Shanahan as trustee of the bankrupt estate of Hall v Hall, in the matter of Hall

Case [2025] FCA 1020

FEDERAL COURT OF AUSTRALIA

Shanahan as trustee of the bankrupt estate of Hall v Hall, in the matter of Hall [2025] FCA 1020  

File number(s): QUD 379 of 2024
Judgment of: COLLIER J
Date of judgment: 27 August 2025
Catchwords: PRACTICE AND PROCEDURE – Interlocutory application for summary dismissal or permanent stay of substantive proceedings – where respondents claim proceedings an abuse of process – where previous proceedings commenced in the District Court of Queensland but not served – where previous agreements reached between the parties in respect of progression of District Court proceedings – where applicant discontinued District Court proceedings before commencing the present proceedings – whether agreement between the parties precluded the applicant bringing proceedings in the Federal Court – whether substantial prejudice to respondents – interlocutory application dismissed
Legislation:

Bankruptcy Act 1966 (Cth) s 120

Federal Court of Australia Act 1976 (Cth) ss 23, 37N

Federal Court Rules 2011 (Cth) r 26.01(1)(d)

Jurisdiction of Courts (Cross-Vesting) Act 1987 (Qld)

Land Title Act 1994 (Qld) s 126(2)(a), (b)

Cases cited:

Dey v Victorian Railways Commissioners (1949) 78 CLR 62

General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125

Jackson v Sterling Industries Ltd; (1987) 162 CLR 612

Matson v Attorney-General (Cth) [2021] FCA 161

Przybylowski v Australian Human Rights Commission [2021] FCA 1398

Ridgeway v R (1995) 184 CLR 19

Walton v Gardiner (1993) 177 CLR 378

Webster v Lampard (1993) 177 CLR 598
Division: General Division
Registry: Queensland
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Number of paragraphs: 62
Date of last submission/s: 12 September 2024
Date of hearing: 16 September 2024
Counsel for the Applicant: Mr R Tooth
Solicitor for the Applicant: Enyo Lawyers
Counsel for the Respondents: Mr S Russell
Solicitor for the Respondents: HopgoodGanim Lawyers

ORDERS

QUD 379 of 2024

IN THE MATTER OF JOHN LEIGHTON HALL (A BANKRUPT)

BETWEEN:

JOHN GERVASE SHANAHAN AS TRUSTEE IN BANKRUPTCY OF JOHN LEIGHTON HALL (A BANKRUPT)

Applicant
AND:

JOHN LEIGHTON HALL

First Respondent

CAROLINE CHARMAINE HALL (ALSO KNOWN AS CAROLINE ANNE-MARIE HALL)

Second Respondent

ORDER MADE BY:

COLLIER J

DATE OF ORDER:

27 AUGUST 2025

THE COURT ORDERS THAT:

1.The interlocutory application filed on 7 August 2024 by John Leighton Hall and Caroline Charmaine Hall (respondents) be dismissed.

2.The costs of John Gervase Shanahan as Trustee in Bankruptcy of John Leighton Hall (A Bankrupt) of and incidental to the proceeding be paid by the respondents, such costs to be taxed if not otherwise agreed.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

COLLIER J:

  1. Before the Court is an interlocutory application (Application) filed by the respondents, John Leighton Hall and Caroline Charmaine Hall (the Halls), on 7 August 2024, seeking summary dismissal, or alternatively a permanent stay, of the substantive proceedings. By an application and statement of claim filed on 11 July 2024, the applicant, John Gervase Shanahan (Mr Shanahan),…

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Shanahan as trustee of the bankrupt estate of Hall v Hall, in the matter of Hall [2025] FCA 1020
Case
[2025] FCA 1020
Decision Date

CaseChat Overview and Summary

The matter before the court involves John Leighton Hall and Caroline Charmaine Hall, who are the respondents, and John Gervase Shanahan, as trustee of the bankrupt estate of John Leighton Hall, who is the applicant. The dispute pertains to the applicant's proceedings against the respondents, which the respondents claim to be an abuse of the court process. The proceedings originated from an earlier District Court case in Queensland that was not served on the respondents. The respondents argue that the applicant's current proceedings are precluded by prior agreements reached between the parties and that they have suffered substantial prejudice due to the applicant's actions.

