Mahony Trading as Mahony Law v Neale
[2020] FCCA 2294
•24 September 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MAHONY TRADING AS MAHONY LAW v NEALE | [2020] FCCA 2294 |
| Catchwords: BANKRUPTCY – Creditor’s petition – grounds of opposition considered – sequestration order made. |
| Legislation: Bankruptcy Act 1966 (Cth), s.52 Federal Circuit Court (Bankruptcy) Rules 2006 (Cth) |
| Cases cited: Neale v Mahony [2018] FCCA 363 Neale v Mahony (No 2) [2018] FCCA 3221 Neale v Mahony (No 2) [2019] FCCA 3250 Neale v Mahony [2018] NSWSC 1046 Neale v Mahony (No 2) [2018] NSWSC 1253 |
| Applicant: | JOHN FRANCIS MAHONY TRADING AS MAHONY LAW |
| Respondent: | JAMES WOODWARD NEALE |
| File Number: | SYG 3253 of 2019 |
| Judgment of: | Judge Driver |
| Hearing date: | 19 August 2020 |
| Date of Last Submission: | 31 August 2020 |
| Delivered at: | Sydney |
| Delivered on: | 24 September 2020 |
REPRESENTATION
| Counsel for the Applicant: | Mr A Moroya |
| Solicitors for the Applicant: | Mahony Law |
| The Respondent appeared in person |
ORDERS
A sequestration order is made against the estate of James Woodward Neale.
The petitioning creditors costs, including reserved costs, if any, be taxed and paid in accordance with the Bankruptcy Act 1966 (Cth).
The Court notes that the date of the act of bankruptcy is 11 June 2019.
The Court notes the obligations on the applicant creditor to notify, enter and serve these orders in accordance with the Federal Circuit Court (Bankruptcy) Rules 2006 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 3253 of 2019
| JOHN FRANCIS MAHONY TRADING AS MAHONY LAW |
Applicant
And
| JAMES WOODWARD NEALE |
Respondent
REASONS FOR JUDGMENT
Introduction and background
The applicant (Mr Mahony) seeks orders under a creditor’s petition presented on 11 December 2019. The petition states that the respondent debtor (Mr Neale) owes the sum of $36,096.34 for unpaid legal fees pursuant to judgment of the Local Court of New South Wales on 14 June 2016.[1]
[1] case number 2015/00164387
The act of bankruptcy relied upon is failure to comply on or before 11 June 2019[2] with the requirements of bankruptcy notice BN237826 served on Mr Neale on 24 March 2019 or to satisfy the Court that he had a counter claim, set-off or cross demand equal to or more than the sum claimed in the bankruptcy notice.
[2] that being the date for compliance ordered by Registrar Morgan on 28 May 2019 in case number SYG927/2019
Mr Mahony is an unsecured creditor.
The creditor’s petition is supported by the affidavit within it verifying its contents and the affidavit of Mr Mahony made on 24 February 2020 dealing with the judgment debt, non compliance with the bankruptcy notice and service of the creditor’s petition and the bankruptcy notice.
Updated affidavits of search and debt were provided at the trial of this matter on 19 August 2020.
The petition is opposed by Mr Neale, who filed a Notice Stating Grounds of Opposition on 20 April 2020. There are 15 grounds of opposition listed in that Notice, all of which are pressed by Mr Neale:
1 I have filed a Form 3BA requesting a review of the order made by Registrar Morgan in this matter.
2 I have $millions from the sale of RE assets which are held by the bank and are rightly, absent fraud or unconscionable conduct by CBA and Eddie Obeid, mine.
3 I am a member of the current Class Action v CBA and could recover $millions.
4 In contrast with the above Mr Mahony’s claim is for $25,000 plus costs and interest.
5 Hammerschlag J and my then solicitor, John Whitfield, said if my u-v claim v CBA was removed I can revive it. Its removal is not denied. That claim is worth $millions.
6 The actions of the CBA have deliberately deprived me of all resources ($, my solicitor Serene, my wife Ida, my family) witch which to represent myself and self-isolation makes it much worse. I cannot meet the timetables.
7 I must appeal the [Manousaridis] judgment.
8 Crucial documents which I filed in person in the FCC are apparently missing from the file. His Honour’s judgment states that he did not see them. When I filed the documents in court I served them on Mr Mahony by email and have read receipts confirming that he received them.
9 Since Mr Mahony first obtained a bankruptcy notice against me documents have been discovered which prove that his credit should not have been preferred to mine.
10 I do not owe Mr Mahony any money. His Costs Agreement is apparently missing from the file (according to [Judge Manousaridis]).
11 The overriding purpose of the court to achieve justice has not been complied with as I have been denied legal representation. My lawyer would have a duty to the court which I, unrepresented, am unable to replicate. I am biased.
12 The reasons given in writing by lawyers who declined to assist. Several, including a forensic expert, expressly supported my case. None expressly or by implication said it had no prospects of success.
13 I have an offsetting claim against Mr Mahony because he was aware that his firm had filed the wrong documents and did not rectify his firm’s failure and file the correct documents which I had drafted with him.
14 Mr Marcus Jacobs QC gave evidence in 2013 that he did not support my claim filed by Mr Mahony (which I did not know at the time had not been fixed) and that it needed to be fixed. His estimate of costs was $140,000 for himself, Mr Mahony and experts.
