Cummins v Palms

[2020] FCA 1712

Federal Court of Australia|2020-11-27|Before: Abraham J

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Source facts

Court

Federal Court of Australia

Decision date

2020-11-27

Before

Abraham J

Catchwords

BANKRUPTCY - appeal of decision refusing an application for an annulment of the decision of the Registrar to grant a sequestration order - appeal dismissed

Source

Original judgment source is linked above.

Catchwords

BANKRUPTCY - appeal of decision refusing an application for an annulment of the decision of the Registrar to grant a sequestration order - appeal dismissed

Judgment (15 paragraphs)

[1]

The appeal filed on 30 January 2020 be dismissed.
The respondent's costs of and incidental to the appeal are to be taxed and paid from the estate of the appellant in accordance with the Bankruptcy Act 1996 (Cth). Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

[2]

ABRAHAM J: 1 This is an appeal from a decision of the Federal Circuit Court on 12 December 2019 which dismissed the appellant's application for review of a decision by District Registrar Wall on 5 June 2018 to make a sequestration order against the estate. As explained by the primary judge, an extension of time would have been required for that application which he was not minded to give, but rather on 16 October 2019, after hearing from the parties the primary judge ordered that the application be treated as an application for annulment under s 153B of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act): Palms (Chullora) Pty Ltd v Cummins [2019] FCCA 3683 at [10]-[11]. 2 The appellant was unrepresented in these proceedings, as before the Federal Circuit Court. 3 The issues for the primary judge in considering that annulment application were: first, satisfaction that the sequestration order should not have been made; and second, if the order should not have been made, should the Court exercise its discretion to annul the bankruptcy. The primary judge found that the material available to the Registrar supported the making of a sequestration order. Although the discretion to annul a sequestration order is only enlivened if the Court is satisfied that an order should not have been made, the primary judge concluded that if it had arisen, he would not have exercised it in the circumstances of this case. 4 For the reasons below the appeal filed on 30 January 2020 is dismissed.

[4]

Primary judgment 8 As noted above, the primary judge ordered the application be treated as an application for annulment of the bankruptcy, in a context where the appellant required an extension of time to bring the review application. This occurred on 16 October 2019. The primary judge explained in his later reasons, that he did so after hearing the appellant and that he had taken into account that he was unrepresented and contested "not just the making of the sequestration order by the Registrar, but also the entire process leading to that order and the underlying debt. He made serious allegations from the bar table and I decided that he should be given the opportunity to ventilate those allegations by evidence at a hearing": at [11]. 9 The matter was listed for hearing on 12 December 2019. The primary judge made orders on the day of the hearing, and provided written reasons shortly thereafter. 10 The primary judge detailed the written material relied on by the appellant which took the form of a number of affidavits (partly typed and partly handwritten), and stated at [12] that: [t]hey [the affidavits] are somewhat hard to follow but, as explained by Mr Cummins from the bar table, they were intended to support the proposition that the costs order in the NSW Supreme Court proceedings should never have been made, was not properly assessed, that the bankruptcy notice was not properly served upon him and that serious wrongdoing vitiated the sequestration order. 11 The primary judge also noted that the appellant provided two documents which he marked for identification; MFI A1 being a claim by the appellant for $125 million apparently alleging wrongdoing by court staff in relation to the records of the Supreme Court and MFI A2 appeared to be the original application for assessment of ordered costs taken from the Supreme Court file: at [13]. The primary judge detailed that he granted leave to Palms to rely upon two affidavits filed on 28 November 2019; first an affidavit by Palms' solicitor who deposed as to the background facts and; second, the affidavit of the trustee which provided a report on the administration of the bankrupt estate. The primary judge stated that he took into account that trustee's report in deciding to make the orders on 12 December 2019 and to reserve his reasons. The parties made oral submissions. 12 The primary judge identified the issues to be determined. As noted above he concluded that the appellant did not persuade him that the sequestration order should not have been made. He stated at [17]: …[t]he material available to the Registrar plainly supported the making of a sequestration order and, because of Mr Cummins' failure to participate in any active way in the bankruptcy proceeding, there were no countervailing factors for the Registrar to consider. Although Mr Cummins now alleges wrongdoing at all stages commencing with the initial costs order in the NSW Supreme Court, his allegations are wholly subjective and wholly unpersuasive. The evidence of Mr Manca [Palms solicitor] supports the regularity of the various processes leading ultimately to the sequestration order. I accept that evidence. 13 As noted above, the primary judge also concluded that even if he were wrong the available information weighed heavily against an annulment of the bankruptcy. The primary judge concluded at [18]: …In that regard, I accept the evidence of the trustee relating to his administration of the bankrupt estate. The administration of the bankrupt estate has been active and significant costs have been incurred. There is no proposal before the Court for the payment of the trustee's costs and expenses. Mr Cummins has been uncooperative with the trustee, initially in relation to his statement of affairs and his taxation affairs and more recently in relation to the real estate over which the trustee has finally gained vacant possession.

