Croker v Commonwealth of Australia

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1276 of 2010

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: CLAYTON ROBERT CROKER

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1581 of 2010

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

JUDGES: SIOPIS, TRACEY AND GILMOUR JJ DATE: 28 february 2011 PLACE: MELBOURNE (HEARD IN SYDNEY)

REASONS FOR JUDGMENT 1 In 2003 the High Court of Australia celebrated the centenary of its founding. To mark the occasion cufflinks bearing the Court's crest were manufactured and offered for sale. Mr Croker purchased a set of these cufflinks. He was dissatisfied with their quality. He complained. He was not satisfied with the responses he received. Litigation ensued. Its full extent has been essayed in other judgments: see, for example, Attorney-General of New South Wales v Croker [2010] NSWSC 942 at [72]-[85] (per Fullerton J). In at least six of these cases costs were awarded against Mr Croker. 2 It is not necessary to refer in detail to this litigation. It is sufficient to note that, in four of the six cases Mr Croker was the applicant and the Commonwealth was the respondent. In each of these cases Mr Croker's claim was dismissed with costs. In the other two cases the Commonwealth of Australia was the plaintiff and Mr Croker was the defendant. In aggregate, costs of $51,705.61 were awarded against Mr Croker. The highest single award was $14,700. The lowest was $2,900. 3 On 2 July 2010 the Official Receiver served a bankruptcy notice on Mr Croker. It was in the prescribed form. Relevantly the bankruptcy notice: Identified the Commonwealth of Australia as "the creditor"; Provided a post office box address for the creditor; Advised Mr Croker that the creditor's address for service was "c/- Australian Government Solicitor, Level 42, MLC Centre, 19 Martin Place, Sydney NSW 2000"; Identified the sum owed to the creditor as $51,705.61; Required Mr Croker to pay the creditor the amount of the debt or to make alternative arrangements to the creditor's satisfaction within 21 days after service had been effected; and Advised Mr Croker that the debt could be paid to the Commonwealth "c/- Australian Government Solicitor, Level 42, MLC Centre, 19 Martin Place, Sydney NSW 2000." 4 On 23 July 2010 Mr Croker made application to this Court for an order that the bankruptcy notice should be set aside. 5 His application was dismissed by Foster J on 22 September 2010: Croker v Commonwealth of Australia [2010] FCA 1031. The first of these appeals has been brought from his Honour's decision (proceeding NSD 1276 of 2010). 6 On the following day the Commonwealth filed a creditor's petition in the Federal Magistrates Court. On 2 November 2010 Driver FM made a sequestration order against the estate of Mr Croker: see Commonwealth of Australia v Croker [2010] FMCA 852. Mr Croker lodged an appeal against the Federal Magistrate's decision (proceeding NSD 1581 of 2010). 7 On 17 November 2010 Emmett J ordered that the appeal from Driver FM's decision should be heard by the same Full Court which was to hear the appeal from Foster J.

THE APPEAL FROM FOSTER J 8 Mr Croker based his application to set aside the bankruptcy notice on what the trial judge described as "four broad contentions." They were that: Mr Croker had a counter-claim, set-off or cross demand equal to or exceeding the total amount claimed in the bankruptcy notice; The bankruptcy notice was defective because the Commonwealth had not claimed interest on the debt owing to it; The bankruptcy notice was defective because the address shown for the creditor was a post office box; and The bankruptcy notice was defective because the Commonwealth had failed to act as a model litigant in accordance with a policy promulgated by it under the Judiciary Act 1903 (Cth) ("the Judiciary Act"). 9 The trial judge rejected each of these contentions.

The counter-claim 10 Mr Croker's first contention relied on the provisions of s 40(1)(g), of the Bankruptcy Act 1966 (Cth) ("the Act"). Section 40(1)(g) provides that a debtor commits an act of bankruptcy if the debtor "does not comply with the requirements of [a bankruptcy notice] or satisfy the Court that he or she has a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt …" 11 Although he had been invited to do so Mr Croker failed to identify any cases which he was currently pursuing against the Commonwealth which might constitute a relevant counter-claim. The trial judge was satisfied that, at the time of the decision, Mr Croker had only two proceedings on foot against the Commonwealth. In one of them he made no money claim: it was an application for judicial review of an administrative decision. The other proceeding was the application with which the trial judge was dealing. 12 His Honour also noted that Mr Croker had failed to comply with Rule 3.02 of the Federal Court (Bankruptcy) Rules 2005 which required him to file an affidavit which provided full details of any counter-claim relied on. 13 His Honour was not satisfied that any counter-claim by Mr Croker existed, much less one in a sum equal to or exceeding the amount of the judgment debt, or that there was sufficient substance in any counter-claim such as to warrant the setting aside of the bankruptcy notice: see Glew v Harrowell (2003) 198 ALR 331 at 333-4 (per Lindgren J).

