Re Taylor; Ex parte Natwest Australia Bank Ltd

JUDGMENT NO. %/ ... Q

IN THE FEDERAL COURT OF AUSTRALIA

EXERCISING FEDERAL JURISDICTION

IN BANKRUPTCY

BANKRUPTCY DISTRICT OF

NEW SOUTH WALES AND ACT

R E : GEOFFREY WALTER EDELSTEN

EX PARTE MAX CHRISTOPHER DONNELLY
AS TRUSTEE FOR THE ESTATE OF
GEOFFREY WALTER EDELSTEN

Applicant

A N D :

GEOFFREY WALTER EDELSTEN AND OTHERS

Respondent

COURT : NORTHROP J
PLACE : MELBOURNE
m: 29 APRIL 1992

EX TEMF'ORE REASONS FOR JUDGMENT

The first respondent is seeking an order that paragraphs 7, 8, 13 and 14 of the statement of claim be struck out on various grounds which can be summarized as disclosing no cause of action, embarrassing and possibly an abuse of the process of the Court.

the Federal Court bound by the Federal Court Rules. As a result, directions were given from time to time for pleadings
to be delivered and these orders were complied with. There have been a number of statements of claim. There has been a defence to the amended statement of claim, but nowhere at all was there any motion anywhere to have the statement of claim or the amended statement of claim struck out pursuant to the Federal Court Rules.

When the matter came on for hearing yesterday, the problems arising from the wrong procedures being adopted were referred to and following submissions, orders were made to rectify that problem and to bring the matter within the jurisdiction of the Court conferred by the Bankru~tcv Act. The procedures of the Court under that Act, in the exercise of jurisdiction in bankruptcy, are very different from those applying in the ordinary jurisdiction of the Court under the Federal Court Act and the Federal Court Rules. In particular, the application presently before the Court was dlrected to be an application under the Bankru~tcv Act and Rules and if necessary, all the other documents were to be adapted as they were for that purpose. Rule 102 of the Bankruptcy Rules sets out the procedure by which an application is made to the Court
under the Bankru~tcv Act. It is done by way of application in the form of Form 45 to the Rules. The application must specify the orders that the Court will be asked to make on the hearing of the application. The present amended application is, I have said, of sufficient compliance with that rule for present purposes. Rule 103 of the rules requires that the grounds on which the Court will be asked to make the orders specified in the application and the facts on which the applicant proposes to rely in support of the application for that order shall be stated in the affidavit filed in support of the application. In the present case, there have been a large number of affidavits referred to, 10 altogether which it is said will be relied upon as establishing facts to support the orders being sought against, among others, the first respondent. The affidavits do not specify the grounds on which the Court will be asked to make the orders and it is noted that at the present time the only order sought against the first respondent is as set out in paragraph 7 of the amended application, namely, a declaration that by virtue of the first respondent's bankruptcy on 10 March 1988 and the provisions of the Bankru~tcv Act 1966, the beneficial interest in each and all of the shares in the VIP companies and each of them have vested in the applicant.
One can assume for the moment for the purpose of this
request that the facts upon which that declaration is to be

based, if the declaration is to be made, are set out in the affidavits which have been filed. To some extent paragraphs
7, 8, 13 and 14 of the statement of claim can be considered as
grounds to support the making of such a declaration. They are more than merely a brief statement of facts which, normally, are required by the Federal Court Rules. In any event, what is in issue, it is said, is that the facts which are contained in the affidavits are facts which lead to a conclusion that the beneficial interests in the shares have vested in the applicant and therefore the declaration ought to be made.
This is not a case where further particulars are to be sought. They are contained, as far as facts are concerned, in the affidavits. In this regard the affidavits take the place of the particulars. This is not a case where the respondent is to proceed first and does not know just what case is going to be then led against it in ansQer, as was in the case of Bailey v Federal Commissioner of Taxation (1977) 136 CLR 214, a case referred to this morning. This is not a case where normally particulars would be given. There is the absence of stated grounds, but in my opinion that is not sufficient to justify the making or the giving of particulars or striking out any paragraphs of the statement of claim, especially where the parts being relied upon by the applicant are set out in the affidavits. If anything, the particulars of the statement of claim are of assistance as indicating the type of grounds which will be relied upon.

Accordingly, in my opinion, there is no basis for the
orders being made as sought by the first respondent. The
application is refused.
I certify that this and the preceding three (3) pages are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Mr R.M. Northrop.
Associate: 7-
Date:

Many difficulties have arisen in this matter arising from the fact that the wrong procedure was adopted when the matter was initially instituted in Sydney in August of last year. It proceeded initially as if it were an ordinary application in

CaseChat Overview and Summary

The case involves a dispute between the first respondent, Geoffrey Walter Edelsten, and the applicant, Natwest Australia Bank Ltd, as trustee for the estate of Geoffrey Walter Edelsten. The application pertains to the vesting of beneficial interests in shares of VIP companies in the applicant due to the respondent's bankruptcy. The matter was initially heard in the Federal Court of Australia exercising federal jurisdiction in bankruptcy, but it was noted that the wrong procedures were adopted during the initial stages of the case. The primary legal issue before the court was whether certain paragraphs of the statement of claim should be struck out on the grounds that they disclosed no cause of action, were embarrassing, or constituted an abuse of the court's process.

The court considered that the wrong procedures were adopted when the case was first instituted, and that the application should have been made under the Bankruptcy Act and Rules rather than the Federal Court Rules. The court emphasised the importance of following the correct procedures as set out in the Bankruptcy Rules, particularly the requirement to specify the orders sought in the application and to state the grounds and facts relied upon in support of the application. The court noted that while the affidavits filed by the applicant did not explicitly state the grounds for the orders sought, they contained sufficient facts to support the conclusion that the beneficial interests in the shares had vested in the applicant. The court found that there was no basis for striking out the relevant paragraphs of the statement of claim, as the affidavits effectively served as particulars and the statement of claim provided helpful context regarding the grounds that would be relied upon.

In conclusion, the court refused the respondent's application to strike out paragraphs 7, 8, 13, and 14 of the statement of claim. The court held that the application did not meet the criteria for striking out the paragraphs, as the affidavits contained sufficient facts to support the orders sought, and the statement of claim provided useful context. The court emphasised the importance of following the correct procedures in bankruptcy cases and noted that the initial procedural errors did not warrant the striking out of the relevant paragraphs.

CaseChat Overview and Summary

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Background to the litigation

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Legal Principle Established