Cummins v Palms (Chullora) Pty Limited

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FEDERAL COURT OF AUSTRALIA

Cummins v Palms (Chullora) Pty Limited [2020] FCA 1712   

Appeal from: Palms (Chullora) Pty Ltd v Cummins [2019] FCCA 3683
File number: NSD 88 of 2020
Judgment of: ABRAHAM J
Date of judgment: 27 November 2020
Catchwords: BANKRUPTCY – appeal of decision refusing an application for an annulment of the decision of the Registrar to grant a sequestration order – appeal dismissed  
Legislation:

Bankruptcy Act 1966 (Cth) ss 40(g), 52, 116, 153B

Bankruptcy Regulations 1996 (Cth) cl 4.02A, 16.01

Federal Court Rules 2011 (Cth) rr 1.61, 36.03

Legal Profession Uniform Law Application Act 2014 (NSW) Division 3 of Part 7

Cases cited:

BPL20 v Minister for Home Affairs [2020] FCA 1207

Carr v Finance Corporation of Australia Ltd (No 1) [1981] HCA 20; (1981) 147 CLR 246

Culleton v Balwyn Nominees [2017] FCAFC 8; (2017) 343 ALR 632

Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337

Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488

Palms (Chullora) Pty Ltd v Cummins [2019] FCCA 3683
Division: General Division
Registry: New South Wales
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Number of paragraphs: 58
Date of last submission: 29 October 2020
Date of hearing: 20 October 2020
Counsel for the Appellant: The Appellant appeared in person
Solicitor for the Respondent: Mr D Manca of LAS Lawyers & Consultants

ORDERS

NSD 88 of 2020
BETWEEN:

RICHARD JAMES CUMMINS
Appellant
AND:

PALMS (CHULLORA) PTY LIMITED

Respondent

ORDER MADE BY:

ABRAHAM J

DATE OF ORDER:

27 NOVEMBER 2020

THE COURT ORDERS THAT:

1.The appeal filed on 30 January 2020 be dismissed.

2.The respondent’s costs of and incidental to the appeal are to be taxed and paid from the estate of the appellant in accordance with the Bankruptcy Act 1996 (Cth).

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

ABRAHAM J:

  1. This is an appeal from a decision of the Federal Circuit Court on 12 December 2019 which dismissed the appellant’s application for review of a decision by District Registrar Wall on 5 June 2018 to make a sequestration order against the estate. As explained by the primary judge, an extension of time would have been required for that application which he was not minded to give, but rather on 16 October 2019, after hearing from the parties the primary judge ordered that the application be treated as an application for annulment under s 153B of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act): Palms (Chullora) Pty Ltd v Cummins [2019] FCCA 3683 at [10]-[11].

  2. The appellant was unrepresented in these proceedings, as before the Federal Circuit Court.

  3. The issues for the primary judge in considering that annulment application were: first, satisfaction that the sequestration order should not have been made; and second, if the order should not have been made, should the Court exercise its discretion to annul the bankruptcy. The primary judge found…

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Details
Case
[2020] FCA 1712
Decision Date

