FEDERAL COURT OF AUSTRALIA
Garrett v Macks [2015] FCA 254
Citation: Garrett v Macks [2015] FCA 254 Appeal from: Application for leave to appeal: Garrett v Macks [2014] FCA 1259 Parties: ANDREW MORTON GARRETT v PETER IVAN MACKS File number: VID 732 of 2014 Judge: BEACH J Date of judgment: 16 March 2015 Catchwords: PRACTICE AND PROCEDURE – application for leave to appeal summary judgment – applicant a former bankrupt – deed of settlement between applicant and trustee in bankruptcy – 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 24(1A), 24(1D)(b), 31A, 37AO, 37M
Federal Court Rules 2011 (Cth) r 26.01Cases 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
Rucinski v Monash University [2012] FCA 362
Sali v SPC Ltd (1993) 116 ALR 625
Spencer v The Commonwealth (2010) 241 CLR 118Date of hearing: 13 March 2015 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 33 Counsel for the Applicant: The Applicant appeared in person Counsel for the Respondent: Mr P Zappia SC Solicitors for the Respondent: DLA Piper Australia
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 732 of 2014
BETWEEN: ANDREW MORTON GARRETT
ApplicantAND: PETER IVAN MACKS
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 732 of 2014
BETWEEN: ANDREW MORTON GARRETT
ApplicantAND: PETER IVAN MACKS
Respondent
JUDGE:
BEACH J
DATE:
16 MARCH 2015
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
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 process be dismissed. The respondent opposes such leave to appeal.
In my opinion, for the reasons that follow, leave to appeal should be refused.
Before proceeding further, I should note one matter. Justice Pagone on 26 February 2015 made, in essence, 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) in the following terms (order 4):
The applicant is prohibited from:
(a) instituting in his own name; or
(b) causing others to institute; or
(c)being concerned, whether directly or indirectly, in the institution…
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- AGLC
- Garrett v Macks [2015] FCA 254
- Case
- [2015] FCA 254
- Decision Date
CaseChat Overview and Summary
Garrett, a former bankrupt, applied for leave to appeal a decision made by Tracey J regarding a summary judgment. The respondent, Macks, was the trustee in bankruptcy of Garrett's estate. The crux of the matter was a deed of settlement, which included release clauses and a covenant not to sue, between Garrett and Macks. The legal issues that arose from this were whether there was sufficient doubt in the original decision to warrant a reconsideration, and if refusal of leave would cause substantial injustice to Garrett.
The court examined the settlement agreement, which included an unconditional release and discharge by Garrett of all claims against Macks and other parties. The covenant not to sue also barred any future claims related to the administration of Garrett's estate. Despite the applicant's extensive list of proposed grounds for appeal, the court found that none of them had any substance. The applicant's real grievances were addressed and found to be without merit. The court concluded that there was no sufficient doubt about the original decision, and refusing leave to appeal would not cause Garrett substantial injustice.
The court dismissed the application for leave to appeal with costs. The decision underscored the enforceability of settlement agreements and the stringent criteria required to overturn a summary judgment in such cases.
The court examined the settlement agreement, which included an unconditional release and discharge by Garrett of all claims against Macks and other parties. The covenant not to sue also barred any future claims related to the administration of Garrett's estate. Despite the applicant's extensive list of proposed grounds for appeal, the court found that none of them had any substance. The applicant's real grievances were addressed and found to be without merit. The court concluded that there was no sufficient doubt about the original decision, and refusing leave to appeal would not cause Garrett substantial injustice.
The court dismissed the application for leave to appeal with costs. The decision underscored the enforceability of settlement agreements and the stringent criteria required to overturn a summary judgment in such cases.
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
The order made by Pagone J refers to the “institution of”, “instituting” and other verbal forms. 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 the respondent was appointed as the trustee in bankruptcy of the applicant’s estate. (b)The applicant was discharged from that bankruptcy on 22 April 2009, with the respondent finalising the administration of the applicant’s estate on or about 17 May 2011. (c)During the course of the administration of the estate, the applicant and the respondent were involved in various disputes and legal proceedings. Disputes arose concerning which assets formed part of the property of the estate. Further, the applicant commenced administrative review proceedings against the respondent seeking to review decisions made by the respondent in his capacity as trustee.(d)On 10 March 2009, the applicant and the respondent entered into a Settlement Agreement to resolve their disputes and differences. Stephen James Duncan (Duncan), the trustee in bankruptcy of the estate of Averil Gay Garrett (the applicant’s former spouse) was also a party to the Settlement Agreement. The applicant has also brought separate proceedings against Duncan. I heard and determined the applications for leave to appeal in each proceeding together (see Garrett v Duncan [2015] FCA 255). (e)The respondent complied with his obligations under the Settlement Agreement (see his Honour’s reasons for judgment at [13]). Those obligations included the payment of money to the applicant and to entities (including the Australian Taxation Office) on the applicant’s behalf (see his Honour’s reasons for judgment at [11]). 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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