FEDERAL COURT OF AUSTRALIA

Winn v Blueprint Instant Printing Pty Ltd (No 2) [2011] FCA 723

THE COURT ORDERS THAT:

1.    The proceeding be fixed for hearing at 1.15pm on 30 June 2011 for a duration of one hour, with time to be equally divided between the appellant and the respondents, in relation to costs and any application for a stay of orders.

2.    On or before 4.00pm on 29 June 2011, all the parties file and serve any affidavit and any outline of submissions (not to exceed five pages) on which they intend to rely.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

iNTRODUCTION

1    By a supplementary notice of appeal dated 24 December 2010, the appellant, Julene Winn, appeals from the sequestration order against her estate made by Hartnett FM on 26 November 2010, on the basis of non-compliance with a bankruptcy notice dated 20 February 2009. As at the date of the sequestration order, the appellant’s appeal to the Federal Court from a Federal Magistrate’s decision dismissing her application to set aside the bankruptcy notice had been heard, but not determined.

2    Hartnett FM ordered:

1.    There be a sequestration order against the estate of Julene Marguerite Winn.

2.    The costs of the petitioning creditor and supporting creditor including any reserved costs be taxed and paid in accordance with the statute.

AND THE COURT NOTES:

The date of the act of bankruptcy is 7 September 2009.

3    The appellant, who appeared in person by video link at the hearing of the appeal, seeks, inter alia, that the orders of Hartnett FM and the creditor’s petition be set aside. As appears from the materials, the appellant has described herself as a barrister by occupation, but does not practise. The supplementary notice of appeal sets out numerous grounds, which may, at this point, be summarised as follows:

1.    The Federal Magistrate:

(a)    lacked jurisdiction;

(b)    denied the appellant procedural fairness;

(c)    failed to give any reason for her decision;

(d)    failed to apply r 4.04(1)(a)(ii) of the Federal Magistrates Court (Bankruptcy) Rules 2006;

(e)    created an apprehension of bias;

(f)    erred in publishing reasons for decision dated 8 December 2010 (after the appellant had filed a notice of appeal from that decision on 30 November 2010) on the Internet and by posting the decision to the appellant, rather than delivering the reasons in open court; and

(g)    erred in law in finding that there was an act of bankruptcy on 7 September 2007.

4    The appellant also relied on an outline of submissions dated 21 April 2011, a reply dated 11 May 2011 to the first respondent’s submissions, a reply dated 11 May 2011 to the second respondent’s submissions, and the appellant’s affidavit as to solvency sworn on 13 May 2011, which was filed and served on the day of the hearing of the appeal.

5    The respondents to the appeal are the petitioning creditor, Blueprint Printing Pty Ltd (“Blueprint”) and the supporting creditor, Garland Hawthorn Brahe. At the hearing of the appeal, Garland Hawthorn Brahe objected to its joinder as a respondent to the appeal. The appellant conceded that Garland Hawthorn Brahe was not “technically” a respondent to the appeal although “someone has put them on as respondents but I don’t see them as that”. Blueprint relied on written submissions dated 2 May 2011 and Garland Hawthorn Brahe relied on written submissions dated 3 May 2011.

Background

6    The background to the appeal appears in the Reasons for Judgment of Hartnett FM published on 8 December 2010, and submissions and materials filed by the parties. The history of the matter is complex, as it involves numerous proceedings, including appeals, in different courts or tribunals in protracted litigation over a number of years. The facts may be summarised as follows.

7    On 20 February 2009, Blueprint issued a bankruptcy notice (VN 358/09) against the appellant. The schedule to the bankruptcy notice required the debtor to pay the debt shown in the schedule of $21,655.63 (comprising a debt of $17,139.20, interest of $6,265.43 and a payment or credit of $1,750.00) within 21 days after service of the bankruptcy notice or to make an arrangement to the creditor’s satisfaction for settlement.

8    The bankruptcy notice attached a copy order of taxation of legal costs in proceeding 4215 of 2002 made by Taxing Master Bruce of the Supreme Court of Victoria on 9 November 2005 which, in “other matters”, stated “taxation pursuant to the order of the Honourable Justice Byrne made 2 August 2002” and ordered that “the costs of Blueprint Instant Printing Pty Ltd are taxed and allowed in the sum of $17,139.20”.

9    On 20 July 2009, following the service of the bankruptcy notice on 17 July 2009, the appellant filed an application to set the bankruptcy notice aside and to extend the time for compliance until the determination of the application.

10    On 20 July 2009, the Court, inter alia, adjourned the hearing of the application to set aside the bankruptcy notice and extended the time for compliance until 4.30pm on 7 September 2009.

11    On 7 September 2009, Riley FM, who had already determined a matter relating to an earlier bankruptcy notice issued by Blueprint based on the same orders of Taxing Master Bruce made on 9 November 2005, disqualified herself from determining the appellant’s application to set aside the bankruptcy notice. Riley FM listed the appellant’s application for hearing before Phipps FM but did not extend the time for compliance with the bankruptcy notice.

12    On 12 October 2009, Phipps FM heard the appellant’s application to set aside the bankruptcy notice. On 30 October 2009, his Honour dismissed the application.

13    On 12 November 2009, the appellant filed an appeal from Phipps FM’s decision.

14    On 25 January 2010, Blueprint (then Blueprint Proprietary Limited) filed a creditor’s petition against the appellant.

15    On 9 April 2010, Ryan J heard the appellant’s appeal from Phipps FM’s decision and reserved judgment.

16    On 13 April 2010, Registrar Pringle made orders for substituted service of the creditor’s petition on an interim application of Blueprint filed on 10 March 2010, supported by the affidavit of Alexandra Santamaria sworn on 10 March 2010.

17    On 15 April 2010, Blueprint served the creditor’s petition together with a letter, affidavits and the sealed order of Registrar Pringle in accordance with the orders for substituted service, as deposed by Alexandra Santamaria in her affidavit sworn on 20 April 2010.

18    On 4 May 2010, the appellant applied for a review of Registrar Pringle’s orders. On 17 May 2010, Burchardt FM dismissed the application for review. On 7 June 2010, the appellant appealed from the decision of Burchardt FM.

19    On 8 June 2010, at the first return of the creditor’s petition, the hearing was adjourned until August 2010. Hartnett FM ordered as follows:

1.    The further hearing of the creditors petition be adjourned to 16 August 2010 at 10.00am.

2.    Costs are reserved including the supporting creditors costs.

3.    Within 14 days hereof the supporting creditor serve the respondent with copies of the Notice of Appearance and supporting creditor’s Affidavit of Debt dated 4 June 2010 and the affidavit of Nadia Chami sworn 8 June 2010 by forwarding all such documents by ordinary pre-paid post to 32 Danube Drive Strathpine in the State of Queensland 4500.

4.    At least 7 days before the adjourned date the respondent file and serve on each of the applicant and supporting creditor any affidavit material and / or submissions on which she seeks to rely.

20    On 20 July 2010, Gray J dismissed the appeal from the decision of Burchardt FM with costs, as it was sought without leave.

21    The letter of Herbert Geer, the solicitors for the first respondent, dated 9 August 2010, informed the appellant that the petition had been adjourned to 16 August 2010 and Ryan J’s chambers had indicated that the decision in the appeal would not be handed down beforehand. The letter proposed that the hearing of the creditor’s petition be adjourned by consent. Minutes of proposed orders, including the adjournment of the petition to a date no earlier than 1 November 2010, were signed by the appellant and the respondents.

22    On 24 August 2010, the hearing of the creditor’s petition was again adjourned until 26 November 2010 by Hartnett FM, who ordered as follows:

1.    The hearing of the creditor’s petition be adjourned to 26 November 2010 at 10:00am.

2.    The parties have liberty to apply.

3.    No order as to costs.

4.    The 31 August 2010 hearing date is vacated.

23    On 11 November 2010, as the appeal had not yet been determined and a decision was unlikely to be delivered until 2011, Blueprint proposed a further adjournment on the basis that Ms Winn would consent to the extension of the creditor’s petition, but received no response to its correspondence.

Application to appear by audio link

24    On the morning of 25 November 2010, the appellant forwarded a facsimile to the Court seeking leave to appear by telephone at the hearing of the creditor’s petition. The facsimile relevantly stated:

I currently reside in Brisbane and, as a result of being unwell for some weeks, I am in the process of a series of medical tests, investigations, procedures and medication, including…

25    On the following day (26 November 2010), both the petitioning creditor and the supporting creditor appeared and were legally represented at the hearing of the creditor’s petition. The appellant initially attended in person by telephone. The respondents opposed her application to appear by telephone.

26    The Federal Magistrate refused the appellant leave to appear and to make submissions by telephone, although she permitted the appellant to remain on the telephone in order to listen to the proceedings. While the reasons for judgment do not disclose whether the appellant adopted that course, before me, the appellant stated that she remained on the telephone line for some, but not all, of the hearing.

27    On 26 November 2010, the Federal Magistrate gave ex tempore reasons for refusing the appellant leave to appear by telephone, which were subsequently revised as written reasons dated 8 December 2010.

28    In her reasons, the Federal Magistrate observed that during the three month period between the fixing of the date and the hearing, the appellant had not applied for a telephone appearance. The appellant’s facsimile contained bare assertions that she had been unwell and was undergoing medical tests and procedures, without supporting medical evidence.

29    The Federal Magistrate accepted the respondent’s submissions that the appellant’s delay in making the request was prejudicial, and if permitted to appear by telephone, the appellant would not be able to see written submissions on the substantive matter.

30    The Federal Magistrate concluded that “importantly”, there was a “lack of sufficient material” in the appellant’s facsimile to justify departure from the Court’s usual procedure, no explanation of why solicitors or counsel could not appear on instructions and no proper explanation of why the appellant could not have appeared in person at the hearing of the creditor’s petition, which had been pending since January 2010.

Sequestration order

31    On 26 November 2010, following her refusal of leave for the appellant to appear by telephone, the Federal Magistrate proceeded to hear the creditor’s petition. At the conclusion of the hearing, she made a sequestration order against the appellant’s estate and a consequential costs order. On 26 November 2010, her Honour delivered ex tempore reasons for her decision, which were subsequently revised as written reasons dated 8 December 2010.

