Macchia v Nilant

[2006] FMCA 1095

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MACCHIA v NILANT [2006] FMCA 1095

BANKRUPTCY – Declaration sought pursuant to ss.116 and 58 of Bankruptcy Act 1966 – whether Anshun estoppel applies – whether special circumstance – lengthy litigation history – application dismissed.

Bankruptcy Act 1966, ss.30(1)(b), 58, 116
Administration Act 1903 (WA), s.14
Limitation Act (WA) 2005

Macchia v Nilant(Trustee) [2006] FCA 213
Nilant v Macchia [2000] 104 FCA 238
Macchia v Nilant [2001] FCA 7
Re Macchia; Ex parte Macchia v Nilant [2000] FCA 353

Applicant: MARIO SILVERIO MACCHIA

Respondent: CHARLES PHILIPE LOUIS NILANT

File number: PEG 46 of 2006

Judgment of: McInnis FM

Hearing date: 15 May 2006

Date of last submission: 22 May 2006

Delivered at: Perth

Delivered on: 3 August 2006

REPRESENTATION

Counsel for the Applicant: Mr S. Smith

Solicitors for the Applicant: Lawton Gillon

Solicitor for the Respondent: Mr A. Carles

Solicitors for the Respondent: Carles Solicitors

ORDERS

1. The Application be dismissed.

2. The Applicant pay the Respondent’s costs to be taxed in default of agreement.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PERTH

PEG 46 of 2006

MARIO SILVERIO MACCHIA

Applicant

And

CHARLES PHILPE LOUIS NILANT

Respondent

REASONS FOR JUDGMENT

1. Mario Silverio Macchia (the Applicant) in an application filed 2 March 2006, seeks orders pursuant to the Bankruptcy Act 1966 (the Bankruptcy Act) against Charles Philipe Louis Nilant (the Respondent). The Respondent is sued in his capacity as trustee of the bankrupt estate of the Applicant.

2. The Applicant was declared bankrupt on 16 September 1991.  The Applicant filed a statement of affairs on 21 January 1994.  He was discharged from bankruptcy on 22 January 1997. 

3. The application before this court seeks the following orders:

   “2.A declaration pursuant to section 116 and 58 of the Bankruptcy Act 1966 that the chose in action for due administration is not after acquired property pursuant to the Bankruptcy Act 1966.

   3.All rights title and interest of Mr Mario Macchia (the Applicant) whose Bankruptcy started on 21 January 1994 and was discharged on 22 January 1997 pursuant to the Bankruptcy Act 1996 and whose mother died intestate on 21 March 1995 did not form part of the property of the bankrupt as the right of action could not and did not accrue until the letters of administration were granted to the Public trustee as Administrators on 25 August 1998, some 18 months after the Applicant's discharge took place.”

4. In support of the application, the Applicant filed and served an affidavit sworn by him on 2 March 2006.  That affidavit purports to set out background details and to some extent also contains legal argument, which in this instance is more appropriately dealt with by reference to the written and oral submissions made on behalf of the Applicant by his solicitor.

5. The parties to these proceedings have been engaged in an extensive litigation saga.  The facts and background to the current application were summarised in just one of many Federal Court proceedings between the parties in Macchia v Nilant(Trustee) [2006] FCA 213 (Macchia v Nilant 2006) where Siopis J relevantly summarised the background material in paragraphs 21-44 as follows:

   “21 It is necessary to examine briefly the history of litigation between the parties to understand the context in which the respondent brings his claim for summary dismissal or permanent stay. The matters set out below are based upon the reasons which were delivered in the course of this litigation.

   22 The applicant was made bankrupt by a sequestration order made by this Court on 16 September 1991. The respondent was appointed as the trustee of the bankrupt estate of the applicant, pursuant to that order of the Court.

