Fokas v Mansfield

Fokas v Mansfield - [2017] NSWCA 231 - NSWCA 2017 case summary — Zoe

Judgment

HIS HONOUR: By a notice of motion filed on 22 August 2017 the applicant seeks an order that: "The Court to stop imidiately the exercising of the power of a 'WRIT OF POSSESSION' issued 14 December 2016 by the Supreme Court Sydney for the case number bellow 2016/00213128. As it has NO LEGAL POWER." [sic]
In oral submissions the applicant says that she seeks an order to restrain any person from taking any further action pursuant to the first respondent's having been given possession of the subject property, that is, a property in English Street, Kogarah of which the applicant was formerly the registered proprietor. The first respondent to this application, Mr David Mansfield, is the trustee in bankruptcy of the applicant's estate, although the applicant denies this.
On 1 November 2012 the Federal Magistrates Court (as it was named at that time) made an order in the following terms: "1. A Sequestration Order be made against the estate of Maria Fokas. 2. The Applicant Creditor's costs fixed in the amount of $5,543.12 be paid from the estate of the Respondent Debtor in accordance with the Bankruptcy Act 1966. The Court notes that the date of the act of bankruptcy is 22 June 2012."
A certificate of appointment of trustee issued by the Insolvency and Trustee Service Australia ("ITSA") records that Mr Mansfield was appointed as trustee of the applicant's bankrupt estate on 20 March 2013. That certificate bears a signature above the words "Official Receiver". Pursuant to regulation 13.07 of the Bankruptcy Regulations 1996 (Cth) a copy of the Certificate of Appointment of Trustee issued by ITSA is proof, in the absence of evidence to the contrary, of information on the Index that is stated in the document.
As I have said the applicant was the registered proprietor of the land in English Street, Kogarah. On her becoming bankrupt that property vested in her trustee in bankruptcy. In due course, Mr Mansfield became registered as proprietor of the property. He instituted proceedings for possession. On 14 December 2016 he obtained a judgment for possession. On 30 January 2017 the Sheriff executed a writ of possession and Mr Mansfield entered into possession of the property. A list was taken of personal and household items of the property and they were moved into storage.
On 26 July 2017 the applicant filed a notice of motion in the proceedings in the Common Law Division of the Court (2016/213128), being the proceedings in which the judgment for possession was given. She has at all times been self-represented.
The notice of motion did not expressly seek an order setting aside the order giving judgment for possession made on 14 December 2016. It did seek the following relief: "5. The Court to dispense with any requirement of rules of court as it is appropriate in the circumstances. 'THERE IS SOME MATTER CALLING FOR REVIEW' and 'THE INTEREST OF JUSTICE SO REQUIRE'."
By her notice of motion filed on 26 July 2017 the applicant in substance sought an interim injunction to restrain anyone from taking further action pursuant to the writ of possession and she sought other orders including an order for return of possessions. She sought the following orders: "3. Vary in TOTAL a judgment given or made on 14 December 2017 [sic] or on 14 November 2017 [sic] or at any other time that I am not aware of, as THERE ARE SPECIAL CIRCUMSTANCES. 4. To be wiped off the conditions imposed on me by the Kogarah Police on the 8th May 2017, that one is: Prohibiting me to go to my residence!" … 6. I, to be free in my home. No restrictions on me or on my premises as it is an exempt asset."
The applicant by her notice of motion also claimed damages in respect of items destroyed or taken and sought the return of household possessions. She also sought payment of an aged pension income from August 2012 to March 2013 and sought an order that the first respondent pay the cost of a new passport. It appears that the relief claimed in paragraph 4 quoted above was relief to alter bail conditions imposed by the police when they took steps at the behest of the first respondent to remove her from the premises.
