Moore v Macks

Federal Court of Australia|2007-04-27|Before: Mansfield J, Finn J

REASONS FOR JUDGMENT 1 The two motions before me arise in separate appeals (SAD 84/2006 and SAD 7/2007) but can conveniently be dealt with together. Each motion seeks leave to appeal against orders, inter alia, that the appellant, David Gerald Moore, provide security for the costs of the respective appeals in the sums, respectively, of $4,000 and $4,200 by a specified date and that the hearing of each appeal be stayed until the security is provided or until further order. While the motions themselves raise similar issues of narrow compass, it is necessary to refer in a little detail to the background giving rise to the two appeals.

BACKGROUND 2 The genesis of the litigations giving rise to the appeals was an oppression action under the Corporations Act 2001 (Cth) in which Mr Moore was an unsuccessful respondent: see Wilson v Manna Hill Mining Co Ltd [2004] FCA 912. Mr Moore instituted two separate appeals from the orders made in this action ("the primary action") including the costs orders. 3 In the course of the primary action two orders for costs were made against Mr Moore which were made payable forthwith. Judgment was later entered against Mr Moore in respect of these leading ultimately to his being declared bankrupt by order made on 21 January 2005. The present respondent, Peter Ivan Macks, was appointed his trustee in bankruptcy. The sequestration order having been made by the District Registrar, Mr Moore sought to have it reviewed in the Federal Magistrates Court. That application was dismissed: Moore v Wilson [2005] FMCA 870. An appeal to this Court was, in turn, dismissed. Special leave to appeal to the High Court was sought but the application was deemed abandoned under the High Court Rules. 4 I simply note in passing that while many of the matters relied upon by Mr Moore at the hearing of the present motions may well have been of some relevance in the proceedings referred to in the preceding paragraph, they had no relevance for present purposes. The same observation was made by Mansfield J in the decision against which Mr Moore now seeks leave to appeal. 5 I would also note that Mr Moore's two appeals in the primary action had not been heard before he was declared bankrupt. 6 Apart from challenging the making of the sequestration order, Mr Moore separately applied to the Federal Magistrates Court both for the removal of Mr Macks as his trustee pursuant to s 179 of the Bankruptcy Act 1966 (Cth) for alleged conflict of interests and other conduct and for an order that Mr Macks continue to conduct the appeals in the primary action. Mr Macks applied to have these proceedings summarily dismissed. 7 On 27 April 2006, Lindsay FM dismissed the application to have Mr Macks removed as trustee: Moore v Macks [2006] FMC 594. The Federal Magistrate referred to this Court that part of Mr Moore's application which concerned the proposed decision of Mr Macks to abandon the appeals in the primary action. 8 Mr Moore then appealed from the order dismissing his removal application. That appeal (SAD 84 of 2006), the first of the two of present relevance, has been listed for hearing by a Full Court on 15 May 2007. The substantive grounds of appeal assert that: "… [Mr Moore was] not given a fair hearing, due process not followed, bias displayed. Magistrate did not properly regard my evidence, allow cross-examination, he had regard to irregular matters, irrelevant including matters of political, legal reputations. Magistrate aware of illegal actions of Macks, I let, Wilson, Lawton. Not given procedural fairness. Unlawful activities. Trustee has a conflict of interest, negligent." 9 The matter referred to the Federal Court by Lindsay FM was heard by Besanko J. His Honour dismissed Mr Moore's application for an order directing Mr Macks not to implement his decision to abandon the appeals in the primary action: Moore v Macks [2007] FCA 10. Mr Moore's appeal from that decision (SAD 7 of 2007), the second appeal of present relevance, has also been listed for hearing on 15 May 2007. The grounds of appeal in this matter assert: "The legal principles governing the evidence and procedures were not properly applied. Admissible evidence was excluded. The judge acted unfairly and was biased." Then follow about forty paragraphs of alleged errors, assertions of wrongdoings by third parties, and generalised complaints.

