Kalaiselvi Gomez v Michael Carrafa

[2021] VSCA 37

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2020 0108

KALAISELVI GOMEZ	Applicant
v
MICHAEL CARRAFA	Respondent

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JUDGES:	McLEISH, SIFRIS and KENNEDY JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	24 February 2021
DATE OF ORDERS:	24 February 2021
DATE OF JUDGMENT:	4 March 2021
MEDIUM NEUTRAL CITATION:	[2021] VSCA 37
JUDGMENT APPEALED FROM:	[2020] VSC 661 (Daly AsJ)

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PRACTICE AND PROCEDURE – Special federal matter – Transfer of proceeding to Federal Court of Australia under s 6 Jurisdiction of Courts (Cross-vesting) Act 1987 – Whether appeal competent – Section 13(a) precludes appeal from decision of court in relation to transfer of proceeding under Act – Whether decision confined to reasons for transfer and not antecedent reasons – Tangalooma Island Resort Pty Ltd v Miles (1989) 96 FLR 47, applied – Jurisdiction of Courts (Cross-vesting) Act 1987, ss 6(1), 13(a).

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APPEARANCES:	Counsel	Solicitors
For the Applicant	In person
For the Respondent	Mr B Barr	Zervos Lawyers

McLEISH JA
SIFRIS JA
KENNEDY JA:

Introduction

1. In July 2014, the respondent, Mr Michael Carrafa was appointed trustee of the bankrupt estate of the applicant, Ms Kalaiselvi Gomez.  He remained in that role until August 2017, when Ms Gomez was discharged from bankruptcy.

1. Ms Gomez issued proceedings in the Trial Division of this Court on 9 June 2020, claiming that as her trustee in bankruptcy, Mr Carrafa improperly used his position and power as trustee, breached his duty of care and engaged in fraudulent misrepresentations, fraudulent concealment and malicious prosecution.  Ms Gomez seeks compensation, damages and costs.  The particulars are not presently relevant.  However, the claims all relate to the conduct of Mr Carrafa in his capacity as Ms Gomez’s trustee in bankruptcy, an office subject to the provisions of the Bankruptcy Act 1996 (Cth) (‘Bankruptcy Act’).

1. In his defence, Mr Carrafa alleges that the proceeding relates to a matter in which the Federal Court of Australia has sole and exclusive jurisdiction under the Bankruptcy Act.

1. On 13 October 2020, pursuant to s 6 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (‘Cross-vesting Act’), Daly AsJ transferred the proceeding to the Federal Court of Australia. Her Honour published extensive reasons,[1] and held that ‘the whole of this proceeding is a special federal matter for the purpose of s 6 of the [Cross-vesting] Act’.[2] Section 6(1) is in the following terms:

   [1]Gomez v Carrafa [2020] VSC 661.

   [2]Ibid [23].

If:

(a)a matter for determination in a proceeding that is pending in the Supreme Court of a State or Territory is a special federal matter;  and

(b)the court does not make an order under subsection (3) in respect of the matter;

the court must transfer the proceeding in accordance with this section to the Federal Court or a court mentioned in paragraph (2)(b).

1. Her Honour made the following orders:

1.Pursuant to section 6(1) of the [Cross-vesting Act], this proceeding be transferred to the Federal Court of Australia, Melbourne Registry.

2.The plaintiff pay the defendant’s costs of the proceeding, fixed in the sum of $2,000.00.       

1. On 24 November 2020, Ms Gomez filed an application for leave to appeal the decision of Daly AsJ.

1. Ms Gomez did not apply for a stay of the orders of Daly AsJ and the parties have taken steps in the proceeding in the Federal Court.

Objection to competency

1. On 16 December 2020, Mr Carrafa filed a notice of objection to competency and applied for the question of competency to be heard and determined before the hearing of the application for leave to appeal.[3]  The grounds set out in the notice are as follows:

   [3]Pursuant to Supreme Court (General Civil Procedure) Rules 2015 r 64.33.

1.The Applicant’s application seeks to appeal the decision of Associate Justice Daly of 13 October 2020 in the Supreme Court of Victoria (the “Decision”).

2.The Decision was to order the transfer Supreme Court Proceeding S ECI 2020 02533 to the Federal Court on the basis the proceeding was a ‘special federal matter’ within the meaning of s 6(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic) (the “Act”).

