Pan v Macarthur Central Shopping Centre Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Pan v Macarthur Central Shopping Centre Pty Ltd [2023] FCA 1199  

Appeal from: Macarthur Central Shopping Centre Pty Ltd v Pan [2022] FedCFamC2G 1029
File number(s): QUD 10 of 2023
Judgment of: DOWNES J
Date of judgment: 11 October 2023
Catchwords: BANKRUPTCY AND INSOLVENCY – appeal against decision of Federal Circuit and Family Court of Australia (Division 2) (FCFCOA) dismissing application for review of sequestration order made by registrar – where summary judgment against appellant entered by District Court of Queensland – where appellant did not have legal representation at hearings in District Court and FCFCOA – where English is appellant’s second language – whether primary judge stated correct legal test – where appellant sought leave to advance new argument not advanced before primary judge – where appellant sought to contend that grounds existed for going behind judgment debt – appeal dismissed   
Legislation:

Bankruptcy Act 1966 (Cth)

Federal Court (Bankruptcy) Rules 2016 (Cth) r 7.05(2)
Cases cited:

Corney v Brien (1951) 84 CLR 343

Cumins v Deputy Commissioner of Taxation (2008) 172 FCR 425; [2008] FCAFC 185

Doggett v Commonwealth Bank of Australia [2019] FCAFC 19

Macarthur Central Shopping Centre Pty Ltd v Di Pan [2021] QDC 344

Macarthur Central Shopping Centre Pty Ltd v Pan [2022] FedCFamC2G 1029

Pan v Macarthur Central Shopping Centre Pty Ltd [2022] QCA 150

Ramsay Health Care Australia v Compton (2017) 261 CLR 132; [2017] HCA 28
Division: General Division
Registry: Queensland
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Number of paragraphs: 36
Date of hearing: 4 October 2023
Counsel for the Appellant: Mr M Taylor
Solicitor for the Appellant: Bell Legal Group
Counsel for the Respondent: Mr J Hughes
Solicitor for the Respondent: Allens

ORDERS

QUD 10 of 2023
BETWEEN:

DI PAN

Appellant
AND:

MACARTHUR CENTRAL SHOPPING CENTRE PTY LTD (ACN 119 813 795)

Respondent

ORDER MADE BY:

DOWNES J

DATE OF ORDER:

11 OCTOBER 2023

THE COURT ORDERS THAT:

1.The appellant has leave to amend the Notice of Appeal in accordance with the draft which is schedule 1 to the interlocutory application dated 20 September 2023, except for the inclusion of the proposed ground of appeal 2.

2.The following is admitted into evidence on the appeal:

(a)exhibit TME-2 to the affidavit of Timothy Myles Elliott affirmed 20 September 2023;

(b)affidavit of Julia Louise Egarr affirmed 25 September 2023.

3.The appeal be dismissed.

4.The respondent’s costs of the interlocutory application, and of the appeal, be paid with priority from the appellant’s estate.

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


REASONS FOR JUDGMENT

DOWNES J:

Relevant background

  1. The respondent as lessor, and the appellant as lessee, were parties to a lease of premises in MacArthur Central Shopping Centre, Brisbane, which commenced on 8 July 2016.  The respondent operated a hairdressing salon in that shopping centre.  That business experienced financial difficulties and the respondent terminated the lease on 30 June 2021.  The respondent then brought…

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Details
Case
[2023] FCA 1199
Decision Date

CaseChat Overview and Summary

In the case of Pan v Macarthur Central Shopping Centre Pty Ltd, the appellant sought to appeal a decision of the Federal Circuit and Family Court of Australia (Division 2) (FCFCOA) that dismissed an application for review of a sequestration order. The sequestration order was based on a judgment debt from a summary judgment entered by the District Court of Queensland against the appellant. The appellant, who had English as a second language, appeared unrepresented at the hearings in both the District Court and the FCFCOA. The legal issues in the appeal centred on whether the primary judge applied the correct legal test when deciding not to go behind the judgment debt, and whether the appellant could advance a new argument that was not presented in the primary judge's court.

The court found that no error of law was demonstrated by the primary judge in applying the legal test for going behind a judgment debt. The court noted that the primary judge considered not only evidence of fraud, collusion, or miscarriage of justice but also whether there were any special circumstances justifying such action. The court rejected the appellant's proposed new argument that grounds existed to go behind the judgment debt, as it was not supported by the evidence and would lack merit. The court emphasised that the appellant had the opportunity to present her case on its merits in the District Court and that there was no evidence of inadequate representation or misunderstanding of the legal process.

As a result, the appeal was dismissed with costs to be paid with priority from the appellant's estate. The court granted leave to amend the Notice of Appeal except for the inclusion of the proposed ground 2, which was deemed to lack merit. This decision underscores the importance of adhering to procedural requirements and the public interest in the finality of litigation.

Orders

Orders of the court

1. The appellant has leave to amend the Notice of Appeal in accordance with the draft which is schedule 1 to the interlocutory application dated 20 September 2023, except for the inclusion of the proposed ground of appeal 2.

2. The following is admitted into evidence on the appeal:

(a) exhibit TME-2 to the affidavit of Timothy Myles Elliott affirmed 20 September 2023;

(b) affidavit of Julia Louise Egarr affirmed 25 September 2023.

3. The appeal be dismissed.

4. The respondent’s costs of the interlocutory application, and of the appeal, be paid with priority from the appellant’s estate.

