Satchithanantham v NAB Ltd
[2008] FMCA 940
•1 July 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SATCHITHANANTHAM v NAB LTD | [2008] FMCA 940 |
| BANKRUPTCY – Application to set aside bankruptcy notice – based on quantified indemnity costs order – no invalidity in notice – no reason to go behind judgment debt – no cross‑demand of any merit shown – application dismissed. |
| Bankruptcy Act 1966 (Cth), ss.40(1)(g), 41(7), 306 Civil Procedure Act 2005(NSW), ss.98(1)(a), 98(1)(b), 98(4)(c) Legal Profession Act 2004(NSW), s.353(1) |
| Glew v Harrowell of Hunt & Hunt Lawyers (2003) 198 ALR 331 Olivieri v Stafford (1989) 91 ALR 91 Opie v Opie (1951) 84 CLR 362 Re O’Sullivan; Ex parte O’Sullivan v Commonwealth Bank of Australia (1995) 57 FCR 145 Wren v Mahony (1972) 126 CLR 212 |
| Applicant: | THAMBIAPPAH SATCHITHANANTHAM |
| Respondent: | NATIONAL AUSTRALIA BANK LIMITED (ABN 12 004 044 937) |
| File Number: | SYG 1434 of 2008 |
| Judgment of: | Smith FM |
| Hearing date: | 1 July 2008 |
| Delivered at: | Sydney |
| Delivered on: | 1 July 2008 |
REPRESENTATION
| Counsel for the Applicant: | Applicant in person |
| Counsel for the Respondent: | Mr A Leopold SC |
| Solicitors for the Respondent: | Dibbs Abbott Stillman |
ORDERS
The subpoena issued on 25 June 2008 addressed to Danielle Catherine Kuti is set aside.
The application is dismissed.
The applicant must pay the respondent’s costs, including reserved costs, as agreed or taxed under the Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1434 of 2008
| THAMBIAPPAH SATCHITHANANTHAM |
Applicant
And
| NATIONAL AUSTRALIA BANK LIMITED ABN 12 004 044 937 |
Respondent
REASONS FOR JUDGMENT
(revised from transcript)
As with many matters in bankruptcy, this application comes before this Court as a further step in a maze of litigation involving Mr Satchithanantham. The evidence presented to the Court by both parties gives only glimpses of the litigation, and, when saying this, I mean no criticism of either party for limiting the amount of evidence which they have presented. I shall not myself attempt to explain all of the litigation or its background, but I note that more details can be found in the Supreme Court judgments to which I shall refer below.
Underlying Mr Satchithanantham’s present application to set aside a bankruptcy notice are proceedings in the Supreme Court taken by the National Australia Bank Limited (“the Bank”) as mortgagee over several properties whose ownership appears to have been that of Mr Satchithanantham’s sister, wife and son. The circumstances in which he did not have any relevant ownership rights in those properties are unclear to me, but they may relate to his being bankrupt at a previous time.
Supreme Court proceedings No. 15249 of 2005 involved the Bank’s claim for possession of at least one of the parcels of land. Mr Satchithanantham attempted to join that proceeding as a party. Exactly why he wished to be a party is not clear to me, but he brought repeated applications for his joinder, and then further applications to appeal and otherwise challenge the refusals of various Registrars, Associate Justices and Justices of the Supreme Court to allow him to be joined. He apparently felt that it was not sufficient that he was involved in the litigation as the helper of his wife and the other owners, nor that he could be a witness in the defences and cross‑claims pleaded against the Bank’s mortgagee claims.
