Zhao v Goodman - [2011] FMCA 518

FEDERAL MAGISTRATES COURT OF AUSTRALIA

ZHAO v GOODMAN

[2011] FMCA 518

BANKRUPTCY – Application for review of a Registrar’s decision dismissing an application to set-aside a Bankruptcy Notice – hearing de novo – Applicant seeking to pursue further litigation in the District Court – previous proceedings essentially pleading the same issues – initial proceedings dismissed by District Court, Court of Appeal and High Court – Application for review dismissed.

Bankruptcy Act 1966 (Cth), s.41(7)
Home Building Act 1989 (NSW), s.18B
Limitation Act 1969 (NSW), s.14

Goodman v Zhao [2008] NSWDC 373
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Re James & Anor; Ex parte Carter Holt Harvey Roofing Australia Pty Ltd (1993) 46 FCR 183
Zhao v Goodman & Anor [2010] NSWCA 2

Applicant:

YAN SHOU ZHAO

Respondent:

MARLA SHOSHANA GOODMAN

File Number:

SYG 901 of 2011

Judgment of:

Lloyd-Jones FM

Hearing date:

14 June 2011

Delivered at:

Sydney

Delivered on:

8 July 2011

REPRESENTATION

Solicitors for the Applicant:

Applicant appeared in person

Solicitors for the Respondent:

Mr Curry of Mills Oakley Lawyers

ORDERS

The Application for Review filed on 25 May 2011, be dismissed.
The Applicant, Mr Yan Shou Zhao, is to pay the costs of the Respondent, fixed in the sum of $2,000.00.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 901 of 2011

YAN SHOU ZHAO

Applicant

And

MARLA SHOSHANA GOODMAN

Respondent

REASONS FOR JUDGMENT

This matter appeared in the Registrar’s list on 14 June 2011, at which time it was referred to this Court and the parties indicated to me that the matter concerned an Application for Review filed by Mr Zhao on 25 May 2011. This Application is seeking the review of the orders made by Registrar Hedge on 17 May 2011, dismissing an Application filed on 6 May 2011, seeking to set-aside Bankruptcy Notice No. NN2333 of 2011 issued on 4 April 2011.
In the Application for Review filed on 25 May 2011, Mr Zhao indicated that he was seeking to review all of the orders on the Application and provided the basis for that review:
In the hearing dated 17/05/2011, I showed the court the Attachment ‘3’ that I just finished write in that day and asked the Court because my English is no good please give me more time to finish the Statement of Claim dated 20/05/2011see attached but the court did not give me more time, I don’t understand why the Court can give other people extra time but not give me extra time in that day, so I application for review the case.
This is a hearing de novo. After hearing the argument advanced by both sides, it was clear that Mr Zhao, a self-represented litigant, was unable to provide the Court with any basis for setting-aside the orders made by Registrar Hedge. Consequently, after discussing this matter with the parties, I believed it was in both parties’ interest to know with some certainty the future progress of this matter. Hence, I made orders dismissing the review application and indicated that I would publish my reasons for those orders.