15 My brother may lend me money to settle but he is not so obliged. I do not know if the Covid 19 virus has rendered him illiquid. I will not expore that path as it would aid and abet the CBA crime.
The Notice of Grounds of Opposition is supported by two affidavits made by Mr Neale on 16 April 2020 and 5 May 2020.
Mr Neale has also engaged in voluminous email correspondence with the Court registry and my associate. Parts of that correspondence relate only to issues of procedure but parts raise issues of substance. I have had regard to the email correspondence to the extent that it contains submissions in opposition to the creditor’s petition.
Mr Neale was legally represented at an early stage of the present proceedings but his solicitor withdrew from the record on 15 June 2020. Mr Neale claimed to have instructed another solicitor but was unable to contact her. Efforts by my associate to make contact with that practitioner were also unsuccessful. Mr Neale represented himself at the trial and, noting his disadvantage as an elderly self represented litigant, I gave him the opportunity to provide post-hearing submissions or additional evidence.
On 31 August 2020, purportedly in compliance with my orders, Mr Neale emailed to the registry and my associate a document styled as an affidavit but not signed or witnessed. Various other documents were attached. I have had regard to the attached documents and have treated the body of the affidavit as a submission.
Mr Mahony responds to the issues raised in Mr Neale’s grounds of opposition in his affidavits made on 13 May 2019 (in earlier proceedings in this Court), 17 April 2020 and 14 May 2020.
Consideration
As I informed the parties at the trial on 19 August 2020, I am satisfied that the formal requirements for the making of a sequestration and related orders have been met. The real issue concerns the grounds of opposition advanced by Mr Neale. Those grounds all relate in one way or another to an exceptionally protracted and debilitating dispute which Mr Neale has engaged in with the Commonwealth Bank in relation to its takeover of Bankwest and action taken by the bank to sell property owned by Mr Neale, allegedly at a very substantial undervalue. It is fair to say that this dispute has absorbed all of Mr Neale’s energies and taken over his life. There was extensive litigation in part of which Mr Mahony acted for Mr Neale. The present bankruptcy proceedings arise from unpaid fees due to Mr Mahony for so acting.
The greater part of the evidence and submissions advanced by Mr Neale relates to his grievances against the Commonwealth Bank. Mr Mahony’s position, which I accept, is that any claims which Mr Neale may now have for compensation from the Commonwealth Bank for damages suffered by him as a result of the Commonwealth Bank’s takeover of Bankwest are irrelevant to the present bankruptcy proceeding.
The facts are that between 2009 and 2012, Mr Mahony carried out substantial legal work for Mr Neale relating to loans that he had with Bankwest and the preparation for his case defending repossession and eviction proceedings commenced against him by the Commonwealth Bank. Legal costs were incurred in excess of $200,000, of which Mr Neale paid approximately $10,000. This led to Mr Mahony and Mr Neale parting company but in late 2012, Mr Mahony agreed again to act for Mr Neale in relation to an appeal in the New South Wales Supreme Court. Mr Mahony’s agreement to act was conditional upon a costs agreement. Mr Neale, however, failed to pay the costs incurred by Mr Mahony. Mr Neale did not pay an invoice provided to him. Mr Mahony commenced proceedings against Mr Neale in relation to non payment of that invoice. Mr Mahony was successful and obtained an indemnity costs order at the Local Court on 14 June 2016 after a two day hearing.
A bankruptcy notice was issued which was contested by Mr Neale and expired. A fresh bankruptcy notice was issued on 15 March 2019 and it is that bankruptcy notice which supports the current creditor’s petition.
The bankruptcy notices and the Local Court judgment on which they were based have been the subject of earlier proceedings in this Court in 2018[3] before Judge Nicholls and in 2019 before Judge Manousaridis.[4] The unfortunate history of the matter was dealt with at some length by Judge Manousaridis in his decision in that case. His Honour rejected, correctly, the asserted cross-claim by Mr Neale against Mr Mahony.
[3] Neale v Mahony [2018] FCCA 363; Neale v Mahony (No 2) [2018] FCCA 3221
[4] Neale v Mahony (No 2) [2019] FCCA 3250
A separate attempt by Mr Neale to pursue off setting claims against Mr Mahony in the New South Wales Supreme Court was for the most part summarily dismissed on 22 March 2017, with the balance dismissed on 10 August 2018 by Davies J.[5]
[5] Neale v Mahony [2018] NSWSC 1046; Neale v Mahony (No 2) [2018] NSWSC 1253
It follows, and I find, that there is no substance to the grounds of opposition advanced by Mr Neale in this present proceeding. The issues relating to the sum due to Mr Mahony have been litigated exhaustively. While the situation Mr Neale finds himself in, at the end of an exceptionally long and fruitless battle against the Commonwealth Bank, are exceptionally unfortunate, there is no reason for the Court not to make a sequestration order.
I am satisfied that Mr Neale committed the act of bankruptcy alleged in the petition. I am satisfied with the proof of the other matters of which s.52(1) of the Bankruptcy Act 1966 (Cth) requires proof. I will make the orders sought in the petition and related thereto.
I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of Judge Driver
Associate:
Date: 24 September 2020
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