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[2014] FCAFC 171
Federal Court of Australia (Full Court)
2014-12-12
Mr P, Yates JJ
Original judgment source is linked above.
The application to adduce further evidence 58 A Full Court hearing an appeal from a single Judge has power to admit further evidence: Federal Court of Australia Act 1976 (Cth) s 27. The "power to admit … further evidence exists to serve the demands of justice": CDJ v VAJ (1998) 197 CLR 172 at 202 per McHugh, Gummow and Callinan JJ. 59 Two considerations relevant to the exercise of the discretion to admit further evidence, and to the "administration of justice" to both the party seeking to introduce the further evidence and the opposing party, are whether the evidence sought to be adduced could have been obtained with reasonable diligence at the time of hearing and whether it may affect the result: NASB v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 24 at [43] per Beaumont, Lindgren and Tamberlin JJ. It is ordinarily necessary for a party seeking to adduce further evidence to demonstrate that the evidence is "cogent": Freeman v National Australia Bank Limited [2003] FCAFC 200 at [57] per French, Cooper and RD Nicholson JJ. 60 In the present proceeding, Mr Shaw has filed an Interlocutory Application seeking leave to adduce further evidence. As explained in his oral submissions, that further evidence would go to the following two discrete issues: • whether judgments had been procured by "fraud" - namely whether the two judgment creditors were bona fide creditors or whether any loss or damage had been suffered or incurred by the MAB Corporation (or MAB Holdings Pty Ltd); and • Mr Shaw's solvency. Each should be considered separately. 61 As to the former of these two issues, the Interlocutory Application as filed sought an order permitting the service of "Notices to Produce, subpoenas and other documents in accordance with the court rules to obtain such evidence". 62 In respect to this issue there was no evidence presently available to be tendered. It may be doubted whether s 27 would permit the Court "to receive further evidence" where such evidence has not yet been secured and is not yet available for tender at the time of the hearing of the appeal. In such a case there may well be no extant "evidence" which would fall within the reach of s 27. A separate question may well arise as to whether the hearing of an appeal should be adjourned to permit a party to seek to obtain "evidence" not presently available. But there is no need in this appeal to determine the potential reach of s 27. 63 In this appeal there was not only no "evidence" available to be tendered. There was also no draft of any proposed Notice to Produce or Subpoena. The further evidence that was sought to be obtained by such means was, however, in the submission of Mr Shaw "in the same vein" as that which had been sought before the primary Judge. 64 The Interlocutory Application is both in terms and in substance not an application to adduce further evidence but an application that Mr Shaw be permitted to go forth and gather such further evidence and thereafter tender so much of that further evidence as he sees fit. 65 Insofar as the Interlocutory Application seeks leave to adduce such further evidence as may be obtained at some point of time in the future, it is to be dismissed. The further "evidence" sought to be obtained and adduced on appeal was essentially the same "evidence" as he sought to obtain and adduce before the primary Judge. Her Honour gave reasons for setting aside the Notice to Produce served by Mr Shaw during the course of the hearing which sought the production of documents of the same character: [2014] FCA 616 at [86] - [88]. No error is exposed in her Honour's reasons. Moreover, the Interlocutory Application filed in this Court fails to comply with r 36.57(2) of the Federal Court Rules. The Affidavit which has been filed in support of the Application fails to state "briefly but specifically, the facts on which the application relies" or "the grounds of appeal to which the application relates". As explained in oral submissions, however, but not in the Affidavit - the further evidence could potentially go to Grounds 4(h) and (k) of the Notice of Appeal. 66 The Application, in any event, is more in the nature of an application - not to adduce further evidence - but to re-open the hearing of the issues determined by the primary Judge. 67 Insofar as the Application seeks to adduce further evidence as to solvency, the Affidavit filed by Mr Shaw in support does set forth evidence in respect to: three properties and their value, albeit a valuation that is not supported by any independent assessment; and the value of monies held in a superannuation fund. Such evidence would not be of sufficient weight to establish solvency. 68 The Application to adduce further evidence directed to this discrete issue is nevertheless also rejected because: the available evidence is far from "cogent" - the evidence is no more than assertion on the part of Mr Shaw as to his ability "to pay the debts claimed…"; the question of solvency was not an issue raised for resolution before the primary Judge ([2014] FCA 616 at [100]) and no appellable error arises by reason of her Honour not resolving an issue which was not advanced; and no injustice is occasioned to Mr Shaw in rejecting the evidence because he remains free to bring any such further application as he sees fit seeking to set aside or annul the sequestration order made by the primary Judge: Bankruptcy Act s 153B. 69 The Interlocutory Application should be dismissed.
