SP & G Nominees Pty Ltd v Stumer, Ex parte Attorney-General of the Commonwealth B26/2001 [2001] HCATrans 208 (17 May 2001)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B26 of 2001

B e t w e e n -

SP & G NOMINEES PTY LTD

Applicant

and

NEVILLE ALBERT STUMER

Respondent

Ex parte -

THE ATTORNEY-GENERAL OF THE COMMONWEALTH

Application for removal pursuant to section 40 of the Judiciary Act 1903

CALLINAN J

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON THURSDAY, 17 MAY, 2001, AT 10.35 AM

Copyright in the High Court of Australia

MR D.M.J. BENNETT, QC, Solicitor-General for the Commonwealth: If your Honour pleases, I appear with my learned friend, MR J.S. STELLIOS, for the applicant for removal, the Attorney-General, and I would then be appearing for him as intervener, if that order is made. (instructed by the Australian Government Solicitor)

MR P.P. McQUADE: I appear for SP & G Nominees Pty Ltd, which is the applicant creditor in respect of the creditor's petition in the bankruptcy matter. (instructed by Short Punch & Greatorix)

MR R.A. ALLEN: I appear for the respondent, your Honour. (of Whitman & Co)

HIS HONOUR: What is the position?

MR ALLEN: I withdraw the words "conflict of interest". It is more of an ethical problem. Can I just hand up a series of correspondence. The client has placed at least myself in a difficult position, because I cannot speak for the practitioner who is on the record.

HIS HONOUR: You are counsel - - -?

MR ALLEN: Solicitor.

HIS HONOUR: Solicitor.

MR ALLEN: I am an employed solicitor.

HIS HONOUR: For - - -?

MR ALLEN: With Whitman & Co.

HIS HONOUR: Yes. Have the other parties seen this - - -

MR ALLEN: I have asked it to be initially an order for confidentially. I am not quite sure whether it concerns them. The letter emanated from the Legal Assistance Branch of the Attorney-General - - -

HIS HONOUR: Why do you want me to look at this correspondence?

MR ALLEN: It will fill your Honour in as to the problem we are confronted with.

HIS HONOUR: Assume there is a problem, what do you want to do?

MR ALLEN: Not make submissions.

HIS HONOUR: Not make submissions?

MR ALLEN: Yes, until our ethical position, or my ethical position at least, is considered further.

HIS HONOUR: What is the attitude of the other parties to this?

MR BENNETT: I do not quite understand what is being sought. I am ready to proceed, your Honour, and seek to do so.

HIS HONOUR: What is your position, Mr McQuade?

MR McQUADE: The same view. I wish to proceed. I do not want the matter being adjourned.

HIS HONOUR: You do not want the matter adjourned?

MR McQUADE: No, because it has had a history already in the Federal Court of being adjourned a number of times.

HIS HONOUR: What should I do with this correspondence?

MR BENNETT: I do not know what it is, your Honour - - -

HIS HONOUR: No. It is very difficult to state an attitude about something you - - -

MR BENNETT: I would certainly object to your Honour seeing something which we are not permitted to see. I suspect it is something that I have copy of, but I cannot be sure of that until I see it.

HIS HONOUR: And you do not want me to show this to the other parties?

MR ALLEN: Not initially, your Honour. You may rule in that regard, but - - -

HIS HONOUR: Anyway, you say, Mr McQuade, you have a conflict of interest; is that - - -

MR ALLEN: No, not a conflict, an ethical problem.

HIS HONOUR: Well, what would you want to do?

MR ALLEN: Not make submissions until that position can be clarified. It must be borne in mind that I am only an employed solicitor - I am not the practitioner on the record who may take an entirely different attitude. As an employed solicitor, I am an officer of this Court, as I am an officer of any other court. I just consider myself in a very difficult position at this point of time to make any submissions.

