Solicitors:
Neil Scott Lawyers (Applicants)
File Number(s): 2016/273397
[2]
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
[3]
Judgment
LEEMING JA: Two directors of a corporate trustee commenced proceedings in the Equity Division in September 2016 seeking an order under s 81 of the Trustee Act 1925 (NSW) varying the vesting date of a trust established in 1974. Without a variation, the trust property will vest no later than 2024. There is evidence that the trustee holds substantial real property, and that vesting will give rise to a large CGT liability which, if the vesting date is extended, will be deferred.
On the first return date, the matter was placed by the Duty Judge in consultation with the President in the Registrar of the Court of Appeal's list. The Duty Judge did not himself make an order under UCPR r 1.21 transferring the matter to the Court of Appeal. The Duty Judge advised senior counsel for the plaintiffs that he had spoken with the President, and there followed this exchange:
"HIS HONOUR: ... As I said, the Court of Appeal may look at the matter and say, 'No, for other reasons we think there should be a first instance trial.'
BURTON: Yes.
HIS HONOUR: I think that depends on whether they perceive or accept or don't accept the proposition that there is really no scope for factual issues that need to be determined. What they might do, there is another process, they may say, 'We would require a contradictor before we decide whether it has to go back or not.' The President made it clear to me that there is a possibility that they might refer it back to the [Equity] Division. That is understandable that that might happen.
BURTON: The parties understand they are in the Court's hands on this."
The matter came before the Registrar of the Court of Appeal on 10 October 2016. On that day, the plaintiffs filed a notice of motion, paragraph 1 of which seeks orders that the proceeding be transferred to the Court of Appeal. The remaining paragraphs are directed to other procedural aspects of the litigation, including the appointment of a contradictor. The Registrar directed that a written submission be supplied, with a view to having the procedural matters "determined on written submissions or on hearing as the Court considered appropriate". Submissions were filed on 19 October 2016.
I am determining paragraph 1 of the notice of motion. I am doing so on the papers and with the benefit of the written submission directed by the Registrar.
The motion invokes UCPR r 1.21 and ss 44 and 46(2) of the Supreme Court Act 1970 (NSW). UCPR r 1.21(1) authorises the Court in a Division to remove proceedings into the Court of Appeal, if it makes an order under r 28.2 for the decision of a question of law, or if, having stated the question to be decided or determined, it is satisfied that special circumstances exist. UCPR r 1.21(2) authorises the Court of Appeal to remit the whole or part of proceedings removed to it under subrule (1) back to a Division. The scheme complements the longstanding provisions of s 51(4) and (5) of the Supreme Court Act to remove a proceeding to the Court of Appeal, in which in all cases (save for when a question of law has been stated for separate determination) there is a requirement of special circumstances: see for example University of New South Wales v McGuirk [2008] NSWSC 369 at [11]. That in turn reflects the fact that ordinarily matters will be determined in the first instance by the Court in a Division: Barton v Berman [1980] 1 NSWLR 63 at 67 (Hope JA, with whom Hutley and Glass JJA agreed).
Section 44 of the Supreme Court Act empowers the Court of Appeal, "in proceedings before it", to exercise every power, jurisdiction or authority of the Court. The applicants invite this Court to exercise the removal power conferred by r 1.21(1). If that be correct, then s 46(2)(b) would authorise a single Judge of Appeal to exercise the powers of the Court of Appeal in a case such as this.
But I doubt that s 44 works in the way seemingly envisaged by the notice of motion. The premise of the power in s 44 is that there are proceedings before the Court of Appeal. I am doubtful that s 44 can be used together with r 1.21(1) to achieve the result that there are proceedings in the Court of Appeal when, at the time the power is exercised, proceedings have not been removed into the Court of Appeal. That is not to say that power does not exist (either in this Court's inherent jurisdiction or, in the particular facts of this case, under s 51(5) of the Supreme Court Act, which would turn on whether the summons seeking orders under the Trustee Act is a proceeding "by way of appeal or otherwise under any Act"). It is not necessary to resolve any of these questions. Had I been of the view that this was an appropriate proceeding to be determined in this Court, I would have followed the course adopted by Basten JA in similar circumstances in Chand v Lifestyle Homes NSW Pty Ltd [2010] NSWCA 135 and requested the Chief Judge to make an order under r 1.21.