Background

In setting out the following background material I have relied on the oral submissions and affidavit sworn 16 May 2011 of Mr Curry, of
Mills Oakley Lawyers, representing Mrs Goodman. The information is provided to assist in the understanding of the nature of the Application and not to establish any evidentiary point, as Mr Zhao is a self-represented litigant and has a limited command of the English language. It was appropriate that Mr Curry assisted the Court in this way to quickly establish the nature of the Application and the background leading to the underlying dispute between the parties. Mr Zhao was invited to interrupt and make any comment if he believed that the material being presented did not accurately reflect the circumstances of the dispute.
Mr Zhao is a licensed building contractor trading as “YSZ Building Service” and Marla Shoshana Goodman is a home owner. The parties entered into a domestic building contract in February 2000 and that contract remained on foot until approximately March 2001.
Various allegations were made, firstly by Mrs Goodman, concerning defective building work, and secondly by Mr Zhao, for unpaid monies. Vero Insurance Limited was a home warranty insurer of residential building works undertaken by Mr Zhao at the property owned by
Mrs Goodman. In April 2004, Vero Insurance Limited paid an indemnity to Mrs Goodman in settlement of two claims lodged under her home warranty insurance for alleged defective building works carried out by
Mr Zhao. Following that payment, Vero was subrogated to the rights of Mrs Goodman against Mr Zhao pursuant to the insurance contract and law. On 9 March 2006, Vero Insurance Limited filed a Statement of Claim in the District Court of New South Wales, proceedings 976/2006, using rights subrogated from Mrs Goodman’s claim in damages against Mr Zhao.
Mr Curry described this as a conventional Statement of Claim filed in the Building and Engineering list in the District Court in that Mrs Goodman sued Mr Zhao for defective and incomplete building work. It pleads that Mr Zhao breached the statutory warranty implied in the building contract by s.18B of the Home Building Act 1989 (NSW) (Statement of Claim, affidavit of Darren Curry, sworn 16 May 2011, annexure ‘A’).
On 7 April 2006, Mr Zhao filed a defence and critically for the purposes of these proceedings, a cross-claim against Mrs Goodman. As part of that pleading (para.4) Mr Zhao alleges that Mr Brian Goodman
(Mrs Goodman’s husband) directed Mr Zhao not to do particular work specified in the contract which Mr Zhao claims he has confirmation indicating that he did not do those works. The next allegation (para.6) is that at various time during the course of doing the work, Mr Goodman requested Mr Zhao to do further work in addition to what he was required to do under the contract. Mr Zhao then alleges (para.10) that
Mrs Goodman, in breach of her obligations under the contract, failed to pay Mr Zhao all of the monies due to him under the contract.
The quantum sought was $61,285.00. The matter proceeded to trial before the District Court and ran for 15 days. Mr Zhao was legally represented in those proceedings. At the conclusion, judgment was given by his Honour Johnstone J in favour of Mrs Goodman and Mr Zhao was ordered to pay approximately $157,000.00. His Honour dismissed
Mr Zhao’s cross-claim.
In Goodman v Zhao [2008] NSWDC 373 his Honour Johnstone J dealt with the cost claim in the following manner:
110. I turn, therefore, to the question of quantum. The claims made amount to a total of $58,306.40, being $53,940.00 for the termite claim, and $4,366.40 for sub-floor ventilation (Scott Schedule at Items 10 and 11). There were no substantive submissions challenging these amounts. The only submission made (at 12.5) was to the effect that the claim based on the detection and baiting system for termites is not a head of damages flowing from any breach by the defendant, and his liability should be limited to the repair of the termite damage, and should not extend to ongoing monitoring, which only became necessary after termite infestation, which steel mesh would not have prevented. This submission is, however, flawed because the unchallenged evidence is that the monitoring is required because of the defective ant capping, which cannot now be rectified, and the site conditions created by Mr Zhao.
111. For these reasons, I find the claims are reasonable and appropriate, and I award damages for these items in the amounts claimed.
112. In the light of the findings I have made it is not necessary that I make a finding as to whether the plaintiff agreed to excise the requirement for the installation of Termimesh in accordance with the specifications. In the event that were to become a relevant consideration, I was not satisfied that the requirement was excised. In my view the recording of the words "spray only" on the iteration of the quotation Mr Goodman stapled on the inside cover of the counterpart contract were equivocal. Apart from the question of credit that I have addressed on a number of occasions, which would persuade me to reject Mr Zhao’s evidence on the issue, having regard to my findings as to the applicable contract, it is clear that no amendments to the specifications were formally recorded. I find, therefore, that it was the common objective intention of the parties that the specifications, as incorporated into the Home Building Contract entered into between the parties, was binding on Mr Zhao. In the absence of any formal variation, therefore, he was contractually bound to install the Termimesh that the specifications required.
Summary of damages
113. The damages I have awarded are, in summary:
Items 1, 2 and 3 The terraces on levels 2 & 3 $ 23,878.21
Item 4 Defective render $ 68,962.29
Item 5 Kitchen fountain $ 443.05
Item 6 Front entry $ 2,016.63
Item 7 Garage ceiling $ 4,240.72
Item 10 Termite damage $ 53,940.00
Item 11 Sub-floor ventilation and abutting soil $ 4,366.40
Total $157,847.30
114. I find for the plaintiff on her claim against the defendant for that total amount, together with interest to date at the applicable statutory rate.
The cross-claim
115. I turn now to consider Mr Zhao’s cross-claim. The cross-claim was brought against the plaintiff, Mrs Goodman, and against her husband, Mr Goodman.
116. The cross-claim seeks payment for amounts in respect of various items of work Mr Zhao alleged he performed, which he claimed remain outstanding under the contract or were additional works requested on behalf of Mrs Goodman, for which he has not received payment.
117. I am unable to see any basis for the joinder of Mr Goodman as second cross-defendant. There was never any suggestion that he acted at any time other than as agent for Mrs Goodman, either in connection with the formation of the construction work, or in relation to the building works. There is no evidence that he was ever a principal in his own right and there can be no claim against him in contract. No other basis for personal liability on his part was pleaded, or argued. The cross-claim against him was misconceived and fails.
118. To the extent that the cross-claim against Mrs Goodman depends upon Mr Zhao’s version of the applicable construction contract, it fails for the reasons I have already given.
Mr Zhao then lodged an appeal against the District Court decision in the Court of Appeal in Zhao v Goodman & Anor [2010] NSWCA 2.