THE APPLICATIONS FOR SECURITY AND THE PRIMARY JUDGE'S DECISIONS 10 His Honour's statement of the principles applicable to an application for security for costs is, with respect, wholly unexceptionable. Mansfield J noted that the discretion given by s 56 of the Federal Court of Australia Act 1976 (Cth) must be exercised judicially, but it is a broad and unfettered discretion. His Honour referred to those of the factors that have been held to be relevant to the exercise of that discretion which were of significance to the circumstances before him. Mr Moore's impecuniosity was acknowledged as was the demonstrable risk that if the two appeals were unsuccessful Mr Moore would be unable to meet the costs of Mr Macks of the appeals. 11 Mansfield J noted the now well accepted proposition that where an impecunious litigant has had the benefit of a full hearing at first instance, the significance of the fact that a security for costs order may frustrate the exercise of the right of appeal should carry less weight than in the circumstances where a litigant at first instance may be put out of litigating a matter at all: see Cowell v Taylor (1885) 31 Ch D 34 at 38; Skyring v Sweeney [1999] FCA 61 at [6]. His Honour accepted that to order security against Mr Moore would be likely to frustrate the conduct of the appeals. He went on to note there was no suggestion on the evidence that the cause of Mr Moore's impecuniosity was the consequence of any conduct or fault of Mr Macks. His Honour noted of this that, while Mr Moore asserted to the contrary in his submissions, he did not explain why that was so. I would simply note in passing that a similar allegation was made before me. It had no proper evidentiary foundation. Mansfield J then observed, unexceptionably in my view, that the appeals did not raise issues of public interest or matters of general significance. Finally, consideration was given to the prospects of success of each of the appeals. 12 First, the appeal from the decision of Lindsay FM. Mansfield J observed that the stated grounds of appeal self evidently were discursive and unhelpful and they did not focus in any coherent way upon errors allegedly made by the Federal Magistrate. His Honour noted, with respect correctly, that the Federal Magistrate properly identified the "threshold requirement" that had to be satisfied before a case had been made out for inquiry into the trustee's conduct under s 179 of the Bankruptcy Act. Mansfield J then considered the manner in which Lindsay FM dealt with the evidence before him and the conclusions he reached that there was nothing in the alleged conflict of interest which provided any sufficient basis to embark on a s 179 inquiry and there was no communication with Mr Moore from Mr Macks from which properly to infer significant animosity towards Mr Moore or allegedly improper conduct on Mr Mack's part. As to the latter, Lindsay FM concluded there was no foundation for any of the allegations made. Nor was there material of any substance to establish any impropriety in the professional relationship between Mr Macks and his legal advisers nor any foundation for the serious allegation made against those legal advisers. Put generally, the Federal Magistrate characterised Mr Moore's allegations as having no factual basis and his "miscellany of other complaints" as falling in the category of "unsubstantiated assertion". 13 Mansfield J concluded that Mr Moore did not identify anything which showed any of the assertions contained in his grounds of appeal or in his submission had any prospect of success. 14 Turning to the decision of Besanko J, his Honour held that there were no grounds either under s 179 or s 178 of the Bankruptcy Act to impugn Mr Macks' decision not to seek an extension of time to elect to prosecute the appeals in the primary action. By reason of s 60(3), those appeals would be deemed to have been abandoned. 15 Mansfield J, in considering Mr Moore's prospects of success on his appeal, observed that Mr Moore had not pointed to any feature of his Honour's judgment which could demonstrate any arguable error of law or arguable error in the application of the law to the facts. Nor had Mr Moore demonstrated any finding of fact which had an arguable prospect of being disturbed on the appeal. Besanko J identified the reasons for Mr Macks' intention not to prosecute the appeals in the primary action, and the confirmatory advice, and Mr Moore's criticism of those reasons. He identified the contention that Mr Macks had sufficient funds in the bankrupt estate to pay to prosecute those appeals, and rejected that contention on the evidence. He addressed the contention that Mr Macks intended not to prosecute those appeals to do harm to Mr Moore, and rejected that claim on the evidence. His Honour was satisfied that Mr Macks as trustee was independent and had considered in an objective and appropriate fashion the question of whether he should prosecute those appeals. 16 Mansfield J also indicated that there was nothing to indicate, even on an arguable basis, that Mr Moore did not have a fair hearing. 17 His Honour concluded that the cases were clearly ones in which security for costs should be ordered. I would note that it has not been, nor could it properly be, suggested that the security ordered was inappropriate.

