Blueprint Printing Pty Ltd v Winn

[2010] FMCA 951

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BLUEPRINT PRINTING PTY LTD v WINN [2010] FMCA 951

BANKRUPTCY – Creditor’s petition – sequestration order made.

Bankruptcy Act 1966 (Cth)

Winn v Blueprint Instant Printing Pty Ltd [2008] VSC 522
Winn v Blueprint Instant Printing Pty Ltd [2008] FMCA 1430
Winn v Blueprint Instant Printing Pty Ltd [2009] FMCA 1074
Winn v Blueprint Instant Printing Pty Ltd [2010] VSCA 35
Guss v Johnstone [2000] HCA 26

Applicant: BLUEPRINT PRINTING PTY LTD

Respondent: JULENE MARGUERITE WINN

File Number: MLG 95 of 2010

Judgment of: Hartnett FM

Hearing date: 26 November 2010

Delivered at: Melbourne

Delivered on: 26 November 2010

REPRESENTATION

Counsel for the Applicant: Mr Scotter

Solicitors for the Applicant: Herbert Geer Lawyers

Counsel for the Supporting Creditor: Mr Moon

Solicitors for the Supporting Creditor: Garland Hawthorn Brahe Lawyers Pty Ltd

ORDERS

1. There be a sequestration order against the estate of JULENE MARGUERITE WINN.

2. The costs of the petitioning creditor and supporting creditor including any reserved costs be taxed and paid in accordance with the statute.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

MLG 95 of 2010

BLUEPRINT PRINTING PTY LTD

Applicant

And

JULENE MARGUERITE WINN

Respondent

REASONS FOR JUDGMENT

1. A creditor’s petition was filed by the applicant on 25 January 2010.  The petition lapses in January 2011.  Attached to that creditor’s petition is an affidavit verifying the petition, sworn by Mr Christopher John Terry.  Mr Terry swore on 22 January 2010 that the statements made in paragraphs 1, 2 and 3 of the creditor’s petition were, within his own knowledge, true.  As to paragraph 4 of the creditor’s petition, the applicant relies upon the affidavit of Ms Alexandra Madeleine Santamaria, sworn 22 January 2010 and filed in the proceedings.  That affidavit deposes to the act of bankruptcy being committed on 7 September 2009. 

2. The applicant creditor has this day been given leave to file an affidavit of debt and an affidavit of search, the affidavit of debt being sworn by Mr Christopher John Terry on 25 November 2010, and the affidavit of search being sworn by Alexandra Madeleine Santamaria on 26 November 2010.  There was also leave to file this day, a supporting creditor’s affidavit of debt, sworn by Mr Ronald Lane on 25 November 2010.  The supporting creditor was represented by Mr Moon of counsel in the proceedings this day.  Mr Scotter of counsel represented the applicant creditor.  The respondent debtor did not appear she having been refused leave to appear by telephone.

3. The court must be satisfied of the matters required to be proven at a hearing of a creditor’s petition as set out in section 52 of the Bankruptcy Act 1966 (Cth) (“the Act”). The court is so satisfied with respect to the affidavits verifying the petition, paragraphs 1 to 4 inclusive. The court is further satisfied that there has been service of the petition in accordance with the order for substituted service made by Registrar Pringle on 13 April 2010. The evidence of service is contained in the affidavit of Ms Santamaria sworn 20 April 2010. Ms Winn has also appeared subsequently. The court is further required to be satisfied that the debt or debts on which the petitioning creditor relies is or are still owing. The court is so satisfied on the basis of the affidavit material referred to in paragraph 2 of these reasons. Section 52 of the Act provides that if the court is satisfied with the proof of those matters (as the court is) then the court may make a sequestration order against the estate of the debtor.

4. Section 52(2) of the Act sets out when it is that a court may dismiss the petition.  That subsection is as follows:

   If the Court is not satisfied with the proof of any of those matters, or is satisfied by the debtor:

   (a)  that he or she is able to pay his or her debts; or

   (b) that for other sufficient cause a sequestration order ought not to be made; 

   it may dismiss the petition.

