Applicant v Respondent

2 On 17 April 2009, on the application of Permanent Custodians Limited ('Permanent'), this Court made an order under r 64.03(4) of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) ('Rules') dismissing as incompetent an appeal by Michael Palmer from an order of a judge of the Trial Division sitting in the Practice Court.

3 The Court made that order for the following reasons:

(a) An order refusing an application to set aside a default judgment is an interlocutory order.[1]

(b) A party seeking to appeal from such an order to the Court of Appeal requires leave to do so.[2]

(c) As Mr Palmer has not been granted leave to appeal from the order of the Practice Court judge, his purported appeal was incompetent[3] notwithstanding any advice to the contrary Mr Palmer may have received from Registry staff.[4]

4 Today, Mr Palmer made an oral application for leave to appeal. For the reasons given below, I would dismiss the application.

5 On 30 May 2008, Permanent filed a writ against Virgin Investments Pty Ltd

('Virgin') and Mr Palmer. Permanent alleged that it had advanced money to Virgin pursuant to a loan agreement, that Virgin provided a mortgage over certain land in favour of Permanent to secure the advances, that Mr Palmer agreed to guarantee Virgin's obligations under the loan agreement and mortgage, and that Virgin subsequently defaulted in respect of payments due under the loan agreement and mortgage. On 11 July 2008, Permanent obtained default judgment against Virgin for possession of the relevant land and payment of the outstanding advances.

6 On 11 February 2009, an associate judge dismissed a summons issued by Mr Palmer on behalf of Virgin seeking the setting aside of the default judgment. On 24 February 2009, the Practice Court Judge dismissed an appeal by Virgin from the associate judge's decision.

7 On 10 March 2009, Mr Palmer served on Permanent a notice of appeal dated 10 March 2009 without obtaining leave to appeal.

8 As I have stated earlier, Mr Palmer has now made an application for leave to appeal.

9 Mr Palmer made the following submissions in support of his application for leave to appeal:

(a) Neither he nor anyone authorised on behalf of Virgin to do so, has signed any loan contract or agreement with Permanent.

(b) The initial proceeding filed against Virgin and Mr Palmer by Permanent was fatally defective in that the statement of claim was signed in the name of Permanent's firm of solicitors which is not a legal entity.

(c) Permanent's statement of claim is void because it refers to non-existent 'laws of Australia'.

(d) As the default judgment entered on 11 July 2008 overlooked the matters mentioned in (a) and (b) above, it was entered in error.

(e) The dismissal of the summons by the associate judge was erroneous because Virgin was 'incompetently represented by practitioners who refused to advance the fatally flawed Writ and Statement of Claim argument as well as advance argument that the initial Default Judgment was obtained by way of Fraud on the Court'.

(f) The dismissal of the appeal by the Practice Court judge was erroneous because 'the standing of the fatally flawed Statement of Claim was ignored', as was evidence sourced from Reserve Bank of Australia statistics which 'evidenced the impossibility of the claim by the Respondent'. It was also in breach of the rules of natural justice because the Practice Court judge commented that the judge 'could not allow a case to proceed that held the potential to destroy the banking system as we know it' in circumstances where there was no lawful authority or jurisdiction to make such a statement or rule to that effect.

10 Leave to appeal will be granted only where the applicant for leave shows that the decision was wrong or attended with sufficient doubt to justify the grant of leave, and that substantial injustice would be done if the decision was to stand.[5]

11 There is no merit in any of Mr Palmer's submissions.

12 The allegation that Virgin has not signed any loan contract or agreement with Permanent was raised below and was rebutted by evidence presented by Permanent, including documents bearing signatures of Mr Palmer in his own right and on behalf of Virgin, including a copy of Mr Palmer's driver licence and letters from solicitors acting for Mr Palmer and Virgin forwarding to Permanent the loan agreement, mortgage, guarantee and other documents said to be signed by Mr Palmer or Virgin, as the case may be.

13 Rule 5.11(2) of the Rules provides that where a party sues by a solicitor, the writ must be signed by the solicitor and r 13.01(3) provides that a pleading must be signed by the solicitor where it is not settled by counsel. The Legal Profession Act 2004 (Vic) recognises that solicitors may practise as sole practitioners or as partners of a law firm[6] and imposes a number of obligations on law firms notwithstanding that they are not separate legal entities.[7] The Rules also recognise law firms.[8] Accordingly, a writ and a statement of claim can be signed in the name of a law firm even though the firm is not a separate legal entity and there is no requirement to identify the person signing in the name of the firm.

