Dubow v Fitness First Australia Pty Ltd

Judgment 1ALLSOP P: On 15 May 2012, Ms Dubow filed a summons seeking leave to appeal from orders made by a judge of the Common Law Division (Garling J) on 27 February 2012. 2On 20 March 2012, Ms Dubow was made bankrupt (on her own petition) by an order of the Federal Magistrates Court. The Official Trustee became trustee of her estate. On 26 April 2012, Mr Andrew Barden, a registered trustee, replaced the Official Trustee as Ms Dubow's bankruptcy trustee. I will come to the conduct of the bankruptcy presently. 3The respondent to the summons, Fitness First Australia Pty Ltd ("FFA") has moved the Court for the dismissal of the application for leave to appeal. 4A little history is necessary. It is taken from the reasons of Garling J. 5In July 2004, Ms Dubow commenced proceedings in the General Division of the Consumer, Trader & Tenancy Tribunal (the "CTTT") against FFA. She later withdrew the claim. The CTTT made a costs order on 5 May 2005. Since then the parties have been in dispute about the costs order. Four matters were commenced in the Supreme Court (two by Ms Dubow and two by FFA). Garling J dealt with all four. 6The first proceedings brought by Ms Dubow sought to appeal against the CTTT's costs order. Garling J describes these proceedings in [10]-[17] of his reasons. In these proceedings, on 24 August 2007, RS Hulme J set aside the CTTT's orders for costs and remitted the matter to the CTTT: Dubow v Fitness First Australia Pty Ltd [2007] NSWSC 935. On 5 December 2007 and 8 February 2008, RS Hulme J published a judgment making relevant orders: Dubow v Fitness First Australia Pty Ltd [2007] NSWSC 1390. The costs orders that RS Hulme J made on 8 February 2008 were referred to by Garling J at [16]. They gave some costs to each party and were stayed, though allowing assessment. 7Ms Dubow sought to have the costs assessed. On 9 November 2010, a costs assessor issued a Certificate of Determination of Costs for $28,127.48 payable by FFA. The costs of the assessment were $3,398.16. 8On Ms Dubow's application, on 16 December 2010, the Local Court entered judgment in favour of Ms Dubow against FFA for $31,603.64. 9Shortly before this, however, the parties had been negotiating a settlement. A deed of release was entered into on 5 November 2010, which purported to resolve all issues between the parties. 10The later attempts by Ms Dubow to enforce the Local Court judgment have spawned the four proceedings in the Supreme Court. 11In February 2011, Ms Dubow filed a summons (2011/39995) seeking to appeal from the decisions of Magistrate Townsend to set aside the December orders and to dismiss the proceedings in the Local Court, with costs of $1,000 ordered against Ms Dubow. Those decisions were challenged before Garling J. 12In February 2011, Ms Dubow sought to file the costs certification in the Supreme Court. The proceedings were given the number 2011/39253. Judgment was entered against FFA. Ms Dubow then in February 2011 sought a garnishee order against the National Australia Bank on the basis of the judgment. In March 2011, FFA sought an order from Adams J restraining Ms Dubow from seeking to enforce the February 2011 judgment debt. Adams J stayed execution of the judgment. 13In May 2011, FFA sought leave to appeal against the determination of the Costs Assessor on the basis of the deed of release. The proceedings were numbered 2011/152563. 14In June 2011, FFA filed a summons (2011/211563) seeking relief under the Supreme Court Act 1970 (NSW), s 69, quashing the Costs Determination of the Costs Assessor and other relief seeking to enforce the deed of release. 15All four matters came before Garling J. After a detailed judgment his Honour made orders. 16In 2011/39995, Ms Dubow's appeal against Magistrate Townsend's orders was dismissed with costs. 17In 2011/39253, Ms Dubow's attempts to file the costs certificates in the Supreme Court were rejected. The judgment against FFA was set aside and Ms Dubow was restrained from proceeding on the certificates. She was ordered to pay the costs of FFA. 18In 2011/152563, FFA obtained orders substantially in accordance with those asked. Ms Dubow was ordered to pay costs. 