Sampson as the trustee of the Bankrupt Estate of Wei Chen v Huang

Federal Court of Australia|2020-04-20|Before: Wigney J

This proceeding be transferred to and heard in the Federal Circuit Court of Australia pursuant to s 32AB of the Federal Court of Australia Act 1976 (Cth) and rr 27.11 and 27.12 of the Federal Court Rules 2011 (Cth).
Costs be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

WIGNEY J: 1 On 20 April 2020, I made orders exercising the power conferred by s 32AB of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and rr 27.11 and 27.12 of the Federal Court Rules 2011 (Cth) (FC Rules) to transfer the present proceeding to the Federal Circuit Court of Australia. These are my reasons for making those orders.

the parties' submissions 10 The Trustee and Ms Huang provided three short submissions in support for why the proposed consent orders should be made: (1) Ms Huang had initiated property settlement proceedings against the Trustee and the Bankrupt, which relevantly concerned the property claimed by the Trustee in this proceeding; (2) The Trustee and Ms Huang understood that the Circuit Court has jurisdiction to hear both bankruptcy and family law disputes; and (3) The Trustee and Ms Huang believed that having this proceeding heard together with the property settlement proceedings in the Circuit Court shall save costs for both parties.

principles relevant to the question of transfer 11 Section 32AB of the FCA Act provides that the Court may transfer a proceeding to the Circuit Court. That section is in the following terms: 32AB Discretionary transfer of civil proceedings to the Federal Circuit Court (1) If a proceeding is pending in the Court, the Court may, by order, transfer the proceeding from the Court to the Federal Circuit Court. (2) The Court may transfer a proceeding under subsection (1): (a) on the application of a party to the proceeding; or (b) on its own initiative. (3) The Rules of Court may make provision in relation to transfers of proceedings to the Federal Circuit Court under subsection (1). (4) In particular, the Rules of Court may set out factors that are to be taken into account by the Court in deciding whether to transfer a proceeding to the Federal Circuit Court under subsection (1). (5) Before Rules of Court are made for the purposes of subsection (3) or (4), the Court must consult the Federal Circuit Court. (6) In deciding whether to transfer a proceeding to the Federal Circuit Court under subsection (1), the Court must have regard to: (a) any Rules of Court made for the purposes of subsection (4); and (b) whether proceedings in respect of an associated matter are pending in the Federal Circuit Court; and (c) whether the resources of the Federal Circuit Court are sufficient to hear and determine the proceeding; and (d) the interests of the administration of justice. (7) If an order is made under subsection (1), the Court may make such orders as it considers necessary pending the disposal of the proceeding by the Federal Circuit Court. (8) An appeal does not lie from a decision of the Court in relation to the transfer of a proceeding under subsection (1). (8A) The Federal Circuit Court has jurisdiction in a matter that: (a) is the subject of a proceeding transferred to the court under this section; and (b) is a matter in which the court does not have jurisdiction apart from this subsection. To avoid doubt, the court's jurisdiction under this subsection is not subject to limits set by another provision. (9) The reference in subsection (1) to a proceeding pending in the Court includes a reference to a proceeding that was instituted in contravention of section 32AA. (9A) This section does not apply to criminal proceedings. (10) This section does not apply to proceedings of a kind specified in the regulations. 12 The rules to which subsections 32AB(3) and (4) refer are to be found in Div 27.2 of the FC Rules. Rules 27.11 and 27.12 provide as follows: 27.11 Transfer to Federal Circuit Court of Australia A party may apply to the Court to transfer to the Federal Circuit Court of Australia: (a) a proceeding other than an appeal; or (b) an appeal under the AAT Act. 27.12 Factors to be taken into account (1) For an appeal under the AAT Act, the parties must address the matters mentioned in section 44AA(7) of that Act. (2) For a proceeding, the parties must address the matters mentioned in section 32AB(6) of the Act. (3) For an appeal under the AAT Act or a proceeding, the parties should address the following: (a) whether the appeal or proceeding is likely to involve questions of general importance; (b) whether it would be less expensive and more convenient to the parties if the appeal or proceeding were transferred; (c) whether an appeal or proceeding would be determined more quickly if transferred; (d) the wishes of the parties. 13 Accordingly, in determining whether or not the Court should transfer a proceeding to the Circuit Court, regard must be had to the matters in subs 32AB(6) of the FCA Act and r 27.12(3) of the FC Rules.

consideration 14 There are good and compelling reasons for ordering that the present proceeding be transferred to the Circuit Court. These reasons are readily discernible when each of the above matters is considered seriatim.

