The appeal
30 The Commissioner submits that the first issue raised in the appeal is whether the decision of Barker J in Clifford v Vegas Enterprises Pty Ltd [2009] FCA 1204 was wrong. However, that is a false issue because the Commissioner submits that the decision in Clifford is correct.
31 In truth, the Commissioner's opposition to the appeal is on two bases.
32 The first basis is that the primary judge was correct, albeit for four different reasons, to refuse to make the order requiring the production of the Optus documents as follows:
The primary judge was correct to conclude the Optus Documents ought not be admitted albeit for different reasons. First, the documents were produced by Optus on 30 June 2021. No proper explanation was provided by Mr Ritson (a resident of Queensland) as to why he did not take any steps to be released from the implied undertaking provided to the Queensland District Court. Second, no explanation was provided by Mr Ritson as to why he did not seek leave of the Federal Circuit Court to issue a subpoena on similar terms to Optus seeking those documents, or his delay in bringing the application to reopen. Third, no admissible evidence was adduced from Optus as to their internal systems to establish that they recorded and retained all call data in respect of a phone call received by an Optus managed mobile number, and, accordingly, the documents ought to be rejected under s 135(b) - (c) of the Evidence Act. Fourth, to the extent that the Optus Documents could affect the outcome of the proceedings, the delay in brining (sic) those documents to the attention of the Commissioner meant that the Commissioner was deprived of an opportunity to properly respond to them, given the imminent lapse of the creditors (sic) petition on 16 August 2021. The above matters would justify a refusal to admit the Optus Documents into evidence.
33 We reject these submissions.
34 The first and second reasons identified by the Commissioner are merely factors for consideration in the exercise of discretion to admit evidence. Further, both of these factors are explicable by the fact that Mr Ritson is a self-represented litigant (and obviously so) and it may be inferred that Mr Ritson was not aware of those procedures.
35 Further, during the hearing below, Mr Ritson did provide an explanation as to why he did not seek leave from the District Court, stating that:
I've put in evidence that Mr Ryan [the defendant in the District Court proceedings] has been delaying and not responding to various - the process in the District Court. ... I submit that going through a process of seeking leave from the District Court would require me to file an application, serve it on Mr Ryan, and go through that process, which would take weeks at best. And I'm conscious of the time limit in this proceeding, for the life of the creditor's petition. ... So to suggest that I should have taken some other course ignores the fact of the tight timeframe, and also of Mr Ryan's obvious uncooperativeness. [The] approach I've taken in the circumstances is the least time consuming and also the most efficient way of doing things.
36 The third reason identified by the Commissioner is misconceived. The Commissioner submits that the Optus documents were in any event inadmissible as the primary judge would have exercised his discretion to refuse to admit the documents under s 135 Evidence Act 1995 (Cth) including because there was no admissible evidence adduced from Optus as to their internal systems to establish that they recorded and retained all call data in respect of a telephone call received by an Optus managed mobile number. There are a number of difficulties with this submission.
37 First, Mr Ritson did not seek to tender the Optus documents below. This was no doubt due in part to the submission by the Commissioner that to do so would amount to contempt. And the primary judge intervened when Mr Ritson attempted to refer to their contents in oral submissions. Hence the question of the admissibility or discretionary exclusion of the Optus documents did not arise because of the acceptance by the primary judge of submissions advanced on behalf of the Commissioner.
38 Secondly, had Mr Ritson sought to tender the documents in the proceedings before the primary judge, which he did not, the purpose of the tender would have been to show that Mr Ritson possessed evidence which would be able to be adduced at the trial of the District Court proceedings (probably under s 95 Evidence Act 1977 (Qld)) and which would necessarily impact on the primary judge's assessment of his prospects of success in relation to his claim in that proceeding. That was the fact in issue in relation to which the relevance of the representations in the document would have been assessed if the tender had been made.
39 Thirdly, if the argument had not been misdirected by the Commissioner and, in response to the tender, objection to admissibility had been made, no doubt the primary judge would have considered whether the documents should have been admitted subject to an appropriate limitation under s 136 of the Evidence Act 1995 (Cth).
40 The Commissioner has failed to show, and indeed cannot show, that the primary judge would have exercised a discretion to exclude this evidence under s 135 Evidence Act 1995 (Cth) in these circumstances. Indeed the suggestion that the documents may have been excluded on a discretionary basis (rather than rejected as inadmissible) merely reinforces that view we have formed that they were clearly relevant to the fact in issue we have identified (documents which do not pass through the Pt 3.1 "gateway" of relevance are not, of course, the subject of discretionary exclusion provided for by Pt 3.11).