The bankruptcy notice which Mr Satchithanantham now asks the Court to set aside was issued on 15 April 2008 at the request of the Bank. It relies upon an order made by James J on 12 December 2007, when ruling upon another motion by Mr Satchithanantham to join the proceeding. This occurred in the second round of litigation in which he had sought such an order. James J’s orders were as follows:
1.the motion filed by the applicant Thambiappah Satchithanantham on his own behalf and on behalf of Bramooth Satchithanantham dated 19 October 2007, be dismissed;
2.Thambiappah Satchithanantham pay the plaintiff’s costs of the motion filed by Thambiappah Satchithanantham dated 19 October 2007 and of the motion filed by the plaintiff dated 20 November 2007, in the sum of $10,000 inclusive of GST pursuant to section 94(4)(c) of the Civil Procedure Act 2005 on an indemnity basis within 28 days;
3.Thambiappah Satchithanantham be restrained from filing and serving any notice of motion and from making any oral application in these proceedings either on his own behalf or on behalf of Bramooth Satchithanantham without the leave of a judge of the Court;
4.if Thambiappah Satchithanantham does, without the leave of a judge of the Court, file or serve any notice of motion, the plaintiff shall not be required to attend at the return of the notice of motion, or to participate in proceedings upon the notice of motion unless a judge of the Court shall otherwise direct, and unless the Court shall think fit to give such direction, any such notice of motion shall be dismissed without being heard;
5.leave pursuant to order 3. is to be sought by written application setting out the full basis on which leave is sought and the full basis for the claim for relief with a copy of the proposed notice of motion;
6.no oral hearing will take place on the application for leave, which will be determined without notice to other parties, unless the judge otherwise directs.
There is before me one page of the transcript from 12 December 2007, when the orders were made. Clearly more was said on that day about the making of a costs order, and why it was made on an indemnity basis and was immediately quantified by James J. What the one page of transcript does make clear, is that his Honour applied his mind to what would be an appropriate, and it seems to me plainly modest, assessment of the Bank’s costs for a hearing extending over two days, and involving solicitors and counsel on the part of the Bank in proceedings of some complexity.
On an appeal by Mr Satchithanantham which was determined on 14 May 2008, the President of the Court of Appeal, with whom Handley JA agreed, gave short reasons for dismissing the appeal. He said:
MASON P: The goal of the applicant, Mr Satchithanantham, is to become a party in proceedings that are presently in the course of trial before McCallum J. The plaintiff is the National Australia Bank and the defendant is the applicant’s wife. The application to intervene and become a party in those proceedings was rejected initially by Sully J in 2006. There was an application for leave to appeal from that decision which was dismissed by Beazley and Tobias JJA.
A further application was made. It was claimed that it was on additional new grounds. The matter came initially before a Registrar and then Malpass AsJ and then before James J. He gave a decision on 12 December 2007 and it is from that decision dismissing Mr Satchithanantham’s appeal that this application is brought. His Honour concluded at para 19 of his reasons that he did not consider that Mr Satchithanantham had shown any new ground which had not already been considered by other judicial officers in one or other of the applications he had made. His Honour also considered the matter quite independently of the decisions of the other judicial officers and concluded that he was not satisfied that Mr Satchithanantham had discharged the onus of showing that he should be joined as a party.
In my view his Honour was entirely correct in that conclusion. To add Mr Satchithanantham as a party in the proceedings between the Bank and his wife would only serve to confuse the issues that are involved in those proceedings. Nothing we decide in this case affects Mr Satchithanantham’s capacity to be a witness in his wife’s proceedings or to assist his wife in those proceedings if permitted to do so by the primary judge.
Because there is no error in an interlocutory matter of practice and procedure I therefore propose that leave to appeal be refused and that the summons be dismissed with costs.
The appeal judgment contains further transcript of what was said at the time of delivering judgment. In this, Mason P made clear to Mr Satchithanantham that the Court of Appeal would not stay enforcement of James J’s order nor, indeed, its own costs order.
The present bankruptcy notice was issued on 15 April 2008 in relation to the $10,000 quantified costs order of James J. It does not claim any additional amount in relation to costs or interest, and does not rely upon other costs orders against Mr Satchithanantham.
