant to the three separate oral contracts is $661,747. He has not identified the separate work done or amount due under each of the three contracts.
The Moloneys deny that Mr Moloney entered into the three contracts alleged by Mr Cooper. Their case is that Mr Moloney engaged Mr Cooper’s associates direct on a fee for services basis and the contractual relationship is with each associate and not Mr Cooper. It appears that their case is that they engaged Mr Cooper in a similar manner and paid him for any work he undertook pursuant to that engagement.
The Moloneys’ case is that Mr Moloney, as agent for Gortmore Proprietors, entered into four oral contracts with Mr Cooper:
1. in October 2009 to manufacture a chaser bin;
2. in October 2009 for the Moloneys to harvest grain on land owned by the Aboriginal Lands Trust at Point Pearce;
3. in December 2009 for Mr Cooper to purchase an R62 Gleaner harvester;
4. in December 2009 for Mr Cooper to transport grain from the Moloney land to the Ardrossan silos.
Mr Cooper admits the first two contracts but his case is that they were made by him as agent for the trustee of the T & A Holdings Trust. He denies the existence of the other two contracts alleged by the Moloneys.
The actions
In August 2011, Hampden Park instituted the Trespass Action in the District Court.
In November 2011, Mr Cooper instituted the Debt Action in this Court.
In December 2011, the Moloneys’ solicitors wrote to Mr Cooper’s bankruptcy trustee informing him that Mr Cooper was in occupation of the Moloney land and that Hampden Park had instituted the Trespass Action in the District Court seeking his removal.
On an unknown date, but which may have been in December 2011, Mr Cooper informed his bankruptcy trustee that he had taken debt recovery action against the Moloneys for work performed by him after the commencement of his bankruptcy.
In January 2012, Mr Cooper filed a defence in the Trespass Action relying on the alleged 10 year oral lease. In February 2012, he amended the defence to include a counterclaim seeking a declaration that he is entitled to quiet enjoyment relying on the alleged 10 year oral lease.
In March 2012, the Trespass Action was transferred to this Court.
In May 2012, the Moloneys applied for summary judgment in both actions on the basis that Mr Cooper has no standing, as an undischarged bankrupt, to claim the debt claimed in the Debt Action or the lease claimed in the counterclaim in the Trespass Action. The lack of standing was not pleaded by the Moloneys in either action as part of their defence to the counterclaim and their defence respectively. However, it was the basis for their applications for summary judgment and Mr Cooper has taken no point that it is not pleaded.
In August 2012, during the course of hearing the summary judgment applications, a Master raised the question whether this Court has jurisdiction to determine the standing of Mr Cooper as an undischarged bankrupt and consequently whether this Court has jurisdiction to determine the actions themselves. On 3 September 2012, the Master dismissed the applications for summary judgment on the basis that it was reasonably arguable that Mr Cooper did have standing to bring the relevant claims.[4] He expressed the view that the next step should be a decision whether section 27 of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”) excludes the jurisdiction of this Court to determine the actions and the question of Mr Cooper’s standing to bring the claims in them. The parties request that I determine that issue by way of separate trial pursuant to Rule 211 of the Supreme Court Civil Rules 2006 (SA).
[4] Cooper v Moloney (No 2) (Unreported, Supreme Court of South Australia, Master Lunn, 3 September 2012).
On 5 October 2012, by interlocutory application in the Debt Action (FDN 47), Mr Cooper applied for orders pursuant to section 5 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (SA) transferring the Actions to the Federal Court of Australia.
On 16 and 17 October 2012, the solicitors for Mr Cooper and the solicitors for the Moloneys wrote to the bankruptcy trustee. The trustee was provided with a copy of the relevant pleadings in both actions together with the Master’s reasons for judgment dated 3 September 2012.
On 17 October 2012, the bankruptcy trustee wrote to the solicitors for the Moloneys. He said that:
1. he had been aware that Mr Cooper was conducting a business from which he derived income and had been provided by Mr Cooper with statements regarding his income derived from the business for various periods after the commencement of his bankruptcy;
2. Mr Cooper had notified him that he had instructed his solicitors to recover monies owed to him for his business activities conducted during his bankruptcy and that he had taken debt recovery action against Mr Moloney for work performed by him after commencement of his bankruptcy;
3. he had not authorised Mr Cooper to commence the Debt Action or seek to enforce the lease, but considered that Mr Cooper was permitted to conduct a business in his own name[5] and that he was entitled to take debt recovery action in his own name.
[5] Provided he appropriately reported details of that business and the income derived from it.
The bankruptcy trustee did not seek to intervene in the actions or appear at the hearing before me on 22 October.
The issue of standing
Section 58(1)(b) of the Bankruptcy Act relevantly provides:
(1)Subject to this Act, where a debtor becomes a bankrupt:
(a) …
(b) after-acquired property of the bankrupt vests, as soon as it is acquired by, or devolves on, the bankrupt, in the … trustee of the estate of the bankrupt…
The term “after-acquired property” is defined by section 58(6) to mean:
… property that is acquired by, or devolves on, the bankrupt on or after the date of the bankruptcy, being property that is divisible amongst the creditors of the bankrupt.
