Martin v Insurance Australia Ltd, in the matter of Martin

Madgwick J: 1 This is an application to set aside a bankruptcy notice on the basis that proceedings to set aside the original judgment have been instituted (cf. s 41(6A) of the Bankruptcy Act 1966 (Cth) ('the Act') which allows for extension of time to satisfy the bankruptcy notice in such a case). Additionally or alternatively, the applicant seeks to set aside the bankruptcy notice on the basis of a counter claim, set up or cross demand that could not be set up in the original action and is equal to, or exceeds, the amount claimed in the bankruptcy notice. 2 The bankruptcy notice itself demands the payment of $31,689.76, which is specified in the schedule attached to the bankruptcy notice as being 'amount of judgments or orders $29,441.09' and interest accrued since the date of the judgments or orders in the amount of $2,248.67. Copies of the judgments or orders relied upon the by creditor are attached to the bankruptcy notice. 3 Those orders attached are, respectively, an order made by Gaudron and McHugh JJ, High Court of Australia, on 14 September 2001, ordering that an application for special leave to appeal to that Court from a judgment and order of a Full Court of this Court, given in and made on 18 May 2000, be refused, and that the present applicant should pay the present respondent's costs of, and incidental to, that application, such costs to be taxed by the proper officer of the Court. There is also a certificate, from the taxing officer of the High Court, that the Bill of Costs of the respondent against the applicant pursuant to that order 'has been taxed and allowed at $10,089.09'. 4 The second foundation of the bankruptcy notice is an order of the Federal Court. It recites that, on 22 February 1999, a Full Court ordered that the applicant pay the respondent's costs of a certain appeal; that on 29 January 2003, the respondent filed a Bill of Costs; that on 23 October 2003, the taxing officer issued an estimate of the taxed costs for the sum of $11,570; that no notice of objection to that estimate was duly filed and that a Certificate of Taxation was issued by this Court on 28 November 2003 allowing taxed costs in the sum of $11,570. In consequence of these matters, the Court ordered, on 28 July 2004, that the applicant pay the respondent the said sum of $11,570. 5 The third order, dated 28 July 2004, founding the bankruptcy notice concerns a sum of $7,782, ordered to be paid by this Court, as having been allowed in a Certificate of Taxation, dated 28 November 2003. 6 The sum of those three figures is the amount of $29,441.09 claimed and calculations of the interest were apparently duly incorporated into the schedule to the bankruptcy notice. 7 The cost orders on which the bankruptcy notice is ultimately founded arose in the course of litigation between the parties, extending back, as they both informed me, for no less than 17 years. Mr Martin, the debtor and applicant, believes that he has been the victim of two major injustices, as he explained the matter to me. The first is that property in which he claimed to have had an interest was sold by the respondent pursuant to commercial arrangements at an undervalue, shown by its having been resold the following day at a much higher value, as a result of which he lost a great deal of money. Secondly, he alleges that it has fairly recently come to light that for many years the creditor has not been in possession of adequate evidence to defend his case against it, but that the creditor and its legal advisers have nevertheless unmeritoriously carried on the proceedings. 8 In relation to the High Court costs order, the evidence before me goes no higher than to show that the applicant applied to a single Judge of the High Court, Heydon J, to reopen the application for special leave to appeal, which he had unsuccessfully prosecuted in that Court, and to set aside the judgment insofar as it referred to costs; that Heydon J, shortly and summarily dismissed that application; that the applicant has filed an application for special leave to appeal from the judgment of Heydon J; and that the time of disposition of that application is uncertain. 9 In respect of either of the two orders of the Federal Court, there is nothing before me to indicate that a stay has been sought in order to allow the applicant to appeal, albeit that each arose on interlocutory appeals from aspects of proceedings in the Supreme Court of the Australian Capital Territory, at a time when appeals from Judges of that Court were heard by the Full Court of this Court. 10 In 2004, Connelly J summarily dismissed the applicant's substantive claim against the respondent, along with claims for various forms of interlocutory relief that he had sought, and the applicant has appealed, or sought leave to appeal, as the case may be, from those orders of Connelly J, which projected appeal awaits hearing. 11 The applicant appears sincerely to feel a sense of injustice, but there is insufficient material in the proceedings before me to indicate that there is any substance in his application for special leave in the High Court or in his intended appeals, or applications for leave to appeal in the Supreme Court. As I have mentioned, there is nothing to indicate that there is presently any challenge to either of the costs orders made by this Court. 12 In these circumstances, I must conclude that the Court would not be justified in setting aside the bankruptcy notice on either of the bases claimed. The material before the Court must contain evidence which establishes that there is an effective and bona fide claim which is real. Mere assertions of the applicant's belief in the justice of his cause are quite insufficient. 13 In the circumstances, the applications will be dismissed with costs. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick.