Federal Court of Australia

Von Risefer v Blue Cube Developments Pty Ltd [2024] FCAFC 12

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The respondent’s costs on appeal (including reserved costs) be taxed and paid out of the estates of the appellants in accordance with s 109(1)(a) of the Bankruptcy Act 1966 (Cth).

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

1    By way of an amended notice of appeal filed on 20 March 2023, the appellants, Mr George Von Risefer and Mrs Elizabeth Von Risefer, who are self-represented, appeal orders by which a Judge of the Court dismissed their application to review the exercise of delegated power by a Registrar on the basis of which a sequestration order was made against them, and the sequestration order affirmed: Blue Cube Developments Pty Ltd v Von Risefer [2022] FCA 1193.

2    For the reasons that follow we have concluded that no error has been identified in the conduct of the review by the primary judge. The appeal will thus be dismissed with costs, and the sequestration order will remain undisturbed.

Background

3    The act of bankruptcy relied on by Blue Cube Developments Pty Ltd in its creditor’s petition is the failure of the appellants to comply with the requirements of bankruptcy notices that were served on 28 August 2021. The bankruptcy notices were issued on 28 June 2021 and were addressed to the appellants jointly. It relies upon a judgment debt which is the product of orders entered in the Magistrates’ Court of Victoria on 26 April 2021 in the total amount of $101,938.85. That amount comprises a damages award of $43,564.98, together with statutory interest of $17,021.37 and costs of $41,352.50.

4    As the primary judge observed, the judgment obtained by Blue Cube Developments in the Magistrates’ Court followed a protracted hearing conducted over nine days in September and October 2019 and February 2020. The five defendants to that proceeding were Outdoor Kitchens Group Pty Ltd, Mr Alexander Von Risefer, Mrs Elizabeth Von Risefer, Mr George Von Risefer and Kitchen Labs Pty Ltd. Mr George Von Risefer apparently acted for himself, and had leave to act for each of the corporations of which he was the director. Mrs Von Risefer acted for herself, and it is apparent that she was the primary spokesperson for all the defendants. The claim in the Magistrates’ Court was not advanced against Mr Alexander Von Risefer, apparently because his estate was the subject of a sequestration order.

5    The Magistrates’ Court proceeding concerned a contract between Blue Cube Developments and either or both the corporate defendants which was entered into in October 2016. This contract was for the supply and installation of kitchen cabinets with stone bench tops and bathroom vanity cabinets with stone bench tops for a total price of $56,600, to be delivered and installed in 10 semi-detached townhouses that Blue Cube Developments was developing in Melbourne. A related claim for misleading or deceptive conduct was brought against Mr George Von Risefer and Mrs Von Risefer pursuant to s 18 of the Australian Consumer Law, being Schedule 2 to the Competition and Consumer Act 2010 (Cth). This claim was based on representations said to have been made by Mr George Von Risefer and Mrs Von Risefer about the delivery, installation and quality of the goods to be supplied in order to obtain various pre-payments. As will become relevant, despite having had the opportunity to do so, neither Mrs Von Risefer nor any of the other defendants prosecuted a set-off or counterclaim against Blue Cube Developments.

6    After having received written submissions from the parties in the course of 2020, the Magistrate delivered ex tempore reasons on 20 April 2021. By reference to certain affidavit material in the present proceeding, and a partial transcript of the proceedings in the Magistrates’ Court, the primary judge accepted that the Magistrate found that Blue Cube Developments had established its case against the corporate entities for supply of defective products and as against Mr George Von Risefer and Mrs Von Risefer for misleading or deceptive conduct, and that Blue Cube Developments had suffered damage by reason of breach of contract and misleading or deceptive conduct. The Magistrate assessed damages in the amount of $43,567.98. Interest and costs were awarded in the amount of $16,949.73.

7    Mr George Von Risefer and Mrs Von Risefer filed a notice of appeal in the Supreme Court of Victoria on 25 May 2021, however the appeal was not prosecuted by them in a timely manner. The appeal was ultimately dismissed because the appellants had failed to comply with certain procedural orders.

8    In this Court the primary judge hearing the review application was satisfied that the appellants’ arguments were devoid of merit, and that Blue Cube Developments had established each of the matters required to be proved by it pursuant to the relevant provisions of the Bankruptcy Act 1966 (Cth). His Honour dismissed the appellants’ interim application, and affirmed the sequestration order made by the Registrar on 12 May 2022.

The appellants’ grounds of appeal

9    The appellants have acted for themselves at all times in this Court. This seems to have caused difficulty below in comprehending the grounds of review and the grounds relied on to resist the creditor’s petition. It has also caused difficulty in comprehending the amended notice of appeal as well as the appellants’ written and oral submissions. It is relevant to note, in this regard, that the appellants have had three opportunities to fashion a coherent notice of appeal, as well as guidance from the Court at three case management hearings in relation to the nature of an appeal and the Court’s expectation as to the form and substance of a notice of appeal.

10    Despite this, the appellants’ grounds of appeal as articulated in their amended notice of appeal were lengthy and prolix. They are set out in a schedule to these reasons for judgment. During the course of the hearing, however, the appellants accepted that their claims in support of their appeal could be summarised as follows, and in these circumstances the Court will address the appeal by reference to these claims:

(1)    In relation to the proceedings in the Magistrates’ Court in which final orders were made against the appellants that formed the foundation of the bankruptcy notices, the Magistrate did not permit the appellants to bring a counterclaim for the value of kitchen equipment and joinery that the appellants claimed the petitioning creditor had retained following the termination of the contract that was the subject of that proceeding (Ground one).

(2)    The creditor’s petition that was filed in this Court bore an error in its heading that affected the validity of the petition, and that it was subsequently amended without leave of the Court having been obtained (Ground two).

(3)    The bankruptcy notices were not served on Mrs Von Risefer, and the attempt that was made to serve her with the bankruptcy notices involved a breach of the terms of statutory instruments under State laws that were then in place concerning COVID-19 restrictions (Ground three).

