Storry v Weir (No 2)

Case [2022] FCA 1360

FEDERAL COURT OF AUSTRALIA

Storry v Weir (No 2) [2022] FCA 1360  

File number: QUD 103 of 2022
Judgment of: THOMAS J
Date of judgment: 15 November 2022
Catchwords: PRACTICE AND PROCEDURE – application under r 39.05(b) of the Federal Court Rules 2011 (Cth) – whether judgment was procured by fraud – whether successful party responsible for the fraud – no allegations of fraud made out – no allegations of fraud relate to the judgment – application dismissed
Legislation:

Bankruptcy Act 1966 (Cth)

Federal Court of Australia Act 1976 (Cth)

Federal Court Rules 2011 (Cth)

Agents Financial Administration Act 2014 (Qld)

Cases cited:

Clone Pty Ltd v Players Pty Ltd (in liquidation) (Receivers and Managers Appointed) (2018) 264 CLR 165; [2018] HCA 12

Laffer v Michelmore Real Estate Group Pty Ltd [2014] FCA 495

McDonald v McDonald (1965) 113 CLR 529

Monroe Schneider Associates (Inc) v No 1 Raberem Pty Ltd (No 2) (1992) 37 FCR 234

Spalla v St George Motor Finance Ltd (ACN 007 656 555) (No 5) [2004] FCA 1262

Storry v Weir [2022] FCA 794

Wentworth v Rogers (No 5) (1986) 6 NSWLR 534

Wu Avin Operations Pty Ltd (No 2) [2006] FCA 792

Division: General Division
Registry: Queensland
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Number of paragraphs: 104
Date of hearing: 20 September 2022
Counsel for the Appellant: The Appellant appeared in person
Counsel for the Respondent: Mr P Van Grinsven
Solicitor for the Respondent: SLF Lawyers

ORDERS

QUD 103 of 2022
BETWEEN:

VENETIA LOUISE STORRY

Appellant
AND:

JONATHAN DAVID WEIR

Respondent

ORDER MADE BY:

THOMAS J

DATE OF ORDER:

15 NOVEMBER 2022

THE COURT ORDERS THAT:

1.The interlocutory application filed 29 August 2022 be dismissed.

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


REASONS FOR JUDGMENT

THOMAS J:

  1. A final judgment in these proceedings was handed down on 7 July 2022: Storry v Weir [2022] FCA 794.

  2. Ms Venetia Storry (the appellant) filed an interlocutory application on 22 August 2022 seeking a stay of the sequestration order under r 39.05 of the Federal Court Rules 2011 (Cth) (the Rules). On 26 August 2022, orders were made that the appellant file and serve any amended application seeking an order to set aside the judgment handed down on 7 July 2022 by reference to r 39.05 of the Rules by 29 August 2022.

  3. Rule 39.05 of the Rules provides:

    Varying or setting aside judgment or order after it has been entered

    The Court may vary or set aside a judgment or order after it has been entered if:

    (a)it was made in the absence of a party; or

    (b)it was obtained by fraud; or

    (c)it is interlocutory; or

    (d)it is an injunction or for the appointment of a receiver; or

    (e)it does not reflect the intention of the Court; or

    (f)the party in whose favour it was made consents; or

    (g)there is a clerical mistake in a judgment…

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AGLC
Storry v Weir (No 2) [2022] FCA 1360
Case
[2022] FCA 1360
Decision Date

CaseChat Overview and Summary

In Storry v Weir (No 2), the appellant sought to set aside a judgment obtained by the respondent. The appellant alleged that the judgment was procured by fraud and sought various orders under r 39.05(b) of the Federal Court Rules 2011 (Cth). The central legal issue before the court was whether the judgment was indeed obtained through fraud by the successful party, thereby warranting its nullification under the specified rule. The court had to scrutinise the allegations of fraud, assess their relevance to the judgment, and determine whether they met the stringent threshold for setting aside a judgment under r 39.05(b).

The court meticulously examined the appellant's affidavits and submissions, noting that the appellant had raised several allegations of fraud. However, the court found that none of these allegations pertained directly to the judgment in question or involved any fraudulent conduct by the respondent. The allegations, instead, related to other proceedings and actions by third parties. The court emphasised that for an application under r 39.05(b) to succeed, the fraud must be directly material to the judgment and clearly pleaded and proved. As the appellant failed to demonstrate that the judgment was obtained through fraud by the respondent, the court concluded that the requirements for setting aside the judgment were not satisfied. Consequently, the court dismissed the application, highlighting that such applications are only to be exercised in exceptional circumstances and are not substitutes for appeal. The court also noted that it would hear arguments regarding costs.

The court's decision underscores the high threshold for setting aside a judgment based on fraud and reinforces the principle that such applications are reserved for cases where fraud directly impacts the judgment. The dismissal of the application in Storry v Weir (No 2) serves as a reminder of the stringent requirements and the limited circumstances under which a judgment may be set aside on the basis of fraud.

Orders

Orders of the court

1. The interlocutory application filed 29 August 2022 be dismissed.

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

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

The appellant’s submissions relied on r 39.05(b) of the Rules, that the judgment was obtained by fraud.AFFIDAVIT EVIDENCE The affidavit of the appellant affirmed 5 September 2022 (and annexures) is 161 pages in length and comprises two paragraphs and 35 annexures. The two paragraphs do not describe how the annexures relate to the appellant’s submissions or interlocutory application. The affidavit affirms that the appellant is “the [appellant]” and that “[f]alse information going through the courts and damage is being done where bankruptcy would not be a possible judgement without these earlier matters occurring” (errors in original). The affidavit of Mr Canavan affirmed 16 September 2022 is 221 pages in length and comprises 14 paragraphs and 11 annexures. The respondent drew the Court’s attention to annexures “AGC-1”, being a copy of a document referred to as the “QPRIME Traffic Crash Report” and “AGC-6”, being a copy of a Google Maps route from the respondent’s home address to Dean Street, Toowong, Brisbane. The affidavit of the appellant affirmed 12 September 2022 (and annexures) is 72 pages in length and comprises two paragraphs and 27 annexures. As with the previous affidavit of the appellant of 5 September 2022, the two paragraphs affirm that the appellant is “the [appellant]” and that “[f]alse information going through the courts and damage is being done where bankruptcy would not be a possible judgement without these earlier matters occurring” (errors in original). The affidavit of the appellant affirmed 19 September 2022 (and annexures) is 192 pages in length and comprises two paragraphs, 27 annexures and two exhibits in the form of four CD and DVD disks. As with the previous affidavits of the appellant, the two paragraphs affirm that the appellant is “the [appellant]” and that “[f]alse information going through the courts and damage is being done where bankruptcy would not be a possible judgement without these earlier matters occurring” (errors in original). The appellant’s submissions for the purpose of the final hearing focused on r 39.05(b) of the Rules, asserting that the judgment was obtained by fraud.RULE 39.05 – FRAUD The setting aside or varying a finalised judgment under r 39.05 of the Rules is a power that is only to be exercised in exceptional circumstances. There is a public interest in the finality of litigation and this is a factor which weighs heavily in an application based on r 39.05 of the Rules. Allegations of fraud are “extremely serious” and the fraud must be “directly material” to the judgment challenged: Wu Avin Operations Pty Ltd (No 2) [2006] FCA 792 at [24] (per Kenny J). The power to set aside a judgment after it has been entered “does not extend to forms of malpractice not amounting to fraud”: Clone Pty Ltd v Players Pty Ltd (in liquidation) (Receivers and Managers Appointed) (2018) 264 CLR 165; [2018] HCA 12 at [41] (per Kiefel CJ, Gageler, Keane, Gordon and Edelman JJ). Their Honours observed (at [62]) that “[f]raud needs to be clearly pleaded and proved”.

