Deputy Commissioner of Taxation (Cth) v Bourke
[2018] VSC 380
•11 July 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2017 02211
| DEPUTY COMMISSIONER OF TAXATION FOR THE COMMONWEALTH OF AUSTRALIA and COMMONWEALTH OF AUSTRALIA | Plaintiffs |
| v | |
| KATHLEEN ELLEN BOURKE and ROBERTA WILLIAMS | First Defendant Second Defendant |
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JUDGE: | CAMERON J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 22 and 26 June 2018 |
DATE OF JUDGMENT: | 11 July 2018 |
CASE MAY BE CITED AS: | Deputy Commissioner of Taxation (Cth) v Bourke |
MEDIUM NEUTRAL CITATION: | [2018] VSC 380 |
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PRACTICE AND PROCEDURE – Appeal against summary judgment for possession and sale of land by a mortgagee – Defendants executors of estate of deceased person – Whether refusal of oral application for adjournment contrary to natural justice and procedural fairness – Whether a fair hearing given in accordance with Charter of Human Rights and Responsibilities Act 2006 (Vic) s 24 – Whether finding that no reasonable prospect of success was error of law and fact – Whether trial should be ordered at Court’s discretion, despite prospects, in interest of justice – Whether matter in public interest – No ground of appeal made out – Khouri v Khoury [2018] VSC 305 considered – Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392 considered – Civil Procedure Act 2010 (Vic) ss 63, 64 considered.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr J D McKay | Australian Government Solicitor |
| For the First Defendant | No appearances – Excused from attending | - |
| For the Second Defendant | Mr J M Selimi | - |
HER HONOUR:
What is this case about?
This case is an appeal from a decision of the Honourable Associate Justice Derham made 8 February 2018.
The case before his Honour was a summary judgment application by the first and second plaintiffs, the Deputy Commissioner of Taxation of the Commonwealth of Australia (‘DCT’) and the Commonwealth of Australia (collectively ‘the plaintiffs’) for the possession of land at 82 Primrose Street Essendon (described as Lot 1 on Plan of Division 506108K, Certificate of Title Volume 11431 Folio 319 (‘the Property’). His Honour ordered that there be summary judgment for DCT for possession of the Property. The Court also declared that the DCT was entitled to sell the Property.
The Property is presently occupied by the second defendant, Roberta Williams (‘Ms Williams’).
Ms Williams appeals the orders made by Derham AsJ. I will set out the grounds of appeal below.
The first defendant, Kathleen Ellen Bourke (‘Ms Bourke’) makes no appeal against his Honour’s orders and sought leave to be excused from appearing at the hearing of this appeal, which I granted. Ms Bourke, however, did make submissions in relation to costs.
Background facts
The background facts of this matter were well summarised in paragraphs [5] to [20] inclusive in the judgment of Derham AsJ dated 16 March 2018.
In short, the facts to which I have regard are as follows. Mr George Williams (‘Mr Williams’) died on 12 May 2016. He was the registered proprietor of the Property. Mr Williams appointed Ms Bourke and Ms Williams as executors of his estate by his will dated 16 December 2010. Probate of Mr Williams’ will was granted by this Court on 14 February 2017 (to Ms Bourke) and 3 April 2017 (to Ms Williams). Ms Williams is currently in possession of the Property.
Mr Williams had issues with the Australian Taxation Office (‘ATO’) in relation to his income tax for the years ending 30 June 2001, 2002, 2003 and 2004.
These issues were not resolved, resulting in the institution of proceedings in this Court for outstanding tax. That proceeding was discontinued by the DCT on 19 June 2009. The circumstances of the discontinuation of that proceeding are as follows, and appear uncontroversial:
(a) On or about 21 January 2009, the ATO was approached by representatives of the Victoria Police. The purpose of the discussion was to determine whether the Victoria Police would pay the tax debt of Mr Williams.
(b) Communications followed as to the details of the proposed payment. These conversations involved police officers in the Victoria Police at the highest level, including Commissioner Simon Overland and Inspector Peter Wilkins.
(c) The evidence is that on 17 March 2009, the Victoria Police (Mr Wilkins) informed the ATO (Mr Robin Allan Best) that Mr Overland had ‘okayed’ the payment of Mr Williams’ outstanding tax debt. However, according to the evidence, Mr Wilkins told Mr Best that the sum which might be applied to meet Mr Williams’ tax debt should be held in abeyance by the ATO until the Victoria Police authorised its release.
(d) Mr Best discussed Mr Wilkins’ request with a staff member of the ATO (Mr Zafiriou), who advised Mr Best that the payment would be held in a suspense account, and would not be used to pay Mr Williams’ tax debt until the Victoria Police so instructed. On 15 June 2009, the Victoria Police paid $576,000 to the ATO by cheque, to be applied (according to the ‘Advice to Payee’ that was attached) to the ATO ‘holding account’.
(e) On 17 July 2009, the ATO sent Mr Williams a letter stating, in effect, that $576,000 had been applied in payment of his tax debt, and that his account now had a nil balance.
(f) On 20 July 2009, an ATO employee (Mr Rafferty) emailed Mr Best, attaching a copy of the letter that the ATO had sent to Mr Williams, and asking whether the payment made by the Victoria Police to the ATO on 15 June could be transferred from the suspense account into Mr Williams’ tax accounts.
(g) Mr Best did not become aware of the letter of 17 July 2009, or the email of 20 July 2009, until 28 July 2009. He then contacted Mr Zafiriou, who told him that the letter of 17 July 2009 had been issued in error.
(h) Later on 28 July, Mr Rafferty, having been advised by Mr Best that the letter of 17 July 2009 had been issued in error, issued a correction letter to Mr Williams, informing him that his tax accounts had not been credited by $576,000, and that he remained in debt to the ATO to the sum of $574,296.90.
(i) Relevantly, the letter to Mr Williams of 28 July 2009 stated the following:
Unless the payment in full is received by close of business on the date shown hereunder, it is our intention to issue legal proceedings for recovery of the outstanding amount. This legal action for recovery will commence without further notice. Legal costs incurred in connection with this action may also be payable by you.
…
You are reminded that where any amount is not paid by the due date, the general interest charge (GIC) accrues on the outstanding balance until the entire amount has been paid. Interest is calculated on a daily compounding basis. GIC is currently imposed at a rate of 10.13% per annum (reviewed every three months). The GIC is tax deductible in the year that it is incurred.
It is important that you are aware of your rights and obligations when dealing with the Tax Office. These are explained in the taxpayers’ charter, along with the service and other standards you can expect from the Tax Office. To view the taxpayers’ charter visit our website at To get a printed copy of the Taxpayers’ Charter-what you need to know (NAT 2548) phone our distribution service on 1300 720 092.
FINAL DATE:- 11 August 2009
(j) On 18 September 2009, Mr Best spoke with Mr Wilkins to find out whether the money in the suspense account could be applied to Mr Williams’ tax accounts. Mr Wilkins advised that there remained an ‘issue’ preventing the payment from being made. He did not say what that issue was, and never instructed the ATO to make any payment to discharge Mr Williams’ tax liability.
(k) On 22 February 2010, the Victoria Police sent Mr Best a fax, stating that ‘the proposed arrangements relating to the taxation affairs of Mr Williams are no longer an option’, and that any offer by the Victoria Police to make any payments towards Mr Williams’ tax debts had been withdrawn.
(l) The ATO subsequently repaid the $576,000 to the Victoria Police by cheque on 12 July 2010.
Following the apparent collapse of the proposed arrangements between the Victoria Police and Mr Williams, the DCT commenced proceeding S CI 2011 05571 against Mr Williams on or about 18 October 2011. The proceeding sought income tax, interest and penalties in the amount of $559,745.13, and a running balance account deficit debt in the amount of $183,306.97.
In his amended defence in proceeding S CI 2011 05571, Mr Williams contended that there had been an arrangement between the State of Victoria (‘the State’) and Mr Williams’ son, the late Mr Carl Williams, under which the State promised to pay (or arrange the waiver) of Mr Williams’ tax debt, and that this agreement had been performed by the State by, inter alia, the payment by the Victoria Police to the DCT of $576,000 on 15 June 2009.
