Renet v The Owner Strata Plan SP22143

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FEDERAL COURT OF AUSTRALIA

Renet v The Owner – Strata Plan SP22143 [2023] FCA 631  

Appeal from: The Owner - Strata Plan SP22143 v Renet [2022] FedCFamC2G 953
File number: ACD 58 of 2022
Judgment of: RAPER J
Date of judgment: 15 June 2023
Catchwords: BANKRUPTCY AND INSOLVENCY –  appeal from a decision of the Federal Circuit and Family Court of Australia dismissing an application for review of a Registrar’s orders – where Registrar made sequestration order against the estate of the appellant – whether “other sufficient cause” for why the sequestration order ought not be made – appeal dismissed
Legislation:

Bankruptcy Act 1966 (Cth) ss 43, 52, 52(1), 52(2), 52(2)(b)

Federal Circuit and Family Court of Australia Act 2021 (Cth) s 256(1)

Federal Court of Australia Act 1976 (Cth) s 27

Crimes Act 1900 (NSW) s 192E

Strata Schemes Management Act 2015 (NSW) s 85(5)
Cases cited:

BVZ21 v Commonwealth of Australia [2022] FCAFC 122

Emerson v Wreckair Pty Limited (1992) 33 FCR 581

Ex parte Kibble; In re Onslow (1875) LR 10 Ch App 373

Katter v Melhem (No 2) [2014] FCA 1176; 319 ALR 646

Olivieri v Stafford (1989) 24 FCR 413

Petrie v Redmond [1943] St R Qd 71

Ramsay Healthcare Australia Pty Ltd v Compton [2017] HCA 28; 261 CLR 132

Re Flateau; Ex parte Scotch Whisky Distillers Ltd (1888) 22 QBD 83

Re Riviere; Ex parte Original Mont de Piete Ltd (1919) 20 SR (NSW) 77

Toki v Minister for Immigration, Citizenship and Multicultural Affairs [2022] FCAFC 164

Totev v Sfar [2008] FCAFC 35; 167 FCR 193

Whiteman v Deputy Commissioner of Taxation [2022] FCA 975

Wren v Mahony (1972) 126 CLR 212
Division: General Division
Registry: Australian Capital Territory
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Number of paragraphs: 74
Date of hearing: 2 June 2023
Counsel for the Appellant: Mr Renet appeared in person
Solicitors for the Respondent:  Mr T Nicolaidis of Baker Deane & Nutt

ORDERS

ACD 58 of 2022
BETWEEN:

MARK RENET

Appellant
AND:

THE OWNER - STRATA PLAN SP22143

Respondent

ORDER MADE BY:

RAPER J

DATE OF ORDER:

15 JUNE 2023

THE COURT ORDERS THAT:

1.The appeal be dismissed.

2.If a costs application is to be made, within seven (7) days of the date of this judgment, any such application, any evidence in support of that application and written submissions (not exceeding two pages in length) which address the reasons why a costs order should be made, must be filed.

3.Any party opposing the costs application may, within fourteen (14) days of the date of this judgment, file any evidence in opposition of that application and written submissions (not exceeding two pages in length) which address the reasons why a costs order should not be made.

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


REASONS FOR JUDGMENT

RAPER J

  1. On 6 August 2021, a bankruptcy notice was served on the appellant, Mr Mark…

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Details
Case
[2023] FCA 631
Decision Date

CaseChat Overview and Summary

In this appeal, the appellant, Mr Renet, sought to challenge the decision of the Federal Circuit and Family Court of Australia (FCFCOA) which dismissed his application for review of a sequestration order. The sequestration order was made against Mr Renet's estate by a Registrar of the FCFCOA, following a creditor's petition by The Owner Strata Plan SP22143. The key legal issues before the court were whether the primary judge erred in law or failed to consider relevant material in dismissing Mr Renet's application for review and whether there was "other sufficient cause" for the sequestration order not to be made under section 52(2)(b) of the Bankruptcy Act 1966 (Cth).

The court examined the submissions made by Mr Renet, which primarily revolved around a dispute regarding the judgment debt and his contention that a settlement agreement precluded the judgment debt. The court found that Mr Renet's claims lacked substance as there was no appeal or application to set aside the judgment debt, and he had been legally represented during the proceedings that led to the judgment. The court also noted that the figures presented by Mr Renet were not reconcilable. In dismissing the appeal, the court held that Mr Renet had not demonstrated any legal, factual, or discretionary error in the primary judge's decision. The court emphasised that the primary judge's evaluation of whether there was "other sufficient cause" was not subject to the correctness standard but rather required demonstration of miscarriage.

Consequently, the appeal was dismissed. If a costs application is to be made, the parties must file their submissions within the specified timeframes. The court did not make a costs order at this stage but provided a procedural guideline for future costs applications.

Orders

Orders of the court

1. The appeal be dismissed.

2. If a costs application is to be made, within seven (7) days of the date of this judgment, any such application, any evidence in support of that application and written submissions (not exceeding two pages in length) which address the reasons why a costs order should be made, must be filed.

3. Any party opposing the costs application may, within fourteen (14) days of the date of this judgment, file any evidence in opposition of that application and written submissions (not exceeding two pages in length) which address the reasons why a costs order should not be made.

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

Background

Background to the litigation

Mr Renet applied for a review of the sequestration order made by the Registrar under s 256(1) of the Federal Circuit and Family Court of Australia Act 2021 (Cth). Mr Renet attended the hearing of his application on 19 August 2022, made submissions and was permitted to file further submissions after the hearing. On 16 November 2022, the FCFCOA made orders dismissing the application for review with costs: The Owner – Strata Plan SP22143 v Mark Renet [2022] FedCFamC2G 953 (J). Mr Renet now appeals from those orders. Background At an early case management hearing in this matter, I ordered that the Strata Plan file all documents that were before the primary judge. It is upon my review of those documents that I note the following background facts. On 8 June 2021, the Local Court of New South Wales ordered that Mr Renet pay the Strata Plan $12,365.19 (the Judgment Debt). The debt arose from Local Court proceedings No. 2020/00252979. On 5 August 2021, a bankruptcy notice was issued for the amount of $12,487.11, to which Mr Renet did not comply. On 2 February 2022, the Strata Plan filed a creditor’s petition applying to the FCFCOA for a sequestration under s 43 of the Bankruptcy Act 1966 (Cth) against the estate of Mr Renet with respect to the Judgment Debt. On 25 March 2022, a Registrar of the FCFCOA, made orders for the hearing of the creditor’s petition to be adjourned until 27 May 2022. Mr Renet was not in attendance when the Registrar made those orders. The Registrar made orders that Mr Renet be notified by representatives of the Strata Plan of the hearing date. There was evidence before the primary judge that Mr Renet was informed, by email, dated 25 March 2022, at 2:12pm of the hearing being adjourned until 11am on 27 May 2022. On 27 May 2022, a Registrar of the FCFCOA made a sequestration order against the estate of Mr Renet, and ordered the creditor’s cost fixed in the sum of $8,172.47 be paid from his estate. Mr Renet did not attend. There was evidence from Mr Renet that attempted to dial in unsuccessfully to the hearing. The Strata Plan made a submission to the primary judge that it appeared from Mr Renet’s evidence of call logs that he dialled into the incorrect number. Proceedings before the FCFCOA On 31 May 2022, Mr Renet filed an application for review on 31 May 2022 in relation to the orders made by the Registrar on 27 May 2022, and sought the following orders: Details of orders sought to be reviewed 1. A sequestration Order against Mark Renet.2. Applicant creditors [sic] costs fixed sum [sic] $8,172.47 of respondent debtor.Orders sought 1.Cancel judgment to hear matter of defendant 2.“As above [sic]-(see orders sought 1). (Emphasis in original.) As noted by the primary judge, Mr Renet sought the following relief (at J[7]): By way of apparent relief and in response to that part of the Application entitled “terms of the Order(s), Mr Renet stated: “Re list hearing” and “To re list hearing to address matter with all parties.”

