Jeray v Blue Mountains City Council
[2013] FCCA 297
•16 May 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| JERAY v BLUE MOUNTAINS CITY COUNCIL | [2013] FCCA 297 |
| Catchwords: PRACTICE AND PROCEDURE – Application in a case seeking to reopen hearing and set aside orders made by consent – Application seeking similar orders as orders made by consent finalising proceedings – Interest in finality of litigation – No reasonable grounds raised to warrant reopening of proceedings – Application in a case dismissed. |
| Legislation: Federal Circuit Court Rules 2001 (Cth) rr.16.05(1),16.05(2),16.05(3) |
| Cases cited: Autodesk Inc v Dyason (1993) 176 CLR 300 Dennis v Tubb [2012] FMCA 26 Diver v Neal [2009] NSWCA 115 Elder v Cameron [2007] NSWSC 984 Maritime Union of Australia v Geraldton Port Authority (2001) FCA 434 Russfal Pty Ltd v Tassal Ltd [2007] TASSC 80 State Rail Authority of New South Wales v Codelfa Construction Pty Ltd (1982) 150 CLR 29 Wentworth v Woollahra Municipal Council (1982) 149 CLR 672 |
| Applicant: | IVAN JERAY |
| Respondent: | BLUE MOUNTAINS CITY COUNCIL |
| File Number: | SYG 2274 of 2012 |
| Judgment of: | Judge Lloyd-Jones |
| Hearing date: | 13 May 2013 |
| Delivered at: | Sydney |
| Delivered on: | 16 May 2013 |
REPRESENTATION
| The Applicant: | The Applicant appeared in person |
| Solicitors for the Respondent: | Mr G. Butterfield of Marsdens |
ORDERS
The Application in a Case filed on 1 May 2013 is dismissed.
The Applicant pay the Respondent’s costs and disbursements of and incidental to the Application in a Case filed on 1 May 2013.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 2274 of 2012
| IVAN JERAY |
Applicant
And
| BLUE MOUNTAINS CITY COUNCIL |
Respondent
REASONS FOR JUDGMENT
Introduction
On 1 May 2013 the applicant, Ivan Jeray (“Jeray”), filed an Application in a Case (the “Interlocutory Application”) in these proceedings seeking the following orders:
1. Leave granted to hear this interlocutory application out of time.
2. Leave granted for the applicant to issue subpoenae [sic] for Ms Emma MacFarlane and Mr Nelson Arias-Alvarez to attend the Court when required with conduct money required only for the cost of a return ticket from Campbelltown to St James railway stations set at no more that $25 per person. Conduct money may be payed to the subpoenaed person upon their arrival to the Court when required. Service of the subpoenae [sic] may be effected by post to the Campbelltown PO Box address of the Marsdens Law Group.
3. Set aside the decision and orders made by District Registrar Wall on November 2012.
4. Set aside bankruptcy notice BN 5792.
5. A declaration that the respondent and its legal representatives have abused the legal system by applying for BN 5792 that was intentionally based on an invalid judgment, which was then issued and served on the applicant.
6. Costs, including the applicant’s time for preparing for and conducting the hearings.
The Interlocutory Application was referred to this Court from the Registrar’s Bankruptcy List on the morning of 13 May 2013. Jeray made submissions as to why the orders sought should be granted and Mr Butterfield (“Butterfield”), appearing on behalf of the respondent Blue Mountains City Council (“BMCC”), made submissions that the Interlocutory Application should be dismissed.
Jeray sought to rely on the following evidence at the hearing on 13 May 2013:
a)Affidavit of Ivan Jeray sworn 1 May 2013; and
b)Affidavit of Ivan Jeray sworn 13 May 2013.
Butterfield indicated he did not wish to rely on any evidence.
Background
On 14 February 2011 his Honour Heydon J dismissed a summons filed by Jeray in the High Court seeking reinstatement of proceedings against BMCC and two other respondents (Proceedings S279/2010). His Honour also ordered that Jeray pay the costs of the summons. These costs were assessed by a registrar of the High Court on 29 May 2012 and allowed in the sum of $6,028.90. Judgment was then entered in the Local Court of NSW in proceedings 2012/00241653 in favour of BMCC on 3 August 2012 in the amount of $6110.90. BMCC then applied for the issue of a bankruptcy notice against Jeray which was issued (BN 5792 of 2012) on 14 September 2012 and served thereafter.
The original application (SYG2274/2012) filed by Jeray on 12 October 2012 sought to set Bankruptcy Notice BN 5792 of 2012 (the “First Bankruptcy Notice”) aside and was supported by an affidavit sworn by himself on the same day. The matter first came before Registrar Wall on 23 October 2012, where orders were made for the filing of documents and adjourning the proceedings to 13 November 2012. On 25 October 2012 BMCC filed a notice stating grounds of opposition to the application and a supporting affidavit of Emma MacFarlane opposing the orders sought in the application and seeking to have it dismissed.
By consent on 13 November 2012 the following orders were made by Registrar Wall:
1. The Bankruptcy Notice, BN 5792 issued on 14 September 2012 be set aside.
2. The Respondent pay the Applicant’s costs of the application.
The proceedings were finalised at that point, and have remained so until the filing of the Interlocutory Application on 1 May 2013.
BMCC conceded that it had erroneously sought the issue of the First Bankruptcy Notice on the basis that it relied on a judgment of the Local Court of NSW. As the Order of Heydon J and Certificate of Taxation issued in the High Court were a “final order” for the purposes of s.40(1) of the Bankruptcy Act 1966 (Cth) (the “Bankruptcy Act”) there was no need to register the Order and Certificate of Taxation as a judgment in the Local Court of NSW for the purposes of enforcement and to be the basis of the issue of a bankruptcy notice. In addition to having the First Bankruptcy Notice set aside, BMCC also filed a notice of motion in the Local Court of NSW seeking to have the judgment entered on 3 August 2012 in proceedings 2012/00241653 set aside by consent. Jeray consented and the judgment of the Local Court of NSW was set aside.
After the setting aside of the First Bankruptcy Notice and judgment in the Local Court of NSW BMCC sought to have another bankruptcy notice issued, relying directly upon the Orders of Heydon J of 14 February 2011 and Certificate of Taxation issued on 29 May 2012. On 20 November 2012 a fresh bankruptcy notice was issued in the sum of $6,301.32 against Mr Jeray (the “Second Bankruptcy Notice”) and was subsequently served.
Jeray lodged an application in the Federal Court on 14 December 2012 (Proceedings NSD2216/2012) seeking, amongst other orders, to extend time to comply with the Second Bankruptcy Notice and have it set aside. The application was heard by Registrar Wall on 27 February 2013 and dismissed on that day. Reasons for Decision were prepared by Registrar Wall on 21 March 2013. Jeray subsequently sought to have that decision reviewed by a Judge of the Federal Court. His Honour Edmonds J heard and dismissed that application on 12 April 2013.
It should be noted at this point that a creditor’s petition, founded on the Second Bankruptcy Notice was filed in this Court on 11 March 2013 Proceedings SYG466/2013). Those proceedings came before me and were referred to mediation on 3 May 2013. That mediation has not yet occurred.
Hearing 13 May 2013
Applicant’s Submissions
Jeray indicated at the outset that the intention of the Interlocutory Application was not for the First Bankruptcy Notice to be put back on foot, but for it to be set aside again for different reasons, on the basis of new information that had become available to him. He contended that the Court could review the decision again if new information became available. Specifically, this application related to the declaration sought in Order 5 of the Interlocutory Application (reproduced at [1] above).
Jeray submitted that he had had difficulties in serving documents on the respondent’s solicitors, Mr Arias-Alvarez and Ms MacFarlane. He contended that he had attempted to serve Mr Arias-Alvarez in Court 6D of John Maddison Tower on 3 May 2013 with a subpoena in respect of these proceedings (relevantly at the hearing of SYG466/2013 before this Court), but Mr Arias-Alvarez would not accept service of that subpoena and left it under the bar table. Jeray sought leave to access the audio and video recordings taking in the courtroom, but that request seems not to have been pressed.
Jeray indicated to the Court that Mr Arias-Alvarez was present in the courtroom, but Ms MacFarlane was not. Mr Butterfield advised the Court she could be brought to give evidence on 90 minutes notice. Jeray submitted that their behaviour in respect of the subpoenas adds to his claim that BMCC and its legal representatives have been abusing the legal system by applying for the First Bankruptcy Notice when it was based on an invalid judgment.
Jeray contended that, in respect of the current proceedings, Ms MacFarlane made an error by registering a judgment of the High Court in the Local Court of NSW and having the First Bankruptcy Notice issued against him. After he applied to have it set aside, Ms MacFarlane opposed that application on the basis that Jeray had no legitimate argument as to why it should be set aside. At that time there was nothing forthcoming from Ms MacFarlane that there was any problem with the way in which the First Bankruptcy Notice had been obtained. Jeray contends that shortly afterwards he received a letter from Ms MacFarlane of which the contents are not before the Court, along with consent orders for him to sign allowing his application and awarding him costs of the proceedings.
After the First Bankruptcy Notice was set aside Jeray contends that he was served with the Second Bankruptcy Notice. He applied to have the Second Bankruptcy Notice set aside and Ms MacFarlane was ordered by a registrar of the Federal Court to put on a notice stating grounds of opposition and evidence in support. When this occurred it became clear the First Bankruptcy Notice had been issued invalidly on the basis that there was an incurable error made by registering the judgment of the High Court with the Local Court of NSW.
Jeray submitted that Ms MacFarlane did not make an error, but in fact she had erroneously sought the issue of the First Bankruptcy Notice for deliberate reasons. Jeray contended that there was evidence in his affidavits that this was the case as Ms MacFarlane had sought a bankruptcy notice in 2009 based on an order of the Federal Magistrates Court (as it then was). Accordingly, Jeray submits Ms MacFarlane has not been truthful to the Court. Jeray contends that the legal representatives of BMCC knew that the judgment was invalid when they sought the First Bankruptcy Notice, but sought to proceed to make Jeray bankrupt nonetheless.
Jeray submitted that he was seeking to challenge the Orders of Registrar Wall. He indicated that he was now seeking orders basically in the same fashion, but it would be inappropriate for the Orders of 13 November 2012 to remain in force as they state they were made by consent. Further, he was seeking an additional order in the form of a declaration at noted at [11] above. Mr Jeray took the Court to the Annexure “C” of his affidavit sworn 1 May 2013, specifically the Affidavit of Emma MacFarlane sworn in support of BMCC’s notice stating grounds of opposition to Jeray’s application to set aside the Second Bankruptcy Notice (in Proceedings NSD2166/2012).
Jeray also attached (Annexures “E” and “F”) two bankruptcy notices issued by ITSA pursuant to requests by Marsdens. These were obtained by Jeray pursuant to a Freedom of Information application, but are significantly redacted. Both bankruptcy notices were founded on judgments of the Federal Magistrates Court and not judgments of federal courts entered in the Local Court of NSW. Jeray submitted that, based on this information, it is clear Ms MacFarlane knew that orders made in the federal jurisdiction don’t need to be entered in the Local Court of NSW because the Local Court does not have jurisdiction and this was the basis of his subpoena for Ms MacFarlane to give evidence. He submitted that he received these notices on 17 April 2013 and this was the new evidence that had come to light he was seeking rely on.
Jeray submitted that this was not the entirety of his case, as he would need evidence to be given by Ms MacFarlane and Mr Arias-Alvarez in cross-examination to complete his evidence. He submitted that if he were granted leave to issue the subpoenas he would show that Ms MacFarlane didn’t make an error, but knew that the Local Court of NSW judgment that was the foundation of the First Bankruptcy Notice was invalid.
Respondent’s Submissions
Butterfield indicated that he had no evidence to adduce based on Jeray’s submissions as they stood. He indicated that Order 1 of the Interlocutory Application was not opposed, but all other orders being sought were.
Butterfield contended there is a lack of utility in the making of Order 2 (noted at [1] above). He submits the Court must ask itself what Jeray is seeking to achieve by the proposed issue of the subpoenas. Butterfield submits that, based on Jeray’s submissions and on the material before the Court, Jeray seeks a declaration that there has been an intentional abuse of process by Ms MacFarlane. This is nothing more than a fishing expedition and there is no forensic purpose for this to occur.
Butterfield contended that there is no evidence to support the making of any declaration as sought against the respondent BMCC. There are declarations sought against BMCC’s legal representatives, of which there is no evidence or specificity given. Assuming that one the representatives is Ms MacFarlane, Butterfield submits that Jeray is relying on his Affidavit sworn 1 May 2013. Butterfield contended that if a declaration were to be made, it would be made against a party that is not a party to the current proceedings. There is nothing in the evidence or submissions put to the Court by Jeray to support the grant of leave to issue subpoenas. Butterfield further contended that, on the basis of the admissions given by Jeray as to why he wished to have the Orders of 13 November 2012 set aside, there is no purpose other than to obtain a declaration, a declaration that would have no utility in the form it is currently sought.
Butterfield argued that Jeray is seeking to bring some form of claim against Ms MacFarlane in proceedings that don’t need to be set aside as they have already been dealt with. Ms MacFarlane is not a party to the proceedings and there is no direct evidence of intention to proceed against someone on the basis of an invalid judgment. The only reasonable conclusion that can be drawn is that Ms MacFarlane made an error. It follows that there is no purpose in having Ms MacFarlane cross-examined, given her ability not to incriminate herself, as it would be nothing more than a fishing expedition. Further, Butterfield argued that the subpoena as against Ms Arias-Alvarez seemed to be no longer pressed as no ventilation had been given to why it should be issued.
Butterfield submitted that leave should not be granted for the issue of any subpoenas and the proceedings should otherwise be dismissed.
Consideration
Before me is an application to reopen proceedings that were finalised by consent on 13 November 2012. It is important to note at the outset that these proceedings were finalised by consent, allowing Jeray’s application to have the First Bankruptcy Notice set aside and awarding costs in his favour. It is not apparent from the Court File that Jeray has since sought to have his costs assessed. Between the finalisation of these proceedings on 13 November 2012 and the filing of the Interlocutory Application there have been a number of other events that have occurred and these are set out at [4] – [10] above.
Jeray seeks in his Interlocutory Application to set aside the orders of Registrar Wall made on 13 November 2012, to issue two subpoenas to Ms MacFarlane and Mr Arias-Alvarez, both solicitors with Marsdens who act for BMCC in this and other related proceedings, declarations to be made against BMCC and its legal representatives, whom it can be assumed is Ms MacFarlane, an order setting aside the First Bankruptcy Notice again, and his costs. Order 1 seeks leave to hear the Interlocutory Application out of time and BMCC has taken no issue with that.
The first issue that must be considered is the application to have the proceedings reopened. Rule 16.05 of the Federal Circuit Court Rules 2001 (Cth) states:
16.05 Setting aside
(1) The Court may vary or set aside its judgment or order before it has been entered.
(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; or
(b) the order is obtained by fraud; or
(c) the order is interlocutory; or
(d) the order is an injunction or for the appointment of a receiver; or
(e) the order does not reflect the intention of the Court; or
(f) the party in whose favour the order is made consents.
(3) This rule does not affect the power of the Court to vary or terminate the operation of an order by a further order.
The Orders made on 13 November 2012 by Registrar Wall were entered on the same day. Accordingly, there is no power to vary or set aside the Orders pursuant to r.16.05(1) of the Federal Circuit Court Rules 2001 (Cth). It is unclear on what basis Jeray seeks to set aside the Orders of 13 November 2012, but I am satisfied that I have the power to do so under r.16.05(3).
Their Honours Mason ACJ, Wilson and Brennan JJ in Wentworth v Woollahra Municipal Council (1982) 149 CLR 672 held at 684:
[T]he circumstances in which this court will reopen a judgment which it has pronounced are extremely rare. The public interest in maintaining the finality of litigation necessarily means that the power to reopen to enable a rehearing must be exercised with great caution. Generally speaking, it will not be exercised unless the applicant can show by accident without fault on his part that he has not been heard.
His Honour Mason CJ cited this with approval in Autodesk Inc v Dyason (1993) 176 CLR 300 at 302. This authority has also been followed in a number of more recent judgments: Elder v Cameron [2007] NSWSC 984; Maritime Union of Australia v Geraldton Port Authority (2001) FCA 434; Russfal Pty Ltd v Tassal Ltd [2007] TASSC 80.
In Diver v Neal [2009] NSWCA 115 their Honours Allsop P (as he then was), Ipp and Basten JJA stated at [5]:
While the court has power to vary orders, the exercise of that discretion should take into account the public interest in preserving the finality of concluded litigation: see State Rail Authority of New South Wales v Codelfa Construction Pty Ltd [1982] HCA 51 ; 150 CLR 29 at 38 (Mason and Wilson JJ). After noting that jurisdiction existed in the court to entertain the application in that case, their Honours continued:
Nevertheless, it is a power to be exercised with great caution. There may be little difficulty in a case where the orders have not been perfected and some mistake or misprision is disclosed. But in other cases it will be a case of weighing what would otherwise be irremediable injustice against the public interest in maintaining the finality of litigation. The circumstances that will justify a rehearing must be quite exceptional.
Their Honours then went to cite the authority of Wentworth v Woollahra Municipal Council (supra).
Jeray seeks to raise an allegation of intentional misconduct on the part of Ms MacFarlane in her capacity as a solicitor in the employ of Marsdens, the firm on the record for BMCC which is the respondent in these proceedings. This allegation is based upon the erroneous manner in which the First Bankruptcy Notice was originally sought and subsequently set aside.
Registrar Wall, in his Reasons for Decision of 21 March 2013 in proceedings NSD 2166/2012, the proceedings in which Jeray sought to set aside the Second Bankruptcy Notice, stated at [21]:
As I have noted at [2] above, Mr Jeray filed an application with the Federal Magistrates Court (in Sydney) to set aside the [First Bankruptcy Notice]. The [First Bankruptcy Notice] was set aside (in my view correctly) by orders made with the consent of the parties without a hearing on the merits. In my view, the [First Bankruptcy Notice] was incurable and invalid and would have been set aside by the court. This is because the judgment relied upon in the [First Bankruptcy Notice] from the NSW Local Court was more likely than otherwise irregularly entered and inconsistent with the legislative scheme and terms of the costs order made by the High Court. I have arrived at this conclusion for two reasons. The first: I respectfully and gratefully adopt the reasoning of Smith FM in Dennis v Tubb [2012] FMCA 26; to the effect that the registration of a Costs Certificate made under federal laws with a NSW Court would in all probability be inconsistent with the terms of the order and regime under which this order was made. The second reason is that, consistent with the well established principles of this Court in the judgment of Hely J in Croker v Commissioner of Taxation [2005] FCA 127 at [14] and Marshall J in Rankine v Lord [2011] FCA 478 at [38], a BN which relies on a judgment registering a costs order must not include an amount in addition to the amount of the certificate of taxation. There was a clear discrepancy between the amount in the [First Bankruptcy Notice] and the amount described in the certificate of taxation issued by the High Court to have invalidated the first BN.
In my view, Registrar Wall has accurately described the events in respect of the proceedings before this Court.
In these proceedings BMCC, through its lawyers, sought to enforce a judgment debt owed to it by Jeray pursuant to an order of the High Court and a Certificate of Taxation issued thereafter. Ms MacFarlane erroneously sought to have the High Court order and Certificate of Taxation entered in the Local Court of NSW and added the costs of the registration of the judgment to the total in the Bankruptcy Notice. The First Bankruptcy Notice was issued on 14 September 2012 and subsequently served on Jeray. Jeray filed an application to set the First Bankruptcy Notice on 12 October 2012. This application was allowed by orders made with the consent of both parties on 13 November 2012 and it should be noted that this avenue was pursued on the initiative of BMCC, most likely upon its realisation that the First Bankruptcy Notice was invalid and incurable. Jeray was further awarded his costs of the proceedings and, ultimately, I am satisfied that this remedied any effect of the conduct of BMCC and its lawyers.
I am not satisfied that there is a reasonable prospect of establishing intentional misconduct by the lawyers acting for BMCC. The only respondent in these proceedings is BMCC and, on the evidence before the Court, there is no basis for a declaration to be made in respect of their conduct. Nonetheless, there would be no utility in making any declarations as the bankruptcy jurisdiction is not the correct avenue for pursuing such claims.
In respect of the issue of Jeray’s attempted service of Mr Arias-Alvarez, Mr Arias-Alvarez was made available for cross-examination at the hearing on 13 May 2013 and I am satisfied no further issue arises.
Jeray is seeking, in effect, the same orders, with an additional declaration, that were made with his consent on 13 November 2012. Any circumstances to justify a rehearing must be quite exceptional and there is a public interest in maintaining the finality of litigation. Accordingly, I am satisfied that this is a matter where the circumstances are not so exceptional as to warrant a rehearing and the granting of leave to issue subpoenas to non-parties to the proceedings. The Interlocutory Application should be dismissed with costs awarded to BMCC.
I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of Judge Lloyd-Jones
Associate:
Date: 16 May 2013
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