Nyoni v Murphy

Case [2017] FCA 941

FEDERAL COURT OF AUSTRALIA

Nyoni v Murphy [2017] FCA 941

File number: WAD 193 of 2017
Judge: BARKER J
Date of judgment: 16 August 2017
Catchwords: BANKRUPTCY – application for extension of time to appeal – sequestration order made in proceeding before primary judge – where bankruptcy notice underlying creditor’s petition sought payment of costs orders awarded in related proceedings – where related proceeding still on foot – whether primary judge failed to consider prospect of applicant succeeding on appeal and remaining solvent – “other sufficient cause”  to adjourn or dismiss petition – where applicant claimed abuse of process
Legislation: Bankruptcy Act 1966 (Cth)
Cases cited:

Murphy v Nyoni [2017] FCCA 143

Nyoni v Chee Koon Hee (No 4) [2013] FCA 948

Nyoni v Shire of Kellerberrin (No 7) [2016] FCA 135

Nyoni v Shire of Kellerberrin (No 8) [2016] FCA 245

Nyoni v Shire of Kellerberrin [2017] FCAFC 59
Date of hearing: 18 July 2017
Date of last submissions: 3 August 2017
Registry: Western Australia
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Category: Catchwords
Number of paragraphs: 77
Counsel for the Applicant: The Applicant appeared in person
Counsel for the Respondents: Mr C Beetham
Solicitor for the Respondents: State Solicitor’s Office
Table of Corrections
23 October 2017 In the quoted portions of the judgment in [18] through to [24], excluding [21(a)], where the words “Mr Nyonis” appear, they have been replaced with the words “the Applicants”.
23 October 2017 In the quoted portion of the judgment in [21(a)] following the word “have” and following the words “each of”, the words “Mr Nyoni” have been replaced with the words “the Applicants”.

ORDERS

WAD 193 of 2017
BETWEEN:

EMSON NYONI

Applicant
AND:

JILLIAN MURPHY

First Respondent

THERESA BEECH

Second Respondent

CHIEF EXECUTIVE OFFICER OF THE DEPARTMENT OF HEALTH WA

Third Respondent

JUDGE:

BARKER J

DATE OF ORDER:

16 AUGUST 2017

THE COURT ORDERS THAT:

1.The application for extension of time to appeal be dismissed.

2.The applicant pay the respondents’ costs, to be assessed if not agreed.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

BARKER J:

  1. At various times since 2010, Mr Emson Nyoni has been engaged in litigation with the Shire of Kellerberrin and certain of its representatives, and the Department of Health of Western Australia and certain of its representatives.

  2. As a result of costs orders made against him in favour of the respondents to this proceeding, along the way, Mr Nyoni was the subject of a sequestration order by the Federal Circuit Court of Australia on 17 February 2017 and so became a bankrupt.  See Murphy v Nyoni [2017] FCCA 143. The order was made on the application of the present respondents. Mr Nyoni now seeks to appeal from that order.

    BACKGROUND

  3. Something of the background to the dispute involving Mr Nyoni and the present respondents can be gleaned from the introduction to the reasons for judgment of…

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Nyoni v Murphy [2017] FCA 941
Case
[2017] FCA 941
Decision Date

CaseChat Overview and Summary

In Nyoni v Murphy, Emson Nyoni sought an extension of time to appeal a sequestration order made by the Federal Circuit Court of Australia on 17 February 2017. The sequestration order resulted from Mr Nyoni's inability to pay costs orders awarded against him in a related proceeding, leading to the application by the respondents, who held these costs orders. The primary issue before the court was whether the primary judge failed to consider the prospect of Mr Nyoni succeeding on appeal and remaining solvent, and whether there was "other sufficient cause" to adjourn or dismiss the petition. Additionally, Mr Nyoni claimed abuse of process by the respondents.

The court examined the reasoning of the primary judge, who had found that Mr Nyoni could not meet his debts as they fell due and did not have assets to liquidate for debt repayment. The primary judge dismissed Mr Nyoni's claims of abuse of process and collusion without finding sufficient evidence. The court held that the primary judge's approach and reasoning were sound, meeting the technical requirements of the relevant act. The respondents were entitled to pursue the costs orders through a bankruptcy notice, and Mr Nyoni's failure to satisfy it constituted an act of bankruptcy.

Ultimately, the court found no error in the primary judge's decision. Mr Nyoni's contentions of collusion and abuse of process were not supported by evidence, and no sufficient reason was presented to adjourn or dismiss the creditors' petition. The application for an extension of time to appeal was dismissed, and Mr Nyoni was ordered to pay the respondents' costs.

