Bank of Queensland Ltd v G.L. & L.A. Collis Pty Ltd & Ors [2019] VCC 2062

2 Since 24 June 1997, the third defendant, Gary Collis ("Collis"), and his wife, the fourth defendant, Leslie Collis ("Mrs Collis"), have been registered proprietors of the property at 60-85 Hamilton Highway, Fyansford ("the Fyansford property").

3 On 11 December 2000, the first defendant, G.L. & L.A. Collis Pty Ltd ("Collis Pty Ltd") was incorporated. Mr and Mrs Collis are directors and shareholders of Collis Pty Ltd.

4 On 11 December 2000, the fifth defendant, Asia Pacific Trade Pty Ltd ("APT"), was incorporated. Collis is the sole director and shareholder of APT.

5 On about 8 February 2006, BOQ registered a mortgage over the Fyansford property to secure a principal sum of $650,000 and such future sums as it may advance from time to time.

6 On 29 April 2013, the second defendant, Fyansford Pty Ltd ("Fyansford"), was incorporated. Collis is the sole director and shareholder of Fyansford.

7 On about 25 July 2013, Collis and Mrs Collis entered into a variable home loan package of $801,233.80 ("the home loan"). The purpose of the home loan was to refinance an existing loan. It was secured by a mortgage over the Fyansford property ("Fyansford mortgage").

8 On about 28 August 2013, Collis Pty Ltd entered a facility agreement with BOQ ("the business loan") whereby it borrowed $350,000 to purchase the property at 17-21 Seaford Street, North Shore ("North Shore property"). The business loan was secured by:

• a guarantee and indemnity provided by Mr and Mrs Collis; and

• a guarantee and indemnity provided by Fyansford in its own capacity and as trustee of the Collis Superannuation Fund, together with a mortgage over the North Shore property ("North Shore mortgage").

9 Since 13 December 2013, Fyansford has been the registered proprietor of the North Shore property. On the same day, Fyansford registered a mortgage over that property in favour of BOQ as security for the business loan made to Collis Pty Ltd. Fyansford guaranteed the obligations of Collis Pty Ltd under the loan.

10 From about 24 July 2018, Collis and his wife were in default under the home loan by failing to repay the minimum monthly repayments.

11 On about 24 July 2018, BOQ's lawyers sent a combined notice of default/notice of demand to Mr and Mrs Collis at their last known address, namely the Fyansford property, informing them that they were in default under the said loan and had accumulated arrears of $47,511.90.

12 Also on 24 July 2018, BOQ's lawyers sent a combined notice of default/notice of demand to Collis Pty Ltd informing it of its default under the business loan and demanding payment of arrears of $17,178.15.

13 On 24 July 2018, BOQ's lawyers also sent a combined unregulated notice of default and notice of demand on guarantor and demand under section 76 of the Transfer of Land Act 1958 (Vic), both to Fyansford at its registered office and to Mr and Mrs Collis.

14 On 1 November 2018, John Lindholm and Samantha Taylor of Ferrier Hodgson were appointed as agents for BOQ over Fyansford.

• none of the defendants had paid BOQ any money pursuant to the demands made;

• Mr and Mrs Collis remained in default under the home loan and the Fyansford mortgage. Further, they failed to comply with the combined notice and guarantor demand;

• Collis Pty Ltd remained in default of the business loan and failed to comply with the borrower demand issued to it; and

• Fyansford remained in default of the guarantee and the North Shore mortgage and failed to comply with the guarantor demand issued to it.

16 On 6 December 2018, BOQ commenced these proceedings seeking: -

(a) payment of debts owed by Collis Pty Ltd and Fyansford in the amount of $297,249.07;

(b) payment of debts owed by Collis and Mrs Collis in the amount of $1,112,423.71;

(c) an order for possession of the North Shore property; and

(d) an order for possession of the Fyansford property.

17 On 21 December 2018, Collis filed a notice of appearance on behalf of himself and the other defendants.

18 On 11 January 2019, Mrs Collis filed a notice of appearance on her own behalf.

19 On 6 February 2019, Collis served BOQ's solicitors with the defendants' defence. On the same day, Collis attempted to file at court a defence on behalf of himself and the other defendants. The defence was not accepted for filing and Collis was advised by the court he would need to seek leave from the court in order to represent the defendant companies and his wife.

20 Later that same day, Collis filed an affidavit. The affidavit appeared to be in relation to an application for leave for Collis to appear on behalf of the defendant companies. The affidavit exhibited a number of documents, one of which was a defence to the plaintiff's claims dated 30 January 2019, and another, an ASIC company extract for Fyansford. The defence exhibited to Collis' affidavit did not comply with the Rules of Court regarding pleadings. The company extract of Fyansford listed the status of that company as "externally administered".

