Mulhern v Pearce & Anor
[2012] FMCA 1186
•10 December 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MULHERN v PEARCE & ANOR | [2012] FMCA 1186 |
| BANKRUPTCY – Applications for annulment of bankruptcy and for permission to travel – interim application for a change of venue. |
| Bankruptcy Act 1966 (Cth), s.153B Federal Magistrates Act 1999, s.52 Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth) Federal Magistrates Court Rules 2001 (Cth) |
| CNH Capital Australia Pty Ltd v Pratley (No.2) [2009] FMCA 455 Sherwood Overseas Co Pty Ltd v Jaymac International Pty Ltd [2008] FMCA 495 |
| Applicant: | MICHAEL RICHARD MULHERN |
| Respondents: | MARK WILLIAM PEARCE AND ANDREW JOHN HEERS AS TRUSTEES OF THE PROPERTY OF MICHAEL RICHARD MULHERN |
| File Number: | SYG 2805 of 2012 |
| Judgment of: | Driver FM |
| Hearing date: | 10 December 2012 |
| Delivered at: | Sydney |
| Delivered on: | 10 December 2012 |
REPRESENTATION
| Solicitors for the Applicant: | Mr M Smith |
| Solicitors for the Respondent: | Mr P Lynch Lynch Morgan Lawyers |
INTERLOCUTORY ORDERS
Pursuant to s.52 of the Federal Magistrates Act 1999 (Cth) and rule 8.01 of the Federal Magistrates Court Rules 2001 (Cth), proceedings SYG 2805 of 2012 be heard in the Brisbane registry of the Court.
The trustee’s costs of the interim application be costs in the administration of the estate.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2805 of 2012
| MICHAEL RICHARD MULHERN |
Applicant
And
| MARK WILLIAM PEARCE AND ANDREW JOHN HEERS AS TRUSTEES OF THE PROPERTY OF MICHAEL RICHARD MULHERN |
Respondent
REASONS FOR JUDGMENT
(revised from transcript)
I have before me an interim application filed on 4 December 2012, seeking a change of venue of bankruptcy proceedings pursuant to s.52 of the Federal Magistrates Act 1999 (Cth) (Federal Magistrates Act) and rule 8.01 of the Federal Magistrates Court Rules 2001 (Cth) (Federal Magistrates Court Rules). The application is supported by the affidavit of Mark William Pearce filed on 4 December 2012, who was not required for cross-examination. The parties have prepared written submissions. Those of the applicant trustees detail the principles relating to a change of venue, which I adopt, and also the merits of the trustees’ application.
Rule 8.01 of the Federal Magistrates Court Rules provides:
Change of venue
(1) A party who files an application or response in a proceeding may apply to have the proceeding heard in another registry of the Court.
(2)In considering an application, the Court must have regard to:
(a) the convenience of the parties; and
(b) the limiting of expense and the cost of the proceeding; and
(c) whether the matter has been listed for final hearing; and
(d) any other relevant matter.’
Section 52 of the Federal Magistrates Act provides:
Venue
(1) The Federal Magistrates Court may sit at any place in Australia.
(2) The Federal Magistrates Court or a Federal Magistrate may, at any stage of a proceeding in the Federal Magistrates Court, order that:
(a) the proceeding; or
(b) a part of the proceeding;
be conducted or continued at a place specified in the order, subject to such conditions (if any) as the Federal Magistrates Court or Federal Magistrate imposes.’
Regulation 1.03 of the Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth) provides:
Application of these Rules and other rules of the Court
(1) These Rules apply to a proceeding to which the Bankruptcy Act applies.
(2)The other rules of the Court apply, so far as they are not inconsistent with these Rules, to a proceeding to which the Bankruptcy Act applies.
In determining whether to order a change in venue the Court will act in accordance with the following principles:
a)in considering a change of venue application this Court is constrained by the mandatory requirements of rule 8.01(2) of the Federal Magistrates Court Rules[1];
b)the Court must first consider those matters identified in rule 8.01(2)(a), (b) and (c) and must then consider any other relevant matter by reason of rule 8.01(2)(d) of the Federal Magistrates Court Rules[2];
c)the matters that must be considered by the Federal Magistrates Court on a change of venue application are different to those that are considered by the Federal Court of Australia because the discretion conferred on the latter Court is unfettered as to the factors it may consider[3];
d)Federal Court authorities on change of venue are relevant insofar as they consider the factors referred to in rule 8.01(2) of the Federal Magistrates Court Rules[4];
e)in considering rule 8.01 the test is where can the case be conducted or continued most suitably, bearing in mind the interests of all the parties, the ends of justice in the determination of the issues between them and the most efficient administration of the Court[5].
