Davis v Official Trustee
[2006] FMCA 1853
•29 November 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DAVIS v OFFICIAL TRUSTEE & ORS | [2006] FMCA 1853 |
| BANKRUPTCY – PRACTICE & PROCEDURE – Application to review mediation agreement by a party claiming to be a trustee for parties who have entered into and complied with terms of the agreement. |
| Applicant: | WARWICK DAVIS |
| First Respondent: | THE OFFICIAL TRUSTEE IN BANKRUPTCY |
| Second Respondent: | BRIAN DAVIS |
| Third Respondent: | JOY DAVIS |
| File number: | SYG2327 of 2005 |
| Judgment of: | Raphael FM |
| Hearing date: | 29 November 2006 |
| Date of last submission: | 29 November 2006 |
| Delivered at: | Sydney |
| Delivered on: | 29 November 2006 |
REPRESENTATION
| For the Applicant: | Applicant in person |
| Counsel for the First Respondent: | Mr G McGrath |
| Solicitors for the First Respondent: | Lobban McNally |
| Counsel for the Second and Third Respondents: | Mr F Kunc & Mr J Emmett |
| Solicitors for the Second and Third Respondents: | Colquhoun Murphy |
ORDERS FOLLOWING THE MEDIATION
Amended application, cross-claim and response filed on 23 June 2006 be dismissed.
All previous cost orders are vacated.
The hearing date fixed for 4 and 5 December 2006 be vacated.
Any documents produced during the proceedings to either the court or another party’s solicitor in response to either a notice to produce or a subpoena to be returned to the person or party that produced the documents.
No order as to costs.
ORDERS FOLLOWING THE HEARING OF THE INTERLOCUTORY APPLICATION
Application dismissed.
Applicant to pay the costs of the Official Trustee assessed in the sum of $750. Such costs to be paid within 28 days.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2327 of 2005
| WARWICK DAVIS |
Applicant
And
| OFFICIAL TRUSTEE IN BANKRUPTCY |
First Respondent
| BRIAN DAVIS |
Second Respondent
| JOY DAVIS |
Third Respondent
REASONS FOR JUDGMENT
On 19 February 1998, Mr Warwick Davis had a sequestration order made against him. That sequestration order and his bankruptcy ceased on 20 February 1991. At the time of his bankruptcy Mr Davis was a joint tenant in a property in Broulee New South Wales, having a title number 14814, folio 237, but is now folio 16/21/758168. The other two joint tenants were Mr Davis’ parents who are the cross-respondents in these proceedings.
According to an application which was commenced in this court on 23 August 2005 by Mr Davis, on 29 July 2004 the respondent, being the Official Trustee in Bankruptcy, made a claim to the applicant’s interest in the Broulee property which it claimed was vested in his trustee. A caveat was lodged against the property on or about the same day.
The proceedings brought by Mr Davis in this court sought a declaration that the interest of Mr Davis in the property was as a trustee and he also sought the discharge of the caveat. The matter proceeded rather slowly because of the necessity to file a considerable quantity of evidence most of which related to a period almost 20 years ago, some of which was available and some of which was apparently not. The matter was set down for hearing on 27 and 28 April 2006, but that hearing date was vacated. On 7 February 2006 there was an order that the case be referred to mediation. The matter came back to the court on several further occasions until on 15 February 2006 I made consent orders which confirmed the hearing which had previously been fixed for 4 and 5 September of this year.
I also made two other orders, one of which was that the parties mediate the matter before a Registrar of this court, such mediation to conclude prior to 17 November 2006. The matter was mediated before a Registrar and, as a result of that mediation a settlement agreement was entered into between the cross-respondents, Mr Davis’ parents, the Official Trustee and Mr Davis.
I am told, and I accept, that on the day of the mediation Mr Davis was somewhat distressed and he absented himself from the completion of the mediation and, therefore, did not sign the agreement on that day. The agreement which is in holograph form and a copy of which is attached to the affidavit of Mark Terrence McNally, filed in court, was signed by the parents and was later signed by Mr Davis on 5 November 2006. The mediation had been conducted on 1 November 2006.
In short, the agreement provided that in consideration for the payment of some $20,000 the Official Trustee would give up any claim it might have as the trustee of Mr Warwick Davis’ estate to any interest in the property and would withdraw the caveat. The payment was to be made by the parents. It is to be remembered that Mr Davis does not claim any beneficial interest in this property, he claims he is a trustee and his parents are his beneficiaries.
