Spiliotopoulos v Jackson
[2020] FCCA 870
•20 April 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SPILIOTOPOULOS v JACKSON | [2020] FCCA 870 |
| Catchwords: LIMITATIONS – Whether limitation period extended by reason of respondent’s conduct. |
| Legislation: Bankruptcy Act 1966 (Cth), ss.30, 40, 41 Limitation Act 1969 (NSW), ss.14, 55 |
| Cases cited: Spiliotopoulos v National Australia Bank Ltd [2017] NSWSC 971 Spiliotopoulos v National Australia Bank Limited [2017] NSWSC 1069 King v Victor Parsons & Co [1973] 1 All ER 206 Ramsay Health Care Australia Pty Ltd v Compton (2017) 261 CLR 132 Katter v Melhem (No 2) [2014] FCA 1176 Seymour v Seymour (1996) 40 NSWLR 358 Gerace v Auzhair Supplies Pty Ltd (2014) 87 NSWLR 435 |
| Applicant: | ARTHUR SPILIOTOPOULOS |
| Respondent: | LORRAINE JACKSON |
| File Number: | SYG 14 of 2019 |
| Judgment of: | Judge Cameron |
| Hearing date: | 27 August 2019 |
| Date of Last Submission: | 27 August 2019 |
| Delivered at: | Sydney |
| Delivered on: | 20 April 2020 |
REPRESENTATION
| Solicitors for the Applicant: | Mr T Hall of Hall Partners |
| Counsel for the Respondent: | Mr H Altan |
| Solicitors for the Respondent: | Willis & Bowring |
ORDERS
The application be dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 14 of 2019
| ARTHUR SPILIOTOPOULOS |
Applicant
And
| LORRAINE JACKSON |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
On 4 January 2019 the applicant, Mr Spiliotopoulos, filed an application to set aside bankruptcy notice BN232143 (“Bankruptcy Notice”) which had been issued at the request of the Respondent, Ms Jackson, and served on him on 18 December 2019. These reasons concern that application.
BACKGROUND
On 16 March 2016 Mr Spiliotopoulos commenced New South Wales Supreme Court proceedings 2015/82205 (“Supreme Court Proceedings”) against National Australia Bank (“NAB”), the Registrar General (of New South Wales it is to be presumed), Ms Jackson and his former wife, Ms Spiliotopoulos. Relevantly Mr Spiliotopoulos alleged that Ms Jackson had fraudulently or negligently purported to witness his signature on a mortgage to the NAB of certain land (“Property”). Justice Harrison summarily dismissed those proceedings on 21 July 2017: Spiliotopoulos v National Australia Bank Ltd [2017] NSWSC 971.
Following summary dismissal, Ms Jackson filed a notice of motion seeking her costs of the Supreme Court Proceedings. On 27 September 2017, Harrison J ordered Mr Spiliotopoulos to pay Ms Jackson’s costs “on an ordinary basis prior to and including 20 August 2016 and thereafter on an indemnity basis”. Mr Spiliotopoulos was also ordered to pay the costs of the Notice of Motion: Spiliotopoulos v National Australia Bank Limited [2017] NSWSC 1069 (“Supreme Court Costs Proceedings”).
Ms Jackson’s costs were assessed and certificates of determination for $129,289.30 and $4,216.58 were issued on 11 December 2018. Upon registration of those certificates, on 13 December 2018 judgment for $133,505.88 was entered in Ms Jackson’s favour in the District Court of New South Wales.
The Bankruptcy Notice which is the subject of this proceeding was issued on 17 December 2019 and was based on the District Court judgment.
