O'NEILL v Dwyer

[2013] FCCA 1322

FEDERAL CIRCUIT COURT OF AUSTRALIA

O'NEILL & ANOR v DWYER [2013] FCCA 1322

Catchwords:
BANKRUPTCY – Creditor’s petition – notice stating grounds of opposition to petition filed – no grounds of opposition to the petition made out – notice dismissed.

Legislation:

Bankruptcy Act 1966, ss.43, 52(1), 52(3),

Legal Profession Act 2004 (NSW), ss.384, 385
Uniform Civil Procedure Rules 2005 (NSW), r.50.3

Burrell v Connell (1998) 48 FCR 383
Joosse v Commissioner of Taxation (2007) 66 ATR 236
Makhoul v Barnes (1995) 60 FCR 572

Applicant: MICHAEL FRANCIS O'NEILL & JOHN DAVID HAMILTON EVANS T/AS O'NEILL PARTNERS COMMERCIAL LAWYERS

Respondent: GRANT DWYER

File Number: SYG 3075 of 2012

Judgment of: Judge Lloyd-Jones

Hearing date: 13 May 2013

Delivered at: Sydney

Delivered on: 13 September 2013

REPRESENTATION

Solicitors for the Applicant: Mr M. Stevens of O’Neill Partners

The Respondent: The Respondent appeared in person

ORDERS

1. The Notice Stating Grounds of Opposition to the Creditor’s Petition filed by the respondent debtor on 10 January 2013 be dismissed.

2. The proceedings be listed before a registrar of the Court at 10.00am on Monday 23 September 2013 in Court 6D, John Maddison Tower, 88 Goulburn Street for hearing of the Petition.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT SYDNEY

SYG 3075 of 2012

MICHAEL FRANCIS O'NEILL & JOHN DAVID HAMILTON EVANS T/AS O'NEILL PARTNERS COMMERCIAL LAWYERS

Applicant

And

GRANT DWYER

Respondent

REASONS FOR JUDGMENT

Introduction

1. Before the Court is a creditor’s petition filed on 21 December 2012 (the “Petition”) by the applicant creditor, Michael Francis O’Neill & John David Hamilton Evan t/as O’Neill Partners Commercial Lawyers (“O’Neill Partners”) against the respondent debtor, Grant Dwyer (“Mr Dwyer”).  The Petition states Mr Dwyer failed to comply within 21 days of service with the requirements of Bankruptcy Notice BN 3885 of 2012 issued 28 June 2012.  Mr Dwyer filed a Notice Stating Grounds of Opposition to the Petition on 10 January 2013 (the “Notice of Opposition”). These reasons address Mr Dwyer’s Notice of Opposition.

Evidence

1. O’Neill Partners tendered in Court at the hearing a tender bundle with chronology (the “Tender Bundle”) and was marked Exhibit “A”.  This was the only evidence read in respect of the Notice of Opposition by O’Neill Partners.

2. Mr Dwyer relied on the following affidavits in support of his Notice of Opposition:

   a)Affidavit of Grant Dwyer sworn 10 January 2013 (the “First Dwyer Affidavit”);

   b)Affidavit of Blair Darryl Puata sworn 19 January 2013;

   c)Affidavit of Desmond George Seivewright sown 20 February 2013;

   d)Affidavit of Geoffrey Richard Dwyer sworn 26 February 2013;

   e)Affidavit of William Arthur (Bill) Ranken sworn 28 February 2013;

   f)Affidavit of Philip Edward Silva sworn 11 March 2013;

   g)Affidavit of Grant Dwyer sworn 12 March 2013 (the “Second Dwyer Affidavit”); and

   h)Affidavit of Grant Dwyer sworn 10 January 2013 and filed on 5 April 2013 (this affidavit annexes a document purported to be signed on 5 April 2013) (the “Third Dwyer Affidavit”).

   There are a number of deficiencies in the form of the various affidavits, however, this Court is not a court of strict pleading.  Accordingly, as no objection was raised by O’Neill Partners to the reading of the affidavits, I intend not to address these in any further detail.

