Parton v Robins
[2020] WASC 206
•11 JUNE 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: PARTON -v- ROBINS [2020] WASC 206
CORAM: HILL J
HEARD: 3 JUNE 2020
DELIVERED : 11 JUNE 2020
FILE NO/S: CIV 3040 of 2018
BETWEEN: NEVILLE WILLIAM PARTON
Plaintiff
AND
BRAD MARK ROBINS
First Defendant
JEFFREY DICKENS
Second Defendant
LUCAS KENNETH HICKEY
Third Defendant
PALMER ST DEVELOPMENTS PTY LTD
Fourth Defendant
Catchwords:
Courts and judicial system - Cross-vesting - Application to transfer proceedings from State to Queensland Supreme Court - More appropriate forum - Interests of justice - Turns on own facts
Courts and judicial system - Cross-vesting - Application to transfer proceedings from State to Brisbane District Registry of Federal Court - Whether proceedings or substantial part of proceedings involve Commonwealth legislation - Turns on own facts
Practice and procedure - Application to strike out proceedings - Whether trustee consented to issue of proceedings - Disputed question of fact - Turns on own facts
Legislation:
Bankruptcy Act 1996 (Cth), s 189
Jurisdiction of Courts (Cross-Vesting) Act 1987 (WA), s 5
Result:
Application to strike out proceedings dismissed
The proceedings be transferred to the Queensland Supreme Court
Representation:
Counsel:
| Plaintiff | : | In Person |
| First Defendant | : | JM Healy |
| Second Defendant | : | JM Healy |
| Third Defendant | : | JM Healy |
| Fourth Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | In Person |
| First Defendant | : | Barry Nilsson Lawyers |
| Second Defendant | : | Barry Nilsson Lawyers |
| Third Defendant | : | Barry Nilsson Lawyers |
| Fourth Defendant | : | No appearance |
Case(s) referred to in decision(s):
Nil
HILL J:
The plaintiff by chamber summons dated 4 May 2020 seeks an order for these proceedings to be transferred to the Brisbane registry of the Federal Court in Queensland. This chamber summons was filed pursuant to programming orders made by Acting Master Whitby on 25 February 2020 in respect of the first to third defendants' chamber summons dated 24 December 2019. The first to third defendants seek orders to strike out the writ of summons, alternatively for the proceedings to be transferred to the Supreme Court of Queensland.
The fourth defendant has not filed a memorandum of appearance and took no part in the hearing. Where I refer to the defendants in these reasons, this reference is to the first to third defendants.
In the hearing before me, the defendants limited their application to strike out the proceedings to one issue. This was whether the plaintiff, who was subject to a personal insolvency agreement under pt X of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) at the time the proceedings were commenced, had obtained the consent of his trustee to the commencement of these proceedings. The defendants contended that the trustee's consent had not been obtained and that as a result, the proceedings were incompetent and should be struck out.
For the reasons set out below, I am not satisfied, for the purposes of an interlocutory application, that the plaintiff did not have the oral consent of the trustee to the commencement of these proceedings. Accordingly, I dismiss this part of the defendants' application.
Having reviewed the claim brought by the plaintiff, I consider that it is a claim substantially based on contract, negligence and breach of fiduciary duty against his former solicitors. For this reason, the proceedings would have been capable of being instituted in the Queensland Supreme Court rather than the Federal Court and, pursuant to the Jurisdiction of Courts (Cross-Vesting) Act 1987 (WA) (Cross-Vesting Act) should be transferred to the Queensland Supreme Court.
Factual background
Each of the first to third defendants are legal practitioners. In or about March 2011, the plaintiff retained the defendants to act on his behalf in respect of the sale of a restaurant business he operated through a corporate vehicle.
The plaintiff alleges that the defendants introduced him to a purchaser of the business and recommended that the sale be structured by way of a sale of the shares in the corporation rather than a sale of the business. The defendants acted for both the plaintiff and the proposed purchaser on the sale. Ultimately the plaintiff agreed to sell 49% of his shares to the proposed purchaser, with the balance of the shares to be transferred two years after completion.
Following the purchase of the restaurant, the business declined and ultimately liquidators were appointed to the company.
There has been a series of proceedings in which the fourth defendant is a defendant in the District Court and Supreme Court of Queensland. The evidence of the defendants' solicitor is that these proceedings involved the plaintiff although he is not a named party. There is no evidence before the court as to the subject matter of these proceedings or the involvement of the plaintiff in these proceedings.