At [133] of that judgment is the submission by Mr Zhao that he calculated the $61,285.00 owed to him as being the contract price, less work performed by the Goodmans, which resulted in the amount owing. In effect, Mr Zhao said there was a contract price and following discussions between the parties, the Goodmans decided to do certain work themselves and there was therefore a variation to remove that work from the contract.
At para.[138] – [139] of Zhao v Goodman & Anor (supra) the primary judge determined that no monies were owing to Mr Zhao and if anything, he had been overpaid:
[138] The primary judge (at [115]) accepted the calculations of the respondent with the consequence that no moneys were owing to the appellant — if anything, he had been overpaid. The question is whether it was open to his Honour to accept the respondent’s calculations in preference to those of the appellant.
[139] The respondents claimed both at trial and on the appeal that they had paid $420,162.12 to the appellant or his contractors and suppliers. As they were only required to pay the appellant $387,205, they submitted, and his Honour found at [119], they had overpaid the appellant for the fixed price contract works by some $32,867.12.
The Court then goes on to look at aspects of his Honour Johnstone J’s decision and concludes that there is no reason to disturb the finding of the Court below.
The Court of Appeal went on to make the following observations at [144] – [145]:
[144] But for present purposes, the critical finding of his Honour is at [119] where he found that even if the appellant had a valid claim for variations, he had in fact been paid for them as he accepted the calculations in the table that I have recorded at [135] above.
[145] His Honour therefore accepted that the first respondent had paid the appellant and his suppliers a total of $420,162.12. On the appellant’s own case, the total amount which he was entitled to be paid (including variations) was $406,685 (see [133] above). Although the appellant contended that he and his suppliers had only been paid $345,500, this assertion was rejected.
His Honour Tobias JA (McFarlane JA and McClellan CJ at CL agreeing) at [150] stated:
[150] Accordingly, in my view it has not been demonstrated that his Honour erred in finding at [119] that the total amount paid by the respondents exceeded that to which the appellant was entitled with the consequence that as no further monies were due to the appellant and unpaid, his cross-claim fails.
On 5 February 2010, Mr Zhao then applied for special leave to appeal to the High Court which was refused on 17 June 2010, by their Honours Hayden and Bell JJ.
After the judgment had been entered in the District Court, Mrs Goodman issued a Bankruptcy Notice NN2067of 2009 (‘first Notice’) in the amount of his Honour’s judgment from the District Court. As Mr Zhao had commenced his first appeal to the Court of Appeal, there was an Application to Set-Aside the Bankruptcy Notice on the basis of that appeal. Following the special leave refusal, Registrar Hedge dismissed the Application, allowing the bankruptcy to proceed. However, the Creditor’s Petition was not filed within six months of the date of bankruptcy due to an administrative oversight. The original Creditor’s Petition was subsequently withdrawn, when it was realised that it was more than six months after the date of the act of bankruptcy. As a result of this oversight, on 4 April 2011 a fresh Bankruptcy Notice NN2333 of 2011 (‘second Notice’) was filed. The Notice was served on Mr Zhao on 18 April 2011 by a licensed process server. On 6 May 2011, Mr Zhao filed an Application to Set-Aside the second Notice. The current Application to Set-Aside the second Bankruptcy Notice is based on an allegation that there is a cross-claim, set-off or cross-demand.

