Russell v Polites Investments Pty Ltd

JUDGE: FLICK J DATE OF ORDER: 16 January 2012 WHERE MADE: SYDNEY (HEARD IN ADELAIDE)

1. The Interlocutory Application filed on 25 October 2011 is dismissed. 2. The Notice of Appeal filed on 14 July 2011 is dismissed. 3. The Appellant is to pay the costs of the Respondent, certified fit for Counsel. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 168 of 2011

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

JUDGE: FLICK J DATE: 16 January 2012 PLACE: SYDNEY (HEARD IN ADELAIDE)

REASONS FOR JUDGMENT 1 The parties to the present appeal have been engaged in litigation for over a decade. 2 It would seem that the source of the disagreement that divides them can be traced back to a lease of premises at Hindley Street, Adelaide for a period from about June 1999 to August 2000. Mr Russell was the tenant; Polites Investments Pty Ltd ("Polites") was the landlord. Mr Russell was evicted from those premises in August 2000. 3 Thereafter the litigation ensued, being (in summary form) as follows: a proceeding in the Adelaide Magistrates Court commenced by Mr Russell on 29 August 2000 for relief against forfeiture. On 30 August 2000 that application was withdrawn; a proceeding in the District Court of South Australia commenced by Mr Russell on 23 June 2003 in respect to personal injuries allegedly sustained whilst descending stairs on the leased premises in October 1999, January 2000 and August 2000. That proceeding was dismissed on 8 July 2009 by Judge Millsteed. It was concluded that there was "no case to answer": Russell v Polites Princes Group of Companies [2009] SADC 73; a proceeding in the District Court of South Australia commenced by Mr Russell on 19 February 2007 claiming damages by reason of his eviction. Security for costs in the sum of $15,000.00 was ordered on 9 July 2009. Security was not provided within the time permitted. That proceeding was dismissed by Master Blumberg for want of prosecution on 31 May 2010. The District Court thereafter on 16 September 2010 entered an allocatur in respect of costs in the sum of $41,997.55. That sum has not been paid; a further proceeding in the Adelaide Magistrates Court commenced by Mr Russell on 15 June 2010. This proceeding was dismissed on 10 August 2010 by Mr Milazzo SM as an abuse of process on the basis that Mr Russell was seeking to re-agitate issues raised and dealt with in the District Court proceeding. An order for costs was made on that date in the sum of $1,500.00; two further proceedings in the District Court of South Australia commenced by Mr Russell on 18 October 2010, being an appeal against the order for security for costs made on 9 July 2009 by Master Bampton and an appeal against the decision dismissing the proceeding for want of prosecution on 31 May 2010 by Master Blumberg. An interlocutory application was also filed by Mr Russell on 20 October 2010 seeking to set aside the allocatur. Leave to appeal was required but was refused. The appeals and the interlocutory application were dismissed. Reasons for decision were published by Judge Herriman on 23 March 2011: Russell v Polites Investments Pty Ltd [2011] SADC 30; and a proceeding in the Supreme Court of South Australia commenced by Mr Russell on 5 October 2011 consisting of an appeal and an application for an extension of time within which to appeal against the order made on 10 August 2010 by Mr Milazzo SM for the payment of costs in the sum of $1,500.00. That appeal was listed for hearing before Justice Vanstone on 29 November 2011. 4 The present bankruptcy proceeding before this Court may be traced back to a Bankruptcy Notice served on 1 October 2010. There was a failure to comply with that Bankruptcy Notice and a Creditor's Petition was filed on 29 October 2010 and served on 3 November 2010. The Creditor's Petition stated that Mr Russell owed $43,497.55 pursuant to: the order for costs made on 10 August 2010 in the sum of $1,500.00; and the allocatur obtained on 16 September 2010 in the sum of $41,997.55. The Creditor's Petition was listed for hearing on 20 December 2010. A sequestration order was made against Mr Russell's estate by Registrar Christie of the Federal Magistrates Court. Reasons for making that order were published on 24 December 2010. Those reasons record (inter alia) a recognition of the "principle that the Court should in general not proceed to sequestrate the estate of a debtor where an appeal is pending against the judgment relied upon as a foundation of the bankruptcy proceedings, if there are genuine and arguable grounds for the appeal and success may bring the debt below the statutory threshold, currently $5,000". The making of orders for sequestration and distribution, it will be recalled, have been described as "essential features of a bankruptcy system": R v Davison (1954) 90 CLR 353 at 375 per Fullagar J. 5 An application seeking review of the decision making the sequestration order was filed on 13 January 2011. An amended application was later filed. Mr Russell was unsuccessful, and the amended application was dismissed. The reasons of the Federal Magistrate were delivered on 24 June 2011: Russell v Polites Investments Pty Ltd [2011] FMCA 476. 6 A Notice of Appeal was filed in this Court on 14 July 2011. On 15 August 2011, the parties were advised by way of letter from the Federal Court of Australia Registry that the appeal was listed for hearing in Adelaide on 23 November 2011.

