Garrett v Duncan

Case [2015] FCA 255

FEDERAL COURT OF AUSTRALIA

Garrett v Duncan [2015] FCA 255

Citation: Garrett v Duncan [2015] FCA 255
Appeal from: Application for leave to appeal: Garrett v Duncan [2014] FCA 1260
Parties: ANDREW MORTON GARRETT v STEPHEN JAMES DUNCAN
File number: VID 730 of 2014
Judge: BEACH J
Date of judgment: 16 March 2015
Catchwords: PRACTICE AND PROCEDURE – application for leave to appeal summary judgment – applicant and former spouse former bankrupts – applicant joint trustee of family trust – applicant sought order that surplus of former spouse’s estate be paid to him as joint trustee – deed of settlement between applicant and trustee of former spouse’s bankrupt estate – release clauses – covenant not to sue – complete defence – no sufficient doubt to warrant reconsideration – no substantial injustice if leave refused – application dismissed
Legislation:

Bankruptcy Act 1966 (Cth) s 179
Federal Court of Australia Act 1976 (Cth) ss 20A, 24(1A), 37AO, 37M, 37P

Federal Court Rules 2011 (Cth) r 26.01
Cases cited: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397
Re CSR Ltd (2010) 183 FCR 358
Sali v SPC Ltd (1993) 116 ALR 625
Date of hearing: 13 March 2015
Place: Melbourne
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 40
Counsel for the Applicant: The Applicant appeared in person
Counsel for the Respondent: The Respondent appeared via telephone

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 730 of 2014
BETWEEN:

ANDREW MORTON GARRETT
Applicant
AND:

STEPHEN JAMES DUNCAN
Respondent

JUDGE:

BEACH J

DATE OF ORDER:

16 MARCH 2015

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.The application for leave to appeal Tracey J's decision made on 21 November 2014 is dismissed.

2.The applicant is to pay the respondent's costs of and incidental to the application for leave to appeal.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 730 of 2014
BETWEEN:

ANDREW MORTON GARRETT
Applicant
AND:

STEPHEN JAMES DUNCAN
Respondent

JUDGE:

BEACH J

DATE:

16 MARCH 2015

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

  1. The applicant seeks leave to appeal the orders and decision of Tracey J made on 21 November 2014 pursuant to which his Honour ordered, inter-alia, that the applicant's originating application be dismissed.  The respondent opposes such leave to appeal. 

  2. In my opinion, for the reasons that follow, leave to appeal should be refused. 

  3. Before proceeding further, I should note one matter. Justice Pagone on 26 February 2015 made a vexatious litigant order under s 37AO of the Federal Court of Australia Act 1976 (Cth) (the Act) in proceeding VID 600 of 2014 (Garrett v Commissioner of Taxation [2015] FCA 117). The present application for leave to appeal was instituted before that order was made. The order in form does not expressly refer to continuing a proceeding already…

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AGLC
Garrett v Duncan [2015] FCA 255
Case
[2015] FCA 255
Decision Date

CaseChat Overview and Summary

Garrett v Duncan was an application for leave to appeal a summary judgment made by Tracey J in the Federal Court of Australia. The applicant, Garrett, had been a former bankrupt and was now the joint trustee of a family trust. Garrett sought an order that the surplus of his former spouse's estate be paid to him as joint trustee. The dispute centred around a deed of settlement between Garrett and the trustee of his former spouse's bankrupt estate, which contained release clauses and a covenant not to sue.

The court had to decide whether Garrett's application for leave to appeal the summary judgment was valid, considering the release clauses in the settlement deed, which constituted a complete defence. The court also had to determine if there was sufficient doubt about the summary judgment to warrant reconsideration, and if Garrett would suffer substantial injustice if the leave to appeal was refused.

The court found that the release clauses in the deed of settlement constituted a complete defence and that there was no sufficient doubt about the summary judgment to warrant reconsideration. The court also concluded that Garrett would not suffer substantial injustice if the leave to appeal was refused. Consequently, the application for leave to appeal was dismissed, and Garrett was ordered to pay the respondent's costs of and incidental to the application for leave to appeal.

