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[2002] FCA 1215
procedural. The respondents were permitted to advance the identified no case submissions only if they elected to call no evidence (para 26). The court exercised its discretion to adhere to the general rule...
During trial, respondents sought to make no case submissions on several pleaded claims (alleged transfers by the bankrupt to defeat creditors) without first electing not to call evidence. The Court applied the usual rule that a party may not make a no case submission unless they elect to call no evidence, but acknowledged a discretion to depart from that rule in appropriate cases. Because the alleged impropriety was directed at the bankrupt (a non-party), the authorities permitting departure in 'fraud' cases did not support a departure here. The Court exercised its discretion to require the respondents to elect to give no evidence if they wished to advance the nominated no case submissions (paras 7, 12, 15-21, 26).
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2,008 words · generated 02/07/2026
This is a procedural ruling given by Sackville J at a trial conducted in the Federal Court (New South Wales Registry). The trustees in bankruptcy (the applicants) sued to recover or challenge various transfers said to have been made by John Daniel Cummins (the Bankrupt). On the second day of the trial the respondents (including Mrs Cummins and related companies) sought to make so-called no case submissions in relation to particular pleaded causes of action: (a) an August 1987 transfer of a share in the matrimonial home; (b) the transfer of 6,000 shares in Counsel's Chambers Limited to Aymcopic Pty Ltd; and (c) various transfers of money to Mrs Cummins alleged to be without consideration or at undervalue (para 2). The respondents wished to put those no case submissions without electing to call no evidence, and moreover sought to limit any election to the issues on which the no case submissions were to be advanced (paras 4, 8).
The applicants accepted that other pleaded claims had been made out by the evidence (for example, entitlement to a share in Hospitality Hire Pty Ltd and certain advances) and did not seek no case submissions on those issues (para 3). The Court was asked to determine whether the respondents could be permitted to make no case submissions without electing not to call evidence, and if not, whether any election required would need to be global or could be limited to particular issues (paras 4, 6, 25). Sackville J concluded that the general practice requiring election should apply and that the respondents could advance the identified no case submissions only if they elected to call no evidence (paras 7, 26). The parties had consented to the process in which the Court would rule on the no case submissions before resuming the remainder of the hearing (paras 10-11).
Two principal legal propositions guided the reasoning.
First, there is a long-standing general rule of practice that a party should not be permitted to make a no case submission unless he or she elects not to call evidence (quoted and discussed at paras 12 and 7). Protean Holdings v American Home Assurance Co and Rasomen v Shell were relied upon for the general rule and the formulation of the discretionary principles the court must apply (para 12). The quoted passage in para 12 encapsulates the court's approach: the judge is guided by the nature of the case, the stage it has reached, the particular issues, and the evidence already given; the imposition of an election requirement depends on the just and convenient disposition of the litigation.
Second, authorities recognise that a departure from the general rule is often justified where fraud is alleged against the moving party, the rationale being that it can be unfair to compel a defendant to submit to cross-examination before it is seen that there is some real evidence of fraud against him or her (para 14, citing Union Bank v Puddy and other authorities). However, Sackville J found that the rationale for that exception did not apply in this case because the allegations of improper purpose under s 121(1) of the Bankruptcy Act were directed at the Bankrupt, who was not a party to the proceedings (paras 15-21). The authorities that more readily permit no case submissions without election were cases in which fraud was alleged against the party seeking to make the submission (para 19). Since the respondents were not the ones alleged to have engaged in fraud, the key policy reason for the exception was absent (para 20).
Other practical considerations also weighed against departing from the general rule: the prospective saving in court time was likely to be insubstantial, the respondents sought to make no case submissions only on some issues (so the trial would not necessarily end if those submissions succeeded), and the applicants' statutory examination and compulsion powers under the Bankruptcy Act (ss 77, 81) were not relevant to the no case submission doctrine (paras 21-23). The notoriety of the bankrupt's conduct was explicitly held to be irrelevant (para 24). In the exercise of discretion, Sackville J required election as the appropriate measure (para 26).
Before this ruling: The established practice was that election not to call evidence is required before a court generally decides a no case submission. The authorities allowed exceptions, particularly where fraud was alleged against the defendant or moving party so that it would be unjust to force them to give evidence before it was clear there was a real case against them (Union Bank v Puddy as explained at para 14; see also Protean and Compaq cited at para 14).
After this ruling: Sackville J reaffirmed and applied the general rule and its discretionary structure, while clarifying its application in the particular context of allegations under s 121(1) of the Bankruptcy Act where the alleged improper conduct is that of a non-party. The key take-away is that allegations analogous to fraud do not automatically permit a departing course where they are directed at a non-party. In such circumstances the ordinary course, requiring election before entertaining no case submissions, remains the appropriate starting point, and a discretionary departure will not lightly be made (paras 12, 15-21, 26).
This decision does not displace the prior authorities that permit discretion to depart in some fraud cases. It emphasises the reason for that exception and confines its reach where the alleged impropriety is not directed at the moving respondents.
Para 7: Quote: "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."
Para 12: "the Judge will be guided by the nature of the case, the stage it has reached, the particular issues involved and the evidence that has been given...depend on the just and convenient disposition of the litigation."