Failure to claim interest 14 It was common ground that the bankruptcy notice did not contain a claim for interest on the principal sum claimed. 15 The trial judge rejected this ground on the basis of authority which established that a judgment creditor was free to refrain from making any claim for interest in a bankruptcy notice: see Re Mullavey; Ex parte Australia and New Zealand Banking Group Limited (1977) 32 FLR 1 at 9-10; Re Wong; Ex parte Kitson (1979) 38 FLR 207 at 216.

Creditor's address 16 Mr Croker contended that the bankruptcy notice was apt to mislead him because the creditor's address had been given as a post office box. This, it was suggested, did not satisfy the requirements of O 7 r 6(1) of the Federal Court Rules which stipulates that an address for service must be a place at which documents may be left and to which documents may be posted to the recipient. 17 The trial judge rejected this ground for a number of reasons. The notice had made clear that the Commonwealth's address for service was the Australian Government Solicitor's offices and that, had Mr Croker wished to pay the sum owing, he had the option of doing so at those offices. The address was provided. The bankruptcy notice was in the prescribed form. In any event, Mr Croker had never intended to pay the amount claimed and so, in a practical sense, there was no risk that he might be misled about how he should respond to the notice.

Model litigant issue 18 Mr Croker had made a generalised claim that, in dealing with his various cases, the Commonwealth had failed to comply with the Legal Services Directions 2005 which had been issued by the Attorney-General under s 55ZF(1) of the Judiciary Act. In particular it was said that the Commonwealth had failed to act as a model litigant. Mr Croker failed to identify the specific ways in which it was said that the Commonwealth had failed to comply with the directive. 19 It was not necessary for his Honour to explore this issue further because compliance with the directions was not enforceable by Mr Croker and could not be raised in any proceeding other than by or on behalf of the Commonwealth: see s 55ZG of the Judiciary Act.

Notice of appeal 20 Mr Croker appealed from his Honour's judgment on two grounds. They were that his Honour had failed "to adhere the Respondent to the strict compliance [set] down by the Bankruptcy Act 1966 and Bankruptcy Rules (Cth)" and that his Honour's judgment had "[installed] a gross miscarriage of justice on the already aggrieved Appellant [sic]". 21 In his submissions Mr Croker sought to argue, in substance, that the primary judge was in error by failing to accept each of the four contentions which he had advanced in support of his application at trial.

Notice of a constitutional matter 22 On 8 November 2010 Mr Croker filed a notice of a Constitutional matter in proceeding NSD 1276 of 2010. The notice was served on the Commonwealth, State and Territory Attorneys-General pursuant to s 78B of the Judiciary Act. No Attorney sought to intervene. 23 To the extent that the notice seeks to identify Constitutional issues which are said to arise on the appeal, it is unintelligible. Doing the best we can, we understand Mr Croker to be alleging that the Trade Practices Act 1974 (Cth) has, in some way, been "subverted" by decisions made in this Court, thereby rendering it invalid.