On 17 May 2018, the plaintiff entered into a personal insolvency agreement under pt X of the Bankruptcy Act. He was discharged from this agreement on 19 March 2019.[1] That is, the plaintiff was subject to the agreement at the time these proceedings were commenced.
[1] Affidavit of Gillian Michelle Sheppard filed 17 March 2020 'GMS1'.
The plaintiff's evidence is that he obtained the oral consent of his trustee to the commencement of these proceedings on 19 November 2018. His evidence was that he met his trustee at a coffee shop across from the Federal Circuit Court in Brisbane after the dismissal of proceedings concerning his personal insolvency agreement and had the following conversation:[2]
I said to Mr Hambleton, 'David, essentially it is now all over, if she does not appeal.'
He said, 'That's right, Neville.'
I said, 'Well, I want to sue the solicitors who got into this mess. I am still wanting to go to Perth. Is it all right if I sue? I have looked into it and I will just issue a writ. I won't serve it until these matters are finally concluded.'
He said, 'That's fine, Neville. The creditors have no interest. But you may want to think twice before you waste your own money on litigation again.'
[2] Affidavit of Neville Parton filed 24 April 2020 [18].
On 27 November 2018, the plaintiff commenced these proceedings. He served them on the defendants on 27 November 2019. Following service of the proceedings, the solicitors for the defendants emailed the plaintiff's former trustee on 4 February 2020. The email attached a copy of the writ and asked whether the trustee was consulted 'in relation to the attached proceedings' and otherwise sought his views in relation to the proceedings.[3] In response, on 5 February 2020, the trustee stated that he did not recall these pleadings and asked one of his employees to check in detail and confirm the position.[4] The subsequent response from the employee on 7 February 2020 confirmed 'we have no knowledge of the proceedings'.[5]
[3] Affidavit of Gillian Michelle Sheppard filed 17 March 2020 'GMS2'.
[4] Affidavit of Gillian Michelle Sheppard filed 17 March 2020 'GMS3'.
[5] Affidavit of Gillian Michelle Sheppard filed 17 March 2020 'GMS3'.
On 31 March 2020, the plaintiff wrote to his former trustee enclosing a copy of the writ and the amended writ in these proceedings. This email set out the plaintiff's understanding of matters, namely that the claims underlying the writ did not form part of his personal insolvency agreement, the trustee was not interested in these claims as they were speculative and that even if the claims did form part of the estate, the claims reverted to the plaintiff on the completion of the personal insolvency agreement.[6] I note that this email does not refer to the oral conversation in [11].
[6] Affidavit of Neville Parton filed 24 April 2020 'NWP7'.
On 1 April 2020, the plaintiff's former trustee responded and confirmed that he has no interest or claim in this matter.[7]
[7] Affidavit of Neville Parton filed 24 April 2020 'NWP7'.
There is no evidence before the court as to whether the plaintiff's evidence of the oral conversation in November 2018 was put to the trustee and, if so, what his response was.
Effect of personal insolvency agreement
The evidence before the court is that the plaintiff entered into a personal insolvency agreement on 17 April 2018 and that this was finalised on 19 March 2019.
Under the Bankruptcy Act:
(a)a debtor who wants their affairs to be dealt with under pt X of the Bankruptcy Act, without their estate being sequestrated, may sign an authority under s 188(1) of the Act, authorising a registered trustee to call a meeting of the debtor's creditors, 'and to take control of the debtor's property';
(b)when an authority becomes effective, the person authorised by it becomes the controlling trustee of the debtor's property.[8]
[8] Bankruptcy Act 1966 (Cth), s 188(6).
Section 189 of the Bankruptcy Act provides that:
(1)When an authority given by a debtor under section 188 becomes effective, the property of the debtor becomes subject to control under this Division.
…
(2)A debtor whose property is subject to control under this Division:
(a)shall not remove, dispose of or deal with any of his or her property except with the consent of the controlling trustee;
…
Penalty: Imprisonment for 12 months.
(3)A disposal of, or dealing with, property by a debtor in contravention of subsection (2) is not invalid by reason only of that contravention.
The primary issue raised by the defendants is whether the plaintiff's trustee gave his consent to the commencement of the proceedings. The defendants submitted that there was no evidence before the court on which a finding could be made that any form of consent was obtained by the plaintiff prior to the commencement of the proceedings. This submission referred to and relied upon the email exchange the plaintiff had with his former trustee after the commencement of the writ. The defendants contended, quite rightly in my view, that this exchange post-dated the issue of the writ and could not constitute the necessary consent.
