Satchithanantham v National Australia Bank Ltd

Federal Court of Australia|2009-03-11|Before: James J, Edmonds J

Introduction 1 On 27 February 2009 I dismissed the appellant's appeal from the judgment of the Federal Magistrates Court (Smith FM): Satchithanantham v National Australia Bank Limited [2008] FMCA 940, and indicated that publication of my reasons would shortly follow. 2 The appeal put in issue an order dismissing the appellant's application to set aside a bankruptcy notice issued on 15 April 2008 at the request of the respondent ('the Bank') and served on the appellant on 14 May 2008 ('the bankruptcy notice'). 3 The bankruptcy notice relies upon an order made by James J (of the Supreme Court of New South Wales) on 12 December 2007 that the appellant pay the Bank's costs (of the motions referred to in the order of 12 December 2007), which was in the following terms: 2. Thambiappah Satchithanantham pay the plaintiff's costs of the motion filed by Thambiappah Satchithanantham dated 19 October 2007 and of the motion filed by the plaintiff dated 20 November 2007, in the sum of $10,000 inclusive of GST pursuant to section 98(4)(c) of the Civil Procedure Act 2005 on an indemnity basis within 28 days; (Hereinafter sometimes referred to as 'the costs order'.) 4 The appellant's notice of appeal filed on 21 July 2008 ('the notice of appeal') contains some 20 paragraphs under the heading 'grounds of appeal' but many of them assert no more than that his Honour erred 'in law and facts' by doing things or by not doing things, without any particularisation of the alleged errors. 5 The appellant filed an amended notice of appeal on 15 September 2008 containing a further 20 paragraphs under the heading 'grounds of appeal' as well as repeating the 'grounds of appeal' in the notice of appeal. Leave was required for the filing of this amended notice of appeal because it was out of time. The appellant sought that leave on the hearing of the appeal in reliance on his affidavit sworn and filed in Court on 10 December 2008. This affidavit was read on the hearing of the appeal. The appeal was conducted on the basis that leave for the filing of the amended notice of appeal had been granted and I now grant that leave. 6 The so-called 'grounds of appeal' in the amended notice of appeal are largely repetitive of the 'grounds of appeal' in the notice of appeal and suffer from the same deficiencies. 7 On the hearing of the appeal, the appellant said that he relied on: (1) Written submissions filed on 28 January 2009. (2) Written supplementary submissions filed in Court on 27 February 2009. (3) Three affidavits sworn by him: (a) the first on 14 October 2008 and filed the same date; (b) the second on 22 October 2008 and filed in Court on 23 October 2008; and (c) the third being the affidavit referred to in [5] above. These three affidavits were read without objection on the hearing of the appeal. 8 However, in the course of his oral submissions, the appellant made no reference to any of these documents although he did make reference to some of the matters to which the documents refer. 9 None of the grounds of appeal identify any basis for error on the part of his Honour, whether of law or fact, and most of them seek to agitate issues arising out of other proceedings, one involving the Bank and the appellant's wife in the Supreme Court of New South Wales concerning a property she owns. 10 While I can well understand the anxiety of the appellant to ventilate and agitate grievances which he harbours and genuinely views, rightly or wrongly, as being sourced in the conduct of the Bank towards him and his wife, this is not the proceeding, and perhaps this Court is not even the forum, in which to do it. 11 His appeal to this Court has no foundation. Some of the grounds are incomprehensible. Doing the best I can, I will address the other grounds. Before doing so, there is one matter I should note. 12 In the course of his reasons for judgment, his Honour made reference to various proceedings in the Supreme Court of New South Wales taken by the Bank as mortgagee over properties which appear to be in the ownership of close relatives of the appellant; as well as to the appellant's attempts to be joined as a party to these proceedings; and the dismissal of the appellant's appeal to the New South Wales Court of Appeal. In her written submissions, counsel for the Bank drew my attention to developments in these proceedings since 1 July 2008, the date of the hearing of the appellant's application to set aside the bankruptcy notice before his Honour. These included: (a) the appellant's appeals from the judgments of MacCready AsJ dismissing his claims against the Bank in proceedings Nos. 6031/07 and 5597/07 were dismissed by White J on 26 September 2008; (b) the appellant's further motion in Court of Appeal proceeding No. 40444/08, challenging the costs order was dismissed with costs; (c) the appellant's application for special leave to appeal to the High Court against the Court of Appeal's refusal to grant leave to appeal against the orders made by James J on 12 December 2007 was refused on 10 December 2008; (d) the hearing of proceeding No. 15249/05 before McCallum J was completed on 5 September 2008. Judgment was handed down on 6 February 2009 (National Australia Bank v Satchithanantham [2009] NSWSC 21) wherein the Bank was directed to bring in short minutes of order including an order for possession of the property at Westmead owned by the appellant's wife.