Background

1. A convenient summary of the history of the history of the events leading to the filing of the Petition has been prepared by O’Neill Partners and appears at the front of the Tender Bundle:

Item	Date	Event	Reference
1.	May 2010	Instructions received from Dwyer to reinstate his Company Paris Jade International Pty Ltd
2.	27.5.2010	O’Neill Partners costs agreement and disclosure sent to Dwyer – general estimate $10,000 plus GST and disbursements – to be paid 14 days from issue of invoices.	Tab 1
3.	10.11.10	O’Neill Partners invoice issued to Dwyer for legal service provided from 23.05.10 to 30.09.10 - $18,324.12	Tab 2
4.	1.4.11	O’Neill Partners file Application foe Assessment of Costs – Case Number 2011/105934	Tab 3
5.	17.5.11	O’Neill Partners Application for Assessment of Costs assigned to Robin Peter Malik – costs assessor	Tab 4
6.	24.11.11	Amended Certificate of Determination of Costs $18,263.15 – Robin Peter Malik – costs assessor	Tab 5
7.	2.12.11	Local Court Judgement 2011/384875 - $!8,343.15	Tab 6
8.	28.12.11	Dwyer Application for Review of costs assessor Robin Peter Malik (assessor) determination issued 24.11.11	Not served by Dwyer
9.	27.03.12	Review Panel determination and Statement of Reasons $18,263.15 plus costs of $1,591.33 = $19,854.48	Tab 7
10.	1.06.12	Local Court Certificate of Judgment issued $18,343.15	Tab 6
11.	28.06.12	Bankruptcy Notice lodged at ITSA $18,343.15
12.	7.07.12	Bankruptcy notice served by post on Dwyer	Aff of Service of Bankruptcy Notice – Stephanie Schiller 20.7.12
13.	20.07.12	Settlement agreement to pay $12,000 by way of instalment payments	Tab 8
14.	27.7.12	Deemed act of bankruptcy of Dwyer
15.	1.8.12	Dwyer first instalment payment of $1,000 received
16.	3.9.12	Dwyer second instalment payment of $1,000 received
17.	30.9.12	Dwyer third and final instalment payment of $10,000 not received – breach of Settlement Agreement
18.	21.12.12	Creditor’s Petition filed at Federal Magistrates Court (as it was then) $16,343.15
19.	18.1.13	Creditors Petition personally served on Dwyer	Affidavit of Personal Service of Creditors – Mark Slater – 30.1.2012 (sic 2013)
20.	18.2.13	Dwyer server Federal Magistrates Court Notice of Grounds of Opposition – filed 10.1.13
21	21.2.13	First Creditor’s Petition return date Court Orders 21.1 Dwyer serve evidence by 11.2.13 21.2. O’Neills serve evidence / submissions by 12pm 15.3.12 12.3 Costs reserved 21.4 Further return date 18.3.13
22.	18.03.13	Second creditor’s Petition return date	Adjourned on application of Respondent
23.	05.04.13	Dwyer’s Local Court Motion filed seeking to permanently stay Local Court Judgment 2011/384875	Tab 9
24.	15.04.13	Third Creditor’s Petition return date	Adjourned by consent
25.	29.04.13	Fourth Creditor’s Petition return date	Adjourned by consent
26.	09.05.13	Dwyer’s Local Court Motion 2011/384875 hearing to permanently stay Local Court Judgment.  Dismissed with Dwyer ordered to pay O’Neill Partners costs as agreed or assessed.
27.	13.05.13	Fourth Creditors Petition return date.

1. The Petition is founded on a judgment debt of the Local Court of NSW entered on 2 December 2011 in the amount of $18,343.15.  Mr Dwyer engaged O’Neill Partners to act on his behalf in the period between May 2010 and September 2010 in respect of an application to reinstate Mr Dwyer’s company, Paris Jade International Pty Ltd, from deregistration.  That application was successful and an invoice was rendered to Mr Dwyer by O’Neill Partners for $18,432.15.  This invoice was assessed by R. Malik, costs assessor, on 24 November 2011, who determined that $18,263.15 was the fair and reasonable amount to be paid.  Mr Dwyer then sought to review the Costs Determination.  The Costs Determination was affirmed by the Review Panel and it found $18,263.15 was the fair and reasonable amount to be paid by Mr Dwyer to O’Neill Partners.

2. On 20 July 2012 Mr Dwyer and O’Neill Partners entered into an agreement for the payment of a reduced amount of money, being $12,000.00, to satisfy the debt owing.  Mr Dwyer made two payments of $1,000.00 each before breaching the agreement in September 2012.