The Interlocutory Application - A Stay or Adjournment 7 On 25 October 2011 an Interlocutory Application was filed in this Court by Mr Russell seeking "a stay on the appeal of the Sequestration Order". Mr Russell, it was understood, sought an adjournment of the hearing of the appeal. 8 As at 25 October 2011 no Appeal Book had been prepared. The Interlocutory Application was listed for mention in Adelaide on 28 October 2011. On that date, the Interlocutory Application was stood over to 23 November 2011. 9 As at 28 October 2011 the Notice of Appeal which had been filed identified no error said to have been committed by the Federal Magistrate and there was no relevant Affidavit evidence supporting the Interlocutory Application then being made. Reference was made by Mr Russell to a mention or directions hearing before Justice Vanstone to be held on 9 November 2011. But the relevance of that matter to the issues to be resolved in the present appeal was not then explained. There was either no or an inadequate factual basis upon which any adjournment was then warranted. Rather than dismissing the Interlocutory Application, however, it was stood over to 23 November 2011. 10 The deficiencies in the Notice of Appeal were brought to Mr Russell's attention. Polites was also encouraged to itself prepare a bundle of papers upon which the appeal was to be resolved. The hearing date of 23 November 2011 was confirmed. 11 Mr Russell did in fact thereafter prepare three folders of materials. Polites, albeit the Respondent, also prepared what was described as an "Appeal Book." Within those materials were the documents upon which the present appeal was to proceed to hearing. 12 At the outset of the hearing on 23 November 2011 Mr Russell renewed his application to have the hearing of his appeal adjourned. It was understood that Mr Russell sought further time in which to obtain a response to a freedom of information request he had made. That request had apparently been made to the Adelaide City Council and sought documents as to the numbering of premises in Hindley Street. The response to that request, in his submission, would establish that the property the subject of the lease had been incorrectly described from the outset with the errors in description going to the identification of the Certificate of Title and also the street address. Those errors, Mr Russell contended, would support his submission that Polites had been engaged in a process of what he characterised as "fraud" and "perjury". Such submissions, however, seemed more directed (if at all) to the proceeding challenging his eviction rather than any issue relevant to the present bankruptcy proceeding. An adjournment of the appeal to await the production of documents pursuant to Mr Russell's freedom of information request, it was considered, was not warranted. 13 The manner in which Mr Russell sought to advance his appeal was also pursued at the outset - and prior to the hearing of the appeal - with a view to determining whether he had available to him all of the other documents relevant to such submissions as he wished to make. Why an Appeal Book including all such documents had not been filed in accordance with the Federal Court Rules 2011, or why the documents had not been included in the three folders of materials belatedly filed by Mr Russell, may be left to one side. It nevertheless emerged that central to the case Mr Russell sought to advance in this Court were: an appeal from the decision of Judge Millsteed on 8 July 2009; an appeal from the decision of Judge Herriman on 23 March 2011; and the appeal against the decision of Mr Milazzo SM to be heard by Justice Vanstone on 29 November 2011. But missing from the documents before this Court - and presumably also documents that were not before the Federal Magistrate whose decision is under appeal - were any notices of appeal from the decisions of Judges Millsteed and Herriman. The hearing of the appeal before this Court was, accordingly, stood down for slightly less than one hour so as to permit Mr Russell to attend the Registry of the Supreme Court of South Australia with a view to obtaining copies of those notices of appeal. Copies were obtained. These further appeals also form part of the chronology of litigation between the parties. 14 Given the irrelevance (or very marginal relevance) of the documents said to evidence "fraud" or "perjury" and the belated availability of the notices of appeal upon which reliance was to be placed by Mr Russell, any further adjournment of the hearing of the appeal was refused. Although the notices of appeal that had been obtained from the Registry of the Supreme Court of South Australia had not previously been seen by Senior Counsel on behalf of Polites or those instructing him, no objection was taken to them being included within the documents to be considered in resolving the appeal. 