PRACTICE AND PROCEDURE - Abuse of process - Rule 13.10 Federal Magistrates Court Rules - application dismissed - court able to rely on Rule on own motion.

Bankruptcy Act 1966, s.153B

(2) That the Applicant pay the Respondent's costs pursuant to Order 62 of the Federal Court Rules in accordance with the Federal Court scale.

1. Before the court is an amended application pursuant to s.153B of the Bankruptcy Act 1966 (the Bankruptcy Act). The amended application was filed on the fifth day of August 2002. The matter had commenced by way of an application filed earlier in the Federal Court of Australia on 5 July 2002. The proceedings were transferred to the Federal Magistrates Court by order of the Federal Court on 2 September 2002.

2. In the application which is now, as I have indicated, amended and filed on 5 August 2002, Yap Cheng See, (the applicant), seeks an annulment of a sequestration order and does so in reliance upon s.153B of the Bankruptcy Act.

3. The court in addition to noting the amended application to which I shall refer briefly has received a number of documents from both parties and for the sake of completeness it is appropriate that I indicate that the court has taken into account and considered those documents. They include a significant and voluminous affidavit from the applicant comprising some 396 pages of an affidavit sworn 5 July 2002 by the applicant. In addition the applicant has relied upon a further affidavits sworn by her on the 26th day of July 2002 and on 29 July 2002. The applicant has relied upon submissions in support of the application for annulment filed 12 August 2002, further submissions which are entitled "Applicant's further submissions to establish respondent's fraud in support of application seeking annulment of bankruptcy" filed 30 August 2002, a further document entitled "Applicant's submissions pursuant to Registrar Jan's direction given on 2 September 2002 in support of application seeking annulment of bankruptcy and damages", and then a further affidavit in support of the application for annulment of bankruptcy and damages sworn 4 October 2002, and a further submission in support of the application seeking annulment of bankruptcy and damages filed 10 October 2002.

4. The last two of those documents are documents which were filed out of time in the sense that the order made by the registrar in relation to the filing and serving of submission only was an order made on 2 September 2002 which provided that the applicant should file and serve written submissions by 16 September 2002 and that the respondent shall file and serve written submissions by 30 September 2002. As a matter of fairness the respondent in the present application did not object to the later documents being filed, served and relied upon by the applicant and leave was granted to the applicant to so file and serve those later documents.

5. For its part the respondent has substantially relied on an affidavit which was sworn by Bruce Stevenson Dodd on the 26th day of July 2002. The respondent has also filed and served three sets of submissions: first, respondent's submissions in opposition to the application seeking annulment of bankruptcy filed 26 July 2002, second, respondent's further submissions in opposition to application seeking annulment of bankruptcy filed 27 August 2002 and the third, respondent's submissions in response to application seeking annulment of bankruptcy filed 27 September 2002.

6. The amended application which has been relied upon by the applicant refers to the grounds for annulment as follows:

"1. Deliberate concealment of facts by Mallesons S Jacques, Respondent's solicitors, that:

(1) Respondent failed to file and serve a defence by 3.7.92 pursuant to Registrar Kingsley's order dd 23.6.92 in DC 1536/89 on which date it was appointed to act on defendant's behalf in DC 1536/89 despite it has in possession since 27.6.92 evidential material that substantiate DC 1536/89 based on plaintiff's deed stamped 9.9.88, defendant's $67,000 alleged debts, is a false claim. The $67,000 debts are false substantiated by material in its possession since 27.6.92 which material

(2) The respondent failed to put before Court in support of application made on defendant's behalf in DC 1536/89.

(3) Respondent failed to do exactly as stated in the yellow note defendant gave to Mr Smallbone on 26.6.92 which state:

a. Appeal against R. Kingsley's decision made on 23.6.92.

b. Make application for a stay of execution pending the determination of the Appeal despite he assured defendant that there was no problem to do exactly as stated in the yellow note.

(4) Respondent failed to make application to vary Registrar Kingsley's orders in time....

(5) Mr Smallbone deliberately misrepresented facts at the hearing held on 10.8.92 before His Honour J Viol in DC 1536/89 which misrepresentation culminated in defendant allegedly found cheques at 3 am... hearing voice in mind ... which he knew was false that resulted in His Honour dismissing the application that led to the defendant's loss of her home, 449 Canning Highway Melville sold on 5.11.93 in a sham bailiff's auction for $142,000 though worth more than $400,000 pursuant to writ of fifa215/93 by M Ellison pursuant to DC1536/89 which action based on plaintiff's deed stamped 9.9.88, defendant's $67,000 alleged debts which debts are false proved in evidential material in Respondent's possession since 27.6.92 it failed to put before the Court in support of application it made on defendant's behalf in DC1536/89 thereby her loss and damage suffered as a result of Respondent's negligence as in 1(1) - (5) above.

