Shaw v The Official Trustee in Bankruptcy Vic 1697/14/1 of Australian Financial Security Authority

Procedural background 4 The relevant background to these proceedings is set out in detail in the primary judge's reasons for judgment in Shaw v The Official Trustee in Bankruptcy Vic 1697/14/1 of Australian Financial Security Authority (No 2) [2019] FCA 1574 at [5]-[18] (Shaw (No 2)), and in our reasons for judgment in Shaw v The Official Trustee in Bankruptcy Vic 1697/14/1 of Australian Financial Security Authority [2020] FCAFC 136. 5 The grounds of appeal in this appeal overlap to a significant extent. For that reason, and in order to consider as best we can the grounds of appeal and the submissions advanced by the appellant, the principal grounds of appeal, properly characterised, can be summarised as raising the following two questions: (1) Did the primary judge fall into appellable error in dismissing the appellant's interlocutory application to restrain the respondent's solicitors from acting in this proceeding? For the reasons that follow, the answer to that question is "no". (2) Did the primary judge fall into appellable error in confirming the respondent's decision made in July 2019 to in part admit in the bankruptcy of the appellant's bankrupt estate a proof of debt submitted to it by Yarranova and NewQuay, by otherwise dismissing the appellant's originating application and ordering that the appellant pay the respondent's costs? For the reasons that follow, the answer to that question is "no". 6 The appellant filed detailed written submissions on 14 July 2020 and written submissions in reply on 30 July 2020. He also made oral submissions at the hearing on 4 August 2020. The respondent filed written submissions on 23 July 2020 and was represented by Mr CR Brown of counsel at the hearing.

Leave to appeal the interlocutory orders of 29 August 2019 7 The appellant requires leave to appeal. 8 The respondent submits that the application for leave to appeal ought to be dismissed, as it was filed late and is out of time. As the appellant is self-represented, we will grant leave to the appellant to file his application out of time so that we may deal with the substance of the appellant's application for leave to appeal from the primary judge's order the subject of the interlocutory judgment. 9 The appellant contends that the respondent's solicitors' attitude was unnecessarily adversarial and not in accordance with their duties as officers of the court. The appellant further submits that the respondent's solicitors obstructed the court and the appellant and that the respondent's solicitors were "too close to the respondent and have been for too long" and have "acted in previous related proceedings for it". The appellant further complains that the respondent's solicitors provided inadequate responses to his requests for information. On these bases, the appellant submits that the primary judge ought to have restrained the respondent's solicitors from acting further in the proceeding. 10 The applicable principles are well settled and were recently restated by the Full Court in Nationwide News Pty Ltd v Rush [2018] FCAFC 70 at [2]-[6] (Lee J; Allsop CJ and Rares J agreeing): The starting point is that in exercising the power to grant leave, regard must be had to the statutory charge in s 37M(3) of the Federal Court of Australia Act 1976 (Cth) (Act) that the power must be exercised or carried out in the way that best promotes the overarching purpose, being the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. Consistently with the facilitation of a just resolution, an applicant must usually show that: (a) in all the circumstances, the decision to be appealed is attended with sufficient doubt to warrant its reconsideration on appeal; and (b) supposing the decision to be wrong, substantial injustice would result if leave were refused: Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-399 (Sheppard, Burchett and Heerey JJ). The sufficiency of the doubt in respect of the decision to be appealed and the question of substantial injustice bear upon each other so that the degree of doubt which is sufficient in one case may be different from that required in another. It has also been said that the considerations are cumulative such that leave ought not be granted unless each limb is made out: Rawson Finances Pty Ltd v Deputy Commissioner of Taxation [2010] FCAFC 139; (2010) 81 ATR 36 at 38 [5] (Ryan, Stone and Jagot JJ); Melbourne City Investments Pty Ltd v Treasury Wine Estates Ltd [2017] FCAFC 98; (2017) 252 FCR 1 at 4 [3] (Jagot, Yates and Murphy JJ). Additionally, consistent with the facilitation of a quick, inexpensive and efficient resolution is the principle which emerges from the oft-cited warning of Jordan CJ in In re the Will of F. B. Gilbert (Deceased) (1946) 46 SR (NSW) 318 at 323, that if a tight rein is not kept upon the interference with orders of judges at first instance in the exercise of discretion on a point of practice and procedure, the result will be 'disastrous to the proper administration of justice'. … Even if it was reasonably arguable that the primary judge's discretion miscarried, that would not, in and of itself, be a sufficient basis for the grant of leave. (Emphasis in original.) 11 In our view, the primary judge's decision is not attended with sufficient doubt to warrant reconsideration on appeal. We have reached this conclusion for the following reasons. 12 The primary judge identified the complaints made by the appellant concerning the respondent's solicitors' conduct in Shaw v The Official Trustee in Bankruptcy Vic 1697/14/1 of Australian Financial Security Authority [2019] FCA 1412 at [12]-[15]. His Honour identified that at the heart of the appellant's complaint was the notion that the respondent's solicitors were "too adversarial" or "have otherwise conducted themselves adversarially in circumstances where that is not the nature of the proceeding in which they are acting". The primary judge rejected the appellant's complaints as having no substance: ibid at [16]-[23]. 13 The decision whether or not to restrain solicitors from acting is entirely discretionary. As Middleton J said in Bahonko v Nurses Board of Victoria (No 3) [2007] FCA 491 at [2]: The Court's jurisdiction to restrain a legal practitioner from acting in proceedings is an exceptional one and is discretionary. It must be exercised with appropriate caution and due weight must be given to the public interest in a litigant not being deprived of the legal practitioner of its choice without due or good cause. (Citations omitted.) 14 We respectfully agree. 15 The appellant has failed to demonstrate that the exercise of the discretion of the primary judge was founded on error: see House v The King (1936) 55 CLR 499. The appellant has failed to identify error on the part of the primary judge concerning the manner in which the primary judge exercised the discretion. The appellant has failed to establish that the primary judge's discretion miscarried. 16 In those circumstances, leave to appeal must be refused. There is no sufficient doubt to warrant a reconsideration on appeal of the primary judge's decision.

Appeal from the orders of 26 September 2019 17 We now turn to the second principal question which we have identified earlier in these reasons - namely, did the primary judge fall into appellable error in confirming the respondent's decision made in July 2019 to in part admit in the bankruptcy of the appellant's bankrupt estate a proof of debt submitted to it by Yarranova and NewQuay, by otherwise dismissing the appellant's originating application and ordering that the appellant pay the respondent's costs 18 There is no appellable error disclosed in the primary judge's reasons by which the primary judge rejected the appellant's contention that the proof of debt of Yarranova and NewQuay was not owed, or was defective or invalid. 19 The primary judge (in Shaw (No 2) at [53]-[56]) rejected the appellant's submissions that the court should look behind the costs order upon which the debt the subject of the proof of debt was founded. The primary judge found that there was no evidence beyond the barest assertions that the costs orders were the product of fraud, collusion or a miscarriage of justice such that the court might doubt the reliability of the proof of the existence of the debt that was the foundation for the proof of debt. 20 The primary judge found that the appellant had not produced any evidence sufficient to elicit any real doubt that Yarranova and NewQuay were owed the debt upon which the proof of debt was founded. The primary judge observed correctly that this was at least the fifth occasion on which the appellant had sought to convince a court to go behind the costs orders and had failed. 21 We find no error in the primary judge's reasons for refusing to exercise the discretion to go behind the existing costs orders. Accordingly, the second question is answered no. 22 We now turn to the remaining grounds.

Ground 10 23 We reject the appellant's submission that the primary judge's reasons are inadequate and do not enable the court or the appellant on appeal to discern the primary judge's reasons for arriving at the orders which he made. Accordingly, we reject ground 10.

Grounds 11 and 13 24 There is no substance to these grounds, which allege that the appellant was denied procedural fairness and was unable to make submissions and put his case to the judge. 25 The transcript of the hearing (at 31-35) demonstrates that the primary judge ruled on the appellant's objections mostly on the grounds of relevance. Following ruling on the first series of objections as to relevance, the appellant conceded that the balance of his objections were on the same footing and accepted the same ruling would apply to those objections. The transcript further discloses (at 29) and the primary judge's reasons record (Shaw (No 2) at [23]-[24]), that the primary judge considered the objections raised and, where appropriate to do so, limited the use to which the relevant passages of evidence may be put under s 136 of the Evidence Act 1995 (Cth). As a consequence, all of the appellant's affidavit material was accepted in evidence. 26 The transcript of the hearing and the primary judge's reasons disclose that the appellant was afforded an opportunity to put on evidence and make submissions. The appellant filed six affidavits and several written submissions in support of his application. The appellant made further extensive oral submissions over several hearings. It is plain that the primary judge gave the appellant every opportunity to be heard and to put the arguments that he wished to make in support of his application. 27 It follows that there was no denial of procedural fairness in the manner in which the primary judge dealt with the appellant's application. Accordingly, grounds 11 and 13 are rejected.

Ground 12 28 There is nothing in the submissions of the appellant which could found a proper allegation of apprehended bias or bias by the primary judge. For this reason, ground 12 must be rejected.

Disposition 29 Accordingly, the court will make orders refusing leave to appeal against the orders made by the primary judge on 29 August 2019. 30 The court will also dismiss the appeal from the primary judge's orders in respect of the application under s 104 of the Bankruptcy Act, there being no appellable error disclosed in the primary judge's reasons or in the manner in which the primary judge conducted the hearing. 31 The appellant should pay the respondent's costs of and incidental to the application for leave and of the appeal. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices O'Callaghan, Anastassiou and Anderson.