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

As the primary judge understood it, Mr Renet’s “regular complaint (made primarily in open court as opposed to his written submissions)” was as follows: The judgment debt 29 Although not formalised, Mr Renet’s regular complaint (made primarily in open Court as opposed to in his written materials) related, in part, to the judgment debt in the Queanbeyan Local Court, which ultimately led to the bankruptcy proceedings and the sequestration Order. In relation to the judgment debt, I note that:(a) The judgment was never appealed or Application made to set it aside;(b) In his own submissions, Mr Renet confirmed that he was legally represented, at least for part of the litigation that resulted in the judgment debt (as noted below, he claims a significant sum, apparently by some sort of “cross-claim” arising from these legal fees); and (c) Mr Renet regularly contended that a “settlement” between the parties regarding strata fees precluded the judgment debt standing.30 The formulation of Mr Renet’s contention, set out in the preceding sub-paragraph (c), is drawn from an annexure to his Affidavit, filed 22nd July 2022, described as “Item 1 – Settlement”. This document, dated 4th April 2017, purports to reflect a settlement between the parties at that time regarding outstanding strata fees.31 In the other Annexures to his Affidavit (all described as “Item” followed by a number), there is something of a history, and at other times, a conflation, of contest between the parties invariably over payment of strata fees by Mr Renet. For example, there is correspondence between Mr Renet and his then lawyer (Mr O’Keefe), dated 2nd September 2016, regarding him requiring legal representation concerning a civil matter (seemingly, again, over strata fees) and some criminal matter that Mr Renet alleges against the Strata Manager of the property in which Mr Renet’s unit is located. He contended in this correspondence that there had been a fraud perpetrated against him, which would result in the Strata Manager (or others involved) in being liable for imprisonment for 10 years.32 Another annexure (described as “Item-5 Failed record of accord”) is described as “Owner ledger from 1/1/15 to 20/7/22”. Mr Renet is recorded as the “owner” of Unit 7 in the property complex. This document has obviously been produced (and provided) by the Strata Managers of the property, Civium Property Group. The final entry on this document shows a debit balance of $19,073.80 (at 1st April 2022) as the amount of strata fees owing by Mr Renet. The outstanding amount includes interest. This ledger statement records that, the “opening balance” as at 1st January 2015 was $0. As at 27th May 2015, the debit balance was $9,144.75; and as at 30th May 2021, the balance owing by Mr Renet for strata levies totalled (with interest) $14,773.51. I recall that the judgment debt of $12,365.19 was entered on 8th June 2021.33 Two other annexures to Mr Renet’s Affidavit should be noted. First is an Affidavit of Ms Park, filed in the current proceedings on 21st June 2022. Mr Renet contends that this Affidavit is “false.” I consider this Affidavit below.34 The second annexure to note here is “Item 8”, being an Affidavit of Mr Renet, filed in this proceeding, on 20th July 2022. This earlier Affidavit of Mr Renet has annexed to it what purports to be an Invoice (dated 15th July 2022), addressed to “Strata Plan 22143, Civium …” This invoice seems to claim “legal fees” he has incurred of $9,000.00, together with what seems to be his assessment of levies due, but notably with no component of interest for outstanding levies.35 According to his written submissions, Mr Renet then contends that when one takes account of the 2017 settlement, his legal fees, and the outstanding strata fees (apparently without interest), the only amount due and payable by him is $447.10, which seems to cover the period up to 1st November 2022. As an observation only, the figures set out in his written submissions and those set out in his “Invoice” recorded above do not “add up”, that is, they are not readily reconcilable.36 For the reasons set out above, the oral submission by Mr Renet on 19th August 2022 that there was some kind of deficiency regarding the judgment debt that was entered in the Queanbeyan Local Court on 8th June 2021, has no substance. No evidence was provided to support this assertion. And as already recorded, there was no appeal from that judgment, or Application to stay it or to set it aside.