There is in evidence before me further efforts by Mr Satchithanantham to “reopen” his appeal from James J’s orders. An application seeking to do this was filed on 29 May 2008, and was dismissed by Registrar Schell on 16 June 2008. The reasons for that dismissal do not appear in the evidence before me, but I would confidently infer that the application was not regarded as having any merit.
Mr Satchithanantham admits service of the bankruptcy notice on 14 May 2008 “in the court building” of the Supreme Court. In one of his documents, he challenges the legality of that service, but I accept the submission of the Bank that no defect in service occurred (citing Re O’Sullivan; Ex parte O’Sullivan v Commonwealth Bank of Australia (1995) 57 FCR 145 at 149E).
The bankruptcy notice therefore expired on 4 June 2008, subject to any automatic extension which might have arisen under s.41(7) of the Bankruptcy Act 1966 (Cth) upon the filing of the present application on 4 June 2008. Such an automatic stay comes to an end once the Court has addressed and determined the issue raised by s.40(1)(g), of whether it is satisfied that Mr Satchithanantham:
has a counter‑claim, set‑off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter‑claim, set‑off or cross demand that he or she could not have set up in the action or proceeding in which the judgment or order was obtained;
Mr Satchithanantham’s affidavits, his application, and his written and oral submissions to me today have raised a number of challenges to the bankruptcy notice, and also contends the existence of counter‑claims within s.40(1)(g).
In relation to the validity of the notice, he first contends that the bankruptcy notice is defective because, although para.2 refers to “a copy of the judgments or orders relied upon by the creditor is attached”, in fact only a single judgment or order was attached, being the order made and entered on 12 December 2007 which I set out above. Mr Satchithanantham contends that the plural reference in the bankruptcy notice was a formal defect which was irremediable under s.306 of the Bankruptcy Act.
I do not accept this submission. I accept the Bank’s submission that the bankruptcy notice followed the prescribed form in its use of plurals. I also accept that there was no misleading effect by reason of the bankruptcy notice having only a single judgment attached. In my view, there could have been no mistake by a recipient of the notice as to the debt relied upon, nor as to the judgment under which it was claimed to have arisen. If necessary, I would apply s.306 of the Bankruptcy Act.
A second challenge to the bankruptcy notice was that it was not based on a “final judgment or final order, being a judgment or order the execution of which has not been stayed”. Mr Satchithanantham contends that the order was “interlocutory” rather than “final” because the proceedings in which it was made, being the Bank’s possession suit and the cross‑claims in proceedings 15249 of 2005, have not yet come to an end.
However, Mr Satchithanantham’s involvement in those proceedings as a prospective party pursuant to his application for joinder did come to an end with the orders made by James J, and the subsequent upholding of those orders by the Court of Appeal. His right to become involved in the proceedings was in that sense “finally resolved”. In any event, the judgment resolved and quantified his liability to a final costs order in relation to an application he had brought in the Supreme Court. It “ascertained or established” a “previously existing liability” to the Bank imposed by James J in relation to its costs (cf. Opie v Opie (1951) 84 CLR 362 at 372). It was, in my opinion, in its own terms immediately enforceable, and was made pursuant to the Supreme Court’s express power to order the payment of a “specified gross sum instead of assessed costs” under s.98(1)(a), (1)(b) and (4)(c) of the Civil Procedure Act 2005 (NSW).
As an order for a “specified amount” of costs, it was excluded from the regime for assessing costs under the Legal Profession Act 2004 (NSW) (see s.353(1)). Mr Satchithanantham’s submission that it was not “final” until costs were assessed is, therefore, unsound.
A further challenge to the bankruptcy notice by Mr Satchithanantham is that it wrongly demanded payment from him of the full amount of costs awarded to the Bank, but that he should only have been required to pay one half of it, since his son, who apparently was also a party to the proceedings in some fashion, should also have been liable for the other half. The factual background to this contention is obscure on the evidence before me. However, the terms of the order quite plainly imposed the liability to pay the whole of the quantified indemnity costs solely upon Mr Satchithanantham.