3. The Applicant is precluded by the Act to make this Application.

4.S 13(a) of the Act states:

“An appeal does not lie from a decision of a court:

(a)in relation to the transfer [or] removal of a proceeding under this Act.”

5.Therefore s 13(a) of the Act prohibits the Applicant to appeal the Decision.

1. Mr Carrafa submitted, by reference to the unambiguous wording of s 13(a) of the Cross-vesting Act and relevant authorities,[4] that there was an ‘outright prohibition’ on any appeal from the decision made by Daly AsJ to transfer the proceeding. 

   [4]Bankinvest AG v Seabrook (1988) 14 NSWLR 711 (‘Bankinvest AG’);  Tangalooma Island Resort Pty Ltd v Miles (1989) 96 FLR 47 (‘Tangalooma’);  Bell Group Ltd v Westpac Banking Corporation (2000) 104 FCR 305; [2000] FCA 439 (‘Bell Group’);  Dye v Commonwealth Bank of Australia [2012] NSWCA 220 (‘Dye’).

1. Ms Gomez submitted that the proposed grounds of appeal were limited to the issue as to whether Daly AsJ was correct in determining that the proceeding arose under the Bankruptcy Act and was therefore a special federal matter. She submitted that s 13(a) was directed only to the decision to transfer the proceeding and did not preclude a court of appeal from determining the anterior and foundational question as to whether or not there was a basis for making such a decision. Accordingly, she submitted that Daly AsJ’s decision which related to and was based on the Bankruptcy Act fell outside the scope of the Cross-vesting Act, with the consequence that s 13(a) did not apply and the application for leave to appeal was competent.

1. On 24 February 2021, the Court made orders upholding the objection to competency and dismissing the application for leave to appeal, with written reasons to follow.[5]  These are those reasons.

   [5]An order was also made that Ms Gomez pay Mr Carrafa’s costs of the application for leave to appeal fixed at $5,000. At the hearing, Mr Carrafa’s counsel confirmed that Mr Carrafa would forego the costs order of $2,000 made by Daly AsJ, so it was unnecessary to rule on whether s 13(a) prohibited this Court from hearing an appeal about that order.

Analysis and conclusion

1. Section 13(a) contains an outright prohibition on any appeal from a decision in relation to the transfer of a proceeding under the Cross-vesting Act. The relevant authorities, as set out below and referred to by Mr Carrafa, clearly recognise that there is no scope for dispute or an alternative interpretation of s 13(a), as submitted by Ms Gomez.

1. In Bankinvest AG v Seabrook, Street CJ referred to s 13(a) and noted that ‘an appeal does not lie from the decision to transfer proceedings to another court’ in the context of discussing the policy objectives of the cross-vesting legislation operative throughout Australia.[6] Similarly, Rogers AJA stated that ‘there is no appeal from an order under the Act’.[7]

   [6]Bankinvest AG (1988) 14 NSWLR 711, 714.

   [7]Ibid 718.

1. In TangaloomaIsland Resort Pty Ltd v Miles, Kirby P considered a motion objecting to the competency of an appeal purportedly brought from a decision for the transfer of a proceeding commenced in the Supreme Court of New South Wales to the Supreme Court of Queensland.  His Honour said:

It is clear that the policy of Parliament in s 13 of the Cross-Vesting Act is that decisions of the character here in question should be quickly made and conclusively determined, at first instance. Parliament has set its face, by the provisions of the statute, against interlocutory appeals of the character which the opponent now seeks to bring. The opponent contends that this can lead to great injustice. So it may. In some cases, the removal of a case commenced in the Supreme Court to another State may circumscribe the damages which can be recovered by the law of that State. In other cases, the order of removal may circumscribe recovery altogether. But that is not to the point if an appeal does not, by law, lie. It is then not open to this Court to reverse a decision made by the judge at first instance. It has no jurisdiction to do so. It has presumably been deprived of jurisdiction in order to secure the attainment of a wider objective which has been judged sufficient to exclude, in this instance, the benefit of appellate review of such decisions. That wider benefit is the saving of time, cost, argument and uncertainty in preliminary matters of this kind, where a judge has decided that the case should more naturally proceed in another jurisdiction. If an important question of principle is raised it will be open to the parties to suggest – or the judge to take – the course taken by Rogers J in the Bankinvest case. But if this is not done, no appeal lies and no appeal lies from a refusal of a judge to take such a course.

