FEDERAL COURT OF AUSTRALIA
Du Bray v ACW [2020] FCA 1680
ORDERS
NSD 800 of 2020 BETWEEN: LEE FRANCIS DU BRAY
Appellant
AND: ACW
Respondent
ORDER MADE BY:
FLICK J
DATE OF ORDER:
24 NOVEMBER 2020
THE COURT ORDERS THAT:
1.On or before 8 December 2020 the Appellant is to provide security for the costs of the appeal in the sum of $50,000.
2.In the event of non-compliance with Order 1, the appeal is stayed.
3.Liberty is reserved to either party to vary Order 2.
4.The Appellant is to pay the costs of the Respondent in respect to the Respondent’s Interlocutory Application dated 16 September 2020.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
FLICK J:
On 16 July 2020, a Judge of this Court delivered judgment giving reasons for his decision to (inter alia) grant a sequestration order against the estate of Lee Francis Du Bray: ACW v Du Bray (No 2) [2020] FCA 994. That case, it may be noted, followed a series of litigation and judgments in New Zealand, those judgments being described by the primary Judge as “the outcome or culmination of many years of protracted litigation between the applicant and Mr Du Bray following the break-up of their relationship”: [2020]…
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- AGLC
- Du Bray v ACW [2020] FCA 1680
- Case
- [2020] FCA 1680
- Decision Date
CaseChat Overview and Summary
In the matter of Du Bray v ACW, the Federal Court addressed an appeal concerning the assessment of security for costs. The appeal arose from a creditor's petition for bankruptcy, where the appellant, Du Bray, contested the validity of the petition on the basis of its verification under s 47(1) of the Bankruptcy Act 1966 (Cth). The court was required to determine the merits of Du Bray's objections and whether the petition was properly verified by an affidavit from a person with knowledge of the relevant facts.
The primary focus of the appeal was on the interpretation and application of s 47(1) of the Bankruptcy Act. Du Bray argued that the petition was invalid because it was not verified by someone who had personal knowledge of the facts, but rather by the creditor's solicitor, who swore the affidavit "on the basis of information and belief". The court reviewed relevant case law, including Re Cirillo; Ex parte Commissioner of Taxation and Daly v Watson, and concluded that a solicitor can verify a petition if they possess sufficient knowledge of the relevant facts, even if acquired from the creditor. The court found that the solicitor in this case had sufficient knowledge from acting on the creditor's behalf in the proceedings.
Ultimately, the court dismissed Du Bray's objection and held that the petition was validly verified. Given the limited prospects of success on appeal, the court ordered that Du Bray provide security for the costs of the appeal in the sum of $50,000 by a specified date. Failure to comply would result in the stay of the appeal. Additionally, Du Bray was ordered to pay the respondent's costs in relation to an interlocutory application.
The primary focus of the appeal was on the interpretation and application of s 47(1) of the Bankruptcy Act. Du Bray argued that the petition was invalid because it was not verified by someone who had personal knowledge of the facts, but rather by the creditor's solicitor, who swore the affidavit "on the basis of information and belief". The court reviewed relevant case law, including Re Cirillo; Ex parte Commissioner of Taxation and Daly v Watson, and concluded that a solicitor can verify a petition if they possess sufficient knowledge of the relevant facts, even if acquired from the creditor. The court found that the solicitor in this case had sufficient knowledge from acting on the creditor's behalf in the proceedings.
Ultimately, the court dismissed Du Bray's objection and held that the petition was validly verified. Given the limited prospects of success on appeal, the court ordered that Du Bray provide security for the costs of the appeal in the sum of $50,000 by a specified date. Failure to comply would result in the stay of the appeal. Additionally, Du Bray was ordered to pay the respondent's costs in relation to an interlocutory application.
Orders
Orders of the court
1. On or before 8 December 2020 the Appellant is to provide security for the costs of the appeal in the sum of $50,000.
2. In the event of non-compliance with Order 1, the appeal is stayed.
3. Liberty is reserved to either party to vary Order 2.
4. The Appellant is to pay the costs of the Respondent in respect to the Respondent’s Interlocutory Application dated 16 September 2020.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
Consistent with the fact that the power to order security is discretionary and necessarily is to be exercised by reference the facts and circumstances of each individual case, instances can be provided where an order for security has not been made against an appellant: e.g., Nyoni v Shire of Kellerberrin (No 9) [2016] FCA 472 per Mortimer J. Those instances include bankruptcy proceedings where the application for security has been founded upon a failure on the part of the bankrupt to satisfy prior orders for costs incurred in litigation: e.g., Pearse v Wiseguy Pty Ltd [2005] FCA 222 per Finn J. Section 47 & the decision of the primary Judge A principal focus of the appeal is the construction and application of s 47(1) of the Bankruptcy Act. That issue emerged in what the primary Judge described as the “long and sorry history of the litigation”: [2020] FCA 994 at [7]. Section 47(1) provides as follows: A creditor’s petition must be verified by an affidavit of a person who knows the relevant facts.To the extent that the Appellant also makes reference to s 52(1) of the Bankruptcy Act, it may be noted that that sub-section provides as follows: At the hearing of a creditor's petition, the Court shall require proof of: (a)the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient); (b)service of the petition; and (c)the fact that the debt or debts on which the petitioning creditor relies is or are still owing; and, if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor. In the course of reviewing the litigation being pursued in New Zealand, the primary Judge (inter alia) noted the criticism that had been levelled against the Appellant by one or other of the New Zealand Judges, including criticisms that: ·“Mr Du Bray’s conduct during the litigation [was characterised] as the waging of a ‘war of attrition’ against the applicant” (at [9]);·there had been on the part of Mr Du Bray a “‘longstanding and conspicuous failure’ to pay costs” (at [11]); and·“Mr Du Bray’s actions had constituted a ‘protracted game of ‘chicken’ with the Court’ and that the applicant had suffered prejudice as a result of those actions” (at [18]). Such were the criticisms made by Judges in New Zealand. Of more immediate concern to an assessment as to the Appellant’s prospects of success on appeal are the reasons of the primary Judge for rejecting Mr Du Bray’s argument in respect to s 47(1) of the Bankruptcy Act. His Honour’s reasons for decision in respect to this issue were expressed as follows: GROUND 1 – VERIFICATION OF THE CREDITOR’S PETITION[106] The first point to emphasise is that Mr Du Bray’s articulated ground of opposition to the creditor’s petition was essentially a technical one; that the amended creditor’s petition was defective because it was not verified by a person who had knowledge of the relevant facts as required by s 47(1) of the Act. His submissions, however, tended to conflate the requirement in s 47(1) of the Act with the requirement, under s 52(1)(a) of the Act, that there be proof of the “matters stated in the petition”. [107] Mr Du Bray did not contend that the matters stated in the petition had not been proved, or were not the subject of proof, as required by s 52(1)(a) of the Act. His second ground of opposition, which will be considered next, referred to s 52(1)(c) of the Act and was to the effect that the Court cannot be satisfied that the debts on which the applicant relied were owing. That contention was in turn based entirely on the proposition that the Court should exercise its discretion to go behind the relevant judgments, or at least one of them. Mr Du Bray, not surprisingly given the history of the matter, did not dispute the existence of the orders referred to in paragraph 1 of the amended creditor’s petition, or suggest that he had paid the applicant the amounts that he had been ordered to pay her. Nor did he dispute that the statement in paragraph 2 of the amended creditor’s petition that the applicant did not hold security over his property, or dispute the statement in paragraph 3 of the amended creditor’s petition that he was either ordinarily resident in Australia, or had a dwelling house or place of business in Australia.[108] Mr Du Bray’s contention that the amended creditor’s petition was not verified by a person who had knowledge of the facts was based entirely on the fact that the affidavit verifying the petition was sworn by the applicant’s solicitor, Ms Kiera Peacock, who deposed (at paragraph 6) that “[t]he statements made in paragraphs 1, 2 and 3 of the amended creditor’s petition remain within my own knowledge true, on the basis of information and belief from [the applicant]”. His contention, in short, was that, because Ms Peacock’s assertion that the statements in the petition were within her knowledge true was qualified by the words “on the basis of information and belief from [the applicant]”, it necessarily followed that she did not know the “relevant facts” as required by s 47(1) of the Act. [109] That contention is rejected.His Honour then proceeded to review the authorities, including Re Cirillo; Ex parte Commissioner of Taxation (1992) 36 FCR 279 and Daly v Watson (1994) 50 FCR 544. His Honour then relevantly concluded: [120] It would thus appear, on the basis of both Cirillo and Daly v Watson, that a solicitor can swear or affirm an affidavit verifying a creditor’s petition if they have knowledge of the relevant facts, even if that knowledge was acquired in the course of their acting for the creditor, including knowledge acquired from the creditor, so long as that knowledge amounted to more than mere instructions. It would equally appear, from Cirillo at least, that the verifying affidavit may be sworn on information and belief. [121] It is tolerably clear that, despite the inclusion of the words “on the basis of information and belief from [the applicant]” in her verifying affidavit, Ms Peacock in fact had sufficient knowledge of the relevant facts for the purposes of s 47 of the Act. In her verifying affidavit, Ms Peacock stated that she had acted for the applicant in each of the proceedings referred to in paragraph 1 of the creditor’s petition. In another affidavit sworn by Ms Peacock and read without material objection in support of the creditor’s petition, Ms Peacock stated that she had acted for the applicant in all of the proceedings before this Court since 2015 and gave a detailed recitation of the extensive chronology of the proceedings between the applicant and Mr Du Bray, including the proceedings in New Zealand. None of her evidence relating to the chronology of the proceedings was challenged or disputed in any way. There could be little doubt that Ms Peacock acquired knowledge of the matters in the creditor’s petition in the course of her acting for the applicant. That knowledge was not acquired simply as a result of instructions. [122] It follows that ground 1 of Mr Du Bray’s notice stating his grounds of objection to the creditor’s petition has no merit and must be rejected. …The limited prospects of success
Ratio Decidendi
Legal Principle Established
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