On 25 September 2012, Mr Williams, Ms Williams, and Ms Dhakota Lee Williams (by her litigation guardian Ms Williams) commenced proceeding S CI 2012 05437 against the State and the Commissioner of Taxation for the Commonwealth, alleging that an agreement had existed between the State and Mr Williams, on similar terms as had been alleged by Mr Williams in proceeding S CI 2011 05571.
On 6 May 2013, by a letter to the Australian Government Solicitor, Mr Williams’ solicitors Lennon Mazzeo offered to settle proceedings S CI 2011 05571 and S CI 2012 05437, on the following terms:
(a) Judgment would be entered against Mr Williams in proceeding S CI 2011 05571 in the sum of $576,000, with no order as to costs. Mr Williams would grant a mortgage over the Property to secure the judgment debt;
(b) Judgment would be entered in favour of the DCT in proceeding S CI 2012 05437, with no order as to costs; and
(c) The DCT would not enforce the judgment in proceeding S CI 2011 05571 until the conclusion of proceeding S CI 2012 05437, or 4:00 p.m. on 7 May 2018, whichever came first.
This settlement offer was accepted by the Australian Government Solicitor on 6 May 2013 (the ‘Settlement Agreement’) on behalf of the DCT. Consent orders were duly made in proceeding S CI 2011 05571 and proceeding S CI 2012 05437 on 6 May 2013 and 14 May 2013, respectively.
On or about 2 July 2013, in accordance with the Settlement Agreement, Mr Williams granted a mortgage over the Property to the DCT as representative of the Commonwealth of Australia. The mortgage was registered on the title of the Property on 2 August 2013, and was drafted so as to secure the payment of the judgment debt in proceeding S CI 2011 05571 (‘the mortgage’).
On 29 July 2015, Spicer Lawyers, who at that time represented the remaining plaintiff in proceeding S CI 2012 05437, wrote to the Australian Government Solicitor stating that on that day, the terms of the Settlement Agreement had been approved by Derham AsJ. Accordingly, on 30 July 2015, upon receipt of minutes of consent orders dated 29 July 2015, the Honourable Justice T Forrest issued authenticated orders in proceeding S CI 2012 05437 dismissing the claims of the first and second plaintiffs.
Under the Settlement Agreement, the judgment debt in proceeding S CI 2011 05571 became enforceable against Mr Williams from the conclusion of proceeding S CI 2012 05437. Mr Williams did not pay any part of the judgment debt to the DCT on that date, or on any date thereafter. This, on its face, entitled the DCT to take possession of the Property and to exercise those rights conferred under the Transfer of Land Act 1958 (Vic) (‘TLA’) in respect of the Property. In short, to take possession of the Property and to exercise its power of sale.
The DCT wrote to Mr Williams on 31 August 2015, demanding payment of the $576,000 due under the orders made on 6 May 2013 in proceeding S CI 2011 05571. As I have observed, this money was not paid.
Mr Williams died on 12 May 2016. Notices of default were served on the defendants on 22 March 2017, demanding payment of money secured by a mortgage, pursuant to s 76 of the TLA.
His Honour’s orders – the subject of this appeal
Derham AsJ made orders, as I have said, on 8 February 2018, expressing ex tempore reasons for doing so at the time.
Subsequently, his Honour amplified those reasons in his judgment dated 16 March 2018.
It is convenient to set out the orders and declaration made by his Honour, from which this appeal flows:
1.Pursuant to ss 61 and 63 of the Civil Procedure Act 2010 (Vic), there be summary judgment for the first plaintiff against the defendants.
2.The first plaintiff recover possession of the land known as 82 Primrose Street, Essendon, in the State of Victoria, being the land more particularly described as Lot 1 on Plan of Subdivision 506108K, and being the land more particularly described in Certificate of Title Volume 11431 Folio 319 (‘the Property’).
3.The plaintiffs’ and the first defendant’s costs of the proceeding are reserved.
4.By 16 February 2018, the plaintiffs file and serve on the defendants any outline of submissions and any further affidavit material in relation to the question of the costs of the proceeding.
5.By 23 February 2018, the defendants file and serve on the plaintiffs any outline of submissions and any further affidavit material in relation to the question of the costs of the proceeding.
6.The application is adjourned, so far as it concerns the costs of the proceeding and any application by the first defendant pursuant to Order 54 of the Rules in relation to the costs of the proceeding, to 8 March 2018 at 10:30am in Court 3, 436 Lonsdale Street, Melbourne.
THE COURT DECLARES THAT:
1.The first plaintiff is entitled to exercise its power of sale in respect of the Property pursuant to s 77(1) of the Transfer of Land Act 1958 (Vic).
Grounds of appeal
Ms Williams advanced five grounds of appeal against the decision of Derham AsJ, as follows.
Ground 1:The refusal of an oral application for adjournment was contrary to natural justice and procedural fairness.
Ground 2:His Honour failed to accord a fair hearing pursuant to the Charter of Human Rights and Responsibilities Act 2006 (Vic) s 24.
Ground 3:His Honour, as an Associate Judge, lacked jurisdiction to hear application for summary judgment without a referral from a Justice of the Supreme Court.
Ground 4:The finding that second defendant had no reasonable prospect of success was an error of law and fact.
Ground 5:The finding that first plaintiff is entitled to exercise a power of sale in respect of the Property was an error of law.
At the hearing of the appeal, Ms Williams abandoned Grounds 3 and 5. Accordingly, it is not necessary for me to deal with these matters.
Legal principles – Appeal from an Associate Judge
Under r 77.06 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), an appeal may be brought against a decision of an Associate Judge.
Prior to 1 January 2013, appeals from orders of Associate Judges were by way of hearing de novo. Now, error must be demonstrated on the part of the Associate Judge before appellate power can be exercised.[1] Such an error may be ‘legal, factual or discretionary’.[2]
[1]Schreuders v Grandiflora Nominees Pty Ltd [2014] VSC 310, [4] (Garde J). See also Hou v Westpac Banking Corporation [2014] VSC 606.
[2]Wilson v Building Commission of Victoria [2015] VSC 629 [8] (John Dixon J).
The operation of the current r 77.06 was considered by Ferguson J (as her Honour then was):
[A]ppeals [under r 77] are no longer by way of rehearing de novo. Instead, they are rehearings which, in the absence of further evidence or a change in the law, ordinarily require the appellant to show error on the part of the Associate Judge before appellate power may be exercised. In addition, if the orders from which an appeal is brought relate to a matter of practice and procedure (as the orders in this case do), an appellate court will exercise particular caution in reviewing the decision.[3]
[3]Oswal v Carson [2013] VSC 355 [11]. See also GLS v Goodman Group Pty Ltd(t/a Goodman Group Lawyers) [2015] VSC 627 [4].
The distinction between a hearing de novo and an appeal by way of rehearing was succinctly explained by the High Court in Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission & Ors:
Ordinarily, if there has been no further evidence admitted and if there has been no relevant change to the law, a court or tribunal entertaining an appeal by way of rehearing can exercise its appellate powers only if satisfied that there was an error on the part of the primary decision-maker. That is because statutory provisions conferring appellate powers, even in the case of an appeal by way of rehearing, are construed on the basis that, unless there is something to indicate otherwise, the power is to be exercised for the correction of error. However, the conferral of a right of appeal by way of a hearing de novo is construed as a proceeding in which the appellate body is required to exercise its powers whether or not there was error at first instance.[4]
[4](2000) 203 CLR 194, 203–4 [14] (Gleeson CJ, Gaudron and Hayne JJ).
In this proceeding, therefore, it is incumbent upon the appellant to demonstrate some error on the part of Derham AsJ, whether factual, legal or discretionary, in arriving at his decision. It does not fall to the Court to hear the matter afresh.