15 The appeal to be heard by Justice Vanstone, it should also be noted, had been set down for hearing on 29 November 2011. Notwithstanding the imminence of that hearing, the preferable course (it was concluded) was to continue with the hearing of the appeal before this Court and to permit both parties the opportunity to thereafter put before the Court further documents and submissions. The fate of the proceeding before Her Honour, in that manner, was able to be the subject of consideration by this Court. The resolution of the appeal in this Court, the parties were advised, would most probably be reserved to permit those future events to be addressed in such manner as the parties saw fit. The opportunity to provide further documents and submissions also had the potential to accommodate the desire of Mr Russell to rely upon documents which he anticipated would be produced pursuant to his Freedom of Information Act 1982 (Cth) request. 16 As events later unfolded, on 29 November 2011 Justice Vanstone proceeded to deliver ex tempore reasons striking out Mr Russell's appeal. A further Affidavit was filed by Polites on 2 December 2011 and a further Affidavit was filed by Mr Russell on 7 December 2011. 17 Leave to appeal from the decision refusing the adjournment was sought by Mr Russell at the outset of the hearing before this Court on 23 November 2011. It was indicated to Mr Russell that if leave to appeal was sought from the Court as presently constituted, such leave would be refused; it was further indicated to Mr Russell that the Court was not prepared to adjourn the hearing of the appeal even for the purpose of Mr Russell making an application for leave to appeal before another Judge of the Court. All of the documents of relevance to the hearing of the appeal, it was concluded, were before the Court. The appeal proceeded to hearing. 18 The Interlocutory Application as filed on 25 October 2011 is to be dismissed.

The Notice of Appeal 19 As filed, the Notice of Appeal set forth the Grounds of Appeal (without alteration) as follows: 1. THE DEBT SUBJECT OF THE BANKRUPTCY IS PART OF ONGOING LITIGATION'S BEING APPEALED IN THE SUPREME COURT. 2. THAT THE BANKRUPTCY MAY AND CAN BE USED AGAINST THE APPEALANT AND CAUSE INJUSTIST TO HIM. 3. THE APPEALANT IS SEEKING JUDICIAL INQUIRY INTO THE ABOVE ACTIONS AND OTHER WHICH THE BANKRUPTCY MAY IMPEDE. 20 Notwithstanding the manner in which the Grounds of Appeal have been expressed, it is relatively clear that Mr Russell seeks to contend (inter alia) that: the "ongoing litigation" to which he refers constitutes "other sufficient cause" within the meaning of and for the purposes of s 52(2)(b) of the Bankruptcy Act 1966 (Cth); and that the obtaining of the sequestration order on the part of Polites constituted an abuse of process. It was also apparent from the oral submissions made by Mr Russell that he disputes, amongst other things, that he had failed to pay rent and that he had been lawfully evicted. 21 The appeal is to be dismissed.

The Making of a Sequestration Order - General Principles 22 Section 52 of the Bankruptcy Act 1966 (Cth), the section of immediate relevance to the present appeal, provides in part as follows: Proceedings and order on creditor's petition (1) At the hearing of a creditor's petition, the Court shall require proof of: (a) the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient); (b) service of the petition; and (c) the fact that the debt or debts on which the petitioning creditor relies is or are still owing; and, if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor. (1A) … (1B) … (2) If the Court is not satisfied with the proof of any of those matters, or is satisfied by the debtor: (a) that he or she is able to pay his or her debts; or (b) that for other sufficient cause a sequestration order ought not to be made; it may dismiss the petition. (3) The Court may, if it thinks fit, upon such terms and conditions as it thinks proper, stay all proceedings under a sequestration order for a period not exceeding 21 days. (4) … (5) … 23 Upon proof of the matters set forth in s 52(1) a petitioning creditor has been said to have a "prima facie right" to the making of a sequestration order: Deputy Commissioner of Taxation v Cumins [2008] FCA 353 at [14], 101 ALD 78 at 81. Gilmour J there helpfully summarised the general principles to be applied as follows: [14] On proof of the matters mentioned in s 52(1) of the Bankruptcy Act 1966 (Cth) (the Act) a petitioning creditor has a prima facie right to the making of a sequestration order and the court will proceed to make a sequestration order unless the court is satisfied that for other sufficient cause a sequestration order should not be made: s 52(2)(b) of the Act; Cain v Whyte (1933) 48 CLR 639 at 646. The onus is on the respondent debtor to demonstrate "sufficient