Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Gibson v McIntosh [2015] NSWCA 112 Hearing dates: 23 April 2015 Decision date: 23 April 2015 Before: Leeming JA; JC Campbell AJA Decision: (1) Summons dated 4 February 2015 dismissed with costs. (2) Notice of motion filed 18 February 2015, dismissed with costs. Catchwords: PRACTICE – jurisdiction – defendants residents of New Zealand – plaintiff seeking to impugn agreement reached by defendants in New Zealand – no error shown in refusal of leave by primary judge – leave refused Legislation Cited: Bankruptcy Act 1966 (Cth), s 27 Cross-Border Insolvency Act 2008 (Cth), s 10 Supreme Court Act 1970 (NSW), s 101 Trans-Tasman Proceedings Act 2010 (Cth) Uniform Civil Procedure Rules 2005, r 11.4 Cases Cited: Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 The Age Company Ltd v Liu [2013] NSWCA 26; 82 NSWLR 268 Category: Principal judgment Parties: Neville James Gibson (Applicant) Alexander David Kaheel McIntosh (First respondent) Bernard Joseph Drumm (Second respondent) Representation: Counsel: Applicant (In person) J Darams (First respondent) File Number(s): 2015/35021 Decision under appeal Court or tribunal: Supreme Court of New South Wales Date of Decision: 8 January 2015 Before: Black J File Number(s): 2015/4617 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] EX TEMPORE Judgment 1. LEEMING JA: The applicant, Mr Neville James Gibson, seeks leave to appeal from the interlocutory judgment, delivered ex tempore in the vacation on 8 January 2015, refusing to grant leave to proceed in a new proceeding 2015/4617 brought by him against two residents of New Zealand, Mr Bernard Joseph Drumm and Mr Alexander David Kaheel McIntosh. Mr McIntosh appeared when Mr Gibson's summons for leave was heard and made submissions opposing the grant of leave. There is no evidence that Mr Drumm has been served (whether formally or informally). I return to the precise orders made by the primary judge and the question of parties below. 2. Mr Gibson was, and is, unrepresented. He is a plaintiff in another proceeding pending in this Court, being proceeding 2010/425027, in which on 7 November 2014 orders were made for a mediation in the following terms: "I order that the claims of each of the second and third plaintiffs against the defendants in these proceedings be referred to mediation. Such mediation is to take place in New Zealand at a time and place to be arranged as soon as practicable." 1. The proposed defendants, Messrs Drumm and McIntosh, were parties to whom that order was directed. The first order sought by Mr Gibson in the 2015 proceeding is that they be restrained from giving legal effect to an agreement said by him to have been reached between them on 12 December 2014 and the nature of that agreement is the subject of one of Mr Gibson's proposed grounds of appeal. 2. The primary judge recorded that Mr Drumm did not appear when the matter was called and heard. The other defendant, Mr McIntosh, appeared by counsel and solicitor, but on a conditional basis, reserving the question as to whether he had been properly served. The evidence before the primary judge was that Mr Gibson had purported to serve both men by email, pursuant to leave that the primary judge had earlier granted. However, the substantial question raised by Mr McIntosh was not mere service, but whether the New South Wales Supreme Court ought exercise jurisdiction concerning Mr Gibson's claims and grant him leave under Pt 11 r 11.4 of the Uniform Civil Procedure Rules 2005 to proceed. 3. It also appears that Mr Gibson is an undischarged bankrupt. However, rather than dealing with the question of whether Mr Gibson had capacity to commence the 2015 proceeding, his Honour confined attention to the anterior question of jurisdiction. He was correct to deal with that question first. 4. Further, the primary judge expressly did not deal with all aspects of leave. His Honour noted that it appeared that Mr Gibson had not presently relied upon the Trans-Tasman Proceedings Act 2010 (Cth) to effect service (at [6]), and for that reason did not dismiss the proceedings, but stood them over for directions before the Registrar at [28]. 5. His Honour noted that the rules relating to service of proceedings outside Australia require the grant of leave to proceed if (as here) the defendant does not enter an appearance. The primary judge observed that the substantive relief sought in paragraphs 1 and 2 of the summons related to an agreement said to have been reached in New Zealand between Mr Drumm and Mr McIntosh, two residents of New Zealand, on or around 12 December 2014, which accordingly was not founded on a cause of action arising in New South Wales, or on a breach in New South Wales of a contract, or on a contract made in New South Wales: at [17]. Mr Gibson said that there were errors made by the primary judge in reaching that conclusion. There were two identified when the matter was heard today and in Mr Gibson's written submissions supplied to the Court today. The first was that he said there was "every dispute" about the statement that an agreement had been entered between two New Zealanders in New Zealand. However, Mr Gibson, in my view, entirely properly accepted that, although there was a substantial dispute raised by him about the terms of the settlement entered into between Mr Drumm and Mr McIntosh, there was no dispute that settlement was entered into in New Zealand on about 12 December 2014 and that Mr Drumm and Mr McIntosh were residents of New Zealand. 