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G.J Murphy Holdings Pty Ltd (in liquidation) v Murphy[2021] QSC 225

G.J Murphy Holdings Pty Ltd (in liquidation) v Murphy[2021] QSC 225

SUPREME COURT OF QUEENSLAND

CITATION:

G.J Murphy Holdings Pty Ltd (in liquidation) v Murphy & Ors [2021] QSC 225

PARTIES:

G.J MURPHY HOLDINGS PTY LTD (IN LIQUIDATION)

(plaintiff)

v

NOREEN THERESE MURPHY

(first defendant)

JUSTIN BRADLEY WOODS

(second defendant)

CAMPHIN BOSTON

(third defendant)

FILE NO/S:

BS No 11753 of 2019

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED EX TEMPORE ON:

10 June 2021

DELIVERED AT:

Brisbane

HEARING DATE:

10 June 2021

JUDGE:

Williams J

ORDER:

Order as per initialled draft.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – OFFER OF COMPROMISE, PAYMENT INTO COURT AND SETTLEMENT – where proceedings were commenced against the first defendant, who was represented by a litigation guardian, to recover approximately $3 million as a pecuniary penalty as a result of her alleged failures in October 2018 to comply with her director’s duties under the Corporations Act 2001 – where there is a binding agreement and a settlement has been achieved – where the first defendant’s litigation guardian applies for a sanction of the proposed compromise – where the first defendant has agreed to pay the plaintiff an amount under the terms of the compromise, in full and final settlement of any liability on behalf of the first defendant – whether the settlement should be approved pursuant to rule 98 of the Uniform Civil Procedure Rules 1999 (Qld)

Corporations Act 2001, s 180, s 182

Public Trustee Act 1978, s 59

Uniform Civil Procedure Rules 1999 (Qld), r 5, r 98

COUNSEL:

No appearance for the plaintiff

J B Sweeney for the first defendant

No appearance for the second defendant

No appearance for the third defendant

SOLICITORS:

No appearance for the plaintiff

Redchip Lawyers for the first defendant

No appearance for the second defendant

No appearance for the third defendant

  1. [1]
    This is an application on behalf of the first defendant in proceedings before the Supreme Court.  The proceedings have been compromised, and a detailed deed of settlement has been executed by all parties, except for one party which has indicated it will finalise the execution of the settlement deed once it has received funds into its account from the insurer.  The evidence before the Court is that there is a binding agreement and settlement has been achieved.  There is also evidence before the Court that the other relevant parties to the proceedings do not intend to appear at the hearing today. 
  2. [2]
    [Redacted].
  3. [3]
    The proceedings were commenced against the first defendant, who was represented by a litigation guardian, to recover approximately $3 million as a pecuniary penalty as a result of her alleged failures in October 2018 to comply with her director’s duties under the Corporations Act 2001. 
  4. [4]
    The first defendant’s litigation guardian applies for a sanction of the proposed compromise.  Under the terms of the compromise, the first defendant has agreed to pay the plaintiff [redacted].  This is, in effect, in full and final settlement of any liability on behalf of the first defendant. 
  5. [5]
    There are other terms of the deed of settlement in relation to payments from other parties that are not relevant to the application for sanction before the Court today. 
  6. [6]
    The first and second affidavit of Mr Champney include copies of the deed of release and settlement which have been executed in counterparts. 
  7. [7]
    In respect of the settlement concerning the first defendant, there is evidence before the Court that [redacted].
  8. [8]
    The issue for consideration before the Court today is whether the settlement should be approved pursuant to rule 98 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR).  Rule 98 of the UCPR relevantly states in subsection one:

“A settlement or compromise of a proceeding in which a party is a person under a legal incapacity is ineffective unless it is approved by the court or the public trustee acting under the Public Trustee Act 1978, section 59.”

  1. [9]
    Subsection two states:

“To enable the court to consider whether a settlement or compromise should be approved, the litigation guardian for the party must produce to the court—

  1. (a)
    an affidavit made by the party’s solicitor stating why the settlement or compromise is in the party’s best interests; and
  1. (b)
    a statement by the litigation guardian that instructions have been given for the settlement or compromise of the proceeding; and
  1. (c)
    any other material the court may require.
  1. [10]
    Subsection three states:

“The documents mentioned in subrule (2) are not to be served on another party unless the court orders otherwise.”

