Samootin v Official Trustee in Bankruptcy

REASONS FOR JUDGMENT 1 On 19 October 2007, I made orders dismissing an application brought by the applicant, Ms Alexandra Samootin, against the Official Trustee in Bankruptcy. My reasons for judgment and the orders I made are to be found in Samootin v Official Trustee in Bankruptcy [2007] FCA 1618 ("my 2007 orders"). My 2007 orders were entered by the court shortly after they were made. Indeed they were the subject of an appeal or an application for leave to appeal made by Ms Samootin, which was dismissed: see Samootin v Official Trustee in Bankruptcy [2008] FCA 914. Approximately three and a half years later on 21 April 2011, Ms Samootin filed a notice of motion seeking leave to reopen the matter. The notice of motion also seeks leave for the reopened matter to be heard concurrently with a proceeding recently commenced in this court - matter NSD 164 of 2011 ("NSD 164 of 2011"). 2 The Court has power in the limited circumstances set out in O 35 r 7 of the Federal Court Rules 1979 (Cth) ("Federal Court Rules") to vary or set aside a judgment or order after it has been entered. I will refer later to the rule and the relevant principles which govern its application. However, before doing so, it is necessary to state as briefly as possible the nature of the application that was the subject of my 2007 orders and the reasons why Ms Samootin seeks leave to reopen. To do so, it is necessary to say something about the background of the litigation upon which Ms Samootin relies to support her application to reopen my 2007 orders. 3 The reasons which I gave for my 2007 orders explain the nature of Ms Samootin's application which was a very limited one that touched only briefly upon the very substantial history of the litigation in which Ms Samootin has engaged. Ms Samootin was declared bankrupt by a sequestration order made in the Federal Magistrates Court on 24 May 2006 on the application of Ms Giselle Wagner by reason of unpaid costs orders in proceedings in the Supreme Court of New South Wales: Wagner v Samootin [2006] FMCA 688. All avenues of appeal in relation to the sequestration order have been exhausted. 4 The essence of Ms Samootin's complaint in the matter which was the subject of the 2007 orders concerned the way in which the Official Trustee had acted in relation to the conduct of certain proceedings in the Supreme Court of New South Wales. In particular Ms Samootin contended that Ms Nash, the solicitor for the Official Trustee, entered into contracts on Ms Samootin's behalf in breach of the provisions of the Consumer Credit (New South Wales) Act (1995) (NSW). I rejected Ms Samootin's submission as to any misconduct by the Official Trustee or by Ms Nash on the Official Trustee's behalf. On 30 April 2008, Emmett J dismissed Ms Samootin's appeal against my 2007 orders for want of appearance by Ms Samootin at a callover. No application was made by Ms Samootin to set aside Emmett J's order. 5 The essential factual background to a large number of proceedings which Ms Samootin has brought in the Federal Court and the Supreme Court of New South Wales, is described in the reasons of Campbell JA (with whom Beazley and Hodgson JJA agreed) in Samootin v Shea [2010] NSWCA 371 ("Samootin v Shea"). It is unnecessary to repeat the detail of what was said by Campbell JA, save to say that prior to her bankruptcy, Ms Samootin was engaged in a dispute with her former husband, Mr Shea, and his friend, Mr Deans, in relation to the beneficial interest she claimed in respect of two properties at 24 and 26 Oxford Falls Road, Beacon Hill. 6 In 2001, Ms Samootin commenced proceedings in the Equity Division of the Supreme Court against Mr Shea, Mr Deans and two of Mr Deans' companies, Loan Design Pty Limited and S R Deans Pty Limited. Loan Design was the registered proprietor of the properties. Palmer J heard the matter in 2003. His Honour found that Ms Samootin was not entitled to any of the relief claimed by her: Samootin v Shea (No 2) [2003] NSWSC 695. 7 However, following an application for leave to appeal and the remittal of the matter to Palmer J, his Honour made substituted orders and declarations which inter alia declared that Loan Design held the properties at 24 and 26 Oxford Falls Road on trust for Ms Samootin, Mr Shea and Loan Design, their respective interests being in proportion to the equity contributed by them to the acquisition of the properties. Ultimately, the inquiry ordered by Palmer J came on for hearing before Hammerschlag J in 2007. Hammerschlag J determined what was, in essence, an accounting to determine the respective interests of the relevant parties in the properties at 24 and 26 Oxford Falls Road in light of the principles referred to by the High Court in Calverley v Green (1984) 155 CLR 242. 8 He determined that Ms Samootin and Mr Shea each held beneficial interests of 15.2 per cent, with the remaining 69.6 per cent held beneficially by or on behalf of Mr Deans or Loan Design. Hammerschlag J also accepted an undertaking by Ms Samootin to pay an occupation fee for her occupation of the property at 26 Oxford Falls Road, as a condition of which a writ of possession obtained by the mortgagee of the property, St George Bank, was effectively stayed. Ms Samootin's principal complaint about the proceedings in the Supreme Court appears to be as to the accounting exercise conducted by Hammerschlag J. She claims to be beneficially entitled to the whole (or substantially the whole) of the properties. 