Batterham v Turner Freeman
[2015] FCCA 145
•20 February 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BATTERHAM v TURNER FREEMAN | [2015] FCCA 145 |
| Catchwords: BANKRUPTCY – Application for Review of Registrar’s order for sequestration – whether debt still owing – whether other sufficient cause – application dismissed. |
| Legislation: Bankruptcy Act 1966, ss.52(1)(c), 52(2)(b) |
| Batterham v Goldberg [2014] FCAFC 136 Bhagat v Global Custodians Limited [2002] FCA 223 Commonwealth Bank of Australia v Quresh [2009] FMCA 1111 Corney v Brien (1951) 84 CLR 343 Rigg v Baker (2006) 155 FCR 531 Singh v Deputy Commissioner of Taxation [2011] FCA 889 Westpac Banking Corp v Goodman [2010] FMCA 993 Wren v Mahoney (1972) 126 CLR 212 |
| Applicant: | PETER JAMES BATTERHAM |
| Respondent: | TERRENCE LOUIS GOLDBERG, ARMANDO GARDIMAN AND THADY BLUNDELL T/AS TURNER FREEMAN |
| File Number: | SYG 543 of 2014 |
| Judgment of: | Judge Altobelli |
| Hearing date: | 8 December 2014 |
| Date of Last Submission: | 8 December 2014 |
| Delivered at: | Sydney |
| Delivered on: | 20 February 2015 |
REPRESENTATION
| The Applicant appeared in person |
| Solicitors for the Respondent: | Sally Nash & Co |
ORDERS
The Application for Review filed 21 November 2014 be dismissed.
The sequestration order made by Registrar Tesoriero on 13 November 2014 be affirmed.
The costs of the Respondent of and incidental to the Application for Review be taxed and paid in accordance with s.109 of the Bankruptcy Act 1966 (Cth).
THE COURT NOTES THAT:
A.The Court notes the obligations on the Respondent Creditor to notify, enter and serve these orders in accordance with the Federal Circuit Court (Bankruptcy) Rules 2006 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 543 of 2014
| PETER JAMES BATTERHAM |
Applicant
And
| TERRENCE LOUIS GOLDBERG, ARMANDO GARDIMAN AND THADY BLUNDELL T/AS TURNER FREEMAN |
Respondent
REASONS FOR JUDGMENT
On 13 November 2014, Registrar Tesoriero made a sequestration order against the estate of Peter James Batterham. By way of an Application for Review filed 21 November 2014, the bankrupt asks the Court to “stay … the issue of a sequestration order … until the Summons filed … on May 6 2014 in the District Court is determined.” The bankrupt will be treated as the Applicant in the present proceedings. He represented himself. The focus will, therefore, be on substance rather than form, and attempting to discern not only what relief the Applicant sought, but the basis of this. It was not always easy to achieve this. The judgment creditors will be treated as the Respondent.
The matter has a very long litigation history, which is succinctly set out in the judgment of Justice White in the Full Court at [16] – [25] of Batterham v Goldberg [2014] FCAFC 136. There is no need to say anything further about the history of this case.
The Applicant’s Application for Review was supported by his affidavits of 7 November 2014 and 21 November 2014. The Respondent’s Notice stating grounds of opposition filed 5 December 2014 was supported by the following documents:
·Affidavit Verifying Creditor’s Petition, sworn 5 March 2014;
·Affidavit of Service, filed 6 March 2014 and 24 October 2014;
·Affidavit of Search, filed 24 October 2014;
·Affidavit of Search, filed 13 November 2014;
·Affidavit of Debt, filed 13 November 2014; and
·Trustee’s Consent to Act dated 25 February 2014.
From a legal perspective, the Applicant’s argument, reduced to its simplest form, and doing the best the Court can to understand the substance of his case, is that the Creditor’s Petition should be dismissed because there is, pursuant to s.52(2)(b) of the Bankruptcy Act 1966 (hereafter referred to as ‘the Act’), “other sufficient cause” as to why the sequestration order ought not to be made. Another possible characterisation of the Applicant’s legal claim is that, pursuant to s.52(1)(c) of the Act, the debt on which the petitioning creditor relies is not “still owing”. Both possible arguments rely on the same facts, i.e. the judgment pursuant to the costs assessment and the Applicant’s attack on the validity of this judgment. An additional consideration, however, is the Applicant’s claim in the District Court of NSW against the judgment creditor and Senior Counsel, which appears to be based in negligence.
