[2014] FCCA 302
Batterham v Goldberg (2014) 226 FCR 166
Source
Original judgment source is linked above.
Catchwords
[2014] FCCA 302
Batterham v Goldberg (2014) 226 FCR 166
Judgment (4 paragraphs)
[1]
The applicant's application for leave to appeal
The draft notice of appeal which accompanied the applicant's summons seeking leave to appeal did not set out any specific proposed grounds of appeal. It merely referred to the applicant's ten page summary of argument dated 18 July 2023. At the outset of the hearing of the application for leave to appeal, the applicant handed up an 8 page written transcript of his oral submissions, which the Court has considered.
In brief, it appears that the applicant seeks leave to pursue the following grounds of appeal:
1. The primary judge erred in not addressing [12] of the amended statement of claim and the applicant's related submissions to the effect that the respondents knowingly and wrongly submitted an illegitimate fee invoice from Mr Kenzie QC for a costs assessment in 2011. This was described as "central" to the applicant's claim. The applicant complained that in submitting the fee invoice for costs assessment, the respondents failed to comply with the requirements in ss 310, 311, 345 and 351(3)(a) of the Legal Profession Act. Sections 310 and 311 related to the disclosures a law practice was required to make to its client under s 309 as to the legal costs that would be incurred. Section 345 prohibited a law practice from acting on a claim for damages unless the legal practitioner responsible reasonably believed that the claim had reasonable prospects of success. Section 351 concerned the timing of the making of an application for a costs assessment.
2. The primary judge erred in describing the applicant as "an aggrieved litigant" who was unable to move past the unfavourable outcomes he had previously experienced in various jurisdictions, including the Federal Court, the Supreme Court and the High Court (at PJ[3]). The applicant added that "the judiciary has been reluctant to hold legal practitioners to account" for their professional misconduct. The applicant then described at some length advice he had received from various other law firms, including Clayton Utz and Hunt & Hunt. He complained that he only became aware of Mr Kenzie's fee invoice in mid-2009, notwithstanding that it related to proceedings in the High Court in 2005. He complained that the "illegitimate invoice" was submitted by the respondents in early 2011 for costs assessment, which was beyond the 60-day time limit. He further complained that he only became aware of the costs assessment when he was served with a bankruptcy notice in November 2013, by which time he could not challenge the costs assessment.
3. The primary judge erred in stating at PJ[4] that the applicant alleged in his statement of claim that "he was wrongly made bankrupt some years ago because of a judgment wrongly entered in the Local Court". The applicant pointed to [12] of his amended statement of claim, which stated:
The claim against the Defendants is that the Defendants breached the law when submitting the amended costs assessment application of a third-party invoice in relation to Mr Kenzie by misrepresenting to the costs assessor that the Defendants had instructed Mr Kenzie in relation to the conduct of the High Court appeal hearing in November 2005 on behalf of the Plaintiff, when they knowingly had not.
1. The applicant claimed that he directly instructed Mr Kenzie QC in the High Court proceedings in November 2005, and not the respondents.
2. The applicant repeated his claims that providing Mr Kenzie's fee invoice for costs assessment in 2011 was in breach of the respondents' obligations under ss 310, 311, 345 and 351 of the Legal Profession Act.
3. The applicant denied that he was attempting to re-litigate matters determined by Halley J because he said [12] of his amended statement of claim was not addressed in those proceedings.
4. The primary judge erred in concluding at PJ[7] that the applicant had no valid cause of action because the only reason why Halley J concluded at [178] that there was non-compliance with the Superannuation Industry (Supervision) Act 1993 (Cth) was because, as a bankrupt, the applicant could not continue to be a director of the BRF corporate trustee.
5. The primary judge erred in concluding at PJ[16] that if the applicant's cause of action arose in November 2017 as alleged, this was prior to his discharge from bankruptcy on 3 December 2017. The applicant alleged that the BRF shareholding was "exempt property" in bankruptcy and any monies which were received by the BRF would flow to him as sole beneficiary of the self-managed superannuation fund.
[2]
Consideration and determination
For the following reasons, leave to appeal should not be granted.
First, the applicant has not identified any issue of principle or any question of general public importance sufficient to warrant a grant of leave.
Secondly, the applicant has not raised any matter relating to the primary judgment which is beyond what is merely arguable. Rather, he largely repeats submissions which were made, unsuccessfully, by him below.
