Cottrell v Wilcox

Case [2002] FCAFC 53

Cottrell v Wilcox [2002] FCAFC 53

Cottrell v Wilcox [2002] FCA 232

NOTE: CHANGES TO THE MEDIUM NEUTRAL CITATION (MNC)

The Federal Court adopted a new medium neutral citation (FCAFC) for Full Court judgments effective from 1 January 2002.  Single Judge judgments will not be affected and will retain the FCA medium neutral citation.

The transitional arrangements are as follows:

  • All Full Court judgments delivered prior to 1 January 2002 will retain the FCA medium neutral citation.
  • All Full Court judgments delivered between 1 January 2002 to 30 April 2002 have been assigned parallel medium neutral citations in both the FCA and FCAFC series. 
  • All Full Court judgments delivered from 1 May 2002 will contain the FCAFC medium neutral citation only.

FEDERAL COURT OF AUSTRALIA

Cottrell v Wilcox [2002] FCA 232

BANKRUPTCY – appeal against sequestration order – application by appellant to lead further evidence on appeal – whether appellant entitled to go behind judgment debt – bankruptcy notice based on judgment debt arising out of Local Court judgment – judgment debt set aside by Local Court after sequestration order made – whether appellant thereby entitled to have sequestration order set aside

Federal Court of Australia Act 1976 (Cth) s 35A(6)
Bankruptcy Act 1966 (Cth) ss 52, 153A and 153B

Federal Court Rules O 77 r 19

Martin v Commonwealth Bank [2001] FCA 87 referred to
Australia and New Zealand Banking Group Ltd v Prestia [2001] FCA 792 at par [32] referred to
CDJ v VAJ (1998) 197 CLR 172 at 184-186, 199-201 and 230-238 referred to

DAVID MERVYN COTTRELL v JOHN ALFRED WILCOX

N1415 OF 2001

BRANSON, WEINBERG and DOWSETT
14 MARCH 2002
SYDNEY


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N1415 OF 2001

ON APPEAL FROM A SINGLE JUDGE

BETWEEN:

DAVID MERVYN COTTRELL
APPELLANT

AND:

JOHN ALFRED WILCOX
RESPONDENT

JUDGES:

BRANSON, WEINBERG and DOWSETT JJ

DATE OF ORDER:

14 MARCH 2002

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The appeal be dismissed.

2.The respondent’s costs be taxed and paid from the estate of the appellant in accordance with the Bankruptcy Act 1966 (Cth).

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N1415 OF 2001

ON APPEAL OF A SINGLE JUDGE

BETWEEN:

DAVID MERVYN COTTRELL
APPLICANT

AND:

JOHN ALFRED WILCOX
RESPONDENT

JUDGES:

BRANSON, WEINBERG and DOWSETT JJ

DATE:

14 MARCH 2002

PLACE:

SYDNEY

REASONS FOR JUDGMENT

THE COURT

  1. This is an appeal by David Mervyn Cottrell from a decision of Conti J who, on 21 September 2001, made a sequestration order against the estate of the appellant. 

    BACKGROUND

  2. The matter has had a long and somewhat convoluted history.  On 29 November 2000 a Registrar of the Court, acting upon the petition of John Alfred Wilcox which was filed on 18 October 2000, made a sequestration order against the estate of Mr Cottrell.

  3. The act of bankruptcy upon which the Registrar’s order was founded was the…

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Cottrell v Wilcox [2002] FCAFC 53
Case
[2002] FCAFC 53
Decision Date

CaseChat Overview and Summary

In Cottrell v Wilcox, David Mervyn Cottrell appealed against a sequestration order made against him by Conti J. The initial sequestration order was made by a Registrar of the Court following a petition by John Alfred Wilcox, based on Cottrell's failure to comply with a bankruptcy notice demanding payment of a judgment debt of $36,697.42. Cottrell attempted to set aside the sequestration order, alleging abuse of process and a champertous agreement between Wilcox and others. Conti J rejected Cottrell's application, and the Full Court later allowed the appeal but only to remit the matter to Conti J for reconsideration as a hearing de novo.

