Gold, Isobel Patricia v The Proprietors - Units Plan No 52

[1997] FCA 1163

FEDERAL COURT OF AUSTRALIA

BANRUPTCY - application to have proof of debt expunged on the ground that it has been wrongly admitted

Bankruptcy Act 1966 (Cth) - s 99(1)
Unit Titles Act 1970 (ACT) - s 48

PATRICIA ISOBEL GOLD -V- THE PROPRIETORS - UNITS PLAN NO. 52 & BARRY A TAYLOR

A 54 of 1997

FOSTER, VON DOUSSA & LINDGREN JJ
24 OCTOBER 1997
CANBERRA

IN THE FULL COURT OF THE  FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY                   DISTRICT REGISTRY	A 54 of 1997

Appeal from a single judge of the Federal Court

RE:  PATRICIA ISOBEL GOLD

A Bankrupt

BETWEEN:

PATRICIA ISOBEL GOLD
APPELLANT

AND:

THE PROPRIETORS - UNITS PLAN NO. 52
FIRST RESPONDENT

BARRY A TAYLOR

Trustee in Bankruptcy

SECOND RESPONDENT

JUDGES:

FOSTER, VON DOUSSA AND LINDGREN JJ

DATE OF ORDER:

24 OCTOBER 1997

WHERE MADE:

CANBERRA

THE COURT ORDERS THAT:

1. The appeal be dismissed with costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FULL COURT OF THE  FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY	A 54 of 1997

Appeal from a single judge of the Federal Court

RE:  PATRICIA ISOBEL GOLD

A Bankrupt

BETWEEN:

PATRICIA ISOBEL GOLD
APPELLANT

AND:

THE PROPRIETORS - UNITS PLAN NO. 52
FIRST RESPONDENT

BARRY A TAYLOR

Trustee in Bankruptcy

SECOND RESPONDENT

JUDGES:	FOSTER, VON DOUSSA AND LINDGREN JJ
DATE:	24 OCTOBER 1997
PLACE:	CANBERRA

REASONS FOR JUDGMENT
(Extempore)

THE COURT:          This is an appeal against a judgment of Finn J which dismissed an application by the appellant, Mrs Gold. Mrs Gold became bankrupt pursuant to the sequestration order made on 21 June 1993 on the petition of the first respondent. The second respondent is the trustee in bankruptcy of Mrs Gold’s estate. The sequestration order was based upon failure to comply with a bankruptcy notice founded upon a judgment debt for $2,458.78 being for “outstanding levy contributions”.

Mrs Gold claims that her sole creditor is the first respondent, and that the second respondent has admitted a proof of debt by the first respondent in the sum of $60,000. She made application pursuant to s 99(1) of the Bankruptcy Act1966 (“the Act”) to have that proof of debt expunged on the ground that in law the sum claimed is not a valid debt due by her estate to the first respondent. Finn J dismissed the application, and it is from that dismissal that this appeal arises.

Mrs Gold’s application under s 99(1) of the Act was preceded by a long line of other cases, applications and appeals between herself and the first respondent which go back to 1987. Finn J, in the judgment under appeal, observed that the Federal Court has spent an inordinate amount of time considering applications of Mrs Gold which are without merit. He described the instant case as one of the more obvious of these, as the issues which she sought to agitate in the application had already been considered in previous proceedings. In dismissing the application he described it as vexatious. We agree with that description. The application is vexatious as the issues canvassed by Mrs Gold in her supporting affidavits and arguments are, in substance, the very issues that have been considered in earlier cases and decided adversely to her.

In the hearing today, we have invited her on more than one occasion to indicate what new material was before Finn J. She has failed, in our view, to indicate any. A history of Mrs Gold’s ongoing battle with the first respondent is set out in judgments of Finn J dated 29 February 1996 given on an application by Mrs Gold to have her bankruptcy annulled, and of the Full Court of this Court dated 24 June 1996 on appeal from that decision. An early part of the history is also recorded in another judgment of the Full Court of this Court delivered in proceedings between Mrs Gold and the first respondent on 16 August 1993. No purpose is served in repeating that history in these reasons.

The first respondent is a “corporation” within the meaning of s 48 of the Unit Titles Act 1970 (ACT). Mrs Gold at all material times was the proprietor of Unit 20 in a block of units administered by the first respondent. Mrs Gold’s disputation with the first respondent had its genesis in the circumstances in which a new manager was appointed to the first respondent by its members in mid 1985. She objected to the appointment. She then refused to pay annual levies raised by the first respondent, apparently believing that this would lead to her objection being fully ventilated. The first respondent sued her for outstanding levies, and a judgment was given against her in the Small Claims Court on 21 August 1987 for $1,369.55. No order for costs was made as the claim was in a “no costs” jurisdiction. Mrs Gold paid this sum, but was then presented with a copy of a bill rendered by the first respondent’s solicitors to it for $1,836.60 for the legal services incurred by the first respondent in taking recovery proceedings against Mrs Gold. This sum was claimed by the first respondent from Mrs Gold as a statutory debt due by her under s 48 of the Unit Titles Act 1970.

