Fitzpatrick v Kidney
[2007] FMCA 942
•21 May 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| FITZPATRICK v KIDNEY | [2007] FMCA 942 |
| BANKRUPTCY – Bankruptcy notice – application to set aside – application for review of Registrar’s decision not to set aside – final judgment relating to debt – existence of counterclaim – costs. |
| Bankruptcy Act 1966 (Cth), s.41 Federal Magistrates Court (Bankruptcy) Rules 2006, r.3.02 Federal Magistrate Court Rules 2001 |
| Crimmins v Glenview Home Units Pty Ltd [1999] FCA 515 |
| Applicant: | RAYMOND ARTHUR FITZPATRICK |
| Respondent: | TONY KIDNEY |
| File number: | CAG 11 of 2007 |
| Judgment of: | Mowbray FM |
| Hearing date: | 21 May 2007 |
| Delivered at: | Canberra |
| Delivered on: | 21 May 2007 |
REPRESENTATION
| Solicitors for the Applicant: | Applicant in person |
| Solicitors for the Respondent: | Gillespie-Jones & Co |
ORDERS
The application for review filed on 10 April 2007 be dismissed.
The applicant pay the respondent’s costs fixed in the sum of $3,915.00 by 22 June 2007
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT CANBERRA |
CAG 11 of 2007
| RAYMOND ARTHUR FITZPATRICK |
Applicant
And
| TONY KIDNEY |
Respondent
REASONS FOR JUDGMENT
This is an ex tempore judgment which has been revised and edited from the transcript. The judgment was delivered on 21 May 2007 with short additional reasons and a decision on costs on 22 May 2007.
On 13 February 2007, at the request of Mr Kidney, the creditor and respondent in these proceedings, the Official Receiver issued a bankruptcy notice to Mr Fitzpatrick, the debtor and applicant. The debt in the schedule was $8,110.76 which resulted from:
·orders made by Master Harper in the ACT Supreme Court on 14 February 2003 for costs against the applicant
·orders made by Connolly J in the ACT Supreme Court on 6 February 2004 for costs against the applicant
·a certificate of taxation for these costs made by the Deputy Registrar of the ACT Supreme Court on 1 November 2004.
Following the issue of the bankruptcy notice the applicant applied to this Court on 5 March 2007 to have the bankruptcy notice set aside. This was opposed by the respondent in a notice of opposition filed on 28 March 2007. On 29 March 2007 Registrar Hedge dismissed the application and ordered costs against the applicant. On 10 April 2007 the applicant sought review of that decision.
As far as I can ascertain the application to set aside the bankruptcy notice relies principally on two grounds:
·there has been no final judgment in relation to the debt, and
·the applicant may have a counterclaim.
There is no suggestion that the bankruptcy notice was defective in any other respect.
Preliminary questions
There are two preliminary issues with which I should deal before turning to the more substantial matters.
When I raised the question of the applicant’s current proceedings before the ACT Court of Appeal, he sought to give oral evidence to make up for what he seemed to think was a deficiency in the affidavit evidence that he had put before the Court. I refused that application for the following reasons:
·on 26 April 2007 I made orders that the applicant file and serve any further affidavit evidence on which he sought to rely by 16 May 2007. He therefore had had ample opportunity to provide any affidavit evidence. Indeed he had done so in an affidavit filed on 14 May 2007
·I was also not satisfied, particularly having regard to the affidavit material that had already been filed by the applicant, that he would now provide any relevant evidence on the specific issues that I have to deal with.
It is clear from the material before the Court that the applicant is very confused about the issues before the Court. He has a tendency to conflate all the issues as being related to his main real concern – the orders made by Special Magistrate Symons on 22 September 2003.
The second preliminary matter concerns the third order that
Mr Fitzpatrick seeks – to call the respondent, Mr Kidney, and his solicitor, Mr Gillespie-Jones, to give evidence.
It is obvious that this was to explore the hearing before Special Magistrate Symons and related matters, and to examine the reasons why the respondent has pursued his costs. Neither of these matters would assist me in the issue that I have to decide. Therefore I did not allow the applicant to call the respondent and his solicitor to give evidence.
Relevant legislation
I only need to refer to one provision of the Bankruptcy Act 1966 (Cth), section 41(1) which provides:
(1) An Official Receiver may issue a bankruptcy notice on the application of a creditor who has obtained against a debtor:
(a) a final judgment or final order that:
(i) is of the kind described in paragraph 40(1)(g); and
(ii) is for an amount of at least $2,000; or
(b) 2 or more final judgments or final orders that:
(i) are of the kind described in paragraph 40(1)(g); and
(ii) taken together are for an amount of at least $2,000.
