Australia and New Zealand Banking Group Limited v Thomson
[2022] QSC 18
•24 February 2022
SUPREME COURT OF QUEENSLAND
CITATION: Australia and New Zealand Banking Group Limited v Thomson [2022] QSC 18 PARTIES: AUSTRALIA AND NEW ZEALAND BANKING
GROUP LIMITEDACN 005 357 522
(applicant)v
CAROLYN MARY THOMSON(respondent) FILE NO/S: BS No 8958 of 2019 DIVISION: Trial Division PROCEEDING: Originating application ORIGINATING Supreme Court of Queensland at Brisbane COURT: DELIVERED ON: 24 February 2022 DELIVERED AT: Brisbane HEARING DATE: 7 February 2022 JUDGE: Williams J ORDER:
1. A copy of the respondent’s email dated 14 February 2022 is marked for identification “A”.
2. The respondent’s application that I recuse myself on
the basis of actual or apprehended bias is refused.
3. Pursuant to r 436(2) of the Uniform Civil Procedure Rules 1999 (Qld), the applicant is granted leave to rely on the Smith affidavit in evidence in support of the application.
4. Pursuant to s 459H of the Corporations Act 2001 (Cth), the statutory demand dated 1 August 2019 served on the applicant by the respondent be set aside.
I will hear from the parties in respect of costs.
CATCHWORDS:
CORPORATIONS – WINDING UP – WINDING UP IN INSOLVENCY – STATUTORY DEMAND – where respondent a customer of applicant – where negotiations between the parties had occurred over a number of years –
where respondent served a statutory demand pursuant to section 459E of the Corporations Act 2001 (Cth) on the
applicant for various sums totalling over two million dollars – where applicant filed application to set aside statutory demand in August 2019 – where application adjourned pending outcome of complaint about the applicant made by respondent to financial industry ombudsman the Australian Financial
Complaints Authority – where respondent disputes solvency of the applicant – whether typographic error on the application affects its validity – whether a genuine dispute between the parties exists – whether statutory demand should be set aside
pursuant to section 459H of the Corporations Act 2001 (Cth) – whether statutory demand should be set aside pursuant to section 459J(1)(b) of the Corporations Act 2001 (Cth) PROCEDURE – CIVIL PROCEEDINGS – PROCEDURAL ASPECTS OF EVIDENCE – AFFIDAVITS – where
supporting affidavit required by section 459G(3)(b) of the Corporations Act 2001 (Cth) – whether the affidavits were supporting affidavits within section 459G(3)(b) of the Corporations Act 2001 (Cth) – where one supporting affidavit was not in the approved Queensland form – where one
supporting affidavit had additional exhibit not referred to in the body of the affidavit nor contained within the certificate of
exhibits – where the supporting affidavits did not contain the proceeding number – whether alleged defects in the affidavits were irregularities of form – whether alleged defects in the
affidavits give rise to a jurisdictional issue under s 459G of the
Corporations Act 2001 (Cth)COURTS AND JUDGES – JUDGES – DISQUALIFICATION FOR INTEREST OR BIAS – GENERALLY– where respondent to application self- represented – where judgment reserved after hearing application to set aside statutory demand – where respondent sent an email to her Honour’s chambers after the hearing of the
matter making an informal application for her Honour to recuse herself on both grounds of apprehended bias and actual
bias – whether recusal appropriate on grounds of apprehended
bias – whether recusal appropriate on grounds of actual biasCorporations Act 2001 (Cth), ss 459G, 459H, 459J
Supreme Court (General Civil Procedure) Rules 2015 (Vic),
r 43
Oaths and Affirmations Act 2018 (Vic), ss 23, 25, 26, 27, 29Oaths and Affirmations (Affidavits, Statutory Declarations and Certifications) Regulations 2018 (Vic)
Uniform Civil Procedure Rules 1999 (Qld), ss 371, 435,
436(2), 964, Sch 1AAustralian Communication Exchange Ltd v Pilot Partners Pty Ltd [2017] QSC 176
Benonyx Pty Ltd v Fetrona Pty Ltd [1999] NSWSC 181
Chelring Pty Ltd v Coombs [2000] WASC 60
Craneford Nominees Pty Ltd v VGC Co-Operative Ltd (2012)262 FLR 283 Financial Solutions Australasia Pty Ltd v Predella Pty Ltd (2002) 26 WAR 305; [2002] WASCA 51 Grocon Constructors (Qld) Pty Ltd v Dexus Funds
Management Limited as Trustee for the Dexus 480Q Trust(No 2) [2019] FCA 1117
Lifese Pty Limited v Lee Crane Hire Pty Limited [2012] FCA
302
LJAW Enterprises Pty Ltd v RJK Enterprises Pty Ltd [2004]
QSC 134
Paperlinx Ltd v Skidmore (2004) 51 ACSR 614
Parbery v QNI Metals Pty Ltd [2018] QSC 213
Reid v Commercial Club (Albury) Ltd [2014] NSWCA 98
Reschke Pty Ltd v DiGiorgio Family Wines Pty Ltd [2017]
SASC
Robowash Pty Ltd v Robowash Finance Pty Ltd (2000) 158
FLR 338
Sceam Constructions Pty Ltd v Clyne [2021] VSCA 270
SGR Pastoral Pty Ltd v Christensen (2019) 2 Qd R 334;
[2019] QSC 229
Syncordia Group Pty Ltd v Nexia Melbourne Pty Ltd [2021]
VSC 732
Tatlers.com.au Pty Ltd v Davis (2006) 203 FLR 473; [2006]
NSWSC 1055
Thomson v Tremco Pty Ltd (2019) 136 ACSR 1; [2019]
QCA 018
Tremco Pty Ltd v Thomson [2018] QDC 101Whisson and Another v Eastland Technology Australia Limited [2004] WASCA 272 COUNSEL: E J Goodwin for the applicant
Self-represented respondentSOLICITORS: Herbert Smith Freehills
Self-represented respondent
This is an originating application by the applicant, the Australia and New Zealand Banking Group Limited (the ANZ), pursuant to ss 459G, 459H and 459J of the Corporations Act 2001 (Cth) (the Corporations Act) by which the ANZ seeks orders to set aside the statutory demand dated 1 August 2019 for the amount of $2,832,378.00.
The application to set aside the statutory demand is based upon two grounds. First,
the existence of a genuine dispute about the alleged debt and, second, for “some other
reason”.Background
The respondent served the statutory demand for the amount of $2,832,378.00 on the ANZ on 5 or 6 August 2019. A copy of the statutory demand is exhibited to the first affidavit of Inge Kindermann sworn 21 August 2019 and filed 22 August 2019 (first Kindermann affidavit) at pages 2 - 6 of the exhibit.
The statutory demand claims the amount of $2,832,378.00 as being payable by the ANZ to the respondent pursuant to an alleged agreement:
(a)
on 22 March 2018 to pay the three creditors of the respondent, namely Tremco Pty Ltd, PWA Financial Group Pty Ltd and Thomson Lawyers the total amount of $1,052,000.00; and
(b)
on 12 October 2018 to pay the respondent a further $1,780,378.00 “cash payment” in respect of a longstanding dispute between the ANZ and the
respondent.
