Storry v Weir

Case [2022] FCA 362

FEDERAL COURT OF AUSTRALIA

Storry v Weir [2022] FCA 362 

Appeal from: Weir v Storry [2022] FedCFamC2G 183
File number(s): QUD 103 of 2022
Judgment of: COLLIER J
Date of judgment: 7 April 2022
Catchwords:  PRACTICE AND PROCEDURE – application for interim orders to stay sequestration order of Federal Circuit and Family Court of Australia – whether arguable point on the proposed appeal or rational prospect of success –balance of convenience
Legislation:

Bankruptcy Act 1966 (Cth)

Federal Court of Australia Act 1976 (Cth)

Federal Court Rules 2011 (Cth)

Magistrates Courts Act 1921 (Qld)

Uniform Civil Procedure Rules 1999 (Qld)
Cases cited:

Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd [2008] QCA 322

Cox v Journeaux (No 2) [1935] 52 CLR 713

Dyer v Chrysanthou (No 4) [2022] FCA 51

Faulkner v Bluett [1981] FCA 3

Kitay, in the matter of Frigger (No 2) [2018] FCA 1032

National Road Transport Association Ltd v Road Safety Remuneration Tribunal (No 2) [2016] FCAFC 58

Obeid v The Queen [2016] HCA 9

Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28

Viagogo AG v Australian Competition and Consumer Commission [2021] FCA 175

Weir v Storry [2022] FedCFamC2G 183

Wynch v Ketchell [2001] QCA 391
Division: General Division
Registry: Queensland
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Number of paragraphs: 66
Date of hearing: 6 April 2022
Solicitor for the Applicant: The Applicant appeared in person
Counsel for the Respondent: P. Van Grinsven
Solicitor for the Respondent: SLF Lawyers

ORDERS

QUD 103 of 2022
BETWEEN:

VENETIA LOUISE STORRY

Applicant
AND:

JONATHAN DAVID WEIR

Respondent

ORDER MADE BY:

COLLIER J

DATE OF ORDER:

7 APRIL 2022

THE COURT ORDERS THAT:

1.The interim orders sought by the appellant in her notice of appeal filed on 30 March 2022 be refused.

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


REASONS FOR JUDGMENT

COLLIER J

  1. On 30 March 2022 the appellant, Ms Storry, filed a notice of appeal from a decision of the Federal Circuit and Family Court in Weir v Storry [2022] FedCFamC2G 183. In that decision the primary Judge ordered that a sequestration order be made against the estate of Ms Storry under the Bankruptcy Act 1966 (Cth), and that the costs of the petitioning creditor be paid out of the bankrupt’s estate.

  2. Ms Storry’s grounds of appeal are:

    1.His Honour erred acted outside his jurisdiction in saying the applicant exhausted her rights to appeal of the Magistrates Decision which was the basis for the Sequestration Order when an appeal existed in the District Court and the prospects of success are not within his jurisdiction to make, nor did he have all of the material, nor was this a judgement asked of him to make.

    2.His Honour erred in considering the lawyer's fees that was the basis of the sequestration Order are not standard Magistrate fees but Indemnity fees that were never cost assessed and the application to…

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AGLC
Storry v Weir [2022] FCA 362
Case
[2022] FCA 362
Decision Date

CaseChat Overview and Summary

The case of Storry v Weir involved an application by Venetia Louise Storry for interim orders to stay a sequestration order made against her by the Federal Circuit and Family Court of Australia. Ms Storry argued that the sequestration order should be stayed pending the hearing and determination of a notice of appeal and stay application she intended to file in the District Court of Queensland. The primary Judge had already dismissed Ms Storry's stay application in the Magistrates Court and the Court of Appeal. The legal issues before the Court were whether there was an arguable point on the proposed appeal or a rational prospect of success, and whether the balance of convenience favoured Ms Storry.