THE LEAVE APPLICATION 18 The order for security for costs being an interlocutory one, leave to appeal is required: Federal Court of Australia Act, s 24(1A). The usual considerations of which account is to be taken in determining whether leave ought be granted are well accepted. They are (i) whether in all the circumstances the decision is attended by sufficient doubt to warrant its being reconsidered by the Full Court; and (ii) whether substantial injustice would result if leave were refused supposing the decision to be wrong: see Decor Corp Pty Ltd v Dart Industries (1991) 33 FCR 397. It is also well accepted that where the interlocutory decision is on a point of practice and procedure - and a decision to order security for costs is such a decision: Croker v Deputy Registrar of the High Court of Australia [2003] FCA 681 at [3] - a tight rein should be kept on appeals against such decisions: see National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155 at 161. 19 The draft notices of appeals filed with each of the motions are in near identical terms. That in SAD 84 of 2006 is in the following terms: "Magistrate and Justices Lander, Besanko, Mansfield silent on 'breakin'. The legal principles governing the evidence and procedures were not properly applied. The analysis of key facts and the application of rules was wrong. There is an abuse of process; judge is biased. There was basis in fact and prima facie evidence for judge not to have made these orders. Appeals raise issues of policy and public interests." The supporting affidavits in each matter - again they are in near identical terms - do little to further illuminate the precise character of the errors alleged. They assert "incoherent reasoning", "abuse of process", a failure to refer to Mr Moore's mental illness and disability, a failure to refer to the serious allegations made against Mr Mack's legal advisers (which Lindsay FM found to be without foundation) and a "conflict of legal duty", this last apparently because his Honour heard the appeal from Lindsay FM against the making of the sequestration order. 20 In his oral submissions Mr Moore has ranged widely over all of the previous proceedings to which I have referred and of the alleged actions of some number of persons involved (directly or indirectly) in those proceedings. Allegations have been made (i) impugning both the decision in the primary action and the making of the sequestration order; (ii) ascribing "conflicts of interest" to Mr Macks and to judicial officers; (iii) asserting judicial concert "keeping me bankrupt"; (iv) asserting corrupt or otherwise improper conduct; (v) alleging that Mr Mack's wrongdoing was the cause of his impecuniosity; and (vi) asserting systematic judicial bias, judicial knowledge of illegal actions and judicial failure to refer to matters Mr Moore considers to be significant for whatever reason. 21 What is plainly apparent from the above is that the attacks on the impartiality and integrity of various judicial officers are unfounded and gratuitous. These should never have been made. 22 What is equally apparent is that some number of the generalised accusations and allegations made have been ventilated and dealt with in earlier proceedings (e.g. Lindsay FM's decision of 27 April 2006) or else could or should have been raised in those proceedings. Virtually all are without relevance to the narrow question I have to decide on the present leave applications. In saying this I would not wish it to be thought that a satisfactory evidentiary foundation has been established for any of the allegations so made. On the contrary. 23 I have set out Mansfield J's reasons for decision at some length. Not only am I satisfied that his Honour's decision is not attended by doubt, it is in my respectful view plainly correct. 24 The draft grounds of appeal Mr Moore has put forward do not address his Honour's reasons and order. They point to no operative error. They raise no doubt. 25 I accept, as did Mansfield J, that the order for security is likely to frustrate the appeals. If his Honour's decision was attended by doubt, this would have weighed heavily in favour of the grant of leave. It is not. 26 Neither matter is an appropriate one in which to grant leave to appeal. I will order that the motion seeking leave to appeal in each appeal be dismissed. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn.

Associate: Dated: 27 April 2007 Counsel for the Applicant: The Applicant appeared in person.

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