Solomon v Green

[2001] FCA 1586

FEDERAL COURT OF AUSTRALIA

Solomon v Green [2001] FCA 1586

BANKRUPTCY – appeal against a sequestration order – application for leave to appeal against a judgment refusing to stay a sequestration order – application for leave to appeal against a judgment dismissing an application to annul the appellant’s bankruptcy

Bankruptcy Act 1966 (Cth)

Bryant v Australia & New Zealand Banking Group Ltd [2000] FCA 1326 cited
Wren v Mahony (1972) 126 CLR 212 cited

DAVID SOLOMON v BRUCE NOEL GREEN & ANOR

N 899 of 2001
N 1281 of 2001

LEE, MOORE AND MADGWICK JJ
9 NOVEMBER 2001
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 899 of 2001 N 1281 of 2001

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

DAVID SOLOMON
APPLICANT/APPELLANT

AND:

BRUCE NOEL GREEN
FIRST RESPONDENT

DENISE ANN GREEN
SECOND RESPONDENT

JUDGES:

LEE, MOORE AND MADGWICK JJ

DATE OF ORDER:

9 NOVEMBER 2001

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.        The appeal against the judgment of Wilcox J of 5 June 2001 be dismissed.

2.        Leave to appeal against the judgment of Whitlam J of 9 July 2001 be refused.

3.        Leave to appeal against the judgment of Gyles J of 28 August 2001 be refused.

4.Mr David Solomon pay the respondents’ costs in each matter, such costs to be costs in the bankruptcy.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 899 of 2001 N 1281 of 2001

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

DAVID SOLOMON
APPLICANT/APPELLANT

AND:

BRUCE NOEL GREEN
FIRST RESPONDENT

DENISE ANN GREEN
SECOND RESPONDENT

JUDGES:	LEE, MOORE AND MADGWICK JJ
DATE:	9 NOVEMBER 2001
PLACE:	SYDNEY

REASONS FOR JUDGMENT

THE COURT

1. The Full Court has before it three applications.  In each matter the moving party is Mr David Solomon who has represented himself in all proceedings in this Court.  The first is an appeal against the judgment of Wilcox J of 5 June 2001 sequestrating the estate of Mr Solomon.  The second is an application for leave to appeal against a judgment of Whitlam J of 9 July 2001 dismissing an application to stay the order of Wilcox J. The third is an appeal against a judgment of Gyles J of 28 August 2001 dismissing an application to annul the bankruptcy of Mr Solomon.  Although the latter proceeding was instituted as an appeal, it is probably properly characterized as an appeal from an interlocutory judgment and leave to appeal is required.  Accordingly, the notice of appeal can be treated as an application for leave to appeal:  see Bryant v Australia & New Zealand Banking Group Ltd [2000] FCA 1326 at [10].

2. The notice of appeal in the first matter does not set out any grounds identifying any alleged error on the part of Wilcox J. In submissions filed on 16 October 2001, Mr Solomon recounted events, as he saw them, associated with the proceedings in the District Court of New South Wales which led to the judgment debt founding the bankruptcy notice on which the sequestration order was ultimately based.  We will discuss those proceedings shortly.

3. In further submissions filed on 17 October 2001 Mr Solomon identified several instances where the petitioning creditors, Mr Bruce Green and Mrs Denise Green, had allegedly failed to comply with the Bankruptcy Rules (“the Rules”).  If, as a matter of fact, the petitioning creditors had failed to comply with the Rules in the way alleged, then arguably Wilcox J erred in making the order he did.  However, with one exception, none of the alleged failures to comply with the Rules has been established as matter of fact.

