Shaw v Official Trustee in Bankruptcy

Case [2025] FCA 1148

FEDERAL COURT OF AUSTRALIA

Shaw v Official Trustee in Bankruptcy [2025] FCA 1148

File number: QUD 26 of 2025
Judgment of: MARKOVIC J
Date of judgment: 18 September 2025
Catchwords:

PRACTICE AND PROCEDURE – application to summarily dismiss objection to competency of appeal –whether r 36.72 of the Federal Court Rules 2011 (Cth) permits objection to the competency of part of an appeal – where part of appeal incomprehensible or entirely unrelated to the issues dealt with in the judgment appealed from – application dismissed

PRACTICE AND PROCEDURE – notice of objection to competency of appeal – whether appeal incompetent on the grounds of res judicata – whether appeal incompetent as incomprehensible or bearing no relation to the judgment appealed from on ground – application partially upheld

Legislation:

Federal Court of Australia Act 1976 (Cth) ss 24, 31A, 37M

Federal Court Rules 2011 (Cth) rr 26.01, 36.72

Insolvency Practice Rules (Bankruptcy) being Sch 2 to the Bankruptcy Act 1966 (Cth)
Cases cited:

Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (1981) 147 CLR 297

Danthanarayana v Commonwealth of Australia [2016] FCAFC 114

Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630

K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309

Kilby v Gawith [2009] 1 WLR 853

O’Toole v Charles David Pty Ltd (1990) 17 CLR 232

Pathmanathan v Healthscope Operations Pty Ltd [2020] FCA 65

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355

Przybylowski v Australian Human Rights Commission No 2) [2018] FCA 473

Shaw v The Official Trustee in Bankruptcy [2024] FCA 137

Singh v Owners Strata Plan No 11723 (No 3) (2012) 207 FCR 390

TheOfficial Trustee in Bankruptcy v Shaw (No 3) [2023] FCA 1178

The Official Trustee in Bankruptcy v Shaw (No 4) [2024] FCA 1345

The Official Trustee in Bankruptcy v Shaw (No 5) [2024] FCA 1490

Zegaracv Dellios [2007] FCAFC 58

Zetta Jet Pte Ltd v The Ship “Dragon Pearl” (No 2) (2018) 265 FCR 290; [2018] FCAFC 132

P Herzfeld  and T Prince, Interpretation (3rd ed, Thomas Reuters, 2024)
Division: General Division
Registry: Queensland
National Practice Area: Commercial and Corporations
Sub-area: Corporations and Corporate Insolvency
Number of paragraphs: 71
Date of hearing: 3 September 2025
Counsel for the Appellant: The Appellant appeared in person
Counsel for the Respondent: Dr O Bigos KC and Ms T Meyrick
Solicitor for the Respondent: MinterEllison

ORDERS

QUD 26 of 2025
BETWEEN:

JOHN RASHLEIGH SHAW

Appellant
AND:

OFFICIAL TRUSTEE IN BANKRUPTCY

Respondent

ORDER MADE BY:

MARKOVIC J

DATE OF ORDER:

18 SEPTEMBER 2025

THE COURT ORDERS THAT:

1.The appellant’s amended interlocutory application accepted for filing on 22 July 2025 (Amended IA) be dismissed.

2.The respondent’s further amended notice of objection to competency accepted for filing on 24 June 2025 be partially upheld.

3.The following paragraphs of the amended notice of appeal accepted for filing on 17 June 2025 be dismissed as incompetent:

(a)paragraph 1;

(b)parts of the…

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AGLC
Shaw v Official Trustee in Bankruptcy [2025] FCA 1148
Case
[2025] FCA 1148
Decision Date

CaseChat Overview and Summary

The case of Shaw v Official Trustee in Bankruptcy involved the Official Trustee in Bankruptcy, acting as the respondent, and Mr Shaw, the appellant. The dispute centred around objections to the competency of an appeal filed by Mr Shaw against certain orders made in a proceeding that the Official Trustee had commenced against him. The Court of appeal was required to determine whether the respondent could object to the competency of only part of an appeal, and if so, under what circumstances. Specifically, the court needed to assess the validity of the grounds raised in the notice of objection to competency and whether certain parts of the amended notice of appeal were incompetent.

The court examined the rules governing objections to the competency of appeals, particularly rule 36.72 of the Federal Court Rules 2011 (Cth). It considered Mr Shaw's argument that rule 36.72 only permits a respondent to object to the competency of an entire appeal and not part of it. The court referenced Singh v Owners Strata Plan No 11723 (No 3) to understand the distinction between an appeal being incompetent and the procedure for summary dismissal. It concluded that while an appeal may be incompetent if it is incomprehensible or unrelated to the issues in the judgment appealed from, a respondent could object to the competency of part of an appeal if it falls into these categories. The court found that some parts of Mr Shaw's amended notice of appeal were indeed incomprehensible or unrelated to the issues, rendering them incompetent. However, the court also upheld parts of the respondent's further amended notice of objection to competency, finding that it appropriately challenged certain aspects of the appeal.