3. Bankruptcy Notice no 3885 of 2012 issued on 28 June 2012 was sent by prepaid ordinary post to Mr Dwyer on 2 July 2012.  O’Neill Partners allege that an act of bankruptcy was then committed by Mr Dwyer on 27 July 2012.  The Petition was then filed in this Court on 21 December 2012 and served on Mr Dwyer on 18 January 2013.  On 20 January 2013 Mr Dwyer filed the Notice of Opposition.  The Petition came before the Court on a number of occasions where it was adjourned before the Notice of Opposition was heard on 13 May 2013.

The Notice of Opposition

1. The Notice of Opposition contained the following grounds in opposition to the Petition:

   1. The matter be set aside

   2. This matter be permanently stayed

   These grounds, however, instead appear to be the orders sought by Mr Dwyer and will be treated accordingly.

2. The First Dwyer Affidavit was filed with the Notice of Opposition.  There are a number of annexures (not marked) to the Affidavit and appearing on the ninth page of the annexures is an affidavit prepared, though on the face of it not sworn, by Mr Dwyer stating:

   1. The judgement entered on 2 December 2011 arises from the registration by the plaintiffs of a certificate of costs assessment that was issued in respect of legal costs allegedly incurred by the plaintiffs on my behalf. 

   2. The agreement I made with the plaintiffs was an agreement to the effect that

   a. They would act on my behalf on a contingency basis that I was at the time a bankrupt and in any event had no funds that I could use all access to pay legal fees;

   b. If the proceedings were unsuccessful then no costs would be payable by me.

   c. If the proceedings were successful then the plaintiffs would be entitled to charge full legal costs against me and to recovery (sic) those from any verdict monies I received.

   3. I have recently been served with a bankruptcy notice based upon the judgment entered in this Court on 2 December 2011.

   4. The question of my liability for the legal costs on the plaintiffs have not been determined by a Court.

   5. I wish to have the question of my liability for those legal costs determined by this Court and I will, on the first return of this notice of motion, be asking the Court to fix a timetable for the filing and serving of evidence in relation to the question of my liability for legal costs.

Submissions – Notice of Opposition

Mr Dwyer’s Submissions

1. Mr Dwyer submits that the genesis of what is now before the Court was his company, Paris Jade International Pty Ltd, going into voluntary administration and liquidation after legal proceedings involving it, Jennifer Hawkins and the Miss Universe Organisation.  Mr Dwyer subsequently became a bankrupt as a result of those proceedings.  He then received legal advice that he had a strong case against Jennifer Hawkins and the Miss Universe Organisation, but the pursuit of such a case would require substantial funding and resources.

2. Mr Dwyer contends that he was then advised through Phil Silva and Yosse Goldberg that O’Neill Partners were interested in taking on any such matter on a no win, no fee basis.  Mr Dwyer had a meeting with David Purcell of O’Neill Partners where he made it clear that he did not have the funds available to pursue legal proceedings and could only proceed on a no win, no fee basis.  Mr Dwyer submits that Mr Purcell then advised him he was prepared to pursue legal proceedings and not charge for work completed, but instead receive a percentage of the outcome of a successful settlement or judgment.  Mr Dwyer contends that he sent an email to O’Neill Partners stating they would receive 40% of $1,000,000 and 25% thereafter.

3. As Mr Dwyer had no funds, Yosse Goldberg paid for the reregistration of Paris Jade International.  He submits that the cost of “reactivating” his company was expected to be approximately $10,000.00 based on estimates given to him by O’Neill Partners.  Mr Dwyer contends that these fees would be made as a priority payment from the proceeds of successful litigation that was to be undertaken on behalf of Paris Jade International.  Mr Dwyer attempted to arrange for crucial documents in respect of the proposed litigation to be provided by his previous lawyer, Paul Harb, however, Mr Harb was not forthcoming with crucial documentation.  Months passed and no further work was done.

4. Mr Dwyer then submits the next event was his receiving of an invoice for $18,423.15 from O’Neill Partners for legal fees.  He was shocked and immediately expressed his disappointment to O’Neill Partners and his associates.  Mr Goldberg and Mr Silva, when shown the invoice, were also bewildered and contacted O’Neill Partners to express their concerns.  Mr Dwyer attempted to resolve the costs dispute, which he found very stressful and was compounded by his father going in and out of hospital for cancer treatment.  Mr Dwyer offered to pay by instalments and paid two of those, but failed to make any further payments.