4. It is apparent from the Court file that the affidavit verifying the petition was not accompanied by the orders of a Registrar finally deciding an application by Mr Solomon to set aside the bankruptcy notice.  In this respect the petitioning creditors did not comply with r 18(3) of the Rules.  However the orders deciding the application to set aside the notice were served on Mr Solomon when the petition was served.  It is unnecessary, in this appeal, to determine what generally the consequences might be of a failure to comply with r 18(3) and the possible operation of s 306 of the Bankruptcy Act 1966 (Cth) on such a failure. That is because, in this matter, there was no issue before Wilcox J about whether the orders of the Registrar had been made nor was it suggested that the date on which the orders were made was significant in any jurisdictional sense or would have been relevant to the exercise of any discretion by Wilcox J. The only relevance of the orders, a relevance appreciated by his Honour, was that they determined the date of the act of bankruptcy. Indeed his Honour granted the petitioning creditors leave to amend the petition to identify correctly when the act of bankruptcy occurred. The failure to comply with r 18(3) does not raise an issue in this appeal about the correctness of the judgment of Wilcox J.

5. The proceedings in the District Court were brought by the petitioning creditors against Mr Solomon seeking relief under s 72 of the Fair Trading Act 1987 (NSW). The misleading or deceptive conduct relied on was associated with the acquisition by the Greens of certain intellectual property owned by Mr Solomon. It concerned a mechanical self-lifting toilet seat operated by a spring and two air valve suction cups. The gravaman of the complaint of the Greens was that Mr Solomon made several misleading representations to the Greens when selling the intellectual property. The trial judge found that Mr Solomon had represented that the toilet seat would be readily saleable and would work on all commonly used toilets in Australia and that he did not have reasonable grounds for making those representations. His Honour set aside the sale agreement for the intellectual property rights and ordered that Mr Solomon refund moneys paid by the Greens to acquire the intellectual property. The trial judge gave judgment on 28 August 2000. An application for leave to appeal from the judgment of the trial judge was dismissed by the Court of Appeal on 21 May 2001 constituted by Meagher and Giles JJA.

6. A central feature of the case that Mr Solomon has sought to raise in this Court, is an allegation that the judgment in the District Court was procured by the improper conduct of counsel for the Greens in the proceedings in the District Court.  Mr Solomon alleges that the Greens’ counsel interfered with a toilet seat which was in evidence and was used, in the District Court proceedings, to demonstrate how the invention operated.  He alleges that the barrister  interfered with the delay timer in the toilet seat (which had earlier been used in the proceedings to demonstrate, with success, how it operated) so as to render it defective.  After the toilet seat had been tampered with (as alleged by Mr Solomon), it failed to operate in a second demonstration before the trial judge. Mr Solomon has maintained that his allegation of tampering by the barrister  is made out by viewing a video recording taken by a security camera within the court room.

7. The video recording was viewed by the members of the Court of Appeal.  They had before them a document prepared by Mr Solomon which explained the points in one version of the video recording where it was said to be apparent the barrister  was involved in interfering with the toilet seat.  The video recording was also viewed by Hodgson JA before giving judgment on 4 June 2001 dismissing an application by Mr Solomon for an order staying the order of the Court of Appeal pending the determination of an application for special leave to appeal to the High Court.  Both Meagher and Giles JJA were not satisfied that the alleged interference was established by the events depicted in the video. While Hodgson JA did not say so expressly, it is likely he formed the same view when deciding to refuse to grant a further stay.

8. Mr Solomon tendered, without opposition, the video recording in this appeal (there were several versions of the recording actually tendered).  We have studied it.  The video lacks sufficient clarity to show the acts of the people involved, much less the allegation of interference made by Mr Solomon.  It does show the barrister twice approaching the toilet seat, looking at it from various angles and handling it.  At one or more points it appears that the barrister had an object or objects in his hand and that he approached the toilet seat and handled it.  However the video is equivocal and falls short of establishing the allegation of Mr Solomon.  Moreover an affidavit of the barrister involved, prepared for the proceedings in the Court of Appeal, forms part of the material before us.  The barrister concerned denies the specific allegation of interfering. As we noted earlier, Mr Solomon has represented himself.  Nonetheless he is intelligent and articulate.  He has had ample time to assemble the material that might raise a prima facie case and does not appear to lack the ability to obtain expert assistance of technical kinds.   Notwithstanding, Mr Solomon has not, in our opinion, made out a prima facie case that would warrant this Court, in proceedings brought under the Bankruptcy Act 1966 (Cth), to go behind the judgment of the trial judge in the District Court, particularly having regard to the fact that Mr Solomon was unsuccessful in his application for leave to appeal.

9. While these matters were raised before Wilcox J they were not referred to by his Honour in his reasons for judgment.  It is obvious, however, that his Honour had decided that Mr Solomon had not established that the Court should “go behind” the judgment to see if, in truth, a debt existed:  see Wren v Mahony (1972) 126 CLR 212. Whilst we note that the video recording was not received into evidence before his Honour, our perusal of that material and other evidence sought to be relied on by Mr Solomon shows that his Honour would not have come to any other conclusion. Mr Solomon has not demonstrated any error on the part of Wilcox J of a kind which would warrant the intervention of this Full Court in the appeal by the setting aside of his Honour’s orders.

10. Before passing from considering the proceedings in the District Court we should mention one matter apparent from reading the reasons for judgment of the trial judge in the District Court. It was not a matter raised at the hearing of the appeal and counsel for the petitioning creditors has not had the opportunity of addressing it. As noted earlier, the proceedings in the District Court were a claim for relief under s 72 of the Fair Trading Act 1987 (NSW). The misleading or deceptive conduct pleaded involved representations which were identified in the judgment as:

    “1.      ‘the plaintiffs could sell 1,000 hygienic toilet seats per month.’

    2.‘the patent to the hygienic toilet seat was worth $150,000 and that the plaintiffs would always have a buyer for the patent.’

    3.‘the hygienic toilet seat would work on all commonly used toilets in Australia.’”

    The trial judge ultimately found representations 1 and 2 were puffery and did not induce the Greens to enter the contract.  His Honour found that Mr Solomon represented to the Greens that the toilet seat and lid would be readily saleable and also that it would work on all commonly used toilets in Australia.  The latter is representation 3.  The former appears not to have been a pleaded representation unless it was a variant of representation 1.  In any event, his Honour treated both as representations as to future matters requiring Mr Solomon to prove, which he failed to do, that he had reasonable grounds for making the representations.  Why his Honour characterized the representations as relating to future matters is not clear.  They appear to us to relate to then existing characteristics of the toilet seat.  However we are not in a position to assess whether the ultimate result in the proceedings would have been different if the representations had not been characterized as representations as to future matters.

11. The application for leave to appeal against the judgment of Whitlam J alleges, in substance, that his Honour denied Mr Solomon the opportunity to put his case by refusing him the opportunity to give evidence orally in circumstances where no affidavits in a proper form had been filed.  The approach of his Honour appears to us to have been unexceptionable and no error of principle is apparent in his Honour's reasons.  The application for leave to appeal must be refused.

12. The notice of appeal against the judgment of Gyles J contains no grounds of appeal.  However an affidavit in support repeats the matters raised in the appeal from the judgment of Wilcox J about the failure of the petitioning creditors to comply with the Bankruptcy Rules.  Another affidavit makes various allegations about the conduct of the trial judge and the legal representatives of the petitioning creditors in the proceedings in the District Court of New South Wales.  The allegations are, in substance, a repetition of the matters we have already considered in the appeal from Wilcox J.  In our opinion, nothing in the material reveals error on the part of Gyles J.  Leave to appeal is refused.

I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Associate:

Dated:             9 November 2001

The applicant/appellant appeared in person

Counsel for the Respondent:	GJ Nell & F Rogers
Solicitor for the Respondent:	Ian Mitchell
Date of Hearing:	6 November 2001
Date of Judgment:	9 November 2001