KC Parcels P/L v Gaudio & Ors [2003] NSWCA 299 (12 December 2003)

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KC Parcels P/L v Gaudio & Ors [2003] NSWCA 299 (12 December 2003)

Last Updated: 16 December 2003

NEW SOUTH WALES COURT OF APPEAL

CITATION: KC Parcels P/L v Gaudio & Ors [2003] NSWCA 299

FILE NUMBER(S):

40358 of 2003

HEARING DATE(S): 17/09/03

JUDGMENT DATE: 12/12/2003

PARTIES:

KC Parcels Pty Ltd (In Liquidation) ACN 071 504 188

v

John Gaudio & 2 Ors

JUDGMENT OF: Meagher JA McColl JA

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): 3770 of 2001

LOWER COURT JUDICIAL OFFICER: Rein DCJ

COUNSEL:

Claimant: R K Newton

Opponents: M Green

SOLICITORS:

Claimant: Purcell Insolvency Lawyers

Opponents: Verekers Solicitors

CATCHWORDS:

APPLICATION FOR LEAVE TO APPEAL: Judgment at first instance - Grounds of appeal different to issues dealt with in judgment appealed from.

LEGISLATION CITED:

DECISION:

Summons dismissed with costs.

JUDGMENT:

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.

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LAST UPDATED: 15/12/2003