cause": Commissioner of Taxation v Bayeh (1999) 100 FCR 144; [1999] FCA 1223 at [12]. [15] Section 52(2)(b) of the Act is wide enough to entitle the court, in a proper case, to adjourn or dismiss a petition in the exercise of its discretion, where the debtor demonstrates a genuine dispute as to the liability to pay the debt: Re Verma; Ex Parte Deputy Commissioner of Taxation (1984) 4 FCR 181 at 185 and 187. This power is discretionary: Clyne v Deputy Commissioner of Taxation (1982) 45 ALR 323 at 328. [16] The court is entitled to inquire whether a judgment is founded on a real debt. In general, a court exercising jurisdiction should not proceed to sequestrate the estate of a debtor where an appeal is pending against the judgment relied on as the foundation of the bankruptcy proceedings, provided that the appeal is based on genuine and arguable grounds: Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137 at 148; Bayne v Baillieu (1907) 5 CLR 64, [1907] HCA 39. [17] The mere fact that an appeal has been lodged does not without more, give rise to a duty to postpone the hearing of the petition: in Re Flatau; Ex Parte Scotch Whisky Distillers (1882) 22 QBD 83 (CA) at 84-85; nor will the court as a matter of course inquire into the validity of a judgment debt: Wren v Mahony (1972) 126 CLR 212 at 222-223, [1972] ALR 307 at 312-314. [18] The test to be applied has been described variously. The judgment debtor must point to grounds having "a real chance of success on appeal": Re Lewin; Ex Parte Milner (1986) 11 FCR 312 at 318; or ensure "that substantial reasons are given for questioning" whether there was in truth a debt: Wren at 225. It is not enough to rely upon mere assertion. The onus is on the applicant for a stay to show the existence of a genuine dispute by adducing evidence establishing the substantial nature of the grounds of challenge: Re Verma and Re Virendra Kumar Verma; Ex Parte Deputy Commissioner of Taxation (FCA, Beaumont J, 14 November 1984, unreported) referred to with approval in Re Verma at 187: [[2008] FCA 353] In Re Dolman; Ex parte Elder Smith Goldsbrough Mort Ltd (1967) 10 FLR 384 at 391 Gibbs J also referred to a creditor who had proved the existence of a debt and an act of bankruptcy having "what may be called a prima facie right to a sequestration order". See also: Burgess v Permanent Custodians Ltd [2010] FCA 986 at [37]. 24 Notwithstanding the reference to this "prima facie right", s 52(2)(b) "confers a discretion on the Court to refuse to make a sequestration order 'for other sufficient cause', i.e., for a cause other than that the debtor is solvent, a circumstance provided for in s 52(2)(a)": Gould v Day [2000] FCA 1673 at [52] per Heerey, Moore and Goldberg JJ. Even if a debtor can bring himself within either s 52(2)(a) or (b), he is not entitled to have the sequestration order necessarily set aside. Falling within either s 52(2)(a) or (b) merely enlivens the exercise of the discretion conferred by s 52(2). "The power conferred upon the court by s 52(2) is permissive not mandatory, although it seems that the occasions on which the discretion not to dismiss the petition might be exercised would not be frequent": Sarina v Council of the Shire of Wollondilly (1980) 48 FLR 372 at 377 per Bowen CJ, C A Sweeney and Lockhart JJ. See also: Narain v Euroasia (Pacific) Pty Ltd [2010] FCA 1352 at [9] per Gray J. 25 Albeit in the context of addressing the terms of the Bankruptcy Act 1924-1932 (Cth), in Cain v Whyte (1933) 48 CLR 639 at 646 it was said that "it is for the debtor to show some cause overriding the interest of the public in the stopping of unremunerative trading, and the rights of individual creditors who are unable to get their debts paid to them as they become due. Something has to be put before the Court to outweigh those considerations before it can be said that sufficient cause is shown against the making of a sequestration order". An appeal challenging these observations of Henchman J, sitting as a Judge in Bankruptcy for the District of Southern Queensland, was dismissed. Appl'd: Cosco v Tsatsoulis [2002] FCA 358 at [20], 189 ALR 559 at 563 to 564 per Hely J. 26 Where reliance is placed by a debtor upon an outstanding appeal, it has been said to be "well established that in general a court exercising jurisdiction in bankruptcy should not proceed to sequestrate the estate of a debtor where an appeal is pending against the judgment relied on as the foundation of the bankruptcy proceedings provided that the appeal is based on genuine and arguable grounds": Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137 at 148 per Davies, Lockhart and Neaves JJ. See also: Rigg v Baker [2006] FCAFC 179 at [67], 155 FCR 531 at 545 per French J; Deputy Commissioner of Taxation v Caporale Group Pty Ltd [2011] FCA 1189 at [18] per Yates J. Clearly enough, not every appeal or challenge