New South Wales Supreme Court CITATION : Boral Ltd v Arcfab Pty Ltd [2001] NSWSC 307 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 1725/01; 1724/01; 1721/01 HEARING DATE(S) : 9 April 2001 JUDGMENT DATE : 9 April 2001 1725/01 Boral Limited (P) Arcfab Pty Limited (D) 1724/01 PARTIES : Boral Limited (P) Arcfab Pty Limited (D) 1721/01 Flyash Australia Pty Limited (P) Arcfab Pty Limited (D) JUDGMENT OF : Hamilton J COUNSEL : M Dempsey (Ps) J Simpkins SC (D) SOLICITORS : Murphy & Moloney (Ps) Williams Oates Lawyers (D) CATCHWORDS : PROCEDURE [316] - Inferior Courts - District Court - Removal into Supreme Court - Extent of Court's discretion - Difficult questions of law - Considerations on which discretion exercised. LEGISLATION CITED : Corporations Law s 553C District Court Act 1973 s 145 CASES CITED : Ex parte McIntosh; re Frey (1958) 77 WN (NSW) 519 G M & A M Pierce & Co Pty Limited v RGM Australia Pty Limited [1998] 4 VR 888 DECISION : Matters removed into Supreme Court. IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION HAMILTON J MONDAY, 9 APRIL 2001 1725/01 BORAL LIMITED v ARCFAB PTY LIMITED 1724/01 BORAL LIMITED v ARCFAB PTY LIMITED 1721/01 FLYASH AUSTRALIA PTY LIMITED v ARCFAB PTY LIMITED JUDGMENT 1 HIS HONOUR: These are summonses relating to three matters in the District Court at Sydney, the substantive prayer in each case being that the proceedings be removed into this Court under s 145 of the District Court Act 1973 ('the DCA"). Essentially, the ground upon which the application is made is that complicated issues of law are involved. The three actions in the District Court all arise out of building contracts and the questions of law concerned essentially arise out of paragraph 9 of the defence filed in each case. "In answer to paragraphs 23, 24, 25, 26 and the whole of the Statement of Claim, the defendant says that:- (i) on 14 December 1995 the plaintiff entered into a Deed of Company Arrangement pursuant to Pt 5.3A of the Corporations Law. (i) clause 8 of the schedule 8A to the Corporations Law was not excluded by the Deed of Company Arrangement. (iii) the respective rights and obligations of the plaintiff and the defendant under the agreement, the subject of the claims made in the Statement of Claim, formed part of mutual dealings, credits or debits between the plaintiff and the defendant for the purpose of s553C of the Corporations Law. (iv) by operation of s 553C of the Corporations Law the claims made in the Statement of Claim and any other claims which the plaintiff may have had against the defendant, and which the defendant had against the plaintiff, arising out of the mutual dealings between the parties under the agreement are extinguished." This raises questions of set off to be determined under s 553C of the Corporations Law. It is contended on behalf of the defendants in the District Court actions, who are the plaintiffs in the proceedings before me, that the matter is governed by the decision of the Victorian Court of Appeal in G M & A M Pierce & Co Pty Limited v RGM Australia Pty Limited [1998] 4 VR 888 and that the question of law is simple, to the extent, counsel for the plaintiffs says, that, if the matters are removed into this Court, applications will be made to this Court for the summary dismissal of the proceedings on the basis of that decision, which applications will inevitably succeed. 2 The discretion conferred by s 145 of the DCA is a wide one and there is not a great deal of authority relating to its exercise. One case in which it was discussed is Ex parte McIntosh; re Frey (1958) 77 WN (NSW) 519, a decision of Else Mitchell J. In that decision his Honour emphasised the width of the discretion but said at page 522 to 523: "The District Courts are Courts established for the convenience of the litigative public, and once an action is properly brought in one of those Courts, it seems to me that it should continue there unless the defendant can show some sound reason for its transfer to the Supreme Court. Whatever the precise scope of the discretion given to a judge of the Supreme Court to grant a writ of certiorari under the District Courts Act 1912 - 1957, s 47 [the predecessor of the present section], it is clear that the applicant for such a writ must show some substantial ground or cause for removal, and if he fails to do so, the writ should not issue." His Honour found that there was no justification for removal in that case. I entirely and respectfully agree with what his Honour said concerning the principles on which an application should be approached. Indeed, the ambit of the work of the District Courts has increased and the mandatory limits of the jurisdiction of that Court have increased greatly since his Honour's judgment was delivered. 3 However, in this case Mr Simpkins, of Senior Counsel for the plaintiffs, has said to me that the issues of law which arise are not yet precisely defined. He draws attention to what he says is an anomaly between the plaintiff saying that there are difficult questions of law, and, on the other hand, announcing that it proposes to apply for summary dismissal of the proceedings, when removed into this Court, and he suggests that, particularly in the light of the sort of matters that the District Court deals with in this day and age, there is no necessity for removal of the proceedings to this Court. He concedes that the determination of the proceedings will involve mixed questions of law and fact, but says that these will be largely questions of the application of the law laid down in the Victorian case to the particular facts of these cases. 4 I have come to the view that the correct exercise of my discretion is to remove these matters into the Supreme Court. That in particular cases a summary dismissal application may be made on a matter of law does not necessarily mean that the matter of law is itself not one of difficulty or complexity. If, after argument, a sufficiently clear view can be arrived at, there will be summary dismissal no matter what the initially apparent difficulty or complexity of the matter of law. Questions as to the incidents of the regime of voluntary administration of companies are questions that are certainly not commonly dealt with in the District Court. They are questions about which there is a body of law of some complexity and complication and, furthermore, in this particular case, there are involved concepts and statutory provisions as to set off which are among the matters of law that need to be dealt with. The District Court's jurisdiction, as I have said, is larger and wider than ever before, but the voluntary administration of companies is usually dealt with in this Court. As I have said, whilst I have not, in the Duty Court, gone deeply into the matters to identify the precise issues of law that will arise, it does seem to me that there are here questions of some complexity and difficulty. 5 In those circumstances, my conclusion is, as I have said, that the appropriate course in these cases is to order that the proceedings be removed into the Supreme Court. It is not my view that the District Court is not capable of handling (as it must in many instances handle) in the course of exercising its jurisdiction questions of fact and law that arise in relation to corporations, nor is this decision to be taken as displaying a view on my part that any case in which a voluntary administration of a company comes into view is one that ought be or will be removed from the District Court to the Supreme Court. That, however, is the conclusion that I have come to in these cases. 6 Mr Simpkins has submitted to me that the removals, if made, should be on a costs regime that limits the recovery of costs to no more than would be recoverable in the District Court, but, as I have taken the view that the appropriate course is for these matters to be removed into the Supreme Court, I do not think that I should place any limitation at this stage on what flows as to costs or impose any such condition on the removals. The order I shall make in each case is that the proceedings be removed into this Division of this Court. 7 As to the costs of these summonses, the District Court proceedings will, when removed, continue to be separate proceedings and will each be given a new and separate number. The applications for removal are discrete proceedings which are now complete. In my view, they were adversarial proceedings. The applications were opposed and the defendants ought be ordered to pay the plaintiff's costs of the removal proceedings. The removed proceedings will be placed before the Registrar at 9.30 am on 23 April 2001. …oOo… Last Modified: 05/16/2001 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. 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