The Owner Strata Plan SP22143 v Renet

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Federal Circuit and Family Court of Australia

(DIVISION 2)

The Owner - Strata Plan SP22143 v Renet [2022] FedCFamC2G 953  

File number(s): CAG 2 of 2022
Judgment of: JUDGE W J NEVILLE
Date of judgment: 15 November 2022
Catchwords: BANKRUPTCY – Application for review of sequestration order made by Registrar on the basis of the debtor not having complied with the requirements of a bankruptcy notice – sequestration order sought/made on the basis of unsatisfied judgment debt – whether creditor has established preconditions to the making of a sequestration order – non-compliance with earlier orders of the Court – hearing de novo – application for review dismissed with costs.  
Legislation:

 Bankruptcy Act 1966 (Cth) s. 37, 52(1) - (3)

Federal Circuit and Family Court of Australia Act 2021 (Cth) s.256(1) and (2)

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) Division 13.2; Division 21.2 “Review of Registrars’ powers”

Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth) Division 7.2 “Review of sequestration order”

Cases cited:

Bechara v Bates (2021) 286 FCR 166

Clapham v Commonwealth Bank of Australia [2013] FCAFC 84

Hutchings v Australian Securities and Investments Commission [2017] FCA 858

Kimber v Owners of Strata Plan No.48216 (2017) 258 FCR 575

Ling v Enrobook Pty Ltd (1997) 74 FCR 19; (1997) 143 ALR 396

Martin v Commonwealth Bank of Australia (2001) 217 ALR 634

Richmond v BMW Australia Finance Ltd (No.1) [2009] FCAFC 24

Robson v Body Corporate for Sanderling at Kings Beach CTS 2942 (2021) 286 FCR 494

Schepis v Osborne [2015] FCA 192

Totev v Sfar (2008) 167 FCR 193

Zdrilic v Hickie (2016) 246 FCR 532

Division: Division 2 General Federal Law
Number of paragraphs: 51
Date of last submission/s: 16 September 2022
Date of hearing: 19 August 2022
Place: Canberra
Solicitor for the Applicant in the Application for Review Self-represented
Solicitor for the Respondent in the Application for Review Baker Deane & Nutt

ORDERS

CAG 2 of 2022

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:

THE OWNER - STRATA PLAN SP22143

Applicant
AND:

MARK RENET

Respondent

order made by:

JUDGE W J NEVILLE

DATE OF ORDER:

16 November 2022

ON A FINAL BASIS, THE COURT ORDERS THAT:

1.The Application for Review of the Orders made by a Registrar of this Court on 27 May 2022 that:

(a)a sequestration Order be made against the estate of the Respondent Debtor; and

(b)The Applicant’s costs fixed in the sum of $8,172.47 be paid from the bankrupt estate of the Respondent in accordance with the Bankruptcy Act 1966 (Cth),

is dismissed.

2.The sequestration Order made by a Registrar of this Court on 27 May 2022 is affirmed.

3.The Applicant’s costs of the review fixed in the sum of $5,000.00 be paid from the bankrupt estate of the Respondent in accordance with the Bankruptcy Act 1966 (Cth).

Note: The form of the order is subject to the entry in the Court’s records.

Note: The Court…

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Details
Case
[2022] FedCFamC2G 953
Decision Date

CaseChat Overview and Summary

In the case of The Owner Strata Plan SP22143 v Renet, the Federal Circuit and Family Court of Australia was presented with a dispute concerning outstanding body corporate levies owed by Mr Renet for his property at 7/3 Charles Street, Queanbeyan, NSW. The matter originated in the Queanbeyan Local Court, where a judgment was entered against Mr Renet for the sum of $12,365.19 inclusive of GST. Following the issuance of a bankruptcy notice and a creditor's petition application, a sequestration order was made against Mr Renet by the Federal Circuit and Family Court of Australia on 27 May 2022. Mr Renet subsequently applied for a review of the sequestration order, alleging that he had been provided with the incorrect dial-in number for the hearing and thus was unable to participate in the proceedings.

The court was required to determine whether Mr Renet's application for review was valid and whether the sequestration order should be set aside or affirmed. The court noted that Mr Renet had not appealed the judgment debt in the Queanbeyan Local Court and had been legally represented during part of the litigation that resulted in the judgment debt. Furthermore, the court observed that Mr Renet had not provided any evidence to support his claim that the outstanding debt had been settled. The court also considered the Full Court decision in Bechara v Bates, which emphasised the importance of a de novo review in such matters and the responsibilities of the creditor and the court in this process.

The court found that Mr Renet's application for review was essentially hopeless and should be heard and disposed of promptly at a final hearing, in line with the character of the power being exercised by the court on applications for de novo review of a delegated power. The court held that the sequestration order should be affirmed, as the Applicant had complied with all orders, the Bankruptcy Act 1966 (Cth), and the Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth). The court dismissed Mr Renet's application for review and ordered that he pay costs to the Applicant.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

The Strata Plan’s written submissions, filed 19th July 2022, were as follows (emphasis in original): A. BACKGROUND1.On 31 August 2020, the Applicant/Respondent for the Review (Applicant/Review Respondent) filed a statement of claim in the Queanbeyan Local Court against the Respondent/Applicant for the Review (Respondent/Review Applicant) for outstanding body corporate levies outstanding to be paid by the Respondent/Review Applicant in respect of the property known as 7 /3 Charles Street, Queanbeyan NSW 2620.2.On 8 June 2021, Orders were made in the Queanbeyan Local Court ordering that the Respondent/Review Applicant pay to the Applicant/Review Respondent the sum of $12,365.19 inclusive of GST.3.On 6 August 2021, bankruptcy notice was personally served on the Respondent/Review Applicant.4.On 2 February 2022, the Applicant/Review Respondent filed the creditor's petition application in the Federal Circuit and Family Court of Australia (FCFCOA).5.On 24 February 2022, the Creditor's Petition documentation were personally served on the Respondent/Review Applicant.6.On the morning of 25 March 2022, the date of the hearing, the Respondent/Review Applicant emailed the FCFCOA seeking an adjournment on the basis of his ongoing illness and alleging that the outstanding debt had been settled.7.Orders were made on 25 March 2022, adjourning the hearing to 27 May 2022. The purpose of the adjournment was to provide the Respondent/Review Applicant with an opportunity to pay the outstanding debt, and for him to seek legal advice.8.The Orders also made clear that unless by consent, any further adjournment was to be supported by an affidavit to be filed and served by 20 May 2022.9.The Applicant/Review Respondent emailed and express posted a letter to the Respondent/Review Applicant enclosing a copy of the Orders made on 27 May 2022, complying with Order 4, and explaining the basis for the adjournment being granted.10.The Respondent/Review Applicant did not seek any further adjournments nor pay any of the outstanding debt.11.On 27 May 2022, the hearing proceeded in the Respondent/Review Applicant's absence as he did not make an appearance.12. Sequestration Order was made against the Respondent/Review Applicant.B. RESPONDENT/REVIEW APPLICANT'S APPLICATION1.The Respondent/Review Applicant's review application and its supporting affidavit attached screenshots of the Respondent/Review Applicant's phone trying to dial into the virtual courtroom.2.The Respondent/Review Applicant's affidavit stated that he dialled the meeting number #923255303 for the hearing.3.The correct dial in number for the hearing on 27 May 2022 should have been #957584035, as informed by the FCFCOA on 26 May 2022 to both parties by way of email in anticipation of the hearing on 27 May 2022. The dial in number #923255303 was for the hearing on 25 March 2022.4.The Applicant/Review Respondent respectfully submits that even if the Respondent/Review Applicant had attended the hearing on 27 May 2022, the outcome of the hearing would have been no different to the Orders made on 27 May 2022, in that the Registrar would have made the Sequestration Order against the Respondent/Review Applicant, for the following reasons:(a)The Respondent/Review Applicant ignored the FCFCOA's advice that the Respondent/Review Applicant seek legal advice and pay the outstanding debt.(b)The Respondent/Review Applicant has not provided any evidence that the outstanding debt have been settled, as claimed by the Respondent/Review Applicant in his email to the FCFCOA on 25 March 2022. The Applicant/Review Respondent submits that the Respondent/Review Applicant has mislead [sic] the FCFCOA as the debt is still due and outstanding as evidenced by Affidavit of Debt of Micaela Battiste affirmed 26 May 2022.(c)The Applicant/Review Respondent has complied with the Orders made on 25 March 2022 and has satisfied the FCFCOA that the requirements of s 52 of the Bankruptcy Act 1966 (Cth) (the Act) have been met for the Sequestration Order to be made.(d)The Applicant/Review Respondent has complied with all Orders, the Act and the Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth).5.The Applicant/Review Respondent respectfully submits that the evidence before the FCFCOA shows that the Respondent/Review Applicant has committed an act of bankruptcy and has taken no active steps to remedy the outstanding debt and that the Sequestration Order made on 27 May 2022 was made pursuant to Order 3 made 25 March 2022.6.The Respondent/Review Applicant has abused the court process throughout the Queanbeyan Local Court matter by seeking multiple adjournments and the Applicant/Review Respondent respectfully submits that the Respondent/Review Applicant's application to review the Registrar's decision is abuse of the court process and at the Court's and the Applicant/Review Respondent's expenses.7.As such, the Applicant/Review Respondent submits the review application should be dismissed and seeks costs against the Respondent/Review Applicant.Mr Renet’s further submissions