2. Mallesons S Jacques' deliberate misrepresentation of facts in every Court to conceal 1(1) - (5) to save their hides and to pervert the course of justice."

7. An order is sought amongst others, that the applicant's bankruptcy be annulled. In general terms it is clear from the voluminous material to which I have referred that the applicant is aggrieved as a result of the bankruptcy order and believes that she was wrongly declared bankrupt and that the judgment entered against her which provided the basis upon which the bankruptcy order was made was wrongly entered.

8. There can be little doubt that the applicant has pursued with vigour and in some detail her concerns about the process. Some insight into the extent and the pursuit of those concerns is found in the history of the proceedings which is set out in the affidavit largely supported by the cases to which I will presently refer, of Mr Dodd sworn 26 July 2002.

9. Referring to that history it's noted that on 10 April 1989 a default judgment was entered against the applicant in District Court action 1536 of 1989 the default judgment was claimed to be for an unpaid debt. On 23 June 1992 District Court Registrar Kingsley in DC 1536 of 1989 set aside the default judgment and gave the applicant leave to defend the 1989 proceedings provided the applicant paid $39,000 into court by 7 July 1992. The applicant failed to make the payment.

10. The applicant appealed with the assistance of the respondent to the District Court and Judge Viol on 21 August 1992 in action DC 1536 of 1989, refused to alter the decision of Registrar Kingsley and dismissed the appeal with costs. The applicant applied for leave to appeal in District Court action 1536 of 1989 to the Full Court of the Supreme Court. The Full Court dismissed the applicant's application on 10 June 1993, with costs. The applicant then sued the respondent for negligence in District Court action 6202 of 1993. Judgment was delivered by Commissioner Martin QC on 7 May 1996. He found that the applicant had failed to prove the respondent had been negligent and her prayer for relief was denied. The respondent was awarded the costs of the action.

11. The applicant appealed that decision to the Full Court of the Supreme Court in action number FUL 85 of 1996, which appeal was eventually dismissed on 21 July 1997, with costs for want of prosecution. The reasons for decision noted it was impossible to determine an arguable case by way of appeal. Prior to that decision, the applicant appeared before the Full Court on at least two occasions and before a master in chambers on at least five occasions regarding the notice of appeal. The applicant then appealed the decision to the High Court in action number P46 of 1997. The special leave application was denied on

12. On 14 December 2001, the applicant applied for judgment based on admissions allegedly made at the trial in District Court action 6202 of 1993. The application was heard by District Court Judge Wisbey on

21 January 2002, who dismissed it with costs. On 15 March 2002, the applicant applied again to the District Court for a retrial of DC 6202 of 1993 based on alleged fresh evidence. Commissioner Greaves heard that application and dismissed it with costs on 22 March 2002. The applicant appealed the decision of Commissioner Greaves. The appeal was heard on 12 April 2002 and dismissed with costs by District Court Judge Williams.

13. The applicant then filed an application in Supreme Court action CIV 1865 of 2002 for a rehearing based on alleged fresh evidence and alleged misrepresentation of facts, which was listed before the Full Court on 24 July 2002 and is now listed, according to the affidavit of Mr Dodd, before the Full Court on 14 August 2002. I should interpolate here that what has occurred, I was told today, is that there has now been a hearing of that appeal and the decision of the Full Court is reserved but, as there is a retirement of one of the members of that court due the next day or so, it is expected a judgment of that Full Court will be delivered within a matter of days from today.

14. The history of the bankruptcy proceedings is likewise set out in the affidavit and I recite that simply by way of background. The bankruptcy notice was served on 11 October 1997. The applicant applied to have the bankruptcy set aside in proceedings WG 7407 of 1998. On 1 December 1998, It appears the Federal Court Registrar dismissed an application to set aside the bankruptcy with costs. On

10 December 1998, Federal Court Registrar Jan made a sequestration order. The applicant applied to set aside the registrar's decision and sequestration order and on 30 July 1999 French J dismissed the application, with costs. The applicant appealed to the Full Federal Court. That court denied leave to appeal on 29 November 1999, with costs.

15. The applicant then sought to have the sequestration order annulled and the respondent opposed the application on the grounds of res judicata and issue estoppel. The application was dismissed by Nicholson J on 28 June 2001. The applicant applied for leave to appeal the decision of Nicholson J to the Full Federal Court. Leave to appeal to that court was refused on 29 November 2001, with costs.