5. During this period the Costs Assessment and Review of that Assessment also took place on Mr Dwyer’s application.  Mr Dwyer submits that incorrect statements were made by the assessors stating that he had paid for Paris Jade International’s reregistration, when it was Mr Goldberg who had.  Mr Dwyer then got legal advice to state that the costs assessments were performed incorrectly and failed to take into account his arrangement with O’Neill Partners that he would not be paying legal costs until resolution of litigation as he was unable to.  If he had had the funds available, he would have instructed a firm Sir Laurence Street had recommended, instead.

6. Mr Dwyer also submits that the liquidating advisory company that was engaged in respect of Paris Jade International has never invoiced him as they were subject to the same arrangement as O’Neill Partners.  Mr Dwyer is not able to currently pay the amount sought in the Petition and it would be terrible for him and his family if he were made bankrupt as a result of this.  He feels the actions of O’Neill Partners have been unconscionable and that his evidence validates that.

O’Neill Partners’ Submissions

1. O’Neill Partners accept that it is Mr Dwyer’s desire to have the Petition permanently stayed. Mr Dwyer was entitled to lodge an appeal against the decision of the Review Panel made on 27 March 2012 (see [5] above) in the District Court of NSW as of right on matters of law, pursuant to s.384 of the Legal Profession Act 2004 (NSW). Pursuant to s.385 of the Legal Profession Act 2004 (NSW), leave would need to be sought by Mr Dwyer to appeal against the decision of the Review Panel in the District Court of NSW on any other basis or bases.

2. Any appeal that was sought to be filed by Mr Dwyer in respect of the 27 March 2012 Decision of the Review Panel was required to be filed by 24 April 2012, being 28 days after the Decision of the Review Panel.  No such appeal was filed.

3. O’Neill Partners submit that the Notice of Opposition before the Court relies upon the same grounds put forward by Mr Dwyer in the application for review lodged by him on 28 December 2011 and addressed by the Review Panel in its reasons dated 27 March 2012 (Tab 7 of the Tender Bundle).  Mr Dwyer has not raised any new matter of law or put forward any new evidence in his Notice of Opposition that was not able to be provided by him in the costs assessment processes before the Assessor and the Review Panel.  Further, Mr Dwyer’s notice of motion seeking to have the Local Court of NSW Judgment founding the debt stayed were dismissed on 9 May 2013, with an order for Mr Dwyer to pay O’Neill Partners’ costs.

4. Accordingly, O’Neill Partners submit this Court cannot entertain the Notice of Opposition having regard to the failure by Mr Dwyer to lodge an appeal or application for leave to appeal in the District Court of NSW by 24 April 2012.  O’Neill Partners contend the Notice of Opposition should be dismissed and a sequestration order made against Mr Dwyer.

Consideration

1. Mr Dwyer informed the Court that he relied upon a number of affidavits which are identified at [3] above. Mr Stevens indicated that there was no objection to the reading of any of these affidavits. Consequently, that material was read into evidence. A review of that material, other than the Third Dwyer Affidavit, sets out various details of Mr Dwyer’s associates’ observations concerning the business operations of Mr Dwyer and his company Paris Jade.

2. The focus of that material concentrates on the failure of Mr Dwyer’s business operation due to a conflict with the Miss Universe Organisation and the subsequent loss of a number of contractual relationships with the Miss Universe winner, Jennifer Hawkins, after her one year exclusive contractual arrangement with the Miss Universe Organisation.  Paris Jade International Pty Ltd was placed in administration, but failed to trade out of its financial difficulties, resulting in its liquidation.  Mr Dwyer subsequently was made bankrupt, though the details of how that came about are unclear. though Mr Dwyer’s bankruptcy presumably came about as a result of his being a guarantor to that business venture. 

3. Mr Dwyer sought advice from various sources in an attempt to resurrect his business operation and pursue legal remedies against the Miss Universe Organisation.  Some arrangement was reached with Mr David Purcell of O’Neill Partners.  Mr Dwyer claims that this arrangement to pursue the Miss Universe Organisation was on the basis of a no win, no fee arrangement.  Mr Dwyer claims that there was no formal agreement executed between the parties setting out this arrangement.