Mr Satchithanantham’s last contention that the bankruptcy notice did not rely upon a “final judgment or order”, submitted that it could be subject to further attempts to be reopened by way of appeal to the Court of Appeal. However, the judgment of the Court of Appeal which addressed Mr Satchithanantham’s efforts to become a party to the possession proceeding, and which addressed this costs order, leads me to conclude that there is no prospect that the Court of Appeal will ever reopen that issue. There is no evidence that Mr Satchithanantham has sought special leave to appeal to the High Court.
In my opinion, the order made by James J is a final order which is immediately enforceable. There is no evidence of any stay on enforcement issued by the Supreme Court or any other Court, and in my opinion the judgment relied upon by the Bank satisfies the description of a final judgment able to support a bankruptcy notice under s.40(1)(g).
Mr Satchithanantham’s other submissions challenging the bankruptcy notice invited the Court to “go behind” the judgment debt arising from James J’s order. He sought to present evidence, and to conduct further investigations by way of invoking this Court’s subpoena powers, to challenge James J’s quantification of the indemnity costs in the amount of $10,000. He submitted that it was obscure how this amount was arrived at by his Honour, and that an investigation of the solicitors’ costings in this and other matters would allow him to prove that it was inappropriately quantified or was arrived at by abuse of process.
I have considered all his submissions in support of these contentions, and have read the evidence that he has presented to the Court attempting to give substance to them. However, I can find no substance whatsoever in his challenge to the quantification of the costs, such as would cause the Court to “go behind” the judgment by allowing an investigation of its merits. Indeed, I formed a clear opinion that it is appropriate for the Bankruptcy Court to rely upon the outcome of the appeal processes of the Supreme Court which have already been pursued by Mr Satchithanantham, and to decline Mr Satchithanantham’s applications seeking to “embark upon an inquiry as to what lies behind the judgment debt” (cf. Olivieri v Stafford (1989) 91 ALR 91 at 107). As I have indicated, those appeal processes have been fully explored by Mr Satchithanantham unsuccessfully, and I do not consider that any basis has been shown for this Court to exercise its “discretion” to go behind the judgment debt (see Wren v Mahony (1972) 126 CLR 212 at 224).
My doubts about this caused me to adjourn until the end of today’s hearing, my further consideration of objections raised by the Bank to a subpoena issued at the request of Mr Satchithanantham which was returnable today. It sought the production of records concerning solicitors’ costings and other matters relating to costs in various proceedings. A number of objections were taken by the Bank to the subpoena, but essentially it was submitted that it would be irrelevant to the application to set aside the bankruptcy notice, and oppressive on the Bank, for the Court to order the production of these documents, unless it was satisfied that there was a proper reason for going behind the judgment. As I have indicated, I have not been satisfied that a proper reason for going behind the quantification of the indemnity costs has been raised, and I therefore uphold the Bank’s objections to the subpoena. It follows that I would also refuse Mr Satchithanantham’s application for an adjournment to allow that material to be produced and examined by him.
I now turn to consider Mr Satchithanantham’s claim that, even if the costs order was final and immediately enforceable, he has a counter‑claim that he could not have set up in answer to it. Mr Satchithanantham has pointed to other proceedings which he has brought against the Bank and other parties in the Supreme Court. He referred to several such actions which are mentioned in the evidence before me.
However, I could find no evidence that any of them had achieved any success, or has even achieved any recognition that he has claims against the Bank of even arguable merit. I therefore invited Mr Satchithanantham to identify which of his actions in the Supreme Court had the most apparent merit. He identified a proceeding which he commenced in 2007 against the Bank in No. 6031 of 2007. In this proceeding, Mr Satchithanantham claimed unquantified damages “exceeding $1.4 million” from the Bank, and other relief concerning a property owned by his wife which had been mortgaged to the Bank. The Bank moved for it to be summarily dismissed or for the statement of claim to be struck out. Mr Satchithanantham moved for default judgment against the Bank. Both motions were addressed by Associate Justice Macready in a judgment delivered on 16 April 2008.