On or about 18 August 2019, the respondent filed a complaint with the Australian Financial Complaints Authority (AFCA) against the ANZ. AFCA is a financial industry ombudsman service created pursuant to Commonwealth legislation.[1] There was overlap in the factual matters in the AFCA complaint, and subsequent complaints, and the factual matters forming the basis of the statutory demand.
[1] Treasury Laws Amendment (Putting Consumers First – Establishment of the Australian Financial
On 22 August 2019, the ANZ filed and served the originating application to set aside the statutory demand, together with the first Kindermann affidavit and an affidavit of Peter Smith sworn 21 August 2019 (Smith affidavit).
The originating application in this Court was adjourned until the complaints process before AFCA was determined. This was in accordance with AFCA requirements. The parties consented to a number of adjournments of the originating application to facilitate this.
On 21 September 2021, AFCA issued its determination. The originating application is now proceeding before this Court.
Application to set aside four subpoenas
The respondent served four subpoenas to give evidence on the following individuals:
(a) David Gonski, a former chairman of the board of directors of the ANZ; (b) Shayne Elliott, the current chief executive officer and a director of the ANZ; (c) Michelle Jablko, a former chief financial officer of the ANZ; and (d) Joan McKinstray, a current senior executive of the ANZ.
The ANZ brought an application to set aside the subpoenas filed on 24 January 2022 and returnable before the Court on Friday 4 February 2022.
Justice Boddice heard the application to set aside the subpoenas on 4 February 2022 and made the following orders:
1.
By consent, the subpoenas for Michelle Jablko and Joan McKinstray are set aside.
2. The subpoena for David Gonski is set aside. 3.
The application to set aside the subpoena for Shayne Elliott is adjourned until 7 February 2022 before Williams J.
4. Costs reserved for the three determined applications.
The application in respect of the subpoena served on Shayne Elliott proceeded before me on Monday 7 February 2022.
Following hearing submissions from both parties, ex tempore reasons were delivered and I ordered that the subpoena addressed to Shayne Elliott be set aside.
Application to set aside statutory demand
Following the ruling, the substantive application to set aside the statutory demand then proceeded before me.
At the hearing before Boddice J on 4 February 2022, the respondent had provided
written submissions dated 3 February 2022 which identified some “preliminary
issues”.
These submissions identified the following questions that the respondent identified
in this category of “preliminary issues”:
“1.
Whether the Applicant has a complying application pursuant to s 459G(2) of the [Corporations Act] that was made within time due to formal defects in its supporting affidavits, where those defects if the Court finds they exist, were not remedied within
the 21 day statutory period for compliance with a creditor’s statutory demand. 2. The Applicant’s application to have the creditors statutory demand set aside dated 21 August 2019 at paragraph 2 asks the Court to make a further and/or alternative order pursuant to s 459J(b) of the Corporations Act, where there is no s 459J(b) of the Corporations Act. The questions the Court needs to answer are:
a
Should this be a preliminary matter the Court needs to consider prior to the application to set aside the subpoenas; or
b Should it be heard at the hearing of the applicant’s originating application?
c Should this have been rectified within the 21 day statutory period for the applicant’s originating application to be on foot? d Does the Applicant have an application on foot to set aside the creditor’s statutory demand? 3. Whether the Court needs to determine the issue of formal defects
in the Applicant’s originating application prior to proceeding
with the hearing regarding the setting aside of subpoenas. Or whether that should be heard at the hearing of the originating application on 7 February 2022.
4. The questions that need to be answered by the Court regarding these formal defects are:
a.
Did Ms Kindermann require the leave of the Court to rely on her affidavit despite the formal defects in it prior to the expiration of the 21 day statutory period for compliance
with the creditor’s statutory demand; and
b. If so, was the affidavit required to have the memorandum of the Court affects to the face of it when it was served on me within the statutory period of 21 days for compliance? c. If leave was not granted for Ms Kindermann’s prior to the expiration of the 21 day period for compliance is this fatal
to the client’s originating application?
d. As Mr Smith’s affidavit served […] in support of the Applicant’s originating application includes an additional annexure not referred to in the body of the affidavit or the
certificate of exhibits does that mean that the Applicant’s
originating application is not on foot because of?”
After posing these questions, the respondent then made substantive written submissions in relation to these alleged defects and the consequences of the alleged defects. The submissions also address the alleged defect of the copy of the supporting affidavits not having the matter number endorsed on them.
The respondent relies on an affidavit sworn 13 January 2022 and exhibits consisting of 1006 pages, over four volumes. The body of the affidavit of the respondent consists of 70 pages. Included in the exhibit is correspondence between the respondent and the ANZ solicitors where the alleged defects in the affidavit material were first raised.
At the hearing on 7 February 2022 the applicant sought leave to read and file written submissions which addressed the alleged defects identified by the respondent. Further, Counsel on behalf of the applicant made oral submissions supplementing these written submissions.
The written submissions also attach an extract from the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Victorian Supreme Court Rules) and the index of forms to the Victorian Supreme Court Rules.
The respondent was provided with these submissions in the morning prior to the hearing on 7 February 2022.
Following the oral submissions on behalf of the applicant on 7 February 2022, the respondent indicated that she was not in a position to respond to them. At approximately 12.30 pm on 7 February 2022, the hearing was adjourned until 2.30 pm to enable the respondent an opportunity to consider the further material and for the Court to deal with another matter that had been listed on that day.
On the resumption of the hearing at 2.30 pm on 7 February 2022, the respondent indicated that she was not in a position to make submissions in relation to the matters raised by the applicant in response to the alleged defects.
At this stage of the proceedings, the respondent sought an adjournment. The applicant opposed that adjournment. Following the giving of ex tempore reasons, I refused the application for an adjournment.
Following that ruling, the respondent did proceed to make some submissions in respect of the alleged defects, however she indicated that she was not in a position to address all matters raised by the applicant.
Both parties were given an opportunity to make submissions in respect of the alleged jurisdictional issues and alleged defects. Subsequently, the hearing proceeded to deal with the substantive issues on the application to set aside the statutory demand. This was on the basis that the decision of the Court would deal with the alleged jurisdictional issues prior to the consideration of the substantive application to set aside the statutory demand.
This was explained to the parties to be similar to when the Court considered an application for leave together with the substantive appeal. No objection was taken to proceeding on this basis.
At a later stage in submissions in respect of the substantive application, the respondent raised again that she considered that she had been unfairly denied the application for an adjournment to be able further address the submissions raised in respect of the alleged defects in the affidavit material and also raised the decision to set aside the subpoena.
Subsequent informal application for recusal
At the conclusion of the hearing of the originating application on 7 February 2022 judgment was reserved.
On 8 February 2022 the respondent sent a lengthy email to my Associate which in effect contained further submissions. My Associate responded that it was not appropriate to send correspondence of this nature to Chambers and that the parties would be notified when judgment was to be delivered.
