Singh v The Owners - Strata Plan 11723

Background 6The dispute between the parties has a long and somewhat tortuous history and involves proceedings in the Local Court, District Court and the Federal Magistrates' Court. It is necessary to summarise these proceedings in order to address the jurisdictional argument made by the defendant.

Local Court Proceedings 7The defendant filed a statement of claim in the Small Claims Division of the Local Court on 6 August 2010 (the Local Court Proceedings) seeking to recover unpaid levies, interest and costs alleged to be owed by the plaintiff and his wife, Sarbjit Kaur, in relation to their unit in Harris Park (the Property). 8On 17 September 2010, the plaintiff and his wife filed a defence and the matter was listed for pre-trial review hearing on 12 November 2010. This hearing was adjourned to 14 January 2011 to permit the plaintiff and his wife to file a cross-claim and for the defendant to file an amended statement of claim. The cross-claim was filed on 12 November 2010 and the amended statement of claim was filed on 2 December 2010. 9On 14 January 2011, the matter was adjourned to 18 February 2011 to permit the plaintiff to provide particulars of his cross-claim. On that occasion a costs order in the sum of $125 was made against the plaintiff. 10On 18 February 2011, the plaintiff did not appear and the defence and cross-claim were struck out. A costs order was made against the plaintiff in the sum of $250. 11On 1 March 2011, the plaintiff sought a review of the strike-out order made on 18 February 2011. Assessor Olischlager conducted the review on 24 March 2011. Following a hearing de novo on the merits, the plaintiff's application was dismissed. 12On 28 March 2011, the defendant sought default judgment in the Local Court on its mixed claim for levies, interest and costs. The notice of motion was supported by an affidavit of Sylvia Quang dated 28 March 2011 and affidavit of Daniel Radman dated 28 March 2011. Where there is a "mixed" claim (so called because it comprises liquidated and unliquidated amounts), the Local Court conducts an assessment of the unliquidated amounts. 13The assessment occurred and, on 6 May 2011, judgment was entered against the plaintiff and his wife in the sum of $14,251.68, which included an unliquidated claim of $7,463.05 for costs incurred by the defendant, pursuant to s 80 of the Strata Schemes Management Act 1996. 14On 2 June 2011, the plaintiff filed a notice of motion to set aside the default judgment. He sought another review of the Registrar's decision to strike out the defence and cross-claim. Following a review conducted by Townsend LCM as a hearing de novo on the merits, the plaintiff's notice of motion was dismissed.

District Court proceedings 15On 23 August 2011, the plaintiff filed a summons in the District Court to appeal the default judgment entered in the Local Court on 6 May 2011 (the District Court Proceedings). 16On 29 September 2011 the plaintiff filed a notice of motion seeking a stay on the enforcement of the judgment until the appeal has been decided in the District Court Proceedings. 17On 7 October 2011, Delaney DCJ determined the plaintiff's notice of motion, ordering him to file an amended summons commencing an appeal by 14 October 2011 and ordered that there be a stay of execution of the Local Court judgment until 4.00 pm on 28 October 2011. 18On 13 October 2011, the plaintiff filed an amended summons commencing an appeal in the District Court Proceedings. On 26 October 2011, the defendant filed a notice of motion in the District Court Proceedings seeking to strike out the plaintiff's amended summons commencing an appeal pursuant to UCPR 14.28. 19On 28 October 2011, Delaney DCJ heard the matter and reserved his decision. The stay of execution lapsed on that day since no order was made to extend it. On 18 November 2011, Delaney DCJ published his reasons for decision. His Honour made an order striking out the plaintiff's amended summons commencing an appeal and ordered the plaintiff to pay the defendant's costs of the motion of $1,500. The plaintiff was ordered to re-plead and serve a further summons commencing an appeal by 31 January 2012 "in proper form after obtaining legal advice". The matter was stood over for directions on 2 February 2012. 20On 30 January 2012, the plaintiff filed a further summons commencing an appeal. When the matter came before Delaney DCJ for directions on 2 February 2012 the defendant made an oral application to strike out the summons. After hearing argument, his Honour ordered: (1)That the summons be struck out; (2)That the plaintiff file a further summons commencing an appeal within 30 days; (3)That the plaintiff pay the defendant's costs of 2 February 2012 in the sum of $1,500; (4)That the plaintiff pay the defendant's costs of 18 November 2011; (5)That the amount of $3,000 (being the total of the two costs orders referred to above) be paid within 28 days; (6)That the District Court Proceedings be stayed until the $3,000 has been paid and a further amended summons commencing an appeal has been completed; and (7)The stay of execution of the Local Court judgment is lifted. 21The last order would appear to have been necessary since the stay had already lapsed. The costs orders were not complied with and no further summons commencing an appeal was filed.

