Simandl v Secure Funding Pty Ltd [2009] FCA 418

FEDERAL COURT OF AUSTRALIA

Simandl v Secure Funding Pty Ltd [2009] FCA 418

Australian Securities and Investments Commission Act 2001 (Cth), s 12GK Judiciary Act 1903 (Cth), s 39 Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth), s 5 Australian Securities and Investments Commission v Edensor Nominees Pty Limited (2001) 204 CLR 559 referred to Felton v Mulligan (1971) 124 CLR 367 referred to ZDENEK SIMANDL v SECURE FUNDING PTY LTD (ACN 081 982 872)

NSD 265 of 2009

JACOBSON J

27 APRIL 2009

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 265 of 2009

BETWEEN: ZDENEK SIMANDL

Plaintiff

AND: SECURE FUNDING PTY LTD (ACN 081 982 872)

Defendant

JUDGE: JACOBSON J

DATE OF ORDER: 27 APRIL 2009

WHERE MADE: SYDNEY

THE COURT ORDERS THAT:

1. Pursuant to section 5 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) and section 12GK of the Australian Securities and Investments Commission Act 2001 (Cth), the proceedings be transferred to the Supreme Court of New South Wales to be heard conjointly with Supreme Court Proceedings Number 16540 of 2008. 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 the Federal Law Search on the Court's website.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 265 of 2009

BETWEEN: ZDENEK SIMANDL

Plaintiff

AND: SECURE FUNDING PTY LTD (ACN 081 982 872)

