State of Victoria v Tucker
[2023] FedCFamC2G 796
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
State of Victoria v Tucker [2023] FedCFamC2G 796
File number(s): MLG 1600 of 2022 Judgment of: JUDGE SYMONS Date of judgment: 30 August 2023 Catchwords: BANKRUPTCY – application for a sequestration order heard together with application for dismissal of creditor’s petition – whether the Court has jurisdiction to make sequestration order pursuant to s 43(1) of the Bankruptcy Act 1966 (Cth) – whether at time of act of bankruptcy the respondent had a dwelling-house in Australia for purpose of s 43(1)(b)(ii) – whether the creditor’s petition is an abuse of the Court’s process - petition opposed on the basis of asserted offsetting and counter-claims and extant fraud proceeding directed at the underlying judgment debt – application for summary dismissal dismissed – creditor’s petition dismissed Legislation: Bankruptcy Act 1966 (Cth) ss 43, 52
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 143
Privacy and Data Protection Act 2014 (Vic) s 77.
Federal Circuit and Family Court of Australia (Division 2)(General Federal Law) Rules 2021 r 13.13
Supreme Court Act 1986 (Vic) s 101.
Cases cited: Alford v Alford (2017) 252 FCR 168; [2017] FCA 782
Bride v KMG Hungerfords (a firm) (unreported, Federal Court of Australia Full Court, Carr, Branson and Nicholson JJ, 23 April 1998)
Cadence (90) Investments Pty Ltd v Chalmers, in the matter of Chalmers [2021] FCCA 29
Clapham v Commonwealth Bank [2013] FCAFC 84 Endresz v Australian Securities and Investments Commission (No 2) (2015) 228 FCR 334; [2015] FCAFC 33
Commissioner of Taxation v Vasiliades (2016) 344 ALR 558; [2016] FCAFC 170
Comaz (Aust) Pty Ltd v Commissioner of State Revenue (2015) 101 ATR 339; [2015] VSC 294
Fuller v Alford (2017) 252 FCR 168; [2017] FCA 782
Guss v Federal Commissioner of Taxation (2015) 238 FCR 509; [2015] FCA 841
Leach v Burston [2022] FCA 87
Li v Ren [2018] FCCA 806
Li v Wu [2020] FCA 776
Mathai v Kwee [2005] FCA 932
Napiat Pty Ltd v Salfinger; In the Matter of Salfinger (No 7) (2011) 202 FCR 264; [2011] FCA 1322
Re Boles [2000] FCA 1782
Re Brauch (A Debtor) Ex parte Britannic Securities & Investments Ltd (1978) 1 Ch 316
Re Coyne, Ex parte Binningup (South) Pty Ltd (unreported, Federal Court of Australia, French J, 10 November 1992)
Re Hecquard (1889) 24 QBD 71
Re Majory; ex parte Debtor v F A Dumont Ltd [1955] Ch 600
Rozenbes v Kronhill (1956) 95 CLR 407
Totev v Sfar (2006) 230 ALR 236; [2006] FCA 470
Tucker v McKee (2022) 292 FCR 666; [2022] FCAFC 98
Tucker v State of Victoria [2022] FCA 1449
Tucker v State of Victoria [2023] VSCA 126
Tucker v State of Victoria & Anor [2022] VSC 760
Tucker v Victoria [2021] VSCA 120
Williams v Spautz (1992) 174 CLR 509; [1992] HCA 34
Division: Division 2 General Federal Law Number of paragraphs: 164 Date of last submission: 31 May 2023 Date of hearing: 5-6 December 2022 Place: Melbourne Counsel for the Applicant: Mr A Silver and Ms A Tresise Solicitor for the Applicant: Blue Rock Law (Melb) Pty Ltd Respondent: In person ORDERS
MLG 1600 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: THE STATE OF VICTORIA
Applicant
AND: TOBIAS JOHN TUCKER
Respondent
order made by:
JUDGE symons
DATE OF ORDER:
30 august 2023
THE COURT ORDERS THAT:
1.The application made on 28 September 2022 to summarily dismiss the creditor’s petition be dismissed.
2.The creditor’s petition filed on 11 July 2022 and extended on 29 June 2023 be dismissed.
3.On or before 4pm on 27 September 2023, the parties file and serve any submissions as to the costs of the application for summary dismissal and/or the creditor’s petition with any such submission not to exceed 4 pages. Upon receipt of any submissions the Court will determine the question of costs (if any) on the papers.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
TABLE OF CONTENTS
INTRODUCTION
[1]
THE HEARING
[3]
THE MATERIAL RELIED UPON
[8]
The State
[8]
Mr Tucker
[10]
THE PARTIES’ ARGUMENTS IN SUMMARY
[12]
Mr Tucker
[12]
The "dwelling-house" issue
[15]
Abuse of process
[30]
Mr Tucker’s cross-claims
[34]
The State
[38]
The State’s response to the “dwelling house” argument
[38]
The State’s response to the abuse of process claim
[57]
The State’s response to the cross-claim argument
[62]
The State’s response to the judgment debt argument
[70]
SHOULD THE STATE’S CREDITOR’S PETITION BE DISMISSED?
[99]
Summary dismissal principles
[99]
At the time that Mr Tucker committed an act of bankruptcy did he have a dwelling-house in Australia?
[104]
Previous decisions
[104]
THE STATE HAS NOT ESTABLISHED THAT MR TUCKER HAD A DWELLING-HOUSE AT THE DATE THE ACT OF BANKRUPTCY OCCURRED
[127]
THE OTHER GROUNDS RELIED UPON BY MR TUCKER DO NOT ESTABLISH THAT THE CREDITOR’S PETITION SHOULD BE SUMMARILY DISMISSED
[147]
The State’s creditor’s petition is not an abuse of process
[147]
Mr Tucker has not established that he has cross-claims that are likely to succeed or unpaid costs orders that will extinguish the judgment debt
[153]
Mr Tucker has not established that there are substantial or genuine and arguable grounds that his fraud proceeding will be successful, including so as to bring the judgment debt under the bankruptcy threshold of $10,000
[161]
ORDERS
[163]
JUDGE SYMONS:
INTRODUCTION
These reasons for judgment concern an application by the State of Victoria (the State) filed on 11 July 2022 for a sequestration order under s 43 of the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act) against the estate of the respondent, Tobias John Tucker (Mr Tucker).[1] The application relates to an undertaking of damages order made on 21 April 2020 that required Mr Tucker to pay the State the sum of $199,681.46 (the judgment debt). The order was made in proceedings brought by Mr Tucker against the State to prevent the finalisation of a disciplinary process initiated against him while he was an employee of the State Revenue Office (the injunction proceeding).
[1] On 29 June 2023 an order was made pursuant to s 52(5) of the Bankruptcy Act extending the creditor’s petition up to and including 31 August 2023.
Mr Tucker opposes the application for a sequestration order on four grounds identified in a notice of opposition filed on 25 August 2022. Mr Tucker also applies for the summary dismissal of the creditor’s petition on grounds identified in an application filed on 28 September 2022, which are relevantly indistinguishable from those identified in the notice of opposition. Mr Tucker agreed that arguments directed at his application for summary dismissal should be understood as incorporating his arguments directed at his opposition to the creditor’s petition more generally.
THE HEARING
The hearing of the creditor’s petition and Mr Tucker’s application for summary dismissal took place in the afternoon of 5 December 2022 and the morning of 6 December 2022. The hearing on 5 December 2022 was postponed to the afternoon to accommodate the parties’ participation in a hearing in the Supreme Court of Victoria. The outcome of this hearing is a matter to which I will return later in these reasons.
The State was represented by Mr Silver and Ms Tresise of counsel and Mr Tucker represented himself. The hearing took place using Microsoft Teams technology at the request of Mr Tucker who, at the time of the hearing, was located in Bali, Indonesia. As will become apparent, questions of domicile assume a particular significance in this proceeding.
At the commencement of the hearing on 5 December 2022, Mr Tucker re-agitated an application that his application for summary judgment be determined separately and ahead of the State’s application for a sequestration order. I say “re-agitated” because on 25 October 2022, Mr Tucker made a similar application. On that date I refused Mr Tucker’s application and instead made an order that the hearing of the State’s creditor’s petition and Mr Tucker’s application for summary dismissal be listed for hearing together on 5 December 2022.
Mr Tucker applied for leave to appeal from the orders made on this date. The application for leave was heard by the Federal Court (Anderson J) on 1 December 2022. His Honour made orders dismissing Mr Tucker’s application and awarding costs to the State (refer Tucker v State of Victoria [2022] FCA 1449).
Against this background and in circumstances where I remained of the view that the State’s application for a sequestration order and Mr Tucker’s application for summary judgment could be comfortably heard together within the two days allocated to them, and where there was substantial overlap between the matters identified in the application for summary judgment and the matters raised in opposition to the creditor’s petition, I refused Mr Tucker’s application to have the summary judgment application heard separately, as well as his application to stay the hearing of the creditor’s petition.
THE MATERIAL RELIED UPON
The State
The State read into evidence and relied upon the affidavit of Alexander Price affirmed 11 July 2022 that verified the creditor’s petition, the affidavit of search of Annabel Clark sworn on 11 July 2022, the affidavit of service of the creditor’s petition and related documents sworn by Claudia Baskett on 18 August 2022, the second affidavit of Alexander Price affirmed 8 November 2022, an affidavit of search sworn by Claudia Baskett on 5 December 2022 and an affidavit of debt affirmed by Alexander Price on 5 December 2022. Only Mr Price, who is an Assistant General Counsel for the Department of Treasury and Finance for the State of Victoria, was required for cross-examination.
The State also tendered the following documents that had been the subject of a subpoena issued to the Department of Home Affairs: (i) an incoming passenger card of Mr Tucker dated 28 January 2022; [2] (ii) the movement records of Mr Tucker from 1 January 2022 to 15 March 2022; [3] and (iii) a Movement Records Key (which explained the second document).[4]
[2] Exhibit “A1”.
[3] Exhibit “A2”.
[4] Exhibit “A3”.
Mr Tucker
Mr Tucker read into evidence and relied upon his affidavit made in opposition to the State’s creditor’s petition that was affirmed on 25 August 2022, the affidavit of lawyer Giulio (Jules) Marra affirmed on 28 September 2022 and the affidavit of Mr Tucker’s mother, Anne Patricia Tucker affirmed on 27 September 2022, both of which were made in support of Mr Tucker’s application for summary judgment. Mr Tucker also relied upon two further affidavits that he affirmed on 1 and 2 December 2022, the first of which was directed at Mr Tucker’s application to stay the hearing of the State’s creditor’s petition pending the hearing and determination of the summary dismissal application and the second of which attached Mr Tucker’s travel records for the period 1 November 2019 to 27 October 2022 (provided by the Department of Home Affairs), the travel itinerary for Mr Tucker’s visit to Australia in January and February 2022 and a photograph of Mr Tucker’s incoming passenger card completed on 28 January 2022.