The Notice of Appeal 13 Paragraph 1 generally challenges the dismissal of the application to set aside the bankruptcy notice. 14 The appellant specifically challenges: (a) The refusal to allow him to issue three subpoenae and to cross-examine Danielle Kuti (paras 2 and 3); (b) the refusal to adjourn the application to set aside the bankruptcy notice until the determination of 'many pending appeals' which seem to relate to the alleged cross-claims against the Bank and in particular the appeals against the dismissal of proceedings Nos. 5597/07 and 6031/07 against the Bank which were heard on 25 September 2008 and also other proceedings to which the Bank is not a party (paras 4, 13, 15, 20(g)); (c) the alleged failure to give due consideration to an offer made for payment of the costs order (para 6); (d) the failure to 'go behind' the judgment upon which the bankruptcy notice was based (paras 5, 8 and 9); and (e) the failure to declare the bankruptcy notice or its service to be defective (paras 10 and 11). 15 Paragraphs 5, 7, 8, 12, 18, 19 and 20 are largely incomprehensible although: (a) para 7 seems to relate to the issue as to whether the costs order is a final order; and (b) para 12 seems to relate to the claim that the costs order is not payable by the appellant but by his wife.

Failure to Grant an Adjournment, Allow Cross-Examination of Danielle Kuti, Permit Reliance on Subpoena 16 The basis for the alleged error in failing to grant an adjournment would appear to be: (a) pending appeals against the judgments of MacCready AsJ dismissing the appellant's claims in proceedings Nos. 6031/07 and 5597/07 (para 13). In his reasons for judgment, his Honour (at [25]) considered the appeal in proceeding No. 6031/07, being the proceeding which the appellant identified at the hearing at first instance as having the most apparent merit, and concluded that it did not have sufficient merit to justify the adjournment of the appellant's application to set aside the bankruptcy notice. In any event, as indicated above, the appeals against the judgments of MacCready AsJ were dismissed by White J on 26 September 2008. It follows, that no error could be said to have been made; and (b) pending appeals in proceedings against parties other than the Bank (para 15). These could not properly form the basis for an application for an adjournment. 17 The appellant does not indicate in the notice of appeal the basis upon which the refusal to permit the cross-examination of Danielle Kuti or reliance on various subpoenae was in error. The relevant paragraphs of his Honour's reasons for judgment are [21] - [23]. His Honour refused to permit the appellant to further investigate, through the issue of subpoenae, the basis of the costs order, when the proper avenue for the appellant to challenge that order was by way of an appeal and his attempts to pursue such a course had not been successful.

Nature of Judgment Debt specified in Bankruptcy Notice 18 As already indicated, the Bank's bankruptcy notice is based on the order of James J made on 12 December 2007, that the appellant pay the respondent's costs (of the motions referred to in the orders of 12 December 2007) in the sum of $10,000 within 28 days of that date. 19 There are a number of important things about the nature of the costs order, which the appellant's affidavits and notice of appeal fail to acknowledge, and which are addressed in his Honour's reasons for judgment at [15] - [20]: (a) Under subss 98(1)(a), (1)(b) and (4)(c) of the Civil Procedure Act 2005 (NSW), the Supreme Court has an express power to order that a person pay a 'specified gross sum instead of assessed costs'. That is precisely what James J did on 12 December 2007; (b) the appellant has no right to have those costs assessed. Section 353(1) of the Legal Profession Act 2004 (NSW) provides that the assessment regime only applies in relation to a person who is liable to pay costs 'as a result of an order for the payment of an unspecified amount of costs made by a court' (emphasis added); (c) any suggestion that the order made by James J on 12 December 2007 is somehow to be split equally between the appellant and his son, Bramooth, merely because they were both appellants to a motion before James J, is misconceived. Likewise there is no basis for the further contention now made in para 12 of the notice of appeal that the costs order is payable by the defendant to proceeding No. 15249/05, being the appellant's wife. Order 2 made by James J on that date plainly orders the appellant alone to pay to the respondent the sum of $10,000 by way of costs; (d) although it is true that an interlocutory order for costs ordinarily does not become payable until the conclusion of the proceedings, that principle does not apply where 'the court orders otherwise': see rule 42.7 of the Uniform Civil Procedure Rules 2005 (NSW). Here, James J plainly ordered otherwise. His Honour ordered that the costs be paid within 28 days, that is, by 9 January 2008; (e) by notice of motion filed in the New South Wales Court of Appeal on 29 May 2008 by the appellant and his son, the following relief (amongst other things) was sought: (i) that the order for costs made by James J on 12 December 2007 'be stayed until assessed and taxed'; (ii) that the appellant and his son were only 'entitled' (sic qu. 'obliged') to pay a half portion of that costs order; and (iii) that the order for costs made by James J on 12 December 2007 be set aside. It has already been noted that (i) and (ii) were misconceived. The motion to the Court of Appeal in its entirety was dismissed with costs on 16 June 2008. This is dealt with in [9] of his Honour's reasons. (f) despite that dismissal, the appellant filed yet a further notice of motion with the New South Wales Court of Appeal on 25 June 2008, returnable on 14 July 2008. In prayer 2, the appellant yet again sought an order that the New South Wales Court of Appeal 'set aside', amongst other orders, the costs order made by James J on 12 December 2007. By prayer 4 he sought a stay of that costs order until determination of that motion (but no such stay has been granted). The further motion was dismissed with costs on 14 July 2008. 20 Viewed in this context, the various attacks by the appellant on the debt underlying the bankruptcy notice are vexatious and frivolous and were correctly dismissed by his Honour.

