FEDERAL COURT OF AUSTRALIA

Singh v Owners Strata Plan 11723 [2013] FCA 714

THE COURT ORDERS THAT:

1.    The application for extension of time and leave to appeal filed on 27 June 2013 is dismissed with costs.

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

REASONS FOR JUDGMENT

Background

1    The applicant (“Mr Singh”), who has brought the application for extension of time and for leave to appeal with which this judgment deals with, was made bankrupt together with his wife, Ms Kaur, by a sequestration order made against their estates by the Federal Magistrates Court of Australia (Smith FM) on 5 April 2012 (The Owners Strata Plan No 11723 v Singh & Anor [2012] FMCA 308). The date of the acts of bankruptcy was noted as being 24 August 2011.

2    The sequestration order gave effect to a creditor’s petition which was based upon a judgment debt obtained in the Local Court of New South Wales on 6 May 2011. The indebtedness alleged, at the time the sequestration order was made, was $21,444.61. During those proceedings, and since that time, Mr Singh has argued persistently that the creditor’s petition was based on incorrect calculations and incorporated fabrications.

Earlier appeal

3    Since the making of the sequestration order, Mr Singh has attempted to ventilate his complaints about the asserted defects in the creditor’s petition and the unreliability of the judgment debt on which it was based, in various proceedings. He did so first by seeking a stay of the sequestration order and attempting to appeal from the judgment and orders of Smith FM. Mr Singh failed to obtain a stay of the sequestration order. Mr Singh’s appeal was dismissed after a number of unsuccessful attempts by him to amend his notice of appeal to put it into a satisfactory state. The appeal was dismissed for the reason that Mr Singh “frequently and persistently failed to comply with Court’s directions” and “failed to provide an acceptable explanation for his delinquency in prosecuting the appeal”. The order dismissing the appeal was made on 26 October 2012. Those matters were dealt with by Griffiths J in this Court in the following judgments: Singh v Owners Strata Plan No. 11723 [2012] FCA 538; Singh v Owners Strata Plan No. 11723 (No 2) [2012] FCA 900; Singh v Owners Strata Plan No 11723 (No 3) [2012] FCA 1121; and Singh v Owners Strata Plan No 11723 (No 4) [2012] FCA 1180.

4    A consistent theme pursued by Mr Singh in those proceedings was that there were errors and fabrications which lay behind the judgment debt obtained in the Local Court and which were incorporated in the creditor’s petition. In the present proceedings, Mr Singh submitted that errors of calculation, upon which he now relies, are in fact disclosed by submissions on behalf of the Owners Corporation dated 7 March 2012, to which he was never made privy. Those submissions were before the FMCA and were quoted extensively in the judgment of Smith FM. The suggestion made in the proceedings before me that Mr Singh was unaware of them or that they had recently come to light appears to me, I regret to say, to be completely unreliable. Mr Singh has in fact constantly relied upon the submissions on behalf of the Owners dated 7 March 2012 (which were before Smith FM and which were extracted in the judgment) to argue that the errors and fabrications which he asserted had been, in effect, admitted.

The proceedings below

5    On 4 June 2013, Mr Singh filed an application in the Federal Circuit Court of Australia (“FCCA”) seeking interlocutory and final relief in relation to the administration of his bankrupt estate, including urgent interlocutory relief. By this point the trustee of Mr Singh’s bankrupt estate (and that of Ms Kaur) had determined to sell two house properties in Harris Park and Rutherford. Although the costs of administration of the bankrupt estate had by that time been very substantial (in part it would appear because Mr Singh, unlike Ms Kaur, had not been co-operative), the trustee anticipated that there would be a surplus in the event that the properties were sold. That surplus would benefit Ms Kaur, at least, who was not a party to any challenge to the trustee’s decision, even if Mr Singh, for his own part, wished the properties to remain unsold.

6    Mr Singh’s application came before Judge Driver on 12 June 2013. Two matters required consideration. The first was an application for interim relief seeking a stay of sale of the properties. The second was an application for final relief which sought annulment of the bankruptcy (by paragraph 1) and (by paragraph 2):

2.    That the Judgment making sequestration order obtained illegally/irregularly admitted by own submission of Creditor on 07 March 2012 found later to be set aside pursuant to Part 36 Rule 36.15(1) Uniform Civil Procedure Rules 2005(NSW) [sic].

7    In his judgment given on 12 June 2013 (Singh v Owners of Strata Plan 11723 [2013] FCCA 506), Judge Driver recorded at [5]:

5.    Essentially, Mr Singh complains that the judgment debt supporting the creditor’s petition and the sequestration orders obtained on that petition were fraudulently obtained. I received a document prepared by Mr Singh headed “Analysis of discrepancies and amounts wrongly claimed in the creditor’s petition”. I received that document as a submission. According to Mr Singh, the amount claimed in the creditor’s petition was overstated by $1384.00. It follows that Mr Singh does not contest that there was a debt of approximately $20,000.

8    Judge Driver also recorded that Mr Singh was pursuing his allegations of fraud in the District Court of New South Wales. Judge Driver observed:

12.     … Mr Singh has been agitating his allegations of fraud in the District Court of New South Wales. Those efforts have, to date, been unsuccessful. His latest, and possibly, final effort is in the form of a notice of motion which will come before the District Court on 8 August 2013. I do not want to put the parties to further trouble and expense in relation to the annulment application, pending the resolution of that proceeding in the District Court. I was invited by the respondent petitioning creditor to summarily dismiss the application as a whole, but I am not persuaded that I should do so at this stage. I will strike out paragraph 2 of the application for final orders and I will further order that no further steps be taken in relation to the application by either party without leave of the court. I will direct that the application be listed for further directions at 9.30 am on 9 August 2013.

9    In the present proceedings, Mr Singh attacked the decision to strike out paragraph 2 of the application for final orders by suggesting that Judge Driver had misunderstood the nature of his claim for relief. He asserted that Judge Driver regarded that claim as one attacking the judgment debt, whereas in reality paragraph 2 challenged the sequestration order and the judgment of Smith FM given on 5 April 2012. I doubt that Judge Driver proceeded upon any misunderstanding of that kind. It is clear that in Mr Singh’s attempts to resist the administration of his bankrupt estate he has challenged the sequestration order by attacking the creditor’s petition on which it was based, but also by suggesting that the judgment debt was unreliable. Be that as it may, paragraph 2 of the application for final relief proceeds upon an illogicality. It is that the Creditors (the Owners) admitted that the sequestration order was illegally or irregularly obtained by the submissions dated 7 March 2012 – i.e. submissions made to Smith FM before the sequestration order was made and referred to by him when the sequestration order was in fact made. There is no substance in any argument of this kind. In any event, if it was to be pursued at all, it was a matter which had to be pursued in the appeal which was before Griffiths J. The dismissal of that appeal by reason of Mr Singh’s defaults and lack of diligent prosecution put an effective end to the contention.

10    Paragraph 1 of the application for final relief has not yet been dealt with by the FCCA. That claim for relief has been adjourned to await the outcome of the District Court proceedings. There can be no serious complaint about that course being taken.

11    The application before the FCCA for interim relief was an application that the FCCA should intervene in the administration of the two bankrupt estates, upon the application of Mr Singh, one of the two bankrupts. Judge Driver’s conclusions about that matter were expressed as follows at [10]-[11]:

10.    The trustee’s estimate of the costs of administration exceeding $100,000 would suggest that there may be a modest surplus in the event that the two properties are sold. Any surplus would benefit the bankrupts. I am not persuaded that Mr Singh’s continuing allegations of fraud provide a sufficient reason to restrain the trustees from continuing with efforts to sell the properties. I also accept that s.37(2) of the Bankruptcy Act would not permit the Court to suspend the continuing administration of the bankrupt estate.

11.    I have concluded, based on the material before me, that the appropriate approach to take is to dismiss, with costs, the application for interim relief.

