Martin v Savas and Savas v Martin
[2012] FMCA 625
•14 August 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MARTIN v SAVAS and SAVAS v MARTIN | [2012] FMCA 625 |
| BANKRUPTCY – Review of Registrar's decision – effect of review of costs assessment under ss.373 & 377 Legal Profession Act 2004 (NSW) – claims concerning alleged counter-claim, set off or cross demand in excess of judgment debt – similar claims having already been raised in appeal proceedings in Supreme Court of NSW Court of Appeal but alleged matters never tried at first instance. |
| Bankruptcy Act 1966, ss.40(1)(g), 41(1), 41(3), 41(5), 41(6A), 41(7) Federal Magistrates Act 1999, ss.104(2), 104(3) Legal Profession Act 2004 (NSW) ss.368(5), 369, 373, 377 Federal Magistrates Court Rules 2001, r.20.03 |
| Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264 Edwards v Santos Ltd (2011) 242 CLR 421 Martin v State of New South Wales (No.13) [2011] NSWCA 296 Martin v State of New South Wales (No.14) [2012] NSWCA 46 Martin v State of New South Wales (No.15) [2012] NSWCA 47 Martin v State of New South Wales [2011] NSWLEC 126 Massih v Esber (2008) 250 ALR 648 O’Meara v Hitwise Pty Ltd (2007) 160 FCR 518 Pattinson v Hadjimouratis (2006) 155 FCR 226 Totev v Sfar (2008) 167 FCR 193 Williams v The Peoples Solicitors Pty Ltd [2011] FMCA 482 |
| Applicant: | ANTHONY GILBERT MARTIN |
| Respondents: | ROSS & KAYLENE SAVAS |
| File Number: | CAG 50 of 2011 |
| Applicants: | ROSS & KAYLENE SAVAS |
| Respondent: | ANTHONY GILBERT MARTIN |
| File Number: | SYG 2974 of 2011 |
| Judgment of: | Neville FM |
| Hearing date: | 7 May 2012 |
| Date of Last Submission: | 21 May 2012 |
| Delivered at: | Canberra |
| Delivered on: | 14 August 2012 |
REPRESENTATION
| Solicitors for the Applicant: | Self Represented Litigant |
| Solicitors for the Respondents: | Goldsmiths Lawyers, Sydney |
| Solicitors for the Applicants: | Goldsmiths Lawyers, Sydney |
| Solicitors for the Respondent: | Self Represented Litigant |
ORDERS
Orders 1 & 2 of the Registrar of 22nd November 2011 be set aside.
Mr Martin is to deposit the sum of $8841 with the Registry of the Court within 7 days of the date of this judgment.
The time for compliance with the bankruptcy notice be extended to 14 days after either:
(a)the decision of the High Court of Australia in relation to Mr Martin’s special leave applications, or;
(b)the decision of the costs review panel in the Supreme Court of New South Wales, which-ever is the later event.
Both the Canberra and the Sydney matters be re-listed at the Court’s earliest convenience 21 days after notification of events pursuant to Order 3.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT CANBERRA |
CAG 50 of 2011
| ANTHONY GILBERT MARTIN |
Applicant
And
| ROSS & KAYLENE SAVAS |
Respondent
SYG 2974 of 2011
| ROSS & KAYLENE SAVAS |
Applicant
And
| ANTHONY GILBERT MARTIN |
Respondent
REASONS FOR JUDGMENT
Introduction
Formally, the self-represented Applicant (Mr Martin) only seeks that this Court review the decision of a Registrar made on 22nd November 2011 to refuse to set aside a bankruptcy notice that issued on 20th September 2011. And in separate but related proceedings commenced in the Sydney Registry of this Court, Mr Martin also opposes a creditor’s petition that was filed on 23rd December 2011.
However, behind these relatively straight-forward applications lays an array of claim, counter-claim and a plethora of allegations, as well as multiple proceedings in the Land and Environment Court and the Supreme Court of New South Wales. The sifting process, so to speak, may be assisted by the following background, which necessarily includes reference to the separate Sydney proceedings, (SYG 2974 of 2011).
Pursuant to orders of his Honour, Smith FM, dated 12th March 2012, the further hearing of the creditor’s petition, and Mr Martin’s opposition to it, was listed to be heard concurrently with Mr Martin’s Application for Review of Registrar Wall’s order made on 22nd November 2011. Mr Martin had sought, and continues to seek, to set aside a bankruptcy notice that issued on 20th September 2011. As I have already mentioned, the Registrar refused to set aside that notice, and Mr Martin seeks a review of that refusal. I deal firstly with the factual background, so far as is relevant, then the procedural background in this Court.
Factual Background
The Applicant, Mr Martin, commenced proceedings in the Land and Environment Court of New South Wales in December 2010. The initial action involved him seeking declarations concerning applications for mining/exploration licences/leases, and it seems that exploration leases/licences were in fact granted to one of his competitors, a company by the name of Highlake Resources Pty Ltd. Mr Martin alleges some form of conspiracy or collusion against the Respondents, who he says passed on confidential information to his competitor, the successful applicant for the exploration leases/licences. The action commenced by Mr Martin in the Land and Environment Court initially embraced the current Respondents. They made an application to have the proceeding against them dismissed or struck out. That matter was heard by Sheahan J on 13th January 2011. His Honour made orders on that occasion in favour of the Respondents, including costs orders, inter alia, on an indemnity basis against Mr Martin.[1]
[1] See Martin v State of New South Wales [2011] NSWLEC 126. A copy of the sealed order, which was entered on 18th March 2011, is Annexure D to Mr Goldsmith’s Affidavit, sworn 24th October 2011, and which is also part of the Exhibit BG2 to Mr Goldsmith’s further affidavit (see Tab D), sworn 28th February 2012, filed in the current proceedings.
Subsequently, Mr Martin filed a Notice of Motion in the Land and Environment Court of New South Wales, which Motion was heard by Pain J on 1st February 2011. Among other relief sought on that occasion was a stay of Sheahan J’s orders in relation to costs. Her Honour refused the application for a stay and made a further costs order against Mr Martin – but not on an indemnity basis.