The court was required to determine whether the applicant's proceedings in the Federal Court constituted an abuse of process, and if so, whether they should be dismissed or permanently stayed. The legal issues involved interpreting the nature of the agreements between the parties and assessing whether those agreements precluded the applicant from bringing the current proceedings in the Federal Court. The court also needed to evaluate whether the respondents had suffered substantial prejudice that would warrant a stay or dismissal of the proceedings.

The court found that the circumstances did not amount to an abuse of the court process. The agreements between the parties did not preclude the applicant from bringing the current proceedings, as the District Court case had not been served and the consent caveat could not be lodged due to reasons beyond the parties' control. The court held that the applicant's actions did not result in substantial prejudice to the respondents, as they had not been impeded in defending the substantive proceedings. Consequently, the interlocutory application was dismissed, and the costs were ordered to be paid by the respondents.

The final orders of the court were that the interlocutory application filed on 7 August 2024 by the respondents be dismissed and that the costs of the applicant, including those incidental to the proceeding, be paid by the respondents, with the costs to be taxed if not otherwise agreed.

Orders

Orders of the court

1. The interlocutory application filed on 7 August 2024 by John Leighton Hall and Caroline Charmaine Hall (respondents) be dismissed.

2. The costs of John Gervase Shanahan as Trustee in Bankruptcy of John Leighton Hall (A Bankrupt) of and incidental to the proceeding be paid by the respondents, such costs to be taxed if not otherwise agreed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

In my view, the Halls’ Application should be dismissed with costs. I have formed this view for the reasons outlined below. BACKGROUND On or about 6 November 2020, Mrs Hall purchased a property at 171 Campbell Street, Bundall, in the State of Queensland, for the amount of $1,120,000 (Campbell Street Property). On 24 March 2021, Mr Hall was made bankrupt. On 12 January 2022, Mrs Hall was served with a summons for examination pursuant to the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) in a separate proceeding in this Court. On 13 January 2021, Mr Shanahan caused a caveat to be lodged over the Campbell Street Property. On 7 February 2022, Mrs Hall gave Mr Shanahan a notice under s 126(2)(a) of the Land Title Act 1994 (Qld) (LTA), requiring Mr Shanahan to commence proceedings within 14 days, failing which the caveat over the Campbell Street Property would lapse. On 9 February 2022, the parties’ solicitors had a teleconference, during which it was agreed that:(a)Mrs Hall would withdraw the notice given on 7 February 2022 and take the necessary steps to enable the lodgement of a consent caveat over the Campbell Street Property; and (b)the consent caveat would expire three months after the conclusion of Mrs Hall’s statutory examinations unless Mr Shanahan commenced proceedings before the expiry of that period. For one reason or another, the Registrar of Titles did not permit a consent caveat to be lodged over the Campbell Street Property. On 21 March 2022, the parties agreed that: (a)Mr Shanahan would file proceedings in the Queensland Supreme Court with respect to his asserted right over the Campbell Street Property; (b)Mr Shanahan would refrain from serving that proceeding in the Supreme Court until the completion of the public examinations. Within two months of the conclusion of those examinations, Mr Shanahan would: (i)serve the Supreme Court proceedings (or an amended version); or (ii)discontinue the Supreme Court proceedings; and (c)a notice of action pursuant to s 126(2)(b) of the LTA would be lodged in the Land Titles Registry, (the Interim Agreement). The Interim Agreement was the result of various negotiations over a period of several weeks. On 30 March 2022, Mr Shanahan commenced proceedings in the Queensland District Court referable to the Interim Agreement (QDC Proceeding). A copy of the QDC Proceeding was sent to the Halls’ solicitors on 14 April 2022 as a courtesy (and expressly not by way of service). On 14 April 2022, the parties agreed to draft consent orders to have the District Court Proceeding adjourned to a date not before 25 July 2022. Those consent orders were made by the District Court on 19 April 2022. On 21 April 2022, Mrs Hall produced documents pursuant to the summons of 12 January 2022. On 10 May 2022, Mrs Hall was examined in the Federal Court before a Registrar of the Court. On 21 July 2022, the Halls’ solicitors wrote to Mr Shanahan’s solicitors stating their belief that, in circumstances where the QDC Proceeding was not served on them by 10 July 2022, Mr Shanahan did not intend to progress the QDC Proceeding.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

