Gargan v Gargan

Case •

[1999] QSC 316

•

13 October 1999

IN THE SUPREME COURT

OF QUEENSLAND

CAIRNS  Writ No.   4 of  1994

[Gargan v Gargan & Ors]

BETWEEN:      PETER ALEXANDER GARGAN

Applicant

AND:  THE OFFICIAL TRUSTEE

JOHN ERNEST GARGAN

GRACE ELAINE GARGAN

GARY JOHN GARGAN

MICHAEL ERNEST GARGAN

SIMON ALEXANDER GARGAN

SAM INDUSTRIES PTY LTD

ABDUL AZIZ MOHAMMED

WILLIAM LINDSAY JUE SUE

BARRY MICHAEL JOHNSON     

Respondents

REASONS FOR JUDGMENT

BEFORE THE HONOURABLE JUSTICE WILLIAMS

DELIVERED THE  13th DAY OF OCTOBER, 1999

  1. In this matter I have used as the heading for the proceedings that which appears on the original application filed in May, 1994.  In documents filed subsequent to a directions order made on 29 July, 1999 the applicant has also named as defendants the Commonwealth of Australia, the State of Queensland, Kippin Investments Pty Ltd and Ritek Buildings Systems Pty Ltd.

  2. The respondent Jue Sue is now deceased, but all other parties (with the exception of the State of Queensland) named either in the original proceedings or later documents appeared on the hearing which took place on 30 September, 1999.

General Background

  1. On 22 July, 1999 the applicant, Peter Alexander Gargan, filed an application in Application 4 of 1994 seeking an order that the order of Byrne J “cross-vesting the action to the Federal Court contrary to the latest interpretation of the Constitution” be set aside.

  2. That application initially came before me in Brisbane by telephone link from Cairns on 29 July, 1999.  It became clear that the applicant wished to raise further arguments and I gave directions that he file and serve any further application he wished to have heard during my Cairns sittings by 30 August, 1999.  In purported compliance with that direction the applicant on 16 August, 1999 filed two documents; one making 8 claims and another entitled Statement of Claim.  The latter contained allegations said to support the 8 claims.

  3. On 29 July, 1999 I also directed the respondents to deliver points of reply by 20 September, 1999.  The respondent, Abdul Aziz Mohammed filed points of reply on 20 August, 1999 generally supporting the applicant.  Then on 20 September, 1999 J.E. Gargan, G.E. Gargan, G.J. Gargan, M.E. Gargan, S.A. Gargan and B.M. Johnson filed their points of reply.  The points of reply of the Official Trustee in Bankruptcy and the Commonwealth of Australia were tendered during the hearing and were marked exhibit 7.

  4. Because exhibit 7 was not filed by 20 September, 1999 in accordance with my earlier direction the applicant filed on 23 September 1999 an application for default judgment against the Official Receiver.

  5. Effectively, therefore, I have to deal with the application filed 22 July, 1999, the claims made in the document filed 16 August, 1999, and the application filed 23 September, 1999.  The hearing took place in Cairns on 30 September, 1999.

  6. As will become obvious nearly all of the applicant’s contentions have been the subject of previous decisions of this or the Federal Court.  On every occasion the applicant has been unsuccessful or at least substantially so..  The chronology (ex.8) and the list of the judgments (ex. 9) provide an overview of the history of the litigation between the parties.

  7. The contentions of the applicant made during the hearing were all recorded. His arguments were generally directed towards the allegations made in the Statement of Claim filed 16 August, 1999 and his written submissions (ex. 1) related to the application for default judgment. Much of his argument was based on the premise that the Uniform Civil Procedure Rules conferred on the Court some wider power than had previously existed to re-hear, in the interests of justice, matters already determined. The bottom line of his submissions appeared to be that he wanted the issues determined by Thomas J in action 101 of 1990, Judgment 12 March, 1992, re-tried before a jury. There were other previously determined matters he also wanted re-tried before a jury. There was no appeal from that decision of Thomas J.

