Miller v Nationwide News Pty Ltd
[2008] FMCA 1576
•14 November 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MILLER v NATIONWIDE NEWS PTY LTD | [2008] FMCA 1576 |
| BANKRUPTCY – Application to set aside Bankruptcy Notice or extend time for compliance – judgment debt for costs arising from unsuccessful claim in contract – leave to appeal and stay on judgment refused by Court of Appeal – outstanding special leave application to High Court – no sufficient grounds for going behind judgment – insufficient prospects shown in High Court application – application dismissed. |
| Bankruptcy Act 1966 (Cth) |
| Burns v AMP Finance Ltd [2004] FCA 1094 Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264 Corney v Brien (1951) 84 CLR 343 Geard, Re; Ex Parte Reid [1994] FCA Unreported 11 February 1994 Miller v Nationwide News Pty Limited [2008] NSWDC unreported 31 January 2008 Miller v Nationwide News [2008] NSWCA unreported 16 June 2008 Miller v Nationwide News Pty Limited [2008] NSWCA 222 Miller v Nationwide News Pty Limited [2008] NSWCA 261 Olivieri v Stafford (1989) 24 FCR 413 Westpac Banking Corporation v Carver (2003) 126 FCR 113 |
| Applicant: | WILLIAM WALTER MILLER |
| Respondent: | NATIONWIDE NEWS PTY LTD ACN 008 438 828 |
| File Number: | SYG 2765 of 2008 |
| Judgment of: | Smith FM |
| Hearing date: | 14 November 2008 |
| Delivered at: | Sydney |
| Delivered on: | 14 November 2008 |
REPRESENTATION
| Counsel for the Applicant: | In Person |
| Counsel for the Respondent: | Mr A Zahra |
| Solicitors for the Respondent: | Blake Dawson |
ORDERS
The application is dismissed.
The applicant must pay the respondent’s costs, including reserved costs, as agreed or taxed under the Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth).
The respondent must provide a copy of this order to the Official Receiver within 2 days.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2765 of 2008
| WILLIAM WALTER MILLER |
Applicant
And
| NATIONWIDE NEWS PTY LTD |
Respondent
REASONS FOR JUDGMENT
(revised from transcript)
Mr Miller applies to the Court to set aside a bankruptcy notice which was issued on 22 September 2008, and which was served upon him on 13 October 2008. The bankruptcy notice required him to pay debts totalling $91,371.90 under a judgment of the Supreme Court entered on 16 September 2008. The judgment was entered in accordance with two certificates of determination of costs assessments issued on 3 September 2008. The two certificates related to party and party costs orders which had been made in the District Court by Delaney DCJ on 31 January 2008 and by Beasley JA in the NSW Court of Appeal on 16 June 2008.
The existence of the costs orders, the assessments, and the judgment debt is not in dispute, but Mr Miller invites the Court to look behind the costs order of Delaney DCJ so as to find that, in effect, it ought not have been made, because Mr Miller’s substantive claim in the District Court should not have been dismissed.
He also invites the Bankruptcy Court to examine the reasoning of Beasley JA, who refused Mr Miller an extension of time for bringing an appeal from the judgment of Delaney DCJ (see Miller v Nationwide News [2008] NSWCA unreported 16 June 2008), and also to examine the reasoning of Hodgson JA, Bell JA and Gyles AJA in the Court of Appeal when refusing his application for review of Beasley JA's judgment (see Miller v Nationwide News Pty Limited [2008] NSWCA 222).
In the material which Mr Miller has presented to this Court, he has extracted some parts of the evidence which was before Delaney DCJ in the matter, in which he delivered judgment after a trial lasting four days (see Miller v Nationwide News Pty Limited [2008] NSWDC Unreported 31 January 2008). Mr Miller relied upon this material in support of various criticisms of how Delaney DCJ conducted the trial and the reasoning of his judgment. I do not consider it necessary in this judgment to discuss the details of these criticisms and their obvious difficulties. I have endeavoured in the course of this morning’s hearing to understand the points made by Mr Miller and to discuss them with him, and the transcript of what has transpired today would indicate their nature.
In short, Delaney DCJ addressed a claim by Mr Miller for $250,000 owing to him by the respondent news publisher, under an oral agreement made with two journalists in return for information supplied by Mr Miller. The information concerned how drugs came to be found in the luggage of Schapelle Corby, in events which are notorious. A report based on Mr Miller’s information was published in the Daily Telegraph in Sydney on 27 July 2005.
His Honour's judgment refers to evidence given by the three witnesses, being Mr Miller and the two journalists. His Honour thought that Mr Miller's own evidence suggested that the discussions about the payment of a sum of money for the information had not reached finality before the article was published, thereby suggesting that no agreement had been arrived at. His Honour also compared the significant evidence from the witnesses about the making of the alleged agreement, and preferred the evidence of one of the journalists, giving some weight to that person's contemporaneous notes and also preferring his recollection as suggesting a more likely version of events. His Honour found that there had been no concluded contract, and that Mr Miller's claim failed. He explained shortly at the end of his judgment:
In my opinion, it fails on the plaintiff's own evidence in chief, but the fact that there was no concluded contract is confirmed by the manner in which the plaintiff gave his evidence about the nature of the amounts claimed, when they were to be paid and the use of a solicitor to confirm the agreement. The plaintiff had the onus of proof, he has not discharged that onus and there will be a verdict for the defendant.
