Hillman & Reeves (No 2)
[2023] FedCFamC1A 168
•29 September 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Hillman & Reeves (No 2) [2023] FedCFamC1A 168
Appeal from: Reeves & Hillman [2023] FedCFamC1F 480 Appeal number(s): NAA 173 of 2023 File number(s): BRC 1750 of 2016 Judgment of: ALDRIDGE, HARPER & SCHONELL JJ Date of judgment: 29 September 2023 Catchwords: FAMILY LAW – APPEAL – Where the primary judge made orders fixing the remuneration of a liquidator’s costs in a fixed sum and ordered that the appellant pay that sum – Whether the primary judge erred in assessing the quantum of the liquidator’s remuneration in a fixed sum – Whether the primary judge erred in accepting the resolution of creditors – Procedural fairness – Adequacy of reasons –
Application of guidelines in Re F: Litigants in Person Guidelines (2001) FLC 93-072 – No error established – Appeal dismissed – No order as to costs.Legislation: Corporations Act 2001 (Cth) ss 58AA(1)(c), 233(1)(a), 473, Sch 2 - Insolvency Practice Schedule (Corporations) ss 60-10, 60-12
Evidence Act 1995 (Cth) ss 56, 57
Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth) r 5.01
Federal Circuit and Family Court of Australia (Family Court) Rules 2021 (Cth) r 5.02
Federal Court (Corporations) Rules 2000 (Cth) Div 9, rr 1.18, 1.19, 1.20
Cases cited: Bahonko v Sterjov (2008) 166 FCR 415; [2008] FCAFC 30
Carr v Finance Corporation of Australia Ltd (No. 1) (1981) 147 CLR 246; [1981] HCA 20
Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577; [2006] HCA 55
Fox v Percy (2003) 214 CLR 118; [2003] HCA 22
Hillman & Hillman [2020] FamCA 630
Hillman & Hillamn (No. 2) [2020] FamCA 893
Hillman & Reeves [2023] FedCFamC1A 152
Housing Commission (NSW) v Tatmar Pastoral Holding Co Pty Ltd (1983) 3 NSWLR 378
Licul v Corney (1976) 180 CLR 213; [1976] HCA 6
Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110
Re F: Litigants in Person Guidelines (2001) FLC 93-072; [2001] FamCA 348
Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex Parte Lam (2003) 214 CLR 1; [2003] HCA 6
Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128; [2016] NSWCA 88
Whisprun Pty Ltd v Dixon (2003) 200 ALR 447; [2003] HCA 48
Number of paragraphs: 70 Date of hearing: 29 September 2023 Place: Sydney The Appellant: Litigant in person Counsel for the Respondent: Mr Coulsen Solicitor for the Respondent: QBM Lawyers ORDERS
NAA 173 of 2023
BRC 1750 of 2016FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR HILLMAN
Appellant
AND: MR REEVES
Respondent
ORDER MADE BY:
ALDRIDGE, HARPER & SCHONELL JJ
DATE OF ORDER:
29 SEPTEMBER 2023
THE COURT ORDERS THAT:
1.The appeal is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Hillman & Reeves (No 2) has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
ALDRIDGE J:
INTRODUCTION
This is an appeal from an order made on 16 June 2023 by a judge of the Federal Circuit and Family Court of Australia (Division 1) which fixed the remuneration of a liquidator’s costs in the sum of $67,056.73 and ordered that the appellant pay that sum.
On 17 November 2016, Austin J ordered that HH Pty Ltd be wound up pursuant to s 233(1)(a) of the Corporations Act 2001 (Cth) (“the Corporations Act”). Mr Reeves (“the respondent”) and Mr AS were appointed as its liquidators. Order 1.7 provided:
1. …
1.7The costs of the Liquidators are to be paid in the first instance by the Company. In the event that the Company does not have sufficient funds to pay the Liquidators’ costs then the [appellant] is to pay such fees.
The orders were made in the course of property settlement proceedings between the appellant and Ms Hillman (“the wife”) which were concluded by reasons delivered on 18 September 2020 and 23 October 2020. Final orders were made on the latter date (Hillman & Hillman [2020] FamCA 630 and Hillman & Hillamn (No. 2) [2020] FamCA 893). The liquidators did not participate in that aspect of the matter.
On 12 May 2021, the respondent filed an Application in a Case seeking the following relief:
1.The remuneration of [the respondent] and [Mr AS] as Liquidators of [HH Pty Ltd] for the period from 17 November 2016 to 1 February 2021 be assessed in the amount of $67,056.73 inclusive of GST pursuant to the Corporations Act 2001 (Cth) Schedule 2, Insolvency Practice Schedule (Corporations), Division 60-10.