Although the State indicated that it wished to cross examine Mr Marra on one aspect of his affidavit, when Mr Tucker informed the Court on the morning of the second day of the hearing that Mr Marra was not available, the State did not press for a ruling that the evidence of Mr Marra be struck out. Instead, the State submitted that the failure of Mr Marra to make himself available for cross-examination was a matter that the Court could take into account when assessing what weight to give his evidence.
THE PARTIES’ ARGUMENTS IN SUMMARY
Mr Tucker
In the slightly unusual circumstances of this case, which involve the prosecution by the State of an application for a sequestration order and an application by Mr Tucker for the summary dismissal of the State’s creditor’s petition I consider it convenient to first identify the arguments made by Mr Tucker. This reflects the interlocutory character of Mr Tucker’s application but also the fact (a matter acknowledged by Mr Tucker) that he relied on the same arguments for both his summary dismissal application and his grounds of opposition to the creditor’s petition.
These arguments were identified in the affidavit of Mr Marra and in Mr Tucker’s notice stating grounds of opposition as:
(a)the Court lacks jurisdiction to make a sequestration order;
(b)the creditor’s petition is an abuse of process;
(c)the respondent has genuine and arguable claims against the applicant which counterbalance the alleged debt the subject of the petition; and
(d)the judgment debt relied on by the applicant is the subject of an application that it be set aside, filed in the Supreme Court of Victoria, and dated 23 August 2022.
Mr Tucker argued that for the purpose of r 13.13(a), (b) and/or (c) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (the Rules) these arguments (if accepted) would have the result that the creditor’s petition should properly be characterised as an abuse of process, vexatious and/or frivolous and one that the Court lacks jurisdiction to entertain. It was this last argument that occupied the majority of the parties’ evidence and submissions and so it is convenient that I deal with this first.
The “dwelling-house” issue
The issue of “jurisdiction” or “the dwelling-house issue” arises by virtue of the requirement on the part of the State (as the petitioning creditor) to (amongst other things) satisfy the Court that the debtor has the required nexus with Australia at the time of commission of the act of bankruptcy. This requirement is contained in s 43(1) of the Bankruptcy Act, which states:
Jurisdiction to make sequestration orders
(1) 43(1) Subject to this Act, where:
(a)a debtor has committed an act of bankruptcy; and
(b)at the time when the act of bankruptcy was committed, the debtor;
(i)was personally present or ordinarily resident in Australia;
(ii)had a dwelling-house or place of business in Australia;
(iii)was carrying on business in Australia, either personally or by means of an agent or manager; or
(iv)was a member of a firm or partnership carrying on business in Australia by means of a partner or partners or of an agent or manager.
the Court may, on a petition presented by a creditor, make a sequestration order against the estate of the debtor.
It is common ground that the act of bankruptcy relied upon by the State occurred on 4 March 2022 and that the State prepared and filed its creditor’s petition on the basis that at the time when the act of bankruptcy was committed, Mr Tucker had a dwelling-house in Australia. It is also common ground that the address of the “dwelling-house” has been consistently identified by the State as the property known as or located at, 3558 Point Nepean Road, Portsea, Victoria (the Portsea address).
Mr Tucker submits however that the State has failed to produce evidence that would allow the Court to find that at the relevant time, he had a dwelling-house for the purpose of s 43(1)(b)(ii) of the Bankruptcy Act and in particular, by reference to the decision of Mathai v Kwee [2005] FCA 932 at [116], has failed to produce evidence that he had maintained “a house in Australia which he uses or has used and may use as his residence and to which he may repair at his whim at any time”.
In this regard, Mr Tucker submits that in circumstances where the incontrovertible evidence (taken from the travel records and his 2 December 2022 affidavit) is that he has been in Australia for only 21 days in the past three years and was last in Australia on 20 February 2022, the State’s position is untenable. Mr Tucker referred the Court to English authority (Re Brauch (A Debtor) Ex parte Britannic Securities & Investments Ltd (1978) 1 Ch 316 at 335 per Goff LJ) which he submitted emphasised the significance of occupation to a conclusion that there was a dwelling-house.
Mr Tucker relies on the affidavit of his mother, Anne Tucker, in which she deposed to having lived at the Portsea address on a full-time basis since 2003. Annexed to her affidavit was a copy of the title search for the Portsea address which identified Mrs Tucker as the registered proprietor with an estate in fee simple.
Mrs Tucker deposed that while she was happy for her three adult children to stay at the Portsea address as guests for short duration - for example, at weekends or during the summer holidays – none of her children (including Mr Tucker) had ever:
(a)owned a set of keys permitting access to the Portsea address;
(b)had access to the Portsea address so they could stay when they liked;
(c)rented the Portsea address as a tenant;
(d)contributed financially to the Portsea address including by paying utility bills or rates;
(e)stayed at the Portsea address without Mrs Tucker’s knowledge or agreement;
(f)conducted repairs to the Portsea address without Mrs Tucker’s knowledge or agreement; or
(g)maintained a wardrobe of clothes and personal belongings at the Portsea address.
Mrs Tucker explained that from time to time she received post addressed to her children at the Portsea address and this was especially the case for Mr Tucker given that he has no other physical address in Australia at which to receive mail.
Mrs Tucker also deposed that Mr Tucker and his family had stayed with her at the Portsea address for approximately two weeks in late January/early February 2022. She described the purpose of the trip as creating the opportunity for her to meet her youngest grandchild (Mr Tucker’s second daughter) for the first time.
The State did not require Mrs Tucker for cross-examination but did make submissions regarding the weight to be afforded her evidence.
Mr Tucker also relies on his own affidavit dated 25 August 2022 in which he deposed to having lived, since September 2020, at 15 Rue Georges Bizet, Saint Medard, France (the French address), with his partner and two daughters, all of whom are French citizens. Annexed to Mr Tucker’s affidavit were documents in the French language that were said to constitute or record a lease agreement for the French address dated 30 August 2020 and 25 August 2021, utility bills for the French address dated 29 March 2022 and 29 July 2022 in the name of Mr Tucker, a letter dated 18 July 2022 confirming that Mr Tucker’s youngest daughter had been enrolled for crèche in the local area, a confirmation of enrolment in the local school for Mr Tucker’s eldest daughter for the 2022/2023 academic year and a report dated 12 May 2022 attesting to Mr Tucker’s attendance at a government funded language course.
Mr Tucker submits that the State’s “own evidence” is that he does not own property in Australia and has “ordinarily resided” overseas since at least April 2020. Mr Tucker is especially critical of what he invited the Court to find was an inconsistent approach taken by the State in relation to his connection to Australia.
Mr Tucker submitted that this was borne out by the submissions filed by the State on 2 February 2022 in proceeding VID 449 of 2021 at [18] to [19][5] where, in support of an application that Mr Tucker provide security for the State’s costs in his appeal from a decision of a single judge of the Federal Court refusing him leave to bring defamation proceedings against the State and Mr McKee (defamation proceedings) the State (and Mr McKee) had submitted:
[18]The respondents have adduced evidence that Mr Tucker has been “ordinarily resident” outside of Australia since before he commenced the proceeding below. From early 2020, Mr Tucker started living in France with his wife who was pregnant at the time.
[19]The fact that Mr Tucker, when travelling to Australia, stays at the residence of family members in Portsea, Victoria is not to the point. Nor is the fact that Mr Tucker uses that address as a post box relevant.
[5] CB 190.
Mr Tucker submitted that not only was this submission inconsistent with the assertion made by the State in this proceeding that he had a dwelling-house in Australia but that it also involved the making of a representation from which the State should be estopped from departing. Mr Tucker submitted that the State could not assert in one proceeding that the Portsea address was a post-box and in another, that it was a dwelling-house.
Mr Price was cross-examined by Mr Tucker about the alleged inconsistency in the State’s position. Mr Tucker placed particular importance on Mr Price’s acknowledgement that when he affirmed his 3 February 2022 affidavit in the defamation proceedings and deposed (at [17]) that the registered owner of the Portsea address was Anne Tucker and that she resided there with Robert Tucker,[6] that he did not know whether other people (including Mr Tucker) resided at the Portsea address and that he had ignored evidence given by Mr Tucker in his affidavit affirmed on 31 January 2022, also in the defamation proceeding, to the effect that as at that date Mr Tucker was residing there.[7] Mr Tucker also placed emphasis on Mr Price’s evidence that when he affirmed his affidavit on 11 July 2022 (in this proceeding) he did not have any evidence that Mr Tucker was in Australia and neither did he have any evidence that Mr Tucker was in Australia on the date of the act of bankruptcy, being 4 March 2022. Mr Price however denied that there was any inconsistency in the approach adopted by the State.
[6] CB 2254.
[7] CB 1809 [49].
Mr Tucker submitted that, to the extent that the State relied on such actions, the nomination of an Australian address for receiving notices, including legal notices, was not evidence of a dwelling-house and nor could such an address constitute a dwelling-house. He submitted that the use of such an address in an affidavit was not “emphatically or automatically a binding nomination of a dwelling house”. He also submitted that the one incoming passenger card relied on by the State was not determinative of the question of whether he had a dwelling-house in Australia.[8] He noted that in that same document he had incorrectly described himself as “not an Australian citizen” when in fact he is (and was) one. Mr Tucker also noted that he had ticked a box that identified the reason for his trip to Australia in January and February 2022 as “visiting friends or relatives”.
[8] CB 2506.
Abuse of process
Mr Tucker made the further submission that the State’s creditor’s petition was an abuse of process. This argument reflected the following matters:
(a)he had been in Australia for just 21 days over the past three years;
(b)he departed Australia on 20 February 2022;
(c)he does not own property in Australia;
(d)he does not rent property in Australia and has not done so for at least three years;
(e)he does not work in Australia; and
(f)he does not conduct business in Australia.
Allied to this submission, Mr Tucker was also critical of the timing of the State’s decision to file its creditor’s petition. Mr Tucker noted that the judgment debt had accrued on 21 April 2020 yet the State had waited until 11 July 2022 to file its petition and only after it had been informed – on 14 December 2021[9] and 22 March 2022[10] – that Mr Tucker had identified breaches by the State Revenue Office that (he said) would entitle him to orders setting aside the orders that gave rise to the judgment debt and only after, the Full Court of the Federal Court had, on 3 June 2022, “reinitiated” Mr Tucker’s defamation claim (refer Tucker v McKee [2022] FCAFC 98).