  8. The applicant made repeated reference to r.667(2)(b) of the UCPR which empowers the Court at any time to set aside an order that was obtained by fraud. The Court has always had that jurisdiction and it is doubtful that the new rule has changed the substantive law on the topic in any way.

Application filed 22 July, 1999

  1. This application was based on the decision of the High Court in Re Wakim ex parte McNally (1999) 73 ALJR.  It was the applicant’s contention that the order of Byrne J cross-vested to the Federal Court questions relating to trusts and partnerships which were solely within State jurisdiction.  Nothing was said in the course of argument about the possible effect of the 1999 remedial legislation.

  2. The applicant asserted (see affidavit filed 22 July, 1999) that “trust and partnership matters do not vest in the Commonwealth by s.51 Constitution but are exclusively State matters”. That statement is, in my view, incorrect – it is far too broadly stated. The Commonwealth clearly has power to legislate with respect to trusts and partnerships where those legal concepts are impacted on by legislation clearly within power, for example, taxation. That in my view is also the position with the Bankruptcy law. There can be no doubt as to the constitutional validity of s.7 (2)(b) and s.116(2)(a) of the 1966 Bankruptcy Act.

  3. Whether the property owned by a bankrupt was held on trust, and therefore not property divisible amongst the creditors by operation of s.116(2)(a), is a question to be determined in the first instance by the Official Receiver and ultimately on appeal to the Federal Court.  The issue whether the property is vested in the Official Receiver is clearly a Federal matter.

  4. By application 4 of 1994 the applicant raised a variety of issues which he said therein he wanted to be “submitted to a jury for determination.”  That application came on before me in Cairns on 23 May, 1994.  I ordered that the application for relief, so far as it related to respondents other than the Official Receiver, be stayed until further order.  One of the bases for making that order was that such issues had prima facie been determined by the decision of Thomas J in 101 of 1990.  I gave directions with respect to the relief claimed against the Official Receiver which was baldly stated to be “whether the Trustee has been negligent in the conduct of the Estate”.  It should be noted that the applicant has made a number of applications to other Judges of this Court to have that stay lifted but all have been unsuccessful.  The stay remains.

  5. The matter came before Byrne J on 23 and 27 February, 1995.  He refused to remove the stay and considered that the remaining part of the application was brought pursuant to s.179 of the Bankruptcy Act.  There was a suggestion during argument on this application that there was some re-drafting before Byrne J of the matter being transferred to the Federal Court but the documents do not make it clear that that was so.

  6. However, the reasons of Byrne J make it clear that the applicant was “willing to accede” to the transfer. Before me the applicant alleged that he only did so because Byrne J misrepresented the position to him. He claims that he was informed that the precise questions he had raised in the Supreme Court would be determined in the Federal Court, but Drummond J in that Court forced him to litigate other issues in a way which he did not like. Assuming those matters were proved they would not, in my view, establish fraud for the purposes of r.667(2)(b).

  7. It seems clear that in the proceedings which resulted in the decisions of Drummond J of 18 August, 1995 (ex. 3) and Kiefel J of 23 August, 1996 (ex.10) most, if not all, of the allegations of negligence against the Official Receiver were canvassed.  That was a Federal matter and was clearly an aspect of the litigation which could have been validly transferred to the Federal Court even in the light of the Wakim decision.

  8. There is no basis established by the applicant for setting aside the order of Byrne J in question. 

  9. That application should be dismissed with costs to be assessed.

Application filed 23 September, 1999

  1. The applicant’s points of claim revealed by the documents filed 16 August, 1999 went far beyond anything contemplated during the directions hearing on 29 July, 1999.  Arguably the claims so made are embarrassing because they do not reveal a clear cause of action and constitute an abuse of process.  Whilst it is true that the Official Receiver and the Commonwealth did not reply within the time specified that is not in the circumstances a ground for entering default judgment.  Both parties had clearly  indicated on 29 July, 1999 an intention of resisting all the applicant’s claims and the applicant was well aware of that.  There is no valid basis for making the order sought.

  2. The application should be dismissed but without any order as to costs.

Claims 4, 5 and 8 filed 16 August, 1999

  1. These claims were in the following terms:-

    “4.An order of the Court directing the State of Queensland to correct the Register of Freehold Land Title with regard to the lands comprising the former Lot 35 on Plan HG 737 Parish of Culgar, County of Hodgkinson, to reflect the effect upon that land of a “deed” executed between Peter Alexander Gargan and John Ernest Gargan and SAM Industries Pty Ltd on 15th August, 1990, or grant an order for compensation.

5.An order of the Court directing the State of Queensland to correct the Registrar of Freehold land Titles to reflect the true owner of Lot 13 on Plan R.P. 838332 County of Hodgkinson, Parish of Culgar and Lot 14 on R.P. 838332 County of Hodgkinson, Parish of Culgar, as a partnership between Peter Alexander Gargan as trustee for Gargan Bros, a firm, and A.A. Mohammed, or order the State of Queensland to pay compensation of $1 million to the plaintiff/applicant for the loss of the interest in Lot 13.

8.In the alternative, the plaintiff/applicant, claims from the State of Queensland damages in accordance with a log of Claim served upon Rodney John Welford, under s.118(1)(b) Land Titles Act 1994, the value of the interest in land, lost to the plaintiff/applicant as trustee for the partnership between himself and John Ernest Gargan and Abdul Aziz Mohammed in the event that the provisions of the Land Titles Act 1994 granting indefeasibility of title, to purchasers of land from the former Lot 35 on HG 737 Parish of Culgar, County of Hodgkinson, are effective.”

  1. The State of Queensland did not appear before me on 30 September, 1999 and it would appear that it had not been properly served.  In any event the applicant informed me he had told the Attorney-General he was not seeking that relief on this hearing.

  2. No claim is properly made against the State of Queensland by the document filed 16 August, 1999.  It was never intended that by the directions hearing of 29 July, 1999 that additional parties could be added to Action 4 of 1994 and new causes of action introduced.

  3. The three claims should be struck out.  That order is made without prejudice to any legitimate claim which the applicant may have against the State of Queensland.

Claim 1 filed 16 August, 1999

  1. This claim is in the following terms:-

    “1.An order of the Court under R.667(2)(b) setting aside as erroneous, having been obtained by fraud, an order of the Court, Setting aside Order No. 2885 6/7/1992 Thomas J made in O.S. 562 of 1992 on 26 June, 1992, removing a caveat No. T570871M lodged to protect the interests of the Plaintiff, John Ernest Gargan and Peter Alexander Gargan and Abdul Aziz Mohammed in the lands described therein.”

  1. It would appear that the caveat was lodged by the Official Receiver after the applicant was made bankrupt.  The application to remove it brought by SAM Industries Pty Ltd was filed in the Cairns Registry and served on the present applicant and other interested parties.  By some arrangement the details of which are not clear the matter was transferred to Brisbane and heard by Thomas J on 26 June, 1992.  It was ordered that the caveat be removed.

  2. The present applicant’s complaint, and the matter he alleges constitutes fraud, is that he was unable to get to Brisbane and so the matter was heard in his absence.  The order and some of the material before the Judge are to be found in ex.2.  It is clear that the contract of 10 July, 1989 and the Deed of that date were before the Court.

  3. The present applicant made an application to de Jersey J in Cairns in August, 1992 to have the order of 26 June, 1992 set aside.  That application was dismissed by consent upon an undertaking given by SAM Industries Pty Ltd with respect to the subject land until action 14 of 1992 in Cairns was heard.  That was a proceeding in which the present applicant sought to establish the interested inserted in the caveat.

