Gadelrabb v Liristis
[2012] FMCA 662
•11 July 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| GADELRABB v LIRISTIS | [2012] FMCA 662 |
| PRACTICE AND PROCEDURE – Application to disqualify on grounds of apprehended bias – where previous judgment – where respondent claims matters of credit previously heard – where no finding upon respondent’s credit in previous judgment – where claimed affidavits ignored in previous matter – whether affidavits formed part of prior proceedings – whether comments made indicating bias – where court must consider reasonable prospects of success of applicant in proceedings to set aside judgment upon which bankruptcy notice is based – whether order that applicant file an affidavit setting out grounds upon he seeks to challenge that judgment within three days indicates bias. BANKRUPTCY – Creditors petition – notice of objection – where respondent claimed no knowledge of affidavit of service of bankruptcy notice –where applicant alleged service by email effected – where delivery status notification received by applicant – where respondent claimed file too large to be sent by email – whether affidavit containing affidavit of service of bankruptcy notice served – whether bankruptcy notice served – where orders for substituted service of bankruptcy petition by email and regular express post – where evidence that email attaching petition received – whether evidence forged – whether size of documents impeded them from being sent – whether bankruptcy petition served. BANKRUPTCY – Creditors petition – where necessary requirements of s.52 of Bankruptcy Act 1966 (Cth) met – application for adjournment on basis that application to set aside judgment upon which creditor’s petition founded – whether reasonable prospects of success in application to set aside – whether to grant a sequestration order. |
| Bankruptcy Act 1966 (Cth), s.52 Legal Profession Act 2004 (NSW), s.384 |
| Totev v Sfar[2006] FCA 470 ; (2006) 230 ALR 23 Ling v Enrobook Pty Ltd (1997) 74 FCR 19 |
| Applicant: | JULIA GADELRABB |
| Respondent: | TONY LIRISTIS |
| File Number: | SYG 2760 of 2011 |
| Judgment of: | Raphael FM |
| Hearing date: | 11 July 2012 |
| Date of Last Submission: | 11 July 2012 |
| Delivered at: | Sydney |
| Delivered on: | 11 July 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr P. Webb |
| Solicitors for the Applicant: | Meridian Legal |
| For the Respondent: | In person |
ORDERS
Application to disqualify on grounds of apprehended bias dismissed.
Notice of Opposition dismissed.
A sequestration order be made against the estate of Tony Liristis.
The applicant creditor’s costs fixed in the amount of $6,665.80 be paid from the estate of the respondent debtor in accordance with the Bankruptcy Act 1966.
Under the Bankruptcy Regulations a copy of this sequestration order be given to the Official Receiver in Sydney within 2 days.
THE COURT NOTES:
That the date of the act of bankruptcy is 3 December 2011.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2760 of 2011
| JULIA GADELRABB |
Applicant
And
| TONY LIRISTIS |
Respondent
REASONS FOR JUDGMENT
Mr Liristis seeks that I should recuse myself from hearing this application for a sequestration order against his estate. He does so on the basis that he believes that I will not bring an impartial mind to the resolution of the question to be decided. He bases that view upon his own interpretation of a previous judgment and orders that I made on 2 July 2012. He also states that I should recuse myself because I heard matters going to his credit in a previous proceeding, upon which I gave judgment on 11 April 2012.
I accept that if I had decided a matter upon which I had come to views about Mr Liristis’ credit in previous proceedings, and the current proceedings also involved a decision upon his credit, then it would be best if I recuse myself. But as I read my own judgment of 11 April 2012, there is nothing in it that impugned Mr Liristis’ credit. Indeed, the only persons whose credit I have found to be of concern was that of the witnesses for the applicant. In [9] of my decision, I said these words:
“I saw Mr S in the witness box, and there is nothing in his questioning or cross-examination which would leave you to have concerns about his evidence. On the other hands, the matters that I have referred to in the evidence of Mr SM and Mr McG do cause me some concern … the end result of all this is that I am not satisfied to the required standard that Mr Liristis was served with the documents.”
This expression of opinion in Mr Liristis’ favour hardly seems to indicate apprehended or actual bias on my part.
Another ground upon Mr Liristis says that I should recuse myself is that two affidavits he filed in the previous proceedings were ignored. In those affidavits Mr Liristis said that he not been served with certain proceedings. He tells the Court today that those affidavits were unchallenged, but that is not my recollection. In fact, it is my recollection that the whole of the process on 11 April 2012 was a challenge to Mr Liristis’ statement that he had not been served. What I suspect is Mr Liristis’ chief complaint is that there was a statement that the bankruptcy notice was not served, and that he believes that this was not dealt with. But it was not dealt with because that was not part of his original proceeding in his application for review of the Registrar’s decision. The proceeding related only to service of the bankruptcy petition itself. I held that the bankruptcy petition had not been served and made orders accordingly that the sequestration order should be set aside. That left the petition on foot and available for service.
Mr Liristis has made some reference to comments he alleges that I made in connection with his case. Unfortunately he has not detailed what those comments were he says indicate apprehended bias or actual bias. I am unable to deal with them directly.
Mr Liristis also argues that I should recuse myself because on 2 July 2012 I gave him three days in which “to file and serve an affidavit setting out the grounds upon which he seeks to set aside the judgment of 23 October 2011 including any submissions as to matters of law”. This order was made because Mr Liristis’ ground of opposition to the sequestration order is that he is making every effort to set aside the order upon which the original judgment was based, and from there, the bankruptcy notice, and from there, the petition. The order itself was an order of Ward J in the Supreme Court of New South Wales in respect of costs thrown away as part of some other proceedings that Mr Liristis was involved in with the applicant.
One of the very important matters that a court has to consider when deciding whether or not to set aside or adjourn the hearing of a bankruptcy petition when an application is made based upon a proposal to set aside the original judgment is the prospects of success of that application: Totev v Sfar[2006] FCA 470 ; (2006) 230 ALR 23. I believe it was perfectly legitimate for me to ask Mr Liristis to tell me why he believed he was able to set that judgment aside. Mr Liristis argues that he can’t do this because he has no Legal Aid for it, and is not a lawyer.
I am not the only judicial officer who has considered the extent of Mr Liristis’ legal knowledge. Ward J, in the judgment of 21 September 2010 from which all these matters originated:
“It seems to me that Mr Liristis has shown a capacity to argue his own case in the past. He has been ready to assure me, at least on one occasion in the past, that he will be able to do so if legal representation could not be found. He assured me this morning that he is better than most lawyers.”
I was myself impressed by Mr Liristis’ knowledge of bankruptcy law when the matter came before me on 11 April 2012. I found that he and I were ad idem on the failure of the applicants to serve upon him an affidavit of service of the bankruptcy notice and other matters which were required under the Bankruptcy Act 1966 (Cth)[1]. If Mr Liristis thinks that he can set aside the judgment of Ward J, he must have some idea as to what he proposes to say in support of that application. His lawyers cannot find something for him. He must give them some instructions. And all I sought from him on 2 July 2012 was some indication of what those instructions might be, insofar as they might shed light on the prospects of success. This is not to weaken Mr Liristis’s case when it is finally brought in the Supreme Court, but to provide assistance to this court in deciding whether or not the petition should be adjourned or dismissed.
In all these circumstances, I have concluded that the responsibility of a judicial officer to see to an end a case that has been delegated to him overrides any temptation that one may have to take the easy option of recusing oneself. I do not believe that it is likely that I will be considered to have placed myself in a position of apprehended bias as far as Mr Liristis is concerned. The application is therefore dismissed.
In this matter, which is an application for a sequestration against the estate of Mr Liristis, there was a significant preliminary point that had to be considered. That was, whether or not Mr Liristis was made aware of the existence of an affidavit of service of the bankruptcy notice by Mr McGinty, that was sworn on 5 December 2011.
The second issue was whether Mr Liristis was served in accordance with an order of Registrar Hedge, dated 25 June 2012, for substituted service of the petition. The importance of the first issue was that Mr Liristis has, in his notice of objection, taken issue with the service of the bankruptcy notice. But he did not seek to cross-examine Mr McGinty upon his affidavit, which is relied upon for that purpose. Mr Liristis claimed that he had no knowledge of the affidavit of service.
The evidence of Ms Abood, who is the solicitor of the creditor in this matter, is that she sent it in an affidavit on 14 May 2012 to Mr Liristis by email. It was attached to an email which is now Exhibit 1. The exhibit shows what I will call an email cover sheet which says:
“Dear Mr Liristis, we refer to our previous email and hereby enclose by way of service again the affidavit of Julie Abood, sworn 14 May 2012, some annexures were omitted.”
There is attached to that document another email from Administrator to Ms Abood, saying these words:
“This is an automatically generated delivery status notification. Your message has been successfully relayed to the following recipients, but the requested delivery status notifications may not be generated by the destination.”
And then it has underneath that “[email protected]”. Ms Abood’s evidence is that these two documents establish that the affidavit was sent to Mr Liristis, as even Mr Liristis agrees that documentation sent to him with that email address is received by him.
Mr Liristis denies receipt of the document. He has given evidence of his alleged expertise in computer matters and essentially says that the size of the annexure was too large for it to go through Ms Abood’s computer system. Mr Liristis claims he has certain certificates and has certain training on Microsoft systems but he is not, in effect, talking about the Microsoft system; he was talking about the servers that he believes Ms Abood’s firm uses. I really do not think that I can be satisfied from his evidence that the document could not be sent as suggested by Ms Abood. I can say, in respect of the same affidavit, that it was the subject of what is called e‑filing in this Court and that means that the whole document is sent to the Court. It appears that it was sent by Ms Abood. So if the document can be sent to the Court by Ms Abood then, surely, it could have been sent to Mr Liristis’s address. I am satisfied that it was, that he had notice of the affidavit of service and that by not calling for Mr McGinty to be cross-examined, Mr McGinty’s affidavit will stand. And I am therefore satisfied that the bankruptcy notice was served upon Mr Liristis as indicated in Mr McGinty’s affidavit.
The next matter is the question about service of the bankruptcy petition and the accompanying documents. Registrar Hedge gave an order for substituted service of those documents on 25 June 2012. The orders stated that:
“A signed and sealed copy of the petition, copies of the affidavits verifying the petition, affidavit of service of Bankruptcy Notice together with a letter of notification of the adjourned time, date and place.
(a)Be sent by prepaid ordinary post addressed to the Respondent at 709 King Georges Road, Penshurst 2222 and at PO Box 752, Kingsgrove, 1480, and also
(b)Be scanned and sent by email to [email protected].”
Ms Abood gave evidence that she complied with that order; that the letter was sent by Express Post to the addresses that were referred to in subparagraph (a). She also gave evidence that the documents were scanned and sent by email, as required.
There is, marked Exhibit 3, an email from Ms Abood to info@pontiacsvr enclosing by way of service the following documents:
(1) letter to Mr Liristis, dated 25 June 2012;
(2) sealed creditor’s petition;
(3) affidavit verifying the petition;
(4) affidavit of service of bankruptcy notice:
(i) affidavit of debts form 14 May 2012;
(ii) affidavit of final service, sworn 14 May 2012; and
(iii) the affidavit of Julie Abood, sworn 14 May 2012.
That is the affidavit that I previously referred to.
There is a further document sent to Ms Abood from the administrator, it is called a “delivery status notification”, and it says:
“This is an automatically generated Delivery Status Notification.
Your message has been successfully relayed to the following recipients, but the requested delivery status notifications may not be generated by the destination.
Mr Liristis disputes the bona fides of these documents. He claims that they are forged, but that is a very serious matter to claim and merely by asserting that such documents cannot come from an administrator, as he has done, will not convince me of the correctness of his challenge.
Mr Liristis also says that, again, because of the size of those documents, including the very large affidavit of 14 May 2012, it would not have gone through Ms Abood’s computer system but I am not prepared to accept that either. I have no reason to believe that Ms Abood is not telling the truth in the court. Indeed Mr Liristis did concede that he couldn’t say that Ms Abood did not send the documents.
Sending the documents is all that is required by the order for substituted service. There is no obligation that the documents should be received either by way of post or by way of email. I am actually satisfied that the email documents were received. I make no comment about the post. To my mind, the obligations contained in the order for substituted service were complied with by Ms Abood and her firm and therefore that part of Mr Liristis’ notice of objection cannot be upheld.
There was a further point made by Mr Liristis in his notice of objection and that is:
“The Judgment Debt which the Petition was based on was the registration of the costs assessors costs certificate which is subjected of an appeal.[sic]”
Actually that is not entirely correct. It is not the subject of an appeal. What Mr Liristis is trying to do is to set aside the judgment, he did not appeal it. However, he is entitled to be heard on that matter and I did hear his submissions in that regard.
On this substantive matter, the court proceeds on the basis that an applicant who has established the necessary requirements of s.52 of the Act is entitled to the sequestration order he or she seeks: Ling v Enrobook Pty Ltd (1997) 74 FCR 19.
If a debtor seeks an adjournment or the setting aside of a petition, he or she must establish that there are sufficient grounds. Therefore, in the case of a debtor who seeks to have a petition set aside or adjourned because of the existence of an appeal or, as in this case, an application to set aside a judgment, the court must take into consideration the prospects of success in relation to that application and also the reasons for any delay in bringing such an application.
In the instant case, the judgment which Mr Liristis seeks to set aside is a judgment for costs consequent upon an order of Ward J in the Supreme Court of New South Wales made on 23 September 2010. Those costs were assessed by Rosemary Workman, who issued a certificate of determination on 7 September 2011. The Legal Profession Act 2004 (NSW) provides that a person who is aggrieved by such an assessment may make what is effectively an appeal against it (s.384). Mr Liristis did not avail himself of that opportunity and, therefore, the creditor was entitled, as it did, to have the certificate registered as a judgment and then to ask the Official Receiver to issue a bankruptcy notice based upon it.
Mr Liristis did not comply with the bankruptcy notice and now, several months afterwards, seeks to persuade the Supreme Court to set aside the judgment, based as it was upon Ms Workman’s assessment. Mr Liristis tells me, in support of his claim that his application will have reasonable prospects of success, two things. Firstly, he says that a solicitor, Mr Claude Bilinsky, has informed the legal aid authorities of New South Wales, to whom Mr Liristis is applying for a grant, that his application has prospects of success. Regrettably, Mr Bilinsky has not appeared in court today. I have no written document before me indicating why he has come to that view and so I must make up my own mind without the benefit of Mr Bilinisky’s expert opinion.
The second matter upon which Mr Liristis relies is what he calls an “inaccuracy” in a decision by Garling J in the Supreme Court of New South Wales on 29 June this year. This was a judgment made in a motion on the application to set aside the judgment. Garling J states within that judgment the following:
“As I have said, Mr Liristis accepts the orders of Ward J with respect to the payment of costs were properly made. He accepts that he is indebted to Ms Gadelrabb with respect to the reasonable legal costs of the wasted proceedings as a consequence of his failed applications. He accepts that at some point he will have to pay a sum of money to Ms Gadelrabb for those costs. There is simply no material at all to suggest that he will not be liable to Ms Gadelrabb for a sum of money and what, in my estimation, may be a significant sum of money.” [28]
His Honour then refers to some matters from the assessment of costs, saying that:
“The Bill of Costs includes work carried out by solicitors and counsel. The Memorandum of Fees rendered by counsel, which noted three and a half days fees, itself comes to a little over $11,500.”[30]
Mr Liristis argues that his Honour was incorrect in making that statement because the hearing before Ward J did not last that long. He may well be right in that because, at [1] of her Honour’s judgment, she says:
“The application that is before me today, and was before me yesterday, is an application to vacate the hearing dates.”
So it would appear from the judgment that the matter only took two days before her Honour, but even so, it must be said that counsel’s fees are likely to exceed $5,000.
Mr Liristis also prays in aid the fact that when the creditor put in a bill of costs against the legal aid authority in respect of the proceedings in the Supreme Court which are behind all of this, that bill of costs was significantly reduced and, therefore, he says, it is likely that this bill of costs will be significantly reduced. The difficulty I have with that assertion is that the bill of costs which was reduced was reduced by an assessor; whereas in the current case an assessor has already spoken and what Mr Liristis is seeking is to overturn the assessor’s decision and to further reduce the costs.
In order to reduce those costs to a figure below $5000, which is the minimum for which a sequestration order can be made, he would have to work very hard indeed, and I am not convinced that I have sufficient evidence before me to suggest that there are reasonable prospects of success on that score. Garling J said at [34]:
“Whilst I do not purport to be a costs assessor, it seems to me highly unlikely, even if Mr Liristis is successful, that there will be any sum less than $11,500 or $12,000 that he will be obliged to pay. No doubt, this is a fact to which the Federal Magistrate can have regard when considering whether or not to proceed upon the application with which the Federal Magistrate will be confronted on next Monday morning.”
Like Garling J, I am not a costs assessor, but I have taken into account the fact that the costs in question were assessed and that Mr Liristis did not avail himself of the opportunities that were open to him to challenge that assessment. I believe this will stand in his way on any application to set the judgment aside. In these circumstances, I cannot be satisfied that there is sufficient in the notice of objection to permit me to adjourn or set aside the creditor’s petition.
The application Mr Liristis intends to make appears to be predicated on the obtaining of a grant of legal aid, although I imagine that if Mr Liristis does not obtain that grant he will proceed on his own account as he has established before me that he is a competent advocate in his own interests. But I have no indication of when the application might be heard by the Supreme Court because it is currently held up by the legal aid application and the other procedural matters. For those reasons, I propose to dismiss the notice stating grounds of opposition to the application and will hear Mr Webb on compliance with s.52.
I am satisfied that the respondent committed the act to bankruptcy alleged in the petition. I am satisfied with the proof of the other matters required by s.52 of the Act. I make a sequestration order against the estate of Tony Liristis. I order that the applicant’s costs be fixed in the amount of $6,665.80 and paid from the estate of the respondent in accordance with the Act and that under the Bankruptcy Regulations, a copy of the sequestration order be given to the Official Receiver in Sydney within two days. The court notes that the date of the act of bankruptcy is 3 December 2011.
I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of Raphael FM
Date: 3 August 2012
[1] The Act.
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