CONCLUSIONS 70 None of the Grounds of Appeal have been made out. Although reference has been made to particular aspects of each of the Grounds, the Grounds have been considered in their entirety - both by reference to the terms of the Grounds of Appeal and Mr Shaw's Outline of Submissions. So construed, it is concluded that each is without substance. 71 The appeal should be dismissed with costs. 72 The present appeal, it should be noted, is the hearing of yet another challenge made by Mr Shaw to a decision of a single judge. 73 Any litigant, of course, is entitled to pursue whatever rights of appeal are available. A decision of a single judge, which may initially appear self-evidently correct, may reveal appellable error on closer scrutiny. 74 But the pursuit of Grounds of Appeal which have no intrinsic merit may also expose a litigant committed to pursuing litigation as a means of simply deferring the inevitable. To do so may expose an abuse of process. An appeal which is an abuse of process may be dismissed. This appeal has many of the hallmarks of such a litigant. 75 Although Mr Shaw appeared unrepresented, his involvement in many past proceedings - both in this Court and in others - has rendered him a "seasoned campaigner". The absence of legal representation cannot shield him from the consequences of filing a Notice of Appeal which does not comply with the Federal Court Rules or from criticism at pursuing unmeritorious litigation.
THE ORDERS OF THE COURT ARE:
Shaw
Yarranova Pty Ltd
the court: 1 On some occasions a commitment to vindicate a principle comes at substantial cost. 2 Such is the present case. 3 In April 2000 Yarranova Pty Ltd, as nominee for MAB Docklands Pty Ltd, sold an apartment in Melbourne to Mr John Shaw. Yarranova Pty Ltd assigned the benefit of that contract to Newquay Stage 2 Pty Ltd. Mr Shaw failed to pay the balance of the purchase price. Newquay Stage 2 Pty Ltd served on Mr Shaw in August 2003 a notice of default and rescission. 4 In March 2006 a Judge of the Supreme Court of Victoria dismissed a claim by Mr Shaw seeking specific performance of the contract of sale and entered judgment in favour of Yarranova Pty Ltd and Newquay Stage 2 Pty Ltd (the "judgment creditors"). Mr Shaw appealed unsuccessfully. The Court of Appeal ordered an inquiry as to damages sustained by the judgment creditors. Master Daly (as her Honour then was) assessed damages plus interest in a sum slightly in excess of $60,000. Mr Shaw was ordered to pay costs. 5 That initial failure to pay the purchase price has spawned judicial outings in the Supreme Court of Victoria, the Court of Appeal in Victoria and in this Court on no less than 10 occasions. 6 The point of principle sought to be vindicated by Mr Shaw is his contention that the judgment creditors have in fact suffered no loss or damage. He maintains, in very summary form, that the judgment creditors falsely represented to Master Daly that they were all part of a group of companies owned by MAB Corporation Pty Ltd and that they had committed a "fraud" by falsely representing to Master Daly that they had been held out of funds - being the sale proceeds - and were not able to invest those monies. 7 The commitment of Mr Shaw to vindicating his principle has led him to pursue largely unsuccessful litigation. In the course of doing so he has been repeatedly ordered to pay the costs incurred. Between September 2009 and October 2011 those costs orders amounted to a sum in excess of $400,000. The costs orders were not paid. 8 On 14 December 2012 the judgment creditors served on Mr Shaw a Bankruptcy Notice. The Bankruptcy Notice was founded upon the unpaid orders for costs. He did not comply with the terms of that Notice. 9 An application to set aside the Bankruptcy Notice was unsuccessful: Shaw v Yarranova Pty Ltd & Anor [2013] FCCA 1627. An appeal from that decision was dismissed: Shaw v Yarranova Pty Ltd [2014] FCA 557. 10 The Respondents filed a Creditors Petition. 11 On 11 June 2014 a sequestration order was made by a Judge of this Court: Yarranova Pty Ltd v Shaw (No 2) [2014] FCA 616. 12 On 30 June 2014 Mr Shaw filed a Notice of Appeal against the making of the sequestration order. 13 Mr Shaw appeared before both the primary Judge and this Court unrepresented. 14 The Notice of Appeal is to be dismissed.
