Davidson v Official Receiver

Case [2023] FedCFamC2G 137

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Davidson v Official Receiver [2023] FedCFamC2G 137   

File number: MLG 319 of 2020
Judgment of: JUDGE RILEY
Date of judgment: 24 February 2023 
Catchwords: BANKRUPTCY – application to transfer proceeding to the Federal Court of Australia – application not supported by affidavit – application dismissed.
Legislation:

Federal Circuit and Family Court of Australia Act 2021 s.153(1)

Federal Circuit And Family Court Of Australia (Division2) (General Federal Law) Rules 2021 r.8.02

Cases cited: White v Ljubicic [2017] FCA 717
Division: Division 2 General Federal Law
Number of paragraphs: 30
Date of last submission: 27 January 2023
Date of hearing: On the papers
Place: Melbourne
Solicitor for the Applicant: Comlaw Barristers & Solicitors
Solicitor for the First Respondent: Colin Biggers & Paisley
Solicitor for the Second Respondent: Nicholas O’Donohue & Co

ORDERS

MLG 319 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:

SAM DAVIDSON

Applicant
AND:

OFFICIAL RECEIVER

First Respondent

PHILIP NEWMAN AS TRUSTEE OF THE BANKRUPT ESTATE OF WILLIAM STEPHEN VLAHOS

Second Respondent

order made by:

JUDGE RILEY

DATE OF ORDER:

24 February 2023

THE COURT ORDERS THAT:

1.The requirement in r.8.02(1)(a) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 that a transfer application be made before the first court date for the proceeding be dispensed with.

2.The requirement in r.8.02(1)(c) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 that a transfer application be supported by affidavit be dispensed with.

3.The applicant’s oral application for these proceedings to be transferred to the Melbourne Registry of the Federal Court of Australia be dismissed.

Note: The form of the order is subject to the entry in the Court’s records.

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

REASONS FOR JUDGMENT

JUDGE RILEY:

  1. This is an application made pursuant to s.153(1) of the Federal Circuit and Family Court of Australia Act 2021 for the transfer of this proceeding to the Federal Court of Australia.

  2. The applicant in the proceeding generally and in the transfer application is Mr Davidson. The first respondent is the Official Receiver. The second respondent is the trustee in bankruptcy of William Stephen Vlahos.

  3. The Official Receiver neither consents to nor opposes the transfer application. The trustee has submitted that many of the factors that the court must consider in a transfer application are neutral in the present case, while one factor weighs in favour of the transfer and one factor weighs against transfer.

  4. Mr Davidson made the transfer application orally to a registrar of this court. The registrar adjourned the transfer application to me to be…

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AGLC
Davidson v Official Receiver [2023] FedCFamC2G 137
Case
[2023] FedCFamC2G 137
Decision Date

CaseChat Overview and Summary

In the case of Davidson v Official Receiver, the primary issue before the court was whether a transfer application should be granted to move the proceedings from the Supreme Court of Victoria to the Federal Court of Australia. The applicant, Mr Davidson, sought the transfer on various grounds, including his preference for the Federal Court and the pendency of a similar case in that court. The Official Receiver and the Trustee opposed the application.

The court was required to decide if the application met the criteria set out in the relevant rules and if the transfer would serve the interests of justice. The court considered factors such as the applicant's wishes, the comparative resources of the two courts, and the potential benefits of transferring the case. Given the lack of evidence regarding the duration of the trial and the comparative resources of the courts, the court found it difficult to assess whether the interests of justice would be better served by a transfer.

