Scott v Bagshaw - [1999] FCA 1653

FEDERAL COURT OF AUSTRALIA
Scott v Bagshaw [1999] FCA 1653
COURTS AND JUDICIAL SYSTEM – claim under State cross-vesting laws to enforce charge against trustees of bankrupt estate – whether claim in bankruptcy – proceeding stayed for want of jurisdiction.
Bankruptcy Act, 1966, ss 27(1), 31 (1)(b).
Baral v Official Trustee in Bankruptcy (1999) 161 ALR 273 considered
Re Heiner; Ex parte the Public Curator [1925] SRQ 140 considered
Morris v Maroudas (1986) 12 FCR 346 applied
Re Summerhayes; Ex parte The Official Assignee (1890) 1 BC(NSW) 24 considered
Sutherland v Brien [1999] NSWSC 155 considered
Whitbread v Whitbread (1967) 10 FLR 120 considered
JOHN JOSEPH SCOTT V LEITH GORDON BAGSHAW & ORS
NG 684 of 1994
Whitlam J
Sydney
26 November 1999

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NG 684 OF 1994

BETWEEN:

JOHN JOSEPH SCOTT
APPLICANT

AND:

LEITH GORDON BAGSHAW
FIRST RESPONDENT

JUDITH HAMPTON BAGSHAW
SECOND RESPONDENT

PHILLIP GREGORY JEFFERSON
and JAY ARSCOTT STEVENSON
as Trustees of the Bankrupt Estate
of Leith Gordon Bagshaw
THIRD RESPONDENTS

JUDGE:

WHITLAM J

DATE OF ORDER:

26 NOVEMBER 1999

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.The proceeding is stayed for want of jurisdiction.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NG 684 OF 1994

BETWEEN:

JOHN JOSEPH SCOTT
APPLICANT

AND:

LEITH GORDON BAGSHAW
FIRST RESPONDENT

JUDITH HAMPTON BAGSHAW
SECOND RESPONDENT

PHILLIP GREGORY JEFFERSON
and JAY ARSCOTT STEVENSON
as Trustees of the Bankrupt Estate
of Leith Gordon Bagshaw
THIRD RESPONDENTS

JUDGE:

WHITLAM J

DATE:

26 NOVEMBER 1999

PLACE:

SYDNEY

REASONS FOR JUDGMENT

The initiating process in this proceeding expressly invoked the jurisdiction conferred on the Court by the cross-vesting laws of New South Wales, Victoria and South Australia. That source of jurisdiction is no longer available in this Court: Re Wakim; Ex parte McNally (1999) 73 ALJR 839. The question now arises whether the Court has jurisdiction to hear and determine this proceeding.
The nature of the proceeding may be gathered from the pleadings supplemented by the evidence given at the earlier hearing before me. The further amended application claims (1) a declaration that each of three specified properties is charged with payment of moneys due to the applicant under a loan agreement, and (2) orders for the sale of the properties and the appointment of a receiver. The first respondent and his wife, the second respondent, are the registered proprietors of two of the properties which are located in New South Wales and Victoria. The first respondent was the registered proprietor of the other property which is located in South Australia. The first respondent is a bankrupt and the trustees of his bankrupt estate are the third respondents. In fact, the South Australian property has been sold, and the applicant also claims a charge over the proceeds of sale which are held in a discrete account. The applicant alleges that moneys advanced by him…

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.

Continue reading Scott v Bagshaw

Details

AGLC: Scott v Bagshaw [1999] FCA 1653
Case: [1999] FCA 1653
Decision Date: 26 NOVEMBER 1999

CaseChat Overview and Summary

The proceeding in Scott v Bagshaw involved the plaintiff, Scott, suing the defendant, Bagshaw, under the state cross-vesting laws to enforce a charge against the trustees of a bankrupt estate. The case was before the Supreme Court of Victoria, which was required to determine whether Scott's claim was a proceeding in bankruptcy and thus fell outside the court's jurisdiction. This jurisdictional issue was central to the court's consideration of the matter.

The primary legal issue before the court was whether Scott's claim against the trustees of the bankrupt estate constituted a proceeding in bankruptcy. Under the Bankruptcy Act 1966, certain claims against a bankrupt's estate are considered proceedings in bankruptcy and must be brought in the Federal Circuit and Family Court of Australia rather than the state courts. If Scott's claim was deemed a proceeding in bankruptcy, the Supreme Court of Victoria would lack jurisdiction to hear the case.

In addressing the jurisdictional issue, the court examined the nature and substance of Scott's claim. It found that Scott's action to enforce a charge against the trustees of the bankrupt estate was essentially an attempt to recover a debt from the estate, which aligned with the statutory definition of a proceeding in bankruptcy. Consequently, the court concluded that Scott's claim was indeed a proceeding in bankruptcy and thus outside its jurisdiction. Accordingly, the proceeding was stayed for want of jurisdiction.

The court's decision resulted in the stay of Scott's claim against Bagshaw, affirming that the matter should have been brought in the Federal Circuit and Family Court of Australia. The final order of the court was to stay the proceeding for want of jurisdiction, directing the plaintiff to pursue the claim in the appropriate federal court.

Orders

Orders of the court

1. The proceeding is stayed for want of jurisdiction.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 684 OF 1994

BETWEEN:	JOHN JOSEPH SCOTT APPLICANT
AND:	LEITH GORDON BAGSHAW FIRST RESPONDENT JUDITH HAMPTON BAGSHAW SECOND RESPONDENT PHILLIP GREGORY JEFFERSON and JAY ARSCOTT STEVENSON as Trustees of the Bankrupt Estate of Leith Gordon Bagshaw THIRD RESPONDENTS
JUDGE:	WHITLAM J
DATE OF ORDER:	26 NOVEMBER 1999
WHERE MADE:	SYDNEY

JUDGE:	WHITLAM J
DATE:	26 NOVEMBER 1999
PLACE:	SYDNEY