Decision

Reasons for decision

Rule 39.05 of the Rules provides:Varying or setting aside judgment or order after it has been enteredThe Court may vary or set aside a judgment or order after it has been entered if:(a)it was made in the absence of a party; or(b)it was obtained by fraud; or(c)it is interlocutory; or(d)it is an injunction or for the appointment of a receiver; or(e)it does not reflect the intention of the Court; or(f)the party in whose favour it was made consents; or(g)there is a clerical mistake in a judgment or order; or(h)there is an error arising in a judgment or order from an accidental slip or omission. On 29 August 2022, the appellant filed a document titled “Amended Interim application to set aside judgment and order” seeking the following “Interim orders”:1.Set aside sequestration and interlocutory judgment order of QUD103/222.Hear on Consolidation associated matter QUD343/213.Restore the [appellant’s] license4.Hear on Consolidation QSCA 4681/22 and transfer Acting Magistrate Smith’s file5.Hear on Consolidation QCAT matters abandoned by the Trustee6.Set aside the appointment of BRI Ferrier and allow the [appellant] to disperse funds7.Incorporate discovery application8.Hear on Consolidation of associated matters both merit and Judicial Review appeal of the Queensland Office of Fair Trading.9.Award damages to the [appellant] and clients of the agency10.Award costs to the [appellant](errors in original; emphasis omitted) The final judgment has been handed down in these proceedings. A dissatisfied party has the right to appeal from that decision. The appellant is aware of this right, but indicated to the Court that, instead, she has opted to apply under r 39.05 of the Rules to set aside the judgment. An application under r 39.05 of the Rules is not an appeal and is not a substitute for an appeal. The exercise of the power under r 39.05 of the Rules does not involve an inquiry as to the merits of the judgment and is conditioned by the terms of r 39.05 of the Rules. It can only be exercised if the requirements outlined in the rule are satisfied. At the hearing, the Court made clear to the parties that, of the various matters outlined in the “Amended Interim application to set aside judgment and order”, the only aspect which the Court would be considering was outlined in [1], namely “Set aside sequestration and interlocutory judgment order of QUD103/22” (emphasis omitted). In addition, the appellant sought to file an application for discovery in these proceedings and was told at the hearing that the Court would not be dealing with this application. Both parties filed written submissions and read affidavits as follows:(a)written submissions of the appellant filed 5 September 2022;(b)affidavit of the appellant affirmed 5 September 2022;(c)written submissions of Jonathan Weir (the respondent) filed 16 September 2022;(d)affidavit of Alexander Gregory Canavan affirmed 16 September 2022;(e)further written submissions of the appellant filed 20 September 2022;(f)affidavit of the appellant affirmed 12 September 2022; and(g)affidavit of the appellant affirmed 19 September 2022.

Ratio Decidendi

Legal Principle Established

The appellant’s written submissions raised several other allegations of fraud which were not set out in the grounds in the application.Statutory Declaration This ground would appear to be an allegation that the Queensland OFT misled the Business Licensing Authority and relates to other proceedings involving the appellant (QUD343/2021 – Venetia Louise Storry v Business Licensing Authority & Anor). In the appellant’s words, this ground is:1.QUD343/21 relies on whether I signed a statutory declaration that reflected that legal status of the [OFT] legal action in relation to a mutual recognition application. The Business Licensing Authority has been misled by the Queensland [OFT]. (See Exhibit)(errors and emphasis in original)Oral Submissions The appellant did not provide any oral submissions as to this ground.Discussion This ground does not appear to relate to the issue of whether the judgment in question was obtained as a result of fraud of the successful party. It is irrelevant to the current application. This ground relates to alleged conduct of the Queensland OFT. No allegation is made against the successful party. The allegation does not particularise any fraud to the extent required (or at all) and does not relate to the judgment in question.CONCLUSION As it is clear from my comments in these reasons, in none of the grounds raised has the appellant addressed or satisfied the requirements which must be met in the exercise of the jurisdiction conferred by r 39.05 of the Rules. The interlocutory application filed 29 August 2022 will be dismissed. I will hear argument in relation to costs.