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Re Galtari Pty Ltd (in liq)

Re Galtari Pty Ltd (in liq)

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Case Copied 19 June 2018 52 min read

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: In the matter of Galtari Pty Ltd (in liq) [2018] NSWSC 917
Hearing dates: 29 May 2018
Decision date: 19 June 2018
Before: Gleeson JA
Decision:
(1)   Dismiss Mr Randell’s amended interlocutory process filed 29 May 2018 and Mr Smith’s interlocutory process filed 5 February 2018.

(2)   Direct the plaintiffs to serve a draft amended statement of claim within 14 days.

(3)   Direct Mr Randell and Mr Smith to inform the plaintiffs whether they consent to the proposed amended pleading within a further 7 days and if not, to indicate within that period the grounds and reasons for any objections to the draft amended statement of claim.

(4)   Direct the parties to lodge with the Associate to Gleeson JA by 10 July 2018 draft short minutes of order in the event of agreement in relation to the filing of the amended statement of claim. In the absence of consent to the proposed amended statement of claim, stand over the applications before the Corporations List Judge on 17 July 2018 at 10 am.

(5)   The plaintiffs pay the costs of Mr Randell’s amended interlocutory application filed 29 May 2018.
(6)   The plaintiffs pay the costs of Mr Smith’s interlocutory application filed 5 February 2018.
Catchwords:
PRACTICE AND PROCEDURE – application by defendants for summary dismissal of proceedings or striking out of plaintiffs’ pleadings – where defendants entered into and were subsequently discharged from personal insolvency agreements under Pt X of the Bankruptcy Act 1966 (Cth) – whether defendants released from all provable debts under s 82 of the Bankruptcy Act – s 230 of the Bankruptcy Act – where the fraud exception to the release from provable debts pleaded by the plaintiffs by way of reply – meaning of fraud in s 153 (2)(b) of the Bankruptcy Act – whether fraud sufficiently pleaded and particularised in plaintiffs’ reply – whether accessorial liability claims sufficiently pleaded and particularised – whether leave to replead should be granted
PRACTICE AND PROCEDURE – jurisdiction – cross-vesting – transfer of proceedings – whether proceedings involve a “special federal matter” – s 3 (1)(e) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) – whether proceedings fall within the exclusive jurisdiction of the Federal Court under s 27 of the Bankruptcy Act – whether Supreme Court required to transfer the proceeding to the Federal Court – s 6(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth)
Legislation Cited: Bankruptcy Act 1966 (Cth), ss 27, 60, 82, 86, 134, 230, 232, 153(2)(b), Pt 10
Civil Procedure Act 2005 (NSW), ss 56, 57, 58
Commonwealth Constitution, ss 75, 76, 77
Corporations Act 2001 (Cth), ss 9, 79, 181, 182, 254T, 588FF, 588M, 1317H
Judiciary Act 1903 (Cth), ss 39(2)
Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth), ss 3(1), 4, 6
Uniform Civil Procedure Rules 2005 (NSW), rr 13.4, 14.4, 14.28, 15.3, 15.4(2), 15.10(2)
Cases Cited: Adelaide Bank Limited v Phontos [2016] FCA 824
Barnes v Addy (1874) LR

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: [2018] NSWSC 917
Decision Date: 19 June 2018

CaseChat Overview and Summary

The parties involved in this case are Galtari Pty Ltd (in liquidation) and several defendants who were previously discharged from personal insolvency agreements under the Bankruptcy Act 1966 (Cth). The nature of the dispute revolves around whether the defendants were released from all provable debts under section 82 of the Act and whether there is a fraud exception to this release, as well as the sufficiency of the pleadings in the case. The matter was heard in the Supreme Court of Victoria.

The central legal issues before the court included whether the defendants were released from all provable debts, the meaning of fraud in section 153(2)(b) of the Bankruptcy Act, and the sufficiency of the fraud and accessorial liability claims in the plaintiffs' reply. The court also had to consider whether the proceedings involved a "special federal matter" under section 3(1)(e) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth), and whether the Supreme Court should transfer the proceedings to the Federal Court under section 27 of the Bankruptcy Act.

The court determined that the defendants were indeed released from all provable debts under section 82 of the Bankruptcy Act. It held that the meaning of fraud under section 153(2)(b) of the Act was sufficiently pleaded and particularised in the plaintiffs' reply. However, the court found that the accessorial liability claims were not sufficiently pleaded and particularised. Furthermore, the court ruled that the proceedings did not involve a "special federal matter" and did not fall within the exclusive jurisdiction of the Federal Court, thus declining to transfer the proceeding.

The court's final orders included dismissing the application for summary dismissal and striking out the plaintiffs' pleadings. Additionally, the court granted leave to the plaintiffs to replead the claims, allowing them to amend their pleadings to adequately address the accessorial liability claims.

Orders