CONSIDERATION
24 Section 29 of the Federal Court of Australia Act 1976 (Cth) provides:
Stay of proceedings and suspension of orders
(1) Where an appeal to the Court from another court has been instituted:
(a) the Court or a Judge, or a judge of that other court (not being the Federal Circuit and Family Court of Australia (Division 2) or a court of summary jurisdiction), may order, on such conditions (if any) as it or he or she thinks fit, a stay of all or any proceedings under the judgment appealed from; and
(b) the Court or a Judge may, by order, on such conditions (if any) as it or he or she thinks fit, suspend the operation of an injunction or other order to which the appeal, in whole or in part, relates.
(2) This section does not affect the operation of any provision made by or under any other Act or by the Rules of Court for or in relation to the stay of proceedings.
25 Further, r 36.08 of the Federal Court Rules 2011 (Cth) allows an appellant to apply to the Federal Court for an order to stay the execution of a proceeding until the appeal is heard and determined.
26 In Viagogo AG v Australian Competition and Consumer Commission [2021] FCA 175 Abrahams J summarised principles relating to the stay or execution or proceedings under a judgment the subject of appeal, as follows:
10. Rule 36.08 confers a broad discretion. Generally, there must be demonstrated "a reason or an appropriate case" to warrant the exercise of discretion in favour of granting a stay. It is not necessary to establish special or exceptional circumstances for the grant of a stay: Powerflex Services Pty Ltd v Data Access Corp [1996] FCA 460; (1996) 67 FCR 65 at 66.
11. Two questions must be considered: first, is there an arguable point on the proposed appeal: Nolten v Groeneveld Australia Pty Ltd [2011] FCA 1494 (Nolten) at [24] or some "rational prospect of success" in relation to any of the grounds of appeal: Burns v AMP Finance Ltd [2005] FCA 761 at [5]; and second, does the balance of convenience favour the grant of a stay: Nolten at [24], [46].
12. The party seeking the order bears the onus of demonstrating a proper basis for a stay, which must be fair to all parties: Alexander v Cambridge Credit Corporation Ltd (receivers appointed) (1985) 2 NSWLR 685 (Alexander) at 695. That party must demonstrate that there is a real risk that it will suffer prejudice or damage if a stay is not granted, which will not be redressed by a successful appeal: Kalifair Pty Ltd v Digi-Tech (Australia) Ltd, McLean Tecnic Pty Ltd v Digi-Tech (Australia) Ltd [2002] NSWCA 383; (2002) 55 NSWLR 737 (Kalifair) at [18]; Flight Centre Limited v Australian Competition and Consumer Commission [2014] FCA 658 (Flight Centre) at [9(f)]. This requirement will be satisfied if a successful appeal will be rendered nugatory unless a stay is granted: Ali v Australian Competition and Consumer Commission [2020] FCA 860 at [11]; Australian Competition and Consumer Commission v BMW (Australia) Ltd (No 2) [2003] FCA 864 (BMW) at [5]; Alexander at 695; Kalifair at [18].
13. The successful party at first instance is entitled to presume that the judgment appealed from is correct: Powerflex Services Pty Ltd v Data Access Corp [1996] FCA 460; (1996) 67 FCR 65 at 66, citing Re Middle Harbour Investments Ltd (in liq) (unreported, Court of Appeal NSW, 15 December 1976); Flight Centre at [9(b)]; Wooldridge v Australian Securities and Investments Commission [2015] FCA 349; (2015) 106 ASCR 551 (Wooldridge) at [11]; Urban Alley Brewery Pty Ltd v La Sirène Pty Ltd (No 2) [2020] FCA 351 at [48], [51].
27 See also Dyer v Chrysanthou (No 4) [2022] FCA 51 at [9]-[10] where Wigney J adopted the statement of legal principles of Abrahams J in Viagogo.
28 In relation to whether there is an arguable point on the proposed appeal against the primary decision, supporting interim restraint orders, it is my view that there is not.
29 In ground of appeal 1 Ms Storry contends that the primary Judge erred in finding that she had exhausted her rights of appeal in respect of the debt, and that his Honour ought not have formed conclusions about her prospects of success in relevant appeals.
30 Section 52 (1) of the Bankruptcy Act provides:
(1) At the hearing of a creditor's petition, the Court shall require proof of:
(a) the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient);
(b) service of the petition; and
(c) the fact that the debt or debts on which the petitioning creditor relies is or are still owing;
and, if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor.
