Shaw v Yarranova Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Shaw v Yarranova Pty Ltd [2014] FCA 557

Citation: Shaw v Yarranova Pty Ltd [2014] FCA 557
Appeal from: Shaw v Yarranova Pty Ltd [2013] FCCA 1627
Parties: JOHN RASHLEIGH SHAW v YARRANOVA PTY LTD (ACN 077 517 616)  and NEWQUAY STAGE 2 PTY LTD (ACN 086 482 644)
File number: VID 1180 of 2013
Judge: BROMBERG J
Date of judgment: 28 May 2014
Catchwords: BANKRUPTCY – appeal of dismissal of application to set aside a bankruptcy notice – whether appellant denied procedural fairness because his application for an adjournment was refused – whether the appellant was denied an opportunity to cross-examine and whether any such denial resulted in a denial of procedural fairness – whether discretion to extend the time for compliance with a bankruptcy notice conferred by s 41(6A) of the Bankruptcy Act 1966 (Cth) miscarried – whether bankruptcy notice was invalid because it was capable of reasonably misleading the debtor – appeal dismissed.
Legislation: Bankruptcy Act 1966 (Cth) ss 40(1)(g), 41(6A), (6C), 41(2) 41(7)
Evidence Act 1995 (Cth) s 91
Cases cited: Shaw v Yarranova Pty Ltd [2013] FCCA 1627
Assistant Commissioner Condon v Pompano Pty Ltd (2013) 87 ALJR 458
Bhagat v Global Custodians Ltd [2002] FCAFC 51
House v R (1936) 55 CLR 499
Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264
Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71
James v Federal Commissioner of Taxation (1955) 93 CLR 631
Date of hearing: 20 May 2014
Place: Melbourne
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 57
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 1180 of 2013
ON APPEAL FROM THE FEDERAL CIRCUIT COURT OF AUSTRALIA
BETWEEN:

JOHN RASHLEIGH SHAW
Appellant
AND:

YARRANOVA PTY LTD (ACN 077 517 616)
First Respondent

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

JUDGE:

BROMBERG J

DATE OF ORDER:

28 MAY 2014

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.The appeal is dismissed.

2.The appellant pay the costs of the respondents.

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 1180 of 2013
ON APPEAL FROM THE FEDERAL CIRCUIT COURT OF AUSTRALIA
BETWEEN:

JOHN RASHLEIGH SHAW
Appellant
AND:

YARRANOVA PTY LTD (ACN 077 517 616)
First Respondent

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

JUDGE:

BROMBERG J

DATE:

28 MAY 2014

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

  1. The appellant (Mr Shaw) has appealed a judgment of the Federal Circuit Court of Australia published as Shaw v Yarranova Pty Ltd [2013] FCCA 1627. Before the primary judge was an application made by Mr Shaw for an order setting aside a bankruptcy notice (Bankruptcy Notice) issued at the behest of the respondents.  Orders…

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Details
Case
[2014] FCA 557
Decision Date

CaseChat Overview and Summary

In the case of Shaw v Yarranova Pty Ltd, Mr. Shaw appeals against the dismissal of his application to set aside a bankruptcy notice. The primary judge dismissed the application, and the appeal was subsequently dismissed by the court. The appeal primarily concerned procedural fairness, the opportunity for cross-examination, and the validity of the bankruptcy notice. Mr. Shaw argued that the primary judge's refusal to grant an adjournment to respond to affidavits denied him procedural fairness, and he was denied the opportunity to cross-examine witnesses. Additionally, he argued that the primary judge misapplied the discretion to extend the time for compliance with the bankruptcy notice, and that the notice itself was invalid as it was capable of reasonably misleading him.

The court considered these issues and found that the primary judge did not err in dismissing the application. The court rejected Mr. Shaw's claims of procedural unfairness, noting that he had not been provided with sufficient notice to respond to the affidavits in time. The court also found that there was no error in the primary judge's refusal to grant an adjournment or in denying Mr. Shaw the opportunity to cross-examine witnesses. Regarding the validity of the bankruptcy notice, the court found no basis to conclude that the notice was invalid or misleading.

The appeal was dismissed, and Mr. Shaw was ordered to pay the respondents' costs. The court upheld the primary judge's decision, finding no error in the dismissal of the application to set aside the bankruptcy notice.