(4)    The creditor’s petition was not served, although Mrs Von Risefer accepted that she had notice of the creditor’s petition because she appeared at the hearing of the petition before the Registrar (Ground four).

(5)    The Registrar had erred in not adjourning the hearing of the creditor’s petition so as to allow the appellants time to prosecute an appeal against the final orders of the Magistrates’ Court in the Supreme Court of Victoria, and that this error involved a miscarriage of the Registrar’s discretion (Ground five).

(6)    Going to the question of whether there was a debt, the appellants submitted that they were not agents of the corporate defendants in the Magistrates’ Court proceeding, and therefore could not be liable for the debts of the corporations. It is convenient at this point to reiterate that the basis of the appellants’ liability was a personal liability for contraventions of the Australian Consumer Law, and not in debt (Ground six).

(7)    The calculations that formed the basis of the sums claimed in the bankruptcy notices were wrong in that:

(8)    The primary judge failed to take account of submissions made on behalf of the appellants that the petitioning creditor had been in receipt of insurance proceeds, and that this went to the question of whether in truth there was a debt (Ground eight).

(9)    The primary judge failed to assist the appellants as unrepresented litigants (Ground nine).

(10)    The primary judge erred in not receiving into evidence an affidavit of Mrs Von Risefer (Ground ten).

(11)    After the sequestration order had been made by the Registrar, the petitioning creditor communicated with the Trustee about the status of the appellants’ appeal to the Supreme Court of Victoria from the orders of the Magistrates’ Court that were the foundation of the bankruptcy notices and the creditor’s petition (Ground eleven).

(12)    There were irregularities about the way in which the appellants’ appeal to the Supreme Court of Victoria from the orders of the Magistrates’ Court was summarily dismissed (Ground twelve).

(13)    The appellants made an overarching submission that they were not indebted to the petitioning creditor (Ground thirteen).

(14)    Mrs Von Risefer had the prospect of recovering compensation from the Shire of Yarra Ranges in relation to separate claims that she made against the Shire which had the consequence that she was solvent (Ground fourteen).

11    We note, for completeness, that the appellants raised certain other issues including allegedly intercepted telephone calls in the context of the proceeding in the Magistrates’ Court, and concerns about the operation of the justice system more generally. The appellants did not, however, explain how these issues related to the appeal, nor did they seek to adduce any further evidence in relation to these matters. Insofar as the allegedly intercepted telephone recordings were concerned, Mrs Von Risefer accepted in argument that no telephone recordings were tendered in evidence in the Magistrates’ Court. In these circumstances it is unnecessary to deal further with these matters.

12    It should be noted finally that on 24 April 2023 the appellants lodged an interlocutory application which sought, in substance, to lead further evidence on the appeal. Although this application was not accepted for filing because the appellants did not pay the filing fee, the application itself and the supporting affidavit were included in the appeal book. At the commencement of the hearing of the appeal the Court entertained an oral application by the appellants, substantially to the effect of the interlocutory application which had been lodged. Having regard to the provisions of r 36.57 of the Federal Court Rules 2011 (Cth), and the principles relating to the exercise of the Court’s discretion to receive fresh evidence on appeal identified by Dixon CJ in Greater Wollongong City Council v Cowan (1955) 93 CLR 435 at 444, the Court dismissed this application.

The respondent’s position

13    The respondent contests the appeal. Its position is that the sequestration order ought to remain undisturbed. The respondent submits that the appellants have not discharged their onus of persuading the Court that the primary judge erred in dismissing the application for review.

14    In relation to the appellants’ grounds of appeal as identified in the notice of appeal, the respondent submits at a high level that:

(a)    the majority of the grounds are simply wrong;

(b)    several of the grounds were not raised before the primary judge, do not feature in the judgment, and are not properly before this Court on appeal;

(c)    none of the grounds properly before the Court has any prospect of success; and

(d)    the appeal itself should fail for the same reasons the primary judge dismissed the application for review.

15    The respondent’s answers to the appellants’ claims in support of their appeal as summarised above in paragraph 10 are addressed individually below in our consideration of the appellants’ case as it was accepted as being put on appeal.

Consideration

Ground one: the conduct of the proceedings in the Magistrates’ Court

16    The appellants complain that they were denied the opportunity to bring a counterclaim against the petitioning creditor. This complaint is unfounded. While the prospect of a counterclaim was canvassed in some detail in the material before the Magistrates’ Court, no such counterclaim was ever brought by the appellants and no relevant ruling was made by the Magistrate preventing the making of a counterclaim.

17    This same argument was raised by the appellants before the primary judge. His Honour concluded by reference to the relevant evidence, and correctly in our respectful view, that:

4     … Despite Mrs Von Risefer foreshadowing, on more than one occasion during the course of the Magistrates’ Court proceedings, that she, and/or one of the other defendants, had and intended to prosecute a set-off or a counter-claim, none was ever pleaded and despite several adjournments granted by the magistrate for that to be done.

…

67     … I am quite satisfied that the magistrate conducted a procedurally fair hearing at which Mrs Von Risefer and Mr Von Risefer had more than adequate opportunity to present their defence. Further, despite the prospect of a set-off or counter-claim being raised in the Magistrates’ Court proceeding (and at least one adjournment having been granted to enable that to be done), the fact is that no set-off or counter-claim was filed in the proceeding.

18    There is no reason to doubt the conclusion of the primary judge in this regard. On the evidence of the respondent’s solicitor, it is sufficiently clear that the Magistrate provided ample opportunity for the appellants to bring a counterclaim for the value of kitchen equipment and joinery following the termination of the contract that was the subject of the proceeding in that Court. No error on the part of the primary judge has been shown on the basis that the appellants were denied the opportunity to bring a counterclaim. Ground one must therefore fail.