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Many of these same issues regarding the confusion of process and articulation of issues were plainly on display in the limited materials filed by Mr Renet in the current matter.The judgment debt Although not formalised, Mr Renet’s regular complaint (made primarily in open Court as opposed to in his written materials) related, in part, to the judgment debt in the Queanbeyan Local Court, which ultimately led to the bankruptcy proceedings and the sequestration Order. In relation to the judgment debt, I note that:(a)The judgment was never appealed or Application made to set it aside;(b)In his own submissions, Mr Renet confirmed that he was legally represented, at least for part of the litigation that resulted in the judgment debt (as noted below, he claims a significant sum, apparently by some sort of “cross-claim” arising from these legal fees); and(c)Mr Renet regularly contended that a “settlement” between the parties regarding strata fees precluded the judgment debt standing. The formulation of Mr Renet’s contention, set out in the preceding sub-paragraph (c), is drawn from an annexure to his Affidavit, filed 22nd July 2022, described as “Item 1 – Settlement”. This document, dated 4th April 2017, purports to reflect a settlement between the parties at that time regarding outstanding strata fees. In the other Annexures to his Affidavit (all described as “Item” followed by a number), there is something of a history, and at other times, a conflation, of contest between the parties invariably over payment of strata fees by Mr Renet. For example, there is correspondence between Mr Renet and his then lawyer (Mr O’Keefe), dated 2nd September 2016, regarding him requiring legal representation concerning a civil matter (seemingly, again, over strata fees) and some criminal matter that Mr Renet alleges against the Strata Manager of the property in which Mr Renet’s unit is located. He contended in this correspondence that there had been a fraud perpetrated against him, which would result in the Strata Manager (or others involved) in being liable for imprisonment for 10 years. Another annexure (described as “Item-5 Failed record of accord”) is described as “Owner ledger from 1/1/15 to 20/7/22”. Mr Renet is recorded as the “owner” of Unit 7 in the property complex. This document has obviously been produced (and provided) by the Strata Managers of the property, Civium Property Group. The final entry on this document shows a debit balance of $19,073.80 (at 1st April 2022) as the amount of strata fees owing by Mr Renet. The outstanding amount includes interest. This ledger statement records that, the “opening balance” as at 1st January 2015 was $0. As at 27th May 2015, the debit balance was $9,144.75; and as at 30th May 2021, the balance owing by Mr Renet for strata levies totalled (with interest) $14,773.51. I recall that the judgment debt of $12,365.19 was entered on 8th June 2021. Two other annexures to Mr Renet’s Affidavit should be noted. First is an Affidavit of Ms Park, filed in the current proceedings on 21st June 2022. Mr Renet contends that this Affidavit is “false.” I consider this Affidavit below.

Ratio Decidendi

Legal Principle Established

In the slightly earlier Full Court decision in Bechara v Bates, the Full Court also commented on the process and import of a hearing de novo. For current purposes, it is sufficient simply to record the following from the headnote and the internal references there given:[12](3) A bona fide application for review engages the Constitutional imperative to hear afresh the creditor’s petition. The creditor is the true applicant in a hearing de novo and carries the onus of proving matters and bringing forward evidence required by s 52(1) of the Bankruptcy Act. The debtor does not need to show error in the registrar’s decision and neither the Court nor the creditor can absolve themselves of responsibility respectively to hear and prosecute the creditor’s petition afresh by pointing to non-compliance with timetabling orders or failure to appear. [27], [59], [61], [62], [66], [74], [88], [92]…(5) Applications for review of registrar’s orders do not invalidate, revoke or suspend the exercise of those orders or the delegated authority, which remains in existence whilst review is pending. If after de novo review, the judge concludes a sequestration order is appropriate, the judge dismisses the application leaving the registrar’s order in place and preferably, confirms or affirms the registrar’s order. If the petition is to be dismissed, the sequestration order is set aside or annulled. [88], [149], [150], [155]…(7) If a review application is hopeless, it should be heard and disposed of promptly at a final hearing. Such is consistent with the character of the power being exercised by the Court on applications for de novo review of a delegated power, which should not affect or impede legitimate and proper case management. [91]-[92][12] Bechara v Bates (2021) 286 FCR 166 at [3], [5] and [7].Consideration and disposition In a number of recent decisions, the Full Court has noted the regularly encountered difficulties in review Applications that are filed by self-represented litigants. A summary of some of these problems was noted by the Full Court in Kimber, at [60] (emphasis added):[13]The review application and the 30 May 2016 Affidavit are difficult documents. They do not comply with the Rules, they are repetitive and they contain complaints about Court staff and members of the executive committee of the Owners Corporation, the strata managers and Grace Lawyers which are personal and some are plainly scandalous. Her oral and written submissions are no less challenging. The exact nature of many of Ms Kimber’s complaints is hard to establish. Many of the matters she raises are either outside the scope of the Court’s jurisdiction on an application to set aside a bankruptcy notice (for instance, to change the outcome of the Local Court proceedings having regard to the course taken in attempts at mediation) or misconceived (in effect, treating the review application as an appeal from the Registrar’s decision). She has plainly struggled as a litigant in person, both with accepting the limits of the Court’s jurisdiction and the disciplines imposed by the FCA Act and the Rules designed to ensure fairness to all parties.[13] Even more succinctly, Allsop CJ said, in Robson, at [19]: “… Not infrequently given the nature of the jurisdiction, litigants are self-represented and their documents, claims and the jurisprudential bases therefor may be confused or wanting in expression.”