4. This claim is at odds with the contents of the Tender Bundle that has been admitted into evidence without challenge.  Appearing behind Tab 1 is a letter, dated 27 May 2010, from O’Neill Partners to Mr Dwyer, in relation to the reinstatement of Paris Jade International Pty Ltd which is headed “Paris Jade International Pty Ltd – restoration of deregistered company”.  Within that document the following statement appears:

   Please note that Section 322(3) of the Legal Professional Act provides that “a costs agreement may consist of a written offer in accordance with sub-section (4) that is accepted in writing or by other conduct”.  Your oral acceptance or you given us further instructions in relation to this matter will constitute the other conduct and we will therefore take it that you have accepted the terms of that Costs Agreement.

   Accompanying that document is a standard costs agreement and a standard costs disclosure.  None of these agreements carry any signatures. 

5. Behind Tab 2 there is a facsimile transmission from Michael Stevens to “AMG”, subject Paris Jade International Pty Ltd (in liquidation) – 100133.  The body of the email states:

   Grant

   Please see attached O’Neill Partners correspondence with invoice dated 10 November 2010.

   Regards

   Michael Stevens

   The second document is a letter addressed to Mr Dwyer, indicating:

   …Tax Invoice for work done for the period 23 May 2010 to 30 September 2010, in accordance with our Costs Agreement…

   The email had attached an itemised tax invoice, listing the professional fees and disbursements due as $18,432.15.  The settlement terms were stated as being strictly 14 days. 

6. Behind Tab 3 there is an “Application by Legal Practice For Assessment of Costs”.  Behind Tab 4 is correspondence from the Supreme Court of NSW advising that the application for a costs assessment was filed in the Registry on 1 April 2011 had been referred to R. Mallik for costs assessment.  Behind Tab 5 is correspondence from the Supreme Court of NSW, attaching an Amended Certificate of Determination dated 24 November 2011.  That Amended Certificate of Determination indicates the costs Mr Dwyer was to pay to O’Neill Partners was the sum $18,263.15.  Behind Tab 6 is a Judgment/Order issued by the Local Court in case number 2011/00384875 ordering Mr Dwyer to pay O’Neill Partners the sum of $18,343.15.

7. The documents appearing behind Tab 7 of the Tender Bundle are the Statement of Reasons for Determination of Review and indicate that Mr Dwyer filed an application for review of the Costs Determination on 28 December 2011 that was subsequently referred to the Review Panel on 25 January 2012.  Within the body of that review statement under the subheading “Brief History of the matter” the Review Panel recorded that the total bill rendered to the review applicant was in the sum $18,432.15 and all work undertaken relates to an application for reinstatement of the company Paris Jade International Pty Ltd, which had been previously deregistered.  It notes that the application was successful, the work was completed on 3 September 2010 and the bill was issued on 10 November 2010.  Under the subheading “Grounds for Review” the Review Panel set out, in considerable detail, the claims advanced by Mr Dwyer as to his understanding of what work O’Neill Partners were performing on his behalf.  The initial instruction was the reinstatement of the deregistered company. 

1. There is clearly a divergence of view in Mr Dwyer’s mind as to what work he believed was being performed by Mr Purcell and what the Review Panel found was actually being undertaken at that time.  This is reflected at paragraph 4 of the “Grounds of Review” in the “Reasons for Determination of Review”, where it states:

   His agreement was “verbal with various witnesses - it was only ever based on a percentage success/ contingency arrangement.” 

   By email dated 22^nd June “re: Hawkins” of which the Review Applicant has provided a copy of his objections, on the subject “re: Hawkins”, the Review Applicant wrote to Mr Purcell “I am doing some signed letters for Michael… re: Directors and Shareholders…official requirements”.  This clearly was a reference to the Reinstatement Application which Mr Stevens was handling.  In relation to the Hawkins matter, My Dwyer has written “I just need to clarify exactly what % you/we receive based on a successful result.

   “I’m fine with 40% of the first 1 million settlement… ie $400K… given that there is a distinct possibility it will be resolved out of court.”

   Mr Purcell responded “Grant, it is too early to discuss % terms.  At this point we need to revive your company from ASIC slumber…those documents are critical to any decision by a third party to throw money at funding a claim against Jennifer Hawkins and perhaps others.  At this point, Yosse and myself have listened to your story and have been persuaded by you to invest more time to investigate whether there is a claim worth pursuing. 

   A third party funder will not discuss % terms with you, until the thunder has researched the case including having access to records via the Liquidator.  Obviously the terms will depend on the strength on the claim and the amount of money that might be recovered.  It is early days for that assessment to be made.  At this point we still need to persuade a Judge to restore the company.  When do you think you will have the materials requested by Michael ready?”

   It is clear that the two matters, the Reinstatement and the claim with respect to Ms Hawkins, were distinct matters.  Mr Stevens has handling the Reinstatement matter and the communication with Mr Purcell was with respect to some sort of contingency success arrangement, but it was not clear that this was with the solicitor as opposed to a “third party”.  Mr Purcell’s email clearly indicates that there was no contractual arrangement and no retainer in respect to the Hawkins matter at this point in time. 

   Further confirmation that the matter was treated separately is that once the company was reinstated a new file was opened by the solicitor and the file note indicates “all time now on new file which is spec file until we have identified case for claims and obtain funding.”  This confirms that the “proposed Hawkins” suit was to be speculative, as opposed to the Application to reinstatement of the deregistered company.  It also appears that consideration was being given to a third party litigation funder to assist with the litigation.

2. The Reasons for Determination of Review issued on 27 March 2012 affirm the original assessment.  Attached to the Reasons for Determination of Review is a Form 9 “Certificate of Determination of Costs, by Costs Review Panel” and a Form 11 “Certificate of Determination of Costs of Review.”

3. Behind Tab 9 of the Tender Bundle is a “Notice of Listing” letter sent by the Local Court of NSW in proceedings number 2011/00384875 for a notice of motion filed by Mr Dwyer to permanently stay proceedings (the sealed Notice of Motion and supporting Affidavit are also attached).  The attached Notice of Motion indicates that the orders sought were as follows:

   1. All enforcement proceedings based upon the judgment entered 2 December 2011 be permanently stayed.

   2. That all enforcement proceedings based upon the judgment entered 2 December 2011 be stayed pending the hearing of this Notice of Motion.

   3. Costs.

4. The Notice of Motion was dismissed on 9 May 2013, with orders that Mr Dwyer pay O’Neill Partners’ costs as agreed or assessed. 

5. On the material set out above, it is clear Mr Dwyer has unsuccessfully pursued an avenue of review in respect of the Judgment Order issued by the Local Court on December 2011 in proceedings 2011/384875 being the judgment debt founding the Bankruptcy Notice BN 3885 of 28 June 2012.  That Bankruptcy Notice founds the Petition currently before this Court.  There is nothing before the Court to suggest that the validity of the Bankruptcy Notice has been challenged.

6. In the Petition at [4] it notes:

   The respondent debtor failed to comply, on or before 27 July 2012 with the requirements of the bankruptcy notice served on him on 2 July 2012 or to satisfy the Court that it had a counter-claim, set-off or cross demand equal to or more than the sum claimed in the bankruptcy notice, being a counter-claim set-off or cross demand that it could not have been set up in an action in which the judgment referred to in the bankruptcy notice was obtained. 

   It should be noted that the date of the act of bankruptcy appears to be incorrectly stated in the Petition.  This is an error that can be amended and should occur before the Petition is heard.

7. The Notice of Opposition was not filed in this Court until 10 January 2013.  The desired outcome of that application was to set aside the Petition or for the Petition to be permanently stayed.  In support of that application, Mr Dwyer filed the First Dwyer Affidavit which states:

   1. The judgement entered on 2 December 2011 arises from the registration by the plaintiffs of a certificate of costs assessment that was issued in respect of legal costs allegedly incurred by the plaintiffs on my behalf. 

   2.  The agreement I made with the plaintiffs was an agreement to the effect that:

   a.  They would act on my behalf on a contingency basis, that I was at the time a bankrupt and in any event had no funds that I could use or access to pay legal fees;

   b.  If the proceedings were unsuccessful then no costs would be payable by me;

   c. If the proceedings were successful, then the plaintiffs would be entitled to charge full legal costs against me and recover from any verdict monies I received.

   3.  I have recently been served with a bankruptcy notice based on the judgment entered in this Court on 2 December 2011.

   4.  The question of my liability of the legal costs of the plaintiff have not been determined by a Court.

   5.  I wish to have the question of my liability of those legal costs determined by the Court and I will, on the first return of this notice of motion, ask the Court to fix a timetable for filing and serving the evidence in relation to the question of my liability of costs. 

