Samootin v Wagner

Grounds of Appeal 10 The appellant filed an amended notice of appeal on 19 December 2008 from which some eight grounds of appeal may be distilled. None of them have any factual or legal substance. (1) The primary judge erred in law in finding that the Court could not be satisfied that a sequestration order ought not to have been made. (2) The primary judge erred in fact in finding that no consent orders were made by Ms Sally Nash, a solicitor. (3) The primary judge erred in fact and law in finding that there was no relevant change of circumstances to warrant any annulment of the bankruptcy. (4) The primary judge erred in law in refusing leave to issue various subpoenas and to require legal representatives of the third respondent, the Official Trustee in Bankruptcy, to give evidence. (5) The primary judge erred in law when he cited, in his reasons for judgment, judgments in other proceedings not in the Federal Court. (6) The primary judge erred in law in finding that the application to annul the appellant's bankruptcy should be dismissed and was an abuse of process. (7) The primary judge erred in law and in fact in finding that the appellant was not a victim of financial, legal and civil abuse. (8) The primary judge erred by ignoring possible conflict of interest elements in the appellant's matter.

Ground One 11 Section 153B of the Bankruptcy Act 1966 (Cth) provides for the exercise of a discretion to annul a bankruptcy in certain circumstances. The primary judge, at [33], observed that this section 'contemplates two elements: the Court reaching a state of satisfaction that an order "ought not to have been made" and an exercise of discretion' in favour of the bankrupt. On the material before his Honour, he found that the appellant had failed to establish any reason why the sequestration order ought not to have been made. The test to apply in determining whether the sequestration order ought not to have been made is whether the judicial officer making the order (Lloyd-Jones FM) was bound not to make it: Re Frank; Ex parte Piliszky (1987) 16 FCR 396 at 403 per Fisher J; f'lld: Boles v Official Trustee in Bankruptcy (2001) 183 ALR 239 at 243 per Emmett J (Katz and Conti JJ agreeing). The primary judge correctly applied this test. He observed at [34] that: Even if it were permissible to simply review the facts as known when the sequestration order was made, nothing [had] emerged other than to confirm that the order was then properly made; [and the appellant had] not been able to point to any "evidence of previously unknown facts" as at the date of the making of the order'. 12 The primary judge went on at [40] to say that given the evidence as to continued insolvency of the appellant, even 'if the occasion for the exercise of discretion had arisen, it would have been exercised adversely to her'. 13 The appellant contended the primary judge erred in finding there was no 'state of satisfaction' for two reasons: (1) The hearing before Palmer J in Supreme Court Proceeding 1973/2001 was interlocutory and therefore could not form the basis of a bankruptcy notice and/ or; (2) the costs judgments were based on 'fabricated court hearings' to which the appellant was not the 'true plaintiff' and therefore unable to lodge any competent appeal. 14 Pursuant to ss 40 and 41 of the Bankruptcy Act, acts of bankruptcy and the issue of bankruptcy notices can only be made on final judgments or orders as opposed to interlocutory relief. It is important, therefore, to identify the true nature of the proceedings before Palmer J and the judgment handed down by his Honour. It is true that the hearing was interlocutory insofar as financial accounting between the parties still had to take place. Relevantly, however, it was a final determination in respect of the liabilities of the parties to the proceeding. The first and second respondents were excused from any further attendance as the claims that related to them had been finally determined and appropriate costs orders made. As such, the nature of the judgment provides no basis for a finding that the sequestration order ought not to have been made. 15 It is further argued by the appellant that her bankruptcy was based on 'fabricated proceedings'. Insofar as this issue was not before the primary judge, nor does it arise from the material the appellant placed before the Court on her annulment application, it is not competent. 16 That aside, the argument is based on a misunderstanding of the administrative process for the entering of costs orders in the Supreme Court of New South Wales. In that court, following costs orders being made, costs assessments being undertaken and certificates as to determination of those costs having being issued and filed, judgments in the amount of these costs assessments are entered. It is the procedure of the Supreme Court to enter these judgments under new Common Law Division proceedings with the parties remaining the same as in the proceedings upon which it is based. Regulation 36.10(1) of the Uniform Civil Procedure Rules 2005 (NSW) envisages the use of such an administrative procedure in providing: The cost assessor's certificate (a) may be filed in proceedings to which it relates or (b) may be filed in fresh proceedings whether in the same court or another court. Section 368(5) of the Legal Profession Act 2004 (NSW) as it stood at the relevant time, provides further support for this procedure. As such, the cost orders made in Supreme Court Proceedings 1973/2001 were entered as judgments in the new Common Law Division proceedings 11966/2001 and 11967/2001. 17 Contrary to what the appellant submitted, this procedure for costs determination and assessment does allow for appeals; see Part 3.2, Division 11 of the Legal Profession Act. The appellant, however, never chose to pursue such relief. For the foregoing reasons, Supreme Court Proceedings 11966 and 11967/2001 are not 'fabricated proceedings' and do not provide support for the submission that the sequestration order ought not to have been made. 18 It follows that this ground of appeal cannot be sustained.