During the appeal to the Full Court, Cottrell sought to lead additional evidence in the form of an affidavit and numerous annexures. The Full Court declined to admit this evidence, finding it largely tendentious, irrelevant, scandalous, and containing numerous assertions of hearsay. The Court held that the evidence did not meet the threshold for admission under s 27 of the Federal Court of Australia Act 1976 (Cth), which requires the exercise of judicial discretion in a manner consistent with the judicial process.

The case was remitted to Conti J, who heard the matter again by telephone link. Conti J found that Cottrell's notice of motion to set aside the judgment did not disclose a basis in law for doing so, and that Cottrell's oral explanation was not comprehensible in terms of legal principle. Conti J concluded that nothing said by Cottrell in opposition to the sequestration order was comprehensible in terms of legal principle. The appeal was ultimately dismissed, and the respondent's costs were ordered to be taxed and paid from Cottrell's estate in accordance with the Bankruptcy Act 1966 (Cth).

Orders

Orders of the court

1. The appeal be dismissed.

2. The respondent’s costs be taxed and paid from the estate of the appellant in accordance with the Bankruptcy Act 1966 (Cth).

Background

Background to the litigation

This is an appeal by David Mervyn Cottrell from a decision of Conti J who, on 21 September 2001, made a sequestration order against the estate of the appellant. BACKGROUND The matter has had a long and somewhat convoluted history. On 29 November 2000 a Registrar of the Court, acting upon the petition of John Alfred Wilcox which was filed on 18 October 2000, made a sequestration order against the estate of Mr Cottrell. The act of bankruptcy upon which the Registrar’s order was founded was the appellant’s failure to comply with a bankruptcy notice. That notice required payment of the sum of $36,697.42, that being the amount of a judgment obtained by the respondent against the appellant in the Local Court at Wagga Wagga. The appellant did not endeavour to establish a counter claim or cross-claim. Nor did he make application, prior to the date upon which the Registrar made the sequestration order, to set aside the bankruptcy notice On 20 December 2000 the appellant filed a notice of motion in which he sought review of the Registrar’s decision. He sought to have the sequestration order set aside, and in lieu thereof, to have an order made dismissing the creditor’s petition. The basis of that application seems to have been an allegation of abuse of process on the part of the respondent. Conti J, who heard the notice of motion as a matter of urgency, characterised the appellant’s claim as being referable to a “champertous agreement”. His Honour rejected the application to set aside the sequestration order, and dismissed the notice of motion. The appellant then filed a notice of appeal against that decision. On 9 July 2001, a Full Court comprising Sundberg, Emmett and Finkelstein JJ delivered reasons for judgment in which each and every contention advanced by the appellant regarding the supposedly champertous agreement was rejected. So too were various other claims which he made of breach of duty and of an attempt to pervert the course of justice. However, the Full Court found that Conti J had erred by dealing with the review of the Registrar’s decision as though it were an appeal stricto sensu rather than a hearing de novo: see s 35A(6) of the Federal Court of Australia Act 1976 (Cth) and Martin v Commonwealth Bank [2001] FCA 87. The Full Court’s reasons for judgment in their initial form contained an order that the appeal be dismissed. That order was subsequently the subject of a corrigendum making it clear that the appeal had been allowed but only for the purpose of enabling the matter to be remitted to Conti J so that his Honour could consider it afresh, as a hearing de novo, in accordance with the reasons for judgment given by the Full Court. The orders pronounced and the reasons for judgment made it clear that his Honour was required to have before him current affidavits in accordance with O 77 r 19 of the Federal Court Rules. It was also indicated that he was expected to say, as a judge hearing an application for a sequestration order “customarily does”, that he was satisfied of the matters proof of which s 52 of the Bankruptcy Act 1966 (Cth) (“the Act”) requires. It is important to note that the Full Court specifically ordered that the remitter to his Honour be dealt with on the basis that there was no notice of opposition to the petition. THE TRIAL JUDGE’S DECISION