32    In her reasons for judgment, the Federal Magistrate found that:

(a)    Paras 1, 2 and 3 of the creditor’s petition filed by Blueprint on 25 January 2010 were verified by the affidavit of Christopher Terry sworn 22 January 2010. Paragraph 4 of the creditor’s petition was supported by the affidavit of Alexandra Madeleine Santamaria sworn 22 January 2010, deposing to the commission of an act of bankruptcy on 7 September 2009.

(b)    There was an affidavit of debt sworn by Christopher Terry on 25 November 2010, an affidavit of search sworn by Alexandra Madeleine Santamaria on 26 November 2010 and a supporting creditor’s affidavit of debt sworn by Robert Lane on 25 November 2010.

33    Hartnett FM stated:

The court must be satisfied of the matters required to be proven at a hearing of a creditor’s petition as set out in section 52 of the Bankruptcy Act 1966 (Cth) (“the Act”). The court is so satisfied with respect to the affidavits verifying the petition, paragraphs 1 to 4 inclusive. The court is further satisfied that there has been service of the petition in accordance with the order for substituted service made by Registrar Pringle on 13 April 2010. The evidence of service is contained in the affidavit of Ms Santamaria sworn 20 April 2010. Ms Winn has also appeared subsequently. The court is further required to be satisfied that the debt or debts on which the petitioning creditor relies is or are still owing. The court is so satisfied on the basis of the affidavit material referred to in paragraph 2 of these reasons. Section 52 of the Act provides that if the court is satisfied with the proof of those matters (as the court is) then the court may make a sequestration order against the estate of the debtor.

34    The Federal Magistrate also observed that the court could, pursuant to s 52 of the Bankruptcy Act 1966 (Cth) (“the Act”), dismiss the petition in the specified circumstances. The appellant, as debtor, bore the onus to establish solvency or some other sufficient cause for dismissal of the petition.

35    The Federal Magistrate held that the appellant had not established her solvency. Further, the Federal Magistrate did not consider that the matters in the appellant’s “grounds of opposition” notice dated 4 June 2010 constituted a sufficient reason not to make the sequestration order. Her Honour observed that the grounds largely comprised an attack on the bankruptcy notice which was issued after Taxing Master Bruce of the Supreme Court of Victoria made orders on 9 November 2005, following taxation of the costs of Byrne J’s judgment given on 2 August 2002 (which dismissed with costs a proceeding the appellant had issued in the Supreme Court of Victoria).

36    Her Honour observed that Phipps FM had dismissed the challenges to that bankruptcy notice on 30 October 2009 and had also rejected suggestions that the appellant had an effective counterclaim. Hartnett FM stated that although the appellant’s appeal from Phipps FM’s decision had not yet been decided, the bankruptcy notice, having not been stayed, was valid unless and until it were set aside on appeal.

37    Hartnett FM also observed that on 17 May 2010, Burchardt FM had dismissed the appellant’s application for review of Registrar Pringle’s orders for substituted service of the creditor’s petition made 13 April 2010.

38    Hartnett FM stated that the appellant’s “grounds of opposition” to the making of the sequestration order challenged Taxing Master Bruce’s costs order made on 9 November 2005, which she had attempted unsuccessfully to challenge or appeal from on a number of occasions in the Supreme Court.

39    Her Honour noted that on 28 November 2008, Smith J of the Supreme Court of Victoria dismissed the appellant’s applications and awarded costs against her on an indemnity basis. In Winn v Blueprint Instant Printing Pty Ltd [2008] VSC 522, his Honour stated at [33] and [34]:

The history of this matter in fact reveals an extreme example of a person misusing the law and the legal system to try to avoid her legal obligations. It would appear that Ms Winn has been engaged in a holding operation to delay having to pay the total of the taxed costs awarded against her. She has been accommodated a number of times and has had ample opportunity to seek the review that she now seeks. In the meantime, Blueprint has been delayed for a long time in recovering its costs and has been put to great expense in pursuing them. It is only now, faced with being made bankrupt, that Ms Winn has attempted to take the steps that she had to take to seek a review — namely, to comply with the order of Byrne J by paying the amount fixed costs and seeking an order for a review.

Whether her claim has any merits or not, the court should not assist her. The reality is, however, that she has not demonstrated any merits…

40    Her Honour also observed that on 3 March 2010, the Victorian Court of Appeal dismissed the appellant’s application for leave to appeal from Smith J’s judgment and ordered her to pay costs on an indemnity basis as she had misconducted herself in relation to the proceeding, should have known she had no prospects of success and, by necessary inference, had the ulterior or collateral purpose of avoiding her legal obligations, particularly in relation to Blueprint.

41    Hartnett FM held that as Phipps FM had concluded, the judgment of Master Bruce was a final judgment and his order was a final and currently enforceable order.

42    Hartnett FM dismissed the appellant’s ground of opposition based on the assertion that the judgment wrongly included the costs of a party (Mr Goodwin) to other Supreme Court proceedings. Her Honour observed that that argument had been dealt with and determined by Riley FM in Winn v Blueprint Instant Printing Pty Ltd [2008] FMCA 1430 and by Phipps FM on 30 October 2009, and was also dealt with by Smith J.

43    Hartnett FM dismissed the appellant’s ground of opposition based on the alleged issuing of the bankruptcy notice out of time, which Phipps FM “dealt with conclusively” in his decision of 30 October 2009. Her Honour found that the relevant judgment was given on 9 November 2005 and the bankruptcy notice was issued on 20 February 2009. The final order was not, as the appellant contended, Byrne J’s order made 2 August 2002 giving rise to the taxation, so time did not run from the date of that order. Rather, it ran from the date of Taxing Master Bruce’s order made on 9 November 2005, which was enforceable in terms of s 40(3)(b) of the Act.

44    Hartnett FM dismissed the appellant’s ground of opposition based on the allegation that her bankruptcy notice was incorrect due to a credit for a payment of $1,750 she had made. Her Honour observed that Phipps FM had dismissed that allegation, holding that the amount was not wrongly stated (as the appellant’s counsel had effectively conceded before Smith J). Her Honour stated that it was not now open to the appellant to revive that ground of opposition.

45    In relation to the appellant’s possible counterclaim, Hartnett FM stated at [14]:

The onus of establishing the existence of a set-off counterclaim or cross-claim for the purposes of section 41(7) of the Act lies with the respondent (Guss v Johnstone [2000] HCA 26). The debtor has not shown a prima facie case, has not adduced any admissible evidence which would make out such a case, and indeed, has provided nothing more than mere unsupported assertion. There is not before the court any proper basis of any cause of action available to the respondent, nor any damage suffered by the respondent.

46    Hartnett FM concluded at [15]:

The court is satisfied with the proof of those matters required pursuant to section 52 of the Act, and is not satisfied by the debtor that any grounds have been made out to dismiss the petition. Accordingly, the court will make a sequestration order against the estate of the respondent with a consequential costs order.

Sequestration order not stayed

47    By a notice of motion dated 10 December 2010, the appellant sought a stay of the sequestration order, which was refused by Gray J on 23 December 2010.

Outcome of appeal from decision refusing to set aside bankruptcy notice

48    On 31 March 2011, Ryan J dismissed the appellant’s appeals from the decisions of Phipps FM and Riley FM with costs: Winn v Blueprint Instant Printing Pty Ltd [2011] FCA 292 and Winn v Blueprint Instant Printing Pty Ltd [2011] FCA 293. His Honour comprehensively considered, and in my view, persuasively analysed and dismissed, the many bases on which the appellant alleged that the bankruptcy notice was invalid.

49    In particular, Ryan J held that:

(a)    the bankruptcy notice was not issued out of time because it related to Byrne J’s judgment or order, rather than that of Taxing Master Bruce.

(i)    His Honour analysed in detail a number of relevant authorities dealing with the nature of costs certificates and orders of a Taxing Master of the Supreme Court of Victoria under the rules of the Court and legislation applicable from time to time.

(ii)    His Honour, (having noted the conflicting views expressed by Finkelstein J in Commonwealth Bank of Australia v Horvath (Junior) (1999) 161 ALR 441 and Hansen J in Scott v Evia Pty Ltd; Scott v Charitopoulos [2008] VSC 324) concluded at [21]:

As a result of Finkelstein J’s characterisation, even if only for reasons of comity, of the order of a taxing master of the Supreme Court of Victoria as a final order for the purposes of s 41(3) of the Bankruptcy Act, I am obliged to come to the same conclusion in respect of the Taxing Master’s order of 9 November 2005 unless I am persuaded that Finkelstein J’s approach was clearly wrong; see Hicks v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 757 per French J, at [76] and Cooper v Cmr of Taxation (2004) 139 FCR 205, per Lander J, at [46]. I am not so persuaded.

(iii)    Ryan J’s view that the Taxing Master’s order was a final order was fortified on the further ground that otherwise, it would not be possible to give a debtor notice of how the amount set out in the schedule to a bankruptcy notice had been calculated as the amount owing, so as to give effect to an acknowledged purpose of the Act.

(iv)    His Honour held that grounds 1(b) to (e) were restatements of, or dependent on, the success of ground 1(a), and also failed.

(b)    The bankruptcy notice did not overstate the amount of the judgment debt by including the appellant’s payment of $1,750 which Blueprint wrongly applied to her liability for its costs.

(c)    The bankruptcy notice did not misstate the claim as a judgment debt or overstate the interest claim (which could only be the case if, contrary to Ryan J’s holding, the appellant had successfully established that the bankruptcy notice were out of time).

(d)    The bankruptcy notice was not issued by only one of two joint creditors, being Blueprint and Mr Goodwin.

(e)    The bankruptcy notice was not invalidated on compendious grounds.

(f)    The appellant did not have a counterclaim in excess of the amount claimed in the bankruptcy notice.

(g)    Blueprint and Mr Goodwin did not have joint liability.

(h)    The appellant did not have a counterclaim based on a contingent liability of Blueprint to pay the appellant’s costs at first instance in MLG 1351 of 2007 or on an appeal to the Federal Court numbered VID 921 of 2008 and no other basis for asserting a counterclaim had been articulated, let alone established.