   23 The sequestration order was made in these circumstances. On 16 May 1991 a creditor of the applicant presented a petition to the Court seeking a sequestration order against the estate of the applicant. On 16 July 1991, the applicant and his brother signed a joint authority under s 188 of the Act authorising the trustee to take control of their joint and several property and to convene a meeting of their creditors under Pt X of the Act. On 16 July 1991 the applicant and his brother gave the trustee a statement of their respective affairs and a joint statement of their joint affairs. The meeting of creditors rejected the composition which was offered by the applicant and his brother and resolved that the debtors be required to lodge their petitions in bankruptcy within 7 days. On 4 September 1991 the applicant and his brother each presented their respective petitions to the Registrar in Bankruptcy. Each petition was accompanied by a statement of affairs verified by an affidavit sworn on 4 September 1991. The Registrar in Bankruptcy, pursuant to s 55(3A) of the Act, referred the applicant’s petition to this Court for a direction whether to accept or reject the petition. On 16 September 1991, this Court directed the Registrar in Bankruptcy to refuse to accept the applicant’s petition and made a sequestration order against the estate of the applicant on the creditor’s petition.

   24 In October 1995 the applicant filed the first application directed towards adjusting the date of discharge of his bankruptcy to a date prior to the date of his mother’s death. By that application, the applicant sought a declaration that he was discharged from bankruptcy on 17 September 1994, or alternatively, an order under s 33(1)(c) of the Act abridging the time limit under s 149 of the Act for the discharge of the applicant from the bankruptcy resulting from the sequestration order made by the Court on 16 September 1991. The respondent trustee objected to the discharge of the applicant from bankruptcy and the hearing of the application was adjourned for some time whilst the objections were taken on review.

   25 The applicant’s application was heard on 8 April 1997 and was opposed by the respondent. On 11 April 1997 Lee J delivered his judgment (Re; Mario Silverio Macchia Ex parte; Mario Silverio Macchia v Charles Philippe Louis Nilant as Trustee of the Bankrupt Estate of Mario Silverio Macchia [1997] FCA 246) and ordered that:

   ‘...the period of bankruptcy limited by s149 of the Act be abridged from 3 years to 1 year and 1 month from the date of filing of the statement of affairs. As a result, [the applicant] will be discharged from bankruptcy as at 22 February 1995.’

   26 Lee J accepted that the date on which the statement of affairs had been filed with the Registrar in Bankruptcy was 21 January 1994.

   27 The applicant was legally represented before Lee J. The case advanced by the applicant was that the applicant had provided to the trustee a statement of his affairs in July 1991 as part of the proposed Pt X composition, and in September 1991 as part of the debtor’s petition, and that the respondent was therefore not prejudiced by the applicant’s failure to provide a statement of affairs earlier than, on the applicant’s version, 6 April 1993, or on the respondent’s version, shortly before 21 January 1994. The applicant submitted that as the respondent had access to the July 1991 and September 1991 statements of affairs, he had sufficient information about the applicant’s affairs to conduct the bankruptcy. No case was advanced on behalf of the applicant that the applicant had provided the trustee with a statement of affairs on 7 October 1991.

   28 In his reasons, after reviewing the evidence, Lee J said at 4-5:

   ‘On 6 October 1992 the Trustee advised Mr Macchia that he had not received a copy of Mr Macchia’s statement of affairs as required by s 54 of the Act and informed Mr Macchia that pursuant to s 149 of the Act discharge from bankruptcy would not occur until 3 years from the filing of the statement of affairs.

   On 9 October 1992 Mr Macchia replied to the Trustee that he had provided a statement of affairs on 16 July 1991 and again on 4 September 1991 and asked that the Trustee obtain a copy of the statements from the Registrar as soon as possible.

   In a letter to the Trustee dated 23 October 1992 Mr Macchia again referred to his debtor’s petition and the statement of affairs and that he had "lodged" with that petition...

   By letter dated 28 October 1992 the Trustee informed Mr Macchia that he had been made bankrupt on a creditor’s petition...and not on the debtor’s petition with which the statement of affairs had been supplied. The Trustee asked Mr Macchia to file a statement of affairs

   On 3 December 1993 the Trustee applied to the Court for an order that Mr Macchia be committed for contempt pursuant to sub-s 54(3) of the Act for failure to file a statement of affairs as required by paragraph 54(1)(a). Before the application came on for hearing Mr Macchia filed a statement of affairs on 21 January 1994. Pursuant to s149 of the Act discharge from bankruptcy will occur on 22 January 1997 if the period of bankruptcy were not extended by an objection lodged by the Trustee.’

