Background
Scruby J heard an Interlocutory Process filed on 26 October 2026 by Anastasios Georgas and Daniel Juratowitch, the trustees in bankruptcy of James Stuart Crawford. Crawford had been the first defendant in proceedings brought by Alan Walker, the liquidator of Quasar Constructions (Commercial) Pty Ltd (in liquidation), and Quasar itself. The plaintiffs pursued Crawford, Quasar’s sole director at all relevant times, for insolvent trading and breach of duty. They also alleged that, before the winding up began, Crawford transferred money to his former wife, Stephanie Elizabeth Crawford, and that those transfers were voidable under s 37A of the Conveyancing Act 1919 (NSW).
The proceedings began by Originating Process, later amended, and the parties filed lengthy points of claim. Facing a freezing-order application, Ms Crawford gave undertakings generally preventing her from dealing with her property, subject to exceptions. No evidence orders had been made, although she had filed an affidavit addressing the substantive claims and the second plaintiff had filed a lengthy affidavit when the proceedings commenced.
After Crawford’s bankruptcy, consent orders stayed the proceedings pending any application by the plaintiffs to the Federal Court for leave under s 58(3) of the Bankruptcy Act 1966 (Cth) to proceed with their claims against Ms Crawford. The trustees sought to vacate that stay, join the proceedings as plaintiffs, and transfer the proceedings to the Federal Court. The existing plaintiffs consented to joinder; Ms Crawford opposed it.
The Court’s Holding
The Court vacated Order 2 of the orders made on 10 July 2026, there being no dispute about lifting the stay. Scruby J emphasized that this did not displace s 58(3): unless and until the Federal Court grants leave, the plaintiffs remain prevented from taking any step in the proceedings.
Transfer was mandatory. It was common ground that the proceedings involved a “special federal matter” within s 3(1) of the Commonwealth cross-vesting legislation and that the Federal Court would have jurisdiction over all claims if transfer occurred. The judge accepted that position, citing Royles v Shalhoub [2026] NSWSC 1269 as involving similar facts. No party asserted “special circumstances” under s 6(3) that would justify refusing transfer. Section 6(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW) therefore required the transfer order and left no discretion to make another order.
Joinder was the only substantial dispute. The Court held that the joinder application was not itself a “matter for determination in a proceeding” constituting a special federal matter. Its jurisdiction to join a party arose from the Uniform Civil Procedure Rules 2005 (NSW), s 9 of the Civil Procedure Act 2005 (NSW), and, insofar as relied upon, its inherent jurisdiction—not from cross-vesting legislation. The judge found it unnecessary to resolve disputes over the precise operation of UCPR rr 6.19 and 6.24, noting the undisputed availability of the residual discretion in r 6.19(1) and the trustees’ reliance on r 6.27.
The trustees wished to pursue the pleaded claims for the benefit of Crawford’s creditors. Without joinder, they said, they would have to commence substantially identical Federal Court proceedings, duplicating resources and probably requiring fresh freezing-order applications. Ms Crawford argued that prayer 11 currently sought to make the proceeds of the impugned transfers available solely to satisfy debts owed to Quasar, contrary to other creditors’ interests and s 116 of the Bankruptcy Act. The plaintiffs and trustees agreed that prayer 11 would instead be amended to seek payment to the trustees. Scruby J held that joinder should not be assessed on the artificial assumption that prayer 11 would remain unchanged. The proposed amendment was an obvious and necessary consequence of Crawford’s later bankruptcy; ignoring it would contradict common sense and the overriding purpose in s 56 of the Civil Procedure Act. He also distinguished the declaratory relief in prayer 10 from the challenged payment relief, leaving any final-hearing utility question for another day.
The Court rejected the separate objection to multiple plaintiffs having different legal representation. Although the ordinary practice favored common representation, it was flexible where justice required. Because s 58(3) barred fresh steps without Federal Court leave, any practical representation problem would arise only if such an application were made, and would concern the plaintiffs rather than the trustees. Ms Crawford’s serious medical condition supplied no reason to refuse the trustees’ orders; possible expedition or other case-management consequences were for the parties and Federal Court.
Key Takeaways
- The 10 July stay was vacated, but s 58(3) continues to bar steps by the plaintiffs absent Federal Court leave.
- The trustees were joined as the Third Plaintiff; the Court did not decide every disputed construction of UCPR rr 6.19 and 6.24.
- Transfer was compulsory on the agreed special-federal-matter footing because no s 6(3) special circumstances were advanced.
- The anticipated amendment of prayer 11 could be considered on joinder; the Court did not finally determine the underlying claims.
Why It Matters
The decision separates a mandatory cross-vesting transfer from the State court’s independent power to determine joinder. It also shows that a joinder application may account for an agreed, consequential amendment to relief rather than treating the existing pleading as immutable.
The rulings are procedural and circumstance-specific. They do not decide the insolvent-trading, breach-of-duty, or voidable-transfer claims, grant leave under s 58(3), or resolve costs, on which the Court said it would hear the parties.