(i)    There had never been two operative and effective bankruptcy notices before the Federal Court or the Federal Magistrates’ Court at the same time.

(j)    The costs assessment was not in dispute.

(i)    Ryan J stated at [39] that “[t]he appellant has exhausted all avenues for obtaining a review in the Supreme Court of Victoria of the Taxing Master’s order of 9 November 2005”, as Smith J’s order of 28 November 2008 made clear.

(ii)    Ryan J concluded at [40] that:

It is therefore no longer accurate or realistic to assert that the costs assessment which underlay the bankruptcy notice is still in dispute or even that it was in dispute when the learned Federal Magistrate made his order of 30 October 2009.

50    Ryan J also considered and dismissed the following grounds of appeal:

Ground 2(d) – that Blueprint and Goodwin are joint creditors.

Ground 2(e) – that Blueprint claimed as its costs in Supreme Court proceeding no 4215 of 2002 Goodwin’s costs in Supreme Court proceedings Nos 4216 and 4217 of 2002.

Ground 2(f) – that Goodwin had given sworn evidence that Blueprint had paid his costs and claimed them as part of its own against the appellant.

Ground 2(g) – that the Taxing Master is obliged by O 63 r 56.1(5) of the Supreme Court Rules to review Blueprint’s bill of costs and vary or affirm the order of 9 November 2005.

Ground 2(h) – that the Supreme Court has failed since 13 December 2005 to review the Taxing Master’s order and since 1 May 2006 to hear an appeal in relation to that failure.

Ground 2(i) – the sworn statements of Mr Lassen and Terry that the appellant paid $1,750 in respect of the order of the Taxing Master of 9 November 2005 are false.

Ground 2(j) – in the circumstances of (d), (e), (f), (g) and (h) the Taxing Master’s order of 9 November 2005 was obtained by dishonesty and a miscarriage of justice.

Ground 2(k) – Blueprint’s conduct in (i) claiming Goodwin’s costs of 4216 and 4217 of 2002 as Blueprint’s costs in 4215 of 2002 to defeat the appellant’s counterclaim against Goodwin, and (ii) repeatedly issuing (4) bankruptcy notices that are invalid and / or not pursued for the collateral purpose of frustrating the review of taxation costs is an abuse of process.

Ground 3 – that the Federal Magistrates Court failed to hold that the issue of two bankruptcy notices based on the same judgment debt was an abuse of process requiring it to “stay” the second bankruptcy notice.

Ground 4 – that the Federal Magistrates Court erred in independently procuring material outside the hearing.

Ground 5 – that the Federal Magistrates Court erred in prejudging the outcome of the appeal from the Order of Federal Magistrate Riley.

Ground 6 – that the Federal Magistrates Court erred in obtaining and copying two previous erroneous judgments without notice to the appellant.

Ground 7 – that the Federal Magistrates Court denied procedural fairness in permitting Blueprint to rely on material submissions and precedents that had not been served on the appellant.

Ground 8 – that the Federal Magistrates Court denied the appellant procedural fairness in denying her appearance by videolink.

Ground 9 – that the Federal Magistrates Court denied the appellant procedural fairness in failing to consider the appellant’s affidavits in proceedings in the Federal Magistrates Court numbered 1531 of 2007 and in the Supreme Court of Victoria numbered 4215 of 2002.

Ground 10 – that Counsel for Blueprint was not registered to appear as counsel in the federal courts.

The appeal

51    Section 24(1)(d) of the Federal Court of Australia Act 1976 (Cth) empowers this Court to hear and determine appeals from judgments of the Federal Magistrates’ Court exercising original jurisdiction. On appeal, the appellant must establish that the judgment of the Federal Magistrate is tainted by legal, factual or discretionary error (Abeyesinghe v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1558 at [4]).

52    In the present appeal from the orders of Hartnett FM, the appellant filed and served voluminous submissions in support of the grounds, which were at points repetitive, overlapping or not clearly related to the specified grounds. The logical or legal basis of a particular ground of appeal was not infrequently undeveloped and remained unclear. The submissions, like the grounds of appeal, included many unevidenced and disputed factual assertions.

53    Prior to the hearing of the appeal, the appellant sought and was granted leave to appear by video link. As video link facilities were not available in the Federal Court in Brisbane for a full day, the matter was listed for hearing for a half day only, and time allocated accordingly with the consent of all parties.

Ground 1

The Federal Magistrate erred in that she did not have the jurisdiction to determine the petition pursuant to a null and void order of Burchardt FM made on 17 May 2010 in the respondent’s application for review of the registrar’s order for substituted service

54    The meaning of ground 1, which is not otherwise apparent, must be discerned from the appellant’s written submissions. The appellant submitted that Hartnett FM had no jurisdiction to determine the creditor’s petition as it came before her pursuant to an allegedly “null and void” order of Burchardt FM, who, on 17 May 2010, when dismissing the appellant’s application for review of the Registrar’s orders for substituted service, ordered that the proceeding be otherwise adjourned to a hearing before a Federal Magistrate. Ground 1 thus in essence purports obliquely to appeal from Burchardt FM’s orders. The appellant’s appeal from Burchardt FM’s orders was dismissed by Gray J on 23 December 2010, as it was commenced without leave. It is not now open to her to appeal from or challenge the validity of the orders of Burchardt FM.

55    The appellant’s complaints were, in any event, unevidenced or misconceived. There was no evidence that Burchardt FM failed to give reasons in accordance with the requirements of the applicable legislation and principles and no apparent basis for the undeveloped allegation that his Honour was not empowered to make the relevant orders.

56    In my opinion, ground 1 is not established.

Ground 2

57    The subparagraphs of ground 2, which are numerous and prolix, in many instances consist of disputed factual assertions for which the appellant, who bore the onus, adduced no or no sufficient evidence. No affidavit setting out a detailed account of what occurred at the hearing on 26 November 2010 was filed. The transcript of the hearing was not included in the appeal book. Nor was the Court provided with relevant evidence of what occurred at previous hearings to which the appellant referred in relation to ground 2.

Ground 2(a)

The Federal Magistrate denied procedural fairness in that she refused to permit the respondent to appear at the hearing

58    The appellant principally submitted that the Federal Magistrate denied her procedural fairness in refusing her leave to appear by telephone and to make submissions at the hearing on 26 November 2010.

59    In Gas and Fuel Corporation of Victoria v Wood Hall Ltd & Anor [1978] VR 385, Marks J described procedural fairness (or “natural justice”) as follows (at 396):

There are two rules or principles of natural justice (de Smith: Judicial Review of Administrative Action 3rd ed. p. 134; Fairness and Natural Justice, by GDS Taylor (1977), 3 Monash Law Review 191 at p. 202). The first is that an adjudicator must be disinterested and unbiased. This is expressed in the Latin maxim--nemo judex in causa sua. The second principle is that the parties must be given adequate notice and opportunity to be heard. This in turn is expressed in the familiar Latin maxim--audi alteram partem. In considering the evidence in this case, it is important to bear in mind that each of the two principles may be said to have sub-branches or amplifications. One amplification of the first rule is that justice must not only be done but appear to be done; (Lord Hewart, CJ in R v Sussex Justices; ex parte McCarthy,[1924] 1 KB 256 at p. 259; [1923] All ER Rep 233). Sub-branches of the second principle are that each party must be given a fair hearing and a fair opportunity to present its case. Transcending both principles are the notions of fairness and judgment only after a full and fair hearing given to all parties.

60    While the content and scope of the procedural fairness requirements, including the requirement of an “opportunity to be heard”, cannot be determined solely by reference to statute, they must nonetheless be considered in light of the statutory context (Re Minister for Immigration and Multicultural Affairs & Anor; Ex parte Miah (2001) 206 CLR 57 at 94 per McHugh J).

61    Section 67 of the Federal Magistrates Act 1999 (Cth) provides:

Appearance of persons by video link or audio link

(1)    The Federal Magistrates Court or a Federal Magistrate may, for the purposes of any proceeding, direct or allow a person to appear before the Federal Magistrates Court or the Federal Magistrate by way of video link or audio link.

(2)    The power conferred on the Federal Magistrates Court or a Federal Magistrate by subsection (1) may be exercised:

(a)    on the application of a party to the proceedings concerned; or

(b)    on the Federal Magistrates Court's own initiative or on the Federal Magistrate's own initiative, as the case may be.

(3)    This section applies whether the person appearing is in or outside Australia, but does not apply if the person appearing is in New Zealand.

62    Section 68 of the Federal Magistrates Act 1999 (Cth) provides:

Making of submissions by video link or audio link

(1)    The Federal Magistrates Court or a Federal Magistrate may, for the purposes of any proceeding, direct or allow a person to make a submission to the Federal Magistrates Court or the Federal Magistrate by way of video link or audio link.

(2)    The power conferred on the Federal Magistrates Court or a Federal Magistrate by subsection (1) may be exercised:

(a)    on the application of a party to the proceedings concerned; or

(b)    on the Federal Magistrates Court's own initiative or on the Federal Magistrate's own initiative, as the case may be.

(3)    This section applies whether the person making the submission is in or outside Australia, but does not apply if the person making the submission is in New Zealand.

63    The relevant provisions do not entitle parties to appear by audio link or video link as of right. They confer a discretion upon the Court which may be exercised “for the purposes of any proceeding”. An appeal from an exercise of such discretion is governed by the well-established principles set out in House v R (1936) 55 CLR 499, where Dixon, Evatt and McTiernan JJ stated at 504-505:

The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.

64    In the present case, the appellant’s application was made at the eleventh hour although the hearing had been fixed for three months. The appellant advanced only bare assertions unsupported by medical evidence to justify the application and stated that the late request was due to her “preoccupation” with the matters asserted. In such circumstances, it was open to the Federal Magistrate to decline to exercise the discretion, as she was not satisfied that there was a sufficient reason for deviation from the usual practice. The appellant’s allegation that the Federal Magistrate erred by considering an irrelevant matter (the appellant’s inability to see written submissions) is not persuasive. Nor did her Honour, as alleged by the appellant, err in entertaining the respondents’ submissions in opposition to the application. An application for leave for a party to appear in person at a substantive hearing by telephone is a matter on which the Court could, and in the circumstances, properly would, hear the submissions of other potentially affected parties.