Final judgment
Has there been final judgment in the sum of $8,110.76 – that is, the debt that is nominated in the bankruptcy notice?
To determine this issue it is helpful to set out in brief the chronology of events and in particular of the litigation:
·a decision of Special Magistrate Symons on 22 September 2003 when she made orders against the applicant requiring him to pay certain costs and conduct money. This included conduct money of $10 for the respondent
·an order of Master Harper on 14 November 2003 in the ACT Supreme Court dismissing an application for leave to appeal from Special Magistrate Symons’ decision and awarding costs against the applicant
·an order of Connolly J in the ACT Supreme Court on 6 February 2004 dismissing a notice of motion dated 17 December 2003 and also ordering the applicant to pay the respondent’s costs
·a certificate of taxation made by the Deputy Registrar of the ACT Supreme Court on 1 November 2004 for the two costs orders of 14 November 2003 and 6 February 2004
·a notice of motion dated 20 October 2005 in the ACT Court of Appeal against both the decision of Master Harper and the decision of Connolly J dismissed by Crispin J on 1 February 2006. He also ordered the applicant pay the respondent’s costs
·an application for special leave to appeal to the High Court dismissed on 7 September 2006 by Hayne and Crennan JJ.
The applicant states that he currently has relevant proceedings before the Court of Appeal of the ACT relating to the costs matter the subject of the bankruptcy notice. Thus he says there has been no final judgment.
However the debt covered by the bankruptcy notice solely concerns costs awarded against the applicant in the proceedings before Master Harper and Connolly J. It does not relate to any costs ordered against the applicant in the proceedings dismissed by Crispin J on 1 February 2006.
I am satisfied from what has been put before me that the following passages from the affidavit of Mr Gillespie-Jones sworn on 28 March 2007 are accurate:
7. The current proceedings in the ACT Court of Appeal referred to by the applicant relate to the costs he was ordered to pay by Justice Crispin in the ACT Court of Appeal on 1 February 2006. A Certificate of Costs Assessment was issued by the ACT Supreme Court on 20 October 2006 in relation to that order. … [Mr Gillespie-Jones annexed a copy of that certificate to his affidavit.] An application dated 30 October 2006 was made by the applicant to set aside that certificate. That application was dismissed by Master Harper on 10 November 2006 and the applicant was ordered to pay the respondent’s costs of the application. An appeal from the order of Master Harper was dismissed by Justice Crispin on 8 December 2006. The applicant is now in the process of appealing to the ACT Court of Appeal in relation to that decision of Justice Crispin. This appeal does not relate to the debt the subject of the bankruptcy notice, as the original application dated 30 October 2006 related only to the Certificate of 20 October 2006. [That Certificate concerns only Crispin J’s decision of 1 February 2006.]
8. By an application dated 28 February 2007 the applicant sought orders in the ACT Court of Appeal inter alia staying execution on the Certificate of Taxation referred to in 2. above [of 1 November 2004 - the subject of the matter before this Court]. That application was dismissed by Justice Gray in the ACT Court of Appeal on 28 March 2007. The applicant was ordered to pay the respondent’s costs of that application.
I note that in his affidavit filed on 14 May 2007 the applicant referred to proceedings before Gray J. He quotes his Honour:
51.2 … Yes, although this is a proceeding within the appeal proceedings isn’t it … before me at the present time I do not have any authority to stay the certificate of 1 November 2004, that it is not a matter the subject of these appeal proceedings, and it is not a matter that I have any jurisdiction to enter upon … because my powers are limited … as a single judge, sitting as a Court of Appeal … but my powers are limited to granting or not granting stays in relation to orders that may be the subject of an appeal …
Mr Gillespie-Jones accepts this as an accurate version of what Gray J said.
It is clear then from the applicant’s own evidence in his affidavit that Gray J was of the view that the costs order of November 2004 was not the subject of the appeal proceedings before the ACT Court of Appeal.
The applicant says that all the matters are related. He says that the original issue underlying the costs orders has not been considered by the Court. Although I do not have all the documents before me, there is sufficient material to satisfy me that the appeal before the ACT Court of Appeal is unlikely to change the position that final orders have been made in relation to the costs orders the subject of the judgment debt.
