Shaw v Yarranova Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Shaw v Yarranova Pty Ltd [2014] FCAFC 171

Citation: Shaw v Yarranova Pty Ltd [2014] FCAFC 171
Appeal from: Yarranova Pty Ltd v Shaw (No 2) [2014] FCA 616
Parties: JOHN SHAW v YARRANOVA PTY LTD (ACN 077 517 616) and NEWQUAY STAGE 2 PTY LTD (ACN 086 482 644)
File number: VID 354 of 2014
Judges: BENNETT, FLICK & YATES JJ
Date of judgment: 12 December 2014
Catchwords:

BANKRUPTCY – the making of a sequestration order – refusal to go behind a judgment – order properly made

PRACTICE AND PROCEDURE – abuse of process – refusal by primary Judge to accede to disqualification application

PRACTICE AND PROCEDURE – application to adduce further evidence – further evidence not yet obtained – application more in the nature of an application to re-open   
Legislation: Bankruptcy Act1966 (Cth) ss 43, 52, 153B
Federal Court of Australia Act1976 (Cth) s 27
Federal Court Rules2011 (Cth) rr 36.01(2)(c), 36.57(2)
Cases cited: Arifin v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2014] FCAFC 61, cited
CDJ v VAJ (1998) 197 CLR 172, cited
Freeman v National Australia Bank Limited [2003] FCAFC 200, applied
NASB v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 24, cited
Shaw v Yarranova Pty Ltd [2011] VSCA 55, considered
Shaw v Yarranova Pty Ltd & Anor [2013] FCCA 1627, referred to
Shaw v Yarranova Pty Ltd [2014] FCA 557, referred to
Shaw v Yarranova Pty Ltd [2014] VSCA 48, referred to
Yarranova Pty Ltd v Shaw [2014] FCA 403, referred to
Yarranova Pty Ltd v Shaw (No 2) [2014] FCA 616, affirmed
Date of hearing: 11 November 2014
Place: Sydney (heard in Melbourne)
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 75
Counsel for the Appellant: The Appellant appeared in person
Counsel for the Respondents: Mr P Fary
Solicitor for the Respondents: Arnold Bloch Leibler

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 354 of 2014
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
BETWEEN:

JOHN SHAW
Appellant
AND:

YARRANOVA PTY LTD (ACN 077 517 616)
First Respondent

NEWQUAY STAGE 2 PTY LTD (ACN 086 482 644)
Second Respondent

JUDGES:

BENNETT, FLICK & YATES JJ

DATE OF ORDER:

12 DECEMBER 2014

WHERE MADE:

SYDNEY (HEARD IN MELBOURNE)

THE COURT ORDERS THAT:

1.The Interlocutory Application filed 7 October 2014 is dismissed.

2.The appeal is dismissed. 

3.The Respondents’ costs are to be paid out of Mr Shaw’s estate.

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


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 354 of 2014
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
BETWEEN:

JOHN SHAW
Appellant
AND:

YARRANOVA PTY LTD (ACN 077 517 616)
First Respondent

NEWQUAY STAGE 2 PTY LTD (ACN 086 482 644)
Second Respondent

JUDGES:

BENNETT, FLICK & YATES JJ

DATE:

12 DECEMBER 2014

PLACE:

SYDNEY (HEARD IN MELBOURNE)

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Details
Case
[2014] FCAFC 171
Decision Date

CaseChat Overview and Summary

The case of Shaw v Yarranova Pty Ltd involved an appeal by Mr. Shaw against a sequestration order made against him. The primary judge had denied Mr. Shaw's application for an adjournment and dismissed his application for the judge to disqualify herself. Mr. Shaw also argued that the primary judge should have gone behind the judgment that supported the creditors' application for a sequestration order. The primary judge's decision to refuse to go behind the judgment and to deny the adjournment application were upheld on appeal. The appeal court also found that there was no substance to Mr. Shaw's claims of abuse of process and fraud.

The legal issues in this case were whether the primary judge should have gone behind the judgment that supported the creditors' application for a sequestration order, whether the primary judge should have granted the adjournment application, and whether the primary judge should have disqualified herself. The appeal court found that the primary judge had correctly exercised her discretion in denying the adjournment application and in refusing to go behind the judgment. The appeal court also found that there was no reasonable apprehension of bias on the part of the primary judge.

The appeal court found that the primary judge had correctly exercised her discretion in denying the adjournment application and in refusing to go behind the judgment. The appeal court found that there was no reasonable apprehension of bias on the part of the primary judge. The appeal court also found that there was no evidence of fraud or collusion. The appeal court found that Mr. Shaw's claims were not based on genuine and arguable grounds.

