BANKRUPTCY – BANKRUPTCY COURTS – TRANSFER OF PROCEEDINGS
– where the defendant, in his capacity as trustee in bankruptcy
for the
plaintiff, had real property registered in his name – where the plaintiff
Source
Original judgment source is linked above.
Catchwords
BANKRUPTCY – BANKRUPTCY COURTS – TRANSFER OF PROCEEDINGS– where the defendant, in his capacity as trustee in bankruptcyfor theplaintiff, had real property registered in his name – where the plaintiffseeks final relief under the Land Title Act 1994 (Qld) to compel theplaintiff’s trustee in bankruptcy to transfer the title of the property tothe plaintiff – where thedefendant trustee brought a summary judgmentapplication against the plaintiff seeking dismissal of the proceeding –wherethe plaintiff brought a summary judgment application seeking the finalrelief – where the real issues involve considerationof the jurisdictionof the Supreme Court of Queensland – whether designated Federal Courtshave exclusive jurisdiction overbankruptcy proceedings – whetherbankruptcy jurisdiction is revested in the Supreme Court of Queensland by s 4 ofthe Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) – whetherthere are ‘special reasons’ justifying an order pursuant to s 6(3)
of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) –
whether the proceeding should be transferred to the Federal Court of
Australia
Bankruptcy Act 1966 (Cth), s 5, s 27, s 31, s 58, s 116,
s 143, s 148, s 149, s 149B, s 153
Judiciary Act 1903 (Cth), s
39
Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth), s 3,
s
4, s 6
Land Title Act 1994 (Qld), s 188, s 188A, s 188B
Uniform
Civil Procedure Rules 1999 (Qld), r 53
Cordes v Dr Peter Ironside
Pty Ltd [2009] QCA 302
[2010] 2 Qd R 235
Gomez v Carrafa [2020] VSC 661
In
the matter of Galtari Pty Ltd (In liq) [2018] NSWSC
917
Jakimowicz v Jacks [2016] VSCA
42
Meriton Apartments Pty Ltd v Industrial Court of New South Wales
[2008] FCAFC 172
Scott v Bagshaw [2000] FCA 816
(2000) 99 FCR 573
Thompson
v Lane (No. 3) (Trustee) [2022] FCA 128
Thompson v Lane (Trustee)
[2023] FCAFC 32
Thompson v Lane [2024] FCA
1234
Truthful Endeavour Pty Ltd v Condon
(Trustee) Re Rayhill (Bankrupt) [2015] FCAFC 70
(2015) 233 FCR 174
Turner v
Gorkowski [2014] VSCA 248
Judgment (119 paragraphs)
[1]
BANKRUPTCY - BANKRUPTCY COURTS - TRANSFER OF PROCEEDINGS - where the defendant, in his capacity as trustee in bankruptcy for the plaintiff, had real property registered in his name - where the plaintiff seeks final relief under the Land Title Act 1994 (Qld) to compel the plaintiff's trustee in bankruptcy to transfer the title of the property to the plaintiff - where the defendant trustee brought a summary judgment application against the plaintiff seeking dismissal of the proceeding - where the plaintiff brought a summary judgment application seeking the final relief - where the real issues involve consideration of the jurisdiction of the Supreme Court of Queensland - whether designated Federal Courts have exclusive jurisdiction over bankruptcy proceedings - whether bankruptcy jurisdiction is revested in the Supreme Court of Queensland by s 4 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) - whether there are 'special reasons' justifying an order pursuant to s 6(3) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) - whether the proceeding should be transferred to the Federal Court of Australia
[1] Ms Emma Thompson has brought a proceeding in the Supreme Court of Queensland against a Mr Morgan Lane, who was appointed on 1 July 2020 as Ms Thompson's trustee in bankruptcy.
[2] Ms Thompson seeks final relief under ss 188 and 188A of the Land Title Act 1994 (Qld). More specifically, the relief sought is an order that Mr Lane "[organise] the transfer of the Title of the property 3/40 Glen Road, Toowong forthwith into [Ms Thompson's] name (within 1 day of making the order)."
[3] Sections 188, 188A and 188B of the Land Title Act are concerned with orders for damages, compensation or title restoration where a party has lost his or her registered title to real properly by reason of, amongst other things, fraud or incorrect registration.