21 Due to the defective nature of Collis' affidavit filed 6 February 2019, Judicial Registrar Burchell made orders on 7 February 2019, directing Collis to file by 21 February 2019 further affidavits in support of his application to appear on behalf of the corporate defendants, and stating that no step could be taken by these defendants unless by solicitor pursuant to Rule 1.17 of the Rules.

22 Judicial Registrar Burchell also made an order on the same date staying the proceeding against Fyansford pursuant to section 440D of the Corporations Act 2001 (Cth).

23 Collis failed to file any further affidavits in compliance with Judicial Registrar Burchell's orders.[1] At a directions hearing on 18 March 2019, Judicial Registrar Burchell made orders that:

(a) By 4:00pm on 8 April 2019, the defendants file and serve an amended defence and any counterclaim.

(b) Pursuant to Rule 1.17 of the County Court Civil Procedure Rules 2018, Collis Pty Ltd, Fyansford and APT not take any steps in this proceeding save by a solicitor, pending any application made by the first, second and fifth defendants to obtain leave to appear other than by a solicitor. Any such application was to be made by email to the Commercial Division Registry by 4:00pm on 8 April 2019, and to be supported by affidavit material as set out in paragraphs 1 and 2 of the orders of 7 February 2019, and to be made returnable at the directions hearing on 22 May 2019.

24 By a document headed "Notice of Attendance [Defence]" dated 6 April 2019, Collis filed what purported to be an answer to the plaintiff's claim. This document was filed by Mr and Mrs Collis both on behalf of themselves and, purportedly, the corporate defendants, despite them not having leave from the Court to do so.

25 On 18 April 2019, Lindholm and Taylor of Ferrier Hodgson retired as agents for BOQ over Fyansford.

26 On 1 May 2019, BOQ filed a summons and supporting affidavit sworn by Anthony Raviola on 30 April 2019, seeking summary judgment. BOQ served the summons and Raviola affidavit on the defendants by email and post on 1 May 2019. Later, BOQ filed and served further affidavits by Raviola sworn 17 May and 18 June 2019.

27 On 17 May 2019, Judicial Registrar Tran dismissed Collis' application for leave to appear on behalf of Collis Pty Ltd, Fyansford, Mrs Collis, and APT.

28 On 7 June 2019, Judge Woodward dismissed Collis' application for review of Judicial Registrar Tran's decision.

29 BOQ's summary judgment application was scheduled to be heard on 21 May 2019. However it was adjourned until 18 June 2019 and then again until 18 July at the request of the defendants. The application was adjourned again until 8 August 2019.

30 By an affidavit sworn on 8 August 2019, Collis sought to put before the Court various documents, including an "affidavit of defence" by Salvatore Marotta, an excerpt from a court book prepared for a matter in the Supreme Court of Victoria by Lander & Rogers solicitors, and a Birth Certificate Content Review document prepared by the New South Wales Registry of Births, Deaths, and Marriages.

31 On 8 August 2019, I heard BOQ's application. At the hearing, Collis again sought to adduce further material on behalf of the defendants which was not already before the court. In an effort to maximise the efficiency of the balance of the application and to try to put some limits on the considerable time and money spent on this application, I made the following orders:**

"1. By noon on 12 August 2019, the defendants are to file and serve any further affidavit material upon which they rely. Such affidavit is to be no more than 2 pages in length, exclusive of exhibits.

1. By 4:00pm on 16 August 2019, the defendants are to file and serve written submissions in opposition to the application for summary judgment, such submissions to be no longer than 10 pages.
2. By 4:00pm on 23 August 2019, the plaintiff is to file and serve any written submissions in reply. Such submissions to be no more than 4 pages.
3. Reserve liberty to the parties to apply by email to the Commercial Division Registry (Commercial.Registry@countycourt.vic.gov.au) for further directions upon giving reasonable notice to all other parties.
4. The defendants pay the plaintiff's costs thrown away by reason of the failure to proceed with the application today, such costs to be taxed on an indemnity basis in default of agreement."

32 On 12 August 2019, Collis sought to put further documents before the court. The categories of documents were as follows:

"GLC 1: F.O.I, letters to Federal Attorney General and replies re: entrenched law, constitution access

GLC 2: Public notice letter from Westpac Bank re: Mortgage securitisation disclosure

GLC 3: Enduring Power of Attorney for Lesley Ann COLLIS

GLC 4: Fact sheet- Parliamentary Education Office (Cth) re: Making a Law

GLC 5: Birth certificates of (A) Gary Collis, and (B) Lesley Collis

GLC 6: Landata entry North Shore property

GLC 7: Landata entry Fyansford property

GLC 8: Criminal investigation documents

GLC 9: Document set as sent to Bank of Queensland, and subsequently returned several months later, consisting of; 2 promissory notes, and, affidavits of Lesley and Gary Collis, and, NSW Government Birth Certificate Content Review, and, Outline to an Affidavit to the High Court by Brian William Shaw

GLC 10: Statement of Brian William Shaw re: Judicial Malfeasance

GLC 11: Letters to: (A) Law Institute Victoria, (B) reply, (C) list of lawyers, (D) proof of delivery

GLC 12: Sections of acts referred to in final submission"

**33 As part of the written statement accompanying these documents, Collis said, inter alia, that:

• the mortgage over his residence showed a principal sum of $650,000;

• there was no principal sum recorded for the commercial property;

• a copy of the mortgage could not be presented as BOQ had on-sold the mortgages to Westpac Banking Corporation; and

• he could not lawfully sign over the title to a property he had not yet bought and this constituted a fraud.

34 On 16 August 2019, Collis filed a document titled "Defense", which was in fact a submission. It was, I presume, filed in accordance with the orders made on 8 August 2019. The document was somewhat perplexing inasmuch as it, to a marked degree, restated and repeated points raised in other documents filed by Mr Collis.

35 By email dated 30 September 2019, Collis sought the court's leave to file new affidavit evidence which included a single document. Collis said that he sent the proposed affidavit material on 27 August 2019 and that the material contained an admission (presumably by BOQ) to which he sought to draw attention. In addition, Collis wanted to refer to a court determination made in the previous two weeks.

36 BOQ, in response, did not consent to the filing of further affidavit material. It pointed out that the court orders made on 8 August 2019 were designed to finalise the summary judgment application and came after a series of adjournments were granted in order to accommodate the defendants. It argued that if the defendants sought a further indulgence from the court to file additional affidavit material after the due date, they should apply in the normal way and seek an order to that effect. BOQ acknowledged that it had received two affidavits dated 27 August 2019 from Mr Collis. It took exception to both, contending that they were objectionable and inadmissible because they were largely commentary and submission and did not raise matters of evidence.

37 On 7 October 2019, Judicial Registrar Irving refused to grant Collis an extension of time to file an application for leave to appeal against the decision of Judge Woodward. Hence, the position remains that Collis is unable to represent his wife and corporate defendants.

38 By email on 11 October 2019, I advised the parties that I was not prepared to further adjourn the summary judgment application to allow any defendant to file additional affidavit material. My disinclination to allow for more material was due to the history and circumstances of the case and an appreciation of the overarching purpose laid down in section 7 of the CPA and the court's obligation to give effect to that purpose as stated in section 8 of the Act. The objects to which I could have regard in furthering the overarching purpose included the matters set out in section 9 of the CPA, including sections 9(1)(c), (d), (f), and (g). BOQ's application was initiated on 1 May 2019 and was adjourned three times. After the hearing in August, including the extension given to the defendants to file more material, there was additional delay due to my taking annual leave and then being ill. Throughout that time, the equity in the Fyansford and North Shore properties was reducing as the collective debt secured by the properties grew.

39 There are two preliminary issues which need to be addressed: the bringing of the summary judgment application and the existence of the stay against Fyansford.

40 On 25 October 2019, I sent an email to the parties inviting submissions on a point which emerged in writing this judgment. I queried whether, in circumstances where:

• Collis served on BOQ a defence for the defendants on 6 February 2019;

• Collis unsuccessfully tried to file a defence with the court for the defendants on 6 February 2019;

• on 6 April 2019, Collis and his wife purported to file a document headed "Notice of Attendance [Defence]" with the court;

• on 17 May 2019, Judicial Registrar Tran dismissed Collis' application for leave to appear on behalf of Collis Pty Ltd, Fyansford, Mrs Collis, and APT,

Collis Pty Ltd, Fyansford, and APT had defences on foot and were properly the subject of BOQ's application for summary judgment under Order 22 of the Rules and the CPA.

41 BOQ filed submissions in response to my invitation, but none of the defendants did.

• Collis Pty Ltd, Fyansford, and APT filed notices of appearance on 21 December 2018;

• those defendants purported to serve a defence on BOQ on about 6 February 2019. At that time, BOQ was unaware that the defence was not filed with the court or accepted at court as a valid pleading.

i. the defendants were to serve an amended defence by 4:00pm on 8 April 2019;

ii. pending an application for leave, which was to be filed by 8 April 2019, Collis Pty Ltd, Fyansford, and APT were not to take any steps in the proceeding other than by solicitor

• the defendants purported to comply with the court order by filing a "Notice of Attendance [Defence]".

