Mulhern v Pearce

REASONS FOR JUDGMENT 1 Before the Court is an interim application by the trustees dated 24 September 2013 that the proceeding be transferred to the Queensland District Registry of the Court. 2 The substantive proceeding was commenced in the New South Wales District Registry on 12 September 2013 and the applicant, Mr Mulhern, seeks the following orders: 1. Pursuant to s 153B of the Bankruptcy Act 1966 (Cth) that the sequestration order made against the applicant on 3 February 2010 be annulled or in the alternative set aside. 2. Pursuant to rule 132 of the Federal Court Rules 2011, the bankruptcy of Richard Mulhern be discharged forthwith. 3. In the alternative, the Court orders the trustee discharge Michael Richard Mulhern from his bankruptcy. 4. Further or in the alternative, the Court orders the trustee return to Mr Mulhern his Irish passport and US Greencard. 5. Such further and other orders as the Court considers appropriate. 3 A notice of opposition to the application was filed by the trustees on 24 September 2013 as follows: 1. The application for an annulment is vexatious and an abuse of process and is liable to be dismissed pursuant to the Federal Court Rules 2011. 2. Order 2 in the application for an annulment seeks relief pursuant to rule 132 of the Federal Court Rules 2011 in circumstances in which no such rule exists. 3. The Court has no jurisdiction to make the order sought in Order 3 of the application for annulment. 4. The Application so far as it purports to join the Second and Third respondents is a nullity because no leave of the Court has been sought authorising the commencement of these proceedings against the Second and Third respondents both of whom are undischarged bankrupts. 5. The Application so far as it purports to seek orders for permission for overseas travel or the return of passports is vexatious and an abuse of process and is liable to be dismissed pursuant to the Federal Court Rules 2011. 6. The Application for annulment is an abuse of process in consequence of the fact that the applicant is in breach of the order made by Burnett FM on 25 March 2013 because of the bankrupt's failure to pay $68,158.77 as security for costs. 7. The Application for annulment is an abuse of process and vexatious because there has been no relevant change in circumstances of the bankrupt since the annulment application brought by him in Application No. SYG 2805 of 2012. 4 I do not need to determine the grounds of the application or the grounds of opposition for the purposes of the present interim application. It is sufficient to note the substance of Mr Mulhern's application and the substance of the notice of opposition to that application. The merits of those matters are not before me today. 5 On 24 September 2013 the trustees filed the interim application seeking an order that the proceeding be transferred to the Queensland District Registry. The interim application was preceded by letters dated 19 September 2013 and 23 September 2013 from the trustees' solicitors to the then solicitors for Mr Mulhern. 6 The matter came before the duty judge and procedural orders in relation to the interim application were made on 2 October 2013. The orders then made were that Mr Mulhern file and serve any further affidavit upon which he sought to rely by 16 October 2013 and the trustees file and serve any further evidence in reply by 21 October 2013. The interim application was adjourned for hearing before me originally at 9:30 am on 23 October 2013. That listing was vacated and the interim application set down for hearing at 2:15 pm today. The solicitors for the trustees were granted leave to appear on the hearing of the interim application by telephone. 7 The evidence filed which I have read and taken into account is as follows: for the applicant, an affidavit sworn by Mr Mulhern in the substantive proceedings dated and filed 12 September 2013. I also have before me and I have read a letter Mr Mulhern forwarded to the Registry on 24 October 2013. for the trustees, the affidavit of Mark William Pearce sworn and filed on 24 September 2013; the affidavit of Paul Gerard Lynch sworn and filed on 27 September 2013; and an affidavit of Neil John Abercrombie sworn on 29 October 2013. There was also an affidavit of Neal John Abercrombie sworn on 25 September 2013 annexing correspondence and a copy of a judgment in SYG 2805 of 2012 in the Federal Magistrates Court. 8 The evidence establishes that the judgment upon which the bankruptcy proceedings are founded was given by the Supreme Court of Queensland; that the proceedings concerning substituted service of the bankruptcy notices and creditors' petitions upon which the bankruptcy proceedings are founded occurred in the Brisbane Registry of the Federal Circuit Court; most of the many other proceedings concerning the administration of the estate of the bankrupt have been instituted by either the trustees or by the bankrupt in the Queensland District Registry of this Court or the Federal Circuit Court or the proceedings have been transferred to those courts: Mr Mulhern in his letter of 24 October 2013 refers to an unlawful act by which he was purportedly made a bankrupt and, relevant for present purposes, that he has made approximately 7 previous applications in the Federal Court for annulment pursuant to s 153B; the trustees' solicitors for all of the proceedings have their offices in Brisbane; the trustees' office is in Brisbane and both of the trustees are resident in Brisbane; Mr Mulhern has in the past attended court and been in Brisbane although I proceed on the basis that he is now resident in New South Wales. 9 Other matters which are established are that the decisions of the trustees not to permit Mr Mulhern to undertake overseas travel were made in Brisbane; the public examination of the bankrupt, which is not yet complete, took place in the Federal Court in Brisbane; according to the evidence of the trustees they intend to cross-examine Mr Mulhern and to call a number of witnesses to give evidence relevant to the issue of whether or not Mr Mulhern was conducting business in Australia at the relevant time and each of those witnesses resides in Brisbane; the trustees intend to tender a number of documents to Mr Mulhern, the originals of which are held by the Official Receiver in its Brisbane office; and findings of credit are likely to have to be made by the Court concerning Mr Mulhern and the trustees' witnesses so that any evidence by video link or telephone may not be appropriate. 