Evidence

Evidence Before The Court

At the appellant’s request the appeal to this Court was heard by telephone link from his home. The application to lead further evidence At the outset of the appeal the appellant indicated that he wished to rely upon an affidavit sworn on 6 October 2001, and filed with the Court on 19 November 2001. The affidavit was included in an appeal book which was not certified. It consisted of some 40 paragraphs and 32 separate annexures. The annexures alone ran for some 143 pages. The respondent objected to the affidavit and its annexures being received by the Court. The appellant acknowledged, in answer to a question from the Court, that there was nothing in the affidavit or in any of the annexures of which he had not been aware at the time of the hearing of the hearing of this matter before Conti J on 21 September 2001. He maintained, however, that the material contained therein was relevant to a number of the grounds of appeal, and that it provided some clarification of the matters which Conti J had said he found incomprehensible when these had been addressed orally by the appellant in argument. The appellant relied upon s 27 of the Federal Court of Australia Act 1976 (Cth). That section provides as follows:“In an appeal, the Court shall have regard to the evidence given in the proceedings out of which the appeal arose, and has power to draw inferences of fact and, in its discretion, to receive further evidence, which evidence may be taken: (a)on affidavit; or (b)by video link, telephone or other appropriate means in accordance with another provision of this Act or another law of the Commonwealth; or(c)by oral examination before the Court or a Judge; or (d)otherwise in accordance with section 46.” At common law the position was that a new trial would not be ordered on the ground of the discovery of fresh evidence unless that evidence was not available at the trial and could not have been obtained by reasonable diligence. Moreover, it had to be reasonably clear that if the evidence had been available at trial an opposite result would have been highly likely to have been produced. Section 27 empowers this Court to receive further evidence on appeal notwithstanding the fact that it may not satisfy the somewhat narrower common law constraints set out above: CDJ v VAJ (1998) 197 CLR 172 at 184-186 per Gaudron J, 199-201 per McHugh, Gummow and Callinan JJ and 230-238 per Kirby J. However, s 27 confers upon this Court a discretion as to whether or not to receive further evidence. That discretion is confined only by the requirement that it be exercised judicially and consistently with the judicial process: CDJ v VAJ at 185. The Court concluded that the affidavit and annexures should not be received for the following reasons:·The affidavit was largely tendentious and contained a great deal of material that was argumentative, rather than assertive of fact. ·It contained a lengthy dissertation upon the elements of the crime of conspiracy which was entirely irrelevant to the issues properly raised before the Court on the appeal. ·It contained material which was scandalous. For example, it asserted that the trial judge:“failed in his duty to the Court by seeking refuge in the downgrading of the criminal conspiracy and all its ingredients to an act of champertous agreement and in so doing gave the conspirators the amnesty and protection of the Federal Court of Australia”. ·It suggested that named individuals were involved in acts of collusion and corruption but provided no particulars of these allegations and no apparent basis for making them. ·It contained numerous assertions which were plainly hearsay, and sometimes hearsay upon hearsay. ·It contained a good deal of other material which was obviously irrelevant to any issue before the Court.·It attempted to raise again the very matters that were the subject of the earlier Full Court decision in which these same claims were expressly rejected. These included the appellant’s allegations of abuse of process, breach of duty, attempting to pervert the course of justice, and oppression. ·It sought to rectify the deficiencies in the appellant’s presentation of his case to Conti J whereby he was unable to explain in terms which were comprehensible to his Honour precisely why he believed that he would be successful in having the judgment debt set aside upon the basis of the respondent’s illegal conduct. (The paragraphs in question consisted largely of a recitation of the appellant’s own past criminality, and his assertion that he was involved in a joint enterprise with the respondent in what he described as the “re-birthing” of motor cars. Apparently the appellant had been imprisoned for his involvement in that activity. However, according to him, the respondent had never been charged. It is implicit, but nowhere clearly spelt out in the affidavit, that the judgment debt, described in the creditor’s petition as being “monies loaned” to the appellant, actually involved some kind of accounting between them for the proceeds of stolen goods.) It is at least open to serious doubt whether, had material in this form been before Conti J on 21 September 2001, it would have affected his Honour’s conclusion that nothing said by the appellant was “comprehensible in terms of legal principle”.

