Re Gold, Patricia Isobel v The Proprietors - Units Plan No. 52

[1996] FCA 734

CATCHWORDS

APPEAL - appeal from the Supreme Court of the Australian Capital Territory - judgment debt - unpaid body corporate fees - bankruptcy - sequestration order - power to annul sequestration order - recovery of respondents' legal costs under s48 Unit Titles Act 1970 (ACT) - power of court to dismiss creditors' petition - ability of debtor to meet liability.

Bankruptcy Act 1966 (Cth), ss52(2), 153B
Unit Titles Act 1970 (ACT), s48
Small Claims Act 1974 (ACT), ss24, 29

ON APPEAL FROM A JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

PATRICIA ISOBEL GOLD v THE PROPRIETORS - UNITS PLAN NO. 52

No. ACT G17 of 1996

O'LOUGHLIN, HIGGINS and MADGWICK JJ
CANBERRA
24 JUNE 1996

IN THE FEDERAL COURT OF AUSTRALIA )
AUSTRALIAN CAPITAL TERRITORY     )  No. ACT G17 of 1996
DISTRICT REGISTRY                )
GENERAL DIVISION                 )

ON APPEAL FROM A JUDGE OF THE SUPREME COURT OF THE
 AUSTRALIAN CAPITAL TERRITORY

BETWEEN:PATRICIA ISOBEL GOLD

Appellant

AND:THE PROPRIETORS - UNITS PLAN

NO. 52

First Respondent

AND:     MR BARRY A TAYLOR
  TRUSTEE IN BANKRUPTCY

Second Respondent

O R D E R

CORAM:            O'LOUGHLIN, HIGGINS and MADGWICK JJ
PLACE:            CANBERRA
DATE:             24 JUNE 1996

THE COURT ORDERS THAT:

1. The appeal be dismissed with costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )
AUSTRALIAN CAPITAL TERRITORY     )  No. ACT G17 of 1996
DISTRICT REGISTRY                )
GENERAL DIVISION                 )

ON APPEAL FROM A JUDGE OF THE SUPREME COURT OF THE
 AUSTRALIAN CAPITAL TERRITORY

BETWEEN:PATRICIA ISOBEL GOLD

Appellant

AND:THE PROPRIETORS - UNITS PLAN

NO. 52

First Respondent

AND:     MR BARRY A TAYLOR
  TRUSTEE IN BANKRUPTCY

Second Respondent

CORAM:            O'LOUGHLIN, HIGGINS and MADGWICK JJ
PLACE:            CANBERRA
DATE:             24 JUNE 1996

REASONS FOR JUDGMENT

THE COURT: The history of this matter has been set out in previous decisions.  Higgins J endeavoured to do so on 16 October 1992 in the course of his Honour's decision on an appeal by Mrs Gold against a decision then said to be of Magistrate Dingwall in the Small Claims Court.  Mrs Gold now says that the decision was of Magistrate Somes, not Dingwall.

However, it clearly makes no difference which Magistrate it was who entered judgment against her.

The respondent body corporate had sued for body corporate fees then outstanding and interest thereon.  It sought also to be
reimbursed for legal costs it had incurred in recovering previously incurred and unpaid body corporate fees.

Mrs Gold's reason for refusing to pay body corporate fees is set out in that judgment.  Higgins J ruled that her grievance concerning the appointment of the managing agent gave rise to no legal entitlement to refuse to pay body corporate fees.

Whilst he held that the body corporate should not have judgment for the legal fees, he did leave the judgment in force to the extent of $2,134.00.

That judgment was not challenged by Mrs Gold.  There was an appeal to a Full Court of this Court by the body corporate against the refusal to allow the judgment to stand in relation to the legal fees.  In a decision dated 16 August 1993, the Full Court upheld that appeal and varied the judgment by increasing the amount thereof to $3,970.60.