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

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

It follows that no error of law has been demonstrated and ground 1 fails.Whether grounds exist to go behind judgment debt (proposed ground 2) It was submitted by counsel for the appellant that:The motivating reason why we say that the judgment should be gone behind is because Ms Pan was a self-represented litigant with English as a second language who was simply not [equipped] to deal with the summary judgment procedure, let alone the nuances of questions such as… which category of Masters v Cameron this was, how principles of contractual interpretation should be applied to this scenario to ultimately come to an outcome… While it was accepted by the appellant that all relevant evidence was before the District Court judge, it was submitted that there were legal submissions that were not made that could have been made had the appellant been legally represented. However, leave will not be granted to include ground 2 in the Notice of Appeal in circumstances where: (1)The factual premise relied upon to go behind the judgment was not established by the evidence, for the reasons already explained.(2)To the extent that it might be inferred that the appellant did not know or appreciate the legal arguments that could have been, but were not, presented by her in the District Court, there was no evidence that the appellant did not understand that she could have had legal representation at the hearing in the District Court, or to explain why she did not have legal representation.(3)There was no explanation in the evidence as to why the appellant did not have legal representation before the primary judge to justify why she should now be permitted to advance the proposed ground 2 on this appeal (being an argument not advanced before the primary judge).(4)There is a public interest in the finality of litigation. A further reason for refusing leave to amend is that the proposed ground 2 lacks merit such that, were it permitted to be advanced, it would fail in any event.(1)The appellant accepts that the same case that she advances before this Court – that a binding agreement was reached with the respondent for her to pay a lesser sum – was advanced by her in the District Court.(2)As already observed, there is no satisfactory evidence which demonstrated that the appellant was unable to, or did not, present her case on its merits in the District Court proceeding.(3)This is not a case involving a consent judgment or a default judgment. On the contrary, the merits of the appellant’s case were tested in a contested hearing at which both parties appeared. All of the relevant evidence was before the District Court. The reasons of the District Court contain an analysis of the merits of the contention by the appellant that an agreement to pay a lesser sum was reached by reference to that evidence: see [17]–[20] DCJ.(4)That the appellant elected not to be legally represented in the District Court (unlike on this appeal) does not have the consequence that she has been deprived of presenting her case on the merits so as to justify going behind the judgment. A suspicion of inadequate representation is not of itself sufficient to give rise to a question worthy of investigation by a bankruptcy court: Ramsay at [71].(5)That there were additional arguments which could have been advanced by the appellant in the District Court, but were not, will not suffice to put in issue whether there “is in truth or reality” a debt upon which a person’s sequestration has been sought: see, generally, Doggett v Commonwealth Bank of Australia [2019] FCAFC 19 (Kerr, Davies and Thawley JJ) at [34].

Ratio Decidendi

Legal Principle Established

For the following reasons, leave will be granted to amend the Notice of Appeal in all respects except for the inclusion of the proposed ground 2 (to which objection was taken) and the appeal will be dismissed with costs to be paid with priority from the estate of the appellant.ConsiderationWhether legal error by the primary judge (ground 1) This ground relates to [8] J at which the primary judge stated:…At the time of the hearing before the Court, the respondent relied upon a number of affidavits, none of which disclosed any good basis for the Court going behind the judgment of the District Court of Queensland. There was no evidence of fraud, improper collusion or any other miscarriage of justice which had been made out in the respondent’s material. There was otherwise no special circumstance justifying this Court going behind the judgment of the District Court. The submissions made by the applicant were to the effect that the District Court judgment was wrong.(citations omitted.) The footnote to the proposition that “[t]here was no evidence of fraud, improper collusion or any other miscarriage of justice” cited Corney v Brien (1951) 84 CLR 343 at [356]–[357] (which I construe as a reference to Fullagar J’s reasons at pages 356 to 357) and Ramsay Health Care Australia v Compton (2017) 261 CLR 132 at [91]. In relation to this ground, the submissions of the appellant will be addressed seriatim. The appellant submitted in writing that the reasons in [8] J indicate that the test that the primary judge applied for going behind the judgment debt was whether there was any “evidence of fraud, improper collusion or any other miscarriage of justice”. However, that submission cannot be accepted, as the primary judge went on to state that “[t]here was otherwise no special circumstance justifying this Court going behind the judgment of the District Court” (emphasis added). The appellant submitted that the citations referred to in the footnote “demonstrate an error of law in taking too narrow a view of the Court’s discretion in this regard”. That was said to be because the citation to Ramsay at [91] is to the minority decision of Gageler J whereas a complete (and accurate) statement of the legal test which should have been articulated by the primary judge should have included a reference to the final sentence of Ramsay at [70] in which the majority (comprised of Kiefel CJ, Keane and Nettle JJ) stated that:The same concern [that is, that a sequestration order has been made which was based on a judgment that was not the outcome of rigorous processes of adversarial litigation] may also arise in a case where the judgment was obtained in circumstances which suggest a failure on the part of the judgment debtor to present his or her case on its merits in the litigation which led to the judgment. However, the final sentence in [70] of Ramsay does not form part of the legal test to be applied for the purposes of deciding whether to go behind a judgment debt such that the primary judge erred in law in not reciting it. It is an articulation of an example of a situation where a court might consider going behind a judgment debt, and needs to be read in the context of the discussion at [68]–[70] of Ramsay.