Orders

Orders of the court

1. The application for extension of time to appeal be dismissed.

2. The applicant pay the respondents’ costs, to be assessed if not agreed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

As a result of costs orders made against him in favour of the respondents to this proceeding, along the way, Mr Nyoni was the subject of a sequestration order by the Federal Circuit Court of Australia on 17 February 2017 and so became a bankrupt. See Murphy v Nyoni [2017] FCCA 143. The order was made on the application of the present respondents. Mr Nyoni now seeks to appeal from that order.BACKGROUND Something of the background to the dispute involving Mr Nyoni and the present respondents can be gleaned from the introduction to the reasons for judgment of North and Rares JJ in the recent decision of the Full Court of this Court in Nyoni v Shire of Kellerberrin [2017] FCAFC 59, at [1]-[4]:1Emson Nyoni (the appellant) was a pharmacist. He had migrated to Australia from Zimbabwe. In 2003, he bought and then operated, until early 2013, the only pharmacy in Kellerberrin, Western Australia. Mr Nyoni brought proceedings against the Shire of Kellerberrin (the first respondent), two of its successive chief executive officers, Frank Peczka and Darren Friend (the fourth and second respondents), its President, Stan McDonnell (the third respondent) and an electrical contractor, Peter Mitchell (the fifth respondent).2The primary judge, in a careful and thorough judgment, dealt with the five substantive causes of action on which Mr Nyoni relied. Those were claims that:(a)Mr Peczka and the Shire acted in concert with Robert Bateman, a senior investigating officer of the Health Department, in trespassing upon Mr Nyoni’s pharmacy property in October 2007 (the 2007 trespass claim);(b)the Shire, by one or more of its agents or officers, had made disparaging statements about Mr Nyoni’s business and, thereby, engaged in misleading or deceptive conduct and/or malicious falsehood (the false statements claim);(c)the Shire, Mr Friend and Mr McDonnell were liable as joint tortfeasors with Mr Mitchell in trespassing upon Mr Nyoni’s property in the course of disconnecting the electricity supply to Mr Nyoni’s pharmacy in March 2010 and in October 2010 (the 2010 trespass claim);(d)the conduct of Mr Friend and Mr McDonnell in relation to the disconnection of the electricity supply to Mr Nyoni’s pharmacy on 14 October 2010, amounted to misfeasance in public office (the misfeasance claim); and(e)the Shire engaged in misleading or deceptive conduct by publishing the minutes of a Shire Council meeting which disparaged Mr Nyoni’s pharmacy business (the minutes claim).3The primary judge found in Mr Nyoni’s favour on one aspect of the 2010 trespass claim. He held that Mr Mitchell had committed a trespass at the pharmacy on 14 October 2010 when he intentionally entered and remained on the premises without consent of owner or lawful authority and, in the course of which, he disconnected the electricity without any lawful basis to do so. His Honour awarded Mr Nyoni $12,000 in damages against Mr Mitchell, that included $4,000 in aggravated damages, and ordered Mr Mitchell to pay Mr Nyoni’s costs in relation to the issues between them.4However, his Honour dismissed with costs all of Mr Nyoni’s claims against the Shire and Messrs Peczka, Friend and McDonnell, including the balance of the 2010 trespass claim. RECENTLY PARTIALLY SUCCESSFUL APPEAL

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Accordingly, the respondents submit, the primary judge did not err in fact or in law in failing to adjourn, or failing to refuse, the petition.CONSIDERATION Having regard to the three broad considerations of the primary judge, set out above in some detail, it must be said that no error in the approach or reasoning of the primary judge can be detected. The technical requirements of the Act were met. On the evidence and material before the primary judge, it appeared almost self-evident that Mr Nyoni could not meet his debts as and when they fell due. He did not appear to have any assets that could otherwise be turned into liquid funds to meet debts such as the two costs orders that the respondents held against him. The real question then, as now, was whether there was some other sufficient reason by reference to which the creditors’ petition should either be adjourned or dismissed. The most obvious factor in this regard was the substantive claim made by Mr Nyoni, that the respondents, with Shire representatives, had effectively conspired against him in various ways, including by bringing the creditors’ petition against him to make him bankrupt. So far as that claim was concerned, the primary judge, not unreasonably found that there was no evidence to support the allegation. The fact of the matter was, and is, that the respondents in this proceeding, held costs orders for some $80,000 against Mr Nyoni and wished to have them satisfied. Ultimately, they issued a bankruptcy notice. They were perfectly entitled to do so. Mr Nyoni’s failure to satisfy it constituted an act of bankruptcy and led the primary judge to consider, ultimately, whether there was some other sufficient reason not to make the sequestration order sought. There was no evidence to support an abuse of process claim and the primary judge cannot be said to have erred in making that finding. Mr Nyoni’s grounds of opposition and submissions all focused on his continued belief that the respondents in this proceeding, the Shire and the respondents in other proceedings were guilty of “collusion” against him. Even though the respondents in this proceeding, who were the applicants on the bankruptcy proceeding, were not parties to the proceedings involving the Shire, as it went forward, including in the recent Full Court appeal referred to above. It may have been open to Mr Nyoni to have contended before the primary judge, in the bankruptcy proceeding, that he had good grounds to expect that his forthcoming appeal would be successful, at least in part, that he would be entitled to damages sufficient to put him in funds to pay the costs orders held by the respondents, and therefore that he had provided a sufficient reason for the creditors’ petition to at least be adjourned to await the outcome of the appeal. In that regard, however, the respondents reasonably submit that no such contention was put in the bankruptcy proceeding before the primary judge by Mr Nyoni. Certainly, it was not put expressly and it is difficult to see that it was put by implication.