Para 16: The recitation of s 121(1) of the Bankruptcy Act.
Para 20: "This rationale does not apply. No allegation of fraud or impropriety is made against any of the respondents...It is difficult to see why the fact that allegations of improper conduct are made against the Bankrupt should be regarded as a significant factor..."
Para 26: Final ruling: respondents may advance the no case submissions only if they elect to call no evidence.
This decision is directly engaged where:
In short, whenever respondents seek to make partial no case submissions on some issues, especially in insolvency contexts alleging transfers to defeat creditors, this ruling guides the court to require an election unless there is a clear reason to exercise discretion otherwise (paras 12, 21-23).
This judgment itself does not record or analyse subsequent treatment by later courts. The decision relies upon and applies prior authorities (Protean, Rasomen, Union Bank v Puddy, Compaq, ACCC v Amcor) and reaffirms the existing discretionary framework for election and no case submissions (paras 12, 13, 14). Any assessment of later judicial treatment would require examination of later decisions; this judgment does not purport to catalogue later authorities and therefore does not provide evidence of how later courts have treated it.
The judgment recognises some issues it does not need to decide in the circumstances before it, hence leaving certain questions open:
Scope of a limited election: The judge noted that, but for the parties' consent, a question would have arisen whether the respondents would have been required to elect to call no evidence at all or merely to elect to adduce no evidence on the issues to which the no case submissions relate (para 25). The Court did not decide that question. That leaves open whether a targeted, issue-by-issue election is permissible in other circumstances.
Extent to which third-party fraud allegations can ever justify departure: Sackville J concluded that where the allegation of impropriety is against a non-party, the rationale for the 'fraud' exception is not persuasive (paras 19-21). However the judgment does not categorically rule out every conceivable circumstance in which third-party wrongdoing might contribute to the exercise of discretion; it applies the general discretion to the facts before it. A future case with different facts might require the court to say more precisely when third-party allegations could justify a departure.
Interaction with statutory investigative powers: The Court held that the trustees' powers under ss 77 and 81 of the Bankruptcy Act are of limited relevance to the election/no case doctrine (para 23). That leaves open whether in some contexts the existence or exercise of statutory investigative powers could produce different practical considerations bearing on the justice or convenience of departing from the general rule.
Quantifying the 'saving' or prejudice: The decision declined to accept an asserted modest saving of trial time as sufficient (para 21). The line at which potential efficiencies outweigh the interests of orderly trial conduct is a matter of degree and discretion, and future cases may be required to delineate that balance further.
Consequences of consented procedure: Here the parties consented to the course whereby judgment on no case submissions would be delivered before the remaining issues were heard, even though that might require an adjournment (paras 10–11). The Court noted some reluctance had it appreciated the consequence. The permissibility and practical implications of such a sequencing arrangement (consented to by parties) remain matters for case-specific judgment.
These questions emerge from the Court's reasoning and from explicit observations that certain topics were not determined (see paras 21, 23, 24, 25). They are matters for future judicial consideration if litigants put them squarely before the court and provide the factual matrices necessary to resolve them.
Concluding practical point: Practitioners should consider at the outset whether a no case submission will be advanced and whether the respondent is prepared to elect not to give evidence. Where allegations of impropriety target a non-party, the path to making a no case submission without election will be narrow; parties should be prepared to seek a judicial exercise of discretion with full factual demonstration of why departure is warranted, including demonstrable prejudice if required to elect.
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.
reasoning on the election issue 12 As Mr Brereton acknowledged, there is a general rule of practice that a party should not be permitted to make a no case submission unless he or she elects not to call evidence: Protean Holdings (Ltd) (Receivers and Managers Appointed) v American Home Assurance Co (1985) VR 187, at 238, per Tadgell J (with whom Fullagar J agreed); Rasomen Pty Ltd v Shell Company of Australia Ltd (1997) 75 FCR 216, at 223, per curiam. The Court, however, retains a discretion as to whether to depart from the general rule. In deciding which course to follow: "the Judge will be guided by the nature of the case, the stage it has reached, the particular issues involved and the evidence that has been given. The imposition of a requirement that the moving party make an election before the Judge entertains the submission, or before he rules on it, will depend on the just and convenient disposition of the litigation." Protean v American Home Assurance, at 238; Rasomen v Shell, at 223. In this respect "caseflow management" principles are relevant, but the ultimate aim is the attainment of justice: Rasoman v Shell, at 224. 13 Mr Brereton submitted that there were a number of reasons justifying a departure from the general rule of practice.
Counsel for the Applicants: Mr B Coles QC with Mr C Newlinds
Solicitor for the Applicants: Clayton Utz
Counsel for the 2nd to 4th Respondents: Mr P L G Brereton SC with Mr M Ashhurst
Solicitors for the 2nd to 4th Respondent: Russell & Company
Date of Hearing: 17, 18 & 19 September 2002
Date of Judgment: 2 October 2002
Prentice
Cummins
The respondents were permitted to advance the identified no case submissions only if they elected to call no evidence (para 26). The court exercised its discretion to adhere to the general rule that an election is required before entertaining a no case submission (paras 7, 12, 26).