41 The fourth reason identified by the Commissioner is similarly unmeritorious. The Commissioner submits that the delay in bringing the Optus documents to the attention of the Commissioner meant that the Commissioner was deprived of an opportunity to respond to them properly.
42 However, the interim application was filed on 30 July 2021 and the hearing was on 5 August 2021. The creditor's petition did not lapse until 16 August 2021. Having regard to the small number of pages contained within the Optus documents, there is no apparent reason why the Commissioner would not have had sufficient time to review and respond to them, including by supplementary submissions, and for the application to be determined prior to 16 August 2021.
43 The second basis put forward by the Commissioner for opposing the appeal is that the admission of the Optus documents would have made no difference to the outcome of the case.
44 We have already noted that they were relevant. This is because, having regard to the submissions by the Commissioner before the primary judge, it was accepted by the Commissioner that the primary judge was required to engage in a consideration of the merits of Mr Ritson's case in the District Court proceedings.
45 When undertaking this process, the primary judge concluded in Ritson (No 5) that he was satisfied Mr Ritson would satisfy the first two elements of the tort of malicious prosecution, as elucidated by the High Court in A v State of New South Wales [2007] HCA 10; 230 CLR 500.
46 However, the primary judge also concluded that he was unable to be satisfied Mr Ritson would be more likely than not to succeed in relation to the final two elements of the tort of malicious prosecution or the tort of abuse of process because the determination of these elements by the District Court would:
... depend on an assessment of the credibility of the two versions of events and of Messrs Ritson and Ryan themselves, which this Court cannot essay with any confidence in light of the nature of the evidence led in this proceeding. Put another way, an attempt by me [the primary judge] to determine which and who is more likely to be believed in the Qld DCt would not be much better than speculation.
47 As a consequence, the primary judge concluded there was no "other sufficient reason" and sequestrated the estate of Mr Ritson.
48 In this context, the submission that the admission of the Optus documents would have no impact on the primary judge's consideration of Mr Ritson's claims made in the Queensland District Court cannot be correct.
49 The Optus documents were relevant evidence in the District Court proceeding in that they would tend to prove or disprove the respective accounts of Mr Ritson and Mr Ryan which in turn were relevant to proving or disproving the elements of the torts which are the subject of the proceedings.
50 Consequently, the Optus documents were relevant to the primary judge's consideration of the merits of Mr Ritson's claim in the District Court proceedings in the way we have explained and we reject the submission that the admission of the Optus documents below would have made no difference to the primary judge's consideration of the strength of Mr Ritson's case against Mr Ryan.
51 That however does not mean that the appeal should be allowed. Mr Ritson still has to deal with [84] and [85]. In Ling v Enrobook Pty Ltd [1997] FCA 226; 74 FCR 19, the Full Court (Davies, Wilcox and Branson JJ) dealt with "other sufficient cause" in s 52(2)(b) of the Bankruptcy Act in circumstances where the debtor had other litigation. Relying upon Cain v Whyte [1932] HCA 6; (1933) 48 CLR 639 at 645-646, the Court made clear that it was for the debtor to make out the basis for the other sufficient cause. The Court indicated that a review of the authorities disclosed in certain circumstances, but not in all circumstances, the fact that the debtor has pending before a court legitimate claims to funds sufficient to satisfy the petitioning creditor's debt may amount to other sufficient cause. The Court referred to the reasons of the primary judge (Lehane J) when his Honour said at 95:
As a general proposition … there is no apparent reason why a petitioning creditor should not be entitled to have a sequestration order made, if the requirements of s 52 are otherwise satisfied, simply because the debtor may have a counter-claim or cross-demand against some other creditor.