This matter, of course, has been extensively litigated. When I asked the Applicant for assurance that he was not going to advance arguments before me that had been unsuccessful elsewhere, he assured me that his arguments would be different. That remains to be seen. What seems clear is that before the appeal to the Full Court was argued on 12 August 2014, the Applicant had already filed in the District Court of NSW seeking leave to appeal the costs assessment. Moreover, on 14 October 2014, the day before the Full Court dismissed the Applicant’s appeal, he filed a Statement of Claim in the District Court of NSW against the Respondent and Senior Counsel seeking damages based on what appears to be negligence. The issue is whether these facts would lead the Court to exercise the discretion it clearly has under s.52 of the Act in favour of the Applicant?
Like many litigants, the Applicant is very confident about the prospects of his success in both appealing the costs assessment, and in the negligence claim. His confidence is in no way reduced, it would seem, by his lack of success in the NSW Industrial Relations Commission, the NSW Court of Appeal, the High Court, before a Judge of this Court, before Justice Buchanan, and before the Full Court of the Federal Court.
Doing the best the Court can to discern the source of this confidence, it is this. He believes that he was negligently advised by his lawyers and Counsel in the Industrial Relationships Commission, Court of Appeal and High Court proceedings. The evidence of this is that Clayton Utz, his solicitors in that litigation (until the Respondents took over a few days before the hearing in the High Court) entered into a settlement with him on 21 December 2007 in which he claims that the firm had breached its duty of care to him. He says his claim was compromised by a payment to him of $110,000. Even though it is patently obvious that the Deed of Release does not preclude the claim by the present Respondents in any way, this ‘victory’ against Clayton Utz, with its tacit (though clearly denied) acknowledgment of breach of duty has energised him to dispute Senior Counsel’s fees, presumably on the same basis. The Applicant contends that these considerations were not taken into account by the learned costs assessor, even though, on his own evidence, he participated in the assessment process. The actual Statement of Claim filed 14 October 2014 against the Respondents and Senior Counsel alleges breaches of the Legal Profession Act 2004 (NSW) but reads as if it were a claim in professional negligence. The Statement of Claim was prepared by the Applicant himself.
The Applicant’s claim fails for a number of reasons. Firstly, the Applicant, through his Counsel, argued substantially the same issues before the Full Court, and was unsuccessful. This is evident, for example, from paragraphs 127 and 132 of the judgment. The arguments did not justify setting aside the bankruptcy notice, and they do not justify not making a sequestration order.
Secondly, in circumstances where the Applicant participated in the costs assessment (e.g. Applicant’s email 7 November 2011, being the annexure A11 to his affidavit of 7 November 2014) it is not possible on the material he has presented to the Court to discern how the judgment was tainted by fraud, collusion or miscarriage of justice: Corney v Brien (1951) 84 CLR 343 at 356-7; Wren v Mahoney (1972) 126 CLR 212 at 224-5. The evidence suggests that a real, current debt exists.
Thirdly, whilst the existence of a pending appeal might be a ground to postponing sequestration (Rigg v Baker (2006) 155 FCR 531 at [67]), that is not an inflexible principle, particularly where, as in the present case, the Applicant faces the obstacle of seeking leave to appeal several years after the fact. The Court must balance the public interest in bankruptcy proceedings against the Applicant’s private interests to challenge the debt in question: Commonwealth Bank of Australia v Quresh [2009] FMCA 1111 at [5] and [6].
Lastly, the Applicant must establish that both the appeal against the costs assessment and the action against the Respondents and Senior Counsel are likely to succeed in order to demonstrate there is “other sufficient cause”: Westpac Banking Corp v Goodman [2010] FMCA 993, particularly the cases cited from [41]. The Applicant needed to establish that his claims were likely to succeed, as opposed to being merely arguable: Singh v Deputy Commissioner of Taxation [2011] FCA 889 at [14] and the cases cited there. All the Applicant has adduced is a copy of the Statement of Claim, but this is no evidence of anything: Bhagat v Global Custodians Limited [2002] FCA 223 at [53].
There is simply no evidence before the Court that leads the Court to exercise any discretion in the Applicant’s favour. Indeed the arguments and considerations in favour of the Respondents are compelling. The evidence adduced on their behalf satisfies the requirements of s.52 of the Act. At no time has the Applicant asserted that he is solvent. The Applicant has not filed at any relevant time any Notice stating grounds of opposition to the Creditor’s Petition. The Creditor’s Petition was first fixed for hearing on 10 April 2014, and it is in the public interest that long running proceedings be brought to a conclusion if there is no reason not to do so.
Based on all the evidence before the Court, the Applicant’s Application for Review should be dismissed, the sequestration order stand, and the Applicant pay the Respondent’s costs on the usual basis. An Application for indemnity costs was made but there is no basis for such an order.
I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Judge Altobelli
Associate:
Date: 20 February 2015
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