Ground two: error in the heading of the creditor’s petition

19    The appellants’ next point focuses on the assertion that the creditor’s petition was invalid as it was filed in this Court with the wrong court heading and subsequently amended without leave of the Court. This argument was raised before the primary judge, who summarised the position as follows:

90    Despite the length of the grounds set out in the review application and the opposition to the creditor’s petition, even more contentions were advanced, particularly by Mrs Von Risefer at the hearing. They can be shortly dealt with as, once again, none is of any merit:

…

(c)    Many submissions were made to the effect that the creditor’s petition is invalid and an abuse of process in that it was first issued in the Federal Circuit Court of Australia. This submission was expanded to embrace a contention that because some of the affidavits of service were titled in that court, it must follow that the entire proceeding is invalid. A creditor’s petition was filed in this Court, but incorrectly titled in the Federal Circuit Court, on 22 October 2021. When that error was noticed an amended and correctly titled petition was filed on 25 November 2021, which is the petition I am concerned with. And the fact that some of the affidavits that were read before me incorrectly referred to the Federal Circuit Court, most certainly does not make the content of those affidavits “invalid”,

(d)    A claim is made that the substituted service order for service of the creditor’s petition made by Registrar Hird on 30 November 2021 is invalid in that it was made upon documents filed “in the wrong court". That is not so: the sealed order was made in this Court. Mrs Von Risefer has managed to completely confuse herself by not appreciating that the applicant does not proceed upon the petition with the incorrect reference to the Federal Circuit Court as explained in the affidavit of Marianne My-An Phan made on 2 September 2022 at paragraphs [18] – [22], which evidence I accept and I find accordingly;

20    As the respondent explains, the rectification of the error in the creditor’s petition occurred on 25 November 2021. That was prior to orders for substituted service being made, prior to service on the appellants being effected, and well prior to the first return date.

21    In these circumstances the primary judge was plainly correct to conclude that the error in the court heading of the creditor’s petition does not invalidate the petition or the content of the relevant affidavits (even if this error was not remedied in certain affidavits). Ground two must also fail.

Grounds three and four: service of the bankruptcy notices and the creditor’s petition

22    On various occasions the appellants appear to have confused concerns relating to the service of the bankruptcy notices and the creditor’s petition, so we deal with grounds three and four together.

Significance of the alleged breach of COVID-19 restrictions

23    In response to the appellants’ contention that the bankruptcy notices were invalid as service of them were in breach of COVID-19 restrictions, the respondent submits that the primary judge considered this argument at [47]-[48], holding that the directions did not apply at the time of service of the bankruptcy notices or the creditor’s petition:

47    The other [point] is that service by that means [substituted service] was in breach of “Covid restrictions”. What is meant by that? The substituted service orders concern the creditor’s petition. I have found that it was served 2 March 2022. There were no relevant Stay At Home Directions made pursuant to the Public Health and Wellbeing Act 2008 (Vic) that operated on that day. The last such Direction was the Stay at Home Directions (Victoria) (No 8), which ceased at 11.59 pm on 23 September 2021. In any event, it is to be noted that cl. 10 of that Direction carved out from the restrictions imposed on leaving premises: leaving for purposes authorised by law or relating to the administration of justice.

48    It may be that this contention relates to the service of the bankruptcy notices as an anterior step which somehow (which was not explained) infects the substituted order for service of the creditor’s petition. On that view it is of no merit as I find, in accordance with the two affidavits of the process server Mr Ramshaw, that each bankruptcy notice was served on 28 August 2021 at 2.10 pm by leaving the documentation in envelopes respectively addressed to Mrs Von Risefer and to Mr Von Risefer in the letterbox at the Templestowe address. Once again, I reject as untruthful evidence to the contrary from Mrs Von Risefer and Mr Von Risefer.

24    The respondent notes, correctly, that the appellants have not provided any explanation as to why service of the bankruptcy notices might have been invalidated even had it occurred in breach of COVID-19 restrictions, or otherwise.

25    We accept, as the respondent submits, that the primary judge correctly found that these directions did not apply at the relevant time and even if they had that this would not affect the validity of the bankruptcy notices or the creditor’s petition.

Service more generally

26    In any event, and as the respondent submits, there can be no real argument that there was no effective service of the bankruptcy notices and the creditor’s petition given that Mrs Von Risefer appeared at the 27 January 2022 return date of the creditor’s petition (and all subsequent return dates) and communicated with the Court (including on 23 February 2022), apparently on behalf of herself and Mr George Von Risefer. Mrs Von Risefer accepted in argument on the appeal that she had the relevant notice given that she appeared at the hearing of the petition before the Registrar.

27    It may also be observed, as the respondent submits, that the affidavits of service speak for themselves and there was no cross-examination of any of the process servers. In this regard the primary judge said as follows at [27]:

I find that the bankruptcy notice was served as deposed to by the process server when he left it in the letterbox at the Templestowe address on 28 August 2021 at 2:10 pm. There is no reason why a process server would give false evidence in this Court as to that simple fact. In contrast, if as claimed by Mrs Von Risefer that the bankruptcy notice was not left in the letterbox, there is no rational explanation as to why she managed to identify LPF lawyers as acting for the applicant at that time, rather than P W Sotir & Co. The identity of LPF lawyers was disclosed on a covering letter addressed to Mrs Von Risefer dated 4 August 2021 which enclosed by way of service the bankruptcy notice and a sealed copy of the Magistrates’ Court order made on 26 April 2021.

28    There is no reason to doubt the conclusion of the primary judge that each bankruptcy notice was served on 28 August 2021 at 2.10pm by placing in an envelope the bankruptcy notice and a copy of the order made in the Magistrates’ Court on 26 April 2021 and by leaving those documents, respectively, in envelopes addressed to Mrs Von Risefer and Mr George Von Risefer that were left in the letterbox at 21 Oakwood Court, Templestowe in the State of Victoria. It follows that grounds three and four must also fail.

Ground five: miscarriage of the Registrar’s discretion in refusal to adjourn

29    The appellants’ next point is that the Registrar ought properly to have adjourned the hearing of the creditor’s petition to enable the appellants to pursue an appeal against the orders made in the Magistrates’ Court to the Supreme Court, and that the failure to do so caused the Registrar’s discretion to miscarry. This contention is without merit.

