FEDERAL COURT OF AUSTRALIA

Carey v Carey [2008] FCA 1581

MARION GRACE CAREY and MARK KNIGHT CAREY v IAN HARVEY CAREY

NSD 1168 of 2008

GRAHAM J

17 OCTOBER 2008

SYDNEY

THE COURT ORDERS THAT:

1.                  The hearing of the respondent’s Notice of Motion filed 29 August 2008 presently fixed before Graham J for 31 October 2008 be vacated.

2.                  The Notice of Motion filed 29 August 2008 be fixed for directions before Justice Flick at 9.30am on Monday, 27 October 2008.

3.                  The respondent’s costs of the applicants’ Notice of Motion filed in Court on 17 October 2008 and any costs of the respondent thrown away by the vacation of the hearing fixed for 31 October 2008 be the respondent’s costs in the Motion filed 29 August 2008 which is now to be heard by Justice Flick.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     On 25 July 2008 the applicants, as executors of the will of the late Grace Dorothy Carey, instituted proceedings against the respondent seeking relief in relation to certain assets forming part of the deceased estate said to be held on trust by the respondent.  The respondent’s address, as given in the Application, was an address in Rotterdam in the Netherlands.  The preamble to the Application was expressed as follows:

‘This application is for recovery of assets to meet Commonwealth taxation obligations and other orders in respect of assets held by the respondent on trust for the estate of the Late Grace Dorothy Carey (“the Estate”).   The plaintiffs are the executors of the Estate.  The legislative basis for the Court’s jurisdiction to hear the matter is pursuant to s.39B(1A) of the Judiciary Act 1903 and the applicants’ right of indemnity and to enforce payment of tax obligations under s.254 of the Income Tax Assessment Act 1936 (“Cth”) from the respondent and/or from the assets invested overseas for possible liabilities arising under the Income Tax Assessment Act 1936 (“Cth”), and associated jurisdiction under s.32 of the Federal Court of Australia Act for possible breach of fiduciary duty and an obligation to account.’

2                     On 18 August 2008 the Court granted leave to the respondent to file in Court a conditional Notice of Appearance dated 18 August 2008. 

3                     On 29 August 2008 the respondent filed a Notice of Motion returnable at 9.30 am on 8 September 2008 seeking the following orders:

‘1         Pursuant to Order 9 rule 7(1)(a) that the originating application filed         on 25 July 2008 in this matter be set aside.

2          Costs.’

4                     The respondent’s Notice of Motion filed 29 August 2008 was fixed for hearing before me on Friday, 31 October 2008. 

5                     At the applicants’ request, the matter was placed in my list for directions earlier today whereupon leave was granted to the applicants to file in Court a Notice of Motion, on which certain manuscript alterations were recorded, in which orders were sought as follows:

‘1.        That the hearing of the respondent’s motion filed 29 August 2008 and listed for hearing on 31 October 2008 be vacated.

2          that these proceedings be listed before the Honourable Justice Flick on 27 October 2008 so as be (sic) mentioned at the same time as matter No NSD 1565/2007

3          subject to further order that these proceedings be transferred to the listing docket of the Honourable Justice Flick.

4          Such further or other order as the Court deems fit.’

6                     The applicants proceeded to move for the relief identified in the Notice of Motion filed in Court on 17 October 2008, relying upon two affidavits of Albert Tak-Fai Yau, sworn 13 October 2008 and 15 October 2008.  For the purpose of the Motion before the Court today, no objections were raised to any parts of the affidavits, nor was the deponent required for cross-examination.  The only other evidence adduced on the hearing of the Motion was in the form of exhibits NMA and NMB being firstly, ‘applicants’ submissions for hearing on 1 May 2008’ in matter number NSD1565 of 2007 and secondly, ‘respondent’s outline of submissions of 27 March 2008’ also in matter number NSD1565 of 2007.

7                     I should mention that the proceedings NSD1565 of 2007 were between precisely the same parties as are the parties to the proceedings NSD1168 of 2008 which are presently before the Court. 

8                     Given the commitments of counsel in other matters today, I proceeded to announce the orders which I intended to make, and did make, on the applicants’ Notice of Motion filed 17 October 2008, earlier today.  The orders which I made were as follows:

‘(1)      That the hearing of the respondent’s Notice of Motion filed 29 August 2008 presently fixed before me for 31 October 2008 be vacated.

(2)       That the Notice of Motion be fixed for directions before Justice Flick at 9.30 am on Monday, 27 October 2008.

(3)       That the respondent’s costs of the applicants’ Notice of Motion filed in Court on 17 October 2008 and any costs of the respondent thrown away by the vacation of the hearing fixed for 31 October 2008 be the respondent’s costs in the Motion filed 29 August 2008 which is now to be heard by Justice Flick.’

9                     With the consent of the parties, I am now providing my brief reasons for the orders which I have just mentioned and which were made earlier today. 

10                  I do not have an extensive knowledge or understanding of the proceedings NSD 1565 of 2007 which have, as I understand it, been before other judges of the Court, including Cowdroy and Flick JJ.  My understanding is that the earlier proceedings were brought pursuant to Order 15A rule 6 of the Federal Court Rules which permit the Court, in certain circumstances, to make orders for discovery of documents where, after making all reasonable inquiries, the applicants seeking such discovery do not have sufficient information to enable them to make a decision whether to commence a proceeding in the Court to obtain relief that they may have an entitlement to.

