Consideration
60 The review application and the 30 May 2016 Affidavit are difficult documents. They do not comply with the Rules, they are repetitive and they contain complaints about Court staff and members of the executive committee of the Owners Corporation, the strata managers and Grace Lawyers which are personal and some are plainly scandalous. Her oral and written submissions are no less challenging. The exact nature of many of Ms Kimber's complaints is hard to establish. Many of the matters she raises are either outside the scope of the Court's jurisdiction on an application to set aside a bankruptcy notice (for instance, to change the outcome of the Local Court proceedings having regard to the course taken in attempts at mediation) or misconceived (in effect, treating the review application as an appeal from the Registrar's decision). She has plainly struggled as a litigant in person, both with accepting the limits of the Court's jurisdiction and the disciplines imposed by the FCA Act and the Rules designed to ensure fairness to all parties.
61 Faced with these difficulties, the primary judge gave proper and careful consideration to:
(1) the fact that the review application under s 35A(5) and (6) of FCA Act requires a hearing de novo;
(2) the requirements for how a pleading must be set out and what it must not contain under paragraphs (1) and (2) of r 16.02 of the Rules, correctly noting that those requirements reflect the function of pleadings, namely to state with sufficient clarity the case that must be met so as to ensure procedural fairness and, incidentally, to define the issues for decision;
(3) the fact that even if a pleading should be struck out under r 16.02, it does not necessarily follow that a proceeding should be stayed or dismissed - an opportunity to re-plead might be allowed;
(4) the legislative bases on which such an application might be struck out or summarily dismissed or evidence disallowed, being s 37P of the FCA Act or judgment given against a party under s 31A(2) of the FCA Act and r 26.01 where an application has "no reasonable prospect of success"; and
(5) the matters which she understood the amended application to raise (see [15] above).
62 In relation to the question of whether an application has "no reasonable prospects of success" for the purposes of s 31A, the primary judge, again correctly, relied on the principles which she summarised in Eliezer v University of Sydney (2015) 239 FCR 381; FCA 1045 at [35]-[39] as follows:
35. First, the respondents as the moving parties bear the onus of persuading the Court that the application has no reasonable prospects of succeeding: Australian Securities and Investments Commission v Cassimatis (2013) 220 FCR 256 (Cassimatis) at [45] (Reeves J).
36. Secondly, as the respondents submit, the intention behind the enactment of s 31A is "to lower the bar for obtaining summary judgment (including summary dismissal) below the level that had been fixed by such authorities as Dey v Victorian Railway Commissioners (1949) 78 CLR 62 at 91-92, and General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129-130…": White Industries Aust Ltd v Federal Commissioner of Taxation (2007) 160 FCR 298 (White Industries) at [54] (Lindgren J); see also Cassimatis at [46] (Reeves J). In the cases to which Lindgren J referred in White Industries, the requirement had been expressed in such terms as "manifestly groundless" or "hopeless". As Hayne, Crennan, Kiefel and Bell JJ held in Spencer v The Commonwealth of Australia [2010] (2010) 241 CLR 118 (Spencer) at 139 [52]-[53]:
…effect must be given to the negative admonition in sub-s (3) that a defence, a proceeding, or a part of a proceeding may be found to have no reasonable prospect of successful prosecution even if it cannot be said that it is "hopeless" or "bound to fail". …[I]t is important to begin by recognising that the combined effect of sub-ss (2) and (3) is that the inquiry required in this case is whether there is a "reasonable" prospect of prosecuting the proceeding, not an inquiry directed to whether a certain and concluded determination could be made that the proceeding would necessarily fail.
In this respect, s 31A departs radically from the basis upon which earlier forms of provision permitting the entry of summary judgment have been understood and administered.
37. Thirdly, the assessment required by s 31A of whether a proceeding has no reasonable prospects of success necessitates the making of value judgments in the absence of a full and complete factual matrix and argument, with the result that the provision vests a discretion in the Court: Kowalski v MMAL Staff Superannuation Fund Pty Ltd (2009) 178 FCR 401 (Kowalski) at [28] (the Court). That discretion includes whether to deal with the motion at once or at some later stage in the proceedings when the legal and factual issues have been more clearly defined: Butorac v WIN Corporation Pty Ltd [2009] FCA 1503 at [19] (Buchanan J); Cassimatis at [50] (Reeves J).
38. In the fourth place, despite the threshold for summary dismissal having been lowered, the discretion must still be exercised with caution (Spencer at [24] (French CJ and Gummow J) and [60] (Hayne, Crennan, Kiefel and Bell JJ)). Consistently with this, the discretion is concerned "with the bringing and defending of proceedings, not just with pleadings; with substance, not just with form": White Industries at [50] (Lindgren J) (approved in Kowalski at [30] (the Court); see also Spencer at [23] (French CJ and Gummow J)).