19In 2011/211563, FFA obtained orders substantially in accordance with those asked. Ms Dubow was ordered to pay costs. 20Against all of those orders Ms Dubow filed a notice of intention to appeal prior to her being made bankrupt. 21The application for leave to appeal was filed after she was made bankrupt. 22I should add at this point that in June 2011 Ms Dubow served a statutory demand on FFA. Ward J set aside the demand and ordered Ms Dubow to pay costs on an indemnity basis. An application for leave to appeal was dismissed with costs. 23The application for leave was not served by Ms Dubow. At a directions hearing before me, Ms Dubow was informed that FFA would be notified of the matter by the Court. Upon that happening, FFA filed an appearance. 24Ms Dubow has informed the Court that she is seeking to have her bankruptcy annulled. 25FFA presses to have the application for leave to appeal dismissed. 26On 14 May 2012, FFA was informed by the registered trustee that he had elected to discontinue various legal proceedings including the four to which I have referred. 27On 29 June 2012, the registered trustee sent an email to the Registrar of the Court of Appeal which stated the following: "As you may be aware, Ms Yolande Victoria Frances Dubow was declared Bankrupt on 20 March 2012 following the acceptance of Ms Dubow's Debtor's Petition by the Insolvency and Trustee Service Australia ('ITSA'). The Official Trustee became the Trustee. Pursuant to Section 181A of the Bankruptcy Act 1966 ('the Act'), the Official Trustee nominated me to replace it as the Trustee of this estate and as no creditor objected, I was appointed as the Trustee of the Bankrupt Estate on 26 April 2012. As you may be aware, pursuant to Section 60(2) of the Act, a legal action commenced by a person who subsequently becomes bankrupt is, upon his or her becoming bankrupt, stayed until the Trustee makes an election, in writing, to prosecute or discontinue the action. Furthermore, pursuant to Section 60(3) of the Act, if the Trustee does not make such an election within 28 days after notice of the action is served upon him or her by a defendant or other party to the action, he or she shall be deemed to have abandoned the action. On 14 May 2012, I caused a letter to be produced whereby I elected to discontinue and/or not defend various legal matters involving the bankrupt, including 2011/211/563, 2011/39995, 2011/39253 and 2011/1582563 [sic: read 2011/152563] which are subject to this Leave of Appeal. Attached hereto is a copy of the said letter. Even though the bankrupt may have filed a Notice of Intention to Appeal on 2 March 2012, prior to her bankruptcy, subject to her becoming bankrupt on 20 March 2012, I am of the opinion that she had no authority to file the Leave to Appeal dated 8 May 2012. Based on the foregoing, I request that this honourable Court consider whether or not the Leave to Appeal can continue." 28On 31 August 2012, I provided the parties with an opportunity to put written submissions as to why the notice of motion should be dealt with prior to the annulment application being decided and any further submissions on the motion for dismissal. 29It is plain that all four proceedings concern the estate of Ms Dubow. Under the Bankruptcy Act 1966 (Cth), s 58(1), any right to appeal or seek leave to appeal vested in, or devolved on, the trustee. Thus, only Ms Dubow's trustee has standing to bring the application: Samootin v Shea [2010] NSWCA 371 at [62]-[107]. 30Ms Dubow seeks to contest the validity of decisions and elections made by the trustee. Objection is also taken to aspects of the proceedings in the Federal Magistrates Court. The former matters are undoubtedly "jurisdiction in bankruptcy" in respect of which this Court has no jurisdiction: Bankruptcy Act, s 27. Nor does this Court have any jurisdiction to correct error on the part of the Federal Magistrates Court. 31Ms Dubow had no standing to commence the application for leave to appeal and has no standing to continue it. 32The summons for leave to appeal should be dismissed with costs. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 October 2012