Section 116(1)(a) of the Bankruptcy Act relevantly provides:
(1)Subject to this Act:
(a) all property that … has been acquired or is acquired by [a bankrupt], or has devolved or devolves on him or her, after the commencement of the bankruptcy and before his or her discharge …
is property divisible amongst the creditors of the bankrupt.
Division 4B of the Bankruptcy Act creates a regime to require a bankrupt who derives income during the bankruptcy to pay contributions towards the bankrupt estate.[6]
[6] Bankruptcy Act 1966 (Cth) s 139J(a). Sections 139P and 139S impose a liability upon a bankrupt to pay to the trustee a contribution based upon an assessment by the trustee. Section 139W empowers and obliges the trustee to make an assessment of, amongst other things, the relevant income of the bankrupt in respect of the relevant contribution assessment period and of the contribution that the bankrupt is liable to pay in respect of that period under s 139S. Sections 139U and 139V require the bankrupt to provide evidence of income to the trustee for this purpose.
Division 4B proceeds upon the premise that, notwithstanding his or her bankruptcy, the bankrupt retains the prima facie right to receive income from strangers to the bankruptcy. As between the bankrupt and the trustee, Division 4B provides that the bankrupt will ultimately retain a portion of income earned, but will be obliged to make a payment to the trustee of part of that income if it exceeds the relevant threshold in respect of the relevant period. But for Division 4B, it might have been considered that the right to receive income and the money comprising the receipt of income would vest in the bankruptcy trustee as after-acquired property pursuant to section 58(1)(b) of the Bankruptcy Act. However, it has been held in a series of cases that this is not so by virtue of the Division 4B regime.[7]
[7] See, for example, Federal Commissioner of Taxation v Official Receiver [1956] FCA 24; (1956) 95 CLR 300 at 312-316 per Williams J and 320 per Fullagar J (Dixon CJ agreeing), 331 per Kitto J and 340 per Taylor J (as to the predecessor to Division 4B) ; Re Gillies; Ex parte Official Trustee in Bankruptcy v Gillies [1993] FCA 289; (1993) 42 FCR 571 at 573-577 per French J; Re Sharp; Ex parte Donnelly [1998] FCA 6; (1998) 80 FCR 536 at 537-541 per Lockhart J.
In relation to the debt claimed in the Debt Action, Mr Cooper contends that the chose in action vests in him because it is for his income (subject to his contribution obligations). The bankruptcy trustee takes the same view. By contrast, the Moloneys contend that, if the debt claimed in the Debt Action exists (which they deny), it became property and vested in the trustee either when the debt accrued, when an agreement was allegedly made in February 2011 for payment of an agreed debt amount (which they deny) or when the Debt Action was instituted in November 2011.
In Kison v Papasian,[8] Bollen J (King CJ and Mullighan J deciding on a different primary ground but agreeing with Bollen J as a secondary ground) held that:
… unless and until the official receiver intervenes, a bankrupt … has power to deal with after-acquired property and to bring proceedings in respect of it, notwithstanding it is vested in the official receiver. If in the course of proceedings by the bankrupt the official receiver does intervene, the bankrupt’s proceedings may be brought to nothing …[9]
[8] [1994] SASC 4476; (1994) 61 SASR 567.
[9] (1994) 61 SASR 567 at 572 quoting from and adopting the reasoning of Bowen CJ in Eq in Thistlethwayte v Gender Estates Pty Ltd (1976) 8 ALR 700 at 703-704.
Mr Cooper contends that he has standing to rely upon the lease and assert a right to quiet possession based on it notwithstanding that the lease may be vested in his bankruptcy trustee.[10] The Moloneys contend that the decision in Kison is not applicable or has been superseded by the decision of the High Court in Cummings v Claremont Petroleum NL.[11]
[10] Mr Cooper also relies on Kison on the question of standing to pursue the Debt Action in the alternative to the income/contribution contention identified above.
[11] [1996] HCA 19; (1996) 185 CLR 124.
I am not called upon to decide these issues. I identify the parties’ respective contentions to provide a context for the issue of jurisdiction.
Jurisdiction of this Court
Section 27(1) of the Bankruptcy Act relevantly provides:
The Federal Court and the Federal Magistrates Court have concurrent jurisdiction in bankruptcy, and that jurisdiction is exclusive of the jurisdiction of all other courts …
By a combination of sections 27, 35 and 35A, exclusive jurisdiction in bankruptcy is vested in the Federal Court of Australia, the Federal Magistrates Court of Australia and in certain circumstances the Family Court[12] (collectively “the federal courts”). This is subject to the High Court’s constitutional original jurisdiction, which can be ignored for present purposes.
[12] This encompasses the Family Court of Australia and the Family Court of Western Australia.
