George v Fletcher [2008] FCA 1848 | Case summary

Leave to appeal 14 Although s 24(1A) Federal Court Act does not require any particular test to be satisfied (Lomas v Winton Shire Council [2002] FCAFC 413 at [15]), issues relevant to the exercise of discretion by the Court in granting leave to appeal are whether the judgment the subject of the appeal was attended by sufficient doubt to warrant it being reconsidered, and whether substantial injustice would result if leave were refused, supposing the decision to be wrong: Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397, at 398-399, Telstra Corporation Ltd v AAPT Ltd [1997] 38 IPR 539 at 542, Harrington v Rich [2008] FCAFC 61 at [25]. 15 The applicant in this case is self-represented, and as is sometimes the case with self-represented litigants has adopted a "scatter-gun" approach to her case. The applicant has cited a significant number of grounds in support of her application for leave to appeal. However in my view key questions are those I have stated in the previous paragraph, and in that light it is clear that the application for leave to appeal must be dismissed because I find no fault in his Honour's reasoning. 16 The decision of the Federal Magistrate was to refuse an application for a stay of proceedings listed for hearing on 8 December 2008. The applicant's grounds in support of her application are largely irrelevant to that decision. In my view the only grounds of any substance - or relevance - to the application before me are: a. whether the Federal Magistrate erred in refusing to stay the proceedings because Ms George had earlier in 2008 commenced other proceedings in the Supreme Court of Queensland; and b. whether the Federal Magistrate erred in refusing to stay the proceedings because Ms George could not be ready for trial commencing 8 December 2008. 17 In relation to the Supreme Court proceedings, the applicant has, in my view, misunderstood the basis upon which his Honour found that the Federal Magistrates Court had exclusive jurisdiction to hear the matter which the applicant sought to bring before the Supreme Court of Queensland. I also consider that Ms George has misunderstood the relevance of principles articulated in Fencott v Muller and Philip Morris to these proceedings. 18 Section 27 Bankruptcy Act provides: (1) The Federal Court and the Federal Magistrates Court have concurrent jurisdiction in bankruptcy, and that jurisdiction is exclusive of the jurisdiction of all courts other than: (a) the jurisdiction of the High Court under section 75 of the Constitution; or (b) the jurisdiction of the Family Court under section 35 or 35A of this Act. 19 In Meriton Apartments in discussing the jurisdiction of the federal courts under s 27(1), Greenwood J observed: [111] In Scott v Bagshaw (2000) 99 FCR 573, the Full Court of this court again considered the source and scope of the court's jurisdiction in bankruptcy in proceedings in which the trustee of a family trust asserted an equitable charge over three properties in support of a loan made to the registered proprietors, a husband and wife. The trustees in bankruptcy of the estate of the husband denied any entitlement in the appellant trustee to an equitable mortgage of Torrens title land and contended that the appellant's claim related to a provable debt under s 82 of the Bankruptcy Act. The appellant required leave under s 58(3)(b) to commence the proceeding. [112] Applying the earlier authorities, the court described s 27 as the "seminal" source of the court's jurisdiction in bankruptcy [17]. The court held that s 27 fell to be understood in context and that s 31(1)(f) elucidated what the drafter "had in mind as falling within 'bankruptcy' in s 27(1) as defined in s 5(1)" [18]. Thus, applications declaring for or against the title of the trustee to any property would be encompassed within the s 27 concept of jurisdiction in bankruptcy. The court distinguished Sutherland v Brien on the ground that s 31(1)(f) made it plain that as against the trustees in bankruptcy, the proceeding before the Full Court was within s 27 as a proceeding under or by virtue of the Bankruptcy Act. In Green v Schneller [2001] NSWSC 897, Barrett J after considering Sutherland v Brien and Scott v Bagshaw made this observation at [22]: When persons become bankrupt, it is necessary for courts to determine all kinds of questions about the consequences. Many of those questions will depend for their answers on the provisions of the Bankruptcy Act. One class of such questions relates to the nature of the rights of persons to property. Austin J held that nothing in the Bankruptcy Act precludes the exercise in such cases of the well established jurisdiction of courts other than those mentioned in s 27(1) "to determine and declare rights to property and make orders as to its destination". But that undoubted jurisdiction will yield to any aspect of the jurisdiction for determination and declaration of such rights which the Bankruptcy Act itself places in the hands of s 27(1) courts. In Scott v Bagshaw the Full Federal Court noted that