Mr Martin subsequently pursued multiple appeals in the New South Wales Court of Appeal – Martin v State of New South Wales (No.13) [2011] NSWCA 296, Martin v State of New South Wales (No.14) [2012] NSWCA 46, and Martin v State of New South Wales (No.15) [2012] NSWCA 47. Other proceedings (in both the Land and Environment Court and the Supreme Court of New South Wales) brought by Mr Martin are referred to in those judgments. For current purposes, subject to what is said later in relation to what I will describe as “Martin No.15” ([2012] NSWCA 47), in my view it is unnecessary to consider any of the detail in those judgments except to say (albeit in very general terms) that the matters raised by Mr Martin essentially entail some version of claim or allegation in relation to the granting of exploration mining licences and the Respondent’s alleged involvement in passing on confidential information to the successful applicant for that licence(s).
I should note that Mr Martin has regularly sought, as against the Respondents (Mr & Mrs Savas) (and others) damages in the order of millions of dollars said to arise out of, inter alia, the alleged breach of confidential information and the [alleged] “theft of minerals under the New South Wales Mining Act 1992.” I might also observe that with each affidavit filed by Mr Martin, the generality and breadth of the claims against the Respondents (and others) broadens significantly, such that, for example, in his affidavit filed on 9th December 2011, Mr Martin alleges breaches of various provisions of the Crimes Act 1900 (NSW), and further alleges, most gravely in my view, in an affidavit filed on 30th April 2012, that the Respondents’ solicitor (Mr Goldsmith) has engaged in various fraudulent acts.
Finally, and most relevantly for current purposes, I should also note that the appeal against Sheahan J’s order in relation to costs was dismissed with costs by the New South Wales Court of Appeal: Martin v State of New South Wales (No.6) [2011] NSWCA 281.[2]
[2] A copy of this judgment is annexure H to Mr Goldsmith’s affidavit, sworn 24th October 2011, which is reproduced in his further affidavit, sworn 28th February 2012 (Tab D). It is also Annexure C to Mr Goldsmith’s February 2012 affidavit, filed in the current proceeding on 29th February 2012.
On 4th August 2011, a Costs Assessor issued a Certificate of Determination in the sum of $8841, and that Certificate was filed with the Supreme Court of New South Wales, whereupon judgment was entered.[3] On 19th September 2011, pursuant to ss.373 and 377 of the Legal Profession Act 2004 (NSW), Mr Martin sought a review of that costs determination. To date, there is no result of the review. This is a matter of some moment, as I confirm later in these reasons.
[3] A copy of this entered judgment is Annexure G to Mr Goldsmith’s affidavit, filed 29th February 2012 in the Sydney proceeding, SYG 2974 of 2011. S.368(5) of the Legal Profession Act 2004 (NSW) provides that in the case of an amount of costs that has not been paid, on the filing of the certificate in the relevant court, “and with no further action, [the certificate is] taken to be a judgment of that court for the amount of unpaid costs….” The operation of this section explains Mr Martin’s regularly cited complaint that he was not a party to this judgment.
By Notice of Motion filed on 26th September 2011, Mr Martin sought a review of all previous decisions concerning matters he had appealed in the Court of Appeal of New South Wales. As Handley AJA noted in the opening paragraph of his judgment (with which Basten JA agreed) in Martin v State of New South Wales [2012] NSWCA 47, the Court of Appeal gave judgment in 13 matters between Mr Martin, the State of New South Wales and other parties between 29th August and 19th September 2011. On 21st March 2012, Mr Martin’s Application for Review was dismissed with costs.
In April 2012, Mr Martin sought from the High Court of Australia special leave to appeal the decisions noted. Respectfully, from my reading of the material filed in the High Court, which Mr Martin has provided, I see no point of principle that he raises. In such circumstances, it would be a visitation case only. Thus far, the High Court has not determined the two special leave applications filed by Mr Martin.
Procedural Background
For ease of reference I set out the steps in each of the separate proceedings, which will be referred to as “the review proceedings” or alternatively “the Canberra matter”, and “the creditor’s petition proceedings” (or alternatively, “the Sydney matter”).
The Canberra Matter
On 6th October 2011, Mr Martin filed an Application to set aside the bankruptcy notice that had issued on 20th September 2011. In his supporting affidavit, which respectfully is extremely prolix and in which he sought to ventilate the same (or very similar) claims to those already canvassed before the Land and Environment Court and on appeal to the Supreme Court of New South Wales, Mr Martin said that he is capable of meeting the costs order but challenges the Respondents’ right to claim it “under the law of this country.”
Among other things, Mr Martin contends that, by virtue of the operation of the Legal Profession Act 2004 (NSW) (“the LPA Act”), the review of the costs assessment is automatically stayed. Mr Goldsmith parried this submission by contending that to the degree that there is any irregularity in the obtaining of the judgment upon which the bankruptcy proceeding is founded then s.369 of the LPA Act applies. I return to these matters later in these reasons. Given that s.369 of that Act deals with “costs of costs assessment”, Mr Goldsmith’s reliance on this section as some form of panacea is not immediately evident.
On 6th October 2011, the Registrar of the Court extended the time for compliance with the bankruptcy notice up to and including 26th October 2011.
A further order was made by the Registrar on 26th October 2011 to extend further the time for compliance with the bankruptcy notice until 22nd November 2011.
By leave of the Registrar, Mr Martin was permitted to file an Amended Application on 4th November in which he particularised further the sections of the Bankruptcy Act 1966 (“the Act”) under which he sought to have the bankruptcy notice set aside. Those sections are: 41(1), 41(3), 41(5), 41(6A), and 41(7).
On 22nd November 2011, the Registrar dismissed with costs the Application to set aside the Bankruptcy Notice that issued on 20th September 2011.