Section 5 of the Bankruptcy Act defines “bankruptcy” in relation to jurisdiction to mean:
jurisdiction … under or by virtue of this Act.
Section 31(1) of the Bankruptcy Act provides guidance as to what may be regarded as jurisdiction under or by virtue of the Act. Section 31 identifies which matters, when a court is exercising jurisdiction under the Bankruptcy Act, must be heard and determined in open court and which may be heard in chambers. While section 31 does not itself confer jurisdiction, it provides a guide to what is bankruptcy jurisdiction within the meaning of section 27.[13] As it may be expected that the more important forms of jurisdiction would be determined in open court, the matters enumerated in section 31(1) may be regarded as the more important aspects of jurisdiction in bankruptcy.
[13] Scott v Bagshaw [2000] FCA 816; (2000) 99 FCR 573 at [15]-[18] per Drummond, RD Nicholson and Katz JJ.
Section 31(1) provides:
In exercising jurisdiction under this Act, the Court shall hear and determine the following matters in open Court:
(a) creditors’ petitions;
(b) examinations under this Act;
(c) proceedings in connection with the consideration of an annulment of a bankruptcy under section 153B;
(d) applications under:
(i)section 222 (as applied by section 76B); or
(ii)section 222C (as applied by section 76B);
for an order setting aside or terminating a composition or scheme of arrangement under Division 6 of Part IV;
(e) applications to set aside or avoid a charge, charging order, settlement, disposition, conveyance, transfer security or payment;
(ea) applications under section 139A;
(f) applications to declare for or against the title of the trustee to any property;
(g) applications for the committal of a person to prison or for the release from prison of a person committed to prison;
(i) applications for the trial of questions of fact with a jury and the trial of those questions;
(j) applications under Part X:
(i)for an order setting aside or terminating a personal insolvency agreement; or
(ii)for a sequestration order against the estate of a debtor;
(ja) applications for an order of annulment of the administration of the estate of a deceased person under Part XI; and
(k) summary trials under Part XIV.
Both Mr Cooper and the Moloneys accept that this Court would have jurisdiction to hear and determine the actions but for the raising by the Moloneys of the issue of standing of Mr Cooper as an undischarged bankrupt. Mr Cooper contends that the issue of his standing can only be determined by the federal courts pursuant to section 27 and accordingly this Court does not have jurisdiction to hear and determine the actions because that would involve determining the issue of standing. By contrast, the Moloneys contend that the issue of standing is purely a matter between Mr Cooper and the Moloneys and not an issue between Mr Cooper and his bankruptcy trustee, and accordingly the federal courts do not have exclusive jurisdiction to determine that issue as part of the actions.
Statutory history
The genesis of the jurisdiction regime under the Bankruptcy Act can be traced back to 1831.
The Bankruptcy Act 1831 (UK) provided for the establishment (by Charter or Letters Patent) of the Court of Bankruptcy. It did not define the jurisdiction of that Court.
The Bankruptcy Act 1869 (UK) (“the 1869 Act”) by section 59 referred to “Courts having jurisdiction in bankruptcy” being the Court of Bankruptcy in London and otherwise the local Court of Bankruptcy being the county court of a district. Section 72 provided:
Subject to the provisions of this Act, every Court having jurisdiction in bankruptcy under this Act shall have full power to decide all questions of priorities, and all other questions whatsoever, whether of law or fact, arising in any case of bankruptcy coming within the cognizance of such Court, or which the Court may deem it expedient or necessary to decide for the purpose of doing complete justice or making a complete distribution of property in any such case …
In Ellis v Silber,[14] Lord Selborne LC addressed the jurisdiction of the Court of Bankruptcy under section 72 of the 1869 Act. He said:
That which is to be done in bankruptcy is the administration in bankruptcy. The debtor and the creditors, as the parties to the administration in bankruptcy, are subject to that jurisdiction. The trustees or assignees, as the persons intrusted with that administration, are subject to that jurisdiction. The assets which come to their hands and the mode of administering them are subject to that jurisdiction; and there may be, and I believe are, some special classes of transactions which, under special clauses of the Acts of Parliament, may be specially dealt with as regards third parties. But the general proposition, that whenever the assignees or trustees in bankruptcy or the trustees under such deeds as these have a demand at law or in equity as against a stranger to the bankruptcy, then that demand is to be prosecuted in the Court of Bankruptcy, appears to me to be a proposition entirely without the warrant of anything in the Acts of Parliament, and wholly unsupported by any trace or vestige whatever of authority.[15]
[14] (1872) LR 8 Ch App 83.
[15] Ibid at 86.
The Australian colonies enacted legislation modelled on the 1869 Act either directly or indirectly (via the Bankruptcy Act 1883 (UK) and/or Bankruptcy Act 1890 (UK)).
The Bankruptcy Act 1914 (UK) was modelled on the 1869 Act. Section 105(1) reproduced section 72 of the 1869 Act.