[4] Mr Lane has brought a summary judgment application which seeks the dismissal of the proceeding. Ms Thompson has brought a summary judgment application which seeks the final relief.
[5] Shortly after argument commenced, it became apparent that the jurisdiction of the Supreme Court of Queensland to hear the matter was an issue which required consideration.
[6] The first duty of the Court is to ensure that it has jurisdiction to hear a matter.[1]
[7] The real issues in this case on jurisdiction involve the following questions:
[20]
[9] Ms Thompson became bankrupt by way of the acceptance of a debtor's petition on
[21]
1 July 2020. On that date, Mr Lane was appointed her trustee in bankruptcy.
[22]
[10] Sometime later in 2021, Ms Thompson commenced proceedings seeking an annulment of her bankruptcy in the Federal Court of Australia. That proceeding was unsuccessful. The reasons for the dismissal of that proceeding were delivered by Logan J on 18 February 2022 in Thompson v Lane (Trustee) (No 3)[2022] FCA 128.
[11] Ms Thompson then appealed from the decision of Logan J to the Full Court of the Federal Court. Ms Thompson was also unsuccessful on that appeal. The reasons on appeal were delivered on 10 March 2023 in Thompson v Lane (Trustee)[2023] FCAFC 32.
[12] On 2 July 2023, Ms Thompson was discharged from bankruptcy after three years, as a result of the operation of s 149 of the Bankruptcy Act.
[13] It is uncontroversial that when a person is discharged from his or her bankruptcy they have the benefit of the effect of s 153 of the Bankruptcy Act, so that the bankrupt is released from a large proportion of his or her debts which were provable in the bankruptcy.[2]
[14] On 17 October 2023, Ms Thompson commenced fresh proceedings in the Federal Court of Australia, whereby she sought an order to the effect that Mr Lane cease to act as trustee of her bankrupt estate.[3] Ms Thompson sought interim relief in that proceeding to the effect that Mr Lane cease acting as trustee and Mr Lane pay to Ms Thompson an amount of funds, which he had held in that capacity.[4]
[15] On 23 February 2024,[5] Mr Lane in his capacity as trustee, had the real property at 3/40 Glen Road, Toowong (the "") registered as "THE TRUSTEE OF THE PROPERTY OF EMMA THOMPSON, A BANKRUPT."
[23]
(a) did not halt an ongoing and incomplete administration of the bankruptcy; and
(b) did not revest property from Mr Lane back to Ms Thompson.[6]
[24]
[18] Ms Thompson continued to live at the Toowong Unit until a point in time in 2025 when Mr Lane took possession of it.
[19] In 2025, Ms Thompson brought a proceeding in the District Court of Queensland (which was then transferred to the Supreme Court of Queensland) against the body corporate in which the Toowong Unit was situated. In that proceeding, Ms Thompson sought interlocutory relief against the body corporate in the form of an injunction requiring restoration of her access to the building in which the Toowong Unit was situated, and a restraint on the body corporate from denying her access to the lift in the common area. That relief was refused by Muir J on 28 March 2025.
[20] This proceeding was then initiated on 31 March 2025 seeking to compel Mr Lane to cause the Toowong Unit to be registered into her name.
[25]
Do the designated Federal Courts have exclusive jurisdiction over the proceeding by reason of s 27 of the Bankruptcy Act 1966 (Cth)?
[26]
[21] The answer to the first real question is that s 27(1) of the Bankruptcy Act does grant exclusive jurisdiction over the proceeding to the designated Federal Courts. The reasons for this answer to the first real question are set out below.
[27]
[22] The starting point is to recognise that s 39(2) of the Judiciary Act 1903 (Cth) confers Federal jurisdiction on State Supreme Courts.
(1) The Federal Court and the Federal Circuit and Family Court of Australia (Division 2) have concurrent jurisdiction in bankruptcy, and that jurisdiction is exclusive of the jurisdiction of all courts other than:
(b) the jurisdiction of the Federal Circuit and Family Court of Australia (Division 1) under section 35 or 35A of this Act.
[31]
(b) exclude the jurisdiction of a court of a State or Territory under the Judiciary Act 1903 in a criminal matter relating to this Act."