Consideration 24 We have given careful consideration to the grounds which Mr Croker has argued on this appeal. We are not persuaded that any of these grounds has merit. On the contrary, we consider that the trial judge was correct to reject Mr Croker's application. 25 Mr Croker's oral submissions on this issue were at a high level of generality, and he failed to identify any evidence before the Court which supported his assertion that he was pursuing other claims against the Commonwealth, which fell within the ambit of s 40(1)(g) of the Act. In the circumstances, his reliance on s 40(1)(g) was unsustainable. The trial judge did not err in so holding. 26 The Commonwealth was not under any obligation to quantify and demand any sum by way of interest in the bankruptcy notice. So much is well established in the authorities to which the trial judge referred. 27 The bankruptcy notice did not fail to include a sufficient address for service. The notice clearly identified the creditor's address for service as being that of the Australian Government Solicitor's Office in Sydney. The notice also advised Mr Croker that payment of the debt could be made at that office. He was not left uncertain as to what he should do to comply with the notice, and to avoid the consequences of committing an act of bankruptcy: see Foote v Mid-West Finance Pty Ltd (1997) 78 FCR 306 at 307. It is permissible, in a bankruptcy notice, for the address for payment to be identified as the office of the creditor's solicitors, provided that those solicitors are authorised by the creditor to collect payment on its behalf: see Nugent v Brialkim Pty Ltd (1985) 61 ALR 725 at 726-7. 28 We are not persuaded that the Commonwealth, in its legal dealings with Mr Croker, in any way contravened the requirements of the Legal Services Directions. Even if it had, such a contravention could not have assisted Mr Croker in prosecuting his application to have the bankruptcy notice set aside. This is so because of the provisions of s 55ZG of the Judiciary Act, on which the trial judge relied. 29 As we have already said, we have experienced great difficulty in understanding the notice of a constitutional issue which has been filed. We note that no such notice was filed and served prior to the hearing at first instance. 30 A Constitutional issue does not arise in a proceeding simply because a party contends that it does. It must appear to the Court that a question arising under the Constitution or involving its interpretation is involved: see Re Finlayson; Ex parte Finlayson (1997) 72 ALJR 73 at 74 (per Toohey J); Glennan v Commissioner of Taxation (2003) 77 ALJR 1195 at [14] (per Gummow, Hayne and Callinan JJ). The Constitutional question, identified in a notice given for the purposes of s 78B of the Judiciary Act, must be framed with "a reasonably high degree of specificity": see State Bank of New South Wales v Commonwealth Savings Bank of Australia (1986) 4 NSWLR 549 at 557 (per Kirby P). 31 Mr Croker's written submissions did not rectify the shortcomings of his notice. His oral submissions did not cast any further light on Constitutional issues. 32 In these circumstances we are not satisfied that any relevant Constitutional issue arises on this appeal.

THE APPEAL FROM DRIVER FM 33 Mr Croker resisted the making of a sequestration order on multiple grounds. 34 Three of the grounds corresponded with the first, second and fourth contentions which had been argued by Mr Croker before Foster J. Driver FM rejected these grounds for the same reasons which had been given by Foster J. In addition, he noted that the judicial review proceeding on which Mr Croker had relied before Foster J to support his argument that he had a viable cross-claim had since been discontinued. 35 Driver FM also rejected certain additional grounds of opposition. 36 Mr Croker submitted that Foster J had erred when he asserted that s 41(1)(b) of the Act only permitted the issue of a bankruptcy notice "if the applicant for the issue of such a notice is the beneficiary of two or more final judgments or orders that are of the kind discussed in s 40(1)(g) of the Act and, when taken together, are for an amount of at least $2,000". Mr Croker drew attention to an amendment to s 41(1)(b) which increased the prescribed amount from $2,000 to $5,000. As Driver FM pointed out, this amendment only applied to bankruptcy notices issued on or after 11 August 2010. As a result, the amendment had no bearing on the issues arising in the present proceeding. 37 Driver FM was not convinced that the appeal in proceeding NSD 1276 of 2010 had the "high" prospects of success claimed by Mr Croker or that the issue of the creditor's petition had been premature because it had been filed before his notice of appeal from Foster J's orders had been lodged. 38 Driver FM also rejected grounds of opposition which had alleged that Foster J had erred by failing "to go behind the judgment debts … where there is evidence of fraud or collusion or miscarriage of justice." His Honour recorded that there had been no evidence of fraud, collusion or miscarriage of justice placed before the Court. 39 Driver FM characterised certain other grounds as being unintelligible. 40 He was satisfied on the evidence before him that the requirements of ss 43(1) and 52(1) of the Act had been met and that the petition was in the form required by the Bankruptcy Rules. He, therefore, proceeded to make the sequestration order.

Notice of appeal 41 Mr Croker's notice of appeal in proceeding NSD 1581 of 2010 did not call into question any of Driver FM's reasons for rejecting his grounds of opposition or for making the sequestration order. 42 Mr Croker's notice of appeal contains only two grounds. They are: "i) The Respondent on the 20/10/2010 suggested that order 4 be made by the Court; ii) The Court below had no jurisdiction to go behind the prior judgments of the Court, yet still ordered the sequestration against the applicant." 43 We do not understand these grounds. 44 No written submissions were filed by Mr Croker in support of this appeal. His oral submissions did not deal with the grounds on which he sought to impugn the Federal Magistrate's decision. 45 We have examined the learned Federal Magistrate's reasons for decision. They disclosed no appellable error.

DISPOSITION 46 Both appeals should be dismissed with costs. I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Siopis, Tracey and Gilmour.