The Bankruptcy Act 1924 (Cth) enacted federal law to address bankruptcy. It was modelled on the United Kingdom 1914 Act and the legislation in the States which in turn were modelled directly or indirectly on the 1869 Act. Section 18 provided for federal courts to be created and state courts to be authorised to exercise jurisdiction in bankruptcy. “Bankruptcy” was defined in similar terms as under the 1966 Act. Section 21 was in similar terms to section 31 of the 1966 Act.
When enacted in 1966, the Bankruptcy Act by section 27 provided for specific courts to have jurisdiction in bankruptcy, namely the Federal Court of Bankruptcy and one court in each state (the Courts of Insolvency in South Australian and Victoria and the Supreme Courts elsewhere). In 1976, the newly created Federal Court of Australia was substituted for the Federal Court of Bankruptcy and in 1988 provision was made for the exercise of jurisdiction by the Family Court of Australia.
In 1996, section 27 was amended to remove the state and territory courts as having jurisdiction in bankruptcy and to leave only the Federal Court of Australia. In 1999, the Federal Magistrates Court was added.
Statutory jurisdiction regime
The Bankruptcy Act assumes a broad dichotomy between matters internal and external to the insolvency administration.
Numerous provisions of the Act expressly confer jurisdiction on the federal courts in various matters internal to the insolvency administration, and such jurisdiction is exclusive under section 27. Such internal matters include:
1. making sequestration, administration or other bankruptcy orders;[16]
[16] Jurisdiction conferred by the Bankruptcy Act 1966 (Cth) ss 43(1), 55, 56C, 244 and 247 and required to be heard in open court where on a creditor’s petition under s 31(1)(a).
2. annulling, setting aside or terminating a bankruptcy, scheme of arrangement, composition, personal insolvency agreement or debt agreement;[17]
[17] Jurisdiction conferred by the Bankruptcy Act 1966 (Cth) ss 153B, 185Q, 222, 222C and 252B and required to be heard in open court under s 31(1)(c), (d), (j) and (ja).
3. examinations concerning the bankrupt’s dealings, property or affairs;[18]
4. appeals against decisions of the trustee;[19]
5. issuing warrants for arrest and committal of the debtor/bankrupt;[20]
6. making orders relating to dividends;[21]
7. controlling and supervising bankruptcy trustees, administrations and committees of inspection;[22]
8. concerning estimates of value and security and surrender of security by secured creditors;[23]
9. staying proceedings against or imprisonment of a person subject to insolvency administration;[24]
10. enforcing a composition or scheme of arrangement;[25]
11. giving or varying priority in distributions to creditors;[26]
12. various other matters addressed by numerous sections of the Act.
[18] Jurisdiction conferred by the Bankruptcy Act 1966 (Cth) ss 81 and 264A and required to be heard in open court if on examination under s 31(1)(b).
[19] Jurisdiction conferred by the Bankruptcy Act 1966 (Cth) ss 82(5), 104 and 178.
[20] Jurisdiction conferred by the Bankruptcy Act 1966 (Cth) s 78 and required to be heard in open court under s 31(1)(g).
[21] Jurisdiction conferred by the Bankruptcy Act 1966 (Cth) ss 145(5), 146 and 147.
[22] Jurisdiction conferred by the Bankruptcy Act 1966 (Cth) ss 72, 134(4), 136, 138, 146, 156A, 157, 165(1)(d), 167(6), 169(2) and (3), 176, 178, 179, 180, 183, 185ZCA, 185ZCB, 185W and 217.
[23] Jurisdiction conferred by the Bankruptcy Act 1966 (Cth) s 207.
[24] Jurisdiction conferred by the Bankruptcy Act 1966 (Cth) ss 60, 189AA.
[25] Jurisdiction conferred by the Bankruptcy Act 1966 (Cth) s 75.
[26] Jurisdiction conferred by the Bankruptcy Act 1966 (Cth) s 109(9) and (10).
Even where no specific provision confers jurisdiction, the federal courts may have jurisdiction over matters internal to the bankruptcy which is either implied or conferred by section 27.[27]
[27] See Morris v Maroudas [1986] FCA 406; (1986) 12 FCR 346 at 359-360 per Toohey J and 364-365 per Spender J; Forshaw v Thompson [1992] FCA 182; (1992) 35 FCR 329 at 334 per Lockhart J (Black CJ and Sweeney J agreeing), Re Dingle; Westpac Banking Corporation v Worrell [1993] FCA 619; (1993) 47 FCR 478 at 484-485 per Wilcox, Ryan and Cooper JJ.
By contrast, in general the provisions of the Bankruptcy Act do not expressly confer jurisdiction in matters external to the bankruptcy administration, such as disputes between the trustee or the bankrupt on the one hand and a stranger to the bankruptcy on the other hand arising under or governed by the general law. The Bankruptcy Act proceeds on the assumption that the trustee or bankrupt will have recourse to courts of general jurisdiction in respect of such matters. This broad dichotomy between internal and external matters reflects the position under the 1869 Act described by Lord Selborne LC in the passage quoted at [51] above.