14 The reference to 'laws of Australia' in the statement of claim is clearly a reference to the Corporations Act 2001 (Cth). While this is an Act of the Commonwealth, it applies throughout Australia and is accurately described as a law of Australia.

15 Mr Palmer has not provided any evidence in support of his allegation that his legal representatives before the associate judge failed to advance an argument that the initial default judgment was obtained by fraud upon the Court.

16 The evidence that Mr Palmer complains was erroneously ignored by the Practice Court judge was described by Mr Palmer as 'facts and figures sourced from the Reserve Bank of Australia statistical tables which, if given due regard, evidenced the impossibility of the claim by [Permanent]'. Based on the transcript of the hearing before the Practice Court judge, it appears that Mr Palmer is referring to statements made by him to the judge that the Reserve Bank has created $45 billion in currency, whereas there is $1.19 trillion in broad money, and that it is not clear where the money has come from in order to be lent to him. The judge was correct to disregard those statements. What was relevant in the proceeding was whether Permanent had loaned the money to Virgin and whether Virgin defaulted in repaying the money.

17 As for Mr Palmer's submissions about the judge's comment that the judge could not allow the case to proceed, this comment must be seen in context. The judge's comments were made in the course of the following exchange during argument before the judge:[9]

MR PALMER: All of these are just figures. They're just figures on a piece of paper. They relate to nothing of value. ...

...

[JUDGE]: ... what you're saying is the whole business community, financial industry, the internet transactions we engage in, financial transactions we engage in, all virtual reality, nothing real, no money.

MR PALMER: That's it ... this is what needs to be fleshed out in court. Where is the value? Where did the money come from? It has to go back to something of value somewhere. If they can't prove that it has value somewhere, then they have no claim that they've suffered a loss. If they haven't suffered a loss, what are they doing?

[JUDGE]: I'm sorry, but courts engage in all sorts of inquiries but the one that you're suggesting that there is a reality totally different to that which we operate in is not something we have time to investigate in court, I'm afraid. ... the defence you've sought to run that there is no value in this, which is really what you're saying, your argument seeks to challenge the very foundation of the financial system.

MR PALMER: Yes, Your Honour.

[JUDGE]: I'm just a judge. I can't do that.

MR PALMER: I'm not asking you to do anything. All I'm asking you to do is allow this to go to trial.

[JUDGE]: I don't think I can allow it to go to trial to pursue that.

18 There is nothing objectionable about the comments made by the judge, because, for the reasons set out above, the evidence based on the Reserve Bank

statistics was irrelevant. Further, the judge is clearly correct in stating that the argument sought to be raised by Mr Palmer was beyond the scope of the proceeding. There was no denial of natural justice.

19 The allegation of non-receipt of the writ was dealt with by evidence by Permanent that the writ was posted to Virgin's registered address. No evidence of non-delivery as distinct from non-receipt has been presented. Service has been established pursuant to s 109X of the Corporations Act.

20 It follows that Mr Palmer has not established that the decision below was wrong or attended with sufficient doubt to justify the grant of leave. No substantial injustice would be done if the decision was to stand because any appeal from that decision would be bound to fail.

21 For these reasons, I would refuse leave to appeal.

23 The order of the Court is that the application for leave to appeal is dismissed with costs, including reserved costs.

[1] Carr v Finance Corporation of Australia Ltd [1981] HCA 20; (1981) 147 CLR 246.

[2] Supreme Court Act 1986 (Vic) s 17A(4)(b).

[3] Supreme Court (General Civil Procedure) Rules 2005 (Vic) r 64.03(4); Little v Victoria [1998] 4 VR 596, 597.

[4] Mr Palmer deposed to a conversation between himself and a member of the staff of the Court of Appeal Registry in which he was informed that the order he sought to appeal was a final order and that he therefore did not require leave to appeal.

[5] Niemann v Electronic Industries Ltd [1978] VicRp 44; [1978] VR 431, 441-2.

[6] See, eg, ss 1.2.1(1) (definitions of 'law firm', 'law practice' and 'sole practitioner'), 2.4.3(3)(b) (conditions to which local practising certificates are subject).

[7] See, eg, ss 3.4.9(1) (disclosure of costs), 3.5.2 (professional indemnity insurance).

[8] Rules 5.07(1)(c), 27.03(11) and form 5A.