On 9th December 2011, Mr Martin filed an Application for Review of the Registrar’s decision made on 22nd November 2011. That Application sought a very significant number of other orders including various declarations regarding the Respondents, and their solicitor, who are alleged to have committed various criminal offences, as well as an order that “exemplary and punitive damage of $10,000,000 be awarded to Anthony Gilbert Martin against [the respondents and their solicitor].” At the hearing of the Application for Review on 7th May 2012, I confirmed to Mr Martin, and to Mr Goldsmith (the Respondents’ solicitor) that prayers 3-14 in the Application were not appropriate – in any respect – and would not be considered by the Court. Among other things, because none of the claims raised by Mr Martin have been determined in any trial, it was inappropriate to raise them for consideration in the current review application.
Written submissions on behalf of the parties were filed prior to the hearing on 7th May; Mr Martin filed further written submissions on 21st May. On 18th May, Mr Goldsmith filed, as requested, a chronology of matters involving the parties, and confirmed his reliance upon his earlier written submissions.
The Sydney Proceeding
A creditor’s petition was filed in the Sydney Registry of this Court on 23rd December 2011. The amount the subject of that petition is stated to be $9077.95 being a debt owing under the bankruptcy notice referred to earlier in these reasons that issued on 20th September 2011. The act of bankruptcy relied on by the petitioning creditors (Mr & Mrs Savas) is Mr Martin’s failure to comply with the bankruptcy notice pursuant to which payment was required on or before 22nd November 2011. That petition was listed for hearing in Sydney on 1st March 2012.
Affidavit’s verifying, and confirming service of, the creditor’s petition were duly filed in December 2011 and February 2012.
Mr Martin filed a Notice of Opposition on 24th February 2012. Among other things, Mr Martin contended that he did not owe the sum in question and that the said judgment was obtained by fraud, as was (he said) the bankruptcy notice. He also maintained that he had a counter-claim or set-off equal to or greater than the amount the subject of the petition. With annexures, his affidavit in support of his Notice of Opposition runs to 125 pages. Much of the material annexed to this affidavit replicates material previously filed in many of the actions noted earlier in these reasons.
On 29th February 2012, Mr Goldsmith filed an affidavit responding to Mr Martin’s affidavit relating to the Notice of Opposition.
Further affidavits of debt and search were filed in February and March, 2012.
On 21st May 2012, Mr Martin filed further written submissions. Among other things, he continued to raise issues of fraud said to be perpetrated by, among others, Mr Goldsmith (items 1 & 5), as well as “numerous [but unparticularised] abuses of court processes” (item 4). Otherwise he contended that there were “at least 9 major issues in this case.” By reference to the numbering contained in his submissions, I do not propose to consider items 1-5, nor items 8-9 (these latter items relate to previous applications for a stay, dealt with by other courts, and previously made allegations against the Respondents regarding some form of illicit collusion that have never been tested or established).[4]
[4] Among other things, Mr Martin seeks to rely also on various parts of the Rules of this Court but which relevantly have as their point of reference family law proceedings and s.69ZT of the Family Law Act 1975 (Cth). The relevance of provisions of the Family Law Act is not immediately obvious.
Summary of Claims by Mr Martin
Apart from (a) consideration of the sections of the Bankruptcy Act upon which Mr Martin relies to oppose the creditor’s petition (which I will come to in due course), and (b) the grounds upon which he seeks review of the Registrar’s decision not to set aside the bankruptcy notice, from the lengthy recitation of the history of both sets of proceedings I have just outlined, it seems to me that there is only one factual area that properly calls for the Court’s consideration. That relates to the effect of Mr Martin’s application to review the costs assessment, the review having been filed on 19th September 2011. This factual matter flows into the construction and application of s.368, and more particularly s.377, of the LPA Act.
For the sake of completeness, the special leave application to the High Court is also a relevant factual and legal consideration in the event that special leave were to be granted.
Likewise of some factual (and potentially legal) relevance is that, as he did in his affidavit material, so too in Court on 7th May, Mr Martin stated that he had the means to pay the costs claimed but disputed the Respondents’ entitlement to them. Indeed, he brandished in Court a wad of cash (which was confirmed by Mr Goldsmith), which I suggested that he pay into Court pending either the decision of this Court and or his application for special leave to the High Court. He declined this suggestion and it was not taken any further at that time. This was especially curious for many reasons, but it is sufficient to note that in his submissions filed on 30th April, at par.6, Mr Martin confirmed that he was prepared to pay into Court the amount in dispute until after the High Court determined his special leave application.
These matters apart, in my view, Mr Martin cannot raise matters that (a) have been previously agitated in the Land and Environment Court of New South Wales, or (b) those which have been the subject of determination by the New South Wales Court of Appeal. Indeed, having regard to the comprehensive orders of the Court of Appeal made on 21st March 2012 I have difficulty in seeing how most of the matters that Mr Martin continues to ventilate can be prosecuted. By this I simply mean, not that Mr Martin is prevented from pursuing his claims, but rather that, to date, he has not followed the usual process by which matters are determined, namely, a trial where evidence is tested and a determination made by a court. Respectfully, the Court of Appeal has made the same point often enough to Mr Martin in the course of their remarks rejecting his attempts to make his claims in the course of conducting various (and multiple) appeals.
Moreover, in the light of the finality of matters in the Court of Appeal, as well the operation of s.368(5) of the LPA Act, I do not see how Mr Martin can continue to claim, as he does, that the costs order made by Sheahan J is not final. Moreover, and perhaps more correctly, the order upon which the bankruptcy notice is founded is the order of the Supreme Court pursuant to the costs assessment and the effect of s.368 (5) of the LPA Act.
In his submissions filed on 21st May, Mr Martin said that there remained one matter before the Land and Environment Court. Whatever the detail of that may be, in my view it has no bearing on the matters to be determined by this Court.