[5]

The appellant's material 14 The Notice of Appeal filed in this Court on 30 January 2020 alleges as the grounds "denial of natural justice - error in facts of the matter/ a conflict of interest". 15 The appellant filed a number of affidavits, one dated 2 June 2020 comprising 141 pages (including annexures), one dated 3 July 2020 (which annexed email correspondence between the appellant, Officeworks and Australia Post and was said to evidence service of the notice of appeal in these proceedings), and one dated 24 August 2020 (which was said in the case management hearing on 25 August 2020 not to be a response to any submission by the respondent but "just information" he had been "building up over time"). 16 The appellant filed submissions, annexed to an affidavit dated 8 July 2020 which comprised 21 pages (including annexures). This purported to identify, amongst other things, what the appellant alleged to be a large number of errors, although they appear to be more accurately described in some instances as complaints about the entire series of events which led to the bankruptcy order. The content of many of the alleged errors are overlapping. It is assumed these are the grounds relied on, although I note that the document contains a number of matters not relevant to this hearing. The appellant also filed a document on 15 September 2020 purporting to be reply submissions to the respondent's submissions, although in many respects it does not reply to the submissions but reiterates his complaints and makes further assertions. Further on 15 October 2020, without leave, the appellant filed a further affidavit, which comprised 20 pages (including annexures) and was replete with repetition. 17 During the course of the hearing the appellant referred to what he described as a 5 page document which he was using during the course of his oral argument, and requested that he be able to provide that document to the Court. I gave him leave to do so and made orders accordingly. 18 During the hearing the appellant also asserted that there were 9 "filings" in the Federal Circuit Court which he did not have, and although the respondent contended that the appellant had that material, they agreed to provide the material to the appellant and I made orders permitting the appellant to file supplementary submissions of no more than five pages addressing that material. The appellant filed an affidavit annexing a further six pages of submissions on 27 October 2020. The respondent filed submissions in reply on 29 October 2020. 19 Following the Court's receipt of that material the appellant sought to file a further affidavit on 3 November 2020, annexing a further 9 pages of submissions. Judgment was reserved and the appellant did not have leave to file those further submissions, and as such that material has not been considered: Carr v Finance Corporation of Australia Ltd (No 1) [1981] HCA 20; (1981) 147 CLR 246 at 258; BPL20 v Minister for Home Affairs [2020] FCA 1207 at [43]. On 11 November 2020 the appellant was advised by an email from the Registry that as judgment was reserved, and he did not have leave to file further material, that material would not be received. Despite that the appellant nevertheless attempted to file a further affidavit on 24 and 25 November 2020 annexing a further 24 pages of submissions. For the same reason, that submission has not been considered.

[6]

Preliminary observations 20 There are two matters as to the appellant's conduct of this matter which it is appropriate to note at the outset. 21 First, the appellant's approach to the conduct of these proceedings is reflected in his assertion made at the case management hearing on 25 August 2020, where the appellant claimed that he had never received the respondent's submissions. The respondent stated that they had been served by post and by email, and that further copies of the submissions were served on the appellant at the address for service by express post and that confirmation had been received that it had been delivered to the correct address. Despite the initial denial of receiving the submissions, even on the appellant's version it became apparent that he ultimately accepted they had been served at his address but he said he was not there, that his parents had the document and that they had not yet sent it to him. The appellant denied receiving emails, although he also then asserted that he does not know how to use his phone and that he accidently deletes emails. The appellant repeatedly asserted that the submissions had not been personally served on him and that "I wasn't even notified that I had to read it". The appellant's explanations as to the service of the submissions were inconsistent. Although the submissions had been served, I nonetheless made orders for the Registry to serve another copy and the appellant was given further time to respond. The appellant's preparedness to make an allegation that he had not been served with the submissions when he had, appears to reflect his approach to this matter. 22 Second, as noted above, the appellant claimed he had not been served with 9 "filings" which appear to be 8 affidavits filed in the Federal Circuit Court between 13 April 2018 and 5 June 2018. These are affidavits relating to the service of documents, debt and search of the National Personal Insolvency Index. This documentation needed to be filed as a result of adjournments to the hearing of the creditor's petition, including by reason of the difficulty in service of documents on the appellant. As explained below, substituted service was ordered, and the documents, which formed the basis of the orders made, were served on the appellant by a number of means. Documents were re-lodged on occasions as a result of orders from the Registrar. 23 As the respondent correctly observed, that assertion that the appellant had not received the particular affidavits is inconsistent with the evidence, including the appellant's own affidavits and submissions he filed on the appeal. To give two examples; first, the appellant contended he had not seen the affidavit of debt filed by Ms Sheehan, he asserted during the hearing that he had never read that affidavit, and did not know it existed. However in his affidavit dated 15 September 2020 the appellant wrote, inter alia, the "[a]ffidavit of debt sworn by M Sheehan actually never stated a "date" something actually happened, so as no date exists an action stated by her does not exist". It follows that the appellant had the affidavit. The second example relates to all the affidavits he claimed to have been unaware of. The appellant's affidavit of 2 June 2020 complained that petitions had been withdrawn, changed and material added, and that affidavits in support of the changes were not resworn. The plain inference is that those references in the appellant's affidavit are to these affidavits. Moreover, the appellant's alleged errors (appeal grounds) include inter alia, an allegation that the petitions were changing "on a continual basis unlawfully". This also could only be referring to the documents addressed by these affidavits. In any event, as explained below, the evidence before the primary judge established that prior to the sequestration order being made by the Registrar, the appellant had been served with the material required by the Bankruptcy Act.

[9]

Criticism of the primary judge 29 Commencing with the appellant's complaints in respect to the primary judge, which appear to be reflected in the original notice of appeal and expanded upon in the subsequent submissions, those complaints are not established. 30 First, the appellant's contention that the primary judge was biased because he did not grant him an extension of time is entirely misplaced. As noted above, the appellant's application was significantly out of time, and although the primary judge concluded he was likely to refuse the extension of time, he ordered the hearing be one for the annulment of the orders. This provided the appellant with a further opportunity to argue his case. In the circumstances, that was a position favourable to the appellant. It provides no proper basis for an allegation of actual or apprehended bias on the part of the primary judge. 31 Second, the complaint that as the primary judge said he knew counsel who appeared for the appellant in the Supreme Court that gave rise to a conflict of interest is without foundation. The submission was put on the basis that as soon as the primary judge knew of counsel's identity he "should have excused himself" from the matter. No proper basis has been provided to establish that a "fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide": Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488 at [11] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ, affirmed in Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337. 32 Third, as to the submission by the appellant that the primary judge failed to explain his reasons for dismissing his application, it should be recognised that in providing reasons it is not necessary to address each and every of the matters relied on. Although the reasons were succinct, they cogently explained the primary judge's conclusion. The material before the Registrar clearly established the procedural requirements for the sequestration order. The primary judge's conclusion at [17], recited above is correct. The appellant's criticisms of the findings have no proper foundation. That the appellant disagrees with the conclusion does not establish such a foundation. As noted above, the primary judge concluded that the appellant, "alleges wrongdoing at all stages commencing with the initial costs order in the Supreme Court, his allegations are wholly subjective and wholly unpersuasive". A consideration of the material reflects that was a conclusion plainly open to him. Contrary to the appellant's contention, in the circumstances of this case, it was unnecessary for the primary judge to recite each of the many allegations made by the appellant. The primary judge expressed his conclusion on the allegations that were advanced in argument by the appellant. A consideration of the material reflects that was also a conclusion open to him. The appellant's allegations were without substance. Nor was it necessary to go through each page of the documents with the appellant to have him comment on them. There is no proper basis to assert, as the appellant did, that the primary judge had not read or considered the material. 33 Fourth, the appellant's submission that the trustee report was "illegal" because it was filed slightly out of time, is incorrect. The Court granted the now respondent leave to rely upon the report. It is a recital by the trustee of material facts as to his experience in the administration of the estate. The appellant has not identified any prejudice by the report being filed and served slightly outside of the date originally directed by the Court below. The appellant has not identified any submission he would have made but did not, because of the timing of the report. The appellant's submission that the report was irrelevant cannot be accepted. Although it addressed the administration of the estate, it at least was relevant to the issue of the discretion if the appellant had satisfied the primary judge that the sequestration order ought not to have been made. 34 Fifth, the criticism that the primary judge used the phrase "if I am wrong", and then also decided the discretionary aspect of the argument, has no proper basis. The appellant's submission that this means "there is a real reason he may be wrong" is incorrect. The primary judge's approach was a conventional one. 35 It is not necessary to address the miscellany of other criticisms interspersed throughout the submissions. The above appear to be the principal issues raised. Suffice to say, any remaining criticisms are also not established. 36 It follows that the grounds relating to criticisms of the primary judge are not made out.

