Miller v Williams
[2014] FCCA 353
•5 February 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MILLER v WILLIAMS | [2014] FCCA 353 |
| Catchwords: BANKRUPTCY – Bankruptcy notice – review of decision – alleged counter-claim, set-off or cross-demand – application dismissed – costs awarded. |
| Legislation: Bankruptcy Act 1966 (Cth) ss.40, 104 |
| Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 AGL Sales (QLD) Pty Ltd v Dawson Sales Pty Ltd [2009] QCA 262 |
| Applicant: | RAYMOND CHARLES MILLER |
| Respondent: | JULIE ANN WILLIAMS |
| File Number: | BRG 957 of 2013 |
| Judgment of: | Judge Burnett |
| Hearing date: | 5 February 2014 |
| Date of Last Submission: | 5 February 2014 |
| Delivered at: | Brisbane |
| Delivered on: | 5 February 2014 |
REPRESENTATION
| The applicant appeared on his own behalf. |
| Solicitors for the Respondent: | Minter Ellison Lawyers |
ORDERS
That the application for review filed on 9 December 2013 be dismissed.
That the Applicant pay the Respondent’s costs of and incidental to the application to be assessed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 957 of 2013
| RAYMOND CHARLES MILLER |
Applicant
And
| JULIE ANN WILLIAMS |
Respondent
REASONS FOR JUDGMENT
(Ex tempore)
This application today seeks review of an order made by Registrar Belcher on 21 November 2013 ordering:
a)That the application to set aside Bankruptcy Notice BN165585 of 2013 issued on 27 September 2013 be dismissed.
b)That the applicant pay the respondent’s costs of and incidental to that application to be taxed if not agreed.
The jurisdiction of the Court to entertain this application is provided for in s.104 Federal Circuit Court of Australia Act 1999 (Cth).The review is conducted by way of rehearing. The original application brought by the applicant on 23 October 2013 to set aside the bankruptcy notice was in respect of a bankruptcy notice which issued on 27 September 2013 in support of a judgment entered against the applicant by a Deputy Registrar of the Supreme Court of Queensland on 13 September 2013. The Deputy Registrar’s order was in response to a costs order made by Dalton J on 26 April 2013, wherein her Honour ordered that the applicant pay the respondent’s costs of a proceeding then before her to be assessed on the indemnity basis.
Following that order a process of assessment was undertaken leading to the order of the Deputy Registrar on 13 September 1013.The Deputy Registrar determined, in accordance with the certificate of the costs assessor filed 9 September 2013 assessing costs at $15,057.10, that there be an order that the applicant pay those costs. That order, as I have noted, supported the bankruptcy notice which in due course issued and was served upon the applicant.
The applicant contests the notice and seeks that it be dismissed. He contends that there are two grounds for its dismissal. The first is that he is appealing the original order made by Dalton J in the Supreme Court on 26 April 2013. The second is that he is suing the respondent for “malpractice” and “making false and misleading allegations” in the Magistrates Court of Queensland. They were the matters placed before the Registrar. They have been embellished slightly in more recent material filed, but in essence remain the points that are contended for by the applicant.
Dealing with the first point, that is, the order of 26 April 2013. There is some short history behind matters leading to that order. The applicant was a director of a company which in partnership with another conducted a business known as Slick Haulage. The partnership was dissolved by an order made on 21 August 2012 by Daubney J and, in accordance with his Honour’s further orders a receiver was appointed to wind up the affairs of the partnership. The receiver then appointed is now the respondent to these proceedings.
In accordance with established practice, the receiver, being court appointed, acts as an officer of the Court and is entitled to be indemnified in respect of costs; I do not believe that matter to be contested. Observations to that effect are made in Kerr & Hunter on Receivers and Administrators 19th ed: See also Angel's Castle Pre-School Pty Ltd (in liq) (No 2) [2012] FCA 57. In this instance, there were obviously difficulties in relation to the payment of the receiver’s costs.
The matter came back before de Jersey CJ on 2 April 2013. His Honour directed that in default of the payment of the receiver’s costs the applicant and the director of another company associated with the partnership were to be personally liable for costs.
I make that observation incidentally as it is not directly relevant to this application. However, the applicant was unhappy with the receiver and the conduct of the receivership, and accordingly brought an application before Dalton J, with her Honour ultimately dismissing the application and awarding indemnity costs against the applicant. It is important to note that at the same time he also brought an application in respect of what can be described as the ‘wages claim.’
In her affidavit filed in Magistrates Court proceedings, which I will address in a short time, the receiver noted that she had prepared an interim report on 17 September 2012. She noted in that report that the applicant had submitted a further claim for wages for the period from the week ending 31 October 2010 to 13 May 2012, totalling $114,800.00, with superannuation contributions of $10,332.00. However, the draft financial statements indicate that as at 30 June 2012 the plaintiff had withdrawn funds totalling $181,809.47 from the partnership. The inference was that if there was any basis for the applicant’s wages claim then it would in turn be subject to a set off against the balance due evident in the partnership account.
That matter is relevant, subject to discussion concerning the proceeding which I will address in a short time. It also demonstrates that the receivers have been embroiled in ongoing negotiations with the applicant, which in part explains why the applicant brought his application in the Supreme Court.
The other matter to note from that proceeding is that her Honour ordered indemnity costs against the applicant. I note from the submissions that were filed in the application that there were contentions that the applicant’s conduct was vexatious. An order for indemnity costs made against the applicant would suggest that her Honour accepted those submissions, consistent with the principles expressed in Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225.