In Mainstream Construction (Aust) Pty Ltd v Carr Electrical Pty Ltd, Cavanough J dealt with an interlocutory order which was based on non-compliance with a previous order. His Honour discussed whether a distinction should be drawn between an appeal from a final decision of an Associate Judge and an appeal from an interlocutory order. His Honour cited Freeman v Rabinov and found that such a distinction is unwarranted, that where injustice in the result would flow from the operation of an interlocutory order, an appeal should not be barred because of the interlocutory nature of the order.[5]
[5][2014] VSC 317 [81]-[85] citing Freeman v Rabinov [1981] VR 539.
Legal principles – when may a proceeding be summarily dismissed?
Counsel for Ms Williams contended that a proceeding should never be summarily dismissed if, in the circumstances, it would be unjust to do so.[6] Counsel emphasised that the Court’s power of summary dismissal, set out in s 63 of the Civil Procedure Act, is expressly subject to s 64 of that legislation.
[6]Civil Procedure Act 2010 (Vic) s 64 (‘Civil Procedure Act’).
In the recent decision of Khouri v Khoury [2018] VSC 305, the Honourable Associate Justice Derham summarised the applicable law:
The power to give summary judgment must be exercised in accordance with the overarching purpose of the Act and taking into account the fact that, if granted, a party will be deprived of the chance to pursue its claim or defence.
These principles were confirmed by the Court of Appeal in Mandie v Memart Nominees Pty Ltd where Kyrou, Ferguson and McLeish JJA observed:
According to Lysaght: a prospect which is not ‘real’ is ‘fanciful’; although the ‘no real prospect of success’ test in s 63(1) of the CP Act is more liberal than the common law test of ‘hopeless’ or ‘bound to fail’, there may not be much difference between them in practice; and, properly understood, a real question to be tried is one which realistically might result in the respondent to an application for summary judgment succeeding in the proceeding …
If there is no real prospect of success, a court may nevertheless allow a matter to proceed to trial if:
(a)it is not in the interests of justice to summarily dispose of the proceeding (s 64(a)); or
(b)the dispute is of such a nature that only a full hearing on the merits is appropriate (s 64(b)).
Whether a proceeding should be allowed to go to a full hearing on the merits must be determined according to the circumstances of each case.[7]
[7]Khouri v Khoury [2018] VSC 305 [29]-[32], quoting Mandie v Memart Nominees Pty Ltd [2016] VSCA 4 [45].
Counsel for Ms Williams referred to the recent High Court decision of Trkulja v Google LLC[8] as having ‘reminded every lawyer in this country to be careful to exercise extreme caution when seeking to deprive a person of their right to a trial’. I did not take counsel to mean that the decision imposed a higher standard for the grant of summary judgment than previously applied in Victoria (it clearly does not).[9]
[8][2018] HCA 25.
[9]Ibid [20]–[23] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).
To the extent that the decision in Trkulja can be read as urging particular caution, this must be understood in the context of that proceeding. Their Honours’ finding that the proceeding before the Victorian Court of Appeal ought not have been summarily determined ‘until after discovery, and possibly at all’ was evidently based on its novel and complex nature, and the fact that summary judgment had been awarded based on the ‘untested assertions of Google deponents’.[10] As will be become clear, the proceeding before Derham AsJ was not analogous to such a situation.
[10]Ibid [39].
Counsel for Ms Williams also drew attention to the statement of the Victorian Court of Appeal in Hausman v Abigroup that ‘the standard of diligence required of the defendant in preparing a case in opposition to [an] application, especially if under pressure of time, is perhaps not as high as that required in preparing for trial’.[11] This may be so. However, the cited paragraph was qualified by their Honours in the following passage:
Nonetheless, the defendant is required to use reasonable diligence to put before the Court, albeit in a summary form, all the evidence relied on in the defence.
…
The authorities suggest that an affidavit in opposition to an application for summary judgment must provide sufficient particulars to enable the defence case to be properly understood. A bald denial that the defendant is indebted to the plaintiff will not suffice. The affidavit should, so far as practicable, deal specifically with the plaintiff’s claim and the facts set out in the supporting affidavit to establish that claim. It should state clearly and concisely what the defence is, and identify the facts relied upon in support of that defence.[12]
[11]Hausman v Abigroup Contractors Pty Ltd [2009] VSCA 288 [63] (Weinberg and Bongiorno JJA, Williams AJA).
[12]Ibid [64]–[65].
Grounds of appeal: Consideration and analysis
Ground 1
Was the refusal of an oral application for adjournment by his Honour contrary to natural justice and procedural fairness?
In my opinion, no.
Courts and tribunals which are bound by the rules of natural justice must afford parties a reasonable opportunity to present their case.[13] Accordingly, the refusal of an adjournment may, in certain circumstances, constitute a miscarriage of justice, and the resultant decision of the court will be set aside. However, it is incumbent on an appellant from a refusal of an adjournment to establish that the refusal deprived him or her of the opportunity to put forward a ‘sustainable proposition that may have affected the outcome of the proceeding’.[14] Ms Williams has not satisfied this burden.
[13]Collection House Ltd v Taylor [2004] VSC 49 [20] (Nettle J).
[14]Opeka v Mackie Group Pty Ltd [2003] VSC 183 [35] (Nettle J).
The foundation of the argument advanced by Ms Williams in support of this ground of appeal rested on the following key matters.
Ms Williams, it was submitted, was not in a position to give instructions to her legal advisors to advance the application for an adjournment of the summary judgment application, or to defend the substantive application for summary judgment, as she was hospitalised at the time.
It is to be noted that Ms Williams was legally represented at the hearing of the summary judgment application on 8 February 2018 by Mr Radebe. Mr Radebe sought an adjournment of the hearing of the application, which his Honour refused.
In support of the application for an adjournment, Mr Radebe put certain medical reports in relation to the health of Ms Williams before his Honour, including letters from Epworth Freemasons Hospital (‘the Epworth’). The documents put before his Honour showed that Ms Williams had been an inpatient at the Epworth between 21 and 24 July 2017, following a surgical procedure. There was also a medical certificate by a haematologist and physician which showed that Ms Williams had been admitted to the Epworth a number of times as a result of severe shortness of breath and cough which was, on each occasion, settled with medication.
His Honour observed that Ms Williams’ most recent stay in hospital, as supported by the documentation, was in December 2017. A letter dated 5 February 2018 showed that Ms Williams undertook a medical procedure on 18 December 2018 (which his Honour presumed was a mistake, and the reference ought to have been to 18 December 2017).
His Honour was not convinced that Ms Williams’ medical history prevented her from attending to the defence of the application before him, and consequently refused the application for an adjournment. On the refusal of the application to adjourn, Mr Radebe informed the Court that he had no instructions to oppose the application for summary judgment and sought leave to withdraw. That leave was granted.
Following Mr Radebe’s withdrawal, a Mr Strangio sought to be heard by the Court on behalf of Ms Williams. Mr Strangio is not a legal practitioner, but told the Court that he spoke on the basis of assisting Ms Williams. Mr Strangio informed the Court that he had been assisting Ms Williams in the litigation for the last six or seven months, preparing documents. No evidence was put before the Court as to the nature of Mr Strangio’s relationship with Ms Williams.
His Honour observed that Mr Strangio may have been in a position to assist Ms Williams as a McKenzie friend,[15] but in the absence of Ms Williams to advance that argument, Mr Strangio would not be recognised as such. His Honour also correctly noted that Ms Williams, and not Mr Strangio, would ‘need to be the person making the submissions to the court’.
[15]A McKenzie friend is an adviser who assists a self-represented person in court proceedings. They may not address the court as an advocate. See McKenzie v McKenzie [1970] 3 All ER 1034; Apostolou v Commissioner of State Revenue [2008] VSC 332 [20] (Mandie J).
Based on the evidence before him, and the submissions (such as they were) made to him, his Honour refused the application for an adjournment.
His Honour observed that Ms Williams had ample opportunity to prepare for the application before him for summary judgment, and failed to do so. His Honour did not accept, based on the evidence before him, that Ms Williams was so unwell that she was incapable of dealing with the substantive matters before the Court, given that she had both a solicitor and counsel representing her during the course of the proceeding.