30    The primary judge considered this issue in some detail at [57]-[62]. His Honour concluded that the Registrar did not misuse her discretion to refuse to grant a further adjournment of the hearing on 5 May 2022 on any of the grounds relied on by the appellants. On the subject of their asserted inability to obtain legal representation, his Honour said as follows at [57]:

… As to their inability to obtain legal representation, there was ample time to do so within the period between 27 January 2022 and 5 May 2022. Mrs Von Risefer and Mr Von Risefer failed to provide any satisfactory evidence or explanation as to their inability to obtain legal representation within that period. Further, it must not be overlooked that, according to the evidence of Ms Gangur, each has considerable experience in acting as a self-represented litigant (though usually Mrs Von Risefer is the leading advocate) through nine legal proceedings commencing with a case in the Supreme Court of Queensland in 2001, which ultimately resulted in a failed application for special leave to appeal to the High Court and which I note commenced with an application by Mrs Von Risefer for an adjournment: Von Risefer v Permanent Trustee Co Ltd [2003] HCATrans 354.

31    The primary judge then directly addressed the appellants’ claim that the Registrar had ignored the extant appeal from the decision of the Magistrate to the Supreme Court. His Honour set out the history of the appeal in the Supreme Court, and the appellants’ failure to prosecute the appeal, concluding at [62] that there was no merit in the contention that the Registrar had ignored the fact of the appeal to the Supreme Court.

32    The appellants advanced no coherent submission in answer to the findings of the primary judge in relation to their asserted inability to obtain legal representation, or whether the existence of their appeal to the Supreme Court had been ignored.

33    Critically, however, by the time the review application came before the primary judge the appellants’ appeal to the Supreme Court had been dismissed by an Associate Judge on the basis that the appellants had failed to comply with several of the procedural orders which had been made on 24 August 2021. There was thus no occasion for the primary judge to consider whether any adjournment of the hearing before the Registrar would have been appropriate. It was for the primary judge, sitting on review from the Registrar, to start again and make a decision unaffected by what had gone before: see generally Allison v Murphy [2021] FCAFC 232 at [37]-[38], [41] (Besanko, Colvin and Downes JJ).

34    Accordingly ground five fails also.

Ground six: the appellants were not agents of the corporate defendants in the Magistrates’ Court proceeding

35    This claim is concerned with whether there was, in fact, a debt for which the appellants could be liable. The appellants submit, in substance, that the liability of the corporate defendants in the Magistrates’ Court should not be attributed to them, notwithstanding the fact that the basis on which the Magistrate found them to be liable was their own contravention of s 18 of the Australian Consumer Law.

36    The respondent submits, and we accept, that this is an entirely new ground which does not relate to the grounds of appeal advanced by the appellants in their amended notice of appeal. The respondent contends that the Court was not taken to any evidence on this point and that, in all the circumstances, it is not a proper ground of appeal.

37    We accept that the appellants did not provide any satisfactory explanation as to why this point, such as it is, was not taken before the primary judge, or take the Court to any relevant evidence in support of it. Whatever might be said, however, about the appellants’ failure to advance this argument before the primary judge, it is clear that this ground is misconceived.

38    As has been mentioned, the findings of liability made by the Magistrate against the appellants were not based on attribution. They were based on freestanding misleading and deceptive representations found to have been made by the appellants in contravention of s 18 of the Australian Consumer Law.

39    In any event, after careful consideration the primary judge determined that there was no occasion to exercise his discretion to look behind the judgment debt in the Magistrates’ Court (as to which see Ramsay Health Care Australia Pty Ltd v Compton (2017) 261 CLR 132). In considering whether to do so his Honour made the following observations at [66]:

… When the argument [that the Court should look behind the judgment debt in the Magistrates’ Court] was developed by Mrs Von Risefer, and to a lesser extent Mr Von Risefer, before me various assertions (unsupported by the evidence) were relied upon: in summary, the magistrate was biased, the magistrate failed to afford procedural fairness, the Supreme Court appeal would have succeeded, there were many appeal grounds, the magistrate should not have preferred the evidence given by witnesses for the applicant and the defendants (or some of them) had a counter-claim or set-off which was ignored by the magistrate. I attempted to explain to Mrs Von Risefer that my discretion is not one to review, as if sitting upon an appeal, the reasoning and orders made by the magistrate, particularly by reference to paragraph [54] from the plurality reasons in Ramsay. Despite my attempt at guidance, Mrs Von Risefer persisted with her submissions.

40    Ultimately the primary judge was not satisfied that the appellants had established any substantial reason or question to engage his discretion to look behind the judgment entered in the Magistrates’ Court. His Honour said as follows in this regard at [67]-[68]:

67    … I reject their submissions as divorced from the evidence, irrational in part and objectively untrue. What must be recalled is that the magistrate conducted a hearing over nine days (although not all full days), received evidence from numerous witnesses, that evidence was tested by cross-examination, conducted largely by Mrs Von Risefer, and from the reasons that have been provided (the summary in the affidavit of Ms Gangur) and the partial transcript attached to the affidavit of Mrs Von Risefer dated 12 September 2022, I am quite satisfied that the magistrate conducted a procedurally fair hearing at which Mrs Von Risefer and Mr Von Risefer had more than adequate opportunity to present their defence. Further, despite the prospect of a set-off or counter-claim being raised in the Magistrates’ Court proceeding (and at least one adjournment having been granted to enable that to be done), the fact is that no set-off or counter-claim was filed in the proceeding.

68    From the partial transcript of the magistrate’s reasons I note that he accepted the plaintiff’s evidence as to the standard of the products to be supplied and installed; accepted that the products as delivered suffered from numerous defects; noted that in an attempt to mitigate its loss the plaintiff used some of the defective products (with the consequence that the quantum of its claim reduced); rejected the defence that despite the defects the plaintiff accepted the goods upon inspection on or about 4 January 2017 and characterised a large number of the arguments and submissions of the defendants as having no merit. The magistrate further found that Mrs Von Risefer and Mr Von Risefer engaged in conduct that was misleading or deceptive or likely to mislead or deceive when they made various misrepresentations about the delivery, installation and quality of the goods to be supplied in order to obtain various pre-payments. None of this supports the submission that in truth the judgment debt is not owing.