65    The Federal Magistrate’s refusal to grant the appellant leave to attend by audio link was not unreasonable or plainly unjust and did not deny the appellant procedural fairness. The appellant was not denied a reasonable opportunity to appear in the conventional way. Rather, she was refused leave to appear by the alternative mode she sought, although, as her Honour found, the evidence did not establish that the appellant was unable to appear in the conventional way. It is true that given the lateness of the appellant’s application to appear by telephone (the delay in which was unsatisfactorily unexplained), if the application were refused, she would be unable, practically speaking, to appear in person at the scheduled hearing or, probably, to appear at all unless an adjournment were granted. There is no evidence or indeed, assertion, that the appellant sought an adjournment and no ground of appeal is expressly based on the failure to grant one. The appellant in written submissions nevertheless asserted that she was entitled to both a telephone appearance and an adjournment on 26 November 2010 because adjournments and audio link appearances had been permitted on past occasions. The appellant characterised the previous making of such orders as relevant matters which the Federal Magistrate failed to take into account, submitting that consistency required like orders to be made on 26 November 2010.

66    There was no evidence for the appellant’s related assertion in her written submissions that the Federal Magistrate ordered or otherwise indicated that the creditor’s petition not be heard until the appeal was determined. The respondents disputed that assertion, which was not supported by the terms of the relevant orders. The appellant was not entitled to assume that the Federal Magistrate would, on 26 November 2010, exercise her discretion to grant leave to appear by audio link and a further adjournment. The relevant discretionary decisions depended on all the relevant circumstances, including the reasons advanced in relation to the hearing in question and the impact of the passage of time. Any previous adjournments and leave to appear by audio link were not, in that context, relevant matters which the Federal Magistrate erred in failing to consider. While the effect of the refusal of leave to appear by telephone on 26 November 2010 was that the appellant could not appear in person at the hearing, the effective cause of her inability to do so was her very late application to appear by telephone on grounds the Federal Magistrate found to be insufficient, as was open to her.

Ground 2 (b)

The Federal Magistrate denied procedural fairness in that she permitted the respondent to appear by telephone for the first listed hearing on 8 June 2010 but refused to permit the respondent to appear by telephone for the same reasons for the relisted hearing on 26 November 2010

67    Ground 2(b) is a variant of the matters submitted under ground 2(a). While there is no evidence, and the orders do not reflect, that the Federal Magistrate permitted the appellant to appear by telephone on 8 June 2010, the appellant’s letter to the Federal Magistrate’s associate dated 7 June 2010 requesting leave to do so referred, inter alia, to her involvement in the daily care of her elderly mother, who had been previously hospitalised, and the appellant’s extreme difficulty in coping. The reasons advanced in the letter were not the same as those expressed in the appellant’s facsimile of 25 November 2010 and the factual basis for this ground of appeal is not established. Assuming, however, that the appellant’s assertions were correct, it is clear from her Honour’s reasons for decision dated 8 December 2010 that in refusing the appellant leave to appear by audio link, she took into account various matters which necessarily distinguished the application from earlier applications, including the late stage at which it was made despite the effluxion of a three month intervening period.

Ground 2 (c)

The Federal Magistrate denied procedural fairness in that she made the decision in a) before hearing any argument on the matter

68    There is no evidence to establish that the Federal Magistrate made the decision to refuse the appellant leave to appear by telephone at the hearing without hearing argument. The Federal Magistrate’s reasons indicate that she considered the appellant’s reasons for seeking to appear by audio link and heard submissions. The appellant’s written submissions asserted that the Federal Magistrate treated her application as a “contested hearing”.

Ground 2 (d)

The Federal Magistrate denied procedural fairness in that she failed to give any or any proper reason for refusing to permit the respondent to appear by telephone for the hearing

69    The Federal Magistrate gave an ex tempore judgment on 26 November 2010. Subsequently, copies of a revised written version of the reasons dated 8 December 2010 were forwarded under cover of a letter of her Honour’s associate dated 9 December 2010 to each of the appellant and the respondents. The covering letter stated:

I refer to the above matter which was heard at the Federal Magistrates Court on 26 November 2010.

Please find attached a copy of reasons for judgment also delivered on 26 November 2010:

Blueprint Printing Pty Ltd v Winn [2010] FMCA 951, and

Blueprint Printing Pty Ltd v Winn (No.2) FMCA 959

…

70    The reasons dated 8 December 2010 set out detailed and cogent reasons for the Federal Magistrate’s refusal of leave for the appellant to appear by telephone.

Ground 2 (e)

The Federal Magistrate denied procedural fairness in that she failed to adjourn the hearing until after the respondent's appeal VID 817 of 2009 challenging the validity of the bankruptcy notice has been determined

71    To the extent that this ground depends on different matters from those discussed above, it apparently depends on an undeveloped assertion (for which no authority was cited) that a creditor’s petition cannot properly be heard while an appeal challenging the validity of the relevant bankruptcy notice is pending.

72    In Worchild v The Drink Night Club (Qld) Pty Ltd [2006] FCA 1384, Collier J held that a decision refusing an application to set aside a bankruptcy notice was final, despite the pendency of an appeal or application for special leave to appeal. Collier J stated at [46] that “decision” in relation to an application to set aside a bankruptcy notice:

bears the plain meaning of the court having entertained an application, and making an order on the basis of that application.

73    Further, her Honour stated (at [47] and [48]):

In the context of r 31.04 Federal Magistrates Court Rules, the concept of finality is referable to whether the decision in relation to the application to set aside the bankruptcy notice finally determined the rights of the applicant or the respondent in favour of either of them.

Where an order is made either allowing or dismissing an application to set aside a bankruptcy notice, the decision does finally determine the rights of the parties in relation to the validity of the bankruptcy notice either in favour of the applicant or the respondent. The terms of r 31.04 indeed imply that the decision on the application is ‘final’. The fact that the decision is capable of being appealed, ultimately to the High Court of Australia, does not in any way derogate from its ‘finality’.

74    In Guss v Johnstone [2000] FCA 1455 (“Guss v Johnstone”), the Full Federal Court recognised that a trial judge’s discretion may have miscarried in refusing to adjourn the hearing of the creditor’s petition until the determination of an application for special leave to appeal from the dismissal of an application to set aside the bankruptcy notice. (The High Court subsequently granted special leave but ultimately dismissed the appeal).

75    Sackville J (Drummond and Dowsett JJ agreeing) referred to the principle in Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137 (at 148) and followed in Adamopoulos v Olympic Airways SA (1990) 95 ALR 525 (at 531 to 532) that:

in general a court exercising jurisdiction in bankruptcy should not proceed to sequestrate the estate of a debtor where an appeal is pending against the judgment relied on as the foundation of the bankruptcy proceedings provided that the appeal is based on genuine and arguable grounds.

76    Their Honours accepted that the special leave application, if successful, would have had a bearing on the creditor’s petition, because (at [15]):

… if the application were granted and the appeal allowed, the bankruptcy notice served on the appellant would presumably have been set aside. This would have removed the foundation for the act of bankruptcy committed by the appellant (that is, non-compliance with the bankruptcy notice) and also removed the basis for the making of a sequestration order against his estate…

77    Sackville J nevertheless concluded that the sequestration order should not be set aside, because the refusal to adjourn the proceedings was an interlocutory decision which occasioned the appellant no injustice. The High Court’s ultimate decision left the bankruptcy notice undisturbed. The refusal to grant an adjournment therefore “merely deprived the appellant of the opportunity to delay the hearing of the creditor’s petition, pending the determination of what was ultimately held to be an unfounded appeal” (at [17]).

78    Similarly, in Moran v Lydiard Financial Services Pty Ltd [2007] FCA 872, a special leave application before the High Court concerning an application to set aside a bankruptcy notice was pending when a Federal Magistrate upheld the making of a sequestration order. Gordon J dismissed an appeal from that decision. Her Honour noted that the Federal Magistrate had considered the merits of the appellant’s special leave application and was satisfied that it had no reasonable prospect of success. Gordon J held that there was no basis for interfering with the Federal Magistrate’s exercise of discretion. Her Honour further held (at [40]), consistently with Guss v Johnstone, that the failure to adjourn the hearing of the petition occasioned no injustice, because the High Court ultimately refused special leave.

79    In the present case, no application for an adjournment was made, nor necessarily, was it refused by the Federal Magistrate. Her Honour noted that the appellant had appealed from Phipps FM’s decision, but observed that the bankruptcy notice was valid unless set aside by Ryan J. In a context where considerable time had elapsed since the hearing of the appeal, there had been prior adjournments and the decision was unlikely to be delivered in the immediate future, her Honour clearly recognised the age of the petition which would soon expire unless extended. Further, it may be inferred from Her Honour’s concurrence with Phipps FM’s findings, that she did not consider the prospects for success on appeal high.

80    Her Honour had a discretion to hear the petition which in my view did not miscarry. If, contrary to that conclusion, her Honour did err in proceeding to hear the petition, it occasioned no injustice, as Ryan J subsequently dismissed the appeal from the decision of Phipps FM.

81    In my opinion, the failure on 26 November 2010 to adjourn the hearing of the creditor’s petition filed on 25 January 2010 until the hearing and determination of the appeal from the decision of Phipps FM did not deny the appellant procedural fairness or otherwise constitute error.

Ground 2 (f)

The Federal Magistrate denied procedural fairness in that she made an order at the hearing on 8 June 2010 that the matter was to be relisted after the appeal in e) had been determined but then heard the matter on 26 November 2010 before the appeal was determined

82    There is no evidence that the Federal Magistrate made an order in the terms alleged on 8 June 2010 or at any time.

Ground 2 (g)

The Federal Magistrate denied procedural fairness in that she failed to take into consideration the respondent's:

i.    grounds of opposition;

ii.    written submissions; and

iii.    affidavit including the documentary evidence that:

(a)    the bankruptcy notice issued on 20 February 2009 is outside the six year limit from the date of judgment of 2 August 2002;

(b)    the judgment is not attached to the bankruptcy notice;

(c)    the claim is erroneously stated in the bankruptcy notice as a judgment debt (page 4, Schedule) but in the creditor's petition is stated as legal costs (page 2, paragraph 1).