43 Thus, BOQ accepted that, by reason of the court orders made in March 2019, Collis Pty Ltd, Fyansford, and APT could not have taken a step in the proceeding or filed an amended defence without either engaging a solicitor or obtaining leave from the court.

44 BOQ argued that Rule 14.04 of the Rules imposed an obligation upon a defendant to serve a defence after filing an appearance. Rule 14.04, by its terms, obliges a defendant who filed an appearance on receipt of a writ to serve a defence within 30 days of the appearance. Rule 14.10 requires that a party who serves a pleading on another party shall file a copy of the document at court.

45 Rule 21.02 provides that a plaintiff may enter or apply for judgment against a defendant who is required to serve a defence but fails to do so within the time specified in the Rules. BOQ argued that upon service of the defence, a plaintiff is unable to seek default judgment. Here, all five defendants purportedly served a defence on BOQ.

46 BOQ submitted that it was unworkable for a plaintiff in its position if a defendant served a defence but, because it was not served by a solicitor or accepted by the court, the plaintiff was precluded from seeking a default judgment or summary judgment to enforce its rights where there was no defence on the merits.

47 In essence, BOQ contended that I should accept the defence served upon it as triggering its right to proceed to a summary judgment application under Order 22. Then, having considered the significant volume of material filed by or on behalf of the defendants, I should find that the defence had no more than a fanciful prospect of success and grant judgment against the defendants.

48 Alternatively, BOQ contended that, if the served defence were to be ignored due to the problems associated with Collis Pty Ltd, Fyansford, and APT taking steps in the proceeding other than through a solicitor, then BOQ should obtain default judgment by reason of their failure to serve a defence within time.

49 I consider that the summary judgment provisions and the default judgment provisions in the Rules should work harmoniously. Hence, the former applies where a defendant serves a defence and the latter applies where the defendant fails to file a defence. There is no requirement under the CPA or the Rules that a defence is to be filed in court before a plaintiff can initiate a summary judgment application. As set out above, Orders 14.04 and 21.02 together create a scenario under which the service of a defence, and not its filing in court, suffices to entitle a plaintiff to bring a summary judgment application.

50 Here, Rule 1.17 and the court orders are clear. At the time Collis purported to serve a defence on behalf of all defendants, he was not authorised to take that step in the proceeding for the corporate defendants. The commentary in Civil Procedure Victoria, states that a corporation may file an appearance by any person authorised by it to do so.[2] Under the Rules, filing an appearance is the only step which a corporation may take in a proceeding without a lawyer. When a corporation takes a step without engaging a solicitor, the step is irregular - for example, in Crescent Oil and Shipping Services Ltd v Importang UEE[3], the plaintiff commenced the action without a solicitor and the writ together with its service was set aside.

51 In the circumstances, I consider that any defence purportedly served and filed on behalf of Collis Pty Ltd, Fyansford, and APT, is irregular. That being so, BOQ cannot apply for summary judgment against those defendants under Order 22. However, having regard to the CPA, especially sections 7 - 9 inclusive, I am prepared to grant judgment in default of defence against those defendants.

52 As will appear later in this judgment, my view is that the matters raised by Collis do not constitute a defence of the kind which justifies a refusal of summary judgment. Collis has not raised a defence which has a real prospect of success. Insofar as Collis Pty Ltd, Fyansford, APT allowed Collis to act for them in this application, they relied upon the same material and arguments which Collis raised in opposing BOQ's summary judgment application. Thus, if I had accepted BOQ's submissions and found valid the summary judgment procedure under Order 22, I would have determined that the defence of the corporate defendants had no real prospect of success and BOQ would have been entitled to summary judgment against those defendants too. Given they did not serve and file a valid defence within the time prescribed by the Rules, they are no worse off due to the default judgment.

53 There were other ways of addressing the issue about taking steps in an action without engaging a solicitor, none of which was argued. Therefore, I will refer to them briefly but not consider them in any detail. Rule 2.04 gives the court an express power to dispense with compliance with any of the requirements of the Rules, either before or after the occasion for compliance arises. Thus, if the circumstances were thought to warrant it, the court could have exercised its power to overcome the failure by the corporate defendants to comply with Rule 1.17. Another possible way of addressing the matter arose through consideration of Rule 2. Pursuant to Rule 2.01(1), a failure to comply with the Rules is an irregularity and does not render a proceeding or step taken a nullity. Where there has been a failure to comply, the court can set aside any step taken or document or judgment in the proceeding. Also, the court can exercise its powers to allow amendments and to make orders dealing with the proceeding generally.