New District Court of New South Wales proceedings 2011/93149

On 23 March 2011, Mr Zhao filed a Statement of Claim in the District Court of New South Wales seeking relief for the sum of $68,820.00 plus interest and costs. That Statement of Claim is in respect of the same building works that were the subject of the original District Court proceedings. On 12 May 2011, Mrs Goodman filed a Defence.

Mr Curry indicated to the Court that he held instructions to make a summary dismissal application in respect to the second proceedings.
Mr Curry indicated to the Court that at the hearing before Registrar Hedge, Mr Zhao indicated that he intended to bring a further action against
Mrs Goodman. In the Application for review filed on 25 May 2011, which is currently before this Court, Mr Zhao states at [8], under the heading
“Set out the decree(s) or order(s) sought in place of those to be reviewed”:
In the hearing on 17/05/2011[before Registrar Hedge] I showed the Court the Attachment 3 that I had Just finished write in that day and asked the Court because my English no good, “please give me more time to finish the Statement of Claim dated 20/05/2011 see attached but the Court not give me more time,

I don’t understand why the Court can give other people extra time but not give to me extra time in that day so I application for review the case.
Mr Curry indicated that what Mr Zhao was alluding to was that three days after Registrar Hedge dismissed his application, he filed a second Statement of Claim in the District Court (Case Number 2011/166219 filed 20 May 2011) against Mrs Goodman. The Statement of Claim is annexed to the Affidavit of Mr Yan Shou Zhao sworn 25 May 2011.
Mr Curry made the observation that the new Statement of Claim contained pleadings that closely resemble Mr Zhao’s first District Court Statement of Claim (Case Number 2011/93149, filed 23 March 2011) that is already on foot.
An analysis of the two Statements of Claim reveal that Paragraphs 1 – 3 are identical and expressed in the following terms:
1. The Plaintiff is a natural person entitled to sue in and by his own name and capacity.
2. The Defendant is a natural person able to be sued in and by her own name and capacity.
3. By an agreement made on 25/1/2000 between the Plaintiff and the Defendant, the Plaintiff agreed for reward to carry out building work including residential building work for and on behalf of the Defendant (‘the building contract’).
Paragraphs [4] of the two statements differ, the first stating:
4. The Building work contract including. The Home Building Contract Booklet that signed after 19/2/2005. b. The Detail Building work Contract dated on 25/01/200 that Yan Shou Zhao carry work $366,805.00, and Marla Shoshana Goodman carry work $176, 995.00.
Paragraph [4] of the second Statement of Claim states:
4. The Building work contract including; a The Home Building Contract Booklet that signed after 19/2/2005. b. The Detail building work Contract dated on 25/01/2000.
Paragraph [5] of both statements are in identical terms:
5. The Plumbing Certificate and The Structure Engineer Certificate and the Termite ants cap Certificate and The Building Occupation Certificate all shows the building work meet Australian Standard.
Paragraph [6] – [10] of the first claim states:
6. The payment sum that supplied by Marla Goodman dated 2/1/2001 shows total paid to Yan was $327,500.00.
7. The payment daily record by Yan Shou Zhao dated 25/1/2000 it 2/1/2001 shows total received from Marla Goodman was $301,400.00.
8. Extra work paid by Marla Goodman to Yan was $17,450.00.
9. Other documents for extra work.
10. The letter to the Prime Minster and the answer, that proved Marla Goodman lie to the insurance company.
Paragraph [6] of the Second Claim states:
6. Marla Goodman’s illegal work and defect work and other work cause I loss $443,593.18.
Mr Zhao did not dispute any of the material put before the Court by

Mr Curry by way of background to these proceedings. However, he wished to indicate that he was now initiating a further Statement of Claim to be filed in the District Court. He indicated that he was not getting any assistance with this because legal costs were too high.