Decision

Reasons for decision

SUNDBERG, EMMETT AND FINKELSTEIN JJ
The Full Court’s reasons for judgment in their initial form contained an order that the appeal be dismissed. That order was subsequently the subject of a corrigendum making it clear that the appeal had been allowed but only for the purpose of enabling the matter to be remitted to Conti J so that his Honour could consider it afresh, as a hearing de novo, in accordance with the reasons for judgment given by the Full Court. The orders pronounced and the reasons for judgment made it clear that his Honour was required to have before him current affidavits in accordance with O 77 r 19 of the Federal Court Rules. It was also indicated that he was expected to say, as a judge hearing an application for a sequestration order “customarily does”, that he was satisfied of the matters proof of which s 52 of the Bankruptcy Act 1966 (Cth) (“the Act”) requires. It is important to note that the Full Court specifically ordered that the remitter to his Honour be dealt with on the basis that there was no notice of opposition to the petition. THE TRIAL JUDGE’S DECISION The matter was heard again by Conti J on 21 September 2001. That proceeding was conducted, at Mr Cottrell’s request, by telephone link. This was done upon the basis that he claimed to be ill, and physically incapable of attending court. In compliance with the orders of the Full Court, current affidavits were filed on behalf of the petitioning creditor. In opposing the making of a sequestration order, the appellant relied principally upon a copy of a notice of motion filed on 5 September 2001 in the Local Court at Wagga Wagga together with an affidavit sworn on 3 September 2001 in support. By that notice of motion he sought an order setting aside the judgment in favour of the respondent upon which the sequestration order originally made by the Registrar was based. Conti J in his reasons for judgment observed that the notice of motion did not disclose any basis in law for setting aside the judgment. His Honour commented:“ the stated basis is supposedly contained in an affidavit made by Mr Cottrell on 3 September 2001. The affidavit referred to a previous affidavit said to have been provided in support of a notice of motion made to the Local Court on 8 March 2001, but no such affidavit was provided. What was the fate of that notice of motion was not stated. The present notice of motion is listed for hearing by the Local Court on 31 January 2002; … The appellant also relied upon a signed statement to the effect that the purpose of the respondent’s pursuit of the bankruptcy proceeding was to “stifle” litigation in a particular Victorian County Court proceeding which was said to relate to the “act of Marie Den Boer to incite others to murder the Applicant Cottrell”. The appellant claimed that the respondent and others (including the legal representatives acting for the defendants in that litigation) had engaged in a conspiracy designed to prevent him from pursing his legal rights in that proceeding. Conti J continued:“When I asked Mr Cottrell to explain verbally the basis for his application to set aside the Local Court judgment obtained by Mr Wilcox against Mr Cottrell upon which the present proceedings are based, he said words to the effect that the judgment debt was based upon some form of illegal conduct involving Mr Wilcox and the Applicant, which was said to vitiate the viability of the judgment debt. Nothing that he said to me in that regard was comprehensible in terms of legal principle, but he claimed that he had nevertheless the support of legal advice from solicitors who were acting for him in connection and the setting aside of the judgment debt.”

Ratio Decidendi

Legal Principle Established

Established by: SUNDBERG, EMMETT AND FINKELSTEIN JJ

Full text does not contain this section.