to a judgment which may found a creditor's petition need be resolved before a sequestration order may be made: Narain v Euroasia (Pacific) Pty Ltd. The Court was there entertaining an appeal from the decision of a Federal Magistrate who had affirmed the decision of a registrar to grant a sequestration order against Ms Narain. In refusing leave to appeal out of time, Gray J referred to the decision in Ahern and continued: [52] The submissions of counsel for Ms Narain included the proposition that the federal magistrate was bound to give her an opportunity to pursue her application for special leave to appeal to the High Court, and any resulting appeal, so that the federal magistrate's refusal to do so established that his Honour was in error. That proposition cannot be sustained. It cannot be the case that a court dealing with a creditor's petition is bound to permit the debtor to invoke every possible avenue of appeal. The capacity of some debtors to generate new proceedings, in vain attempts to overturn judgments against them, is part of the experience of every judicial officer who deals with bankruptcy cases. The existence of a discretionary power carries with it the proposition that each exercise of discretion must be based on the circumstances of the particular case: [[2010] FCA 1352] 27 It has also been similarly recognised that a debtor who maintains that he has a claim against a creditor "must establish that his claim … is likely to succeed, not merely that he has an arguable claim": ICM Agriculture Pty Ltd v Young [2009] FCA 1169 at [85], 260 ALR 515 at 531 per Lindgren J. Appl'd: Singh v Deputy Commissioner of Taxation [2011] FCA 889 at [14] per Collier J. The same requirement has been variously expressed. Thus, in St George Bank Ltd v Helfenbaum [1999] FCA 1337 at [13], Sundberg J said that a debtor must establish "that he has a real claim against the creditor that is likely to succeed". A debtor will not establish such a claim where "there is no evidence as to the prospects of success" or the quantum of any possible recovery: Hilellis v Mobil Oil Australia Ltd [2000] FCA 1139 at [8] to [9] per Hely J. Nor will a debtor establish such a claim merely by producing a statement of claim or "by pointing to the existence of current litigation against the creditor": St George Bank Ltd v Helfenbaum at [13] per Sundberg J. An appeal by itself may not be "other sufficient cause": e.g., Smart v Esanda Finance Corp Ltd [2000] FCA 235 at [18] to [21] per Lee, Goldberg and Kenny JJ. 28 Whether it be an appeal against a judgment or some other claim that a debtor may have, "other sufficient cause" is not made out for the purposes of s 52(2)(b) if the appeal or claim is not "genuine and arguable".

The "Ongoing Litigation" - Other Sufficient Cause? 29 Before the Federal Magistrate there was no question but that there was proof of each of those matters set forth in s 52(1). Nor was any question raised as to the ability of Mr Russell to pay his debts so as to invoke s 52(2)(a). 30 The case as advanced by Mr Russell before the Federal Magistrate was that he could bring himself within s 52(2)(b) by reason of outstanding litigation and by reason of the pursuit by Polites of the bankruptcy proceedings with a view to stifling the other litigation in which he was involved. The mere fact that Mr Russell asserted or maintained that he had outstanding litigation was, of course, not in itself a "sufficient cause" to not make the sequestration order. 31 The Federal Magistrate, it is respectfully considered, did not err in dismissing Mr Russell's amended application. 32 Similarly, before this Court, the major thrust of Mr Russell's submissions was again that the sequestration order ought not to have been made because "other sufficient cause" for the purposes of s 52(2)(b) was made out by reason of outstanding litigation, being: the appeal from the decision of Judge Millsteed (the notice of appeal being filed in September 2010); the appeal from the decision of Judge Herriman (the notice of appeal being filed in April 2011); and the appeal against the decision of Mr Milazzo SM to be heard by Justice Vanstone on 29 November 2011. Although the debts relied upon in support of the Creditor's Petition were the allocatur obtained on 16 September 2010 in the sum of $41,997.55 and the costs order for $1,500.00 made on 10 August 2010, Mr Russell obviously cast his challenge to the making of the sequestration order far wider. Each of the orders that have been made against him, and each of his challenges to one or other of those orders, have thus been considered with a view to determining whether "other sufficient cause" can be discerned in any of his outstanding litigation. 33 None of the outstanding litigation relied upon by Mr Russell, it is concluded, constitutes "other sufficient cause". Such litigation needs to be addressed, not for the purpose of this Court purporting to resolve any appeal that may be pending before another Court, but, for the more confined purpose of determining whether any one or other of the appeals may fall within s 52(2)(b). 34 Approached in this manner, it is not considered that the appeal from the decision of Judge Millsteed can be brought within s 52(2)(b). 35 That proceeding was commenced in June 2003. The hearing took place on a number of days in September 2006, September 2007 and November 2007. The apparent delay between 2003 and 2006-2007 was not adequately explained. The expiration of time between the last hearing date in November 2007 and the publication of reasons for decision in July 2009, obviously enough, cannot be visited upon Mr Russell. But, there is no self-evident reason to question the decision of Judge Millsteed that there was "no case to answer". That decision was founded upon conclusions that: there was a duty of care owed to Mr Russell, but that there was no breach of that duty; there was a failure on the part of Mr Russell to establish that the third alleged fall upon the stairs was caused by the condition of the stairs; and there was an exclusion clause in the lease excluding liability. The exclusion clause, for example, was to be found in cl. 2.30 of the Memorandum of Lease. That clause provided as follows: To Occupy Premises at his own Risk To occupy and use the Premises at the Lessee's risk and the Lessee releases to the fullest extent permitted by law the Lessor its servants agents and contractors from all claims and demands of any kind and from all liability which may arise in respect of any accident damage or injury occurring to any person or property in or about the Premises or the Building. After having addressed the former two bases upon which the decision was based, Judge Millsteed went on to conclude: The exclusion clause [110] Although the above findings are sufficient to uphold the submission of no case to answer I proceed to consider PIPL's argument that, regardless of whether or not the lease included the stairs, the plaintiff has no claim because he agreed to "occupy and use the premises" at his own risk and to release PIPL "its servants and agents and contractors from all claims and demands of any kind and from all liability which may arise in respect of any accident damage or injury to any person or property in or about the premises of the Building" (Cl 2.30). … [116] In the present case, the essential question is, what would reasonable people in the position of the parties have taken the clause to mean, read in the light of the Agreement as a whole? [117] As earlier observed the exclusion clause purports to release PIPL "to the fullest extent permitted by the law from all claims and demands of any kind and from all liability which may arise in respect of any accident damage or injury". There is no express reference to negligence, however, giving these words their plain and natural meaning, and having regard to the context in which they appear, they are plainly wide enough to embrace liability for negligence. There is, in my view, no ambiguity that warrants construing the clause contra proferentem. To my mind this construction is also consistent with the Agreement placing no obligation on PIPL to maintain and repair the premises. [118] Accordingly, I accept PIPL's submission that, regardless of whether or not the stairs were included in the lease, the plaintiff had agreed to release PIPL from liability in negligence for any type of accident "in or near" the demised premises. Because the stairs were either "in or near" the demised premises the exclusion clause operates to exclude PIPL from liability in respect of the plaintiff's alleged fall: [[2009] SADC 73] Irrespective of such difficulties as may be encountered by reason of the notice of appeal from that decision being filed over a year after the decision was published, there is no reason to conclude that an appeal has any such prospects of success as to constitute "other sufficient cause". 36 Nor could any challenge to the decision of Judge Herriman fall within s 52(2)(b). 37 The notice of appeal filed in April 2011 challenging the decision of Judge Herriman reads as follows: (APPEAL 1) AND NEW TRIAL EXTENSION OF TIME FOR APPEAL. APPEAL AGAINST SECURITY COST (APPEAL 2) AGAINST ORDER ON MASTER BLUMBERG ORDER 31 MAY 2010 AND EXTENSION OF TIME DENIED AND INTERLOCUTORY APPLICATION TO SET ASIDE THE DEFENDANTS ALLOCATUR The grounds of appeal are there set forth as follows: THE APPEALANT BELIEVES THE LEASE IS NOT A BONA VIDE LEASE AND THE RESPONDENT BREACHED STATUTONIAL REQUIREMENTS IN ASSIGNING SAID LEASE BUT HAS BEEN UNABLE TO HAVE THE CASE TO BE HEARD TO ESTABLISH THIS 38 The challenge to the allocatur in respect of costs in the sum of $41,997.55, it should be noted at the outset, confronts considerable difficulties. The order of Master Blumberg dismissing the proceeding in the District Court for want of prosecution, without more, seems unexceptional. So, too, seems the consequential order for costs. Master Blumberg delivered ex tempore reasons on 31 May 2010 for making his order dismissing the proceeding for want of prosecution and for ordering that "the costs of the Action be the defendant's costs to be agreed or taxed." Such orders as to costs necessarily involve exercises of discretion which are difficult to upset on appeal. The subsequent quantification for costs in the sum of $41,997.55 seems equally unexceptional, especially in circumstances where a previous order that security for costs be provided had not been complied with. But, whatever may be the prospects of success on appeal, there are considered to be insufficient prospects of success to warrant the conclusion that that appeal can be brought within s 52(2)(b). 39 Not without significance are the views expressed by the Federal Magistrate with respect to any challenge to the decision of Judge Herriman. The Federal Magistrate recounted the history of the litigation between the parties and extracted the "strong views" expressed by Judge Herriman: Russell v Polites Investments Pty Ltd [2011] FMCA 476 at [16]. The Federal Magistrate thereafter referred to Judge Herriman's characterisation of the litigation before him as "frivolous, vexatious and an abuse of court process". The Federal Magistrate expressed agreement with this "characterisation of that litigation": [2011] FMCA 476 at [27]. For present purposes it is sufficient to conclude that no error is discernible in the reasons of the Federal Magistrate and that any appeal from the decision of Judge Herriman would not constitute "other sufficient cause" for the purposes of s 52(2)(b). 40 Finally to be considered is the challenge to the costs order made on 10 August 2010 by Mr Milazzo SM for $1,500.00. Any challenge to that order, without more, would probably have assumed little importance. But any challenge has now been resolved. On 29 November 2011, Justice Vanstone struck out Mr Russell's notice of appeal. Her Honour characterised the proceeding before her as "an appeal and an application for an extension of time within which to appeal against an order made by Mr Milazzo SM in the Magistrates Court on 10 August 2010 for payment of costs to the respondent in the sum of $1500." Her Honour found that "the appeal notice is incompetent." That appeal is thus no longer outstanding and cannot fall within s 52(2)(b). 41 The difficulties confronting Mr Russell in the pursuit of any of his appeals were summarised during the oral submissions of Senior Counsel for Polites. Although it was not to be expected that Mr Russell as a self-represented litigant would seek to rebut each of the submissions made against him in any great detail, it should be noted that he made no real attempt to lay the groundwork for a submission that the appeals had any real prospects of success. Such submissions as were advanced by Mr Russell repeatedly made reference to what he referred to as "fraud" and "perjury". The further Affidavit filed by Mr Russell on 7 December 2011 returned to these allegations referring, for example, to "the Creditor's Polites petition of $43,497.55 as being a corrupt manipulation of the process". Those submissions and allegations, with respect to Mr Russell, are groundless. 42 Moreover, even if it be concluded - contrary to the conclusion in fact reached - that the "ongoing litigation" satisfies the requirements of s 52(2)(b), it is not considered that the discretion conferred by s 52(2)(b) should be exercised in favour of Mr Russell. Irrespective of the prospects of success of any of the appeals presently being pursued by Mr Russell, it is considered that the discretion should be exercised such that the sequestration order should remain because the history of the litigation exposes in part the fact that: Mr Russell has sought to re-agitate issues that have previously been resolved against him; and Mr Russell has not complied with orders made by other Courts and has thereafter sought to resist the consequences of his non-compliance in a manner which seemingly lacks merit. The oral submissions of Mr Russell that he has actively pursued the litigation he has commenced and that such delays as have been encountered are not to be visited upon him are noted. A dispute which has its origins in facts which took place in 1999 should nevertheless have been resolved long ago. Why it has not been resolved was not satisfactorily explained by Mr Russell. 43 The "ongoing litigation" referred to in Ground 1 of the Notice of Appeal does not constitute "other sufficient cause" within the meaning of and for the purposes of s 52(2)(b). Nor does the unspecified "judicial inquiry" referred to in Ground 3.

