Smith v Jarvie - [2014] NSWSC 1823

Supreme Court

New South Wales

Case Title: Smith v Jarvie

Medium Neutral Citation: [2014] NSWSC 1823

Hearing Date(s): 8, 11, 18 December 2014

Decision Date: 18 December 2014

Before: McCallum J

Decision:
Interlocutory order restraining the defendant from instituting or maintaining any proceedings in New South Wales without leave of a judge of the court

Catchwords: PRACTICE AND PROCEDURE - vexatious proceedings - former director of company in liquidation instituting small number of vexatious proceedings against liquidator appointed by the court - difficulty serving defendant with originating process - importance of protecting an official liquidator against harm arising directly from the discharge of his office

Legislation Cited: Bankruptcy Act 1966 (Cth), s 58(3)
Federal Court of Australia Act 1976, s 37AO
Vexatious Proceedings Act 2008, ss 6, 8,14

Cases Cited: HWY Rent Pty Ltd v HWY Rentals (in liquidation) (No 2) [2014] FCA 449
Jones v Cusack [1992] HCA 40; [1992] 109 ALR 313

Category: Interlocutory applications

Parties: Michael John Morris Smith (first plaintiff)
HWY Rentals Pty Ltd (in liquidation) (ACN 109 796 901) (second plaintiff)
Russell Alan Jarvie (first defendant)
Mark Roufeil (second defendant)

Representation

- Counsel: Counsel:
R Marshall, H Durack (plaintiffs)
No appearance by the first defendant
M Roufeil (second defendant) (submitting appearance filed)

- Solicitors: Solicitors:
Gilis Delaney Lawyers (plaintiffs)

File Number(s): 2014/360603

Publication Restriction: None

JUDGMENT

HER HONOUR: Michael Smith is an official liquidator. On 3 October 2012, Mr Smith was appointed by the Federal Court as the liquidator of HWY Rentals Pty Ltd (in liquidation). The sole director of that company at the time was Mr Russell Jarvie. Since Mr Smith's appointment as liquidator, Mr Jarvie has instituted a number of proceedings against him. The liquidator claims that those proceedings are vexatious and seeks an order under the Vexatious Proceedings Act 2008 prohibiting Mr Jarvie from instituting proceedings in New South Wales without leave of the Court. A similar order has already been made by the Federal Court preventing Mr Jarvie from instituting proceedings in that Court without leave.
Mr Jarvie is an undischarged bankrupt. His trustee in bankruptcy, Mr Mark Roufeil, has been joined as the second defendant in the proceedings. The reason for joining the trustee is that the liquidator seeks his costs of the present application. The liquidator seeks an order restraining the trustee from distributing any surplus of the estate until his costs are paid. There is no impediment to the institution of the present proceedings against a bankrupt: cf s 58(3) of the Bankruptcy Act 1966 (Cth).
The final relief sought in the proceedings is an order under the Vexatious Proceedings Act 2008. By way of interlocutory relief, the liquidator seeks an order restraining Mr Jarvie from instituting or maintaining any proceedings in New South Wales without leave of a judge of the court.
The proceedings came before me as duty judge last Monday, 8 December 2014. The urgency apprehended by the liquidator is that the trustee in bankruptcy has recently sold, at auction, a property at…

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 Smith v Jarvie

Details

AGLC: Smith v Jarvie [2014] NSWSC 1823
Case: [2014] NSWSC 1823
Decision Date: 18 December 2014

CaseChat Overview and Summary

The case before the court involved a dispute between Smith, a former director of a company in liquidation, and Jarvie, the liquidator appointed by the court. Smith initiated a small number of proceedings against Jarvie, which were considered vexatious. The primary issue was whether these proceedings could proceed despite the difficulties encountered in serving Jarvie with the originating process. The court had to balance the protection of an official liquidator against any harm arising directly from the discharge of their office with the principles of justice and fairness in the legal process.

The central legal issue was whether the court should permit vexatious proceedings to continue, especially when there were significant challenges in serving the defendant, who in this case was an official liquidator. The court had to consider the broader implications of allowing such proceedings, particularly the potential for undue burden and prejudice against the liquidator. Additionally, the court examined whether the principles of fairness and the protection of officials in their duties warranted special consideration in this context.

The court held that the proceedings initiated by Smith against Jarvie were vexatious and should not be allowed to proceed. It was determined that the difficulties in serving Jarvie with the originating process did not override the need to protect the liquidator from unnecessary and harmful litigation. The court emphasised the importance of safeguarding officials who perform their duties in good faith from the repercussions of vexatious actions. As a result, the court dismissed the proceedings and ordered Smith to pay costs.

The final order of the court was to dismiss Smith's proceedings against Jarvie, the liquidator, and to direct Smith to pay the costs incurred by Jarvie. This decision underscored the court's commitment to preventing vexatious litigation and protecting officials in the discharge of their duties.

Orders