41    In the face of the conclusions of the primary judge in this regard, and in circumstances where no point about the appellants’ liability for the debts of the corporate defendants was raised before his Honour, the liability findings of the Magistrate are clear, and we were not taken to any evidence in support of the appellants’ attribution argument, it is untenable for the appellants to seek to raise this point now: see generally VUAX v Minister for Immigration and Multicultural Affairs (2004) 268 FCR 588 at 589-599 [46]-[48] (Kiefel, Weinberg and Stone JJ), and the cases there cited. Ground six must fail also.

Ground seven: incorrect calculations in the bankruptcy notices

42    This claim seeks to dispute the calculations that formed the basis of the sums claimed in the bankruptcy notices. The appellants contend that the calculations were wrong in that they included claims for liquidated damages, the interest calculations were incorrect, and insofar as the bankruptcy notices included a demand for the costs component of the Magistrates’ Court order, the claim for costs was fraudulent because the corporate solicitors engaged by the petitioning creditors were not incorporated during some of the period during which the costs were incurred.

43    It should first be observed, as the respondent submits, that this point was not raised by the appellants in their amended notice of appeal. Whatever may be said about this, however, it is not apparent to us that there is any deficiency in the analysis of the primary judge at [70] and [73] in dealing with these matters as they were raised before him. The Magistrate ordered costs as a lump sum, and the incorporation point was without merit. The basis of the interest calculation made by the Magistrate is clear, and as the respondent submitted, there was no suggestion that the bankruptcy notice was the subject of any application to set it aside for overstatement or any kindred problem. Added to all this the appellants have not pointed to any evidence which could indicate an ability for them to bring the notice below the threshold amount. In all the circumstances ground seven must fail also.

Ground eight: the petitioning creditor’s receipt of insurance proceeds

44    Although the appellants’ articulation of this ground is particularly unclear, they appear to contend that the petitioning creditor committed some form of insurance fraud and that this brought into question whether a relevant debt existed.

45    The respondent submits, and we accept, that there is no evidence of any fraud and that there has been no finding of fraud in this proceeding, or any related proceeding. In any event, the issue was considered by the primary judge and determined as follows:

71    That last submission of Mrs Von Risefer was taken further by submitting that the Magistrates’ Court order endorsed “fraudulent actions” by the plaintiff in that proceeding. When pressed by me to identify the basis of the fraud, I was taken to documents that evidence the settlement of an insurance claim between AIG Australia Ltd and the applicant [Blue Cube] for an amount of $14,000 in resolution of a claim made by the insured in consequence of the fraudulent conduct of one of its former employees. The recitals to the deed of settlement and release record that the applicant claimed indemnity from the insurer in the amount of $43,031.98 in consequence of an allegedly fraudulent arrangement between one of the applicant’s employees and Outdoor Kitchens Group Pty Ltd. It is further recorded that the applicant commenced a proceeding against the insurer in the Magistrates’ Court in order to recover the indemnified sum. The insurer denied liability, but without admission agreed to pay the applicant $14,000 in full settlement and in exchange for the usual releases.

72    None of that is evidence of fraud. What is not understood by Mrs Von Risefer is that the existence of insurance which indemnifies an insured for defined loss does not extinguish the claim of the insured against a third party, or by the insurer in exercise of the right of subrogation. It is a core principle of insurance law that a third party cannot avoid liability to an insured on the basis that there is a full or partial indemnity for the loss claimed: Bradburn v The Great Western Railway Company (1874) L.R. 10 Ex 1 where Bramwell B was “dismayed” by an argument to the contrary.

46    There is no reason to doubt the conclusions of the primary judge in this regard, and no articulation by the appellants of how the receipt by the petitioning creditor of insurance proceeds could go to the question of whether there was a debt. For these reasons we consider that ground eight must fail also.

Ground nine: failure to assist appellants as self-represented litigants

47    The appellants have also advanced a generalised and unparticularised complaint that the primary judge failed to do as much as he should have done to assist them as self-represented parties. The respondent submits that this complaint is without foundation, and that reference to the transcript and to his Honour’s reasons demonstrates as much.

48    It is axiomatic to observe that judges have an overriding duty to ensure a fair trial for all parties who are involved in a proceeding: Dietrich v The Queen (1992) 177 CLR 292 at 298-300 and 309-311 (Mason CJ and McHugh J), 326-328 and 331 (Deane J), 353 (Toohey J), 363, 371-372 (Gaudron J). As is apparent from the observations of the Full Court in SZRUR v Minister for Immigration and Border Protection (2013) 216 FCR 445 at 452-455 [37]-[44] (Robertson J, Allsop CJ agreeing at [47] and Mortimer J agreeing at [56]), the discharge of this duty may involve different considerations and difficulties where one or more of the litigants is unrepresented; see also Minogue v Human Rights and Equal Opportunity Commission (1999) 84 FCR 438 at 445-446 [26]-[29] (Sackville, North and Kenny JJ); AMF15 v Minister for Immigration and Border Protection [2016] FCAFC 68 at [37]-[39] (Flick, Griffiths and Perry JJ).

49    In SZRUR at 452-453 [37], Robertson J cited with approval the principles and considerations identified by the New South Wales Court of Appeal in Hamod v New South Wales [2011] NSWCA 375 at [309]-[316] (Beazley, Giles and Whealy JJA) concerning the courts’ duty to unrepresented litigants. It is sufficient to observe, as is well accepted, that the court is required to ensure that an unrepresented litigant does not suffer a disadvantage from exercising the right to be self-represented.

50    However, the court’s duty is not solely to the unrepresented litigant. All parties must have a fair trial. There is no obligation on the judge to conduct the case on behalf of the unrepresented litigant, the touchstone at all times being that of fairness. Some forms of assistance, such as suggestions by the judge that an affidavit be filed, can often be appropriate: Wills v Australian Broadcasting Corporation (2009) 173 FCR 284 at 293 [45] (Rares J). The court may be required to take steps to explain its processes and procedures to a litigant in person to ensure that there is procedural fairness: SZVCP v Minister for Immigration and Border Protection [2016] FCAFC 24 at [38] (Kenny, Robertson and Griffiths JJ).