[1] Sherwood Overseas Co Pty Ltd v Jaymac International Pty Ltd [2008] FMCA 495 at [7]-[19]; CNH Capital Australia Pty Ltd (No 2) [2009] FMCA 455 at [16]
[2] Sherwood Overseas Co Pty Ltd v Jaymac International Pty Ltd [2008] FMCA 495 at [7]-[19]; CNH Capital Australia Pty Ltd (No 2) [2009] FMCA 455 at [16]
[3] Sherwood Overseas Co Pty Ltd v Jaymac International Pty Ltd [2008] FMCA 495 at [7]-[19]; CNH Capital Australia Pty Ltd (No 2) [2009] FMCA 455 at [16]
[4] Sherwood Overseas Co Pty Ltd v Jaymac International Pty Ltd [2008] FMCA 495 at [7]-[19]; CNH Capital Australia Pty Ltd (No 2) [2009] FMCA 455 at [16]
[5] Koh v Erwin [2010] FMCA 278 at [13]
The submissions of the respondent bankrupt deal in large part with the principal proceedings being an application for annulment pursuant to s.153B of the Bankruptcy Act and also an application to review a decision of the bankruptcy trustees to refuse permission to the bankrupt to travel overseas.
The material before me establishes a number of things. The first is that the bankrupt, Mr Mulhern, has fundamental objections to his bankruptcy, which have not previously been conclusively determined. The second is that there have been earlier proceedings in Queensland in the Federal Court in relation to the bankruptcy, including two previous annulment applications and an appeal. It appears that the earlier annulment applications were dealt with at interlocutory stages for procedural reasons.
I have regard to the following factors identified by the trustee.
The convenience of the parties
The trustees’ office is located in Brisbane and the trustees’ solicitors’ office is located in Brisbane and the transfer of the proceedings to Brisbane would be more convenient to both the trustees and their legal advisors[6].
[6][15(d)] and [(e)] affidavit of MW Pearce filed 4 December 2012
The bankrupt formerly resided in Brisbane and was employed by a Brisbane-based company and the trustees assert that the transfer of the proceedings to Brisbane would be more convenient to the bankrupt[7].
[7][15(f)] and [(g)] affidavit of MW Pearce filed 4 December 2012
Each of the witnesses from whom the trustees intend to adduce evidence reside in Brisbane and the transfer of the proceedings to Brisbane will be more convenient for these witnesses as it will avoid the need for them to travel to Sydney for the trial[8].
[8] [15(k)] affidavit of MW Pearce filed 4 December 2012
Some of the documents that the trustees intend to tender upon the final hearing of the application for an annulment are contained in files located in the Federal Court Registry in Brisbane whilst other documents sought to be tendered are held by the Official Receiver’s office in Brisbane[9].
[9][15(j)] and [(k)] affidavit of MW Pearce filed 4 December 2012
The limiting of expense and the cost of the proceeding
If the proceedings remain in the Sydney Registry it will be necessary for the trustees to duplicate material previously filed by the trustees in the various Queensland proceedings for filing in the Sydney Registry rather than simply being able to refer to the documents on the existing files of the Federal Court held in Brisbane thus increasing the costs and expense of these proceedings accordingly[10].
[10][15(j)] affidavit of MW Pearce filed 4 December 2012
If the proceedings remain in the Sydney Registry then the trustees will be required to pay for travel and accommodation expenses for counsel, solicitors and witnesses in Sydney for the duration of the trial which costs would not be incurred if the matter were transferred to the Brisbane Registry because counsel, solicitors and witnesses are all resident in Brisbane and thus the costs of the trial will be significantly reduced by the transfer of the matter to the Brisbane Registry[11].
[11][15(m)] affidavit of MW Pearce filed 4 December 2012
The bankrupt, if he chooses to reside in Brisbane, will not be required to incur travel and accommodation costs if the matter is transferred to the Brisbane Registry and this will significantly lower the costs that the bankrupt will incur in conducting the matter[12].
[12][15(f)] affidavit of MW Pearce filed 4 December 2012
Whether the matter has been listed for final hearing
The applicant’s application for an annulment has not been listed for final hearing but for a first directions date[13].
[13] [4] affidavit of MW Pearce filed 4 December 2012
Any other relevant matter
The judgment upon which the bankruptcy proceedings are founded was given by the Supreme Court of Queensland[14].