2.The remuneration of the Liquidators, together with the outlays incurred or payable by the Liquidators be paid by the [appellant] pursuant to Order 1.7 of the Orders made by Justice Austin on 17 November 2016 (amended 22 September 2017).
3. Such further or other Orders as the Court deems appropriate.
There were thus two issues to be considered – whether the appellant should pay the costs of the liquidators and the quantum of them.
As to the first issue, the primary judge said, referring to the earlier reasons:
10. However at [50], the Court recorded the following:
50.It is reasonable to infer that, to some extent, it suited the parties to not have the liquidator “control” the sale of assets as more costs of liquidation would have been incurred. It seems that, before the liquidation order was made by Austin J in November 2016, and for some period thereafter the parties personally benefited from accessing company funds, at least to the extent identified by the liquidator, namely:
[The appellant] - $112,959.09 + $65,031.01 = $177,990
Wife - $93,000.00 + $55,000.00 = $148,000
11.The result of these actions is that I am satisfied that the company “does not have sufficient funds to pay the liquidators’ costs”.
The respondent’s remuneration fell to be determined under s 60-10(1)(c) of the Insolvency Practice Schedule (Corporations) to the Corporations Act, which replaced s 473 of the Corporations Act. Section 60-12 sets out the matters to which the court must have regard in determining whether the remuneration is reasonable.
His Honour said:
30.Whilst it is true that the liquidators’ actions did not result in any return to creditors, and further that this was a relatively small insolvency, I am satisfied the work was reasonable and necessarily required to be performed to prepare the report, required by the Court Orders.
31.The liquidator was entitled to rely upon the Remuneration Approval Report, and the challenges raised in the [appellant’s] submissions and in his brief cross-examination of [the respondent] do not persuade me otherwise.
THE APPEAL
The Amended Notice of Appeal filed on 9 August 2023 contains eight grounds. The appellant’s Amended Summary of Argument filed on 11 September 2023 indicated that Grounds 2 and 4 were not pressed. Grounds 1A and 7 were not directly addressed in it. Ground 1A appears to be part of Ground 1.
Was the appellant’s cross-examination of the respondent improperly interrupted by the primary judge? (Ground 3(a))
It is necessary to commence with Ground 3 which asserts procedural unfairness as it goes to the integrity of the trial process itself (Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd (2006) 229 CLR 577; Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128).
The ground states:
3. That his Honour failed to afford the Appellant procedural fairness by:
a)Not allowing the Appellant to carry out the cross examination of [the respondent] and by often interrupting same without providing proper reason or explanation.
b)By not assisting the self-represented [appellant] in any matter expected by a Court.
In support of this ground the appellant submitted that the tone of the primary judge was loud with a raised voice and was dismissive.
A direction was made on 4 September 2023 that the appellant listen to the audio of the hearing and identify with precision the parts of it he relied upon (Hillman & Reeves [2023] FedCFamC1A 152). The appellant did not comply with that direction.
He said today that he attended the registry and had listened to the audio, but decided not to proceed with that aspect of that matter.
The transcript of the cross-examination of the respondent by the appellant covers some 20 pages, it records frequent interruption by the primary judge, but that does not bespeak error of itself. As is apparent from the transcript, his Honour considered that many of the questions or lines of questions were irrelevant and he would not permit them to be put. It is to be remembered, as identified earlier, that there were only two issues before the Court. The application was not a general inquiry into the conduct of the liquidators, as the primary judge often reminded the appellant.
It is the role of a judge to control the proceedings before him or her, and to ensure their conclusion in an efficient and timely manner. Irrelevant evidence is inadmissible (s 56 and s 57 of the Evidence Act 1995 (Cth)) and if permitted unduly prolongs proceedings for no good purpose whatsoever. Witnesses should not be subjected to unnecessary questioning. The fact that the cross-examiner is an unrepresented litigant does not alter these fundamental principles.
It is also to be noted that many of his Honour’s “interruptions” were, in fact, rulings on objections taken by the counsel for the respondent, which the primary judge was obliged to make. This obligation was made more difficult by the tendency of the appellant to continue talking after the objection was taken and during the course of the objection being dealt with.
Further, on more than one occasion the appellant said that he was “terribly prepared for this” (for example, at Transcript 10 February 2022, p.23 line 10).
