Dunkerley v Comcare

The judgment under appeal 5 Before the primary judge, the appellant contended that she did not owe the debt alleged in the bankruptcy notice because the respondent committed fraud and breached its model litigant obligations, its counsel engaged in professional misconduct, and the judges of the Court who dealt with the three proceedings culminating in the costs orders failed to comply with the relevant Rules, made the costs orders against her without evidence, and the bankruptcy notice was an abuse of process. 6 In short, the primary judge held that the appellant had failed to establish any sufficient basis for the Court to go behind the judgments which resulted in the costs orders forming the basis of the bankruptcy notice, and had not made good her serious allegations of abuse of process, fraud, and other misconduct by the respondent. His Honour expressed the view that, in effect, the appellant's submissions were no more than an attempt to re-litigate the same issues of fact and law that had been considered and rejected in the previous proceedings. 7 Aspects of his Honour's reasons are discussed more fully below.

The notice of appeal 8 It is common ground that, despite the statement in the notice of appeal that the appellant needs leave to appeal, no such leave is required. 9 The notice of appeal contains the following contentions said to establish error on the part of the primary judge: (1) The primary judge erred in failing to find that Flick J failed to carry out a full investigation as required by s 52(1) of the Bankruptcy Act 1966 (Cth) (Grounds 2 and 21). (2) The primary judge erred in failing to find that Flick J allowed an application for an interlocutory hearing "in breach of 16 12.1 (sic) of the Central Practice Note, which states that '[i]interlocutory hearings should be kept to a minimum'" and "the appellant suffered a detriment when Flick J failed to take case management procedural steps to avoid an interlocutory hearing which resulted in the loss of an opportunity to make representation at a Full Court Hearing" (Grounds 3, 4, 5, 6 and 21). (3) The primary judge erred in finding that no prima facie case of fraud was made out in the handling of the matter by Flick J (Grounds 3, 7, 8, 9, 10, 11, 12, 13, 14, 15 and 21) because: (a) although the parties agreed to an extension of time until 21 August 2015 for the submission of an appeal book, the respondent filed an interlocutory application on 3 August 2015 seeking that the proceeding be dismissed for the reason that the appellant had not provided an explanation for her non-compliance with the order concerning the service of the appeal book; (b) the respondent, a model litigant, deliberately misled the Court when it sought a dismissal of the appeal primarily by reason of the absence of an explanation from the appellant for non-compliance with the Court order; (c) the respondent breached its statutory duty to the Court by failing to disclose to the Court that the parties had agreed to an extension to the date for submission of an appeal book; (d) the respondent deliberately breached case management rules and its agreement with the appellant when it filed its interlocutory application seeking dismissal of the appellant's appeal; (e) the primary judge erred in failing to find that Flick J erred in allowing the interlocutory application prior to the agreed date for submission of the appeal book and wrongly denied the appellant's right to submit an appeal book. (4) The primary judge erred in failing to find that Flick J erred: (a) in dismissing the appeal primarily by reason of the absence of an explanation provided by the appellant as to her reasons for non-compliance and the absence of any merit in the appeal itself when, having regard to the parties' agreement, she was in fact compliant; and (b) in finding that there was no merit in the appeal without evidence, given no appeal book was allowed at the hearing (Grounds 16, 17, 18 and 19). 10 The appellant referred to Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28; 261 CLR 132, Simon v Vincent J O'Gorman Pty Ltd [1979] FCA 75; (1979) 27 ALR 619, Corney v Brien [1951] HCA 31; (1951) 84 CLR 343 and HWY Rent Pty Ltd v HWY Rentals (in liq)(No 2) [2014] FCA 449. 11 As outlined in her written submissions filed on 2 December 2019, the appellant sought the following orders (as written): 1. The appeal be allowed with costs. 2. All cost orders (Perram, Flick and Rares) be dismissed, and the respondent to pay the costs of the appellant. 3. The respondent be required to reimburse the appellant an amount equivalent to that sought by the respondent through the cost orders. 4. Remit the matter to Comcare for determination pursuant to ss 16 and 19, and Part Three of the SRC Act pursuant to the AAT Decision dated 19 June 2009.