The appeal was dismissed and the respondents' costs were to be paid out of Mr. Shaw's estate. The appeal court found that the appeal was an abuse of process and that Mr. Shaw's involvement in many past proceedings had rendered him a "seasoned campaigner". The appeal court found that the absence of legal representation could not shield Mr. Shaw from the consequences of filing a Notice of Appeal which did not comply with the Federal Court Rules or from criticism at pursuing unmeritorious litigation.

Orders

Orders of the court

1. The Interlocutory Application filed 7 October 2014 is dismissed.

2. The appeal is dismissed.

3. The Respondents’ costs are to be paid out of Mr Shaw’s estate.

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

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

The reasons for decision of the primary Judge, however, expressly address: ·the reasons for refusing leave to issue three subpoenas – leave being refused because each subpoena was considered to be “an abuse of process” ([2014] FCA 616 at [49]);·the earlier decision to set aside the Notice to Produce dated 8 April 2014 and the fact that “[a]t the hearing of the creditors’ petition on 30 May 2014, Mr Shaw did not pursue the application in relation to the setting aside of the Notice to Produce…” ([2014] FCA 616 at [56]); and·the application for the adjournment and the decision to refuse that adjournment ([2014] FCA 616 at [63] – [85]). The consideration of each of those three issues fully sets forth the reasoning of the primary Judge. With specific reference to Ground 8, there is with respect to Mr Shaw no substance in a submission that the primary Judge failed to give adequate reasons because she did not give reasons at the time of refusing the adjournment and only provided such reasons in writing at a later time.The absence of evidence of fraud A separate focus of attention during the course of oral submissions on the appeal were the following observations of the primary Judge:[83] Against this background, it is evident that Mr Shaw’s alleged claim is not “based on genuine and arguable grounds”. There is nothing in the facts of the present case that would warrant this Court embarking on what amounts to a re-trial of the issues that had been determined after a contested hearing before Daly AsJ and which were the subject of an appeal to the Court of Appeal of the Supreme Court of Victoria.[84] Mr Shaw has not adduced any evidence of fraud. Indeed, even if the allegations made by Mr Shaw in the draft endorsed writ (see [64]–[65]) above were taken at their highest, a prima facie case of fraud or collusion would not be made out. Moreover, it must be recalled that the Assessment Orders of 7 March 2008 are not the only orders underpinning the Bankruptcy Notice: see [22] above. Mr Shaw does not seek to challenge the other orders relied upon.[85] The two applications are refused — the Application for an adjournment of the hearing pending the outcome of an appeal from the orders of Vickery J in the Supreme Court of Victoria of 7 May 2014 and the application to go behind the judgment which supports the applicant creditors’ application for a sequestration order.Whether this argument falls within Ground 7 or (perhaps) Grounds 4 or 5 matters not. As the Notice of Appeal acknowledges, “[s]ome grounds of appeal overlap.” There was limited ambiguity, with respect, in the reasoning expressed in paragraph [83]. It is, perhaps, unclear as to whether paragraph [83] is a reference to those issues which had been determined after a contested hearing before Daly AsJ and a separate reference to those issues which had been determined on appeal. Although an appeal had been filed against the decision of Daly AsJ, this Court was informed that that appeal had been placed “on hold” and had not been resolved. There were, however, at least two decisions of the Victorian Court of Appeal – the first being Shaw v Yarranova Pty Ltd [2011] VSCA 55; another being Shaw v Yarranova Pty Ltd [2014] VSCA 48. The former of these two decisions resolved Mr Shaw’s argument that, because MAB Corporation had paid the judgment creditors’ costs, calling upon Mr Shaw to pay those costs offended the “indemnity principle”. The question as to who paid the costs was a central plank in Mr Shaw’s submissions that a “fraud” had been perpetrated. Part of the reasoning of Redlich and Mandie JJA in that decision provided as follows: Co-existing obligations to pay solicitors’ costs[23] Payment by MAB Corporation of the respondents’ costs did not give rise to an inference that the respondents had no liability for their solicitors’ costs. The existence of a concurrent obligation by MAB to pay the respondents’ solicitors’ costs pursuant to its retainer, and the fact that the accounts for services may not have been rendered to the respondents, did not preclude the presumption from applying. A litigant who is liable to his or her own solicitor for the costs of proceedings and is indemnified in whole or in part for those proceedings is entitled to recover his or her taxed or assessed costs for the benefit, in whole or in part, of the party providing that indemnity. Having paid or agreed to pay the solicitors for the successful party’s costs, the indemnifier would become subrogated to all rights of the successful party, subrogation being an equitable right which does not depend upon a contractual entitlement.It is presumably this decision to which the primary Judge was referring. But even such limited ambiguity as there may be in respect to her Honour’s reasons does not support any conclusion that her Honour erred in concluding that Mr Shaw’s “alleged claim” was not “based on genuine and arguable grounds…”.