However, as the plaintiff submitted, this is not the only evidence on which he relied as constituting the necessary consent. The plaintiff's evidence is that the trustee gave oral consent to the commencement of proceedings prior to their commencement.[9] As such, there is some evidence that this occurred. While this evidence is disputed by the defendants, this dispute cannot be resolved on an interlocutory application without cross-examination.
[9] ts 12 - 13.
Neither party addressed me in submissions as to the proper construction of s 189(2) of the Bankruptcy Act, its legislative history or whether oral consent is sufficient for the purposes of the section. Given the potential importance of this issue generally, I do not consider that it would be appropriate to express a concluded view without the benefit of detailed submissions on these matters and a contradictor.
It is sufficient for the purposes of this application that I consider it is arguable that oral consent may be sufficient for the purpose of s 189(2)(a) of the Bankruptcy Act. On this basis, I am not satisfied that the trustee did not consent to the commencement of proceedings. Accordingly, I dismiss this aspect of the defendants' application to strike out the proceedings.
Transfer of proceedings
The parties agree that the proceedings ought to be transferred to Queensland but disagree as to whether it should be transferred to the Supreme Court or Federal Court. The basis upon which the plaintiff seeks for it to be transferred to the Federal Court is that he is partly disabled from osteoarthritis and he considers the Federal Court to be closer to accommodation and have better access for a person with a disability.
The defendants have filed an affidavit which attests to the disability access arrangements at the Supreme Court of Queensland. I am satisfied that the Supreme Court of Queensland can accommodate the needs of the plaintiff.
The transfer of proceedings from this court to another court is governed by the Cross-Vesting Act. In this case, the relevant provision are ss 5(1) (in respect of the transfer of proceedings to the Federal Court) and s 5(2) (in respect of the transfer of proceedings to the Supreme Court) of the Cross-Vesting Act. In essence, where the proceedings or a substantial part of the proceedings would have been incapable of being instituted in the Supreme Court and capable of being instituted in the Federal Court, and the matters arising are questions as to the application of Commonwealth legislation, and it is in the interests of justice, the court shall transfer the proceedings to the Federal Court. Similar considerations arise in respect of the transfer to the Supreme Court - namely, whether the claim brought in the proceedings or a substantial part of the proceedings were incapable of being instituted in this court and were capable of being instituted in the Supreme Court of Queensland.
That is, the question as to which court these proceedings should be transferred to depends on the nature of the claim brought in the proceedings. In this regard, the comparative accessibility of the courts in Brisbane, while material to the plaintiff, is not a relevant consideration under the Cross-Vesting Act.
Claim in proceedings
The plaintiff commenced these proceedings by writ of summons with an indorsement of claim on 28 November 2018. An amended writ of summons was filed on 5 November 2019.
The defendants to the proceedings are the plaintiff's former solicitors together with a company as fourth defendant which the plaintiff claims holds the plaintiff's shares in a company as bare trustee. Paragraph 4 of the amended indorsement of claim provides:
The Plaintiff sues for breach of contract, breach of tortious duty, breach of fiduciary duty, and misleading or deceptive conduct (Whether in meetings or by virtue of the mail, telephone, facsimile, email and/or other electronic communications).
The indorsement of claim does not state where the advice, meetings or telephone conversations occurred. It does not appear to be in dispute between the parties that these all occurred in Queensland.
Apart from the allegation of misleading and deceptive conduct, the causes of action raised by the plaintiff arise as a matter of common law or equity; they do not concern the application of Commonwealth legislation.
For this reason, I do not consider that the proceedings or substantial part of the proceedings would have been capable of being instituted in the Federal Court. However, a substantial part of the proceedings were capable of being instituted in the Supreme Court of Queensland.
Accordingly, I consider that the order of the court should be that the proceedings be transferred to the Supreme Court of Queensland.
Conclusion
For the reasons set out above, I refuse the defendants' application to dismiss the proceedings. In my view, the appropriate order is for the proceedings to be transferred to the Supreme Court of Queensland.
Given that the parties have each been partly successful on the applications before me, I will hear from the parties as to the costs of the application.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
ME
Associate to the Honourable Justice Hill11 JUNE 2020
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