[32]
[24] In accordance with s 27(1) of the Bankruptcy Act, concurrent jurisdiction is granted to the Federal Court of Australia and the Federal Circuit and Family Court of Australia (Division 2) for "jurisdiction in bankruptcy." The modifying effect of
[33]
s 27(1) of the Bankruptcy Act on s 39(2) of the Judiciary Act was described by Greenwood J as being "...a repeal of the general investing of federal jurisdiction in State courts...by s 39(2) of the Judiciary Act...to the extent any jurisdiction or proceeding arises under or by virtue of the Bankruptcy Act..."[7]
[34]
[25] The operation of s 27(1) of the Bankruptcy Act is subject to the exclusions in s 27(2). There had been an oral submission by Ms Thompson that a making of a fraud allegation in the proceeding would engage the exclusion in s 27(2) of the Bankruptcy Act. That argument may be swiftly disposed of. This proceeding is a civil action, and to the extent that Ms Thompson made fraud allegations, they were not made in a "criminal matter" as contemplated by the relevant subsection.
[26] Returning to the proper construction of s 27(1), the ambit of its operation is determined by the phrase "jurisdiction in bankruptcy."
[27] That phrase is then informed by the definition of "bankruptcy" as it appears in s 5 of the Bankruptcy Act. Section 5 relevantly provides as follows:
[35]
bankruptcy, in relation to jurisdiction or proceedings, means any jurisdiction or proceedings under or by virtue of this Act."
[36]
[28] Within that definition of bankruptcy, the critical words are "jurisdiction or proceedings under or by virtue of this Act."
[29] The phrase "jurisdiction or proceedings under or by virtue of [the Bankruptcy Act]" has been the subject of judicial interpretation. It has been given a broad rather than a constrained construction.
[30] The foundational intermediate appellate authority which established the broad construction is the Full Court of the Federal Court of Australia's decision in Scott v Bagshaw[2000] FCA 816; (2000) 99 FCR 573. In that case, the Court was dealing with an appellant who was the trustee of a family trust who sought declarations against the defendants, one of whom included the trustees in bankruptcy, that the appellant held security in the form of equitable mortgages over certain properties. The trustees in bankruptcy were one of the registered proprietors of the relevant properties. The trustees in bankruptcy denied that any such security interest existed. The trustees in bankruptcy contended that the family trustee merely had an unsecured provable debt in the bankruptcy.
[31] The Full Court of the Federal Court found that the relevant claim by the family trustee came within the operation of s 27(1) of the Bankruptcy Act and accordingly the exclusive jurisdiction of the designated Federal Courts. The Court concluded as follows:[8]
[37]
"On the face of the pleadings, the claim is one to realise an equitable charge. The pleadings make no reference of any section of the [Bankruptcy] Act and the matter may be capable of reaching judgment without reference to any such section.
[38]
However, the undoubted effect of an order being made in the terms sought by the appellant would be that a declaration would be made against the title of the third respondents.[9] Upon the third respondents' becoming trustees [in bankruptcy], the title to the properties (and subsequently to the money representing part of the properties) became vested in them: ss 58(1) and 132 of the [Bankruptcy] Act. The consequence of any such order must therefore be that it would have a necessary adverse effect on the title of the third respondents to the extent that it established title in the appellant. That is a matter that falls within the jurisdiction in bankruptcy."
[39]
[32] As part of the reasoning which supported this conclusion, the Court had referred to
(1) In exercising jurisdiction under this Act, the Court shall hear and determine the following matters in open Court:
[42]
(f) applications to declare for or against the title of the trustee to any property..."
[43]
[33] That section was regarded by the Court as articulating an example of jurisdiction under the Act.
[34] In the Queensland Court of Appeal decision of Cordes v Dr Peter Ironside Pty Ltd[2009] QCA 302; [2010] 2 Qd R 235, the Court was concerned with a factual circumstance where a plaintiff had asserted rights to certain real property on the basis of an interest which was inconsistent with rights claimed by a trustee in bankruptcy in respect of the same property. Holmes and Chesterman JJA (with whom Mullins J, as her Honour then was, concurred) followed the reasoning in Scott v Bagshaw. Their Honour's concluded at [38]:
[44]
"Although the paths of reasoning in the judgments of Greenwood J and Perram J in Meriton Apartments are not identical, and the contemplated scope of bankruptcy jurisdiction is correspondingly different, both firmly endorse the conclusion in Scott v Bagshaw, that decisions involving findings for or against the trustee in bankruptcy's title to property fall within the jurisdiction of the Federal Court. This Court should not depart from an appellate decision of the Federal Court unless convinced that its interpretation is wrong. The conclusion that s 31(1)(f) provides an example of bankruptcy jurisdiction is not obviously flawed. There is no reason not to follow Scott v Bagshaw." (footnotes omitted)
[45]
[35] The construction of s 27(1) of the Bankruptcy Act to the effect that decisions involving findings for or against the trustee in bankruptcy's title to property fall within the exclusive jurisdiction of the Federal Court, is one which has been repeatedly approved of and followed in both first instance and intermediate appellate authorities.
[36] By way of example only, the Victorian Court of Appeal in Jakimowicz v Jacks[2016] VSCA 42 observed as follows when considering the operation of s 27(1) of the Bankruptcy Act:[10]
[46]
"The position is different when a trustee is a party to the litigation and claims that the property in dispute (which may be the chose in action itself) has vested in the trustee pursuant to s 58 of the Act and is divisible property under s 116. In that situation, the question is not just one of standing. Rather, there is also a question that requires a binding determination as to whether the property has vested in the trustee. In those cases, a court's finding will necessarily have an effect on the trustee's title. That was the situation in the following cases:
[47]
Scott v Bagshaw (claim by trustee to real property and proceeds of sale);
Cordes v Dr Peter Ironside Pty Ltd (claim by bankrupt against trustee for reconveyance of real property);
Gorkowski (claim against trustee by third party alleging she had an equitable interest in property); and
Truthful Endeavour (claim by third party that property held on trust for her by trustee in bankruptcy)." (footnotes omitted)
[48]
(c) Application of legislation and principle to the present proceeding
[49]
[37] The subject matter of the present proceeding falls firmly within the four corners of the decisions in Scott v Bagshaw and Cordes v Dr Peter Ironside Pty Ltd.
[38] First, in this proceeding, Ms Thompson seeks an order under ss 188 and 188A of the Land Title Act for Mr Lane to cause her to be registered as the proprietor of the Toowong Unit. Whilst not mentioned by Ms Thompson, it seems clear that the relief sought could only be made via s 188B of the Land Title Act. The relevant portions of ss 188, 188A and 188B of the Land Title Act are as follows:
[50]
"188Compensation for deprivation of lot or interest in lot
[51]
(1) This section applies if a person (the claimant) is deprived of a lot, or an interest in a lot, because of -
[52]
(b) the incorrect creation of an indefeasible title in the name of another person; or
[53]
(2) The claimant is entitled to compensation from the State for the deprivation.
[54]
(1) This section applies if a person (the claimant****) suffers loss or damage because of -
[55]
(a) the incorrect creation of an indefeasible title in the name of another person; or
[56]
(c) an error in an indefeasible title or in the freehold land register;
[57]
(2) The claimant is entitled to compensation from the State for the loss or damage.
[58]
188B Order by Supreme Court about deprivation, loss or damage
[59]
(1) For section 188 or 188A, a claimant may apply to the Supreme Court for an order -
[60]
(2) The court may make the order it considers just.
[61]
(3) Without limiting subsection (2), the court may by order direct the registrar to -
[62]
(a) cancel or correct an indefeasible title or other particulars in the freehold land register; or
[63]
(4) The court may join any other person it considers appropriate in a proceeding under this section."
[64]
[39] Accordingly, the relief itself reveals that the proceeding will ultimately involve a decision with a finding for or against the trustee in bankruptcy's title to the Toowong Unit.
[40] Secondly, a consideration of the pleadings further illustrates this point.
[41] Ms Thompson's statement of claim makes the following relevant allegations:
[65]
(a) Ms Thompson went into bankruptcy on 1 July 2020;
(b) Ms Thompson was discharged from bankruptcy on 2 July 2023;
(c) the transfer by registration of the real property into Mr Lane's name occurred on 23 February 2024,[11] purportedly in his capacity as trustee of the property of Ms Thompson as a bankrupt;
(d) the transfer was invalid;
(e) prior to 2 July 2023, Mr Lane had not made an application to extend the administration;
(f) prior to 2 July 2023, Mr Lane had not determined that there was a valid debt payable from the bankrupt estate;
(g) prior to 2 July 2023, Mr Lane did not inform Ms Thompson of specifics of any ongoing administration; and
(h) in consequence of the matters pleaded above, Ms Thompson was entitled to have Mr Lane cause the re-transfer (by registration) of the Toowong Unit to her as the proprietor.
