Jones v OFFICIAL RECEIVER and Anor (No.5)

[2017] FCCA 2170

FEDERAL CIRCUIT COURT OF AUSTRALIA

JONES v OFFICIAL RECEIVER & ANOR (No.5) [2017] FCCA 2170

Catchwords:
BANKRUPTCY – Interlocutory application –application for an order under r.16.05(2) of the Federal Circuit Court Rules 2001 (Cth) to set aside orders – whether prejudice will be suffered by the trustees and creditors by the setting aside of the orders made – no reasonable explanation for failure to appear by the applicant either in person, or by telephone – application dismissed.

Legislation:

Bankruptcy Act 1966 (Cth)

Evidence Act 1995 (Cth), s.74
Federal Circuit Court Rules 2001 (Cth), r.16.05

Cases cited:

BYF15 v Minister of Immigration & Border Protection [2016] FCA 774

Jones v Thompson & Anor (No.2) [2016] FCCA 931

SZRUR v Minister for Immigration & Border Protection [2015] FCCA 760

Wint v Medimobile Pty Ltd [2016] FCCA 102

Applicant: RICHARD JONES

First Respondent: OFFICIAL RECEIVER

Second Respondents: JASON PORTER
PAUL GERARD WESTON

Cross Applicant: PAUL GERARD WESTON

First Cross Respondent: RICHARD JONES

Second Cross Respondent: SUZANNE LEA HOMBSCH

Third Cross Respondent: CREST AUSTRALIA PTY LTD ATF MY PREROGATIVE SUPER FUND

Fourth Cross Respondent: REGISTRAR GENERAL OF NEW SOUTH WALES

File Number: SYG 2492 of 2014

Judgment of: Judge Smith

Hearing date: 9 May 2017

Date of Last Submission: 9 May 2017

Delivered at: Sydney

Delivered on: 9 May 2017

REPRESENTATION

No appearance by or for the applicant.

Counsel for the Respondent: Mr A. Spencer

Solicitors for the Respondent: Bamford Lawyers

ORDERS

1. The applicant’s application for an order under r.16.05(2) of the Federal Circuit Court Rules 2001 (Cth) to set aside the orders made on 12 April 2017 be dismissed.

2. The applicant pay the first respondent’s costs of the application.

3. The cross-applicant is to serve a copy of those orders on the cross-respondents together with an explanation of the effect of r.16.05(2) of the Federal Circuit Court Rules2001 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 2492 of 2014

RICHARD JONES

Applicant

And

OFFICIAL RECEIVER

First Respondent

JASON PORTER AND PAUL GERARD WESTON

Second Respondents

PAUL GERARD WESTON

Cross Applicant

RICHARD JONES

First Cross Respondent

SUZANNE LEA HOMBSCH

Second Cross Respondent

CREST AUSTRALIA PTY LTD ATF MY PREROGATIVE SUPER FUND

Third Cross Respondent

REGISTRAR GENERAL OF NEW SOUTH WALES

Fourth Cross Respondent

REASONS FOR JUDGMENT

(Delivered Extempore and Revised)

1. The Court has in this matter received from Mr Jones, the applicant and first cross-respondent, a letter dated 3 May 2017, in which he requests amongst other things, that the orders made on 12 April 2017 be set aside. Those orders included that his application be dismissed. Attached to that letter are four documents and I will deal with those in due course.

2. The applicant has not appeared today but I am willing to hear this informal application in spite of his failure to appear, and in spite of the failure to comply with the Federal Circuit Court Rules 2001 (Cth) (Rules), given that Mr Jones is, and has always been in these proceedings, unrepresented.  In that way, I am attempting, as far as I can, to overcome the difficulties inherent in that position:  see SZRUR v Minister for Immigration & Border Protection (2013) 216 FCR 445.

3. On that basis, there is an application before the Court for an order under r.16.05 of the Rules which provides in sub-rule (2) that the Court may vary or set aside its judgment order after it has been entered, if the order is made in the absence of a party.

4. The general considerations in the exercise of that discretion were set out by the Court in Wint v Medimobile Pty Ltd [2016] FCCA 102 at [6] and [7], which stated:

   6.There are three criteria, each of which should usually be demonstrated before a judgment or order is set aside under FCCR 16.05(2)(a), namely:

   (a)a reasonable explanation for the applicant’s absence at the trial or hearing;

   (b)material arguments available to the applicant that might reasonably lead to the making of an order different to that sought to be set aside, and

   (c)no prejudice to the party with the benefit of the orders sought to be set aside that is not able to be adequately addressed by the Court. 

   (7)Matters relevant to the three criteria set out above will include, but will not necessarily be limited to:

   (a)whether a party with notice of proceedings disregarded the opportunity of appearing at and participating in the trial;

   (b)delay, if any, in bringing the application to set aside and whether, if during the period of delay the successful party has acted on the judgment, or third parties have acquired rights by reference to it, and

   (c)the conduct of the applicant, since the judgment or order sought to be set aside was made. 

   See also BYF15 v Minister of Immigration & Border Protection [2016] FCA 774 at [29] to [31].

5. While there is a reference to criteria in those authorities, there are no criteria as such, but rather considerations that are often considered to be relevant to the broad discretion.

6. Importantly, any discretion under the Rules must of course be exercised with a view to fulfilling the purpose of the Rules, as well as the general purpose of the Court being the proper administration of justice.

Consideration

1. I return then to the documents attached to the letter.  These documents go at least some way, if admissible, to the first consideration: namely, the explanation for the applicant’s absence at the hearing. 

