Supreme Court New South Wales Medium Neutral Citation: Life Image Medical (Gold Coast) Pty Ltd v Chimborazo Pty Ltd (as trustee for the Advanced Orthopaedic Property Unit Trust) [2014] NSWSC 1928 Hearing dates: 14 November 2014 Date of orders: 14 November 2014 Decision date: 14 November 2014 Jurisdiction: Equity Division Before: Brereton J Decision: Upon the undertaking of the plaintiff that it will not rely on the orders made in these proceedings as founding any res judicata or estoppel or otherwise affecting the wife's application in the Family Court of Australia to set aside the transfer to the plaintiff of the subject units the court orders that: 1. the defendant rectify the unit register of the Advanced Orthopaedic Property Unit Trust and unit certificate 17 of that trust so as to record the plaintiff, Life Image Medical (Gold Coast) Pty Limited in place of Life Image Medical (Qld) Pty Limited as the registered holder of the subject 244,500 units; 2. the summons be otherwise dismissed; 3. the plaintiff pay the costs of the applicant, Lisa Catherine Slater, of the motion filed 1 October and amended 14 October 2014; and 4. the defendant pay 50 per cent of the plaintiff's costs of the proceedings not including the costs payable by the plaintiff to the applicant wife under order 3. Catchwords: PROCEDURE – miscellaneous procedural matters – transfer of proceedings under Jurisdiction of Courts (Cross-Vesting Act) – to Family Court – where resolution of proceedings in which party to Family Court proceedings has no standing may affect outcome of Family Court proceedings – where issue in proceedings is clearcut and transfer would increase costs – where undertaking given not to raise estoppel in Family Law proceedings – transfer refused and order made. Legislation Cited: (Cth) Family Law Act, s 106B (Cth) Jurisdiction of Courts (Cross-Vesting Act) 1987 Cases Cited: Lederer v Hunt (2007) 208 FLR 120 Mattock v Mattock (1989) 97 FLR 112 Texts Cited: Life Image Medical (Gold Coast) Pty Ltd (plaintiff) Chimborazo Pty Ltd as trustee for The Advanced Orthopaedic Property Unit Trust (defendant) Lisa Catherine Slater (applicant) Category: Principal judgment Parties: Life Image Medical (Gold Coast) Pty Ltd (plaintiff) Chimborazo Pty Ltd as trustee for The Advanced Orthopaedic Property Unit Trust (defendant) Lisa Catherine Slater (applicant) Representation: Counsel: S T White SC (applicant) M Klooster w M Fantin (plaintiff) N Beaumont SC w JD Williams (defendant) C Latham (Trustee in Bankruptcy) Solicitors: Lander & Rogers (plaintiff) Barkus Doolan(defendant) Michael Conley Lawyers (applicant) File Number(s): 2014/ 285670 Judgment (ex tempore) 1. HIS HONOUR: By summons filed on 29 September 2014, the plaintiff Life Image Medical (Gold Coast) Pty Limited sought a declaration that it was the beneficial owner of 244,500 units in Advanced Orthopaedic Property Unit Trust and an order that the unit register be rectified to reflect that by replacing the registered holder, which is presently recorded as Life Image Medical (Queensland) Limited, with Life Image Medical (Gold Coast) Pty Ltd and an order in relation to unit certificate 17 to the same effect. By notice of motion filed on 1 October 2014 and amended on 14 October 2014, Lisa Catherine Slater seeks order that she be joined to the proceedings and that the proceedings be transferred pursuant to the (Cth) Jurisdiction of Courts (Cross-Vesting Act) 1987 to the Family Court of Australia, in which there are pending matrimonial property adjustment proceedings pursuant to (Cth) Family Law Act 1975, s 79, between Mrs Slater, her former husband Dr Gordon Slater, and Dr Slater's trustee in bankruptcy. 2. Each of Mrs Slater and Dr Slater are shareholders in Slater Properties Pty Limited, together with Dr Slater's brother Geoffrey Edward Slater. By an instrument which was registered with ASIC only on 3 September this year, an additional twenty shares in Slater Properties were issued, ten to Geoffrey Slater, and ten to Jacqueline Helen Hartnett who, it may be inferred from the address given, is the same person as Jacqueline Helen Schurig, who is the sole director of the plaintiff. The evidence suggests that Dr Slater and Ms Schurig are in a personal relationship. 3. The instrument, though registered only on 3 September this year, suggests that the share issue in question may have taken place in 2007 but it may be anticipated that that will be the subject of potential dispute. 4. In the present proceedings, the plaintiff seeks to have rectified what appears to be an obvious clerical error in the name of the transferee of the 244,500 units in question, which were formerly held by Slater Properties, but were apparently purchased by the plaintiff on 27 August 2013. 5. Mrs Slater, understandably enough, was concerned that the resolution of questions pertaining to the beneficial ownership of the units in these proceedings, to which she will not be a proper party, might inhibit her ability to impugn the transfer of the units at what she suggests is an undervalue, and potentially also the issue of the initial shares in Slater Properties, in proceedings in the Family Court pursuant to the Family Law Act, s 106B. That apprehension, in the light of the totality of the relief claimed in the summons was, as I have said, not an unreasonable one. But it seems to me that the question of rectification to correct the clerical error is a very simple and straight-forward one and that rather than visiting on all of the parties to these proceedings – which now involve three parties with senior and junior counsel, and counsel for Dr Slater's trustee in bankruptcy – it is expedient and just, quick and cheap to resolve the rectification issue, which cannot be controversial, immediately – on the basis that it does not resolve any of the disputes concerning the beneficial ownership of the shares, or any claim to set aside the underlying transfer. 