Norman v Heers (Trustee)
[2016] FCA 821
•20 July 2016
FEDERAL COURT OF AUSTRALIA
Norman v Heers (Trustee) [2016] FCA 821
File number: SAD 180 of 2016 Judge: WHITE J Date of judgment: 20 July 2016 Catchwords: PRACTICE AND PROCEDURE – Application for extension of time to appeal – decision of the Federal Circuit Court of Australia – length of extension – whether prejudice to applicants – whether appeal grounds reasonably arguable – application refused. Legislation: Bankruptcy Act 1966 (Cth) ss 43, 54, 58
Federal Court Rules 2011 (Cth) r 36.03
Cases cited: Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 Date of hearing: Heard on the papers Registry: South Australia Division: General Division National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Category: Catchwords Number of paragraphs: 27 Counsel for the Applicants: The Applicant did not appear Counsel for the Respondent: The Respondent did not appear ORDERS
SAD 180 of 2016 BETWEEN: JANICE MAY NORMAN
First Applicant
DEREK NORMAN
Second Applicant
AND: ANDREW JOHN HEERS AND MARK WILLIAM PEARCE AS JOINT AND SEVERAL TRUSTEES OF THE BANKRUPT ESTATE OF JANICE MAY NORMAN
Respondent
JUDGE:
WHITE J
DATE OF ORDER:
20 JULY 2016
THE COURT ORDERS THAT:
1.The application for an extension of time in which to appeal is refused.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
WHITE J:
This judgment concerns an application for an extension of time in which to appeal.
On 21 September 2015, on an application by Axess Debt Management Pty Ltd, the Federal Circuit Court of Australia (the FC Court) made a sequestration order pursuant to s 43 of the Bankruptcy Act 1966 (Cth) against the estate of the first applicant. Mr Heers and Mr Pearce were appointed as joint and several trustees (the Trustees). The proposed appeal relates to later orders made by the FC Court in relation to the bankrupt estate.
In the FC Court, Mr Heers deposed that, as at 10 March 2016, the first applicant had not, despite various demands that she do so, lodged a statement of affairs under s 54 of the Bankruptcy Act nor provided to the Trustees any books and accounts. However, the Trustees ascertained that the first applicant owns jointly with her husband, the second applicant, the property at 149 Haggartys Avenue, Karrabin, Queensland (the Property). Pursuant to s 58 of the Bankruptcy Act, the first applicant’s interest in that property vested in the Trustees.
Mr Heers deposed to attempts which the Trustees have made to realise the first applicant’s interest in the Property, either by the second applicant purchasing her interest, or by the second applicant agreeing to the sale of the Property with the net proceeds being divided between the Trustees and him. Those attempts were unsuccessful.
Accordingly, the Trustees applied to the FC Court for orders appointing trustees for the sale of the Property and consequential orders. Both the first and second applicants were respondents to that application.
The Trustees’ application was heard in the FC Court on 2 May 2016. Although the applicants had been served with the application and supporting affidavits, and were aware of the hearing, neither attended the hearing. In their absence, the FC Court Judge made a number of orders. The first five orders were as follows:
1.An order pursuant to Section 30 of the Bankruptcy Act 1966 and Section 38 of the Property Law Act 1974 (QLD) that David James Hambleton and James Marc Imray be appointed joint and several trustees (the Trustees For Sale) for the sale of the property comprising Certificate of Title Reference 18740101 being Lot 3 Registered Plan 815919 being the Property known and located at 149 Haggartys Ave KARRABIN QLD 4306 (the Property).
2.An order pursuant to section 30(1), 58(1), 77(1)(e) and 77(1)(g) of the Bankruptcy Act 1966 that the First Respondent vacate the Property within twenty one (21) days of the Court's final order.
3.In the event the First Respondent fails to give vacant possession of the Property in accordance with the orders granted pursuant to paragraph 1 herein, there be an order for possession of the Property issued forthwith pursuant to Rule 29.11 of the Federal Circuit Court Rules 2001 and Division 5 of the Property Law Act 1974 (QLD).
4.An order that the Second Respondent vacate the Property within twenty one (21) days of the Court's final order pursuant to section 30 (1) of the Bankruptcy Act 1966 or alternatively Section 38 of the Property Law Act 1974 (QLD) by virtue of the associated jurisdiction of this Honourable Court pursuant to section 18 of the Federal Circuit Court of Australia Act 1999.
5.In the event that the Second Respondent fails to give vacant possession of the Property in accordance with orders granted pursuant to order 3 herein, there be an order for possession of the Property issued forthwith pursuant Rule 29.11 of the Federal Circuit Court Rules 2001.
The FC Court Judge then made a number of orders directed to the preparation of the Property for sale, the sale of the Property, the dispersal of the sale proceeds, as well as orders of an incidental kind.
As can be seen, the FC Court orders required that vacant possession be given by 23 May 2016. Mr Heers has deposed, however, to the Trustees for sale having agreed with the applicants that the 21 day deadline be extended to 24 June 2016.
