Cummins v Palms

Factual background 5 The appellant's bankruptcy had its genesis in 2016 when the appellant lodged a caveat over certain real estate at Chullora, NSW owned by the petitioning creditor, Palms (Chullora) Pty Ltd (Palms). I note that the primary judge mistakenly referred to the real estate as being at Oakhurst NSW, but it is plain that the mistake is of no moment to his reasons or the orders made. The appellant sought to extend the caveat in proceedings in the NSW Supreme Court (Supreme Court), the outcome of which included a costs order against him. Palms applied for assessment of those costs and a certificate was issued on 7 July 2017. The certificate was filed in the Local Court Sydney Civil Registry and judgment was entered in favour of Palms on 19 July 2017. 6 The appellant failed to pay the judgment debt, a bankruptcy notice was served upon him, and Palms commenced these bankruptcy proceedings. The appellant did not take any active steps in the bankruptcy proceedings and on 5 June 2018, in his absence, the Registrar made a sequestration and other orders. 7 Later, in the administration of the bankrupt estate the trustee obtained orders for possession of real estate at 12 Wraysbury Place, Oakhurst in New South Wales (the Oakhurst property) and the Oakhurst property, which was owned by the appellant, was vested in the trustee upon the bankruptcy. On 9 July 2019, a notice to vacate the property was issued by the NSW Sheriff to the appellant. Although the appellant obtained a temporary stay, that application was ultimately dismissed on 3 September 2019. Shortly thereafter the appellant filed the application for review which was before the primary judge. The trustee took possession of the Oakhurst property the following day.

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.

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.

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.

Extension of time 24 The respondent submitted that the appellant required an extension of time as the appeal was filed outside the 28 day period contemplated by r 36.03(a)(i) of the Federal Court Rules 2011 (Cth) (Federal Court Rules). The appellant contended that he was not out of time because holiday periods do not count. The respondent's submission fails to have regard to r 1.61 of the Federal Court Rules. Although the appeal was not filed until 30 January 2020, in circumstances where the orders were pronounced on 12 December 2020, r 1.61(5) applies which provides that "[i]f the time fixed [by the Rules for doing an act] includes a day in the period starting on 24 December in a year and ending on 14 January in the next year, the day is not to be counted". This rule "suspends the running of time from 24 December to 14 January": Culleton v Balwyn Nominees [2017] FCAFC 8; (2017) 343 ALR 632 at [10]. Accordingly, taking r 1.61(5) into account, it appears that the appellant filed one day within the expiration of the appeal period, and an extension of time is not required.

Consideration 25 Even allowing for the difficulties faced by an unrepresented appellant, all the documents filed by the appellant were extensive, at times unrelated to the issues in these proceedings and filed in breach of the Court rules and orders made, as to the content, form and time of filing of the documentation. Aspects of the submissions put are difficult to discern, and contain inter alia, allegations of wrongdoing at every stage of the bankruptcy process, and in effect assert that there have been breaches of various laws including criminal conduct by all involved in the process. The documents also include many matters of which the appellant complains but which have no relevance to these proceedings. The appellant's oral submissions were in the same vein. 26 The appellant has not identified or established any error in the conclusions of the primary judge, nor the orders made. The conclusions were open, and on the material before him, correct. The primary judge was entitled to accept the evidence he did. 27 For the purposes of responding to the submissions, the respondent grouped what appear to be the appellant's complaints, as follows: technical issues as to the sequestration order; the Supreme Court proceedings in relation to the extension of caveat proceedings; the Supreme Court costs assessment process; the possession of the Oakhurst property; s 116(2)(g) of the Bankruptcy Act; and, personal criticisms of the primary judge. 28 The grounds are addressed below by reference to those groups, which as best can be ascertained, do reflect the appellant's written and oral submissions.

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.

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.

Supreme Court proceedings and costs assessment 46 The appellant complains about a number of aspects of the caveat proceedings, which gave rise to the underlying costs judgment. 47 First, the appellant's complaint about the Supreme Court proceedings appears to be directed at his own counsel. It is plain that the caveat proceeding which had been instituted by the appellant were dismissed by consent. The costs order were also made by consent. They were the inevitable consequence of the proceedings being dismissed. Moreover, in any event, any complaint about his own counsel does not affect the legitimacy of the orders made. 48 Second, there again appears to be complaints by the appellant that documents were not served. In so far as the appellant complains that there was no notice of motion in relation to the costs order served on him in advance of the hearing again, the evidence is that the order was by consent. In so far as the appellant claims he was not properly served with the application for costs assessment, the evidence establishes that he participated in the costs assessment process and made submissions to the costs assessor. 49 Third, the appellant's complaint that the costs assessor lacked jurisdiction, is without merit: Division 3 of Part 7 of the Legal Profession Uniform Law Application Act 2014 (NSW). The costs assessment certificate having been issued, the respondent caused it to be filed as a judgment of the NSW Local Court. 50 Finally, nothing in the matter suggests that there was anything irregular in the process of obtaining the costs order or the costs assessment. The appellant has not established otherwise. 51 The grounds relating to the Supreme Court proceedings and the costs assessment have not been made out.

12 Wraysbury Place Oakhurst 52 A number of allegations were made by the appellant in relation to the seizure of the Oakhurst property. On the material provided the appellant has not established that there is a proper basis to contend that the seizure of the Oakhurst property and possession being obtained by the trustee, was anything other than appropriate, executed properly and in accordance with valid orders of a Court of competent jurisdiction. It follows that this ground lacks merit.

Section 116 of the Bankruptcy Act 53 The appellant contended that the Oakhurst property is not available to the trustee for the purposes of dividing the estate among the creditors because the mortgage repayments, renovations and improvements to the Oakhurst property were apparently paid for as a result of money received by the appellant for personal injury. The appellant has not identified any evidence below that he received any money for any personal injury, or if so, how much. This provision is irrelevant to these proceedings. 54 The appellant in oral submissions went further and submitted that the bankruptcy notice was invalid because, pursuant to s 116 of the Bankruptcy Act, a bankruptcy notice cannot be served if the person has no assets. This is incorrect. Section 116 of the Bankruptcy Act does not affect the validity of the notice, which is dependent on the existence of a debt. 55 In any event, as the respondent submitted, even if the appellant could establish this, it does not affect the question as to whether or not a sequestration order ought to have been made by the Registrar on 5 June 2018. Although it may be a relevant matter for the trustee in the administration of the estate, having regard to s 116(4) of the Bankruptcy Act, it is not however material to this appeal. The appellant's reliance on s 116 of the Bankruptcy Act is misplaced and the ground has not been made out.

Discretion 56 The primary judge concluded in the alternative, that even if he had concluded that the sequestration order had not been appropriately made the available information weighed heavily against the annulment. The appellant did not address any submission at this finding. It was one plainly open on the material before the primary judge. As I have noted above at [34] the primary judge's approach was a conventional one.

Conclusion 57 The appellant has not established any of the grounds of appeal. In those circumstances the appeal is dismissed. 58 The appellant has been wholly unsuccessful on appeal and there is no reason why costs should not follow the event. I am satisfied that there should be an order to the effect that costs be paid from the appellant's estate in accordance with the Bankruptcy Act 1966 (Cth). I certify that the preceding fifty-eight (58) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Abraham.