The Review of the Registrar’s Order of November 2011
I have previously indicated that I advised Mr Martin and Mr Goldsmith at the hearing on 7th May that I would not consider prayers 3-14 set out in Mr Martin’s Application for Review. Among other things, and in addition to what has been said earlier in these reasons at [19], for example, Mr Martin’s relief sought included a declaration that s.40(g) of the Bankruptcy Act 1966 is “ultra vires” on various grounds, and further that various declarations be made in relation to alleged criminal acts of the Respondents and Mr Goldsmith. These matters are completely inappropriate to raise, and otherwise are not justiciable before this Court, in the current review proceedings. In such circumstances, the only matters to consider are the following orders sought by Mr Martin, as set out in his Application for Review, filed on 9th December 2011. Prayers 1 and 2 read as follows:[5]
· The Bankruptcy Notice No. BN7036 be set aside under Sec.41(1), (3), (5), (6A) & 7 of the Bankruptcy Act 1966
· Orders 1 & 2 of Registrar Wall of the 22nd November 2011 be set aside
[5] Prayers 15 & 16 of the Application for Review simply sought costs and such other order as the Court deemed appropriate.
In support of his Application, Mr Martin relied upon two affidavits, filed on 9th December 2011 and 23rd April 2012. In his December affidavit, Mr Martin refers to three earlier affidavits, filed 6th and 26th October and 4th November 2011. It is sufficient to note the following from those affidavits.
Paragraphs 1-4 of the affidavit filed on 6th October outline the procedural history, as comprehended by Mr Martin, that gave rise to the bankruptcy notice issuing. He confirmed that an indemnity costs order was made in the Land and Environment Court on 13th January 2011. Part of paragraph 4, and the remaining paragraphs of that affidavit outline Mr Martin’s contentions in relation to the Respondents’ alleged theft of minerals under the Mining Act 1992 (NSW), the change in jurisdiction of the [Mining] Warden’s Court, and the subsequent appeals, then on foot, in the Supreme Court of New South Wales. Mr Martin said in that affidavit that the change in jurisdiction under the Mining Act from the ‘Warden’s Court’ to the Land and Environment Court prevented him from setting up a counter-claim against the Respondents, said to be worth “100s of millions of dollars.” It is not immediately clear how any change in jurisdiction of the kind alleged by Mr Martin could or would preclude him from pleading, in an appropriate manner, any “counter-claim” in the Land and Environment Court.
Multiple annexures are also part of Mr Martin’s 6th October affidavit. They include various documents filed in matters before the Land and Environment Court.
Mr Martin’s affidavit filed on 26th October 2011 is (a) part response to an affidavit of Mr Goldsmith (filed on 24th October), (b) confirmation by the Supreme Court of New South Wales that the costs assessment had been referred for review by a review panel, (c) an outline of correspondence between Mr Martin and the Respondent’s Melbourne lawyer, as well as an outline of a dinner meeting in Canberra attended by Mr Martin and the Respondents. At that meeting, said to be held on 19th April 2010, Mr Martin contends that he handed over ‘confidential business plans, geological drawings, documents etc for forwarding to Mr Jan Vestrum.’ Mr Martin contends that the Respondents acted for Mr Vestrum.
Mr Martin further avers that some five days after the April 2010 meeting with the Respondents, a company (Highlake Resources Pty Ltd) “owned by Mr Ian Gandel of Melbourne an associate of Mr Ross Savas” applied for a mining exploration licence in Cooma. Mr Martin “believes” that the success of the grant of such a licence to Highlake “could not have been made without the confidential information given to Mr Ross Savas on 19th April by [Mr Martin].”
Among various annexures to this affidavit is a letter from the Manager, Costs Assessment, Supreme Court of New South Wales, dated 29th September 2011 (Annexure A), which advised Mr Martin of the review of the costs assessment. Part of that letter states: “The operation of a costs assessor’s determination is suspended once the Manager, Costs Assessment has referred a [sic] application for review to the panel.”
In his affidavit filed on 4th November 2011, Mr Martin records again the history of matters that culminated in the indemnity costs order made in the Land and Environment Court on 13th January 2011. He maintained that that order was not a final order, which (he says) thereby makes the bankruptcy notice “null and void.”
Mr Martin also repeated his contentions in relation to (a) the alleged cross-claims he has against the Respondents, and (b) the effect of the review of the costs assessment. He annexed to his affidavit certain correspondence with the Costs Manager of the Supreme Court of NSW. In the light of the Court of Appeal’s series of judgments that may be taken to have disposed of all of Mr Martin’s appeals, most particularly that delivered on 21st March 2012 ([2012] NSWCA 47) to which I have earlier referred, I need not traverse other matters raised by Mr Martin in this affidavit.
In his affidavit filed on 9th December 2011, in large part, Mr Martin repeated his previously made contentions in relation to the conspiracy or collusion between the Respondents, and the involvement of Mr Goldsmith, and the various claims that one or all of these persons have committed certain criminal offences. Mr Martin also referred to his version of events before the Registrar on 22nd November 2011, particularly his application for an adjournment. Mr Martin further confirmed that he had lodged a formal complaint against the persons I have just named with ‘the Australian Crimes [sic] Commission, the Australian Federal Police, the NSW Crimes [sic] Commission, Interpol Agency [sic], the Australian Securities and Investment Commission, Australian Capital Territory Police, the Victorian Police, and the NSW Police.’ A copy of the letter sent to these entities on 8th December 2011 is annexed to his affidavit.
Finally, in his affidavit filed on 23rd April 2012, Mr Martin confirmed that (a) the resolution of his costs assessment review was still to be determined, (b) the New South Wales Court of Appeal had delivered two judgments on 21st March [2012] NSWCA 46 & 47, and (c) two applications for special leave to appeal had been filed with the High Court of Australia. Copies of the special leave applications are annexed to the affidavit.
I have earlier referred to the substance of the Court of Appeal judgment in [2012] NSWCA 47. It is as well to refer also to the relevant matters addressed in [2012] NSWCA 46. In that appeal, there were three matters considered: (i) an appeal against a decision by Preston CJ in the Land and Environment Court (that part of the appeal was dismissed); (ii) an appeal (by leave) against certain interlocutory order by Pain J (which appeal was allowed by consent); and (iii) a notice of motion by which Mr Martin sought relief in 10 separate proceedings, joining seven respondents. Part of that relief concerned the costs order made by Sheahan J on 13th January 2011.
