Cottrell v Nicholls

1 On 10 December 2003 the applicant, David M Cottrell, filed a notice of motion naming "Alan Nicholls (Trustee)" as respondent seeking orders explained and identified on the first page of the notice of motion in the following terms: This application relates to the making of a second sequestration order (N 6038/1/2 by Conti JJ on the 21st September 2001 during an appeal by the applicant before Conti JJagainst an already existing sequestration order (N 7880 of 2000) this applicant seeks the annulment of the second bankruptcy (6038/1/2) and the setting aside oF the second sequestration order (6038/1/2). Sequestration order (N 6038/1/2) and all attachments were generated as the result of a procedural error by the judge within the court system and as such must be set aside. This application is sought under section 153B of the Bankruptcy Act 1966. Orders sought: 1. setting aside of second sequestration order (6038/1/2) 21st September 2001. 2. Annulment of bankruptcy order (6038/1/2) 21st September 2001. Conti JJ . [Capitalisation in original] 2 The second page of the notice of motion contained a summary submission to which I will return. 3 Mr Cottrell filed two affidavits in support of his application. The first, entitled "Affidavit in support of Application", was a two page affidavit with various annexures. The second, entitled "Affidavit in Support of Application Containing Further and Better Particulars", contained two pages, then nine pages of annexures and a final summary page of material. Both these affidavits were sent to the Court by facsimile. Mr Cottrell is disabled and is not able to leave his home. 4 The notice of motion, in effect for an annulment of the bankruptcy of Mr Cottrell (or as Mr Cottrell would have it, the second of his bankruptcies) under s 153B of the Bankruptcy Act 1966 (Cth) (the Act), came before me on 16 December 2003. Ms Nash appeared for the trustee. 5 Prior to the hearing Mr Cottrell had sent another document to the court by facsimile. This was an eight page transmission which contained the following documents: (a) a facsimile from the Wagga Wagga Local Court to one of the Court officers in the New South Wales Registry, dealing with the authenticity of six pages said to be true copies of documents on the file at Wagga Wagga Local Court; (b) a facsimile from Mr Cottrell to the Wagga Wagga Local Court asking that six pages be authenticated as part of file 459 of 1992 in that court; (c) Six documents so authenticated being: (i) a note that in civil claim file 459/92 between John Alfred Wilcox as plaintiff and Mr Cottrell as defendant there was a note to the following effect "judgment set aside; judgment debtor pay judgment creditor costs of $500 within 28 days. Verified defence to be filed within 21 days"; (ii) a letter from the Registrar of the Wagga Wagga Local Court saying that the Magistrate's decision after evidence at the hearing on 22 June 1999 was as set out in (i) above; (iii) the form of a notice of grounds of defence apparently filed by Mr Cottrell in the Local Court proceedings; (iv) a document purporting to set out Mr Cottrell's defence; (v) a document with two receipt stamps dated 3 August 1999 being copies of the one receipt (R 563312) for $500 paid by Mr Cottrell; (vi) a handwritten note from a court clerk at Wagga Wagga Local Court that the original defence and cross claim in matter 459/92 were on file and that the defence dated 30 July 1992 and the cross claim were received on 25 August 1992. 6 From an examination of the material before me and the Court file, the chronology appears to be as follows. On 29 November 2000 a sequestration order was made against the estate of Mr Cottrell by a Registrar of the Court (Registrar Tesoriero) on the petition of John Alfred Wilcox (the plaintiff in the Wagga Wagga Local Court proceedings). The order noted that the date of the relevant act of bankruptcy was 18 September 2000. 7 Mr Nicholls was appointed trustee on 7 December 2000. 