[9] See Marra affidavit affirmed 28 September 2022 at [40] and Annexure “GM-11”.
[10] See Marra affidavit affirmed 28 September 2022 at [42]-[43] and Annexure “GM-13”.
Although he placed less emphasis on this at the hearing, Mr Tucker also relied on Mr Marra’s evidence of a phone call that took place between himself and Mr Price on 11 May 2022, this being five days before the hearing of the appeal in the defamation proceedings. The file note made by Mr Marra recorded the following exchange:[11]
Alex Price (DTF) called 11 May 2022 at 12.12 PM
Said appeal had “little prospects” and TT would be required to pay costs.
Threatened bankruptcy if appeal wasn’t discontinued “things won’t go well” for TT and employment prospects wouldn’t “look good”. Confirmed we didn’t have instructions in the matter as yet.
Indicated SRO may drop bankruptcy if TT drops appeal but any deal had to be done “now”. No clear offer. Said I would pass info on to TT.
[11] See Marra affidavit affirmed 28 September 2022 at [35]-[36] and Annexure “GM-03”.
Mr Tucker submitted that all of these matters suggested that the State’s petition was filed for the collateral purpose of dissuading him from commencing or continuing with litigation against the State.
Mr Tucker’s cross-claims
The third argument advanced by Mr Tucker was that even if the Court did have jurisdiction to make a sequestration order, there were extant cross-claims of substance, including unpaid, unassessed tax orders that were owed to Mr Tucker by the State and which had a direct bearing on Mr Tucker’s solvency and meant that it was not appropriate to make a sequestration order. Instead, the petition should be dismissed, or it should be adjourned to allow these claims to be processed (refer Clapham v Commonwealth Bank [2013] FCAFC 84; Endresz v Australian Securities and Investments Commission (No 2) [2015] FCAFC 33 and Totev v Sfar [2006] FCA 470).
The claims identified by Mr Tucker were:
(a)his remitted defamation proceedings and a favourable costs order in the defamation proceedings relating to an interlocutory application brought by the State (VID 274/2020);
(b)Mr Tucker’s costs of his successful appeal in the defamation proceedings (VID 449/2021);
(c)Mr Tucker’s claim for compensation for privacy breaches in the Victorian Civil and Administrative Tribunal (H365/2020); and
(d)Mr Tucker’s application for special leave to appeal in the High Court of Australia the decision of a Full Court of the Federal Court dismissing his claim for pecuniary penalties arising from the State’s breach of an enterprise agreement (M81/2022).
Finally, and related to the previous submission, Mr Tucker also challenged the creditor’s petition on the basis that the judgment debt relied on by the State was the subject of an application that it be set aside, filed on 23 August 2022 in the Supreme Court of Victoria.
In his affidavit affirmed on 25 August 2022, Mr Tucker acknowledged that while it was difficult to precisely quantify each of the identified claims in financial terms, he considered that in their totality they would comfortably exceed the amount of $200,000, being the amount of the judgment debt.[12]
The State
[12] See Tucker affidavit affirmed 25 August 2022 at [49]; (CB 83).
The State’s response to the “dwelling house” argument
The State acknowledged that while the Bankruptcy Act did not contain a definition of the term “dwelling-house”, several cases provided guidance through the identification of indicia suggestive of the maintenance of a dwelling-house. The State submitted that in this regard, it was important not to conflate the test for “ordinarily resident” with that of dwelling-house because although they were both concerned with establishing a nexus between the individual and Australia, they occurred in different contexts. The State alleged that Mr Tucker’s submissions suffered from this difficulty, especially to the extent that he sought to undermine the State’s position through reference to its security for costs application in the defamation proceedings.
The State submitted that the fact that Mr Tucker had no legal or equitable right to occupy the Portsea address by way of ownership or lease was not a determinative factor in this case. It submitted instead that a person can maintain a dwelling-house whilst merely being granted permission of the owner to do so.
The State submitted that the cases upon which it relied[13] all had identified the consistent nomination by the debtor of an address as that person’s Australian address as being highly probative of the existence of a dwelling-house for the purpose of s 43(1)(b)(ii) of the Bankruptcy Act.
[13] Which in addition to Mathai v Kwee included Fuller v Alford [2017] FCA 782 and Li v Ren [2018] FCCA 806.
The State submitted that the Court would need to consider whether the body of evidence upon which it, as petitioning creditor relied, established (when considered as a totality and cumulatively), that on the balance of probability as at the date of the act of bankruptcy, the debtor had a dwelling-house. This evidence fell into two categories.
In the first category were the occasions on which Mr Tucker had identified the Portsea address as his permanent address in Australia. The examples, of which 25 were identified in an aide memoire produced by the State and handed up at the hearing on 5 December 2022, were taken from affidavits affirmed by Mr Tucker on 24 April 2020, 27 April 2020, 28 April 2020, 8 May 2020, 1 June 2020, 3 June 2020, 25 June 2020, 19 August 2020, 24 September 2020, 21 May 2021, 26 August 2021, 6 October 2021, 10 November 2021 and 31 January 2022 and from Court documents filed on 27 April 2020, 29 April 2021, and 23 December 2021.
The examples included 15 occasions on which Mr Tucker had identified the Portsea address as his address for service and 17 occasions on which, in the introductory paragraph to his affidavit, Mr Tucker had identified his address as the Portsea address.
The second examples, which the State characterised as “highly probative” of the Portsea address being a dwelling-house, were the following statements made by Mr Tucker on oath, being:
In his affidavit affirmed on 31 January 2022 and made in opposition to the State’s security for costs application where, at [49]-[51], Mr Tucker deposed that:
Residency
[49]I am currently in Australia residing at the address 3558 Point Nepean Road, Portsea, VIC 3944 (my address).
[50]I have maintained a permanent address at that property since on or around November 2019.
[51] Attached to my affidavit are copies of:
(a) my current Australian Passport…;
(b) my current Victorian Driver’s Licence…;
(c)correspondence from Care Super addressed to me, at my address, dated 25 October 2021…; and
(d)correspondence from Westpac addressed to me, at my address, dated 10 January 2022 enclosing a credit card…
The documents referred to at [51] of the affidavit each recorded the Portsea address as the address for Mr Tucker.
The State submitted that the statements made on oath by Mr Tucker on that occasion and the exhibiting of relevant documents to support and make good the assertion that he had maintained the Portsea address as a permanent address since around November 2019 significantly undermined Mr Tucker’s assertion (in this proceeding) that the Portsea address was a “mere address for service put in an affidavit”.
The State also relied upon the following exchange that took place during Mr Tucker’s cross-examination on 20 August 2020 and during which Mr Tucker gave evidence under oath as to what he understood his address in his affidavit to mean:[14]
[14] CB 1706.
Can I take you to your – your affidavit. In your affidavit, you’ve affirmed – you state:
I, Tobias John Tucker, of –
And then you list an address on the Mornington Peninsula?---Yes.
Do – so you consider that an accurate statement?---I do consider that an accurate statement. It’s pretty hard to – yes, it’s pretty to travel in these times.
Because essentially, what that statement is meant to convey, is “I, Tobias Tucker, currently at this address” – but that’s not what you’ve put, is it?---
My understanding is that’s where you put your residence.
…
MR HOOPER: Thank you, your Honour. I could understand – so you’re not currently residing at the Mornington Peninsula address?---I object to that question.
HIS HONOUR: Well – well, Mr Hooper, I think it’s all replaying from what Mr Tucker said – that he’s not currently residing there. The question – or the distinction I understand Mr Tucker to be making is that while he doesn’t presently reside there, he regards it as his residence.
If you like, it’s his domicile?---That’s correct, your Honour. That’s my evidence.
The State made the submission that whether the Portsea address ceased to be Mr Tucker’s residence at some point in time was not what was in issue. Instead, what was in issue was that he had, throughout the two plus years since he had left Australia in late 2019, maintained a permanent address in Australia on a continued basis throughout that period. The State relied on the following exchange, which occurred on 9 February 2022 when the State’s application for security for costs in the defamation proceedings was before Senior Judicial Registrar Legge, as the final word from Mr Tucker on the issue:[15]
[15] CB 2315, lines 7 to 33.
THE REGISTRAR: All right. Thanks, Mr Tucker. I just had a couple of residual questions for you.
MR TUCKER: Sure.
THE REGISTRAR …The position as I understand it from your evidence and your submissions again today is that there is no evidence before the court as to your current intentions regarding your stay in Australia, assuming you are still in Australia. Do you accept that’s an accurate summary of the evidence? There is no evidence as to your intentions in the future.
MR TUCKER: Yes. Yes, I would accept that. I mean – I think you summarised the evidence, Registrar, accurately, and I wouldn’t objection (sic) to your summary. Basically, there is evidence that I have been overseas. But the evidence is that I’m Australian and I’m currently in Australia. And that’s as far as I guess the evidence goes. Also that I maintain a permanent address at the relevant address at all relevant times. So that goes I guess to the criticism about this thing of misidentifying the address on the appeal documents. So – yes, I mean I accept – I think there was, yes, discussion about what evidence is before the court and the questions that I guess are up in the air. And I ---
THE REGISTRAR: And on that, Mr Tucker, would you accept that evidence that you maintain a permanent address here might be something different from being ordinarily resident within the jurisdiction.
MR TUCKER: Yes, I do accept that…
It was submitted by the State that there was no evidence before the Court that the circumstances of Mr Tucker had changed in any way between 9 February 2022 and the date of the act of bankruptcy (4 March 2022).
The State noted that one of the decisions relied upon by Mr Tucker – Cadence (90) Investments Pty Ltd v Chalmers, in the matter of Chalmers [2021] FCCA 29 – was a case where this Court had considered the nomination of an address with ASIC as not being sufficient to establish that a debtor maintained a dwelling-house.
The State sought to distinguish the circumstances of that case; in particular, there had been no evidence of any other matters and no formal adoption of the relevant address in any other way. Further, there had been no evidence as to when the nomination had been made on the register and how that related (temporally) to the act of bankruptcy. The State submitted that the act of registering an address with ASIC in some time in the past was highly distinguishable from this case in which Mr Tucker, a trained solicitor, was deposing on oath that he maintained a permanent address in Australia.
The State submitted that despite being afforded the opportunity to confront the inconsistency in his sworn statements, Mr Tucker had not taken up the opportunity to put on reply material on the “dwelling-house issue”.[16] The State invited the Court to draw an inference against Mr Tucker that any evidence he would have been in a position to give on this inconsistency would not have assisted him.
[16] See orders made on 25 October 2022 at paragraph 3.
The State submitted that Mr Tucker had produced no evidence that was probative of the issue of whether he had a dwelling-house at the relevant time. In particular, the State was critical of his affidavit which it said deposed to matters such as where Mr Tucker currently lives[17] and matters which had occurred well after the time frame about which the Court was concerned.[18]
[17] By reference to [21] of the Tucker affidavit affirmed 25 August 2022; (CB 81).
[18] By reference to [24] to [28] of the Tucker affidavit affirmed 25 August 2022 ;(CB 81 -82).
The evidence annexed to Mr Tucker’s affidavit of 2 December 2022 was said by the State to do nothing more than record Mr Tucker’s travel movements. The fact that Mr Tucker did not travel during the COVID-19 pandemic was not highly probative one way or the other on the issue. As far as Mr Tucker offered an explanation as to why he went to France – namely, that he wanted to be with his wife, who was pregnant – and that he did not travel with his pregnant wife and later newborn child over the period of the pandemic, was not of significant weight.
As far as the affidavit of Mr Tucker’s mother, Anne Tucker was concerned, it was submitted that nothing in this affidavit was inconsistent with the proposition that Mr Tucker had a dwelling-house in Australia. This was because it was not disputed that Mrs Tucker was a resident of the Portsea address or that Mr Tucker did not have a right to reside there without the consent of his mother and/or father. It was submitted that the high point of Mrs Tucker’s evidence was that none of her three children have ever had access to the property at the Portsea address such that they could stay there when they liked. The State submitted that if this evidence was accepted as relevant it was in any case wholly inconsistent with Mr Tucker’s assertions that he had kept the Portsea address as his residence in the period from November 2019 up to the date of the act of bankruptcy.
The State’s response to the abuse of process claim
The State firmly rejected Mr Tucker’s characterisation of its creditor’s petition as involving an abuse of process. The State submitted that it was entitled to seek payment of the judgment debt, which had been owing since 21 April 2020 and had been the subject of written demands for payment issued on 9 August 2021, 25 August 2021, 7 September 2021 and 9 December 2021, as well as having been identified in the bankruptcy notice issued on 7 February 2022.
To the extent that Mr Tucker relied on the conversation of 11 May 2022 recorded in Mr Marra’s file note (refer [32] above) as disclosing conduct on the part of the State designed to exert pressure on him, including in relation to extant court proceedings, the State submitted that the more reliable record of what had been discussed was contained in Mr Price’s evidence which referred to and annexed a set of “speaking notes” that had been prepared in anticipation of the discussion with Mr Tucker’s lawyer and from which, according to Mr Price, he had not materially departed during his conversation with Mr Marra.[19] These notes record:
·Wanted to speak now as we’re about to enter an active phase of the various proceedings – defamation hearing on 16th May, and then preparation for and attendance at FCA Penalties hearing in August.
·TT’s prospects in defamation and FCA Penalties are poor. Even if TT somehow succeeded on jurisdiction in defamation appeal. It would be a temporary victory given State’s defence to underlying cause of action is unassailable. FCA Penalties appeal stands little chance.
·State is racking up costs and expects to get its costs once it wins the defamation and FCA penalties matters. Those are in addition to the costs we already have in our favour, which include $150K+ from Supreme Court. These costs orders aren’t going anywhere (we have years to enforce) and we will get to taxing and enforcing those in due course.
·You’ll also be aware of bankruptcy notice which served on TT in early Feb (and papers provided to you, assume you passed these on to TT). No response so act of bankruptcy committed so should know the consequences of this, both for his ability to sustain proceedings but also personally.
·If TT wants to try to do a deal to stem the bleeding, now is the time. We’re willing to talk about the terms of a settlement (in the next week) by which TT discontinues the proceedings and we take a view on pursuing the State’s entitlements against him, but he needs to understand that that’s the only basis upon which any deal will get done. And it needs to occur now.
·If not now, things will get worse as TT’s liabilities to the State increase further and we will pursue him through all available means including bankruptcy.
[19] See Price affidavit affirmed 8 November 2022 at [45]; (CB 1559 - 1560).
During cross-examination, Mr Price was asked about the penultimate bullet point and his comment that any potential settlement had “to occur now”. Mr Price explained that this reflected the fact that there were various ongoing proceedings at that time and that if the parties were to benefit from a settlement and to avoid accruing lots of additional costs, any such settlement should take place soon.[20]
[20] Transcript of proceedings 5 December 2022, page 33, lines 5-10.
The State submitted that the conversation (even on Mr Marra’s account) did not reveal an abuse of process because when it took place the bankruptcy notice had already expired, and the necessary act of bankruptcy had been committed. In these circumstances, the State’s progression down the bankruptcy path had well and truly commenced. Although during the conversation Mr Price referred to the defamation appeal, the fact remained that the State waited until after the defamation appeal was handed down before filing the creditor’s petition. There was no use of the bankruptcy process to obtain an ulterior benefit in the defamation proceeding in these circumstances.
Likewise, it was said that the fact that Mr Tucker may have informed the State that he became aware of “new evidence” relating to the judgment debt was irrelevant. This was because the judgment debt was not subject to any application by Mr Tucker to set it aside when Mr Tucker committed the act of bankruptcy and when the State filed its creditor’s petition.
The State’s response to the cross-claim argument
As far as the set-off argument was concerned, the State acknowledged that s 52(2)(b) of the Bankruptcy Act (which refers to there being “other sufficient cause” why a sequestration order ought not be made) comprehends a situation where there is an offsetting claim or cross-claim against the petitioning creditor. Ordinarily, it was submitted, this would justify a court ordering an adjournment to facilitate the litigation, rather than (as Mr Tucker sought here), the (summary) dismissal of the petition. However, it remained the burden of the debtor to prove that his cross-claim against the creditor would be likely to succeed and that success on the claim would lead to the realisation of an amount that was equal to or which exceeded the creditor’s claim (referring to Li v Wu [2020] FCA 776 at [96](c)).
Applying this analysis, the State submitted that any set-off would need to operate against a liquidated debt in an amount of at least $252,053.04 – representing the quantum of the judgment debt plus the interest that was accruing pursuant to s 101 of the Supreme Court Act 1986 (Vic).
As to each of the claims identified by Mr Tucker in support of his set-off argument, the State submitted that:
First, the costs order in Mr Tucker’s favour in the defamation appeal is unliquidated and untaxed. Mr Tucker has not adduced any evidence upon which the quantum might even be estimated.
Second, Mr Tucker’s claim in the defamation proceeding is not supported by anything other than evidence of the pleadings. The claims made by Mr Tucker are time barred and leave has not been granted to him to proceed with such claims.
Third, Mr Tucker’s claim in the penalties proceeding was summarily dismissed on the basis of it being an abuse of process. The same result occurred with his appeal from that decision. Indemnity costs were ordered against Mr Tucker in respect of both proceedings.
Fourth, Mr Tucker’s claim in the privacy proceedings is not supported by anything other than evidence of the pleadings and is limited by the jurisdiction of the Tribunal which is prevented by statute from ordering compensation in an amount exceeding $100,000 (refer s 77(1)(a)(iv) of the Privacy and Data Protection Act 2014 (Vic)).
The State submitted that Mr Tucker had failed in these circumstances to demonstrate any real likelihood of success in any of the above four proceedings. Further, and this being a separate question to prospects, Mr Tucker had failed to demonstrate how his cross-claims would ultimately “comfortably” exceed the judgement debt, while also ignoring the State’s untaxed costs orders which the State identified as comprising: (i) costs (on a standard basis) of three separate appeals brought by Mr Tucker in the injunction proceeding; (ii) costs of the undertaking as to damages claim in the injunction proceeding (on an indemnity basis); costs of a notice to produce and application to set the same aside in the injunction proceeding (on an indemnity basis); costs of the penalties proceeding (on an indemnity basis); and costs of the penalties appeal (on an indemnity basis).
The State’s response to the judgment debt argument
As far as Mr Tucker’s application to set aside the judgment debt was concerned, the State submitted that the fact that such an application had been made was not a ground in and of itself for dismissing the creditor’s petition, especially where the application was made after the creditor’s petition was filed (referring to Guss v Federal Commissioner of Taxation [2015] FCA 841 at [62]).
The State submitted that instead, it was within the wide discretion of the bankruptcy judge to determine whether the creditor’s petition should be adjourned. However, such a step would be justified only where it had been demonstrated that there were “substantial” or “genuine and arguable grounds” that the appeal would be successful so as to bring the judgment debt under the bankruptcy threshold of $10,000.
The State submitted that it was necessary for the Court to enquire as to the grounds for the appeal and to consider their substance.
In order to provide context to this inquiry the State identified the following facts leading up to and following the judgment debt order, none of which were challenged in any meaningful way by Mr Tucker.
Mr Tucker was an employee of the State Revenue Office. In June 2017, two sets of allegations were documented by Mr Tucker’s superiors against him in respect of his employment and were the subject of separate investigations, one relating to what was described as oral allegations of misconduct by a female co-worker (harassment investigation) and the other relating to his access to private information of taxpayers (customer search investigation).
The harassment investigation report was provided to Mr Tucker on a redacted basis.
In a proceeding commenced on 12 December 2017(this being the injunction proceeding), Mr Tucker asserted that the State had breached its obligations to Mr Tucker in respect of the harassment investigation and the customer search investigation. Mr Tucker also sought an interlocutory injunction enjoining the State from finalising proposed disciplinary outcomes. The court granted the injunction on an undertaking as to damages provided by Mr Tucker.
On 16 July 2019, the Supreme Court found against Mr Tucker in respect of his claims as to both the harassment investigation and the customer search investigation and discharged the injunction.
Mr Tucker’s employment was terminated as a result of the customer search investigation only and on 30 July 2019, Mr Tucker commenced an unfair dismissal proceeding against the State, which was settled on 1 November 2021.
On 21 April 2020, the Supreme Court ordered Mr Tucker to pay $199,681.46 in respect of his undertaking to damages, being the judgment debt now relied upon in the bankruptcy notice.
Mr Tucker brought appeals against various orders made in the injunction proceeding. On 12 May 2021, the Court of Appeal, in the context of dealing with these appeals, made orders and published reasons in which the Court (amongst other matters):[21]
(a)noted that the injunction was no longer relevant in light of the “implementation of the disciplinary action resulting from the Customer Search Investigation and the apparent decision of the SRO to not impose the foreshadowed disciplinary action in relation to the Harassment Investigation”;[22]
(b)rejected the grounds of appeal relating to the customer search investigation;[23]
(c)found that the redaction of the reasons in the harassment investigation was inconsistent with the principles of procedural fairness;[24] and
(d)rejected Mr Tucker’s appeal against the judgment debt, finding that Mr Tucker’s grounds were “entirely without merit”.[25]
[21] Tucker v Victoria [2021] VSCA 120
[22] Ibid [215].
[23] Ibid [282].
[24] Ibid [317].
[25] Ibid [434].
On 23 August 2022, Mr Tucker filed an originating motion and commenced proceedings in the trial division of the Victorian Supreme Court (the fraud proceeding). The State opposed the application and sought its summary dismissal.
The State submitted that Mr Tucker had not adduced any evidence as to the merits of the fraud proceeding or whether it raised an arguable point. The State also noted that the fraud proceeding did not constitute an appeal from the judgment debt and that (as recorded above) the judgment debt had already survived an appeal.
When the matter was before the Court for hearing on 5 December 2022, the parties had, that morning, been before the Supreme Court on the return of Mr Tucker’s application for a stay of the damages judgment, the subject of his fraud proceeding and his summons seeking an order that he be released from his undertaking to pay damages. The State informed the Court that in the context of this hearing, the Supreme Court had invited the parties to address it on the question of whether the plaintiff (Mr Tucker) was currently in breach of the undertaking as to damages which he proffered to the Court on 2 March 2018 in proceeding no. S CI 2017 05032 and if Mr Tucker was in breach of that undertaking, whether the Supreme Court should direct that he not be permitted to take any steps in the current proceeding until such time as he has complied with the undertaking. I was informed that the Supreme Court heard submissions on these issues and had reserved its decision. The State identified these events as creating a further potential difficulty for Mr Tucker in his efforts to have the judgment debt set aside.
On 12 December 2022 (when a decision in this matter was reserved), the State (with notice to Mr Tucker) sent an email to chambers that attached a copy of the decision of the Supreme Court (McDonald J) in which his Honour determined (and made orders reflecting this) that the fraud proceeding be stayed until Mr Tucker complies with his undertaking as to damages (see Tucker v State of Victoria & Anor [2022] VSC 760).
In rejecting Mr Tucker’s application that he be released from the undertaking, Justice McDonald observed that “[t]he evidence before the Court which Mr Tucker relies upon falls well short of establishing that the defendants engaged in fraud. Mr Tucker has failed to establish any proper basis for him to be released from his undertaking, as to damages”.[26]
[26] Tucker v State of Victoria [2022] VSC 760 at [4].
At [31] McDonald J elaborated upon this point, stating:
During the hearing on 5 December 2022 I asked Mr Tucker if he was able to point to any particular documents which constituted evidence supporting a finding that the Damages judgment had been tainted by fraud. He was not able to do so. Rather, he submitted that the defendants’ fraud was evidenced by ‘many strands of the cable’ which established that the SRO had wilfully advanced an artificial narrative during the proceedings at first instance. I reject this submission. Mr Tucker’s contention that the Damages judgment is tainted by fraud is extremely tenuous. None of the ‘strands in the cable’ provide a credible basis for impugning the customer investigation report which underpinned the termination of his employment and enlivened the undertaking as to damages. Mr Tucker ultimately conceded during the hearing on 5 December 2022 that on the material presently before the Court there was no proper basis for a finding of actual fraud…
However, this was not the end of the matter. On 25 May 2023, lawyers for the State contacted chambers via email with information that Mr Tucker’s appeal from the judgment of McDonald J had been determined. The Court of Appeal overturned the decision of the primary judge to stay the fraud proceeding. However, the Supreme Court’s decision to refuse to stay or dismiss the undertaking (the subject of the bankruptcy notice) was upheld (refer Tucker v State of Victoria [2023] VSCA 126).
Following this email on 25 May 2023, Mr Tucker requested an opportunity to file brief written submissions on the consequences of this decision on this proceeding. The parties were given leave to file brief written submissions addressing this question. Both parties filed submissions on 31 May 2023.
In its decision, the Court of Appeal (comprising McLeish and Niall JJA) allowed in part Mr Tucker’s appeal from the judgment of McDonald J. The Court of Appeal found that the primary judge had been correct to refuse Mr Tucker’s applications for a stay of the damages orders and to be released from the undertaking. The Court of Appeal found that the primary judge had erred in staying the fraud proceeding.
In relation to the first finding, the Court of Appeal found that there was no appealable error in the primary judge refusing the orders that Mr Tucker sought by summons. Indeed, the Court of Appeal found that the decision to that extent was clearly correct ([52]).
At [53]-[58] their Honours recorded the following observations concerning the merits of Mr Tucker’s proposed fraud case:
[53]As the judge’s Reasons show, the applicant’s case on the fraud proceeding was, by any measure, weak. The fraud proceeding sought to set aside the orders made by Ierodiaconou AsJ and the Court of Appeal pursuant to which the applicant was ordered to pay the State of Victoria the sum of $199,681.46, on the basis that the damages judgment was infected by fraud. The decision to terminate the applicant’s employment was made by reason of the adverse findings of Mr Di Federico in the customer search investigation. The applicant failed to dislodge those findings in the Court of Appeal. On their face, the findings of wrongdoing outlined in the Di Federico report following the customer search investigation provided a sound basis for the termination of the applicant’s employment. It follows that in order to impugn the termination decision, the decision of the Trial Division upholding it, the damages order and the decision of the Court of Appeal, the applicant would need to establish that the customer search investigation or the termination on which it was based was affected by fraud. He relies on an alleged absence of a complaint of harassment by [a female colleague] SM; the withholding of the Di Federico investigation notes; and the Egan statement.
[54]The applicant has failed to establish an arguable case on the material filed to date that the SRO conducted the harassment investigation on the fraudulent basis of a non-existent complaint. Bearing in mind that an allegation of fraud must be distinctly pleaded and proved, the covert recording of SM in which she apparently denies making a complaint does not establish fraud in the part of any officer of the SRO and may bear a different complexion on full examination. There is other evidence, including SM’s responses to Mr Klug during the investigation that show that an oral complaint was made. The evidence does not suggest that pursuing the investigation of the oral complaint was fraudulent. But even if the applicant got that far, he has not established an arguable case that the alleged wrongdoing in relation to the harassment investigation impugned the termination decision, which the Court of Appeal held, was based on different misconduct. The idea that the harassment allegations provided an implicit and unexpressed reason for the termination appears, on the material presently before the Court, to be without foundation.
[55]In answer to the quarantining of the harassment investigation, the applicant relies on the aphorism that ‘fraud unravels everything’. That aphorism, like most, has its limitations as an analytical tool. In Clone, the High Court traced the relevant history noting that the general power to set aside a judgment on the ground of fraud required actual fraud; and the essence of the action [was] fraud. The ground is a narrow one requiring a connection between the fraud and the obtaining of judgment. For example, it has been said in the High Court that except in very exceptional cases, fraud constituted by perjury of a witness or witnesses acting in concert is not a sufficient ground for setting aside a judgment. Reliance on the aphorism does not take the applicant very far in the absence of an evidential link between the two investigations.
[56]In relation to the Di Federico investigation notes, the applicant has failed to show that their non disclosure amounted to a denial of procedural fairness. He did not point to any material fact that was withheld, and it appears that he was provided with the substance of the adverse material and that the substance of the case against him was conveyed to him before the Di Federico report was finalised. More fundamentally, a denial of procedural fairness would be insufficient to overturn the decisions in the Trial Division and the Court of Appeal. Clone establishes that nothing short of fraud will be sufficient.
[57]The Egan statement does not advance the fraud case. The statement was obtained by the applicant, and it may be inferred, could have been obtained by him during the proceedings in the Trial Division. The statement does not meet the case against the applicant because it does not provide a legitimate SRO-business purpose for him accessing the customer files.
[58]It follows that the judge’s implicit characterisation of the fraud case as weak was well open to him.
In relation to the stay of the fraud proceeding, their Honours said:
[75]Once the judge refused the stay of the damages order, which he was correct to do, the question of enforcement of that judgment was a matter for the State deploying the usual mechanisms available to a judgment creditor and which the evidence suggested it had already begun to utilise. In that respect, the applicant had deposed to a bankruptcy proceeding having commenced against him. In the usual course, a stay of a different, albeit related, proceeding should not be used as a means of enforcement unless to allow the proceeding to continue would work a relevant injustice. Again, in the usual course, a judgment creditor does not enjoy immunity from suit by a judgment debtor until the debt is discharged. The risks that a respondent will incur further costs in circumstances where it has the benefit of an extant judgment can generally be addressed by an application for security for costs.
In his written submissions, Mr Tucker identified the pertinent findings of the Court of Appeal as that: (i) his fraud claim was regularly commenced; (ii) if successful, this would provide a means for setting aside the judgment debt; and (iii) the fraud claim was not an abuse of process.
Mr Tucker acknowledged that the Court of Appeal had endorsed the primary judge’s evaluation of his claim as “weak”, but emphasised the interlocutory character of this appraisal, dissociated from the evidence to be furnished at trial.
Mr Tucker submitted that the Court of Appeal decision reinforced the appropriateness of an order that the petition be adjourned sine die pending the outcome of the fraud claim. He was also critical of the failure of the State to inform the Court of the existence or progress of his appeal to the Court of Appeal and submitted that this was a matter that should bear on the question of costs as involving a failure to assist the Court (referring to Comaz (Aust) Pty Ltd v Commissioner of State Revenue [2015] VSC 294 at [71], [78]).
The State in its written submissions invited the Court to find that the decision of the Court of Appeal had no probative value in determining the creditor’s petition as it did not dislodge the State’s earlier submissions that: (i) the existence of the fraud proceeding is not a basis to dismiss the petition; and (ii) Mr Tucker has not fulfilled the requirement of demonstrating substantial or genuine and arguable grounds that the fraud proceeding will be successful in reducing the judgment debt under the threshold of $10,000.
The State submitted that the finding of the Court of Appeal reinforced this conclusion and referred, in addition to the paragraphs reproduced above, to the Court of Appeal’s observations at [60] that “It remains the case that the evidence filed by [Mr Tucker] as it currently stands, would be insufficient to prove actual fraud”.
The State submitted, by reference to [75], that the Court of Appeal had essentially given its imprimatur to its bankruptcy proceeding.
SHOULD THE STATE’S CREDITOR’S PETITION BE DISMISSED?
Summary dismissal principles
Although Mr Tucker did not identify the test that should be applied in approaching his application for summary dismissal of the State’s creditor’s petition it must nonetheless be evaluated within and against the following legislative framework and legal principles.
The Court has the power to summarily dismiss a claim before it pursuant to s 143 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (the FCFCOA Act) and r 13.13 of the Rules. Section 143 of the FCFCOA Act relevantly provides that summary judgment may be given in relation to the whole or part of any proceedings where “the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding”.
Section 143(3) of the FCFCOA Act specifically provides that:
(3)For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:
(a) hopeless; or
(b) bound to fail;
for it to have no reasonable prospect of success.
Rule 13.13 of the Rules further provides that:
The Court may order that a proceeding be…dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:
(a)the party prosecuting the proceeding or claim has no reasonable prospect of successfully prosecuting the proceeding or claim; or
(b) the proceeding or claim for relief is frivolous or vexatious; or
(c)the proceeding or claim for relief is an abuse of the process of the Court.
The legal principles applicable to an application for summary dismissal of proceedings are well established. In Leach v Burston [2022] FCA 87, Halley J distilled the relevant principles at [36], in such a way that warrants their reproduction in full:
[36] The principles relevant to summary dismissal can be summarised as follows:
(a)the discretion to summarily dismiss proceedings should be exercised if, and only if, the Court is satisfied that there is no reasonable prospect of success: Spencer v Commonwealth of Australia (2010 241 CLR 118 (Spencer) at [60] (Hayne, Crennan, Kiefel and Bell JJ);
(b)the enquiry required to be undertaken is whether there is a reasonable prospect of prosecuting the proceeding, not an enquiry directed to whether a certain or concluded determination could be made that the proceeding will necessarily fail: Spencer at [52];
(c)the use of the word “may” in s 31A of the FCA Act is to be read as an empowering word, not for the purpose of conferring a discretion on the Court. If the Court is satisfied that a cause of action has not reasonable prospect of success, it “must” be exercised. The exercise of the power turns not on the discretion of the Court, but rather upon proof that the cause of action has no reasonable prospect of success: Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372; [2008] FCAFC 60 at [128]-[129] (Gordon J);
(d)full weight must be given to the expression “no reasonable prospect” as a whole, and it might readily be accepted that the power to dismiss a proceeding summarily is not to be exercised lightly: Spencer at [60];
(e)particular caution to exercise the discretion is required if there are factual disputes and evidence is not in a final form: Houston v New South Wales (No 2) [2021] FCA 637 (Houston) at [5(d)] (Griffiths J); Boston Commercial Services Pty Ltd v G E Capital Finance Australasia Pty Ltd (2006) 236 ALR 720 at [43]-[45] (Rares J);
(f)appropriate account needs to be taken of the possibility that existing authority may be overruled, qualified or further explained; summary dismissal must not be used to stultify the development of the law: Houston at [5(e)] (Griffiths J); Spencer at [25]; Western Australia v Fazeldean (No 2) (2013) 211 FCR 150 at [35] (Allsop CJ, Marshall and Mansfield JJ); and
(g)the party seeking summary dismissal bears the onus of establishing the proceeding or defence has no reasonable prospects of success: Kitiko v University of Technology Sydney [2021] FCA 360 at [55] (Griffiths J).
At the time that Mr Tucker committed an act of bankruptcy did he have a dwelling-house in Australia?
Previous decisions
There have been only a handful of decisions that have considered what circumstances might establish the jurisdictional fact that a debtor “had a dwelling-house in Australia” for the purpose of s 43(1)(b)(ii) of the Bankruptcy Act.
The decision of Mathai v Kwee was relied upon by both parties. It is instructive because it considered the question of whether Mr Mathai had a dwelling house in Australia as the primary basis upon which the Court’s jurisdiction was said to be established rather than this being identified by the petitioning creditor as a fall-back or alternative basis to the primary contention that jurisdiction was established because the bankrupt was “personally present” or “ordinarily resident” in Australia.
After referring to the decisions of In re Brauch (A Debtor); In re Hecquard (1889) 24 QBD 71) and Re Boles [2000] FCA 1782, the Federal Court (Graham J) stated the test as being that “a debtor will have a dwelling-house in Australia if there is a house in Australia which he uses and may use as his residence and to which he may repair at his whim at any time”.
The test reflected the following propositions, themselves drawn from earlier decisions that had considered the question:
(a)It is possible for a debtor to have a dwelling house in Australia even though the debtor has not in fact been in occupation of it at any time during a given year;
(b)It is not necessary that a debtor has a legal or equitable estate in the property in question. A licence to occupy a dwelling-house may suffice;
(c)Abandonment of a residence even when owned will not constitute that residence as a dwelling house;
(d)The more there is actual occupation the easier it is to conclude that the debtor has a dwelling house.
The Court found in this case that Mr Mathai did have a dwelling house in the Melbourne suburb of Kew (the Kew property), notwithstanding that records of the Department of Immigration revealed that in the period from 1 February 1981 to 31 December 2003 (this being the date on which the act of bankruptcy occurred) Mr Mathai had lived in Australia for approximately 12.5% of the time (corresponding to around 2.83 years).
The Court identified the following considerations as informing this conclusion:
(a)Mr Mathai was involved in the purchase of the Kew property and in arranging the finance for its purchase (by an adult son of Mr Mathai);
(b)The Kew property was invariably nominated by Mr Mathai as his intended address in Australia when he returned from overseas (on incoming passenger cards);
(c)When Mr Mathai travelled overseas for his work, he always declared (on outgoing passenger cards) that he “lived” in Victoria and that he intended to return;
(d)Mr Mathai maintained a wardrobe of clothing at the Kew property;
(e)The Kew property was undoubtedly Mr Mathai’s wife’s “home” and he was in frequent contact with her in relation to family matters;
(f)Mr Mathai never sought nor needed permission to return to the Kew property or to dwell in it;
(g)Mr Mathai used the Kew property whenever he was in Australia.
The conclusion was not undermined by evidence that Mr Mathai:
(a)was not an Australia resident for tax purposes and had never lodged tax returns in Australia;
(b)never held a Medicare card;
(c)was not enrolled on the State or Federal Electoral Rolls;
(d)travelled on both Australian and Malaysian passports from time to time;
(e)carried a Malaysian identity card and had a Malaysian driving licence;
(f)did not have a Victorian drivers licence.
In Fuller JR, in the matter of Alford v Alford [2017] FCA 782 (a decision relied upon by the State) the question of jurisdiction was considered in circumstances where the act of bankruptcy had occurred on 27 June 2016. The Federal Court (Perry J) found that jurisdiction was established on each of the three grounds relied upon by the petitioning creditor, including that the debtor had a dwelling-house in Australia at the time of the alleged act of bankruptcy.
The focus in this decision was on the question of whether the debtor had been ordinarily resident in Australia at the time of the act of bankruptcy. However, there was some limited discussion concerning the construction of the phrase “had a dwelling-house….in Australia”.
The Court preferred the submission of counsel for the creditor that the phrase should be interpreted as meaning “a house in which the creditor may reside should he so decide”, finding that it was consistent with the construction adopted by Graham J in Mathai v Kwee.[27] Her Honour rejected the competing submission that it should be interpreted as meaning that the debtor had a house in which he (actually) dwelled in Australia.[28]
[27] Fuller at [45].
[28] Ibid at [44].
The essential reasoning as to why s 43(b)(ii) was satisfied appeared at [48]:
The irresistible inference arising from paragraph 21 of the debtor’s affidavit deposing that he has not resided at the Macquarie Street unit for at least three years and his place of residence will be updated is that the debtor had resided at that address prior to those three years. Nor did the debtor suggest that the Macquarie Street unit was not available to him to reside in thereafter, should he so decide, as is suggested at the very least by his continued identification of this address as his Australian address. As to the latter, the debtor gave that address as his address in email correspondence in 2006, as his address in the deed of settlement dated 15 January 2015 with Jolimont Resources Pty Ltd and the creditor, and in the various ASIC records to which I have already referred. In this regard, it matters not whether could he could reside at that location because he owns the unit, holds a lease, or holds a mere licence.
The ASIC records to which her Honour was referring had been identified at [39] of the judgment as involving: the giving of the Macquarie Street address as at April 2016 in relation to 14 Australian companies of which the applicant was a director and or secretary and that the Macquarie Street address continued to be identified as the debtor’s address in relation to all eight corporate entities of which the debtor remained a director; the debtor’s declaration of his Macquarie Street address on documents dated 3 September 2016 (being almost a year after he allegedly moved to Singapore) and filed with ASIC in relation to a company which also gave the Macquarie Street address as the registered address for the company.
In Napiat Pty Ltd v Salfinger; In the Matter of Salfinger (No 7) [2011] FCA 1322, the Federal Court (Foster J) noted that whether a debtor “has” a dwelling house or a place of business in Australia is a question of fact that to be answered affirmatively requires that the debtor “use the premises to live in or conduct business from, but does not necessarily have to own the premises”.[29]
[29] Salfinger at [76].
The Court found in that case that the following findings together and without distinction, supported a conclusion that jurisdiction had been established under each of ss 43(1)(b)(i), (ii) and (iii) of the Bankruptcy Act. The findings, which operated on a date of bankruptcy of 11 April 2011, were described as:[30]
(a)In the period from mid to late February 2009 until at least mid-May 2011, the respondent debtor lived at an address in Dianella, Western Australia. He did not spend time there every day but that was his normal place of abode – his home. That property is a residential property which fact was asserted and thus admitted by the respondent in statements which he made in ASIC documents lodged by him in respect of a company of which he had previously been director and secretary and in statements which he made to the Family Court of Western Australia;
(b)In the period referred to in subparagraph (a) above, the respondent debtor had travelled overseas from time to time to Israel and to Canada. However, those trips were of finite duration and were made for work or business purposes. The respondent did not relocate permanently to either of those countries;
(c)The respondent debtor had unequivocally asserted in Family Law proceedings on 14 April 2011 that he was, at that date, “ordinarily resident” in Western Australia, presumably upon the basis that he was, at that time, living at the Dianella address.
[30] Ibid at [78].
The Court noted in respect of the respondent’s assertion, that in the context in which it was made – namely, that the respondent was endeavouring to invoke the jurisdiction of the Family Court to determine his matrimonial dispute – that the respondent must be taken to have understood the implications of the statement.[31]
[31] Ibid at [78].
In Li v Ren [2018] FCCA 806, the (then) Federal Circuit Court (Judge Dowdy) found that the body of evidence relied upon by the creditor established, when considered as a totality and cumulatively, that on the balance of probability, as at the date of the act of bankruptcy (28 December 2016), the debtor was able to repair, to use and dwell in a property located in Warrawee, New South Wales at his wish and whim.[32] The evidence was identified as:
[32] Li v Ren at [31].
(a)The debtor (Mr Ren) was an Australian citizen who was still enrolled to vote on the electoral roll with his residential address shown as the Warrawee property;
(b)Mr Ren remained on the title to the Warrawee property with a half interest as joint tenant with a prima facie right to non-exclusive possession with his former wife;
(c)Mr Ren’s former wife and their children resided at the Warrawee property;
(d)Over the course of 2015 and 2016, documents were sent to Mr Ren addressed to the Warrawee property and he signed documents which represented that his address was the Warrawee property;
(e)Mr Ren identified his address as the Warrawee property in a number of affidavits. A costs agreement and a number of tax invoices and office account costs receipts were issued to Mr Ren at the Warrawee property address during 2015 and 2016. This address was also identified by Mr Ren’s solicitor in a Notice of Intention to file Notice of Ceasing to Act;
(f)From his arrival in Australia on 26 January 2015 until his arrival in Australia on 22 March 2017, Mr Ren completed incoming and outgoing passenger cards in which he referred to himself as a resident of Australia, either returning or leaving. On no such passenger card during that period did he assert that he was a visitor and not a resident of Australia. In the majority of cases, Mr Ren identified the Warrawee property as his intended address;
(g)Telstra mobile phone records connected Mr Ren’s phone usage to the vicinity of the Warrawee property;
(h)In his application for consent orders dated 8 August 2016, Mr Ren gave the Warrawee property as his contact address for service;
(i)In an appearance dated 13 June 2017 in an equity proceeding, Mr Ren’s address for service was identified as the Warrawee property.
The Court placed particular emphasis on Mr Ren’s legal ownership of property and his relationship to those who resided there, from which the Court inferred that Mr Ren “had every reason to repair to and dwell in the Warrawee property when he was in Sydney”. The Court found that Mr Ren’s ability to repair to and use the Warrawee property at his whim remained “undiminished” at least up to and inclusive of 28 December 2016, being the date of bankruptcy.[33]
[33] Ibid at [58].
In Cadence (90) Investments Pty Ltd v Chalmers, in the matter of Chalmers [2021] FCCA 29 (a decision upon which Mr Tucker placed importance), Judge Manousaridis was not satisfied that the debtor (Mr Chalmers) had a dwelling-house or was ordinarily resident in Australia at the time that he committed an act of bankruptcy on 5 March 2020.
The body of evidence that was identified by his Honour as relevant to determining the issue was to the following effect:
(a)Although Mr Chalmers had been born in Sydney and attended school in Canberra, in November 2016 he was granted a visa to work in the USA and moved to Los Angeles the next month;
(b)Between the period 13 August 2017 and 4 January 2021, Mr Chalmers travelled to and stayed in Australia; initially this was because his employer had an office in Australia. More recently, it was to visit family and friends;
(c)Mr Chalmers travelled and travels on an Australian passport and remained listed on the Australian electoral roll. He had not disavowed any intention to return to Australia;
(d)Mr Chalmers caused to be recorded in a number of documents that he lodged with ASIC an address located in Burradoo, New South Wales;
(e)Mr Chalmers had resided with his partner in Los Angeles since 2016 where they occupied an apartment under a lease to which they were both noted as lessees;
(f)Mr Chalmers did not presently own any residential property in Australia and he did not own any such property on 5 March 2020;
(g)Mr Chalmers was an officer of several companies before moving to the USA. However, of the 24 recorded, all but six had apparently ceased before the date of the act of bankruptcy.
Judge Manousaridis was not satisfied that Mr Chalmers having caused to record the Burradoo address in documents he submitted to ASIC was evidence on the basis of which he could rationally conclude that the property identified in those documents constitutes, or at any time constituted, Mr Chalmers’ dwelling-house. The more probable inference, according to his Honour, was that the address was nominated for the purpose of receiving notices.[34] Mr Tucker invited the Court to draw the same inference in his case.
[34] Cadence (90) Investments at [17].
In addition to the collection of decisions referred to above, resort must also be had to the actual language used in the text of s 43(1)(b)(ii) and the ordinary and grammatical meaning of the term “dwelling-house”.
The Online Macquarie Dictionary (2023) contains the following definition of “dwelling-house”:
noun a house occupied, or intended to be occupied, as a residence.
The Online Oxford Dictionary (2023) defines the expression in similar terms as:
A house occupied as a place of residence, as distinguished from a house of business, warehouse, office, etc.
THE STATE HAS NOT ESTABLISHED THAT MR TUCKER HAD A DWELLING-HOUSE AT THE DATE THE ACT OF BANKRUPTCY OCCURRED
This case is finely balanced. However, I am ultimately not persuaded that the State has established on the balance of probabilities and by reference to the combination of matters that it relies on and which are identified at paragraphs [30]-[43] of its written submissions, that Mr Tucker had a dwelling-house in Australia as at 4 March 2022, being the date on which the act of bankruptcy occurred.
I have reached this conclusion for the following reasons:
First, in what might be regarded as the leading decision on the interpretation and application of s 43(1)(b)(ii), namely, Mathai v Kwee, the formulation of the test and the matters upon which Graham J placed significance reflected three conditions:
(a)The character of the “dwelling-house” as a house or place of residence;
(b)The use (or prospect of use) by the debtor of the “dwelling-house” in a manner referable to its character as a house or place of residence; and
(c)The unrestricted right of the debtor to go (or repair) to the “dwelling-house” at any time.
Second, an application of these “conditions” to the facts of this case yields to the following analysis:
It is not in dispute that the Portsea address is the location for a property that is capable of being used as a house or residence. Mrs Tucker’s unchallenged evidence is that she has lived at the Portsea address since 2003 and that her adult children (and their offspring) have lived or stayed at the Portsea address for discrete periods of time as her guest. The first condition identified at [129(a)] is satisfied.
As far as the second and third conditions are concerned, as set out earlier in these reasons, the State relies on evidence in essentially two categories. The first of those categories includes the occasions across the period beginning 24 April 2020 and ending 31 January 2022 when, according to the State, Mr Tucker made admissions that he maintained a dwelling-house by identifying the Portsea address as either an “address for service” on a document filed in the Federal Court or the Supreme Court of Victoria or as his “address” in the introductory paragraph of an affidavit filed in one of these jurisdictions.
As to the identification of the Portsea address as an address for service, it is immediately apparent that it is not being used or identified in a manner referable to its character as a house or place of residence. Instead, its nomination reflects its character and suitability as an address to which court documents can be sent. The fact that the Portsea address might also be the location of a “dwelling-house” does not undermine this conclusion. Moreover, the fact that I have counted 15 occasions on which such a nomination has occurred, does not improve the argument or the probative value of the material. The essential character of the representation remains unchanged and does not, in my view, constitute an admission by Mr Tucker that at the time that the documents referred to were filed, he maintained a “dwelling-house”.
The identification of the Portsea address in the introductory paragraph to 17 affidavits filed by Mr Tucker is more ambiguous in terms of the character and representations that these acts might be said to convey. On the one hand the identification of the Portsea address as Mr Tucker’s “address” on its face says nothing about its character or use as a house or residence. On the other hand, the evidence of Mr Tucker given in proceeding VID274/2020 (the “defamation proceeding) (refer [48] above) to the effect that he adopted the proposition that his reference to the Portsea address in an affidavit filed in the proceeding was intended to convey that the Portsea address was his domicile, provides a basis upon which to infer that all such subsequent references conveyed the same representation and reflected the subjective view of Mr Tucker that the Portsea address was available to him in its character as a house or residence.
This then takes me to the second category of evidence relied upon by the State, being the statements made by Mr Tucker on oath reproduced at [45] and [49] above which the State submitted were highly probative of the Portsea address being a dwelling-house.
The first set of statements, which appeared in an affidavit of Mr Tucker dated 31 January 2022, were made by way of response to the State’s security for costs application in the defamation proceeding. Mr Tucker, in that context, provided sworn evidence that he was currently residing at the Portsea address and that he had maintained a “permanent address” at that property since around November 2019, this also closely corresponding to the time that, according to movement records, he had departed Australia for France.
The fact that Mr Tucker was residing at the Portsea address as at 31 January 2022 does not, as a single circumstance, say much about the “dwelling-house issue”. The unchallenged evidence of both Mr Tucker and his mother, was that Mr Tucker and his family had stayed at the Portsea residence for a period of between two and three weeks over January/February 2022 when they visited for the purpose of introducing Mr Tucker’s second born daughter to his parents. The statement by Mr Tucker that he had maintained a “permanent address” at that property does little to further illuminate the issue. The designation by reference to “address” (whether permanent or otherwise) involves a representation dissociated from the character of the Portsea address as a house or residence.
It must also be borne in mind that Mr Tucker’s evidence was directed in this context to the legal concept of being “ordinarily resident” outside of Australia, this being a circumstance that militates in favour of an application for security for costs.[35] While Mr Tucker should be taken to have been cognisant of the implications of assertions made and directed at this concept, it does not follow in my view that this understanding transposes automatically to the present environment and inquiry which is concerned with a concept of a fundamentally distinct nature. The caution appropriately identified by the State – that the concepts of “ordinarily resident” and “having a dwelling-house” should not be conflated – operates in respect of the evidence and admissions made by both parties.
[35] Commissioner of Taxation v Vasiliades (2016) 344 ALR 558; [2016] FCAFC 170 at [75].
As to the second statement made by Mr Tucker, being the evidence given on February 2022, again in the context of defending the State’s security for costs application, I understood the State to rely in particular on Mr Tucker’s assertion that he maintained a “permanent address” at the relevant address at all relevant times, that this explained his use of the relevant address (being the Portsea address) on Court documents and that he accepted there might be a distinction between a “permanent address” (as a concept) and a person being “ordinarily resident within Australia”. The State again invited me to treat this evidence as involving an admission by Mr Tucker that he maintained a “dwelling-house”. The State also invited me to find that in the absence of any intervening disavowal or retraction by Mr Tucker of this admission that the status quo should be understood to have been preserved at least up to and including the date of the act of bankruptcy.
However, I consider that a level of circumspection is also required in approaching the treatment of these statements as involving an admission by Mr Tucker against interest. The designation of the Portsea address as a “permanent address” again does not explicitly invoke its character as a house or residence and says nothing about the right of Mr Tucker to go to it at any time. The fact that Mr Tucker acknowledged a difference between the evidence required to establish a “permanent address” and that he was “ordinarily resident in Australia” likewise does not operate on the question of whether he also maintained a dwelling-house, given the context in which the acknowledgement was made.
On the other side of the ledger – these being circumstances upon which Mr Tucker places emphasis – it is not controversial that Mr Tucker has spent only 22 days in Australia during the period commencing 4 December 2019 and ending 27 October 2022; International Movement Records for Mr Tucker produced by the Department of Home Affairs record that Mr Tucker departed Australia on 4 December 2019, entered Australia on 28 January 2022 and departed Australia again on 20 February 2022. It is also accepted that Mr Tucker does not own real estate in Australia (including the Portsea address) and there is no evidence that he has any right based in contract or property law to occupy the Portsea address as a house or residence.
I also take into account the evidence of Mrs Tucker which (as noted above was not the subject of cross-examination) that Mr Tucker did not ever have access to the Portsea address so he could stay there when he liked. This goes directly to the third condition identified at [129(c)] above and although the State invites me to find that it is inconsistent with Mr Tucker’s assertions that he kept the Portsea address as his residence, I am not persuaded that an assertion to this effect was ever made explicitly by him, except on the occasion on 20 August 2020 when he acknowledged that the Portsea address was his “domicile”.
Having considered the body of evidence as a totality and cumulatively I am not persuaded that on 4 March 2022, when Mr Tucker committed an act of bankruptcy he had a dwelling-house in Australia. In these circumstances and where the State has not submitted that it was able to establish Mr Tucker’s connection to Australia on an alternate basis, the jurisdictional requirement under s 43(1)(b) of the Bankruptcy Act has not been satisfied. I propose to order that the creditor’s petition filed on 11 July 2022 and extended on 29 June 2023 be dismissed.
It does not automatically follow however that Mr Tucker should succeed on his application for summary dismissal of the creditor’s petition.
In the first place, as I noted at the outset, the jurisdictional issue was finely balanced. The State’s argument was not on any view capable of being characterised as one enjoying no reasonable prospect of success, as being frivolous or vexatious or constituting an abuse of process.
Second, and for the reasons that follow, I would otherwise dismiss the three further grounds upon which Mr Tucker sought to challenge the State’s application for a sequestration order against him and to seek the summary dismissal of the creditor’s petition.
THE OTHER GROUNDS RELIED UPON BY MR TUCKER DO NOT ESTABLISH THAT THE CREDITOR’S PETITION SHOULD BE SUMMARILY DISMISSED
The State’s creditor’s petition is not an abuse of process
As far as the first matters relied upon by Mr Tucker are concerned (being those set out at [30] of these reasons), they are considerations that were deployed by Mr Tucker on the question of jurisdiction. They do not operate to make the creditor’s petition an abuse of the Court’s process in circumstances where I have found that the State had an arguable case with respect to establishing that Mr Tucker had the necessary connection with Australia.
I am also not persuaded that the other arguments raised by Mr Tucker establish an abuse of process. In making this assessment I adopt, with some small modification, the following summary provided by the State as an accurate synthesis of the abuse of process principles as they operate in the present bankruptcy environment:[36]
(a)the debtor bears the onus of proving abuse of process and that onus is a heavy one;[37]
(b)it needs to be demonstrated that the creditor is using the bankruptcy procedure to exert pressure;[38]
(c)if there is no direct evidence of the creditor’s state of mind, a court will not infer improper conduct;[39]
(d)the debtor needs to demonstrate that the creditor is using the procedure for an improper purpose and the improper purpose should be the predominant purpose in using the legal process;[40]
(e)where litigation exists between the parties, and the crediting petitioner use the petition as a means to stifle that litigation, that is not of itself a reason for refusing the order sought if apart from such motive the creditor is entitled to the order.[41]
[36] State’s written submissions, [17]; CB 2478.
[37] Williams v Spautz (1992) 174 CLR 509 at 529.8 (Mason CJ, Dawson, Toohey and McHugh JJ) (Spautz).
[38] Rozenbes v Kronhill (1956) 95 CLR 407 affirming Re Majory; Ex parte Debtor [1955] Ch 600.
[39] Bride v KMG Hungerfords (a firm) (unreported, Federal Court of Australia Full Court, Carr, Branson and Nicholson JJ, 23 April 1998) at [8]-[9].
[40] Spautz at 529.4.
[41] Re Coyne; Ex parte Binningup (South) Pty Ltd (unreported, Federal Court of Australia, French J, 10 November 1992) at [22].
Mr Tucker was critical of the time taken by the State to file its creditor’s petition – the judgment debt crystallised on 21 April 2020 and the creditor’s petition was filed on 11 July 2022. However this argument, with respect, involves an incomplete and artificial analysis of time frames and events and the generally unqualified entitlement of the State to invoke this Court’s bankruptcy jurisdiction.
The State formally took steps to commence bankruptcy proceedings when it obtained a bankruptcy notice from the Official Receiver on 7 February 2022. However, prior to this date the State had issued four written notices of demand to Mr Tucker which apparently went unanswered or at least, did not satisfy the State that he was in a positon to compromise the judgment debt. The last of these demands was dated 9 December 2021.
The bankruptcy notice was served on Mr Tucker on 11 February 2022. Mr Tucker could have, at this time, sought an extension of time in which to comply with the bankruptcy notice on the ground that he had instituted proceedings to set aside the judgment debt. Mr Tucker could have made an application to set aside the bankruptcy notice. Mr Tucker did not take either of these steps. Upon the failure of Mr Tucker to comply with the bankruptcy notice within 21 days after its service, he committed an act of bankruptcy on 4 March 2022. By operation of s 44(1)(c) of the Bankruptcy Act, the State was then required to present its creditor’s petition within six months of this occurring, making the last date for filing 4 September 2022.
The fact that the State chose to file its creditor’s petition on 11 July 2022 is unremarkable and no doubt involved a series of decisions that it would be inappropriate for the Court to second-guess. While I accept that the prospect of the State abandoning the bankruptcy proceeding was discussed with Mr Tucker’s (then) legal representative and in the context of extant litigation, I am not satisfied on the evidence that is before me that this conversation, or the message that it conveyed, involved the use of the bankruptcy procedure (that was by this stage well advanced) predominantly for the purpose of exerting pressure on Mr Tucker.
Mr Tucker has not established that he has cross-claims that are likely to succeed or unpaid costs orders that will extinguish the judgment debt
Mr Tucker has identified three extant proceedings – the remitted defamation proceeding, the application for special leave to the High Court from his unsuccessful claim for pecuniary penalties and his claim for compensation for privacy breaches lodged in the Victorian Civil and Administrative Tribunal (VCAT).
However, Mr Tucker has failed to produce any satisfactory evidence directed at the question of the prospects of the success of any one or more these claims or the extent to which, any success he might enjoy would compromise the judgment debt. In this last respect, I did not understand Mr Tucker to challenge the State’s submission that (at the time of hearing) the quantum of the debt was $252,053 and accruing.
No evidence directed at Mr Tucker’s High Court special leave application was placed before the Court except a copy of the special leave application[42]. It is impossible to prognosticate on its prospects of success.
[42] See Tucker affidavit affirmed 1 December 2022 at [17].
As far as the VCAT proceeding is concerned, Mr Tucker produced the referral of his privacy complaint from the Office of the Victorian Information Commissioner made on 8 October 2020,[43] his points of claim filed on 26 August 2021,[44] the respondent’s points of defence filed on 1 October 2021[45] and his points of reply filed on 20 October 2021.[46] However as the State observed and as was noted in Li v Wu at [96(d)], a debtor does not establish a real cross-claim that is likely to succeed for the purposes of s 52(2)(b) of the Bankruptcy Act “merely by producing a statement of claim in an action against the creditor or by pointing to the existence of current litigation against the creditor”. The situation is not improved in my view by providing the responsive documents. Absent evidence of a capitulation, these documents merely illustrate that there is a genuine controversy between the parties. There is also evidence before the Court that the State has moved to have the privacy proceeding struck out.[47] It is unknown whether the State has succeeded in this endeavour.
[43] CB 558-567.
[44] CB 568-573.
[45] CB 574-580.
[46] CB 581-584.
[47] See Tucker affidavit affirmed 1 December 2022 at [19].
The situation with respect to the remitted defamation proceeding is not significantly different. Mr Tucker has produced his originating application filed on 24 April 2020,[48] his amended statement of claim filed on 21 June 2020[49] and the further amended defence filed by the State and Mr McKee on 22 June 2020[50]. He also relies upon a statement attributed to the Full Court in the defamation appeal judgment that “the issue subject of Proceeding VID449/2021 was ‘one of substance’”[51]
[48] CB 263-267.
[49] CB 268-278.
[50] CB 279 -292.
[51] See Tucker affidavit affirmed 25 August 2022 at [31].
However, this statement is taken out of context. What the Full Court (Allsop CJ, Kenny and Jagot JJ) said was that “[t]he subject of the appeal is important; the jurisdiction of the Court. The issue is one of substance and at least some of the complaints made by the appellant, Mr Tucker are valid”.[52] It is clear that their Honours comments were directed not at the substantive defamation proceeding but at the question of jurisdiction that was before it on the appeal. These comments do not assist in determining the prospects of the extant application that has been remitted to a single judge of the Federal Court.
[52] Tucker v McKee [2022] FCAFC 98; (2022) 292 FCR 666, [1]
Mr Tucker has also not explained why the Court should not find that his action for defamation was made out of time and that he needs leave to continue its prosecution. Mr Tucker’s originating application contains an explicit acknowledgement that under the Uniform Defamation Laws, he requires an order that he be granted an extension of time to file an action for defamation.[53] He seeks the same indulgence at paragraph 10 of his amended statement of claim.[54] Mr Tucker has not made any attempt to explain how this requirement would operate on the merits of his case.
[53] CB 265.
[54] CB 274-275.
I am also not persuaded that that there is sufficient force in Mr Tucker’s argument that his unpaid cost orders would operate to off-set the judgment debt. While these orders are certain in character, there is simply no evidence before the Court that would allow me to be satisfied that once liquidated and taxed the two orders would realise funds of the magnitude required to meet the judgment debt.
Mr Tucker has not established that there are substantial or genuine and arguable grounds that his fraud proceeding will be successful, including so as to bring the judgment debt under the bankruptcy threshold of $10,000
While much ink has been spilt on the fraud proceeding and its related appeal, it remains burdened with the challenges identified by the State in its submissions; namely, the fraud proceeding is not an appeal of the judgment debt (this has occurred); to succeed Mr Tucker would need to overcome the high burden required to set aside an extant judgment for fraud; that the alleged fraud identified by Mr Tucker in his pleadings largely operates on the harassment investigation instead of the customer search investigation (this being the basis for dismissal) and, to the extent that an appraisal has already been undertaken of the prospects of its success, this appraisal suggests that the fraud proceeding is wholly lacking in merit.
In this regard, it is noteworthy that both the primary judge and the Court of Appeal characterised the fraud proceeding as weak in terms of identifying and evidencing instances of fraud and also, perhaps more problematically, establishing a connection between the alleged fraud and the termination decision which, because it was upheld, resulted in the liability of Mr Tucker to satisfy the undertaking as to damages.
ORDERS
In light of the findings recorded above, the Court will make orders dismissing both the creditor’s petition and the application for its summary dismissal.
The question of costs (if any) will be determined “on the papers” having regard to any submissions filed and served by the parties within 28 days.
I certify that the preceding one hundred and sixty-four (164) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Symons. Associate:
Dated: 30 August 2023.
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