The Grounds of Appeal 15 The Notice of Appeal states at the outset: "Some grounds of appeal overlap & should also be considered 'globally'". 16 The Notice of Appeal thereafter proceeds to set forth the Grounds of Appeal as follows (without alteration): 1. The honourable judge erred in failing to recuse from hearing the matter. 2. The honourable judge acted in a way that raises a reasonable apprehension of bias … 3. The honourable erred by referring to irrelevant & inadmissible evidence & past judgements. 4. The honourable judge erred & denied the appellant procedural fairness and natural justice … … 5. The honourable judge erred in failing to properly take relevant evidence into account … 6. The honourable judge acted on the wrong principles … 7. The honourable judge made findings that are not supported by facts … 8. The honourable judge erred in failing to provide adequate reasons for findings … 9. The honourable judge erred in failing to take into account relevant evidence in exercise of discretion to deny the creditors petition per S 52(2) of the Bankruptcy Act. Grounds 2, 4, 5, 6, 7 and 8 go on to elaborate upon the content of each of those Grounds. By reason of the manner in which that elaboration of those Grounds is expressed, however, questions have inevitably arisen as to whether there has been compliance with r 36.01(2)(c) of the Federal Court Rules 2011 (Cth) ('Federal Court Rules'). That rule requires a Notice of Appeal to state "briefly but specifically, the grounds relied on in support of the appeal". Non-compliance with the Federal Court Rules - even by an unrepresented party, it has been recognised, may place both the opposing party and the Court itself in an invidious position: Arifin v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2014] FCAFC 61 at [30] per North, Flick and Jagot JJ. 17 But there nevertheless remained a core remnant of the Grounds of Appeal by reference to which Mr Shaw quite properly advanced his central grievance. Whether by reference to one particular Ground of Appeal or by reference to those Grounds which "overlapped", Mr Shaw advanced his point of principle as to the alleged "fraud". His grievance was compounded, upon his case, by reason of his contention that his point of principle had never really been addressed by any of the courts that entertained one or other of his many applications. In one way or another, Mr Shaw contended that courts - and in particular the primary Judge who made the sequestration order against which he now appeals - had failed to consider evidence central to his allegation of "fraud" or had denied him procedural fairness by not permitting him the opportunity to obtain the evidence which would substantiate that allegation. 18 Although no allegation of "fraud" was expressly identified in the Notice of Appeal, it was an allegation repeatedly returned to by Mr Shaw in his oral submissions. 19 But none of the Grounds of Appeal, however construed, have been made out.
The making of the sequestration order 20 The main task before the primary Judge was the resolution of the judgment creditors' application for a sequestration order. Other tasks included the resolution of Mr Shaw's application for an adjournment and his application for the primary Judge to disqualify herself by reason of a claimed reasonable apprehension of bias. 21 In resolving the application for the sequestration order, the grounds of opposition to the making of such an order, as filed in the proceeding before the primary Judge, were identified as follows: 1. The application is an abuse of process 2. The opponent has an offset claim that has not yet been finally determined. Subject to any exercise of judicial discretion, those Grounds defined the boundaries of the issues relevant to the application being made before the primary Judge. Mr Shaw did not contend that a sequestration order should not be made by reason of his ability to pay his debts. 22 At the heart of both the abuse of process claim and the "offset claim" was the allegation as to "fraud". The abuse of process claim also involved - on Mr Shaw's case - a contention that the bankruptcy proceedings were simply an attempt to "stifle" his pursuit of his claims, a contention that the judgment creditors never held any reasonable belief as to his insolvency and a claim that they had delayed in commencing the bankruptcy proceedings. 23 Power to make a sequestration order is conferred by s 43 of the Bankruptcy Act 1966 (Cth) ('Bankruptcy Act'). Section 52 of that Act goes on to identify those matters about which the Court "shall require proof…". 24 In the course of resolving Mr Shaw's grounds of opposition, the primary Judge set forth the history of the litigation in the Victorian Supreme Court. It was necessary for her Honour to do so because (inter alia): one argument advanced by Mr Shaw was that the application for the making of a sequestration order should be adjourned pending the outcome of an appeal to the Victorian Court of Appeal; and because her Honour was being invited to go behind the judgment upon which the disputed costs order was founded. Her Honour concluded that she would not go behind the judgment and that Mr Shaw had not adduced any evidence as to fraud: [2014] FCA 616 at [70] - [85]. 25 No appellable error is exposed in her Honour's reasons for so concluding. 26 There is certainly no error, as maintained in Ground 3, in referring to "past judgments". 27 Ground 6 further alleges that the primary Judge "acted on the wrong principles". But the reasons for decision of the primary Judge, with respect, expose an unwavering focus on the "principles" relevant to the manner in which the application should proceed and the manner in which s 52 of the Bankruptcy Act should be applied to the facts. Separate from any consideration given to the various other issues Mr Shaw sought to canvass, the "principles" of most immediate relevance to the exercise of the discretionary power to make a sequestration order were the "principles" relevant to: the adjournment application - those principles being expressly set forth by the primary Judge ([2014] FCA 616 at [67]); whether a Court should go behind a judgment - those principles being set forth ([2014] FCA 616 at [69]); and the contention that the proceeding was an abuse of process - those principles also being set forth ([2014] FCA 616 at [90] - [92]). Rather than applying the wrong "principles", it is concluded that the primary Judge correctly identified and applied the principles relevant to the issues posed for resolution. 28 To the extent that Grounds 3, 5, 6 and 9 of the Notice of Appeal can be confined to the manner in which the primary Judge resolved the grounds of opposition and exercised her discretion to make a sequestration order, those Grounds of Appeal are rejected. They are without substance. 29 To the extent that Grounds 3 and 9 may be construed as challenging the application of ss 43 and 52 of the Bankruptcy Act to the facts before the primary Judge, or her Honour's exercise of discretion, they should also be dismissed upon the basis of a failure to comply with Rule 36.01(2)(c) of the Federal Court Rules. The "irrelevant & inadmissible evidence" referred to in Ground 3 is not identified. Nor is there any specific identification of the "past judgments" to which exception is taken. There is equally no identification in Ground 9 of "the relevant evidence" which it is said was not taken into account. Deficiencies in the formulation of Grounds of Appeal cannot be remedied by the identification of (for example) "evidence" in written submissions. However, where deficiencies in the formulation of Grounds of Appeal are addressed in written submissions, the fact that they are so addressed may be relevant to the exercise of the discretion to strike out otherwise improperly drafted Grounds. The written submissions filed by Mr Shaw do not provide any reason for hesitation. Those submissions do not clearly identify the "evidence" to which those Grounds are directed. Indeed, on some occasions the submissions only serve to occasion further confusion. For example, to support a contention that the primary Judge "shut me out from adducing relevant evidence" the submissions refer not to any statement of the primary Judge appearing on the transcript or even to the "evidence" being adduced but to submissions being made by the judgment creditors. 30 Ground 6, it may be further observed, is perhaps an example of the manner in which Mr Shaw contends that his Grounds of Appeal "should be considered globally". In addition to alleging the manner in which Mr Shaw contended that the primary Judge "acted on the wrong principles", being the "principles" relevant to the application of s 52 to the facts, that Ground goes on to state (without alteration) that the primary Judge: … Erred in failing to find that the pending appeal of Vickery J orders was a sufficient proceeding to justify the ordering of an adjournment. No error is exposed by the decision to refuse to adjourn the proceeding pending the hearing of the appeal in the Victorian Court of Appeal. The decision, in any event, was an exercise of discretion. And no error is exposed in the manner in which the primary Judge exercised that discretion. 31 The rejection of these Grounds leaves for resolution questions about alleged "procedural irregularities".