39. Finally, in his Honour's helpful explanation of how these principles are to be applied, Reeves J in Cassimatis further explains at [46] that:
…the determination of a summary dismissal application therefore does not require a mini-trial based upon incomplete evidence to decide whether the proceedings are likely to succeed or fail at trial. Instead, it requires a critical examination of the available materials to determine whether there is a real question of law or fact that should be decided at trial. Each application for summary judgment or summary dismissal has to be determined according to its particular circumstances. What is required is a practical judgment of the case at hand. The relevant circumstances will partly depend upon the stage which the proceedings have reached. Among other things, this will affect the materials available to the Court considering the application, for example, whether pleadings have been exchanged, or discovery of documents has occurred.
63 In relation to the issues which the primary judge identified as having been raised by the review application, she honoured each of these principles in reaching her conclusion that the review application should be dismissed summarily.
64 However, the primary judge did not identify the question of whether a ground based on s 41(5) of the Bankruptcy Act had any reasonable prospect of success even though there is an explicit reference to s 41(5) at pages 2-3 of the review application (see [16] above) and there are a number of explicit references to that section in JMK 1 and JMK 3 in connection with complaints about changes in allocation of payments made by Ms Kimber to the Owners Corporation in the Owners Ledger for lot 110 between 6 January 2016 and 13 April 2016, a period which includes the time of the issue of the bankruptcy notice. Ms Kimber's claim that the Owners Ledgers had been "jimmied to fit" the bankruptcy notice is pointed. Section 41(5) is not mentioned in the primary judge's reasons nor is there any finding in relation to the relevance of the 1 April 2016 email exchange between Ms Kimber and Mr Scott Martin or the Owners Ledgers.
65 It is certainly the case that the focus of Ms Kimber's submissions and the review application is her claim that the Local Court judgment was an "ill-gotten" judgment with the result that she did not "deserve" the bankruptcy notice. None of the body of the 30 May Affidavit, the orders sought in the review application or Ms Kimber's written submissions to the primary judge in relation to the summary dismissal application contained a reference to s 41(5). Those documents clearly did repeatedly express Ms Kimber's concern that the bankruptcy notice was part of a concerted, malicious effort by Stratachoice, Grace Lawyers and the executive committee of the Owners Corporation to prosecute the Local Court judgment. That remains the bias of Ms Kimber's argument even in her submissions to the Court despite the fact that she was granted leave to appeal only on the basis of s 41(5): see [42] above.
66 Such a confined understanding is not, however, consistent with the language used at pages 2-3 of the review application. It is true that Ms Kimber does not assert that she intentionally made payments towards the amount of the Local Court judgment; she says she intended moneys which she paid to be allocated to periodic levies. She certainly would accept that the bankruptcy notice was "overstated" because (she says) the Local Court judgment should not exist. However, she does also focus on the fact that the allocations in the lot 110's Owners Ledger to solicitors' fees which formed part of the Local Court judgment debt before the bankruptcy notice was issued were changed to remove those allocations and assign moneys paid to periodic levies instead. The language which is emphasised in bold at [16] complains about the conduct of the Owners Corporation's legal representative in the proceedings before the Registrar on the basis that that representative sought to minimise the invalidation of the bankruptcy notice under s 41(5). Ms Kimber clearly states that she claimed the invalidity because of her conversations with Mr Martin and the 1 April 2016 email exchange. In the bolded material, Ms Kimber notes that the telephone call and the email exchange occurred within the 21 days period for compliance with the bankruptcy notice as required by ss 41(2) and (5). She uses the term "overstated" and refers to the "defective" bankruptcy notice. She states her belief that the "ledger" had been "jimmied to fit" the defective bankruptcy notice 12 days after her conversations with the strata manager and the 1 April 2016 email (that is, on 13 April 2016). Those claims are supported by the materials in JMK 1 and JMK 3 identified above.
67 The primary judge found that the requirements of reg 4.02 of the Bankruptcy Regulations 1966 (Cth) and s 41(2) of the Bankruptcy Act had been met in relation to the bankruptcy notice. Her Honour also found that the 30 May Affidavit did not support contentions that the strata managers or Grace Lawyers had engaged in serious misconduct in relation to procuring the Local Court judgment such that it was not appropriate to "go behind" that judgment. Her Honour therefore found that there were no reasonable prospects of success of such claims: see primary judge's decision at [68]-[71].
68 In contrast, there is no evidence that the primary judge understood that Ms Kimber relied on s 41(5) to claim that the bankruptcy notice was invalidated because her payments had been allocated to solicitors' costs included in the Local Court judgment as recorded in the Owners Ledgers for lot 110. There is no reference to such a claim or findings relating to it in the primary judge's reasons. In those circumstances, the primary judge could not have formed a view as to the prospects of success of that ground.