54 The power of the court under Rule 2.01 to deal with a failure to comply with the Rules constituting an irregularity is additional to its power under Rule 2.04 to dispense with compliance with the Rules. The Rule gives the court a wide discretion to deal with irregularities in procedure. The power is to be exercised according to the justice of the particular case.[4]

55 A separate issue to be addressed is the question of the stay against the second defendant pursuant to the orders of Judicial Registrar Burchell on 7 February 2019. Given that Fyansford is now noted as having the status of being "registered" as opposed to being in "external administration", that administration having ceased in May 2019, under the terms of section 440D of the Corporations Act 2001 (Cth), I consider that the stay has ceased.[5] The stay was operative "during the administration" of the company. Hence, BOQ can proceed against Fyansford.

56 BOQ submits that on 8 February 2006, a mortgage was registered over the Fyansford Property by Mr and Mrs Collis in favour of BOQ as security for payment of a home loan given by BOQ to Mr and Mrs Collis ("Fyansford mortgage").

57 In addition, BOQ states that on 13 September 2013, a mortgage was registered over the North Shore Property by Fyansford in favour of BOQ as security for payment of a business loan given by BOQ to Collis Pty Ltd and guaranteed by Fyansford ("North Shore mortgage").

58 BOQ says it provided further financial accommodation to the defendants by way of the home loan in the amount of $801,233.80 to Mr and Mrs Collis, and by way of the business loan in the amount of $350,000 to Collis Pty Ltd.

59 BOQ contends that, as of 6 March 2018, Collis Pty Ltd was in default of the business loan, and, as of 24 July 2018, Collis and his wife were in default of the home loan.

60 Notices of default were sent to the defendants notifying them of the default and demanding payment in respect of both the business loan and home loan.

61 BOQ alleges that the defendants failed to make payment in accordance with the demands contained in the notices of default and have not made any payments since these proceedings were commenced.

62 The material filed by Collis sought to raise points about a variety of matters, most of which seemed to be irrelevant to the issues I had to decide.

63 I do not propose to deal in great detail with these points. In part, this is because they are incomprehensible. In the absence of a rational explanation and argument detailing how and why the above points are material to the application before me, I struggle to see how I can sensibly engage with them.

64 BOQ has attempted to analyse and categorise the defendants' points in a coherent manner and has suggested that the main arguments raised are as follows:

(a) a company cannot be incorporated under the Corporations Act 2001 (Cth) as the Commonwealth of Australia was not empowered to pass such legislation (paragraph 1 of the defence);

(b) the plaintiff did not make a loan which constituted valuable consideration, but rather the plaintiff created a credit on its ledger (paragraphs 6 and 7 of the defence);

(c) the defendants are not in default of the loan facilities and claim that payment was made by post by promissory note on 11 July 2018 - (paragraphs 10 - 12 of the defence); and

(d) the defendants otherwise deny indebtedness, the breach of facilities, and that the plaintiff is entitled to possession of both the Fyansford Property and North Shore Property - (paragraphs 13 - 23 of the defence).

65 In determining an application for summary judgment, the court must have regard to section 61 and sections 63 to 65 of the CPA: -**

61 Plaintiff may apply for summary judgment in proceeding

A plaintiff in a civil proceeding may apply to the court for summary judgment in the proceeding on the ground that a defendant's defence or part of that defence has no real prospect of success.

63 Summary judgment if no real prospect of success

(1) Subject to section 64, a court may give summary judgment in any civil proceeding if satisfied that a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, as the case requires, has no real prospect of success.

(2) A court may give summary judgment in any civil proceeding under subsection (1) -

(a) on the application of a plaintiff in a civil proceeding;

(b) on the application of a defendant in a civil proceeding;

(c) on the court's own motion, if satisfied that it is desirable to summarily dispose of the civil proceeding.

**66 At the hearing of an application for summary judgment, the plaintiff must satisfy the court that the contents of the affidavit verify the elements of the claim and discharge the onus on the plaintiff proving the claim. Further, the affidavit must establish that the deponent believes that the defence has no reasonable prospect of success.

67 The court will not give judgment pursuant to sections 61 and 64 of the CPA, if the defendant satisfies the court that: -

(a) in respect of that defence, or part of the defence, that it has a real prospect of success;

(b) it is not in the interests of justice to dispose of the matter summarily; or

(c) the dispute is of such a nature that only a full hearing on the merits is appropriate.

68 The Court of Appeal in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd,[6] considered the operation of section 63 of the CPA and stated that:[7]**

"It follows that, for present purposes, the test under s 63 of the Civil Procedure Act should be construed as one of whether the respondent to the application for summary judgment has a "real" as opposed to a "fanciful" chance of success; that the "real chance of success" test is to some degree a more liberal test than the "hopeless" or "bound to fail" test; and that, as the law is at present understood, the real chance of success test permits of the possibility that there may be cases, yet to be identified, in which it appears that, although the respondent's case is not "hopeless" or "bound to fail", it does not have a real prospect of succeeding."

69 Warren CJ and Nettle JA summarised the law in the following terms:[8]

"Upon the present state of authority:

(a) the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a "real" as opposed to a "fanciful" chance of success;

(b) the test is to be applied by reference to its own language and without paraphrase or comparison with the "hopeless" or "bound to fail test" essayed in General Steel;

(c) it should be understood, however, that the test is to some degree a more liberal test than the "hopeless" or "bound to fail" test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent's case is not hopeless or bound to fail, it does not have a real prospect of success;

(d) at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence."

70 Before attempting to grapple with the material submitted by Collis, I wish to make some general observations about that material.

71 If the hallmarks of good writing are that the text is clear, concise, and comprehensive, then the material filed and relied upon by Collis does not satisfy those criteria. Indeed, much of the documentation is incomprehensible, including, as it does, references to and material about: the relationship between, and the source of authority as between, Collis and his wife as stated in the King James Bible; alleged breaches of the Charter of Human Rights and Responsibilities Act 2006 (Vic); the invalidity of the Corporations Act 2001 (Cth); the invalidity of the Rules; the conflict of interest faced by the County Court of Victoria in circumstances where it was separated from the court system established by State Parliament due to the creation of Court Services Victoria and/or its association with, or ownership by, foreign financial corporations who are said to be shareholders in BOQ and Liberty Group, the latter of which owns the court building; and the unsuccessful attempt to find a solicitor who had taken the oath of allegiance allegedly required by section 88 of the Imperial Acts Application Act 1922 (Vic).

72 Collis does not display a disciplined mind or a keen sense of relevance. A number of the documents filed, whether they were purportedly affidavits or submissions, comprised plentiful and repeated assertions and references to matters which were not obviously relevant, frequently not explained, and appeared designed to obscure rather than illuminate. From one perspective, it seemed a fraught task to try and deal with the defendants' material in a way which assumed, wrongly, that it represented an intelligible and coherent defence to the BOQ's application.

73 The more direct approach is to regard the vast bulk of the defendants' material as legal nonsense. However, while the direct approach is both attractive and probably justified in the circumstances, I shall nonetheless attempt to make sense of the defendants' case. In doing this, I shall endeavour to address the points made as best as I can understand them.

(a) Has the plaintiff prima facie proved the essential elements of its claims?

(b) Did BOQ actually lend money to and take security from the defendants?

(c) Did the promissory notes given by Collis discharge the debt owed by the defendants to BOQ?

(d) Is the County Court without jurisdiction or biased and unable to hear the case?

(e) Is the Corporations Act 2001 (Cth) invalid?

(f) Does section 78(b) of the Judiciary Act 1903 (Cth) provide a defence?

(h) Does section 88 of the Imperial Acts Application Act 1922 (Vic) provide a defence?

(a) Has the plaintiff prima facie proved the essential elements of its claims?

75 I am satisfied that BOQ has proved its case and verified its claim against the third and fourth defendants. The affidavits of Anthony Raviola, together with the exhibits thereto, support the claims which BOQ made. I am satisfied that:

• The defendant companies are duly incorporated companies;

• The second defendant has been the registered proprietor of the North Shore property at all relevant times;

• The third and fourth defendants have been registered joint proprietors of the Fyansford property at all relevant times;

• The plaintiff provided financial accommodation to the defendants by way of the home loan, which was secured by the Fyansford mortgage, and the business loan, which was secured by a guarantee and indemnity provided by the third and fourth defendants and the North Shore mortgage;

• The defendants have failed to make the requisite payments;

• Notices of default/demand were served upon the defendants in respect of the unpaid amounts;

• The defendants failed to make payment in response to those notices; and

• The defendants' defence has no reasonable prospect of success.

76 Accordingly, BOQ is prima facie entitled to summary judgment.**

(b) Did BOQ actually lend money to and take security from the defendants?