Mr Zhao indicated that there was further material and additional claims that he wished to put before the Court in support of his claim.

Submissions by Mr Curry

Mr Curry submits that in respect to the Application to Set-Aside the first Bankruptcy Notice, whilst the appeal was on foot, there was no mention of any cross-claim, set-off or cross-demand whatsoever and on this basis he indicated that he wished to advance an Anshun submission. As set out in the background above, Mr Zhao had sought to set-aside the first Bankruptcy Notice which was based on precisely the same judgment debt that is the basis of the second Bankruptcy Notice, on the ground that the debt was not owed and that there was an appeal on foot. No mention was made at any time in the course of that application of any cross-claim, set-off or cross-demand.
The current Application to Set-Aside the second Bankruptcy Notice is based on entirely different grounds, being that there is an allegation of a cross-claim, set-off or cross-demand, existing. Mr Curry contends that these should have been raised in respect of the previous Application to Set-Aside the first Bankruptcy Notice. Mr Curry indicated to the Court that he relied upon the decision in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, but indicated to the Court that this point had not been raised before Registrar Hedge.
Mr Curry referred to the Application that was before Registrar Hedge on 17 May 2011, which concerned the second Bankruptcy Notice, served on Mr Zhao on 18 April 2011. Attached to that Application is an affidavit of Mr Zhao sworn 6 May 2011 and filed on the same day. This is an affidavit relating to s.41(7) of the Bankruptcy Act 1966 affidavit, although there is no direct reference to this provision within the affidavit. Mr Curry contends that this affidavit must stand alone but acknowledged it can be supplemented by additional evidence, but it must set out the basis for the cross-claim, set-off or cross-demand by stating the full details of that claim. It must state the amount by which it alleges to exceed the amount of the Bankruptcy Notice. Further, he must state why the counter-claim, set-off or cross-demand was not raised previously.

Mr Curry contends that the affidavit does none of these things and for that reason it is an ineffective affidavit for the purposes of a s.41(7) application: Re James & Anor; Ex parte Carter Holt Harvey Roofing Australia Pty Ltd (1993) 46 FCR 183 at 188 it states:
The debtors, within the time limited for compliance with the bankruptcy notice, filed two affidavits. These affidavits, individually or cumulatively, did little more than assert the existence of a cross-claim, cross-demand, or set off, and in my view did not comply with the provisions of s 41(7). The affidavit of which s 41(7) speaks must do more than merely assert the existence of a cross-claim etc of the relevant value. It must contain evidence which establishes that there is an effective cross-claim, a claim that is real; cf Lukin J in Re Vogwell; Ex parte Vogwell (1939) 11 ABC 75 at 77, affirmed on appeal by the High Court in Vogwell v Vogwell (1939) 11 ABC 83 at 85 Ebert v Union Trustee Co of Australia Ltd (1960) 104 CLR 346 at 350 Re McKechnie; Ex parte Weir (1991) 99 ALR 99 ; 27 FCR 515 at 519–20 per Foster J. This is so because the affidavit in question is required to ``show'’ a relevant counter-claim, set off or cross-demand. An insufficient affidavit does not bring the provisions of s 41(7) into operation.
Although the debtors filed out of time an affidavit setting out the facts upon which they would rely to show a relevant cross-claim, cross-demand or cross-action, that affidavit, while it might be read to expand matters in an affidavit otherwise complying with s 41(7) filed in time, cannot be used to supplement any deficiency where no sufficient affidavit has been filed within the terms of s 41(7).
Mr Curry contends that the s.41(7) affidavit deposes the following issue:
2. Ground materials supporting to set aside Bankruptcy Notice
1. Bankruptcy Notice No.2333, 4 April 2011.
2. Statement of Claim at District Court of NSW Case Number 2011/93143
3. Marla Shoshana Goodman lied to the court too much, here list two examples, See attachment 1 and attachment 2.
4. I will appeal the judgment/order in the Supreme Court.
The amount claimed in the Bankruptcy Notice is $230,593.18. Mr Curry contends that the 23 March 2011 Statement of Claim filed against
Mrs Goodman, was done against the background where there was a claim and a cross-claim for unpaid monies that went all the way through to the Special Leave Application. While in the 20 May 2011 Statement of Claim, which is very difficult to follow in the manner in which it is pleaded, pleads nothing more than a claim for unpaid monies under the very same building contract that was the subject to the cross-claim in which Mr Zhao failed on and appealed all the way to the High Court.
Mr Curry submits that the position of his client in respect to the new District Court Statement of Claims (filed 23 March 2011 and 20 May 2011) it is a complete abuse of process. It appears that, with respect to Mr Zhao, he doesn’t understand the Court process and appears to be of the view that he can attempt to sue again for the same thing that he has already failed on. On the front page of the 23 March 2011 Statement of Claim the amount being claimed is:
Amount of Claim            $68,820.00
Interest  $68,820.00
Filing Fee  $555.00
Service Fee  $54.00
Solicitors Fee                 -
Total:  $138,249.00.
There are no particulars setting out how the interest is being calculated. Mr Curry contends that all appeal rights have been thoroughly exhausted in this matter.
Mr Curry referred the Court to the Defence filed against the

