Trustee of the Bankrupt Estate of Ewing and Ewing

[2017] FamCA 1042

FAMILY COURT OF AUSTRALIA

TRUSTEE OF THE BANKRUPT ESTATE OF EWING & EWING [2017] FamCA 1042

FAMILY LAW – PRACTICE AND PROCEDURE – Whether the court should make further directions – Where the matter has been concluded – Where the Court has no jurisdiction to continue the proceedings – Costs to be paid

Family Law Act (Cth) (1975)

Warby and Warby [2002] FLC 93-091

APPLICANT: Trustee of Bankrupt Estate of Mr Ewing

SECOND RESPONDENT: Mr Ewing

FILE NUMBER: SYC 7226 of 2011

DATE DELIVERED: 11 August 2017

PLACE DELIVERED: Parramatta

PLACE HEARD: Sydney

JUDGMENT OF: Le Poer Trench J

HEARING DATE: 29 March 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Bennett

SOLICITOR FOR THE APPLICANT: Norton Rose Fulbright Australia

COUNSEL FOR THE RESPONDENT: Mr Hall

SOLICITOR FOR THE RESPONDENT: Hall Partners

Orders

1. The second Respondent is to pay the costs of the Trustee on a party and party basis.

2. The second respondent is to pay the costs in the sum of $10,000 within 28 days from the date hereof unless he notifies the Trustee that he requires the costs to be assessed. Any such notice is to be given, in writing, to the solicitor for the Trustee, on or before 4.30 p.m. on 25 August 2017.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Trustee in Bankruptcy of the Estate of Ewing & Ewing has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: SYC 7226/2011

Trustee of Bankrupt Estate of Mr Ewing

Applicant

And

Mr Ewing

Second Respondent

REASONS FOR JUDGMENT

1. On 29 March 2017, the Court made orders, by consent, pursuant to a document titled “Minutes of Consent Orders”. That document was signed by all the parties to the proceeding which included the applicant Trustee and the second  respondent Mr Ewing. The first order made was as follows:

   1.        All extant Applications before the Court are dismissed.

2. On the document titled “Minutes of Consent Orders” were two further orders numbered 3 and 4. Those also became orders of the Court. All parties consented to the order. With the benefit of hindsight, and the submissions which have been made pursuant to those orders, it seems clear the Court should not have made the orders, as recited in 3 and 4, as the first order made, as above set out, must be seen as finalising the proceeding in suit number SYC 7226 of 2011.

3. In my defence, being the judge who made the orders of 29 March 2017, I assumed that there remained some aspect of the suit, perhaps costs arguments between the Applicant and the second Respondent, which were still to be determined. Alas, that was not the case.

4. The second respondent (no longer a bankrupt) filed his submissions on 7 April 2017. The submission was contained within 4 pages. Those submissions set out the following points of note.

5. The second respondent asserts “The Trustee has settled the proceeding with all other parties other than [Mr Ewing].” I note that such an assertion would appear contrary to the effect of order 1 made 29 March 2017 as above set out.

6. The second respondent then proceeds in his submissions to set out his grievance against the Trustee which seems to crystallise to a complaint that the trustee did not pursue an action against the Commonwealth Bank for the way in which that bank moved against the second respondent based upon a security it held for a loan which had been contracted between the second respondent and Bankwest, a corporation acquired by the Commonwealth Bank.

7. The action which the second Respondent says lies against the Trustee appears to be one which would provide a remedy of damages in favour of the second respondent for breach of fiduciary obligations which the second respondent claims repose in the Trustee.

8. The possible cause of action identified by the second respondent calls for the exercise of jurisdiction which this Court would only have available in a very limited circumstance. That circumstance is identified in the decision of Warby and Warby [2002] FLC 93-091.

9. The proceeding in this Court, which was still extant before the order of 29 March 2017 was made, was initiated by the applicant seeking to set aside property orders made in this court, by consent, between the second respondent and the first respondent Ms Ewing. The proceeding initiated by the Applicant relied upon jurisdiction found in section 79A of the Family Law Act.

10.The second respondent in his submission acknowledges the case put by the Trustee that the proceeding has been settled and the orders of 29 March 2017 conclude the proceeding, yet he argues there still remains his claim against the Trustee for failure to undertake his responsibilities as a trustee and prosecute an action against the Commonwealth Bank.

11.This court has no jurisdiction to hear the type of action anticipated by the second respondent in the absence of a cause of action grounded upon jurisdiction identified in the Family Law Act. As a consequence there is no direction to be made by the Court pursuant to order 3 of the orders made 29 March 2017.  The court retains jurisdiction to make an order for costs.

Costs 

12.The Trustee seeks an order for costs. The order sought is for indemnity costs. Indemnity costs ought only be ordered in exceptional cases. This case must be very close to fitting within that requirement given that the court has found the second respondent seeks directions for the progress of a case which the Court has no jurisdiction to hear.

13.The trustee has set out detail of the costs incurred in responding to the second respondents claim. I propose to make an order for costs in favour of the Trustee assessed on a party and party basis. Given the small quantum of the costs sought I propose to set the amount to be paid at $10,000, however, I will give the second respondent the option to accept that quantification of the costs or apply for assessment of the costs conditional upon his giving notice to the Trustee that he requires assessment, with such notice to be given within 14 days of the date of the order.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench delivered on 11 August 2017.

Associate: 

Date: