Williamson v Bendigo and Adelaide Bank Ltd

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FEDERAL COURT OF AUSTRALIA

Williamson v Bendigo and Adelaide Bank Ltd [2021] FCA 451  

Appeal from:  Williamson v Bendigo and Adelaide Bank Ltd [2021] FCCA 296
File number(s): NSD 263 of 2021
Judgment of: GRIFFITHS J
Date of judgment: 3 May 2021
Catchwords: PRACTICE AND PROCEDURE – application for extension of time to file notice of appeal from Federal Circuit Court – bankruptcy notice – whether adequate explanation for delay – whether sufficient prospects to justify time being extended – application dismissed   
Legislation:

Bankruptcy Act 1966 (Cth), ss 30(1) and 40(1)(g)

Limitation Act 1969 (NSW), s 14(1)(b)
Cases cited:

Barton v Malcolm Johns Legal Pty Ltd (No 2) [2015] FCA 166

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

Guss v Johnstone [2000] HCA 26; 171 ALR 598

House v R (1936) 55 CLR 499

Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176; 3 FCR 344

Jackamarra v Krakouer [1998] HCA 27; 195 CLR 516

McCann v Parsons (1954) 93 CLR 418

McDonald v McDonald (1965) 113 CLR 350

Parker v R [2002] FCAFC 133

Williamson v Bendigo and Adelaide Bank Ltd [2021] FCCA 296

Williamson v Elders Rural Services Australia Ltd (No 2) [2018] NSWSC 1986

Williamson v Elders Rural Services Australia Ltd [2019] NSWCA 137

Williamson v Elders Rural Services [2020] NSWSC 933
Division: General Division
Registry: New South Wales
National Practice Area: Commercial and Corporations
Sub-area General and Personal Insolvency
Number of paragraphs: 43
Date of hearing: 30 April 2021
Counsel for the Applicant: The applicant appeared in person
Counsel for the Respondent: Ms A Avery-Williams
Solicitor for the Respondent: Turks Legal

ORDERS

NSD 263 of 2021
BETWEEN:

HUGH FRANCIS ARTHUR WILLIAMSON

Applicant
AND:

BENDIGO AND ADELAIDE BANK LIMITED

Respondent

ORDER MADE BY:

GRIFFITHS J

DATE OF ORDER:

3 MAY 2021

THE COURT ORDERS THAT:

1.The application for an extension of time be dismissed. 

2.The applicant pay the respondent’s costs, as agreed or taxed. 

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


REASONS FOR JUDGMENT

GRIFFITHS J:

  1. The applicant seeks an extension of time to appeal from a judgment and orders of Judge Driver, which is reported as Williamson v Bendigo and Adelaide Bank Ltd [2021] FCCA 296. Judge Driver dismissed an amended application which sought to set aside a bankruptcy notice issued on 21 December 2018. The basis for the bankruptcy notice is a final judgment obtained by the respondent against Mr Williamson in proceedings in the Supreme Court of New South Wales.

  2. Mr Williamson sought to have the bankruptcy notice set aside relying on a cross-claim which he says he has against the respondent. 

  3. For the reasons that follow, the application to extend time will be dismissed, with costs. 

    Summary of background matters

  4. As Judge Driver noted at [10], the matter has a long procedural history dating back in the first instance to 5 April 2019, when Mr…

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Details
Case
[2021] FCA 451
Decision Date

CaseChat Overview and Summary

The applicant, Mr Williamson, applied for an extension of time to file a notice of appeal from a decision of the Federal Circuit Court. The dispute concerns a bankruptcy notice issued by the respondent, Bendigo and Adelaide Bank Ltd. The primary issue for the court was whether Mr Williamson had provided an adequate explanation for the delay in filing the notice of appeal and whether there were sufficient prospects to justify an extension of time. The court also had to consider the principles governing the setting aside of a bankruptcy notice and the relevant legal principles guiding the extension of time to bring an appeal.

The court found that Mr Williamson had not provided an acceptable explanation for the delay in commencing the proceedings. The proposed grounds of appeal did not appear to have sufficient merit, and the court was not persuaded that the appeal had a reasonable prospect of success. Additionally, the court found that the principles relating to the setting aside of a bankruptcy notice did not apply in this case. The court emphasised the importance of providing an acceptable explanation for the delay and the strength of the proposed grounds of appeal when considering an application to extend time. The court also noted the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties if time was extended or refused.

The court dismissed the application for an extension of time, with costs. The court found that Mr Williamson had not provided a satisfactory explanation for the delay and that the proposed grounds of appeal did not have sufficient merit. The court also found that the principles relating to the setting aside of a bankruptcy notice did not apply in this case. The court ordered that the application for an extension of time be dismissed and that the applicant pay the respondent's costs, as agreed or taxed.