   The onus is on the respondent debtor to establish before the court her solvency – she has not done so – or to establish that for some other sufficient cause, a sequestration order ought not be made on this creditor’s petition.

5. Ms Winn filed a notice stating grounds of opposition to application, interim application or petition on 4 June 2010.  Almost all of those grounds represent an attack on the bankruptcy notice which issued following orders made by Master Bruce of the Supreme Court of Victoria on 9 November 2005 following a taxation of costs in relation to a judgment made on 2 August 2002 that a proceeding issued by the respondent in the Supreme Court of Victoria be dismissed with costs.   The respondent’s arguments in respect to the bankruptcy notice VN358 of 2009 were heard and dismissed by order of Phipps FM on 30 October 2009.  Arguments in those proceedings were dealt with conclusively in the reasons of Phipps FM delivered on 30 October 2009.

6. Also ventilated before Phipps FM on that occasion was the respondent’s reference to a possible counterclaim. Phipps FM rejected any suggestion that there was an effective counterclaim to come within the terms of section 41(7) of the Act and rejected the arguments put forward by the respondent in respect of the bankruptcy notice confirming the validity of the notice. Ms Winn has appealed the decision of Phipps FM. At the present time however the order of Phipps FM is an operative order which has not been stayed. The bankruptcy notice is therefore valid and remains so until and unless Ryan J, before whom Ms Winn’s appeal has been heard, sets it aside. This was the view taken also by Burchardt FM on 17 May 2010 when the respondent made application for review of orders made by Registrar Pringle on 13 April 2010 for substituted service. Ms Winn’s application for review filed 4 May 2010 was dismissed by Burchardt FM.

7. In her notice stating grounds of opposition, the respondent seeks to challenge the judgment, being the costs fixed by order of Master Bruce in the Supreme Court of Victoria of 9 November 2005, after taxation of costs and pursuant to an order of Byrne J made 2 August 2002.  The respondent has been unsuccessful in numerous attempts to challenge the judgment in the Supreme Court of Victoria.  On 28 November 2008, Smith J dismissed all the applications made by the respondent at the time, and awarded the applicant costs on an indemnity basis.  In the course of those reasons Smith J said as follows:

   “[33] The history of this matter in fact reveals an extreme example of a person misusing the law and the legal system to try to avoid her legal obligations.  It would appear that Ms Winn has been engaged in a holding operation to delay having to pay the total of the taxed costs awarded against her.  She has been accommodated a number of times and has had ample opportunity to seek the review that she now seeks.  In the meantime, Blueprint has been delayed for a long time in recovering its costs and has been put to great expense in pursuing them.  It is only now, faced with being made bankrupt, that Ms Winn has attempted to take the steps that she had to take to seek a review – namely, to comply with the order of Byrne J by paying the amount of fixed costs and seeking an order for review.

   [34] Whether her claim has any merits or not, the court should not assist her.  The reality is, however, that she has not demonstrated any merits …” (Winn v Blueprint Instant Printing Pty Ltd [2008] VSC 522)

8. The respondent sought leave to appeal against the decision of Smith J.  The Court of Appeal dismissed her application on 3 March 2010 (Winn v Blueprint Instant Printing Pty Ltd [2010] VSCA 35).  The Court of Appeal ordered the respondent pay indemnity costs because (a) she had misconducted herself in relation to the proceeding, causing loss of time and inconvenience to Blueprint and the court, (b) the respondent should have known that she had no prospect of success, and (c) the court held that it was impossible not to conclude that this application for leave to appeal was issued by Ms Winn for an ulterior or collateral purpose, namely, to try to delay her legal obligations, in particular, the attempt by Blueprint to bankrupt her.

9. There is no basis for the respondent to assert that the judgment is not final.  In any event, the Supreme Court of Victoria dismissed Ms Winn’s application for review of the judgment on 31 January 2006.  As Phipps FM concluded in his reasons for judgment of 30 October 2009 in Winn v Blueprint Instant Printing Pty Ltd [2009] FMCA 1074:

   “[36] The applicant has no basis for arguing that there is still a pending review of the taxation.  The Taxing Master’s order is a final and currently enforceable order.”