Counsel for Ms Williams in the present proceeding suggested that his Honour’s refusal to hear Mr Strangio amounted to a failure to accord a fair hearing to Ms Williams. It must be said that counsel’s submissions on this point were somewhat confused. In relation to Mr Strangio, the following exchange occurred before me:
MR SELIMI: Your Honour will see this in the transcript which is from pp.1 through to 12 of the transcript. It’s interesting and supports my arguments in respect of natural justice too, Your Honour, because I’m not criticising His Honour for refusing to hear Mr Strangio. Does Your Honour recall the involvement of Mr Strangio perhaps? If I can refer - - -
…
MR SELIMI: His name is mentioned - - -
HER HONOUR: Yes.
MR SELIMI: Throughout the transcript. In fact it would seem he was bobbing his head up somewhat in contempt, I might say. He was bobbing his head up every now and again, to have his two bobs’ worth, and His Honour clearly stopped him from speaking or purporting to speak on behalf of Roberta Williams. I don’t criticise that, Your Honour, but I should say that it exemplifies, or illustrates, the denial of procedural fairness that my client suffered before His Honour in not having the benefit of legal representation. We have this bush lawyer trying to have his say on behalf of the estate, and he was precluded from making submissions. But in any event, if I can go back to what I was going to say earlier. Page 13 of the transcript, G458 – perhaps just to finish what I was saying about Strangio. Your Honour, it simply illustrates that here we had a case where the solicitor withdrew and we had a person purporting to act as a McKenzie friend, but His Honour said, “Well, because your client’s – because the person is not here, you can’t act as a McKenzie friend and you can’t speak,” which is quite – it’s quite right, it’s correct.
HER HONOUR: That’s correct, isn’t it?
MR SELIMI: But it does exemplify the injustice of the situation, and illustrates, in my submission, that there was not a fair hearing before His Honour by reason of the absence of legal representation and in the absence of an opportunity to give evidence once Ms Williams recuperated from her hospitalisation.
Even though counsel for Ms Williams conceded the correctness of his Honour’s decision not to recognise Mr Strangio as a McKenzie friend, the submission was nevertheless pressed that this decision by his Honour brought about an injustice, such that the proceeding before his Honour was contrary to natural justice and procedural fairness. There was no real foundation advanced in support of this submission which rose above mere assertion. Accordingly, in my opinion, this submission is clearly inconsistent and misconceived, and cannot succeed.
It is important to note that the matters raised by Ms Williams in her defence to proceeding S CI 2011 05571 echo those matters now sought to be raised by her in her defence to the summary judgment application.
As submitted by the plaintiffs:
In any event, the Second Defendant’s primary argument simply re-hashes claims already made and compromised in proceedings S CI 2012 05437 and S CI 2011 05571. By an amended defence dated 7 March 2013 filed in S CI 2011 05571, the Deceased contended at paragraphs 32 to 35 that there had been an agreement between the State of Victoria and Carl Williams pursuant to which the State of Victoria had promised Carl Williams that it would pay (or arrange the waiver of) the Deceased’s tax liabilities, and that the State of Victoria performed this payment agreement by the payment of $576,000 to the Deputy Commissioner of Taxation on 15 June 2009. Similar assertions were made at paragraphs 50 to 40H of the statement of claim filed by the Deceased in proceeding S CI 2012 05437.
This was not refuted by Ms Williams.
As such, Ms Williams must have discussed the detail of these issues with her legal advisers, at least at a level that would permit the preparation of her defence in proceeding S CI 2011 05571. This state of affairs would have made it easier for Ms Williams to instruct her legal advisers in the defence of the summary judgment application.
I accept that Ms Williams, despite her troubled medical history and frequent admissions to hospital, was capable of, and had the opportunity to, properly prepare her defence to the summary judgment application. Ms Williams’ hospital admissions were of relatively short duration, with the exception of her hospital stay during July 2017, which was well before the filing of the summons for summary judgment in October 2017.
Since October 2017, Ms Williams was aware of the impending summary judgment application. Counsel for the plaintiffs submitted that Ms Williams failed to comply, without explanation or notification, with all directions made by the Court leading up to the hearing of the summary judgment application. Counsel for Ms Williams did not refute this point.
Indeed, counsel for the plaintiffs submitted to the Court that, based on the medical evidence before his Honour, there were some 81 days where Ms Williams had the opportunity to instruct her counsel and solicitor in relation to the summary judgment application. Again, this was not refuted by counsel for Ms Williams.
At the hearing of the application before me, leave was sought by Ms Williams to file a further affidavit exhibiting medical reports and records relating to both her and Mr Williams.[16] There being no objection to the receipt of that affidavit by the Court, I granted leave for the affidavit to be filed. In my opinion, the additional evidence does not improve the position of Ms Williams, in the sense that it does not demonstrate an ongoing condition that would have prevented her from properly attending to the defence of this matter.
[16]A copy of the last will and testament of Mr Williams dated 16 December 2010 was also exhibited.
A medical certificate, dated 5 June 2018, was provided by Dr Annabel Tuckfield, a haematologist and physician at the Epworth. It chronicles some seven instances where Ms Williams had been an inpatient at that hospital. The duration of Ms Williams’ admissions over these seven occasions vary. The reason for her admissions, however, was said to be ‘intractable migraine requiring heavy analgesia and rest’.
Most of the medical records advanced are economical, and to the extent that some are not, they do not assist Ms Williams’ case. By way of example, Ms Williams was an inpatient at the Epworth from 8 February 2018 to 19 February 2018 in respect of, as I have said, ‘intractable migraine’. This was also the reason for her admission to the Epworth between 15 and 16 January 2018. However, it is to be noted that on 15 January 2018, the clinical report recording Ms Williams’ admission to the hospital on that day states as follows:
Examination:
Awake and alert.
Nil obvious distress.
Vitals stable.
CVS HSx2, no murmurs/gallops, good peripheral perfusion.
Chest some scattered wheezing bilaterally.
Abdo distended, tender on palpation generally, no guarding or rigidity.
It was urged upon the Court that the mere fact of Ms Williams’ medical issues rendered her incapable of providing competent instructions in this matter.
I do not agree.
Not all medical conditions preclude functionality in a decision making sense. Indeed, in Ms Williams’ case, as I have observed, the clinical report on her by the Epworth dated 15 January 2018 specifically states that she was awake, alert and exhibited no obvious distress.
As expressed by Bryson J in Newjur, infirmity is not an absolute excuse for failing to provide instructions or otherwise act in their own best interests in a proceeding:
Litigants who have difficulties in giving instructions are not for that reason excused from giving any attention to their litigation; while allowances must in justice be made for infirmity, infirmity does not exempt the infirm from all action in their own interests, so that it may be necessary for them to make special arrangements for their legal advisers to attend on them, or for them to get other assistance in preparing for their litigation.[17]
[17]Newjur Pty Ltd v Pangas (1997) 140 FLR 194, 196.
There was no evidence before the Court which would form a proper basis upon which the Court could conclude that Ms Williams was incapable of providing instructions in relation to the adjournment or indeed the summary judgment application itself on and/or leading up to the hearing of the matter on 8 February 2018. Indeed, as submitted by counsel for the plaintiffs, Ms Williams’ presence was not required at the hearing before his Honour. As no evidence beyond affidavits filed in the proceeding are relied upon in summary judgment applications, it is commonplace for parties not to appear at the hearing.
Conclusion
For the reasons set out above, I do not consider that his Honour fell into error in refusing to grant an adjournment of the summary judgment application. I do not consider that his Honour’s refusal was contrary to natural justice and procedural fairness.
Accordingly, Ground 1 is dismissed.
Ground 2
Was there a failure to accord a fair hearing pursuant to s 24 of the Charter of Human Rights and Responsibilities Act 2006 (Vic) (‘the Charter’)?
Section 24 of the Charter states:
24 Fair hearing
(1) A person charged with a criminal offence or a party to a civil proceeding has the right to have the charge or proceeding decided by a competent, independent and impartial court or tribunal after a fair and public hearing.