83    The appellant’s written submissions and affidavit referred to above were not clearly identified. An affidavit of the appellant sworn 7 June 2010 was included in Appeal Book Part C, but the relevant written submissions were not located. The appellant’s “notice of grounds of opposition” alleged that the bankruptcy notice was invalid on numerous bases, including abuse of process because the creditor’s petition had been issued before the appeal from Phipps FM’s decision had been determined, invalid service of the creditor’s petition, the petition’s misstatement of the amount owed as legal costs, its inclusion of false and “perjurious” statements contrary to the findings of the Victorian Court of Appeal, and the obtaining of the costs order by dishonesty, miscarriage of justice and procedural unfairness.

84    As Nettle JA stated in Hunter v Transport Accident Commission [2005] VSCA 1 (“Hunter”), ordinarily, reasons for judgment should indicate, inter alia, why the judge rejected relevant and cogent evidence or other material and deal with substantial points that have been raised, sufficiently to expose an intelligible path of reasoning which led to the ultimate conclusion so that the reader is not left to wonder as to which of a number of possible routes was taken. The judge is not required, however, to deal with each and every argument. Nor, in my opinion, is it necessary to address in detail misconceived arguments or to strain to attribute a meaning to unclear claims.

85    The appellant’s grounds of opposition included many opaque, unevidenced or incoherent assertions. The appellant in written submissions alleged that the Federal Magistrate failed to refer to and address in the reasons a large number of specified grounds and to consider submissions and affidavits proving breach of court rules, the respondents’ failure to serve documents, the invalidity of the bankruptcy notices, invalid service of the petition and the invalidity of the Victorian Court of Appeal judgment. The Federal Magistrate nevertheless took full account of the appellant’s substantial claims, but did not accept them.

Grounds 2 (h) and 2 (i)

The Federal Magistrate denied procedural fairness in that she:

h)    permitted Blueprint and Garland Hawthorn Brahe to rely on affidavits, material and submissions that had not been served on the respondent;

i)    took into consideration the documents in h) that had not been served

86    The appellant, in her written submissions, alleged that the Federal Magistrate referred to and relied on affidavits that had not been served, or were served late. The assertion was unsupported by evidence and there is nothing to suggest that the Federal Magistrate was led, by any material she considered, into error in relation to any factual finding or legal conclusion.

Ground 2 (j)

The Federal Magistrate denied procedural fairness in that she failed to take into consideration that:

i.    Blueprint's claim on the bankruptcy notice of the amount of the Taxing Master's assessment of legal costs dishonestly includes the legal costs of Rod Goodwin's proceedings 4216 and 4217 of 2002 to which the respondent has a counterclaim;

ii.    Blueprint's claim is disputed on the bases of i) and that the Supreme Court of Victoria has failed to conduct the review of taxation of costs upon the appellant's filed objections and to confirm a final order on the taxation of the costs, as required under Supreme Court Rules Rule 63.56.1(5);

iii.    Mr Terry (Blueprint) and Mr Lassen and Ms Santamaria (Herbert Geer) made false sworn statements in the bankruptcy notice and petition that the respondent's payment to Blueprint of $1,750 on 6 December 2007, that lifted the Supreme Court's 2 August 2006 stay on the hearing of the appellant's appeal against the Taxing Master's order of 31 January 2006 striking the application for review of taxation of costs out of the Callover list, was payment to reduce the amount stated on the bankruptcy notice;

iv.    the legal costs claimed in the bankruptcy notice were incurred by Ms Winn's solicitor, Garland Hawthorn Brahe, filing out of time and without instruction proceeding 4215 of 2002, an application for leave to appeal a non-monetary VCAT order that was in Ms Winn's favour, and by Garland Hawthorn Brahe and Herbert Geer Rundle for Blueprint together litigating the application to incur legal costs of over $74,000.00 in respect of a minor civil claim of $1,877 then claiming all those costs from Ms Winn and together pursuing bankruptcy against Ms Winn for same;

v.    service of the petition is invalid;

vi.    the petition was issued after the respondent filed an appeal to have the bankruptcy notice set aside; and an order for substituted service was made on 13 April 2010 by a registrar, without an application or appearance, after the hearing of the appeal on 9 April 2010;

vii.    that the creditor's petition included an affidavit that contained the statement that the appeal (VID 817 of 2009) filed 12 November 2009 in respect of the bankruptcy notice had not yet been determined.

87    Many elements of ground 2(j) substantially repeat aspects of ground 2(g).

88    Grounds 2(j)(i) to (iv) were not established. The Federal Magistrate took into account the appellant’s principal allegations of invalidity of the bankruptcy notice on various bases although she concluded that they had already been determined against the appellant and dismissed them.

89    In her written submissions under ground 2(g)(i), the appellant submitted that the Federal Magistrate failed “properly and independently” to consider the grounds of opposition and that:

the FM was not bound by the reasons of another FM or findings of another court where these have been contested throughout and Winn had evidence to support her claims. On the hearing of a petition, the FM had power to investigate issues related to service of the notice, validity of the notice, validity of the judgment, creditors’ dishonesty, service and validity of the petition. Indeed, an FM is compelled by statute to properly consider some of these.

90    The appellant reiterated that submission in various forms at other points in her written submissions. The first respondent submitted that the appellant was precluded by issue or Anshun estoppel, or on some aspects, res judicata, from challenging either the judgment or bankruptcy notice in the present appeal.

91    The appellant’s contention, while insinuated, not explicit, was rather that the Federal Magistrate dismissed without considering arguments to which issue or Anshun estoppel did not apply, and thereby erred.

92    Even were such an error established, Ryan J in the appeal from Phipps FM’s decision comprehensively dismissed the appellant’s allegations of invalidity of the bankruptcy notice and judgment, together with her assertions of a counter-claim or set off.

93    For completeness, however, in my opinion, the Federal Magistrate did not err in failing to consider, on the erroneous basis that estoppel applied, issues she was required to determine.

94    In Kuligowski v Metrobus (2004) 220 CLR 363 (at 375), the High Court held:

A “final” decision [in the context of issue estoppel]… is one which is not of an interlocutory character but is completely effective unless and until rescinded, altered or amended. The fact that an appeal lies from a decision does not make it any less final. It must be “final and conclusive on the merits”: “the cause of action must be extinguished by the decision which is said to create the estoppel”.

95    In so far as the appellant alleged matters which could and should reasonably have been raised in earlier proceedings, Anshun estoppel applied.

96    In Makhoul v Barnes (1995) 60 FCR 572 (“Makhoul”), the Full Court considered in detail the principles governing and distinguishing res judicata, issue estoppel and Anshun estoppel in the context of an appeal from the dismissal of a creditor’s petition, in circumstances where an application to set aside a bankruptcy notice issued by the appellant against his ex-wife had previously been dismissed by consent. At the hearing of the creditor’s petition, the debtor filed new evidence challenging the existence of the underlying debt. The primary judge found that there were good reasons for doubting that the debtor was truly indebted to the petitioning creditor and was not satisfied that a true debt lay behind the judgment on which the petition was based.

97    The appellant appealed on various bases, including that the primary judge erred in failing to hold that the debtor was estopped from litigating in the petition proceedings the question whether a real debt lay behind the judgment.

98    The Full Court dismissed the appeal. Their Honours noted, inter alia, that the question of issue estoppel was raised only obliquely, if at all, before the primary judge.

99    The Full Court observed (at 578) that issue estoppel precluded the subsequent raising of matters already decided in a prior judgment, decree or order which it was necessary to decide and was actually decided as the ground work of the decision itself, though not then directly the point at issue, so that “[m]atters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous”, citing Coleridge J in R v Inhabitants of the Township of Hartington Middle Quarter (1885) 4 E and B 780 at 794.

100    The Full Court observed that in the case before them, it was necessary to determine, inter alia, whether any issue decided in the application to set aside a bankruptcy notice was identical with an issue sought to be raised in the creditor’s petition proceeding.

101    Their Honours acknowledged that Australian bankruptcy practice generally accepted that on an application to set aside a bankruptcy notice, the Court would (as recognised in Wilkinson v Osborne (1915) 21 CLR 89), in an appropriate case, go behind the judgment.

102    They accepted that in the case before them, in the application to set aside the bankruptcy notice the debtor had raised the question whether the judgment on which the bankruptcy notice was based was founded on an underlying debt.

103    The Full Court observed that at the hearing of a creditor’s petition, where a petitioning creditor has obtained a judgment which founds a bankruptcy notice, and which judgment remains unsatisfied, the petitioning creditor needed to rely on the debt underlying the judgment, as it also founded the entitlement to a sequestration order. Where no application to set aside the bankruptcy notice had been made, the court might, on hearing the creditor’s petition, consider whether a bankruptcy notice was valid as to form, and would consider, in an appropriate case, whether a real debt underlay the judgment. Nevertheless, (irrespective of whether there had been an application to set aside the bankruptcy notice) the court would not inquire into the validity of the judgment debt as a matter of course. Rather, it had a discretion to accept proof of the judgment as satisfactory proof of the petitioning creditor’s debt.

104    If, at the petition stage, the court inquired into the judgment and was unsatisfied, or considered that the bankruptcy notice was not valid in form, it would exercise its discretion against making a sequestration order and would dismiss the petition. If, on the other hand, the validity of the bankruptcy notice had been established in proceedings to set aside that notice, failure to comply with it would automatically give rise to an act of bankruptcy.

105    The Full Court stated that:

In the present case, an issue estoppel would have arisen at the conclusion of the proceedings to set aside the bankruptcy notice as to the validity of that notice. A court would not, at the petition stage, entertain a submission that no act of bankruptcy had been committed on the grounds that the bankruptcy notice was invalid for Cooper J had ruled on its validity.

106    The Full Court noted that even where the validity of the bankruptcy notice were already determined and an act of bankruptcy established, issue estoppel would not prevent the Court from going behind the debt relied on in the bankruptcy notice, and, if not satisfied, exercising its discretion to dismiss the petition. It would rarely, if ever do so, however, where that question had already been investigated in an application to set aside the bankruptcy notice; it would ordinarily accept the judgment as evidence of the debt.

