Credit Suisse AG v Gu (No 2) - [2022] NSWSC 198

Supreme Court

New South Wales

Medium Neutral Citation: Credit Suisse AG v Gu (No 2) [2022] NSWSC 198
Hearing dates: 2 March 2022
Date of orders: 3 March 2022
Decision date: 03 March 2022
Jurisdiction: Common Law
Before: Davies J
Decision:
1. The hearing of the proceedings fixed for 4 April 2022 is vacated.
2. These proceedings are transferred from this Court to the Federal Court of Australia pursuant to s 5(1)(b)(i) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth).
3. Costs thrown away by reason of the transfer reserved to the Federal Court.
4. Costs of the notice of motion filed 24 February 2022 be costs in the cause.

Catchwords:
CIVIL PROCEDURE – cross-vesting – transfer to Federal Court of Australia – related proceedings in Federal Court – special federal matter – property proceedings in Supreme Court – dispute over priorities of interests in land – bankruptcy of borrower/registered proprietor – proceedings in Federal Court for orders under ss 120 and 121 Bankruptcy Act arsing from interests of claimants – jurisdiction of Supreme Court in bankruptcy – more appropriate court - interests of justice

Legislation Cited:
Bankruptcy Act 1966 (Cth) ss 30,120,121
Conveyancing Act 1912 (NSW) s 12
Judiciary Act 1903 (Cth) s 39B
Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) ss 3,5,6,12

Cases Cited:
Bankinvest A G v Seabrook (1988) 14 NSWLR 711
BHP Billiton Ltd v Schultz (2004) 221 CLR 400; [2004] HCA 61
Docherty v Porter, in the matter of Docherty (Bankrupt) [2021] FCA 1227
Re Hamilton-Irvine (1990) 101 FLR 11
Seven Network (Operations) Limited v Harrison [2017] NSWSC 405
Truthful Endeavour Pty Ltd v Condon (Trustee), in the matter of Rayhill (2015) 233 FCR 174; [2015] FCAFC 70

Texts Cited:
Nil

Category: Procedural rulings
Parties: Menghong (Michael) Gu (First Defendant)
Great Lands Investment Pty Ltd (Second Defendant)
Zhi Huang (Third Defendant)
Ying Qin (Fourth Defendant)
Zhenhua Zhang (Fifth Defendant)
Po Hu (Sixth Defendant)
Hongyun Liu (Seventh Defendant)
I-Prosperity Pty Ltd (In Liquidation) (Eighth Defendant)
Jing Spring Hill Pty Ltd (Ninth Defendant)
Liyun Liu (Tenth Defendant)
Representation:
Counsel:
J Wherrett (Second Defendant)
S Docker (Third-Sixth Defendants)
No appearance (Seventh Defendant)
F Murray-Palmer (Eighth Defendant)
S Wang (Ninth Defendant)
No appearance (Tenth Defendant)
Solicitors:
MJF Law (Third to Sixth Defendants)
Norton Rose Fulbright (Eighth Defendant)
Hall and Wilcox Lawyers (Ninth Defendant)
Ashurst Australia (Tenth Defendant)

File Number(s): 2020/313035
Publication restriction: Nil

Judgment

At the conclusion of the hearing of a notice of motion filed by the second, third, fourth and fifth defendants on 24 February 2022, I made orders vacating the hearing of these proceedings on 4 April 2022 and transferring the proceedings to the Federal Court. I reserved my decision on costs. These are my reasons for the orders, and in relation to costs.
These proceedings commenced as possession proceedings by the plaintiff in relation to a property owned by the first defendant in Superba Parade, Mosman. The plaintiff was the first registered mortgagee, and the first defendant, Menghong Gu, was the registered…

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.

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Details

Case: [2022] NSWSC 198
Decision Date: 03 March 2022

CaseChat Overview and Summary

Credit Suisse AG was involved in a dispute with Gu over the priorities of interests in a piece of land. The matter was initially before the Supreme Court of New South Wales but was subsequently transferred to the Federal Court of Australia. The Federal Court had to determine if it had jurisdiction to hear the matter, given that there were related proceedings in the Federal Court and special federal matters involved. The case revolved around the dispute over the priorities of interests in the land, which arose from the bankruptcy of the borrower and registered proprietor.

The court had to decide whether the proceedings were a "special federal matter" within the meaning of section 39B of the Judiciary Act 1903. The court also had to determine if the Federal Court was a more appropriate court to hear the matter, considering the interests of justice. The central issue was whether the Federal Court had jurisdiction to hear the case, given the existing proceedings in the Federal Court and the related property proceedings in the Supreme Court.

The court found that the proceedings were indeed a special federal matter as they involved interests of claimants in the property of a bankrupt under sections 120 and 121 of the Bankruptcy Act 1966. The court also concluded that the Federal Court was a more appropriate court to hear the matter due to the related proceedings and the special federal nature of the case. The interests of justice were best served by having the matter heard in the Federal Court, given the complexity and the need for consistency in the handling of related matters.

The court ordered that the proceedings be transferred from the Supreme Court to the Federal Court of Australia. This decision aimed to ensure that all related matters were heard in the appropriate jurisdiction, facilitating a more efficient and effective resolution of the dispute over the priorities of interests in the land.

Orders