69 For clarity, it is undoubtedly true that the review application fails to comply with the requirements of rr 16.02-16.04 and 16.59 as to the form, content and amendment of pleadings in almost every conceivable respect. Contrary to some of Ms Kimber's submissions to the primary judge, we do not think that it was for the primary judge to search out the import of the reference to s 41(5) from the review application and the 471 pages of the 30 May Affidavit to find the materials at JMK 1 and JMK 3 referred to above. The fact that a litigant is unrepresented cannot impose such a duty on the judge. The Rules do apply to unrepresented litigants even if some tolerance for non-compliance with the Rules is often afforded to such litigants in the interests of justice. The justice system of Australia would be bogged down to an unacceptable extent if the standard a trial judge dealing with an unrepresented party was expected to meet was that asserted by Ms Kimber.
70 Having said that, where a represented litigant brings an application for summary dismissal of an application made by a litigant in person, it is the duty of the applicant party to assist the Court to understand the claims made by the litigant in person and what might be the evidence called in aid of those claims. It is the duty of the lawyer representing the applicant party to assist it to fulfil that duty. Those duties are made explicit by ss 37M and 37N of the FCA Act. Section 37M(1) states that the overarching purpose of the civil practice and procedure provisions, being the Rules and any other provision made by or under the FCA Act with respect to the practice and procedure of this Court, is to "facilitate the just resolution of disputes … according to law; and … as quickly, inexpensively and efficiently as possible". Section 37N(1) imposes an obligation on the parties to civil proceedings before this Court to conduct proceedings in a way which is consistent with the overarching purpose. Section 37N(2) imposes an obligation on a party's lawyer to take account of the obligation imposed on that party by s 37N(1) and assist the party to comply with it. In exercising its discretion to award costs, the Court or a Judge may take into account the failure to comply with either of ss 37N(1) or (2).
71 That view is supported by the decision of the New South Wales Court of Appeal in Serobian at [42]. Ms Kimber relied on Serobian on page 2 of the review application, quoted at [16] above, and in her submissions on appeal. At [42], the Court of Appeal noted that s 56(3) of the Civil Procedure Act 2005 (NSW) imposes an obligation on parties to civil proceedings to assist the court to further the overriding purpose of facilitating the "just, quick and cheap resolution of the real issues in the proceedings". We endorse the view expressed by the Court of Appeal in Serobian at [42] that:
Where, as here in the case of the respondent, a party is represented by competent and experienced lawyers and is opposed by litigants in person, the party and its lawyers have a duty to assist the court to understand and give full and fair consideration to the submissions of the litigants in person. In particular such a party must refer the court to evidence in the proceedings that is relevant to those submissions. This duty is accentuated where, again as here, the party is a substantial institution accustomed to litigating cases involving issues such as are involved in the present case, often against litigants in person.
72 That is the case whether or not the unrepresented litigant has complied with the Rules in the presentation of claims and evidence. Indeed, it might be expected that there will be departures from the Rules of some dimension when a litigant with no legal training is involved. The existence of a reasonable cause of action and the pleading of a reasonable cause of action remain distinct concepts. Section 31A of the FCA Act is concerned with the summary disposition of proceedings. The Court must come to a view about the prospect of the proceedings and look beyond deficient pleadings unless the deficiency is incurable: see Spencer v The Commonwealth (2010) 241 CLR 118; HCA 28 at [22]-[23] per French CJ and Gummow J.
73 In our view, the proper observance of the represented party's duty to the Court encompasses telling the Court what may be the weaknesses of their summary judgment or summary dismissal application as well as making the case for it. To use an old expression, if summary judgment is claimed, it must be a "clean kill". Otherwise, justice demands that the issues raised by the litigant in person's application be tried.
74 The Owners Corporation's written submissions filed in relation to the summary dismissal application summarise its understanding of the orders which Ms Kimber sought in the review application at paragraph [9]. Although paragraph [9a] summarises some of the underlined words at the end of the extract from pages 2-3 the review application set out at [16] above, it does not refer to the matters preceding it which relate to s 41(5) of the Bankruptcy Act at all, even though the Owners Corporation does (perhaps in error) refer to r 1.31 in that context. The whole focus of the Owners Corporation's submissions to the primary judge was on matters of form and compliance with the Rules, not to the substance of Ms Kimber's claims. Ms Kimber's submissions (which also do not refer to s 41(5)) responded to that approach.
75 In our view it was for the Owners Corporation to make the primary judge aware of the s 41(5) issue and the relevance of the materials in JMK 1 and JMK 3 which bear on it. This is for two reasons. First, because the Owners Corporation was seeking summary dismissal or summary judgment of the review application. As the applicant for those orders, the Owners Corporation carried the onus of demonstrating that the review application had no reasonable prospect of success. Second, because Ms Kimber was unrepresented.