Whether the proceeding is likely to involve questions of general importance 15 The questions raised in this proceeding are undoubtedly important to the parties. They are not, however, of such general importance that this Court, rather than the Circuit Court, should be required to determine them. Questions may be of general importance if they raise novel or controversial issues: Currie v Joffe [2020] FCA 68 at [12]. Questions that, by contrast, concern questions of fact and the application of law to those facts, and do not involve a point of principle, are unlikely to be of general importance. The questions raised in this proceeding are, in all the circumstances, ones that can be appropriately determined by the Circuit Court.

Whether it is less expensive and more convenient to transfer the proceeding 16 The Trustee and Ms Huang submitted that they "believe[d] it shall save costs for the parties and the Court" if the proceedings were transferred to the Circuit Court. This belief is strongly supported by Kenny J's observation that "the fees likely to be incurred in connection with a proceeding in the Federal Circuit Court as compared with this Court pursuant to schedule 1 of the Federal Court and Federal Circuit Court Regulation 2012 (Cth)" are undoubtedly less and support the conclusion that the Circuit Court "is the natural, generally more convenient, and less expensive forum": Currie at [14]. There is certainly no evidence before me to suggest that the proceeding being heard in the Circuit Court would be more expensive than having the proceeding continue in this Court. 17 The Trustee and Ms Huang also submitted that they "understand that the Federal Circuit Court of Australia has the jurisdiction to hear the bankruptcy and family law matters". The fact that the Circuit Court can hear bankruptcy matters under s 27 of the Bankruptcy Act and family law matters under subs 39(1A) of the Family Law Act 1975 (Cth), acknowledging that this Court has not been conferred jurisdiction to hear family law matters, unquestionably makes it highly convenient for this proceeding to be heard in the Circuit Court.

Whether the proceeding would be determined more quickly if transferred 18 The Trustee and Ms Huang did not address whether the proceeding would be more likely to be heard and determined earlier in the Circuit Court. Without submissions or evidence from the parties, it is difficult to conclude whether the proceeding is likely to be heard and determined earlier in the Circuit Court compared to if the matter simply remained in my docket. There are, however, two conclusions that are reasonably open. First, it is unlikely that the proceeding would be heard significantly later in the Circuit Court as compared to this Court: Rixon v Business Parcel Express Pty Ltd [2006] FCA 969 at [4]; Beetham v Cortra Pty Ltd [2003] FCA 150 at [2]. Second, there is no suggestion of a possible delay to resolving the issues in dispute if the proceeding is transferred. It is noted, in this regard, that no directions or timetabling orders have been made in this Court. It therefore cannot be said that this Court has had any real or meaningful involvement in the management of the proceeding to date that might otherwise warrant against a transfer of the proceeding. The Circuit Court, in these circumstances, would be able to freely give directions from the outset as to how best progress the matter: Stevens v Barrett Property Sales & Administration Pty Ltd [2019] FCA 740 at [8].

The wishes of the parties 19 The Trustee and Ms Huang have agreed to transfer the proceeding to the Circuit Court. It has been held that consent in these circumstances is "decisive": Rixon at [4]; Denison v Boart Longyear Pty Ltd [2011] FCA 881 at [11]. 20 This consideration, noting that the parties have also agreed that costs be reserved, is one that I have afforded significant weight.

Whether proceedings in respect of an associated matter are pending in the Circuit Court 21 I accept that there are no proceedings in respect of an associated matter currently before the Circuit Court or this Court. The associated matter presently before the Family Court - the property settlement proceeding - raises no difficulties in light of the parties' acknowledgment that they are concurrently seeking orders, also by consent, for leave to transfer that proceeding to the Circuit Court.

Whether the resources of the Circuit Court are sufficient to hear and determine the proceeding 22 There is no question, notwithstanding the absence of submissions on this issue, that the resources of the Circuit Court are sufficient to hear and determine this proceeding.

The interests of the administration of justice 23 There are three relevant matters as regards to whether transferring a proceeding to the Circuit Court is in the interests of the administration of justice. 24 First, this Court must have regard to s 37M of the FCA Act, which establishes that the overarching purpose of the civil practice and procedure provisions of this Court, including its rules, is to facilitate the just resolution of disputes in a manner that is quick, inexpensive and efficient. Section 37M is in the following terms: 37M The overarching purpose of civil practice and procedure provisions (1) The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes: (a) according to law; and (b) as quickly, inexpensively and efficiently as possible. (2) Without limiting the generality of subsection (1), the overarching purpose includes the following objectives: (a) the just determination of all proceedings before the Court; (b) the efficient use of the judicial and administrative resources available for the purposes of the Court; (c) the efficient disposal of the Court's overall caseload; (d) the disposal of all proceedings in a timely manner; (e) the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute. (3) The civil practice and procedure provisions must be interpreted and applied, and any power conferred or duty imposed by them (including the power to make Rules of Court) must be exercised or carried out, in the way that best promotes the overarching purpose. (4) The civil practice and procedure provisions are the following, so far as they apply in relation to civil proceedings: (a) the Rules of Court made under this Act; (b) any other provision made by or under this Act or any other Act with respect to the practice and procedure of the Court. 25 When consideration is given to the factors listed in subs 37M(2), it is clear that a transfer of this proceeding to the Circuit Court would constitute an efficient, timely and just disposal of the proceeding. 26 Second, this Court should have regard to whether the parties would be limited as to the nature or scope of possible relief in the Circuit Court as compared to this Court. There is no basis for concluding that in this proceeding the parties could not seek, and subsequently be granted, proper relief in the Circuit Court. This position was reflected in the proposed consent orders provided by the Trustee and Ms Huang, who referred to the broad powers of the Circuit Court in both bankruptcy matters - s 30 of the Bankruptcy Act - and in family law matters - s 79 of the Family Law Act. 27 Third and finally, consideration should be given to the rationale for the establishment of the Circuit Court, helpfully summarised by White J in Fair Work Ombudsman v Ecosway Pty Ltd [2015] FCA 102. His Honour declared, in the context of whether proceedings should be transferred from this Court to the Circuit Court, that the creation of the Circuit Court was based on the principle that smaller matters would be allocated to a lower competent authority: Ecosway at [37]. This proceeding is a perfect illustration of such a matter. 28 Transferring proceedings to the Circuit Court should not, however, convey the impression that the Circuit Court only deals with matters of lesser significance. To do so would be to misunderstand the nature of the Circuit Court. Rather, transfers of proceedings are simply a reflection of "the concept of more efficient and better administration of justice which underlies the creation of that court and underlies the arrangements for transfer of cases between the two courts": Sheikholeslami v University of New South Wales [2006] FCA 712 at [8]-[9].

conclusion 29 For the reasons stated above, it is appropriate, in all the circumstances, that the proceeding be transferred to, and be heard in, the Circuit Court. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wigney.

Federal Court and Federal Circuit Court Regulation 2012(Cth)

Bankruptcy Act 1966(Cth)ss 27, 30, 139ZQ, 139ZR(1), 139ZR(4), 139ZS

Family Law Act 1975(Cth)ss 39(1A), 79

Federal Court of Australia Act 1976(Cth)ss 32AB, 32AB(3), 32AB(4), 32AB(6), 37M, 37M(2)

Federal Court Rules 2011(Cth)rr 27.11, 27.12, 27.12(3)

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (14 paragraphs)

Parties

Legislation Cited (5)

Cases Cited (7)

Cited By (4)