(2) Despite subsection (1), a court or tribunal may exclude members of media organisations or other persons or the general public from all or part of a hearing if permitted to do so by a law other than this Charter.
(3) All judgments or decisions made by a court or tribunal in a criminal or civil proceeding must be made public unless the best interests of a child otherwise requires or a law other than this Charter otherwise permits.
Sub-ss (2) and (3) were not pressed by counsel for Ms Williams and are not relevant to this application. This leaves only s 24(1) for consideration.
Pound and Evans suggest that ‘the three express elements to s 24(1) are that the hearing be: (i) “fair”; (ii) “public”; and (iii) decided by a “competent, independent and impartial court or tribunal”‘.[18]
[18]Alistair Pound and Kylie Evans, An Annotated Guide to the Charter of Human Rights and Responsibilities (Lawbook Co, 2008) 165.
Counsel for Ms Williams did not press any argument in relation to the question of whether the hearing before his Honour was one decided by a ‘competent, independent and impartial court or tribunal’. Relevantly, the transcript reads:
MR SELIMI: I do not in any shape or form seek to suggest that the great Associate Justice, Honourable Associate Justice Derham, was not independent or impartial.
This leaves only the question of whether a fair and public hearing was afforded to Ms Williams.
The element of ‘fairness’ relates to procedural fairness, rather than substantive fairness. It does not involve an assessment of the merits of the particular decision; rather, it is synonymous with the principle of ‘equality of arms’, which holds that a party must have a reasonable opportunity to put his or her case under conditions that do not place him or her at a substantial procedural disadvantage relative to the opposing party.[19]
[19]See, e.g., Ragg v Magistrates’ Court of Victoria& Anor (2008) 18 VR 300, 310 [45]–[47] (Bell J).
Counsel for Ms Williams submitted that the Charter does not impose a different standard of procedural fairness than the common law. The relevant passage of the transcript is extracted below:
MR SELIMI: It’s been well known and well regarded as being consistent with the common law principle of natural justice, procedural fairness. It doesn’t add, in my submission, it doesn’t add anything of great substance, because it’s consistent with the common law principle of natural justice.
The common law principle of natural justice, the most important of which is the right to be heard, is really part and parcel of the obligation to conduct a hearing, a fair hearing. There is an obligation in s.24 of the Charter of Human Rights and Responsibilities Act to conduct a hearing fairly, which includes the obligation to provide an opportunity to be heard...
For the same reasons that were out in addressing Ground 1 of this appeal, I find that Ms Williams received a fair hearing within the meaning of s 24(1) of the Charter.
Ms Williams had ample opportunity to prepare for the application for summary judgment, and failed to do so, despite having legal assistance. Further, the refusal of Derham AsJ to hear Mr Strangio was appropriate, as was effectively conceded by counsel for Ms Williams. Nothing has been put before the Court that would suggest that Ms Williams suffered a substantial procedural disadvantage, or was otherwise denied a fair hearing.
The requirement that proceedings be ‘public’ is synonymous with the common law principle of open justice. The principle helps maintain public confidence in the administration of justice. Moreover, by exposing proceedings to public scrutiny, it helps ensure their fairness.
There is no indication that any person associated with the parties, or indeed any member of the public, was excluded from the hearing. The hearing was conducted in open court. The judgment of Derham AsJ was, and is, freely available to the public. Indeed, there is nothing to suggest that the proceeding that is the subject of this appeal was anything other than public.
Conclusion
For the reasons set out above, I do not consider that there was a failure by his Honour to accord a fair and public hearing pursuant to section 24(1) of the Charter.
Accordingly, Ground 2 is dismissed.
Ground 4
Did his Honour err in law and in fact by finding that Ms Williams had no real prospect of defending the proceeding?
Ms Williams’ claim that the decision of his Honour was unfair and not in the interests of justice was based on allegations of unconscionability and duress. I will consider each of these matters in turn. But I will first turn to the legal authorities in relation to these matters to which the Court will refer.
Legal principles
At the hearing of the appeal, reference was made to the oft-cited decision of Amadio, in which the High Court set aside a mortgage granted to a bank by an elderly couple with limited facility in English, who had been misled as to the terms of that agreement:
It is apparent that Mr. and Mrs. Amadio, viewed together, were the weaker party to the transaction between themselves and the bank. Their weakness may be likened to that of the defendant in Blomley v. Ryan of whom McTiernan J. said:
“His weakness was of the kind spoken of by Lord Hardwicke” [in Earl of Chesterfield v. Janssen] “in defining the fraud characterised as taking surreptitious advantage of the weakness, ignorance or necessity of another. The essence of such weakness is that the party is unable to judge for himself.”[20]
[20]Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447, 476–7 (Deane J), citing Blomley v Ryan (1956) 99 CLR 362, 392 (McTiernan J).
In the more recent case of Kakavas, the full High Court clarified the nature of the test set out in Amadio:
Essential to the principle stated by both Mason J and Deane J in Amadio is that there should be an unconscientious taking advantage by one party of some disabling condition or circumstance that seriously affects the ability of the other party to make a rational judgment as to his or her own best interests. It may well be that an unconscientious taking of advantage will not always be manifest in a demonstrated inequality of bargaining power or in a demonstrated inadequacy in the consideration moving from the stronger party to the weaker; but the abiding rationale of the principle is to ensure that it is fair, just and reasonable for the stronger party to retain the benefit of the impugned transaction.[21]
[21]Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392, 425 [118] (‘Kakavas’).
Counsel for Ms Williams referred to the statement of Nettle J in Collection House Ltd v Leigh-Anne Taylor that ‘illness, ignorance, inexperience, impaired faculties, financial need or other circumstances’ might cause one party to be at a special disadvantage in dealing with the other party, such that their ability to make decisions in their own best interests was impaired.[22]
[22]Collection House Ltd v Taylor [2004] VSC 49 [50].
However, this statement must be read in context. Later in his decision, his Honour emphasised that the mere fact that a person is ill, ignorant, inexperienced, poor or otherwise disadvantaged does not impugn every transaction they enter into. Rather, ‘a special disadvantage is nothing to the point unless it seriously affects the person’s availability [sic] to make a judgment as to what is in their best interests’.[23]
[23]Ibid [54].
Further, the inability of a party to make judgments as to their best interests is not, of itself, sufficient to set aside a transaction. It must also be the case that the stronger party had knowledge, or at least exhibited wilful ignorance, of the weaker party’s disability. In Kakavas, the High Court stated:
Equitable intervention to deprive a party of the benefit of its bargain on the basis that it was procured by unfair exploitation of the weakness of the other party requires proof of a predatory state of mind. Heedlessness of, or indifference to, the best interests of the other party is not sufficient for this purpose. The principle is not engaged by mere inadvertence, or even indifference, to the circumstances of the other party to an arm’s length commercial transaction. Inadvertence, or indifference, falls short of the victimisation or exploitation with which the principle is concerned.[24]
[24]Kakavas (2013) 250 CLR 392, 439–40 [161].
Unconscionability
In my opinion, there is no room for ambiguity in the communication from the ATO to Mr Williams dated 28 July 2009 (referred to in paragraph [9(i)] above). That is, as at 28 July 2009, Mr Williams was informed, and knew that:
(a) his tax debt had not been discharged;
(b) he would be charged interest on any outstanding taxation debt if it was not paid by the due date;
(c) the due date for payment for outstanding tax liabilities was 11 August 2009; and
(d) there were available avenues for him to pursue to explore his rights and obligations when dealing with the ATO, by reference to the taxpayers’ charter and there were avenues – by electronic means, or by telephone, to understand more about these rights and obligations.
Ms Williams’ affidavit dated 21 June 2018 which, as I have said, I admitted into evidence in the hearing before me, exhibited a copy of a letter from Mr Williams’ cardiologist, Dr Leanne Balding, dated 27 July 2007.
This report notes that Mr Williams had, at least at that time, ‘severe coronary artery disease for which there are no possible surgical interventions short of cardiac transplantation’. It was noted that Mr Williams was, at that time, ‘on maximum medical therapy and his prognosis is obviously fairly guarded’.