His Honour carefully examined the contents of the statement of claim, pointing to a number of difficulties, and also to aspects which suggested that Mr Satchithanantham was, in effect, attempting to litigate the causes of action which he had unsuccessfully presented to the Court as reason for his joinder to the mortgagee proceedings in relation to the same property. His Honour also pointed to other difficulties, and concluded:
25.In considering the Statement of Claim it is impossible to see sufficient material facts to give any basis for the claims made. Given the inability to perceive any material facts which might be some basis for a claim for damages or for the other claims for relief referred to in the Statement of Claim it seems to me that there is some basis disclosed for default judgment and there is reason why the Statement of Claim should be struck out and the proceedings not allowed to remain. I note that the Bank took care to write to the plaintiff explaining the difficulties before the proceedings were heard. The proceedings should be dismissed against the first defendant. Given that there is no case disclosed in the Statement of Claim the motion for summary judgment should be dismissed.
The last sentence of the above paragraph refers to Mr Satchithanantham’s motion for summary judgment against the Bank.
Macready AsJ delivered judgment on the same day in relation to another motion by the Bank to strike out proceedings brought by Mr Satchithanantham and his sister in a different action, No. 5597 of 2007. In his Honour’s view, the pleading in that matter suffering from similar vices, insofar as it made claims incorrectly assuming that Mr Satchithanantham had ownership rights in the relevant properties. His Honour dismissed the proceedings brought by Mr Satchithanantham, but his sister was given an opportunity to re‑plead her claims. As I have indicated, Mr Satchithanantham did not submit to this Court that the claims which he sought to present in that matter had greater substance or prospects than his claim in matter No. 6031 of 2007.
On the evidence before me, I am unable to detect any merit in either of these proceedings commenced by Mr Satchithanantham. Nor can I detect any merits in any other claim asserted by Mr Satchithanantham against the Bank, whether made in past, current or anticipated litigation.
Taking into account all of the evidence and submissions of Mr Satchithanantham seeking to persuade this Court that he has a cross‑claim as described in s.40(1)(g), I am entirely unsatisfied that such a claim exists within the tests set out in the authorities summarised by Lindgren J in Glew v Harrowell of Hunt & Hunt Lawyers(2003) 198 ALR 331. I am not satisfied that he has a “prima facie case” and certainly not any “fair chance of success” of recovering a sum exceeding $10,000 from the Bank, even in the sense that his Honour describes as being a claim “deserving to be finally determined”. Indeed, I am left with the impression that he will be incapable of ever presenting a claim which can be meaningfully understood, at least so long as he does not have the assistance of a lawyer.
I am therefore not satisfied that this Court has reason to set aside the bankruptcy notice on any of the grounds presented by Mr Satchithanantham, and I can see no purpose in further adjourning his application to set it aside.
I note that Mr Satchithanantham referred to his having a current application in the Supreme Court which is listed on 25 September 2008 before White J. This is a notice of motion which seeks obscure orders, apparently by way of challenge or appeal from Macready AsJ’s orders in matter 6031 of 2007. I have considered the contents of the documents filed by Mr Satchithanantham in support of that application, and in my opinion they do not suggest any prospect that he will obtain the reversal of the opinions arrived at by Macready AsJ, or his orders which terminated that proceeding. I do not consider that sufficient merit for that application has been shown to justify this Court postponing its further consideration of the application to set aside the bankruptcy notice.
For the above reasons, I dismiss the application. I do not consider that it is necessary to make a declaration as to my absence of satisfaction in terms of ss.40(1)(g) and 41(7), since this should be apparent from my above reasons.
I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of Smith FM
Associate: Lilian Khaw
Date: 21 July 2008
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