Defendant

JUDGE: JACOBSON J

DATE: 27 APRIL 2009

PLACE: SYDNEY

REASONS FOR JUDGMENT 1 The defendant to these proceedings has filed a notice of motion dated 16 April 2009. The motion seeks an order that the originating process and Statement of Claim filed by the plaintiff on 31 March 2009 be dismissed, or alternatively, that pursuant to section 5 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) and section 12GK of the Australian Securities and Investment Commission Act 2001 (Cth), the proceeding be transferred to the Supreme Court of NSW to be heard conjointly with Supreme Court proceedings number 16540 of 2008. 2 The proceedings number 16540 of 2008 were commenced in the Supreme Court of NSW on 10 December 2008 by the present defendant, Secure Funding, seeking possession of a property at 31 Haslemere Crescent, Buttaba, NSW, owned by the present plaintiff, Mr Simandl, and his wife. 3 Mr Simandl and his wife failed to file a Defence within time in the Supreme Court proceedings. An application for default judgment was lodged with the Supreme Court by Secure Funding on 25 February 2009. On 3 March 2009, Mr Simandl and his wife filed a Defence in the Supreme Court proceedings. 4 The Supreme Court proceedings came before Hoeben J on 17 April 2009. On that date, his Honour made orders that the Defence to the Supreme Court proceedings filed by Mr and Mrs Simandl be struck out and that those proceedings be listed for further mention before his Honour on 1 May 2009. Hoeben J apparently listed the matter for mention on 1 May to enable Mr and Mrs Simandl to seek legal advice. 5 Hoeben J noted for the benefit of Mr and Mrs Simandl that Secure Funding was entitled to press its application for default judgment. I have been informed this morning that the application for default judgment has not yet been dealt with by the Registry of the Supreme Court. 6 On 31 March 2009, Mr Simandl filed an originating process and a Statement of Claim in this Court against Secure Funding. The Statement of Claim states that, amongst other things, if Secure Funding had "acted with conscience" and charged an interest rate of 8.00% p.a. on the amount of approximately $450,000 due under a mortgage from Secure Funding, Mr and Mrs Simandl would have been able to obtain other finance which they could afford to pay. 7 The Statement of Claim in the Federal Court appears to be in substance to the same effect as the Defence filed in the Supreme Court proceedings on or about 3 March 2009. 8 The Defence in the Supreme Court, in [7], makes specific reference to section 12CA and section 12CB of the Australian Securities and Exchange Commission Act which prohibit unconscionable conduct by a lending institution. Notwithstanding this, Hoeben J considered it appropriate to strike out the Defence. 9 Mr Simandl has filed and handed up to me written submissions comprising 19 paragraphs. I will mark his submissions as MFI-1 in case he wishes to put them before Hoeben J on 1 May. The submissions make a number of very wide-ranging allegations, including an allegation that the Supreme Court is now illegal and that the powers conferred by section 6 of the Supreme Court Act 1970 (NSW) have given lawyers unfettered powers which are said to be inconsistent with the provisions of the Constitution. Mr Simandl's submissions also invoke the decision of the High Court in Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51. 10 The substance of Mr Simandl's submissions is that the Statement of Claim should not be struck out and, if I am minded to strike it out, I ought not, in any event, transfer the proceedings to the Supreme Court of NSW because of the serious allegations made in his written submissions. He says that the only court that can deal with the issues that he raises, which he says are federal matters, is the Federal Court exercising federal jurisdiction under section 79 of the Constitution. 11 In my view, this submission is wrong and must be rejected. It is plain from the provisions of section 39(2) of the Judiciary Act 1903 (Cth) that the Supreme Court of NSW would be invested with federal jurisdiction in this matter in the event that I make an order transferring the proceeding to the Supreme Court. 12 The authorities dealing with that provision establish that the intention of the provision is to place State courts exercising federal jurisdiction on the same general footing as the federal courts that could be created by Parliament. The leading authorities are Felton v Mulligan (1971) 124 CLR 367 and Australian Securities and Investments Commission v Edensor Nominees Pty Limited (2001) 204 CLR 559. 13 It seems to me to be plain that the possession proceedings having been commenced in the Supreme Court and the Defence having already been struck out by Hoeben J, the Supreme Court is the more appropriate forum to deal with the present matter. 14 There are a number of reasons for this which may be reduced to the simple proposition that the possession proceedings were commenced in the Supreme Court on 10 December 2008 and an application for default judgment was already filed in those proceedings on 25 February 2009, before the proceedings in the Federal Court were commenced. Moreover, the Defence in the Supreme Court, which is in virtually identical terms to the present Statement of Claim, has been struck out and the matter has been re-listed before Hoeben J on 1 May 2009. 15 Furthermore, the NSW Supreme Court has jurisdiction in relation to the matters which Mr Simandl wishes to raise under sections 12CA and 12CB of the Australian Securities and Investments Commission Act, as well as the various other provisions to which reference is made in his written submissions. 16 Mr Mathas, who appears for Secure Funding, acknowledged that the transfer of the proceedings to the Supreme Court would not be without utility. He quite fairly conceded that although Hoeben J has struck out the Defence, as filed in the Supreme Court, this did not mean that it may not at least be possible for Mr Simandl to file a Defence which raises an arguable defence to the claim for possession. 17 That may be the reason why Hoeben J re-listed the matter for mention on 1 May 2009 and noted that that date had been selected to enable Mr and Mrs Simandl to seek legal advice. It is apparent from what has transpired to date that Mr Simandl has not done so. However, he at least has until the end of this week to seek to obtain legal advice before the matter is again before Hoeben J. 18 For the reasons that I have given above, it seems to me to be appropriate to transfer the proceedings to the Supreme Court of NSW pursuant to section 5 of the Jurisdiction of Courts (Cross-vesting) Act and section 12GK of the Australian Securities and Investments Commission Act, for the proceedings to be heard conjointly with the Supreme Court proceedings number 16540 of 2008. 19 In accordance with the usual practice, I have made an inquiry of the chambers of Hoeben J, and have been informed that he would be prepared to receive these proceedings in the event that I determine that the Supreme Court is the appropriate court as I have so determined. Accordingly, I will make an order in terms of paragraph 2 of the notice of motion filed by Secure Funding. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.