107    The Full Court stated (at 582):

In other words, because the Court at the petition stage does not actually decide as between the parties that no debt existed but rather only whether the circumstances are such that in the exercise of discretion a sequestration order should not be made, the decision not to set aside the bankruptcy notice does not involve the same issue as arises on the petition so as to found an issue estoppel.

108    The Full Court also observed that the Anshun principle estopping a party from raising an issue in a second case where it could give rise to two inconsistent judgments did not apply in the case before it, because the “dismissal of the petition did not involve a finding inconsistent with the validity of the bankruptcy notice”, but “merely the finding that the circumstances of the case did not warrant the exercise of the discretion to make a sequestration order” (at 583).

109    The Full Court nevertheless recognised that, on the other hand, the making of a sequestration order would invariably involve a finding that there had been an act of bankruptcy (and, in the case at hand, that there was a valid notice and a failure to comply with it), which would be inconsistent with an earlier finding that the bankruptcy notice was invalid because there was no real debt.

110    Thus, the Full Court held that on the hearing of a creditor’s petition, the Court is:

(a)    neither precluded nor required to go behind the judgment and merely has a discretion to do so, which would rarely be exercised if the validity of the debt has been investigated in an application to set aside the bankruptcy notice; and

(b)    entitled to rely on the judgment as proof of the debt in determining whether to exercise its discretion to make a sequestration order.

111    Nevertheless, the Full Court in Makhoul indicated that at the petition stage, issue estoppel would apply if a prior application to set the notice aside based on alleged invalidity as to form had been dismissed. Only if the question of validity of form had not previously been decided would the Court, at the petition stage, exercise its discretion against making a sequestration order on that basis.

112    In National Australia Bank Ltd v Westbrook [2000] FCA 246 (“Westbrook”), Gray J dismissed a creditor’s petition based on a bankruptcy notice which the debtors had previously unsuccessfully applied to set aside, on the basis that they had a counter-claim, set off or cross-demand that they could not have set up in the proceeding in which judgment was obtained.

113    Gray J found that the bankruptcy notice (non-compliance with which constituted the act of bankruptcy on which the petition was based) was a nullity, and appeared to reject the creditor’s “faint attempt” to rely on Anshun estoppel, as the Court would not have the jurisdiction to make the sequestration order in the absence of a valid bankruptcy notice. The Full Court in Trustees of the Franciscan Missionaries of Mary v Weir (2000) 98 FCR 447 subsequently disagreed with Gray J’s conclusion that the bankruptcy notice was a nullity but expressed no view on his Honour’s brief comments on Anshun estoppel. Clearly the question was not fully argued before Gray J and the application to set aside the bankruptcy notice in Westbrook involved a determination of whether there were a relevant counter-claim or set off, rather than whether the bankruptcy notice was a nullity due to its essential deficiencies or potentially misleading qualities.

114    To the extent of any tension, the Full Court’s analysis in Makhoul prevails over the observations in Westbrook which do not, in any event, assist the appellant in this case. Consistently with the Full Court’s analysis in Makhoul, Hartnett FM was not precluded by issue estoppel from going behind the judgment, irrespective of whether Phipps FM had considered it. She was not, however, bound to do so, and its previous consideration by Phipps FM rendered the revisitation of that issue unlikely. Her Honour accepted, as was open to her, the judgment as proof of the validity of the underlying debt.

115    To the extent that Phipps FM found that the bankruptcy notice was invalid as to form, issue estoppel precluded her Honour from determining the repeated challenge. Further, in so far as the appellant alleged matters which she should reasonably have raised before Phipps FM or other courts, but did not, or which could have resulted in findings inconsistent with previous decisions, Anshun estoppel would have applied.

116    It is unnecessary to analyse the potential application and status of various species of estoppel in relation to all of the many grounds the appellant relied on before Hartnett FM. Her Honour was bound by Phipps FM’s findings of validity as to the form of the bankruptcy notice and the absence of counter-claim and by the finding of validity of the substituted service orders. Her Honour was entitled to accept that the judgment was proof of the debt. The circumstances and other previous determinations to which her Honour referred cogently explained why she did not exercise a discretion to go behind the judgment at the hearing of the petition.

117    Further, Ryan J’s decision dismissing the appellant’s appeal from Phipps FM’s decision was handed down before the hearing of this appeal. Issue or Anshun estoppel applies to his Honour’s findings on the appellant’s challenges to the validity of the bankruptcy notice identical to the issue raised on this appeal, or which the appellant could and should reasonably have raised in that appeal or other proceedings.

118    Ground 2(j)(v) is not established. The Federal Magistrate, in her reasons, identified the matters deposed to in the affidavit of Alexandra Santamaria sworn 20 April 2010 as the basis for concluding that the creditor’s petition had been validly served. Moreover, the appellant filed an appearance on 4 May 2010 and in her affidavit of the same date deposed that the creditor’s petition was left outside her house on 19 April 2010 and she became aware of it on that date.

119    Grounds 2(j)(vi) and (vii), which refer to matters discussed in relation to ground 2(j)(i), were not established.

Ground 2 (k)

The Federal Magistrate denied procedural fairness in that she:

i.    availed herself of material adverse to the respondent that had not been filed and served in the proceeding;

ii.    failed to inform that she intended to take that material into consideration and failed to give the respondent an opportunity to contest that material

120    Ground 2(k)(i) was not established. The adverse material referred to in ground 2(k)(i) was not specifically identified. There was, perforce, no evidence of failure to file and serve it, of whether there was any requirement to do so or whether its nature required that the appellant be afforded an opportunity to respond to it. As stated above, there was nothing to suggest that her Honour was led by any material into factual or legal error.

Ground 3

The Federal Magistrate failed to give any reasons for her decision

121    As stated above, in my opinion the Federal Magistrate’s reasons satisfied the requirements and met the standards to which reasons for judgment must conform, as stated by Nettle JA in Hunter at [21] and [22] and like authorities. Her Honour dealt with the substantial points and arguments raised by the appellant, and provided a clear and comprehensive explanation of the path of reasoning which led to the conclusion and rejection of those arguments.

122    In my opinion, Ground 3 is not made out.

Ground 4

The Federal Magistrate failed to apply Federal Magistrates Court (Bankruptcy) Rules 2006 Reg 4.04 (1) (a) (ii) that requires the filing of an affidavit stating that any application in the Federal Court for an order setting aside the bankruptcy notice has been finally decided and Reg 4.04 (2) that requires a copy of the order to be attached

123    Rule 4.04 of the Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth) (“Bankruptcy Rules”) provides:

(1)     If a creditor’s petition is founded on an act of bankruptcy mentioned in paragraph 40(1)(g) of the Bankruptcy Act, the petition must also be accompanied by:

(a)     an affidavit stating:

(i)     that the records of the Court and the records of the Federal Court have been searched and no application in relation to the bankruptcy notice has been made; or

(ii)     that an application was made in the Court or in the Federal Court, as applicable, for an order setting aside the relevant bankruptcy notice and the application has been finally decided; or

(iii)     that an application was made in the Court or in the Federal Court, as applicable, for an order extending the time for compliance with the bankruptcy notice and the application has been finally decided; and

                           (b)    an affidavit of service of the relevant bankruptcy notice.

(2)     If an application mentioned in subparagraph (1)(a)(ii) or (iii) was made, a copy of the order finally deciding the application must be attached to the affidavit required by paragraph (1)(a).

124    There was no evidence to establish that the requirements of rules 4.04(1)(a) and (2) had not been met. To the contrary, Alexandra Santamaria, in her affidavit of 22 January 2010 filed in support of the creditor’s petition, deposed to compliance as follows (emphasis in original):

I say that the respondent (Winn) made an application to the Federal Magistrates’ Court (the Court) on or about 20 July 2009 for an order that bankruptcy notice VN 358 / 09, (the bankruptcy notice) be dismissed / set aside as well as an order extending the time for compliance with the bankruptcy notice up to and including the date of the hearing of the application to have the bankruptcy notice dismissed / set aside (Winn’s Application).

…

On 20 July 2009, the Court made orders in respect to Winn’s Application, including extending time for compliance with the bankruptcy notice until 4.30pm on 7 September 2009...

Annexed to this affidavit and marked “ASM-3” is a true copy of the Orders made on 20 July 2009.

Winn’s Application was first listed for hearing on 7 September 2009. Orders were made by Federal Magistrate Riley on 7 September 2009 that the further hearing of Winn’s Application was to be adjourned to 12 October 2009 before Federal Magistrate Phipps.

Annexed to this affidavit and marked “ASM-4” is a true copy of the Orders of Federal Magistrate Riley made on 7 September 2009.

At the hearing on 7 September 2009, the Court did not make an order extending the time for compliance with the bankruptcy notice…

…

On 30 October 2009, Federal Magistrate Phipps made orders that Winn’s Application filed 20 July 2009 to set aside the bankruptcy notice be dismissed…

Annexed to this affidavit and marked “ASM-5” is a true copy of the Orders of Federal Magistrate Phipps made on 30 October 2009.

On 12 November 2009, Winn lodged a Notice of Appeal, appealing from the orders of Federal Magistrate Phipps made on 30 October 2009 (Winn’s Appeal).

…

On 22 January 2010, I carried out a search of the indexes maintained by the Federal Court of Australia and the Court, and aside from Winn’s Application (as set out above) and Winn’s Appeal, no further applications have been made by Winn in respect of the bankruptcy notice.

125    In my opinion, ground 4 is not established.

Ground 5

The Federal Magistrate created an apprehension of bias in that she:

a)    permitted the breaches of the Federal Magistrates Court Rules in the changing of the hearing dates of the creditor's petition of 25 March and 11 May 2010 by unilateral request without an appearance or an application; by the order for substituted service without an application or appearance; as stated in 2. j) vi.; and breaches of Regs 4.04 and 4.05 (b), (c) and (e) of the Federal Magistrates Court (Bankruptcy) Rules 2006 as referred to in 2 h);

b)    refused to permit the respondent to participate in the hearing.