Before then, however, on 3 August 1992, the body corporate, relying on the unchallenged judgment for $2,134.00 plus costs and interest, issued a petition seeking a declaration of bankruptcy against Mrs Gold.  The total debt due on the judgment as it then stood was $2,458.78.

The petition was heard by Neaves J on 21 June 1993.

Mrs Gold appeared and opposed the grant of the relief sought under the petition.  She refused, despite his Honour's urging, to face the legal issue involved.  That was that, whilst the judgment for, then, $2,458.78 remained unsatisfied, the body corporate was entitled to a sequestration order against her.

Her only expressed ground for opposition was her assertion that the members of the body corporate had acted unjustly and unlawfully at the meeting about which she had originally complained.  She called it the "phantom meeting".  It was the meeting at which the appointment of the body corporate manager had been recommended.  She also had complaints about certain actions, or lack of action, of the body corporate in relation to maintenance of the premises.

The issue as to the validity of the appointment, it should be noted, had already been litigated before Higgins J on 15 May 1992.  Mrs Gold's complaints were then found by Higgins J to be without legal foundation.

Nevertheless, Mrs Gold continued to refuse to accept that.

It is obvious that Mrs Gold will not recognise any legal rights but her own imagined rights.  She does not recognise the legal injustice her unreasonable and intransigent attitude has caused to the other members of the body corporate.

On the hearing of the bankruptcy petition, Neaves J, with commendable patience, listened to lengthy and irrelevant submissions from Mrs Gold before deciding to make a sequestration order against her.  There was no legal alternative open to him.

The present appeal is in respect of the dismissal by Finn J of an application by Mrs Gold to annul the bankruptcy.

Section 153B of the Bankruptcy Act 1966 (Cth) is the only source of power so to do. The power may be exercised only if,

... the Court is satisfied that a sequestration order ought not to have been made ...

Before Finn J, Mrs Gold complained of,

.the appointment of the managing agent back in 1985;

.the judgment against her for the legal costs incurred by the body corporate in recovering the sum of $1,369.55 for levies previous to those founding the debt upon which the bankruptcy position was based.

Mrs Gold has a view, to which we will later refer, that the body corporate was not entitled to recover legal costs under s48 of the Unit Titles Act 1970 (ACT) (UT Act) because of what she called "my 2.3.88 court order". That matter had nothing to do with the fact that the judgment for $2,134.00 plus costs and interest remained due and payable and was not challenged or open to challenge.

Mrs Gold also contended before Finn J that she was entitled to relief because the members of the body corporate had acted unjustly towards her and that entitled her to repudiate her obligations towards them.

Her alternative submission was that the claim under s48 UT Act was contrary to the "2.3.88 court order" and that this consideration, in some way only Mrs Gold can understand, taints the judgment for body corporate fees on which the sequestration order was based.

Mrs Gold says that she did not refer to the "2.3.88 court order" when before Finn J.  She now has sought to refer to it.

Contrary to Mrs Gold's contention, it is apparent that Finn J was well aware of the so-called order of 2.3.88.

Whether deliberately or otherwise, Mrs Gold has chosen to ignore the fact that the "2.3.88 court order" was an order against her.  It followed the dismissal of her counter-claim to the claim for payment of unpaid levies made by the body corporate.  She was ordered to pay the body corporate's legal costs of those proceedings.  It was ordered that such costs were "to be taxed".

Mrs Gold contends that, because the body corporate chose not to tax those costs but to recover its legal costs including,
presumably, the costs referred to in that order under s48 UT Act, the judgment for unpaid levies was "tainted". Whether this refers to the earlier judgment which she paid, or the judgment upon which the petition is founded, is not clear but I assume it to be at least the latter.

Simply to state the proposition demonstrates how untenable it is.  Granted that a Full Court has held that the body corporate was entitled to recover its costs in the way that it did, there is no legal basis for Mrs Gold to claim that she should not pay them.  She did not avail herself of any opportunity to challenge the reasonableness of the sums claimed.