The Court of Appeal noted that leave to appeal that order was incompetent; leave to appeal was refused, as was the appeal from Pain J’s refusal to grant a stay.[6]
[6] Relevant detail, including citations, is set out at [2012] NSWCA 46 at [66] ff.
The Court of Appeal then referred to the costs assessment review lodged by Mr Martin and the bankruptcy notice issued and served on him by the respondents. The Court noted however that there was no challenge before the Court to the costs order made by Sheahan J and that, accordingly, there were no proceedings in that Court that could be stayed. That part of Mr Martin’s Notice of Motion was dismissed with costs.
The Court next turned to relief sought by Mr Martin in relation to [alleged] contempt and an award of exemplary damages against the Respondents (and others) and their solicitors and barristers. The Court found that in the absence of the proper formulation of the charges supported by affidavit evidence it “could not entertain the claim in prayer 19 [for contempt].” Similarly, in relation to Mr Martin’s claim for exemplary damages, the Court said that such a claim was incompetent where, as here, there had been no consideration of it at first instance.[7]
[7] See [2012] NSWCA 46 at [75] – [80].
In short, the relief further claimed by Mr Martin pursuant to his Notice of Motion was dismissed with costs.
In sum: the only matters – procedurally and substantively – outstanding are (a) Mr Martin’s costs review in the Supreme Court of New South Wales, and (b) Mr Martin’s applications for special leave to the High Court of Australia, being appeals from the New South Wales Court of Appeals’ two judgments in [2012] NSWCA 46 & 47.
Mr Martin filed written submissions in this [Canberra] proceeding on 30th April and 21st May; on behalf of the Respondent creditors, written submissions were filed on 4th May.
Mr Martin’s Submissions
Two observations should be made immediately. First, among many authorities to which Mr Martin refers in his submissions is the High Court decision in Edwards v Santos Ltd (2011) 242 CLR 421. At [76] – [80] in [2012] NSWCA 46, the Court of Appeal dealt comprehensively with Mr Martin’s submissions that relied on this High Court authority. The Court said, at [79], that the passage of Heydon J in Santos on which Mr Martin relied “read in context, does not support this claim [for exemplary damages] by Mr Martin.”[8] It having been traversed and disposed of by the Court of Appeal there is no foundation on which it may, or should, be canvassed again in the current review proceeding.
[8] Edwards v Santos Ltd (2011) 242 CLR 421 at [76] – [80].
The second observation is that Mr Martin repeats in his written submissions the claims, for example, concerning fraud by the Respondents (and their solicitors) and various [alleged] abuses of process. Because these matters have all been so comprehensively dealt with by the Court of Appeal in the two recent judgments to which I have referred – [2012] NSWCA 46 & 47 – it is superfluous for me to consider these unsubstantiated claims by Mr Martin. Among other things, there is no evidentiary base to do so, they are pleaded (as noted by the Court of Appeal) with a significant degree of generality and lack of specificity. Unfortunately, Mr Martin continues to make bald assertions and seek to have the Court draw certain adverse inferences against a wide range of persons without any of the matters having been thoroughly and properly tested in any trial at first instance. Unless and until that occurs, I suggest that Mr Martin will continue to suffer the kinds of comments and decisions recently delivered by the Court of Appeal.
In his written submissions filed on 30th April (par.6), Mr Martin confirmed again that he is able to pay the amount in question but disputes his liability to pay it “until the issues are finally decided on by the Honourable High Court of Australia.” In the light of his statement (previously noted), at the hearing on 7th May I raised with Mr Martin, indeed invited him, to pay the money in dispute into Court, pending the determination of the outstanding matters. As I have earlier noted, he declined this invitation.
In his written submissions filed on 21st May, Mr Martin firstly said that there were “at least four sets of distinct acts of fraud.” Because of what I have said in [52] of these reasons, I do not propose to deal with any of the matters he repeats in relation to the alleged fraud or abuse of process.
Next Mr Martin submits that the solicitors who act for the Respondents should be cross-examined in relation to the affidavits they have filed, which Mr Martin contends are “false and fraudulent.” Presumably in aid of this submission Mr Martin referred to the introductory note to Part 15 of this Court’s Rules, which refer to s.69ZT of the Family Law Act in relation to ‘child-related’ family law proceedings. Patently, this has nothing to do with the current matter.
He also referred to Rule 15.29A which allows the Court to dispense with cross-examination of a deponent of an affidavit. As with the reference to s.69ZT of the Family Law Act I do not see the utility of Mr Martin’s submissions in relation to Rule 15.29A.
Mr Martin also claims that the Registrar erroneously applied, or failed to apply, the decision of his Honour, Smith FM in Williams v Peoples Solicitors Pty Ltd [2011] FMCA 482. As I apprehend Mr Martin’s submission in this regard, he relies upon that part of his Honour’s judgment, at [29] and [33] – [36], where there is reference to and acknowledgment of the effect of s.377 of the LPA Act and the reference to a panel review of a determination of a costs assessor as giving rise to a “statutory stay on enforcement of the present cost certificate.”
Respectfully, his Honour’s helpful decision in Williams is relevant in a number of respects to the current matter. First, Smith FM notes, at [18] (internal citations omitted), that a stay on execution under s.377 of the LPA Act “would not retrospectively invalidate the bankruptcy notice.” Secondly, his Honour noted, at [6], and contrary to Mr Martin’s regularly made submissions that he was not a party to the relevant judgment, that such a certificate (issued by the Supreme Court pursuant to a costs assessor’s determination) upon registration ex parte becomes a judgment and is not open to contest or cross-claim by the debtor.[9]
[9] See Massih v Esber (2008) 250 ALR 648 at [38] ff.
Thirdly, his Honour (again helpfully) outlined, at [23] – [25], the authorities and the principles derived from them in relation to the requirements of s.40(1)(g) of the Act – a section of relevance to the current proceeding apropos Mr Martin’s reliance on s.41(7).
I deal with the submission in relation to the ‘statutory stay’ when considering Mr Goldsmith’s submissions to which I now turn.
Mr Goldsmith’s Submissions
In written submissions filed on 3rd May, Mr Goldsmith identified the three issues sought to be raised by Mr Martin in the review proceeding, as well as the sections of the Bankruptcy Act 1966 upon which Mr Martin seeks to rely, namely ss.41(1), 41(3), 41(5), 41(6A) and 41(7). The three issues are: (i) the bankruptcy notice is null and void because the judgment on which it is based is said not to be a final judgment; (ii) the bankruptcy notice should be set aside because the amount due to the creditor exceeds the amount due; and (iii) Mr Martin has a counter-claim, set off or cross-demand well in excess of the amount of the judgment debt.
Summarily, and following the order as dealt with in the written submissions, Mr Goldsmith contends that s.41(1) has no application because the relief in the review proceeding does not join, refer to the discretion exercised by, or seek any relief against, the Official Receiver. Thus, reliance on s.41(1) is misconceived. I accept this submission.
Secondly, the judgment upon which the bankruptcy notice is founded is a judgment of the Supreme Court of New South Wales in relation to costs, based on the costs certificate that issued and was registered. In that respect, it was a final judgment, rather than, as contended by Mr Martin, an interlocutory judgment. I accept this submission also.
Thirdly, the judgment is of a kind that comes directly within the terms of s.40(1)(g) of the Act, and in relation to which there has been no stay. Subject to what is said later in these reasons with respect to s.377 of the LPA Act, I accept this submission.
Fourthly, concerning s.41(3) of the Act, Mr Goldsmith simply contends that the Respondents have obtained a final judgment, which has not been stayed, and that sub-section (c) of s.41(3) has no application to the current matter.
Fifthly, as at the date of the bankruptcy notice, the amount due and payable to the Respondents was definite. Whatever may or may not happen in relation to the amount due in the light of the review of the costs assessment must remain unknown until that time. In such circumstances the terms of s.41(5) of the Act cannot have any application.
Sixthly, Mr Goldsmith contends that s.41(6A), which allows a court to extend time for compliance with a bankruptcy notice, has no application here because there is no evidence that Mr Martin has applied, as required by this sub-section, to set aside the judgment upon which the bankruptcy notice was founded. While Mr Martin seeks to set aside the bankruptcy notice, he has not sought to set aside the judgment upon which it is founded. True it is that there has been no formal attack on the relevant judgment; however, it is also true that Mr Martin has pursued a statutory path open to him to challenge the quantum of the sum that ultimately constitutes the judgment debt.
Seventhly, s.41(7), which refers to where there is a ‘counter claim, set-off or counter demand, the issue is one of compliance within a prescribed time. In the circumstances of this matter, it is submitted that it has no application.
Finally, Mr Goldsmith contended that the operation of s.377 of the LPA Act suspends, but does not stay, the relevant order. Curiously in this regard, he did not address the remarks of Smith FM on this subject in Williams v The Peoples Solicitors.
Consideration & Resolution: The Review Proceeding
Review of a Registrar’s decision is pursuant to s.104(2) of the Federal Magistrates Act 1999 (Cth) (“the FMC Act”), and Division 20.2 of the Federal Magistrates Court Rules 2001. Section 104(3) of that Act invests the Court with wide power to make such orders the Court deems fit. Rule 20.03 provides, among other things, for such a review to be a hearing de novo, and that the Court may, with leave being granted, receive further evidence.
In the light of the matters already canvassed, and as already indicated, in my view, the only matters properly before the Court to consider are: (a) the import and effect of Mr Martin’s application for review of the costs assessment (including the import of Smith FM’s comments in Williams v The Peoples Solicitors), (b) the import and effect of his application for special leave to appeal to the High Court and (c) whether he has any relevant counter-claim, set-off, or cross demand equal to or exceeding the amount of the judgment debt. Any and all of the other matters he raises are not properly within the purview of the current application, for the reasons already articulated. Matters (a) and (b) can and will be treated together.
Further, having regard to the fact that the grounds of opposition to the creditor’s petition filed by Mr Martin on 24th February 2012 in the Sydney proceeding are almost identical to the grounds upon which Mr Martin seeks the review of the Registrar’s decision in the Canberra proceeding, this Court’s determination of the latter will also enable the Court to make orders in the former, being the Sydney proceeding.
The Costs Assessment Review
Respectfully, I accept and adopt the reasoning of Smith FM in Williams v The Peoples Solicitors concerning his Honour’s consideration and treatment of s.377 of the LPA Act. Beginning at [32], his Honour said:
[32] The consequence of this referral of the matter to a panel is that s 377 of the Legal Profession Act 2004 (NSW) came into play yesterday. It provides:
377 Effect of review on costs assessor’s determination
(1) If the Manager, Costs Assessment refers a determination of a costs assessor to a panel for review under this Subdivision, the operation of that determination is suspended.
(2) The panel may end such a suspension:
(a) if it affirms the determination of the costs assessor, or
(b) in such other circumstances as it considers appropriate.
[33] It was not contested by The People’s Solicitors before me today that s 377, in effect, gives rise to a statutory stay on enforcement of the present cost certificate. Their concession extended to accepting that it gave rise to a direct or inevitable right to obtain a stay on the Local court judgment on the registration of the costs certificate. This concession is consistent with the broad view taken in bankruptcy law as to the existence of a stay on execution (cf. Maher v Honeysett [2009] FMCA 4 ; (2009) 222 FLR 407 at [31]).
[34] The People’s Solicitors also accepted that I had a discretion today to grant final relief by way of an extension of time of the bankruptcy notice until the completion of Mr Williams’ proceedings under the review of the cost assessor’s determination. They did not contest that it might be an appropriate exercise of that discretion in the circumstances before me, provided that they receive the benefit of a costs order in the present proceedings.