It appears to me that most of Mr Miller’s criticisms of Delaney DCJ's judgment and conduct of the trial, if not all of them, which were presented to me have previously been presented to the members of the Court of Appeal, and were addressed by them in the judgments which I have cited above. Essentially, Mr Miller invited the Court of Appeal, and now invited me, to make findings of fact that the two reporters’ evidence should not have been preferred. He pointed to some peripheral weaknesses in their evidence, especially in relation to some of their recollections and notes of their communications with Mr Miller, and invited a general conclusion that they gave false evidence on the critical matters.
However, although Mr Miller is unhappy with how his points were examined in the Court of Appeal, in my respectful opinion, their judgments show a real attempt to try to understand the attacks made by Mr Miller on the judgment of Delaney DCJ, including his costs order, and to assess the merits of his proposed appeal. The three Justices who considered his application to review the judgment of Beasley JA expressly said that they had permitted Mr Miller to extend his submissions concerning Delaney DCJ's judgment beyond the matters put to her. None of the Justices were persuaded that there were grounds sufficient to raise an arguable case on the proposed appeal.
Mr Miller subsequently lodged an application for special leave to appeal to the High Court on 26 September 2008, and this is in evidence before me. It is unclear whether he has yet filed his written case, but he invites me to assume that he will be putting to the High Court the same points which he made to me and to the Court of Appeal.
After service of the bankruptcy notice, Mr Miller also applied to the Court of Appeal for a stay on the two costs orders and the judgment debt based on the costs assessments. This was addressed by McColl JA on 13 October 2008 (see Miller v Nationwide News Pty Limited [2008] NSWCA 261). Her Honour adopted the most lenient principles available under the jurisprudence of that Court in relation to the granting of a stay while a special leave application was outstanding, but concluded:
26.There are circumstances in which the court will grant a stay of proceedings where an applicant is, as the applicant appears to be in this case, impecunious and cannot provide any security to preserve the status quo, an outcome a court would ordinarily regard as desirable in circumstances where a stay is sought. Such a stay might be granted in circumstances where, as the applicant submits, the appeal would otherwise be rendered nugatory. However, even in such a case the impecunious applicant must show that the appeal raises serious questions for the determination of the appellate court.
27.It is virtually impossible to distil from the applicant’s application for special leave the basis upon which he seeks to identify error which would attract a grant of special leave from the High Court. The application for special leave appears to be capable of description in the same terms as Gyles AJA described the argument advanced on 8 September 2008, namely, a discursive series of points in no particular order designed to show error.
28.Doing the best I can to understand the grounds upon which the applicant proposes to seek special leave to appeal I cannot discern that he has any prospects of obtaining a grant of special leave to appeal. The grounds upon which the applicant appears to propose to seek special leave to appeal to the High Court appear to be those matters on which he was unsuccessful before the court on 8 September 2008. That of course does not indicate that he may not in due course be successful on a grant of application for special leave. However, the substantive basis upon which he appears to have lost at trial and to have been unsuccessful in persuading Beazley JA and, in turn, the Court of Appeal on review, to find in his favour turn on the acceptance of his evidence as opposed to that of two witnesses called by the respondent. The application for special leave to appeal appears to be based, as it was before Beazley JA, and before Hodgson and Bell JJA and Gyles AJA, on an attempt to set aside findings of fact made on an assessment of the evidence of competing witnesses. In those circumstances I cannot see that the application for special leave to appeal has any prospects of success.
There are many cases which have discussed the principles upon which a Bankruptcy Court will itself embark on a review of the merits of orders which have given rise to the judgment debt, in particular, in the course of considering the validity of a bankruptcy notice. In Olivieri v Stafford (1989) 24 FCR 413, authorities about going behind a judgment debt were referred to, such as Corney v Brien (1951) 84 CLR 343. The judgments of the majority justices, Beaumont and Gummow JJ, suggest that it would be a "rare case" in an application to set aside a bankruptcy notice, where the Bankruptcy Court would extend time for compliance so that the Court could embark upon an inquiry as to what lay behind the judgment debt, in circumstances where the merits of the dispute had been adjudicated previously in a trial court and where avenues of appeal have been pursued unsuccessfully (cf. Beaumont J at 104 and Gummow J at 107 and 110).
