Jeevaratnam v Combis
[2020] FCCA 746
•3 April 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| JEEVARATNAM & ANOR v COMBIS & ANOR | [2020] FCCA 746 |
| Catchwords: BANKRUPTCY – Application by respondents for summary dismissal of Applicants’ claims – Applicants’ claim not easy to construe and in part based on misunderstanding of the law – Applicants seeking standing to litigate case in County Court of Victoria – Applicants facing insuperable difficulties in any event – where the Applicants have no reasonable prospect of success – Application dismissed. |
| Legislation: Bankruptcy Act 1966 (Cth), s.179 |
| First Applicant: | KANESARATNAM JEEVARATNAM |
| Second Applicant: | JANANI JEEVARATNAM |
| First Respondent: | NICK JIM COMBIS |
| Second Respondent: | ROBYN ERSKINE |
| File Number: | MLG 539 of 2020 |
| Judgment of: | Judge Burchardt |
| Hearing date: | 27 March 2020 |
| Date of Last Submission: | 27 March 2020 |
| Delivered at: | Dandenong |
| Delivered on: | 3 April 2020 |
REPRESENTATION
| Advocate for the Applicants: | Self-represented |
| Solicitors for the Applicants: | Not applicable |
| Advocate for the First Respondent: | Mr Williams |
| Solicitors for the First Respondent: | Colin Biggers & Paisley |
| Advocate for the Second Respondent: | Ms Lucas |
| Solicitors for the Second Respondent: | Piper Alderman |
ORDERS
The Form B2 Application filed by the Applicant on 17 February 2020 be dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT DANDENONG |
MLG 539 of 2020
| KANESARATNAM JEEVARATNAM |
First Applicant
| JANANI JEEVARATNAM |
Second Applicant
And
| NICK JIM COMBIS |
First Respondent
| ROBYN ERSKINE |
Second Respondent
REASONS FOR JUDGMENT
Introduction
By an application filed on 17 February 2020, the applicant seeks relief that clearly arises out of an action for possession taken against himself and his wife in relation to their matrimonial home. The relief sought in the application is that a judgment obtained by default in a case in the County Court of Victoria be set aside and the matter heard and determined according to law. Interrelated with that application is an application that the trustees give consent to Mr and Mrs Jeevaratnam so they will have standing to contest the case in the County Court of Victoria.
When the matter came before the Court on 2 March 2020, I granted leave to the applicants, who were represented by counsel on that occasion, to file and serve any amended application and affidavits in support on or before 10 March 2020. The applicants did not file any such material, so the matter returned to Court on 12 March 2020, at which time I set it down for Hearing on 27 March 2020. That Hearing was, owing to the exigencies of distance and the circumstances of the COVID-19 outbreak, heard in open court, but with all parties appearing by telephone.
It should be noticed in parenthesis that on 2 March 2020, Her Honour Judge Marks in the County Court of Victoria made orders, the relevant effect of which was that should Mr and Mrs Jeevaratnam not file any evidence by 4:00pm on 30 March 2020 that they had standing to make their application, their then extant application to set aside a County Court judgment would be dismissed with costs.
In his affidavit filed on 27 March 2020, the applicant raised for the first time matters that he would seek to agitate under section 179 of the Bankruptcy Act 1966 (Cth) (“the Act”), in addition to seeking an order for the trustees to give consent so that he and his wife can defend the County Court proceeding.
Leaving aside the fact that section 179 has been repealed, I can say shortly that the attempt to add matters going to the trustee’s conduct in this last-minute fashion without any proper application having been made, is not one I will accede to. To the extent that it might be said to have been raised before the Court, I will dismiss it. It is, of course, open to Mr and Mrs Jeevaratnam to make any such application arising out of any allegations they wish to put against the trustees in a proper way.
The respondents had squarely raised the issue of summary dismissal, pursuant to section 17A during the interlocutory proceedings. The matter has proceeded on that footing.
For the reasons that follow, I think that the applicant’s case has no reasonable prospects of success and I will dismiss the application accordingly.
Background
Mrs Jeevaratnam became bankrupt on 18 October 2010, and as I understand it is undischarged. Mr Jeevaratnam became bankrupt on 19 July 2013 and was discharged from bankruptcy on 3 October 2016. Their shares in the matrimonial home vested in their trustees in bankruptcy, obviously, when the bankruptcies occurred.
In his Statement of Affairs, Mr Jeevaratnam relevantly stated that he had secured creditors, including relevantly a loan to Angelie Pty Ltd in the sum of $350,000, and it is clear from the materials filed that Angelie Pty Ltd registered mortgage number AJ390502U over the property on 22 December 2011.
It should be noted that the Statement of Affairs is a document which is attested on oath.
On 21 July 2015, an examination of Mr Jeevaratnam was conducted. The transcript has been made available. As the second respondent’s written submissions correctly assert at paragraph 21, Mr Jeevaratnam relevantly stated on his oath that:
a)Angelie Pty Ltd loaned the first applicant around $300,000 in relation to a property development he was undertaking in Hawthorn.
b)Others had also loaned him about $170,000.
c)He had not repaid those loans.
d)He and his wife granted a mortgage over the property to the secured parties in June 2011.