On Monday 14 February 2022 my Associate received a further lengthy email from
the respondent making an “informal application” for me to recuse myself from the
matter prior to handing down the decision that had been reserved. My Associate
responded by email that the respondent’s email had been drawn to my attention.
A copy of the email from the respondent dated 14 February 2022 is marked for
identification “A” and has been placed on the Court file.
The respondent’s email dated 14 February 2022 sets out in detail the concerns she is
raising as the basis for her application. The respondent’s email states:
“This is an application for Her Honour to recuse herself, and not force
me as a self-represented litigant to make an application for Her Honour to be disqualified from handing down her decision in this
matter. It is based on apprehended bias and actual bias.”
Whilst there is not a formal application before the Court for me to consider whether
it is necessary for me to recuse myself, I consider that the respondent’s email has
raised the issue and it is appropriate and necessary for me to deal with the issues
raised without the need for a formal application.
The respondent further states:
“My application for recusal is based on apprehended bias and/or actual
bias as follows:-
1. The hearing of this application is a Public Interest matter for
bank victims not only ANZ’s, but all other banks, together with
the public, particularly where the Banking Royal Commission heard stories of the systemic breaking of the law by Banks and drew massive public attention.
2. The orders I request Her Honour make are :-
a.
That Her Honour be recused from further involvement in these proceedings; and
b.
That Her Honour is precluded from handing down any further decision in these proceedings until either this recusal application and/or an application for disqualification of Her Honour is determined; and
c.
The proceedings be transferred to another Judge for a rehearing de nuovo [sic] on the evidence already before the Court; and
d. The matter be admitted to the Self-Represented Litigant Supervised Case List for further case management.”
The email identifies that the respondent relies on the statement of the legal principles as set out in Parbery v QNI Metals Pty Ltd [2018] QSC 213.
As to the particular matters relied upon by the respondent in respect of her application, these appear to be in the following categories:
(a) The public were not admitted to a public hearing. (b) No disclosure prior to commencement of hearing. (c) Comments regarding the exhibit to the Smith affidavit. (d) The applicant’s solvency. (e) Setting aside of the subpoena addressed to Mr Shayne Elliott. (f)
Failure to give the required assistance and/or consideration to a self-represented litigant.
(g) Comments in respect of “other avenues” to pursue claimed debt. (h) Other background matters.
Before considering the issues raised, it is convenient to consider the relevant principles of law.
It is settled authority that the test to be applied in determining whether a judge should be disqualified for apprehended bias is the objective test of whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide.[2]
[2] Livesey v New South Wales Bar Association (1983) 151 CLR 288; Johnson v Johnson (2000) 201 CLR 488; Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; British American Tobacco Australia Services Ltd v Laurie (2011) 242 CLR 283; Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427.
Bond J (as his Honour then was) in this Court summarised the application of the test as follows:
“[30] The application of the test requires two steps:
(a)
first, the identification of what it is said might lead the judge to decide the question otherwise than on its legal and factual merits; and
(b)
second, the articulation of the logical connection between that matter and the risk that the judge will decide the matter otherwise than on its legal and factual merits.
[31] The application of the test uses the touchstone of the ‘fair- minded lay observer’ and that person’s reasonable apprehension. The law contemplates the following in the
application of that test:
(a)
The fair-minded lay observer has attributed to him or her awareness of and a fair understanding of the nature of the decision, the context in which it was made, and the circumstances leading up to the decision.[3]
(b)
The fair-minded lay observer has attributed to him or her knowledge that the judge is a professional lawyer, whose training, tradition and oath or affirmation require him or her to discard the irrelevant, the immaterial and the prejudicial, with the result that a conclusion that there is a reasonable apprehension that the judge might be biased should not be drawn lightly.[4] The observer does not have attributed to him or her knowledge of the character or the ability of the particular judge concerned.[5]
(c)
The fair-minded lay observer does not have attributed to him or her a detailed knowledge of the law, but the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice, taking into account the exigencies of modern litigation.[6]
[3] Isbester v Knox City Council (2015) 255 CLR 135 at [23] per Kiefel, Bell, Keane and Nettle JJ.
[4] Vakauta v Kelly (1988) 13 NSWLR 502 at 527-528 per McHugh JA and at 535 per Clarke JA.
[5] Johnson v Johnson (2000) 201 CLR 488 at [13] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ.
[6] Ibid.
[32]
What is required for justice to be seen to be done is that it must be apparent to the fair-minded lay observer that the judge will bring to the resolution of the issues an impartial and unprejudiced mind which will decide the issues according to their factual and legal merits. If such an observer might reasonably apprehend that the judge might not do that, then a case of apprehended bias is established. But if the possibility of such a reasonable apprehension does not exist, it will not suffice that there might be a reasonable apprehension that the
judge will decide an issue or issues adversely to one party.”[7]
[7] Re JRL; Ex parte CJL (1986) 161 CLR 342 at 352 per Mason J; Re Polites; Ex parte Hoyts Corporation Pty Ltd (1991) 173 CLR 78 at 86 per Brennan, Gaudron and McHugh JJ.; Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507 at [72] per Gleeson CJ and Gummow J.
[33] Although the test is expressed in terms of a reasonable apprehension that the judge might not bring an impartial and unprejudiced mind, it is also clear that the law requires that
proposition to be ‘firmly established’ before the judge should
disqualify himself or herself.
…
[34] The judge’s ordinary duty to sit unless convinced otherwise
was also discussed in the earlier decision of Ebner v Offıcial
Trustee in Bankruptcy (2000) 205 CLR 337 per Gleeson CJ,
McHugh, Gummow and Hayne JJ at [19] to [21]:
‘[19] Judges have a duty to exercise their judicial functions when their jurisdiction is regularly invoked and they are assigned to cases in accordance with the practice which prevails in the court to which they belong. They do not select the cases they will hear, and they are not at liberty to decline to hear cases without good cause. Judges do not choose their cases; and litigants do not choose their judges. If one party to a case objects to a particular judge sitting, or continuing to sit, then that objection should not prevail unless it is based upon a substantial ground for contending that the judge is disqualified from hearing and deciding the case. [20] This is not to say that it is improper for a judge to decline to sit unless the judge has affirmatively concluded that he or she is disqualified. In a case of real doubt, it will often be prudent for a judge to decide not to sit in order to avoid the inconvenience that could result if an appellate court were to take a different view on the matter of disqualification. However, if the mere making of an insubstantial objection were sufficient to lead a judge to decline to hear or decide a case, the system would soon reach a stage where, for practical purposes, individual parties could influence the composition of the bench. That would be intolerable.
[21] It is not possible to state in a categorical form the circumstances in which a judge, although personally convinced that he or she is not disqualified, may properly decline to sit. Circumstances vary, and may include such factors as the stage at which an objection is raised, the practical possibility of arranging for another judge to hear the case, and the public or constitutional role of the court before which the proceedings are being conducted. These problems usually arise in a context in which a judge has no particular personal desire to hear a case. If a judge were anxious to sit in a particular case, and took pains to arrange that he or she would do so, questions of actual bias may arise.”[8] (emphasis in original)
[8] Parbery & Ors v QNI Metals Pty Ltd & Ors [2018] QSC 213.