APPLICANT’S APPLICATION
Mr Spiliotopoulos sought the following relief in his application filed on 4 January 2019:
Orders and declarations for the purposes of Section 30 of the Bankruptcy Act, Rules 3.02 and 3.03 of the Federal Circuit Court (Bankruptcy) Rules 2016 Cth, and such other Rules of Court, provisions of the Federal Court Act and or the Federal Circuit Court Act, and / or pursuant to the Bankruptcy Act Regulations (Cth) as are appropriate, and as are detailed following:
1.A Declaration that the judgment relied upon for the purposes of Bankruptcy Notice numbered BN232143 is not a proper judgment for the purposes of bankruptcy;
2.An order that the Court determine in the exercise of its bankruptcy jurisdiction, the value of the principal claim that the Applicant sort [sic] to bring in the proceedings to which the Respondent's judgment as to costs relates and was occasioned, and that the amount of that claim be set off against the judgment as to costs that the Respondent relies upon for the purposes of the Bankruptcy Notice numbered BN232143;
3.An order that Bankruptcy Notice numbered BN232143 dated 17 December 2018 be set aside;
…
The basis of the application was set out in Mr Spiliotopoulos’s affidavit sworn 4 January 2019:
5.I have attempted to plead a case against the Respondent that she had fraudulently attested as to my signature on a mortgage over my home in circumstances in which I had not been present, at the time that it was signed.
…
12.Because there is a finding of dishonesty in the decision of the [family law court] that followed the decision of the Supreme Court and in which the claims I made against Lorraine Jackson and that were dismissed without proceeding to hearing, I say that I have a maintainable claim against Lorraine Jackson for the purposes of bankruptcy, and concerning:
(i)the circumstances in which the mortgage came into existence; and,
(ii)that the value of the claim exceeds the costs claim that has been brought against me by the Respondent, for the purposes of the bankruptcy notice that is the subject of these proceedings.
In relation to the latter point, Mr Spiliotopoulos deposed in his affidavit sworn 28 February 2019 that as a consequence of the alleged fraud he had suffered the following loss and damage:
a)$382,930.68 being the cost of paying out the debt secured by the mortgage;
b)$175,758.63 for NAB’s legal expenses and fees;
c)$20,020 for real estate agent fees; and
d)$3,500 for marketing expenses.
NOTICE OF GROUNDS OF OPPOSITION
On 25 January 2019 Ms Jackson filed a notice stating grounds of opposition pleading:
1.The Judgment relied on for the purposes of Bankruptcy Notice BN232143 is a proper judgment for the purposes of bankruptcy.
2.The matters relating to the applicant's “principal claim” have already been determined in Supreme Court Proceeding 2015/82205, in which proceeding the Court summarily dismissed the applicant's claim. The applicant cannot seek to re-litigate this dispute by the operation of the principle of res judicata.
3.The applicant is estopped from seeking a determination of the value of its “principal claim”.
4.A determination of the applicant's “principal claim” would be an abuse of process.
EVIDENCE
Applicant’s evidence
Mr Spiliotopoulos deposed that:
a)he had been the sole registered proprietor of the Property which his former wife mortgaged without his knowledge;
b)he had not signed the mortgage;
c)he had alleged in the Supreme Court Proceedings that Ms Jackson had fraudulently attested his signature on the mortgage documents;
d)the Supreme Court Proceedings were struck out in circumstances where an expert report said that he had in fact signed the mortgage document;
e)he had admitted in family law proceedings that the mortgage had been entered into without his knowledge and the family law judgment confirmed that the mortgage had been entered into in circumstances that involved deception;
f)as a result he has a maintainable claim against Ms Jackson; and
g)his claim against Ms Jackson exceeded the amount particularised in the bankruptcy notice.
Mr Spiliotopoulos also deposed that he had filed an application for review of the costs determination.
Respondent’s evidence
Ms Jackson swore an affidavit on 25 January 2019 which was read in this proceeding. It annexed copies of the order for costs in the Supreme Court Proceedings in respect of the substantive proceeding and the application for costs, the certificates of determination of those costs, the District Court “Judgment/Order” in the sum of $133,505.88 in respect of those determinations and the Bankruptcy Notice based on the judgment of the District Court.
Ms Jackson deposed that as at the date of her affidavit no filed notice of appeal or notice of intention to appeal the Supreme Court Proceedings had been served on her solicitors. Ms Jackson annexed to her affidavit a copy of Harrison J’s judgment in the Supreme Court Proceedings.
Ms Jackson also gave oral evidence at the hearing in this matter. Relevantly, her evidence was that one day at work, Ms Spiliotopoulos had asked her to witness her signature on a document. Ms Jackson said she went around to Ms Spiliotopoulos’s workstation and saw that she had a document in front of her, which she saw her sign. Ms Jackson said that she then signed the document herself. The document had been folded over and secured with a bulldog clip.
Litigious background
Supreme Court Proceedings
In his reasons for judgment, Harrison J recounted that Mr Spiliotopoulos had initially alleged fraud against Ms Jackson at the outset only to abandon it and later seek to revive it in his reply as an allegation of equitable fraud. Justice Harrison observed in that connection:
16.… The plaintiff now asserts that in referring to his claim as one alleging equitable fraud he is relieved of the obligation specifically to plead Ms Jackson’s state of mind at the relevant time, such as that she witnessed the fourth defendant [ie Ms Spiliotopoulos] signing the mortgage well knowing that the fourth defendant was forging her husband’s signature.
His Honour accepted Ms Jackson’s argument that Mr Spiliotopoulos’s Supreme Court claim of fraud was hopeless:
20.Ms Jackson submitted that the plaintiff’s allegations of fraud are an attempt to overcome the inescapable reality that he is unable to point to any particular knowledge on her part to substantiate them. Moreover, it is plainly wrong as a matter of law. As noted in Seymour v Seymour (1996) 40 NSWLR 358,
“[e]quitable fraud is a doctrine which depends, for this purpose, too much on nice distinctions which have been drawn in other times … In my opinion, there must be in what is involved a consciousness that what is being done is wrong or that to take advantage of the situation involves wrongdoing” [emphasis added].
His Honour stated:
32.The essential point is that if one seeks to make out a case of fraud, this must be made very clear from the pleading and the facts upon which the allegation of fraud is based must be distinctly pleaded. It is impermissible simply to plead a whole series of facts and, at some stage in the proceedings, assert that some or all of those facts would support a finding of fraud.
…
39.… The plaintiff cannot, and never has, put his case against Ms Jackson any higher than that she incorrectly witnessed the signing of a document without satisfying herself of the nature of the document and ensuring that the person whose signature she was witnessing was the person named in the document. At its highest, those facts are sufficient to disclose a cause of action in negligence but not fraud.
Family law proceeding
Mr Spiliotopoulos introduced into evidence a copy of the family law judgment relating to his property proceedings with Ms Spiliotopoulos that he had referred to in his affidavit sworn 4 January 2019. The family law judge found that Ms Spiliotopoulos had secured Mr Spiliotopoulos’s signature on the mortgage by a deception, wrongly telling him that “the bank” wanted him to sign the document. The family law judge concluded that Ms Spiliotopoulos had misled Mr Spiliotopoulos about the mortgage so she could borrow money to assist a relative without Mr Spiliotopoulos finding about it. The family law judge also found that Mr Spiliotopoulos had not been willing to arrange to have his signature witnessed and had suggested to Ms Spiliotopoulos that she have someone she knew “witness” it.
RELEVANT LEGISLATION
Bankruptcy Act
Section 30 of the Bankruptcy Act 1966 (“Act”) relevantly provides as follows:
30General powers of Courts in bankruptcy
(1)The Court:
(a)has full power to decide all questions, whether of law or of fact, in any case of bankruptcy or any matter under Part IX, X or XI coming within the cognizance of the Court; and
(b)may make such orders (including declaratory orders and orders granting injunctions or other equitable remedies) as the Court considers necessary for the purposes of carrying out or giving effect to this Act in any such case or matter.
…
Section 40(1)(g) of the Act relevantly provides as follows:
40Acts of bankruptcy
(1)A debtor commits an act of bankruptcy in each of the following cases:
…
(g)if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not:
(i) where the notice was served in Australia—within the time specified in the notice; or
(ii) where the notice was served elsewhere—within the time fixed for the purpose by the order giving leave to effect the service;
comply with the requirements of the notice or satisfy the Court that he or she has a counter‑claim, set‑off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter‑claim, set‑off or cross demand that he or she could not have set up in the action or proceeding in which the judgment or order was obtained;
…
Subsections 41(6A) and (7) of the Act relevantly provides as follows:
41 Bankruptcy notices
…
(6A)Where, before the expiration of the time fixed for compliance with the requirements of a bankruptcy notice:
(a)proceedings to set aside a judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; or
(b)an application has been made to the Court to set aside the bankruptcy notice;
the Court may, subject to subsection (6C), extend the time for compliance with the bankruptcy notice.
(7)Where, before the expiration of the time fixed for compliance with the requirements of a bankruptcy notice, the debtor has applied to the Court for an order setting aside the bankruptcy notice on the ground that the debtor has such a counter‑claim, set‑off or cross demand as is referred to in paragraph 40(1)(g), and the Court has not, before the expiration of that time, determined whether it is satisfied that the debtor has such a counter‑claim, set‑off or cross demand, that time shall be deemed to have been extended, immediately before its expiration, until and including the day on which the Court determines whether it is so satisfied.
Limitation Act 1969 (NSW)
Section 14(1)(b) of the Limitation Act 1969 (NSW) (“Limitation Act”) provides that the limitation period for an action in tort is six years.
Section 55 of the Limitation Act relevantly provides:
55 Fraud and deceit
(1) Subject to subsection (3) where:
…
(b)a cause of action or the identity of a person against whom a cause of action lies is fraudulently concealed,
the time which elapses after a limitation period fixed by or under this Act for the cause of action commences to run and before the date on which a person having (either solely or with other persons) the cause of action first discovers, or may with reasonable diligence discover, the fraud deceit or concealment, as the case may be, does not count in the reckoning of the limitation period for an action on the cause of action by the person or by a person claiming through the person against a person answerable for the fraud deceit or concealment.
…
Subsection (3) of s.55 is not relevant to this proceeding.
SUBMISSIONS
Mr Spiliotopoulos submitted that:
a)Ms Jackson attested a signature on the mortgage of the Property that purported to be his signature although she had not seen him sign the document;
b)a person who attests a signature in such circumstances is liable “to the Plaintiff in the circumstances of fraud and irregularity” for losses suffered as a result;
c)such an attestation is an untrue representation and so dishonest;
d)there was expert handwriting analysis evidence adduced in the Supreme Court Proceedings, the burden of which was that the “signature on the mortgage was in all probability” his. Mr Spiliotopoulos invited the Court “to proceed on the basis that he may well have signed the mortgage” and, on that basis, the case was:
… one of deception as to the circumstances in which the mortgage was shown and presented to him by the persons that organised for him to sign it - that person being the Applicant's former spouse … who evidently presented the mortgage to the Applicant in circumstances in which he had no idea as to what it was.
In addresses, Mr Spiliotopoulos argued:
… The fraud on the part of the respondent is not a fraud, dishonesty or deception in the circumstances in which she … signed the mortgage. The fraud that we would allege is the equitable fraud of in the circumstances where it was the respondent’s conduct, on our submission, that has brought about financial loss, which we will develop also in our submission, where – where the respondent by having signed the mortgage in circumstances in which Mr Spiliotopoulos was not there, it is her conduct, rightfully or wrongfully – and we say wrongfully – that has brought about the situation that has ultimately led one to loss, and that has ultimately kept Mr Spiliotopoulos out of the means of knowledge of the fact of the mortgage.