The appellant's submissions in summary 12 The appellant submitted that the appeal raised the following issues: (1) whether a court in bankruptcy exercising its jurisdiction under s 52 of the Bankruptcy Act can or should go behind the judgment after an uncontested interlocutory hearing where alleged fraud and miscarriage of justice is made out; (2) whether a court exercising its jurisdiction under r 17.01 of the Rules can or should issue final orders in an ongoing case, or whether it is restricted to the making of interlocutory, interim or procedural orders; (3) whether a court in bankruptcy exercising its jurisdiction under s 52 of the Bankruptcy Act can or should go behind the judgment if the judgment debtor adduces evidence which shows that there is "substantial reason to believe" that the debt is not owed; (4) whether a breach of the model litigant obligation has no consequences in terms of civil litigation; and (5) whether, under s 14 of the SRC Act, a second decision can be "applied" to a compensable injury to "cease liability". 13 The appellant submitted that there was no fully contested hearing before Flick J on the issue of the debtor's liability and that "Flick J erred in finding that he could establish satisfactory proof of the debt as required by s52 of the Bankruptcy Act given the total absence of evidence, and that he had authority to deny a Full Court Hearing which could have established satisfactory proof of no debt owed." Further, the appellant submitted "[the primary judge] erred in finding that the judgment of Flick J satisfied the level of proof mandated by s 52 of the Bankruptcy Act." 14 The appellant submitted that there had been a miscarriage of justice because what had occurred was inconsistent with the statement in the Central Practice Note that interlocutory hearings should be kept to a minimum and most interlocutory disputes could be avoided or resolved through proper dialogue between the parties and their legal representatives. The appellant submitted that Flick J failed to take case management procedural steps to avoid an interlocutory hearing which resulted in the loss of an opportunity to make representations at a Full Court hearing. 15 The appellant next made submissions under the heading "Fraud". The appellant referred to the letter to the appellant from the respondent's legal representatives dated 29 July 2015 and submitted that the parties had thereby agreed to an extension date of 21 August 2015 for the submission of an appeal book, yet the respondent filed an interlocutory application on 3 August 2015 that the proceeding be dismissed for the reason that the appellant had not provided an explanation for her non-compliance in submitting an appeal book. The appellant submitted that when the respondent's interlocutory application was filed she was compliant with the agreement reached by both parties in good faith that the appeal book be submitted by 21 August 2015 and that the respondent misled the Court when it sought a dismissal of the appeal primarily by reason of the absence of an explanation from her as to her reasons for non-compliance. The appellant submitted that the respondent breached its statutory duty to the Court, case management rules and its agreement with the appellant made in good faith, when it filed the interlocutory application and that Flick J erred in allowing the interlocutory application prior to 21 August 2015, the agreed date for submission of the appeal book. For these reasons, she contended that the primary judge erred in finding no prima facie case of miscarriage of justice or fraud was made out in the handling of the matter by Flick J. 16 The appellant further submitted that the rights of the parties could not be considered on an interlocutory application. She cited Cotton LJ in Gilbert v Endean (1878) 9 Ch D 259 at 268. The appellant argued that it was not open to Flick J to make an order to deny her a Full Court hearing or to make an order which failed to satisfy the purpose and nature of an interlocutory injunction, namely, to preserve the subject matter of the dispute and to maintain the status quo pending the determination of the parties' rights. She referred to Waikato (Pty) Ltd v Kaplan [2002] VSC 310 at [33] per Gillard J. She submitted that the primary judge erred in finding that an interlocutory order could not be appealed and that Flick J could make an order which failed to satisfy the purpose, and nature, of an interlocutory injunction. 