The respondent also relies upon actual bias, and the relevant legal principles are conveniently summarised in Reid v Commercial Club (Albury) Ltd [2014] NSWCA 98:[9]
[9] Gleeson JA with Emmett JA and Tobias AJA agreeing.
“[68]
A finding of actual bias is a grave matter: Sun v Minister for Immigration and Ethnic Affairs (1997) (Sun v Minister) 81 FCR 71 at 127 per Burchett J. Authority requires that an allegation of actual bias must be distinctly made and clearly proved; that such a finding should not be made lightly; and that cogent evidence is required: South Western Sydney Area Health Services v Edmonds [2007] NSWCA 16 at [97] and the authorities there cited.
[69] Where the issue is actual bias in the form of prejudgment, the appellant had to establish that the primary judge was ‘so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or arguments may be presented’: Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17; 205 CLR 507 at [72] per Gleeson CJ and Gummow J (Hayne J agreeing at [176]). See also Kirby J at [127].
[70] As Gleeson CJ and Gummow J observed in that case at [71]: ‘The question is not whether a decision-maker’s mind is
blank; it is whether it is open to persuasion.’
[71] In the same case, Hayne J noted at [185] the several distinct elements underlying the assertion that a decision-maker has prejudged or will prejudge an issue, or the assertion that there is a real likelihood that a reasonable observer might reach that conclusion. The first is the contention that the decision-maker has an opinion on a relevant aspect of the matter in issue in the particular case. The second is the contention that the decision- maker will apply that opinion to the matter in issue. The third is the contention that a decisionmaker will do so without giving the matter fresh consideration in light of whatever may be the facts and arguments relevant to the particular case.
[72] His Honour observed at [186] that allegations of actual bias through prejudgment often fail at the third step he had identified. This was because notwithstanding whatever expression of preconceived opinions by the decision-maker, it does not follow that the evidence will be disregarded.
[73] The test of actual bias in the form of prejudgment requires an assessment of the state of mind of the judge in question: Michael Wilson & Partners Limited v Nicholls & Others [2011] HCA 48; 244 CLR 427 at 437 [33]. However, actual bias need not be confined to an intentional state of mind. Bias may be subconscious, provided it is real: Bilgin v Minister for
Immigration and Multicultural Affairs (Bilgin v Minister)
(1997) 149 ALR 281 at 289-290 per Finkelstein J; Sun v Minister at 127 per Burchett J and 135 per North J. As Finkelstein J said in Bilgin v Minister at 290:
‘The wrong involved is the failure to decide a case
impartially. Whether that failure was deliberate or not should be beside the point insofar as the validity of the
decision is concerned.’
[74] The circumstances in which actual bias can be demonstrated solely from the published reasons for decision must be
considered to be rare and exceptional …”
The Australasian Institute of Judicial Administration Incorporated has published a “Guide to Judicial Conduct” (3rd Edition) (AIJA Guidelines) which also provides
some useful guidance in respect of issues such as those raised by the respondent.
In respect of “shareholding in litigant companies, or companies associated with
litigants” the AIJA Guidelines state:
“The judge should disclose the fact of the shareholding in open court
thereby giving the parties an opportunity to make any submissions
with respect to disqualification or otherwise.It may be wise, but not obligatory, to limit the range of investment in public companies, to minimise the need for frequent disclosure. Shareholding in a public investment company or in managed funds
may be a sensible alternative.”[10]
[10] Page 13 at 3.3.1.
Further, the AIJA Guidelines consider the approach to personal relationships and identify what are described as first degree, second degree and third degree relationships. First degree relationships are parent, child, sibling, spouse or domestic partner. Second degree are grandparent, grandchild, in-laws of the first degree, aunts, uncles, nephews, nieces. Third degree are cousins and beyond.
A judge should not sit on a case in which the judge is in a relationship with the first, second or third degree to a party or the spouse or domestic partner of a party. That issue does not arise here.
The AIJA Guidelines also consider other relationships which may require further consideration. Specifically, in relation to past professional relationships, the AIJA Guidelines state:
“Friendship or past professional association with counsel or a solicitor
is not generally to be regarded as a sufficient reason for disqualification. An existing commercial or business relationship between the judge and counsel or a solicitor in a matter to be heard by the judge will require very careful consideration, as will the question of the extent and detail of the disclosure required by the judge in the circumstances.[11]
[11] Page 16 at 3.3.4(f).
These principles need to be considered in the context of the complaints raised by the respondent.
The public were not admitted to a public hearing
The respondent identifies that there is a public interest in this matter. Her complaint is that she has been contacted by people who tried to access the hearing on 7 February
2022 who advised that they had entered the “waiting room” but were not given access
to the hearing.
Further, the respondent states:
“Her Honour’s Associate handed a post-it-note to Her Honour. Her
Honour then proceeded to ask if either party was aware of someone trying to dial in. I was not aware at that time that this was another ANZ Bank victim dialling but was told after the hearing. When the parties said no, Her Honour did not even turn her mind to the fact that the public could be trying to access this hearing. Her Honour advised her Associate not to connect the call. The public were not admitted to this hearing and denied access to what was a public hearing. No application was made by [ANZ] for any suppression order or for the
hearing to be in camera.”
On 7 February 2022, the application was specifically listed before me at 10.00 am in the Applications List. The parties were appearing in person and there was no application for leave for a party to appear by telephone or video-link. On the previous Friday, Boddice J had indicated in relation to the subpoena addressed to Mr Elliott, that Mr Elliott, if required, would be dealt with later in the day. Accordingly, for the
purposes of the hearing, the video-link and telephone-link were not “set up” as there
were no participants in the hearing requiring access via those facilities.
The Court was open for the duration of the hearing. At no time during the hearing on 7 February 2022 was the Court closed or a direction made that any person be prohibited from the Courtroom.
During the hearing, my Associate did convey to me that the Registry had received an enquiry from somebody who was wanting to join the hearing. I made enquiries of the parties. The relevant extract from the transcript is as follows:
“HER HONOUR: Can I just interrupt you for a second. We’re
getting a message from the registry that there’s somebody asking to
join in this matter by Chorus Call. Is anybody expecting anyone to
be joining in?
RESPONDENT: No.
MR GOODWIN: No, your Honour.
HER HONOUR: No. Associate, there’s no one to worry about.
Thank you. It might have been a different court in applications.”[12]
[12] T1-58 line 39 to T1-59 line 2.
The hearing was conducted as a public hearing and there was no denial of access to the hearing. In accordance with the usual procedure, the video and telephone facilities were not set up for the duration of the hearing unless by prior arrangement.
I have considered the issue raised by the respondent in respect of the unidentified individual who made an enquiry about joining the hearing. I do not consider that this gives rise to a legitimate concern about the hearing being conducted not as an open hearing, or otherwise contrary to the open justice principles.
No disclosure prior to commencement of hearing
The respondent raises two distinct categories in respect of the alleged non-disclosure.