CaseChat Overview and Summary

In the matter of Cummins v Palms (Chullora) Pty Limited, the appellant sought to appeal a decision that dismissed an application for annulment of the decision of the Registrar to grant a sequestration order. The appellant argued that the primary judge erred in not granting him an extension of time to bring the review application. The appeal was dismissed by the court. The primary judge had ordered the application be treated as an application for annulment of the bankruptcy, in a context where the appellant required an extension of time to bring the review application. The primary judge took into account that he was unrepresented and contested “not just the making of the sequestration order by the Registrar, but also the entire process leading to that order and the underlying debt”. The primary judge made orders on the day of the hearing and provided written reasons shortly thereafter. The primary judge detailed the written material relied on by the appellant which took the form of a number of affidavits (partly typed and partly handwritten). The primary judge also noted that the appellant provided two documents which he marked for identification; MFI A1 being a claim by the appellant for $125 million apparently alleging wrongdoing by court staff in relation to the records of the Supreme Court and MFI A2 appeared to be the original application for assessment of ordered costs taken from the Supreme Court file. The primary judge detailed that he granted leave to Palms to rely upon two affidavits filed on 28 November 2019; first an affidavit by Palms’ solicitor who deposed as to the background facts and; second, the affidavit of the trustee which provided a report on the administration of the bankrupt estate. The primary judge stated that he took into account that trustee’s report in deciding to make the orders on 12 December 2019 and to reserve his reasons. The parties made oral submissions. The respondent submitted that the appellant required an extension of time as the appeal was filed outside the 28 day period contemplated by r 36.03(a)(i) of the Federal Court Rules 2011 (Cth) (Federal Court Rules). The appellant contended that he was not out of time because holiday periods do not count. The respondent’s submission fails to have regard to r 1.61 of the Federal Court Rules. Although the appeal was not filed until 30 January 2020, in circumstances where the orders were pronounced on 12 December 2020, r 1.61(5) applies which provides that “[i]f the time fixed [by the Rules for doing an act] includes a day in the period starting on 24 December in a year and ending on 14 January in the next year, the day is not to be counted”. This rule "suspends the running of time from 24 December to 14 January": Culleton v Balwyn Nominees [2017] FCAFC 8; (2017) 343 ALR 632 at [10]. Accordingly, taking r 1.61(5) into account, it appears that the appellant filed one day within the expiration of the appeal period, and an extension of time is not required. Considering the difficulties faced by an unrepresented appellant, all the documents filed by the appellant were extensive, at times unrelated to the issues in these proceedings and filed in breach of the Court rules and orders made, as to the content, form and time of filing of the documentation. Aspects of the submissions put are difficult to discern, and contain inter alia, allegations of wrongdoing at every stage of the bankruptcy process, and in effect assert that there have been breaches of various laws including criminal conduct by all involved in the process. The documents also include many matters of which the appellant complains but which have no relevance to these proceedings. The appellant’s oral submissions were in the same vein. The appellant has not identified or established any error in the conclusions of the primary judge, nor the orders made. The conclusions were open, and on the material before him, correct. The primary judge was entitled to accept the evidence he did. For the purposes of responding to the submissions, the respondent grouped what appear to be the appellant’s complaints, as follows: technical issues as to the sequestration order; the Supreme Court proceedings in relation to the extension of caveat proceedings; the Supreme Court costs assessment process; the possession of the Oakhurst property; s 116(2)(g) of the Bankruptcy Act; and, personal criticisms of the primary judge. The grounds are addressed below by reference to those groups, which as best can be ascertained, do reflect the appellant’s written and oral submissions. Criticism of the primary judge Commencing with the appellant’s complaints in respect to the primary judge, which appear to be reflected in the original notice of appeal and expanded upon in the subsequent submissions, those complaints are not established. First, the appellant’s contention that the primary judge was biased because he did not grant him an extension of time is entirely misplaced. As noted above, the appellant’s application was significantly out of time, and although the primary judge concluded he was likely to refuse the extension of time, he ordered the hearing be one for the annulment of the orders. This provided the appellant with a further opportunity to argue his case. In the circumstances, that was a position favourable to the appellant. It provides no proper basis for an allegation of actual or apprehended bias on the part of the primary judge.

Orders

Orders of the court

1. The appeal filed on 30 January 2020 be dismissed.

2. The respondent’s costs of and incidental to the appeal are to be taxed and paid from the estate of the appellant in accordance with the Bankruptcy Act 1996 (Cth).

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

For the reasons below the appeal filed on 30 January 2020 is dismissed.Factual background The appellant’s bankruptcy had its genesis in 2016 when the appellant lodged a caveat over certain real estate at Chullora, NSW owned by the petitioning creditor, Palms (Chullora) Pty Ltd (Palms). I note that the primary judge mistakenly referred to the real estate as being at Oakhurst NSW, but it is plain that the mistake is of no moment to his reasons or the orders made. The appellant sought to extend the caveat in proceedings in the NSW Supreme Court (Supreme Court), the outcome of which included a costs order against him. Palms applied for assessment of those costs and a certificate was issued on 7 July 2017. The certificate was filed in the Local Court Sydney Civil Registry and judgment was entered in favour of Palms on 19 July 2017. The appellant failed to pay the judgment debt, a bankruptcy notice was served upon him, and Palms commenced these bankruptcy proceedings. The appellant did not take any active steps in the bankruptcy proceedings and on 5 June 2018, in his absence, the Registrar made a sequestration and other orders. Later, in the administration of the bankrupt estate the trustee obtained orders for possession of real estate at 12 Wraysbury Place, Oakhurst in New South Wales (the Oakhurst property) and the Oakhurst property, which was owned by the appellant, was vested in the trustee upon the bankruptcy. On 9 July 2019, a notice to vacate the property was issued by the NSW Sheriff to the appellant. Although the appellant obtained a temporary stay, that application was ultimately dismissed on 3 September 2019. Shortly thereafter the appellant filed the application for review which was before the primary judge. The trustee took possession of the Oakhurst property the following day.Primary judgment As noted above, the primary judge ordered the application be treated as an application for annulment of the bankruptcy, in a context where the appellant required an extension of time to bring the review application. This occurred on 16 October 2019. The primary judge explained in his later reasons, that he did so after hearing the appellant and that he had taken into account that he was unrepresented and contested “not just the making of the sequestration order by the Registrar, but also the entire process leading to that order and the underlying debt. He made serious allegations from the bar table and I decided that he should be given the opportunity to ventilate those allegations by evidence at a hearing”: at [11]. The matter was listed for hearing on 12 December 2019. The primary judge made orders on the day of the hearing, and provided written reasons shortly thereafter. The primary judge detailed the written material relied on by the appellant which took the form of a number of affidavits (partly typed and partly handwritten), and stated at [12] that: [t]hey [the affidavits] are somewhat hard to follow but, as explained by Mr Cummins from the bar table, they were intended to support the proposition that the costs order in the NSW Supreme Court proceedings should never have been made, was not properly assessed, that the bankruptcy notice was not properly served upon him and that serious wrongdoing vitiated the sequestration order.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Later, in the administration of the bankrupt estate the trustee obtained orders for possession of real estate at 12 Wraysbury Place, Oakhurst in New South Wales (the Oakhurst property) and the Oakhurst property, which was owned by the appellant, was vested in the trustee upon the bankruptcy. On 9 July 2019, a notice to vacate the property was issued by the NSW Sheriff to the appellant. Although the appellant obtained a temporary stay, that application was ultimately dismissed on 3 September 2019. Shortly thereafter the appellant filed the application for review which was before the primary judge. The trustee took possession of the Oakhurst property the following day.Primary judgment As noted above, the primary judge ordered the application be treated as an application for annulment of the bankruptcy, in a context where the appellant required an extension of time to bring the review application. This occurred on 16 October 2019. The primary judge explained in his later reasons, that he did so after hearing the appellant and that he had taken into account that he was unrepresented and contested “not just the making of the sequestration order by the Registrar, but also the entire process leading to that order and the underlying debt. He made serious allegations from the bar table and I decided that he should be given the opportunity to ventilate those allegations by evidence at a hearing”: at [11]. The matter was listed for hearing on 12 December 2019. The primary judge made orders on the day of the hearing, and provided written reasons shortly thereafter. The primary judge detailed the written material relied on by the appellant which took the form of a number of affidavits (partly typed and partly handwritten), and stated at [12] that: [t]hey [the affidavits] are somewhat hard to follow but, as explained by Mr Cummins from the bar table, they were intended to support the proposition that the costs order in the NSW Supreme Court proceedings should never have been made, was not properly assessed, that the bankruptcy notice was not properly served upon him and that serious wrongdoing vitiated the sequestration order. The primary judge also noted that the appellant provided two documents which he marked for identification; MFI A1 being a claim by the appellant for $125 million apparently alleging wrongdoing by court staff in relation to the records of the Supreme Court and MFI A2 appeared to be the original application for assessment of ordered costs taken from the Supreme Court file: at [13]. The primary judge detailed that he granted leave to Palms to rely upon two affidavits filed on 28 November 2019; first an affidavit by Palms’ solicitor who deposed as to the background facts and; second, the affidavit of the trustee which provided a report on the administration of the bankrupt estate. The primary judge stated that he took into account that trustee’s report in deciding to make the orders on 12 December 2019 and to reserve his reasons. The parties made oral submissions.