Abuse of Process? 44 The remaining Ground 2 sought to be advanced by Mr Russell is addressed to an alleged abuse of process. There is no merit in this Ground of Appeal. 45 It may be accepted that it is an abuse of process to pursue bankruptcy proceedings "for the purpose of stifling litigation": Bayne v Baillieu; Bayne v Riggall (1908) 6 CLR 382 at 396 per Griffith CJ. The power of the Court to prevent such an abuse of process may also be readily accepted. The "ultimate principle involved is that a court will not allow its process to be abused": Rozenbes v Kronhill (1956) 95 CLR 407 at 417. Dixon CJ, Webb and Fullagar JJ there said that a court would "look strictly at the conduct of a creditor using or threatening bankruptcy proceedings" and at whether "the creditor has used, or attempted to use, a pending petition, or a threat of a petition, in order to extract from the debtor money which the debtor is not bound to pay, or in order to obtain some secret and unfair advantage over other creditors". 46 In the context of an application to set aside a bankruptcy notice, Gyles J in Killoran v Duncan [1999] FCA 1574 relevantly observed: [12] Whilst there is no debate about the jurisdiction of the Court to set aside a bankruptcy notice as an abuse of process where it can be concluded that it was simply to put pressure on the debtor rather than to genuinely invoke the Court's jurisdiction, I am not satisfied that that is the position here. There is nothing to indicate that the respondent creditor does not genuinely intend to pursue the matter if there is default in complying with the notice. In my opinion, there is nothing special about abuse of process in this field, and, if a person wishes to resort to the jurisdiction of the Court for appropriate orders, then it will be an unusual case in which that will be prevented. [13] There is no evidence here of any collateral purpose or of any undue pressure being applied. It is correct, I think, that the time to judge abuse of process is the time that the bankruptcy notice is issued and that subsequent events have relatively slight relevance. They may be relevant insofar as they throw light upon circumstances which might have been appreciated and foreseen at the time of the issue of the notice. [14] If, contrary to my view, however, there were a prima facie case of abuse of process, the remedy is discretionary and, in my view, if circumstances following that time had altered significantly so that it would not be appropriate to set aside the notice, I think that the jurisdiction of the Court is wide enough to give effect to that. I have in mind here that whilst the immediate parties to the application are those with the most interest in the matter, the body of creditors generally also have an interest and I cannot be certain one way or the other about the position of solvency. It may be most unfortunate if a bankruptcy notice were set aside in circumstances where the debtor is in fact insolvent: [[1999] FCA 1574]. See also: Maxwell-Smith v S & E Hall Pty Ltd [2006] FCA 825, 233 ALR 81 at [41] to [49] per Jacobson J; Cavoli v Etl [2007] FCA 1191 at [17] per Heerey J; Slack v Bottoms English Solicitors [2002] FCA 1445 at [15] to [18] per Spender J; Yang v Mead [2009] FCA 1202 at [11]; Seller v Deputy Commissioner of Taxation [2011] FCA 865 at [15] to [16]. An allegation of abuse of process, it is to be recalled, is a "serious" allegation and one not to be made without a sufficient factual foundation: cf. Conley v Commonwealth Bank of Australia [2006] FCA 1255 at [9] to [18] per Bennett J. 47 There is, however, no basis in the present proceeding upon which any conclusion may be reached that Polites, in issuing the Bankruptcy Notice and in filing a Creditor's Petition in 2010, was doing anything other than properly invoking the processes provided for by the Bankruptcy Act. The chronology of events does not support any inference of any improper purpose of the kind relied upon by Mr Russell - indeed, the chronology would support the contrary inference that Polites endured a series of claims being made and resolved before finally seeking recourse to its rights conferred by the Bankruptcy Act. There is no basis upon which it can be concluded that Polites was pursuing some improper purpose, such as a purpose of improperly putting pressure on Mr Russell or attempting to stifle his pursuit of other litigation. 48 The allegation that an erroneous description of the property the subject of the lease constitutes "fraud" or "perjury" - and presumably thereby an abuse of process - is rejected. Any errors in the description of the property would not vitiate the orders founding the Creditor's Petition and would not expose any improper purpose or motive on the part of Polites in invoking its rights under the Bankruptcy Act. Each of the documents exhibited to Mr Russell's further Affidavit filed on 7 December 2011 has been reviewed. But none advance his allegations as to either "fraud" or "perjury". 49 No error is discernible in the Federal Magistrate's rejection of this submission.

Conclusions 50 Irrespective of the terms in which the Notice of Appeal is expressed, the appeal is without merit. 51 Mr Russell cannot bring himself within s 52(2)(b). The mere filing of the notices of appeal does not constitute "other sufficient cause". Nor is there any substantive merit in the appeals themselves as to constitute "other sufficient cause". No occasion therefore arises for any exercise of the discretion conferred by s 52(2), but had such an occasion arisen, that discretion would have been exercised adversely to Mr Russell. 52 The decision of the Federal Magistrate is correct. 53 The appeal is to be dismissed. The costs order as sought by Polites will be made.

ORDERS The Orders of the Court are:

1. The Interlocutory Application filed on 25 October 2011 is dismissed.
2. The Notice of Appeal filed on 14 July 2011 is dismissed.
3. The Appellant is to pay the costs of the Respondent, certified fit for Counsel. I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.