In relation to external matters, three potential qualifications to this broad dichotomy need to be considered.
1. Sections 120 to 122 render void as against the trustee in bankruptcy certain dispositions by the bankrupt. Those sections have been construed as meaning “voidable at the election of the trustee in bankruptcy”.[28] Sections 120 to 122 are not expressed to confer jurisdiction to hear and determine applications to set aside or avoid such dispositions. However, section 31(1)(e) provides pertinently as follows:
[28] Williams v Lloyd; Re Williams [1934] HCA 1; (1934) 50 CLR 341 at 374 per Dixon J (Rich J, Evatt J and McTiernan J agreeing); NA Kratzmann Pty Ltd (in liq) v Tucker (No 1) [1966] HCA 72; (1966) 123 CLR 257 at 277 per Barwick CJ and 293 per Kitto J (Windeyer J agreeing).
In exercising jurisdiction under this Act, the Court shall hear and determine the following matters in open Court:
…
(e) applications to set aside or avoid a charge, charging order, settlement, disposition, conveyance, transfer security or payment …
It has been held, having regard to section 31(1)(e), that the Bankruptcy Act implicitly confers jurisdiction on the federal courts to hear and determine applications to set aside or avoid such dispositions.[29] It should be noted that since 1992 Part VI Division 4B Subdivision J has provided an administrative alternative for the determination that dispositions are void as against the trustee. Section 139ZQ empowers the Official Receiver to require payment of the amount or value of a disposition as determined by the Official Receiver. Section 139ZQ(8) provides that amounts payable to the Official Receiver who issues a section 139ZQ notice are recoverable in a court of competent jurisdiction (ie including a State or Territory court).
2. Sections 139A to 139EA provide for the recovery from entities associated with the bankrupt of property and money to the extent that they represent the value of voluntary contributions to the entity by the bankrupt. Those sections expressly confer jurisdiction on the federal courts to hear and determine applications by trustees for such recoveries. Section 31(1)(ea) requires such matters to be heard in open court.
3. The Bankruptcy Act delimits the rights of the trustee as against the bankrupt in respect of the property which would, but for the bankruptcy, vest in the bankrupt.[30] The Act does not expressly confer jurisdiction on the federal courts to decide as between the bankrupt and the trustee rights in respect of specific property. However, section 31(1)(f) provides:
In exercising jurisdiction under this Act, the Court shall hear and determine the following matters in open Court:
…
(f) applications to declare for or against the title of the trustee to any property ...
It has been held that, particularly having regard to section 31(1)(f), the Act implicitly confers jurisdiction on the federal courts to hear and determine the issue of contested title to property as between bankrupt and trustee.[31]
[29] Denbe (as Trustee in Bankruptcy of Estate of SS Wing Tam) v Shum [2002] QSC 117 at [21]-[40] per Muir J; see also Scott v Bagshaw (2000) 99 FCR 573 at [17]-[22] per Drummond, RD Nicholson and Katz JJ. By contrast, it has been held that, if the issue whether a disposition is void by reason of section 120 is raised by way of defence or otherwise than in proceedings to set aside or avoid the disposition, the jurisdiction to decide that issue is not vested exclusively in the federal courts: see Sutherland v Brien [1999] NSWSC 155; (1999) 149 FLR 321 at [5]-[8] per Austin J and Scott v Bagshaw (2000) 99 FCR 573 at [22] per Drummond, RD Nicholson and Katz JJ.
[30] See principally ss 58 and 116.
[31] Scott v Bagshaw (2000) 99 FCR 573 at [17]-[22] per Drummond, RD Nicholson and Katz JJ. Compare Mulkerrins v PricewaterhouseCoopers [2003] UKHL 41; [2003] 1 WLR 1937 at [15] per Lord Millett (Lord Bingham and Lord Scott agreeing) and [44]-[45] per Lord Walker (Lord Bingham, Lord Nicholls and Lord Scott agreeing) in relation to the position in the United Kingdom under the Insolvency Act 1986 (UK).
As to the first potential qualification, sections 120 to 122 create, as a matter of substance, special statutory causes of action for the recovery of property disposed of by the bankrupt before bankruptcy.[32] The avoidance of such dispositions is substantively a redistribution in accordance with a statutory concept of equities as between competing creditors in the bankruptcy administration. This makes the recovery effectively internal to the bankruptcy administration.
[32] Before 1992, technically the sections rendered the transactions voidable and left the trustee to rely on general law remedies (such as restitution or conversion) to recover the property the subject of the disposition: see, for example, NA Kratzmann Pty Ltd (in liq) v Tucker (No 1) (1969) 123 CLR 257 at 285 per Barwick CJ (Windeyer J agreeing); Coates v Charles Porter & Sons Pty Ltd (1990) 2 ACSR 733 at 735 per Ipp J. Since 1992, sections 139ZQ and 139ZR have provided for the alternative process described above of creating a statutory debt and/or charge over property where the Official Receiver exercises an administrable power to issue a notice to that effect (subject to the jurisdiction of the Federal Court under section 139ZS to set aside the notice).