The first category is in relation to whether any bank accounts, mortgages or shares in the ANZ need to be disclosed. I have considered the legal principles and the AIJA Guidelines and consider that no disclosure is required.
The second category of alleged non-disclosure is in relation to potential relationships with firms of solicitors and their clients, and counsel retained by those firms. The respondent particularly raises concerns as to the ANZ being a client of Clayton Utz, King & Wood Mallesons and Corrs Chambers Westgarth.
I was an articled clerk and employed solicitor at Clayton Utz for a period from early 1994 to mid-1996. Further, I worked as an employed solicitor at Mallesons Stephen Jaques (the predecessor firm to King & Wood Mallesons) for a period from late 1997 to early 2006. Given the considerable passage of time since then, I do not consider that any relevant issue arises as to the current clients of those firms.
Further, I was an employed solicitor and later a partner at Corrs Chambers Westgarth for a period from early 2006 to early 2020. There has been a period of two years since I departed the firm. Accordingly, I do not consider that any relevant issue arises as to the current clients of Corrs Chambers Westgarth.
The respondent has raised a further issue in relation to the firms of Clayton Utz, King & Wood Mallesons and Corrs Chambers Westgarth retaining Mr Edward Goodwin, the counsel who appears for the applicant in the current proceedings.
I have considered the issue raised by the respondent and considered the legal principles and the AIJA Guidelines, particularly in respect of past professional association. Given the effluxion of time, I do not consider there is any disclosure that needs to be made in this respect.
I have considered the matters raised by the respondent in relation to the alleged non- disclosure prior to the commencement of the hearing, and have reached the view that no reasonable apprehension of bias could be held by a fair-minded lay observer by fact of my previous association with Clayton Utz, Mallesons Stephen Jaques (the predecessor to King & Wood Mallesons) and Corrs Chambers Westgarth in respect of the current application.
Further, Herbert Smith Freehills are the current solicitors on the record for the ANZ. No declarations are necessary in respect of Herbert Smith Freehills.
Comments regarding the exhibit to the Smith affidavit
The respondent raised a preliminary issue as to whether the inclusion of the
“additional exhibit” in the exhibit bundle to the Smith affidavit was of such a
character that resulted in there being no jurisdiction to deal with the application to set aside the statutory demand. Counsel on behalf of the applicant made submissions in respect of the exhibit responding to the issue raised by the respondent.
The respondent complains about comments I made in exchanges with Counsel for the applicant as to the search that was undertaken to obtain the document exhibited to the affidavit.
The transcript records that exchange as follows:
“MR GOODWIN: Yes. So this – look, I should go back a step, your
Honour, just to make the point clear. If your Honour takes up the full set of the Smith affidavit, your Honour will see in volume 1 the ASIC search begins at page 21. And as your Honour probably recalls, there
are providers who you can – commercial providers who will provide
you with an ASIC report, and this one is provided by InfoTrack. And
that appears at the top right-hand corner of page 21.
HER HONOUR: Yes.
MR GOODWIN: And it’s just unfortunate that this is such a large
document, but the rules require an applicant to put on a company search of itself when it applies to set aside a statutory demand. And because this is a bank - - -
HER HONOUR: It’s huge.
MR GOODWIN: - - - it’s huge. So we’ve duly exhibited the ASIC search. And you’ll see that the internal page numbering for this ASIC
search begins at page 1 at the bottom centre of page 21 of the exhibit.
HER HONOUR: Yes.
MR GOODWIN: Has your Honour picked that up?
HER HONOUR: Yes.
MR GOODWIN: Then – if your Honour then flicks through to where Mrs Thomson’s complaint begins, you’ll see at page 633,
bottom right-hand corner, this is a credit report. And then you’ll see
at the top right-hand corner, Credit Report stamped there.
HER HONOUR: Yes.
MR GOODWIN: And what you’ll see – if your Honour looks down
at the centre of the page, you’ll see page 613. Does your Honour see
that?
HER HONOUR: Yes.
MR GOODWIN: And then if your Honour goes over to the earlier
page, you’ll see 612. So what your Honour can deduce from that is
when they put in a request for the search with InfoTrack, this is the
document they get back.
HER HONOUR: Yes.
MR GOODWIN: Now, the actual ASIC report itself formally says
‘end of document’ and you can see that in a vertical line straight
above 612, ‘end of document’.
HER HONOUR: Yes.
MR GOODWIN: But it’s all gone in. Now, Mrs - - -
HER HONOUR: But isn’t this also – when you tick the – what
reports you want, you can get a fully historical, bells and whistles type of report or you can get a truncated one. And this is actually a
more complete report than if you’d gone for one that didn’t have this
included, isn’t it?
MR GOODWIN: It is a more complete report, but to be honest, your
Honour, I don’t know - - -
HER HONOUR: I can’t see why you – from your submissions – I
see you’re not reading it, but to say that it’s wrong to have it in there – I don’t see technically that it’s wrong if it is a report that’s
available - - -
MR GOODWIN: It’s not wrong – what happened was the bank
perceived Mrs Thomson to be complaining about us taking some
forensic point about sort of, I don’t know, sneaking this in somehow.
So we just said, ‘Look, we don’t care. We won’t read it,’ to just solve that. But then actually Mrs Thomson’s forensic point is slightly
different. It’s not that we sort of put in there surreptitiously; she says,
‘Well, it’s an additional exhibit and it shouldn’t be in there and
somehow that makes the whole’ - - -
HER HONOUR: Well, equally, you might have been criticised for not including pages which were part of the original report.
MR GOODWIN: Maybe, your Honour. But look, it’s - - -
HER HONOUR: So, to me, it’s hard to see that this point actually
goes anywhere when that is an entire document. And in this court,
an entire document should be put in - - -
MR GOODWIN: Yes.
HER HONOUR: - - - unless there’s a reason not to.
MR GOODWIN: So look, it’s a nothing point, but it’s taken against us. So I’m just explaining to your Honour why - - -”.[13]
[13] T1-33 line 14 to T1-35 line 4.
The respondent now takes issues with that exchange, in particular, that I must have been drawing on personal experience as a solicitor and not from the evidence before the Court. The respondent contends that this is actual bias in respect of the ultimate issue that needs to be determined on the substantive application.
The Smith affidavit indicates that he caused a search to be undertaken. The submissions and exchange were directed at whether the full document exhibited from page 21 of the exhibit to the Smith affidavit was the result of that search or whether
the exhibit did not reflect the result of that search. The reference to “tick box” was a
shorthand reference to selecting a particular search to be undertaken.
I have considered the concerns raised by the respondent and the exchange with Counsel for the applicant. I do not consider that actual bias has been established or that it gives rise to a fair-minded lay observer reasonably apprehending that I might not bring an impartial and unprejudiced mind to the resolution of the question that is required to be decided in relation to the application.
Applicant’s solvency
The respondent also raises a complaint in respect of statements made by me in the course of the hearing regarding the solvency of the applicant, including enquiring whether the respondent was relying on any evidence that the applicant was not able to pay its debts as and when they fell due.