51    Having reviewed the transcript of the hearing before the primary judge, and in light of his Honour’s reasons for judgment and the unparticularised nature of the appellants’ complaint, we do not accept that his Honour failed to assist the appellants as unrepresented litigants. Although the primary judge was clearly unimpressed by the appellants, his Honour’s detailed reasons demonstrate that he sought to consider and to address their submissions. As the respondent submits, on more than one occasion the primary judge extended the hearing in order to accommodate the appellants’ submissions. It is also clear that his Honour attempted to explain the nature of the proceeding to the appellants (see at [66], for example), although it would seem with limited success. In these circumstances we are unable to conclude that there is any substance to the claim that the primary judge fell short of his duty to ensure that the appellants did not suffer any disadvantage from exercising their rights to be self-represented. Ground nine thus fails also.

Ground ten: refusal to accept an affidavit into evidence

52    The appellants do not specify which affidavit or affidavits are the subject of this complaint. However, the respondent submits that the only affidavit which was not accepted into evidence was the 20 September 2022 affidavit of Mrs Von Risefer which the appellants sought to introduce into evidence on the second day of the hearing before the primary judge. His Honour explained at [15] that “[t]his time [counsel for the respondent] objected to the receipt of that document, not only on the ground of its late delivery but also because each party closed their respective cases on 15 September 2022…”. The respondent submits that his Honour’s reasons demonstrate that admission of the affidavit was not refused on the basis of any technical defect, but because service was unduly late, the proceeding was part heard, all parties’ evidence had concluded, and all parties had closed their cases six days prior.

53    In the circumstances we do not consider that the decision of the primary judge not to admit this affidavit can properly be the subject of criticism. Indeed, in our view the course his Honour adopted was unexceptionable.

54    Insofar as the appellants also complain in their amended notice of appeal that the primary judge “refused the application form B5 and affidavit sealed and filed 18 March 2022, in order to defend the sequestration order”, this complaint is also without foundation. It is clear, as the respondent submits, that the appellants’ 18 March 2022 form B5, the notice stating grounds of opposition to application, interim application or petition, was in fact before the primary judge. The relevant document was in the court book and is referred to expressly in his Honour’s reasons at [82]-[89].

55    Ground ten must fail also.

Ground eleven: the petitioning creditor informing the Supreme Court of the sequestration order

56    A further complaint advanced by the appellants is that, for some unarticulated reason, it was improper for the respondent’s solicitors to inform the Supreme Court that the sequestration order had been made.

57    The respondent submits, and we accept, that it was entirely appropriate for the respondent’s solicitors to do so, and that the trustee would likely have done so in any event.

58    Ground eleven is without foundation and must fail also.

Ground twelve: asserted irregularities in the summary dismissal of the appeal to the Supreme Court of Victoria

59    The appellants complain also about the circumstances in which their appeal from the Magistrates’ Court was dismissed by the Supreme Court. The respondent submits that there was nothing irregular about the way in which this occurred.

60    It is apparent that at the time the appeal to the Supreme Court was dismissed it had been on foot for almost 12 months and was still not in any competent form. The appeal had also been the subject of an application for summary dismissal for several months. The primary judge explained the position as follows at [7]:

Mrs Von Risefer and Mr Von Risefer were each unhappy with the result in the Magistrates’ Court and on 25 May 2021 filed a notice of appeal to the Supreme Court of Victoria. They did not progress that appeal in a timely way. Various procedural orders were made by a judicial registrar on 24 August 2021 concerning the preparation and filing of appeal books, the provision of an amended notice of appeal and a requirement to file and serve written submissions. Apart from the filing of an amended notice of appeal, those orders were ignored by Mrs Von Risefer and Mr Von Risefer. Accordingly, by an application filed on 12 April 2022 the applicant (being the respondent in the appeal) [Blue Cube Developments] moved to have the appeal dismissed for non-compliance with the procedural orders. That application was heard by Matthews AsJ on 3 June 2022. In the Other Matters that are set out in the general form of order that was entered on that day, her Honour noted that Mrs Von Risefer and Mr Von Risefer had been made bankrupt on 12 May 2022 and the consequential effect of s 58(1) of the Bankruptcy Act. However, and importantly, her Honour dismissed the appeal because Mrs Von Risefer and Mr Von Risefer had failed to comply with a number of the procedural orders that had been made on 24 August 2021.

61    Given that the appellants had failed to comply with a series of procedural orders, and their appeal was dismissed on this basis, we accept that there is nothing irregular in the summary dismissal of the appeal and that the primary judge was correct to proceed on this basis. Ground twelve must fail also.

Ground thirteen: the overarching submission that there was no debt

62    To the extent that it is possible to derive a substantive argument advanced by the appellants in this appeal, it appears to be a contention that the primary judge erred in determining that there was no reason to go behind the judgment on which the creditor’s petition was based in the sense in which that expression is used in Ramsay.

63    The respondent submits, and we accept, that the primary judge clearly set out the basis on which he exercised his discretion in concluding that the objections raised by the appellants in this regard were without merit and that there was no occasion to go behind the findings of the Magistrates’ Court.

64    Plainly enough, a bankruptcy court has the power to go behind a judgment in appropriate circumstances: Ramsay at 135 [1], 149-150 [61]-[64] and 151 [69] (Kiefel CJ, Keane and Nettle JJ); Lowbeer v De Varda (2018) 264 FCR 228 at 240 [53] (Reeves, Farrell and Colvin JJ). But this does not mean that it is necessary to examine every judgment debt: see, for example, Petrie v Redmond [1943] St R Qd 71 at 76 (Latham CJ). The court will not go behind a judgment “as a matter of course but only if appropriate circumstances were shown to exist”: Wren v Mahony (1972) 126 CLR 212 at 224-225 (Barwick CJ). Sufficient reason must be shown to question whether a particular debt is in fact payable, and the court must be “extremely cautious” before going behind a primary judgment: Ramsay at 164-165 [108]-[109] (Edelman J). The power is not to be used lightly or indiscriminately: Doggett v Commonwealth Bank of Australia [2019] FCAFC 19 at [34] (Kerr, Davies and Thawley JJ).