A distinction was sought to be drawn between the “decision of a court” and the “reasoning of a court”, that is, between the principles to be applied and their application to a particular case. It was suggested that s 13 stands in the way only of appeals from the decision but does not prevent an appeal from the reasons in a decision, if it can be shown that the trial judge has fallen into error in his or her reasons.

There are several answers to that contention. First, the statute provides only for the case of an appeal from a decision and then in order to exclude it. There is no express provision contemplating any other appeal or conferring any other right to appeal. Secondly, appeals to this Court are, in their generality, from judgments and orders of Divisions of the Supreme Court or of other courts and tribunals subject to our jurisdiction. We do not, except in the process of reviewing such judgments and orders, correct the reasoning of the court or tribunal which led to them. It is the judgment or order which attracts our jurisdiction, not the reasoning. Thirdly, the words of connection used by Parliament are expressed in the widest possible terms. It is sufficient if it is shown the decision of the court is “in relation to” the transfer or removal of the proceedings.[8]

[8]Tangalooma (1989) 96 FLR 47, 48.

1. In Bell Group Ltd v Westpac Banking Corporation, the respondents contended that s 13(a) was not a valid exception to or regulation of the jurisdiction conferred by s 73 of the Constitution upon the High Court of Australia to hear and determine appeals. The respondents further contended that there was a ‘real question’ as to whether s 13 was effective to exclude appeals where the proceeding involved one or more matters under the Constitution, and submitted that the motions in relation to jurisdiction in the proceedings raised numerous questions arising under the Constitution. Carr J held:

In my view, s 13 of the Cross-Vesting Act is constitutionally valid as an exception within the meaning of s 73 of the Constitution. There can be no doubt that it operates validly to exclude appeals to a Full Court of this Court; there was no submission to the contrary…

Section 13 is, in my view, concerned with certain interlocutory orders of the types described in it. To make those orders an exception to the general rule that an appeal lies to the High Court of Australia does not, in my opinion, eat up or destroy the general rule.

I accept that the words “in relation to” can be interpreted, on occasion, quite broadly. But I think that in the case of s 13, Parliament’s intention is sufficiently clear. As I see it, Parliament thought it was undesirable for there to be appeals, relevantly in this case, from the decision of a court relating to the transfer of a proceeding to another court, with consequent delays and expense in the conduct of the litigation. I would not construe s 13 as preventing a party from raising jurisdictional or constitutional issues on appeal from an order transferring a proceeding under the Cross-Vesting Act, either by way of appeal to a Full Court of this Court or to the High Court. Furthermore, to the extent that constitutional issues remain live in the proceeding, the mere transfer of the proceeding to another court would not, in my opinion, prevent a party from challenging the decision on any constitutional point by way of an appeal to the High Court.[9]

[9]Bell Group (2000) 104 FCR 305, 338–9 [157]–[159].

1. Lastly, in Dye v Commonwealth Bank of Australia, Campbell JA stated:

There is every reason for s 13(a) to prohibit an appeal against an order that transfers proceedings from one court to another. It is of obvious high practical importance that there be certainty about which court is entrusted with a piece of ongoing litigation. Making unappealable a first instance decision that such a transfer should occur is an effective way of giving effect to that policy.[10]

[10]Dye [2012] NSWCA 220, [5].

1. Daly AsJ’s judgment embraces all of the reasoning that informed her Honour’s decision.  The distinction Ms Gomez seeks to draw between her Honour’s consideration of whether the claims arise under the Bankruptcy Act and her Honour’s decision to transfer the proceeding is not supported by the authorities referred to.

1. To the contrary, those authorities show that s 13(a) has a wide ambit. In this case, the question whether the Federal Court had exclusive jurisdiction in a matter in the proceeding was an essential step in determining whether there was a special federal matter for determination in the proceeding, within the meaning of s 6(1) of the Cross-vesting Act. Daly AsJ’s conclusion on that question was therefore a decision ‘in relation to the transfer … of a proceeding’ under the Cross-vesting Act. Indeed, to challenge that conclusion would be to appeal against the actual decision to transfer the proceeding, the very thing that s 13(a) forbids.

1. Accordingly, this Court does not have jurisdiction to entertain Ms Gomez’s appeal from the order made by Daly AsJ to transfer the proceeding to the Federal Court.