[14][15(a)] affidavit of MW Pearce filed 4 December 2012
Proceedings concerning substituted service of the Bankruptcy Notices and Creditor’s Petitions upon which the bankruptcy proceedings are founded occurred in the Brisbane Registry of this Court[15].
[15] [15(b)] affidavit of MW Pearce filed 4 December 2012
All of the other proceedings concerning the administration of the estate of the bankrupt have been instituted by either the trustees or the bankrupt in the Queensland District Registry of the Federal Court of Australia[16].
[16] [15(c)] affidavit of MW Pearce filed 4 December 2012
The decision of the trustees not to permit the bankrupt to undertake overseas travel which is the subject of the bankrupt’s interim application, was made in Brisbane[17].
[17][15(h)] affidavit of MW Pearce filed 4 December 2012
The public examination of the bankrupt, which is not yet complete, took place in the Federal Court in Brisbane[18].
[18] [15(i)] affidavit of MW Pearce filed 4 December 2012
Having regard to the fact that findings of credit will have to be made by the Court concerning both the bankrupt and the trustees’ witnesses, it may be inappropriate that evidence be given by such witnesses either by videolink or telephone[19].
[19] [15(k)] affidavit of M.W. Pearce filed 4 December 2012
There is no explanation by the bankrupt for his consenting to an order that his annulment application brought in QUD 577 of 2012 be dismissed and the filing by him of a further application for an annulment in the Sydney Registry of this Court which seeks the same principal relief as QUD 577 of 2012[20].
[20] [15(l)] affidavit of MW Pearce filed 4 December 2012
A significant financial burden would be placed on the trustees for the payment of accommodation and travel costs in Sydney for a trial here who would be required to utilise their own funds to pay these trial expenses in order to properly discharge their duties[21].
[21] [15(m)] affidavit of MW Pearce filed 4 December 2012
The trustees have expressed concern that the bankrupt has initiated these proceedings in the Sydney Registry of the Court merely for the purpose of causing the trustees to incur further unnecessary cost and expense in circumstances in which the bankrupt’s own breach of his duties under the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) to pay income contributions and his failure to cause monies in USA bank accounts in his name at the date of his bankruptcy to be forwarded to the trustees has contributed to the estate of the bankrupt being assetless[22].
[22] [16] affidavit of MW Pearce filed 4 December 2012
The trustees have also expressed concern that the institution of these proceedings in the Sydney Registry of this Court and the bankrupt’s withdrawal of application QUD 577 of 2012 are an attempt to circumvent the orders made by Reeves J in that proceeding[23].
[23] [17] affidavit of MW Pearce filed 4 December 2012
The merits of the application for a change of venue point to the location of the parties and witnesses and documents, earlier proceedings in Queensland in the Federal Court and the likelihood that these present proceedings would be dealt with more quickly, more cheaply and more efficiently in Queensland. I accept that the trustees and the trustees’ witnesses are located in Queensland. I also accept that documents, including the files relating to the earlier proceedings in the Federal Court and documents seized from the bankrupt by the Official Receiver, are located in Queensland. Those documents may well have a bearing on the annulment application. There have also been earlier applications for permission to travel, which have been dealt with by the trustee, and there may be relevant documents bearing on that issue.
As for Mr Mulhern, it appears that he does not currently have a permanent residence in Australia. He formerly resided in Queensland, but his residence there has been sold. He resided temporarily in Queensland during earlier proceedings in the Federal Court. He is currently residing, at least temporarily, with an associate in Sydney. In my view, the circumstances point to the desirability of the proceedings being transferred to Queensland, primarily for the reasons advanced on behalf of the trustee. Given the location of witnesses and documents in Queensland, including the Federal Court files, it is likely to more be more efficient for the proceedings to be conducted there.
It is also likely in my view that the proceedings would be conducted more quickly in this Court on a transfer to Queensland. That will provide some benefit to Mr Mulhern in that he will obtain, hopefully, a definitive judicial determination on the bankruptcy at an earlier date and he will be able to resolve, at an earlier date, the issue of his wish to travel overseas to support his wife, who is unwell. Those issues are issues to be determined on the merits of the principal application.
I will order that, pursuant to s.52 of the Federal Magistrates Act and rule 8.01 of the Federal Magistrates Court Rules, the proceedings be heard in the Brisbane registry of the Court.
I will order that the trustee’s costs of the interim application be costs in the administration of the estate.
I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of Driver FM
Associate:
Date: 12 December 2012
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