   29 At 9-10 of his reasons, Lee J said:

   ‘In the present case the bankrupt has been the author of his own misfortune in that he continued to maintain, in the face of the Trustee’s advice that he was obliged to file a further statement of affairs, that he had complied with the requirements of the Act when he presented his own petition and by declining to comply with the Trustee’s request that he do so.’

   30 Apart from the statement of affairs, which was filed with the Registrar in Bankruptcy on 21 January 1994, Lee J referred in his judgment only to two statements of affairs, made by the applicant, namely, the statement of affairs of 16 July 1991 (provided as part of the attempts to reach a composition under Pt X), and the statement of affairs of 4 September 1991 (provided with the debtor’s petition). His Honour made the orders abridging the time relying upon the provisions of s 33(1)(c) of the Act and the case of Re; Rohde (1993) 42 FCR 149 (‘Rohde’).

   31 Before Lee J the applicant argued that there had in fact been compliance with s 54(1) of the Act in that the statement of affairs had been filed with the Registrar in Bankruptcy as part of the debtor’s petition on 4 September 1991, being a date within 14 days of the sequestration order, albeit before the date of the sequestration order. Lee J rejected that argument, holding that on a proper construction, s 54(1) of the Act required that the statement of affairs be filed within 14 days after the date of the making of the sequestration order, and not 14 days before the making of that order.

   32 The respondent appealed the decision of Lee J and the appeal was upheld by the Full Court. The decision of the Full Court is reported as Nilant v Macchia (1997) 78 FCR 419. The Full Court overruled the decision of Rohde and held that the Court does not have power pursuant to s 33(1)(c) of the Act to abridge the time limited by s 149(3) of the Act.

   33 The Full Court said at 428:

   ‘The result is that, in our opinion, the present matter has proceeded on an assumption which did not have a secure legal foundation. We will order that the matter be remitted to the learned trial judge for further consideration. It may be that some other basis can be advanced [apart from s 33(1)(c)] for treating one or other of the statement of affairs filed by the respondent as having being duly filed in accordance with the Act.’

   34 It is plain from the judgment that the reference to ‘one or other of the statement of affairs’ is a reference to the two statements of affairs which had been referred to by Lee J in his judgment, namely, the statement of affairs which was prepared and filed as part of the Pt X proceedings and the second statement of affairs which accompanied the debtor’s petition presented to the Registrar in Bankruptcy by the applicant.

   35 There is no reference in either of the decisions of Lee J or the Full Court referred to above, to any claim or argument being advanced by the applicant on the basis that he made and supplied the respondent with a statement of affairs on 7October 1991.

   36 After the Full Court decision in 1997, the applicant in March 1999 applied for and was given leave to file a further amended application. The application was heard on 12 October 1999. At that time, there were in existence further objections by the respondent to the discharge of the applicant from bankruptcy. The hearing was adjourned part heard. However, on 17 December 1999, and before the hearing of the application was resumed the respondent withdrew his objections to the applicant’s discharge from bankruptcy. The withdrawal of the objections meant that the applicant was discharged from bankruptcy pursuant to s 149 of the Act with effect from 22 January 1997 - that being three years from the filing of the statement of affairs with the Registrar in Bankruptcy. However, as at 17 December 1999, the applicant had been treated as an undischarged bankrupt for almost three years beyond the date on which the bankruptcy terminated under the Act.

   37 Thus, by the time the application came on for the resumed hearing before Lee J on 23 February 2000 the applicant had been discharged from his bankruptcy. At the resumed hearing the applicant further amended the application. In that amended application, the applicant relied upon s 30(1)(b) and s 306 of the Act to seek a declaration that a ‘proceeding’ under the Act had not been invalidated by a formal defect or irregularity. The ‘proceeding’ which the applicant sought to be validated was the statement of affairs prepared in relation to the Pt X proceedings, or alternatively the statement of affairs dated 4 September 1991 accompanying the debtor’s petition. The declaration he sought was that either of those statements of affairs be deemed to have been filed in the office of the Registrar in Bankruptcy on 17 September 1991.