The absence of evidence of fraud 51 A separate focus of attention during the course of oral submissions on the appeal were the following observations of the primary Judge: [83] Against this background, it is evident that Mr Shaw's alleged claim is not "based on genuine and arguable grounds". There is nothing in the facts of the present case that would warrant this Court embarking on what amounts to a re-trial of the issues that had been determined after a contested hearing before Daly AsJ and which were the subject of an appeal to the Court of Appeal of the Supreme Court of Victoria. [84] Mr Shaw has not adduced any evidence of fraud. Indeed, even if the allegations made by Mr Shaw in the draft endorsed writ (see [64]-[65]) above were taken at their highest, a prima facie case of fraud or collusion would not be made out. Moreover, it must be recalled that the Assessment Orders of 7 March 2008 are not the only orders underpinning the Bankruptcy Notice: see [22] above. Mr Shaw does not seek to challenge the other orders relied upon. [85] The two applications are refused - the Application for an adjournment of the hearing pending the outcome of an appeal from the orders of Vickery J in the Supreme Court of Victoria of 7 May 2014 and the application to go behind the judgment which supports the applicant creditors' application for a sequestration order. Whether this argument falls within Ground 7 or (perhaps) Grounds 4 or 5 matters not. As the Notice of Appeal acknowledges, "[s]ome grounds of appeal overlap." 52 There was limited ambiguity, with respect, in the reasoning expressed in paragraph [83]. 53 It is, perhaps, unclear as to whether paragraph [83] is a reference to those issues which had been determined after a contested hearing before Daly AsJ and a separate reference to those issues which had been determined on appeal. Although an appeal had been filed against the decision of Daly AsJ, this Court was informed that that appeal had been placed "on hold" and had not been resolved. There were, however, at least two decisions of the Victorian Court of Appeal - the first being Shaw v Yarranova Pty Ltd [2011] VSCA 55; another being Shaw v Yarranova Pty Ltd [2014] VSCA 48. The former of these two decisions resolved Mr Shaw's argument that, because MAB Corporation had paid the judgment creditors' costs, calling upon Mr Shaw to pay those costs offended the "indemnity principle". The question as to who paid the costs was a central plank in Mr Shaw's submissions that a "fraud" had been perpetrated. Part of the reasoning of Redlich and Mandie JJA in that decision provided as follows: Co-existing obligations to pay solicitors' costs [23] Payment by MAB Corporation of the respondents' costs did not give rise to an inference that the respondents had no liability for their solicitors' costs. The existence of a concurrent obligation by MAB to pay the respondents' solicitors' costs pursuant to its retainer, and the fact that the accounts for services may not have been rendered to the respondents, did not preclude the presumption from applying. A litigant who is liable to his or her own solicitor for the costs of proceedings and is indemnified in whole or in part for those proceedings is entitled to recover his or her taxed or assessed costs for the benefit, in whole or in part, of the party providing that indemnity. Having paid or agreed to pay the solicitors for the successful party's costs, the indemnifier would become subrogated to all rights of the successful party, subrogation being an equitable right which does not depend upon a contractual entitlement. It is presumably this decision to which the primary Judge was referring. But even such limited ambiguity as there may be in respect to her Honour's reasons does not support any conclusion that her Honour erred in concluding that Mr Shaw's "alleged claim" was not "based on genuine and arguable grounds…". 54 In paragraph [84] the primary Judge recorded that Mr Shaw had not adduced evidence of the fraud he had alleged. Read critically, this paragraph of her Honour's reasons may not fully expose why the primary Judge came to that conclusion. Nevertheless, concurrence is expressed with her Honour's conclusion. 55 It the course of hearing of the appeal, the Court was taken to evidence which Mr Shaw, in his own way, perceived to be a sure pointer to the fact that the fraud alleged in his draft endorsed writ did exist. This evidence included an Affidavit made by Mr Shaw on 27 April 2014 which, it is understood, was read in opposition to the creditor's petition. This Affidavit contained a number of bare allegations that the judgment creditors and MAB Corporation had made misrepresentations as to their corporate relationship and that the evidence given by Mr Smith (the Chief Financial Officer of the MAB Group of companies) as to the foregone investment opportunities, was designed to mislead the Supreme Court of Victoria. A number of documents were annexed to the Affidavit, including Affidavits made by Mr Smith. Mr Shaw's Affidavit also included evidence as to how money paid by him pursuant to a settlement agreement had been treated by the MAB Group. 56 On consideration of the evidence, it falls far short of providing a satisfactory basis for the fraud alleged by Mr Shaw and would not have justified the adjournment of the hearing of the creditor's petition that Mr Shaw sought. Further, that evidence would not have justified the primary Judge going behind the damages judgment and costs order of 7 March 2008 on the basis that they had been obtained by fraud or collusion. 57 However Mr Shaw's challenge to paragraph [84] of the primary Judge's reasons be expressed, it is without substance and is rejected.
[2014] VSCA 48
(1998) 197 CLR 172