Ratio Decidendi

Legal Principle Established

The respondent submitted that the appellant required an extension of time as the appeal was filed outside the 28 day period contemplated by r 36.03(a)(i) of the Federal Court Rules 2011 (Cth) (Federal Court Rules). The appellant contended that he was not out of time because holiday periods do not count. The respondent’s submission fails to have regard to r 1.61 of the Federal Court Rules. Although the appeal was not filed until 30 January 2020, in circumstances where the orders were pronounced on 12 December 2020, r 1.61(5) applies which provides that “[i]f the time fixed [by the Rules for doing an act] includes a day in the period starting on 24 December in a year and ending on 14 January in the next year, the day is not to be counted”. This rule "suspends the running of time from 24 December to 14 January": Culleton v Balwyn Nominees [2017] FCAFC 8; (2017) 343 ALR 632 at [10]. Accordingly, taking r 1.61(5) into account, it appears that the appellant filed one day within the expiration of the appeal period, and an extension of time is not required. Consideration Even allowing for the difficulties faced by an unrepresented appellant, all the documents filed by the appellant were extensive, at times unrelated to the issues in these proceedings and filed in breach of the Court rules and orders made, as to the content, form and time of filing of the documentation. Aspects of the submissions put are difficult to discern, and contain inter alia, allegations of wrongdoing at every stage of the bankruptcy process, and in effect assert that there have been breaches of various laws including criminal conduct by all involved in the process. The documents also include many matters of which the appellant complains but which have no relevance to these proceedings. The appellant’s oral submissions were in the same vein. The appellant has not identified or established any error in the conclusions of the primary judge, nor the orders made. The conclusions were open, and on the material before him, correct. The primary judge was entitled to accept the evidence he did. For the purposes of responding to the submissions, the respondent grouped what appear to be the appellant’s complaints, as follows: technical issues as to the sequestration order; the Supreme Court proceedings in relation to the extension of caveat proceedings; the Supreme Court costs assessment process; the possession of the Oakhurst property; s 116(2)(g) of the Bankruptcy Act; and, personal criticisms of the primary judge. The grounds are addressed below by reference to those groups, which as best can be ascertained, do reflect the appellant’s written and oral submissions. Criticism of the primary judge Commencing with the appellant’s complaints in respect to the primary judge, which appear to be reflected in the original notice of appeal and expanded upon in the subsequent submissions, those complaints are not established. First, the appellant’s contention that the primary judge was biased because he did not grant him an extension of time is entirely misplaced. As noted above, the appellant’s application was significantly out of time, and although the primary judge concluded he was likely to refuse the extension of time, he ordered the hearing be one for the annulment of the orders. This provided the appellant with a further opportunity to argue his case. In the circumstances, that was a position favourable to the appellant. It provides no proper basis for an allegation of actual or apprehended bias on the part of the primary judge.