This issue arises in respect of the second ground raised by the applicant in the
originating application pursuant to s 459J(1)(b) of the Corporations Act. The “other reason” relied upon by the applicant in respect of this ground is that the applicant was
at all relevant times solvent, the respondent was aware of this and in the circumstances this is an abuse of process or a subversion of the statutory regime. Part of the
applicant’s argument is that the respondent had no genuine belief that the ANZ is
insolvent and had no legitimate expectation that the ANZ would be wound up for failing to satisfy her demand. The issue of the absence of a reasonable belief on the part of the respondent was clearly in issue in the substantive application.
The complaint made by the respondent in this regard is stated in the email as follows:
“32. In the hearing of an application to set aside a creditors statutory demand made against ANZ, one of Australia’s big four banks, it would be difficult for any Judge to approach the hearing without a prejudgment that the Bank is solvent. But this prejudgment would be based on information obtained prior to entering the Court room through media, holding bank accounts with ANZ, loans being entered into between ANZ and the Judge, possible share ownership in ANZ and experience as a solicitor working for legal firms where ANZ is a client. 33. The only way that this prejudgment could not exist is for the Judge to come to the hearing with an open mind to base the decision solely and only on the evidence before the Court, and not take into account experience and knowledge that Her Honour gained through the media, being associated in some way with ANZ though a bank account, loan or shareholder and as a solicitor and the law.”
The applicant has filed and served evidence which it seeks to rely on (subject to the determination of the preliminary issues identified by the respondent) to establish the
applicant’s solvency for the purposes of the second ground raised in the originating
application.
The second aspect of the second ground is the respondent’s knowledge. The
exchanges with the respondent during the course of her submissions were directed at providing the respondent with an opportunity to identify the basis for her stated belief that she had concerns about the solvency of the applicant.
Further, the respondent concludes:
“47. The fair-minded lay observer with his attributes would
apprehend if Her Honour did make a decision in regard to
ANZ’s solvency that it was not done on the merits of the
evidence before the Court and had not brought an impartial and unprejudiced mind to the resolution of the question she needed to answer around insolvency. That any decision she makes is not on the incomplete set of financial records but on a prejudgement that ANZ is solvent. It is not possible on the
evidence for Her Honour to do this.”
Having considered the matters raised by the respondent, I do not consider that a fair- minded lay observer might reasonably apprehend that I might not bring an impartial and unprejudiced mind to the resolution of the question required to be decided in respect of the issue of solvency raised in the second ground or more broadly.
Setting aside subpoena addressed to Shayne Elliott
At the outset of the hearing on 7 February 2022, I raised with both the applicant and respondent the best way to proceed in relation to the two applications namely, the application to set aside the subpoena and the originating application. Following hearing from both parties, I determined to proceed by dealing with the application to set aside the subpoena first and then followed by the originating application, which included consideration of the identified preliminary issues.
I gave ex tempore reasons for my decision in relation to setting aside the subpoena addressed to Mr Elliott. My reasons have been included in the daily transcript received from Auscript and appear at T1-20 line 46 to T1-25 line 8.
In those reasons, I identify the relevant authorities and considered the submissions raised by the parties.
In respect of the decision to set aside the subpoena addressed to Mr Elliott, I do not consider that a fair-minded lay observer might reasonably apprehend that I might not bring an impartial and unprejudiced mind to the resolution of the question to be determined in respect of the issues raised in the application.
The respondent’s complaint also raises issues in relation to the ANZ’s “model litigant
principles”. The respondent exhibits a copy of a document entitled “ANZ’s Dispute
Resolution Principles and Model Litigant Guidelines” in her affidavit sworn 30
January 2022 at page 630.
It appears from the respondent’s email that there may be some confusion between the
obligations on parties under r 5 of the Uniform Civil Procedure Rules 1999 (Qld)
(UCPR) and the document entitled “ANZ’s Dispute Resolution Principles and Model
Litigant Guidelines” (ANZ Model Litigant Guidelines).
The ANZ Model Litigant Guidelines include principles to be applied in relation to legal proceedings, including at point 15:
“If litigation cannot be avoided, minimise the impact to the customer
and ANZ by:
a. Taking steps to clarify and narrow the issues in dispute. b.
Not requiring the other party to prove a matter that ANZ knows to be true.
c.
Not contesting liability if ANZ knows that the dispute is really about quantum.
d. Avoiding unnecessary delays. e.
Monitoring the progress of litigation and using appropriate methods to settle or resolve the matter.
f.
Ensuring that any person negotiating a settlement on behalf of ANZ has authority to reach agreement.
g. Not undertaking or pursuing an appeal unless there are reasonable prospects of success.”
These objectives are similar in a number of respects with the objective and purpose of r 5 of the UCPR, being the just and expeditious resolution of the real issues at a minimum of expense.
The respondent concludes at [57] of her email as follows:
“The fair-minded lay observer would reasonably apprehend with his
attributes of knowledge that the Judge is a professional lawyer, where
there is no evidence before the Court about the Court’s Model
Litigant Principles but there is evidence of ANZ’s Model Litigant
Principles before the Court, would apprehend that Her Honour might not bring and [sic] impartial and unprejudiced mind to the resolution of whether Mr Elliott should give evidence under the Subpoena in
accordance with ANZ’s model Litigant Principles it has agreed to be
bound by.”
In my reasons for setting aside the subpoena addressed to Mr Elliott, I refer to r 416 of the UCPR which provides that the Court may make an order setting aside all or part of the subpoena. I do not refer to r 5 of the UCPR.
[87] In the subsequent ruling in respect of the respondent’s application for an
adjournment,[14] reference is made to the obligations in r 5 of the UCPR that the matter be dealt with in the most efficient and expeditious way.[15] Further, there was an exchange with the respondent in relation to the ANZ Model Litigation Guidelines in respect of the application for an adjournment.[16] This does not appear to be part of the current complaint by the respondent.
[14] T1-53 line 24 to T1-1-56 line 4.
[15] T1-55 line 46 to 47.
[16] T1-52 line 30 – T1-53 line 2.
In any event, the Court is able to take into account and consider the relevant rules contained in the UCPR and the relevant law, without them being put into evidence by the parties.
I do not consider that there is any basis to the complaint concerning what the
respondent refers to as the “Court’s Model Litigant Principles”.
Not giving the required assistance and/or consideration to a self-represented litigant
The respondent also raises a complaint in respect of the overall conduct of the hearing.
[91] The hearing commenced at approximately 10.00 am and proceeded until approximately 12.30 pm. It reconvened at 2.30 pm and concluded again at approximately 5.20 pm. As a result, the hearing occurred in a period of just under five and a half hours. This time is significantly in excess of the two hour provision for matters heard in the applications list.
Given that an interlocutory application and the originating application were being dealt with and that there were numerous voluminous affidavits, some in multiple large parts, there was confusion at times as to what documents were being referred to. The applicant was given an opportunity to make submissions and take the Court to the material that she wanted to refer to and rely on in the affidavits over the course of the hearing.