Clearly, this medical report predated the issues in this proceeding by some several years. A further report prepared by Dr N Diner dated 1 June 2007 addressed to Revill & Papa Lawyers confirms that Mr Williams underwent surgery for coronary disease on 13 January 2006 and remained hospitalised until 28 January 2006. It was also noted that Mr Williams’ post-operative recovery was complicated by ‘development of pneumonia and heart failure’. It was also noted that, at the time, Mr Williams continued to complain of chest pain and pain over the sternum secondary to the surgical wound. Finally, it was noted that Mr Williams had multiple risk factors ‘including smoking, hyperlipoidemia, diabetes and hypertension’.
As such, although indeed Mr Williams may have suffered from coronary artery disease for some considerable period of time prior to the events currently under consideration occurring, it is unclear, and the Court has no evidence upon which it can reasonably rely, as to what effect, if any, that affliction had on the ability of Mr Williams to make decisions in relation to his affairs.
A further medical report in respect of Mr Williams, being a psychiatric assessment, was provided to Mr Hamish Myers of Spicer Lawyers by Dr Timothy J Entwistle dated 29 October 2013. It is to be noted that this psychiatric assessment post-dates the offer of settlement outlined in the letter from Lennon Mazzeo to the Australian Government Solicitor dated 6 May 2013. However, it was put before the Court, and there is no other evidence of Mr Williams’ psychiatric state as at or around May 2013. Notwithstanding that, the document having been put into evidence requires consideration as it was relied upon by Ms Williams in support of her submission that Mr Williams was incapable of making decisions in relation to the Settlement Agreement and ancillary matters due to his state of health.
Mr Williams presented for his psychiatric assessment on 24 October 2013 and was interviewed for a period of two hours. The report produced was detailed. It is not necessary for me to summarise all the details of that report. However, certain matters are noteworthy, as follows:
MENTAL STATE EXAMINATION
Appearance – Mr Williams was a man of average height and medium build with a pot belly and a receding rockabilly hairstyle and glasses. He was reasonably presented in casual clothing, being a blue collared short sleeved T-shirt and trousers.
Affect – Mr Williams was a pleasant man of contained demeanour initially, but became visibly distressed and saddened when describing the circumstances of his son’s death, the media frenzy which followed it, and subsequently his persistent grief and guilt over Carl’s death and ensuing loneliness which has since followed. Whenever any of these matters were touched upon, they were accompanied by tearfulness on his part. Notwithstanding his variable emotional states, good eye contact and rapport persisted across the interview.
Talk – Speech was normal in rate, rhythm, tone and volume, and apart from his emotional episodes, thought content was at all times relevant to the interview situation and subject at hand. There were no unusual notions or ideas, evidence of delusional beliefs or formal thought disorder. Depressed and anxious themes were evident in the context of long-standing health issues and a series of losses involving Shane, Barbara and Carl.
Cognition – His memory and concentration were intact.
Perception – There were no perceptual abnormalities noted.
Insight – Insight was present.
Whilst the psychiatric assessment ultimately diagnosed Mr Williams as suffering from ‘complex grief reaction’, ‘adjustment disorder and anxious mood’ and ‘some features of traumatisation’, ultimately resulting in a poor prognosis of his future treatment, it was not suggested that these unfortunate health conditions impaired his cognition, perception or insight. Accordingly, as I have observed, notwithstanding that this psychiatric assessment was conducted some months after the settlement agreement was concluded, there being no other evidence before the Court, the Court cannot conclude that the serious medical issues faced by Mr Williams impaired his ability to make sound and informed decisions in his own interests in relation to the litigation in which he was involved.
Ms Williams deposed in her affidavit dated 21 June 2018 that she ‘often overheard conversations George had with the Tax Office on various occasions in 2013 where he expressed his anguish over the alleged tax debt and he told them that he was very sick and suffered from heart problems and depression’.
However, notwithstanding this evidence, there is simply an insufficient basis upon which the Court can determine that the alleged ‘overheard conversations’ about Mr Williams’ coronary condition and depression resulted in knowledge by the ATO of Mr Williams’ state of health or indeed any special disability suffered by Mr Williams disenabling him from instructing his lawyers and acting in his own best interests. Ms Williams’ evidence in this regard amounted to nothing but a mere unparticularised assertion.
The plaintiffs deny that they possessed knowledge of an alleged ‘special disability’ of Mr Williams. Indeed, as outlined in the plaintiffs’ outline of submissions on summary judgment dated 29 January 2018, it was noted:
The Plaintiffs’ solicitor has deposed: ‘I confirm that neither I nor the Commonwealth entities’ other legal representatives had any knowledge that the Deceased suffered from any physical and mental ailment at the time the Settlement Agreement or Mortgage was entered into that that would have prevented him from being able to protect and preserve his interests in the relevant dispute’.
There is no evidence before the Court to suggest that this submission ought not be accepted, and the Court so accepts it.
Ms Williams made a further submission on this point, through her counsel at the hearing before me:
MR SELIMI: And then, she also says somewhat speculatively I must confess, “I also believe the ATO was well aware of George’s condition as his case and condition always attracted media attention, which must have come to the attention of the ATO”.
Again, Ms Williams’ evidence does not rise above speculation, as was conceded by her counsel. The Court cannot accept, based on the authorities, that media reports that may or may not be read and considered by statutory authorities, officers of public institutions or members of the public equate to knowledge of an alleged special disability suffered by a particular individual in particular circumstances.
In summary, therefore, I accept the correctness of the observation of counsel for Ms Williams that this was a somewhat speculative submission. There was no evidence that the ATO knew of Mr Williams’ medical condition, nor the effect, if any, it had on his ability to make decisions in his own best interests, including instructing legal advisers. In my opinion, to suggest that the ATO ought to have drawn serious conclusions about Mr Williams’ capacity to make decisions in his own best interests based on media reports (which I note were not identified) is wholly unconvincing and not accepted by this Court.
The Court notes that it was indeed Mr Williams’ own legal advisers, Lennon Mazzeo, who proposed the terms upon which the settlement of proceeding S CI 2012 05437 could proceed. Counsel for Ms Williams accepted, prima facie, ‘that the fact of legal representation militates against a finding of unconscionable conduct’. There was some attempt at the hearing before me to bring into question the experience of Mr Williams’ legal advisers to advise him in respect of settlement. This appeared to derive from the observations of his Honour that Mr Williams was represented by experienced litigation lawyers.
It is not the function of this Court to investigate the professional background or experience of officers of this Court who are appropriately qualified and hold a practicing certificate. There was no suggestion that Mr Mazzeo did not hold a current practicing certificate or was otherwise the subject of actions which may compromise his ability, professionally or ethically, to properly advise and represent his client, in this case Mr Williams. Accordingly, the Court accepts that Mr Williams, subject to the observations I will make below in relation to duress, was appropriately legally represented in relation to the Settlement Agreement and the granting of the mortgage.
Finally, the Court enquired as to whether there was a solicitor’s certificate accompanying the mortgage. Ms Williams’ counsel submitted that there was not, and relied upon that fact as further evidence of the unconscionability of the DCT now seeking to enforce the mortgage
I agree with the submissions of the plaintiffs on this matter that solicitors’ certificates are most commonly provided in the context of the provision of guarantees and indemnities by individuals. However, it is to be noted that this matter is not determinative at all in the Court’s decision and certainly the Court does not accept that the absence of any certificate provides any evidence whatsoever going to the conclusion that the entry into of the mortgage by Mr Williams was unconscionable.
Duress
Ms Williams submits that the Settlement Agreement and mortgage were procured, or at least infected, by duress.
According to the evidence of Ms Williams, there were two elements to this alleged duress.
Firstly, it is said that during attendances with Mr Williams in June and July 2013, Mr Pat Lennon, a principal of Mr Williams’ previous solicitors Lennon Settle, ‘told George that he had no choice but to settle the tax debt as the ATO had threatened to bankrupt George if he did not agree to provide a mortgage’.