77 I am satisfied from the evidence of BOQ, including the copied bank statements, that BOQ advanced money to Mr and Mrs Collis and Collis Pty Ltd. To the extent that the defendants argued that BOQ advanced no monies but just created book entries falsely suggesting that it had done so, I reject that argument. I find that BOQ advanced, and was entitled to recover from the third and fourth defendants, the monies which it lent. Similarly, the bank statement exhibited indicated that the advances made by BOQ exceeded the principal sum of $650,000 set out in the mortgage over the Fyansford property registered in February 2006.

(c) Did the promissory notes given by Collis discharge the debt owed by the defendants to BOQ?

**78 Collis submitted that the debt owed to BOQ had been satisfied by way of promissory notes drawn by himself and his wife dated 9 July 2018.

79 Collis further submitted that BOQ acquiesced to the use of the promissory notes to satisfy the debt because there was no objection by BOQ upon receipt of the promissory notes on 11 July 2018.

80 In his submissions, Collis appeared to argue that the promissory notes were legal tender as they were "clearly linked to the birth certificates of the defendants" and "are payable on demand, not at a future date". Collis went on to say that he could not elaborate on the point due to the 10 page limitation I imposed when granting him yet another opportunity to file material in opposition to the application by BOQ. Instead, he refers to exhibit "GCL 10". This was a document titled "Statement of Brian William Shaw re Judicial Malfeasance" which appeared to relate to a different proceeding in the Supreme Court of Victoria and had no obvious relevance to the present proceeding.

81 BOQ submitted that the promissory notes drawn by Collis and his wife did not constitute payment and did not discharge the debt as they were not prepared by a reputable recognised financial institution and were merely a voluntary promise by them.

82 The courts have dealt before with cases in which parties have purported to create their own promissory notes or bills of exchange and sought to use them to discharge debts owed to a third party. Cases such as Hou v Westpac Banking Corporation Ltd,[9] ANZ v Evans[10] and Permanent Custodians Ltd v Sanders[11] reflect the simplistic and legally ineffective approach which some debtor litigants take with such documents. In general terms, the cases cited show that:

(a) home-made promissory notes or bills of exchange which are not drawn on a reputable and substantial financial institution will most probably not excuse a debtor from paying a creditor;

(b) proffering a home-made promissory note or bill of exchange is not equivalent to payment in cash;

(c) it is nonsense to suggest that a debtor's liability to repay a substantial debt to a creditor can be excused or discharged by giving the creditor a home-made promissory note or bill of exchange;

(d) to be legally enforceable and relevant, the debtor should show, inter alia, that the promissory note or bill of exchange is a recognised and permissible form of payment under the finance documentation with the creditor;[12] and

(e) where a creditor, who receives from a debtor a purported promissory note or bill of exchange not drawn on a reputable financial institution and not shown to be a recognised form of payment under the finance documentation, is silent and takes no action regarding the documentation, such silence or inactivity cannot change a debtor's unilateral demand into a contract.

83 I find that the promissory notes or bills of exchange relied upon by Collis and his wife were ineffective and did not discharge the debt to BOQ. The documents were without legal effect. In any event, BOQ returned them and did not accept them. To contend that a birth certificate could somehow form a binding promissory note which discharged a creditor's debt is fanciful. I reject the contention by Collis in his submissions that "[B]irth certificates are a lawful instrument of the State and Federal Governments and can be used to pay an obligation".[13]**

(d) Is the County Court without jurisdiction or biased and unable to hear the case?

**84 Collis appeared to contend that the County Court was not properly constituted as a court and lacked the power or jurisdiction to deal with the present application. The factual and legal basis for this contention was unclear. However, my view is that the court is properly established as a court of record under legislation passed by the Victorian Parliament. The court has jurisdiction to hear cases of the kind before me. Indeed, in the past, it has heard and determined many such cases.

85 Although not clear, it seems that Collis' point about the connection between this court and Liberty Group goes partly to the court's jurisdiction and partly to bias or conflict of interest. Collis says that the court is not part of the State of Victoria but a "private foreign bank controlled facility". It is managed by the Liberty Group, a trading entity owned and controlled by Challenger Financial Corporation. This is, according to Collis, a public company listed on the Australian Stock Exchange with shareholders including Hong Kong and Shanghai Banking Corporation ("HSBC"), the Citigroup Corporation, JP Morgan Chase Banking Corporation, BNP Paribas Banking Corporation and National Nominees Pty Ltd, the last of which comprises "an opaque collective of local and foreign investors". Collis contended that HSBC was the major shareholder of the holding corporation which manages and is in partnership with the County Court and was also the major shareholder of BOQ.

86 On the question of bias or conflict of interest, I consider that there is no connection between this court or Court Services Victoria and the Liberty Group or Challenger Financial Corporation (or their respective shareholders) which creates a situation of actual or apprehended bias which would render it inappropriate for me to determine this application. In my opinion, there is no relevant connection between BOQ and the court which might cause a fair minded lay observer to reasonably question whether the defendants would receive an impartial hearing.