Thirdly, the applicant has not identified any error on the part of the primary judge which warrants a grant of leave. As the respondents correctly pointed out in their response to the application for leave to appeal filed on 16 August 2023, despite the repeated references to "error" in the applicant's summary of argument, no error of law or fact was identified.
The applicant sought to rectify this criticism in his submissions in reply filed on 11 September 2023. In particular, apart from repeating many of the matters raised in the earlier summary of argument, the applicant submitted that the primary judge's "material error" was to misconceive at PJ[34] the applicant's complaint that the respondents had breached provisions of the Legal Profession Act by submitting a knowingly illegitimate invoice for costs assessment.
We consider this allegation to have no basis, to be not even barely arguable and to add nothing to a substantially similar claim which was considered and rejected by Halley J, whose findings were implicitly accepted by the primary judge. Despite their length, it is desirable to set out the following extracts from Halley J's extensive judgment:
Retainer of Mr Kenzie QC
165. It is convenient to commence with the retainer of Mr Kenzie QC.
166. The question of who was instructing Mr Kenzie QC in the High Court Appeal after Clayton Utz's instructions were withdrawn on 2 November 2005 is central to Mr Batterham's contentions against both Clayton Utz and Turner Freeman.
167. Given the withdrawal of Clayton Utz's instructions, it must follow that they could not have been instructing Mr Kenzie QC in the High Court Appeal after 2 November 2005. The issue thus becomes whether Mr Kenzie was instructed by Turner Freeman, or whether he was appearing on a direct access basis and was instructed by Mr Batterham at the hearing of the High Court Appeal.
168. The Costs Assessor determined that Mr Kenzie QC was instructed by Turner Freeman after Clayton Utz's instructions were withdrawn. That finding was clearly open to the Costs Assessor given the withdrawal of Clayton Utz's instructions, the retainer of Turner Freeman and the absence of any direct access costs agreement between Mr Kenzie QC and Mr Batterham.
169. Mr Batterham's contention that Mr Kenzie QC's fees for services rendered after the withdrawal of Clayton Utz's instructions was entirely a matter between him and Clayton Utz was not accepted by the Costs Assessor. Contrary to the position advanced by Mr Batterham, the absence of a detailed knowledge of the proceeding did not preclude Turner Freeman from instructing counsel in the hearing of the High Court Appeal. In any event, the finding by the Costs Assessor was not appealed and subsequently merged in the Local Court Judgment.
170. Mr Batterham's belated challenge to the finding on the basis that Turner Freeman failed to disclose to the Costs Assessor the alleged "admission" in their 11 May 2011 letter to the Manager of the Costs Assessment Unit, that Mr Kenzie QC had been instructed by Mr Batterham, is misconceived. The alleged admission was in truth a submission that, in the absence of any direct access costs agreement or other evidence of any agreement to accept a direct access brief, was incorrect and was rejected by the Costs Assessor. It certainly could not be an admission by Mr Kenzie QC that he had accepted a direct access brief.
171. The alleged admission was inconsistent with Mr Kenzie QC's explanation of his retainer in his letter of 5 May 2009 to Turner Freeman in which he stated:
10. Around 2 November 2005, immediately prior to the hearing in the High Court, Mr Batterham terminated the services of Clayton Utz and instructed your firm in the proceedings.
…
13. Following this, in further compliance with the High Court's procedural requirements, submissions in reply were prepared by myself (and Mr Kimber) and filed by your firm on 3 November 2005. Enclosed is a copy of the written submissions in reply signed by myself and Mr Kimber and filed on Mr Batterham's behalf.
14. I appeared with Mr Kimber as my junior counsel at the hearing of Mr Batterham's appeal before the High court on 8 and 9 November 2005. His appeal was heard together with the appeal in Fish v Solution 6 Holdings (2006) 225 CLR 180 and Old UGC Inc v Industrial Relations Commission (NSW) (2006) 225 CLR 274. I was instructed on these days by Mr Aaron Magner of your office. During the proceedings, I spoke to Mr Batterham in the courtroom and reported to him on the ongoing progress of the submissions. Mr Batterham refers to this in his email (annexed and marked with the letter "I") of 15 March 2006.
…
16. Mr Batterham's assertion in the abovementioned email that he thought Mr Kimber was representing him is correct in the sense that Mr Kimber was appearing with me as junior counsel. But the suggestion that Mr Batterham was unaware that I was representing him in the High Court proceedings is disingenuous.