11                  I am informed by senior counsel for the applicants that in the course of the proceedings before Flick J in matter number NSD 1565 of 2007, some 15 affidavits were read for the applicants, some 10 affidavits were read for the respondent and some 13 exhibits were tendered.  Senior counsel for the respondent was prepared to generally concede that evidence as extensive as that, had in fact been before his Honour. 

12                  Somewhat unusually, I understand that orders in the nature of Mareva injunctions were granted in the preliminary discovery proceedings in respect of certain property.  The respondent has indicated his desire at some stage to have those injunctions dissolved or discharged.

13                  On 6 May 2008, Flick J made a series of orders in proceedings NSD 1565 of 2007 including:

‘5.        The Applicants are to commence any proceedings within 12 weeks of the date hereof and otherwise, if not commenced, the injunctive orders are discharged.

6.         The question of jurisdiction, raised in the Respondent’s Notice of Motion dated 7 November 2007 is reserved.’

14                  There is, so it would seem, a link between the proceedings before Flick J and the proceedings before me, in that the Application, which was filed in the proceedings before me in NSD 1168 of 2008, constituted the commencement of proceedings as contemplated in order 5 as made by Flick J on 6 May 2008.  Thus it would seem there are continuing injunctive orders in place in the preliminary discovery proceedings. 

15                  The evidence before me does not include a copy of the respondent’s Notice of Motion dated 7 November 2007 in proceedings NSD 1565 of 2007 to which reference was made in Order 6, as made by Flick J on 6 May 2008.  However, I am informed that that Notice of Motion seeks to raise, as a question of jurisdiction, the power of the Court to entertain the claims for relief in proceedings NSD 1565 of 2007.  I am unable to make any observation on the question of whether or not rights to challenge the jurisdiction of the Court in those proceedings have been lost by the participation of the respondent in those proceedings.  However, I am informed by senior counsel for the respondent that further relief is sought by his client in relation to the injunctive orders and at some stage the question of jurisdiction, raised in his client’s Notice of Motion dated 7 November 2007, will arise. 

16                  Senior counsel for the applicants submits that Flick J is, in fact, part heard in his consideration of the jurisdictional issue.  That contention is disputed by senior counsel for the respondent.  Senior counsel for the respondent accepts that no findings on credit have been made by Flick J which would, in any way, disqualify him from considering not only the jurisdictional issues arising in the earlier proceedings, but also the jurisdictional issue tendered by the respondent’s Notice of Motion filed on 29 August 2008 in these proceedings. 

17                  When the proceedings were before Flick J on 2 May 2008 an exchange took place between senior counsel for the respondent and Flick J which included:

HIS HONOUR:        ‘Now, Mr Carey, [the respondent] as I understand it, is leaving the country today or this evening?’

MR WILMOTT:       ‘Yes.  This all presumes jurisdiction, of course?’

HIS HONOUR:        ‘Yes.  It might be appropriate, well, it is appropriate to revamp the short minutes of orders in a way which the two of you can work out between the two of you?’

18                  The Application for the hearing before me to be vacated and for the matter to be transferred to Flick J is put on the basis that there is material before Flick J which will be germane to the determination of the questions of jurisdiction that have been raised.  It is said that Flick J has the advantage of knowing what that evidence is, whereas I am completely ignorant in relation to it. 

19                  Senior counsel for the respondent submits that the jurisdictional issue which was to be determined by me was to proceed solely upon a consideration of the Application and the accompanying Statement of Claim filed 25 July 2008 and accordingly did not require me to have the knowledge of the facts which underlie the other proceedings, which Flick J enjoys.

20                  It seems to me that there is considerable merit in having one judge of the Court decide the jurisdictional issues arising in the two separate sets of proceedings.  There will no doubt be some overlap in relation to the Court’s consideration of the relevant law.  In the foregoing circumstances I concluded, in the exercise of my discretion, that the matter was best addressed by Flick J who has had an extensive involvement with the dispute between the parties in the context of the Order 15A rule 6 application.

21                  Needless to say, if his Honour were to make a finding that the Court had jurisdiction to entertain the applicants’ claims in the proceedings number NSD 1168 of 2008 there would be no reason why the matter could not be set down for hearing before me.  That is a matter for Flick J to address and it should not be presumed that because his Honour will be asked to address the jurisdictional issue that he must thereafter continue with the hearing of the proceedings if jurisdiction is found.

22                  In relation to costs, it seems to me that the application is made relatively late in the piece.  It would not appear that there has been extensive work done in preparation for the hearing on 31 October 2008.  Accordingly, the costs associated with the vacation of the hearing date are unlikely to be particularly high.  Before I made the order for costs that I did, I foreshadowed what that order might be and, as I understand it, senior counsel for the applicants did not oppose the order in the terms in which it was made.  Senior counsel for the respondent sought an outright order that the costs be paid by the applicants, but in my opinion the orders which I have formulated do justice between the parties.

Associate:

Dated:         22 October 2008