  1. [11]
    When this matter came before the Court on a previous occasion, an issue arose as to whether the application could be made ex parte, and a question also arose in respect of rule 98 of the UCPR as to whether the Court only has jurisdiction under s 59 of the Public Trustee Act 1978.
  2. [12]
    Submissions have been made by Mr Sweeney today in relation to both of these issues. 
  3. [13]
    I am satisfied on the material that this is not an application which is properly ex parte.  The application has been served on the relevant parties, and they have indicated in evidence before the Court that they do not intend to appear at the hearing of this application.  I also note that the terms of the deed itself make this application a condition precedent to the deed, and therefore it was clearly envisaged by all parties that the first defendant would be making this application as this application is for the benefit of the first defendant.
  4. [14]
    In respect of the second issue which has been raised as to the meaning of rule 98 of the UCPR, it is not necessary for me to conclusively determine the width of rule 98.  However, for the purposes of the application today, I note that section 59 of the Public Trustee Act  1978 is a very particular provision which deals with the compromise of actions brought by or in part of persons under a legal disability where they are actually claiming money or damages.  It is envisaged in that section that it is actually a claim by the person the subject of the legal incapacity. 
  5. [15]
    Counsel has also referred to Schedule 1 of the Supreme Court of Queensland Act 1991, which refers to the ability of the rules to address matters including civil proceedings by or against a business or person under a legal incapacity.  Under that Act a “person with impaired capacity” means “a person who is not capable of making the decisions required of a litigant for conducting proceedings or was deemed by an Act to be incapable of conducting proceedings”. 
  6. [16]
    The first defendant is clearly such a person, however, as the first defendant is a defendant in the current proceedings, section 59 of the Public Trustee Act 1978 is not applicable.  However, when rule 98 of the UCPR is read in the context of rule 5 of the UCPR and the overriding obligations therein, I consider that the preferable interpretation of rule 98 of the UCPR is that the jurisdiction of the Supreme Court of Queensland to approve settlements or compromises of a proceeding involving a party where a person is under a legal incapacity is not limited to only those proceedings which are brought under section 59 of the Public Trustee Act 1978.
  7. [17]
    This is also consistent with the wider jurisdiction of the Supreme Court of Queensland in its parens patriae jurisdiction.  As has been recognised by the cases, the Supreme Court has an extremely wide jurisdiction in relation to the supervision of the interests of parties who are under an incapacity, and to construe rule 98 of the UCPR to limit the Court’s inherent jurisdiction would be inconsistent with the width of that inherent jurisdiction. 
  8. [18]
    In the circumstances, the first defendant is a defendant to these proceedings, and faces the risk of being liable for the full amount of the claim if the compromise that has been reached is not finalised.  Even if I am wrong about the interpretation of rule 98 of the UCPR, I consider that this Court would have jurisdiction to consider the settlement under its parens patriae jurisdiction. 
  9. [19]
    There is evidence before the Court that the first defendant is suffering from a current incapacity, and this is reflected in the litigation guardian having been appointed to protect her interests.  The jurisdiction of the Court is also to protect the first defendant’s interests, being a person subject to an incapacity.  Accordingly, the jurisdiction of the Court should be consistent with that overriding jurisdiction and also the purpose of rule 5 of the UCPR. 
  10. [20]
    The proceedings between the plaintiff and the first, second and third defendants included claims for a considerable amount of money and breaches of sections 180 and 182(2) of the Corporations Act 2001. 
  11. [21]
    [Redacted].  In these circumstances, it appears that the settlement figure is a reasonable sum and is in the best interests of the first defendant.
  12. [22]
    There is evidence before the Court that [redacted].
  13. [23]
    [Redacted].  In these circumstances, I am satisfied that the settlement is in the first defendant’s best interests. 
  14. [24]
    It has been proposed that the Court make orders, approving the terms of the settlement, and also that the affidavits of Robert Champney sworn 3 June and 9 June and the submissions of the litigation guardian be placed in a sealed envelope which is not to be opened unless there is a further order of the Court.  I consider it appropriate to make the orders as proposed in the draft.  It is also proposed that there be no order as to the costs of this application, which is also appropriate in the circumstances.  Accordingly, I will make the order as per the initialled draft.
  15. [25]
    Further, the Court directs that the transcript from today’s hearing and the ex tempore reasons be confidential and only available to the parties to the proceeding without the leave of the Court.  I direct that a redacted non-confidential version of the ex tempore reasons be prepared and placed on the Court file.  By doing that, there is a copy of the reasons available if anyone wants to search for it.
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Editorial Notes

  • Published Case Name:

    G.J Murphy Holdings Pty Ltd (in liquidation) v Murphy & Ors

  • Shortened Case Name:

    G.J Murphy Holdings Pty Ltd (in liquidation) v Murphy

  • MNC:

    [2021] QSC 225

  • Court:

    QSC

  • Judge(s):

    Williams J

  • Date:

    10 Jun 2021

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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