[10]

Technical issues 37 A strong theme throughout the appellant's submissions was a complaint that documents were not served on him, which appears to extend to all documents at all stages of the proceedings. 38 First, as an example, the appellant claimed that he was not served with the bankruptcy notice. The evidence before the Registrar, and before the primary judge plainly establishes the notice was served within the meaning of the Bankruptcy Act. The method of service used was a valid method of service pursuant to cl 4.02A and 16.01 of the Bankruptcy Regulations 1996 (Cth). The appellant's explanation, which appears to include that the notice was stolen from his mailbox, is fanciful. 39 Second, the appellant's submission that the petition was not served on him, or there is no evidence that they were served, is also incorrect. The petition was served in accordance with the orders of the Court, and the affidavit evidence filed established that. It required obtaining an order for substituted service as attempts to serve the appellant personally were being frustrated. The orders dispensed with personal service and specified the means by which the petition must be served. The evidence established that the petition was served by multiple methods including by post, email and SMS. The appellant's submission that substituted service still requires personal service is incorrect. Indeed, the appellant's submissions that documents had not been served on him were based, at least in some instances, on a misunderstanding of the requirements for the service of documents. 40 Third, the appellant's claim that the date of bankruptcy was changed and that the date of bankruptcy cannot now be established, does not advance his case. The date recorded in the petition on which the sequestration order was made is 4 October 2017, when the date of the act of bankruptcy was 3 October 2017, the bankruptcy notice having been served on 12 September 2017: s 40(g) of the Bankruptcy Act. The date in the petition does not affect the merit of the application for sequestration, or the correctness of the decision of the Registrar or the primary judge. 41 Fourth, although the appellant made many submissions in relation to the affidavits referred to above at [22]-[23], those affidavits related to documents which had been filed as a result of adjournments which occurred in the hearing of the creditor's petition, including by reason of the difficulty in service of the documents on the appellant. There was no irregularity in that process. Documents were in fact re-lodged on occasions as a result of orders from the Registrar. 42 Fifth, the evidence also established that the appellant was informed, by various methods, of the date of the hearing of the creditor's petition on 5 June 2018, although he failed to attend. It followed that the appellant did not put a case before the Registrar. The evidence also established that the appellant had been notified of the earlier hearing dates by those methods. The appellant failed to attend on any occasion. 43 Sixth, the technical steps involved in making the order were established. Before the Registrar, pursuant to s 52 of the Bankruptcy Act, it was necessary for him to be satisfied that there was proof as to: (1) the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient); (2) the service of the petition; and, (3) the fact that the debt on which the creditor relies is still owing, in order to be able to make a sequestration order against the estate of the appellant. The affidavit material before the Registrar established each of those matters and there is no reason why the order should not have been made. It was open to the primary judge, on the material before him, to conclude that the regularity of the sequestration order was established. On the material, he correctly so concluded. 44 As the primary judge observed, the appellant failed to actively participate in the proceedings in relation to the making of the sequestration order. The appellant's contention that that finding was an error because he had not been served with the documents, is plainly incorrect. The evidence established that the appellant had been served with the proceedings. The appellant's contentions to the contrary were correctly rejected by the primary judge. On the evidence before the primary judge that finding was plainly correct. 45 It follows that the grounds relating to technical issues advanced by the appellant are not established.

Cummins v Palms

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