Sims v Suda Ltd

1. The appellant's appeal filed on 22 December 2016 is summarily dismissed.
2. The appellant is to pay the respondent's costs of the appeal. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

SIOPIS J: 1 There are two matters before the Court today, which was originally listed as a directions hearing. 2 The first matter (WAD 525 of 2016) is an application by Mr Sims, dated 7 November 2016, for leave to appeal against an interlocutory order of the primary judge made on 27 October 2016, refusing to order discovery in a Federal Circuit Court of Australia proceeding to review the decision of a Registrar of that Court to make a sequestration order under the Bankruptcy Act 1966 (Cth), in respect of Mr Sims' estate. 3 The second matter (WAD 593 of 2016) is an application, dated 21 December 2016, in which Mr Sims nominally seeks leave to appeal from the order of the primary judge on 20 December 2016, dismissing Mr Sims' application to review the Registrar's decision to make the sequestration order. Because the order of the Federal Circuit Court dismissing Mr Sims' review application was a final order, I have treated this application as an appeal against the orders made by the primary judge on 20 December 2016. 4 The petitioner for the sequestration order was a company, Suda Ltd (Suda). Mr Sims has had a prior business relationship with Suda and over the years Mr Sims has conducted extensive litigation against Suda. 5 Suda's petition was founded on an unsatisfied judgment debt for costs ordered against Mr Sims in favour of Suda in a proceeding in this Court (Sims v Suda Ltd (No 2) [2015] FCA 281 (Sims v Suda (No 2) FCA). The costs order was made by Gilmour J after his Honour had, on Suda's application, struck out Mr Sims' statement of claim and summarily dismissed Mr Sims' originating application against Suda, on the basis that Mr Sims' proceeding was an abuse of process and wholly without merit. 6 Prior to the hearing today, solicitors for Suda notified Mr Sims in writing that Suda would apply for both applications to be dismissed at this hearing. 7 In his application for discovery, Mr Sims sought discovery in respect of documents which related to the past financial dealings of Suda and other companies. Mr Sims sought discovery of these documents to support his claim, in the review proceeding, that the sequestration order should be set aside pursuant to s 52(2)(b) of the Bankruptcy Act, because there was some "other sufficient cause" why the sequestration order should not be made. That "other sufficient cause", said Mr Sims, was that the costs order made in Sims v Suda Ltd (No 2) FCA, which founded Suda's petition, had been obtained in a proceeding in which Suda's defence was funded by the proceeds of crime. 8 At the subsequent hearing of the main review application before the primary judge on 1 December 2016, Mr Sims contended that the sequestration order should be set aside and the petition dismissed for the same "other sufficient cause". 9 It follows that if Suda is successful in its summary judgment application to dismiss the appeal from the primary judge's order of 20 December 2016 dismissing Mr Sims' review application, its summary judgment application to dismiss Mr Sims' application for leave to appeal from the interlocutory order refusing discovery, would also succeed. 10 Therefore, I deal first with the appeal in respect of the order, dated 20 December 2016, dismissing Mr Sims' application to review the Registrar's decision. 11 As mentioned, in his application to review the Registrar's decision before the Federal Circuit Court, Mr Sims argued that, pursuant to s 52(2)(b) of the Bankruptcy Act, there was some "other sufficient cause" why the sequestration order should not be made; namely, that the costs order on which Suda's petition was based, had been obtained in a proceeding in which Suda's defence was funded by the proceeds of crime. 12 The primary judge, in a detailed judgment, found that Mr Sims had not made out that there was some "other sufficient cause" for not making the sequestration order. The primary judge found that the impugned costs order had been made in circumstances where Mr Sims' proceeding against Suda had been dismissed because it did not have reasonable prospects of success, there had been an unsuccessful appeal and that, therefore, the manner in which Suda funded its defence, was irrelevant to the basis on which the impugned costs order was made. The primary judge refused to admit into evidence, affidavits tendered by Mr Sims which sought to explore financial matters which went to the history of dealings between Mr Sims and Suda, on the grounds of relevance and for other reasons. 13 The primary judge went on to say that despite having commenced a great deal of litigation, Mr Sims had not been able to demonstrate that he had a cause of action which might, within a reasonable time, put Mr Sims in funds arising from that litigation. 14 Further, the primary judge said that, in any event, even if Mr Sims had demonstrated some "other sufficient cause", in the exercise of his discretion, the primary judge would not have set aside the sequestration order or dismissed the petition. This was because of the amount of Mr Sims' indebtedness, Mr Sims' known indebtedness not only to Suda, but also to other persons, and Mr Sims' failure to proffer evidence of solvency. 15 Mr Sims' grounds of appeal set out in his affidavit of 22 December 2016 seek to impugn the primary judge's finding that the manner in which Suda funded its defence was, in the circumstances of the case, irrelevant and did not comprise some "other sufficient cause" not to make the sequestration order. 16 In my view, the fact that the impugned costs order was made against Mr Sims by Gilmour J had nothing to do with the manner in which Suda had funded its defence. Rather the costs order was obtained pursuant to a summary judgment founded on Mr Sims' own failure to plead a case which enjoyed reasonable prospects of success. The decision of the primary judge is not attended by any arguable error, and in my view, is correct for the reasons which the primary judge gave. 17 There is simply no prospect of Mr Sims succeeding in the appeal against the orders made by the primary judge on 20 December 2016; and, therefore, there is no prospect of Mr Sims succeeding on his application for leave to appeal against the interlocutory order, dated 27 October 2016. 18 Accordingly, I dismiss both the appeal and the application for leave to appeal. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.