At the hearing the respondent indicated she was unable to immediately deal with the submissions by the applicant in response to the concerns she raised in respect of the affidavits. The matter was adjourned at approximately 12.30 pm to provide an opportunity for the respondent to consider the submissions and material that had been provided to her that morning, and to accommodate the hearing of another matter at 2.00 pm. Upon the resumption of the hearing at 2.30 pm, the respondent made an application for an adjournment. The application was refused and reasons given. My reasons have been included in the daily transcript received from Auscript and appear at T1-53 line 24 to T1-56 line 4.
The respondent does raise a further matter in respect of a case referred to by Mr Goodwin, counsel for the applicant, as follows:
“63. Her Honour asked Mr Goodwin if he had been able to find any caselaw regarding this affidavit without the perjury clause. He stated that he had found an unreported case that had an Italian sounding like name of ‘Punda’ something. He was not able to provide a citation for this case and this case was not in ANZ’s written submissions. He also did not make any further oral submissions in regard to this case.”
The relevant transcript of the exchange with Counsel regarding this authority is as follows:
“MR GOODWIN: Your Honour, the closest I came – it seems to be
an unreported decision, but there’s a case – it’s got an Italian-
sounding name. I can dig it up over lunchtime. It’s called Pudzioni
or something like that where – it’s the flipside of this situation where
the applicant to seek to set aside a statutory demand is complaining
about defects in the statutory demand.
HER HONOUR: Demand itself.
MR GOODWIN: And what they say is, ‘Look, your affidavit, verifying the statutory demand, doesn’t have the perjury warning in it, among other things.’ And the – that argument is not successful.
The statutory demand was not set aside on technical grounds. But
it’s not – there’s no helpful reasoning about that particular point. It’s
dealt with in a rather cursory fashion where the judge just says, ‘Look, I’m not satisfied that any of the defects in the statutory demand cause,
I think, substantial injustice.’ There’s a specific test - - -
HER HONOUR: Test, yes.
MR GOODWIN: - - - under the Act, and that test is unique to thedemand. It doesn’t apply to the application - - -
HER HONOUR: To set aside.”[17]
[17] T1-32 line 25 to 46.
In relation to this issue the respondent later indicated to the Court:
“RESPONDENT: - - - gave me that material this – I only got that
material this morning and there’s other cases being named. I mean,
you rightfully asked him whether or not there was a case that was on point in regard to the form of the Victorian affidavit. He raised that
there is a case. He didn’t know the name. It was Italian [indistinct]
I did go and research that at lunch time. That has nothing to do with
anything that we’re talking about here. It had to do with defects in
the actual demand and supporting affidavit itself. So the reality of it
here is we’re going right off track in terms of what I actually raised.”[18]
[18] T1-57 line 16 to 23.
(underlining added)
In respect of the refusal of the adjournment, the respondent states in her email dated 14 February 2022:
“70. The fair-minded lay observer would reasonably apprehend that Her Honour’s refusal to adjourn to give a self-represented person requisite assistance and consideration to be able to deal with the late service of the written submissions; no Regulation to hand up at the hearing; and then Her Honour asking a question that lead to an answer that was not in their written submissions and could not remember the name of case, is apprehended bias to a self-represented person where Her Honour may not have brought the appropriate mindset to a hearing where one party is self-represented and the other one of Australia’s big four banks.”
I do not consider that there is any issue arising out of the exchange with Counsel or the non-production of the authority. Counsel indicated that he had considered the authority and it applied a different test and was of no assistance to the question that needed to be determined by this Court on this application. The respondent appears to have verified this position independently.
I do not consider that the issues raised by the respondent would cause a fair-minded lay observer to reasonably apprehend that I might not bring an impartial and unprejudiced mind to the resolution of the questions that are required to be decided.
Other avenues
In the course of the hearing, it was identified that the task to be undertaken on an application to set aside a statutory demand on the basis that there was a genuine dispute as to the debt being owing did not require a determination of the merits. Further, if the statutory demand was set aside, the respondent could pursue other avenues to seek payment for the debt claimed.
[101] The respondent in her email raises difficulties that she had experienced in other proceedings including difficulties in having conduct money returned.
It is in these circumstances that the respondent raises a further complaint, namely:
“77. A fair-minded lay observer with the attributes afforded to him and with knowledge of a fair understanding of the nature of the decision to be made and the circumstances leading up to that decision of whether to set side the statutory demand or not, would reasonably apprehend that Her Honour had a preconceived idea of other avenues open to me, when the evidence before Her Honour was that when I had taken another avenue the Applicant ensured that the subpoenas never reached its employees and they then never gave the required evidence which would have been detrimental to ANZ.”
The availability of “other avenues” including trial is consistent with the policy and
objective behind s 459H of the Corporations Act. Where there is a genuine dispute about the existence or amount of a debt to which the demand relates then the statutory
demand regime in the Corporations Act is not available, but “other avenues” are
available for the dispute to be determined on its merits.
The comments in relation to “other avenues through the Courts” reflects the legal
consequences if a statutory demand is set aside. The references to “other avenues”
being available if the statutory demand was set aside on the basis of there being a genuine dispute does not give rise to reasonable apprehension in a fair-minded lay observer that I might not bring an impartial and unprejudiced mind to the resolution of the questions that are required to be decided.
Further background
[105] The respondent’s email at [78] to [80] also points to some further background
between the respondent and the applicant as to the dispute that led to the negotiations and alleged agreement. It does not seem to raise any specific complaint that requires
consideration in respect of the respondent’s application for me to recuse myself.
[106] Having considered the matters raised by the respondent in her email dated 14 February 2022, I do not consider that there is any basis to conclude that I should recuse myself on the basis of actual or apprehended bias.
[107] The originating application was allocated to me to be heard in the applications jurisdiction. Oral submissions in respect of the preliminary issues and the substantive grounds in the originating application were heard on 7 February 2022. At the conclusion of the hearing, I reserved my decision.
The issues raised by the respondent come one week after the conclusion of the hearing and the decision being reserved.
The respondent indicated at the conclusion of the hearing that she would be appealing.
In the circumstances, I consider I have a duty to exercise the judicial function which has been allocated to me to determine the originating application.
Accordingly, the application by the respondent that I recuse myself on the ground of actual or apprehended bias is refused.
I will now proceed to deal with the preliminary issues raised in respect of jurisdiction and the substantive issues in the originating application.
Whether the applicant has a compliant application on foot to set aside the
creditors statutory demand – jurisdiction issues
Respondent’s position
The applicant filed the originating application to have the statutory demand set aside on or about 22 August 2019 and filed two supporting affidavits at the same time. These documents were served on the respondent.
Following the proceedings no longer being in abeyance, on 30 December 2021, the respondent advised that she had identified defects in the two supporting affidavits which she considered had needed to be remedied within the 21 days statutory period.
[115] These defects were:
(a) The first Kindermann affidavit was not on the approved Queensland affidavit form and had a different Court heading. (b) The Smith affidavit had an additional exhibit not referred to in the body of the affidavit nor contained within the certificate of exhibits. (c) The first Kindermann affidavit and the Smith affidavit did not contain the matter number.