Whether Magistrate Ward had power to order Mrs Gold to pay the costs of the proceedings before him is a moot point, see ss24 and 29 Small Claims Act 1974 (ACT). However, that is totally irrelevant.

It is irrelevant both because the judgment founding the sequestration order did not include any such costs and also because the entry of judgment for those costs since then has been held to be both proper and lawful.

Mrs Gold also referred to a comment made, she says, by Magistrate Somes, though the transcript and order referred to Magistrate "Dingwall", about the "splitting" of the claim for
levy fees and legal costs.  A tentative view was expressed that the claim ought not to be "split".

It is standard procedure on a summary judgment application that judgment be entered for part only of a sum claimed if part only is genuinely in dispute.  Insofar as Mrs Gold purports to interpret Mr Somes', or Mr Dingwall's, remark otherwise, her assertion is without foundation.  As it happened, Mr Somes (or Mr Dingwall) found no arguable case to exclude the claim for costs although the sum claimed for interest was reduced.

The complaint by Mrs Gold that the $1,839.00 for legal costs was split from the claim for levies, therefore, does not affect the validity of the judgment debt upon which the petition was founded.

It follows that there is no legal or factual basis for this appeal.  It should be dismissed with costs.

Despite her evidence intransigence, Mrs Gold is a beguiling character.  She gives the impression of a person of advancing years bravely and firmly standing on what she sees as a matter of principle.  Perhaps it is this, in part, as well as simply a generally conscientious approach to their work, which has been responsible for so many judges so carefully considering Mrs Gold's claims.  The attention which Finn J devoted to the
matter, for example, was evidently illumined with compassion.  There may or may not be some matter of moral principle ultimately involved in the homely dispute underlying all this litigation.  But no legal proceeding brought by or against Mrs Gold has furnished a legally appropriate occasion for the determination of that question.  This is not the fault of any court or judicial officer who has been involved;  neither is there even any reason, in this case, to think that the legal system itself is at fault.  In no legal system can every privately-held moral principle be vindicated;  and no legal system can accommodate those, like Mrs Gold, who simply will not accept, no matter how often courts tell them so, that their felt cause is without legal redress.

Mrs Gold should clearly understand that all her property may well be sold to satisfy the debts she has, without legal justification, imposed on her fellow unit holders.  They are entitled to recover such debts from her.  If that result follows, she has only herself to blame.

There is only one additional matter that might be mentioned for the sake of completeness. Under sub-s 52(2) of the Bankruptcy Act (1966) (Cth) the Court may dismiss a creditor's petition if the Court is satisfied by the debtor that she is able to pay her debts. Mrs Gold is the owner of a home unit; that much is apparent having regard to the nature of the dispute between her and her petitioning creditors. It might
therefore be thought tha she had assets of more than sufficient worth to pay a relatively small liability.  however, the value of her unit is not known nor indeed was there any information before the Court about her other assets (if any) and her other liabilities (if any).  There is a possibility that bankruptcy might have been avoided but this Court has been denied the opportunity, on each occasion when Mrs Gold has appeared before it, of making a proper assessment of her circumstances.  In particular, she did not given the Court an opportunity to determine whether she was able to pay her debts.

I certify that this and the preceding eight (8) pages are a true copy of the Reasons for Judgment herein of their Honours, Justice O'Loughlin, Justice Higgins and Justice Madgwick.

Associate:

Date:19 August 1996

PATRICIA ISOBEL GOLD v THE PROPRIETORS - UNITS PLAN NO. 52

No. ACT G17 of 1996

ON APPEAL FROM THE MAGISTRATES COURT

Counsel for the Appellant:   Self

Counsel for the first
respondent:                 No appearance

Instructing solicitors:     Clayton Utz

Counsel for the second
respondent:                 Mr G Walker

Instructing solicitors:     Hill & Rummery

Dates of Hearing:           24 June 1996

Date of Judgment:           24 June 1996