   38 On 27 March 2000, Lee J, granting relief under s 306(1) of the Act, ordered that the statement of affairs signed by the applicant on 4 September 1991 and presented to the Registrar in Bankruptcy on that date be deemed to have been made out and filed in the office of the Registrar in Bankruptcy, and a copy furnished to the trustee of the sequestrated estate of the applicant, on 16 September 1991 in compliance with the requirements of s 54(1) of the Act (Macchia v Nilant [2000] FCA 353).

   39 The respondent appealed that decision and the Full Court upheld the appeal finding that s 306 of the Act does not confer a power to treat a failure to comply with s 54(1) of the Act as compliance with it. The case is reported as Nilant v Macchia (2000) 104 FCR 238.

   40 The Full Court held that relief under s 306(1) of the Act was not available because the bankrupt had not made any attempt to comply with s 54(1) of the Act which required a filing of a statement of affairs after the date of sequestration.

   41 Weinberg J said at 249, at [54]:

   ‘In the present case, the plain fact is that the appellant did not file a statement of affairs in accordance with the requirements of s 54(1) of the Act, but assumed erroneously that a statement of affairs previously filed with the Registrar on a debtor‘s petition would serve that purpose. There was no act on the part of the appellant which could be described as even purported compliance with the requirements of the section. His failure to comply with the requirements of s 54(1) does not give rise to a "proceeding under this Act" which would be invalidated but for the fact that any defect or irregularity is merely formal. In these circumstances, there is no proceeding capable of being brought before the Court on an objection concerning that invalidity.’ (original emphasis)

   42 At 251, at [64] and [65], Weinberg J said:

   ‘Where there has been an attempt to comply with the obligations of s 54(1), whether within the fourteen day period specified, or on some other occasion thereafter, it is entirely apt to speak of that attempt being a "proceeding under this Act", and being capable of being regarded by the Court as "not invalidated" by reason of any formal defect or error. Section 306(1) in such a case is to permit the period of bankruptcy to run from the date of purported compliance with the Act, or perhaps some later date. It follows that the bankruptcy will not continue for an unconscionably long period merely because of some relatively minor failure on the part of the bankrupt to comply with the strict requirements of s 54(1).

   Regrettably, it seems to me that s 306(1) cannot be invoked in the circumstances of the present case, where no step whatever has been taken by the bankrupt in purported compliance with the requirements of s 54(1). There is simply no "proceeding" or "step" taken in the course of the bankruptcy which is capable of being the subject of an order that it not be invalidated.’

   43 Carr J at 246, at [36] said:

   ‘3. In the present matter, where there has been no attempt to comply with s 54 until (at the earliest) 6 April 1993, there was no proceeding which by the operation of s 306 could escape invalidity due to formal defect or irregularity.’

   44 There was no case made by the applicant at the hearing of the second application before Lee J in 2000, nor at the hearing before the Full Court in 2000, that the applicant had made a statement of affairs dated 7 October 1991 and delivered it to the respondent. Indeed, the finding by the Full Court that the applicant made no attempt to make a statement of affairs until 6 April 1993 at the earliest, is at the heart of the Full Court’s decision. It was a crucial finding on which the whole decision rested.”

6. In his affidavit, the Applicant claims in paragraph 4 that since his mother's death, the Respondent had -

   “ … tried to keep the Applicant bankrupt by lodging objections to discharge that were invalid and foreign pursuant to the Bankruptcy Act, to ensure he would succeed in after acquired property.”

7. The Respondent has objected to the Applicant relying upon that paragraph and submits, and I accept, that withdrawal of objections by the Respondent were undertaken according to law and that otherwise, circumstances surrounding lodgment of objections and Applicant’s discharge from bankruptcy are irrelevant for the purpose of the present application.

8. Other facts which may be gleaned from the summary by Siopis J referred to above, together with the Applicant's affidavit and submissions, apart from the date of bankruptcy and discharge and the date of death of the Applicant's mother, are as follows: 

   ·The Public Trustee applied for letters of administration to administer the Applicant's deceased mother's intestate estate on 26 February 1998.

   ·The Public Trustee was granted letters of administration on 25 August 1998.

   ·The Applicant's father pre-deceased the Applicant’s mother and the Applicant is one of three adult children of his mother.