6. If that were not capable of being done, then I would be strongly inclined to the view that these proceedings should be transferred to the Family Court of Australia, because if they would potentially impinge on the viability of the s 106B application, then they should be dealt with in proceedings in which the wife had standing to be heard [cf Mattock v Mattock (1989) 97 FLR 112 (McClelland CJ in Eq); Lederer v Hunt (2007) 208 FLR 120]. 7. However, as the question of rectification can be decided separately without further ado, and as it appears that the plaintiff will give an undertaking not to rely on the orders that I propose to make as founding any estoppel in the Family Law proceedings, it seems to me that the most just and expedient course is to resolve the rectification issue in a way that will finalise the proceedings before this Court. 8. For those reasons, I propose to make the following orders: 1. Upon the undertaking of the plaintiff that it will not rely on the orders made in these proceedings as founding any res judicata or estoppel or otherwise affecting the wife's application in the Family Court of Australia to set aside the transfer to the plaintiff of the subject units, the court orders that the defendant rectify the unit register of the Advanced Orthopaedic Property Unit Trust and unit certificate 17 of that trust so as to record the plaintiff Life Image Medical (Gold Coast) Pty Limited in place of Life Image Medical (Qld) Pty Limited as the registered holder of the subject 244,500 units. 2. The court notes that this order is made solely to correct a clerical error in the registration of the transfer and without being intended to resolve any claim as to the beneficial ownership of the units or any claim to set aside the transfer of the units to the plaintiff. 3. The court further notes that there is in place an inter partes agreement as to how the assets of the trust that are distributable in respect of the subject units are to be held pending the determination of the Family Court proceedings. 4. The court further orders that the summons be otherwise dismissed. Costs 1. Although the applicant wife has not obtained an order for transfer of the proceedings to the Family Court, which was the substantive relief she sought, she has obtained a result that ensures that any issue in respect of the beneficial entitlement to the units in question will be determined in Family Court proceedings and will not be determined in proceedings in which she at least arguably does not have standing as a party in this court. 2. Although it might not have been apparent on the summons and initial affidavits in the proceedings, the later correspondence foreshadowed amending the summons, and the short minutes proposed made clear that the purpose of these proceedings was to obtain access to the trust assets attributable to the units in question, which would thereby remove them from the pool available for division in the matrimonial proceedings. That object has been defeated, and the applicant wife must be regarded as having had a substantial measure of success on the motion, despite the fact that the order for transfer was not made. It seems to me that, as the proceedings appear to have been calculated to create impediments to the wife's matrimonial cause, it is appropriate that the plaintiff should pay the applicant's costs of the motion. 3. As between the plaintiff and the defendant, the plaintiff has obtained most of the relief claimed on the face of the summons – namely, the orders for rectification that I have made – but has not obtained the declaration as to beneficial ownership referred to in paragraph (1) of the summons, nor the order for payment to it of the funds attributable to the units in question referred to in the short minutes that were subsequently proposed and which, it is clear enough, was a substantial though not the sole object of the proceedings. Just as the absence of any response to the applicant wife's correspondence before she filed the motion has contributed to my view that the plaintiff should pay the wife's costs, so the unhelpful and apparently obstructive response to the plaintiff's correspondence before action, and the absence of any sensibly articulated basis for refusing to rectify the register to correct the clerical error to which I earlier referred, indicate that the plaintiff had to commence proceedings to obtain rectification of the register, regardless of whatever other motives the plaintiff may have had. 4. Bearing in mind that the plaintiff's success was only partial, the defendant should pay half of the plaintiff's costs of the proceedings, not including the costs payable by the plaintiff to the applicant wife. 5. Accordingly, the court further orders that: 1. The plaintiff pay the costs of the applicant Lisa Catherine Slater of the motion filed 1 October and amended 14 October 2014. 2. The defendant pay 50 per cent of the plaintiff's costs of the proceedings, not including the costs payable by the plaintiff to the applicant wife under order (1). ********** 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. Decision last updated: 27 February 2015