Ground Two 19 The second ground of appeal raised by the appellant centres on orders made by Hammerschlag J in the Supreme Court of New South Wales on 17 July 2007 and as amended on 30 July 2007, specifically whether these were valid 'consent orders'. 20 The primary judge considered these orders at [41] - [43] of his reasons. At [42], his Honour said: Ms Nash made no "Consent Orders"; she signed orders made by a court on behalf of her client. And, in any event, the involvement of Ms Nash in the various proceedings to date has also previously been the subject of prior judicial determination. 21 The appellant contended that this finding was wrong in fact and that these orders are invalid as she did not provide consent as is required by Reg 36.1A of the Uniform Civil Procedure Rules. 22 This submission, however, ignores the nature of the proceedings before Hammerschlag J. As counsel for the third respondent outlined in his submissions, the hearing before his Honour lasted several days during which his Honour made several rulings allowing some matters and disallowing others. At the conclusion of the hearing, his Honour directed that short minutes be brought in reflecting the various matters that he had ruled on with respect to each of the points in issue raised before him during the course of the hearing. It is these orders that were signed by Ms Nash. As such, the orders reflected the orders made by the court; not 'consent' orders that required the consent of appellant. 23 Accordingly, we agree with the primary judge's conclusion at [42] and find that this ground of appeal cannot be sustained.

Ground Three 24 The third ground of appeal raised by the appellant relates to whether there was any relevant change of circumstances to now warrant annulment of the bankruptcy. 25 The primary judge found, at [38], that the only change of circumstances, being that the appellant moved out of the marital home which is at the centre of this litigation, was not relevant to consideration of any potential annulment of her bankruptcy. 26 The appellant claims that there are two relevant changed circumstances: (1) Smith FM did not look at the default cost order judgments that were presented by the first and second respondents, and (2) the third respondent unlawfully caused the Shea/Samootin marital property pool of assets a severe loss. 27 The first issue is largely a re-agitation of concerns dealt with in respect of the first ground of appeal. As there explained, the cost orders were validly entered in 'fresh proceedings' in the Common law Division of the Supreme Court of New South Wales and therefore do not constitute 'changed circumstances'. The second issue has already been considered and dismissed by Jacobson J in Samootin v Official Trustee in Bankruptcy [2007] FCA 1618. Relevantly, at [19], his Honour found: In my view, Ms Samootin's submission must be rejected. It has to be borne in mind first that Ms Samootin's interest in the property has, as I have said, vested in the Official Trustee in Bankruptcy. Second, and perhaps more importantly for present purposes, the undertaking to which Hammerschlag J referred was given by Ms Samootin. There is no question in my opinion that Ms Nash entered into any contract on behalf of Ms Samootin. Accordingly, it cannot be suggested that there was any breach of the Consumer Credit Act as contended by Ms Samootin this morning. 28 As both of these circumstances have been canvassed and dismissed before, they do not constitute any relevant 'changed circumstances' to warrant any re-examination of the sequestration order made against the appellant's estate. 29 For these reasons, this ground of appeal cannot be sustained.

Ground Four 30 The fourth ground of appeal relates to the primary judge's refusal to issue subpoenas to (a) Mr Stephen Golledge; (b) Ms Sally Nash and (c) Mr Tibor Karolyi, an Assistant Official Receiver. The appellant contended that this refusal amounted to a denial of procedural fairness. 31 At [30] of his reasons, the primary judge decided that it was not considered that Mr Golledge or Ms Nash could 'give any evidence of relevance to the matters properly before th[e] Court'. As for Mr Karolyi, the primary judge noted he was able to present himself for cross-examination and the appellant was able, in fact, to ask him questions, and he was able to provide an account to the appellant as to the realisation of assets, and the payment of debts therefore removing the need for the issue of a subpoena. 32 The appellant's main concern appears to be that she was unable to question the above three individuals about the Supreme Court proceedings and their conduct in relation to the Shea/Samootin marital property. 33 We agree with the findings of primary judge on this ground. Mr Karolyi was available for cross-examination. As an assistant official receiver who had the day-to-day carriage of this administration, subject to the overriding supervision of the official receiver, he, rather than Ms Nash and Mr Golledge, was the person most obviously connected with the conduct of the administration. In any event, the issues the appellant wanted to question these individuals about relate to the first and second grounds of appeal which have been rejected. 34 This ground of appeal cannot be sustained.

Ground Five 35 The fifth ground of appeal agitated by the appellant concerns the primary judge's reference to judgments in other proceedings not in the Federal Court. 36 The appellant contended that the primary judge referred to passages from other proceedings which the appellant considers cast her in an unfavourable light. In particular, the Court was taken to [36] of the primary judge's reasons where reference was made to Palmer J's comments in Supreme Court Proceeding 1973/2001. 37 Whilst the appellant may feel aggrieved at the way in which Palmer J articulated his reasons, this in itself does not amount to error. Moreover, the primary's judge recitation of these comments does not constitute appellable error. 38 This ground of appeal cannot be sustained.

Ground Six 39 The sixth ground of appeal raised by the appellant concerns the view formed by the primary judge, at [53], that the appellant's amended application should be dismissed as an abuse of process. 40 This ground was not agitated specifically in the appellant's written submissions or on the hearing of her appeal. It appears to encompass the whole of the other arguments put by the appellant. As a discrete ground, without further argument, it must be rejected.

Ground Seven 41 The penultimate ground of appeal concerns the primary judge's finding that the appellant was not a victim of financial, legal and civil abuse. 42 The primary judge found, at [52], that the submission as to legal and civil abuse was 'totally without merit'. At [51], his Honour noted that the appellant has been afforded numerous opportunities to 'ventilate her grievances' and such opportunities are inconsistent with her claims of discrimination. 43 The appellant continues to assert she is the victim of such abuse. This ground appears based on a complaint that she was denied access to justice and legal systems that are available to other citizens. We agree with what the primary judge said at [50] - [52]. The appellant has been afforded every opportunity to present her case before this Court and before other judicial officers on repeated occasions. The fact that relief for her grievances has been repeatedly refused says more about the merits of her case than it does about the possibility of any discrimination at the hands of judicial officers. 44 Absent any further material being led by the appellant, the seventh ground of appeal must be rejected.

Ground Eight 45 The final ground of appeal concerns the primary judge's alleged failure to address possible conflict of interest elements in previous judicial proceedings concerning both the appellant and the respondents. 46 This issue was not considered by the primary judge. In the amended notice of appeal, the appellant articulates this ground as arising out of her contention that the Honourable Justice Michael Kirby, formerly of the High Court of Australia, had known the 'Deans family for 40 years' and did not disclose this conflict at a special leave application in which the appellant was the applicant. This ground was only mentioned in passing on the hearing of the appeal. 47 Even if, however, this contention is correct, it has no bearing on whether the sequestration order, based on the costs judgments, ought not to have been made against the appellant's estate. The matter over which Kirby J was involved concerned the appellant seeking special leave from a decision of the Full Court of the Family Court which was in her favour. Callinan and Kirby JJ explained to the appellant that as her appeal was successful and the original orders made by Cohen J revoked, there was no relief the High Court could afford her and an appeal to the High Court was futile (High Court Transcript Samootin & Anor v Shea & Ors S283/2000, 23 November 2001). 48 Accordingly, this ground of appeal is rejected.

Conclusion 49 For the foregoing reasons, the appeal must be dismissed. The appellant must pay the respondents' costs. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Edmonds, McKerracher and Barker.

Associate: Dated: 26 June 2009 Counsel for the Appellant: The appellant appeared in person

Counsel for the First and Second Respondents: Ms K Dawson

Solicitor for the First and Second Respondents: Mallesons Stephen Jaques

Counsel for the Third Respondent: Mr S Golledge

Solicitor for the Third Respondent: Sally Nash & Co