10 Further evidence was given by the solicitor, a partner in the firm of solicitors for the trustees, who has acted in all matters concerning the trustees' administration of the bankrupt estate of Mr Mulhern. He estimates, and I accept, that the likely duration of the trial will be three days. 11 I find that it will be significantly more expensive for the trustees to conduct the present proceedings if they continued in Sydney. I also find that the estate of the bankrupt is presently assetless and the trustees would have to utilise their own funds to pay the expenses, and consequently any increased expenses, in the discharge of their duties. 12 The trustees contended that no explanation had been provided by Mr Mulhern for his consenting to an order that his annulment application brought in the Queensland District Registry, QUD 577 of 2012, be dismissed and for a further application for annulment being filed in the Sydney Registry of the Federal Circuit Court, being matter SYG 2805 of 2012, or for the commencement of these proceedings in the New South Wales District Registry seeking the same principal relief as in the proceedings I have just referred to in the Queensland District Registry and in the Federal Circuit Court where, I note, that Court made an order that the proceedings be heard in the Brisbane Registry of that Court. 13 The trustees state they are concerned that the institution of the present proceedings in the New South Wales District Registry and the withdrawal of Mr Mulhern's annulment application in the proceedings in the Queensland District Registry are an attempt to circumvent the orders made by Reeves J in that proceeding. However, the orders made by Reeves J appear to be procedural orders only and I place no weight on this contention. 14 I take into account the considerations referred to in National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155, more recently restated in Mortimer v Opes Prime Stockbroking Limited (ACN 086 294 028) (Administrators Appointed) (In Liquidation) [2009] FCA 227, relevantly: There must be sound reason to direct that the proceeding be conducted or continued elsewhere. If the party commencing the proceeding chose the place capriciously the Court would be justified in giving no weight to the choice of place. The balance of convenience is important but its weight must vary from case to case. What needs to be ascertained is where the case can be conducted or continued most suitably bearing in mind the interests of the parties, the ends of justice and determination of the issues between them, and the most efficient administration of the Court (National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155 at 162). The location of parties and witnesses, the place where the cause of action arose and the convenience of the Court are all factors (National Mutual 19 FCR 155 at 162, Wang v Australian China Marketing Co Pty Ltd [2001] FCA 13 at [21], Aquila Resources Ltd v Pasminco Ltd [2004] FCA 39 at [27]-[34] and [42]-[43]. Typically there is no factor that is determinative but rather it is necessary to weigh all the relevant factors that might connect the proceedings to one jurisdiction or the other (Australian Competition and Consumer Commission v Fila Sport Oceania Pty Ltd [2003] FCA 430 at [19]). The national character of the Court including its capacity to make flexible arrangements for the taking of evidence and the receipt of submissions is relevant (Australian Competition and Consumer Commission v Virgin Mobile Australia Pty Ltd [2002] FCA 1239). The question of which District Registry should conduct the proceedings does not raise matters of high principle. Essentially it is a matter of case management and proper recognition of the legitimate interests of each of the parties reflected in the balance of convenience as between them and the convenience of the Court and any economies and efficiencies which may attach to one choice or the other (Lamb v Hog's Breath Company Pty Ltd (No 1) [2007] FCA 49). There may be flexibility - one Registry could conduct pre-trial management while allocating the trial to a judge in another Registry (Hog's Breath at [10]). There is no burden of proof governing the exercise of the discretion in s 48 of the Act (National Mutual 19 FCR 155 at 162). 15 I do not proceed on the basis that Mr Mulhern has chosen to commence the proceedings in the New South Wales District Registry of the Court capriciously as he is presently living in New South Wales. 16 I reiterate that I am not today dealing with the substantive application about which, no doubt, Mr Mulhern in a suitable venue would have much to say. 17 I am however satisfied that on the interim application the trustees have shown sound reason for a change of venue. I take into account in particular that the closely related proceedings involving Mr Mulhern's bankruptcy and the administration of his estate, and his incomplete public examination, have all been in Brisbane, in particular the proceedings in QUD 577 of 2012 in this Court and SYG 2805 of 2012 in the Federal Circuit Court seeking annulment of the sequestration order were conducted or are to be conducted in Brisbane. I take into account as well the place of residence of the witnesses. I take into account the place of residence of Mr Mulhern. I take into account the location of documents and the limiting of costs and expenses to be incurred and I am satisfied that the costs and expenses of the litigation will be substantially greater if these proceedings remain in the New South Wales District Registry. 18 I do not accept that this matter would come on for hearing more slowly in the Queensland District Registry than in the New South Wales District Registry and indeed it seems to me to be likely that the proceedings would come on more readily in the Queensland District Registry given the litigation that has already been conducted in Brisbane. 19 I am not persuaded that the interests of Mr Mulhern which he seeks to litigate would be adversely affected by the transfer. 20 In my opinion, the case can be conducted more suitably in the Queensland District Registry bearing in mind the interests of the parties, the ends of justice and determination of the issues between them, and the most efficient administration of the Court. 21 The orders I make are that I direct pursuant to s 48 of the Federal Court of Australia Act 1976 (Cth) that the proceeding be conducted at the Queensland District Registry of the Court and that the proceeding be transferred to that Registry: see rule 2.02 of the Federal Court Rules 2011. I order that the trustees' costs of the interim application be costs in the administration of the estate. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Robertson.