87 Moreover, and more importantly in the current context, I do not consider there is any basis disclosed in the defendants' material to justify a fair minded lay observer in reasonably apprehending that I, as the judge hearing the case, might not bring an impartial mind to the resolution of the application before me. There must be a real and not remote possibility of bias. Application of the apprehension of bias principle requires two steps.[14] First, the party complaining must identify what might lead a judge to decide a case other than on its legal and factual merits. Secondly, the party must articulate the logical connection between the current application and the feared deviation from deciding that application on its merits. A bare assertion of bias is not enough. Unless the complaining party satisfies the two steps, the reasonableness of the asserted bias cannot be assessed.[15] I consider that Collis has not satisfied the applicable criteria and I resolve this argument against the defendants.

88 Collis claimed in his material that the County Court is:

• not "under the Crown" and has no authority to make orders;

• a "private foreign bank controlled facility" which is managed by the Liberty Group.

As to these allegations, I find that none of them was established on the evidence.**

(e) Is the Corporations Act invalid?

**89 The Corporations Act 2001 (Cth) is a valid Commonwealth law. Not only was this issue addressed in Re Wakim; Ex parte McNally,[16] there have been many cases heard and determined involving this Act such that its validity must be taken as indisputably established. It is wrong to assert, as Collis did, that the Act has never been enacted.

(f) Section 78(b) of the Judiciary Act 1903 (Cth)

90 Collis seemed to rely upon the Judiciary Act to challenge the validity of the case brought against him and the other defendants. However, it is clear that a mere assertion by a party that there is a constitutional point raised in a proceeding is not determinative of the question.[17] The party asserting the constitutional point needs to establish to the court's satisfaction that the requirements of section 78(b) of the Judiciary Act 1903 (Cth) are made good. Here, Collis has not satisfactorily explained the nature and basis of the constitutional point allegedly raised. Accordingly, I am not persuaded that section 78(b) has any application to this case.**

**91 Collis appeared to assert that Biblical law, as embodied in the King James Bible, constituted some higher form of the law which was binding in a way which Victorian and Commonwealth law was not. Collis did not explain how the King James Bible was relevant to the case and how it affected the application of standard legal principles. Accordingly, I find it is irrelevant in the context and creates no defence against BOQ's claim.

(h) Section 88 Imperial Acts Application Act 1922 (Vic)

92 This provision was repealed a long time ago.[18] Mr Collis did not explain how and why the provision was relevant to this case. I am not persuaded that it is relevant or provides any of the defendants with a basis to defend BOQ's claims. Whether or not there exists a solicitor who has taken the oath of allegiance allegedly required by this provision has no obvious bearing on BOQ's application or the defendants' defence to it.

93 A document purporting to be an affidavit by Salvatore Marotta was filed in support of the defendants' case. The document comprised mainly submissions or the views of Mr Marotta. The document was not sworn. The defendants did not explain who Mr Marotta was and how he was connected to them or to the case more broadly. Nor did they explain how the material was relevant to the dispute.

94 For the reasons set out, I find that BOQ should obtain summary judgment against the third and fourth defendants and judgment in default against the first, second, and fifth defendants. I direct that by 4:00pm on 13 December 2019, the parties file minutes of order, together with any supporting material, giving effect to these reasons.**

[1] Collis ultimately filed a further affidavit in support on 12 April 2019, however it did not contain any of the information ordered by Judicial Registrar Burchell.

[2] J K Arthur, D L Bailey, & N J Williams, LexisNexis, Civil Procedure Victoria (online at 11 December 2019) [1.17.0].

[3] [1998] 1 WLR 919.

[4] Hubbard Association of Scientologists International v Anderson & Just (No 2) [1972] VicRp 66; [1972] VR 577, 580.

[5] Based upon a search of the ASIC Register on 20 November 2019.

[6] [2013] VSCA 158; (2013) 42 VR 27.

[9] [2015] VSCA 57.

[10] [2016] NSWSC 1742.

[11] [2017] VSC 516.

[13] The rejection is specifically referable to the second clause of the sentence.

[14] Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at [8].

[17] Australian Competition and Consumer Commission (ACCC) v CG Berbatis Holdings Pty Ltd [1999] FCA 1151; (1999) 95 FCR 292 at [14]; Croker v Commonwealth of Australia [2011] FCAFC 25 at [30].

[18] See Tripodi v TM Fresh Pty Ltd [2019] VSC 383 at [23].