It is important to note that the judgment which was entered by her Honour on 26 April 2013, and which has now been the subject of assessment and the order made by the Deputy Registrar has not been appealed. That is particularly relevant given that the applicant contends in his affidavit filed 11 November 2013, and continues to contend today, that he intends to appeal the judgment. There are, of course, extra difficulties to be faced by the applicant if he were to pursue that course made all the more difficult because it is now almost 12 months since that judgment was entered. He requires leave from Dalton J to appeal s.69B Civil Proceedings Act 2011. Leave won’t be given lightly: AGL Sales (QLD) Pty Ltd v Dawson Sales Pty Ltd [2009] QCA 262. In the circumstances, it is likely that he will have great difficulty satisfying the Court of Appeal that he ought be given leave for an extension of time to lodge his appeal, putting aside whether or not he may need leave, because it is an appeal against a costs order.
The other matter which was advanced by the applicant concerns the claim he purports to pursue for malpractice and making false and misleading allegations in the Magistrates Court. There were three proceedings commenced in the Magistrates Court by the applicant, each of which requires some brief consideration. The first was proceeding number 3159/13, which was an application commenced against Ms Williams personally. In those proceedings he sought to pursue the wages claim which I have earlier spoken of. It was addressed by Ms Williams in her affidavit. It also claims for damages against her for a sum of $150,000.00 for, in essence, negligence. That proceeding was dismissed by an order of Magistrate Shearer following an application brought by the respondent. That order has not been appealed.
The second proceeding, 7892/13, was also brought in the Magistrates Court. In that instance the application was brought against Ms Williams as receiver for Slick Haulage. Ms Williams was not being pursued in a personal capacity as she is in this application and was being pursued in the previous application. In any event, that application could not be pursued in a personal capacity because it concerned an alleged debt between the applicant and the partnership, a matter which I note has been addressed by Ms Williams in her affidavit.
The third proceeding, 11959/13, really sought to restate the claim which was addressed in proceeding 3159/13 and which was subsequently dismissed by Magistrate Shearer. An analysis of the pleadings in both those applications shows that in essence they seek to pursue the same cause of action. It is worth noting that in 3159/13, as I have earlier observed, an application was brought for that proceeding to be dismissed or permanently stayed. The application was premised upon contentions of abuse of process, allegations that the claim did not assert a reasonable cause of action, and a complaint that there had been an attempt to circumvent the Court’s processes.
I will put to one side matters concerning the allegations in respect of wages because they would not be matters that concern Ms Williams. The only matter that concerns Ms Williams is the allegation in respect of purported negligence. It is important to note that in the proceeding before Dalton J one of the matters raised was the alleged misfeasance on the part of the receiver. In submissions that were filed in the Magistrates Court proceedings the respondent contended that the plaintiff had already raised and been heard on these matters in the Supreme Court proceedings and that the matters had been dealt with by that court.
In that regard, his Honour was informed that on 12 April the applicant, as a director of Miller Nominees (Qld) Pty Ltd, had filed an application in the Supreme Court proceedings which sought, among other things, an order to have Ms Williams investigated and removed as receiver of the partnership on the basis of noncompliance with her duties as receiver. When the matter was heard by Dalton J, her Honour dismissed the application and ordered that Mr Miller pay indemnity costs. As I have earlier observed, the clear inference to be drawn from her Honour’s orders is that not only did she not accede to Mr Miller’s application, but she regarded it as risible.
It follows that although proceeding 11959/13 remains on foot, it too is likely to be subject to an application for strike out. I understand from the applicant that there is some sort of application on foot, but it is not quite plain to me from his submissions precisely what is being sought in that application. He makes some ambiguous reference to a trial. In any event, it seems to me that it is likely, having regard to the earlier orders and the manner in which the application is pleaded, that an application by the respondent under rule 171 Uniform Civil Procedure Rules 1999 (Qld) to have the application struck out is likely to be successful on the basis that it appears to be an abuse of process, as it raises a matter which has previously been disposed of by the Court.
Coming then to the second matter which was raised by the applicant, that is, that this application ought succeed because he is suing the respondent for “malpractice” and/or the making of false and misleading allegations in the Magistrates Court proceedings. It is necessary for the court to consider this issue to determine whether there is a proper basis for the setting aside of the bankruptcy notice. Section 40(1)(g) Bankruptcy Act 1966 (Cth) relevantly provides:
“(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;”
There is, in my view, a real question about whether or not his claim or his purported counterclaim, set off or cross-demand is one that could not have been set up in the proceeding in which the order or judgment was obtained. The order is one for costs, but of course it arises in an action where the very point which is the subject of the purported counterclaim, set off or cross-demand was set up. That factor aside, even if there is a basis to contend that it was a counterclaim, the question remains whether there is a counterclaim, set off or cross-demand that could not have been pursued in proceeding in which the judgment or order was obtained. The Court must be satisfied that he has such a claim. In Massih v Esber [2008] FCA 1452, Flick J said:
“[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” …
[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 … 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 … Mere production of a statement of claim, without more, is not sufficient … Nor is a “shadowy” claim that could not fairly be litigated …”
In this instance, having regard to the nature of the claim which is now sought to be contended against the respondent, I am not satisfied that there is indeed a proper claim there. Not only has the matter been the subject of earlier determination against the applicant, but it is not plain from the pleading itself what allegations the applicant truly makes against the receiver.
It follows, in my view, that there is no basis demonstrated on the part of the applicant to cause the bankruptcy notice to be discharged or to be set aside, and it follows that his application is dismissed.
The respondent seeks costs. The applicant’s only contention against a usual costs order is that he disagrees with the decision made against him. In my view, this is an appropriate circumstance for an order for costs. There is no reason why the costs ought not follow the event. I will direct that the applicant pay the respondent’s costs of and incidental to the application to be assessed if not agreed.
I certify that the preceding twenty-three paragraphs are a true copy of the reasons for judgment of Judge Burnett
Date: 27 February 2014
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