65    Ramsay establishes that the two questions to be asked are:

(a)    did the primary judge err in exercising the discretion to decline to go behind the judgment giving rise to the debt; and

(b)    if the primary judge’s discretionary decision was unsound, and the Court had gone behind the judgment, would the Court have found there was not “in truth and reality” a debt owing from the appellants to the respondent.

66    We accept, as the respondent submits, that the answer to both these questions must in the present circumstances be no. The matters raised by the appellants do not establish a proper basis to satisfy the Court that the judgment debt is not “in truth and reality” owed by the appellants to the petitioning creditor. On the contrary, the evidence reveals that there was a contested claim in the Magistrates’ Court heard over several days, there were detailed pleadings, further particulars, seven witnesses (including two experts) and that the appellants and their interests were unsuccessful. This is decidedly different from circumstances where a bankruptcy notice is based on a default judgment, or where there has been little or no consideration of the evidence when adjudicating a claim.

67    Moreover, at the time the application was before the primary judge the appellants had not:

(a)    filed or prosecuted any counterclaim, cross-claim or set-off in the Magistrates’ Court proceeding;

(b)    complied with multiple orders in relation to their appeal to the Supreme Court, leading to their appeal being dismissed months prior to the application for review; and

(c)    filed or prosecuted any application seeking to set aside the 3 June 2022 orders of the Associate Judge dismissing their appeal to the Supreme Court.

68    Having regard to these matters the primary judge found that he was satisfied that the creditor’s petition was correctly proved before the Registrar and that it had been proved before him, and therefore that the relevant matters required to make the sequestration order had been proven.

69    The primary judge was also satisfied that there was no further matter which would justify a refusal of the making of the sequestration order as sought by the respondent.

70    There is no basis on which it would be open to us to form a different view to that taken by the primary judge. There is no appealable error in the legal analysis or findings of his Honour on ground thirteen, and it must fail also.

Ground fourteen: the prospect of recovering compensation from the Shire of Yarra Ranges

71    The appellants assert that Mrs Von Risefer may have been solvent because she had the prospect of recovering compensation in another proceeding.

72    The respondent submits, and we accept, that the appellants did not provide any evidence about the dispute with the Shire of Yarra Ranges, and that to the extent this claim can be understood it is the dispute briefly referred to by the primary judge as follows at [78]:

Further, no evidence of the commencement of any claim for damages against the Commonwealth Bank or the Yarra Ranges Council was adduced before me. No factual basis from which one may infer that a damages claim is open was set out in the evidence, save for an oblique assertion in the unsworn document in the form of an affidavit of Mrs Von Risefer dated 5 May 2022 where it is said:

House owned by the family in 132 Belgrave ferny creek road in 2012 was burned by arsonists in August

House and 10 acres of land was repossessed by commonwealth bank and sold in 2015

Claim in county court pending for under value sale and wrong possession by the bank as well

Vcat claim against Yarra ranges city council pending in September 2022 hearing.

Defamation claim is due to be lodged against Ping Gangur against the whole family of wrong claims in her insurance falsely claims $100.000 in the Magistrates Court

(sic.)

73    The appellants gave no indication why this dispute, such as it was, would have had any impact on Mr George Von Risefer, who does not appear to have been a party to the proceeding and so would not have benefited from any recovery insofar as his solvency is concerned.

74    Nor did the appellants provide any information demonstrating the potential financial outcome of the dispute, or how any funds received would be utilised. There is no evidence before this Court as to the appellants’ other assets, liabilities, and expenses such as might have put the primary judge and this Court in a position properly to consider the matter of the solvency of Mrs Von Risefer or Mr George Von Risefer.

75    For these reasons ground fourteen fails also.

Conclusion

76    None of the complaints which the appellants have pressed withstand scrutiny. The appellants have almost entirely failed to engage with the reasoning of the primary judge, and they have not directed the Court’s attention to any evidence which might provide a foundation for their complaints. Each of the appellants’ complaints concerning the reasoning of the primary judge having failed, the appeal will be dismissed.

77    Consistently with the order made by the Full Court in Culleton v Balwyn Nominees Pty Ltd (No 2) [2017] FCAFC 12 at [10] (Allsop CJ, Dowsett and Besanko JJ), there will be an order that the respondent’s costs of the appeal (including reserved costs) be taxed and paid out of the estates of the appellants in accordance with s 109(1)(a) of the Bankruptcy Act.

Associate:

Dated:    16 February 2024

Schedule

Grounds of appeal

The Appellant appeals from the whole of the judgment of the Federal Court given on 6 OCTOBER 2022 at MELBOURNE

Decision of justice McElwaine

Ground 1

During the directions hearing on the 15th of November 2017 it was decided that the telephone recording of the intercepted phone calls in relation to Paragraphs 5,6,8,9 MCV

a)    The first day of the trial in the MCV was decided by the mcv and barrister McCullagh have agreed not to discuss or intercepted phone calls will not be admitted in any form as they stated in the 13 December 2020 submission and C B instead they referred to the call in order to allege misleading and deceptive contact for the appellant's

b)     Phone calls was about communication between second appellant and the container which was with a party of. outdoor kitchen group first defendant in the MCV which was not in the judgement of H10571210

Ground 2

McElwaine J erred in his decision by not accepting the appellants affidavits on the basis that they where unsworn and not witnessed by a justice of the pe ace. According to advice from the Federal court registry, due to the Covid pandemic affidavits do not require to be sworn and witnessed by a justice of the peace until the 4th of November 2022.

The following affidavits where refused to be accepted as evidence:

A)    23 February 2022

B)     22 March 2022

C)    5 May 2022

D)    23 August 2022

E)    12 Sept ember 2022

F)    14 September 2022

Ground 3

Mcelwaine J erred in his findings of the proceedings by failing to take into account the following:

A)     22nd of September Amended notice of appeal filed and sealed by the red crest in the Supreme court according to the order of Keith R on the 24 August 2021.

