Bell v Commonwealth Bank of Australia
[2014] FCCA 1313
•12 June 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BELL v COMMONWEALTH BANK OF AUSTRALIA & ORS | [2014] FCCA 1313 |
| Catchwords: BANKRUPTCY – Application for summary dismissal of application for annulment – no reasonable prospects of successfully prosecuting application for annulment – application dismissed. |
| Legislation: Bankruptcy Act 1966, ss.40(1)(g)(iii), 41(3) |
| Wren v Mahony (1972) 126 CLR 212 |
| Applicant: | CARL WILLIAM BELL |
| First Respondent: | COMMONWEALTH BANK OF AUSTRALIA |
| Second Respondent: | OFFICIAL TRUSTEE IN BANKRUPTCY OF AFSA |
| Third Respondent: | BARRY ANTHONY TAYLOR AS THE REGISTERED TRUSTEE |
| Fourth Respondent: | JEAN VILLANI: THE REGISTRAR OF TITLES OF WESTERN AUSTRALIA |
| Fifth Respondent: | VERONIQUE INGRAM: THE INSPECTOR GENERAL IN BANKRUPTCY OF AFSA |
| File Number: | PEG 115 of 2014 |
| Judgment of: | Judge Jarrett |
| Hearing date: | 12 June 2014 |
| Date of Last Submission: | 12 June 2014 |
| Delivered at: | Perth |
| Delivered on: | 12 June 2014 |
REPRESENTATION
| The applicant appeared on his own behalf |
| Counsel for the First Respondent: | Mr Holler |
| Solicitors for the First Respondent: | Norton Rose Fulbright |
| Counsel for the Second and Fifth Respondents: | Ms Kovacevic |
| Solicitors for the Second and Fifth Respondents: | Australian Government Solicitor |
| No appearance for the Third and Fourth Respondents |
ORDERS
The application filed on 13 May 2014 be dismissed.
The first, second and fifth respondents’ costs be taxed and paid in accordance with r.13.01 of the Federal Circuit Court (Bankruptcy ) Rules 2006 (Cth).
AND THE COURT NOTES that these orders have been amended pursuant to r.16.05(2)(e) of the Federal Circuit Court Rules 2001 (Cth) to show the name of the second and fifth respondents’ representative as “Ms Kovacevic” in lieu of “Ms Kovocevic”.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 115 of 2014
| CARL WILLIAM BELL |
Applicant
And
| COMMONWEALTH BANK OF AUSTRALIA |
First Respondent
| OFFICIAL TRUSTEE IN BANKRUPTCY OF AFSA |
Second Respondent
| BARRY ANTHONY TAYLOR AS THE REGISTERED TRUSTEE |
Third Respondent
| JEAN VILLANI: THE REGISTRAR OF TITLES OF WESTERN AUSTRALIA |
Fourth Respondent
| VERONIQUE INGRAM: THE INSPECTOR GENERAL IN BANKRUPTCY OF AFSA |
Fifth Respondent
REASONS FOR JUDGMENT
ex tempore
This is an application for the summary dismissal of an initiating application filed by Carl William Bell on 13 May this year.
In his initiating application, Mr Bell seeks orders which are relatively extensive.
Firstly, he seeks that the sequestration order made against him on 15 January, 2013 be annulled on the grounds that the petitioning creditor has no standing and is not his creditor. Secondly, he seeks an order, perhaps by way of declaration, that the summary judgment made against him in the Supreme Court of Western Australia was not a final judgment within the meaning of that phrase as used in s.40(1)(g)(iii) and s.41(3) of the Bankruptcy Act1966. Further, he seeks orders of a declaratory nature that he was solvent at the time the judgment was given against him and, finally, that the process against him is an “abuse of the process of the courts”.
He also seeks orders that various allegedly improper court orders be set aside on the basis, it seems, that they are “travesties of justice”. He also seeks some interim relief. The interim relief that he seeks concerns only some of the respondents.
I turn to the respondents to the application. They are, first of all, the Commonwealth Bank of Australia, secondly the Official Trustee in Bankruptcy, thirdly the trustee in bankruptcy of the applicant’s estate in bankruptcy, fourthly Ms Villani, who is said to be the Registrar of Titles of Western Australia, and fifthly the Inspector-General of Bankruptcy. Of those respondents, the first respondent appears, as does the second and fifth respondents. The others do not appear. It is of no surprise that they do not appear.
As against the second and fifth respondents, the interim or interlocutory orders sought by the applicant are relevant. In that respect, he seeks that the Inspector-General in Bankruptcy investigate, pursuant to ss.19, 58, 116, 128, 178 and 179 of the Bankruptcy Act:
on the topic of the dereliction of duties of the registered trustee Barry Anthony Taylor vis-à-vis the conduct of the Official Trustee in failing to discharge their fiduciary duties to the applicant impartially and independently, resulting from their apparent connivance at the abuse of process by the plaintiff (the investigation of the registered trustee by the Inspector-General in Bankruptcy).