The court dismissed certain paragraphs of the amended notice of appeal as incompetent and partially upheld the respondent's further amended notice of objection to competency. It reserved the question of costs until the balance of the amended notice of appeal was determined. The court's decision underscored the importance of ensuring that appeals are both comprehensible and relevant to the issues at hand, while also providing guidance on the permissible scope of objections to competency under the Federal Court Rules.

Orders

Orders of the court

1. The appellant’s amended interlocutory application accepted for filing on 22 July 2025 (Amended IA) be dismissed.

2. The respondent’s further amended notice of objection to competency accepted for filing on 24 June 2025 be partially upheld.

3. The following paragraphs of the amended notice of appeal accepted for filing on 17 June 2025 be dismissed as incompetent:

(a) paragraph 1;

(b) parts of the paragraph appearing before paragraph 2 insofar as it seeks to reagitate the issues which were addressed in The Official Trustee in Bankruptcy v Shaw (No 3) [2023] FCA 1178 by seeking to appeal from paragraphs 1, 11 and 17 of the interlocutory application filed in proceeding VID361/2021 on 19 September 2024; and

(c) paragraphs 2 to 9.

4. The costs of the Amended IA and of the further amended objection to competency are reserved until after determination of the balance of the amended notice of appeal.

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

Background

Background to the litigation

Before turning to consider those applications, it is convenient to set out the history of the litigation between the parties which led to the appeal and the filing of the applications.BACKGROUNDThe Trustee commences proceeding VID361/2021 On 2 July 2021 the Trustee commenced proceeding VID361/2021 in this Court by way of originating application seeking an order, among others, pursuant to s 37AO(2) of the Federal Court of Australia Act 1976 (Cth) (FCA Act) that Mr Shaw be prohibited from instituting any proceeding in this Court without leave of the Court. Mr Shaw defended VID361/2021 on a number of grounds including, as set out in his amended interlocutory application filed on 24 July 2023 (July 2023 IA), on the basis that the Trustee lacked the jurisdiction, standing and authority to commence and maintain the proceeding. On 21 August 2023 the Court made orders for certain questions about the Trustee’s standing and authority to institute and conduct VID361/2021 to be determined as separate questions pursuant to r 30.01 of the Federal Court Rules 2011 (Cth). The separate questions were:Question 1:Is the [Trustee] authorised under the Bankruptcy Act 1966 (Cth) to institute proceedings under s 37AO(2) of the [FCA Act] against [Mr Shaw]?Question 2:Have these proceedings, VID 361 of 2021, been validly instituted by the [Trustee] with the authority of the Official Receiver under ss 15 and 18 of the Bankruptcy Act 1966 (Cth)?Question 3:Have the [Trustee’s] solicitors been validly instructed and conducted the proceedings with the authority of the [Trustee] in accordance with ss 15 and 18 of the Bankruptcy Act 1966 (Cth)? On 6 October 2023 SC Derrington J made orders (6 October 2023 Orders) and delivered reasons in relation to the separate questions, answering each of them in the affirmative: see TheOfficial Trustee in Bankruptcy v Shaw (No 3) [2023] FCA 1178. Mr Shaw seeks leave to appeal from the 6 October 2023 Orders Mr Shaw sought leave to appeal from the 6 October 2023 Orders. On 21 February 2024 the Court made orders dismissing Mr Shaw’s application for leave to appeal: Shaw v The Official Trustee in Bankruptcy [2024] FCA 137 (Shaw Leave to appeal). In Shaw Leave to Appeal Jackman J explained the basis on which he refused the application at [6]:In my view, the primary judge answered the three separate questions correctly and there is no error in her Honour’s reasons. There is no demonstrated merit in any of the proposed grounds of appeal and there does not appear to be any realistic prospect of success for Mr Shaw on appeal. That is sufficient to dispose of the application for leave and it is not necessary to consider whether substantial injustice would result if leave were refused on the assumption (which in this case is not realistic) that the decision is wrong. In any event, I regard the argument for substantial injustice as relatively weak.Mr Shaw files a second interlocutory application in VID361/2021 On 19 September 2024 Mr Shaw filed an interlocutory application in VID361/2021 (September 2024 IA) seeking orders: (1)that SC Derrington J recuse herself from the proceeding (at [1]-[4]);(2)in relation to perceived deficiencies in the Trustee’s response to Mr Shaw’s requests for information made between 24 October and 1 November 2023 pursuant to s 70-56 of Sch 2 to the Insolvency Law Reform Act 2016 (Cth) (the effect of which was to insert Sch 2 Insolvency Practice Schedule (Bankruptcy) to the Bankruptcy Act 1966 (Cth)) (at [5]-[6]);(3)for leave to file a cross-claim (at [7]);(4)setting aside or varying case management orders made in the proceeding on 3 August 2023 (at [8]);(5)setting aside the 6 October 2023 Orders (at [9]-[13]); and(6)for leave to amend the July 2023 IA (at [14]-[22]).

