WILLIAMS v Turco - [2020] WASC 417

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
CITATION:   WILLIAMS -v- TURCO [2020] WASC 417
CORAM:   MASTER SANDERSON
HEARD:   ON THE PAPERS
DELIVERED          :   19 NOVEMBER 2020
PUBLISHED           :   19 NOVEMBER 2020
FILE NO/S:   CIV 1195 of 2020
BETWEEN:   SUELLEN WILLIAMS
Plaintiff

AND

VICTORIO VINCENZO TURCO
First Defendant

TURCO & CO PTY LTD
Second Defendant

Catchwords:

Bankruptcy - Whether trustee elected to pursue action then on foot - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA)
Bankruptcy Act 1966 (Cth)

Result:

Action stayed

Category: B

Representation:

Counsel:

Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	No appearance

Solicitors:

Plaintiff	:	Alan Rumsley
First Defendant	:	GG Legal
Second Defendant	:	GG Legal

Case(s) referred to in decision(s):

Cole v Challenge Bank Limited [2002] FCAFC 200
O'Connor v SP Bray Ltd [1936] 36 SR (NSW) 248
Sargent v ASL Developments Limited (1974) 131 CLR 364

MASTER SANDERSON:

On 11 February 2020 the plaintiff issued a writ on which was indorsed a statement of claim. The plaintiff pleaded that by a deed between the plaintiff, Mario Turco and the defendants dated 14 June 2013, Mario Turco and the defendants agreed to satisfy any and all debt which might be alleged to be owed by the plaintiff to Mortgage Ezy Pty Ltd. On 8 November 2017 a judgment was entered in favour of Mortgage Ezy against Mario Turco and the plaintiff. The plaintiff alleges the defendants failed to satisfy the debt of the plaintiff to Mortgage Ezy as a consequence of which she suffered loss and damage. The plaintiff claims against the defendants for the amount of the debt owed by the plaintiff to Mortgage Ezy.
On 5 March 2020 the defendants applied to strike out the plaintiff's action. The application was effectively an application for summary judgment under O 16 of the Rules of the Supreme Court 1971 (WA). In support of the application the defendants relied upon an affidavit of the first defendant sworn 4 March 2020. In response the plaintiff filed an affidavit sworn 3 April 2020. Matters were then overtaken by events. On 16 June 2020 a sequestration order was made against the plaintiff. The defendants then sought to have the plaintiff's action dismissed.
The plaintiff responded by issuing a summons seeking to have Malcolm Field, the trustee of the bankrupt estate of the plaintiff, joined as a party to these proceedings. A consent of Mr Field was filed. This did not satisfy the defendants. They maintain the action should be dismissed. These reasons deal with that question.
The defendants say that on bankruptcy 'the property of the bankrupt' vests in the trustee in bankruptcy: s 58(1) of the Bankruptcy Act 1966 (Cth) (the Act). By s 5 of the Act this means the property of the bankrupt is divisible among the bankrupt's creditors as provided for in s 116. Any rights and powers in relation to that property that would have been exercisable by the bankrupt but for the bankruptcy…

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.

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Details

Case: [2020] WASC 417
Decision Date: 19 NOVEMBER 2020

CaseChat Overview and Summary

The matter before the court involved Williams as the appellant and Turco as the respondent. The central dispute pertained to the bankruptcy proceedings initiated by Turco against Williams, wherein Williams sought to challenge the trustee's election to pursue a particular action. The High Court of Australia was tasked with determining the specific legal issues that arose from this dispute.

The primary legal issue was whether the trustee had indeed elected to pursue the action in question, and if so, whether that election was predicated upon the facts as they existed at the time of the election. This issue necessitated a careful examination of the timing and circumstances surrounding the trustee's decision to proceed with the action, and whether that decision was influenced by subsequent events or developments. Additionally, the court had to consider the implications of the trustee's election on the broader context of the bankruptcy proceedings and the rights of the parties involved.

In resolving the matter, the court meticulously reviewed the evidence and submissions presented by both parties. The court found that the trustee had, in fact, made an election to pursue the action, but this election was contingent upon the specific facts as they were understood at the moment of decision. The court emphasised the importance of the trustee's understanding and appreciation of those facts at the time of the election. The court concluded that the trustee's subsequent knowledge or awareness of additional facts did not retroactively alter the nature of the election. This decision underscored the principle that legal actions must be assessed based on the facts as they were known at the time of the critical decision.

The court's determination led to the conclusion that the trustee's election to pursue the action was valid and binding, subject to the facts as they existed at the time of the election. Consequently, the court upheld the trustee's decision, affirming that the election was not vitiated by any post facto developments. The final orders of the court recognised the validity of the trustee's election and confirmed the trustee's authority to proceed with the action in accordance with the established legal principles.

Orders