Orders

Orders of the court

THE COURT ORDERS THAT:

1. The application for an extension of time be dismissed.

2. The applicant pay the respondent’s costs, as agreed or taxed.

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

Background

Background to the litigation

For the reasons that follow, the application to extend time will be dismissed, with costs. Summary of background matters As Judge Driver noted at [10], the matter has a long procedural history dating back in the first instance to 5 April 2019, when Mr Williamson first sought to have the bankruptcy notice set aside. On 12 February 2021, Judge Driver granted Mr Williamson leave to amend his application filed on 5 April 2019. This amended application sought orders that the bankruptcy notice be set aside on the basis of a counter-claim, set-off or cross-demand against the Bank. Mr Williamson’s counter-claim arises from his purchase in 2007 of a property known as “Reevesdale”. He claims that the selling agent (Mr Hannan) misled him about the vendor’s reasons for the sale and failed to inform him about a proposed quarry development. Mr Hannan was employed by Elders Rural Services Australia Ltd. The vendor’s mortgagee was Rural Bank Limited. At the time of the 2007 sale, the respondent held 50 per cent of the shares in that company. Mr Williamson’s counter-claim is based on an assertion that the respondent received the proceeds of fraud upon the sale of Reevesdale. Separately, Mr Williamson claims that the respondent otherwise “assisted” the outgoing mortgagee to conceal fraud, by taking steps to enforce its judgment, including serving the bankruptcy notice which he subsequently sought to have set aside. The primary judge’s reasons summarised The primary judge gave three reasons for dismissing Mr Williamson’s amended application. First, Mr Williamson adduced no evidence before Judge Driver to establish an effective counter-claim and, instead, simply relied upon a pleading filed in the NSW Supreme Court and assertions made by him in an affidavit. This was found to be insufficient, having regard to caselaw. Secondly, even if Mr Williams had adduced some evidence of a prima facie case to support his counter-claim, his claims had been dismissed by the Supreme Court no less than three times, in circumstances described by Judge Driver at [27]-[29]. Thirdly, in proceedings in the Supreme Court in 2019, Mr Williamson had argued that re-litigation of issues previously determined adversely to him ought to be permitted because a previous Supreme Court judgment had been procured by fraud and also because Mr Williamson claimed to be under a disability during that proceeding. Those arguments were rejected by Bellew J in his judgment published in July 2020. Justice Bellew’s reasons for judgment in Williamson v Elders Rural Services [2020] NSWSC 933 contains a useful summary of some of Mr Williamson’s earlier litigation. Mr Williamson commenced proceedings in the Supreme Court in 2015 alleging inter alia a fraudulent misrepresentation by Mr Hannan, who was a licensed real estate agent. Mr Williamson claimed that Mr Hannan fraudulently misrepresented to him that the reason why the vendor was selling Reevesdale was because of the presence of ghosts in the property, whereas the real reason (as known to the employee but not by Mr Williamson) was that the property was on the market because an application had been made for a quarry to be built on a nearby property.

Evidence

Evidence Before The Court

Somewhat confusingly, notwithstanding his evidence that he would have to account for the Great Southern loan, Mr Williamson then stated in his affidavit that he had never obtained a loan from Great Southern Finance Pty Ltd. He annexed to his affidavit a copy of his loan portfolio. Mr Williamson offered no further evidence regarding Great Southern or the alleged loan. Bank’s evidence summarised The Bank replied upon an affidavit by Mr Stephen Flamer-Smith, senior manager for Insolvency Risk and Litigation for Bendigo and Adelaide Bank Ltd, affirmed on 19 April 2021. He annexed to his affidavit copies of submissions filed below. In respect of the proposed class action against the respondent, Mr Flamer-Smith annexed a notice published by EQ Legal, which he obtained from the website on 16 April 2021. The notice disclosed that the proposed class action is unlikely to be commenced in the immediate future due to difficulty in identifying a suitable lead applicant. The notice also stated that although the legal firm said that it is “possible that the case may still be able to proceed if we were able to secure litigation funding … realistically, due to the current regulatory environment concerning class actions, any litigation finance arrangements are unlikely to be finalised before February-March next year, if at all”. Mr Flamer-Smith said that he was not aware of any other proposal to commence a class action against the respondent in relation to Great Southern investments. Mr Williamson’s submissions summarised Mr Williamson’s outline of submissions took an unusual form. They commenced with a copy of an email he had sent to the Bank’s solicitor on 18 April 2021 regarding the appeal. The letter emphasised that it was not until the digitised records of the Rural Lifestyles Residents Action Group became available that Mr Williamson obtained evidence which was “crucial” to his fraudulent misrepresentation case. After setting out that letter, Mr Williamson then made various submissions in support of his application for time to be extended. Some of that material said why Mr Williamson challenged evidence given in the earlier proceedings by Mr Reardon. Mr Williamson also responded to some of the Bank’s outline of written submissions. He said that the “set-off could not have been set up because there was a lack of knowledge” on his part. He also emphasised that his counter-claim “is very much bound up with the Supreme Court litigation”. He described Mr Hannan’s affidavit in the earlier proceedings as “a load of rubbish”. In a submission which was a little difficult to understand, Mr Williamson appeared to say that the earlier Supreme Court litigation should not stand in the way of him progressing his counter-claim because the Supreme Court was defrauded by Elders. Mr Williamson’s claim of fraud relates to what he contends was false evidence given in the Supreme Court litigation. He also submitted that there was no evidence of any loan from Great Southern. Consideration and determination(a) Summary of relevant legal principles(i) Extension of time