The Court considered the principles of staying proceedings under appeal, including the requirement for a reason or appropriate case to warrant a stay, and the need for the applicant to demonstrate a real risk of prejudice if a stay is not granted. The Court noted that Ms Storry had exhausted her avenues of appeal against the Magistrates Court judgment and that any further appeals had no prospects of success. The Court also found that Ms Storry had not provided evidence of her solvency or any other reason why the sequestration order should not be made. The Court concluded that the balance of convenience did not favour Ms Storry, given that the sequestration order was based on an act of bankruptcy and that Ms Storry had failed to pay the judgment sum.

Accordingly, the Court refused the interim orders sought by Ms Storry. The Court noted that Ms Storry's application was an attempt to relitigate issues that had already been decided against her, and that a stay would not prevent any prejudice that she might suffer as a result of the sequestration order. The Court also noted that Ms Storry's personal circumstances, such as finalising her late father's financial affairs and the recent floods in south-east Queensland, did not outweigh the interests of the creditor in enforcing the judgment. The Court found that the primary Judge had correctly exercised his discretion in refusing the stay application, and that there was no basis for the Court to interfere with that decision.

In conclusion, the Court refused the interim orders sought by Ms Storry and upheld the sequestration order made against her by the primary Judge. The Court found that there was no arguable point on the proposed appeal or rational prospect of success, and that the balance of convenience did not favour Ms Storry. The Court emphasised the importance of finality in litigation and the need to avoid unnecessary duplication of proceedings. The Court also noted that the principles of staying proceedings under appeal are not to be lightly invoked, and that the onus is on the applicant to demonstrate a proper basis for a stay.

