Davey v Vrsecky (Trustee), in the matter of Dessmann (Bankrupt)
[2023] FedCFamC2G 551
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Davey v Vrsecky (Trustee), in the matter of Dessmann (Bankrupt) [2023] FedCFamC2G 551
File number: MLG 1877 of 2022 Judgment of: JUDGE RILEY Date of judgment: 12 May 2023 Catchwords: BANKRUPTCY – application for leave to amend an application for leave to proceed against a bankrupt. Legislation: Bankruptcy Act 1966 s.58(3), 82(3). Division: Division 2 General Federal Law Number of paragraphs: 16 Date of hearing: 12 May 2023 Place: Melbourne Advocate for the Applicant: In person Advocate for the First Respondent: Chloe Moorfoot Solicitor for the First Respondent: FAL Lawyers - Francis Abourizk Lightowlers Advocate for the Second Respondent: No appearance ORDERS
MLG 1877 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
IN THE MATTER OF PETER PATRICK DESSMANN, BANKRUPT
BETWEEN: JOHN DAVEY
Applicant
AND: PETR VRSECKY IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF PETER PATRICK DESSMANN
First Respondent
PETER PATRICK DESSMANN
Second Respondent
order made by:
JUDGE RILEY
DATE OF ORDER:
12 may 2023
THE COURT ORDERS THAT:
1.The applications in paragraphs 1(a), (b) and (c) of the amended application filed on 11 October 2022 (for leave pursuant to s.58(3)(b) of the Bankruptcy Act 1966 to proceed against the bankrupt, Peter Patrick Dessman) be dismissed.
2.Leave to file the proposed further amended application emailed to chambers on 10 May 2023 be refused.
3.The matter be adjourned to 8 June 2023 at 10am for hearing on the question of costs.
4.By 4pm on 19 May 2023, the first respondent file and serve:
(a)an affidavit regarding costs; or
(b)a calculation of costs.
5.By 4pm on 2 June 2023, the applicant file and serve any material in response.
AND THE COURT NOTES THAT:
A.The applications in paragraphs 1(a) and (c) of the amended application filed on 11 October 2022 were dismissed with the applicant’s consent.
B.The application in paragraph 1(b) of the amended application filed on 11 October 2022 was dismissed largely because the applicant informed the court that the relevant proceeding, being proceeding BP 307/2021 in the Victoria Civil and Administrative Appeals Tribunal, had been finalised and an amendment would have been futile.
C.Pursuant to r.17.05(2)(a) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021, the court may vary or set aside a judgment or order made in the absence of a party.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
(revised from transcript)JUDGE RILEY:
There is an application before the court for the applicant to file a further amended application. The existing application is as follows:
1.Pursuant to section 58(3)(b) of the Bankruptcy Act 1966 (Cth) that Mr John Patrick Davey be granted leave to commence or proceed with proceedings against the Bankrupt Peter Patrick Dessmann with regards to:
a. Victorian Court of Appeal Proceedings S EAPCI 2022 0061
b. Victorian Civil and Administrative Tribunal Proceedings BP 307/2021
c. An action for compensation pursuant to Sections 588M and 79 Corporations Act 2001.
The applicant has today consented to an order that paragraphs 1(a) and 1(c) of that application be dismissed. The applicant has now filed a proposed amended application where, added to the existing paragraph (b) would be the words “now on appeal to the Victorian Supreme Court SECI 2022 04494,” and, added to the existing application would be a proposed paragraph (d), which would be “an application for rectification to the Victorian Supreme Court from the decision of Magistrate Radford against the bankrupt dated 6 June 2019.”
The matter has had five previous returns before the court to enable the applicant to supplement the material that he has provided and correct various defects in that material.
In any event, there is now before the court, in relation to the Victorian Civil and Administrative Tribunal (“VCAT”) proceeding referred to in paragraph (b) of the application to this court, the applicant’s affidavit affirmed on 13 May 2022. In that affidavit, the applicant said:
16.The Defendants herein described, were also my landlord. They unlawfully attempted to evict me during the debt recovery proceedings.
17. I have commenced an action in VCAT with the file number BP 307 of 2021 against three other Respondents. The cause of action is based in the Australian Consumer Law and the Victorian Retail Leases Act.
