Mulhern (Bankrupt) v Official Receiver

1. The application filed on 30 March 2016 be dismissed.
2. The costs of the respondent be paid by the applicants, such costs to be taxed if not otherwise agreed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

COLLIER J: 1 The applicants in this proceeding are Michael Richard Mulhern and Jacqueline Patricia Mulhern. Both applicants describe themselves as "Australian Made Bankrupt". Irrespective of the description they append to themselves, both Mr and Mrs Mulhern are bankrupts under the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act). 2 The application filed on 30 March 2016 seeks the following orders: 1. That the Australian made Bankruptcy of Jacqueline Patricia Mulhern be annulled pursuant to Section 153B of the Bankruptcy Act 1966 2. That the Australian made Bankruptcy of Michael Richard Mulhern be annulled pursuant to Section 153B of the Bankruptcy Act 1966. 3. That the Respondent pays the Applicants costs of $350,000 as per the Order of Rangiah J delivered 10 August 2015, as assessed by Platinum Lawyers. 4. That the Respondent direct forthwith that the Court appointed Trustees of the First Applicant, release upon production of this Order to the Respondent, or its Solicitor, the following: a. His United States Green Card b. His Irish Passport c. All documents seized or held as a result of the raid conducted on 5 march 2010 or retained after 8 January 2012 5. The Respondent pays the Applicant's costs of this application on an indemnity basis. 3 When this matter came before me on 21 April 2016 I made the following orders: 1. The matter be listed for determination of the separate question whether the matter should not be summarily dismissed as an abuse of process and want of service on the proper respondent. 2. The applicant file any submissions in respect of the separate question by 4 pm on 19 May 2016. 3. The respondent file any submissions in respect of the separate question by 4 pm on 9 June 2016. 4. The separate question be listed for half a day hearing at 10.15 am on 16 June 2016. 4 Submissions were filed by the applicant on 24 May 2016 and by the respondent on 9 June 2016. 5 Upon examination the applicants' submissions appear to have been originally marked No NSD 371/2015, and be referable to orders of 26 June 2015. These notations have been struck through by hand, renumbered QUD 235/2016 and re-dated 21 April 2016. Similarly, the submissions stated that they were "settled by G Miller QC", and were signed "D.L. McClelland, Solicitor for the Plaintiffs 6 July 2015", when the only solicitors for the applicants to have entered an appearance was RappLaw, which has since ceased to act for the applicants. 6 It is clear that the applicants are, in effect, "recycling" submissions from previous cases in which they have been involved. 7 Indeed a casual search of the data bases show that both applicants have been involved in many applications in both this Court and the Federal Circuit Court below in respect of their respective bankruptcies. It appears that not only are the applicants recycling submissions - they are recycling applications. 8 Having regard to the proceedings currently before the Court it is clear to me that they are an abuse of the Court's process, primarily because three of the paragraphs in the application have been before the Courts on multiple occasions. It is sufficient for me to note: In respect of paragraph 1 of the application - the Federal Magistrates Court (as it then was) has already heard, and dismissed, an application by Mrs Mulhern under s 153B(1) of the Bankruptcy Act concerning whether a sequestration order ought to have been made: Mulhern v Bank of Queensland Limited [2012] FMCA 1266. I note further that Mrs Mulhern subsequently filed an application in this Court for an order under s 153B of the Bankruptcy Act to annul the sequestration order or alternatively have it set aside. This application was dismissed by Jacobson J as constituting an abuse of the Court's process: Jacqueline Patricia Mulhern v Bank of Queensland [2014] FCA 26. Paragraph 1 of the application currently before the Court is an abuse of process. That a different respondent is nominated this time (that is the Official Receiver this time, as distinct from the Bank of Queensland) is irrelevant - the issue remains the same, and has already been dealt with by the Courts. A similar comment can be made in respect of paragraph 2 of the application. Mr Mulhern filed an application in QUD 208/2012 on 13 April 2012 in this Court seeking, inter alia, an order that "The Australia made bankruptcy of Michael Richard Mulhern, born on 19 May 1960, be annulled pursuant to Section 153B of the Bankruptcy Act 1966 (Cwth)". Mr Mulhern also sought orders against the Court-appointed trustees, Mr Pearce and Mr Heers, as well as Mr Joseph Dodrill. On 17 May 2012 Justice Dowsett made orders dismissing Mr Mulhern's application, and also requiring Mr Mulhern to pay the respondents' costs. It appears that Mr Mulhern subsequently appealed the orders of Justice Dowsett, however before the appeal was heard the respondents brought an application pursuant to s 25(2B)(ba) and (bb) of the Federal Court of Australia Act 1976 (Cth), which entitles the Court to make an order dismissing an appeal for want of prosecution or failure to comply with a direction of the Court. Justice Besanko ordered that Mr Mulhern's appeal against Justice Dowsett's orders be dismissed pursuant to those provisions: Mulhern v Pearce [2012] FCA 884. It follows that, as is the case with Mrs Mulhern, Mr Mulhern's application to have his bankruptcy set aside pursuant to s 153B of the Bankruptcy Act has already been dealt with by this Court, making paragraph 2 of the current application an abuse of process. The prayer for relief in paragraph 4 of the application, namely that the respondent direct Mr Mulhern's trustees to release his green card, passport, and other associated documents to him, is both an abuse of process and misconceived. It is an abuse of process because the question whether these documents should be returned to Mr Mulhern by his trustees has already been dealt with by the Court - unfavourably to Mr Mulhern - and no material is before the Court to suggest that circumstances have changed to now warrant an order in Mr Mulhern's favour. (I note, for example, the decision of Justice Logan in Mulhern v Pearce [2012] FCA 570, my decision in Mulhern v Pearce (No 2) [2014] FCA 805, and other judgments referred to in my earlier decision at [21]). Paragraph 4 is misconceived because the applicants point to no power vested in the respondent to direct the trustees to do what the applicants seek. The proper respondents to such an application would be Mr Mulhern's trustees, however I note that they are not parties to this application, and even if they were such an application against them would be an abuse of process for reasons I have already explained. In any event, I note that Justice Rangiah made an order on 10 August 2015 in Mulhern v Pearce (No 3) [2015] FCA 806 requiring Mr Mulhern to seek leave of the Court prior to commencing any proceedings against the Trustees. 9 In relation to paragraph 3 of the application, I am satisfied that this prayer for relief cannot be sustained and should be summarily rejected. This is because: The order in respect of which the applicants now seek relief in this proceeding was made by Justice Rangiah on 10 August 2015 at the same time as delivery of his Honour's judgment in Mulhern v Official Receiver [2015] FCA 807. Relevantly, the order provided: The respondent pay the applicants' costs (if any) thrown away by reason of the respondent's failure to comply with the order of the Court made on 27 April 2015. The "order of the Court made on 27 April 2015" by Justice Rangiah was Order 1 of that date in NSD 371/2015, namely: The respondent file and serve any application for summary dismissal and any supporting affidavits by 4 pm on 18 May 2015. As Justice Rangiah noted at [2] in the judgment, the respondent's application was not filed until 25 May 2015. His Honour continued in the judgment: 3. On 27 May 2015, by reason of the respondent's default in complying with the order, the applicants filed an interlocutory application seeking orders preventing the respondent from pursuing its application for summary dismissal. 4. The respondent has now applied for an extension of time to file the application for summary judgment. 5. For the reasons that follow, the respondent should be granted an extension of time and should have summary judgment against the applicants. The applicants' interlocutory application and their originating application will be dismissed. His Honour ordered the applicants to pay the respondents costs of the proceedings save for any costs thrown away by reason of the respondent's failure to comply with the Court's order made on 27 April 2015. I consider it fanciful in the extreme that the costs of the applicants in respect of that delay would have exceeded the costs of the respondent in those proceedings - and even more far-fetched that the costs of the applicants thrown away by the one-week delay in filing the summary dismissal application would have been in the amount of $350,000. That this was the amount allegedly "assessed" by Platinum Lawyers is in my view unpersuasive. More particularly - the proper proceedings in which to raise the issue of unpaid costs in NSD 371/2015 are those proceedings, not this matter. 10 Finally, the respondent submits that the final order sought by the applicants that the respondent pays their costs of these proceedings on an indemnity basis is patently absurd. I agree. 11 Finally, this morning in Court Mr Mulhern made extensive oral submissions. His submissions included a recitation of facts (from his perspective); a plea for justice; an attack on his previous lawyers, the Official Receiver and his current trustees; insistence on his rights as a US resident; and a statement of indignation as to his treatment. 12 I note that Mr Mulhern has been in Australia for several years now as a bankrupt. However unfortunately for him and the second applicant, continually repeating the same applications and seeking the same relief (as exemplied in this application) will not bring them the outcome they desire. Mr Mulhern's submission that he is not subject to Australian bankruptcy laws because he is an Irish citizen and US resident is without basis (see, for example, Mulhern v Pearce (No 2) [2014] FCA 805 at [90] et seq). Mr Mulhern's submission that the trustees in bankruptcy have no control over any of his affairs is - irrespective of his personal views - simply not the case (cf comments of the Full Court in Pantzer v Wenkart [2006] FCAFC 140 at [1], Parts V and VI Bankruptcy Act 1966). His submission that the trustees in bankruptcy appointed to the estates of the applicants are the agents of the Official Receiver for the purposes of the administration of their bankrupt estates is without merit. Finally his submission that the previous cases in this Court and the Federal Magistrates Court determining applications seeking annulment of the applicants' bankruptcies and return of Mr Mulhern's property, did not actually "determine" those applications, is plainly wrong. 13 The appropriate orders are to dismiss Mr Mulhern's substantive application 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 Collier.