Cornerstone Medical (Jimboomba) P/L v Anscor P/L & Ors [2005] QCA 180

1 SUPREME COURT OF QUEENSLAND CITATION: Cornerstone Medical (Jimboomba) P/L v Anscor P/L & Ors [2005] QCA 180 PARTIES: ZIPSIDE PTY LTD ACN 010 845 093 as Trustee for the Glentern Property Trust (first plaintiff/first respondent) AUSTRALIA-PACIFIC HOLDINGS PTY LTD ACN 011 065 133 (second plaintiff/second respondent) MANBURY PTY LTD ACN 010 925 274 as Trustee for the WILSON PENSION FUND (third plaintiff/third respondent) v ANSCOR PTY LTD ACN 065 225 505 in its own right and as Trustee of the Anzcorp Discretionary Trust (first defendant/first appellant) ROBERT EDWARD CORBETT (second defendant/second appellant) ANNE SHIRLEY CORBETT (third defendant/third appellant) CORNERSTONE MEDICAL (JIMBOOMBA) PTY LTD (applicant) FILE NO/S: Appeal No 2910 of 2004 SC No 4997 of 1998 DIVISION: Court of Appeal PROCEEDING: Miscellaneous Application – Civil General Civil Appeal ORIGINATING COURT: Supreme Court at Brisbane DELIVERED EX TEMPORE ON: 31 May 2005 DELIVERED AT: Brisbane HEARING DATE: 31 May 2005 JUDGES: de Jersey CJ, Atkinson and Mullins JJ Separate reasons for judgment of each member of the Court, each concurring as to the orders made ORDERS: 1. Application dismissed 2. The applicant pay the respondents’ costs of the -- 1 of 7 -- 2 application to be assessed 3. Appeal dismissed 4. The appellant pay the respondents’ costs of the appeal to be assessed CATCHWORDS: PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PRACTICE UNDER RULES OF COURT – PARTIES – OTHER MATTERS – where appellant brought appeal in own right and as trustee – where appellant placed in liquidation – where liquidators of appellant did not wish to pursue appeal – where appellant’s office as trustee vacated automatically on liquidation – where applicant appointed as trustee – whether applicant should be joined as an appellant in the appeal to prosecute the appeal COUNSEL: No appearance for the appellants D A Savage SC for the respondents M A Martin for the applicant SOLICITORS: No appearance for the appellants Tucker & Cowen for the respondents Shand Taylor Lawyers for the applicant MULLINS J: This is an application by the applicant in its capacity as trustee of the Anzcorp Discretionary Trust ("the trust") to be included as a party to the appeal and be joined as an appellant in the appeal. The appeal was filed by Anscor Pty Ltd as first appellant and Mr and Mrs Corbett as the second and third appellants. The appeals by Mr and Mrs Corbett were struck out on 22 April 2005. I will therefore refer to the first appellant as the appellant. The proceeding has always shown the appellant as party in its own right and as trustee of the trust. The trust was established by deed of settlement made on 29 June 1994 with the appellant as trustee. -- 2 of 7 -- 3 The appellant continued as trustee until 5 May 2005 when it was wound up by order of this Court which had the effect under the deed of settlement of automatically terminating the appellant's office as trustee of the trust. The applicant was appointed the new trustee of the trust on 13 May 2005. In Federal Court proceeding QG7308 of 1998 judgment was obtained on 10 April 2003 by the Trustee in Bankruptcy of the Estate of Geoffrey Robert Dexter ("Dexter") against the appellant for a sum in the vicinity of $26 million as a result of the Court declaring that the amount of $26,379,260 paid by the appellant to Dexter comprised transfers of property to the appellant which were void as against the Trustee in Bankruptcy of Dexter pursuant to section 120 of the Bankruptcy Act 1966. An appeal to the Full Court of the Federal Court was dismissed on 26 March 2004. The appellant has applied for special leave to appeal to the High Court from the judgment of the Full Court of the Federal Court. The application for special leave seeks to raise a question of law in relation to section 120 of the Bankruptcy Act. That application for special leave is due to be heard in June 2005. In this Supreme Court proceeding that is the subject of this appeal, judgment was given against the appellant in favour of the first respondent for the sum of $300,000 and interest of $150,256.16, in favour of the second respondent for the sum of -- 3 of 7 -- 4 $250,000 and interest of $97,082.17 and in favour of the third respondent for the sum of $20,000 and interest of $9,522.93. The respondents had been successful in their respective claims for damages for misleading and deceptive conduct. The liquidators of the appellant do not wish to pursue the appeal and have not appeared on the hearing of the appeal today. The sole director and shareholder of the applicant is accountant Mr Graeme Scott. He has sworn an affidavit on 17 May 2005 in which he identifies contingent assets of the trust on the basis that the High Court application for special leave to appeal is successful and the appeal is then successful. These assets are: that judgment against Anscor for $26 million would be set aside; the appellant would be entitled to be reimbursed by the Trustee in Bankruptcy of Dexter in an amount of $193,662 plus interest which has been paid pursuant to the Federal Court judgment by the appellant to the Trustee in Bankruptcy; and the appellant would be entitled to the benefit of an order for costs against the Trustee in Bankruptcy of Dexter in respect of the High Court special leave application and the Federal Court proceedings. No other assets of the trust are identified in Mr Scott's affidavit. According to Mr Scott the applicant as trustee of the trust seeks to be joined as an appellant to the appeal to prosecute -- 4 of 7 -- 5 the appeal on the same basis that the appellant was prosecuting the appeal, in order to provide an opportunity for the assets of the trust to be free of any claim from indemnity by the appellant in respect of the liability under the judgment given by his Honour Mr Justice Helman. Although the appellant at all times relevant to the proceeding was acting as trustee of the trust which gives the appellant rights of indemnity against the trust assets, the judgments obtained by the respondents are against the appellant. The trust is not a separate legal identity and is not a party to the appeal. The appellant is the proper party to the proceeding brought against it by the respondents and is the proper party to appeal against the judgment. This is not altered by the fact that the appellant is shown in the heading of the proceeding as being a party in its own right and as trustee of the trust. The applicant is interested in the outcome of this appeal in the sense of wishing to protect the trust assets as a result of its recent appointment as trustee of the trust, but that does not mean that it is directly affected by the appeal or has an interest in the outcome of the appeal which requires it to be before the Court. One way of testing this is whether the respondents could have successfully applied to bring the applicant before the Court -- 5 of 7 -- 6 as an appellant. Such an application would not have been successful. The purpose of this application is to enable the applicant to prosecute an appeal that would otherwise not be pursued by the appellant. That cannot justify adding a party which does not have a proper interest in being a party to the appeal. The application should be dismissed and the applicant should be ordered to pay the respondents' costs of the application to be assessed. The appeal should also be dismissed and the appellant should be ordered to pay the respondents' costs of the appeal to be assessed. THE CHIEF JUSTICE: I agree. ATKINSON J: I agree with the orders proposed by Justice Mullins and with her Honour's reasons. THE CHIEF JUSTICE: The orders of the Court are as indicated by Justice Mullins. ----- -- 6 of 7 -- 7 -- 7 of 7 --