Ratio Decidendi

Legal Principle Established

The Strata Plan sought orders dismissing the appeal and requiring Mr Renet to pay its costs on an indemnity basis.Consideration The nature of an appeal of this kind was recently described in a fulsome way by Wheelahan J in Whiteman v Deputy Commissioner of Taxation [2022] FCA 975 at [61]–[63] as follows: 61 This appeal comes before me as a single judge exercising appellate jurisdiction pursuant to the Federal Court of Australia Act 1976 (Cth), s 25(1AA)(a). The appeal is by way of re-hearing, in which the primary judge enjoyed no relevant advantage over this court. However, unlike the review that was before the primary judge, the appeal to this court is not a re-hearing de novo. The court’s powers on appeal are engaged only if, upon this court considering for itself the evidence and other material that was before the primary judge, some legal, factual, or discretionary error is demonstrated in the orders that were made: Allesch v Maunz [2000] HCA 40; 203 CLR 172 at [23] (Gaudron, McHugh, Gummow and Hayne JJ).62 For the purposes of the demonstration of error on appeal, the engagement of s 52(2)(b) of the Bankruptcy Act involves two related levels of decision-making. The first is whether the primary judge was satisfied that there was some “other sufficient cause” for which a sequestration order ought not be made. This does not involve the evaluation of facts and circumstances against some legal norm: cf, Dwyer v Calco Timbers Pty Ltd [2008] HCA 13; 234 CLR 124 at [40] (Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ); Templeton v Australian Securities and Investments Commission [2015] FCAFC 137; 108 ACSR 545 at [23] (Besanko, Middleton and Beach JJ). Rather, it is the type of decision to which Mason and Deane JJ referred in Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513 at 518, which calls for value judgments in respect of which there may be room for reasonable differences of opinion, no particular opinion being uniquely correct. See also, Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; 264 CLR 541 at [43]-[49] (Gageler J). Because the powers on appeal are exercisable only upon the demonstration of error, the primary judge’s evaluation of whether there was “other sufficient cause” for the purposes of s 52(2)(b) must be shown to have been wrong. Error is not shown merely by persuading an appellate court to make a different evaluation, which may be no better than the first: see, Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 211-212 (Mason CJ, Deane and McHugh JJ), and the approval of the comments of Kirby P in Golosky v Golosky (unreported, NSW Court of Appeal, 5 October 1993). The second and related level of decision-making is whether upon the judge being satisfied of some “other sufficient cause”, the court should in the exercise of its discretion dismiss the petition: Endresz v Australian Securities and Investments Commission (No 2) [2015] FCAFC 33; 228 FCR 334 (Endresz) at [34], [37] (Edmonds, Gordon and Beach JJ).63 Therefore, in relation to this appeal from the decision of the primary judge to the extent that it challenges the judge’s rejection of the appellant’s claim that the power under s 52(2)(b) should have been exercised to dismiss the petition, the principles essayed in House v The King [1936] HCA 40; 55 CLR 499 at 504-505 apply, such that it must be demonstrated that the decision miscarried. Within those principles, the correctness standard applies to any challenge on appeal to the legal principles that were applied, or to findings of material fact upon which the evaluation took place, but not to the primary judge’s evaluation, or to the exercise of the statutory discretion. The principles in House v The King also apply to the appellant’s challenge to the primary judge’s discretionary decision to fix the review for hearing. If the court is satisfied that error is established, then in a case such as the present where the primary judge enjoyed no relevant advantage over this court, the court may proceed to make its own findings and evaluative conclusions, and formulate its own reasoning: Robinson Helicopter Company Inc v McDermott [2016] HCA 22; 331 ALR 550 at [43] (French CJ, Bell, Keane, Nettle and Gordon JJ). (Emphasis added.)