On more than one occasion the appellant simply ignored the ruling and had to be directed to move on to other matters (for example, Transcript 10 February 2022, p.24 line 44 to p.30 line 24).
The appellant did not suggest that any of the rulings on this question were wrong. For our part, they were, respectfully obviously correct.
It is plain from the transcript that the appellant did not take kindly to these rulings and continued to talk over the primary judge. In such circumstances, a litigant can hardly complain about being spoken to firmly.
The making of proper rulings on evidence and appropriate control of the questioning cannot amount to excessive intervention even if it occurs frequently. That is simply a judge undertaking the role of a judge. Further, such interventions do not make the trial unfair, which is the test to be applied, but one designed to make the hearing fair. The fact that the rulings may be largely adverse to one side does not, of itself, demonstrate unfairness.
It is for the appellant to identify the matters he relies upon in support of his appeal. In Bahonko v Sterjov (2008) 166 FCR 415, the Full Court of the Federal Court said:
3.Notwithstanding the obligation of an appeal court, where it is able to do so, to make its own evaluation of the material at first instance, it is a fundamental aspect of the appellate process that appeals are made available for the correction of error (see Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at [14]; Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 at [22]-[30]; Poulet Frais Pty Ltd v The Silver Fox Company Pty Ltd (2005) 220 ALR 211 at [45]). This basic principle imposes an obligation upon an appellant to identify where error is to be found in a judgment under appeal, whether it be an error of fact, law or general principle. It is not necessary for an appeal court to hunt through all the material at first instance and recanvass every aspect of it unless an occasion arises for suspecting, on reasonable grounds (generally those provided by the appellant), that such an examination may yield a conclusion of appellable error.
The appellant did not identify the parts of the audio recording on which he relied because he now does not rely on this aspect of the matter. There is however no reason to suspect that any further enquiry by the Court would identify error. In my opinion, none has been shown.
Did the primary judge fail to assist the appellant? (Ground 3(b))
It is not the role of a judge to provide legal advice to an unrepresented litigant or to conduct a case on their behalf. The approach to such litigants was set out in Re F: Litigants in Person Guidelines (2001) FLC 93-072 as follows:
253.Finally, we think it useful to list the set of guidelines as altered by our consideration of them above.
1.A judge should ensure as far as is possible that procedural fairness is afforded to all parties whether represented or appearing in person in order to ensure a fair trial;
2.A judge should inform the litigant in person of the manner in which the trial is to proceed, the order of calling witnesses and the right which he or she has to cross examine the witnesses;
3.A judge should explain to the litigant in person any procedures relevant to the litigation;
4.A judge should generally assist the litigant in person by taking basic information from witnesses called, such as name, address and occupation;
5.If a change in the normal procedure is requested by the other parties such as the calling of witnesses out of turn the judge may, if he/she considers that there is any serious possibility of such a change causing any injustice to a litigant in person, explain to the unrepresented party the effect and perhaps the undesirability of the interposition of witnesses and his or her right to object to that course;
6.A judge may provide general advice to a litigant in person that he or she has the right to object to inadmissible evidence, and to inquire whether he or she so objects. A judge is not obliged to provide advice on each occasion that particular questions or documents arise;
7.If a question is asked, or evidence is sought to be tendered in respect of which the litigant in person has a possible claim of privilege, to inform the litigant of his or her rights;
8.A judge should attempt to clarify the substance of the submissions of the litigant in person, especially in cases where, because of garrulous or misconceived advocacy, the substantive issues are either ignored, given little attention or obfuscated. (Neil v Nott (1994) 121 ALR 148 at 150);
9.Where the interests of justice and the circumstances of the case require it, a judge may:
•draw attention to the law applied by the Court in determining issues before it;
•question witnesses;
•identify applications or submissions which ought to be put to the Court;
•suggest procedural steps that may be taken by a party;
•clarify the particulars of the orders sought by a litigant in person or the bases for such orders.
The above list is not intended to be exhaustive and there may well be other interventions that a judge may properly make without giving rise to an apprehension of bias.
The appellant did not identify the way in which the primary judge failed to assist him.
It is plain from the transcript that his Honour often attempted to explain why the questions being asked by the appellant were not relevant, asked the witness questions to get to the substance of the question asked by the appellant and at times, rephrased questions for the appellant.
Therefore, as Gleeson CJ said in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex Parte Lam (2003) 214 CLR 1, “[n]o practical injustice has been shown. The applicant lost no opportunity to advance his case” (at [38]).
Whether the primary judge failed to give any or any adequate reasons for:
(a)The Application in a Case by the respondent be struck out as it was out of time.