Paragraph 2 of the interim orders sought goes on to specify what the investigation of the registered trustee by the Inspector-General in Bankruptcy must look at. Paragraph 3 of the interim orders sets out that the Inspector-General is to report to the applicant the result of the review process in accordance with what is described as “statement 12 of the statutory reviews of trustees decisions” under the Act.
And finally – and this is where the interim relief is tied into the final relief – Mr Bell seeks an order that:
The result of the investigation is to be trialled for the purpose of achieving the final orders as stated above.
I confess to not fully understanding what that means, but I suspect it means that the results of the investigation should inform the decisions of the Court when it comes to determine the final relief that the applicant is seeking.
The first respondent now applies to have that application in its entirety summarily dismissed. The second and fifth respondents join in that application seeking dismissal of the orders sought against them.
To succeed in an application for summary dismissal, the applicants must show that the applicant has no reasonable prospect of successfully prosecuting the applications. I have concluded that they have demonstrated that without any difficulty at all.
I reach that conclusion for these reasons.
The applicant is presently a bankrupt pursuant to a sequestration order that was made on 15 January, 2013. The sequestration order was made on the basis of an act of bankruptcy which was committed by the applicant when he failed to comply with a bankruptcy notice that was, according to the material before me, properly served on him.
That bankruptcy notice in turn was based upon the judgment given by Master Sanderson in the Supreme Court of Western Australia. It was a summary judgment, but it is a judgment nonetheless, and I accept the submissions for the first respondent that a summary judgment is a final judgment for the purposes of the Bankruptcy Act. I know of no authority which suggests to the contrary. None was brought to my attention.
So the judgment exists. I am told in submissions that the issues that Mr Bell now argues in this case were also argued in the case before the Master, namely that the plaintiff in the Supreme Court proceedings did not properly prove its entitlement to the debt the subject of the judgment.
Although there are no reasons for judgment from Master Sanderson before me, those matters seem to have been agitated before the Master and Mr Bell adequately explained in his submissions that he made those points in the Supreme Court. That those points were not accepted by the Supreme Court is neither here nor there at the end of the day, because the judgment was given. There was an unsuccessful appeal against it.
There is nothing in the first or second grounds of the application.
The third ground, namely, that at the time of delivery of the summary judgment Mr Bell was solvent, is as well neither here nor there. Solvency at the date the judgment is given is irrelevant. What is relevant is solvency at the date the creditor’s petition is determined, because it may well be a ground for refusing to make a sequestration order, notwithstanding the proof of an act of bankruptcy, that the debtor is, in fact, solvent. There is a difference between a debtor who cannot pay a debt and a debtor who simply will not pay a debt, but there is nothing in the material before me to suggest that Mr Bell is in the second category rather than the first.
When the matter was before me earlier this week, I indicated that Mr Bell might put on some evidence about solvency. But he does not seem to have done that; nor does he suggest, either in what he has filed or in his oral submissions, that he needed more time to gather information about his solvency. So the third ground fails.
There is no abuse of process apparent on the material. I understand the arguments that Mr Bell wishes to make, at least in a general sense. This Court has a power to inquire into and go behind a judgment of another court. A judgment of another court against a debtor for the payment of money is usually accepted as sufficient proof of the relevant debt by a court in bankruptcy for the purposes of the proceedings before that bankruptcy court.
But that is not always the case, and a bankruptcy court retains a jurisdiction to go behind a judgment if, in the circumstances of the particular case before it, it chooses to do so. The principles are explained in Wren v Mahony (1972) 126 CLR 212 and cases that follow that, and they are well-known.
This is not a default judgment, the type of judgment which sometimes excites the interest of the bankruptcy court to inquire into the debt itself, but rather this is a summary judgment – again, not a judgment after a full trial where there has been a complete exploration of all of the issues and a determination of the facts and the law; but something perhaps in between. Nonetheless, a summary judgment is a judgment on the merits.
There is nothing in the material that I have been taken to, nothing in the affidavit filed by Mr Bell on 15 May 2014 or on 11 June 2014, which satisfies me that I ought to exercise the discretion to go behind the judgment given by Master Sanderson so long ago.
It is also worth recording that there has been an attempt to set aside the sequestration order once before, and that failed. Judge Riethmuller of this Court determined that application and dismissed it on 19 April last year.
The submissions made by Mr Bell seem to focus upon ensuring that his trustee in bankruptcy ensured that the first respondent in this case properly proves its debt in a way upon which Mr Bell insists. Whether or not the trustee discharges the obligations upon him insofar as the acceptance or rejection of proofs of debt is concerned is a matter that can be adjudicated upon if and when those things occur, and there are mechanisms available under the Bankruptcy Act to review those types of decisions.
But to the extent that this application has been brought to secure the proper performance of the registered trustee’s obligations under the Act, this application is ill-conceived.
For all of those reasons I am satisfied, as I have already indicated, that there is no reasonable prospect of the applicant prosecuting this application, and it will be dismissed.
I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of Judge Jarrett delivered on 12 June 2014.
Associate:
Date: 24 June 2014
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