It is clear from the transcript that at no stage did Mr Jeevaratnam assert any fraud or impropriety on behalf of any of the parties, including relevantly Angelie Pty Ltd.
On 20 December 2018, the secured parties issued proceedings in the County Court seeking possession. On 7 February 2019, that application was granted.
On 22 February 2019, the applicants filed a summons in the County Court seeking orders that the summary judgment be set aside. This ran into the obvious difficulty that the applicants, Mr and Mrs Jeevaratnam, did not have standing to make the application. That application was eventually dismissed by His Honour Judge McNamara on 24 September 2019. His Honour expressed, in my respectful view wholly unsurprisingly, some scepticism as to the chances of success of the applicants on any basis, given the matter of the Statement of Affairs to which I have referred. His Honour dismissed the application.
The Jeevaratnams then made a further application on 30 January 2020, which culminated in the order of Judge Marks to which I have already referred.
The Applicants’ Affidavit Materials
In this first affidavit filed on 17 February 2020, the applicant deposes to the existence of the County Court case, seeking possession. He sets out various aspects of the history of that matter which are already set out above. He asserts that the loan agreements upon which the action for possession are founded are “fraudulent, illegal and invalid” and also refers to the six year limitation period. He asserts that the trustees have refused to give consent to him so that he has legal standing to contest the County Court proceeding and notes that he has continued to pay the mortgage throughout and has done renovation works on part of the matrimonial home. He asserts that the trustees are “siding with the fraudulent creditors”. He asserts “that I have legal standing and equitable claims on the property based on the fact that I have been investing in the property”.
In his second affidavit filed 11 March 2020 (he filed a further identical version of the first one at an interim point), the applicant repeats in substance the matters in his first affidavit and adds at paragraphs 8 and following, his section 179 complaints. As earlier indicated, I do not propose to allow the applicant to ventilate that aspect of the dispute in this hearing.
The Oral Submissions Made
Mr Jeevaratnam addressed the Court. His submissions were not at times entirely easy to understand but, although expressed at some length, essentially repeated in substance the matters he had outlined in his affidavits.
Counsel for the first respondent noted the fact that the property is still vested in the trustees pursuant to the Act and indeed, the wife’s interest is still noted as being with the trustee on title. Counsel submitted that the first notice of alleged misconduct was that in the most recent affidavit and objected to that matter being put before the Court. Counsel also referred to correspondence passing between the parties which touched upon the matter.
Counsel for the second respondent was content to rely upon her written submissions.
Consideration
I regret to say that this case does not require detailed and lengthy reasons for judgment. It is sufficient to say the reasons for the trustees not to assign as the applicants wish their entitlement (to the extent that they may still have one, which is debatable) to contest the County Court proceeding are, in my view, cogent and sound. They are contained in the correspondence annexed to the respondents’ materials.
Furthermore, I think there is real doubt as to exactly what it is that the respondents are being asked to assign.
The relief claimed by the applicants in the originating application is, as the first respondent submits, not entirely clear. However, it is clear that this Court cannot grant the orders sought in relation to the proceeding in the County Court of Victoria. This Court has no power to order the County Court of Victoria to do or not to do anything.
Next, even if in some fashion this Court were to take a step that were to give the applicants standing in the County Court of Victoria proceeding, their prospects of success are negligible. The most obvious point of difficulty, which I personally regard as insurmountable, is that Mr Jeevaratnam has sworn on his oath in his Statement of Affairs and in his oral examination as to the mortgage entered into with Angelie Pty Ltd. At no stage during the oral examination did he make made any of the allegations of fraud and the like that he now makes.
In these circumstances, and this leaves wholly to one side the utility of success for the Jeevaratnams in the County Court case (the deficiencies are outlined succinctly in the materials filed by the respondents), the applicant’s chances of success are, in my view, as I have said and for the reasons I have given, minimal. I would outline the difficulties the Jeevaratnams’ face as follows:
a)The property remains vested in the two Trustees in Bankruptcy;
b)The Trustees have elected not to prosecute the County Court proceeding (at least in the way the Jeevaratnams want them to);
c)The Trustees having made this election, there is arguably no “right to sue” (Insolvency Practice Schedule s100-5) they can assign to the Jeevaratnams;
d)Even if (c) is wrong and the Trustees could grant the Jeevaratnams standing in the County Court proceeding, they face insurmountable credit difficulties in any event; and
e)Even if the Jeevaratnams were to succeed in the County Court, the Trustees will commence possession proceedings themselves.
A case does not have to be doomed to fail to come within the terms of section 17A of the Federal Circuit Court Act of Australia 1999 (Cth). The applicants have no reasonable prospects of success. The application will be dismissed.
I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of Judge Burchardt
Associate:
Date: 3 April 2020
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