New South Wales Court of Appeal CITATION : KC Parcels P/L v Gaudio & Ors [2003] NSWCA 299 HEARING DATE(S) : 17/09/03 JUDGMENT DATE : 12 December 2003 JUDGMENT OF : Meagher JA at 1; McColl JA at 1 DECISION : Summons dismissed with costs. CATCHWORDS : APPLICATION FOR LEAVE TO APPEAL: Judgment at first instance - Grounds of appeal different to issues dealt with in judgment appealed from. KC Parcels Pty Ltd (In Liquidation) ACN 071 504 188 PARTIES : v John Gaudio & 2 Ors FILE NUMBER(S) : CA 40358 of 2003 COUNSEL : Claimant: R K Newton Opponents: M Green SOLICITORS : Claimant: Purcell Insolvency Lawyers Opponents: Verekers Solicitors LOWER COURT District Court JURISDICTION : LOWER COURT 3770 of 2001 FILE NUMBER(S) : LOWER COURT Rein DCJ JUDICIAL OFFICER : IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40358 of 2003 MEAGHER JA McCOLL JA 12 December 2003 KC PARCELS PTY LTD (IN LIQUIDATION) ACN 071 504 188 v GAUDIO & Ors Judgment 1 THE COURT: This is an application for leave to appeal from his Honour Judge Rein SC. In our opinion, it should be refused. 2 The litigation out of which it arises is a most unfortunate one. Apparently the claimant, KC Parcels Pty Ltd (In Liquidation), was once the trustee of a trust called the Transaire Unit Trust. It also appears that Mr and Mrs Gaudio, the first two opponents, were unit holders in the trust. The claimant asserts that they were engaged in certain transactions as a result of which they owed certain moneys (totalling nearly $300,000) to the trustee. The claimant ("as trustee") commenced these proceedings in order to recover these moneys. However, unfortunately for it, the opponents had it removed as trustee of the trust and replaced by a gentleman called Mr Vouris and later put it into liquidation. 3 In these circumstances, his Honour acceded to a Notice of Motion of the opponents to strike out the claimant's Amended Statement of Claim. His Honour's views may be deduced from his summary of the conclusions to which he arrived. They are as follows: 1. The Plaintiff, having been removed as trustee in August 2002, is not permitted to continue the case for recovery of monies due to the trust or beneficiaries. That right became vested in Mr Vouris on his appointment. 2. Mr Vouris has been given extensive opportunity to seek to be substituted as Plaintiff in their proceedings but has chosen not to do so. 3. Whatever rights the Plaintiff had in respect of debts incurred whilst trustee in conducting trust business, were claims recoverable from the trust assets and not the beneficiaries, in the absence of fraud. No claim of fraud is made. 4. Whatever Mr Vouris has assigned it is not his right as trustee to claim the monies owed to the trust but something else, namely a right of the Plaintiff to claim, which right as at the date of the assignment the Plaintiff did not have and which did not flow to Mr Vouris as the new trustee. 4 Whilst an application for leave to appeal might be expected to have something to do with the issues dealt with in the judgment appealed from, in the present case the claimant relies on an entirely different claim. His application contained no allegation of any kind of wrongdoing by the opponents. 5 Instead it sought to argue that neither its removal as trustee nor its subsequent liquidation deprived it of its rights to indemnity, lien or subrogation out of the trust assets in respect of the liabilities it had incurred in lawfully carrying on the business of the trust. 6 However, as at the date the summons was heard (17 September 2003) before us, there was no allegation that any such liabilities were ever incurred, let alone evidence to that effect. Since then, further material has emerged; an unsworn affidavit of Adrian Stewart Duncan and a further affidavit of Steven Peter Agosta sworn 25 November 2003. This material certainly does demonstrate that at all material times, the company had massive liabilities. 7 Nevertheless, we do not see how the claimants' case is advanced. It is clear law that if any of the innumerable creditors seeks to sue the claimant, it will have recourse to rights of indemnity or lien. But, so far as I can see, there is no evidence that this is about to happen. And this simple position has got nothing to do with Mr and Mrs Gaudio, who are alleged to be debtors to the trust, not creditors of the trust. 8 The summons should be dismissed with costs. ***** Last Modified: 12/16/2003 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.