Prentice v Cummins

the procedural course 1 The nature of these proceedings and the reasons for the removal of the Bankrupt as a party appear in two earlier judgments: Prentice v Cummins (No 1) [2002] FCA 1140; Prentice v Cummins (No 2) [2002] FCA 1165. 2 On the second day of the trial, at the conclusion of the case in chief for the applicants ("the Trustees"), Mr Brereton SC, who appeared with Mr Ashhurst for the respondents, informed the Court that he wished to make what is usually referred to as a no case submission in relation to several of the issues raised by the pleadings. In particular, he foreshadowed that he wished to submit that the respondents had no case to answer in relation to the Trustees' claims that (i) the Bankrupt had transferred a share of the matrimonial home beneficially owned by him to the second respondent ("Mrs Cummins") in August 1987 for the purpose of preventing the property from becoming divisible among his creditors; (ii) the Bankrupt had transferred 6,000 shares in Counsel's Chambers Limited to Aymcopic Pty Ltd ("Aymcopic"), the trustee of the Cummins Family Trust, for the purpose of preventing those shares becoming divisible among his creditors; and (iii) the Bankrupt had transferred various sums of money to Mrs Cummins without consideration, for the purpose of preventing the funds becoming divisible among his creditors or, alternatively, at an undervalue. 3 Mr Brereton accepted that the Trustees had adduced evidence capable of satisfying me, as the trier of fact, that other pleaded claims had been made out. In particular, he accepted that such evidence had been adduced in connection with the Trustees' claims that the Bankrupt was beneficially entitled, at the date of the bankruptcy, to one of the two issued shares in the third respondent, Hospitality Hire Pty Ltd, and that certain advances had been made to Mrs Cummins for no consideration. Mr Brereton indicated that he did not wish to make a no case submission in respect of those claims. 4 Mr Brereton proposed at the hearing that I should first address the question of whether the respondents should be permitted to advance the foreshadowed no case submissions only if they elected not to call evidence. He invited me to follow the course taken by me in Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (2000) 169 ALR 344. In substance, this involved the respondents putting their arguments as to why they should not be required to make an election, in the course of which they would outline the nature of the no case submissions they intended to make. The Trustees would then put their arguments on the election question and I would make a ruling as to whether the respondents should be permitted to make the no case submissions only if they elected not to call evidence. 5 Mr Coles QC, who appeared with Mr Newlinds for the Trustees, initially protested that the foreshadowed no case application had taken him by surprise. Without resiling from his protest, he nonetheless ultimately did not dissent from the course proposed by Mr Brereton. 6 Mr Brereton then put the respondents' contention that they should be permitted to make no case submissions without having to elect not to call evidence. Mr Coles advanced arguments to the contrary. I think it fair to say that the argument did not advert specifically to the question of whether, if the respondents were permitted to advance no case submissions only if they elected to call no evidence, that election would prevent them calling evidence on any issue in the proceedings or whether they would be prevented from calling evidence only on those issues covered by the no case submissions. 7 At the conclusion of the argument, I said that I had formed a clear view that "the general rule of practice ought to apply in this case. That is to say…a decision will not be given on a no case submission unless the moving party elects to give no evidence". I stated that I would reduce my reasons for reaching this conclusion to writing. I give those reasons later in this judgment. 8 After I had given my ruling, Mr Brereton asked for time to consider his position. The following exchange then took place: "MR BRERETON: Your Honour, the respondents will call no evidence on the issues concerning Hunters Hill [the matrimonial home] and Aymcopic [the trustee of the Cummins Family Trust], and in respect of the monetary transfers the respondents will call no evidence, save as to the cause of action pleaded in the last three paragraphs of the further amended statement of claim. HIS HONOUR: How is this going to work? You wish to call some evidence in relation to the last three paragraphs pleaded in relation to the money claim? MR BRERETON: Yes, your Honour. HIS HONOUR: You wish to call some evidence in relation to--- MR BRERETON: Hospitality Hire. HIS HONOUR: Hospitality. If, for example, the evidence is from Mrs Cummins, what if Mr Coles says I want to ask her some questions about Hunters Hill? MR BRERETON: Well, that's why your Honour needs to deal with the question as to whether there's a case to answer first…". It will be seen from this exchange that Mr Brereton assumed that it was open to the respondents to make an election limited to the issues in respect of which the no case submissions were to be adduced. In other words, he assumed that the respondents could make no case submissions on the issues he had identified, yet reserve their right to adduce evidence on the issues in respect of which he concedes that the Trustees had made out a prima facie case. 9 Debate then ensued as to whether the course proposed by Mr Brereton was appropriate. That debate had not concluded by the luncheon adjournment on the second day of the trial. 10 Upon resuming after the adjournment, Mr Coles announced that the Trustees consented to my hearing the respondents' application "in the manner foreshadowed". I then pointed out that there might be a reason why this was not the appropriate course, namely that the respondents' election not to call evidence might apply to all issues in the proceeding, including those in respect of which the respondents did not intend to make a no case submission. I indicated, nonetheless, that if the parties consented to the trial following the course proposed by Mr Brereton, I would not be disposed to stand in their way. 11 In consenting to this course, counsel understood (as they later made clear) that I would deliver judgment on the respondents' no case submissions before proceeding to the hearing of the remaining issues in the case. This has the undesirable consequence that it will become necessary to adjourn the hearing until after judgment is delivered on the no case submissions. I must confess that had I appreciated at the outset that this would be the consequence of the respondents being permitted to make no case submissions, I would have been very reluctant to entertain them. However, the parties having consented to the proposed course, I consider that I should follow it.