76 At paragraph [23] of its submissions to the primary judge, the Owners Corporation states that it could not decipher Ms Kimber's claims. It is our view that the legal representatives for the Owners Corporation were in a position to understand the nature of Ms Kimber's claims at pages 2-3 of the review application concerning s 41(5) and that the claims did not simply relate to an "ill-gotten judgment". In terms, they related to the 1 April 2016 email exchange and to the question of the reversal of allocations made after the date on which the bankruptcy notice was issued. That can be derived from Ms Kimber's statement that the "ledger" was "jimmied to fit" the bankruptcy notice. The detail of how Ms Kimber arrived at that conclusion can be found in the documents and handwriting on JMK 1 and JMK 3 concerning the need for comparison of the Owners Ledgers printed on 25 February 2015 and 6 January and 13 April 2016 and the 1 April 2016 email exchange. In our view, while her claims were that the allocations were made with ill-intent, she nonetheless asserted that her payments to the Owners Corporation in amounts required to meet regular administrative and sinking fund levies were applied to payment of solicitor's invoices issued in 2014 such that the bankruptcy notice was overstated.
77 Mr Radman made submissions on the appeal that the allocations referred to in the Owners Ledgers were made by the computer system employed by Stratachoice and not by the Owners Corporation. We note that, possibly contrary to this submission, the levy notice issued on 1 February 2016 appears to have relied on those allocations (see [17] above). Mr Radman also submitted that Ms Kimber has always claimed that the Owners Corporation had no right to allocate moneys paid by her to the solicitors' invoices comprised in the Local Court judgment so that the reallocations reflected in the 25 February 2015 and 6 January and 13 April 2016 Owners Ledgers were only in accordance with her wishes. He says that, accordingly, there is no defect in the bankruptcy notice.
78 Mr Radman might be right. However, there is no evidence that those submissions were made to the primary judge (nor did Mr Radman suggest that they were) and the resolution of those contentions relies on evidence (not submissions from the bar table) and submissions concerning the application of relevant case law or statutes to that evidence. That gives rise to complexity that traditionally requires a trial and, generally speaking, proceedings which have this aspect are unsuitable for summary dismissal. As was said by Reeves J in Australian Securities and Investments Commission v Cassimatis (2013) 220 FCR 256; FCA 641 at [49], the moving party on an application for summary judgment or dismissal would have to show a substantial absence of merit on either issues of fact or law to have a chance of persuading the Court that those questions should be resolved summarily.
79 As a factual matter which may distinguish this case from others, Grace Lawyers (and Mr Radman in particular) acted for the Owners Corporation in the Local Court proceedings and in mediation attempts. They had issued the solicitors' invoices which founded the Local Court judgment. An employed solicitor had appeared for the Owners Corporation before the Registrar and that firm (and Mr Radman in particular) represented the Owners Corporation at the hearing of the summary dismissal application. A competent lawyer should, as part of his or her professional duty, have considered all of the relevant documents filed by Ms Kimber (however long, and even if they contain claims which are likely to be personally offensive) and the implications of the matters she raised in them.
80 In our view, the Owners Corporation and its solicitors have not satisfied that duty to the Court imposed by s 37N of the FCA Act. The failure to identify a ground based on s 41(5) raised by Ms Kimber and therefore to consider whether it has reasonable prospects of success is an error not of the primary judge's making but that failure is nonetheless an error which vitiates her Honour's decision. If only in relation to the s 41(5) ground, a triable issue existed. Justice demands that the appeal be allowed.
81 It is appropriate to add a few other remarks. As noted by the Full Court in Zdrilic v Hickie (2016) 246 FCR 532; FCAFC 101, applications for summary judgment or dismissal do not sit easily with applications for review of a Registrar's decision in light of the "constitutional imperative" that the Registrar's decision be subject to review by a judge. Further, debtors in the bankruptcy jurisdiction are often not legally represented. They often have a minimal grasp on the legal issues directly relevant to an application to set aside a bankruptcy notice or to resist a sequestration order. The essentially technical issues concerning pleadings and the form of evidence which arise on applications for summary judgment or dismissal can add to confusion and bewilderment at the process which seems to some litigants in person to have little or nothing to do with the underlying facts in circumstances where the proceedings have substantial consequences for them.
82 Worse, such applications are often not time or cost efficient compared to a prompt hearing of the review application. As in this case, applications for summary judgment or dismissal may open new avenues of appeal and involve consideration of whether or not leave to appeal the summary judgment or summary dismissal should be given, all of which add to time and cost of resolving the proceedings. There should be no reason why review applications cannot be heard quickly, with primary reliance on the materials which were before the Registrar. Indeed, like Ms Kimber, it is likely that many debtors without legal representation make the unsafe assumption that evidence which was submitted to the Registrar will automatically be before the judge on the review application.