Mrs Gold refused to pay. A counter claim which Mrs Gold had filed against the first respondent in the Small Claims Court proceedings, which had been split off from the claim for outstanding levies, was relisted for hearing. It came on for hearing before Magistrate Ward on 2 March 1988. To what extent the request by the first respondent for payment of its solicitors’ costs was discussed at that hearing is not clear in the papers, but Mrs Gold’s allegations imply that it was considered. At the end of the hearing the Magistrate recorded an order in these terms, and we quote from the transcript of the proceedings:

“Mrs Gold, it is plain, for reasons that have been discussed during the course of your evidence, that your counter claim has no merit. There will be judgment for the plaintiff on the defendant’s counter claim, plus costs to be taxed”.

In later proceedings, Mrs Gold has relied on this order as my “defence of a 2 March 1988 Small Claims Court order”. One of the issues advanced by her on the present application is that this defence has never been litigated, or at least, properly understood and ruled upon. In this connection, it is appropriate at this point to indicate that in our considered view the cost order made by Magistrate Ward on that occasion related entirely to the counter claim and had no bearing whatsoever upon the costs claimed under s 48 of the Unit Titles Act 1970.

Essential to the arguments which Mrs Gold advances in support of her claim that there is no debt due to the first respondent by her estate are two fundamental propositions. The first is that the order of 2 March 1988 relates to the costs of $1,836.60, so that the first respondent has no right to that sum until the first respondent’s solicitors’ bill is taxed. (It is common ground that the bill has never been taxed). The second proposition is that the sum of $1,836.60 claimed from her in respect of those costs is not otherwise due and payable by her. In consequence of these two propositions, Mrs Gold argues that the persistent claims by the first respondent for payment of the sum of $1,836.60 are invalid, and all other claims by the first respondent that include that amount, for instance, claims for subsequent levies to which the sum of $1,836.60 was added, or which are consequential on the non-payment of the sum of $1,836.60 are also invalid and not lawfully made. The proof of debt is in respect of a claim which is invalid, so it is argued, on these grounds.

The Full Court in its judgment on 16 August 1993 held that the sum of $1,836.60 was a statutory debt due by Mrs Gold to the first respondent, and restored a judgment in favour of the first respondent that included that sum. It is clear from the reasons of judgment that the first respondent was not required to have the bill from its solicitors for that amount taxed as a precondition to its entitlement to recover the statutory debt.

The so called “defence of a 2 March 1988 Small Claims Court order” provides no defence to the statutory debt. We have already indicated our view in that regard. Mrs Gold’s notions and beliefs about the meaning and effect of that order are misconceived, as the judgments of Finn J on 29 February 1996 and the Full Court on 24 June 1996 explained. Those judgments considered arguments that are, in substance, the same as those advanced in support of the application under s 99(1) of the Act, and determined them adversely to Mrs Gold. An application for special leave to appeal to the High Court of Australia from the last mentioned judgment of the Full Court was refused on 7 April 1997. The reasons for the refusal given by the High Court were that:

“As there is no reason to doubt the correctness of the decision of the Full Court of the Federal Court in this case, any appeal to this Court would enjoy no prospect of success. Accordingly, special leave to appeal is refused with costs.”

Although Mrs Gold contends that her “defence of a 2 March 1988 Small Claims Court order” has not been litigated or ruled upon, she is mistaken. It is quite clear from the reasons of the judgment of Finn J, dated 29 February 1996, and of the Full Court on the appeal, that the argument she is presently advancing has been fully understood, and rejected. She also contends that the “truth” about her “defence of a 2 March 1988 Small Claims Court order” was not before the Courts, or was misrepresented. Having carefully considered the material submitted to the Court in support of this contention and having heard her oral submissions today, we are satisfied that the contention is misconceived, and reflects misunderstanding by Mrs Gold of the events which have happened. But in any event, and this must be stressed, the defence, as she now explains it, was understood by both Finn J and the Full Court, and has been ruled upon. The order of 2 March 1988 does not have the effect which Mrs Gold asserts, as we have already indicated. Section 48 of the Unit Titles Act 1970 provided an independent way for the first respondent lawfully to recover its costs without taxation, as the Full Court held in the judgment delivered on 16 August 1993 to which we have already made reference.

Mrs Gold’s affidavits and materials in support of the application under s 99(1) of the Act advanced many other arguments that in one form or another seek to agitate her dissatisfaction with the appointment of the present manager of the first respondent, and with its administration. She has reiterated these arguments before us today. However, as we pointed out to her, these are not issues that disentitle the first respondent from filing a proof of debt for moneys that include an amount equal to the solicitors’ costs of $1,836.60 or that have become due subsequent to 1987 in consequence of Mrs Gold’s refusal to pay that sum.

Mrs Gold is bound by the earlier adverse determinations of the issues that form the basis of the application under s 99(1) of the Act. These issues are concluded against her, and cannot be relitigated. The application was rightly dismissed by Finn J for the reasons he gave, and for the same reasons this appeal must fail.

The order of the Court is that the appeal be dismissed with costs.

I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment of the Court.

Associate:

Dated:

Appellant  :          In person
The first respondent did not appear
Counsel for the second respondent    :          Mr G Walker
Solicitors for the second respondent  :          Hill & Rummery
Date of hearing  :          24 October 1997