As has been observed, Mr Williams was apparently represented by experienced lawyers. Counsel for Ms Williams urged upon the Court that it should have no particular regard for this, saying:
MR SELIMI: Well for all we know they could’ve been fools who ill-advised - I’m not be [sic] facetious, Your Honour, according to the evidence of Roberta, that lawyer, Mr Pat Lennon, told George Williams, “You’ve got no choice but to sign the mortgage”, which is wrong. Now whether he said that or not, I don’t know, but we have evidence that it was said.
This submission illustrates the paucity of evidence put before the Court in relation to evidence of duress. The Settlement Agreement, as I have observed, having been entered into some time before the execution of the mortgage, is telling. The chronology of events at least suggests that having entered into the Settlement Agreement on 6 May 2013, Mr Williams had no practical option but to sign the mortgage in accordance with the Settlement Agreement, otherwise he would have faced possible bankruptcy proceedings instituted by the ATO. All these possibilities are mere speculation, and the Court cannot make serious findings of duress in the absence of particularised allegations.
There is serious doubt as to the context and meaning of the comments alleged to have been made by Mr Williams’ then solicitor, such as to render the Court incapable of drawing any conclusion that the entry into the Settlement Agreement and the subsequent execution of the mortgage, were vitiated by duress.
I do not accept that these statements, if indeed made, amounted to duress. They may have been no more than frank advice by a legal practitioner, informing Mr Williams of the probable consequences of the ATO obtaining judgment against him, that is, that if his outstanding tax liability was not paid and not secured, bankruptcy proceedings would inevitably have followed. In my opinion, the communication of 28 July 2009 referred to in para [9(i)] would have left no doubt in Mr Williams’ mind (or that of his legal advisers at the time) that the ATO intended to move to enforcement action in relation to Mr Williams’ outstanding tax liabilities, were those liabilities not satisfied.
In any event, Mr Williams consented to the Settlement Agreement on 6 May 2013, whilst the alleged statements by Mr Lennon took place, on the evidence of Ms Williams, in June and July 2013. By granting a mortgage over the Property, Mr Williams was doing no more than discharging his obligations pursuant to the Settlement Agreement which he had proposed (through his lawyers) and agreed to several months earlier. There is, therefore, no possibility that the alleged statements by Mr Lennon could have influenced the entry into of the Settlement Agreement, as a consequence of which the mortgage was granted.
Secondly, Ms Williams contended that threats were made by ‘the DCT’ or ‘his servants and agents’ to Mr Williams that he would be declared bankrupt if he did not enter into the Settlement Agreement or grant a mortgage over the Property. This allegation was not particularised, and no evidence was presented by Ms Williams to substantiate it. The plaintiffs’ solicitor deposed:
I have examined the files connected with each of the earlier proceedings referred to above and have not located any correspondence or file not suggesting that any such threat was made. I did not personally make such a threat.
It appears that the parties’ submissions regarding the allegation of duress did not differ materially from those before his Derham AsJ during the summary judgment application. His Honour found that the threats alleged by Ms Williams were ‘not particularised’ and ‘no evidence’ was called to support the claims.[25] He further found that even the alleged threat had been made, it did no more than warn Mr Williams of the inevitable consequence of judgment being granted against him for $576,000, namely that he would be declared bankrupt. I see no reason to disturb his Honour’s finding.
[25]Deputy Commissioner of Taxation & Anor v Bourke & Williams [2018] VSC 113 [26].
Absent any evidence to the contrary beyond the bald assertions of Ms Williams, I see no reason to doubt the deposition of the plaintiffs’ solicitor. Accordingly, I find that no threat by the DCT or its servants or agents, such as might ground a claim of duress, has been made out.
Public interest
Irrespective of the Court’s decision on the questions of unconscionability and duress (and even on the assumption that these grounds of impugning the validity and enforceability of the Settlement Agreement and the mortgage were not made out) counsel for Ms Williams submitted that it was in the public interest for this matter to proceed to trial, and as such the discretion granted by s 64 of the Civil Procedure Act ought to be exercised. The section states:
Court may allow a matter to proceed to trial
Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because—
(a) it is not in the interests of justice to do so;
(b)the dispute is of such a nature that only a full hearing on the merits is appropriate.[26]
[26]Civil Procedure Act s 64.
The essence of the public interest argument advanced by Ms Williams was put by her counsel as follows:
The public interest that I strongly rely upon is the public interest in the enforcement of bargains between criminals and the Victoria Police, to which other persons rely, or upon which other persons rely, and it’s in this case, George Williams. This is the public interest. It is the public interest in the enforcement of bargains between criminals and police. It is the public interest – manifest public interest – in encouraging criminals to endanger their lives by divulging evidence which may lead to the prosecution of persons for murder. This is the public interest. It’s the public interest in the enforcement of significant contracts involving public instrumentalities, the State of Victoria and individuals.
It should be noted, at this juncture, that s 64 of the Civil Procedure Act does not make reference to the ‘public interest’. Rather, the considerations that may lead a court to order that a civil proceeding proceed to trial are ‘the interests of justice’[27] and the ‘appropriate[ness]’ of a full hearing.[28] As will be seen, it is not necessary to determine to what extent these considerations overlap with the public interest, or whether they are synonymous.
[27]Ibid s 64(a).
[28]Ibid s 64(b).
It was further submitted by counsel for Ms Williams that his Honour acknowledged that the hearing of the matter was in the public interest at the hearing of the summary judgment application. The relevant excerpt from the transcript of proceedings before his Honour is as follows:
HIS HONOUR: Would you like me to stand down for ten minutes?
MR McKAY: Is this on the assumption that we’ve – in a sense I’ve got very little further to add by way of oral submissions in terms of the actual summary judgment.
HIS HONOUR: I appreciate that. But I think it might be worth you summarising the situation for the court.
MR McKAY: Yes.
HIS HONOUR: It is a matter of public interest.
MR McKAY: Yes.
HIS HONOUR: And I think it’s worth you setting out in short compass the case that you make for summary judgment.
It is difficult at this distance to intuit what his Honour had in mind when he referred to the public interest. There is no question it appears to me that the public at large is interested in cases such as this one. This may arise out of the identity of the parties involved in this case and as a result of their connection with Mr Williams and the late Mr Carl Williams.
However, not all interest that the public may have in matters concerning prominent and publicly known figures equates to public interest as recognised by the law. Indeed, some of this interest may simply be a result of a prurient interest to read about dramatic events or notorious individuals.
As expressed by the Court of Appeal in DPP v Smith, ‘[t]here are many areas of national and community activities which may be the subject of the public interest. … it is necessary to distinguish between “what is in the public interest and what is of interest to know”‘.[29]
[29]Department of Public Prosecutions v Smith [1991] 1 VR 63, 73 (Kaye, Fullagar and Ormiston JJA), quoting Lion Laboratories Ltd v Evans [1985] QB 526, 533 (Griffiths LJ).
As for what exactly the ‘public interest’ is, Tamberlin J suggested in McKinnon v Department of Treasury that because the term is of wide import, and appears in an extensive range of legislative provisions, it is unwise for courts or tribunals to ‘give a description of the public interest that confines this expression’.[30] The best that can be said is that:
The expression “in the public interest” directs attention to that conclusion or determination which best serves the advancement of the interest or welfare of the public, society or the nation and its content will depend on each particular set of circumstances.[31]
[30]McKinnon v Department of Treasury (2005) 220 ALR 587, 589 [8].
[31]Ibid 590 [9].
In the present circumstances, the discretion granted by s 64 of the Civil Procedure Act must be read in light of the purpose of the Act.[32] As such, its exercise must be in order ‘to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute between the parties’,[33] although the Court may consider ‘any other matter’ in exercising it or any other power.[34]
[32]Civil Procedure Act ss 7–9.
[33]Ottendin Investments Pty Ltd v Portbury Developments Co Pty Ltd [2011] VSC 222 [18] (Dixon J).
[34]Civil Procedure Act s 9(3)(b).
In my opinion there is no public interest in the present case before the Court such as would suggest or demand that this matter proceed to trial.