As matters presently stand, I am not satisfied that the circumstances of this case constitute an abuse of the process of the Court such that Mr Shanahan’s proceeding should be dismissed or stayed.CONCLUSION The interlocutory application filed on 7 August 2024 is dismissed. Costs should follow the event.

Ratio Decidendi

Legal Principle Established

Finally, Mr Shanahan submitted that the Halls make no submission referable to these proceedings being out of time or otherwise barred, nor do they make any submission contending that the substantive proceedings are defective, not arguable or otherwise amenable to summary dismissal. CONSIDERATION Section 23 of the Federal Court of Australia Act 1976 (Cth) (FCA Act), provides a broad power for the Court to make orders in the following terms: The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate. As Deane J explained in Jackson v Sterling Industries Ltd; (1987) 162 CLR 612 at 622:Section 23 of the Federal Court of Australia Act 1976 (Cth) confers upon the Federal Court a broad power to make orders of such kinds, including interlocutory orders, as it "thinks appropriate". Wide though that power is, it is subject to both jurisdictional and other limits. It exists only "in relation to matters" in respect of which jurisdiction has been conferred upon the Federal Court. Even in relation to such matters, the power is restricted to the making of the "kinds" of order, whether final or interlocutory, which are capable of properly being seen as "appropriate" to be made by the Federal Court in the exercise of its jurisdiction. Rule 26.01(1)(d) of the Federal Court Rules 2011 (Cth) (Federal Court Rules), provides that:(1)A party may apply to the Court for an order that judgment be given against another party because:…(d) the proceeding is an abuse of the process of the Court; or… Principles relevant to applications for summary judgment for abuse of process pursuant to r 26.01(d) of the Federal Court Rules were set out by White J in Matson v Attorney-General (Cth) [2021] FCA 161 as follows:66.The categories of abuse of process which may be encompassed by r 26.01 (d) of the FCR are not closed. However, as noted by McHugh J in Rogers v The Queen [1994] HCA 42; (1994) 181 CLR 251 at 286, “ abuses of procedure usually fall into one of three categories: (1) the court’s procedures are invoked for an illegitimate purpose; (2) the use of the Court’s procedures is unjustifiably oppressive to one of the parties; or (3) the use of the Court’s procedures would bring the administration of justice into disrepute”. Earlier, at 256, Mason CJ noted that there are two aspects to abuse of process: first, the aspect of vexation, oppression and unfairness to the other parties to the litigation and, secondly, the fact that the matter complained of will bring the administration of justice into disrepute.67.In the circumstances of this case, the respondents rely upon the circumstances stated by Mason CJ, Deane and Dawson JJ in Walton v Gardiner (1993) 177 CLR 378 at 393, namely:[P]roceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and are oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings. The jurisdiction of a superior court in such a case was correctly described by Lord Diplock ... as “the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people.68.The respondents also referred to Tomlinson v Ramsey Food in which French CJ, Bell, Gageler and Keane JJ said:[25]Abuse of process, which may be invoked in areas in which estoppels also apply, is inherently broader and more flexible than estoppel. Although insusceptible of a formulation which comprises closed categories, abuse of process is capable of application in any circumstances in which the use of a court's procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute. It can for that reason be available to relieve against injustice to a party or impairment to the system of administration of justice which might otherwise be occasioned in circumstances where a party to a subsequent proceeding is not bound by an estoppel.[26] Accordingly, it has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel ...(Citations omitted)