Federal Magistrates' Court proceedings 22On 9 December 2011, the defendant filed a creditor's petition against the plaintiff and his wife in the Federal Magistrates' Court. Two notices stating grounds of opposition to the creditor's petition were filed by the plaintiff and his wife on 14 October and 8 November 2011 respectively. 23On 5 April 2012, Smith FM made a sequestration order against the plaintiff and Ms Kaur and handed down reasons for decision which included the following findings and observations: (1)There were no sufficient grounds for the Court to exercise its discretion to go behind the Local Court judgment dated 6 May 2011; (2)The plaintiff had been afforded ample opportunities in the Local Court and District Court to rectify any departures from procedural fairness; (3)The Court was not satisfied that any of the circumstances under which the default judgment was obtained and maintained in the Local Court and was not set aside on appeal to the District Court gave rise to any other sufficient cause to decline making a sequestration order; (4)The Court was of the opinion that there were good reasons to doubt the jurisdiction of this Court to entertain the summons filed by the plaintiff and that there is no reasonable prospect that the there is sufficient reason to embark on that jurisdiction even if it were found this Court did have such jurisdiction.

Appeal to the Federal Court against the sequestration order 24On 24 April 2012, the plaintiff filed a notice of appeal in the Federal Court against the decision of Smith FM on 5 April 2012 to make a sequestration order. On 2 May 2012 the plaintiff filed an interlocutory application in the Federal Court seeking a stay or suspension of the operation of the sequestration order. This application is listed for hearing on 24 May 2012.

These proceedings 25The plaintiff now seeks an order that this Court transfer the District Court proceedings to this Court. 26The defendant opposes the transfer on two bases: first, that this Court has no jurisdiction to do so; and secondly, that the Court is bound to dismiss the summons because the proceedings are taken to have been abandoned by the plaintiff by reason of the provisions of s 60 of the Bankruptcy Act 1966 (Cth). 27Although the proceedings before me could be dealt with solely on the basis of s 60 of the Bankruptcy Act, the defendant has requested that I determine the summons on both bases, since, if I do not, it could impact the Federal Court proceedings, the plaintiff having lodged an appeal against the sequestration order.

