Jeray v Blue Mountains City Council

[2013] FCCA 1144

FEDERAL CIRCUIT COURT OF AUSTRALIA

JERAY v BLUE MOUNTAINS CITY COUNCIL [2013] FCCA 1144

Catchwords:
BANKRUPTCY – Application to set-aside sequestration order – where applicant did not attend court when sequestration order made – whether good reason for non-attendance – where respondent ordered to pay out-of-pocket expenses of applicant in relation to separate court actions – where invoices for expenses indicate that, if moneys repaid, debt may not exceed $5,000.00 – where no proof that applicant paid amounts in invoices or that respondent did not repay them – whether merit in setting-aside order – where other grounds raised were grounds of appeal – where applicant has commenced further proceedings – whether to set-aside sequestration order.

Legislation:  

Bankruptcy Act 1966 (Cth) ss.44(1), 52

Applicant: IVAN JERAY

Respondent: BLUE MOUNTAINS CITY COUNCIL

File Number: SYG 466 of 2013

Judgment of: Judge Raphael

Hearing date: 7 August 2013

Date of Last Submission: 7 August 2013

Delivered at: Sydney

Delivered on: 7 August 2013

REPRESENTATION

For the Applicant: In person

Solicitors for the Respondent: Marsdens Law Group

ORDERS

1. The Application in a Case filed by the respondent debtor, Ivan Jeray, on 25 July 2013 is dismissed.

2. The applicant creditor’s costs of the Applicant in a Case filed 25 July 2013 be taxed and paid from the bankrupt estate of the respondent debtor with the same urgency as costs would be from the making of a sequestration order.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT SYDNEY

SYG 466 of 2013

IVAN JERAY

Applicant

And

BLUE MOUNTAINS CITY COUNCIL

Respondent

REASONS FOR JUDGMENT

1. In this matter a sequestration order was made against Ivan Jeray on 5 July 2013 by Judge Lloyd-Jones of this court.  Mr Jeray did not attend the hearing.  His Honour prepared and handed down reasons for judgment on 18 July 2013.  His Honour also stayed full proceedings under the order for a period of 21 days. 

2. The stay was due to expire on 26 July 2013;  on 25 July 2013 Mr Jeray issued an application in a case seeking that the court set aside or vary its judgment pursuant to Rule 16.05(2)(a) of the Federal Circuit Court Rules 2001(Cth).  That Rule is in the following form

   “(2)  The Court may vary or set aside its judgment or order after it has been entered if:

   (a)  the order is made in the absence of a party”.

3. In the affidavit in support of the application, Mr Jeray produced three letters.  The earliest was a letter dated 20 June 2013;  that letter was sent to the Registrar of this court and indicates that Mr Jeray intended to file a show cause notice in the High Court against two decisions of the Federal Court on appeal from this court in respect of his matters. He stated:

   “The court should be aware that I am an unrepresented litigant and have no legal qualifications and thus require ample time to prepare for court applications, directions and hearings, including the opportunity to obtain legal assistance and advice and undertake legal research.  Accordingly, I request the Court not to bankrupt me but to adjourn case no. SYG466/2013 for eight weeks to allow me a proper opportunity to commence “Show Cause” proceedings in the High Court regarding case nos. NSD845/2013 and NSD968/2013, as these cases question the bias of Lloyd-Jones J and the validity of the creditor’s petition and bankruptcy notice BN7569 in case no. SYG466/2013.”

4. The letter of 5 July refers to that letter and to the fact that Mr Jeray had attempted to obtain a copy of the decision of Jagot J in one of the appeals but had not received it. 

   “Accordingly, I again request the Court not to bankrupt me but to adjourn case no. SYG466/2013 for eight weeks to enable me to receive the judgment by post and allow me proper opportunity to commence “Show Cause” proceedings in the High Court. […]

   Given the Court is aware that I am an unrepresented litigant, I also wish to inform the Court that I am unable to attend court because I feel threatened and unsafe when in the presence of the applicant’s legal representatives, the M Law Group.  I have informed the applicant in writing that I will no longer communicate with or accept any correspondence from the M Law Group due to their corrupt and threatening conduct and should their threatening conduct continue towards me, I will contact the police.”

5. A letter of 25 July says:

   “Further to my letter of 5 July 2013, I request the Court security to be present during court proceedings and the Court to notify me when the legal representatives from the M Law Group file documents on behalf of Blue Mountains City Council in this matter.”