Decision

Reasons for decision

The Interlocutory Application should be dismissed. CONCLUSIONS None of the Grounds of Appeal have been made out. Although reference has been made to particular aspects of each of the Grounds, the Grounds have been considered in their entirety – both by reference to the terms of the Grounds of Appeal and Mr Shaw’s Outline of Submissions. So construed, it is concluded that each is without substance. The appeal should be dismissed with costs. The present appeal, it should be noted, is the hearing of yet another challenge made by Mr Shaw to a decision of a single judge. Any litigant, of course, is entitled to pursue whatever rights of appeal are available. A decision of a single judge, which may initially appear self-evidently correct, may reveal appellable error on closer scrutiny. But the pursuit of Grounds of Appeal which have no intrinsic merit may also expose a litigant committed to pursuing litigation as a means of simply deferring the inevitable. To do so may expose an abuse of process. An appeal which is an abuse of process may be dismissed. This appeal has many of the hallmarks of such a litigant. Although Mr Shaw appeared unrepresented, his involvement in many past proceedings – both in this Court and in others – has rendered him a “seasoned campaigner”. The absence of legal representation cannot shield him from the consequences of filing a Notice of Appeal which does not comply with the Federal Court Rules or from criticism at pursuing unmeritorious litigation. THE ORDERS OF THE COURT ARE:1.The Interlocutory Application dated 7 October 2014 is dismissed.2.The appeal is dismissed.3.The Respondents’ costs are to be paid out of Mr Shaw’s estate.

Ratio Decidendi

Legal Principle Established

But none of the Grounds of Appeal, however construed, have been made out.The making of the sequestration order The main task before the primary Judge was the resolution of the judgment creditors’ application for a sequestration order. Other tasks included the resolution of Mr Shaw’s application for an adjournment and his application for the primary Judge to disqualify herself by reason of a claimed reasonable apprehension of bias. In resolving the application for the sequestration order, the grounds of opposition to the making of such an order, as filed in the proceeding before the primary Judge, were identified as follows: 1. The application is an abuse of process2. The opponent has an offset claim that has not yet been finally determined.Subject to any exercise of judicial discretion, those Grounds defined the boundaries of the issues relevant to the application being made before the primary Judge. Mr Shaw did not contend that a sequestration order should not be made by reason of his ability to pay his debts. At the heart of both the abuse of process claim and the “offset claim” was the allegation as to “fraud”. The abuse of process claim also involved – on Mr Shaw’s case – a contention that the bankruptcy proceedings were simply an attempt to “stifle” his pursuit of his claims, a contention that the judgment creditors never held any reasonable belief as to his insolvency and a claim that they had delayed in commencing the bankruptcy proceedings. Power to make a sequestration order is conferred by s 43 of the Bankruptcy Act1966 (Cth) (‘Bankruptcy Act’). Section 52 of that Act goes on to identify those matters about which the Court “shall require proof…”. In the course of resolving Mr Shaw’s grounds of opposition, the primary Judge set forth the history of the litigation in the Victorian Supreme Court. It was necessary for her Honour to do so because (inter alia):·one argument advanced by Mr Shaw was that the application for the making of a sequestration order should be adjourned pending the outcome of an appeal to the Victorian Court of Appeal;and because ·her Honour was being invited to go behind the judgment upon which the disputed costs order was founded. Her Honour concluded that she would not go behind the judgment and that Mr Shaw had not adduced any evidence as to fraud: [2014] FCA 616 at [70] – [85]. No appellable error is exposed in her Honour’s reasons for so concluding. There is certainly no error, as maintained in Ground 3, in referring to “past judgments”. Ground 6 further alleges that the primary Judge “acted on the wrong principles”. But the reasons for decision of the primary Judge, with respect, expose an unwavering focus on the “principles” relevant to the manner in which the application should proceed and the manner in which s 52 of the Bankruptcy Act should be applied to the facts. Separate from any consideration given to the various other issues Mr Shaw sought to canvass, the “principles” of most immediate relevance to the exercise of the discretionary power to make a sequestration order were the “principles” relevant to:·the adjournment application – those principles being expressly set forth by the primary Judge ([2014] FCA 616 at [67]); ·whether a Court should go behind a judgment – those principles being set forth ([2014] FCA 616 at [69]); and ·the contention that the proceeding was an abuse of process – those principles also being set forth ([2014] FCA 616 at [90] – [92]). Rather than applying the wrong “principles”, it is concluded that the primary Judge correctly identified and applied the principles relevant to the issues posed for resolution.