None of the points raised by Mr Miller before me today, in my opinion, raise anything near a sufficient case to justify this Court doubting the foundation for the judgment debt, either in relation to Delaney DCJ’s substantive judgment, or the costs orders and assessments which have resulted in the bankruptcy notice. In relation to the prospects of the High Court special leave application, I would, with respect, form the same opinion of its prospects as was explained by McColl JA. I therefore decline to embark on a retrial of the existence of the contract asserted by Mr Miller, so as to arrive at a conclusion undermining the validity of the bankruptcy notice.
Nor am I persuaded that Mr Miller’s points, or his outstanding special leave application, justify adjourning the present application or extending the time for compliance with the bankruptcy notices.
The relevant principles were identified by Lehane J in Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264. His Honour cited a judgment of Sheppard J in Geard, Re; Ex Parte Reid [1994] FCA Unreported 11 February 1994. This made the point that the currency of a special leave application or appeal, could be considered differently in the context of a bankruptcy notice than in the context of a bankruptcy petition, since the status of the debtor is not in immediate jeopardy. As a consequence, the Court is less inclined to extend time for compliance with a bankruptcy notice than it would be to adjourn a petition.
In both situations, the Bankruptcy Court should assess the prospects of the judgment debt being overturned on appeal, but the approaches of the Court to its assessment of merits differ. In relation to adjourning a petition, Beaumont J in Westpac Banking Corporation v Carver (2003) 126 FCR 113 at 118 considered that the debtor must show “that there are arguable grounds for concluding that special leave to appeal will be granted”. As I have indicated above, I am not persuaded that Mr Miller’s present application satisfies even this test.
In relation to extending a bankruptcy notice, Byron supports the approach that “considerable weight should be given to the circumstance that…no stay has been granted…of the judgment supporting the bankruptcy notice”. This suggests that the bankruptcy court should not itself even enter into the merits of the appeal for which special leave is being sought in the High Court, where a stay has been refused (compare also Branson J in Burns v AMP Finance Ltd [2004] FCA 1094).
In the present case, Mr Miller has failed to obtain a stay on enforcement of the judgment debt relied upon in the bankruptcy notice. Taking into account the considerations identified by Lehane J in Byron and by Branson J in Burns, I am firmly of the opinion that Mr Miller's application to set aside the present bankruptcy notice should be resolved today, and that no adjournment or further extension of time for compliance should be granted.
As well as his submissions concerning the merits of his prospective appeal in the High Court, Mr Miller made other contentions in his application, affidavits and submissions. In essence, they raise two points. The first is that:
This bankruptcy is being used to stop the debtor's appeal to the High Court of Australia, which the debtor is awaiting leave by the High Court of Australia.
However, as is pointed out by Counsel for the respondent, this is not the effect of the service of the bankruptcy notice, nor would it result from the commission of an act of bankruptcy by non-compliance with the bankruptcy notice. Mr Miller's ability to pursue his special leave application would be unaffected by the dismissal of his application today.
The effect on a pending special leave application of a sequestration order is not a matter which I need to consider today. Mr Miller will have opportunity, should he wish, to oppose the making of such an order if a petition is filed in the future, and if the special leave application has not been resolved before the petition is brought on for hearing.
Mr Miller's second area of contention is that he is impecunious, that this is known to the respondent, and:
it’s not in the public's best interest to bankrupt the debtor as to the cost to manage him, also the creditor knew before start defence the debtor had no money or assets, and this is to just punish the debtor.
Mr Miller also suggests that the creditor would be better off saving the expenses of pursuing him in bankruptcy.
However, in my opinion, these points do not provide an acceptable argument for setting aside the bankruptcy notice, adjourning the present application, or extending the time for compliance with the notice. A creditor such as the present creditor, is entitled to pursue its remedies through the service of a bankruptcy notice notwithstanding a probability of insolvency, and even where there is no prospect of a dividend emerging from a bankruptcy should it eventuate. I pause to say there is, in fact, no sufficient evidence before me as to Mr Miller's financial circumstances to establish the probability of such an outcome.
There is no evidence before me which persuades me that the service of the bankruptcy notice was in any respect an abuse of process. In my opinion, the evidence suggests that the respondent is taking no more than a step open to any other creditor who has the benefit of costs orders gained in the course of successfully defending litigation.
In terms of public interest, the Bankruptcy Act gives remedies to a creditor by way of service of a bankruptcy notice and then, if thought appropriate by a creditor, the bringing of a petition for sequestration. These remedies are provided also in the public interest on the policy that insolvent persons should be subject to some restraints in relation to their financial activities, and also that their involvement in litigation involving their property rights should be supervised. I am not persuaded that any of Mr Miller's objections to the prospect that this might happen to him gives rise to a good reason for making any of the orders he seeks in the present application.
For the above reasons, I consider it appropriate to dismiss the application.
I note that after I had foreshadowed that order to Mr Miller and had commenced my judgment, Mr Miller objected to my directing him to cease interrupting my delivery of my judgment, and then left the Court. A copy of my revised judgment will be sent to him, together with the order I am making today.
I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of Smith FM
Associate: Michael Abood
Date: 25 November 2008
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