126    The apprehension of bias principle is expressed in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 (“Ebner”), British American Tobacco Australia Services Ltd v Laurie (2011) 85 ALJR 348 at 377 and Re JRL; Ex parte CJL (1986) 161 CLR 342 at 352. In Ebner, Gleeson CJ, McHugh, Gummow and Hayne JJ stated (at 344):

Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge… the governing principle is that, subject to qualifications relating to waiver… or necessity… a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide.

127    The alleged breaches of the Federal Magistrates Court Rules 2001 (Cth) (“Court Rules”) or the Bankruptcy Rules were not established.

128    There was, in my opinion, no basis on which to find that a fair minded lay observer might reasonably apprehend that the Federal Magistrate might not bring an impartial mind to the resolution of the issues in the case.

129    The appellant alleged in written submissions that the Federal Magistrate failed to “properly consider” the alleged bases of invalidity of the bankruptcy notice and related evidence, and erred in referring to prior judicial determinations prejudicial to the appellant. In my opinion, the extracts from other judgments cited by her Honour, albeit critical of the appellant, were relevant to the issues before her.

130    The appellant also submitted that the Federal Magistrate used submissions or “adverse material outside the hearing” which had not been served on the appellant. The material allegedly procured outside the hearing was not identified and there was nothing to suggest that any such material led to findings on disputed facts or led the Federal Magistrate into legal error.

131    In her written submissions, the appellant alleged that the Federal Magistrate made or adopted numerous factual errors, which the appellant had no opportunity to correct. The written submissions suggest that the alleged errors principally comprised the Federal Magistrate’s acceptance of the validity of findings and determinations of the Supreme Court and Court of Appeal, in which issues raised by the appellant had been conclusively resolved against her. No affidavit or other evidence adduced by the appellant established any factual errors. Rather, the appellant’s submissions expressed dissent from, disapproval of and complaints regarding, the decisions of a number of courts which were referred to by the Federal Magistrate.

Ground 5 (a)

The Federal Magistrate created an apprehension of bias in that she permitted the breaches of the Federal Magistrates Court Rules in the changing of the hearing dates of the creditor's petition of 25 March and 11 May 2010 by unilateral request without an appearance or an application; by the order for substituted service without an application or appearance; as stated in 2. j) vi.; and breaches of Regs 4.04 and 4.05 (b), (c) and (e) of the Federal Magistrates Court (Bankruptcy) Rules 2006 as referred to in 2 h)

132    There was no evidence that the Federal Magistrate changed the hearing dates of the creditor’s petition “by unilateral request” in breach of the Court Rules, thereby creating a reasonable apprehension of bias against the appellant. To the contrary, Alexandra Santamaria, by her affidavit sworn 24 November 2010, deposed that the matter was adjourned by consent.

133    As stated above, the appellant was refused leave to appeal from Burchardt FM’s decision dismissing her application to review the orders for substituted service, and the alleged invalidity of such orders does not constitute a basis for apprehension of bias.

134    The appellant’s allegations that the Federal Magistrate permitted breaches of rules 4.04 and 4.05(b), (c) and (e) of the Bankruptcy Rules were not made out. As stated above, there was nothing to suggest non-compliance with rule 4.04. Rule 4.05 provides:

Unless the Court otherwise orders, at least 5 days before the date fixed for the hearing of a creditor’s petition, the applicant creditor must serve on the respondent debtor:

(a)     the creditor’s petition; and

(b)     a copy of the affidavit, or affidavits, verifying the petition required by subsection 47 (1) of the Bankruptcy Act; and

(c)     if applicable, a copy of the affidavit required by paragraph 4.04 (1) (a); and

(d)     if applicable, a copy of the affidavit of service of the bankruptcy notice required by paragraph 4.04 (1) (b); and

(e)     a copy of any consent to act as trustee filed under section 156A of the Bankruptcy Act.

135    There was no evidence to establish that the requirements of rule 4.05 were not satisfied and no indication of the basis on which such non-compliance, if established, could found a reasonable apprehension of bias by the Federal Magistrate.

136    In her written submissions, the appellant further alleged that rule 4.06 of the Bankruptcy Rules had not been met. Rule 4.06 requires certain additional affidavits to be filed before the hearing of a creditor’s petition. Non-compliance with rule 4.06 was not a ground of appeal and there was, in any event, no evidence to establish non-compliance.

137    Ground 5(a) is not established.

Ground 5 (b)

The Federal Magistrate created an apprehension of bias in that she refused to permit the respondent to participate in the hearing

138    As stated above, there is no evidence that the Federal Magistrate refused to permit the respondent to participate in the hearing in the conventional way and her Honour’s discretion did not miscarry in refusing the appellant leave to appear by telephone. The refusal could not create a reasonable apprehension of bias.

Ground 6

The Federal Magistrate erred in that she:

a)    published reasons for decision on 8 December 2010 after the respondent had filed Notice of Appeal No. VID 1039 of 2010 against that decision on 30 November 2010

b)    published reasons for decision dated 8 December 2010 on the internet and posted a copy to the respondent on 9 December 2010 and so failed to deliver the reasons for decision in open court.

139    The appellant cited no authority for the proposition that the publication of reasons after the filing of a notice of appeal would constitute error. There was, in any event, no evidence that the Federal Magistrate in the present case failed to deliver reasons prior to the appellant’s filing of the notice of appeal on 30 November 2010.

140    The appellant alleged that the Federal Magistrate failed to deliver her reasons in open court. The appellant relied, in that context, on sub-sections 13(2) and 75(2) of the Federal Magistrates Act 1999 (Cth) and the decision of Richmond v BMW Australia Finance Limited (No 2), which she cited as “[2009] FCAFC 24” but which is in fact (2009) 174 FCR 232 (“Richmond v BMW”).

141    Section 13(2) of the Federal Magistrates Act 1999 (Cth) provides:

The jurisdiction of the Federal Magistrates Court must be exercised in open court. However, this rule does not apply where, as authorised by this Act or another law of the Commonwealth, the jurisdiction of the Federal Magistrates Court is exercised by a Federal Magistrate sitting in Chambers.

142    Section 75(2) of the Federal Magistrates Act 1999 (Cth) provides:

If:

(a)    the Federal Magistrates Court reserves reasons for its decision in a proceeding; and

(b)    the Federal Magistrate who heard the proceeding has prepared reasons, but is not available to publish those reasons;

those reasons may be made public by another Federal Magistrate on behalf of the Federal Magistrate who heard the proceeding.

143    In Richmond v BMW, the Full Federal Court dismissed an appeal from a sequestration order made by a Federal Magistrate, brought on the ground that the Federal Magistrate did not deliver his reasons for decision contemporaneously with the making of the order. While the Full Court held that the Federal Magistrate had the power to reserve his reasons for judgment, Black CJ stated (at para [15]):

It should be noted that underlying this whole matter is the prime importance of justice being administered in public. Reflecting the common law tradition, the Act specifically provides that the jurisdiction of the Court must be exercised in open court: see s 13(2). It was not, however, contended by the appellant that the reasons were not delivered in public.

144    Rares J stated (at paras [22] and [23]):

[T]here was no evidence before us that the federal magistrate did not give his reasons in open court… However I wish to emphasise what Griffith CJ, speaking for the Full Court of the Supreme Court of Queensland, said in Melville v Phillips (1899) 9 QLJ 114 at 116:

But pronouncing judgment upon a trial is a judicial proceeding – perhaps the most important part of the judicial proceeding – and I confess that I do not see how a judge can pronounce judgment except in open court, unless under the authority of some statute.

I am of opinion that it is an essential incident of the exercise of judicial power to publish reasons in open court for making orders after a contested hearing.

145    In the present case, while the transcript of the hearing on 26 November 2010 was not included in the Appeal Book, the letter of the Federal Magistrate’s associate dated 9 December 2010, referred to above, indicated that the written reasons dated 8 December 2010 were also delivered on 26 November 2010. Counsel for the first respondent informed the court from the bar table that, as appeared from her letter set out in paragraph 69, the Federal Magistrate made the sequestration order on 26 November 2010 and also delivered ex tempore reasons on that same day, which were subsequently revised in written form dated 8 December 2010. The appellant acknowledged that she did not remain on the telephone line until the conclusion of the hearing on 26 November 2010 and did not dispute that account.

Ground 7

The Federal Magistrate erred in fact and in law in finding that there was an act of bankruptcy on the date of 7 September 2009.

146    Ground 7 was raised for the first time in the supplementary notice of appeal dated 24 December 2010. It was not raised in the appellant’s “notice of opposition” before the Federal Magistrate. Nor, necessarily, as the appellant was not granted leave to appear by audio link, was it raised in oral submissions.

147    The appellant submitted:

Further there was no act of bankruptcy on 7 September 2009. On 7 September Riley FM adjourned the further hearing of the application to set aside the bankruptcy notice. It is contended that that part hearing operated to extend the time for compliance and that no further order for extension was required. As the applicant had included in her application to set aside the notice the ground that she had a counterclaim, time for compliance was extended until the court determined whether it was satisfied that the applicant has such a counterclaim: BA s 41(7); Guss v Johnstone [2000] HCA 26.

148    Although the appellant did not seek leave to rely on a ground of appeal based on an argument not raised before the primary judge, such leave may be readily granted where it involves only questions of statutory construction, no additional questions of fact need be proved and it is in the interests of justice to do so (see, for example, Coulton v Holcombe (1986) 162 CLR 1 at 7 to 8, Cumins v Deputy Commissioner of Taxation (2008) 172 FCR 425 at [16], and Lansen and Ors v Minister for Environment and Heritage and Anor (2008) 174 FCR 14 at [4] per Moore and Lander JJ).

149    Section 41(7) of the Act provides:

Where, before the expiration of the time fixed for compliance with the requirements of a bankruptcy notice, the debtor has applied to the Court for an order setting aside the bankruptcy notice on the ground that the debtor has such a counter‑claim, set‑off or cross demand as is referred to in paragraph 40(1)(g), and the Court has not, before the expiration of that time, determined whether it is satisfied that the debtor has such a counter‑claim, set‑off or cross demand, that time shall be deemed to have been extended, immediately before its expiration, until and including the day on which the Court determines whether it is so satisfied.

