Wakeling v Wade

Case [2011] FCA 1292

FEDERAL COURT OF AUSTRALIA

Wakeling v Wade [2011] FCA 1292

Citation: Wakeling v Wade [2011] FCA 1292
Parties:

DONALD WILLIAM WAKELING v DAWN FLORENCE WADE and PAUL ANDREW LEROY

SOUAD CLARKE and MATTHEW TRNKA v PAUL ANDREW LEROY, DONALD WILLIAM WAKELING and DAWN FLORENCE WADE 

File number(s): NSD 212 of 2010
NSD 986 of 2010
Judge: NICHOLAS J
Date of judgment: 15 November 2011
Catchwords:

BANKRUPTCY – whether various causes of action vested in trustee in bankruptcy – where former bankrupt has relied upon causes of action in proceedings commenced by her in New South Wales Supreme Court after discharge from bankruptcy – whether defendant to Supreme Court proceedings is entitled to declarations that causes of action vested in former bankrupt’s trustee in bankruptcy – whether purported assignments to bankrupt of various companies’ causes of action are enforceable – purported assignments of companies’ causes of action not enforceable – where companies deregistered – companies’ causes of action vest in Australian Securities and Investments Commission

EQUITY – deeds of assignment – whether deeds of assignment enforceable – assignments of bare causes of action – purported assignee having no genuine commercial interest in causes of action – deeds of assignment unenforceable either as assignment of bare causes of action in tort or as assignment of bare causes of action in which assignee has no genuine commercial interest

TRUSTS AND TRUSTEES – whether causes of action were held on trust by bankrupt for her son so as not to constitute property of the bankrupt vested in her trustee in bankruptcy – evidence not establishing existence of trust – causes of action vested in bankrupt’s trustee in bankruptcy
Legislation: Bankruptcy Act 1966 (Cth) ss 5(1), 27(1), 31(1)(f), 33(1)(c), 58(1), 82(2), 116(1), 116(2)(a), 117, 133(1), 133(2), 178
Conveyancing Act 1919 (NSW) s 12
Corporations Act 2001 (Cth) s 601(A1)(2)
Civil Procedure Act 2005 (NSW) ss 64, 65
Judicature Act 1873 (UK) s 25(6)
Limitation Act 1969 (NSW)
Cases cited:

Bahr v Nicolay (No 2) (1988) 164 CLR 604
Citicorp Australia Ltd v Official Trustee in Bankruptcy (1996) 71 FCR 550
Ellis v Torrington [1920] 1 KB 399
Freeman v National Australia Bank Limited [2004] FCAFC 318
Glegg v Blomley [1912] 3 KB 474
Greater Lithgow City Council v Wolfenden [2007] NSWCA 180
Haq v Singh [2001] 1 WLR 1594 (CA)
Hawkins v Clayton (1988) 164 CLR 539
McGee v Yeomans [1977] 1 NSWLR 273
Meriton Apartments Pty Ltd v Industrial Court of New South Wales (2008) 171 FCR 380
New Cap Reinsurance Ltd (in liq) v Reaseguros Alianza SA (2004) 186 FLR 175
Poulton v The Commonwealth (1953) 89 CLR 540
Proctor v Jetway Aviation Pty Ltd [1984] 1 NSWLR 166
Ramsey v Hartley [1977] 1 WLR 686 (CA)

Re Harry Simpson & Co Pty Ltd (in liq) [1966] 2 NSWR 445)

Re Harry Simpson & Company Pty Ltd and the Companies Act1936 [1964-5] NSWR 603
Scott v Bagshaw (2000) 99 FCR 573
Stein v Blake [1996] AC 243
Trendtex Trading Corporation v…

Continue reading Wakeling v Wade

Sign in free to access the full text

Details
AGLC
Wakeling v Wade [2011] FCA 1292
Case
[2011] FCA 1292
Decision Date

CaseChat Overview and Summary

The case of Wakeling v Wade involves parties seeking declarations regarding the ownership of various causes of action in the context of bankruptcy proceedings. The matter was heard in the Federal Court of Australia, where the primary issue revolved around whether certain causes of action vested in the trustee in bankruptcy after the discharge of the bankrupt, Ms Wade. The case also examined the enforceability of assignments of these causes of action to Ms Wade or her son, Mr Trnka, and whether these actions were held on trust for Mr Trnka.

The court was required to decide several legal issues. Firstly, it had to determine whether the various causes of action vested in the trustee in bankruptcy, Mr Leroy, upon his appointment. Secondly, the court had to assess the enforceability of the deeds of assignment that purportedly transferred the causes of action to Ms Wade or Mr Leroy. Thirdly, the court had to consider whether the causes of action were held on trust by Ms Wade for Mr Trnka, thereby preventing them from vesting in the trustee in bankruptcy.

The court found that the purported assignments of the causes of action were ineffective because they involved bare causes of action in tort and the purported assignees did not have any genuine commercial interest in those actions. Consequently, the causes of action never vested in Ms Wade or Mr Leroy and remained with the original companies until their deregistration, at which point they vested in the Australian Securities and Investments Commission. The court also found that there was no evidence to establish that Ms Wade held the causes of action on trust for Mr Trnka. As a result, the causes of action vested in Mr Leroy upon his appointment as trustee in bankruptcy and have continued to vest in him since.

The court made a declaration to the effect that the relevant causes of action vested in Mr Leroy upon his appointment and have continued to vest in him ever since. The court ordered that Mr Wakeling file and serve proposed short minutes of orders within seven days, along with a written submission limited to four pages in support thereof. Other parties were given 14 days to file and serve any written submissions in reply, also limited to four pages.

Orders

Orders of the court

1. Within 7 days of today Mr Wakeling is to file and serve proposed short minutes of orders (including as to costs) together with a written submission in support thereof limited to 4 pages in length.

2. Within 14 days of today each other party is to file and serve any written submission in reply also limited to 4 pages in length.

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

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

In my opinion the causes of action the subject of the family law proceeding vested in Mr Leroy upon his appointment. There is nothing to suggest that they were ever assigned by Mr Leroy to Ms Wade or that they otherwise revested in her for any other reason whether before or after her discharge from bankruptcy. INITIAL CONCLUSIONS I can now state my conclusions in relation to the assignments relied upon by Ms Wade, Mr Trnka and Ms Clarke. First, the deed dated 8 February 2003, at least in so far as it is said to have effected an assignment of causes of action owned by GSR against Mr Muir and Mr Wakeling, was ineffective to do so. Each of the relevant causes of action was a bare cause of action in tort and not a cause of action in which Ms Wade or Mr Leroy had any genuine commercial interest. Secondly, the deed dated 20 September 2004, at least in so far as it is said to have assigned causes of action owned by AE against Mr Muir and Mr Wakeling, was also ineffective to do so. The assignment which is said to have been effected by the 20 September 2004 deed involved bare causes of action in tort. In Proceeding 986 Mr Trnka and Ms Clarke sought declarations that the causes of action owned by GSR that vested in Ms Wade were held by her on trust for Mr Trnka and Ms Clarke or, alternatively, that all causes of action owned by GSR vested in Ms Clarke and Mr Trnka. I am satisfied, in light of my previous findings, that it would not be appropriate to make any such declaration. Ms Clarke and Mr Trnka sought similar declarations in relation to any causes of action previously owned by AE which they alleged to have been assigned to Ms Wade on trust for Mr Trnka. Again, I am satisfied that it would not be appropriate to make any such declaration. As to the Gloucester proceeding, so far as the personal causes of action are concerned, there is no doubt that they vested in Mr Leroy either at the time of his appointment as Ms Wade’s trustee in bankruptcy (if they had already accrued) or, though this seems unlikely, at some time shortly thereafter (if they accrued afterwards). Either way, title to the personal causes of action came to vest in Mr Leroy and, despite Ms Wade’s subsequent discharge from bankruptcy, continue to vest in him. So far as the assigned causes of action are concerned, for reasons I have explained, they never were the subject of any valid or enforceable assignment to Ms Wade or Mr Leroy. Hence, those causes of action continued to vest in GSR and AE until those companies’ eventual deregistration upon which event they vested in ASIC: see s 601(A1)(2) Corporations Act 2001 (Cth). Further, assuming that the relevant causes of action accrued by no later than early February 2003 (though it is likely that they accrued earlier than that) then they became statute barred by no later than February 2009. As to the family law proceeding, I am satisfied that the relevant causes of action were never held by Ms Wade on trust for Mr Trnka, they vested in Mr Leroy upon his appointment and they have continued to vest in him ever since. It is appropriate to make a declaration to that effect. POSSIBLE ASSIGNMENT OF CAUSES OF ACTION BY TRUSTEE

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.