17 The appellant also submitted that the primary judge erred by approaching the case on the basis that a court in bankruptcy cannot or should not "go behind a judgment after an uncontested hearing without full investigation where the judgment debtor adduces evidence which shows that there is substantial reason to believe that no debt is owed." The appellant cited Ahern v Deputy Commissioner of Taxation (Qld) [1987] FCA 312; 76 ALR 137 at 147-148 for the proposition that, even where the judgment was obtained following a hearing on the merits where both parties appeared, if there were substantial reasons for questioning whether behind the judgment there was in truth and reality a debt due to the petitioning creditor, the court will go behind the judgment and inquire into the consideration for it. She noted that occasions amounting to such "appropriate circumstances" include where there are circumstances tending to show fraud, collusion or miscarriage of justice, or that the compromise was not a fair and reasonable one: Wren v Mahony [1972] HCA 5; 126 CLR 212 at 221-225. 18 The appellant submitted that, if Flick J had allowed a Full Court hearing, it might have led to a costs order against the respondent as a losing party in the litigation, had it examined Perram J's finding "that a second s 14 can be applied to cease liability for a compensable injury:" Dunkerley v Comcare [2015] FCA 392. 19 She then addressed s 14 of the SRC Act. 20 The appellant submitted that the "finding" by Perram J in the first judgment that a new incident which resulted in an aggravation of a pre-existing compensable injury "can be denied on the grounds of reasonable administrative action" was inconsistent with Australian Postal Corporation v Oudyn [2003] FCA 318. The place where this finding was said to have been made was not identified. The appellant also submitted that the respondent failed to act honestly "when it claimed, and continues to claim that it can legitimately deny entitlements under ss 16 and 19 [of the SRC Act] for the aggravation of the 2007 compensable injury 'adjustment disorder with anxious mood' which remains 'extant' by application of a second s14 to the compensable injury to cease liability." 21 Last, the appellant submitted that the obligation to act as a model litigant required that the respondent act honestly and consistently in the handling of claims and litigation, that that requires that the facts relied upon as primary facts must be based on evidence, and that the interpretation of relevant legislation must be consistent with accepted legal opinion. She submitted that the Full Court should find that the model litigant obligation does not allow "the regulatory agency" (presumably Comcare) "to advance its case in seeking a debt judgment, by openly committing fraud, breaching court rules, and advancing untruths under the protections of its [m]odel [l]itigant status". 22 The appellant submitted that the Full Court should not award costs to the respondent, relying on Deputy Commissioner of Taxation v Clear Blue Developments Pty Ltd (No 2) [2010] FCA 1224 at [48] per Logan J. 23 In her submissions in reply, the appellant made the following submissions. 24 First, the order made by Flick J miscarried pursuant to the "no evidence" rule. 25 The appellant submitted that the primary judge, at [80], failed to consider that the respondent did not have the evidence in order to satisfy the Court of the requirements for an interlocutory injunction to be issued when he rejected the appellant's claim that the respondent's conduct amounted to fraud. She submitted that Flick J "failed to consider that the applicant must put on evidence or make submissions sufficient to discharge the burden" and that the respondent, as the applicant on the interlocutory application, "did not discharge the burden, given its submission was based on misleading and fraudulent argument, not based on facts." The appellant submitted that the primary judge "failed to find that there was no serious question to be tried, and that the applicant did not demonstrate an entitlement to relief." She submitted that Flick J should have held that the respondent failed to make out an entitlement sufficient to issue an interlocutory injunction to prevent the appellant from having the decision by Perram J reviewed at the scheduled Full Court hearing. She also submitted that the primary judge failed to consider that Flick J had been tasked to prepare the matter for review at a Full Court hearing pursuant to case management rules, and that the denial of the hearing resulted in an injustice. 26 Second, the respondent had not provided any evidence to support a claim that it did put on evidence before Flick J that there was no serious matter to be tried. In these circumstances, she contended that it was "reasonable to conclude…that the respondent misled the court about the absence of a serious matter to be tried, and in so doing committed fraud". 