17. Following the High Court hearings, the Court requested further submissions on the statutory amendments to s. 106 and I was instructed by your firm to draw further submissions in respect of this matter. These submissions were drafted and filed and were the subject of my subsequent memorandum of fees of 23 February 2006.
18. Following this there was a further conference in my chambers on 24 May 2006 in the immediate aftermath of the High Court's decision of 18 May 2006. Apart from myself, Mr Kimber, Mr Batterham and yourself were present. The conference concerned, inter alia, the possible future course of Mr Batterham's proceedings in the Industrial Relations Court that were unaffected by the prohibitive orders.
19. Needless to say, at no stage in any of these matters did Mr Batterham suggest that I was not, nor had I been, properly instructed to act on his behalf.
20. In your email to me of 16 April 2009 you reiterated the view that it would be best if I issued your firm with an invoice relating only to the period from when you commenced acting in the matter - so that an invoice could be sent to Mr Batterham for this amount. In the circumstances, I agree that this is the appropriate course and I enclose a memorandum of fees in respect of the period from 2 November 2005 when your firm assumed conduct of the matter continuing to retain me on behalf of Mr Batterham.
172. Independently of limitation, res judicata, issue estoppel and abuse of process considerations, I am satisfied that the finding that Mr Kenzie QC was retained by Turner Freeman in the High Court Appeal from 2 November 2005 was plainly correct and Mr Batterham has not established any basis on which it should now be disturbed.
The primary judge relied upon these and other parts of Halley J's judgment in support of her summary dismissal decision. Indeed at PJ[21], her Honour referred with apparent approval to Halley J's conclusion at [172] that Mr Kenzie QC was retained by Turner Freeman on behalf of the applicant in the High Court proceeding and the applicant had failed to establish any basis on which that finding should be disturbed (see also at PJ[24]).
Mr Batterham had challenged the judgment entered in the Local Court on the costs assessor's certificate in his application to set aside the bankruptcy notice. That application was dismissed by Judge Raphael in the Federal Circuit Court (Batterham v Goldberg (2014) 285 FLR 370; [2014] FCCA 302). Mr Batterham's appeal from that decision was dismissed by the Full Court of the Federal Court (Batterham v Goldberg (2014) 226 FCR 166; [2014] FCAFC 136) which upheld the decision of the Federal Circuit Court that Turner Freeman were Mr Batterham's creditors for the fees the subject of Mr Kenzie QC's invoice and entitled to issue the bankruptcy notice (at [11], [59]-[61], [65(c)], [69]).
It appears from the reasons of Judge Raphael that it was common ground that there was no written costs agreement entered into between Mr Batterham and Turner Freeman or between him and Mr Kenzie (at [5]). Judge Raphael found that after Mr Batterham dispensed with the services of Clayton Utz he instructed Turner Freeman to continue to involve Mr Kenzie (at [8]). On the appeal, White J referred to the long established principle that, in considering an application to set aside a bankruptcy notice, the Court may go behind the judgment to ascertain whether in truth the debt for which judgment has been given was due (at [24]).
As Halley J held, the question whether Turner Freeman was entitled to issue and rely on the bankruptcy notice is res judicata.
The applicant's references to the respondents' alleged non-compliance with ss 310, 311, 345 and 351(3)(a) of the Legal Profession Act do not overcome the primary judge's conclusion that the claims in his amended statement of claim were an attempt to re-litigate claims made in previous proceedings. It was open to the applicant to raise those statutory provisions in his earlier proceedings.
In oral address before us, the applicant said that he had not raised these provisions before Judge Raphael but that he did raise them before Halley J and his Honour failed to deal with them. Even if this be the case (and it is unnecessary to determine the matter) the fundamental difficulty is that Judge Raphael's decision was upheld on appeal by the Full Court of the Federal Court (and there is nothing in the separate judgments published by that Court to suggest that the provisions were raised on that appeal). Furthermore, Stewart J refused the applicant leave to appeal against Halley J's decision (and again, there is nothing to suggest that the applicant relied on the provisions in support of that application for leave to appeal). These matters serve to underline why the doctrine of res judicata applies in the applicant's case.
None of the other "grounds" in the applicant's summary of argument, including the matters summarised at [16(g) and (h)], are sufficiently arguable to warrant leave to appeal being granted.
[3]
Conclusion
For these reasons, the applicant has not established any basis warranting the grant of leave to appeal. Accordingly, the summons seeking leave to appeal filed on 19 July 2023 should be dismissed, with costs.
[4]
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Decision last updated: 06 October 2023
HEADNOTE
[This headnote is not to be read as part of the judgment]
The applicant claimed that the respondents (partners of Turner Freeman) wrongfully caused him to become bankrupt and consequently suffer losses. He alleged that the respondents knowingly caused a false amended costs assessment application for unpaid legal costs of Mr Kenzie QC, for which the applicant claims he was not liable, to be submitted for the purpose of obtaining a costs assessment in their favour. Turner Freeman relied on the costs certificate issued, which took effect as a Local Court judgment, in obtaining a bankruptcy notice against the applicant. The applicant claimed that the respondents are liable for the subsequent losses he suffered from a joint venture.
The primary judge summarily dismissed the proceeding under r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW). Her Honour found that the proceedings before her duplicated claims which were unsuccessfully made by the applicant in proceedings in the Federal Court: Batterham v Clayton Utz Partnership [2022] FCA 360 per Halley J. Her Honour concluded the applicant's cause of action was "hopeless" and was also both vexatious and an abuse of process because it sought to re-litigate issues which had been "comprehensively considered and determined" in the Federal Court.
On appeal, the issues were:
(i) Whether leave to appeal should be granted;
(ii) Whether the primary judge failed to address and misconceived (at [34] of the primary judgment) the applicant's complaint that the respondents had breached ss 310, 311, 345 and 351 of the Legal Profession Act 2004 (NSW) (Legal Profession Act) by submitting a knowingly illegitimate invoice for costs assessment.
The Court, dismissing the application, with costs:
(1) As to issue (i) leave to appeal should not be granted: at [17] The applicant has not identified any issue of principle or any question of general public importance, nor identified any error on the part of the primary judge which warrants a grant of leave: at [18], [20]. The applicant did not raise any matter relating to the primary judgment which is beyond what is merely arguable: at [19]
(2) The allegation raised by the applicant in issue (ii) has no basis, is not even barely arguable and adds nothing to a substantially similar claim which was considered and rejected by Halley J in the Federal Court, whose findings were implicitly accepted by the primary judge: at [22] As Halley J held, the question whether Turner Freeman was entitled to issue and rely on the bankruptcy notice is res judicata: at [26] The applicant's references to the respondents' alleged non-compliance with the Legal Profession Act do not overcome the primary judge's conclusion that the claims in his amended statement of claim were an attempt to re-litigate claims made in previous proceedings: at [27]-[28]
JUDGMENT
THE COURT: The applicant requires and seeks leave to appeal from an order made by Lonergan J on 22 June 2023 in which her Honour dismissed the applicant's proceeding under r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). Her Honour held that the proceeding was frivolous and vexatious, disclosed no reasonable cause of action and was an abuse of process. Subsequently, on 27 June 2023, her Honour published detailed reasons for summarily dismissing the proceeding (see Batterham v Goldberg [2023] NSWSC 721 (primary judgment or PJ)).
There was no dispute as to the relevant principles guiding this Court's decision whether or not to grant leave to appeal: they are well settled. Ordinarily, an applicant for leave must show that the subject decision is attended by sufficient doubt to warrant its consideration on appeal, that there is some issue of principle or of general public importance, or that there is an injustice that is reasonably clear beyond being merely arguable (see, e.g., Carolan v AMF Bowling Pty Ltd [1995] NSWCA 69).
The applicant requires leave because the summary dismissal is an interlocutory decision: Supreme Court Act 1970 (NSW) s 101(2)(e). The respondents properly acknowledged that, despite the summary dismissal being interlocutory, it had the practical effect of finally determining the applicant's right to bring the proceeding.
The respondents oppose the grant of leave. For the following reasons, leave should not be granted.
By an amended statement of claim filed on 22 February 2023, the applicant alleged that he was wrongly made bankrupt in 2014 by the law firm Turner Freeman, based upon a judgment for unpaid legal costs which the applicant asserts was wrongly entered in the Local Court. In essence, the applicant claimed that the unpaid legal costs, which were recorded in a fee invoice issued by Mr Kenzie QC, created no liability on the applicant's part because the applicant himself had directly briefed Mr Kenzie to appear in High Court proceedings in 2005, and not Turner Freeman acting on his behalf.