HIS HONOUR: Well, why is it you are - - -

MR ALLEN: Because our initial submissions were to oppose the application for removal and have it remitted back to the Federal Court and I should not make those submissions given the position we have been placed in by the client.

HIS HONOUR: Well, this is not a criticism of you, Mr McQuade, but why is not your employer here?

MR ALLEN: He is in another court at the moment.

HIS HONOUR: Well, I do not think he should put you in the position of having to adopt this stance on the matter when perhaps you say you have a problem but he may not have a problem.

MR ALLEN: Well, I cannot speak for him.

HIS HONOUR: Well, what do the other parties think of that? My inclination would be stand the matter down and insist that Mr McQuade's employer present himself here and take a position.

MR McQUADE: I am Mr McQuade, your Honour, so I do not want to get confused on the record with Mr Allen, because I know the transcript will - - -

HIS HONOUR: I beg your pardon.

MR ALLEN: I do not mind if his name actually stays in the record in respect of this.

HIS HONOUR: Who is your employer?

MR ALLEN: Whitman & Co. He is a sole practitioner. I am an employee.

HIS HONOUR: Well, why is he not here? It seems - - -

MR ALLEN: Maybe if I just withdraw - - -

HIS HONOUR: No, listen to me - - -

MR ALLEN: - - - the correspondence and not make any submissions full stop.

HIS HONOUR: All right.

MR ALLEN: Thank you. That way it does not sort of alert your Honour to a problem which is a continuing problem at the moment.

MR BENNETT: May I just say this, your Honour. The application we make is an application as of right.

HIS HONOUR: Yes, under section 40, is it?

MR BENNETT: Yes. If there were to be an application to remit the matter back, that would be a matter which could be brought at any time, so it is hard to see what prejudice would flow from my application proceeding and being dealt with today, but it is a matter - - -

HIS HONOUR: Well, Mr Allen has made it clear that he is not going to make a submission now.

MR ALLEN: That is correct.

HIS HONOUR: Is that right? So what I have before me then is your application for removal, Mr Solicitor. Is that right?

MR BENNETT: Yes, your Honour.

HIS HONOUR: Which is section 40 application, which is as of right. Is that so?

MR BENNETT: Yes, your Honour, and I move on the notice of motion dated 17 April and the affidavit of Anna Katherine Lukeman sworn the same date.

HIS HONOUR: That is the only application before me today?

MR BENNETT: So far as we were aware, yes, your Honour. Yes, so far as we were aware.

HIS HONOUR: That is right, Mr McQuade, is it not?

MR McQUADE: That is correct, your Honour, yes.

HIS HONOUR: Well, what is your attitude to the application?

MR McQUADE: We do not oppose the matter being remitted. The only factor that I wish to make a submission on is in respect of a cost order similar to that which was made in the GPS First Mortgage one, which I can hand a copy of that up to your Honour.

HIS HONOUR: All right. Have you seen the order I made in this other matter, Mr Solicitor?

MR BENNETT: Yes. Your Honour, the position is that I do not consent to the application, but there is nothing I can put to your Honour that would distinguish this matter from the GPS matter.

HIS HONOUR: This raises exactly the same question, does it not, as the GPS matter. Is that right?

MR BENNETT: Yes, your Honour, which is about to disappear.

HIS HONOUR: Yes, and I think I expressed concern about the absence of a real contradictor in the GPS matter. Is that right?

MR BENNETT: Yes, your Honour.

MR McQUADE: I think that was the Lynch matter, your Honour.

HIS HONOUR: Lynch matter?

MR McQUADE: Yes. There is three of them now. The GPS was going to go away. There is one called the Lynch matter, which involved the Deputy Commissioner of Taxation.

HIS HONOUR: Right. Well, I will just look at the affidavit to which you have referred. Mr Solicitor, do you say that the section 78B notice properly encapsulates the constitutional questions arising?

MR BENNETT: It includes it, your Honour. We would hope to be able to agree with the parties on a form of case for your Honour to state.