27 The appellant maintained that Flick J erred in law, when he failed to find that there was no serious question to be tried and that the respondent, as the applicant on the interlocutory application, did not demonstrate an entitlement to relief, and that the primary judge erred in law when he failed to find that the judicial process was not properly conducted, as there were no reasonable grounds available to allow the interlocutory application to be heard. 28 Third, she had never sought to re-litigate. Rather, she had sought and continued to seek the right to judicial review by a Full Court of the first judgment (of Perram J). 29 The appellant submitted that the primary judge erred in finding that there had been an appeal to review the correctness of the judgment, given the Full Court hearing to review the judgment was denied by Flick J. 30 Fourth, the primary judge erred in refusing to exercise his discretion to go behind the judgments of the three proceedings where the associated costs orders resulted in the three certificates of taxation upon which the bankruptcy notice was founded and/or otherwise set aside the bankruptcy notice as an abuse of process. 31 Fifth, a breach of model litigant obligations could not be rewarded by a costs order. The appellant submitted the primary judge made an error of law in concluding that she had fallen far short of establishing any abuse of process or demonstrating any proper basis upon which the Court would go behind the judgments. 32 Sixth, Perram J's costs order should be set aside on the grounds that his decision was contrary to law and affected by fraud; the costs order made by Flick J should be dismissed on the grounds that there was no evidence to justify the making of the decision and it was affected by fraud; and the costs order made by Rares J should be dismissed as it would not have eventuated had Flick J prepared the matter for a Full Court hearing according to law and case management rules. The appellant invoked s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) in support of this contention.

Consideration 33 None of the appellant's submissions has merit. 34 An issue which it is convenient to address first is the appellant's contention that the proceeding before Flick J was an uncontested hearing. This is not so, as the appellant appeared and presented argument in those proceedings. 35 Second, s 52 of the Bankruptcy Act is irrelevant. Contrary to the submissions of the appellant, the proceeding before Flick J had nothing to do with s 52 or with any other provision of the Bankruptcy Act. No question of bankruptcy then arose. We consider s 52 further at [50]-[51] below. 36 Third, as to the appellant's reliance on Ahern v Deputy Commissioner of Taxation (Qld), there is no doubt about the principle that if a genuine dispute exists as to the liability of the debtor to the petitioning creditor it ought to be investigated before the debtor is made bankrupt, but here there is no such genuine dispute and so the principle is inapplicable. 37 Fourth, the appellant appears to contend that r 17.01 of the Rules, dealing with interlocutory applications, governs the powers available to a judge of the Court under s 25 of the FCA Act. This is to confuse process with power. A single judge may exercise the appellate jurisdiction of the Court by making an order that an appeal to the Court be dismissed for failure to comply with a direction of the Court. The power is expressly conferred by s 25(2B)(bb)(i) of the FCA Act. 38 Fifth, we do not accept the appellant's submission to the effect that a judge case managing an appeal may only make orders in the nature of injunctions. The clear words conferring the power which was exercised by Flick J (in s 25(2B)(bb)(i) of the FCA Act) show that such a submission is untenable. 39 Sixth, the appellant's reliance on what Cotton LJ said in Gilbert v Endean is misplaced. The context is provided by a fuller passage from the judgment, at 268-269, as follows: I am not now adverting to the question as to whether or no the evidence ought to have been given vivâ voce or by affidavit, but to the question whether the rule that on interlocutory applications the Court may act upon evidence given on the witness's information and belief applies to the present case. But for the purpose of this rule those applications only are considered interlocutory which do not decide the rights of parties, but are made for the purpose of keeping things in statu quo till the rights can be decided, or for the purpose of obtaining some direction of the Court as to how the cause is to be conducted, as to what is to be done in the progress of the cause for the