Michael Wilson & Partners Limited v Cronan - [2023] NSWSC 1050

Supreme Court

New South Wales

Medium Neutral Citation: Michael Wilson & Partners Limited v Cronan [2023] NSWSC 1050
Hearing dates: 17 August 2023
Date of orders: 1 September 2023
Decision date: 01 September 2023
Jurisdiction: Common Law
Before: Schmidt AJ
Decision:
(1) Pursuant to subs 5(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) and rule 44.3 of the Uniform Civil Procedure Rules 2005 (NSW), these proceedings be transferred to the Federal Court of Australia.
(2) The costs of the proceedings to date and of this application are costs in the cause.

Catchwords:
CIVIL PROCEDURE — Cross-vesting — application for transfer under Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW), subs 5(1) — application opposed — where plaintiff seeks damages for defendants’ alleged breaches of their duties as trustees in bankruptcy — Court’s jurisdiction — whether claims concern a “special federal matter” under Bankruptcy Act 1966 (Cth) which must be transferred — if not, whether discretion to transfer should be exercised — where Federal Court has already heard and determined proceedings in relation to the bankrupt estates and the trustees’ exercise of their duties — where resolution of disputed claims will require exercise of Federal Court’s jurisdiction “in bankruptcy” under s 27 of the Bankruptcy Act — matter transferred

Legislation Cited:
Bankruptcy Act 1966 (Cth), ss 5, 19, 19AA, 27, 58, 60, 109, 116, 120, 121, 133, 134, 230, Sch 2, cll 85-5
Bankruptcy Regulations 2021 (Cth), reg 25
Corporations Act 2001 (Cth)
Insolvency Practice Rules (Bankruptcy) 2016 (Cth), rr 42-40, 42-45, 42-60, 42-135, 42-175, 42-180, 90-15
Judiciary Act1903 (Cth), ss 39, 39B
Jurisdiction of Courts (Cross-vesting) Act1987 (Cth), ss 3, 7
Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW), ss 5, 6
Uniform Civil Procedure Rules 2005 (NSW), rr 42.1, 44.3

Cases Cited:
Adsett v Berlouis (1992) 37 FCR 201
BHP Billiton Ltd v Schultz (2004) 221 CLR 400; [2004] HCA 61
CGU Insurance Limited v Blakeley (2016) 259 CLR 339; [2016] HCA 2
Coshott v Parker [2017] NSWSC 1098
Credit Suisse AG v Gu (No 2) [2022] NSWSC 198
Eberstaller v Poulos (2014) 87 NSWLR 394; [2014] NSWCA 211
Felton v Mulligan (1971) 124 CLR 367; [1971] HCA 39
Fewin Pty Ltd v Burke [2015] NSWSC 1411
Gomez v Carrafa [2020] VSC 661
In the matter of Galtari Pty Ltd (in liq) [2018] NSWSC 917
LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575; [1983] HCA 31
McEwan v Burke [2023] QSC 114
Meriton Apartments Pty Ltd v Industrial Court of New South Wales (2008) 171 FCR 380; [2008] FCAFC 172
Michael Wilson & Partners Ltd v Emmott [2021] NSWCA 315
Michael Wilson & Partners Ltd v Porter [2022] FCA 336
Michael Wilson & Partners Ltd v Porter (No 2) [2022] FCA 901
Michael Wilson & Partners Ltd v Porter (No 3) [2022] FCA 998
Morris Finance Ltd v Brown (2016) 93 NSWLR 551; [2016] NSWCA 343
Palmer (Trustee), in the matter of Slater (Bankrupt) (No 2) [2016]…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] NSWSC 1050
Decision Date: 01 September 2023

CaseChat Overview and Summary

The case of Michael Wilson & Partners Limited v Cronan involved the plaintiff, Michael Wilson & Partners Limited, seeking damages from the defendants, Cronan and others, for alleged breaches of their duties as trustees in bankruptcy. The dispute was heard in the Supreme Court of New South Wales. The plaintiff filed an application for cross-vesting under the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) to transfer the proceedings to the Federal Court of Australia. The defendants opposed the application.

The central legal issues before the court were whether the claims in the proceeding constituted a "special federal matter" under the Bankruptcy Act 1966 (Cth) that mandated transfer, and if not, whether the discretion to transfer should be exercised under s 5(1) of the Act. The plaintiff argued that the claims did not concern a special federal matter, while the defendants contended that the subject matter was within the exclusive jurisdiction of the Federal Court. The court also considered that the Federal Court had already heard and determined proceedings in relation to the bankrupt estates and the trustees' exercise of their duties.

The court determined that the claims did not involve a special federal matter, as they did not directly concern the administration of the bankrupt estates or the exercise of the Federal Court's jurisdiction "in bankruptcy" under s 27 of the Bankruptcy Act. However, the court exercised its discretion to transfer the proceeding to the Federal Court, given that the resolution of the disputed claims would require the exercise of the Federal Court's jurisdiction in bankruptcy. The application for cross-vesting was therefore granted, and the matter was transferred to the Federal Court of Australia.

The court ordered that the proceedings be transferred to the Federal Court of Australia. The parties were directed to take such steps as were necessary to effect the transfer in accordance with the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW). The plaintiff was to bear the costs of the application for cross-vesting.

Orders