Huang v Drumm [2017] NSWCA 29

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Huang v Drumm [2017] NSWCA 29 Hearing dates: 21 February 2017 Decision date: 21 February 2017 Before: Beazley ACJ; Macfarlan JA Decision: 1. Leave to appeal is granted.

2. Costs of the summons seeking leave to appeal are costs in the appeal. Catchwords: APPEAL – application for leave to appeal – circumstances where grant of leave appropriate – important matters of principle raised by proposed appeal – underlying proceedings in District Court seeking equitable compensation for breach of trust and/or fiduciary duty – dispute as to jurisdiction of District Court to entertain claim Legislation Cited: District Court Act 1973 (NSW) Cases Cited: McDonough v The Owners Strata Plan No 57504 [2014] NSWSC 1708 Category: Principal judgment Parties: Biru Huang (Applicant) Bernard Joseph Drumm (Respondent) Representation: Counsel: J T Svehla (Applicant) D F Elliott (Respondent)

Solicitors: Koffels (Applicant) Lander & Rogers (Respondent) File Number(s): 2016/233914 Decision under appeal Court or tribunal: District Court Jurisdiction: Civil Date of Decision: 8 July 2016 Before: Williams DCJ SC File Number(s): 2016/96823

[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.]

Judgment 1. THE COURT: In an amended summary of argument that was filed in the Court this morning, and which was supplemented by oral submissions of counsel who appears for the applicant, the question which was said to be in issue, and which should have been determined by the primary judge was whether the Court had jurisdiction to deal with the applicant's claim. 2. The applicant had, in brief terms, raised three claims in her pleading. First, a claim that the respondent had acted in breach of trust. Secondly, that the respondent had breached a fiduciary duty, and thirdly that the respondent had breached a professional duty of care. The argument which was advanced before the Court was that the first and the second of those claims are not claims which may be heard and determined by the District Court, because the subject trust funds exceed $20,000 in amount or value and the claims fall within s 134(1)(e) of the District Court Act 1973 (NSW). 3. The respondent submitted that the District Court had jurisdiction, and that the proceedings in the District Court filed by the applicant, leaving aside the claim for breach of duty, fell within s 134(1)(h) of the District Court Act. 4. There is no settled authority on that question, although there are a number of decisions which have referred to it. It is only necessary, for present purposes, to refer to the decision of Brereton J in McDonough v The Owners Strata Plan No 57504 [2014] NSWSC 1708 in which his Honour, at [10], considered that a claim for equitable compensation for breach of trust is a claim to which s 134(1)(e) applies, and therefore is excluded from s 134(1)(h), such that the District Court does not have jurisdiction unless the relevant trust fund is less than $20,000 in value or amount. 5. Leaving aside the claim for breach of duty, it is argued that the claims in this case for equitable compensation for breach of trust and breach of fiduciary duty fall within s 134(1)(e). It was submitted by the applicant that whether this is so raises an important matter of principle, as it concerns, in a very real and practical way, the jurisdiction of the District Court. 6. The Court is of the view that the matter is clearly arguable, and may even be strongly arguable, although we do not have to go that far. It clearly raises an important matter of principle that concerns the jurisdiction of the District Court, and for that reason we will order that leave to appeal be granted. [Discussion re costs] 1. The Court proposes to order that costs will be costs in the appeal. Accordingly, the formal orders of the Court are as follows. 1. Leave to appeal is granted. 2. Costs of the summons seeking leave to appeal are costs in the appeal.

********** 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 February 2017