Camm v Linke Nominees Pty Ltd

REASONS FOR JUDGMENT 1 On 25 October 2010 I published reasons for judgment in Camm v Linke Nominees Pty Ltd [2010] FCA 1148. The reasons related to two questions which the parties had framed and contended should be decided separately from and before all other questions in the proceeding. Having considered argument I felt able to answer one of the two questions. For reasons which I explained, I did not consider that it was possible to answer the other question. I invited the parties to consider the reasons and to make submissions as to what orders (if any) should be made to give effect to them. 2 The Applicants (whom I shall again refer to as "the trustees") submitted that my reasons should be recalled and reconsidered. In the event that I was not prepared to take this course, the trustees submitted, in the alternative, that a declaration should be made that they are not entitled to rely upon s 121 of the Bankruptcy Act 1966 (Cth) ("the Act") for the purpose of voiding the relevant transaction. They also sought further orders allowing approximately three weeks within which they might amend their application so as to identify and seek to enforce the "side agreement" to which I referred in my reasons. 3 The Respondent ("Linke") acknowledged that question (a) as framed could not be answered in any sensible manner consistently with my analysis of the relevant law. It submitted that the preferred course would be for me to make a series of declarations and consequential orders which were consistent with my reasons. These included orders that judgment be entered for Linke and the proceeding be dismissed. It opposed the trustees' application that the reasons be recalled and reconsidered. 4 The trustees' application was made because of what they perceive to have been an oversight, on my part, when dealing with question (a). I proceeded (earlier reasons at [31] and [42]) on the basis that, upon Mr Camm becoming bankrupt on 29 November 1995, the legal estate in the property, referred to in this question, vested in his trustee in bankruptcy (Mr Schmierer) pursuant to s 58(1) of the Act. 5 The trustees submit that, in so concluding, I must have overlooked s 58(2) which provides that: "Where a law of … a State … requires the transmission of property to be registered and enables the trustee of the estate of a bankrupt to be registered as the owner of any such property that is part of the property of the bankrupt, that property, notwithstanding that it vests in equity in the trustee by virtue of this section, does not vest at law until the requirements of that law have been complied with." 6 The trustees point to various provisions of the Land Title Act 1994 (Qld) ("the Land Title Act") which, they submit, when read together, satisfy the preconditions for the operation of s 58(2) of the Act. These provisions are: · Section 115 which provides that the Registrar "may register a transmission of an interest in a lot under a law about bankruptcy only if a request to register the transmission is lodged." · Section 166 (formerly s 181) which provides that an instrument does not transfer an interest in land until it is registered. · Section 4 which defines "instrument" to include "(e) a request, application or other document that deals with a lot and may be registered under this Act." · Section 167 (formerly s 182) which provides that a transfer of an interest in a lot from one person to another occurs on registration of an instrument. 7 If s 58(2) applied Mr Schmierer obtained no more than an equitable interest in the relevant land upon Mr Camm becoming bankrupt. In the absence of a registered transfer from Mr Camm to Mr Schmierer, Mr Schmierer, so the submission ran, never obtained a legal interest in the land. Immediately before the land was transferred to Linke in February 1996, Mr Camm retained the legal interest and was the transferor of the property. If this analysis be correct, so it was submitted, Mr Camm had transferred his interest in the property before his second bankruptcy and the trustees, in that second bankruptcy, could have resort to s 121 of the Act with a view to having the transaction voided. 8 It is important, in dealing with the trustees' principal application, to bear in mind the terms of O 29 of the Federal Court Rules under which the order was made that two questions should be determined separately before any trial. Order 29 r 2 confers a broad discretionary power on the Court to make such an order. By O 29 rr 3 and 4 it is provided that, if questions posed pursuant to rule 2 are answered, consequential orders (including final orders), may be made. 9 This procedure has proved to be useful in resolving some cases where the answers may obviate the need for a trial or substantially narrow the issues to be resolved at trial. When an application is made for an order under O 29 r 2, the Court must do its best, having regard to the pleadings and the submissions of the parties, to predict whether the resolution of the proposed questions will have the desired outcome. This is not the first, nor will it be the last, case in which such a prediction has been found to be wrong or wrong in part. As already noted, the position is that I have been able to answer one question but not the other. The reasons which the trustees seek to have recalled relate to the unanswered question. 10 There can be no doubt that the Court has power to recall and reconsider reasons which it has given. That power must be exercised sparingly and in the interests of justice. In Nutrasweet Australia Pty Ltd v Ajinomoto Co Inc (No 3) (2007) 73 IPR 282 at [12] Finkelstein J said: "The power to reopen a case is not in doubt. It is, however, a power that must be exercised sparingly, having regard to the public interest in maintaining the finality of litigation. Smith v New South Wales Bar Association (No 2) (1992) 176 CLR 256 at 265. Still, there are occasions in which it is both appropriate and fair to allow further argument and even further evidence in a case before it is finally disposed of. For example, if it turns out that a court finds that the unsuccessful party has not had the clear and adequate opportunity to argue its case, there might be a denial of procedural fairness if the case were not reopened: Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 at 309. It would also be appropriate to reopen if it were clear that the court had proceeded "on a misapprehension as to the facts or the law", especially where the misapprehension was the result of accident or oversight and not the fault of the party seeking to reopen the case: De L v Director-General, NSW Department of Community Services (No 2) (1997) 190 CLR 207." 