Whether this Court has power to transfer the District Court proceedings 28This Court's power to transfer District Court proceedings to this Court derives from s 140 of the Civil Procedure Act 2005, which relevantly provides: "(1) The Supreme Court may, of its own motion or on application by a party to proceedings before the District Court or the Local Court, order that the proceedings, including any cross-claim in the proceedings, be transferred to the Supreme Court." 29However, the power of this Court to transfer proceedings from other courts is not unlimited. The ambit of s 140(1) was considered by Brereton J in Rinbac Pty Ltd v Owners Corporation Strata Plan 64972 [2010] NSWSC 656; 77 NSWLR 601 (Rinbac). In Rinbac, the plaintiff filed a summons in the District Court seeking leave to appeal from a decision of the Consumer Trade and Tenancy Tribunal (CTTT) on the basis of a statutory right of appeal granted by s 200 of the Strata Schemes Management Act, which relevantly provided: "An appeal lies to the District Court against an order made by the Tribunal under this Chapter." 30Because of the novelty and complexity of the issues raised in the appeal, Rinbac then filed a summons in this Court seeking an order that the matter be transferred to this Court pursuant to s 140 of the Civil Procedure Act. Brereton J held that the terms of s 200 of the Strata Schemes Management Act provided that an appeal from the CTTT was to be determined by the District Court and said, at [11]-[12]: "The purpose of Civil Procedure Act, s 140, is to permit the removal from a lower court to a higher court of proceedings in the lower court where there is good reason to do so. Typically, that has been where there has been a risk that a jurisdictional limit affecting the lower court would be exceeded, where there are complex and important issues, and where the proceedings involve allegations of significant notoriety or public importance. But there is nothing in or about s 140 which confers on a transferee court additional jurisdiction that it does not otherwise have. This is to be distinguished, for example, from s 149 (which, in the case of a transfer from a higher court to a lower court, gives the lower court all the relevant jurisdiction of the higher court), and similarly, s 149E (which in the case of transfer of proceedings between the Supreme Court and the Land and Environment Court, gives the transferee court all the jurisdiction of the transferor court). But as I have said, there is nothing in connection with transfers from a lower court to a higher court that gives the higher court jurisdiction that it did not otherwise have. The jurisdiction to entertain an appeal under s 200 of the Strata Schemes Management Act is plainly given to the District Court and only to the District Court. It is a statutory right of appeal, defined by the terms of the statute that creates it. In my view, the Supreme Court cannot give itself jurisdiction to hear such an appeal by removing the proceeding from the District Court into the Supreme Court." 31The District Court's jurisdiction to determine the District Court Proceedings derives from s 30 of the Local Court Act 2007 which provides the District Court only has jurisdiction to hear an appeal of a Local Court judgment sitting in its Small Claims Division on the grounds of lack of jurisdiction or denial of procedural fairness. It is a statutory appeal. This Court has no jurisdiction to appropriate to itself jurisdiction which Parliament has expressly conferred on another Court. 32Nor can the plaintiff's claim in this Court be dealt with by the Court of Appeal since a District Court hearing of a statutory appeal is not an "action" for the purposes of s 127 of the District Court Act 1973 which permits a party to appeal to the Court of Appeal: Muldoon v Church of England Children's Homes Burwood [2011] NSWCA 46 (which concerned an appeal to the District Court from the CTTT) at [65], per Young JA with whom Campbell JA and Macfarlan JA agreed. 33Accordingly, for the foregoing reasons, I am satisfied that this Court has no power to transfer the plaintiff's appeal in the District Court to this Court. 34It is therefore unnecessary, and would be inappropriate, for me to express any view on the arguments which the plaintiff raised in the course of the hearing of the application as to the merits of his argument that the Local Court judgment ought never to have been entered against him or his wife.

Dismissal of proceedings pursuant to s 60 of the Bankruptcy Act 35Section 60 of the Bankruptcy Act relevantly provides: "... (2) An action commenced by a person who subsequently becomes a bankrupt is, upon his or her becoming a bankrupt, stayed until the trustee makes election, in writing, to prosecute or discontinue the action. (3) If the trustee does not make such an election within 28 days after notice of the action is served upon him or her by a defendant or other party to the action, he or she shall be deemed to have abandoned the action." 36As referred to above, these proceedings were commenced on 23 March 2012 and a sequestration order was made against the plaintiff and his wife in the Federal Magistrates Court on 5 April 2012, at which time Paul Desmond Sweeney and Terry Grant van der Velde (the Trustees) were appointed as joint and several trustees of the plaintiff's and his wife's bankrupt estate. On 11 April 2012, the defendant notified the Trustees of these proceedings by way of letter. On 3 May 2012, the Trustees advised by letter that they did not wish to make any election neither to consent nor object to the plaintiff's application to the Supreme Court. The 28 day period provided for in s 60(3) lapsed on 9 May 2012. Accordingly, by operation of s 60(3) of the Bankruptcy Act, the Trustees are deemed to have abandoned the action. Accordingly, the proceedings should be dismissed. 37In cases where an action is taken to have been abandoned because of the operation of s 60(3) and there is an appeal against the sequestration order which has not been determined, it is usual for the court to grant liberty to apply to reinstate the proceedings within 28 days should such an appeal succeed: see, for example, Dr Falamaki v Wollongong City Council [2010] NSWSC 38, per Schmidt J. However, in the instant case, there would be no utility in making such an order since this Court has no jurisdiction to grant the relief sought by the plaintiff in his summons in any event.

Orders 38For the foregoing reasons I make the following orders: (1) Summons dismissed. (2) Plaintiff to pay the defendant's costs of the proceedings.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 May 2012