First document – medical certificate dated 3 April 2017

1. This is a document on the letterhead of St Vincent’s Hospital, Darlinghurst signed by a Doctor on 3 April 2017.  The certificate indicates that the applicant was suffering from a medical complaint and was unsuitable for work/play/Court, (I am not sure that the second word is play) during the period 3 April 2017 until 8 April 2017.

2. Even if I were to accept that rather poorly stated opinion and give any weight to it, the certificate does not include in it the date of 12 April 2017, which is the date on which the orders were made.

Second document – facsimile report

1. The second document is what purports to be a print out of a successful facsimile message to the Federal Circuit Court of Australia.

2. I take this to be a suggestion that the previous document was faxed to the Court, or perhaps the subsequent document.

Third document – medical certificate dated 11 April 2017

1. This is a document entitled “Medical Certificate” (certificate) and purported to be signed by a Dr Russell King of Integral Health, Barney Street, Armidale dated 11 April 2017, certifying (without alteration):

   Mr Richard Jones has a medical condition and will be unfit to appear in court or receive court documents from 11/04/2017 to 12/05/2017 inclusive. 

2. This was in fact a document that was before the Court on 12 April 2017.  At that time, I did not accept that it provided a reasonable basis for the applicant’s failure to appear.  Amongst other things, there is no explanation of what the medical condition is, or the reason for which that medical condition might make the applicant unfit to either appear in Court, or to receive Court documents. 

3. Further, the applicant at that time had, as he had on numerous occasions prior to that date, leave to appear by telephone and when his telephone number was called, there was no answer.  Therefore, I did not at the time, accept that the reason provided within the certificate, as a reasonable basis for the failure to appear and my opinion that remains so. 

Fourth document – medical certificate dated 2 May 2017

1. The fourth document is again a medical certificate from Dr Russell King of Integral Health, Barney Street, Armidale, this time dated 2 May 2017, certifying (without alteration):

   Mr Richard Jones has a significant medical condition and will be unfit for travel to Sydney to attend court from 02/05/2017 to 30/05/2017 inclusive.  I believe to do so would seriously jeopardise his health

2. Although no objection was taken to the admission of that document, I have serious doubts as to whether it would satisfy the expert evidence rules which would overcome the exclusion of opinion evidence in s.74 of the Evidence Act 1995 (Cth).

3. Just as the previous medical certificates did not, this document does not explain in any way, the basis upon which the opinion is given. It is impossible for the Court to determine whether the basis of the opinion is made on any relevant expertise, training or experience. 

4. In any event, once again, Dr King has failed to disclose what the significant medical condition is, and why that condition means that the applicant would be unfit to travel to Sydney to attend Court.  Perhaps, more importantly, Dr King does not give an opinion that the applicant would be unable to attend Court by telephone rather than in person.

5. On the basis of the material before the Court, I am not satisfied there is a reasonable explanation for the applicant’s absence at the hearing. 

6. The second consideration is whether or not, in effect, is there any utility to make any order. 

7. In Jones v Thompson & Anor (No 2) [2016] FCCA 931 (Jones (No.2)), I considered the prospects of Mr Jones’s success in these proceedings in the circumstances of an application for security of costs made by the respondents. 

8. I came to the view, simply put, that there was little prospect of success but I could not reject the possibility that the application might succeed.  At [20] of that judgment, I concluded that he would not inevitably lose.

9. The material before the Court, at that time, has not materially changed and I cannot say that there is any real difference in the possibilities of outcome on the basis of that material.

10. However, as Mr Spencer, Counsel for the trustees has submitted, there is an additional consideration in this respect. That is, that the orders in the proceedings are not by way of a money judgment or any other material benefit in the sense of physical material:  rather, all that the trustees seek is some vindication of Mr Jones’s long-held position in respect of his transfer of certain properties and the conduct of the trustees during the course of his bankruptcy.  I consider that that is a relevant consideration in determining whether or not to set aside orders made in Mr Jones’s absence. 

11. The third matter is prejudice.  The prejudice in this case goes beyond simply the question of costs but I will deal with the costs first. 

12. The trustee appeared represented by a solicitor and Counsel at the hearing on 12 April 2017 and was prepared to run a hearing.  In my experience therefore, the trustees’ costs of the proceedings would be, at the very least, in the thousands of dollars, if not tens of thousands of dollars. 

13. As I noted in Jones (No.2), the evidence suggested that Mr Jones, who is a discharged bankrupt, a pensioner and unemployed, is unlikely to meet any order for costs. 

14. In those circumstances, if the orders were set aside it would be unlikely that the Court would be able to make orders that would overcome the prejudice suffered by the trustees in respect of the costs order made on the costs incurred at that time.

15. Secondly, and perhaps just as significantly, Mr Jones has been discharged as a bankrupt for five years and yet his estate remains unadministered. His creditors remain unsatisfied and the continuation of these proceedings presents a continued barrier to their satisfaction, and to the fulfilment of the object of the Bankruptcy Act 1966 (Cth) that has a serious public object, which must be fulfilled by the trustees in their duties, and the fulfilment of which to date, has not yet seen the trustees paid for any of their work.

16. All of those matters give rise to significant prejudice, not only to the trustees personally, but to the general public and to the creditors in particular.

Conclusion

1. For each of those reasons, I consider that despite the fact that there might be some prospects of  Mr Jones succeeding if the orders were set aside, that those orders ought not to be set aside and so I refuse the application to do so under sub-r.16.05(2)(a) of the Act.

2. I order that Mr Jones pay the trustees’ costs of the application. 

I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of Judge Smith

Associate: 

Date:  11 September 2017