Orders

Orders of the court

1. The interim orders sought by the appellant in her notice of appeal filed on 30 March 2022 be refused.

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

Background

Background to the litigation

For the following reasons this relief should be refused.BACKGROUND In summary, Ms Storry and Mr Weir were involved in a motor vehicle accident on 27 July 2016. As a result the Queensland Police Service issued a traffic infringement notice to Ms Storry for the offence of failing to give way to a vehicle at an intersection with a stop sign. Ms Storry contested the infringement in the Queensland Magistrates Court, however Ms Storry was convicted and fined. Ms Storry appealed her Magistrates Court conviction to the District Court of Queensland. Mr Weir had vehicle insurance with RACQ Insurance (RACQ). On 24 May 2017 RACQ commenced civil proceedings in the Magistrates Court seeking loss and damages in the sum of $13,396.00 against Ms Storry in respect of damage to Mr Weir’s vehicle. When RACQ became aware of Ms Storry’s District Court appeal in respect of her conviction it elected not to take further steps until the appeal was finalised. On 1 December 2017 the District Court dismissed Ms Storry’s appeal. An appeal against the decision of the District Court was dismissed by the Court of Appeal of Queensland on 16 August 2018. RACQ then proceeded with its civil claim against Ms Storry. On 4 December 2020 Acting Magistrate Smith found in favour of RACQ. The total sum awarded totalled $39,506.86, being damages, costs, interest and witness expenses. On 15 January 2021 Ms Storry filed an appeal in the Court of Appeal of Queensland against the decision of Acting Magistrate Smith. The appeal was dismissed by the Court of Appeal on 16 February 2021. On 29 September 2021 SLF Lawyers on behalf of the respondent served a bankruptcy notice on Ms Storry. Ms Storry filed:·A stay application in the Court of Appeal against the order of 16 February 2021. This was dismissed on 26 October 2021.·A stay application in the Magistrates Court against Acting Magistrate Smith’s judgment of 4 December 2020. This was dismissed on 7 December 2021 by Acting Magistrate Turra. On 14 December 2021 a creditor’s petition was filed against Ms Storry seeking a sequestration order against her estate. On 11 March 2022 Ms Storry filed an appeal in the District Court of Queensland against the decision of Acting Magistrate Turra. On 16 March 2022 the High Court of Australia dismissed Ms Storry’s application to set aside the decision of the Court of Appeal of 16 February 2021. The creditor’s petition was heard by the primary Judge on 17 March 2022.PRIMARY JUDGMENT The primary Judge observed:3.As at the date of the court hearing, the respondent had not filed any document in response to the application. At the hearing, the Court admitted into evidence as Exhibit 1 an amended document dated 14 March 2022, which the applicant advised the Court had not been accepted for filing due to its lack of form. On its face, that document is of no obvious significance. His Honour then set out the relevant litigation history involving Ms Storry and the respondent. His Honour noted that Ms Storry conceded that she had not paid the judgment sum to the applicant, and continued:5.… The respondent made submissions to the Court to the effect that the Court should stay the further hearing of the sequestration application pending the hearing and determination of a notice of appeal and stay application yet to be filed by her in the District Court of Queensland. The respondent had admitted into evidence as Exhibit 2 a bundle of documents which she submitted showed a good basis for the making of a stay order.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The creditor’s petition was heard by the primary Judge on 17 March 2022.PRIMARY JUDGMENT The primary Judge observed:3.As at the date of the court hearing, the respondent had not filed any document in response to the application. At the hearing, the Court admitted into evidence as Exhibit 1 an amended document dated 14 March 2022, which the applicant advised the Court had not been accepted for filing due to its lack of form. On its face, that document is of no obvious significance. His Honour then set out the relevant litigation history involving Ms Storry and the respondent. His Honour noted that Ms Storry conceded that she had not paid the judgment sum to the applicant, and continued:5.… The respondent made submissions to the Court to the effect that the Court should stay the further hearing of the sequestration application pending the hearing and determination of a notice of appeal and stay application yet to be filed by her in the District Court of Queensland. The respondent had admitted into evidence as Exhibit 2 a bundle of documents which she submitted showed a good basis for the making of a stay order. His Honour had regard to Exhibit 2 and observed that he had not identified any document or transcript which could constitute the basis for any reasonable argument that a stay order ought to be made in the present proceeding, continuing:6.… The respondent has exhausted her avenues of appeal against the Magistrates Court judgement entered against her. Any further appeal proceedings filed by or on behalf of the respondent have no prospects of success. His Honour had regard to the affidavit material filed on behalf of Mr Weir in support of the making of a sequestration order, including a bankruptcy notice and a creditor’s petition. His Honour observed:9.The applicant [sic – I understand his Honour meant the respondent in those proceedings] has failed to provide evidence:(a) As to her solvency as at the date of the hearing before the Court; or(b) That the sequestration order ought not to be made for any other reason.10. The relevant act of bankruptcy occurred on 1 November 2021, that being the date prior to which the respondent had failed to pay the judgement sum to the applicant after service upon her of the Bankruptcy Notice.11.The Court is satisfied that the judgement sum remains unpaid, and that the respondent is unable to pay her debts as and when they fall due.12.The Court is further satisfied that the respondent was duly served with all relevant documents, and that the applicant has otherwise established that all procedural matters required to be attended to by him have been duly carried out.13.Accordingly, a sequestration order is made against the estate of Venetia Louise Storry.SUBMISSIONS OF THE PARTIES Ms Storry appeared in person before me. She filed written submissions and made oral submissions at the hearing. In summary Ms Storry submitted:·The judgment of the primary Judge turned her into a bankrupt for seeking clarification of a point of law raised by the respondent.·Section 60 (4) of the Bankruptcy Act supported her claim for relief.·In the Magistrates Court proceedings Ms Storry was prejudiced by being unable to subpoena witnesses who would have given evidence that she did give way and swerve at the time of the accident involving Mr Weir.·The bill of costs used to bankrupt Ms Storry was not served on Ms Storry prior to the hearing before the primary Judge.·The balance of convenience favours Ms Storry because ·she is finalising her late father’s financial affairs, and the recent south east Queensland floods have impacted on this;·her bankruptcy is not founded on an inability to pay, but rather a legal argument;·a stay of the primary decision would allow a District Court appeal to proceed in respect of the decision of Acting Magistrate Smith;·Ms Storry has been prejudiced by previously following incorrect appellate procedure; and·Ms Storry’s status as a real estate agent is imperilled by the sequestration order.·The hearing before the primary Judge was scheduled on 17 March 2022, however the High Court decision was not given until late afternoon of 16 March 2022.·The respondent misled the District Court based on s 60 (2) and (3) of the Bankruptcy Act when the authority of Faulkner v Bluett [1981] FCA 3 was against the respondent.·The primary Judge erred at [3] when finding that Ms Storry had not filed any material in the primary proceedings, when she clearly had.·There are further appellate avenues available to Ms Storry to set aside the debt the source of her bankruptcy.

Ratio Decidendi

Legal Principle Established

The respondent was represented by Counsel, and submitted in summary that the relief sought by Ms Storry should be refused.CONSIDERATION Section 29 of the Federal Court of Australia Act 1976 (Cth) provides:Stay of proceedings and suspension of orders(1) Where an appeal to the Court from another court has been instituted:(a)the Court or a Judge, or a judge of that other court (not being the Federal Circuit and Family Court of Australia (Division 2) or a court of summary jurisdiction), may order, on such conditions (if any) as it or he or she thinks fit, a stay of all or any proceedings under the judgment appealed from; and(b)the Court or a Judge may, by order, on such conditions (if any) as it or he or she thinks fit, suspend the operation of an injunction or other order to which the appeal, in whole or in part, relates.(2) This section does not affect the operation of any provision made by or under any other Act or by the Rules of Court for or in relation to the stay of proceedings. Further, r 36.08 of the Federal Court Rules 2011 (Cth) allows an appellant to apply to the Federal Court for an order to stay the execution of a proceeding until the appeal is heard and determined. In Viagogo AG v Australian Competition and Consumer Commission [2021] FCA 175 Abrahams J summarised principles relating to the stay or execution or proceedings under a judgment the subject of appeal, as follows:10.Rule 36.08 confers a broad discretion. Generally, there must be demonstrated “a reason or an appropriate case” to warrant the exercise of discretion in favour of granting a stay. It is not necessary to establish special or exceptional circumstances for the grant of a stay: Powerflex Services Pty Ltd v Data Access Corp [1996] FCA 460; (1996) 67 FCR 65 at 66.11.Two questions must be considered: first, is there an arguable point on the proposed appeal: Nolten v Groeneveld Australia Pty Ltd [2011] FCA 1494 (Nolten) at [24] or some “rational prospect of success” in relation to any of the grounds of appeal: Burns v AMP Finance Ltd [2005] FCA 761 at [5]; and second, does the balance of convenience favour the grant of a stay: Nolten at [24], [46].12.The party seeking the order bears the onus of demonstrating a proper basis for a stay, which must be fair to all parties: Alexander v Cambridge Credit Corporation Ltd (receivers appointed) (1985) 2 NSWLR 685 (Alexander) at 695. That party must demonstrate that there is a real risk that it will suffer prejudice or damage if a stay is not granted, which will not be redressed by a successful appeal: Kalifair Pty Ltd v Digi-Tech (Australia) Ltd, McLean Tecnic Pty Ltd v Digi-Tech (Australia) Ltd [2002] NSWCA 383; (2002) 55 NSWLR 737 (Kalifair) at [18]; Flight Centre Limited v Australian Competition and Consumer Commission [2014] FCA 658 (Flight Centre) at [9(f)]. This requirement will be satisfied if a successful appeal will be rendered nugatory unless a stay is granted: Ali v Australian Competition and Consumer Commission [2020] FCA 860 at [11]; Australian Competition and Consumer Commission v BMW (Australia) Ltd (No 2) [2003] FCA 864 (BMW) at [5]; Alexander at 695; Kalifair at [18].13.The successful party at first instance is entitled to presume that the judgment appealed from is correct: Powerflex Services Pty Ltd v Data Access Corp [1996] FCA 460; (1996) 67 FCR 65 at 66, citing Re Middle Harbour Investments Ltd (in liq) (unreported, Court of Appeal NSW, 15 December 1976); Flight Centre at [9(b)]; Wooldridge v Australian Securities and Investments Commission [2015] FCA 349; (2015) 106 ASCR 551 (Wooldridge) at [11]; Urban Alley Brewery Pty Ltd v La Sirène Pty Ltd (No 2) [2020] FCA 351 at [48], [51].