As to the second potential qualification, sections 139A to 139EA create special statutory causes of action for the recovery of property disposed of by the bankrupt before bankruptcy. The requisite non-arms length relationship between the bankrupt and the entity makes such recovery actions effectively internal to the bankruptcy administration.
As to the third potential qualification, a contest as to title to property between bankrupt and trustee is a matter internal to the bankruptcy administration.
For the above reasons, the vesting of jurisdiction in the federal courts to determine contests the subject of the three potential qualifications does not disclose any statutory intention that jurisdiction to hear and determine litigation generally in respect of matters external to the bankruptcy be vested exclusively in the federal courts.
Established Principles
The following principles are established by intermediate court of appeal authority.
1. Section 27(1) is the source of the federal court’s jurisdiction in bankruptcy. Sections 30 and 31 do not confer jurisdiction, although they elucidate what is encompassed as falling within the concept of “jurisdiction in bankruptcy”.[33]
2. The mere fact that it is necessary in a proceeding to apply or interpret a provision of the Bankruptcy Act does not mean that a court is exercising jurisdiction in bankruptcy within the meaning of sections 5 and 27.[34]
3. The Bankruptcy Act does not deprive State courts of their ordinary jurisdiction in matters arising under the general law as between a bankruptcy trustee and a stranger to the bankruptcy or as between the bankrupt and a stranger to the bankruptcy.[35]
4. Section 27 of the Bankruptcy Act vests exclusive jurisdiction in the federal courts to determine, in proceedings to which a bankrupt and the trustee are parties, the title to property contested between them.[36]
5. State and Territory courts have jurisdiction to determine the standing of a bankrupt as between the bankrupt and a stranger to the bankruptcy. This is so notwithstanding that the determination depends upon the construction of sections 58 and 116 of the Bankruptcy Act.[37]
[33] Scott v Bagshaw (2000) 99 FCR 573 at [17]-[18] per Drummond, RD Nicholson and Katz JJ.
[34] Geia v Palm Island Aboriginal Council [1999] QCA 389; [2001] 1 Qd R 245 at [18]-[19] per Pincus JA, Thomas JA and Jones J; Meriton Apartments Pty Ltd v Industrial Court of New South Wales [2008] FCAFC 172; (2008) 171 FCR 380 at [3], [8] and [18] per Branson J and [88] per Greenwood J (compare at [194]-[209] per Perram J); Macchia v The Public Trustee [2008] WASCA 241 at [21] per Steytler P (Le Miere AJA agreeing).
[35] Geia v Palm Island Aboriginal Council [2001] 1 Qd R 245 at [19] per Pincus JA, Thomas JA and Jones J; Macchia v The Public Trustee [2008] WASCA 241 at [21] per Steytler P (Le Miere J agreeing).
[36] Geia v Palm Island Aboriginal Council [2001] 1 Qd R 245 at [19] per Pincus JA, Thomas JA and Jones J; Scott v Bagshaw (2000) 99 FCR 573 at [20] per Drummond, RD Nicholson and Katz JJ.
[37] Geia v Palm Island Aboriginal Council [2001] 1 Qd R 245 at [18]-[19] per Pincus JA, Thomas JA and Jones J; Meriton Apartments Pty Ltd v Industrial Court of New South Wales (2008) 171 FCR 380 at [3] and [8] per Branson J and [88] per Greenwood J; Macchia v The Public Trustee [2008] WASCA 241 at [21] per Steytler P (Le Miere AJA agreeing).
In addition, the following propositions follow from general principles.
1. A determination of the standing of a bankrupt as between the bankrupt and a stranger to the bankruptcy cannot bind the bankruptcy trustee who is not a party to the action.[38]
2. Conversely, a determination by a court having jurisdiction in bankruptcy as between bankrupt and trustee as to entitlement to a chose in action will necessarily have a consequential effect in any proceedings in a court of general jurisdiction in which the title of the bankrupt or trustee to sue is raised by a stranger to the bankruptcy.[39]
[38] Mulkerrins v PricewaterhouseCoopers [2003] 1 WLR 1937 at [15] per Lord Millett (Lord Bingham and Lord Scott agreeing); Macchia v The Public Trustee [2008] WASCA 241 at [21] per Steytler P (L Miere AJA agreeing).
[39] [2003] 1 WLR 1937 at [15] per Lord Millett (Lord Bingham and Lord Scott agreeing).
The present case
Mr Cooper’s bankruptcy trustee is not a party to the actions. The trustee takes the view that Mr Cooper is entitled to pursue the Debt Action as against the Moloneys (albeit Mr Cooper will be subject to contribution obligations if he receives monies as a result of the action). There is no lis between Mr Cooper and the trustee as to the entitlement to pursue the Debt Action.