18. The proceeding against Dessco has been dismissed due to that company's liquidation.
19. I now require leave of this Court under section 58(3)(b) to proceed against the bankrupt Mr Peter Dessmann.
20. I attach as Exhibit JPD-03 A Statement of Claim already filed in VCAT a co-respondent of Mr Peter Dessmann (the Bankrupt)
Although those paragraphs should refer to the respondents, the application to this court, at the time the applicant filed his affidavit on 13 May 2022, had no respondents or defendants at all. It is, therefore, unclear who the defendants referred to might actually be.
That affidavit also had exhibited to it the points of claim in the VCAT matter. The points of claim had the applicant in the present application as the applicant in the VCAT proceeding and a company by the name of Alexandria Superannuation Pty Ltd (ACN 605 322 969) as the proposed first defendant.
According to the points of claim, a company by the name of “Dessco”, or, alternatively, the proposed first respondent, was the corporate trustee for the Alexandria Superannuation Fund. The trust was the landlord of a particular property which was leased to the applicant. Later in the proposed points of claim, there is reference to a second, third and fourth respondent. However, they were not identified in the document itself. As mentioned previously, the proposed points of claim only referred to a proposed first respondent.
In any event, the applicant has told the court today that the VCAT matter has been determined so it is no longer appropriate for the applicant to be given leave to proceed against the bankrupt in that matter. In view of that development, what the applicant seeks is to amend his application to this court to be given leave under s.58(3) of the Bankruptcy Act1966 (“the Act”) to proceed against the bankrupt, Peter Patrick Dessmann, in the applicant’s appeal from the VCAT decision.
However, the applicant has not provided any information about how the bankrupt would be involved in that proceeding. As the applicant was told by the Court of Appeal in S EAPCI 2022 0061, a person cannot be joined to an appeal if they were not a party to the proceeding below. On the information before this court, the only respondent to the proceeding below was Alexandria Superannuation Pty Ltd. Therefore, it is very difficult to see how the bankrupt could be joined to the appeal to the Victoria Supreme Court from the VCAT decision.
Moreover, the trustee in bankruptcy has filed an affidavit which says that the bankrupt, Mr Dessmann, has nothing in his estate. The estate may have a claim worth about $26,000 but that is vastly offset by the costs that the trustee has already incurred. The effect of that is that there would be no return to creditors at all, and, therefore, no point in proceeding against the bankrupt even if he could be joined to the appeal from the VCAT decision.
For these reasons, I do not grant leave to amend the existing application to add to paragraph (b) the words “now on appeal to the Victorian Supreme Court SECI 2022 04494”. Obviously, without leave to amend, the applicant could not be given leave as sought in paragraph (b) of the application because the VCAT application has been finalised.
The new proposed paragraph (d) of the application to this court is for the applicant to have leave to proceed against the bankrupt for rectification of some orders made by the Magistrates’ Court. The Magistrates’ Court orders were appealed to the Supreme Court of Victoria. Justice Keogh determined the appeal. Justice Keogh’s decision was further appealed to the Court of Appeal.
Justice Keogh considered, and it seems that it is no longer disputed, that to the extent that the magistrate made certain orders for compensation to be paid by the bankrupt to the applicant, that compensation could not be assessed by the Costs Court, contrary to the magistrate’s orders. In addition, Justice Keogh also apparently held, and nobody now disputes, that the magistrate was wrong in saying that the compensation ordered by the magistrate could be calculated under the practitioner’s remuneration order.
The position is that while the magistrate did make orders for compensation to be payable by the bankrupt to the applicant, there are absolutely no funds in the bankrupt estate and no reasonable prospect of any return to creditors. Therefore, there is no benefit whatsoever in leave being granted for the applicant to be able to proceed against the bankrupt.
In an affidavit filed by the applicant late yesterday in support of this application, the applicant claimed that the compensation ordered by the magistrate was actually a penalty within the meaning of s.82(3) of the Act. That subsection provides that penalties or fines imposed by a court in respect of an offence against a law, whether a law of the Commonwealth or not, are not provable in bankruptcy. The court asked the applicant what the offence was that the bankrupt had committed in relation to the order for compensation. The applicant was unable to identify any offence, and, in effect, conceded that s.82(3) would not apply and the debt was in fact provable.
All in all, it seems to me that there would be no benefit to anyone in granting the applicant leave to amend the existing application to add the proposed paragraph (d) because there would be no benefit in giving the applicant leave to proceed against the bankrupt. Consequently, leave to add the proposed paragraph (d) to the existing application will not be granted.
I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of Judge Riley. Associate:
Dated: 12 May 2023
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