   ·The main asset of the deceased estate of the Applicant's mother is a residential property in North Perth which has been occupied by the Applicant's brother, Lucio Macchia, since the mother's death in 1995. 

   ·The Applicant and his brother, Lucio Macchia, unsuccessfully contested the Public Trustee's application for letters of administration in proceedings in the Supreme Court of Western Australia in 1998.

9. It is not in dispute that pursuant to s.14 of the Administration Act 1903 (WA), the Applicant is entitled to a one-third interest in the deceased estate of his mother.

10. It is that interest which is at the heart of the dispute in this application, with the Applicant seeking the declaration set out above and the Respondent asserting that the one-third interest of the Applicant has vested in the Respondent pursuant to s.58 of the Bankruptcy Act.

11. The substance of the application relies upon the assertion by the Applicant that as at the date of his mother’s death, the Applicant did not acquire a chose in action. 

1. The Respondent has raised what I regard to be threshold preliminary issues namely that Anshun estoppel applies to this application and in the alternative that the current application is a claim which could properly be described as equitable declaratory relief pursuant to the Court’s powers under s.30(1)(b) of the Bankruptcy Act and accordingly that claim for relief is subject to the limitation period prescribed by the Limitation Act (WA) 2005.

2. Clearly if Anshun estoppel applies to this application then it would be unnecessary for the Court to further consider the alternative argument that the Limitations Act applies and/or to then further consider the merits of the substantive application.  It is appropriate therefore that I deal with the submissions of the Respondent based upon Anshun estoppel.

Anshun Estoppel

1. In considering the relevant law in relation to Anshun estoppel, I apply and adopt the following extract from the decision of Siopis J in Macchia v Nilant 2006 where His Honour applying a decision of the Full Court of the Federal Court, stated at paragraphs 67-69 the following:

   “67 The Anshun estoppel principles have recently been considered by the Full Court of this Court in the case of Wong v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 146 FCR 10 (‘Wong’). The Full Court said that the doctrines of res judicata and issue estoppel are founded on the broad rules of public policy that a person ought not to be vexed twice for one and the same cause and that it was in the public interest that there be an end to litigation. At 17-18, at [36]-[37] the Full Court went on to say:

   ‘...It would be an abuse of process to allow parties to litigate repeatedly matters that have been finally determined by the Court. Also, quite apart from any psychological detriment that might flow from an individual having to undertake litigation of the same issue a second time, the State has an interest in ensuring that, once an issue has been determined according to law and all rights of appeal have been exhausted, that should be an end of the matter. The resources of the community ought not to be expended in the litigation, more than once, of the same issue.

   A plea in bar may be raised in respect of an issue, not only if the Court in the earlier proceeding was actually required by the parties to form an opinion and pronounce a judgment, but also in relation to every issue that properly belonged to the subject of the earlier litigation and which the parties, exercising reasonable diligence, might have brought forward at the time of the earlier litigation: Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 598 and 602. Anshun estoppel arises where the issue, now raised for the first time, properly belonged to the subject of the earlier proceeding but, by negligence, omission or accident, was not raised in earlier proceeding. In essence, where the issue was so relevant to the subject matter of the earlier action that it would be unreasonable not to have raised it at that time, it is an abuse of process to endeavour to raise that issue for the first time in a subsequent proceedings between the parties: Anshun at 602.’

   68 Further, at 17, at [38] the Full Court said:

   ‘...As foreshadowed in Anshun, there will be instances where, even though there is every reason why the matter should have been raised earlier but was not, there are special circumstances that prevail to permit a party to raise the issue in a subsequent proceeding. The Court therefore has a discretion, if it determines that special circumstances exist, to allow an issue to be raised, even where it is found that the point was unreasonably omitted from the earlier proceeding: see Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543 at 558...’

   69 What will be sufficient to constitute ‘special circumstances’ is not fixed and may involve a range of factors that bear upon the general discretion of the Court where justice requires the non-application of the general principle (Wong at 18).”