The applicants now wish to appeal against the orders made on 2 May 2016. Such an appeal should have been commenced within 21 days of 2 May 2016 (r 36.03 of the Federal Court Rules 2011 (Cth)). The applicants did not commence an appeal within this period.
On 16 June 2016, the applicants filed the present application seeking an extension of time in which to file an appeal. This was 45 days after the decision of the FC Court.
The application names as the respondent the Federal Circuit Court of Australia. That was inappropriate as the FC Court is not a litigant. The respondents to the application should, at the least, be the Trustees, Mr Heers and Mr Pearce. The Trustees have not been prejudiced by the applicants’ error because Mr Heers has filed an affidavit in relation to the application for the extension of time and he and Mr Pearce have filed an outline of submissions. In those circumstances I made an order, on the Court’s own motion, that Mr Heers and Mr Pearce as joint and several trustees of the bankrupt estate be substituted as the respondent to the application for the Federal Circuit Court of Australia, and that the FC Court no longer appear in the title of the Action.
The application for the extension of time was set down for hearing on 12 July 2016. The applicants (who do not have legal representation) did not appear at the hearing, although the Court had indicated its willingness to allow them to do so by video link. The Court also invited the applicants to provide submissions in writing, but they did not do so. The Trustees, who opposed the grant of an extension of time, were content for the Court to determine the application on the papers, and I indicated that I would proceed on that basis.
The principal matters to which the Court has regard on applications of the present kind are well‑known. They include the length of the extension of time which is sought, the reason for the delay, the prejudice to the respective parties if the extension is allowed, or not allowed, as the case may be, and any other matters bearing upon the conduct of the parties in relation to the proposed appeal. The exercise of the discretion to extend time must take account of the rationale for the existence of the limitation period: Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 553. A limitation period is not to be seen as an arbitrary cut‑off point unrelated to the demands of justice or the general welfare of society. It represents a judgment, in this case by the Court as expressed in its Rules, that the administration of justice is best served by appeals being brought in a timely way.
The applicants have the onus of establishing that the justice of the case warrants an exercise of the discretion to extend time.
The period of the extension sought by the applicants, 24 days, is not of itself long, but would result in a period more than double the 21 day period fixed by the Rules of Court. In context therefore, the applicants seek an extension of time which is significant.
The applicants have not provided any explanation for their failure to commence an appeal within time nor for the delay of 24 days which occurred after 23 May 2016 before they filed the application for an extension of time. Each has filed an affidavit which is in material respects, identical to that filed by the other. The flavour of the affidavits is seen in their first eight paragraphs:
1.I am of sound mind, i.e. this affidavit and the facts herein are the product of knowledge and creative-expression by its creator.
2.My name constitutes property.
3.My name is owned by my master in accordance with the common-law copyright notice attached hereto and marked with the letter “A 1”.
4.My owner/master is sui juris (sovereign), sentient, and a human being, complete with soul, i.e. my owner/master has a direct experience of the divine, answering only to the God within (SUI JURIS. Lat. Of his own right; possessing full social and civil right; not under any legal disability, or the power of another, or guardianship. Black’s 4th.).
5.My owner/master has the right to the security of the person, especially where I am said person.
6.This affidavit has the indorsement of my owner/master in his/her correct status as an Authorized Representative or Agent for me, by way of red ink signature, which signifies the blood of the living, breathing, man/woman (Note: Where the said signature is not red, it is to be taken as being red. This is because it is intended that way but has obviously been incorrectly required, by cultural milieu or otherwise, to be different).
7.My owner/master possesses estate allodium (ALLODIAL. Free; not holden of any lord or superior; owned without obligation of vassalage or fealty; the opposite of feudal. Black's 1st. ALLODIUM. Land held absolutely in one's own right, and not of any lord or superior; land not subject to feudal duties or burdens. An estate held by absolute ownership, without recognizing any superior to whom any duty is due on account thereof. Black's 1st.).
8.There are ten (10) maxims of Commerce:
a.A workman is worthy of his hire.
b.All are equal under the Law.
c.In Commerce truth is sovereign.
d.Truth is expressed by means of an affidavit.
e.An unrebutted affidavit stands as the truth in Commerce.
f.An unrebutted affidavit becomes the judgment in Commerce.
g.A matter must be expressed to be resolved.
h.He who leaves the field of battle first loses by default.
i.Sacrifice is the measure of credibility.
j.A lien or claim can be satisfied only through rebuttal by Counter-affidavit point-for-point, resolution by jury, or payment.
Some of the content in the balance of the affidavits appears to be directed to a dispute about the basis upon which the underlying sequestration order was made against the first applicant and to seek the setting aside of that order. These include the following paragraphs:
31.No debt or alleged debt. ab initio. has yet been substantiated therefore any party attempting to collect on said debt, is an unsolicited interloper.
32.Specie of money – Credit-money differs from money earned from labour in that a workman is worthy of his hire and credit money is not derived from anything of intrinsic value. whereas money from labour is commonly interpreted as a measure of productivity.