8 On 22 December 2000, Conti J made an order which in terms dismissed Mr Cottrell's application to set aside the sequestration order ([2000] FCA 1656). The first paragraph of the reasons for judgment of Conti J set out the background to the matter: On 29 November 2000 the Respondent David Mervyn Cottrell ("Mr Cottrell") was made bankrupt on the petition of an unsecured creditor John Alfred Wilcox ("Mr Wilcox"). The basis of the sequestration order in bankruptcy was non-compliance with a bankruptcy notice related to a Wagga Wagga Local Court judgment for moneys lent by Mr Wilcox to Mr Cottrell and interest accrued thereon in the sum of $36,679.42, which judgment had been entered on 17 August 1999 and remained unsatisfied. The petition in bankruptcy brought by Mr Wilcox was supported by Goddard Elliott claiming as an unsecured creditor for legal services in the sum of $21,636. No counter demand or counter claim was ever sought to be established by Mr Cottrell in this Court, nor was any application ever made to this Court to set aside the preceding bankruptcy notice prior to the sequestration order being made. 9 Mr Cottrell then appealed from the orders of Conti J and sought a stay. The application for a stay was rejected by Katz J on 7 March 2001 ([2001] FCA 193). The background to the application before Katz J was set out in [2] of his Honour's reasons as follows: The background to Mr Cottrell's motion is that on 29 November 2000, a Registrar of this Court made a sequestration order against Mr Cottrell's estate on the petition of Mr John Alfred Wilcox, that petition being supported by another creditor of Mr Cottrell's. Mr Cottrell applied for review of that order, but, on 22 December 2000, Conti J affirmed that order. Then, on 29 December 2000, Mr Cottrell filed in person both a notice of appeal from the judgment of Conti J and a notice of the present motion. Subsequently, on 5 February 2001, Mr Cottrell filed in person a supplementary notice of appeal. 10 On 17 May 2001 the appeal from the orders of Conti J was heard by a Full Court (Sundberg J, Emmett J and Finkelstein J). On 9 July 2001 the Court made orders allowing the appeal, setting aside the orders made by Conti J and remitting the matter to his Honour in accordance with s 35A(6) of the Federal Court of Australia Act 1976 (Cth): "on the basis that there is no notice of opposition to the petition". See [2001] FCA 866. 11 The Full Court set out the background to the matter in [1] of its reasons: On 29 November 2000 a sequestration order was made against the appellant's estate on the petition of the respondent. The order was made by a Registrar of the Court. The act of bankruptcy that founded the order was non‑compliance with a bankruptcy notice requiring payment of $36,679.42, being the amount of a judgment obtained by the respondent against the appellant in the Wagga Wagga Local Court for moneys lent together with interest. The appellant did not seek to establish a counterclaim or cross claim, and he did not apply to set aside the bankruptcy notice prior to the making of the sequestration order. On 20 December 2000 the appellant filed a notice of motion by which he sought an order that the Registrar's decision be reviewed and the sequestration order set aside. The matter came before a judge of the Court as a matter of urgency, for reasons that will be noted later. It was heard on 22 December. As a result of a physical disability that prevented him appearing in Court in Sydney, the appellant presented his case by telephone link from Yackandandah in Victoria. The primary judge refused to set aside the sequestration order and dismissed the motion. The appellant appeals from that decision. 12 The Full Court set out what it saw as the error of Conti J in approaching the matter as an appeal, rather than as a hearing de novo. The Court, however, made clear in its reasons that the serious allegations raised by Mr Cottrell concerning abuse of process and oppression and that he had a good defence or good cross-claim to the Wagga Wagga Local Court were correctly rejected by the primary judge. The Full Court made clear that the matters being remitted to Conti J in review of the Registrar's decision were limited to the determination of the formal matters of proof referred to in s 52(1) of the Act and would not extend to any further consideration of the other matters raised by Mr Cottrell. 13 On 19 September 2001, Conti J once again heard the review from the orders of Registrar Tesoriero, pursuant to the remittal of the matter by the Full Court. (It should be noted that the number of the file in which Mr Wilcox sought a sequestration order against Mr Cottrell was N 7880 of 2000. That was the matter before Registrar Tesoriero on 29 November 2000 and before Conti J on 22 December 2000 and 19 September 2001. The file number before Katz J and the Full Court was the appeal process number 1476 of 2000). The orders made by Conti J on 19 September 2001 were as follows: