FEDERAL COURT OF AUSTRALIA

Garrett v Macks [2009] FCA 253

PRACTICE AND PROCEDURE – transfer of proceedings – Federal Court of Australia Act 1976 (Cth) s 48 – related proceedings in South Australia Registry – all witnesses other than applicant reside in South Australia – most documents also located there – proceedings transferred.

Federal Court of Australia Act 1976 (Cth) s 48

Bankruptcy Act 1966 (Cth) s 104, 178, 156A(3)   

National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155 cited     

ANDREW MORTON GARRETT personally and in his capacity as trustee of the Andrew Garrett Family Trust v PETER IVAN MACKS in his capacity as trustee of the bankrupt estate of Andrew Morton Garrett

WAD 260 of 2008

GILMOUR J

23 MARCH 2009

PERTH

THE COURT ORDERS THAT:

1.                  The proceeding be transferred to the South Australian District Registry of the Court.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

REASONS FOR JUDGMENT

1                     The respondent, Peter Ivan Macks, is the trustee of the bankrupt estate of the applicant, Andrew Morton Garrett.  The respondent, by motion dated 15 December 2008, seeks an order pursuant to s 48 of the Federal Court of Australia Act 1976 (Cth) that this proceeding be transferred to the South Australian District Registry of this Court and be conducted in Adelaide.  The motion is supported by an affidavit sworn by Mr Macks on 15 December 2008 and an affidavit sworn by Lisa Jane Loeche, a solicitor employed by the respondent’s solicitors, on 16 December 2008.  No affidavit material was put on by Mr Garrett.  He acknowledged in argument that he was not in a position to contradict any of the contents of the affidavits relied on by the respondent.

2                     In this proceeding commenced on 17 November 2008, Mr Garrett seeks to review a decision by Mr Macks, as trustee in bankruptcy, made on 17 September 2008 to refuse Mr Garrett’s request to review his earlier decision to admit a number of proofs of debt in the administration of Mr Garrett’s bankruptcy, which proofs were admitted by Mr Macks on 24 May 2007.  No application was made by Mr Garrett under s 104 of the Bankruptcy Act 1966 (Cth) (“the Act”) to review the decision of Mr Macks in respect of the admission of those debts.  Mr Garrett, nonetheless, seeks orders in this proceeding setting aside those proofs of debt as well as removing Mr Macks from the office of trustee and substituting the Official Trustee.  The application in these respects, according to Mr Garrett, is grounded in s 178 of the Act. 

3                     The proceeding has not advanced beyond the filing of the statement of claim by Mr Garrett.

4                     The power available to the Court under s 48 is unfettered.  Relevant factors for consideration include the residence of parties and of witnesses, expense to parties, the place where the cause of action arose and the convenience of the Court.  The balance of convenience will generally be a relevant consideration, but not necessarily determinative of each case.  The Court must, however, be satisfied, after considering all relevant matters, that there is sound reason to direct that the proceeding be conducted or continued elsewhere: National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155.    

5                     Mr Garrett recently moved to Western Australia in order to gain employment.  Apart from the fact that Mr Garrett now resides in Western Australia there is no connection between this proceeding and Western Australia.  However, the issues arising in this proceeding have a significant connection with South Australia as set out in the affidavit of Mr Macks sworn on 15 December 2008 in support of this application.  They are in summary as follows: 

(a)        Mr Macks was appointed trustee of Mr Garrett’s bankrupt estate in South Australia on 27 September 2004 pursuant to s 156A(3) of the Act.

(b)        Mr Macks has administered the Estate from his offices in Adelaide, where all of the books and records relevant to the administration are located.  These comprise some 33 archive boxes and about 20-30 arch lever files. 

(c)        Mr Garrett’s business and personal affairs that have been the subject of Mr Macks’ investigations took place primarily in South Australia.

(d)        All of the debts the subject of the proofs of debt, which Mr Garrett seeks to challenge, arose in South Australia.

(e)        The decisions of Mr Macks which Mr Garrett seeks to review, being the principal subject matter of this proceeding, were made by Mr Macks in Adelaide.  

(f)         The National Australia Bank affidavits which Mr Garrett seeks to challenge were sworn in Adelaide and the deponent resides there. 

6                     There are additional considerations.  Mr Macks and Mr Garrett are involved, as opponents, in two separate but related proceedings in the South Australian District Registry of this Court.  Following the trial in respect of the first action, SAD29 of 2005, judgment was reserved on 7 March 2006 by Lander J.  Judgment remains reserved in that matter pending determination of the second action, SAD5 of 2006 (the SA Proceedings).  The trial of the SA Proceedings is listed before Lander J for four days to commence on 10 March 2009.  The cross-claim filed by Mr Macks in the SA Proceedings seeks a declaration from the Court as to his entitlement to an equitable charge over assets of the Andrew Garrett Family Trust constituted by Deed of Trust dated 31 May 1993 to secure a right of indemnity in respect of liabilities of Mr Garrett.  These are the same liabilities for which proofs of debt have been lodged and admitted in Mr Garrett’s bankruptcy, and which, subject to the correction of the stated amount of two of those debts, are the subject of the relief sought in this proceeding by Mr Garrett. 

7                     There is in this and other respects a significant overlap of factual matters alleged in the statement of claim in this proceeding and the cross-claim in the SA Proceedings.

8                     The statement of claim in this proceeding includes very serious allegations against both Mr Macks and the unidentified deponent of three affidavits on behalf of the National Australia Bank.  These allegations, in paras 4-6 of the statement of claim, assert that Mr Macks knowingly associated with fraudulent documents filed in this Court in SAD29 of 2005 as well as the SA Proceedings in the knowledge that these were acts of perjury.  

9                     Mr Garrett informed the Court that it is not his intention to call any parole evidence at trial but rather that he will rely solely on documentary evidence.  These documents are located in Adelaide.  For his part, Mr Macks intends that both he and the deponent of the impugned affidavits will give evidence.  They both live in Adelaide.     

10                  Further, Mr Macks has instructed solicitors, senior counsel and junior counsel to act on his behalf in relation to the administration of the Estate, all of whom are based in Adelaide and all of whom have been involved in proceedings against Mr Garrett for a significant period of time such that it would cause significant inconvenience and expense to Mr Macks if he were required to find alternative legal representation in Perth.  

11                  Mr Garrett has recently entered into a consultancy agreement and expects to be in receipt of income in the near future.  His capacity to travel to Adelaide for interlocutory hearings or any final hearing in respect to this proceeding is presently unknown.  However, there is no reason why any interlocutory matters cannot be dealt with either by a telephone link or video-link to the Court in Adelaide. 

Conclusion

12                  In all the circumstances to which I have referred and, in particular, having regard to the close and immediate connection between the matters alleged in this proceeding and the State of South Australia, including the related proceedings pending there and the absence of such a connection with Western Australia, I am satisfied that there are sound reasons for acceding to the motion for transfer.  There will be orders accordingly.  I will hear the parties on the question of costs.

Associate:

Dated:         23 March 2009