Nicholls v Hertslet

Case [2016] FCA 655


FEDERAL COURT OF AUSTRALIA

Nicholls (Trustee) v Hertslet [2016] FCA 655

File number: NSD 1657 of 2015
Judge: BROMWICH J
Date of judgment: 3 June 2016
Catchwords: PRACTICE AND PROCEDURE – Harman v Home Office implied undertaking not to use documents produced by process of a court for a purpose outside those proceedings – application for leave to use documents produced by a consent order in proceedings in the Supreme Court of New South Wales  – whether implied undertaking arises for Trustee in bankruptcy in relation to documents for the administration of an estate to which the bankrupt is a beneficiary – failure to seek leave before using documents – meaning of ‘special circumstances’ for the grant of leave
Legislation:

Bankruptcy Act 1966 (Cth), s 30

Federal Court Rules 2011, rr 1.33, 26.12(2)(c) and 40.04(a)

Cases cited:

Binetter v BCI Finances Pty Ltd (in liq) [2015] FCAFC 122; (2015) 235 FCR 410

Harman v Secretary of State for the Home Department [1983] 1 AC 280

Hearne v Street [2008] HCA 36; (2008) 235 CLR 125

Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3; (2005) 218 ALR 283

Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217

Date of hearing: 27 April 2016
Registry: New South Wales
Division: General Division
National Practice Area: Commercial and Corporations
National Practice Sub-Area: General and Personal Insolvency
Category: Catchwords
Number of paragraphs: 78
Counsel for the Applicant: Mr A Spencer
Solicitor for the Applicant: McLean and Associates Solicitors
Counsel for the First Respondent: The first respondent appeared in person by telephone
Counsel for the Second Respondent: Ms E Glover
Solicitor for the Second Respondent: Goldrick Farrell Mullan Solicitors

ORDERS

NSD 1657 of 2015
BETWEEN:

ALAN RICHARD NICHOLLS IN HIS CAPACITY AS THE TRUSTEE IN BANKRUPTCY OF THE BANKRUPT ESTATE OF JOHN CHARLES HERTSLET

Applicant

AND:

JOHN CHARLES HERTSLET

First Respondent

DOUGLAS JAMES HERTSLET

Second Respondent

JUDGE:

BROMWICH J

DATE OF ORDER:

3 JUNE 2016

THE COURT ORDERS THAT:

1.The second respondent pay the applicant’s costs of the interlocutory application as taxed or agreed.

2.Leave is granted to the applicant to discontinue the part of the application filed on 15 December 2015 brought against the second respondent.

3.The second respondent pay the applicant’s costs (including reserved costs) of the application filed on 15 December 2015 brought against the second respondent as taxed or agreed.

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


REASONS FOR JUDGMENT

BROMWICH J:

Introduction

  1. The applicant is the trustee in bankruptcy of the bankrupt estate of John Charles Hertslet (the Trustee).  The first respondent is the bankrupt, John Charles Hertslet (John).  John has no active part to play in the interlocutory proceedings at this stage, although he will be indirectly affected by the outcome. 

  2. The second respondent, Douglas James Hertslet (Douglas), is the brother of John and the executor of the estate of the late Marjorie Adline Matilda…

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AGLC
Nicholls v Hertslet [2016] FCA 655
Case
[2016] FCA 655
Decision Date

CaseChat Overview and Summary

In the case of Nicholls v Hertslet, the parties involved were Nicholls, the applicant, and Hertslet, the second respondent. The dispute centred around the use of documents produced by a consent order in proceedings in the Supreme Court of New South Wales. The legal issues to be decided were whether an implied undertaking not to use these documents for a purpose outside those proceedings applied to the Trustee in bankruptcy in relation to documents used for the administration of an estate to which the bankrupt is a beneficiary, and whether special circumstances existed to warrant the grant of leave to use the documents. The court had to determine if the Trustee's failure to seek leave before using the documents was justified under the circumstances.

The court ruled that the implied undertaking did not extend to the Trustee in bankruptcy in relation to documents used for the administration of an estate. It further held that the Trustee's use of the documents without seeking leave was not justified as there were no special circumstances present. The court emphasised the importance of seeking leave before using such documents and the consequences of failing to do so. The court granted leave to discontinue the substantive proceedings but required the second respondent to pay the applicant's costs of the interlocutory application and any other costs of the substantive proceedings.

The final orders of the court were that the second respondent must pay the applicant’s costs of the interlocutory application as taxed or agreed. Additionally, leave was granted to the applicant to discontinue the part of the application filed on 15 December 2015 brought against the second respondent. The second respondent was also ordered to pay the applicant’s costs, including reserved costs, of the application filed on 15 December 2015 brought against the second respondent as taxed or agreed. These orders were to be entered in accordance with Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. The second respondent pay the applicant’s costs of the interlocutory application as taxed or agreed.

2. Leave is granted to the applicant to discontinue the part of the application filed on 15 December 2015 brought against the second respondent.

3. The second respondent pay the applicant’s costs (including reserved costs) of the application filed on 15 December 2015 brought against the second respondent as taxed or agreed.

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

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Douglas should therefore pay the Trustee’s costs of the substantive Douglas proceedings, including any reserved costs, as taxed or agreed. I do not consider it appropriate to order that those costs be paid on an indemnity basis, although that was sought by the Trustee in the 15 December 2015 application.Conclusion Leave is granted to discontinue the substantive Douglas proceedings. Douglas must pay the costs of the successful interlocutory application for leave and for any other costs of the substantive Douglas proceedings, including any reserved costs.

Ratio Decidendi

Legal Principle Established

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