purpose of enabling the Court ultimately to decide upon the rights of the parties. Now many of the cases which are brought before the Court on motions and on petitions, and which are therefore interlocutory in form, are not interlocutory within the meaning of that rule as regards evidence. They are to decide the rights of the parties, and whatever the form may be in which such questions are brought before the Court, in my opinion the evidence must be regulated by the ordinary rules, and must be such as would be admissible at the hearing of the cause. Contrary to the appellant's submission, the judgment does not stand for the proposition that the rights of parties may not be considered on an interlocutory application. 40 Seventh, the Central Practice Note upon which the appellant relied did not exist at the time of Flick J's decision. In any case, there is nothing in the Central Practice Note to suggest that Flick J erred in allowing the interlocutory application to be heard. There was no miscarriage of justice (or fraud). 41 Eighth, the letter from the solicitors for the respondent to the appellant dated 29 July 2015 should be considered in light of the interlocutory application dated 1 July 2015 (and filed the next day), listed for hearing on 23 July 2015. That interlocutory application sought that the proceeding be dismissed pursuant to s 37AO of the FCA Act. That provision concerns the powers of the Court when satisfied that a person has frequently instituted or conducted vexatious proceedings in Australian courts or tribunals. The appellant did not appear on 23 July 2015. In her absence, the matter was stood over to 9:30 AM on 25 August 2015. 42 The letter of 29 July 2015 noted that the appellant was in default of the Court's orders 1 and 2 of 10 June 2015 to the effect that the appeal book was to be completed by 26 June 2015 and on or before 9 July 2015, the appellant was to file and serve an outline of submissions. The letter continued that the respondent's solicitors were instructed to file a further interlocutory application seeking the dismissal of the matter under r 36.74 of the Rules. That rule provides that a respondent may apply to the Court for an order that an appeal be dismissed for the failure by an appellant to: comply with the direction of the Court; comply with the Rules; attend the hearing relating to the appeal; or prosecute the appeal. 43 The letter stated that the respondent's additional interlocutory application would be made on the bases that the appellant was in default of orders 1 and 2 made by the Court on 10 June 2015; that she had failed to prosecute a matter by not complying with those orders, not attending, attempting to attend or appointing a representative to attend Court on 23 July 2015; and failing to comply with the Rules relating to appeals generally. The letter stated that if the appellant did not remedy her non-compliance by 5 PM on Friday 21 August 2015, the respondent reserved its right to seek an order that her matter be dismissed pursuant to r 36.74. The letter noted that the Court did not proceed to hear the respondent's interlocutory application filed on 1 July 2015 in the appellant's absence, but that the respondent's solicitors were instructed to request that the Court proceed with that application on 25 August 2015. 44 The letter involved neither fraud nor a breach of any model litigant obligations. 45 Ninth, contrary to the submissions of the appellant, the Administrative Decisions (Judicial Review) Act has no application, as the judgments of the Court are not decisions of an administrative character within the meaning of that Act. The judgments of the Court are made in the exercise of judicial power. 46 Tenth, we see no error on the part of the primary judge in his consideration of whether there was a proper basis for going behind the judgment of Perram J. The appellant's submissions take no proper account of the decision of the Full Court in Telstra Corp Ltd v Hannaford [2006] FCAFC 87; 151 FCR 253, applied more recently by a Full Court in Commonwealth of Australia v Snell [2019] FCAFC 57; 370 ALR 1. Instead, the appellant's submissions refer to the discussion in Hannaford at first instance, Hannaford v Telstra Corp Ltd [2005] FCA 1298; 88 ALD 702, which was reversed by the Full Court on appeal. Justice Perram, at [23], followed the Full Court's judgment at [57] and [59] in finding there was no doubt the "Comcare, is entitled to take the course of reassessing a claim if fresh evidence suggests the injury is no longer extant". 