It appears from the applicant's affidavit of 21 July 2017 that was made in support of her notice of motion filed on 26 July 2017 that the applicant contends that: 1. her house was an exempt asset that did not pass to her trustee in bankruptcy; 2. the sequestration order had no "reckoning as time" and was an order to be made some time in the future. The grounds for this contention are not intelligible; 3. the plaintiff in the possession proceedings, Mr Mansfield, did not ask for sequestration of her land. This was true but irrelevant; 4. she did not receive the statement of claim that sought possession; and 5. she had lived on the property up to 8 May 2017 when she was removed by police and allowed out on bail on conditions that she not approach the property; 6. she was capable of looking after her house and did not consent to the appointment of the plaintiff as her trustee; 7. the facts alleged in the petition leading to her bankruptcy were untrue; 8. she did not owe the debt or debts to Kogarah Council on which she was purportedly made bankrupt and that a re-hearing of a costs assessment would have established that she was not liable to pay costs (apparently costs that were ordered against her by orders made by the Land and Environment Court); 9. she did not attend on the hearing of the bankruptcy petition because she was ill; and 10. exceptional circumstances justify this Court's intervention.
The substance of the applicant's argument is that she is not bankrupt because there were no proper grounds upon which a sequestration order could have been made against her and that the order for possession was made in her absence and without proper evidence of service or service of an affidavit disclosing who was in possession of the English Street property.
The notice of motion of 26 July 2017 was referred by the Registrar of the Common Law Division to Wilson J sitting as Duty Judge. Her Honour gave a short ex tempore judgment noting that much of the material in Ms Fokas' affidavits was irrelevant to the matters with which her Honour was concerned. Her Honour noted that the orders sought by Ms Fokas sought to traverse orders already made in relation to court proceedings which were at an end and some of the other orders in the notice of motion had nothing to do with the Supreme Court, such as the request to review bail conditions. Her Honour noted that on 14 December 2016 a judgment for possession had been obtained and that the writ for possession was issued. Her Honour noted that the writ was executed on 30 January 2017 and the trustee in bankruptcy was in possession of the property. Her Honour concluded that: "This Court, it seems to me with respect to those proceedings, is effectively functus. There is nothing I can properly do nor orders I can make. … Plainly, Mrs Fokas needs some legal assistance and legal advice. But there is nothing that I can do this morning in relation to the notice of motion. It is not properly before the court. I am asked by the respondents to strike it out and it seems to me that this is the only course available to the court."
The order her Honour made relevantly was that "The notice of motion filed on 24 July 2017 is struck out." I understand that to be an order that the notice of motion was dismissed.
On 10 August 2017 the applicant filed a notice of appeal which contains the following: "2. The appellant appeals from parts of the decisions below of J. Wilson duty. A. was refused IMMEDIATELY INTERIM INJUCTION [sic] for order sought on page 3/8 paragraph 1 in the NOTICE OF MOTION. B. Did not give a direction for re-open the case. Case number below 2016/00213128."
The orders sought in the notice of appeal include an order setting aside the order made by Wilson J on 9 August 2017 and an order that the proceeding 2016/213128 be reopened.
The competence of the notice of appeal is not a matter that is presently in issue before me. Prima facie it seems to me that the appeal is not competent because the orders made by Wilson J were interlocutory. I have raised with Ms Fokas the need for her to seek leave to appeal. She says she does not need leave. But if Ms Fokas has regard to s 101(2)(e) of the Supreme Court Act 1970 (NSW) she may consider that that is a matter that needs further attention from her, particularly having regard to decisions such as Macatangay v State of New South Wales (No 2) [2009] NSWCA 272 and McGinn v Cranbrook School [2016] NSWCA 226. In considering the claim for interim injunctive relief I will proceed on the assumption that is favourable to Ms Fokas that she will in due course bring an application for leave to appeal and I will proceed on the assumption also that that application might have reasonable prospects of success, having regard to what might be some important underlying issues concerning the course the primary judge ultimately took of dismissing the notice of motion of 26 July 2017, rather than transferring that application to the Federal Court pursuant to s 6 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) (see Turner v Gorkowski (2014) 46 VR 609; [2014] VSCA 248; Truthful Endeavour Pty Ltd v Condon (2015) 233 FCR 174; [2015] FCAFC 70; (2015) 233 FCR 174; Mateljan v HTT Huntley Heritage Pty Ltd [2016] NSWCA 20; (2016) 111 ACSR 277; and Baykal v Van Der Velde as Trustee for Bankrupt Estate of Tandogan [2017] NSWSC 36).
