Kanakaridis v Australia and New Zealand Banking Group Limited and Hou v Australia and New Zealand Banking Group Limited
[2016] FCCA 2333
•25 August 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| KANAKARIDIS v AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED and HOU v AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED | [2016] FCCA 2333 |
| Catchwords: PRACTICE & PROCEDURE – Applications to set aside interlocutory dismissals – relevant considerations. |
| Legislation: Judiciary Act 1903, s.78B Federal Circuit Court Rules 2001, rr.13.03C, 16.05 Bankruptcy Act 1966 Supreme Court of Queensland Act 1991 |
| Applicant: | SAVVAS KANAKARIDIS |
| Respondent: | AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 |
| File Number: | MLG 483 of 2016 |
| Applicant: | QIN QIN HOU |
| Respondent: | AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 |
| File Number: | MLG 484 of 2016 |
| Judgment of: | Judge Cameron |
| Hearing date: | 25 August 2016 |
| Date of Last Submission: | 25 August 2016 |
| Delivered at: | Melbourne |
| Delivered on: | 25 August 2016 |
REPRESENTATION
| No appearance by or on behalf of the Applicants |
| Solicitors for the Respondent: | Ms H. Cosham of Gadens |
ORDERS
MLG 483 of 2016
The Application in a Case filed by the Applicant on 23 August 2016 be dismissed.
The Applicant pay the Respondent’s costs of and incidental to the Application in a Case filed 23 August 2016 fixed in the sum of $500.00.
MLG 484 of 2016
The Application in a Case filed by the Applicant on 23 August 2016 be dismissed.
The Applicant pay the Respondent’s costs of and incidental to the Application in a Case filed 23 August 2016 fixed in the sum of $500.00.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 483 of 2016
| SAVVAS KANAKARIDIS |
Applicant
And
| AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 |
Respondent
MLG 484 of 2016
| QIN QIN HOU |
Applicant
And
| AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 |
Respondent
REASONS FOR JUDGMENT
Introduction
These reasons concern applications to set aside orders which Judge Riley made in these two proceedings on 10 August 2016. On that day her Honour dismissed applications to set aside orders she had made in each proceeding on 4 July 2016 which had dismissed applications to set aside bankruptcy notices addressed to the applicants. These reasons apply equally to each proceeding.
Because her Honour’s orders were made in their absence, the applicants have had resort to r.16.05 of the Federal Circuit Court Rules 2001 (“Rules”) which provides:
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.
To set aside interlocutory dismissals of the sort in question, an applicant must demonstrate a satisfactory explanation for his or her failure to attend court on the relevant date and he or she must also demonstrate that the underlying action would have reasonable prospects of success were it to be allowed to proceed. In certain circumstances it might also be relevant to consider whether the respondent to such an application to set aside would suffer prejudice were the matter to be reinstated but that does not seem to be a live issue in the present applications.
Because neither of the applicants appeared in court at the hearing today, they having withdrawn during an adjournment the instructions which they had yesterday given to their solicitor, Mr Koroneos, to appear for them in these matters, there is, in fact, no evidence before the Court in a formal sense. However, I will nevertheless take into account the material which has been advanced in the affidavits which have been filed in association with the applications to set aside Judge Riley’s orders and the applications to set aside the bankruptcy notices.
The fact that the applicants have terminated Mr Koroneos’s services in relation to the present applications in a case does not provide a reason why the Court should not proceed to hear the applications in a case even though the applicants themselves are not present. In this regard I note that Mr Koroneos has remained in court to hear these reasons because it appears that his retainer has not been terminated in relation to the related creditor’s petition proceeding. I also note that the Court has received some correspondence from the applicants this afternoon which recorded their termination of Mr Koroneos’s retainer and said that they were not in a position to argue the matters comprehensively today “as [they] are both sick with the flu and under medication that is making drowsy [sic]”.
The obvious response to that communication is that the applicants should not have withdrawn their instructions from Mr Koroneos. Further, no medical evidence has been tendered which would bear out the assertion of illness or why it is necessary for the applicants to take medication which makes them drowsy if, indeed, any medication they take does make them drowsy.
SATISFACTORY EXPLANATION
The applicants’ absence on 10 August 2016 appears, from the affidavits they have filed, to have arisen out of injuries suffered by Mr Kanakaridis during the ejection of the applicants from a residence which they had occupied until early this month. Attached to documents which have been sent to the Court are photographs of Mr Kanakaridis, demonstrating that he had indeed suffered some injuries, although he has not attended court to give evidence that those injuries were sustained by him on the day in question or were such as to prevent him from coming to court on 10 August 2016.
