Schepis v Esanda Finance Corporation Ltd
[2006] FMCA 905
•14 June 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SCHEPIS & ANOR v ESANDA FINANCE CORPORATION LTD | [2006] FMCA 905 |
| BANKRUPTCY – Bankruptcy notice – incorrect spelling of debtors name and other confusion – whether sufficient to void bankruptcy notice – basis upon which a court should look behind a judgment. |
| Bankruptcy Act1966 |
| Wren v Mahoney (1972) 126 CLR 212 Oliveri v Stafford (1989) 24 FCR 413 |
| Applicant: | ANTHONY AND MICHELE SCHEPIS |
| Respondent: | ESANDA FINANCE CORPORATION LTD ACN 004 346 043 |
| File number: | BRG343 of 2006 |
| Judgment of: | Coker FM |
| Hearing date: | 14 June 2006 |
| Delivered at: | Townsville |
| Delivered on: | 14 June 2006 |
REPRESENTATION
| Solicitors for the Applicants: | Self represented |
| Solicitors for the Respondent: | Kemp Strang |
ORDERS
That the application to set aside the bankruptcy notice filed on 30 May 2006 be dismissed.
That the Applicants pay the Respondent’s costs fixed in the sum of $250.00.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT TOWNSVILLE |
BRG343 of 2006
| ANTHONY AND MICHELE SCHEPIS |
Applicants
And
| ESANDA FINANCE CORPORATION LTD ACN 004 346 043 |
Respondent
REASONS FOR JUDGMENT
The application that is before me at this time is one brought by Anthony and Michele Schepis. They are the recipients of a bankruptcy notice, issued by Esanda Finance Corporation Ltd. The application that I am asked to deal with today is an application to set aside the bankruptcy notice, but also to take some further steps in relation to the proceedings and, in fact, the judgment upon which it is said the bankruptcy notice is based.
The orders that are sought by the applicants are in these terms:
1.That the bankruptcy notice number NN1953 of 2005, which was served on me on May 9 2006 be set aside. A copy of that bankruptcy notice accompanies this application.
2.Costs and disbursements.
Orders 3, 4, 5 and 6 then go on to request that the Court, dismiss the original judgment of the local Court after consideration of evidence produced in relation to same, based on what is suggested is fraud, collusion and/or a miscarriage, before the local Court.
Assuming that that particular step is taken in relation to the matter, there are then further orders sought with regard to the repayment of costs incurred in relation to all proceedings over the years and, in fact, these proceedings stem back to dispute between the applicants and respondents in 1992, or early 1993.
Additionally orders are sought with regard to refunding of moneys that the applicants say have been paid to the respondents, in relation to the original judgment, and an award of exemplary damages for the conduct of the respondent during the course of the proceedings since 1993. Esanda Finance Corporation Ltd, oppose the application.
The basis upon which the bankruptcy notice is contested is explained in the affidavit of Anthony Schepis, the husband, if I can describe him that way, being the applicant who has sworn the affidavit in support. It is purported or suggested by Mr Schepis that the bankruptcy notice is a confusing, misleading or incomplete document and that it gives rise to a basis upon which there should be, at least at this time, a discharge of the bankruptcy notice, for the purposes of the application before the Court.
The original bankruptcy notice which was prepared in relation to the proceedings, is dated 21 June 2005. It relates to a judgment apparently obtained by Esanda Finance Corporation Ltd against Mr and Mrs Schepis. The certificate of judgment, attached to the bankruptcy notice, being file number 4673 of 2004, is in these terms:
In this matter, the plaintiff recovered judgment against the defendant on 7 May 2004 in the sum of $40,211.91.
It then goes on to prescribe interest pursuant to the provisions of s.91(1) of the Supreme Court Act 1970. Costs were also the subject of the determination, but no specific order for costs was given in relation to the proceedings.
The confusion that, at least in the first instance, is suggested by the applicants to arise, comes from the fact that the document from the local Court in Sydney, New South Wales, refers to the judgment creditor as Esanda Finance Corporation Limited ABN 64 004 346 043 and judgment debtor, Anthony Schepis and Michele Schepis.
As I said, the actual judgment, or declaration in relation to the matter of costs, however, refers to the plaintiff and the defendant. The applicants here say that that is the first ground upon which it could properly be suggested that there is confusion. The second ground upon which it is suggested that there is confusion arising, relates to the extension of the bankruptcy notice, issued by the Insolvency and Trustee Service of Australia.
The confusion that is said to arise, comes from the fact that there are actually two extensions of bankruptcy notice, apparently under the hand of the Insolvency and Trustee Service of Australia. They are dated respectively, 12 December 2005 and 14 December 2005, and each has been attached to the bankruptcy notice to which I have already referred, on an occasion when it was served or alleged to have been served upon the applicants in these proceedings.
Each of those extensions of bankruptcy notice, refer to the debtors, Anthony Schepis and Michele Schepis. The references in that regard include the spelling of Mrs Schepis's first name with two “l”s, in other words ‘M-i-c-h-e-l-l-e’. The material before the Court at this time clearly shows that the correct spelling of the first name of Mrs Schepis, is Michele with one l, ‘M-i-c-h-e-l-e’.