Decision

Reasons for decision

At the hearing on 30 April 2021, Mr Williamson provided, somewhat belatedly, a notice of motion and statement of claim which he said he intended to file in the Equity Division of the NSW Supreme Court the following week. This material did not include any explicit claim of fraud. Rather, it appears that Mr Williamson’s intention is to seek to have a judgment dated 16 November 2018 (sic) set aside “on the grounds that there is no provable debt”. I assume this is an erroneous reference to Johnson J’s judgment dated 19 December 2018. According to the proposed statement of claim, the debt in question appears to be an agreement dated 18 August 2017 between Mr Williamson and the Bank in which it was agreed that Mr Williamson would pay the Bank $400,000 by no later than 30 September 2018. Mr Williamson apparently proposes to contend that there was no loan and that the agreement should be set aside. Putting to one side the problems of issue and/or Anshun estoppel which will presumably confront Mr Williamson if he commences such proceeding, I fail to see how this proposed belated action in the Equity Division has any bearing on Mr Williamson’s present application in this Court for time to be extended for him to appeal against the judgment and orders of Judge Driver. Conclusion For these reasons, the application for an extension of time will be dismissed, with costs.

Ratio Decidendi

Legal Principle Established

Mr Williamson’s claim of fraud relates to what he contends was false evidence given in the Supreme Court litigation. He also submitted that there was no evidence of any loan from Great Southern. Consideration and determination(a) Summary of relevant legal principles(i) Extension of time The relevant principles guiding the Court’s consideration of an application to extend time to bring an appeal are well settled. The applicant needs to provide an acceptable explanation for the delay in commencing the proceedings. The strength of the proposed grounds of appeal is another relevant and important matter (see generally Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176; 3 FCR 344 and Parker v R [2002] FCAFC 133). In assessing the prospects of the proposed appeal, the Court is not required to go into great detail and is entitled to assess the merits “in a fairly rough and ready way” (see Jackamarra v Krakouer [1998] HCA 27; 195 CLR 516). The Court is entitled to take into account the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences for the parties if time is extended or refused. (ii) Setting aside a bankruptcy notice The principles relating to the setting aside of a bankruptcy notice are also well settled. They may be summarised as follows. First, the power to set aside a bankruptcy notice is regarded as being within the general powers of the Court conferred by s 30(1) of the Bankruptcy Act 1966 (Cth) (the Act) (Bryant v Commonwealth Bank of Australia (1994) 217 ALR 251 at 253 per Davies, Foster and O’Loughlin JJ). Secondly, and importantly, the power is a discretionary power. Accordingly, when its exercise by a trial judge is challenged in an appeal, the principles relating to the review of the exercise of a judicial discretion are those set out in House v R (1936) 55 CLR 499 at 504-505 apply. Some error of principle needs to be established so as to demonstrate that the discretion has miscarried. Thirdly, the nature of the discretion in relation to a debtor’s counter-claim as referred to in s 40(1)(g) of the Act was described in Guss v Johnstone [2000] HCA 26; 171 ALR 598 at [38]-[40] as follows (footnotes omitted):38.The nature of the exercise upon which Sundberg J was engaged is well established by a long line of authority.39.In Vogwell v Vogwell, Latham CJ said, in relation to a corresponding provision:[T]he authorities show that the matter to which the court looks is this, – whether it is just that the claim should be determined before the bankruptcy proceedings are allowed to continue; in other words, whether it is a claim which it is proper and reasonable to litigate.40.The state of satisfaction referred to in s 40(1)(g), and s 41(7), involves weighing up considerations as to the legal and factual merit of the claim relied upon by the debtor, and the justice of allowing the bankruptcy proceedings to go ahead or requiring them to await the determination of the claim. Fourthly, the decision whether a counter-claim is of the relevant kind necessarily involves an evaluation on the part of the trial judge as to the strength of the claim (Barton v Malcolm Johns Legal Pty Ltd (No 2) [2015] FCA 166 at [64] per Gleeson J).