11 This is not a case in which final orders have been pronounced or one in which a trial on all issues has been completed and the Court has sought the submissions of parties as to what orders should be made consistently with published reasons for judgment. Nonetheless, the approach adopted by Finkelstein J in Nutrasweet provides useful general guidance as to what course I should now adopt: cf Wenkart v Pantzer [2008] FCA 1387 at [7]. 12 In seeking to answer question (a) I found it necessary to undertake my own research on a number of issues and, especially, on the operation of the Land Title Act. None of the provisions of this Act to which I referred in my earlier reasons was relied on by the parties in submissions. Most significantly my attention was not directed to s 115, and its potential relevance did not occur to me when I reviewed the legislation. 13 I did not overlook s 58(2) of the Act. I identified it as a potentially relevant part of s 58 and set it out in my earlier reasons at [22]. I did not take it into account in my subsequent analysis because it did not appear to me that it was engaged in the present circumstances. The Land Title Act requires the transmission of property to be registered before a transfer of legal title is effective. It is by no means as obvious that s 115 of that Act (whether read alone or together with the other provisions relied on by the trustees) can be characterised as an enabling provision of the kind comprehended by s 58(2) of the Act. I express no concluded view on the point because it was not argued on the first occasion and was not developed in any detail at the most recent hearing. 14 This is why I proceeded on the basis that s 58(1) had effected a transfer of Mr Camm's legal interest in the property to Mr Schmierer on 29 November 1995. 15 Had the issue been argued and had I determined that s 58(2) had been engaged, such a determination would not necessarily have led to the conclusion that s 121 of the Act was available to the trustees in Mr Camm's second bankruptcy. It was not in dispute that Mr Camm's name appeared on the instrument of transfer as the transferor when the instrument was lodged and registered in February 1996. An issue remains, however, as to the capacity in which Mr Camm acted at the time of the transfer to Linke. Both parties accept that he acted with the approval of Mr Schmierer. On one view he may be said to have acted as Mr Schmierer's agent. This appears to have been the view of counsel for Linke at the first hearing when they submitted that the person who transferred the interest in the property could only have been Mr Schmierer. Alternatively, it might be said that Mr Camm acted in his own name and right with the consent of the trustee. These issues were not developed at the first hearing and could not have been having regard to the limited scope of the agreed facts and the contents of the small bundle of tendered documents. Their significance appears not to have occurred to either party when question (a) was framed and submissions were made as to how it should be answered. 16 Relevantly, the procedural position may be summarised as follows. In an effort to avoid a trial on all or some of the issues in dispute between them, the parties framed two questions and applied, successfully, to have those questions decided separately and before all other questions. I have been able to answer one of those questions. In dealing with the other I found it necessary to examine legislation and authorities which had not been referred to or considered by the parties. That examination led me to the view that I was unable to answer the second question. My analysis of the legal position has exposed a need for further evidence and argument to be considered. 17 The interests of justice require that a full trial take place. The attempt to avoid that necessity has failed. The power of the Court to make final orders dispositive of the proceeding is dependant on an answer being given to the preliminary question: see O 29 rr 3 and 4. Even then, the power is discretionary and, for the reasons which follow, Linke's submission that final orders should be made should be rejected. 18 The present circumstances do not require the recalling or reconsideration of my earlier reasons. Those reasons do no more than expose the need for a trial of all issues. The trustees have not had an adequate opportunity to argue their full case and would, in my view, be denied procedural fairness if they did not have the opportunity to do so. This is not a case in which applicants are seeking to "have another go" having fully but unsuccessfully argued their case. Nor is it a case in which an unsuccessful party is seeking to compromise the principle of finality in litigation. 19 The matter should proceed to trial in the normal way. 20 Save for the answering of question (b), the case should proceed, as it would have done had the examination of preliminary questions not occurred. I will hear the parties on what directions should be made with a view to readying the matter for trial. 21 Senior counsel for the trustees foreshadowed an application by them to amend their application so that it will apply to additional property in which Mr Camm is alleged to have or have had an interest. Any application for amendment can be considered at the directions hearing, I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey.