Pattison v SMITH
[2005] FMCA 813
•17 June 2005
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| PATTISON v SMITH | [2005] FMCA 813 |
| PRACTICE AND PROCEDURE – Bankruptcy – statement of claim – summary dismissal. |
| Bankruptcy Act 1966, ss.120, 121 Federal Magistrates Court Rules 2001, R.13.10 |
| Webster and Another v Lampard 116 ALR 545 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Dey v Victorian Railways Commissioners (1949) 78 CLR 62 Jones v Dunkel (1959) 101 CLR 298 |
| Applicant: | PAUL ANTHONY PATTISON |
| Respondent: | ANNE SMITH |
| File Number: | MLG573 of 2004 |
| Judgment of: | O’Dwyer FM |
| Hearing date: | 12 April 2005 |
| Delivered at: | Melbourne |
| Delivered on: | 17 June 2005 |
REPRESENTATION
| Counsel for the Applicant: | Mr. M. Galvin |
| Solicitors for the Applicant: | Middletons Lawyers |
| Counsel for the Respondent: | Mr. M. Worsnop |
| Solicitors for the Respondent: | Kahns Lawyers |
ORDERS
The Respondent’s Notice of Motion filed on 4 March 2005 is dismissed.
The Respondent pay the Applicant’s costs fixed in the sum of $1.027.50 pursuant to Rule 21.02(a) of the Federal Magistrates Court Rules 2001.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 573 of 2004
| PAUL ANTHONY PATTISON |
Applicant
And
| ANNE SMITH |
Respondent
REASONS FOR JUDGMENT
This proceeding came before the Court on a Notice of Motion by the Respondent which sought to strike out parts of the Applicant’s statement of claim. Although the Applicant came to the hearing believing it was an application based on an attempt to strike out pleadings, the Applicant was prepared to allow the matter to proceed at the request of the Respondent under R.13.10 of the Federal Magistrates Court Rules 2001 by way of an application for summary dismissal of those causes of action identified.
Rule 13.10 provides:
“Disposal by summary dismissal
The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if it appears to the Court that:
(a)no reasonable cause of action is disclosed in relation to the proceeding or claim for relief; or
(b)the proceeding or claim for relief is frivolous or vexatious; or
(c)the proceeding or claim for relief is an abuse of process of the Court.”
The main thrust of the Respondent’s submissions was that no reasonable course of action is disclosed in two causes of action in the Applicant’s four separate causes of action identified in the statement of claim.
The Respondent conceded at the start of the hearing that the test to be applied in a summary application of this nature is one whereby the Court has to exercise great care and has to be satisfied that on the best evidence for the Applicant the cause of action sought to be summarily dismissed is bound to fail. The Respondent further conceded that the test stated in the High Court decision of Webster and Another v Lampard (1993) 116 ALR 545 is “a very difficult test to satisfy”.
In Webster v Lampard the Court said:
“…The power to order summary judgment must be exercised with exceptional caution and should never be exercised unless it is clear that there is no real question to be tried.”
In General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 the Court described the test to be applied to a successful strike out or summary dismissal application as:
“…so obviously untenable that it cannot possibly succeed; manifestly groundless; so manifestly faulty that it does not admit of argument; discloses a case which the Court is satisfied cannot succeed; under no possibility can there be a good cause of action …”
In Dey v Victorian Railways Commissioner (1949) 78 CLR 62 at 91, the Court said that:
“…But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process.”
The two discrete causes of action challenged by the Respondent were “the Centinel Share Transfer” and the “$54,135.93 payment” as set out in paragraphs 4 to 10 and 15 respectively of the statement of claim.
The Applicant was the trustee in bankruptcy of the Respondent’s husband. By his proceeding against the Respondent, the Applicant seeks to recover from the Respondent, pursuant to ss.120 and 121 of the Bankruptcy Act 1966, certain payments and effective transfer of assets allegedly made by the bankrupt to the Respondent.
The Respondent submits that the Applicant’s cause of action in relation to the Centinel Share Transfer is hopeless and bound to fail because Centinel Pty Ltd had only acted in the capacity of a “bare trustee” of the Centinel Discretionary Trust.
The Respondent relied on a number of evidentiary items to confirm the fiduciary capacity of Centinel Pty Ltd and asked the Court to accept such as convincing proof of the hopelessness of the Applicant’s cause of action.
In similar fashion, the Court was asked to accept exhibits to the Respondent’s solicitor’s affidavit to be conclusive evidence of the assertion made that the payment of $54,135.93 to the Respondent was the partial payout from the proceeds of an insurance policy on a horse owned by the Respondent and was unrelated to the income or assets of the bankrupt.
In response to the Respondent’s submissions, the Applicant simply argues that the issue as to what capacity Centinel Pty Ltd held a share in a valuable asset and what was the source of the $54,135.93 are very live issues to be determined at trial. Whilst the Respondent relies very much on the affidavit of her solicitor and the exhibits thereto, the Respondent has not raised these two issues in her formal defence, nor has she deposed to the facts she now asserts about Centinel’s capacity as a trustee or the payment of the $54,135.93. Should she had done so, however, there still remains the entitlement of the Applicant to
cross–examine her on these matters. The Respondent’s failure to commit herself to affidavit on these important matters, in my view, entitles me to draw an adverse inference (see Jones v Dunkel (1959) 101 CLR 298).
I am far from persuaded that the Applicant’s case is obviously hopeless. There is no compelling reason to form a view that the Respondent’s assertion about Centinel Pty Ltd and the capacity in which it acted, or her assertion about the source of the $54,135.93, will prove to be the case. These are very much live issues as to fact.
In addition, the Applicant, in my view, is entitled to challenge the Respondent’s assertions under cross-examination. Even if the Respondent’s evidence as set out in her solicitor’s affidavit is accepted as correct, there remains a gap in that evidence that would best, perhaps only, be resolved under cross-examination at trial.
The Respondent’s application, in my view, falls far short of the tests set out above. Accordingly, the Respondent’s Notice of Motion filed on
4 March 2005 is dismissed with costs.
I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of O’Dwyer FM
Associate:
Date: 17 June 2005
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