In relation to Mr Cooper’s counterclaim seeking a declaration that he is entitled to quiet enjoyment in the Trespass Action, it appears that the trustee takes the same attitude. The trustee has not asserted any rights in respect of the lease, nor did he seek to intervene or be heard on 22 October. Given the nature of the alleged lease and its form, being entirely oral and non-registrable, it is very unlikely that the trustee would assert rights in respect of it as against Mr Cooper. Moreover, Mr Cooper’s reliance on the alleged lease is defensive in nature: he seeks to repel the Trespass Action by reason of the existence of the lease. His defence in this respect would be the same whether or not the alleged lease vested in the trustee.
There being no issue between Mr Cooper and the trustee in relation to the entitlement of Mr Cooper to pursue the claims which he does in the actions, no question of jurisdiction under or by virtue of the Bankruptcy Act arises. This Court has jurisdiction to hear and determine the actions, including the question of standing which arises incidentally therein as between Mr Cooper and the Moloneys.
I am effectively bound by decisions of intermediate courts of appeal in other jurisdictions.[40]
[40] Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485 at 492 per Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ; Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 at [135] per Gleeson CJ, Gummow, Callinan, Hayden and Crennan JJ.
In Geia v Palm Island Aboriginal Council,[41] the Queensland Court of Appeal held that the District Court had jurisdiction to decide whether the bankrupt had standing to sue for wrongful dismissal, which depended on whether the claim vested in his trustee in bankruptcy pursuant to sections 58 and 116 of the Bankruptcy Act. Pincus JA, Thomas JA and Jones J said:
It should be added that no suggestion was made in argument in this Court that jurisdiction to decide the point raised is lacking. Section 27 … could on the face of it be argued to prevent courts … from determining issues arising under the Bankruptcy Act 1966 …
The Federal Court plainly would have jurisdiction, under s. 31(1)(f), to decide the issue which we are determining. But our decision and that made by the learned District Court Judge are not in proceedings of a kind which are, by any specific provision of the Bankruptcy Act 1966, required to be brought in the Federal Court. That Act does not give the Federal Court power to dismiss an action brought in a State court by a bankrupt, purporting to exercise a cause of action which the Bankruptcy Act vests in the trustee. For this reason we are of the view that the assumption that the parties have made, that the District Court and this Court have appropriate jurisdiction, is correct.[42]
[41] [2001] 1 Qd R 245.
[42] Ibid at [18], [19].
In Meriton Apartments Pty Ltd v Industrial Court of New South Wales,[43] a Full Court of the Federal Court held that the Industrial Court of New South Wales had jurisdiction to determine whether an action by a bankrupt was stayed or abandoned by virtue of section 60[44] and to determine whether the bankrupt had standing to pursue a claim based on an allegedly unfair contract.[45] In that case, Branson J said:
[43] (2008) 171 FCR 380.
[44] Ibid at [8] per Branson J, [117] per Greenwood J and [197] and [210] per Perram J.
[45] Ibid at [8] and [18] per Branson J and [86]-[88] and [117] per Greenwood J (Perram J dissenting).
The status of a proceeding commenced by a person who subsequently becomes bankrupt is a matter which must necessarily be addressed by the court in which the proceeding has been commenced. Nothing in s 27, or elsewhere in the Act, discloses an intention to deprive a State court of the power to determine the status of a proceeding before it.
…
I further conclude that the recognition by the Industrial Court of New South Wales of the trustee’s entitlement to assign to Mr Rose the right to prosecute the State proceeding did not involve it in the exercise of jurisdiction in bankruptcy. This is because, as mentioned above, it is not to exercise jurisdiction under or by virtue of the Act for a court simply to recognise the effect of the Act. Indeed it is necessary for a court to be able to determine the standing of parties before it.[46]
and Greenwood J said:
Secondly, that court had to determine whether the proceedings before it could be competently brought or maintained having regard to the application or operation of the relevant provisions of the Bankruptcy Act to those facts. If a consideration of that second limb is properly characterised as an application or proceeding “under” the Bankruptcy Act or one made “by virtue of” the Bankruptcy Act with the result that the Industrial Court is impermissibly engaging the exclusive jurisdiction of a s 27 court, the result is that courts of the States and in particular, the Supreme Courts of the States and Courts of Appeal will be deprived of jurisdiction in such circumstances to determine whether a plaintiff seeking to engage that court’s jurisdiction, either in its original or appellate jurisdiction, is a competent litigant before that court, as a matter of law.
Such courts would be required to say that they have no jurisdiction to determine the competency or standing of the plaintiff to engage the jurisdiction of the court where competency is to be determined by construing the operation of the relevant provisions of the Bankruptcy Act, until that matter is determined for them by, relevantly here, the Federal Court of Australia in entirely separate proceedings.
