Fletcher v George and Ors (No.8) - [2010] FMCA 542

FEDERAL MAGISTRATES COURT OF AUSTRALIA

FLETCHER v GEORGE & ORS (No.8)

[2010] FMCA 542

BANKRUPTCY – Application by the bankrupt for declarative and injunctive relief – issues in relation to objectionable affidavit material, tools of trade and Anshun estoppel.

Bankruptcy Regulations 1996 (Cth)
Evidence Act 1995 (Cth)

George v Fletcher (Trustee) (No 2) [2010] FCA 655
Port of Melbourne Authority v Anshun (1981) 147 CLR 589

Applicant:

WILLIAM JOHN FLETCHER AS TRUSTEE OF THE BANKRUPT ESTATE OF LAUREN KAY GEORGE (A BANKRUPT)

First Respondent:

LAUREN KAY GEORGE

Second Respondent:

DR PETER IRONSIDE PTY LTD

Third Respondent:

DR PETER DOUGLAS IRONSIDE

Fourth Respondent:

NATIONAL AUSTRALIA BANK LIMITED

Fifth Respondent:

SUSAN WILSON

File Number:

BRG 709 of 2008

Judgment of:

Burnett FM

Hearing date:

16 July 2010

Date of Last Submission:

16 July 2010

Delivered at:

Brisbane

Delivered on:

16 July 2010

REPRESENTATION

Counsel for the Applicant:

Mr C.D. Coulsen

Solicitors for the Applicant:

Holman Webb

Solicitors for the First Respondent:

The First Respondent appeared on her own behalf

Solicitors for the Second Respondent:

Bell Dixon Butler Lawyers

Solicitors for the Third Respondent:

Bell Dixon Butler Lawyers

Solicitors for the Fourth Respondent:

Thynne & Macartney

Solicitors for the Fifth Respondent:

Lewis & McNamara Solicitors

ORDERS

That paragraphs 1, 3, 6, 7 & 8 of the Amended Application in a Case filed 17 June 2010 be dismissed.
That paragraphs 4, 5 and 13 (in so far as it concerns the horse float) of the Amended Application in a Case filed 17 June 2010 be adjourned to trial.
That paragraph 9 of the Amended Application in a Case filed 17 June 2010 be dismissed.
That paragraph 10 of the Amended Application in a Case filed 17 June 2010 be adjourned to trial.
That paragraphs 11, 12 and 13 (in so far as it concerns chattels referred to in paragraphs 11 and 12) of the Amended Application in a Case filed 17 June 2010 be adjourned to trial.
That paragraphs 14 and 15 ~~2, 14, 15, 17, 20, 21, 22 and 23~~ of the Amended Application in a Case filed 17 June 2010 be dismissed.
That paragraph 16 of the Amended Application in a Case filed 17 June 2010 be dismissed.
That paragraphs 2, 17, 18, 19, 20, 21, 22 and 23 ~~18 and 19~~ of the Amended Application in a Case filed 17 June 2010 be adjourned to trial.
That each of the parties shall do all acts and sign all necessary documentation give effect to the terms of this Order and in the event that either party refuses or neglects to sign (within fourteen (14) days of a written request to do so) any documents necessary to give effect to the terms of these Orders, the Registrar of the Federal Magistrates Court of Australia is hereby appointed pursuant to section 106A of the Family Law Act 1975 to execute such documents on behalf of such party.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT BRISBANE

BRG 709 of 2008

WILLIAM JOHN FLETCHER AS TRUSTEE OF THE BANKRUPT ESTATE OF LAUREN KAY GEORGE (A BANKRUPT)

Applicant

And

LAUREN KAY GEORGE (A BANKRUPT)

First Respondent

DR PETER IRONSIDE PTY LTD

Second Respondent

DR PETER DOUGLAS IRONSIDE

Third Respondent

NATIONAL AUSTRALIA BANK LIMITED

Fourth Respondent

SUSAN WILSON

Fifth Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

(As Corrected)

On 5 July 2007, the bankrupt was given leave to file an amended application in the case.The application sought 23 orders which I will deal with discretely and in short time. I note by way of background as I stated earlier this morning this application has a turgid history.
There have been a number of interlocutory hearings and various rulings have been made. Appeals have been heard and have been unsuccessful except for one instance in which the bankrupt enjoyed partial success. This application follows the bankrupt’s most recent appeal in respect of which she was partially successful. However, for reasons which follow, she largely seeks orders in respect of matters which concern the unsuccessful issues she took on appeal.
Although the bankrupt identifies 23 discrete matters in respect of which she seeks orders, I agree with counsel for the trustee that the matters can be conveniently divided into four areas.
First, declarations and injunctions relevant to the Hanoverian Warm Blooded Mare, Stellamara, paragraphs 1, 3 and 13 of the application; second, declarations and an injunction in respect of the Toyota vehicle, the Toyota Landcruiser vehicle, that being paragraph 6, 7, 8 and 13 of the amended application; third, declarations and an injunction in respect of the horse float, they being paragraph 4, 5 and 13 of the application; and fourthly, a miscellaneous grouping which of itself has four sub-groups. They being:
a)paragraph 9, which concerns a claim for a refund of about $91,000;
b)paragraph 10, which seeks orders in respect of real estate;
c)paragraphs 11, 12 and 13, which seek orders and injunctions in respect of various chattels; and
d)paragraphs 2, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, which can be broadly described as being the nature of procedural directions.
At the outset, it is necessary to deal with objections to evidence in the material relied upon by the bankrupt. Despite operation of section 190 of the Evidence Act 1995 (Cth) – which ought be applied in proceedings of this kind to sensibly dispense with such formal proof as would be expected to permit evidence to proceed in order to avoid unnecessary expense and delay – that provision cannot address some of the objections that are made. The trustee and the other respondents to the application sought to object to significant parts of the bankrupt’s deposition contained in her affidavit.
They did not object to the numerous annexures which approach I regard as proper, particularly having regard to the nature of the documents which were annexed to the affidavit. However I think they correctly objected to that much of the bankrupt’s deposition in her affidavit on the basis that was either argumentative, irrelevant or descended into an expression of opinion for which she could not provide a proper foundation for such expression of opinion.
In my view, the objections are well-founded and, accordingly, most of her affidavit, being afflicted by those deficiencies, was objectionable. I note that her affidavit extended over 78 paragraphs and 10 pages, of which only about 21 lines in all were, in my view, admissible. The admissible parts of the affidavit have been underlined by me on the original affidavit filed by the bankrupt on 8 June. They are, in summary, the passages acknowledged by the trustee’s counsel and the other respondents as being admissible.
The background of this case has been rehearsed previously and I will not restate those matters today. However, for present purposes, it is necessary to highlight some of the more salient features. When the matter came on for hearing, an application was made at the outset by the trustee, supported by all respondents save for the bankrupt herself. They sought summary judgment in the proceeding in respect of quite a number of matters that were in issue between the parties.
The purpose of the application was hopefully to shorten the length of time for the conduct of the trial, particularly having regard to the myriad of issues that were in contest between the parties, many of which lacked clear structure. I acquiesced and determined that application and in doing so dealt with the following matters so far as is relevant to today: title to the real estate, title to the Toyota Landcruiser and title to the Hanoverian Mare, Stellamara. In respect of other chattels, including a horse float, jewellery and household effects, I made orders for trial and the trial has been listed for hearing later in this year.
I note that, at the time, I heard the summary judgment application the trial had been listed for three days, but by reason of the time taken by the bankrupt in the conduct of her case, the summary judgment application itself ended up taking that much time. Judgment was delivered and ultimately was the subject of appeal by the bankrupt. The appeal was partially successful. The judgment of the Full Court was delivered on 28 May 2010. The Full Court allowed the appeal insofar as it related to the heads of agreement issue and in relation to the question of title to the real property.
Neither of these particular matters are relevant to the bankrupt’s application now before me, that being the application filed by leave on 5 July 2010. It follows that so far as is relevant to this application, orders for declarations of ownership of the Toyota motor vehicle and the Hanoverian Mare in favour of the trustee made by me at first instance remain undisturbed, that is, undisturbed by reason of the Full Court’s intervening decision. I will come back to those matters in greater detail shortly.
First, I will dispose of the less controversial matters. First, the horse float, paragraphs 4, 5 and 13. As is noted in paragraph 71 of my judgment of 9 February 2009, this chattel is a subject of a factual dispute to be resolved at trial. There was a consent order made concerning its title on 5 December 2008 which matter will be agitated at trial. The trustee presently holds the asset but the bankrupt has claimed that this asset is a tool of trade – see her amended statement of claim, paragraph 57.
This is a matter she can no doubt pursue at trial on the basis of her prospective success in her application for a declaration of title to that chattel. But, ultimately, whether any such application under section 116(2)(c) Bankruptcy Act has prospects depends upon a favourable outcome in her application for declarations as to title. As I understand it, the trustee does not seek to do anything with the chattel to date and there is no need for any formal orders.
So far as the other issues are concerned – first, paragraph 9, nobody understands what paragraph 9 seeks, nor do I. And so far as it is concerned, the application in respect of paragraph 9 is dismissed.
Paragraph 10 seeks orders in respect of the real estate. This matter has been remitted to me for rehearing and the issue remains alive on the pleadings and requires no further comment. All I can do is adjourn paragraph 10 to the trial for hearing, noting that the relief sought today probably falls somewhere between the relief sought by the bankrupt in her amended statement of claim at paragraphs 2, 3, 5 and 9.
Next, then, are paragraphs 11, 12 and 13 of the amended application. As with the horse float, these matters were the subject of comment at paragraph 71 of my reasons in February 2009 and are to be determined by trial. Again, I will adjourn the determination of those matters to the trial.
Next, then, are paragraphs 2, 14, 15, 16, 17, 18, 19, 20, 21, 22,

and 23.
Paragraphs 14, 15, 17, and 23 are matters which are procedural in nature and which I do not propose to deal with today. They relate to the trial and/or the administration, in particular concerning one matter; they are matters over which this court ought not make any orders today. The one matter is the matter concerning the order in which witnesses are to be called by various parties (paragraphs 14 and 15). It is well settled that the parties are entitled to call witnesses in any order that they choose. It is not for the court to interfere with a party’s conduct of its action except in the most exceptional circumstances. In this instance none have been demonstrated. So far as paragraphs 14 and 15 are concerned, they are dismissed, as I will deal with any further necessary trial directions at the end of today’s proceedings.
So far as paragraphs 2, 18, 19, 20, 21 and 22 are concerned, they relate to the manner of administration of the estate. The bankrupt’s application in respect of those matters can be pursued at some other time. She has not filed any affidavit material in support of those matters, and accordingly they cannot be disposed of today. So those matters will be simply adjourned to the hearing. I apprehend those matters to concern applications for review of decisions made by the trustee. They can be conveniently disposed of at the hearing and I propose to do so then.
Finally, there is a matter contained in paragraph 16 which is an application for an order seeking that Mr Fletcher surrender his passport and be restrained from travelling overseas. The court has no power to make any such order, and I do not propose to do so. The application, in my view, is incompetent and is dismissed.
That leaves me, then, to consider the substantive application which relates to the declarations in respect of the horse, Stellamarra, and the Toyota motor vehicle. The bankrupt simply refuses to accept that this court’s orders made in February 2009 are efficacious. Moreover, she says that even if they are, she is entitled to the benefit of section 116(2)(c) or 116(2)(ca) of the Bankruptcy Act in respect of those two chattels and they ought be excluded because the provenance of the funds for their acquisition were protected moneys. Putting aside questions of Anshun estoppel in relation to evidence she wants to lead and the way in which she wants to prosecute these claims, these questions were resolved against the bankrupt at first instance and, more recently, on appeal.
Respectfully, the bankrupt simply misunderstands and has misinterpreted the Full Court’s findings at paragraphs 83 and 84 of the judgment of Ryan and Logan JJ. Marshall J, of course, dismissed the appeal in its entirety. And so, again, to like effect, the bankrupt simply fails to comprehend their Honours’ conclusions in relation to those matters.
The position of the Full Court was restated by Logan J in dismissing an application for stay of the Full Court’s orders when application was made for stay pending the bankrupt’s application for special leave to appeal to the High Court in respect of the Full Court’s orders. Without restating all of the relevant passages from the judgment at first instance, but going to what His Honour Logan J said in refusing the stay application[1] commencing at paragraph 21, his Honour noted:
“Further, on 8 December 2008, the bankruptcy trustee did point to evidence he had filed which disclosed that Ms Ironside had, by a Deed of Settlement (with the bankruptcy trustee dated 28 October 2008) agreed to transfer the horse and the land cruiser to the bankruptcy trustee. Last, there was nothing revealed at the trial in December 2008 which suggested that Ms George had a reasonable prospect of successfully defending this part of the claims for relief made by the bankruptcy trustee.
We [that is, the Full Court] added at [84]:
Further, even if, as the learned federal magistrate allowed in his reasons for judgment, contrary to Ms George’s pleaded position, there had been evidence which showed that Ms Ironside held either the horse or the land cruiser in trust for Ms George, the beneficial interest in each item of property had passed to her bankruptcy trustee on the commencement of her bankruptcy. The exception for which s 116(2)(ca) of the Bankruptcy Act provided in respect of means of transport was inapplicable in the case of the land cruiser because, on the only valuation evidence before the Federal Magistrates Court, that vehicle had a value in excess of the prescribed amount.”
[1] George v Fletcher (Trustee) (No 2) [2010] FCA 655.
Returning back to the application then before his Honour Justice Logan, he said:
“Ms George sought to agitate in her affidavit, questions which went to whether the Landcruiser and the horse were each items of property which were (or at least which represented) what might one term protective moneys. This is quite contrary to her pleaded position before the Federal Magistrates Court. She put in her submissions this morning that this position that she aired in her affidavit would have emerged had she been allowed further time on the hearing of the appeal. In other words, had the appeal gone for three rather than two days. The appeal was heard in the time allocated, and in any event, in the face of an expressly pleaded position which is quite contrary to that sought to be aired today it is difficult to see what purpose there would have been in the allowing of further time.
Also to be agitated in the affidavit are factual questions touching upon the worth of the Landcruiser.
His Honour then proceeded to dispose of the submission of the application for stay. As I have noted, the bankrupt simply misapprehends the orders as they relate to each of those chattels.
Matters have been resolved and an issue estoppel arises. In any event, there would be an Anshun[2] estoppel in addition to those matters particularly in respect of the protected moneys claim. Insofar as the bankrupt now seeks to raise other matters, including fresh valuation evidence, it is simply too late.
[2] Port of Melbourne Authority v Anshun (1981) 147 CLR 589
Accordingly, I dismiss the application in respect of paragraphs 1, 2, 3, 6, 7, 8 and 13 insofar as it concerns those chattels.
I just make one further observation in relation to the question of tools of trade. The bankrupt also fails to appreciate that insofar as claims relate to tools in respect of which she seeks to collect the Toyota Landcruiser, the horse, Stellamarra, and the horse float – see paragraph 57 of the amended statement of claim – the present quantum of permitted tools provided for in the Bankruptcy Regulations 1996, which is amended annually, is $3350.00. There can be no question of them being tools of trade, having regard to the evidence before the court, that, save for a question in relation to the value of the horse float, that the Toyota motor vehicle and the horse each have a value well in excess of the prescribed sum.
In the circumstances, and in order to minimise incurring of additional unnecessary expenses, I will make such orders as are necessary for execution of such documents of transfer in respect of the Toyota motor vehicle and the horse, including an order that the Registrar sign all such instruments, as are required to be signed by the bankrupt. In that regard I assume that there might be instruments which can only be signed by the bankrupt and not by her trustee.
I propose to make those orders in addition to the orders dismissing the application and other orders that I have indicated I will make in respect of the application.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Burnett FM

Date: 02 August 2010

CORRECTIONS

(1)Order 6 line 1 – delete “2, 14, 15, 17, 20, 21, 22 and 23” and insert “14 and 15”
(2)Order 8 line 1 – delete “18 and 19” and insert “2, 17, 18, 19, 20, 21, 22 and 23”