23 March 2011 Statement of Claim which indicate that there are res judicata abuse of process, Anshun pleadings in that Defence. There is also a limitation defence pleaded at para.6 on the basis that a domestic building contract was on foot until 28 March 2001. Consequently, any cause of action that Mr Zhao may have for unpaid monies, if it was not already exhausted, any cause of action that Mr Zhao might have against Mrs Goodman would have expired within 6 years after the contract had finished, which would be March 2007. Mr Curry contends that any attempt by Mr Zhao to raise any further claim against Mrs Goodman would be barred under the provisions of s.14 of the Limitation Act 1969 (NSW).
Mr Curry contends that they are self explanatory but it would appear that they are a series of points that Mr Zhao wants to make about the proceedings in the Court of Appeal and/or the hearing in the District Court. The points go to the question of facts and credit, all of which were dealt with by those respective Courts. To the extent that the two annexures are filed in support of a s.41(7) affidavit, they appear to have nothing to do with any cross-claim, set off or cross-demand. They appear to be effectively a dispute about or a disagreement on the part of Mr Zhao about the results in those courts and do not advance a s.41(7) application.
Mr Curry submits that the 23 March 2011 Statement of Claim filed in the District Court claims the amount of $138,249.00 which is substantially less than the value of the Bankruptcy Notice which is $230,593.18.
Even if Mr Zhao did have any form of a counter-claim, set-off or
cross-demand that could be established, it is substantially less than the value of the Bankruptcy Notice. On the basis of the Application before Registrar Hedge, even if she did not accept that the claim that had been lodged in the District Court is barred for the various reasons articulated above, the amount being claimed simply did not exceed the amount of the Bankruptcy Notice. At the hearing before Registrar Hedge, the Applicant made a submission, which is mentioned in his review application, that he intended to bring further actions against
Mrs Goodman. When Registrar Hedge pointed out to Mr Zhao that the amount he was claiming in his 23 March 2011 Statement of Claim was less than the Bankruptcy Notice, Mr Zhao tendered attachment 3 and indicated that he had a further claim. That attachment refers to nine separate items of work which Mr Zhao claims that the Goodmans had other contractors perform.

Submissions by Mr Zhao

Mr Zhao indicated that he believed that the decisions of the District Court, Court of Appeal and the High Court were wrong. When he checked the transcript of the hearings, he believes a number of things said were lies. He indicated that there was a lot of illegal and defective work which were made to look as if they were his problems but, in fact, were works performed by others. He indicated that he wanted to make it clear that he takes his responsibility for his work very seriously. Consequently, he was forced to make the subsequent claims which are identified above as the 23 March 2011, 20 May 2011 and a further (yet to be filed) Statement of Claim. He indicated that he anticipated that there were more claims to be forthcoming.
Mr Zhao stated that he was undertaking the process of checking all documents and that he has identified a number of lies to the Court.