2. It was submitted on behalf of the Respondent that earlier findings in proceedings between the parties confirmed that the issue now raised by the Applicant is so closely related to the subject matter of the earlier proceedings that it was unreasonable for the Applicant not to have raised the issue in part either in the 2000 proceedings or in the recent 2006 proceedings before Siopis J.  It was submitted the court is now being asked to make findings which are inconsistent with findings of two Federal Court judges in earlier proceedings and that Anshun estoppel should therefore apply.

3. The reference to the earlier proceedings includes the decision of Hill J in Nilant v Macchia [2000] 104 FCA 238 in paragraph 6 at 240 where the court stated:

   If, as at the date of his mother's death, Mr Macchia had not been discharged from bankruptcy, any interest Mr Macchia had in the real estate would be available to his creditors.

4. Reference was further made by the Respondent in support of the submission that Anshun estoppel applies to the recent decision of Siopis J in 2006 where his Honour states at paragraph 16 the following:

   “ … Unless the applicant can obtain an order from this Court which has the effect of changing the date of discharge of the applicant from bankruptcy, any interest which the applicant may have in the property comprising his mother's deceased estate, will be regarded as after acquired property and would be property available to his creditors.”

5. Apart from supporting the submission that Anshun estoppel should apply to the present application, it was further submitted for and on behalf of the Respondent that those findings support the Respondent's submission in relation to the merits of the substantive application.  The findings confirm, it was submitted, that rights vested in the Respondent as bankruptcy trustee at the date of death of the Applicant's mother and not when the letter of administration were granted.

6. The Respondent referred to the judgment of French J in Macchia v Nilant [2001] FCA 7 where at paragraphs 7 and 8 the court stated:

   “7 Under the orders made by the Full Court there was a further rehearing on 12 October 1999. At that time the application was amended to seek a declaration that the Statement of Affairs be deemed to have been filed on 16 September 1991. The application was also amended to seek orders that the objections to discharge were invalid and that Mr Nilant's assessments under s 139W of the Act of income payable by Mr Macchia were invalid. At the hearing Mr Macchia's solicitors drew the primary judge's attention to the decision of the Full Court in Challen v Bendeich [1999] FCA 845, a judgment given on 25 June 1999. The effect of that decision was that an income contribution assessment could not be made retrospectively but had to be made during the contribution assessment period in question. Mr Nilant accepted that it followed from this that any objection to discharge lodged on the ground of an assessment so made would also be invalid. The hearing on 12 October 1999 was adjourned on the basis that Mr Nilant's solicitors would consider Challen v Bendeich in more detail and advise him of the effects of that decision on the Notices of Objection to discharge which he had lodged against Mr Macchia. He received legal advice subsequently that the effect of the decision in Challen v Bendeich was that the Notice of Objection to discharge against Mr Macchia dated 3 July 1996 could not stand and he should therefore withdraw that objection. The flow on effect would be that Mr Macchia would have been discharged from bankruptcy in January 1997 and that the two subsequent Notices of Objection dated 19 March 1997 would therefore also be invalid. On the basis of this legal advice, Mr Nilant said he withdrew all three objections to discharge in December 1999.

   8 The hearing continued on 23 February 2000 but in view of the withdrawal of the objections was confined to the question of whether any declaration should be made. On 27 March 2000 the learned primary judge gave judgment declaring that Mr Macchia was discharged from bankruptcy in September 1994. In so doing, his Honour applied s 306(1) to overcome the difficulty caused in relation to the Statement of Affairs - Re Macchia; Ex parte Macchia v Nilant (2000) 172 ALR 158. An appeal against that decision was filed in the Full Court and was heard by the Full Court on 31 August 2000. On 27 October, the Full Court allowed the appeal on the basis that s 306 could not be applied to overcome a failure to file a Statement of Affairs under s 54 - Nilant v Macchia [2000] FCA 1528.”

7. It was noted that all objections to discharge were withdrawn in December 1999 prior to the hearing before the primary judge, Lee J, taking place on 23 February 2000, resulting in his judgment on 27 February 2000 in Re Macchia; Ex parte Macchia v Nilant [2000] FCA 353 and the subsequent appeal from that judgment in Nilant v Macchia [2000)] 104 FCR 238. It was submitted the Applicant was legally represented in both the 2000 proceedings before Lee J and the 2000 appeal. The issue now being raised in the present application, it was submitted, could have been raised in those proceedings but the Applicant failed to do so.