(b)Family Law Rules 2004 - Rule 5.01, Restrictions in relation to applications
1. Final orders have not been made on that application;
2.A party may apply for an interim, procedural, ancillary or other incidental order only if the order sought relates to a current case.
(Ground 1)
That Final Property Orders were made on 23 October 2020 and the File was closed (Ground 1A)
This ground arises from the fact that final property orders were made on 23 October 2020 and the respondent’s application was filed on 12 May 2021, some seven months later.
The appellant relied upon r 5.01 of the Family Law Rules2004 (Cth). Those rules did not apply to the hearing because they had been replaced by the Federal Circuit and Family Court of Australia (Family Court) Rules 2021 (Cth). The equivalent rule would appear to be r 5.02(2) which applies to interlocutory orders, as did r 5.01 of the earlier rules.
We do not see that the fixing of remuneration and the determination of who is to pay it can be characterised as interlocutory as the orders finally disposed of the parties’ rights on those issues (Carr v Finance Corporation of Australia Ltd (No.1) (1981) 147 CLR 246 at 248; Licul v Corney (1976) 180 CLR 213).
The rule therefore does not apply.
The orders of Austin J left open the question of the quantum of the liquidators’ remuneration, of course, because it could not be determined until the conclusion of the winding up.
The winding up of the company was not part of the property proceedings, although it was, of course, associated with it. The appointment of the liquidators and the determination of their remuneration are an exercise of jurisdiction and power conferred by the Corporations Act and not the Family Law Act 1975 (Cth). Contrary to the submission of the appellant, the Court has jurisdiction under the first – see s 58AA(1)(c) of the Corporations Act. The Federal Court (Corporations) Rules 2000 (Cth) (“the Federal Court (Corporations) Rules”) apply instead of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (see r 1.18 and r 1.19 of the Federal Court (Corporations) Rules).
Importantly for this appeal, r 1.20 of the Federal Court (Corporations) Rules provides that an application under the Corporations Act “must not be dismissed only because it has been made in the wrong form”.
Division 9 of the Federal Court (Corporations) Rules deals with the assessment of the remuneration of officeholders which includes liquidators. Such applications may be made by originating or interlocutory processes and no time limit is imposed.
Thus, the complaint made by the appellant is misconceived.
The appellant also complains that the Application in a Case has handwriting on it and therefore should not have been accepted by the Court. The handwriting clarifies that the respondent was, in fact, the applicant, not the wife, and that the wife and the appellant were the respondents.
I do not understand the difficulty that arose from the amendment or why that invalidated the application.
Finally, the appellant submitted that the primary judge gave inadequate reasons for permitting the respondent to rely on the Application in a Case as it stood and dismissing his application to strike it out.
It appears from the transcript that this occurred on an earlier occasion (the material before us does not identify the date) and that no separate reasons were delivered. We do not have the transcript of that hearing and it is impossible to take this aspect of the matter further. I would observe, however, that given the nature of the dispute, little by way of reasons would be expected.
No error has been identified.
Did the primary judge err by assessing the quantum of the liquidators’ remuneration in the sum of $67,056.73? (Ground 5)
In his Summary of Argument, the appellant said that when the liquidators had been appointed, they had quoted their likely fees as between $12,000 and $17,000. He added that the primary judge had relied upon the integrity and honesty of the respondent, which was in fact lacking, and that none of the billing had been audited or assessed by an independent auditor.
The respondent swore an affidavit which annexed a report to creditors. It contained a broad breakdown of the claimed remuneration. He said that the firm maintained a computerised time charging system which he then described in further detail (Respondent’s affidavit filed on 12 May 2021, paragraph 31). In brief, work carried out was entered into the system which recorded the date, name of staff member carrying out the work, the time involved, the charge out rate of the staff member, the amount charged, the general characterisation of the work and details of the work involved.
Annexure “K” to the respondent’s affidavit is a copy of that record. None of the entries in it was challenged by the appellant.
The appellant did not explain why the liquidators were bound by the earlier “quotation” of their fees and we see no reason why they should be. Whilst the appellant frequently complained that the respondent was completely lacking in integrity, merely saying it does not make it so. There was no evidence whatsoever as to any lack of integrity.
There was thus ample evidence of the quantum of the costs and their reasonableness which the primary judge was entitled to accept.
In my opinion, this ground does not succeed.