31 His Honour noted at [10] that the relevant act of bankruptcy of Ms Storry occurred on 1 November 2021, being the date prior to which Ms Storry had failed to pay the judgment sum to RACQ after service upon her of the bankruptcy notice, and at [7] that the creditor's petition was personally served on Ms Storry on 29 January 2022. At [11] his Honour stated his satisfaction that the judgment debt remained unpaid.
32 The submissions of Ms Storry at the hearing before me yesterday did not cavil with these findings.
33 To that extent it is difficult to see how the primary Judge erred, when his Honour was simply applying the provisions of the Bankruptcy Act to the respondent's sequestration application.
34 However Ms Storry submitted that the bankruptcy notice issued by the Official Receiver was somehow faulty, because it was in respect of a debt arising from the decision of 4 December 2020 of Acting Magistrate Smith which Ms Storry sought to appeal to the District Court of Queensland.
35 At the hearing yesterday Ms Storry did not take the court to any notice of appeal to the District Court against the decision of Acting Magistrate Smith. The only evidence that this is the intention of Ms Storry is her evidence from the Bar table.
36 In my view, however, Ms Storry's prospects of successfully appealing the decision of Acting Magistrate Smith (thus seeking to establish error on the part of the primary Judge in the present proceedings) are practically very poor.
37 The judgment debt the subject of the decision of Acting Magistrate Smith was $13,396.06 plus costs. The quantum of the judgment debt was below the minor civil dispute limit for the purposes of s 45 of the Magistrates Courts Act 1921 (Qld). While s 45 of the Magistrates Courts Act contemplates appeals to the District Court from the Magistrates Court where the judgment debt is below the minor civil dispute limit, s 45 (2) provides that an appeal shall only lie by leave of the District Court or a District Court judge, who shall not grant such leave to appeal unless the court or judge is satisfied that some important principle of law or justice is involved.
38 Ms Storry made numerous submissions which I understood went to the importance of her proposed appeal from the decision of Acting Magistrate Smith.
39 Ms Storry submitted, inter alia, that her criminal conviction for the traffic infringement was reliant on a Queensland Traffic Crash Report, however the report was headed by a Disclaimer to the effect that the Queensland Police service in no way warranted and would not be held liable for the accuracy, correctness, currency or otherwise of the information set out in the report.
40 In this regard I note the submission by Ms Storry that an error has been made by the primary Judge in respect of the application of s 60 (4) of the Bankruptcy Act to her case. Insofar as I understand this submission, Ms Storry contends that "a personal wrong" was done to her in respect of that Crash Report for the purposes of s 60 (4).
41 In its entirety, s 60 provides:
Stay of legal proceedings
(1) The Court may, at any time after the presentation of a petition, upon such terms and conditions as it thinks fit:
(a) discharge an order made, whether before or after the commencement of this subsection, against the person or property of the debtor under any law relating to the imprisonment of fraudulent debtors and, in a case where the debtor is imprisoned or otherwise held in custody under such a law, discharge the debtor out of custody; or
(b) stay any legal process, whether civil or criminal and whether instituted before or after the commencement of this subsection, against the person or property of the debtor:
(i) in respect of the non-payment of a provable debt or of a pecuniary penalty payable in consequence of the non-payment of a provable debt; or
(ii) in consequence of his or her refusal or failure to comply with an order of a court, whether made in civil or criminal proceedings, for the payment of a provable debt;
and, in a case where the debtor is imprisoned or otherwise held in custody in consequence of the non-payment of a provable debt or of a pecuniary penalty referred to in subparagraph (i) or in consequence of his or her refusal or failure to comply with an order referred to in subparagraph (ii), discharge the debtor out of custody.
(2) An action commenced by a person who subsequently becomes a bankrupt is, upon his or her becoming a bankrupt, stayed until the trustee makes election, in writing, to prosecute or discontinue the action.
(3) If the trustee does not make such an election within 28 days after notice of the action is served upon him or her by a defendant or other party to the action, he or she shall be deemed to have abandoned the action.
(4) Notwithstanding anything contained in this section, a bankrupt may continue, in his or her own name, an action commenced by him or her before he or she became a bankrupt in respect of:
(a) any personal injury or wrong done to the bankrupt, his or her spouse or de facto partner or a member of his or her family; or
(b) the death of his or her spouse or de facto partner or of a member of his or her family.
Note: See also subsection 5(6).
(4A) Notwithstanding paragraph (1)(b), this section does not empower the Court to stay any proceedings under a proceeds of crime law.