6. The decision of Judge Lloyd-Jones on the bankruptcy petition is of 40 paragraphs and deals very thoroughly with some of the history of the litigation between the applicant and the Blue Mountains City Council and then with all the matters that he was required to be satisfied of, pursuant to s.52 of the Bankruptcy Act 1966 (Cth).[1]  Mr Jeray’s non-attendance at the hearing was his own decision.  There is nothing in the affidavit of 25 July 2013 to explain why he did not attend.  He has managed to attend today, albeit considerably late.  If this court is to set aside a judgment given in a person’s absence, then it has to be satisfied:

   a)That there was a good reason for the non-attendance and;

   b)That there is some merit in setting aside the orders of the court.

   [1] The ‘Act’.

7. I have no evidence before me that would satisfy me on the first count.  However, even if I was not satisfied on the first count, I regard the making of a sequestration order against a person so serious that I might be inclined to make an order setting aside the judgment if there was some good reason shown to me why the judgment should not have been entered. 

8. In this particular case, Mr Jeray has attempted to do that in a number of ways.  First of all, he tells me that he believes that Judge Lloyd-Jones is biased and he gives some indication of what he believes the bias to have been.  Secondly, he tells me that he has not had time to file the show cause applications in the High Court, from which I infer that he is arguing that it would be wrong to make a sequestration order against him whilst there are some appeals outstanding.  Thirdly, he says he has not received copies of the affidavits referred to in the judgment of Judge Lloyd-Jones.  These affidavits are described in that judgment;  they consist of the affidavits of service and the affidavits of debt and search.  The reason that Mr Jeray has not seen those documents is because he did not attend the hearing.  But since the decision he has had adequate time in which to attend the court and look at the file.  If he was to tell the court that he disputed service in some way, then that would have been different, but he did not.

9. One matter that Mr Jeray raised did cause me some concern.  Mr Jeray has been in dispute with the Blue Mountains City Council for some time and was successful in an application to the New South Wales Court of Appeal to have certain proceedings that he had brought against that council and which were dismissed in the Land and Environment Court to be reinstated.  As part of the orders of the Court of Appeal, it would appear from the extracts provided to me today by Mr Jeray, that the respondents were required to pay his out-of-pocket expenses in relation to the application for leave to appeal and in the appeal.

10. Mr Jeray has also provided me with two invoices, which indicate that the costs of filing the notice of appeal was $1,820.00 and the hearing allocation fee was $1,486.00.  There is also an additional invoice for $173.00 for a notice of motion.  The importance of these documents is that the debt itself is only about $6,000.00.  So, if Mr Jeray was entitled to be repaid these moneys by the council, it would certainly be arguable that the debt upon which the sequestration order was made did not exceed $5,000.00.

11. In the service,[2] this matter is dealt with in the commentary to s.44(1) of the Act where it states:

    “If a debtor has a right to set-off, cross-claim, mutual credit or the like so that on a balance of account less than the amount prescribed by s 44(1)(a) is owed by the debtor, it may well be that the debtor can use it as an answer to the petition in order to induce the court, in the exercise of its discretion to refuse to make a sequestration order.”[3] [citations omitted]

    But in this case, I have no proof that Mr Jeray paid the amounts of money in the invoices or that he was not repaid by either the council or one of the other respondents to the proceedings to whom the benefit would then flow.. 

    [2] PP McQuade and MGR Gronow, McDonald, Henry & Meek: Australian Bankruptcy Law & Practice, 6^th Ed, Thomson Reuters.

    [3] Ibid, at p8-1065.

12. The grounds that Mr Jeray advances, other than the one just discussed, are, to my mind, not grounds for setting-aside an order made in the absence of a party but are grounds of appeal against that order.  It is not appropriate for this court to consider those matters and, as I cannot be satisfied of the only matter upon which I do have concern, I do not believe that it is appropriate to make an order under Rule 16.05(2)(a).  

13. Finally, I would mention that Mr Jeray submits that I should make this order because he has commenced some other proceedings in the Supreme Court of New South Wales against the Council.  That is something which he could have raised at the hearing, which he did not because he did not attend and in respect of that argument, I would fall back on my view that Mr Jeray has not properly explained his non-attendance and thus, that argument should not be given any consideration.  In these circumstances, the application is to be dismissed and the costs of the application are to be paid from the estate of the bankrupt with the same priority as the petitioning creditors’ priority.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Judge Raphael

Associate: 

Date:  20 August 2013