9 The extent of Ms Samootin's beneficial interests in the properties was referred to by the New South Wales Court of Appeal in Samootin v Shea. The judgments of the court in that case dealt with four applications made by Ms Samootin, which included applications for leave to appeal against the orders and judgments of Palmer J and Hammerschlag J. The principal judgment in the Court of Appeal was given by Campbell JA, who proposed orders at [131], which were made by the Court of Appeal, dismissing all of Ms Samootin's applications. The reason the court did so was that Ms Samootin had no standing in the proceeding, all of her interest in the properties having vested in the Official Trustee. 10 However, in the course of his reasons for judgment, Campbell JA indicated at [108]-[114], that there may be errors in the calculation of the respective interests in the properties determined by Hammerschlag J. Hodgson JA went further on this issue, stating at [3]-[7] that it appeared that serious errors were made by Hammerschlag J in the orders which resulted in a substantial undervaluation of Ms Samootin's share. He went so far as to say that the errors "may suggest that the whole process miscarried". 11 However, it is important to note that the official trustee was not a party in Samootin v Shea. Hodgson and Campbell JJA made certain comments which I ought to set out in full and I will do so. 12 Hodgson JA said [8]: The Court does not have the details of Ms Samootin's bankruptcy, and does not know whether the apparent errors in the orders consented to by the Official Trustee have been to the disadvantage of Ms Samootin or of her creditors or both. I would propose that a copy of this judgment be sent to the Official Trustee, so that it may consider what if any action it should now take. 13 Campbell JA said at [115]-[116]: Even if the Official Trustee were persuaded, on reconsidering the matter, that there were errors in the orders, its ability to correct any such error may be limited by the fact that the orders are consent orders, that have now been entered. If Ms Samootin is unable to persuade the Official Trustee to take such steps as might be open to it to rectify what she says are errors in the orders, or itself to seek leave to lodge an appeal of the kind that Ms Samootin was seeking, her lack of standing to bring the present applications does not leave her totally without an avenue for curial relief. The majority judgment in Cummings v Claremont Petroleum at 138-9 noted that the relief that is available to a bankrupt when a trustee declines to exercise his power to sue or to appeal is to apply to the Court (which in this context means the Federal Court) under section 178 of the Act to seek an order requiring the Trustee to appeal or to allow the bankrupt, on providing suitable security, to use the Trustee's name. I say nothing about the prospects of success of any such application, and my mention of the theoretical availability of that avenue of relief should not be taken as any encouragement for Ms Samootin to adopt it. 14 The essential reason why Ms Samootin submits that I ought to grant leave to reopen the present matter is that she contends that if I had known the matters referred to by the Court of Appeal (and certain other matters which she alleges) I would not have made my 2007 orders. 15 The other matters upon which Ms Samootin relies were set out in three lengthy, bulky affidavits which contained numerous annexures. The affidavits ran to over 1200 pages. Ms Nash, who appears for the Official Trustee, objected to almost the entirety of the evidence on the ground of relevance and form. I admitted the annexures provisionally and I treated the body of the affidavits only as submissions. I consider that most of the annexures are irrelevant and I reject them save insofar as I mention them again below. Many of the annexures dealt with the various United Nations Conventions dealing with discrimination, in particular the Convention on the Elimination of All Forms of Discrimination against Women, opened for signature 18 December 1979, 1249 UNTS 13 (entered into force 3 September 1981). 16 Ms Samootin submits that all of the orders made by the judges who have dealt with her numerous applications in the Federal Court, the Federal Magistrates Court, the Supreme Court of New South Wales, the Court of Appeal of New South Wales and the High Court of Australia are illegal and contrary to the United Nations Conventions which she invokes. All of these allegations pertaining to discrimination are irrelevant to the application to reopen the present matter and I reject all of the evidence going to those allegations. I admit the annexures which contain copies of judgments of the various courts that have dealt with Ms Samootin's applications, but only as part of the factual background. I reject the entirety of Ms Samootin's account of the litigation, in her affidavits. I do so on the ground of form. 17 I reject Ms Samootin's application to reopen the present matter for four essential reasons. First, the power to set aside an order of the court that has been duly made and entered is a very limited one. The common law rule was that the court lacked power to do so, but O 35 r 7 of the Federal Court Rules sets out express exceptions to the general common law principle. In my opinion, none of the matters to which Ms Samootin referred in argument enlivened any of the exceptions stated in O 35 r 7. In particular, none of her suggestions of impropriety against the Official Trustee or Ms Nash were supported by admissible evidence. They are nothing more than unsupported assertions. 18 The substance of those allegations was that the Official Trustee (through Ms Nash and counsel) misappropriated Ms Samootin's interest in the properties and that they failed to act in the best interests of the bankrupt estate and to realise the assets in a way which would have provided for a very substantial payment (or perhaps the conveyance of the properties) to Ms Samootin. 19 Ms Samootin contends that Ms Nash acted in contravention of the orders of Palmer J and reduced the value of her interest in the properties. Ms Samootin relies in this regard on the report to creditors made by the Official Trustee, which appears to show that Ms Samootin was the beneficial owner of both the properties at 24 and 26 Oxford Falls Road. The report to creditors was an annexure to Ms Samootin's affidavit filed in October 2007, which was in evidence in the matter which was the subject of my 2007 orders. It is therefore part of the record for consideration in the present application. The short answer to Ms Samootin's suggestion is that there is nothing to show impropriety. 20 If, as it appears, there is an error in the report as to affairs, that does not indicate any impropriety by the Official Trustee. Even if Hammerschlag J made errors in the calculation of Ms Samootin's beneficial interest in the properties, there is nothing in the evidence before me to suggest that there was anything apart from honest mistakes in the carrying out of the process. There is otherwise nothing to bring the matter within the exceptions to the common law principle of the finality of litigation stated by Allsop J in Owston Nominees No 2 Pty Limited v Branir Pty Limited (2003) 129 FCR 558 at [27]-[28]. 21 Second, I reject Ms Samootin's submission that, if I had known in 2007 that her true beneficial interest in the properties was greater than that declared by Hammerschlag J, I would not have made my 2007 orders. As I said earlier, my 2007 orders addressed a very limited application. Nothing which Ms Samootin put to me in argument yesterday or in the mass of material on which she relies shows any error in my reasons. Indeed, she did not seek to point to any error. Moreover, Ms Samootin has not sought to set aside Emmett J's order dismissing an appeal against my 2007 orders. 22 Third, even if the errors referred to by Hodgson JA and Campbell JA were made, the present proceeding is not the appropriate vehicle for the consideration of the question. It may be that matter 164/2011 is the appropriate vehicle, because one of the orders sought in that proceeding is an order under s 178 of the Bankruptcy Act 1966 (Cth) ("Bankruptcy Act"). However, as Campbell JA observed in Samootin v Shea at [116], the possibility of such a proceeding as an avenue of relief is merely "theoretical," and his Honour said nothing about the prospects of success of such a proceeding. 23 Fourth, there is a well-recognised public and private interest in the finality of litigation that has been regularly conducted and that has become the subject of final orders. This principle may be found in the decision of the High Court in Autodesk Inc v Dyason No. 2 (1993) 176 CLR 300 ("Dyason"). Mason CJ said at 302 that: The principle of the finality of litigation will not preclude the exceptional step of reviewing or rehearing an issue when a court has good reason to consider that in its earlier judgment it has proceeded on a misapprehension as to the facts or law. 24 Brennan J, at 308, observed that: The jurisdiction is exercised sparingly because it is important to bring litigation to finality. 25 The present case seems to me to be an example of a disappointed litigant seeking, without justification, for no apparent reason and for no apparent purpose (given the existence of more recently commenced litigation in matter NSD 164 of 2011 in which similar relief is sought) to re-agitate issues conclusively determined by my 2007 orders. There is no doubt that upon her bankruptcy, Ms Samootin's property vested in the Official Trustee under s 58 of the Bankruptcy Act, her property included her interest in the litigation in the Supreme Court for an account of her interest in the properties at 24 and 26 Oxford Falls Road, Beacon Hill. Ms Samootin's more recent discharge from bankruptcy in 2009 does not affect that question. 26 It seems to me that the present application is an impermissible attempt to invite reconsideration of a proceeding which was finally determined three and a half years ago. Indeed the material put before me shows that Ms Samootin does not wish to confine the proceeding, if reopened, to the subject matter of the original application but rather to use it as a vehicle to ventilate the entirety of her grievances. The observations made by Campbell JA, in Samootin v Shea were not a carte blanche to Ms Samootin to re-litigate lost causes. None of the exceptions to the general rule relating to the finality of litigation stated by the High Court in Dyason has any application in the present case. 27 Ms Nash's written submissions seek an order under O 21 r 1 of the Federal Court Rules that Ms Samootin be declared vexatious. She observes with some apparent force that the Official Trustee has been the subject of repeated applications in this court and other courts by Ms Samootin and that almost all of them involve identical complaints and issues. 28 Nevertheless, the short answer to Ms Nash's submission is that O 21 r 3 provides that a person seeking an order under O 21 r 1 must proceed by an application. No such application has been made in the present case. Accordingly, it was not open to me to deal with the request made by Ms Nash in her submissions. Similarly, Ms Nash's request for an order that Ms Samootin remove from the internet certain material on her website cannot be dealt with. It was referred to only by way of a submission in Ms Nash's written submissions and it seems to me that a separate application is needed. I therefore decline to deal with Ms Nash's request for that order. 29 On the application made by Ms Samootin to reopen matter number NSD 2070 of 2007 the order I will make is that the motion be dismissed with costs. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.