It may very well be the case, at a different time, with different issues to agitate, that the legally recognised test of public interest may be satisfied. That may involve different parties than those presently before the Court. These issues of public interest may involve an examination of arrangements between the Victoria Police and the late Mr Carl Williams flowing from which Mr Carl Williams assisted the Victoria Police, and on the basis of which Mr Williams arranged his affairs. It may involve a broader exploration of the circumstances in which organisations such as the Victoria Police enter into financial arrangements with convicted criminals in exchange for various forms of co-operation.
However, this is not the case before me at this time. The dispute before me is not of such a nature that only a full hearing on the merits is appropriate. The Court’s purview at this time is of a much more limited compass. That is, is the mortgage granted by Mr Williams enforceable by the ATO? In my opinion, this proceeding is not sufficiently complex to warrant it going to a full hearing. As I have observed, at a different time with different parties and different issues of a wider reach, this matter may indeed engage the Court to make orders pursuant to s 64(b) of the Civil Procedure Act. In my opinion, this is not such a case.
For the reasons, facts and circumstances that I have set out above, in my opinion there is no doubt that this matter does not present any legally recognisable issue of public interest such as to justify a referral to trial under s 64 of the Civil Procedure Act.
Res judicata and issue estoppel
Counsel for the plaintiffs submitted that Ms Williams, having made certain allegations in earlier proceedings before this Court, was estopped from relying on those same allegations in a defence against the enforcement of the mortgage. This was said to arise by either issue or Anshun estoppel.
In the proceeding before Derham AsJ, his Honour found that the alleged agreement struck between Mr Carl Williams and the Victoria Police could not provide a defence against summary judgment.
The agreement had already been alleged in proceedings S CI 2011 05571 and S CI 2012 05437. His Honour found that upon the entry of judgment in those proceedings ‘the underlying rights and causes of action agitated in the proceedings merged in the judgment, were extinguished (or, alternatively, became the subject of issue estoppel preventing them from being re-agitated in future proceedings)’.[35] His Honour further found that any variation of what he termed the ‘payment agreement’ argument that differed from the claims raised in the earlier proceedings could not be raised, due to the operation of the principle enunciated in Port of Melbourne Authority v Anshun Pty Ltd.[36]
[35]Deputy Commissioner of Taxation & Anor v Bourke & Williams [2018] VSC 113 [25].
[36]Ibid, citing Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589.
His Honour noted that the principles of res judicata and issue estoppel apply to judgments obtained by consent,[37] and that judgments derived from an agreement between the parties could only be set aside if that agreement was void ab initio at common law or in equity, such as where duress or unconscionable conduct was found. He determined that Ms Williams’ arguments to invalidate the Settlement Agreement were ‘hopeless’, meaning that the consent judgments stood.[38]
[37]Ibid, citing Isaacs v Ocean Accident and Guarantee Corporation Limited [1958] SR (NSW) 69, 75; Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502, 508; Trustees for the Roman Catholic Church for the Diocese of Bathurst v Hine [2016] NSWCA 213.
[38]Ibid.
Counsel for the plaintiffs in the proceeding before me submitted, and counsel for Ms Williams conceded, that in the absence of some vitiating factor affecting the underlying agreement, a court could not set aside consent orders. In Harvey v Phillips, the High Court held that such vitiating factors include ‘illegality, misrepresentation, non-disclosure of a material fact where disclosure is required, duress, mistake, undue influence, abuse of confidence or the like’, and indeed any ground ‘which would suffice to render a simple contract void or voidable’.[39]
[39]Harvey v Phillips (1956) 95 CLR 235, 243–4 (Dixon CJ, McTiernan, Williams, Webb and Fullagar JJ).
As I have found above, Ms Williams has not established any unconscionability or duress infecting the Settlement Agreement or the mortgage over the Property. No other vitiating factor was pled. Accordingly, she is estopped from re-agitating a defence based on the alleged agreement between Victoria Police and Mr Carl Williams.[40]
[40]See, eg, Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502, 511 (Deane, Toohey and Gaudron JJ).
Other matters
At the hearing before me, counsel for Ms Williams abandoned arguments previously agitated in relation to title details concerning the Property and the question of whether there was adequate consideration in relation to the entry into of the Settlement Agreement.
These points having been abandoned, there is no necessity for me to deal with them.
Did the payment by the Victoria Police into the suspense account establish a trust?
Counsel for Ms Williams submitted that the payment of money by the Victoria Police to the ATO created a trust of which Mr Williams was the intended beneficiary. This was not a matter disclosed on the pleadings, nor was it argued before his Honour.
No particulars were given of any such alleged trust and no authorities cited which would support the submission that a trust existed.
The submission, in my opinion, bore the hallmarks of a last minute thought by counsel for Ms Williams. It is accordingly rejected.
Was the arrangement between Mr Carl Williams and the Victoria Police frustrated?
At one point during the hearing of this proceeding, counsel for Ms Williams suggested that the ‘doctrine of frustration of contracts’ might be relevant:
MR SELIMI: Not a single case anywhere in the common law world where the circumstances of this case have arisen. And it raises very significant questions of fact and also raises very important questions of law involving doctrine of trust, doctrine of frustration of contracts, in terms of the death of Carl Williams which was relied upon
HER HONOUR: None of that has been pleaded, has it Mr Selimi?
MR SELIMI: No, no, but - - -
At no point did counsel expand on this submission. It was not clarified whether Mr Selimi was referring to the alleged arrangement between Mr Carl Williams and the Victoria Police, or some other transaction. No evidence was led on this point, and no authorities relied upon. It was not explained how the matter related to the issues before the Court in this proceeding. Accordingly, I must treat this submission as a passing remark of no weight.
Decision
It is never the case that decisions of this nature which affect the rights of individuals, in this case to have a roof over their head, no matter the circumstances, weigh lightly upon the Court. Quite the contrary.
However, the Court must apply the law without fear or favour based on sound principle and precedent, and in the interests of justice.
I have determined, based on my observations above, that the facts and circumstances to which my attention was drawn and the legal principles and authorities to which I have had regard, that there was no demonstrable error by his Honour in respect of any of the agitated grounds of appeal. The appeal has no merit, was bound to fail and ought be dismissed in its entirety.
Costs
I have received written submissions from the first defendant (who was excused from this proceeding) in relation to costs which I will consider.
Ms Bourke submitted that the usual rule as to the costs of executors in proceedings ought be displaced. It was, in particular, submitted that:
(a) The plaintiffs’ costs ought be paid from, and borne by, the sale proceeds of the Property, and not from the estate of Mr Williams;
(b) Ms Williams ought have no right of indemnity from the estate of Mr Williams for her costs arising from the proceeding or the application;
(c) Ms Bourke’s costs ought be paid by the sale proceeds of the Property; and
(d) The costs caused by Ms Williams having her defence struck out, and filing her amended defence, ought be borne by the share of the estate of Mr Williams against which the mortgage is enforced.
In support of the first of these submissions, Ms Bourke argued that:
(a) Clause 1(e) of the mortgage provides that the costs of enforcement are part of the secured sum. Thus, the costs ought to be paid from the sale proceeds of the Property;
(b) The true cause of the plaintiffs’ costs was the conduct of Ms Williams, and not her:
(i) Prior to proceedings being issued, Ms Bourke did not object to the ATO exercising its power of sale;
(ii) Ms Bourke suggested to Ms Williams that she comply with the ATO’s sale of the Property;
(iii) Ms Bourke never provided a substantive defence, and thus did nothing to cause costs to be incurred;
(iv)Ms Williams has refused to comply with the sale of the Property by the ATO, and ignored Ms Bourke’s suggestion that she do so;
(v) Ms Williams’ defence was unfounded;
(vi)Ms Williams’ did not obtain a Beddoe order;[41] and
(vii) Ms Williams was not truly acting to protect the interests of the estate, but rather to protect the interests of her daughter, who is the beneficiary of the Property.
[41]Re Beddoe, Downes v Cottam [1893] 1 Ch 547.
Otherwise, I will hear the parties on the form of orders and the question of costs.
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