[66]
[42] As Ms Thompson has submitted both in writing and orally, her case is that her discharge from bankruptcy on 2 July 2023 pursuant to s 149 of the Bankruptcy Act brought to an end the ability of Mr Lane to retain any property which he held as her trustee in bankruptcy. In support of this submission, Ms Thompson also relied on
[67]
s 153 of the Bankruptcy Act, which she contended had the effect of discharging for all purposes, any debts which may have been, but which were not yet proved by
[68]
2 July 2023, being her date of discharge from bankruptcy. Ms Thompson also relied on a definition in Schedule 2 of the Bankruptcy Act of the phrase "end of administration," being the day a bankruptcy is annulled or the day a bankrupt is discharged.
[69]
[43] It was not controversial at the time of the hearing that Mr Lane had yet to finally rule on the proofs of debt for the bankruptcy of Ms Thompson. Ms Thompson submitted that at least some of the debts sought to be proved were invalid or statute barred. In effect, Ms Thompson contended that there was no ongoing right to rule on any proofs. Ms Thompson also complained about how long Mr Lane had taken to perform his obligations, belatedly by reference to s 19(1)(j) of the Bankruptcy Act.
[44] In contrast to Ms Thompson's case, Mr Lane contended in his defence to the effect that:
[70]
(a) Ms Thompson's legal and equitable interest in the Toowong Unit vested in him on 1 July 2020 on Ms Thompson's bankruptcy, by operation of s 58 of the Bankruptcy Act;
(b) he was the correct and appropriate registered proprietor of the Toowong Unit, again by reason of s 58 of the Bankruptcy Act;
(c) the right to be the registered proprietor continued on after Ms Thompson's discharge from bankruptcy;
(d) the Toowong Unit continues to be held by him for the purpose of realisation and the distribution of the proceeds; and
(e) such distribution includes distribution to creditors whose proofs of debts are ultimately proved in the bankruptcy process.
[46] By reason of the form of the relief, the pleaded case of Ms Thompson, and the challenge to the pleaded case by Mr Lane, this proceeding is one which will result in a decision involving findings for or against the trustee in bankruptcy's title to the Toowong Unit. Accordingly, consistent with the reasoning in Scott v Bagshaw and the other appellate authorities referred to, the current proceeding involves jurisdiction under or by virtue of the Bankruptcy Act.
[47] The proceeding is therefore within the operation of s 27(1) of the Bankruptcy Act and the designated Federal Court has exclusive jurisdiction, subject only to the matters dealt with below.
[48] Ms Thompson misapprehends the nature of this determination on jurisdiction. This determination on jurisdiction does not involve a final resolution of the underlying legal and factual disputes. What the Court is doing by this decision is characterising the nature of the dispute and then applying that characterisation to the operation of
Does s 4 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) revest bankruptcy jurisdiction into the Supreme Court of Queensland, and does this proceeding involve a "special federal matter" which may be required, in any event, to be transferred to the Federal Court of Australia?
[74]
[49] Despite s 27(1) of the Bankruptcy Act granting exclusive jurisdiction to the designated Federal Courts, this second issue raises the question of whether there is a separate referral of jurisdiction pursuant to s 4 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth)? The answer to that question is yes. It then raises the question as to whether this proceeding involves a "special federal matter" which may require, in any event, to be transferred to the Federal Court of Australia? The answer to that question is also yes.
[75]
[50] For the purpose of this second real issue, the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) is the relevant legislation. In particular, the following provisions are relevant:
[76]
(a) the definition of "special federal matter" as contained in s 3;
[51] The critical portions of those sections are as follows:
[78]
(1) In this Act, unless the contrary intention appears:
[79]
(e) a matter that is within the original jurisdiction of the Federal Court by virtue of section 39B of the Judiciary Act 1903;
[80]
being a matter in respect of which the Supreme Court of a State or Territory would not, apart from this Act, have jurisdiction.