…
… this mortgage has been signed in circumstances that clearly amount to recklessness, because Ms Jackson didn’t ask to see the whole of the document that she was witnessing, and that it has been - - -
Despite having raised questions of equitable fraud, which had figured in Harrison J’s judgment, Mr Spiliotopoulos later expressly eschewed reliance on such concepts and, instead, contended that Ms Jackson was liable to him in negligence. Pointing out that the signature part of the mortgage referred to “Signature of Mortgagor” and that the witness’s certification stated:
I certify that the mortgagor, with whom I am personally acquainted or as to whose identity I am otherwise satisfied, signed this mortgage in my presence.
Mr Spiliotopoulos submitted that:
… it is enough that this was a mortgage, that the respondent placed her signature on that document as an attesting witness, failing to properly satisfy herself as to what the document actually was, and in circumstances also in which, in her defence, she now admits that the mortgagor was not there. And that creates the circumstance of concealment, and that in the circumstances where it is her conduct – and I don’t – it doesn’t need to be dishonest conduct. It is her conduct that has created the means by which this document never came to the attention of the mortgagor.
He submitted that fraud had been his former wife’s.
The material burden of Mr Spiliotopoulos’s submissions was that although the mortgage had been registered in 2005, and thus he suffered damage at that time, his tort claim was not statute barred because he had only become aware of the mortgage much later, in 2015 according to his Supreme Court statement of claim, and his lack of awareness of the mortgage had been caused by Ms Jackson’s concealment of her actions. His position was that time did not start to run until he learned of the mortgage.
In support of that contention Mr Spiliotopoulos argued that it must have been Ms Jackson’s:
… conduct that led to a concealment, or she must have contributed to the concealment, and part of our case is that when you attest a mortgage for a document that has not been signed by the mortgagor, when you do that, your conduct, whether it was intentional or not, deploys the possibility of concealment, and you have played a role in that, and where your conduct deploys the possibility of concealment, it doesn’t then later behove you to say, “Yes. Well, there’s a thing called the statute of limitations and I’m going to take the benefit of it”.
He continued:
We don’t say that Ms Jackson did anything to conceal the circumstances in which she signed this mortgage. She just as likely went home, and that’s it. It is sufficient that [s]he knowingly committed it; in other words, she knowingly signed it, and did not tell the owner anything about it. To that extent, it was done secretly. Now, that’s just an unfortunate fact of this chain of events, and it’s in those circumstances that we say that it – forget about the word “fraud” or anything else. You can’t raise this statute against us until we actually knew. …
Mr Spiliotopoulos also submitted:
… we say that to raise the limitation defence itself is the fraud about which we speak, to plead a statute to divest the plaintiff of his cause of action, which through no fault of his own, you seek to deprive him, when you’re the person who through your actions placed the plaintiff in the position where he never knew. …
On the subject of the application of the limitation period in his case, Mr Spiliotopoulos relied on what Lord Denning MR said in King v Victor Parsons & Co [1973] 1 All ER 206:
In order to show that he “concealed” the right of action “by fraud”, it is not necessary to show that he took active steps to conceal his wrongdoing or his breach of contract. It is sufficient that he knowingly committed it and did not tell the owner anything about it. He did the wrong or committed the breach secretly. By saying nothing he keeps it secret. He conceals the right of action. He conceals it by “fraud” as those words have been interpreted in the cases. To this word “knowingly” there must be added “recklessly” … Like the man who turns a blind eye he is aware that what he is doing may well be wrong, or a breach of contract, but he takes a risk of it being so. He refrains from further inquiry lest it should prove to be correct; and says nothing about it. The court will not allow him to get way with conduct of that kind. It may be that he has no dishonest motive; but that does not matter. He has kept the plaintiff out of the knowledge of his right of action; and that is enough … (references omitted) (at 209)
CONSIDERATION
The Court can set aside a bankruptcy notice if, in truth, no debt lies behind the judgment on which the bankruptcy notice is based. In the High Court in Ramsay Health Care Australia Pty Ltd v Compton (2017) 261 CLR 132, the majority accepted the proposition that :
… the Bankruptcy Court should go behind a judgment where sufficient reason is shown for questioning whether behind the judgment there is in truth and reality a debt due to the petitioning creditor. (at 143 [37]-[38])
Their Honours continued:
In point of principle, scrutiny by a Bankruptcy Court of the debt propounded by a judgment creditor seeking a sequestration order in no sense involves an attempt to impeach the judgment. … Rather, a Bankruptcy Court is concerned with whether the debt on which it is based is truly a basis for the making of a sequestration order. A Bankruptcy Court has a statutory duty to be “satisfied” as to the existence of the petitioning creditor's debt; a creditor should not be able to make a person bankrupt on a debt which is not provable. (reference omitted) (at 147 [54])
The relevant principles had earlier been summarised by Wigney J in Katter v Melhem (No 2) [2014] FCA 1176 at [69]-[79] as follows:
a)the existence of a judgment is prima facie evidence of a debt. However, a judgment is never conclusive in bankruptcy and the Court has a discretion to “go behind” the judgment to investigate whether there was a good debt to support it;
b)the Court will not, however, inquire into the consideration for a judgment as a matter of course. Whilst the circumstances in which the Court will inquire into the validity of a judgment debt are not closed and there is no inflexible rule, it is possible to identify a number of guiding principles:
·first, the Court looks with suspicion on consent judgments and default judgments. Where the judgment in question is a default judgment, it appears that the Court will always “go behind” the judgment if there is what it regards as a bona fide allegation that no real debt lay behind the judgment;
·second, if the judgment in question followed a full investigation at a trial at which both parties appeared, the Court will not reopen the matter unless a prima facie case of fraud or collusion or miscarriage of justice is made out;
·third, where judgment has been entered in pursuance of a compromise, grounds must be shown for challenging the compromise before the subject matter of the judgment will be reopened. That is because it is the compromise and not the claim that was compromised that is the foundation of the judgment.
Where a party challenges a judgment entered on a compromise and that party has acted on the advice of counsel, the judgment will not generally be reopened. The presumption in such circumstances is that it is difficult, although not impossible, to impugn the compromise. One instance where the Court may go behind a judgment in these circumstances is where both parties knew the original claim was not a bona fide claim and the judgment or compromise was obtained by dishonesty known to both parties. If, however, counsel had full knowledge of all relevant facts, and no suspicion of unfairness or impropriety in the compromise arises, a court may decline to go behind a judgment submitted to on the advice of counsel.
The fact that the debtor may have been pressured by his legal advisers to compromise the claim, despite the merits of his defence, will not generally be sufficient to warrant going behind the judgment entered pursuant to that compromise. That will particularly be the case where the judgment creditor was unaware of, or was not implicated in, the alleged undue pressure.
The mere fact that the compromise may not have been “in accordance with the true merits of the claims made” will not be sufficient to impugn the compromise. Such a circumstance alone will therefore not warrant the Court going behind the judgment;
·fourth, the Court should not go behind a judgment where the grounds upon which the judgment is challenged are such that, if accepted, they would only support a finding that the amount of the debt be reduced and would not support a finding that there was, in truth, no debt at all;
·the particular circumstances of any given case may no doubt throw up other considerations relevant to whether the Court should exercise its discretion to go behind a judgment. Where the judgment debtor seeks to go behind the judgment on particular grounds, it is difficult to see why it would not be a relevant consideration that those grounds could have been, but were not, raised in opposition to the judgment, or in an application to set aside the judgment. Parties are ordinarily bound by the way they have chosen to conduct litigation. The fact that, for whatever reason, a party did not put particular arguments before the court that made (or refused to set aside) the judgment does not mean that there was no relevant hearing on the merits; and
·the question whether the judgment is to be reopened or “gone behind” at all will usually involve some preliminary investigation of the merits of the attack of the judgment. That question can and often is dealt with as a preliminary question. Once the Court decides that it will go behind the judgment, the whole of the matter is open. Where it is legitimate to go behind a judgment entered after trial, there would effectively be no alternative but to retry the whole case.
Mr Spiliotopoulos appeared to be prosecuting one or both of the following arguments:
a)if Ms Jackson was liable to Mr Spiliotopoulos in negligence then the Supreme Court Proceeding should not have been dismissed and so Mr Spiliotopoulos ought not to have been ordered to pay her costs of those proceedings;
b)if Ms Jackson was liable to Mr Spiliotopoulos in negligence then the amount she owed him in damages was (much) greater than the amount he owed her for costs.
In either case, the position would seem to be that there was no debt, or no at least no net debt, owed to Ms Jackson.
Both of those approaches involved an acceptance that Mr Spiliotopoulos had a cause of action in negligence against Ms Jackson and that it was available to him to pursue. As recorded earlier, he submitted that that cause of action was still available to him because the statute bar which would otherwise have made a cause of action which accrued in 2005 not maintainable did not apply in this case because of the operation of s.55(1)(b) of the Limitation Act. The operation of that provision was explained by the NSW Court of Appeal in Seymour v Seymour (1996) 40 NSWLR 358 where Mahoney ACJ said at 372, Meagher JA and Abadee AJA agreeing at 373:
In my opinion, there must be in what is involved a consciousness that what is being done is wrong or that to take advantage of the relevant situation involves wrongdoing. At least, this is so in the generality of cases. (There is in this as in many things, the problem of dealing with the person who “closes his eyes to wrong” or is so lacking in conscience that he is not conscious of his own lack of proper standards.)
That statement of the law was applied by a differently constituted Court of Appeal in Gerace v Auzhair Supplies Pty Ltd (2014) 87 NSWLR 435 at 457-458 [76].
The issue then is whether it has been demonstrated that Ms Jackson was guilty of the sort of conscious wrongdoing which engages s.55(1)(b) of the Limitation Act. The only evidence before the Court of Ms Jackson’s state of mind at the time she signed the mortgage was her own evidence that she believed that she saw Ms Spiliotopoulos sign it and that it was Ms Spiliotopoulos’s signature she witnessed. In addresses,
Mr Spiliotopoulos submitted that there was no reason not to accept
Ms Jackson as a witness of truth. I accept her evidence.
There is therefore no basis to conclude that Ms Jackson was conscious of having been guilty of any wrongdoing such that she acted fraudulently as that word in understood in the context of s.55(1)(b) of the Limitation Act. As a result, even assuming for present purposes that
Mr Spiliotopoulos did at one point have a cause of action in negligence against Ms Jackson based on her certification of his signature on the mortgage, I am not persuaded that her failure to mention that act amounted to a fraudulent concealment by her of the cause of action such that s.55(1)(b) of the Limitation Act was engaged.
Given those findings, I am also not persuaded that there exist substantial reasons to doubt that in truth and reality Mr Spiliotopoulos owes a debt to Ms Jackson on the grounds that:
a)
he had a maintainable claim of negligence against Ms Jackson, such that the Supreme Court Proceedings should not have been dismissed and he ought not to have been ordered to pay
Ms Jackson’s costs of those proceedings; or
b)Ms Jackson owed him a sum that was greater than the amount he owed her for costs.
However, there is evidence of the Supreme Court Proceedings, the Supreme Court Costs Proceedings and the District Court Judgment. They satisfy me that there is a debt grounding the Bankruptcy Notice as stated in the Bankruptcy Notice
CONCLUSION
The application will be dismissed.
I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of Judge Cameron
Associate:
Date: 20 April 2020
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