Garrett v Duncan

REASONS FOR JUDGMENT 1 The applicant, Mr Andrew Garrett, commenced this proceeding by originating application dated 25 July 2014. He sought an order that the surplus of the bankrupt estate of his former wife be paid to him in his capacity as joint trustee of a family trust. Various forms of interlocutory relief were also sought. Mr Garrett filed a statement of claim on the same day in which he made various allegations relating to the conduct of the respondent, Mr Stephen Duncan, who was the trustee of Mr Garrett's former wife's bankrupt estate. A further interlocutory application was filed on 12 August 2014. 2 On 2 September 2014 Mr Duncan filed an affidavit in support of applications that the Court should make orders under s 20A of the Federal Court of Australia Act 1976 (Cth) ("the Act") and Rule 26.01 of the Federal Court Rules 2011 ("the Rules") terminating the proceeding without an oral hearing. 3 In his affidavit Mr Duncan confirmed that he had acted as the trustee of Mrs Garrett's bankrupt estate since late 2004. He outlined extensive litigation that ensued in this Court and the South Australian Supreme Court relating to Mr Garrett's affairs and those of his wife. It is not necessary for present purposes to outline this litigation in great detail. It is sufficient to record that the litigation related, in part, to the bankrupt estates of both Mr Garrett and his former wife. 4 The litigation was brought to an end by a settlement agreement which was entered into in March 2009. The parties to the settlement included Mr Garrett and Mr Duncan (both personally and in his capacity as trustee for the bankrupt estate of Mrs Garrett). Both Mr Garrett and Mr Duncan were legally represented during the negotiations which led to the settlement. 5 The settlement agreement contained a release clause pursuant to which Mr Garrett unconditionally released Mr Duncan in all matters arising from the litigation and the administration by Mr Duncan of the bankrupt estate of Mrs Garrett. Mr Duncan granted a reciprocal release to Mr Garrett. Mr Garrett covenanted not to make any further claims against Mr Duncan which arose directly or indirectly out of or related to Mr Duncan's administration of the bankrupt estate of Mrs Garrett. 6 In his affidavit Mr Duncan deposed that the administration of Mrs Garrett's bankrupt estate had been finalised and that there were no funds available to him in his capacity as trustee which might be available for use in defending the proceeding. In order to avoid unnecessary expense he sought to be relieved of any obligation to file a notice of appearance or to attend any oral hearing. Mr Duncan said that he was "not aware of any matter which could vary, qualify or vitiate the settlement agreement". He expressed the opinion that it remained binding. 7 On 5 September 2014 I called the matter on for mention but did not require Mr Duncan to attend. At the hearing Mr Garrett advised the Court that he had engaged the services of a solicitor. In the circumstances I considered it appropriate to give Mr Garrett the opportunity, if he chose, to file an answering affidavit on or before 26 September 2014. He did not do so and has not since done so. I also decided to hear counsel for Mr Garrett before making a decision on Mr Duncan's application. 8 A number of other adjournments followed in order that Mr Garrett could obtain further advice and that the hearing of Mr Duncan's application could coincide with that of the trustee of Mr Garrett's bankrupt estate in proceeding VID 304 of 2014. 9 Given the nature of Mr Duncan's application he was not represented before me this morning. I did, however, accord Mr Garrett the opportunity to make any submissions he wished in relation to Mr Duncan's applications under s 20A of the Act and rule 26.01(1) of the Rules. Mr Garrett advised the Court that he relied on the same submissions that he had earlier made in the proceeding VID 304 of 2014. In substance he sought a 12 week adjournment in order to prepare a response to Mr Duncan's application. I reject that application for the same reasons which I gave in VID 304 of 2014 for rejecting a similar application: see Garrett v Macks [2014] FCA 1259. 10 Section 20A of the Act applies in relation to civil matters in the original jurisdiction of the Court. It provides that a judge may deal with a matter without an oral hearing if satisfied, among other things, that the matter is frivolous or vexatious or that, because of absence of the factual issues and the scope for the legal issues to be dealt with adequately by written submissions, an oral hearing would not significantly aid the determination of the matters in dispute. Rule 26.01(1) provides that a party may apply to the Court for an order that summary judgment be given against another party because the applicant has no reasonable prospect of successfully prosecuting the proceeding, because the proceeding is frivolous or vexatious or because the proceeding is an abuse of process of the Court. 11 Section 20A of the Act serves the purpose of avoiding the time and expense associated with an oral hearing in circumstances where an application is unmeritorious or if the outcome turns on legal argument and the material facts are not in dispute. The section was incorporated in the Act at the same time as Part VB was added. That Part included ss 37M and 37N which identified the over-arching purpose of the civil practice and procedure provisions of the Court to be the just resolution of disputes according to law and "as quickly, inexpensively and efficiently as possible." One of the objectives of the amendments was to secure "the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute": see s 37M(2)(e). 12 In the present case Mr Duncan has long since completed performing his duties as trustee of Mrs Garrett's bankrupt estate. The estate has no assets which are available to Mr Duncan to fund a defence of the proceeding. He should not be required to do so if a clear legal basis exists for summarily terminating the proceeding. 13 In my view, such a basis exists. That basis is that the releases, contained in the settlement agreement, provide Mr Duncan with a complete defence to the proceeding brought by Mr Garrett even assuming that Mr Garrett has standing to pursue Mr Duncan in relation to Mr Duncan's administration of Mrs Garrett's estate. I have explained the legal basis upon which such a defence of accord and satisfaction arises from the terms of the agreement: see Garrett v Macks. I do not repeat what I have there said. 14 Mr Duncan's application for the Court to deal with the proceeding without an oral hearing should be granted. Mr Garrett's application has no reasonable prospects of success and should be dismissed with costs. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey.