Scott v Bagshaw

REASONS FOR JUDGMENT OF THE COURT 1 This is in form an application for leave to appeal from an order that a proceeding be stayed for want of jurisdiction. However, on the hearing of the application for leave, the parties also argued in full the merits of the proposed appeal, on the understanding that, if the Court were minded to grant leave to appeal, it could then proceed immediately to give judgment on the appeal. Since, as will appear below, we have decided to grant to the applicant leave to appeal, we will proceed in these reasons as if the application before us had instead been an appeal. 2 The principal ground supporting the appeal contends that there was error of law in the order staying the proceeding below and that the Federal Court does have jurisdiction to hear and determine that proceeding. Two further grounds of appeal, based on s 30 of the Bankruptcy Act 1966 (Cth) ("the Act"), fell away for reasons which will appear. 3 The first respondent supported the submissions of the appellant on the appeal. For the second respondent, counsel submitted that, following the decision of the High Court of Australia in Re Wakim; Ex parte McNally (1999) 73 ALJR 839, this Court had no jurisdiction in relation to her. We take this as a submission directed to the Court's primary jurisdiction, because counsel stated that she made no submissions on the issue of this Court's accrued jurisdiction in relation to the second respondent. For the third respondent, the appeal was opposed, although it was conceded that there was no discretionary reason for the Court's jurisdiction not to be exercised if the position in law was that that jurisdiction existed. Nature of the proceeding below 4 The appellant is the trustee of a family trust. The first respondent is a bankrupt. The second respondent, who is not a bankrupt, is the wife of the first respondent. The third respondents are the trustees in bankruptcy of the first respondent, appointed pursuant to the provisions of the Act on 3 August 1993. 5 The proceeding below was commenced on 11 October 1994. The orders sought in the further amended application dated 15 August 1995 were: first, a declaration that each of three properties is charged in favour of the appellant with the payment of all moneys due under a loan agreement described in the statement of claim; and, secondly, the appointment of a receiver to each of the properties to effect their sale and for payment of the proceeds, less costs and expenses, to the appellant to the extent of indebtedness under the loan agreement, with the balance to the second and third respondents according to their respective entitlements. 6 The three properties described were respectively at: Terrigal, New South Wales; Mildura, Victoria; and Para Wirra, South Australia ("the properties"). The registered proprietors of the New South Wales and Victorian properties were the first and second respondents together; the registered proprietor of the South Australian property was the first respondent alone. A further property in New South Wales was sold in 1988 and was not the subject of the claim as amended. 7 The amended statement of claim alleged that, on or about 31 December 1985, the first and second respondents agreed with the appellant to borrow $375,399.21 at interest. It was further claimed that the first and second respondents charged their interests in the properties with the payment of principal and interest ("the loan moneys"). Part performance of the agreement to grant the charge was pleaded. Among the acts of part performance relied upon were the lodgment of caveats on behalf of the appellant against the titles to each of the properties and a written memorandum of the alleged agreement. In reliance on the agreement and alleged part performance, it was claimed that an equitable charge was created against the properties in favour of the appellant. 8 The amended statement of claim also pleaded that, in approximately July 1987, the land at Para Wirra, South Australia was sub-divided and a claim was asserted in relation to the land referred to in the certificates of title substituted as a consequence. It is common ground that the land has since been sold and the proceeds are held in trust pending the outcome of this proceeding. A claim is now therefore asserted in relation to that fund. 9 The amended statement of claim relied on a failure to repay the loan moneys and on an entitlement to the appointment of a receiver pursuant to the equitable charge. 10 The defences for the first and second respondents generally denied the matters alleged in the appellant's statement of claim, including the agreement, the lodgment of caveats and advance of the moneys claimed in total. 11 For the third respondents, it was pleaded in their defence that the appellant had no entitlement to any interest as mortgagee in Torrens title land, no power of sale in respect of it nor any power to appoint a receiver in respect of the properties in consequence of the provisions of the Real Property Act 1900 (NSW), the Conveyancing Act 1919 (NSW), the Property Law Act 1958 (Vic), the Transfer of Land Act 1958 (Vic),the Real Property Act 1886 (SA) and the Law of Property Act 1936 (SA). Alternatively, it was pleaded that the appellant's claims were precluded by the provisions of s 14 of the Limitation Act 1969 (NSW), s 35 of the Limitation of Actions Act 1936 (SA) and s 5 of the Limitation of Actions Act 1958 (Vic). 12 It was further pleaded in the defence of the third respondents that the appellant's claim related to a debt provable within s 82 of the Act, so that it had not been competent for the appellant to commence the proceeding without leave: par 58(3)(b) of the Act.