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Paragraph 9 of the amended notice of appeal is in a different category. It does not raise any ground of appeal, nor does it bear any relation to Shaw (No 5). It simply attempts to set out a basis for the Court’s jurisdiction which, in relation to an appeal from Shaw (No 5) is not, at least at this stage, challenged. That paragraph should be dismissed as incompetent.CONCLUSION For those reasons para 1, parts of the paragraph appearing before para 2 identified at [16] above and paras 2 to 9 of the amended notice of appeal will be dismissed as incompetent. The Trustee submits that I should reserve the costs of the Amended IA and of the further amended objection to competency until after the remainder of the appeal is resolved. Mr Shaw who has achieved some success in relation to the further amended objection to competency objects to that course and asks that I resolve the question of costs now. I am satisfied, given the history of the litigation between the parties and the possibility that the outcome of the appeal may impact the submissions to be made on the question of costs of the applications which I have now determined, that I should accede to the Trustee’s request. Upon resolution of the remainder of the appeal, the parties should jointly contact my Associate and, if they have not resolved the question of costs of the Amended IA and the further amended objection to competency by agreement, I will make orders for the filing of short submissions and will, unless any party objects to me doing so, resolve that question on the papers. I will make orders accordingly.

Ratio Decidendi

Legal Principle Established

Rule 36.72 of the Rules headed “[n]otice of objection to competency of appeal” provides:(1)A respondent who objects to the competency of an appeal must, within 14 days after being served with a notice of appeal, file a notice of objection to competency:(a) in accordance with Form 125; and (b) that, briefly but specifically, states the grounds of the objection.(2) The appellant carries the burden of establishing the competency of an appeal.(3)A respondent may apply to the Court for the question of competency to be heard and determined before the hearing of the appeal.(4)If a respondent has not filed a notice under subrule (1), and the appeal is dismissed by the Court as not competent, the respondent is not entitled to any costs of the appeal.(5) If the Court decides that an appeal is not competent, the appeal is dismissed. Consideration In effect, Mr Shaw submits that r 36.72 of the Rules only permits a respondent to object to the competency of the whole and not part of an appeal. He says that the proper procedure where there is objection to only part of an appeal is to apply for summary dismissal of that part of the appeal under r 26.01 of the Rules and/or s 31A of the FCA Act. Mr Shaw relies on Singh v Owners Strata Plan No 11723 (No 3) (2012) 207 FCR 390. In that case the respondent applied to have Mr Singh’s appeal dismissed as incompetent pursuant to r 36.72 of the Rules on the basis of non-compliance with r 36.01 of the Rules and, in the alternative, sought summary dismissal of the appeal under either or both of s 25(2B)(aa) and s 31A of the FCA Act. The respondent’s notice of objection to competency in Singh contended that none of the grounds of appeal raised any appealable error. Justice Griffiths observed (at [20]) that underlying the objection to competency was “the allegation that the appellant has failed to identify in his notice of appeal any tenable grounds of appeal, in the sense of identifying how it is said that the federal magistrate erred, whether in law, fact or in the exercise of discretion”. His Honour was of the view that the respondent may have misconceived the Court’s power under r 36.72 of the Rules and had assumed that non-compliance with r 36.01, which requires a notice of appeal to state the grounds relied on in support of the appeal, provided a sufficient basis to have an appeal dismissed as incompetent: Singh at [21]. Justice Griffiths identified the question which arose for determination at [24], namely:… whether an appeal is incompetent and liable to be dismissed under r 36.72 if an appellant fails to comply with r 36.01. As noted above, the respondent appears to have assumed that dismissal of the appeal under that provision necessarily follows from a failure by an appellant to set out in a notice of appeal briefly, but specifically, the grounds relied on in support of the appeal. In answering this question Griffiths J said at [24]-[25]:24The correct position is set out in the leading judgment of North J (with whom Weinberg and Jessup JJ agreed) in Zegarac v Dellios [2007] FCAFC 58 and is encapsulated in [7] as follows:In my view, it does not follow that a failure to comply with Order 52 Rule 13(2) renders an appeal incompetent. If the notice is incomprehensible or entirely unrelated to the issues dealt with in the judgment, an appeal may be incompetent. Examples relied upon by Mr Nixon are indeed cases of incomprehensibility: Lindsey v Philip Morris Limited [2004] FCAFC 40; Kendrick-Smith v Australian Competition & Consumer Commission [2003] FCAFC 155; Zambini v Secretary, Department of Employment and Workplace Relations [2006] FCA 1773. However, in this case the notice of appeal, while prolix and not in compliance with Order 52 Rule 13(2), is not incomprehensible. It is clear from the document as a whole that Ms Zegarac contends that his Honour erred in holding that she had not established that the judgment in the Magistrates Court was obtained by fraud. Thus, the relief sought in paragraph 1 of the motion should be refused.25While agreeing with North J’s reasons, Jessup J also added at [12] that he thought that the Court “ought to be particularly cautious before it uses r 18 to deal with a Notice of Appeal which is comprehensible, albeit prolix, and unlikely to be regarded as complying with O 52 r 13(2)(b)”. Rule 36.01 of the 2011 Rules has replaced O 52, r 13 of the previous Rules (Federal Court Rules 1979 (Cth)) and r 36.72 has replaced O 52, r 18.