16. I now consider the proceedings before the Court. When I turn to the proceedings and the copy of those proceedings attached to the affidavit of Bruce Stevenson Dodd, it is appropriate that I incorporate to the extent that I am required, a further background summary of the facts which are set out in those judgments. I will not incorporate into this judgment those parts of the judgments which set out the factual background save and except to say that I adopt the factual background set out by Carr J in the judgment he delivered, which was the judgment delivered essentially for and on behalf of the Full Court of the Federal Court on 29 November 1999. The factual background appears at page 2 of His Honour's judgment and appears to cover in part matters to which I have already referred and provides some further details commencing at page 2 of his judgment under the Heading "Factual Background" which I otherwise adopt.

17. It is noteworthy that in the reasons for judgment, however, His Honour Carr J in delivering the decision for and on behalf of the Full Court refers at page 8 of the judgment at line 39, in referring to the trial judge's findings and consideration, the following:

"His Honour said that these issues were further agitated in her affidavit dated 2 November 1998 in opposition to the creditor's petition which endeavoured to assert that the judgment adverse to her in the proceedings against the respondent had been obtained by fraud. ..."

18. It is also clear in the attachments to the affidavit of Mr Dodd to which I have referred and in particular the decision which was delivered by His Honour Nicholson J on 28 June 2001, that the issue of fraud was further referred to and in particular at page 9 of His Honour's decision under the heading `Fraud' His Honour states:

"An allegation of the presence of fraud in the judgment obtained is relevant to both the doctrines of res judicata and issue estoppel. The defence of res judicata can be defeated by proof that the judgment was obtained by fraud as to the very matter litigated. Ebber v Isager [1995] 1 Qd R 150 at 157; Duchess of Kingston's case [1775] AllER Rep 263 at 629 per De Grey CJ, (HL). The allegation of fraud must be pleaded with precision and certainty: Meddowcroft v Huguenin [1844] EngR 549; (1844) 4 Moo PCC 386; 13 ER 352. Surmise and inference as to fraud is not sufficient; Perry v Meddowcroft [1846] EngR 1070; (1846) 10 Beav 122; 50 ER 529. Issue estoppel does not apply to judgments obtained by fraud. Weaver v Law Society of New South Wales [1979] HCA 35; (1979) 142 CLR 201; Director of Public Prosecutions v Humphreys [1977] AC 1 at 21 per Viscount Dilhorne."

19. In the Full Court decision of the Federal Court delivered by Gyles J on 29 November 2001 quoted paragraph 36 of the Trial judge as follows:

"The applicant has not put forward evidence of fraud. In her affidavit she has made statements which are her view of the matter and which are unsubstantiated by proper evidence. Her allegations of fraud founded on the concealment and unavailability of the transcript of action 1536/89 could have been raised in many previous proceedings. In her notice of appeal from the judgment of French J the applicant quotes from the transcript so that was in her possession in 1998. Her failure to raise her allegations of fraud is therefore unreasonable so that she is prevented by the principle of an Anshun estoppel of raising the issue in this proceeding."

20. Gyles J in delivering the Full Court decision concluded:

"We cannot detect any error in principle in the manner in which the primary judge approached the question."

21. It was submitted for and on behalf of the respondent in the written submissions to which I have referred that the application that is currently before the Full Court of the Supreme Court of Western Australia, which as I have indicated is now a reserved judgment, which is about to be delivered any day is the proper forum where these matters, if they may be agitated or should continue to be agitated and that it is inappropriate for this application to be brought in this court when the Full Court of the Supreme Court of Western Australia is seized of the matter.

22. It is further submitted the application in any event is misconceived because the applicant seeks to have a bankruptcy annulled, the order was made by the registrar whose decision on application of the applicant was reviewed by French J, and that application failed and the appeal to the Full Court of the Federal Court of Australia likewise failed and I have referred to that in some detail already. It is noted that the applicant again filed an application to the Federal Court for annulment. Nicholson J refused the application. The applicant sought to appeal that decision and the Full Court of the Federal Court refused leave to appeal. Again I have referred to the details of that process.

23. It is further submitted on behalf of the respondent that the application and the affidavit material in support of the application contains substantially irrelevant material, fails to identify grounds for annulment and seeks to reopen and relitigate issues decided in prior proceedings in this honourable court and other courts, from which all avenues of appeal have been exhausted. Further it is submitted that the applicant has not produced a signed consent from her trustee in bankruptcy for her continuing to pursue proceedings and seek damages from the respondent.

