GE v River Island Clothing Pty Limited

Judgment (ex tempore) 1HIS HONOUR: By originating process filed on 24 April 2013, John Vouris and Chad Rapsey, in their capacity as former administrators of three companies, Lime Gourmet Pizza Bar (Charlestown) Pty Limited, Lime Gourmet Pizza Bar (Darby Street) Pty Limited, and Lime Gourmet Pizza Bar (Hamilton) Pty Limited, sought orders fixing their remuneration for acting as administrators of those three companies and that the defendants, being those companies, pay their remuneration and expenses in an amount approved by the Court. On 22 May 2013, a registrar made an order fixing the remuneration of the plaintiffs. On 9 September 2013, Black J, on the defendants' motion, made an order setting aside the registrar's order, essentially on the grounds that the companies had not been given proper notice of the application [see [2013] NSWSC 1322]. The result of that was that the originating process claiming the orders fixing remuneration remains on foot. 2By notice of motion filed on 25 November 2013, the defendants seek an order, purportedly pursuant to the (NSW) Civil Procedure Act 2005, s 146, transferring the proceeding to the District Court. By interlocutory process filed on 9 December 2013, the plaintiffs seek an order pursuant to Civil Procedure Act, s 140(1), removing certain proceedings in the District Court into this Court. 3The proceedings in the District Court were commenced by the present defendants by statement of claim on 14 October 2013 against Mr Vouris and Mr Rapsey claiming damages, inter alia, pursuant to the (Cth) Personal Property Securities Act 2009, s 271, and the (Cth) Competition and Consumer Act 2010, s 236, for alleged breaches of duties said to arise under Part 5.3A of the (Cth) Corporations Act 2001, and, alternatively at general law, for what is said to be an unlawful lodgement of security interests under the Personal Property Securities Act, for misleading and deceptive conduct under the Competition and Consumer Act, and for defamation. 4It is clear, and neither party appears to dispute, that questions will arise in both proceedings as to the validity of the appointment of the administrators. In the affidavit in support of their interlocutory process filed in these proceedings, the plaintiffs also seek leave to amend the summons by adding claims for relief under s 447A, s 447C and s 1322 of the Corporations Act. It is not seriously, if at all, in dispute that the proceedings presently in the District Court and the proceedings presently in this Court should be heard together. What is in dispute is the Court in which they should be heard, the plaintiffs contending that all proceedings should be heard in this Court, and the defendants that all proceedings should be heard in the District Court. 5The defendants' application is purportedly brought pursuant to Civil Procedure Act, s 146. However, express provision is made for the transfer of proceedings under the Corporations Act, s 1337H of which applies to a proceeding in a court with respect to a civil matter arising under the Corporations legislation where the proceeding is in, inter alia, a State Supreme Court. Subsection (2) provides that if it appears to the transferor court that, having regard to the interests of justice, it is more appropriate for the proceeding or an application in it to be determined by another court that has jurisdiction in the matters for determination in the relevant proceeding or application, the transferor court may transfer the relevant proceeding or application to that other court. 6Section 1337E provides that, subject to relevant exceptions, jurisdiction is conferred on lower courts of each State with respect to civil matters, other than superior court matters, arising under the Corporations legislation. Superior court matters are, in short, matters in which the legislation gives jurisdiction only to a "Court", as distinct from a "court". Proceedings under s 447A, s 447C, and s 449E are proceedings in which jurisdiction is given only to a Court - that is to say, they are superior court proceedings. The District Court does not have jurisdiction in respect of those matters. Accordingly, it would not be open to the Court to transfer those proceedings to the District Court under s 1337H, because it is not a court that has jurisdiction in the matters for determination in the relevant proceeding. 7If it be the case - which, in the light of the fact that s 1337H may be thought to cover the field, is doubtful - that Civil Procedure Act, s 146, is available, it provides that if the Supreme Court is satisfied in relation to proceedings before it that the proceedings could properly have been commenced in the District Court it may order that the proceedings be transferred to the District Court. Once the proceedings are transferred, s 149 provides, as Mr Moshos has emphasised, that the lower court has and may exercise all the jurisdiction of the higher court in relation to any proceedings in which a transfer order relates. However, before making the order, the Supreme Court must be satisfied that the proceedings could properly have been commenced in the District Court, and the expanded jurisdiction given by s 149 is irrelevant to that consideration at that stage [see GE v River Island Clothing Pty Limited [2001] NSWSC 935]. As the District Court does not have jurisdiction to hear proceedings under the Corporations Act, s 447A, s 447C or s 449E, these proceedings could not have been commenced in the District Court and, accordingly, s 146 is not available. 8Mr Moshos has argued that the administrators, being only former administrators, have a claim only in debt, and not a claim under s 449E. There are a number of answers to that. The first is that they have a claim under s 447A to have Part 5.3A apply as if they remained administrators at the time of making the application for remuneration. They also have a claim under s 447C for a declaration as to the validity of their appointment. In any event, even if, strictly speaking, the claim were one merely for debt and not for fixing of remuneration, this Court has expertise in the assessment and fixing of the remuneration of insolvency practitioners, as it has in proceedings under s 447A, s 447C and s 449E, and it would be appropriate in any event that the proceedings be instituted and prosecuted in this court. 9It therefore seems to me that it is not possible to transfer the proceedings in this court to the District Court. 10As to the removal of the District Court proceedings into this Court, I have considered whether s 140 is applicable to proceedings under the Corporations Act. Unlike s 1337H of the Corporations Act, which makes provision for the transfer of proceedings by a court in which Corporations proceedings are pending, nothing in the Corporations Act makes provision for removal of proceedings to a higher Court. 11Under s 1337K, the lower court can transfer proceedings pending in it to a superior Court, but that section does not authorise the superior Court to remove them. However, it is clear from s 1337A that Part 9.6A Division 1, which deals with the jurisdiction and procedure of courts in civil matters, while exclusive of the jurisdiction of the (NSW) Jurisdiction of Courts (Cross-Vesting) Act 1987 and s 39B of the (Cth) Judiciary Act 1903, is not intended otherwise to be exclusive of laws of procedure of courts having jurisdiction in corporations proceedings. 12Given those terms of s 1337A, and given that, unlike s 1337H which makes provision in respect of the transfer proceedings by a court in which proceedings are pending, the Division should not be taken as intended to exclude the jurisdiction of the Supreme Courts of the States in the nature of supervisory jurisdiction over the inferior courts of those States, including the power to remove proceedings where appropriate. 13In my view therefore, s 140 is available to remove the proceedings into this Court. 14On the plaintiffs' interlocutory process filed on 9 December 2013, the Court orders that: (1)Pursuant to Civil Procedure Act, s 140(1), proceedings numbered 2013/308053 in the District Court of New South Wales at Sydney be removed from that Court into this Court. (2)The removed proceedings and these proceedings be heard together and the evidence in one be evidence in the other. (3)Costs of the interlocutory process be costs in the proceedings. 15On the defendants' notice of motion filed 25 November 2013, the Court orders that: (4)The notice of motion be dismissed. (5)No order as to costs, to the intent that each party bear its own costs.