I do note that Mr Kanakaridis’s and Ms Hou’s affidavits of 23 August 2016 filed in support of the present applications in a case annexed two medical reports signed by a Dr Kounnas. The first of these is dated 3 August 2016 and it records that upon examination Mr Kanakaridis displayed two black eyes, abrasions to various parts of his body, bruising, swelling, tenderness, pain to some parts of his body and the loss of a toenail. Those injuries were consistent, the doctor said, with the violence Mr Kanakaridis said was inflicted upon him earlier this month. In a further report dated 6 August 2016, Dr Kounnas said that an x-ray of Mr Kanakaridis showed no fracture but his complaints of numbness of his left hand and of an injury to his left eye were consistent with him having been gouged as he alleged.
It is to be noted that those medical certificates pre-dated Judge Riley’s orders by some days and did not go so far as to say that Mr Kanakaridis could not attend court on 10 August 2016.
It also is to be noted that no medical certificate has been provided in respect of Ms Hou and thus there is no real explanation at all for her absence on 10 August 2016. The evidence propounded by the applicants concerning physical infirmity on 10 August 2016 relates only to Mr Kanakaridis. Ms Hou does not appear to have been adversely affected in any obvious way which raises queries about her absence on the last occasion.
It does not seem to me that such material as the applicants have placed before the Court satisfactorily explains their failure to attend court on 10 August 2016, but such a finding is not necessarily conclusive of an application to set aside an interlocutory dismissal.
REASONABLE PROSPECTS OF SUCCESS
A very important and often preponderant consideration in cases such as the present is whether the underlying applications have reasonable prospects of success. Under the Rules a matter which does not have reasonable prospects of success is liable to be dismissed summarily and so there is no point in reinstating a matter which is liable to such dismissal.
Applications to set aside bankruptcy notices
In these cases the facts seem to be that the applicants are deemed to have been served with bankruptcy notices on 22 February 2016. On 10 March 2016 the applicants applied to set the bankruptcy notices aside on the basis that they had a “counter-claim, set-off or cross demand” equal to or greater than the amounts claimed in the bankruptcy notices. The respondent opposed those applications on the basis that the notices were based on a final judgment of the Supreme Court of Queensland and the alleged counter-claim, set-off or cross demand had been dismissed by the Supreme Court of Victoria on 8 May 2015.
The applications to set aside the bankruptcy notices were dismissed by Registrar Ryan on 21 April 2016.
APPLICATIONS FOR REVIEW OF REGISTRAR’S DECISION
On 3 May 2016 the applicants filed applications for review of the Registrar’s decision. On 7 June 2016 those applications were stood over for hearing to 4 July 2016. On 4 July 2016 the applications were dismissed pursuant to r.13.03C(1)(c) of the Rules, the applicants not appearing.
Applications in a case filed 19 July 2016
On 19 July 2016 the applicants filed applications in a case seeking to set aside the interlocutory dismissals of 4 July 2016. On 10 August 2016 Judge Riley made the orders the subject of the present applications in a case, dismissing the 19 July 2016 applications in a case, the applicants again not appearing.
Applications in a case filed 23 August 2016
On 23 August 2016 the applicants filed the present applications in a case seeking orders setting aside Judge Riley’s second interlocutory dismissals of the proceedings.
An application for review of a registrar’s decision proceeds before a judge as a hearing de novo and so the matters which the applicants relevantly have to show today are that upon a rehearing of the applications to set aside the bankruptcy notices they would have reasonable prospects of obtaining orders setting those notices aside.
Affidavits in support affirmed 3 May 2016
In their affidavits affirmed on 3 May 2016 and filed on that day in support of the applications for review, the applicants claimed that they had a counter-claim, set-off or cross demand equal to or exceeding the sums sought in the bankruptcy notices. They also deposed that that claim could not have been set up in the proceedings in which the judgment had been obtained.
The evidence indicates that the applicants sought to pursue an action against the respondent in the Supreme Court of Victoria. On 7 May 2015 the applicants’ application to amend their statement of claim in that proceeding was dismissed as scandalous, frivolous, vexatious or an abuse of process and their whole action was dismissed for having no real prospects of success. Amongst other comments made by Derham AsJ in his reasons for that ruling was that whatever claim the applicants might have had against the respondent had merged in the judgment of the Supreme Court of Queensland, which created the debt the basis for the bankruptcy notices, and that they were also estopped from raising in the Victorian proceedings any claims which they ought to have raised in the Queensland proceedings.
An appeal from Derham AsJ’s ruling was dismissed by McDonald J on 10 September 2015, the applicants failing to appear.
Other affidavits
Further assertions were made in affidavits affirmed by Mr Kanakaridis on 21 June 2016, 30 June 2016 and 1 July 2016 and it is worth considering them at this point. Those affidavits were filed in both Mr Kanakaridis’s and Ms Hou’s proceedings.
Affidavit of Mr Kanakaridis affirmed 21 June 2016
(a) It is alleged in this affidavit that the respondent made fraudulent representations to the Supreme Court of Queensland.
If the applicants had any concerns about the way the Queensland Supreme Court matter proceeded, then it was appropriate for them to say so in that proceeding, and if they were unhappy with the result, to appeal the judgment which they received, something which appears not to have occurred.
(b) Derham AsJ did not grant an adjournment.
That issue was disposed of by the unsuccessful appeal brought in the Supreme Court of Victoria.
(c) The respondent was bankrupt at the time the Queensland action was commenced against the applicants.
The respondent is a corporation and so the Bankruptcy Act 1966 does not apply to it in questions of its solvency.
(d) The orders made against the applicants by the Supreme Court of Queensland were invalid and unconstitutional because the Supreme Court of Queensland Act 1991 is an invalid act as it was purportedly assented to after and as a result of the invalid Australia Act 1986.
At various points in their affidavits the applicants have asserted that the Supreme Court of Queensland and, for that matter the Supreme Court of Victoria, are in some way or manner not validly constituted by reason of the passage of the Australia Acts of 1986. However, the Australia Acts concern questions of sovereignty quite removed from the matters in issue in these proceedings. The applicants have not placed anything before the Court to suggest that the domestic judicial systems of the States were affected by the Australia Acts or that, at that point, the States somehow lost constitutional competence to create or maintain courts.
Specifically, the applicants did not advance any credible argument which might have suggested that the integrity or existence of State courts were affected by the Australia Acts.
(e) The respondent did not advance money to the applicants.
That question was disposed of by the Supreme Court of Queensland decision.
(f) The respondent and its agents and employees committed criminal negligence and made fraudulent representations with regard to its financial position and its bankruptcy.
As already noted, the Bankruptcy Act does not apply to the respondent, at least in relation to questions of its own solvency, and the alleged negligence and misrepresentations were not particularised. The allegation is scandalous and lacking in meaningful substance.
(g) The respondent is working in collusion with Westpac Banking Corporation and Gadens Solicitors to try to bankrupt the applicants to assist Westpac in certain of its own business operations.
The question relevant to these proceedings is not what motivates the respondent to pursue debts owing to it but its entitlement to pursue debts owing to it.
(h) The proceedings in the Supreme Court of Victoria were unlawfully dismissed by Derham AsJ.
That matter was disposed of by the appeal determined by McDonald J.
On 27 June 2014, the applicants paid an agreed amount to the respondent, which amount was accepted as full and final settlement of the respondent’s claims against them.
The affidavit evidence filed on behalf of the respondent shows that the applicants paid $1 into two accounts they held with the respondent. It appears that this is the accord and satisfaction which the applicants seek to make out. It has not been demonstrated by the material which the applicants have provided to the Court that there was indeed any accord, and I would think it most unlikely that there was, given how small was the amount paid.
(j) The Australian judicial systems in Queensland and Victoria are corporate enterprises which have no basis in law.
This allegation appears to arise out of some business registrations or similar in the United States by some Australian governments and instrumentalities and inferences that the Commonwealth and the States are consequently corporations and not governments or sovereign entities of some sort. This allegation has not been demonstrated to have any substance whatsoever.
(k) The Supreme Court of Victoria had been acting collusively with the respondent in the obstruction of justice.
If the applicants truly believed that the Supreme Court of Victoria had been acting collusively with the respondent in the obstruction of justice, then they could have sought to appeal from McDonald J’s decision, or perhaps even to set that decision aside – noting that that was an appeal to a single judge of the Supreme Court of Victoria which was dismissed in the absence of the appellants. Whatever the case, the applicants have not pursued that allegation in the correct forum.
(l) The applicants have been the victims of physical and psychological torture and abuse from the respondent.
That allegation has not been particularised except to the extent that the applicants say that they were ejected from their home earlier this month. However, that action appears to have been assisted by police, which does not suggest that it was unlawful.
Affidavit of Mr Kanakaridis affirmed 30 June 2016
In this affidavit Mr Kanakaridis made allegations similar to the ones he made in his affidavit of 21 June 2016 and also reproduced many pages of quite irrelevant material to which reference need not be made.
Affidavit of Mr Kanakaridis affirmed 1 July 2016
This affidavit contained much irrelevant material too and also referred to the alleged accord and satisfaction. Mr Kanakaridis additionally deposed that he and Ms Hou are “independent sovereign man and woman under God” and, in summary, that they are not subject to the sovereignty of the Commonwealth.
Finding
The material which I have rehearsed leads me to the conclusion that the applicants do not have reasonable prospects of demonstrating that they have counter-claims, set-offs or cross demands equal to or exceeding the amount claimed in the bankruptcy notices which they could not have set up in the Supreme Court of Queensland proceeding. In those circumstances and given my conclusion that the applicants have not satisfactorily explained their non-attendance on 10 August 2016, there is no proper basis to set aside Judge Riley’s orders made on 10 August 2016.
OTHER MATTERS
Although that conclusion disposes of the present interlocutory applications, there are certain other matters which ought to be addressed today. The first is that, in their applications in a case filed on 23 August 2016 and in their affidavits in support, the applicants asserted that the orders made by Judge Riley on 10 August 2016 had been obtained by fraud. That is an exceptionally serious allegation and it appears to be one directed at her Honour. In this regard, the Court has been provided with a document headed “Charge-Sheet And Summons” signed by Mr Kanakaridis, dated 25 August 2016, which purports to be on a form under the (presumably Victorian) Magistrates’ Court Criminal Procedure Rules 2009, accusing Judge Riley of conspiring with another person to obstruct, prevent, pervert or defeat the course of justice in relation to the judicial power of the Commonwealth.
Such allegations against a judicial officer performing his or her role are scandalous and completely unacceptable in the absence of cogent evidence to give them substance. There is no evidence before the Court which would suggest that Judge Riley did anything other than deal with matters in which applicants had more than once failed to appear in court. There is nothing exceptional in the dismissal of a matter for non-attendance.
It should further be noted that the applications in a case filed on 19 July 2016 alleged that her Honour’s dismissal of the matters on 4 July 2016, again by reason of the absence of the applicants, was also obtained by fraud. That was stated in Ms Hou’s affidavit and in her application in a case and in Mr Kanakaridis’ affidavit and application in a case.
Based on the documents to which I have referred, the applicants appear to have a propensity for making strong and wild allegations. I do not need to make a finding in relation to the matter filed on 19 July 2016. However, I consider that the applications in a case dismissed today were embarrassing, vexatious and abuses of process. I again note that Derham AsJ described an aspect of the proceedings before him in the Supreme Court of Victoria as, amongst other things, vexatious. The applicants should be alert to the possibility that they may be found to be vexatious litigants if they continue this course of conduct.
Another aspect of these matters which, in my view, was vexatious was the filing in the related creditor’s petition proceeding of a notice under s.78B of the Judiciary Act 1903. In that notice of constitutional matter, the applicants say that the orders and judgment against them issued by the Supreme Court of Queensland were invalid on the basis that the Supreme Court of Queensland was not acting in a lawful and proper jurisdiction because:
… the Supreme Court of Queensland was operating under the Supreme Court Act 1995 (Qld) or another act which was created as a result of the unlawful treacherous and unconstitutional Australia Acts of 1986.
As a last matter, I should note that I was informed a few minutes ago, during a pause in the delivery of these reasons, that Mr Kanakaridis has generated a further charge sheet and summons, dated today and addressed to me. That document has played no role in the reasoning which I have expressed and I have put it out of my mind for the purposes of these reasons.
CONCLUSION
For the reasons I have given, the applications in a case filed on 23 August 2016 will be dismissed.
I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of Judge Cameron
Date: 13 September 2016
Key Legal Topics
Areas of Law
-
Insolvency
-
Civil Procedure
Legal Concepts
-
Injunction
-
Stay of Proceedings
-
Abuse of Process
-
Jurisdiction
0
0
8