After weighing the various factors, the court concluded that Mr Davidson's preference and the pendency of another case in the Federal Court were not sufficient grounds to warrant a transfer. The court held that the application did not meet the necessary criteria for transfer, and thus, the application was dismissed. The court noted that the factors considered were largely neutral, and without a clear advantage to transferring the case, it was appropriate to maintain the proceedings in the Supreme Court of Victoria.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Rule 8.02(1)(a) of the Rules requires that a transfer application be made before the first court date. Mr Davidson submitted that the court should waive that requirement. The other parties did not oppose that course. I accept that, in all the circumstances of this case, it is appropriate to dispense with the requirement in r.8.02(1)(a) of the Rules.BACKGROUND In paragraph 5 of his submissions filed on 19 December 2022, Mr Davidson set out the background to this matter as follows: (a)On 6 December 2019 the first respondent (Official Receiver), at the request of the first respondent (Trustee), issued a notice under section 139ZQ of the Bankruptcy Act 1966 (Cth) (BA) addressed to the applicant demanding payment of $12,507,025.84.(b)The claim in the Notice was based on section 120 of the BA, which relates to undervalued transactions.(c) The Trustee’s claim is for payments made by William Stephen Vlahos (Bankrupt) to the applicant.(d) The Bankrupt had operated a betting scheme in which he told investors he would bet on racehorses and distribute winnings to investors. The applicant had a contractual agreement with the Bankrupt that he entered into in good faith on the basis that the Bankrupt would lodge bets on identified racehorses according to the Bankrupt’s betting scheme and would return winnings to investors and syndicate members. (e)The applicant was a syndicate leader. He collected money from friends and relatives to pass on to the Bankrupt to place bets on horse races. He received back from the Bankrupt money that the Bankrupt told him were winnings, and which he distributed to syndicate members, including himself.(f)In White v Ljubicic the Trustee had recovered moneys allegedly paid by the Bankrupt to an investor. The claim was brought under section 120 of the BA. (g)In the Notice the Official Receiver relied on White, a decision of Beach J. His Honour had stated:Given the trustees’ investigations into the Edge punting club, it would appear that the respondent has provided no consideration for the funds received by him. Indeed, there is no evidence of any such consideration. Moreover, the respondent has been given an adequate opportunity by the trustees to put forward any such evidence.(h) On 31 January 2020 the applicant filed an application under section 139ZS of the BA in this Honourable Court to set aside the Notice.(i)In that application the applicant sought, amongst other things, a declaration that the Notice was statute barred.(j) The applicant applied for summary judgment. That application was dismissed by Judge Riethmuller.(k) An appeal to the Full Court of the Federal Court was dismissed.(l) On 3 December 2021 the applicant’s application for special leave to appeal to the High Court of Australia was refused.(m) On 21 February 2020 the Trustee had applied to transfer this proceeding to the Federal Court. That application was opposed by the applicant. The application for transfer was dismissed.(n) The Trustee had commenced a number of other proceedings under section 120 of the BA in the Federal Court against other persons who had received money from the Bankrupt.(o) There was a mediation before the Registrar on 29 May 2020. The mediation resumed on 28 November 2022. There was no resolution of this proceeding.(p) After the mediation the Registrar made orders and directions. Those orders included a direction for filing these submissions.(footnotes omitted)

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

In the absence of an estimate of the likely duration of the trial, and in the absence of evidence about the comparative resources of this court and the Federal Court, I am not able to assess whether the interests of the administration of justice would be better served by the matter remaining in this court or being transferred to the Federal Court.CONCLUSION Weighing up the various matters that I am required to consider, I am not persuaded that this is an appropriate matter to transfer to the Federal Court. Mr Davidson’s wishes are not sufficient to justify a transfer. The pendency of Ragogna in the Federal Court is not sufficient to justify a transfer, in circumstances where there is no evidence about the actual benefit to any party that might arise from a transfer. Mr Davidson’s wishes and the pendency of Ragogna in the Federal Court taken cumulatively are not sufficient to justify a transfer. Otherwise, the factors are neutral. Consequently, the transfer application will be dismissed.

Ratio Decidendi

Legal Principle Established

The parties have not told the court how long the trial is expected to take. It is therefore not possible to assess whether the resources of this court will be insufficient to deal with this matter in a timely way. c. interests of the administration of justice Mr Davidson asserted that it was in the interests of the administration of justice to transfer the proceeding to the Federal Court, but did not explain why. The trustee said that, in the absence of evidence about the comparative resources of this court and the Federal Court, this factor was neutral. In the absence of an estimate of the likely duration of the trial, and in the absence of evidence about the comparative resources of this court and the Federal Court, I am not able to assess whether the interests of the administration of justice would be better served by the matter remaining in this court or being transferred to the Federal Court.CONCLUSION Weighing up the various matters that I am required to consider, I am not persuaded that this is an appropriate matter to transfer to the Federal Court. Mr Davidson’s wishes are not sufficient to justify a transfer. The pendency of Ragogna in the Federal Court is not sufficient to justify a transfer, in circumstances where there is no evidence about the actual benefit to any party that might arise from a transfer. Mr Davidson’s wishes and the pendency of Ragogna in the Federal Court taken cumulatively are not sufficient to justify a transfer. Otherwise, the factors are neutral. Consequently, the transfer application will be dismissed.