Zegarac v Rambaldi

Case [2010] FCA 219

FEDERAL COURT OF AUSTRALIA

Zegarac v Rambaldi [2010] FCA 219

Citation: Zegarac v Rambaldi [2010] FCA 219
Appeal from: Application for leave to appeal:
Zegarac v Rambaldi [2009] FCA 1463
Parties: SLAVICA ZEGARAC v MR GESS RAMBALDI and MR ANDREW YEO
File number(s): VID 905 of 2009
Judge: GRAY J
Date of judgment: 16 March 2010
Catchwords:

PRACTICE AND PROCEDURE – judgment – original application dismissed as abuse of process of court – whether judgment interlocutory – whether leave to appeal required – whether any utility in original proceeding – whether reasonable prospect of success

BANKRUPTCY – discharge – automatic discharge – bankrupt attempting to sue trustees in bankruptcy after discharge – whether utility in application to set aside sequestration order – whether sufficient specification of acts or omissions of trustees and of time at which applicant became aware of them – whether sufficient ground to inquire into conduct of trustees  
Legislation: Bankruptcy Act 1966 (Cth), ss 149(2), 149A, 153B(1), 154, 154(1), 154(1)(a), 154(1)(b), 154(1)(c), 154(2), 178, 178(1), 178(2), 179, 179(1), 179(1)(b)
Federal Court of Australia Act 1976 (Cth), ss 24(1A), 31A, 31A(2), 31A(3)
Federal Court Rules, O 14 r 5A, O 20 r 5(1)(b) and (2), O 35 r 2, O 52 r 10(2A)(b)   
Cases cited:

Cubillo v Commonwealth of Australia [2001] FCA 1213 (2001) 112 FCR 455 referred to
Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 referred to
Marketing Advisory Services (MAS) v Football Tasmania Ltd [2002] FCAFC 165 referred to
Trkulja v Morton [2005] FCA 659 applied
Walton v Gardiner (1993) 177 CLR 378 applied

Zegarac v Pitcher Partners [2009] FCA 804 cited
Zegarac v Rambaldi [2009] FCA 1463 cited
Date of hearing: 4 February 2010
Place: Melbourne
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 50
Counsel for the applicant: The applicant appeared unrepresented
Counsel for the respondents: The respondents did not appear

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 905 of 2009
BETWEEN:

SLAVICA ZEGARAC
Applicant
AND:

MR GESS RAMBALDI
First Respondent

MR ANDREW YEO
Second Respondent

JUDGE:

GRAY J

DATE OF ORDER:

16 MARCH 2010

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.The motions the subject of the notice of motion filed on 18 December 2009 be dismissed.

2.There be no order as to the costs of the proceeding.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 905 of 2009
BETWEEN:

SLAVICA ZEGARAC
Applicant
AND:

MR GESS RAMBALDI
First Respondent

MR ANDREW YEO
Second Respondent

JUDGE:

GRAY J

DATE:

16 MARCH 2010

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

The nature and history of the proceeding

  1. By notice of motion filed on 18 December 2009, the applicant applied for leave to appeal from the judgment of a single judge of the Court, in proceeding no VID 518 of 2009…

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AGLC
Zegarac v Rambaldi [2010] FCA 219
Case
[2010] FCA 219
Decision Date

CaseChat Overview and Summary

In the matter of Zegarac v Rambaldi, the applicant, Ms. Zegarac, sought to challenge the sequestration order against her by applying for its annulment. The respondents, Mr. Rambaldi and Mr. Yeo, who were appointed joint and several trustees of the bankrupt estate of Ms. Zegarac, sought to dismiss her application on the basis that it was frivolous, vexatious, or an abuse of process. The Federal Court of Australia was tasked with deciding whether the application should be dismissed.

The central legal issue before the court was whether Ms. Zegarac's application for the annulment of the sequestration order was an abuse of process and thus should be dismissed. The court also needed to determine whether Ms. Zegarac's lack of cooperation in the administration of her estate and unexplained delay in bringing the application warranted the exercise of the court's discretion under s 153B(1) of the Bankruptcy Act 1966 (Cth).