Validity of and Service of the Bankruptcy Notice 21 The appellant claims that he was served with the bankruptcy notice 'in the court buildings'. His Honour accepted at [10] of his reasons that this does not mean that there is any defect in the service of the bankruptcy notice relying on what Lindgren J said in Re O'Sullivan (1995) 57 FCR 145 at 149E. 22 There is also no error in his Honour's dismissal of the appellant's challenges to the validity of the bankruptcy notice in [13] and [14] of his reasons.

The Appellant has not shown Bona Fide Counter-Claim, Set-off or Cross Demand 23 Taking into account all of the evidence and submissions of the appellant seeking to persuade the Court below that he had a cross-claim within subs 40(1)(g) of the Bankruptcy Act 1966 (Cth), his Honour, at [29], was entirely unsatisfied that such a claim existed within the test set out in the authorities summarised by Lindgren J in Re Glew; Glew v Harrowell of Hunt & Hunt Lawyers (2003) 198 ALR 331. 24 In Re Brink; Ex parte Commercial Banking Co of Sydney Ltd (1980) 30 ALR 433 at 438 - 439, Lockhart J said that the authorities establish that: (a) an affidavit in support of an application to set aside a bankruptcy notice 'cannot merely contain an assertion that the debtor has a counter-claim, set-off or cross demand'. Rather, the affidavit must 'show' the existence of such a claim and the Court must be satisfied that the debtor has 'a fair chance of success' on the asserted claim; (b) the principles in Ebert v Union Trustee Co of Australia Ltd (1960) 104 CLR 346 at 350, remained applicable. His Honour, at 438, quoted with approval a passage from Ebert to the effect that the debtor 'clearly must satisfy the court that there exists in him a counter-claim, set-off or cross demand … The [debtor] cannot satisfy the court that a cross demand exists by showing no more than that she propounds one and states how she suggests that she can make it out'. (Emphasis added) 25 In Re Glew at [9], Lindgren J (citing authority for each proposition) said that a debtor seeking to set aside a bankruptcy notice must satisfy the Court that: (a) he has a 'prima facie' case; (b) he has a 'fair chance of success'; (c) he is advancing a 'genuine' or 'bona fide' claim. Further, Lindgren J said at [10] that, while the Court does not undertake a 'preliminary trial' of the alleged counter-claim, set-off or cross demand, 'clearly, the application of the criteria above requires the court to make some kind of preliminary assessment'. (Emphasis added) 26 I agree with his Honour's lack of satisfaction on this issue. The appellant falls comfortably short of satisfying the relevant requirements.

The Amended Notice of Appeal 27 The 'grounds of appeal' are either repetitive of the 'grounds of appeal' in the notice of appeal or, like many of those latter grounds, are incomprehensible. In his oral submissions, the appellant did not take me to any of the grounds in the amended notice of appeal. There were a number of serious, but totally unsubstantiated, allegations that the Bank and its legal representatives had misled various courts and such allegations do find their way into some of the 'grounds of appeal' in the amended notice of appeal. However, they are undeserving of any consideration past the mere mention of them; they are certainly not deserving of any substantive analysis. 28 The appeal must be dismissed with costs. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds.

Associate: Dated: 11 March 2009 Counsel for the Appellant: The appellant appeared in person

Solicitor for the Respondent: Dibbs Abbott Stillman

Legal Profession Act 2004(NSW)

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