52 The Court then referred to the valuable judgment of Gibbs J (as the later Chief Justice of the High Court then was) in Re Schmidt; Ex parte Anglewood (1968) 13 FLR 111 at 115-116, where the following was said:
The second main contention of the debtor is that he is entitled to damages for the wrongful removal of his own property…The question immediately arises whether I should proceed to determine the existence and extent of the debtor's alleged claim. The position is different from that which arose in relation to his claim that the trucks were sold at an undervalue. In that regard any sum which the mortgagee was entitled to have brought to its credit as the amount which was realised, or ought to have been realised, on the sale of the mortgaged property must also be allowed to the credit of the debtor as surety, thus pro tanto reducing the amount of his indebtedness. It was therefore necessary to determine in this court the questions that arose in relation to that aspect of the matter. Where, however, the debtor claims to be entitled to unliquidated damages in tort against the petitioning creditor the position seems to me to be different. As a general rule this court is not an appropriate forum to decide such a claim and is limited to forming a view as to whether it appears that there is sufficient validity in the debtor's claims to justify a dismissal or adjournment of the petition…Considerable evidence directed to this issue has been given before me and it seems to me that I ought to consider this evidence for the purpose of deciding only whether it is probable that the debtor has against the petitioning creditor a claim which is likely to succeed. If I am satisfied that the debtor has a claim against the petitioning creditor equal to or exceeding the amount of the judgment debt, I should not make a sequestration order. If, however, it appears that the debtor has a claim which is less than the amount of the petitioning creditor's judgment debt, the proper course would seem to be to require the debtor, if he desires to avoid a sequestration order, to pay the difference between the amount of the judgment debt and the amount which it seems probable to me that he will recover in the proceedings against the petitioning creditor. In many cases it would be more convenient, assuming that the debtor showed that he had a real claim to litigate, to adjourn the proceedings to enable his claim to be tried in the ordinary courts, but that course was not taken in the present case, partly because the existence of any valid claim was vigorously denied by the petitioning creditor and partly because the proceedings in the Supreme Court have been somewhat dilatory.
53 Justice Gibbs was dealing with claims by the debtor against the creditor. In relation to claims against third parties by the debtor the Court in Ling referred at 26 to the judgment of the Full Court in Maddestra v Penfolds Wines Pty Ltd (1993) 44 FCR 303 saying:
The authorities also show that satisfaction that the debtor is well advanced with litigation likely to result in the debtor being in a position to pay his or her debts may well provide a basis for a finding that there is a "sufficient cause" for a sequestration order not to be made [reference was then made to Maddestra]. But the authorities do not suggest that it is in the public interest to allow insolvent debtors to prosecute litigation generally. They only recognise that it is not in the public interest for a debtor to be forced into bankruptcy by reason of a state of insolvency likely to be of only short duration.
54 At first instance, in Re Maddestra; Ex parte Penfolds Wines Pty Ltd [1993] FCA 83, Lee J was faced with circumstances not unlike the present. The debtor had a claim against the third party not fully well advanced at a time when the petition was about to become stale. Justice Lee said at 9 and 10, which was upheld by the Full Court, the following:
If collateral litigation is well advanced and likely to bring a beneficial result to a debtor, there may be good cause for the Court not to make a sequestration order and it may be satisfied that such an order ought not to be made. The Court may mould its order according to the circumstances, deferring further hearing of the petition subject to review or it may be entirely satisfied that a sequestration order ought not to be made on the petition at any time and that the petition should be dismissed.
In the present case the extended petition is nearing the end of its life and the point has now come where a determination must be made whether the petition should be dismissed or sequestration orders made. I am not satisfied that the debtors have shown that there is other sufficient cause in which the Court may conclude that a sequestration order ought not to be made. The making of those orders will have no bearing on the conduct of the litigation in the Supreme Court.
55 As the Full Court in Ling and Lee J in Maddestra [1993] FCA 83 made clear, the matters to weigh for consideration in circumstances such as these include the interests of the general public and the general body of creditors. In circumstances where Mr Ritson has not shown that the District Court proceedings are likely to come on any time soon, the learned primary judge was plainly correct in approaching the matter as he did in [84] and [85]. Mr Ritson was not solvent; any successful action would take time; the creditor is entitled to an order; and the general body of creditors are entitled to be protected. It is true that the approach of the primary judge in [84] and [85] did not include consideration of the Optus documents but the primary judge was explicit in noting that the point of departure for his consideration in those paragraphs was if he had been wrong in relation to assessment of the strength of Mr Ritson's case. However, in the light of the acrimonious nature of the dispute between Mr Ritson and Mr Ryan, of the fact that there is no basis in the circumstances to conclude that the Optus documents would be transformative such that the case was likely to be resolved promptly, and of the correctness of the primary judge's approach in [84] and [85], we are of the view that there is no reasonable possibility that the error of the primary judge could have led to a different outcome.
56 In these circumstances, notwithstanding that the learned primary judge made an error in how he treated the Optus documents and how he dealt with the reopening application because of that, and assuming (without deciding) the documents could have had a material effect upon the primary judge's view about the strength of Mr Ritson's case against Mr Ryan, there was no basis to conclude that even a reasonable case against Mr Ryan likely at some point to be successful should have prevented a sequestration order being made on the basis that there was other sufficient cause.