The explanation given in relation to that particular aspect of the matter, is simply that the judgment which has been issued by the local Court is in the name of Michelle, with two “l”s, and that it would be improper and incorrect, therefore, to issue a bankruptcy notice in relation to a claim upon a basis that it was a different spelling of the name, of the judgment debtor.
As I say, there are therefore a number of matters that need to be addressed. The first of those relates to the spelling of the names and the issue of whether there is any confusion that arises as a result of the use of the term, "plaintiff" and "respondent", as well as, "debtor" and "creditor".
There is also an issue then, in relation to the dates which attach to the extensions of the bankruptcy notice by the Insolvency and Trustee Service of Australia and finally, the issue relating to the spelling of the name of Mrs Schepis.
In one respect, there is obviously a basis upon which a concern can arise on the part of the applicants. They suggest that there is confusion in relation to the claim with regard to the debt and, of course, a certain lack of professionalism, if I can describe it that way, in relation to the spelling of the name of Mrs Schepis.
What is clear from the indications that were given to me before the Court today, however, is that there appears to have been some vacillating in the use of the name Michele or, at least, its spelling. The indication given from the Bar table by Mr Schepis, and I accept it as being correct, is that there were occasions when affidavits were prepared for one or other of he or his wife, by legal representatives at the time, and that there was an incorrect spelling of the first name of Mrs Schepis, which was indicated to the solicitors.
Rightly or wrongly, and one would think in the circumstances wrongly, the indication given to them was that there was no confusion or difficulty that arose in relation to the spelling of the name and it seems that that has been perpetuated through the last 13 or 14 years by the fact that some documentation is in the name Michele with one “l”, and other documentation is in the name of Michelle, with two “l”s.
I would find that there is clearly no basis on that particular aspect of the matter upon which there could properly be a finding of confusion as to the parties involved in the proceedings or the obligations that might arise, pursuant to the judgment of the local Court.
The other factors, however, are a little more concerning in relation to determination. It is unclear why there are two extension of bankruptcy notices, both purporting to relate to the period 21 June 2005 to 21 June 2006, but dated respectively 12 and 14 December 2005. It is also somewhat perplexing that a matter of only two days in difference, in the issued dates, results in different letterheads being utilised by the Insolvency and Trustee Service.
The fact is, however, that the debtors, the creditors and the dates in relation to the issue of the notices and the extension dates, remain the same. Whilst it is certainly disturbing that there are two extensions of bankruptcy notice, I am not satisfied that they give rise to a concern in relation to their legitimacy or, in fact, a basis upon which there could be confusion held by the applicants in this matter, as to what was expected on the part of them, at least by Esanda Finance Corporation Limited.
I find that there is not a basis upon which the bankruptcy notice should therefore be discharged in relation to the dates shown on the Insolvency and Trustee Service Australia extensions of bankruptcy notice or the fact that the two documents, purporting to be extensions of bankruptcy notices, are issued on apparently different letterheads.
The third matter to be considered is that which was described to me as most confusing of all, that being the fact the judgment refers to a judgment creditor and judgment debtor but then goes on to refer to the costs and judgment debt, as between the plaintiff and the defendant.
It is suggested on the part of the applicants, that there is a degree of confusion that arises, specifically as a result of that particular aspect of the matter. The extensions of the bankruptcy notice and, in fact, the bankruptcy notice itself, refer to debtor and creditor whilst the judgment that has been issued refers to the judgment in favour of the plaintiff, against the defendant.
Perhaps some reduction in relation to the confusion that might arise in that regard, is given by the fact that the certificate of judgment, which has been issued by the local Court in New South Wales, refers to the judgment creditor and the judgment debtor and the certificate which follows on from the terms of the judgment says:
I certify that the above is a true and correct copy of the entry of the abovementioned judgment in the records of this matter.
It then goes on to indicate that Esanda Finance Corporation Limited are the plaintiff who has sought the issue of the certificate, in relation to the proceedings.
While the Court must always be mindful of the need for there to be accuracy and specific delineation of all parties in relation to proceedings, it is clear that the issue of the certificate of judgment from the local Courts, is in a form approved by the New South Wales legislation or the rules of Court, in New South Wales.
Whilst it is of some concern that there is reference to judgment creditor and judgment debtor in the documentation and yet the judgment itself is as between plaintiff and defendant, it is, in my view, not so confusing or distressing in relation to proceedings, that the applicants could not or would not be aware again of the parties involved in relation to the proceedings and the obligations that arise, in relation to same.
I am not satisfied, therefore, that there is a basis upon which it would be proper for the bankruptcy notice, number NN1953 of 2005, to be set aside. Accordingly, of course, what flows from that is that there should not either be an order made in relation to costs.
It is not technically necessary therefore, for me to consider the additional aspects of the application sought by the applicant. I did, however, take the opportunity to adjourn and to consider at greater length the affidavit that was filed in support of the proceedings previously before the Court, being proceedings number BRG 069 of 2006.