The payment of $20,000 was made and in accordance with the agreement a letter was sent by the Insolvency and Trustee Service to Mr and Mrs Davis and Mr Warwick Davis on 24 November 2006 stating:
“In accordance with the terms of settlement entered into by the parties to finalise the above proceedings, I advise that the Official Trustee in Bankruptcy hereby acknowledges it no longer claims to have any legal or equitable interest in the property known as 13 Larmer Close Broulee (NSW) being land contained in folio 16/21/75168 and accordingly releases and disavows any right title and interest it may have held in the subject property.
Please find enclosed an executed withdrawal of caveat in registrable form, in respect of caveat AA843746P lodged by the Official Trustee in Bankruptcy in respect of the interests of Warwick Davis.”
There was one more step to take in order to conclude the matter and that was for this court to enter orders. In the ordinary course the court would have expected to receive short minutes of orders signed by all the parties and then these would have been signed by myself in chambers and the orders would have been made by the Registry.
But Mr Warwick Davis now seeks to upset the arrangements that have been made and brought on this notice of motion urgently. Mr Davis advises the court that he used to be a legal practitioner and a barrister.
The notice of motion which he drafted seeks an order that the court reviews and modifies the terms of the transaction to which I have previously referred and certain consequential orders, the effect of which would be, so I understand it from his submissions, that the arrangement would effectively be set aside and the $20,000 paid by his parents would be returned to them. Mr Davis’ grounds for asking for these orders are not set out in an affidavit, but are provided in note form in a document entitled draft Points of Claim Style Analysis.
In short, Mr Davis argues that the mediation agreement came about as a result of pressure on himself and his parents and that the agreement was monstrously unjust. What I really gather from Mr Davis’ statements to this court today is that he thinks he could have won the case. But Mr Davis, as Mr Kunc so succinctly points out, claims to be a trustee. He does not suggest that his parents are suffering under any disadvantage that would make them incapable of freely entering into an agreement of this type and they are here today represented by the counsel who have represented them all along in relation to these proceedings and who were present at the mediation.
Mr Kunc has kindly tendered a document entitled “Acknowledgement” signed by Mr Brian Davis on 1 September before the mediation settlement agreement was finalised, acknowledging that he read the terms of settlement and had them explained to him by his solicitor.
He says he understood them and he is entering into them on his own behalf and on behalf of his wife as a result of his own decision and on the basis that he considers it to be in his and his wife’s own best interests to do so. Those instructions from a beneficiary should bind the trustee as well as the beneficiary’s legal advisors.
I do not understand what Mr Warwick Davis’ complaint is. It seems to be that he wishes to save his father from further expense and to recover for his father the expense that he has already occasioned by these proceedings. I should point out that in relation to costs the settlement agreement provided that each party would pay its own. Mr Warwick Davis also says that he has a personal interest in upsetting the agreement because he believes that other creditors of his on the bankruptcy which commenced 18 years ago and completed 15 years ago could still attack him. I am afraid that I have some difficulty in comprehending that such an attack might now take place.
Mr Davis has not provided me with any sworn evidence either of his own state of mind at the time he signed the settlement agreement on
5 November 2006, or of the state of mind of his parents when they signed the settlement agreement on 1 November 2006. I accept that this court would have power to decline to sign short minutes of order or more properly to put into formal orders an agreement if that agreement could be impugned on grounds such as fraud or undue influence. But I do not think that the court has power to order some form of all encompassing review of what went on at the mediation, which is what Mr Davis has requested in his notice of motion.
In the absence of evidence and in the presence of counsel appearing on behalf of the second and third cross-respondents who have complied with the agreement that they entered into and now wish this matter to be concluded, I am not minded to grant Mr Warwick Davis the relief he seeks. I would therefore propose to dismiss his application and to sign the short minutes of order and make those short minutes of order the orders of this court, those orders being:
(i)The amended application, cross-claim and response filed on 23 June 2006 be dismissed;
(ii)All previous cost orders to be vacated;
(iii)The hearing date fixed for 4 and 5 December 2006 be vacated;
(iv)Any documents produced during the proceedings to either the court or another party’s solicitor in response to either a notice to produce or a subpoena to be returned to the person or party that produced the documents;
(v)No order as to costs.
The Public Trustee seeks its costs in relation to this motion. Mr Davis argues that he should not be required to pay costs because the documentation which he says effectively creates the contract only came into his hands at a very late stage, possibly as late as yesterday, and he had no time to take legal advice upon it. Had this submission been attended by an offer to sign the short minutes of order by consent I may well have decided not to make any orders for costs. But Mr Davis, who sincerely believes that the arrangement made by his father is not in his father’s best interests would, understandably, not sign those short minutes of order by consent in any circumstances. That being the case it is appropriate that he should pay the costs of the Public Trustee which I assess in the sum of $750.00, such costs to be paid within 28 days.
I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of Raphael FM
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