Di Pan v MacARTHUR Centralshopping Centre Pty Ltd

[2022] QCA 150

[2022] QCA 150

COURT OF APPEAL

BOND JA

Appeal No 7703 of 2022
DC No 1706 of 2021

DI PAN  Appellant/Respondent

v

MacARTHUR CENTRAL
SHOPPING CENTRE PTY LTD  Respondent/Applicant
ACN 119 813 795

BRISBANE

FRIDAY, 12 AUGUST 2022

JUDGMENT

BOND JA:

1. On 6 July 2021, the applicant respondent filed a claim and statement of claim against the appellant defendant in the District Court claiming money owed for outstanding rent and damages for breach of a lease.  I will refer to the applicant respondent simply as “the respondent” and I will refer to the appellant defendant simply as “the appellant”.  On 23 July 2021, the appellant filed a notice of intention to defend and defence.

2. The respondent was successful in obtaining a summary judgment against the defendant on 11 November 2021 in the sum of just over $53,000 together with damages to be assessed.  No notice of appeal was filed within time, the time for filing a notice of appeal expiring on 10 December 2021.

3. The respondent, now a judgment creditor, became the petitioning creditor in bankruptcy proceedings in relation to the appellant.  On 30 March 2022, a sequestration order was made against her estate by Registrar Loxton in the Federal Circuit and Family Court of Australia (Division 2).  The judgment debt formed the basis of the respondent’s bankruptcy notice and non-compliance with the bankruptcy notice was the foundation of the sequestration order against her estate.

4. On 20 April 2022, the appellant had applied to the Federal Circuit and Family Court of Australia for review of the sequestration order. That application is an application pursuant to s 100 of the Federal Circuit and Family Court of Australia Act and permits the Court to make any order or orders it thinks fit in relation to the sequestration order made by the registrar.  I am told the application for review is listed for a review hearing, at least, early next week.  It is not clear when the application might be decided and I am unable to assess its prospects.

5. On 30 June 2022, the appellant filed a document called “Application to Court of Appeal” which does not appear to be in proper form but appears to be the document that she wishes to have regarded as a notice of appeal.  The possible inadequacies of form of that document may presently be put aside.

6. I should observe that Ms Pan represents herself and her affidavit material deposes to the fact that English is not her first language and she has found difficulty in following the complexities of court procedure in this Court and the Federal Circuit and Family Court.  Ms Pan represented herself before me and although her command of the English language was satisfactory, it was apparent that she struggled with following the legal complexity.  Those observations, of course, are not meant to be a personal criticism of her in the slightest.  These matters are complex to laypeople.

7. The problem facing her is that the fact of a sequestration order has certain legal consequences.  The respondent has submitted to me that the judgment debt that they have obtained is a debt provable in the appellant’s bankruptcy;  that the effect of her bankruptcy divests her of her interests in property and her liability for provable debts; and in those circumstances, the Court is bound to conclude that she has no interest such as would confer upon her the necessary standing to appeal against the judgment obtained in the District Court.  As the High Court observed in Cummings v Claremont Petroleum NL (1996) 185 CLR 124 at 138 (citations omitted):

   “… it is fundamental to the law of bankruptcy that the bankrupt is divested of both his interest in his property and liability for his provable debts.”

8. The person who would have the capacity to appeal is the Official Trustee.  But the affidavit material reveals to me that the solicitors for the respondent, by a letter dated 14 July 2022, approached the Official Trustee and conveyed the following information:

   (a)The appellant had filed an application for review of the registrar’s decision to make the sequestration order on 30 March, which review was scheduled to be heard on 16 August 2022.

   (b)The notice of appeal to the Queensland Court of Appeal had been filed and a copy was provided.

   (c)The respondent’s position was any appeal rights held by the appellant in respect of the District Court order, including any right to apply for leave for an extension of time within which to commence an appeal, vested in the official receiver on and from the date of the sequestration order.

   (d)The respondent inquired whether the Official Trustee could advise whether it had an intention to seek to prosecute the appeal including by seeking leave for an extension of time.  I pause to observe that the respondent correctly identified that the purported notice of appeal was filed over six months out of time and three months after the sequestration order had been made.

9. The response from the Office of the Official Trustee was in these terms, relevantly:

   “Please be advised that the Official Trustee advised the bankrupt on 5 May 2022 that the Official Trustee was not in a position to provide permission for her to appeal, any right to pursue the creditor in relation to the district court judgment likely vested in the Official Trustee.”

10. The doubt expressed in those words has not been shared by the High Court in the case to which I referred and also in cases in this Court which have followed the High Court observations: see, for example, Commonwealth Bank of Australia v Jorgensen [2011] QCA 376 at [10] and [11] and Oliver v Samios Plumbing Pty Ltd [2016] QCA 236.

11. The appellant, by her notice of appeal, seeks to challenge the amount of the judgment debt, saying the correct amount that she owes was a little over $26,000, not a little over $53,000, and seeks orders for costs and compensation for emotional distress.  The appellant’s affidavit material before me deposes to the merits of that position and to the attempts she has made to remedy what she regards to have been done wrongly and the difficulties she has had in understanding what she should do.  She regards the judgment debt to have been obtained wrongly and unfairly.  She regards the consequent sequestration order to have been obtained unfairly.

12. The difficulty is that as a matter of law she has no standing to pursue the appeal before this Court.  She is not in a “Catch-22” position.  She does have steps that she can take.  The first, which she is taking, is to seek to overturn the sequestration order.  If she succeeds in that course then property and rights will revest in her and she can seek to pursue an appeal.  In so doing, she would, of course, have to address the delay between judgment and when she sought to overturn it.  It would be doubtful that any further delay between having the notice of appeal set aside and the hypothetical starting of a new appeal could arguably operate to her prejudice.

13. But there are other possibilities as well.  A consequence of rights vesting in the Official Trustee is the Official Trustee is the person who must get in her assets and pay her debts.  There are two possible ways which may, one way or the other, be open to her.  First, she has rights under r 90-15 of the Insolvency Practice Schedule (Bankruptcy) rules to obtain from the Court such orders as the Court thinks fit in relation to the administration of a regulated debtor’s estate.  That might permit her, if there is any merit in her position, to persuade a Court exercising that jurisdiction, which I hasten to say is not this Court, to make an order that the Official Trustee bring an appeal.  Second, she also has the capacity to challenge any acceptance by the Official Trustee of the judgment creditor’s debt, although the fact of the judgment would prove problematic and it might be that overturning the sequestration order or requiring the Official Trustee to appeal are more attractive avenues.

14. In any event, these are possibilities which demonstrate that she is not closed out from any remedy.  The present position, unfortunately, is, however, she is closed out from the remedy of herself pursuing an appeal in respect of the District Court judgment in this case and at this time.

    …

15. The course I will take for the reasons that I have explained is that I will make an order that the appellant’s notice of appeal be set aside on the basis that she has no standing to institute or continue the appeal at this time.

    …

16. The respondent, having succeeded, submits that it should have its costs of the application.  The appellant relies, essentially, on what she says is the merits of her underlying complaint about the judgment that was obtained in the District Court.  Obviously, this is not the occasion to determine whether there are any merits in that complaint.  The difficulty for the ability of the appellant to resist the costs order is that, perhaps understandably, she being a layperson, she has pursued a remedy in the wrong forum and she must face the consequences of so doing.  I order the appellant pay the respondent’s costs of this application.