Orders

Orders of the court

1. The application for leave to appeal Tracey J's decision made on 21 November 2014 is dismissed.

2. The applicant is to pay the respondent's costs of and incidental to the application for leave to appeal.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Before proceeding further, I should note one matter. Justice Pagone on 26 February 2015 made a vexatious litigant order under s 37AO of the Federal Court of Australia Act 1976 (Cth) (the Act) in proceeding VID 600 of 2014 (Garrett v Commissioner of Taxation [2015] FCA 117). The present application for leave to appeal was instituted before that order was made. The order in form does not expressly refer to continuing a proceeding already begun before the order was made. In my view, although the leave application may be a “proceeding”, it is not caught by his Honour’s order. In any event, even if it was so caught, I would grant leave to the applicant to continue with his application for leave to appeal.FACTUAL BACKGROUND The relevant factual background is as follows:(a)A sequestration order was made against the applicant on 24 September 2004, on which date Peter Ivan Macks (Macks) was appointed as the trustee in bankruptcy of the applicant’s estate. On or about 22 December 2004, a sequestration order was made against the applicant’s former spouse, Averil Gay Garrett, on which date the respondent Stephen James Duncan was appointed as the trustee in bankruptcy of her estate.(b)The applicant was discharged from his bankruptcy on 22 April 2009, with Macks finalising the administration of the applicant’s estate on or about 17 May 2011. On or about 23 December 2007, Averil Garrett was discharged from her bankruptcy, with the respondent subsequently finalising the administration of her estate.(c)During the course of the administration of his and his former spouse’s estates, the applicant, Macks and the respondent were involved in various disputes and legal proceedings. (d)On 10 March 2009, the applicant, Macks and the respondent (both personally and in his capacity as trustee for the bankrupt estate of Averil Garrett) entered into a Settlement Agreement to resolve their disputes and differences. The applicant has also brought separate proceedings against Macks. I heard and determined the applications for leave to appeal together (see Garrett v Macks [2015] FCA 254]). The Settlement Agreement contained various terms including the following: 8. Releases by Garrett8.1Garrett unconditionally releases and forever discharges Macks, Duncan, Lipman Karas, including its directors and employees, Sashi Maharaj QC of counsel, Arturo Dal Cin of counsel, Graham Dart of counsel and Cosoff Cudmore Knox, including its partners and employees from any and all claims whatsoever and howsoever arising out of the facts, matters and circumstances referred to in the Proceedings and in relation to all matters, whensoever or howsoever arising, touching or arising from or in connection with the facts, matters and circumstances alleged in each and every of the Proceedings and including without limitation all matters arising out of the administration by Macks of the bankrupt estate of AMG and the administration by Duncan of the bankrupt estate of Averil Gay Garrett.8.2Save as provided for by the terms of this agreement, Garrett forever releases any claim to and entitlement to the Royalty Stream, which has priority over Macks and Duncan.8.3Obligations and rights under this clause continue after the expiration or termination of this agreement. 8.4Nothing in this clause 8 prevents any party from seeking to enforce the obligations or exercise the rights under this agreement.8.5For the avoidance of doubt, the releases and discharges given by Garrett in this clause 8 are to be held by Macks and Duncan jointly and severally for themselves and on trust for and on behalf of the parties released and discharged who are not parties to this agreement.…10. Covenant not to sue10.1Garrett must not make any claim whatsoever or howsoever arising against any of Macks, Duncan, Lipman Karas, including its partners and employees, Sashi Maharaj QC of counsel, Arturo Dal Cin of counsel, Graham Dart of counsel and Cosoff Cudmore Knox, including its partners and employees arising directly or indirectly out of or relating to:10.1.1 the conduct of the Proceedings; or10.1.2 the administration of the bankrupt estate of AMG; or10.1.3 the administration of the bankrupt estate of Averil Gay Garrett.(the Releases)THE PROCEEDINGS BEFORE TRACEY J

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Further, as I have said earlier, the applicant has sought leave to put forward a proposed amended notice of appeal containing 48 proposed grounds of appeal. It is not useful for me to go through each one of them. In oral argument, the applicant’s “real” grounds of complaint were crystallised and have been addressed by me earlier. None of the proposed grounds of appeal have substance, whether the principal arguments addressed above or the lengthy grounds referred to in the proposed amended notice of appeal.CONCLUSION In summary, the applicant has not shown that his Honour’s decision was attended with any sufficient doubt such as to warrant the grant of leave to appeal. Moreover, given the form of the orders sought in the originating process, the applicant has not in any event shown that he would suffer substantial injustice by my refusing leave, even if the decision below was incorrect. The application for leave to appeal will be dismissed with costs.

Ratio Decidendi

Legal Principle Established

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