The applicant says that the order giving judgment for possession on 14 December 2016 was made in her absence. I do not understand that to be in dispute. Pursuant to r 36.16(2)(b) of the Uniform Civil Procedure Rules 2005 (NSW) the Court would have power to set aside the order after it had been entered as it was given or made in the absence of the applicant. That power is available whether or not she had notice of the relevant hearing or of the application for the order.
A generous reading of the terms of the notice of motion filed on 26 July 2017 would be that that relief was sought by the applicant by her application that there was a matter calling for "review" and by her application that the judgment made on 14 December 2016 be "var[ied] in total". But on an application to set aside the order giving judgment for possession of 14 December 2016 it would be necessary for the applicant to show not only a satisfactory explanation for her not appearing at the hearing when the order was made, it would also be necessary for her to show an arguable defence. That she has not done. Although the applicant does not recognise it, the fact is that a sequestration order has been made in respect of her estate and Mr Mansfield has been appointed as her trustee in bankruptcy. By reason of s 58(1) of the Bankruptcy Act 1966 (Cth) her property has become vested in her trustee in bankruptcy. The question is not, as the applicant would have it, whether there were sufficient grounds for the making of the sequestration order, which it should be noted was made as long ago as 1 November 2012. Rather the question on an application to set aside the order for possession is whether the applicant was or was not bankrupt. If she was, then her trustee in bankruptcy was entitled to possession of the property by reason of its having vested in him. He has become registered as proprietor of the property. One of the applicant's contentions is to have been that the property was not property divisible amongst creditors. I take it that she relies upon s 116(2)(b) of the Bankruptcy Act that provides that a bankrupt's "household property" that is of a kind prescribed by the regulations or identified by a resolution passed by the creditors before the trustee realises the property is property not divisible amongst the creditors of a bankrupt. The English Street property is not "household property" within the meaning of s 116(2) (see Bankruptcy Regulation 6.03).
In my view, the primary judge was not arguably wrong in concluding that the order giving judgment for possession had been spent. Possession has been given. It does not appear that her Honour treated the notice of motion that was before her as extending to a claim to set aside the orders of 14 December 2016. That is quite understandable, having regard to the prolixity and ambiguity of the relief sought in the notice of motion, and it may well be that it is the better understanding of the relief claimed in that document. If however, her Honour were wrong in not treating the notice of motion as extending to a claim to set aside the orders of 14 December 2016, nonetheless for the reasons I have given, any such application would not enjoy any reasonable prospect of success. In these circumstances I see no basis for staying the writ of possession or interfering with anything done by reason of the first respondent's having obtained possession.
As the writ of possession is spent the only substantive relief that could be given would be an order restraining the first respondent from exercising his powers as the trustee in bankruptcy of the applicant's estate. I have serious doubts as to whether I would have power to grant such relief in any event. Under s 27 of the Bankruptcy Act jurisdiction in bankruptcy is vested exclusively in the Federal Court and the Federal Circuit Court, subject to a presently immaterial exception. True it is that under s 4 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) this Court has jurisdiction in bankruptcy, notwithstanding the terms of s 27 of the Bankruptcy Act. However, it may be the case as indicated by the decisions of the Victorian Court of Appeal in Turner v Gorkowski and the Full Court of the Federal Court in Truthful Endeavour Pty Ltd v Condon that the exercise of bankruptcy jurisdiction pursuant to s 4 of the Jurisdiction of Courts (Cross-vesting) Act involves the exercise of jurisdiction in a special federal matter within the meaning of s 6 which would be required to be transferred to the Federal Court unless notice was given to the Attorneys General and the Court determined that there were special reasons, which were independent of reasons relevant to the convenience of the parties, for the Supreme Court to order that the proceedings be determined by that Court. I think that issue raises some potentially difficult questions that may not yet have been fully explored in the authorities, but it is unnecessary to say anything further about that in these reasons.
For these reasons I order that the applicant's notice of motion filed on 22 August 2017 be dismissed. [Parties address on costs.]
Costs should follow the event. I order that the applicant pay the first and second respondents' costs of the notice of motion. I make no order as to costs in respect of the third respondent.

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