HIS HONOUR: Well, that is what I was really leading up to.

MR BENNETT: Yes, and if it were not possible to agree, we would put forward a case and, if necessary, support it with evidence and ask your Honour to state it, but we would hope we can reach agreement on that. The questions may end up being slightly different from those set out in the section 78B notice but, in substance, the question is the validity of the incorporation of a company. The ramifications of the argument are fairly extensive. I can explain that to your Honour, if your Honour wishes. That may take a few minutes, but I am quite happy to do that, if your Honour would be assisted.

HIS HONOUR: Well, I do not think I need that. I can see the sorts of questions that would arise. I am just anxious not to remove anything other than is essential for the resolution of any constitutional question, that is all.

MR BENNETT: Your Honour, the effect of the constitutional point would be that the company is not incorporated and does not exist and, therefore, that there is no - - -

HIS HONOUR: No debt.

MR BENNETT: - - - no debt, no petition in creditor, no - - -

HIS HONOUR: No legal personality.

MR BENNETT: That is right, your Honour. I am not sure what the status of the judgment would be, but we do not need to go into it.

HIS HONOUR: Even though the legal personality presumably has been making money in the past, the - - -

MR BENNETT: Yes. From our point of view, we would wish in the High Court to raise issues about the dicta in Hughes and about the correctness of the Corporations Case, which, in the second place, could not and, and in the first place, only could with difficulty be raised before the Federal Court. The reason we are removing it is we would not the position to arise where a Federal Court judge would be bound by High Court authority against some of our arguments but able to hear and deal with the contrary arguments.

HIS HONOUR: Yes. Well, Mr Solicitor, what should I do? Should I do this? Should I make it clear that I will remove it but make an order that I do it subject to the agreement of the parties upon the form of a settled case or, in default of their ability to agree, upon the basis of a case stated by myself? It should be a case stated by myself, in any event, should it not, ideally?

MR BENNETT: Yes, your Honour. As I say, those consequences would flow in any event, we would submit, from the order for removal. Once it is removed, the next step would be we would endeavour to agree on a stated case. If we cannot agree, we would promulgate one to the Court, put supporting evidence on to show the correctness of the factual allegations in it and then ask your Honour to state it and, if there was opposition, that could be argued before your Honour.

HIS HONOUR: Mr McQuade, it is unlikely that there will be any dispute about any facts?

MR McQUADE: Yes, that is correct, but it may be with Mr Allen subsequently, or whoever acts for Mr Stumer, may have some difficulty, but I am quite sure as between the Solicitor and myself that we can agree on stated facts.

HIS HONOUR: What is Mr Stumer's position in this?

MR ALLEN: If I were capable of making submissions, we would totally disagree with the case stated made by the Commonwealth.

HIS HONOUR: But where does Mr Stumer fit into all of this?

MR ALLEN: Mr Stumer is the one who is virtually running the contradictory argument.

HIS HONOUR: But is Mr Stumer the director of the non-existent company?

MR ALLEN: No, no. He is a respondent against whom the company has made a claim.

HIS HONOUR: All right. Well, thank you, Mr Allen. Well, you have a right to have the matter removed under section 40, Mr Solicitor?

MR BENNETT: Yes, your Honour.

HIS HONOUR: Well, I will make an order that the matter be removed into the High Court and I direct that the parties - I do not see why I cannot give a direction in these terms. I direct that the parties confer with a view to drafting a form of stated case for my consideration and that if the parties are unable to agree as to the form of a stated case, that each party file within 28 days it or his proposed form of stated case for my consideration and I think I should make an order in the same form as paragraph 2 of the order as I made in the matter of Lynch and GPS Securities on 23 June last year. Is that clear to everybody?

MR McQUADE: Yes, your Honour.

HIS HONOUR: Yes. Nothing further, Mr Solicitor? Yes, all right.

AT 10.50 AM THE MATTER WAS CONCLUDED