The court found that Ms. Zegarac's application was bound to fail as she had not provided any evidence to support her claim that the sequestration order ought not to have been made. The court noted that she had ample opportunity to present evidence but failed to do so. Additionally, the court observed that the application seemed to be an attempt to relitigate matters already determined adversely to Ms. Zegarac in earlier proceedings. The court concluded that the application was an abuse of process and dismissed it. The court also ordered Ms. Zegarac to pay the respondents' costs of the application. The respondents, Mr. Rambaldi and Mr. Yeo, were substituted as the proper respondents to the proceeding.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

On 11 December 2009, the primary judge delivered judgment on the motion. He pronounced the orders and published his reasons for judgment. The applicant then sought to engage in a dispute with his Honour about the propriety of the orders, and to interrogate him about the reasons for them.The primary judge’s reasons for judgment In his reasons for judgment, at [1]-[2], the primary judge recited the history of the bankruptcy. A sequestration order was made on 18 May 2006, on the petition of the petitioning creditor. The order was based on a judgment of the Magistrates Court of Victoria, which was the subject of an unsuccessful appeal to the Supreme Court of Victoria. Mr Rambaldi and Mr Yeo were appointed joint and several trustees of the bankrupt estate of the applicant. They are members of the firm Pitcher Partners. At [3]-[7], the primary judge referred to a number of previous proceedings. The applicant applied unsuccessfully to set aside a bankruptcy notice. Leave to appeal out of time against the judgment dismissing that application was refused. An application to review the sequestration order was dismissed. The applicant applied unsuccessfully for special leave to appeal to the High Court from the order refusing leave to appeal out of time against the dismissal of the application to set aside the bankruptcy notice. An appeal from the dismissal of the application to review the sequestration order was also unsuccessful. At [8]-[10], his Honour summarised the history of the principal proceeding. At [11]-[13], his Honour gave reasons for refusing the applicant’s application for an adjournment on 4 December 2009. He recounted the applicant’s submissions in support of her application for an adjournment. His Honour gave two reasons for refusing the adjournment. The first was the absence of evidence to support the allegations on which the application was based, or the allegations of fraudulent conduct on the part of the trustees. Second, his Honour pointed out that all of the allegations against the trustees related to their conduct after their appointment as trustees, and would not provide evidence that could be relied on to support the annulment of the sequestration order. At [14], his Honour recounted that he had given the applicant opportunities to make submissions in response to the application by Pitcher Partners to dismiss the proceeding, but she had advanced no contrary submissions. At [15], the primary judge referred to s 153B(1) of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”), which empowers the Court to annul a bankruptcy if the Court is satisfied that a sequestration order ought not to have been made. The rest of his Honour’s reasons for judgment, at [16]-[22], were in the following terms:[16]Pitcher Partners submitted that the present application seeks to relitigate matters which were determined adversely to Ms Zegarac in the earlier proceedings to which I have referred. They submit further that, in any event, the Court should refuse the application as a matter of discretion because Ms Zegarac has not co-operated in the administration of her estate and because of the considerable and unexplained delay in bringing the application for annulment.[17]I put the latter submission to one side. The question of the exercise of the Court’s discretion under s 153B would arise only in the event that the Court were persuaded, at trial, that the original bankruptcy order ought not to have been made.[18]The power to dismiss a proceeding on the ground that it is frivolous or vexatious or an abuse of process is not to be exercised lightly: see General Steel Industries Inc. v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129-130. If, however, a proceeding is an abuse of process, it may be dismissed: see O 20 r 5 of the Federal Court Rules. A proceeding will constitute an abuse of process if it is “foredoomed to fail”: see Walton v Gardiner (1993) 177 CLR 378 at 393. [19]This proceeding has been before the Court for almost five months. During that time Ms Zegarac has not put on any evidence to support a claim that the sequestration order which was made against her ought not to have been made. She has had ample opportunity to do so. At the last minute, she has claimed that she has discovered “fresh evidence” but has failed to support that claim with any evidence. Furthermore, she has given no indication of where the “fresh evidence” is to be found or the person or persons said to be in possession of it. Her description of the “fresh evidence” suggests that it would, in any event, not be relevant on the hearing of any application for annulment of her bankruptcy.[20]While I am conscious that Ms Zegarac has been unrepresented, the position is that she has failed for almost five months to adduce any evidence which would support the making of an order under s 153B(1) of the Bankruptcy Act. She has been on notice, since at least 21 August 2009, that the respondent was seeking to have her application struck out, inter alia, as an abuse of process. Although some of the things which she has said in argument suggest that she may wish to relitigate some of the issues which had been dealt with in the earlier proceedings, the paucity of evidence prevents me from making the necessary comparison. As a result, I am unable to conclude that, were this application to proceed further, the respondent would be able to rely on some form of issue estoppel. I am, however, satisfied that on the present state of the pleadings and evidence, the application is bound to fail. Despite having had the opportunity to do so, Ms Zegarac has advanced no submission to the contrary.[21]The application must be dismissed as an abuse of process. Ms Zegarac should pay the respondents’ costs of the application.[22]The proper respondents are Mr Rambaldi and Mr Yeo. I will direct that they be substituted as the respondents to the proceeding.The hearing of the motions

Ratio Decidendi

Legal Principle Established

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