among the matters so placed in the hands of those courts, is "applications to declare for or against the title of the trustee to any property". Because this is one of the matters s 31(1) of the Act requires "the Court" to hear an open court, it is identified as a matter within the definition of "bankruptcy" and thereby seen to be within s 27(1). That aspect of the general jurisdiction "to determine and declare rights of property and to make orders as to its destination" which entails "applications to declare for or against the title of the trustee to any property" is accordingly reposed in s 27(1) courts alone. [113] In the result, Barrett J concluded the Supreme Court of New South Wales did not have jurisdiction to entertain a motion for leave pursuant to s 58(3)(b) to continue the proceeding. 20 The facts of this case bear strong similarities to those in Scott v Bagshaw. It appears that Ms George, who is a bankrupt, has sought to commence proceedings in the Supreme Court of Queensland, claiming that property which would otherwise fall within the terms of her bankruptcy, and to which accordingly her trustee in bankruptcy would have title, is actually the subject of a separate trust, and therefore outside the terms of her bankruptcy. In my view, this is clearly an "application to declare for or against the title of the trustee to any property" for the purposes of s 31(1)(f) Bankruptcy Act. To paraphrase the words of the Full Court in Scott v Bagshaw at 577: …the undoubted effect of an order being made in the terms sought by [Ms George] would be that a declaration would be made against the title of the [trustee in bankruptcy]. Upon the [trustee in bankruptcy] becoming trustee, the title to the properties…became vested in them: subs 58(1) and s 132 of the Act. The consequence of any such order must therefore be that it would have a necessary adverse effect on the title of the [trustee in bankruptcy] to the extent that it established title in [Ms George as trustee]. That is a matter that falls within the jurisdiction in bankruptcy. 21 Accordingly I see no error in his Honour's findings as to the exclusive jurisdiction of the Federal Magistrates Court and the Federal Court to hear any dispute as to title in relation to the Landing Place property or any other property which prima facie appears to be "property of the bankrupt" within the meaning of s 5 Bankruptcy Act. The Federal Magistrate was correct in my view in finding commonality of issues between the proceedings in the Federal Magistrates Court and the Supreme Court of Queensland. The substantive proceedings commenced by the trustee in bankruptcy in the Federal Magistrates Court were properly commenced in that Court. The fact that Ms George had brought proceedings in the Supreme Court of Queensland is, therefore, no reason to justify a stay of proceedings properly commenced by the trustee in bankruptcy in the Federal Magistrates Court. 22 In relation to Ms George's submissions concerning her lack of preparedness for trial commencing 8 December 2008, I understand that the relevant issues before his Honour were as to, inter alia, further discovery and further issues to be raised by Ms George. Ms George has raised before me other matters including as to calling witnesses and adducing additional evidence. However in relation to the decision of his Honour I am unable to identify error in his Honour's approach to the applicant's conduct of her case. Notwithstanding that the applicant claimed that she would not be able to afford to refile the material filed in the Supreme Court of Queensland in the Federal Magistrates Court, I note that his Honour ordered in para 5 of his orders of 18 November 2008 that any documents filed in the Supreme Court proceedings be taken as filed in this proceeding. Whether or not to grant an adjournment of a hearing for lack of readiness of either party is a matter of discretion for the judge, and I am unable to find that his Honour's erred as explained in House v R (1936) 55 CLR 499 in light of his Honour's findings including: · the fact that the substantive proceedings raised substantially the same issues that had been the subject of pleadings and other interlocutory steps in the Supreme Court proceedings (at [20]); · the fact that the applicant's cause of action notionally arose at the time of her bankruptcy (at [20]); · the fact that the applicant had time to prepare her case (at [21]); · the fact that evidence in the Supreme Court proceedings could be used in the substantive proceedings (at [21]); · the fact that the rights of the parties had been in contest for some time and the costs to creditors were escalating (at [26]); · the fact that the bankruptcy of the applicant had almost reached its third anniversary (at [27]). 23 In this respect I note similar findings of Weinberg J in Goldberg v Morrow [2004] FCA 1490 at [36]. 24 In conclusion, the decision of his Honour is not attended by such doubt as to warrant it being reconsidered. Accordingly, leave to appeal is dismissed.

George v Fletcher

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