Did the primary judge err in accepting the resolution of creditors at a meeting on 27 March 2018 and was it defective and lacking credibility? (Ground 6)
The primary judge said:
24.It is of fundamental importance that on 27 March 2018, the creditors by resolution approved remuneration in the period from 17 November 2016 to 9 March 2018 in the amount of $49,759.86 (inclusive of GST), and further the creditors resolved that the liquidators’ remuneration from 9 March 2018 to finalisation of the liquidation be capped in the amount of $23,507 (inclusive of GST) – a total of $73,266.86. In fact the claimed remuneration is less than this figure, and was the reduced sum of $67,056.73.
However, this was not the only basis for the primary judge’s decision. The reasonableness of the claimed remuneration was independently discussed and found at [28]–[29].
The register of attendance at the creditors’ meeting records that two creditors gave a proxy to the chairperson and that one person claiming to be a creditor, the wife, attended in person (Respondent’s affidavit filed on 12 May 2021, Annexure “F”).
The minutes of the meeting record that the motion approving the remuneration was moved by one of the creditors who had provided a proxy. The motion was “passed on the voices” with the wife abstaining (Respondent’s affidavit filed on 12 May 2021, Annexure “F”).
In his cross-examination, the respondent explained “so that’s traditionally how you do the voting, and so that would have been on my voice” (Transcript 10 February 2022, p.32 lines 5–6).
In his Summary of Argument, the appellant raised the following:
·The application was defective (as discussed earlier). The wife was originally described as the first respondent which was later corrected in handwriting to the second respondent;
·No creditors were present at the meeting so no vote could be taken;
·The wife failed to notify the liquidators promptly of their appointment;
·The proof of debt form, appointment of proxy form, voting slip and indemnity funds form annexed to the respondent’s affidavit were blank;
·The only creditor who attended the meeting was the wife, who abstained from voting;
·The wife and one of the creditors who provided a proxy were not creditors;
·The amount received by the liquidator equalled the amount spent by him;
·The liquidators should have appeared in the property settlement proceedings;
·The reconciling of receipts versus the payments made to the liquidator is an invention; and
·The primary judge criticised the appellant for being “emotional” (although we are unable to find that word in the transcript).
Most of these points have nothing to do with the ground of appeal.
A creditor can be present at a meeting personally or by proxy. Either way, she, he or it attends the meeting. The appellant’s assertion in his submission that particular creditors were not, in fact, creditors, can carry no weight and in any event, does not demonstrate any error on the part of the primary judge before whom this issue was not raised.
It is true that the forms referred to above, as contained in the evidence, are blank but they are documents which were sent to creditors prior to the meeting. It is clear that the blank forms were for the assistance of creditors wishing to attend the meeting – see for example Respondent’s affidavit filed on 12 May 2021 at Annexure “E”, p.27 and 29–31.
They were described in the evidence as pro forma documents.
Therefore, the fact that they are blank does not prove that no proxies were given or that no creditors attended the meeting.
The fact that the liquidators spent exactly the funds that were received is hardly surprising – they cannot spend funds that they do not have.
This ground has no merit.
Did the primary judge err in not providing adequate reasons for not considering the written submissions made by the appellant? (Ground 7)
The appellant’s Summary of Argument did not address this ground.
The written submissions were filed after the hearing had been completed. His Honour recorded that he had considered them. They were marked as “Appendix One” to the reasons.
The appendix raises, essentially, the same matters as have been raised on appeal. There is no merit in any of them. Some of them, such as the reliance on the pro forma documents are quite misconceived.
A trial judge is not obliged to deal with every argument put before the court (Fox v Percy (2003) 214 CLR 118 at 132; Whisprun Pty Ltd v Dixon (2003) 200 ALR 447 at [62]). The extent and content of reasons depends on the particular case and the matters in issue (Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 at [58]; Housing Commission (NSW) v Tatmar Pastoral Holding Co Pty Ltd (1983) 3 NSWLR 378 at [386]).
The submissions contained in the appendix are misconceived and are obviously lacking in merit. I consider that his Honour did not err by dealing with them as he did. It should be added however, that many of the difficulties faced by the submissions were dealt with by the primary judge in the course of dealing with objections to questions asked by the appellant. Those reasons cannot be ignored and did not need to be repeated later.
This ground does not succeed.
CONCLUSION
It follows that, in my opinion, the appeal will be dismissed.
HARPER J:
I agree.
SCHONELL J:
I agree with the reasons and orders as proposed by Aldridge J.
ALDRIDGE J:
The order of the Court is that the appeal is dismissed.
I certify that the preceding seventy (70) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justices Aldridge, Harper & Schonell. Associate:
Dated: 6 October 2023
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