Donnelly v Prentice

[2003] FMCA 50

FEDERAL MAGISTRATES COURT OF AUSTRALIA

DONNELLY v PRENTICE [2003] FMCA 50

BANKRUPTCY – Removal of trustee and substitution of alternative trustee.

PRACTICE AND PROCEDURE – Federal Magistrates Court Rules – rule 7.01 – whether change in applicant permitted – whether the rule available where the original applicant lacked standing.

Federal Magistrates Court Rules 2001 (Cth)
Supreme Court Act 1970 (NSW)

Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231
Marshall (as Executrix of the Estate of the Late Donald Raymond Marshall) v D G Sundin & Co Pty Ltd (1989) 16 NSWLR 463

Applicant: MAX CHRISTOPHER DONNELLY

Respondent: MAXWELL WILLIAM PRENTICE

File No: SZ1157 of 2002

Delivered on: 25 February 2003

Delivered at: Sydney

Hearing date: 25 February 2003

Judgment of: Driver FM

REPRESENTATION

Counsel for the Applicant
on Notice of Motion: Mr B Skinner

Solicitors for the Applicant: William Oates Lawyers

Counsel for the Respondent
on Notice of Motion: Mr P Walsh

Solicitors for the Respondent: Deacons

ORDERS

1. The application filed on 18 November 2002 is to be struck out.

2. The applicant on the notice of motion is granted liberty to apply within 28 days for further relief in terms of the relief sought in the application filed on 18 November 2002.

3. The applicant on the notice of motion is to pay 50 per cent of the respondent’s costs.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SZ1157 of 2002

MAX CHRISTOPHER DONNELLY

Applicant

And

MAXWELL WILLIAM PRENTICE

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

1. The issue coming before me in this matter this morning arises from a notice of motion filed on 11 February 2003 by Scott Pascoe as trustee of the property of Dulcie Joan Schipp, a bankrupt. The notice of motion seeks that, under Part 7, Rule 7.01 of the Federal Magistrates Court Rules 2001 (Cth) (“the Federal Magistrates Court Rules”), Scott Pascoe as trustee of the property of Dulcie Joan Schipp, a bankrupt, be substituted as applicant in proceedings that were instituted in the name of Max Christopher Donnelly on 18 November 2002.

2. Mr Skinner, who appeared for Mr Pascoe on the notice of motion, has put to me that the rules of court permit the amendment of the application and any other documents to alter the name of the applicant in order to overcome what he put to me was a mistake.  The circumstances are that proceedings were instituted in the name of Max Christopher Donnelly by mistake and that proceedings should have been instituted in the name of Dulcie Joan Schipp. 

3. Ms Schipp was in dispute with Mr George Harrison, a bankrupt, over the appointment of a trustee to administer his estate.  Mr Harrison had become bankrupt on his own petition and had appointed Mr Prentice as trustee.  An issue arose whether Mr Prentice should be removed and Mr Donnelly substituted.  I am told, and I accept, that while Mr Donnelly was prepared to act as trustee, should a change of trustee be made, he never intended to institute the proceedings on his own behalf and would not be prepared to continue them. 

4. Ms Schipp has since the institution of the proceedings herself become bankrupt. I am told, and I accept, that her trustee, Mr Pascoe, has agreed to continue the proceedings in her name should a change of applicant be made. Mr Skinner submits to me that the matter is simply one of mistake and that Part 7 of the Federal Magistrates Court Rules permit the change sought to be made. He submits that no authority prevented this course of action, and took me in particular to the decision of the High Court in Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231.

5. Mr Walsh, who appears for the respondent, submits that the change should not be permitted to be made on a point of principle.  He submits that the proceeding instituted in the name of Mr Donnelly is a nullity because Mr Donnelly, having no relevant interest in the matter sought to be agitated in the application, lacks standing to pursue it.  He took me to the decision in Marshall (as Executrix of the Estate of the Late Donald Raymond Marshall) v D G Sundin & Co Pty Ltd (1989) 16 NSWLR 463 where Yeldham J ruled in the circumstances of that case that a change of party would not be permitted. His Honour held that proceedings which were a nullity by reason of them having been commenced in the name of a deceased person were not saved from being such s.81 of the Supreme Court Act1970 (NSW), which preserves proceedings conducted irregularly, and that the rules of court could not be used to substitute an alternative party.

6. In my view, there are two issues relevant to the determination of this question. One is what the interests of justice properly require, and the second is whether the rules of court are properly available to support the action sought by the notice of motion. I accept that Division 7.1 of the Federal Magistrates Court Rules would permit the amendment of an application to substitute a different applicant for the applicant initially instituting the proceedings, just as they could be used to substitute a different respondent. Commonly, the interests of justice will support a change in an applicant or respondent to correct an error or oversight. Where proceedings are properly instituted the Court should, in the ordinary course, not adopt too technical a view so as to frustrate the resolution of the issue sought to be resolved.

7. However, there is force in the submission put by Mr Walsh that such rules are not properly available in circumstances where the proceedings are instituted by a person who lacks standing to bring them. I would be concerned at the use of Part 7 of the Federal Magistrates Court Rules in these circumstances where it seems to me highly likely that the present applicant lacks standing to bring the proceedings. In the circumstances it is likely that the proceedings are a nullity. In addition, it has been put to me, and I have accepted, that the present applicant had no intention to bring the proceedings in his own name and would be unwilling to continue them in his own name.

8. It seems to me that there is a proper alternative course that I can take in these proceedings in order to facilitate the resolution of the dispute without granting the relief sought by Mr Pascoe.

9. In the circumstances, I will not grant the relief sought in the notice of motion.  I will strike out the application filed on 18 November 2002. 

   
   

   I will, however, grant the applicant on the notice of motion, Scott Pascoe, in his capacity as trustee of the property of Dulcie Joan Schipp, a bankrupt, liberty to apply within 28 days for further relief in the terms of the relief sought in the application filed on 18 November 2002.  That will obviate the need for a further filing fee to be paid.

10. I order that the applicant on the notice of motion to pay 50 per cent of the respondent's costs.

I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of Driver FM

Associate: 

Date:  4 March 2003