8. It is clear the contents of the First Dwyer Affidavit have not been prepared in relation to proceedings before this Court, but have, in effect, been prepared for the purposes of Mr Dwyer’s Notice of Motion brought before the Local Court of NSW.

9. I acknowledge that Mr Dwyer is a self represented litigant, although in the past he has received various degrees of assistance from qualified legal practitioners.  On the material before the Court, it is apparent that Mr Dwyer has made an attempt to have the Judgment/Order issued by the Local Court on 2 December 2011 set aside or permanently stayed, but this action has been unsuccessful.  Also, there is evidence he has challenged the costs assessment issued by the Supreme Court of NSW, but this again has been unsuccessful.  It is not apparent that any other avenue has been pursued.  The contents of Mr Dwyer’s 9 January 2013 affidavit in support of his Notice of Opposition are an attempt to re-ventilate issues that were raised in the Notice of Motion before the Local Court.  It is not appropriate that this Court should entertain an application for a review of a Local Court decision, as that course of review lies with the District Court of NSW.

10. Although not specifically stated by Mr Dwyer, he is, in effect, requesting the Court to go behind the judgment of the Local Court and, possibly, the Costs Assessment and Review thereof.  Special circumstances must exist before a Court will go behind a judgment of a court in another jurisdiction and, significantly, it will not be done as a matter of course: Makhoul v Barnes (1995) 60 FCR 572 per Hill, Cooper and Branson JJ at 581. This will only occur in circumstances where there are substantial reasons for questioning whether the judgment that is relied upon by the petitioning creditor in reality establishes that a debt was due to the petitioner. The existence of these doubts was addressed by his Honour Sackville J in Burrell v Connell (1998) 48 FCR 383 where he said that the rationale for this approach is that the making of a bankruptcy order affects not merely the parties to the judgment, but the rights of all creditors. Having considered the material available in the Tender Bundle, I am satisfied that I should accept the Local Court judgment and the underlying Costs Assessment and Review thereof as satisfactory proof of the debt. Accordingly, I decline any invitation to go behind that judgment and assessment: Joosse v Commissioner of Taxation (2007) 66 ATR 236 per Ryan J at [15].

11. The substantial ground of opposition appears in [4]-[5] of the First Dwyer Affidavit (reproduced at [33] above). The events leading to the filing of the Petition have been traversed above, to which there is no contention, other than in respect of the purported no win, no fee arrangement between Mr Dwyer and O’Neill Partners. As Mr Stevens indicates in his written submissions, Mr Dwyer was entitled to lodge an appeal against the decision of the Costs Assessor (which includes the decision of the Review Panel) to the District Court as a right in respect of matters of law under s.384 of the Legal Profession Act 2004 (NSW). However, on the evidence before the Court, Mr Dwyer has elected not to pursue this avenue.

12. The Notice of Opposition and First Dwyer Affidavit do not make clear whether this is an avenue that Mr Dwyer intends to pursue in that jurisdiction or, alternatively, if he seeks to ventilate those matters in this Court.  Whatever his intention, it is not for this Court to advise Mr Dwyer what avenues of appeal he should pursue.  Notwithstanding, this Court does not have the power to undertake such a review.  Further, it is not appropriate to adjourn or stay these proceedings for the purposes of providing Mr Dwyer with an opportunity to pursue appeals in other jurisdictions which have not been commenced at the time when a creditor’s petition is before this Court.

13. The other order sought by Mr Dwyer is a permanent stay of the Petition which is advanced without explanation. Section 52(3) of the Bankruptcy Act 1966 (Cth) permits the Court to stay proceedings for a sequestration order for 21 days. The most common reason for seeking such an order is to permit the filing of an appeal against the order, but nothing has been advanced by Mr Dwyer to suggest that this is an avenue which he intends to pursue. It is noted that there is an exception to this provision for a stay of proceedings for a sequestration order which operates beyond the 21 day period identified in s.52(3), once a notice of appeal has been filed. There is a substantial body of authority to support this contention, but in these proceedings there is no evidence or even a suggestion of the existence of such an appeal. In the absence of such material there is little point in further exploring this avenue.

Conclusion

1. Consequently, the Notice of Opposition cannot be sustained and should be dismissed.  The Petition then ought to be referred back to a registrar of this Court for hearing.

I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of Judge Lloyd-Jones

Associate: 

Date:  13 September 2013