Assuming there is power, it is clear that only in special circumstances should the power be exercised. It is also clear that I must seek to give effect to the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in the proceeding: Civil Procedure Act 2005 (NSW), s 56.
The plaintiffs' written submission helpfully exposes the issues to which the transfer application is directed. The difficulty arises because it is said that there is at least a risk that there is no power to accede to the underlying application because of what has been said in Re Dion Investments Pty Ltd (2014) 87 NSWLR 753; [2014] NSWCA 367. In part, it is said that the plaintiffs wish to contend that Re Dion was wrongly decided. In part, it is said that Re Dion should not be read broadly so as to prevent the amendment to the trust deed which is sought. It is also said that there are other bases on which, notwithstanding Re Dion, the application may be granted.
The submissions candidly and properly acknowledge that the defendant trustee has as its directors the two plaintiffs, for which reason there is no contradictor. The submissions stated that there was no contradictor in Stein v Sybmore Holdings Pty Ltd [2006] NSWSC 1004 nor, so far as appears from the report, in Re Dion itself. There is evidence that if a contradictor is required, the plaintiffs have approached the Australian Taxation Office, which is considering the matter, and they have contacted a solicitor, Mr Jeremy Glass, who has expertise in this area, and who has indicated his provisional acceptance.
It is said that that there will be few or no contested facts, and that the application gives rise substantially to pure questions of law. There is, so far as I can see, no particular urgency. The matter needs only to be determined in the next 7 years.
I consider that the proceeding should not be transferred to this Court.
First, in my view nothing should be done until the plaintiffs take steps to supply a contradictor, or else determine that their application shall proceed, for better or worse, without one. I do not see why the Court of Appeal should determine the application, and perhaps difficult questions as to the correctness and extent of Re Dion, as well as potentially questions of discretion, before even the plaintiffs decide whether there is to be a contradictor. For a very recent example, this Court in Wilkie v Brown [2016] NSWCA 128 declined to determine whether what had been held in Guss v Veenhuizen (No 2) (1976) 136 CLR 47 continued to apply to the current legislative regime, in light of the fact that there was no contradictor: see at [6] and [49] (Beazley P, with whom McColl and Gleeson JJA agreed).
Secondly, I am not persuaded that there are special circumstances to warrant taking the unusual course of denying the Court of Appeal the benefit of a judgment at first instance. Indeed, I am sceptical that there will in the long run be any advantage in the matter leap-frogging a hearing at first instance. After all, one of the submissions the plaintiffs wish to make is that the relief they seek is not precluded by Re Dion. Thus, it may be that not all of the questions flagged in the written submission need ever be determined. As best I can see, a hearing at first instance with no disputed facts could scarcely take more than ½ a day. If sufficient relief was not obtained at first instance, then it would seem that it would be straightforward to establish that there was an appeal as of right (alternatively, if that is not so, then there would be at the least a powerful case for a concurrent hearing of an application for leave and an appeal).
Certainly, I do not see there is a strong case made out to deny this Court the benefit of a judgment at first instance.
There is a further matter which supports that conclusion. It is that, to the extent that it is said that Re Dion is wrong, it would be of assistance making the decision whether to sit a court constituted by 5 judges to have the reasons of a judge at first instance.
For those reasons, I will dismiss paragraph 1 of the notice of motion filed 10 October 2016. I make no order as to costs, with the intent that the costs of that paragraph of the notice of motion may be the subject of any general costs order ultimately made for the plaintiffs' costs of this proceeding. I direct that the proceedings be listed at a date to be fixed before a Registrar in the Equity Division.
[4]
Amendments
22 November 2016 - Paragraph 5 - "removed to" changed to "removed to it"
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 22 November 2016