   This argument has already been extensively dealt with.

10. A further ground of opposition set up by the respondent relates to the involvement of a Mr Roderick Goodwin in parallel Supreme Court proceedings.  The respondent alleges in some way that the judgment dealt with the costs of the original Supreme Court proceeding wrongly, as it included Mr Goodwin’s costs.  Again this argument has already been dealt with and determined by this court in the decision of Riley FM in Winn v Blueprint Instant Printing Pty Ltd [2008] FMCA 1430 at [25] to [28], [33], [34] and [43] of that decision, and in the decision of Phipps FM of 30 October 2009 at [37] to [39]. The decision of Smith J also dealt with this issue adversely to the respondent as follows:

    “[34] The major point identified by counsel for her, that the taxing Master should have taken steps to ensure that the costs were properly allocated between Blueprint and Goodwin, is met by the evidence of the taxation which shows that the Taxing Master approached the taxing of the costs bearing that very concern in mind.  There might be issues of detail here and there in the taxation but that is all and she has not demonstrated the sort of clear issue needed to have her application taken seriously.” (Winn v Blueprint Instant Printing Pty Ltd [2008] VSC 522)

11. The respondent asserted that the bankruptcy notice had been issued out of time. This assertion was dealt with adversely to the respondent by Phipps FM in his decision of 30 October 2009. Judgment was given on 9 November 2005. The bankruptcy notice was issued on 20 February 2009. The respondent appears to be relying on section 41(3)(c)(i) of the Act which provides that a bankruptcy notice shall not be issued in relation to a debtor if more than six years has elapsed since the judgment or order for the payment of money relied upon was given or made.

12. The respondent seems to assert that as the order of Byrne J was made on 2 August 2002 (that order giving rise to the taxation) that time runs from 2002.  As has been determined by Phipps FM, the order of Master Bruce of 9 November 2005 is a final order for the purposes of the Bankruptcy Act (section 40(1)(g)).  As Phipps FM said in paragraph 34 of his reasons:

    “[34] The applicant’s argument that the bankruptcy notice is out of time depends on her success of her argument that the final order was the order of Byrne J of 2 August 2002, not the order of the Taxing Master of 9 November 2005.  That argument has not been successful.” (Winn v Blueprint Instant Printing Pty Ltd [2009] FMCA 1074)

    The Taxing Master’s order is enforceable in terms of section 40(3)(b) of the Act.

13. Another ground of opposition by the respondent is the claim that the sum claimed in the bankruptcy notice is incorrect due to a credit for a payment of $1750 made by the respondent.  Again, this issue has been previously dealt with by the court and is referred to in the decision of Phipps FM of 30 October 2009 at paragraphs [40] to [41].  The argument was dealt with adversely to the respondent, with Phipps FM concluding that the debt was not wrongly stated.  The matter has also been dealt with adversely to the respondent in Winn v Blueprint Instant Printing Pty Ltd [2010] VSCA 35 at [34] to [36], wherein counsel for the respondent, in effect, conceded the point before Smith J. It is not open now to the applicant to revive that ground of opposition in this court.

14. The onus of establishing the existence of a set-off counterclaim or cross-claim for the purposes of section 41(7) of the Act lies with the respondent (Guss v Johnstone [2000] HCA 26). The debtor has not shown a prima facie case, has not adduced any admissible evidence which would make out such a case, and indeed, has provided nothing more than mere unsupported assertion. There is not before the court any proper basis of any cause of action available to the respondent, nor any damage suffered by the respondent.

15. The court is satisfied with the proof of those matters required pursuant to section 52 of the Act, and is not satisfied by the debtor that any grounds have been made out to dismiss the petition. Accordingly, the court will make a sequestration order against the estate of the respondent with a consequential costs order.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of Hartnett FM

Date:  8 December 2010