12    The continuing allegations of fraud to which Judge Driver referred are those which have received attention in the various proceedings to which I earlier referred. They were allegations which were addressed by Smith FM. They were allegations which were at the heart of Mr Singh’s proposed appeal which he, by his conduct, effectively abandoned. I can see no respectable foundation for the proposition that a repetition of the allegations before the FCCA would provide an adequate foundation to restrain the trustees from the normal administration of the bankrupt estates. I see no error in Judge Driver’s conclusion that the continuing allegations of fraud did not provide a sufficient basis for any restraint of the trustee.

13    The second matter referred to by Judge Driver was the effect of s 37(2) of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”). Section 37(2) provides:

37    Power of Court to rescind orders etc

(1) Subject to subsection (2), the Court may rescind, vary or discharge an order made by it under this Act or may suspend the operation of such an order.

(2) The Court does not have power to rescind or discharge, or to suspend the operation of:

(a)    a sequestration order; or

(b)    an order for the administration of the estate of a deceased person under Part XI.

14    Mr Singh’s answer to the restraint imposed by s 37(2) was to rely upon s 30(1)(b) of the Bankruptcy Act which provides:

30    General powers of Courts in bankruptcy

(1) The Court:

    ….

(b)    may make such orders (including declaratory orders and orders granting injunctions or other equitable remedies) as the Court considers necessary for the purposes of carrying out or giving effect to this Act in any such case or matter.

15    Mr Singh steadfastly resisted any attempt to focus his attention upon the fact that s 37(2) appears to operate as a significant qualification upon the exercise of the power referred to in s 30(1)(b), as it does upon the power given by s 37(1). I see no error in Judge Driver’s understanding of the operation of s 37(2).

16    It does not appear to me, therefore, that Judge Driver made any error in his determination of the application for interim relief. Mr Singh’s complaints have been dealt with and, in any event, there is no power to suspend the operation of the sequestration order in the absence of an extant appeal against it (De Robillard v Carver (2007) 240 ALR 675 at [125] and [138]-[149].

The present application

17    The two questions which are posed for immediate decision by the application with which this judgment deals are first, whether Mr Singh should have an extension of time in which to seek leave to appeal from Judge Driver’s orders and secondly, whether leave to appeal against those orders should be granted. The application for leave to appeal was filed one day out of time. No prejudice could be involved in granting such an extension of time and I would have been prepared to do so had it been appropriate to grant leave to appeal.

18    The matters which lie behind the application for interim relief, and also paragraph 2 of the application for final orders, are matters which Mr Singh has ventilated repeatedly and which have been decided against him. Simply making further applications to the FCCA, or to this Court, does not provide a proper foundation on which to re-open those questions. Any attempt to do so risks being rejected as an abuse of process. It is not necessary for me to give further consideration to that aspect of the matter in the present judgment because I am satisfied that the application for leave to appeal should be dismissed upon conventional grounds.

19    The application for leave to appeal must be assessed in accordance with the test stated in Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397; namely, whether the decision is accompanied by sufficient doubt to warrant it being reconsidered and whether substantial injustice would result if leave were refused, supposing the decision to be wrong.

20    In my view, there is no prospect that an appeal would succeed if leave to appeal was granted, either in relation to Judge Driver’s decision about the application for interim relief or in relation to his decision to strike out paragraph 2 of the application for final orders. No foundation was established upon which it would be proper to interfere with the administration of the two bankrupt estates.

21    Similar considerations apply to any assessment of the second limb of the test, had it been necessary to consider it. In light of the fact that Mr Singh has repeatedly raised the same issues, without success and without pursuing them in a proper fashion, he cannot establish that there would be any substantial injustice arising from the orderly administration of his bankrupt estate pending finalisation of any outstanding proceedings in the District Court of New South Wales and the FCCA.

22    As leave to appeal should be refused, there is no utility in the grant of an extension of time in which to seek leave to appeal.

23    The application for extension of time and leave to appeal will be dismissed with costs.

Associate:

Dated:    24 July 2013