…
The model adopted by the Bankruptcy Act upon its commencement provided for the investing of federal jurisdiction in bankruptcy (ss 27(2) and 5) in the eight courts identified in s 27(1) of that Act rather than an exclusive vesting of jurisdiction in a federal court. It would be an odd result if the subsequent conferral of exclusive jurisdiction in bankruptcy in the terms of the current s 27 of the Bankruptcy Act deprived the several courts of the States of a jurisdiction to determine whether a plaintiff has properly engaged that court’s jurisdiction having regard to his or her standing by reason of the operation of one or more provisions of the Bankruptcy Act. There is a distinction between the exercise of a court’s jurisdiction in a proceeding that calls into question a provision of the Bankruptcy Act on the one hand and the exercise by that court of a jurisdiction under or by virtue of the Bankruptcy Act, on the other.
…
Thus, when a State court determines whether a proceeding can properly be commenced or maintained before it or whether the plaintiff has standing to engage the jurisdiction of the Court, by reason of any impediment going to the operation or application of a provision of the Bankruptcy Act, such an application is not one under or by virtue of the Bankruptcy Act. The Commission in Court Session was not exercising a jurisdiction in bankruptcy by determining the motions before it brought by Meriton and Owners.[47]
[46] Ibid at [8] and [18].
[47] Ibid at [86], [87], [88] and [117].
In Macchia v The Public Trustee,[48] the Court of Appeal of Western Australia held that the Supreme Court had jurisdiction to determine, as between the bankrupt and strangers to the bankruptcy, the entitlement of the bankrupt to an interest in property (his mother’s estate). Steytler P (Le Miere AJA agreeing) said:
It seems to me that the application before the Master could not be categorised as one ‘to declare for or against the title of the trustee to any property’. He was asked only to decide whether or not the appellant was a person interested in the estate of his mother for the purposes of s 29(1) of the Administration Act. He had the necessary jurisdiction to do so. Proceedings of that kind are not proceedings ‘under or by virtue of’ the Bankruptcy Act: Sutherland v Brien [1999] NSWSC 155; (1999) 149 FLR 321 [8] (Austin J). They are proceedings within the ordinary jurisdiction of the Supreme Court. The trustee in bankruptcy was not a party to the proceedings. He could consequently not be bound by anything decided in the course of determining the appellant’s standing under s 29(1) of the Administration Act.[49]
[48] [2008] WASCA 241.
[49] Ibid at [21].
Mr Cooper relies upon the judgments of a Full Court of the Federal Court in Scott v Bagshaw[50] and of Perram J in Meriton Apartments Pty Ltd v Industrial Court of New South Wales[51] in support of his contention that a State court has no jurisdiction to decide the title of a bankrupt to a chose in action as between the bankrupt and a stranger to the bankruptcy. However, in Scott v Bagshaw, the issue was joined as between the bankrupt and trustee and in Merriton Apartments Pty Ltd v Industrial Court of New South Wales, Perram J was dissenting on the relevant issue. Those cases are not authorities against this Court having jurisdiction in the present circumstances.
[50] (2000) 99 FCR 573.
[51] (2008) 171 FCR 380.
Accordingly, I determine as a preliminary issue that this 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 make the claims which he does.
I note for the sake of completeness that neither party addressed the question whether, if the federal courts otherwise had exclusive jurisdiction to hear and determine the actions pursuant to section 27, this Court nevertheless would have jurisdiction vested in it by section 4(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth). When the Bankruptcy Act was amended in 1996 to make the jurisdiction of the federal courts exclusive, the Explanatory Memorandum stated that:
Bankruptcy matters will still be able to be dealt with by Supreme Courts of the States and the Northern Territory under the Jurisdiction of Courts (Cross-Vesting) Act 1987 in appropriate cases.[52]
[52] Explanatory Memorandum at [82].
It is not necessary to consider the application of section 4 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) given the conclusion I have reached regarding section 27 of the Bankruptcy Act.
Application to transfer to Federal Court
Mr Cooper applies for an order pursuant to section 5(1)(b)(ii)(C) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (SA) that the actions be transferred to the Federal Court of Australia.
Mr Cooper makes the application on two alternative bases:
1. if this Court determines that it has no jurisdiction to hear and determine the actions or the question of standing, on that ground; and
2. in the alternative, to avoid the risk of a subsequent challenge by the Moloneys by way of judicial review in the High Court to the jurisdiction of this Court to hear and determine the actions.
In relation to the first ground, I have held that this Court does have jurisdiction to hear and determine the actions and the question of Mr Cooper’s standing.
In relation to the second ground, on the hearing of the application, the Moloneys (and Mr Cooper) agreed that they would not in future bring any such judicial review proceedings challenging the jurisdiction of this Court. This is to be considered in the context that the Moloneys did not before me challenge the jurisdiction of this Court and on the contrary argued in favour of this Court having jurisdiction.
I also take into account the circumstance that there is no lis between Mr Cooper and the bankruptcy trustee as to the right to bring the claims brought by Mr Cooper in the actions. There is no dispute between Mr Cooper and the trustee capable of being the subject of the primary jurisdiction of the Federal Court under the Bankruptcy Act.
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.
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