  4. The applicant asserts that SAM Industries Pty Ltd has disregarded that undertaking, but it is not clear that that is so.

  5. Action 14 of 1992 was dismissed by Shepherdson J on 4 October, 1993 (see ex.3) and the undertaking then expired.  The statement of claim (see ex.3) sought to re-open isues determined by Thomas J in 101 of 1990.

  6. Further, the claims of the applicant are dependant upon the construction of the contract and the Deed of 10 July, 1989.  Those documents have been considered by most, if not all, of the Judges listed in ex.9 and none has apparently accepted the applicant’s construction of the documents.

  7. Even it were held that the applicant was denied the opportunity of appearing before Thomas J on 26 June, 1992 that order cannot now be set aside.  That issue was determined by the order of de Jersey J in August, 1992.  Further, the material does not establish any substantive merits in the applicant’s claim with respect to his rights and those of Abdul Aziz Mohammed under the contract and deed of 10 July, 1989.

Claim 2 filed 16 August 1999

  1. This claim is in the following terms:-

    “An order of the Court under Rule 667(2)(b) setting aside as erroneous as obtained by fraud the order of Byrne J made on 23 February, 1995 and 27 February in this action.”

  2. By the first order Byrne J refused to remove the stay I had ordered on 23 May, 1994 in action 4 of 1994.  The second order was that transferring the remaining part of action 4 of 1994 to the Federal Court which has already been referred to above.

  3. The applicant’s oral argument concentrated on the order of 27 February, 1995.  His complaint seems to be that Byrne J was misled by the Official Receiver who allegedly represented that the jurisdiction to be exercised by the Federal Court was solely Federal jurisdiction when that was not so.  Further, Byrne J misled the applicant by indicating that he would be able to litigate in the Federal Court all the matters raised in the proceedings pending in the Supreme Court.  The applicant then complains he was not given a fair hearing in the Federal Court; for example, he was not allowed to cross-examine as he wished.

  4. The matter transferred by Byrne J to the Federal Court was the subject of the lengthy reasons for judgment of Drummond J delivered 18 August, 1995 and upheld on appeal by Davies, Lockhardt and Foster JJ on 4 November, 1995 (the relevant reasons are to be found in ex.3) and the judgments of Kiefel J in ex. 10. 

  5. In so far as the applicant complains about the way the hearing was conducted in the Federal Court that is irrelevant to whether or not the order of Byrne J should be set aside.  Further, I cannot see in the material any ground for now setting aside the orders in question.

Claim 3 filed 16 August, 1999

  1. This claim is in the following terms:-

    “An order setting aside as an error of judgment under R.667(2), Order No. 60 of 1996 in action No.38 of 1996 and the Reasons for Judgment of Derrington J made in Cairns on 12 June, 1996 and granting $2 million exemplary damages against the Official Trustee in Bankruptcy for fraudulently and without lawful justification appearing with the intention of aiding the defendants in this action to commit fraud by deceiving the Court as to the true nature of the plaintiff’s interest.”

  1. The order in question struck out the statement of Claim in actions 38 of 1996 (see ex.3).  I note that the applicant purported to appeal against that decision by application for Statutory Order of Review dated 24 June, 1996 and that the application was struck out by Moynihan SJA on 10 July, 1996.  From that decision the applicant purported to appeal to the Full Court of the Federal Court by notice of appeal filed 23 July, 1996.  For reasons given by Burchett, Heery and Mansfield JJ on 30 April, 1997 that appeal was dismissed.  The relevant documents are to be found in ex.3.

  2. The decision to strike out the Statement of Claim was clearly correct.  By the action the applicant was seeking to re-litigate an issue which had been the subject of consideration before Thomas J in 101 of 1990 and before Drummond J and the Full Court of the Federal Court in 697 of 1993.  Further, the applicant had no standing to commence the proceedings as he was a bankrupt.

  3. There is on the material available absolutely no evidence of any fraud on the part of the legal representatives of SAM Industries Pty Ltd in connection with the proceedings before Derrington J.