8. It was submitted by the Respondent that the issue being raised in the present application should have been raised in the 2000 proceedings.  Given the Applicant had already been discharged from bankruptcy, the 2000 proceedings were not simply what could be described as an "academic exercise to determine the correct date of discharge from bankruptcy".  It was submitted the only possible benefit to the Applicant as a discharged bankrupt in pursuing the 2000 proceedings was to try to have his date of discharge from bankruptcy backdated so that he, rather than his creditors, would get the benefit of his one-third interest in his mother's estate.  The issue now being raised, it was submitted, should have been raised in the earlier proceedings.

9. It was submitted, applying the principles set out in the decision of Siopis J earlier in this judgment, that Anshun estoppel has not limited the issues already determined by the court and it also applies to an issue which was so relevant to the subject matter of the earlier action that it was unreasonable not to have raised it in the earlier proceedings. 

10. In the alternative, it was submitted on behalf of the Respondent that the issues now raised in these proceedings should at the very least have been raised by the Applicant in the proceedings before Siopis J in the Federal Court.  The application in those proceedings was filed on 2 June 2005, which, it was submitted, is almost six years after the Applicant became aware in December 1999 that objections had been withdrawn, resulting in his discharge from bankruptcy in January 1997.  It was submitted by the Respondent that the present application should be dismissed under Anshun estoppel principles by virtue of the failure of the Applicant to include the relief now sought in his application before Siopis J.

11. It was further submitted by the Respondent that since the Applicant became aware in December 1999 of his 1997 discharge, the Respondent has contested three sets of proceedings (2000, Lee J; 2000, Full Court; and 2006, Siopis J) in order to maintain his right to the interest of the deceased estate.  It was submitted the Respondent has incurred considerable costs in contesting those proceedings on the assumption that the bankrupt's rights to the interest in the deceased estate had vested in the Respondent.  It was therefore submitted that it is entirely unreasonable for the Applicant to bring yet another set of proceedings at this late stage seeking to claim the interest in the deceased estate on the basis that the interest never vested in the Respondent at all.

12. As part of the Respondent's submissions, reference was made to paragraphs 77 and 88 of the judgment of Siopis J where his Honour states:

    77 Secondly, although the degree of vexation which may be caused to a professional trustee, being sued in a representative capacity, could well be regarded as being of a different and less onerous character, than if he was sued in his private capacity, there are other considerations which must be taken into account in this case. There have already been four previous proceedings in which the question of the making of the statement of affairs has been litigated. The respondent would have had to expend his time and effort in participating in those proceedings. Further, the bankruptcy administration has been going on for 14 years and five years has elapsed since the Full Court decision in 2000. I do not, therefore, regard this circumstance, whether alone or in combination with the other circumstance already mentioned, as comprising a special circumstance that would cause me to exercise my discretion not to apply the Anshun estoppel principles.

    …

    88 Firstly, the factual issue as to the time at which the applicant first made a statement of his affairs for the purposes of the Act was of crucial importance in the earlier proceedings. Secondly, there was every opportunity available to the applicant to have advanced in the earlier proceedings a claim based on the factual assertion now made in the application. Thirdly, there are factual findings made in the earlier proceedings which are contrary to the factual position now being asserted in this application. As previously mentioned, the finding that no statement of affairs was made prior to 6 April 1993 at the earliest, was crucial to the Full Court’s decision in 2000. Fourthly, the nature and the object of the relief claimed in the application, is substantially the same as in the earlier proceedings. Each of the earlier proceedings was concerned with the question of if, and when, the applicant had filed a statement of affairs under the Act. Fifthly, there is no plea by the applicant of fresh evidence, nor could there be such a plea. There was evidence available to the applicant and his legal advisers at the time of the hearing of the first application in 1997 before Lee J upon which the claims now made could have been advanced in the earlier proceedings. Sixthly, if the Court were now to make factual findings along the lines claimed in the current proceedings, the factual findings on which the courts acted and upon which decisions were made in the earlier proceedings would be undermined. This would have a tendency to adversely impact upon the finality of judicial determination and public confidence in the administration of justice. Further, the respondent has already been involved in four previous proceedings relating to the issue of the filing of the statement of affairs; and five years have elapsed since the Full Court decision in 2000.”