(5) In this section, action means any civil proceeding, whether at law or in equity.
42 Plainly, s 60 (4) applies to stay of proceedings initiated by the bankrupt prior to bankruptcy. I understand that Ms Storry asserts that she may continue to prosecute appeals in respect of Magistrates Court decisions adverse to her (presumably in this case, the decisions of Magistrate Coates and Acting Magistrate Smith), in particular in respect of her criminal conviction and the judgment debt.
43 I am unable to identify how s 60 (4) assists Ms Storry in the present proceedings. It is not apparent that this section was in issue before the primary Judge in determining whether to make the sequestration order. More relevantly none of Ms Storry's litigation antecedent to the present proceedings appeared to concern any personal injury or wrong done to Ms Storry, or the death of her spouse, partner or family member. "Personal injury or wrong" in the context of what is now s 60 (4) of the Bankruptcy Act was explained by Dixon J in Cox v Journeaux (No 2) [1935] 52 CLR 713 at 721 as follows:
The plaintiff says that he himself is entitled to prosecute it under the proviso as an action for personal injury or wrong done to himself. The test appears to be whether the damages or part of them are to be estimated by immediate reference to pain felt by the bankrupt in respect of his mind, body or character and without reference to his rights of property (Wilson v United Counties Bank Ltd (1920) AC 102 at 111 and 128-133).
44 As a general proposition the existence of a Disclaimer on the Crash Report does not of itself mean that the report is a discredited document. The existence of this Disclaimer, and any grievance Ms Storry may have in relation to it, could not give rise to a "personal injury or wrong" to Ms Storry, by anyone, for the purposes of s 60 (4) of the Bankruptcy Act.
45 No principle of law is in issue in respect of the application of s 60 (4) of the Bankruptcy Act - the section simply does not apply.
46 Ms Storry also submitted that the primary Judge erred in finding that she had not filed any material in the proceedings before his Honour, when she submitted she plainly did. I note the affidavit dated 14 March 2022, filed by Ms Storry in the proceedings before the primary Judge, and now annexed to the affidavit marked as Exhibit 1(A) in the present Federal Court proceedings. I have already referred to para [3] of his Honour's reasons where the primary Judge noted the affidavit there had been admitted into evidence, but was of no obvious significance to those proceedings.
47 Ms Storry's affidavit dated 14 March 2022 annexed material described in the affidavit as:
1. The decision of Acting Magistrate Turra delivered on 7 December 2022;
2. Correspondence of Acting Magistrate Magistrate Turra denying the decision to be handed to the applicant.
3. Acting Magistrate Turra's decision held by the Department of Justice.
4. Application for Special Leave to the High Court.
5. Affidavit of Service to the High Court to SLF Lawyers.
6. District Court of Appeal Application.
7. Hearing transcript of Acting Magistrate Smith with no service of material to the applicant. No adjournment was provided.
8. Transcript of stay hearing to Justice Fraser, the costs told to his honour was for a 3 day trial when really 1.2 days and a judgment.
9. The costs of the car was turned down by SLF lawyers prior to trial.
10. High Court application for the Office of Fair trading.
48 It is unclear to me how the observation of his Honour, that this material was of no obvious significance to the question whether a sequestration order ought be made, would constitute an appellable error.
49 I also note that, insofar as appears on the material before me, there is no suggestion that before his Honour Ms Storry sought to establish for the purposes of s 40 (1)(g) of the Bankruptcy Act that she had a counter-claim, set-off or cross demand equal to, or more than, the sum claimed in the respective bankruptcy notice, being a counter-claim, set-off or cross demand she could have set up in the Magistrates Court proceedings wherein the judgment against her was obtained.
50 Finally, and ultimately, any appeal against decisions of either Acting Magistrate Smith or Acting Magistrate Turra would be subject to the Uniform Civil Procedure Rules 1999 (Qld) (Wynch v Ketchell [2001] QCA 391). Under those rules Ms Storry had 28 days to appeal. Those time periods have clearly long expired, and no evidence is before me that any extensions of time have been granted.
51 In my view ground of appeal 1 from the decision of the primary Judge has no prospect of success.
52 In grounds of appeal 2 and 3 against the decision of the primary Judge, Ms Storry claims error on the part of his Honour in respect of costs ordered by Acting Magistrate Smith on 4 December 2020.
53 In respect of ground of appeal 2, Ms Storry describes the error as "in considering the lawyer's fees that was the basis of the sequestration Order are not standard Magistrate fees but Indemnity fees that were never cost assessed and the application to bankruptcy occurred with stay applications on foot and a yet to be decided High Court appeal." Ground of appeal 3 refers to costs incurred by lawyers, presumably being lawyers of the respondent, and presumably in respect of the proceedings before Acting Magistrate Smith (although this is unclear).
54 As the High Court explained in Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28, the question raised by s 52 of the Bankruptcy Act when the Court is considering whether to make a sequestration order against the estate of a debtor, is whether there is a debt. The relevant debt for the purposes of the proceedings before his Honour was that following the order of Acting Magistrate Smith, namely $13,396.06 plus interests, costs and witness expenses.
55 In this ground of appeal, Ms Storry essentially claims error of the primary Judge in failing go behind the judgment of the Magistrates Court awarding costs to the respondent. In Ramsay however the plurality observed at [68]:
For the purposes of s 52 of the Act, a judgment may usually be taken to be sufficient evidence of a debt in that a judgment against a debtor in favour of a creditor obtained after a trial is, generally speaking, a reliable indication of the true state of indebtedness as between creditor and debtor. Indeed, such a judgment can usually be expected to provide the most reliable statement of the debt humanly attainable because the ordinary processes of the adversarial system provide a practical guarantee of reliability. The testing of the relative merits of a claim and counterclaim under the rigours of adversarial litigation will usually establish the true state of accounts as between the parties to the proceedings. Accordingly, a Bankruptcy Court will usually have no occasion to investigate whether the judgment debt is a true reflection of the real debt. But where the merits of a claim and counterclaim have not been tested in adversarial litigation, a judgment debt will not have this practical guarantee of reliability.
(emphasis added)
56 To the extent that Ms Storry in her notice of appeal asserts that the basis of the assessment of costs in the Magistrates Court was wrong, I note relevant observations of Colvin J in Kitay, in the matter of Frigger (No 2) [2018] FCA 1032, where his Honour said:
40. A costs order creates an obligation to indemnify in respect of costs incurred (which is why the indemnity principle must be met before such an order can be made or enforced). No debt can arise from that obligation unless there is a liability on the part of the party who has the benefit of the costs order to pay legal costs in respect of the conduct of the proceedings. In those circumstances, an assessment of costs on taxation is an adjudication that there is a debt which, by operation of the costs order, there is a liability to pay by way of indemnity.
(emphasis added)
57 In respect of the relevant decision of Acting Magistrate Smith it is unclear on the materials whether the assessment of costs followed taxation. However, costs were ordered by the Acting Magistrate in the amount of $22,741.52 on 4 December 2020 following a trial between the parties in the Magistrates Court. The Magistrates Court has a scale of costs in the UCPR.
58 There is nothing before the Court to support a finding that the primary Judge should have gone behind the decision of Acting Magistrate Smith.
59 The "as yet to be decided High Court appeal" is not identified in ground 2 of the notice of appeal. I note in any event however that simply because special leave to the High Court has been sought, that is, of itself, no basis for ordering a stay of a decision: see for example observations of Gageler J in Obeid v The Queen [2016] HCA 9 at [14], and Buchanan and Rangiah JJ in National Road Transport Association Ltd v Road Safety Remuneration Tribunal (No 2) [2016] FCAFC 58 at [9]-12].
60 In my view ground of appeal 2 has no prospect of success.
61 Ground of appeal 3 ground of appeal is vague, imprecise, and relates to issues which could properly have been raised in the Magistrates Court. In my view it is not competent as a ground of appeal.
62 Ground of appeal 4 is vague to the point of meaningless. In my view it has no prospect of success.
63 Insofar as the balance of convenience is concerned, I am satisfied that it favours the respondent.
64 The fact that Ms Storry has sought to appeal decisions of the Magistrates Court from several years ago does not, of itself, warrant a stay, either of the decision of the primary Judge or any other decision made in the course of this litigation.
65 Ms Storry submits that she holds a real estate agent's licence, and essentially she will lose that licence if she is a bankrupt. While this outcome is plainly prejudicial to Ms Storry, I am not persuaded that it outweighs the ongoing prejudice to, and costs incurred, by the respondent.
66 This litigation has been taken place over almost six years. It appears that at every stage, in every Court, Ms Storry has been unsuccessful in her applications. In the words of Keane JA (as his Honour then was) in Cook's Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd [2008] QCA 322; [2008] 2 Qd R 453 at 455, the respondent is entitled to the fruits of its judgments, including the decision of the primary Judge.
I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Collier.