[35] The exercise of the discretion to extend time under a bankruptcy notice pending an appeal, is the subject of established authority (see Lehane J in Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264, and Branson J in Burns v AMP Finance Ltd [2004] FCA 1094). The authorities suggest that the court would normally be reluctant to extend time for compliance with a bankruptcy notice where there are appeal proceedings outstanding in relation to the judgment debt, if there is no stay on judgment obtained by order of the Appeal court or otherwise. The judgments point out that the situation might be different in relation to an adjournment of a bankruptcy petition, since the effect of refusing to extend time is to give rise to an act of bankruptcy but does not effect an alteration to the legal status of the debtor.
[36] However, for the above reasons, I am satisfied in the present case that there has arisen since yesterday a statutory stay on enforcement of the judgment debt relating to the cost determination.
Here, it is not disputed that Mr Martin’s application for a review of the costs assessor’s determination occurred in September 2011. Likewise, Mr Goldsmith acknowledges, and has otherwise been provided with, a copy of Mr Martin’s 26th October 2011 affidavit which has annexed to it a copy of the letter from the Manager, Costs Assessment, Supreme Court of New South Wales dated 29th September 2011. That letter, as previously noted, confirmed that the cost assessor’s determination had been referred to a review panel. As such, the letter advised Mr Martin (see [40] above) that the “operation of a costs assessor’s determination is suspended once the Manager, Costs Assessment has referred a [sic] application for review to the panel.”
Having regard to Smith FM’s comments in Williams v The Peoples Solicitors, which I respectfully and gratefully accept and adopt, in my view s.377 of the LPA Act operates, and has done so since the letter from the Supreme Court dated 29th September 2011, as a “statutory stay of enforcement” in relation to the bankruptcy notice issued against Mr Martin. It must necessarily also preclude the continued prosecution of the creditor’s petition until further order of the Court, pending the determination of the matters in the High Court and in the Supreme Court of New South Wales.
The Respondents have been fixed with notice of the referral to a review panel of the costs assessor’s determination; indeed, Mr Goldsmith has acknowledged the referral. The distinction relied upon by Mr Goldsmith between a “stay” and a “suspension” under the LPA Act is one without any practical difference. If it were otherwise, s.377 would be a statutory provision without any practical (or legal) effect.
Both by virtue of the operation of s.377, and because of the import and effect of the decision in Williams v The Peoples Solicitors, the Registrar should not have made the orders he did on 22nd November 2011. The “statutory stay” (to use the words of Smith FM in Williams) pursuant to s.377 of the LPA Act, in my view, should continue until 14 days after the costs review decision in the Supreme Court of New South Wales has been delivered. Clearly, however, that is not the end of the matter.
Whatever the prospects of success of his special leave application, it seems to me that Mr Martin should be afforded the opportunity to have those applications determined by the High Court before this Court proceeds further in relation to the bankruptcy proceedings. Respectfully, having regard to the efficiency of the High Court, one might reasonably expect that, once the procedural steps are finalised in relation to those applications, they will be dealt with expeditiously.
I note again that this is a hearing de novo, and further the plenary ambit of the power conferred under s.104(3) of the FMC Act, which provides that the Court “may make any order or orders it thinks fit in relation to the matter in respect of which the power was exercised.”[10]
[10] The nature and conduct of a hearing de novo, as well as consideration of the amplitude of the Court’s power under s.104(3) of the FMC Act are detailed in Totev v Sfar (2008) 167 FCR 193 at [9] – [15] (Emmett J); O’Meara v Hitwise Pty Ltd (2007) 160 FCR 518 (Kiefel, Sundberg & Gyles JJ); and Pattinson v Hadjimouratis (2006) 155 FCR 226 at [3] – [20] (Nicholson J) and at [39] ff (Jacobson J). Although said in the context of an appeal regarding a review of the making of a sequestration order, Jacobson J said, at [43]: “… the Federal Magistrates Court commences afresh without in any way being fettered by the decision of the Registrar. The review is a complete re-hearing in the exercise of the original jurisdiction of the Federal Magistrates Court. It is for the party seeking the sequestration order to satisfy the federal magistrate that all of the necessary conditions have been satisfied to warrant the making of a sequestration order ….”
In all of the circumstances of this case, and particularly Mr Martin’s confirmation that he is prepared to deposit with the Court the costs in question,[11] in my view, the sum of $8841 is to be deposited with the Registry of the Court within 7 days of the date of this judgment.
[11] See Mr Martin’s submissions, filed 30th April 2012, par.6.
Further, having regard to the course adopted by Lehane J in Byron v Southern Star Group Pty Ltd,[12] and having regard to Mr Martin’s formal application under ss.41(6A) and 41(7), rather than dismissing the bankruptcy notice, I further order that the time for compliance with the bankruptcy notice be extended to 14 days after either (a) the decision of the High Court of Australia in relation to Mr Martin’s special leave applications, or (b) the decision of the costs review panel in the Supreme Court of New South Wales, which-ever is the later event.
[12] (1997) 73 FCR 264.
It remains only to consider Mr Martin’s claim that he has a counter-claim at least equal to or exceeding the amount of the judgment debt.
Counter-claim, set-off or cross demand: s.41(7)
It is sufficient for current purposes to set out at some length the comments of Flick J in Massih v Esber because of his Honour’s helpful summary of principle in the course of which he sets out the relevant sections of the Act. At [13] – [19], his Honour said:
[13] Those provisions of the Bankruptcy Act of immediate relevance to the application now before this court are ss 40(1)(g) and 41(7).