13. It was further submitted that those paragraphs can be relied upon by the Respondent as applicable to the present application to the extent that there is an issue of vexation to and oppression of the Respondent in this present application. 

14. It was further submitted there are no special circumstances which should allow the issue to be raised at this later stage and the application should be dismissed under Anshun estoppel principles. 

15. The Applicant submitted that the principles of Anshun estoppel do not prevent the Applicant making the present application.  It was submitted the Applicant has never commenced any action with regard to his mother's intestate estate.  The Applicant had only commenced actions relating to factual matters surrounding his bankruptcy and predominantly relating to his date of discharge and also an action against the Respondent for negligence. 

16. The current proceedings before the court, it is claimed, are not proceedings where the Applicant is asking the court to decide any factual matter relating to his bankruptcy; instead, the Applicant is "seeking a declaration on a point of law".  It was submitted that given the paucity of legal precedents relating to when a possible beneficiary under an intestacy acquires a chose in action against an administrator, the matter should be allowed to proceed to hearing and the law in the area to be addressed.

Reasoning

1. Applying the authorities to which reference has been made and in particular the decision of the Full Court of the Federal Court in Wong which was applied by Siopis J in Macchia v Nilant 2006, it is my view that the Respondent’s submissions in relation to Anshun estoppel are correct.

2. In this instance whilst I note that the Applicant has not made a discrete application seeking declaratory relief of the kind sought in the present application, it is clear on a proper reading of the detailed chronology of litigation between the parties that the current application properly belonged to the subject of the earlier litigation between the parties.  In the circumstances the Applicant exercising what the Court’s have described as “reasonable diligence” might well have brought forward this application for a declaration at the earlier litigation.

3. I accept the submissions by the Respondent that the clear intent of earlier proceedings of the Applicant was in part to at least achieve an outcome whereby the bankruptcy was backdated to enable the Applicant to obtain the benefit of his one-third interest in his mother’s estate.  The declaration now sought could have been raised in those earlier proceedings.

4. It is equally clear in my view that in past litigation Courts have given consideration to this precise issue and have made clear in the absence of a backdating of the bankruptcy the outcome in relation to the Applicant’s interests in his mother’s estate.  So much is evident in the decision of Hill J in Nilant v Macchia (2000) 104 FCA 238 referred to in paragraph 14 of this judgment.

5. Specifically I accept the submission of the Respondent that the issue now being raised in this application ought to have been raised in the 2000 proceeding referred to earlier in this judgment.  As indicated earlier, those proceedings were clearly designed, at least in part, to achieve the benefit to the Applicant of backdating the bankruptcy to enable him to obtain the benefit of his one-third interest in his mother’s estate.

6. I further note and accept that in any event these matters at the very least ought to have been raised before Siopis J in the Federal Court in proceedings filed on 2 June 2005.  It is correctly observed that those proceedings were filed some six years after the Applicant became aware in December 1999 that objection had been withdrawn to discharge from bankruptcy resulting in that discharge in January 1997.  The relief now sought in this application in my view ought properly have been raised and/or might well have been raised by the Applicant in the proceedings before Siopis J.

7. For those reasons it follows in my view that the application should be dismissed with costs.

Conclusion

1. Having found that Anshun estoppel applies for the reasons given it is unnecessary for the Court to further consider the question of the application of the Limitation Act (WA) 2005 to this application.  Likewise, it is unnecessary for the Court to further consider the substantive application though I note in passing that findings already made by the Federal Court and in particular those findings referred to in paragraph 15 of this judgment of Siopis J effectively support the Respondent’s submissions in relation to the merit to the substantive application.

2. I also find that in this application having regard to the chronology of events and the fact that throughout the relevant proceedings the Applicant has been legally represented that there are no special circumstances which would permit this application to be pursued at this late stage.

3. Accordingly the orders of the Court are as follows:-

   (1)    The Application be dismissed.

   (2)The Applicant pay the Respondent’s costs to be taxed in default of agreement.

I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of McInnis FM

Associate: 

Date:  3 August 2006