[81]
4Additional jurisdiction of certain courts
[82]
(a) the Federal Court...has jurisdiction with respect to a civil matter, whether that jurisdiction was or is conferred before or after the commencement of this Act; and
(b) the Supreme Court of a State or Territory would not, apart from this section, have jurisdiction with respect to that matter;
[83]
(c) in the case of the Supreme Court of a State (other than the Supreme Court of the Australian Capital Territory and the Supreme Court of the Northern Territory) - that court is invested with federal jurisdiction with respect to that matter; or
(d) in the case of the Supreme Court of a Territory (including the Australian Capital Territory and the Northern Territory) - jurisdiction is conferred on that court with respect to that matter.
[84]
(3) Where a proceeding is transferred to the Federal Court, the Federal Circuit and Family Court of Australia (Division 1) or a State Family Court of a State, that court has, by virtue of this subsection, jurisdiction with respect to so many of the matters for determination in the proceeding as that court would not have apart from this subsection.
[85]
(a) a matter for determination in a proceeding that is pending in the Supreme Court of a State or Territory is a special federal matter; and
(b) the court does not make an order under subsection (3) in respect of the matter;
[86]
the court must transfer the proceeding in accordance with this section to the Federal Court or a court mentioned in paragraph (2)(b).
[87]
(1A)However, the court must only transfer so much of the proceeding as is, in the opinion of the court, within the jurisdiction (including the accrued jurisdiction) of the Federal Court, or the court mentioned in paragraph (2)(b), as the case may be.
[88]
(2) If the court orders that a proceeding or part of a proceeding be transferred, the proceeding or part of the proceeding must be transferred:
[89]
(a) if the matter for determination in the proceeding is a matter mentioned in paragraph (a), (b), (c) or (e) of the definition of special federal matter in subsection 3(1) - to the Federal Court...
[90]
(3) The Supreme Court may order that the proceeding be determined by that court if it is satisfied that there are special reasons for doing so in the particular circumstances of the proceeding other than reasons relevant to the convenience of the parties.
[91]
(6) In considering whether there are special reasons for the purposes of subsection (3), the court must:
[92]
(a) have regard to the general rule that special federal matters should be heard by the Federal Court or a court mentioned in paragraph (2)(b), whichever is appropriate in the particular case..."
[93]
[52] The Court in this case is dealing with a self-represented person in the form of Ms Thompson. Ms Thompson does have a law degree and has informed me that she is a candidate for a Doctor of Law in an unidentified tertiary institution, but Ms Thompson is not evidently admitted to practice law in this State.
[54] Rule 53 of the Uniform Civil Procedure Rules 1999 (Qld) ("UCPR") provides that a proceeding in which a party relies on the cross-vesting laws must include, in the process for which the laws are invoked, a statement identifying each claim or ground of defence about which the cross-vesting laws are invoked. That was not done in this proceeding. However, I note that r 53(5) of the UCPR makes clear that a failure to comply with that previous sub-rule does not invalidate the process.
[55] Even though Ms Thompson has not complied with r 53 of the UCPR, I am prepared to deal with the proceeding on the basis that she would now seek to invoke the cross-vesting legislation. That approach has not been objected to by Mr Lane. Without reference to the cross-vesting legislation, Ms Thompson's proceeding would be dismissed for lack of jurisdiction as a result of the answer to the first real issue.
[56] I turn then to the cross-vesting legislation. Section 4(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) operates so that the exclusive jurisdiction under s 27 of the is revested into the Supreme Court. That revesting of the relevant federal jurisdiction pursuant to occurs because the Supreme Court would not otherwise have jurisdiction (in bankruptcy) but for the operation of that section.
[94]
[62] I am satisfied that the Supreme Court of Queensland is initially revested with the Federal Court's exclusive bankruptcy jurisdiction. This occurs as a result of the operation of s 4(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth).
[63] However, the entirety of this proceeding is one which involves a "special federal matter" as defined in s 3(1)(e) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth). This conclusion is supported by various intermediate appellate authorities.
[64] In the Victorian Court of Appeal decision of Turner v Gorkowski[2014] VSCA 248, a Mrs Gorkowski had brought a proceeding where she claimed a beneficial interest in certain real property which had been owned by her bankrupt son. The claim was brought against the trustee in bankruptcy in the Victorian Supreme Court. The trustee in bankruptcy applied in that case to have the proceeding struck out on the basis that the Federal Court had exclusive jurisdiction under s 27 of the Bankruptcy Act. At first instance, the trial judge found initially that s 27 deprived the Supreme Court of jurisdiction, but then found that s 4(1) of the (Cth) revested federal jurisdiction back into the Supreme Court. The trial judge also determined that the claim in that case did not give rise to a "special federal matter" within the meaning of of the (Cth). The trustee in bankruptcy appealed that decision. On appeal, the first instance decision was overturned.