24. In the respondent's further submissions filed 27 August 2002 further details are raised in relation to the pending proceedings and in support of the submission that the application is misconceived. I do not need to refer in detail to those submissions. Likewise, I do not need to refer in detail to the further submissions by the respondent filed on 27 September 2002, save and except that I note that attached to those proceedings is a copy of submissions made by the respondent in relation to the issue of `res judicata' and `issue estoppel'. Those matters were raised by way of submission before Nicholson J. Also attached to the more recent submissions by the respondent is a copy of the `supplementary submissions' which are being relied upon in those proceedings on the doctrines of `res judicata' and `issue estoppel' dated 17 April 2001.

25. In my view, where a court has to consider the issue of annulment by the court under s.153B of the Bankruptcy Act, it's appropriate for the court to consider, as I have done, the detailed history and chronology of proceedings in the Federal Court of Australia and proceedings which have been or are currently before the relevant state courts. It is clear to me in the present case that the material which has been relied upon, though voluminous, essentially does seek to relitigate and re-agitate the matters which have been the subject of decisions to which I have referred.

26. In my view the court, when confronted with an application of this kind, has a duty in the interests of the administration of justice to deliver, as I am delivering, a judgment quickly and in a timely manner. Hence, I have decided to deliver an extempore judgment having considered the voluminous material on the file.

27. During the course of submissions by the applicant, on a number of occasions when I was referred to detailed documents and attachments either to affidavits or indeed otherwise in these proceedings, it was made clear that these issues had indeed been agitated on previous occasions in previous courts. It is clear to me that that must be the case as the submissions I have heard today and the material I have read is all material which has been properly considered by other courts.

28. I should also add for the sake of completeness that when the matter was before the High Court of Australia and was agitated by the applicant representing herself on 22 October 1998, a number of these issues that were agitated were the subject of an exchange. In particular, on that occasion His Honour McHugh J said, and I quote from the transcript at page 5 the following:

"Well, you signed a deed and Commissioner Martin refused to accept your evidence in respect of it. He said he did not accept your evidence and he found your explanation unconvincing. In addition, you have to remember that you ultimately conceded in cross-examination that you had, in effect, forged a document of Vivantie's."

29. The court in that case, as I have indicated earlier, declined to allow the application and it was dismissed with costs. It is my view that in cases of this kind it is not appropriate for the Federal Magistrates Court to continue to entertain an application of this kind where clearly the issues have been properly agitated in other courts and been the subject of considered decisions where there is in fact in the present case no additional material which would persuade me that I should exercise my discretion, which I undoubtedly have under s.153B of the Bankruptcy Act.

30. It is appropriate, however, that at all times the court considers the issue of whether or not the proceedings that are before the court are proceedings which can properly be regarded as proceedings which in the legal sense are what might be regarded as frivolous; that is, they are proceedings where there may be no reasonable cause of action disclosed, that is the proceeding is frivolous or vexatious or the proceeding is otherwise an abuse of process of the court. Although Rule 13.10 of the Federal Magistrates Court Rules has not been specifically relied upon by the respondent, it is clear from the submissions to which I have referred that, effectively, the respondents submit that this action is one which cannot be sustained. In the present case the court may rely upon Rule 13.10 of its Rules which provides:

"13.10 The Court may order that a proceeding be stayed or dismissed generally or in relation to any claim for relief in the proceeding, if it appears to the Court that in relation to the proceeding or claim for relief:

(a) no reasonable cause of action is disclosed; or

(c) the proceeding is an abuse of process of the Court."

31. I should add that that would be my view even if I was satisfied that there were no pending proceedings in the Full Court of the Supreme Court of Western Australia. I would be satisfied on the basis of the previous litigation history in the Federal Court alone that this application brought in this manner relying upon the material to which I have referred is effectively an abuse of process and it would be quite wrong for this court to entertain the application based on the material before it. This application is clearly, in my view, an abuse of process and an abuse of process which should not be entertained.

32. In my view, even if I am to be satisfied that it was not an abuse of process, considering the material on its merit and having regard to the fact that the matter has been re-litigated on a number of occasions, I can see no reason why this court should differ in the conclusions it reaches from the conclusion reached by the Full Court of the Federal Court in the appeals to which I have referred and to that extent the doctrine of res judicata applies. In any event, I am satisfied for the reasons stated the application should be dismissed.

(2) That the Applicant pay the Respondent's costs pursuant to Order 62 of the Federal Court Rules in accordance with the Federal Court scale.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of McInnis FM