He states that he indicated to Registrar Hedge that he was not finished in preparing the further Statement of Claim and that he needed further time to complete writing. Mr Zhao indicated that he had not retained any legal practitioner to assist him in this venture and was relying on his own resources. He indicated that he wanted the Bankruptcy Notice set-aside so that he could proceed with initiating a further claim.

Consideration

Mr Zhao is a self-represented litigant and on his own admission has limited understanding and command of the English language. As set out in the material above, there has been a long running dispute between Mr Zhao and the Goodmans in respect of the building works carried out on the Goodman’s residence in the period 2000-2001.

Mr Zhao has been unsuccessful in the litigation which has resulted in costs being awarded against him. The Goodmans are pursuing their costs which has ultimately resulted in the issue of a Bankruptcy Notice.
Mr Zhao has sought the second Bankruptcy Notice be set-aside on the basis of the provisions of s.41(7) of the Bankruptcy Act 1966. Mr Zhao has pursued the option on the belief that he has an outstanding claim against the Goodmans which he is attempting to pursue by the filing of various Statements of Claim in the District Court of New South Wales. Mr Zhao is under the belief that he should be given the opportunity to pursue these claims and that the Bankruptcy proceedings should be terminated by setting aside the Bankruptcy Notice to allow him to advance his claims in the District Court.
The pleadings in respect of the set-aside application do not strictly comply with the provisions of s.41(7) however, in the circumstances of a self-represented litigant with limited language skills and without the assistance of legal advice, the Court must assume that this is the avenue he is attempting to pursue.
The Application to Set-Aside the Bankruptcy Notice NN2333 of 2011 was heard by Registrar Hedge on 17 May 2011 which resulted in orders that the Application be dismissed and Mr Zhao pay

Mrs Goodman’s costs, fixed in the amount of $2,000.00. The basis of Mr Zhao’s complaint is that by his observation during the hearing of the Registrar’s list, a number of parties were granted adjournments for various reasons, but his application, which was based on a claim that he required further time to complete a new Statement of Claim to be lodged in the New South Wales District Court, was rejected.

This Court was advised that Mr Zhao made submissions indicating that his draft was near complete and that he needed a few days to finalise the document and lodge it with the Court Registry. This is confirmed by the fact that Mr Zhao did lodge new proceedings on 20 May 2011, the details of which are set out above.
Transcript of the Registrar’s proceedings are not available and there are no details before this Court as to what reasons were given to Mr Zhao for his application being dismissed. Clearly, there are a number of reasons why Mr Zhao could not succeed and these are adequately summarised in the submissions made by Mr Curry. Significantly, the original proceedings commenced by Vero Insurance Limited, together with the various cross-claims, Mr Zhao was legally represented in the District Court, but self-represented in the Court of Appeal and the High Court. Mr Zhao was unsuccessful at all stages of these proceedings. That obviously placed Mr Zhao at some considerable financial stress to the extent that he indicated to me that he could not afford any further legal assistance and that he was forced to pursue this matter by himself. In these circumstances, this Court must assume that Mr Zhao’s initial position was competently advanced but without success.
I pointed out to Mr Zhao that the course that he was now attempting to pursue was barred by a number of legal principles that would prevent him proceeding any further with the course that he was presently undertaking. I did not attempt to burden Mr Zhao any further by attempting to explain the various concepts of Anshan, res judicata, abuse of process or the fact that the value of his claim in the 23 March 2011 Statement of Claim was substantially less than the value in the Bankruptcy Notice. There is also the issue of the statutory limitation. I accept Mr Curry’s submissions on each of these issues. I advised Mr Zhao that if he did intend to pursue this issue further, that he should seek legal assistance to review all of the material that is in his possession, to determine whether there is any avenue open to him to seek further relief.
Consequently, the Application to Set-Aside the Bankruptcy Notice NN2333 of 2011 cannot succeed and should be dismissed with costs.

I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of Lloyd-Jones FM

Associate:

Date: 8 July 2011