[95]
"Although the matter is not without difficulty, we consider that his Honour should have held that the proceeding was a "special federal matter." We reach that conclusion because it was necessary for the trustee in bankruptcy to rely on the sequestration order made under the Bankruptcy Act and the title conferred on him as a consequence of that order, to resist Mrs Gorkowski's claim. Although his title was not "a defence" to Mrs Gorkowski's claim, s 58 of the Bankruptcy Act, which vested the property of the bankrupt in him, was the basis on which the proceedings had to be brought against him. The onus lay on Mrs Gorkowski to establish her interest in the property, which the trustee claimed was vested in him. This was not a case where the bankruptcy was simply "lurking in the background" to the proceedings." (footnotes omitted)
[96]
[66] In the later decision of Truthful Endeavour Pty Ltd v Condon (Trustee) Re Rayhill (Bankrupt)[2015] FCAFC 70; (2015) 233 FCR 174, the Full Court of the Federal Court also disapproved of the first instance decision in Gorkowski. It appears that the Full Court had not been taken to the subsequent appellate decision in Gorkowski, but they nonetheless reached the same conclusion as the Victorian Court of Appeal. The Full Court expressed their disagreement with the first instance decision in Gorkowski in the following terms:[16]
[97]
"...the rights in issue [in Gorkowski] were not the equitable principles or issues to resolve the dispute, but were Mr Turner's claim to ownership or Mrs Gorkowski's claim that the property was not divisible. Both of those rights owed their existence to federal law, in the former case to ss 58(1) and 116(1) of the Bankruptcy Act and in the latter to s 116(2). That the outcome of a controversy does not depend on federal law for resolution or enforcement is not determinative.
[98]
If a controversy or matter manifested by a proceeding regarding beneficial ownership of property (by reference to equitable principles) claimed by the trustee in bankruptcy by force of ss 58(1) and 116(1) did not arise under the Bankruptcy Act, then what was said by the Full Court in Scott [v Bagshaw] at [20] would have been wrong. The Full Court was not wrong. In such a case a matter does arise under the Bankruptcy Act. It is a matter in bankruptcy; it is a matter that arises under a law of the Parliament (the Bankruptcy Act); it is a matter within the original jurisdiction of the Federal Court; it is a matter in respect of which the Supreme Court of a State or Territory would not, apart from the Cross-vesting Act, have jurisdiction within the closing clause of the definition of "special federal matter" in s 3(1) of the Cross-vesting Act; and it is a "special federal matter" for the purposes of the Cross-vesting Act, in particular s 6 of that Act." (footnotes omitted)
[99]
[67] The statements of principle above were the subject of approval in the later appellate decision of Jakimowicz v Jacks[2016] VSCA 42 at [32]- [34].
[68] In the present case, the proceeding in the Supreme Court of Queensland involves a dispute between a discharged bankrupt and her trustee in bankruptcy as to the legal title to the Toowong Unit. Ms Thompson's claim relies on ss 149, 149B and 153 of the Bankruptcy Act and the definition of "end of the administration" in Schedule 2 of the Bankruptcy Act. Mr Lane's claim is that the property has vested in him as trustee pursuant to s 58 of the Bankruptcy Act and that he holds that property ultimately for distribution in accordance with s 116(1) of the Bankruptcy Act.
[71] The answer to the third real issue is that in the circumstances of this case, no order should be made under s 6(3) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth). The reason for this answer to the third real issue are set out below.
[102]
[72] In the present case, all of the facts point to there being no special reasons.
[73] First, I am not to have regard to the mere convenience of the parties.
[74] Secondly, in support of there being no special reasons, I will have regard to the general rule that special federal matters should be heard by the Federal Court.
[75] Thirdly, there is currently a proceeding brought by Ms Thompson in the Federal Court where she seeks orders that Mr Lane cease to act as the trustee in bankruptcy for the Toowong Unit. The very matters that she raises in this proceeding, based on ss 149, 149B and 153 of the Bankruptcy Act are raised in that existing Federal Court proceeding. That factor strongly points in favour of no special reasons existing. The efficient and cost-effective conduct of this common issue will be promoted if this proceeding is transferred to the Federal Court. The fact that a Federal Court judge in an interlocutory decision has found Ms Thompson's contentions in this respect to not give rise to a triable issue, does not alter this conclusion. It merely points to the inherent weakness of Ms Thompson's contentions.