As I noted earlier the applicant’s affidavits conflate the issues. These affidavits consist mainly of submissions rather than evidence. They are confused and confusing. They tend to suggest that all matters relate to the original orders of Special Magistrate Symons with which the applicant is unhappy.
Has there then been final judgment for the $8,110.76 debt?
The debt subject to the bankruptcy notice is that set out in the certificate of taxation of 1 November 2004. It relates to the decisions of Master Harper on 14 November 2003 and Connolly J of 6 February 2004. It does not concern the costs order of 1 February 2006 made by Crispin J, nor the taxation that was undertaken on that costs order by the Registrar on 20 October 2006. The proceedings before the ACT Court of Appeal are a challenge to the costs certificate of 20 October 2006.
The applicant appealed the matters heard by Master Harper and Connolly J all the way to the High Court. His application for special leave to appeal was dismissed. It is not for this Court to go behind those judgments and orders.
In the result I am satisfied that the respondent has obtained final judgment against the applicant in relation to the $8,110.76 debt. I am also satisfied there is no current action in the ACT Supreme Court or Court of Appeal which will change that position.
Counter-claim
The second ground on which the applicant seeks to challenge the bankruptcy notice is that of a counter-claim.
The applicant mentioned at the hearing before me the possibility of defamation proceedings. He has raised this in his affidavit material. He also refers to the possibility of success in his current matter in the ACT Court of Appeal. He has been vague about this counterclaim and particularly unclear about what cause of action he might be pursuing. He says in the present circumstances it is impossible for him to be more precise.
In Crimmins v Glenview Home Units Pty Ltd [1999] FCA 515 Branson J had this to say about earlier legislative provisions on counter-claims:
[4] … The authorities made it plain that to comply with the requirement so expressed it was necessary for the affidavit do more than merely assert the existence of a counter-claim, set-off or cross demand of the relevant value. It was necessary for the affidavit to contain sufficient details to show that the debtor was bona fide in his or her contention that the counter-claim, set-off or cross demand existed.
Her Honour goes on to say:
[19] In particular, I conclude that the requirement of O 77, r 13(3)(b) [which has now been superseded] that “full details of the counter-claim, set-off or cross demand” be stated in the affidavit which accompanies the application will be satisfied if the details stated are sufficient to show the nature and substance of the cross action and to demonstrate that the debtor is bona fide in his or her contention that the cross action exists. (citations omitted)
These provisions are now in rule 3.02(2) of the Federal Magistrates Court (Bankruptcy) Rules 2006.
It is clear to me that the claims or assertions made by the applicant for a counter-claim come nowhere near satisfying the requirements set out in Crimmins. That ground of complaint about the bankruptcy notice must also be rejected.
Other defects
I have rejected both grounds put forward by the applicant – that final judgment has not been obtained and that there may be a counterclaim. The applicant has alleged no other defect in the bankruptcy notice.
Costs awarded by Registrar Hedge
The applicant has also sought review of the costs order made by Registrar Hedge in the sum of $1,300. The applicant puts several grounds on which Registrar Hedge’s costs order should be set aside – the matter was dealt with in an unfair manner, there were many matters before the Registrar at the time and she had not read the material, and the order was not appropriate. The applicant also stated that there were discrepancies in the way the costs were calculated.
Having examined the material that was before Registrar Hedge and also noting the scale of costs set out in the Federal Magistrate Court Rules 2001, which is not necessarily applicable to bankruptcy proceedings but provides a guide, I am not satisfied that the order made by Registrar Hedge on costs is inappropriate. As Mr Gillespie-Jones put to me, I think it was clearly within the appropriate range.
Conclusions
I have concluded that no defect has been demonstrated in the bankruptcy notice issued on 13 February 2007. Further the discretion exercised by Registrar Hedge in awarding $1,300 costs against the applicant is not something with which it would be appropriate for me to interfere.
I therefore dismiss the application for review.
The applicant opposes any costs order against him for his unsuccessful application for review. However he has not presented any good reason for me declining to make such an order. I accept Mr Gillespie-Jones’ submission on costs, using Schedule 1 of the Federal Magistrates Court Rules 2001 as a guide. I award a lump sum of $3,915 to be paid by 22 June 2007.
I certify that the preceding thirty-four paragraphs are a true copy of the reasons for judgment of Mowbray FM
Associate: Hal Tilemann
Date: 18 June 2007
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