47 Eleventh, no question arises of breach by the respondent of its model litigant obligations in the appeal before Perram J. His Honour said at [26]: As to contention (c), I do not accept either that Comcare has behaved in any way inappropriately or that, even if it had, that this would be relevant in this proceeding. As with several features of this litigation, there is a gulf separating Ms Dunkerley's perceptions of reality and reality itself. In any event, a breach of the model litigant requirements has no consequences in terms of civil litigation. Such a breach may be relevant to other inquiries, such as discipline, but it is not relevant to the case in which the breach is said to arise: Tarrant v Australian Securities and Investments Commission (2015) 317 ALR 328 at 357 [110] (FC); Croker v Commonwealth [2011] FCAFC 25 at [19]. 48 Contention (c) was that the hearing before the AAT had involved a miscarriage of justice, in that Comcare had failed to clarify for the AAT what her case was. The appellant submitted to Perram J that this was a breach of the respondent's obligations as a model litigant. 49 We consider that Perram J was not addressing any consequences of procedural unfairness or any issue of costs, but had in mind s 55ZF of the Judiciary Act 1903 (Cth), which provides for the Attorney-General to issue Legal Services Directions applying to Commonwealth legal work, and s 55ZG of that Act, which specifies which persons or bodies must comply with Legal Services Directions. Section 55ZG(2) provides that compliance with a Legal Services Direction is not enforceable except by, or upon the application of, the Attorney-General. Section 55ZG(3) provides that the issue of non-compliance with a Legal Services Direction may not be raised in any proceeding (whether in a court, tribunal or other body) except by, or on behalf of, the Commonwealth. 50 It is unnecessary separately to consider Ramsay Health Care, Simon v Vincent J O'Gorman Pty Ltd, Corney v Brien and HWY Rent Pty Ltd v HWY Rentals (in liq). The principles are not in dispute. In the present case no occasion arises for their application. Each case turns on its own facts. We note, however, that Ramsay Health Care, for example, concerned the hearing of a creditor's petition and therefore s 52 of the Bankruptcy Act. Section 52 provides: 52 Proceedings and order on creditor's petition (1) At the hearing of a creditor's petition, the Court shall require proof of: (a) the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient); (b) service of the petition; and (c) the fact that the debt or debts on which the petitioning creditor relies is or are still owing; and, if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor. 51 The present case did not involve the hearing of a creditor's petition. Consequently, s 52, which is only concerned with the hearing of a creditor's petition, has no application. The source of the Court's jurisdiction to set aside a bankruptcy notice was considered in Xu v Wan Ze Property Development (Aust) Pty Ltd (in liq), Ren v Wan Ze Property Development (Aust) Pty Ltd (in liq) [2014] FCA 461; 315 ALR 523. 52 The primary judge considered the relevant principles and applied them. In so doing, he did not fall into appealable error. Indeed, we respectfully agree with his Honour that the appellant did not provide any reason to warrant the Court going behind the costs orders and judgments underlying the bankruptcy notice. 53 For completeness, we note that there was a dispute between the parties as to the inclusion of certain supplementary documents in the appeal book before this Court, the appellant contending for their inclusion. We have read those documents, but do not regard them as relevant to the issues that arise on the appeal. They would perhaps have had some relevance if this Court were hearing an appeal from any of the three judgments of Perram J, Flick J and Rares J, or if the appeal before Perram J from the AAT were not by statute limited to a question of law. Further, as the primary judge observed, at [72], the current proceeding cannot be converted into a surrogate appeal from Perram J's judgment, especially when the appellant's appeal from that judgment was dismissed by Flick J. 54 Also for completeness, and with reference to the remedies sought by the appellant set out at [11] above, as Robertson J noted in Xu v Wan Ze Property Development (Aust) Pty Ltd (in liq), Ren v Wan Ze Property Development (Aust) Pty Ltd (in liq) at [57], this Court does not have the power to set aside the judgments on which the bankruptcy notice is based, even if it were to go behind the judgments. This Court is not hearing an appeal from those judgments.

Conclusion and orders 55 For these reasons, the appeal should be dismissed with costs. I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Katzmann, Robertson and Abraham.