I was referred, understandably, by Mr and Mrs Schepis, to the powers of this Court, in relation to going behind a judgment. There is a very specific reason why that power is there and it is set out in the judgment of Wren v Mahoney (1972) 126 CLR 212 at 234, where it is indicated that the very nature of a sequestration order and the effect of the sequestration order upon all of the financial particulars and rights of a party, are such, that there should be a serious consideration of the effect upon the rights of the applicants, as they are in this case, in the event of there being a concern raised with regard to the judgment.
There has been an extremely lengthy history, in relation to the proceedings between the applicants and the respondents in this matter. It would seem that for about 14 years, there has been dispute as between the two of them and, no doubt, a degree of acrimony has arisen. I accept without hesitation that Mr and Mrs Schepis are people of credit and responsibility and that in the operation of their business and their business dealings, they have acted in an appropriate manner and, as Mr Schepis submitted to me, paid their debts when they became due and owing.
There are a number of matters of concern that are raised by the applicants in relation to the conduct of this matter, such that they would suggest in their material, that there has been fraud, collusion or a miscarriage of justice in relation to the obtaining of the judgment against them.
What is also clear, however, is that they were represented, in relation to all such proceedings. As I indicated during submissions, there is a power in relation to this Court going behind the judgment, but there are two distinct bases upon which a Court would properly do so. If you like, the first and more common situation, though not occurring very regularly, is where a judgment has been obtained by default.
That is not the case here. What occurred, as I understand the submissions and the reading of the material, was that the representation that the applicants had was such that they were not able, from their perspective, to fully present or to put their case in relation to the dealings as between themselves and Esanda Finance Corporation Ltd. It was not, therefore, a default judgment, but one that arose as a result of what the applicants say was the defective representation provided to them, in relation to such proceedings.
In the decision of Oliveri v Stafford (1989) 24 FCR 413, it was clearly indicated that there are two distinct situations in which a Court would approach a suggestion, that they should go behind a judgment. If a judgment is obtained on the merits, rightly or wrongly arising from the representation of one party or the other, it would be normal, it was suggested, for a Court to decline to go behind the judgment unless it could be shown that it was obtained in circumstances that involved fraud, collusion or a miscarriage of justice.
As I say, I have taken the opportunity again of reading the affidavit of Mr Schepis, filed in relation to these proceedings and have also taken the opportunity to go through a number of the annexures that are attached to the documentation. There are suggestions raised by Mr and Mrs Schepis in relation to this matter that the documentation relied upon by Esanda, in respect of the proceedings, have been tampered with, improperly dealt with or in some way inappropriately changed, to the detriment of them in relation to their case.
What is clear is that those matters, if they were able to be proven, should have been before the Courts exercising its jurisdiction in relation to civil matters. I am not prepared, on the basis of the allegations that are made by the applicants in relation to these proceedings, to set aside or to rehear the proceedings that have been the subject of proceedings in the local Court, an appeal to the Supreme Court, an appeal to the Court of Appeal in New South Wales and, as I understand the indications, at least the commencement of proceedings in the High Court, seeking leave to proceed.
It would be, in my view, inappropriate for this Court, which is not a superior Court, to reconsider such matters. Again, I raised during the submissions that were made, the question of whether other avenues or steps were to be taken in relation to the representation, or lack of representation as alleged which was provided in relation to those proceedings and the indication given to me was that such steps, were to be taken.
Mr Schepis, in fact, indicated that he had confirmation and I accept it again, without hesitation, of those further proceedings being taken in relation to the inappropriate or ineffectual representation that was provided in relation to the proceedings, over many years. As I say, in my view, it is not appropriate for this Court to seek to re-examine the determination of three Courts that have at least turned their mind to the proceedings.
I would specifically note, however, that I do not find that Mr and Mrs Schepis are, what might be called, disgruntled or antagonistic litigants in relation to these proceedings. They have had dispute with Esanda and they have fought long and hard in relation to what they consider to be the unreasonableness of the proceedings taken by Esanda, in relation to the matter.
The fact is that for one reason or another, the representation that they have received has, at least from their perspective, failed to meet the requisite level or standard that would adequately and properly present their case. It seems to me that the appropriate course is that which is being taken by them in relation to consideration of their position and the quality of the representation received by them, in relation to the proceedings.
Suffice it to say therefore, that whilst I have a degree of sympathy in relation to the position of the applicants in relation to these proceedings, it is not, in my view, appropriate and in the exercise of my discretion I would not re-open and re-examine the case which leads to the judgment in relation to the proceedings.
Accordingly, the orders that I intend to make in relation to the matter at this time are:
ORDERS DELIVERED
RECORDED : NOT TRANSCRIBED
Costs normally do follow the event in relation to such proceedings and as I have indicated the application is, for the reasons that I have given, dismissed. Rather than perpetuate further dispute as between the parties as to what might or might not be the costs in relation to the matter, I intend to make an order in relation to the applicants’ payment of costs, but I will fix the costs in the sum of $250 for today's appearance on behalf of the respondents.
I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of Coker FM
Associate: Christina Herbst
Date: 23 June 2006
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