On 4 January 2022 the applicant advised the respondent that:
(a) the applicant would not be relying on pages 633 to 663 of the exhibit to the Smith affidavit at the hearing of the originating application. (b) the first Kindermann affidavit was in the Victorian form pursuant to r 2.6 of Schedule 1A of the UCPR (Rules for proceedings under Corporations Act or ASIC Act) (UCPR Corporations Rules).
By email dated 5 January 2022 the respondent advised the applicant’s solicitors that
there was a further deficiency in the first Kindermann affidavit. The respondent
contended that the affidavit was not in the “Victorian form” as it was missing the
following statement:
“The contents of this affidavit are true and correct and I make it
knowing that a person making a false affidavit may be prosecuted for
the offence of perjury.”
For ease of reference I will refer to this statement as the perjury warning.[19]
[19] The two further Kindermann affidavits which have been subsequently filed in these proceedings do contain the perjury warning.
In respect of the applicant not relying on pages 633 to 663 of the exhibit to the Smith affidavit, the respondent said that this could not be remedied in this way as it was outside of the 21 day statutory period.
The respondent also raises an issue in the applicant’s originating application. The respondent points to the reference to “s 459J(b)” of the Corporations Act in the second
numbered paragraph.[20] The respondent contends that the applicant raised for the first time the abuse of process claim on the basis that the applicant is solvent in the second Kindermann affidavit affirmed 24 January 2022.
[20] The applicant acknowledges that this is a typographical error and there is no s 459J(b) on the Corporations Act but this is meant to be a reference to s 459J(1)(b).
The respondent contends that the reliance now on s 459J(1)(b) of the Corporations Act does not match what is contained in the originating application.
[122] Further, the respondent submits that the application in relation to whether the statutory demand is set aside or not needs to be determined first and then it is a matter for a determination as to whether the applicant is insolvent. Accordingly, the
respondent contends that there is no “other ground” of abuse of process based on
solvency until a later point in time when the decision is made.[21]
[21] Paragraph 17 of written submissions dated 3 February 2022.
The respondent contends that these preliminary issues need to be determined at the outset as otherwise there is no application properly made pursuant to s 459G of the Corporations Act.
[369] The respondent undertakes a similar exercise in respect of other proceedings involving the applicant. The respondent also makes submissions in relation to a remediation program that the applicant has in place. The respondent is not eligible for the remediation program as hers was a commercial loan and not a home loan. However, the respondent points to alleged delays in the remediation payments and
the payments not being complete as being “evidence of a much wider problem within
the applicant”. The respondent states “these delays in remediation could include the
lack of surplus funds to meet the remediation payments”.
The respondent also points to the financial statements which are in evidence before the Court evidencing that there is a cash profit of $6.162 billion which is unaudited.
The respondent submits “no one has verified its legitimacy or what this includes”.
[371] The respondent seeks to categorise the applicant’s conduct in relation to other
proceedings as evidencing that “law breaking is systemic”. The respondent also
refers to the evidence given at the Banking Royal Commission and also, responses by
the Board at the applicant’s annual general meeting in Perth in 2018 as the basis for
her submission that “[she] had severe questions about the solvency of the Applicant
from all the misconduct and how it was going to pay for it all”.
On this point, the respondent ultimately submits:
“[26] There is no one to protect the little person except the Court under these circumstances. An appointment of a liquidator to determine solvency, where clearly penalties in one matter alone rendered the Applicant insolvent, and where had the Applicant put a provision into its books to cover this as it should, it would have identified a solvency issue where it should have had a liquidator appointed to prevent the systemic lawbreaking [sic], preserve the assets, determine all customers that have been harmed and pay the remediation. It would have not known at the time it reported these contraventions to ASIC what penalty it would be looking at, so it should have declared this in its
books.”
In oral submissions, the respondent stated:
“You know, that this is not an abuse of process of what I’ve done. I’ve
genuinely believed that they are not as solvent as what they are,
because if they were it wouldn’t take them 15 years to pay
remediation to people. That’s in evidence in my stuff to. You don’t take 15 years, and if we’re talking about solvency you have to pay
your debts as and when they fall due.”[98]
[98] T1-100 line 20 – 25.
Consideration
Here the respondent has sought to explain her concerns about the solvency of the applicant and has made submissions as to those concerns. This is in contrast to Lifese Pty Limited v Lee Crane Hire Pty Limited.[99]
[99] [2012] FCA 302.
The applicant needs to establish that the respondent knew of the applicant’s solvency
or had no reasonable belief to the contrary when she issued the statutory demand.
[376] The respondent has articulated concerns about the large amounts of pecuniary penalties and court orders that the applicant has been required to pay. She is
sufficiently concerned about the applicant’s solvency that she has attended the Annual
General Meeting of the applicant in Perth and raised her concerns regarding solvency. The respondent deposes to some of these concerns in her affidavit sworn 5 February 2022.
The applicant submits that the respondent has provided no admissible evidence that the applicant is insolvent. Further, the applicant submits that it can be inferred that the respondent has no genuine belief that the applicant is insolvent.
The respondent clearly is concerned about the issue of solvency and has raised these issues in her oral and written submissions and in her supporting material to the best of her ability as a litigant appearing in person.
On the balance of probabilities, on the evidence filed in support of the application, the applicant is solvent. However, in order to succeed on the second ground the applicant needs to establish an abuse of process or subversion of the statutory regime
by the respondent. The respondent’s concerns about the issues of solvency faced by
the applicant are significant to the respondent. While the respondent’s belief may not
be supported by admissible evidence or constitute a reasonable belief, it is her
strongly held belief.
In these circumstances, I am not satisfied that the applicant has established that there is an abuse of process. Accordingly, the applicant has not established that the statutory demand should be set aside under s 459J(1)(b) of the Corporations Act.
Orders
Accordingly, the Court orders that:
1. A copy of the respondent’s email dated 14 February 2022 is marked for identification “A”.
2. The respondent’s application that I recuse myself on the basis of actual or
apprehended bias is refused.
3. Pursuant to r 436(2) of the UCPR, the applicant is granted leave to rely on the Smith affidavit in evidence in support of the application.
4. Pursuant to s 459H of the Corporations Act, the statutory demand dated 1 August 2019 served on the applicant by the respondent be set aside.
I will hear from the parties in respect of costs.
Complaints Authority) Act 2018 (Cth).
[2019] NSWCA 60; Ibid [48].
and Goldberg JJ) (‘Spencer Constructions’), cited with approval by the Victorian Supreme Court of
Appeal in Malec Holdings Pty Ltd v Scotts Agencies Pty Ltd (in liq) [2015] VSCA 330 [49] (Kyrou,
Ferguson and Kaye JJA) (‘Malec’).
JJA).
JJA agreeing) (‘Creata’).
Assaf’s Winding Up in Insolvency at [8.101].
The full portion of the transcript has been considered in respect of the respondent’s contentions.
filed 17 January, at page 688, [78], [80].
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