  4. I am satisfied that there is no available basis on which the applicant can now apply to have the order of Derrington J set aside.

Claim 6 filed 16 August, 1999

  1. This claim is in the following terms:-

    “Exemplary damages of $2 million from the Commonwealth of Australia under s.56 Judiciary Act (CTH) in tort, for negligence, in appointing as Official Trustee in Bankruptcy a person whose education is insufficient for him/her to understand that in S7(2)(b) Bankruptcy Act 1966 the inclusion of the word “or” after the word “partnership” means that the Commonwealth recognises that the Constitution does not confer upon the Commonwealth the right to deal with Partnership Property, in any way whatsoever.”

  1. Such a claim involves the addition of a party, the Commonwealth, to the proceedings as they had existed since 1994.  It was certainly neither my understanding nor intention in making the directions on 29 July, 1999 that the applicant would be adding new parties and introducing entirely new causes of action.  The applicant has introduced new parties and included them in the heading of documents filed after 29 July, 1999. Counsel for the Official Receiver also announced his appearance for the Commonwealth on the assumption it was a party properly before the Court.

  2. Notwithstanding the new Rules of Court so heavily relied on by the applicant I am not satisfied that he is entitled to make such a new claim in this way.

  3. But in any event this claim does not allege a viable cause of action in negligence.  In support of the claim allegations are made in the Statement of Claim of facts such as: “An understanding of English is a fundamental requirement for a lawyer” and “The Commonwealth has a duty of care to its citizens”.  Whilst the first allegation is generally acceptable as a statement of principle it is difficult to see its relevance to the particular tort alleged.  The second allegation is so broad as to be meaningless.

  4. It is also worth noting that apparently the Judges of the Federal Court could not find any significant fault (perhaps even any fault) with the conduct of the Official Receiver with respect to the applicant’s estate.  (See the judgments of Drummond J and  Kiefel J referred to previously).

  5. I cannot, on the facts alleged, see that the applicant has any cause of action in negligence against the Commonwealth but it is sufficient for present purposes to say that no claim for damages for negligence against the Commonwealth is properly raised in these proceedings.

Claim 7 filed 16 August, 1999

  1. This claim is in the following terms:-

    “Damages in tort from the Official Trustee in Bankruptcy as claimed in the Statement of the Claim attached hereto, for all the damage that flows to the plaintiff/applicant, John Ernest Gargan and Abdul Aziz Mohammed from the wilful interference with the contractual rights vested in the plaintiff/applicant between the plaintiff/applicant and SAM Industries Pty Ltd, his heirs and assigns.”

  1. Again the observation should be made that the addition of this new cause of action went beyond what was contemplated by the directions of 29 July, 1999. 

  2. More significantly for present purposes it would appear that the conduct of the Official Receiver said to constitute interference with the applicant’s contractual rights was conduct in the course of carrying out duties as Official Receiver which has been held by the Federal Court to be proper in the circumstances.  Such a claim is not justiciable in this Court.

General

  1. The main thrust of all submissions made by the applicant at this hearing was that he wanted the issues he has sought to raise to be determined by a jury not  a Judge.  He claims a right to trial by jury.

  2. It is sufficient for me to say that the applicant has not demonstrated any viable cause of action in these proceedings which warrants trial by jury.  Most, if not all, of the critical issues have already been determined against him in other proceedings.

Orders

  1. 1.      Application filed 27 July 1999 dismissed with costs to be assessed.

    2.Application filed 23 September, 1999 dismissed with no order as to costs.

    3.Other claims made in the documents filed by the applicant on 16 August, 1999 struck out.

    4.Order that the applicant, Peter Alexander Gargan, pay the costs of the parties who appeared on 30 September, 1999, to be assessed.

Actions
Download as PDF Download as Word Document
Cases Citing This Decision

0

Cases Cited

0

Statutory Material Cited

0