Orders

Orders of the court

1. The appeal is dismissed.

2. The appellant pay the costs of the respondents.

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

Background

Background to the litigation

Mr Shaw appeals against the primary judge’s dismissal of his application. For the reasons that follow, I have determined that the appeal should be dismissed. FACTUAL AND PROCEDURAL BACKGROUND Before turning to explain why each of Mr Shaw’s grounds of appeal must be rejected, it is necessary to briefly refer to the uncontroversial factual and procedural background. A proceeding was commenced in the Supreme Court by Mr Shaw against the respondents in 2003 (the 2003 proceeding). In that proceeding, Mr Shaw challenged a notice of default and notice of rescission served on him by the respondents in relation to a contract of sale in which Mr Shaw had agreed to purchase the respondents’ land. Mr Shaw also sought a declaration that a caveat lodged by him over the respondents’ land was valid. Mr Shaw was unsuccessful in the 2003 proceeding and Bell J made orders in March 2006, including an order that Mr Shaw’s caveat over the respondents’ land be removed. Mr Shaw appealed and sought a stay of the orders of Bell J pending the determination of the appeal. In May 2006, the stay sought by Mr Shaw was granted but as a condition of the stay, Mr Shaw gave an undertaking to pay any damages sustained by the respondents by reason of the stay. In December 2006, Mr Shaw’s appeal from the orders of Bell J was dismissed. In March 2008, Daly AsJ assessed the damages incurred by the respondents as a consequence of the stay granted to Mr Shaw. Daly AsJ assessed the respondents’ damages at $54,706 and made orders requiring damages, interest and costs to be paid by Mr Shaw. No application for a stay of the orders made by Daly AsJ was made. Mr Shaw’s appeal of the judgment of Daly AsJ was dismissed. Since March 2008, when the orders of Daly AsJ were made, a number of applications, appeals and orders were made in the 2003 proceeding and other related proceedings in the Supreme Court. The costs orders made against Mr Shaw comprise seven orders, in each case made by Wood AsJ. Each order made provides that the costs of the respondents be paid by Mr Shaw. On 4 September 2012, Mr Shaw filed a summons in the Supreme Court (the Summons) seeking to set aside the 7 March 2008 orders of Daly AsJ “on the grounds that there is fresh evidence & that they were procured on the basis of false & misleading affidavits and fraud”. On 18 October 2012, Mukhtar AsJ dismissed that Summons without adjudication as to the merits, on the basis that it was not appropriate for Mr Shaw to proceed by way of a summons and that if he was to proceed at all he should proceed by way of writ on a separately pleaded case. On 7 December 2012, the Bankruptcy Notice was issued and shortly thereafter served on Mr Shaw. On 24 December 2012, Mr Shaw issued his application in the Federal Circuit Court to set aside the Bankruptcy Notice. Mr Shaw also appealed the judgment of Mukhtar AsJ. That de novo appeal was heard by Dixon J on 11 April 2013. Prior to that appeal being dealt with and on 21 February 2013, Luxton R of the Federal Circuit Court extended the time for compliance with the Bankruptcy Notice. It is apparent from the terms of the orders made by Luxton R that the order made dealing with the date of hearing of Mr Shaw’s application was designed to accommodate the hearing taking place after the hearing of the appeal before Dixon J. In that respect, an order was made that Mr Shaw file and serve any affidavit exhibiting a copy of the transcript of the hearing before Dixon J and any reasons for judgment given by Dixon J.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The primary judge did not err in rejecting the challenge to the validity of the Bankruptcy Notice raised by Mr Shaw. Ground six of the Notice of Appeal should also be rejected. CONCLUSION As Mr Shaw has failed in relation to each of his grounds of appeal, it follows that his appeal should be dismissed. Mr Shaw did not resist the proposition that he should pay the respondents’ costs should his appeal not succeed. Accordingly, I will make orders dismissing the appeal and requiring Mr Shaw to pay the costs of the respondents.

Ratio Decidendi

Legal Principle Established

Although of no relevance to the disposition of the appeal, on 24 March 2014 the Court of Appeal of the Supreme Court overturned the orders of Dixon J summarily dismissing the Summons. The initial orders of Mukhtar AsJ (dismissing the Summons without adjudication on the merits) were upheld. The Court of Appeal considered that Mr Shaw was given insufficient notice that the Summons might be summarily dismissed.CONSIDERATION Mr Shaw was not legally represented on his application before the primary judge or on the appeal. His grounds of appeal are largely unparticularised. In his oral submissions on the appeal, Mr Shaw identified the particular basis upon which each of his grounds of appeal were being pressed. The respondents did not take issue with that late provision of particulars and I will consider each of Mr Shaw’s grounds of appeal as particularised through his oral submissions. Two aspects of Mr Shaw’s grounds of appeal must be rejected at the outset because they deal with issues that were not raised before the primary judge and therefore could not have been the subject of any error made by the primary judge. Ground five asserts that the primary judge “failed to recognise that Yarranova Pty Ltd was not a bona fide creditor”. In part, ground six asserts that the primary judge failed to recognise that the Bankruptcy Notice was an abuse of process. Neither of those claims were agitated before the primary judge and therefore I need not further address them. Three of the grounds of appeal assert a denial of procedural fairness. Ground one is a general unparticularised ground to that effect, which Mr Shaw acknowledged was intended to encompass the matters raised by grounds two and four of the Notice of Appeal. Ground two asserted that the primary judge erred by not allowing an adjournment to give Mr Shaw time to respond to the King affidavits. The first of the King affidavits was dated 2 August 2013 and was served at 7.28 pm on 4 August 2013, being the Sunday which proceeded the commencement of the hearing on Wednesday 7 August 2013. At the hearing, the respondents indicated that they sought only to rely upon specified parts of that affidavit. Broadly speaking, the parts of that affidavit which were relied upon referred to the appeal heard by Dixon J, set out the orders made by Dixon J and exhibited a copy of the transcript of that hearing and the reasons for judgment published by Dixon J. Additionally, the first King affidavit referred to and exhibited three email exchanges between Mr Shaw and ABL. Those emails dealt with whether or not Mr Shaw intended to file material of the kind contemplated by the orders made by Luxton R on 21 February 2013 designed to allow the Federal Circuit Court to be updated as to the progress of the proceeding in the Supreme Court. Additionally, the affidavit exhibited Mr Shaw’s Notice of Appeal from the orders made by Dixon J. The second King affidavit was dated 6 August 2013 and I presume was not provided to Mr Shaw until the morning of the hearing. Only some of the contents of that affidavit were relied upon by the respondents. Broadly speaking, the content relied upon dealt with the time of service on Mr Shaw of the first King affidavit and correspondence between Mr Shaw and ABL. In that correspondence, Mr Shaw indicated that he would ask for an adjournment to give him an opportunity to respond and ABL indicated that any adjournment would be opposed. Additionally, a copy of an order made by a Judicial Registrar of the Supreme Court on 31 July 2013 was annexed. That order included an observation to the effect that it was unlikely that the appeal of the orders of Dixon J would be listed for hearing in 2013.