150    Section 40(1)(g) of the Act provides that a debtor commits an act of bankruptcy:

if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not:

(i)    where the notice was served in Australia—within the time specified in the notice; or

(ii)    where the notice was served elsewhere—within the time fixed for the purpose by the order giving leave to effect the service;

comply with the requirements of the notice or satisfy the Court that he or she has a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter-claim, set-off or cross demand that he or she could not have set up in the action or proceeding in which the judgment or order was obtained…

151    The interrelated matters which debtors must satisfy under s 40(1)(g) were identified by Lindgren J in Glew v Harrowell of Hunt & Hunt Lawyers (2003) 198 ALR 331 at [9] to [12] as follows:

•    that they have a “prima facie case”, even if they do not adduce evidence which would be admissible on a final hearing making out that case: Ebert v Union Trustee Co of Australia Ltd (1960) 104 CLR 346 (Ebert) at 350; Re Brink; Ex parte Commercial Banking Co of Sydney Ltd (1980) 30 ALR 433 at 438–9; 44 FLR 135 at 141 (Brink); Gomez v State Bank of New South Wales Ltd [2002] FCAFC 101; BC200201643 at [17], [18];

•    that they have “a fair chance of success” or are “fairly entitled to litigate” the claim: Brink at ALR 438–9; FLR 141; Gould v Day [1999] FCA 1650; BC9907767 at [27], [28]; Re Capsanis; Capsanis v Owners — Strata Plan 11727 [2000] FCA 1262; BC200005275 at [11]; and

•    that they are advancing a “genuine” or “bona fide” claim: Re Capsanis; Capsanis v Owners — Strata Plan 11727 [2000] FCA 1262; BC200005275 at [11].

…

152    The appellant’s application to set aside the bankruptcy notice dated 15 July 2009 and filed on 20 July 2009 sought the following final orders:

1.    Bankruptcy Notice No. VN 358 / 09 (attached) be dismissed / set aside.

2.    The issue of the Bankruptcy Notice is declared out of time and an abuse of process.

3.    Blueprint Instant Printing P/L is prohibited from issuing any further Bankruptcy Notice based on the Order of the Taxing Master of the Supreme Court of Victoria dated 9 November 2005 in respect of the matter Supreme Court No 4215 of 2002.

4.    Blueprint Instant Printing P/L pay the applicant’s costs and expenses of and incidental to this application on an indemnity basis.

153    The application also sought an interim order:

1.    That the time for compliance with the Bankruptcy Notice No. VN 358 / 09 be extended up to and including the date of the hearing of the application to have the Bankruptcy Notice dismissed / set aside.

154    There was no evidence to support the assertion, and the respondents did not concede, that an application answering the criteria in s 41(7) and s 40(1)(g) of the Act was ever made. To the contrary, Hartnett FM cited Phipps FM’s conclusion that no counter-claim worthy of consideration was raised before him. Ryan J also observed that there was no relevant counter-claim or set off.

155    In the present case, the proposed new ground of appeal would require proof that the appellant made an application to which s 41(7) of the Act applied and could involve proof of factual matters relevant to whether the incorrect date of bankruptcy occasioned prejudice.

156    The likely futility of the proposed new ground of appeal would, in any event, argue against grant of leave to raise it.

157    The first respondent conceded that if (contrary to its submission) the Court were satisfied on sufficient material that there was an application to which s 41(7) of the Act applied, then the correct date of the act of bankruptcy would not be 7 September 2009 as stated in the creditor’s petition, but 30 October 2009 (the date on which Phipps FM refused the appellant’s application to set aside the bankruptcy notice). The first respondent submitted, however, that in such circumstances, it would be permitted to amend the creditor’s petition by substituting the correct date of bankruptcy, as no prejudice was established.

158    That course was followed in Jensen v Queensland Law Society Incorporated (2006) 154 FCR 525, where Kiefel J accepted that as the appellant had applied to have the bankruptcy notice set aside on the grounds of his set-off, cross-claim or cross-demand equal to or exceeding the amount of the judgment debt, by the combined operation of ss 40(1)(g) and 41(7) of the Act, the act of bankruptcy was the date on which the Federal Magistrate had refused the application to set aside the bankruptcy notice, rather than the earlier date of non-compliance with the requirements of a bankruptcy notice identified in the creditor’s petition.

159    Kiefel J nevertheless found that the creditor’s petition could be amended. Her Honour distinguished Evans v Duff [2004] FCA 1643, in which the act of bankruptcy referred to in the creditor’s petition related to a different bankruptcy notice from that referred to therein. Her Honour also referred to Matthews v Collett [2000] FCA 224, where the act of bankruptcy was misdescribed, and an amendment which would have alleged an act of bankruptcy of a different kind was refused.

160    Kiefel J observed that in Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287, the Full Federal Court considered that the amendment of an incorrect date of bankruptcy was merely formal. Her Honour stated that whether an error as to the date of bankruptcy referred to in the petition were a merely formal defect depended on whether it was an essential requirement in the sense spoken of in Adams v Lambert (2006) 228 CLR 409. Her Honour stated at [34]:

The identification of the date of the act of bankruptcy may have importance for other transactions, in the event that an order for sequestration is made. If it is incorrect it should be amended. So far as concerns the debtor at the time when an order for sequestration is sought, that person needs to know is [sic] alleged as the act of bankruptcy in order to assess what course he or she should take. Obviously a debtor should not be misled about what is alleged, but it does not follow that in every case a debtor will be misled where a wrong date is given for the act of bankruptcy. The error is not of such a kind that it may be inferred in all cases that it will have an adverse effect upon the debtor. At least where the act of bankruptcy is the failure to comply with a bankruptcy notice, and there has been personal service, the debtor will be able to calculate the date when the act of bankruptcy was committed. And the debtor is to be taken to be aware that s 41(7) has the effect of extending the time fixed for compliance in the notice until the court’s determination of their application to set aside a bankruptcy notice, where they have applied before the expiration of that time. If a debtor is prejudiced by an error as to the date of the act of bankruptcy, s 306 will not apply.

161    In the present case, the appellant did not assert prejudice arising from an incorrect date of the act of bankruptcy in the petition but rather reiterated her fundamental contention that the notice of bankruptcy was itself invalid, as the following exchange reveals:

[I]f you are correct that the date was, in fact, not 7 September but a later date perhaps, when Phipps FM set aside the application you have made, what do you say the detriment to you was by that? How does that harm you or prejudice you?

Your Honour, I’m saying there is not act of bankruptcy because there hasn’t been a valid bankruptcy notice. And unless you have got – you know, it just follows from that. It’s my submission that the bankruptcy notice should have been declared invalid on the hearing by Phipps FM. It’s worthwhile commenting at this stage, your Honour. Phipps FM judgment also took the view that this was the later type order done by Taxing Master Wood. He has equated it with Scott v Evia, that case, and I think Scott v Charitopoulos where the order is one where the Taxing Master using a pro forma and includes liability of payment of one party and the parties are named or identified. So Phipps FM has used that which really doesn’t apply here…

162    There is nothing to suggest that the appellant would have been misled or otherwise prejudiced if the date of 7 September 2009 for the act of bankruptcy in the petition were incorrect, or that she would have taken a different course in consequence of it. Further, the appellant is taken to be aware of the effect of s 41(7) in such circumstances. Were the appellant permitted to raise the new ground of appeal and established that s 41(7) of the Act applied, in the absence of prejudice the creditor’s petition would not be invalidated, and could be amended pursuant to s 306.

163    In my opinion, leave (which was not formally sought) to raise the proposed new ground of appeal should not be granted.

Affidavit of solvency

164    The appellant on the day of the hearing of the appeal filed an affidavit which relevantly stated:

1    I have been employed since 1972 as a secondary teacher and education assessor. I have qualified as a solicitor, barrister and mediator.

2    Since April 2008 I have been caring for my elderly mother.

3    I am not insolvent. I have never throughout my entire life been insolvent.

4    I currently owe an interest free amount of $6,000 of which no part is payable until 3 June 2011 to HSBC. I have no other legitimate debts due to be paid.

5    The cost orders in favour of Blueprint and Garland Hawthorn Brahe were procured through a miscarriage of justice I have described in filed documents.

165    The respondents did not oppose the filing of the affidavit at a late stage. The affidavit does not disclose the appellant’s income, identify her assets, refer to the debt the subject of the petition or the supporting creditor’s debt, provide any detail or exhibit any supporting documentation. It was, as the respondents submitted, inadequate to discharge the appellant’s onus of establishing her solvency under s 52 of the Act.

Change of Creditor’s Name

166    In her written submissions in reply and during the hearing of the appeal, the appellant contended the bankruptcy notice was invalidated by inconsistency between the name of the first respondent in the order of Taxing Master Bruce (where it was stated to be Blueprint Printing in the heading and Blueprint Instant Printing in the body of the order) and in the bankruptcy notice, where it was Blueprint Printing.

167    That allegation was not a ground of appeal and was raised late. Moreover, Phipps FM had determined the validity of bankruptcy notice prior to the hearing of the creditor’s petition and his Honour’s decision was subsequently upheld on appeal.

Request to file further submissions

168    Following the conclusion of the hearing while judgment was reserved, the appellant contacted judge’s chambers by facsimile transmission seeking to file and serve further material on grounds outlined in her affidavit sworn on 8 June 2011. On consideration of the appellant’s affidavit and letters in response dated 9 June 2010 and 10 June 2010 filed by the first and second respondents, I determined that the appellant had not established any very exceptional circumstances which might permit a grant of leave to file submissions after the conclusion of the hearing: Eastman v Director of Public Prosecutions (ACT) (2003) 214 CLR 318 at 329-330 per McHugh J. The parties were advised of that decision by letter dated 15 June 2011, following which the appellant forwarded further communications to judge’s chambers which I declined to read.

CONCLUSION

169    The appeal was complex due to its numerous grounds, context of voluminous related or overlapping litigation, the unexplained omission of material documents from the appeal book, the appellant’s reliance on unevidenced and disputed facts and the appellant’s voluminous, repetitive submissions which in many respects insinuated rather than articulated her arguments. Despite the difficulties it raised, the appeal was, in my view, without merit. It largely constituted reiteration and reventilation in various guises of the appellant’s previously litigated but unfounded complaints.

170    The appeal should be dismissed.

Associate:

Dated:    24 June 2011