6. Secondly, as an articulation of how it was said by him that the primary judge had erred in concluding that none of the relevant paragraphs in schedule 6 applied, Mr Gibson drew attention to the fact that his application was closely connected with the pending 2010 proceedings. His written submissions in this respect were in the following terms: "The primary judge's finding that the Court lacked jurisdiction to deal with the proceedings the subject of the application before him was incorrect. The application before the primary judge was an application brought under matter no. 2010/425027 in the court below to challenge the validity of the agreement purportedly entered into between the Second Plaintiff and First Defendant in that matter in relation to a mediation ordered in those proceedings by Nicholas J on 7 November 2014 that envisaged a formal mediation for which formal mediation consent was given by the parties. Necessarily, the outcome of that formal mediation agreed to was to be imported back into the proceedings in matter no. 2010/425027 from where the order to mediate originated and for continuation of the proceedings should not agreement be reached between the parties in respect of the formal mediation envisaged by the Order. Furthermore, the Applicant sought certain declarations as they related to proceedings in matter no. 2010/425027 which the Applicant had sought after issues of jurisdiction of the Supreme Court in aspects of 2010/425027 had been raised in the Federal Court in respect of matters in 2010/425027 touching on the Applicants bankruptcy in New Zealand. It was not open to the primary judge to then cast that application as another proceeding and proceed to that which the Applicant had brought before the Court and then direct that the Applicant serve by electronic means an entirely different set of proceedings to that which he presented to the Court on 6 January 2015. The orders sought were clearly in relation to matters being ventilated in matter no. 2010/425027." 1. However, to submit, as Mr Gibson does, that the agreement he challenges was closely linked to the pending 2010 proceedings illustrates the fact that the judgment of Black J from which he seeks leave to appeal is simply not to the point. Black J's judgment proceeds expressly on the basis that if, as Mr Gibson contends, he is able to attack the 12 December 2014 settlement within the pending 2010 proceedings, then his Honour's 2015 judgment says nothing about it. In particular, Black J wrote at [18]: "To the extent that Mr Gibson seeks to raise any question as to compliance with the orders for mediation made in the [2010 proceedings] to which I've referred above, then he should have the opportunity to do so if he is entitled to that opportunity in the [2010 proceedings]. That does not create jurisdiction in these separate proceedings for the purposes of schedule 6 of the Uniform Civil Procedure Rules." 1. Paragraphs 3 and 4 of the summons filed in January 2015 sought leave to issue a subpoena relating to the meeting between Messrs Drumm and McIntosh on 12 December 2014, and leave to serve process by facsimile or email. The primary judge treated those orders as derivative upon the substantive orders in paragraphs 1 and 2 of the summons. 2. Paragraphs 5-7 sought various declarations concerning Mr Gibson's bankruptcy in New Zealand. It is not necessary to reproduce in full the declarations sought. The primary judge regarded the absence of service or joinder of the Official Assignee of New Zealand and of Mr Gibson's trustee in bankruptcy – two people in relation to whom the declarations were directed - as fatal to the grant of leave in respect of paragraphs 5 and 6. Although not relied upon by the primary judge, the same must be true of paragraph 7. The primary judge also referred to other matters telling against the grant of leave. 3. The final substantive paragraph in the summons, paragraph 8, sought a declaration that the Supreme Court had jurisdiction to grant the relief in paragraphs 1-7. The primary judge regarded that as a question not free from difficulty, having regard to s 27 of the Bankruptcy Act 1966 (Cth) and the provisions of the Cross-Border Insolvency Act 2008 (Cth). However, his Honour concluded that "this question does not arise, and it is not necessary for me to make a declaration about it, where I am not satisfied that the Court has jurisdiction to deal with the other matters noted in paragraphs 1-7, or that Mr Gibson should be granted leave to pursue those matters, in any event": at [26]. Mr Gibson submitted that there was error in law in concluding that the Supreme Court lacked jurisdiction pursuant to s 27 of the Bankruptcy Act 1966 and s 10 of the Cross-Border Insolvency Act 2010, but that, with respect to him, mis-states the basis on which the primary judge proceeded. 4. Mr Gibson also contends that there was no evidence before the Court to properly determine the matter in relation to any alleged settlement, and that what was said to Black J from the Bar table was inadmissible hearsay. In his written and oral submission today, he made strong submissions about whether what was said from the Bar table properly complied with counsel's obligations. It is not necessary, nor is it possible, for us to express a view as to the correctness of that submission, which is denied by counsel who appeared before Black J and also before us today. The only point that mattered for the purpose of his Honour's orders was something which is not in dispute, namely, that the agreement Mr Gibson seeks to challenge was an agreement made in New Zealand between two residents of New Zealand. 5. I return to the orders made by the primary judge on the question of parties. The orders in fact made by the primary judge were as follows: 1. Note that the Court has not granted leave to proceed against Mr Drumm and Mr McIntosh. 2. Stand over the proceedings before the Equity Registrar on 29 January 2015 to be listed together with proceedings number 2010/425027. 3. Mr Gibson pay Mr McIntosh's costs of the hearing today, and Mr McIntosh have leave to assess and enforce those costs forthwith. 1. It will be seen from what has already been said that although Mr Gibson's submissions proceed on the basis that leave has been refused, that is not what the primary judge did. No appeal lies from the first order noting that leave had not been granted. However, the leave application is not incompetent having regard to order 3. 2. In the absence of an appearance by the second respondent, Mr Drumm, or proof that he had been served, it would not be possible for this Court to grant the leave sought by Mr Gibson. However, in my view, Mr Gibson's application can and should be determined, having regard to its merits at this stage, notwithstanding the absence of one of the respondents. 3. On any view, leave is required to appeal from the interlocutory decision of the primary judge: Supreme Court Act 1970 (NSW), s 101 (2)(e). The decision was one as to practice and procedure. Ordinarily it would be necessary to establish a question of principle or a substantial injustice, in order for there to be a grant of leave. No error of principle is disclosed in the reasons of the primary judge. Nor is there any substantial injustice, especially having regard to the fact that his Honour stood the matter over in order to permit Mr Gibson to seek, if he chose, to take advantage of the provisions of the Trans-Tasman Proceedings Act 2010 (Cth) or to make application in the other proceeding pending in this Court. It is plain from the materials tendered on this application that there have been applications made in the following three and a half months in the 2010 proceeding. The applicable principles are found in Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]-[39]. As Bathurst CJ said in The Age Company Ltd v Liu [2013] NSWCA 26; 82 NSWLR 268 at [13] by reference to Be Financial: "Generally speaking, it is only appropriate to grant leave in matters that involve issues of principle, questions of public importance or in circumstances where it is reasonably clear that an injustice has occurred by reason of error in the judgment, going beyond what is merely arguable." 1. Mr Gibson also seeks leave to appeal from the primary judge's order that he pay the costs of the hearing, and that those costs be assessed and enforceable forthwith. Although there is a dispute as to the quantum of costs, that is something that will be worked out in the ordinary way on assessment. Mr Gibson was also concerned that the costs ordered were of the nature of indemnity costs. It is plain from the face of the order that is not so and Mr Darams has confirmed as much today. No error of principle or substantial injustice has been identified concerning the orders relating to costs 2. This is a clear case where leave should be refused. 3. Mr Gibson also sought, by notice of motion filed 18 February 2015, a stay of the other proceedings pending in this Court, pending the hearing of his application for leave to appeal. It is unnecessary to say anything about the strength or otherwise of that application. In light of the refusal of leave to appeal, the notice of motion must be dismissed. There is no reason in either case for costs not to follow the event. (It may well be that, in light of the non-appearance of Mr Drumm, that no costs have been incurred by him.) 4. Accordingly, I would propose these orders: 1. Summons dated 4 February 2015 dismissed with costs. 2. Notice of motion filed 18 February 2015, dismissed with costs. 1. JC CAMPBELL AJA: I agree with the orders proposed by the presiding judge and also with his reasons. 2. LEEMING JA: Accordingly, the orders of the Court will be as I have indicated. ********** 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: 28 April 2015