In the amended statement of claim, the applicant claimed that the partners of Turner Freeman knowingly caused a false amended costs assessment application to be submitted in July 2011 to obtain a costs assessment in their favour. The applicant pleaded that he had retained Turner Freeman to represent him in the litigation to which he was a party in 2005. He claimed that he was the subject of a wrongful costs assessment for the fees of Mr Kenzie QC, whom he asserted had never been properly retained by Turner Freeman and for which he had no liability. He accused Turner Freeman of using the unpaid invoice to have him bankrupted in November 2014, relying upon a costs certificate issued by the costs assessor, which took effect as a judgment of the Local Court following their filing of the certificate in the Local Court Registry pursuant to what was then s 368 of the Legal Profession Act 2004 (NSW) (Legal Profession Act).
The primary judgment summarised
After summarising the key relevant features of the amended statement of claim, the primary judge referred at some length to the Federal Court proceedings before Halley J and, to a lesser extent, before Stewart J. Her Honour set out lengthy extracts from Halley J's judgment in which his Honour summarily dismissed the applicant's claim that his bankruptcy in November 2014 had the effect of preventing him from being compensated for a reduction in the value of shares in the joint venture company, Ztrata Capital Limited (ZCL).
The primary judge noted that Halley J summarily dismissed the applicant's proceedings in the Federal Court on the following four grounds:
1. Any causes of action advanced against the respondents which were directed to the diminution in value of the ZCL shares were time barred because any such diminution in value crystallised on 4 July 2011 and the subsequent dismissal of proceedings in November 2017 did not restart the limitation period.
2. In any event, any cause of action which the applicant may have had related to this subject vested in his trustee in bankruptcy and did not revest in him after his bankruptcy was discharged unless his trustee in bankruptcy had assigned any cause of action. That is because any such causes of action accrued upon the making of the sequestration order on 13 November 2014 against the applicant, were after-acquired property for the purpose of s 58 of the Bankruptcy Act 1966 (Cth) and were not exempt assets.
3. The applicant's claims were an attempt to re-litigate his unsuccessful challenges to his liability to pay counsel's fees which then led to his bankruptcy, but he was precluded by issue estoppel from challenging the correctness of the proposition that Turner Freeman had retained counsel on his behalf. The issue estoppel arose from the determination of this issue both by the costs assessor, which had effect as a Local Court judgment against the applicant, and in prior proceedings, including those before the Full Federal Court (Batterham v Goldberg (2014) 226 FCR 166; [2014] FCAFC 136, which affirmed the decision of Judge Raphael in Batterham v Goldberg (2014) 285 FLR 370; [2014] FCCA 302).
4. Moreover, the applicant's claims concerning the loss he alleges he suffered from the diminution in value of the ZCL shares had previously been litigated, such that the Federal Court proceedings were a collateral attack on those concluded proceedings and constituted an abuse of process.
In the Supreme Court, the primary judge summarised the parties' evidence and submissions in respect of the summary dismissal application, as well as setting out uncontroversial principles applying to the Court's power summarily to dismiss proceedings. Her Honour correctly acknowledged that the power was an exceptional one which should be used only where there is a demonstrated absence of a cause of action and/or a clear abuse of the Court's processes.
The applicant made further claims, based upon the predicate that he had wrongly been made bankrupt, including that he was disabled from pursuing proceedings against a co-joint venturer (Mr Marcel Nauer) in the Supreme Court, which were dismissed for want of due dispatch on 6 November 2017. The applicant claims such proceedings would have resulted in an award of damages in his favour in excess of $2 million.
The applicant was discharged from bankruptcy on 3 December 2017.
As will shortly be developed, the summary dismissal decision was principally based upon the finding by the primary judge that the claims raised in the amended statement of claim duplicated claims which were unsuccessfully made by the applicant in proceedings in the Federal Court: see Batterham v Clayton Utz Partnership [2022] FCA 360 per Halley J (and see also Batterham v Clayton Utz Partnership [2022] FCA 1435 in which Stewart J refused an application for leave to appeal from Halley J's decision).
These are not the only proceedings in which either or both the applicant and the trustee of his self-managed superannuation fund, Batterham Retirement Fund (BRF), have been involved in relation to or arising from the failed investment. Proceedings have also been brought in this State's Industrial Relations Commission, the District Court, the Supreme Court, this Court, the Federal Circuit Court, the Full Court of the Federal Court, and the High Court (the numerous proceedings are described in Halley J's reasons for judgment).
The primary judge concluded at PJ[35] that the applicant's cause of action was "hopeless" and was also both vexatious and an abuse of process because it sought to re-litigate issues which previously had been "comprehensively considered and determined" in the Federal Court.