33.The payment of interest, especially on loans of credit, is an unconscionable bargain/contract because:
a.Interest is only created by bookkeeping entry and by payment of its alleged obligation.
b.The current financial system at its core is similar to a Ponzi-scheme whereby promises to pay form the principal investments.
c.These principal investments (promissory notes or credit applications) generate negotiable instruments. i.e. “money” as per UCC 3-104, which is then converted and reissued as a “loan”.
d.All said “money”' is fiat currency and thus only worth what one is prepared to pay/exchange for it.
e.Payment of interest inherently reduces other parties ability to pay.
34.Labour-earned money (or the presumption of) paid as interest on credit money is a measure of sacrifice.
35.My owner/master must have increased credibility in proportion to the level of unwittingly sacrificing his/her time and money as interest payments.
36.Credit and credit cards that are not secured (hence the justification for higher interest) are only ever unconscionable bargains/contracts and when this is realized, so to is the realization that there is no obligation to pay.
Not only have the applicants not provided an explanation for the delay, there are some indications in the evidence that they had previously acted to comply with, rather than to challenge, the orders of the FC Court. As previously noted, they negotiated an extension to 24 June 2016 of the time fixed by the FC Court in which they were to give vacant possession of the Property to the Trustees for Sale. In addition, Mr Heers has deposed to receiving a telephone call from the son of the applicants in which he was informed that the first applicant wished to consider refinancing the Property as an alternative to it being sold. Further again, Mr Heers has deposed to being informed by the first applicant on 25 May 2016 that she and her husband have been unable to refinance the Property and had begun the process of vacating it.
In these circumstances, the present application seems to reflect a change of mind by the applicants, but that has not been explained in the evidence.
The applicants have not deposed to the prejudice they will suffer if the extension of time is refused. It seems, however, that the Property may be their family home and it may readily be inferred that they will suffer at least some form of prejudice in the form of disruption if required to vacate the Property and locate new accommodation.
The grant of an extension of time in which to appeal will not, by itself, cause prejudice to the administration of the bankrupt estate of the first applicant. That is because the mere grant of an extension of time in which to appeal will not have the effect of staying the orders made by the FC Court on 2 May 2016. However, the prospect of an order for stay being made should not be overlooked. Nor should the uncertainty which the commencement of an appeal at this stage is likely to cause the Trustees for Sale be overlooked. It is very understandable that they would be unwilling to incur further expense in relation of the sale of the Property while an appeal remains extant. This is especially so given that it appears that there will be relatively little in the bankrupt estate for distribution to creditors. Mr Heers has deposed that, even at this stage, there is no realistic possibility that the unsecured creditors will be paid in full. He deposes to a concern that disputes and legal proceedings in relation to the sale of the Property will erode the funds available in the estate and diminish the returns which may be achieved by the unsecured creditors.
I consider it appropriate to take into account that there is some evidence that the applicants have not cooperated with the Trustees in some respects. It is only relatively recently that the first applicant has provided a statement of affairs. There is other evidence of an absence of cooperation, which it is unnecessary to particularise in these reasons. That evidence does not give the Court confidence that the costs which may be occasioned if the sale of the Property is delayed, will be kept to the minimum.
The grounds of appeal in the draft notice of appeal are as follows:
1.It was not previously recognised that an appearance was necessary in order to action/enable an affidavit (mistake or fact) since it was assumed that the affidavit is in and of itself an appearance of a presentment.
2.Appellant’s affidavit constitutes his/her defence.
3.Appearance (in Adelaide) is hindered by bankruptcy and associated bank account freeze.
4.Time restrictions and work commitments further inhibit appellant’s ability to appear.
5.DEREK BRUCE NORMAN should not be held liable for any costs associated with the Bankruptcy of JANICE MAY NORMAN or indemnity monies from the sale of property.
6.Moving may take longer than 30 days due to the logistics of moving the volume and scale of equipment, property and materials on the property, especially Livestock and the property of other individuals (this is a large block of land).
7.Appellant feels misinformed and uneducated regarding the legal system, how it works and even required legal aid to comprehend the nature of this situation from a legal perspective.
8.Appellant is under extreme emotional stress.
9.Environmental factors such as noise pollution from the local military base flight paths and the pistol range across the road interfere directly with the clear state of mind required for business.
10.If one is unable to ever reach a clear state of mind, one should have remedy by only accruing business hours from the point at which one is finally able to return to work.
In my opinion, these grounds do not identify an error by the FC Court Judge which can at this stage be characterised as reasonably arguable.
The applicants face the difficulty that the orders were made on 2 May 2016 in their absence because they did not attend the hearing. That was despite the fact that the solicitors for the Trustee had put them expressly on notice that, should they fail to attend the hearing, orders would be sought in their absence.
In the circumstances, I do not consider that the applicants have shown that an extension of time on which to appeal is appropriate. In summary, that is because the period of extension sought is, in context, significant; the applicants have not explained their failure to commence an appeal within the 21 day period; the applicants have not explained the subsequent delay in making the application for an extension of time; the applicants have not shown that their proposed appeal is reasonably arguable; and because of the prejudice to the bankrupt estate in the event that the extension is granted.
For these reasons, the application for an extension time in which to appeal against the orders of the FC Court made on 2 May 2016 is refused.
I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice White. Associate:
Dated: 20 July 2016
0
1
2