B)     Summons listed for hearing 21 December 2021 in regards to the stay of the magistrate and further directions.

C)     Summons and affidavit on 1 June 2022 for directions under the rules of the supreme court

D) Keith R on 26 April 2022 ordered directions for hearing on 22 June 2022

Ground 4

McElwaine J erred in his decision page 4 par 12, by characterizing Elizabeth Von Risefer as untruthful witness and rejected affidavits and evidence.

Ground 5

McEwaine J refused the application form B5 and affidavit sealed and fi led 18 March 2022, in order to def end the sequestration order.

Ground 6

McElwaine J erred in his findings by calling the second appellant as a untruthful witness. He states that the second appellant did not know Tina Vo untill 4 August 2021. This is not true because during the magistrates court proceedings, Tina Vo signed the affidavit of Sao Ping of the Calder Bank offer in 2018. Further she was appointed as a solicitor for the respondent on 21 May 2021 and 5 July 2021

CB page 955

Ground 7

McEwaine J erred in his findings by stating that that the server was acting as a administrator of Law. That is not true because the server is a private company under the name ........

Ground 8

McEwaine J and Edward JR erred by refusing to accept evidence, affidavits and application form 5 from the respondents. Instead McEwaine J and Edward JR they asked Shao Pings legal team if the appeal of the appellants in the supreme court had grounds or not.

A)    Issue of sequestration order resulted in struck out of our appeal in the supreme court.

B)    Because of fraudulent contact in evidence of 2 June 2022 when Tina Vo called Joanna Anderson at 8: 17 pm and instructed her to send a email to the supreme court claiming that the appellants where bankrupted by another matter and not related to this one. This is completely false and fraudulent. Als o point out that they where not officially appointed as trustee.

C)    C) During 3r d of June 2022 a officer from AFSA cut and paste the instructions that Tina Vo emailed them. The officer then emailed it to the court. Those instructions under the section 60 of the bankruptcy act does not allow the appellants to pursue the appeal. According to the law they need to consider upto 28 days whether to pursue or not. Instead they followed the orders of Tina Vo a few minutes before the hearing.

Ground 9

McElwaine J erred in his findings of magistrate court by endorsing fraud. Shao Ping purchased insurance policy on the 19th of September 2016. The goods where purchase d before that date (17th August 2016). She comits insurance fraud.

Ground 10

The counter of claim was requested and refused by the magistrate court in contrary of the submission filed by the barrister on the respondent behalf claim that the magistrate court judge in his order which never been produced as evidence in the court but McElwaine J erred against those claims without evidence again his discretion

Ground 11

1)    Invoice and valuation by Diamond edge Joinery company in Elizabeth Von Risefer affidavit on 9 September 2022 was not allowed by McElwaine J He erred in his findings his decision refused evidence of the rejected goods of how much they were worth in the market

page2 par 4 evidence of

    elizabeth von risefer

2)     19 august 2022 evr 5 and evr 4 of all the goods been inspected and collected by SHAO PING

3)     claim against the Yarra ranges city council which was listed on the 15 September 2022 and we have to request adjournment and is due to be heard in May 2023for $170. 000 because they did

demolish the burned house part and demolished the remaining house that wasn't effected by the fire including all the Possessions and house hold worth $170.000 for compensation

Ground 12

McElwaine J failed to see that was the intention of SHAO PING from the beginning

a) receive the goods keep the goods declare as defective on her affidavit and reports the goods, being defective goods which she required to return .she refused to return the goods under the

25 section of the ACL Australian affidavit of elizabeth von risefer on 19 august 2022

B)she sued all the parties of breach of contract and not paid the agreement

d) Shao Ping Gangur elect to sued the appellant’s she admitted she can’t use the intercepted phones

calls and she forgot that the phone calls never been admitted as evidence but the sec 28 of misleading and deceptive contact is only based on her saying promises made on phone calls that never been recorded or discovered as evidence McElwaine J registrar Edward and the magistrate court judge Randford erred in their findings of never prove the allegations

13) McElwaine erred in his findings of the power of attorney which they alleged ,was only produced in April 2017 when default judgment obtained due to reject the magistrate court our defence in April 2017

and I trying to file defense for rehearing of the claim for my son ,I did file affidavit with my power of attorney in April 2017 which was not excepted by the court registry I have to appoint solicitor on his behalf which was resulted in Shao Ping Gangur claim later that I was the agent of George and agent of the companies with a document was created in 2007 how they claim my self as agent of the

company was created in 2015 they never have evidence to prove that the power of attorney was ever been proved produce to her and purport that i was agent ,no evidence again but with the discretion

Justice McElwaine refused that evidence been produced in regards to the supply of the goods before the magistrate court judge Randford and before the justice McElaine erred been excepted

a)    Evidence of parties on the invoice

b)    affidavit and photos of the transport company and workers claiming delivery and inspection by Shao Ping

c) Justice McElwaine refused of false calculations claim of the judgment H10571210 was 65 days by $250.Each day until the 7 April 2017 worth $16.250 while the alleged termination of contract between Kitchen labs was on the 21 February 2017 he refused to accept the affidavit of plaintiffs

d) interest calculations were $ 15.111 on November 2020 not $17.021

plus he rejected the legal cost of 25%$6.000 plus including the cost awarded for unregistered legal LPF lawyers cost

d) emails with Shao Ping Gangur and Alexander Von Risefer and inspection of the goods of 19 hours been refused by justice McElwaine

e) justice McElwaine erred in his findings that the reports for the goods are defective goods but she wants to keep the goods and sued us to get her payment of the agreed invoice 146 on 7 August 2016

f)    counter claim was pleaded with evidence which was refused

g)    Abuser of process fraudulent to struck out the Supreme Court appeal

Grounds 14

14) Justice McElwaine erred in his findings as he promised he will visit the Judgment of Magistrate of

our argument in the Supreme Court. He erred in his findings of not including the submissions been filed on the 19 September 2022 and affidavit of elizabeth von risefer 19 august 2022.