[14] Section 40(1)(g) of the 1966 Act provides as follows:
40 Acts of bankruptcy
(1) A debtor commits an act of bankruptcy in each of the following cases:
…
(g) if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not:
(i) where the notice was served in Australia — within the time specified in the notice; or
(ii) where the notice was served elsewhere — within the time fixed for the purpose by the order giving leave to effect the service;
comply with the requirements of the notice or satisfy the Court that he or she has a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter-claim, set-off or cross-demand that he or she could not have set up in the action or proceeding in which the judgment or order was obtained;
[15] Section 41(7) of the 1966 Act provides as follows:
(7) Where, before the expiration of the time fixed for compliance with the requirements of a bankruptcy notice, the debtor has applied to the court for an order setting aside the bankruptcy notice on the ground that the debtor has such a counter-claim, set-off or cross demand as is referred to in paragraph 40(1)(g), and the court has not, before the expiration of that time, determined whether it is satisfied that the debtor has such a counter-claim, set-off or cross demand, that time shall be deemed to have been extended, immediately before its expiration, until and including the day on which the court determines whether it is so satisfied.
[16] Section 41(7) requires the court to be “satisfied that the debtor has … a counter-claim, set-off or cross-demand” of the kind set forth in s 40(1)(g).
[17] To “satisfy” the court it is not necessary for the debtor to prove, as on a final hearing, the asserted entitlement to recover as against the creditor. That which is to be established is whether the court is “satisfied” that the debtor “has a claim deserving to be finally determined”: Re Glew; Glew v Harrowell (2003) 198 ALR 331 ;[2003] FCA 373 at [11], Lindgren J there observed (at [9]):
[9] There are authorities suggesting that Glew and Tresidder must satisfy me of the following interrelated and sometimes overlapping matters:
• that they have a “prima facie case”, even if they do not adduce evidence which would be admissible on a final hearing making out that case …
• that they have “a fair chance of success” or are “fairly entitled to litigate” the claim … and
• that they are advancing a “genuine” or “bona fide” claim …
It may be that the first and second formulations are intended to cover the same ground. In [Re Brink; Ex parte Commercial Banking Co of Sydney Ltd (1980) 30 ALR 433; 44 FLR 135] Lockhart J treated (at ALR 438-9; FLR 141) the reference to a “prima facie case” … as a reference to “a fair chance of success”.
This was subsequently characterised by his Honour as a “relatively low threshold”: at [64]. The judgment to be made “involves weighing up considerations as to the legal and factual merit of the claim relied upon by the debtor, and the justice of allowing the bankruptcy proceedings to go ahead or requiring them to await the determination of the claim”: Guss v Johnstone (2000) 171 ALR 598 [2000] HCA 26 at [40], per Gleeson CJ, Gaudron, McHugh, Kirby and Callinan JJ.
[18] A debtor cannot “satisfy” the court, for example, by showing no more than the fact that a claim is made and how the claim may be made out: Re Duncan, Ex parte Modlin (1916) 17 SR (NSW) 152 per Street J. It is not sufficient that a debtor believes he has a genuine claim; what is required is that the court must be satisfied that it is just that the claim should be determined before the bankruptcy proceedings are allowed to continue: Dekkan v Evans [2008] FCA 1004 per Jacobson J. See also: Dekkan v Macquarie Leasing Pty Ltd (No 2) [2008] FCA 1431 per Buchanan J; Cirillo v Consolidated Press Property Pty Ltd [2007] FCA 139. Mere production of a statement of claim, without more, is not sufficient: Re Cox (1934) 7 ABC 98. Nor is a “shadowy” claim that could not fairly be litigated: Re Rivett; Ex parte Edward Fay Ltd (1932) 5 ABC 182 at 188.
[19] The objective of the legislature in providing for a bankruptcy notice to be set aside where a judgment debtor has a “counter-claim, set-off or cross-demand” is “to prevent a judgment creditor from pursuing bankruptcy proceedings when, as between himself and the judgment debtor, the balance of account is in favour of the judgment debtor”: In Re Judd; Ex parte Pike (1924) 24 SR (NSW) 537 at 540 (Re Judd) per Maughan AJ. See also: Van Leeuwen v Bank of Western Australia Ltd [[2001] FCA 1826 at [14] per French J.
On the facts of the current matter, the following is clear. First, Mr Martin has consistently claimed before this Court, the New South Wales Court of Appeal, and in the Land and Environment Court that he has a claim of very significant legal and financial worth against the Respondents and that it far exceeds the amount of the judgment debt on which the bankruptcy notice is founded.
Secondly, on more than one occasion, he has been told by various Courts (noted earlier in these reasons) that having raised the matters he has in relation to alleged collusion or improper use of confidential information, he has never taken any action to pursue or prosecute such claims. This is to say that he has never particularised before any relevant Court the basis of these claims, nor has he ever had them tested at trial. As such, he has had many opportunities to formulate, particularise and to have tested in a trial each and every single claim he makes. He has never done so. In such circumstances, his claims of a counter-claim, set-off or demand remain, at their highest, must be characterised as nothing more (from a legal perspective) than a genuine belief in the claims he makes. Such does not satisfy the terms of s.41(7) of the Act.
For this reason, Mr Martin’s claim for relief under s.41(7) fails.
In consequence of the Court’s decision, noted at [80] and [81] of these reasons, to extend time for compliance with the bankruptcy notice, it follows that the Sydney proceedings should be stayed until further order of the Court arising out of either (or both) Mr Martin’s applications for special leave to appeal to the High Court or the decision of the review panel concerning the costs assessment previously made in the Supreme Court of New South Wales.
For completeness, and for the reasons given, the Court makes the following orders:
(1) Orders 1 & 2 of the Registrar of 22nd November 2011 be set aside.
(2) Mr Martin is to deposit the sum of $8841 with the Registry of the Court within 7 days of the date of this judgment.
(3) The time for compliance with the bankruptcy notice be extended to 14 days after either:
(a) the decision of the High Court of Australia in relation to Mr Martin’s special leave applications, or;
(b) the decision of the costs review panel in the Supreme Court of New South Wales, which-ever is the later event.
(4) Both the Canberra and the Sydney matters be re-listed at the Court’s earliest convenience 21 days after notification of events pursuant to Order 3.
I certify that the preceding eighty-eight (88) paragraphs are a true copy of the reasons for judgment of Neville FM
Date: 14 August 2012
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