[76] Fourthly, the only basis raised by Ms Thompson in support of there being special reasons was one which effectively reagitated the same contentions raised in her summary judgment submissions, including reliance on ss 149, 149B and 153 of the (and also the definition previously referred to). That basis has no weight. These are the very arguments which Ms Thompson will seek to reagitate at the final determination of this proceeding. A consideration of special reasons does not involve the final determination of the substantive matters sought to be raised in the underlying proceeding.
[5] Ms Thompson pleaded that the property was registered in the trustee's name on 28 February 2024 at paragraph [4] of her Statement of Claim, however the title search shows it was registered in his name as trustee on 23 February 2024. The exact date is immaterial to the matters to be determined in these reasons.
[11] Ms Thompson pleaded that the property was registered in the trustee's name on 28 February 2024 at paragraph [4] of her Statement of Claim, however the title search shows it was registered in his name as trustee on 23 February 2024.
"Do certain designated Federal Courts have exclusive jurisdiction over the proceeding by reason of s 27 of theBankruptcy Act 1966(Cth) ("Bankruptcy Act")?
Does s 4 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) revest bankruptcy jurisdiction into the Supreme Court of Queensland, and does this proceeding involve a "special federal matter"which may be required, in any event, to be transferred to the Federal Court of Australia?
[8] These reasons will be structured by setting out the relevant background facts, dealing with each of the real issues listed above, and then articulating appropriate orders arising from the conclusions reached on the real issues.
Toowong Unit
[16] The entitlement for that transfer of the Toowong Unit is said by Mr Lane to be based on ss 58(1) and 58(2) of the Bankruptcy Act. Mr Lane says that he remains trustee of the property of Emma Thompson, irrespective of her personal discharge from bankruptcy.
[17] The interim relief sought in the 2023 Federal Court proceeding was refused on 24 October 2024 by Collier J for the reasons expressed in Thompson v Lane[2024] FCA 1234. In those reasons, Collier J rejected Ms Thompson's contention that her discharge from bankruptcy pursuant to s 149 of the Bankruptcy Act brought Mr Lane's role as trustee in bankruptcy to an end. Her Honour found that this contention by Ms Thompson did not give rise to a serious question to be tried. By reference to both the statute and authority, Collier J succinctly explained why the discharge of Ms Thompson as a bankrupt under s 149:
[58] Section 6(3) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) allows for the Supreme Court to order that the proceeding be determined within the Supreme Court if it is satisfied that there are special reasons for doing so in the particular circumstances of the proceeding. Special reasons do not include reasons relevant to the convenience of the parties.
[59] Section 6(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) provides that before making a s 6(3) order, the court must be satisfied that a designated written notice specifying the nature of the special federal matter had been given to the Attorneys-General of the State and Commonwealth, and that a reasonable time had elapsed.
[60] Section 6(6) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) provides that in the process of determining if special reasons are present the court must have regard to the general rule that special federal matters should be heard by the Federal Court.
[61] Special reasons do not require that the relevant circumstances must be extraordinary or unique; however, the circumstances must be uncommon or exceptional and different from the ordinary or usual circumstances. The efficient and cost-effective conduct of litigation is also a relevant consideration in determining whether special reasons exist.[14]
[65] In the appellate decision, Neave and Santamaria JJA observed as follows on this issue:[15]
[69] This set of disputes is a matter in bankruptcy; it is a matter that arises under a law of the Parliament (the Bankruptcy Act); it is a matter within the original jurisdiction of the Federal Court; it is a matter in respect of which the Supreme Court does not, apart from the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth), have jurisdiction within the closing clause of the definition of "special federal matter" in s 3(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth); and it is a "special federal matter" for the purpose of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth), in particular s 6 of that Act. As was observed in the appellate decision in Gorkowski, this is not a case where the bankruptcy is simply 'lurking in the background' to the proceeding.
[70] Given the conclusion that the proceeding involves a special federal matter, this Court must transfer the proceeding to the Federal Court of Australia, unless an order is made under s 6(3) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth).