FEDERAL COURT OF AUSTRALIA

Reaper v Baycorp Collections PDL (Australia) Pty Limited [2016] FCA 1454

ORDERS

THE COURT ORDERS THAT:

1.    The application for leave to appeal filed 5 October 2016 be dismissed.

2.    The costs of the respondents are to be paid by the applicant.

3.    The costs of the first respondent shall be accorded the same priority as costs of the petitioning creditor pursuant to s 109(1) of the Bankruptcy Act 1966 (Cth).

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

REASONS FOR JUDGMENT

COLLIER J:

1    Mr Reaper is a bankrupt. He seeks an order that he be granted leave to appeal from a decision of the Federal Circuit Court made 22 September 2016 in Baycorp Collections PDL (Australia) Pty Ltd v Reaper [2016] FCCA 2458 (MLG887/2012). In that case the primary Judge dismissed Mr Reaper’s application to stay orders made by Judge Burchardt of the Federal Circuit Court on 18 September 2015 (as amended on 9 October 2015) in Vrsecky v Reaper & Anor (No 3) [2015] FCCA 2807 (MLG931/2013).

2    The orders made by Judge Burchardt on 18 September 2015 as amended on 9 October 2015 were:

THE COURT DECLARES THAT:

(1)    50% of the property described in Certificate of Title Volume 10609 Folio 987 and known as 12 The Esplanade, Narre Warren South in the state of Victoria (‘Property’) vests in the Applicant pursuant to sections 58, 115(1) and 116(1) of the Bankruptcy Act 1966 (Cth), as and from the date of the commencement of the bankruptcy of the First Respondent.

THE COURT ORDERS THAT:

(2)    Within 90 days of the making of these orders, the Second Respondent has the option to purchase the Applicant’s interest in the Property for $96,000.

(3)    Failing the Second Respondent executing the option in Order 2 above. Pursuant to section 234D of the Property Law Act 1958 (Vic) as applied by section 79(1) of the Judiciary Act 1903, the land and buildings comprising the Property be sold by the Applicant with all the obligations and privileges pertaining (including signing for and on behalf of the First Respondent in any Contract of Sale of Land and any Property Law Act 1958 form of Transfer and determining the price at which the Property is to be sold).

(4)    For the Purpose of giving effect to Order 3, the Second Respondent do all such things, acts and deeds and sign all documents to list for sale and sell the Property, and for that purpose, including but not limited to the following:

•    (a)    agree on a real estate agent(s) to be appointed to facilitate a sale of the Property within 7 days of being requested to do so by the Applicant. With nomination by the Real Estate Institute of Victoria in default of agreement;

•    (b)    Fix the sale or reserve price at which the Property is to be listed for sale as suggested by the appointed real estate agent at not more than the valuation provided in these proceedings;

•    (c)    deliver a signed Property Law Act 1958 form of Transfer within 24 hours of being requested to do so by the Applicant;

•    (d)    maintain the Property in a clean and presentable manner as required for the proper and effective marketing of the Property; and

•    (e)    allow for an inspection of the Property on 24 hours’ notice of a request made by the Applicant or agent for sale.

(5)    On default of any matter listed in Order 4, the Applicant shall have power to execute any document reasonably required for the purpose of selling the Property on the Second Respondent’s behalf.

(6)    The First and Second Respondents provide vacant possession of the Property on or before 30 days after the date of failing to execute the option described in Order 2.

(7)    The Cross-Claims filed on 12 November 2014 and 27 November 2014 are dismissed.

THE COURT NOTES THAT:

A.    The issue of costs remains reserved.

3    Before turning to the application before this Court it is useful to examine the background facts.

Background

4    There is a long history of litigation between the parties in this matter, both in this Court and the Federal Circuit Court. The essential dispute between the parties so far as concerns this application is, however, relatively straight forward. On 7 March 2013 Mr Reaper was declared bankrupt pursuant to a creditor’s petition filed by the first respondent Baycorp Collections PDL (Australia) Pty Ltd (Baycorp). Mr Petr Vrsecky was then appointed as trustee of Mr Reaper’s estate. The bankruptcy was based on a debt Mr Reaper owed to Westpac Banking Corporation, which had been assigned to Baycorp. Mr Reaper has continued to argue throughout the history of litigation that this debt was not owed by him personally; rather he claims it was owed by the company of which he had been a director. In this respect Mr Reaper has sought to go behind the judgment debt, a point noted by the primary Judge at [12].

Proceedings in the Federal Circuit Court

5    In the Court below pursuant to an application in a case filed on 3 September 2016 Mr Reaper sought the following orders:

1.    That paragraph 6 of the orders of Burchardt J made on 18 September 2015 and amended on 9 October 2015 be stayed under r 29.04 of the Federal Circuit Court Rules 2001 (Cth) pending the hearing and determination of the Respondent’s application in a case.

2.    That, pursuant to section 178 of the Bankruptcy Act 1966 (Cth), the trustee in bankruptcy, Petr Vrsecky, adjudicate, investigate and/or verify the petitioning creditor’s proof of debt.

Further or alternatively to [1]:

3.    That an order in the nature of an injunction be made under subsection 30(1) of the Bankruptcy Act 1966 (Cth) restraining the trustee in bankruptcy, Petr Vrsecky, acting on the orders of Burchardt J made on 18 September 2015 and amended on 9 October 2015 pending the hearing and determination of the Respondent’s application in a case.

6    Before the primary Judge Mr Reaper claimed that the orders of Judge Burchardt should be stayed, as he claimed that since those orders fresh evidence had come to light. Mr Reaper outlined that this fresh evidence was “deemed admissions” derived from a number of notices to admit, and that such evidence was sufficient to warrant a stay of the orders made on 18 September 2015.

7    His Honour noted that Mr Reaper had filed three notices to admit facts, the first dated 22 July 2016 and the second and third dated 31 July 2016. The “deemed admissions” alleged by Mr Reaper to constituted fresh evidence were admissions by Baycorp as to the authenticity of various documents, including a credit card certificate.

8    His Honour did not accept Mr Reaper’s claim that the admissions constituted fresh evidence. His Honour stated:

18.    Mr Reaper raised a so-called “fresh evidence” contention before Davies J. Her Honour dismissed the so-called “fresh evidence” contention observing that the application before her Honour “constitutes yet another attempt to re-litigate” matters already determined by the Federal Court of Australia. Those observations apply with full force and effect to the facts of this application. Baycorp’s admission as to authenticity of a credit card certificate does not constitute fresh evidence. Both Pagone J and Davies J addressed at length aspects of the debt owed by Mr Reaper to Westpac. The documents described in paragraphs 15 and 16 of the 22 July 2016 notice to admit do not provide any foundation for the assertions that Mr Reaper has made. There is no substance in the contention that any alleged admission said to be founded by Baycorp’s admission of the authenticity of the two documents was “fresh evidence”.

(footnotes omitted.)

9    His Honour noted that in one of the notices to admit dated 31 July 2016 Baycorp disputed a number of facts but admitted the authenticity of the two documents referred to in the notice. Further his Honour observed, in respect of the nature of admitting authenticity of a document:

21.    An admission as to the authenticity of certain documents in a notice to admit amounts to the party making the admission stating that the document is what it purports to be. Any such admission says nothing about the legal effect of the document. Nor does the admission say anything about the construction of the document. Those are matters to be proved in the ordinary course.

10    At the hearing before the primary Judge, Mr Reaper also requested that the Judge “require the trustee to adjudicate upon Baycorp’s proof of debt”, so that he could eventually challenge the decision of the trustee under s 178 of the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act) (at [24]). Regarding this point, the primary Judge stated:

24.    … I asked Mr Reaper whether he sought to challenge such an order so that he could lock the trustee into an “act, omission or decision” within the meaning of s.178 of the Bankruptcy Act 1966 (Cth) (“the Act”) later challenging that “act, omission or decision”. Mr Reaper said that was his purpose. It is readily apparent that Mr Reaper’s purpose in engaging in ongoing skirmishing with the trustee is to exhaust the trustee’s willingness to pursue the trustee’s rights against Mr Reaper as well as the trustee’s available funds to do so. It must be remembered that Mr Reaper is an undischarged bankrupt. The trustee is an officer of the court charged with performing the public duties conferred upon him under the Act. In the exercise of my discretion to grant or refuse the relief Mr Reaper seeks, it is relevant for me to take into account Mr Reaper’s conduct in engaging in the procedural tactics and skirmishing in which he is currently engaging when bringing an array of unsuccessful applications and when he continues to make unjustified attacks on the respondents, notwithstanding Davies J’s express disapproval of that conduct.

11    His Honour held that there was no basis for Mr Reaper’s application and made the following orders, on 22 September 2016:

(1)    Paragraphs 1 and 3 of the application in a case filed by the respondent on 13 September 2016 is dismissed.

(2)    Paragraph 2 of the application in a case filed by the respondent on 13 September 2016 is adjourned to this Court before her Honour Judge Hartnett on 20 October 2016.

Application to this Court

12    Mr Reaper filed an application for leave to appeal from the primary decision on 5 October 2016. The grounds of his application were:

1.    Order [1] of the decision sought to be appealed from, is not interlocutory.

2.    The decision is attended by sufficient doubt to warrant its being reconsidered.

3.    Substantial injustice would result if leave were refused.

13    Mr Reaper elaborated on these grounds in his affidavit affirmed 4 October 2016. In that affidavit he clarified that he did not seek to appeal paragraph 2 of the primary Judge’s orders. It follows that it is only paragraph 1 of his Honour’s orders which is the subject of this application.

14    In summary, Mr Reaper’s grounds for seeking leave to appeal paragraph 1 of his Honour’s orders are as follows:

1.    Order 1 of the primary Judge is not interlocutory. There are no obstacles which hampered the primary Judge’s ability to request the trustee to adjudicate Baycorp’s proof of debt. His Honour failed to facilitate the just resolution of Mr Reaper’s request that the trustee adjudicate Baycorp’s proof of debt as quickly, inexpensively and efficiently as possible.

2.    The primary judgment is attended by sufficient doubt to warrant its being reconsidered. The primary Judge:

(a)    mistook the facts;

(b)    re-raised matters previously dealt with;

(c)    caused the parties to reagitate the same matters;

(d)    relied on extraneous or irrelevant issues referred to by the petitioning creditor’s lawyer, notwithstanding that the petitioning creditor was not a party to the proceedings before Judge Burchardt or other proceedings before Davies J and Pagone J in this Court;

(e)    the application listed for hearing on 20 October 2016 before Judge Hartnett was in fact his interim application seeking an order that his bankruptcy be annulled pursuant to paragraph 40(1)(g) of the Bankruptcy Act;

(f)    the primary notices to admit facts in all the circumstances of the case served on Baycorp on 12 December 2013 and Mr Vrsecky on 18 December 2013, on which Mr Reaper relied as being “deemed admissions”, were not taken into account by the primary Judge;

(g)    the notices to admit facts dated 22 July 2016 and 31 July 2016 were of little relevance on their own;

(h)    Baycorp and Mr Vrsecky admitted that various documents were false and misleading;

(i)    the primary Judge acted on the wrong principles in relation to whether a stay should be granted;

(j)    the primary Judge incorrectly referred to an application in a case filed on 13 September 2016.

3.    Substantial injustice would result if leave were refused. The primary Judge was unjust and unreasonable at [6] of the primary judgment in singling out two points of Mr Reaper’s affidavit affirmed 3 September 2016 and disregarding the rest. Similarly the primary Judge was unjust and unreasonable in singling out two sentences in Mr Reaper’s letter dated 12 June 2016 and disregarding the rest.

Draft grounds of appeal

15    In his draft notice of appeal Mr Reaper proposes to rely on the following grounds:

1.    The provisional judge erred in fact in finding and holding that Mr Reaper’s application to set aside the creditor’s petition will be heard on 20 October 2016:

a.    A date for the hearing of Mr Reaper’s Application in a case has not been fixed;

b.    Mr Reaper’s Interim application is listed for hearing on 20 October 2016.

2.    The provisional judge erred in failing to assess the compliance and validity of the application filed by Baycorp on 14 September 2016.

3.    The provisional judge was wrong and incorrect in re-raising the matters previously dealt with by the provisional judge in the earlier proceeding and in causing the parties to relitigate substantially the same matters.

4.    In re-raising the matters previously dealt with, the provisional judge erred in failing to properly assess the events following the judgment of Davies J.

5.    The provisional judge erred in failing to take into account relevant considerations and taking into account irrelevant considerations;

a.    in his narrowing of “deemed admissions”,

b.    in his narrowing of “fresh evidence”, and

c.    in his narrowing of the matters made in support of Mr Reaper’s stay application.

6.    The provisional judge erred in failing to evaluate Mr Reaper’s stay application on its own merit and relevant principles.

(I note that where Mr Reaper referred to “the provisional judge” in his documentation he was actually referring to his Honour the primary Judge in the Federal Circuit Court proceedings.)

16    Orders sought in the draft notice of appeal are:

1.    The order appealed from be set aside and in consequence the judgment be set side.

2.    In lieu of the order appealed from, order:

a.    That paragraph 6 of the order of Burchardt J made on 18 September 2015 and amended on 9 October 2015 be stayed under rule 29.04 of the Federal Circuit Court Rules 2001 pending the hearing and determination of the Respondent’s application in a case.

Further or alternatively;

b.    That an order in the nature of an injunction be made under subsection 30(1) of the Bankruptcy Act 1966 (Cth) restraining the trustee in bankruptcy, Petr Vrsecky, acting on the orders of Burchardt J made on 18 September 2015 and amended on 9 October 2015 pending the hearing and determination of the Respondent’s application in a case.

3.    Any further order as this Honourable Court deems necessary.

17    Mr Reaper requested that the application to the Federal Court be dealt with without an oral hearing. As such, I made orders on 17 November 2016 ordering the parties to file submissions, and stating that the matter would be heard and determined on the papers.

Submissions of the parties

18    In summary Mr Reaper submitted as follows:

    Order 1 of his Honour’s judgment was not interlocutory, as it dismissed parts of his stay application, and he is therefore entitled to be granted leave to appeal.

    Order 2 is not interlocutory as it was not made by consent (under s 24(1D)(a) of the Federal Court of Australia Act 1976 (Cth) (the Federal Court Act)).

    The judgment of the primary Judge was affected by all the relevant kinds of errors referred to in House v The King (1936) 55 CLR 499.

    The primary judgment was affected by error as His Honour:

○    incorrectly addressed the application previously dealt with by Judge Burchardt and made findings on that application contrary to Judge Burchardt’s decision;

○    gave substantial weight to the judgment of Davies J in Reaper v Baycorp Collections PDL (Australia) Pty Ltd [2016] FCA 579, without taking into consideration the judgment of Pagone J in Reaper v Luxton [2016] FCA 784;

○    incorrectly considered the opinions of Pagone J in respect of Mr Reaper’s stay application, where Pagone J said that the Federal Court in its appellate jurisdiction could not consider fraud or fresh evidence;

○    failed to observe that various observations in the judgment of Davies J related to fresh evidence obtained after her Honour had heard the matter, and failed to give weight to various notices to admit relied upon by Mr Reaper;

○    failed to consider the admission by the trustee that the documents attached to the petitioning creditor’s proof of debt were false or misleading;

○    failed to take into account various documents and parts of documents filed by Mr Reaper;

○    allowed the bankruptcy to continue in circumstances where his Honour did not consider Mr Reaper’s counterclaim, and where no evidence was put forward outlining that the debt was still outstanding or owed by the debtor.

    There is sufficient doubt to warrant a reconsideration of the decision of the primary Judge because:

○    his Honour incorrectly dealt with matters previously dealt with by Judge Hartnett on 11 August 2016 and relied on extraneous or irrelevant matters submitted orally by the petitioning creditor’s lawyer at the hearing;

○    key notices to admit facts and further substantial admissions were not taken into account;

○    the “so-called admissions” and the “fresh evidence” were not meaningful when considered on their own;

○    his Honour acted incorrectly in relation to the principles governing a stay order and incorrectly referred to an application in a case filed on 13 September 2016, when the relevant application was filed on 3 September 2016.

19    Further, Mr Reaper claimed that:

    the court has power to set aside a bankrupt notice;

    similar principles are considered in relation to the grant of an interlocutory injunction and a stay order;

    substantial injustice would be suffered by Mr Reaper if leave to appeal were refused, as the primary Judge did not consider all of the evidence provided by Mr Reaper;

    the existence of a relevant debt at the time of this application could not be established by Baycorp.

20    Baycorp submitted, in summary:

    The affidavit filed by Mr Reaper on 5 October 2016 referred to documents which were not in evidence either before the primary Judge or this Court. So, for example, the submissions referred to correspondence dated 2 May 2012 from the solicitors for Baycorp to Baycorp in respect of which Baycorp claims legal professional privilege.

    Various paragraphs of Mr Reapers affidavit filed on 5 October 2016 should be struck out or disregarded as they are merely Mr Reaper’s view of the motivations of the primary Judge for making the relevant orders.

    Baycorp objected to a number of paragraphs which refer to documents not in evidence in either the principal or current proceedings.

    No alleged errors of the Judge below constituted the standard required for the errors to be of the type identified in House v The King 55 CLR 499.

    The primary Judge correctly held that the success of Mr Reaper’s principal application was dependent upon whether Mr Reaper could identify fresh evidence that had arisen or been uncovered since the orders of Judge Burchardt.

    Mr Reaper’s argument that the original debt is not due and owing, has been considered and dismissed by various judges on numerous occasions.

    It is open to Mr Reaper to make an application that the Court should “go behind” the judgment, however the primary Judge was entitled in his discretion to make a finding that such an application was not sufficiently likely to be successful so as to justify the Court making a stay on the orders of Judge Burchardt.

    Leave to appeal should not be granted as the issues highlighted by Mr Reaper have been raised and dismissed many times, the principal application has no reasonable prospect of success, and no legal error in the decision of the primary Judge has been established.

    The allegations of fraud and misconduct against Baycorp and its solicitors are strongly rejected.

    The costs of this proceeding should be ordered with the same priority as costs of the petitioning creditor pursuant to s 109(1)(a) of the Bankruptcy Act, as Mr Reaper is almost certainly unable to pay any costs orders against him, being an undischarged bankrupt.

21    In addition, the second respondent submitted:

    While Mr Reaper is a self-represented litigant, his litigation history shows he is a “very experienced and articulate unrepresented litigant”.

    The below proceeding was not an application for review of a sequestration order despite Mr Reaper alleging this in his submissions.

    If Mr Reaper were successful in his application and an order made under s 153B of the Bankruptcy Act, the trustee’s costs, charges and expense of the administration of the bankruptcy are protection under s 154 of the Bankruptcy Act and his property, currently vested in the trustee, would be applied to meet the trustee’s expenses. The trustee would also benefit from the protection associated with annulment and would retain his rights of recovery for his costs, charges and expenses of the admiration, despite Mr Reaper’s suggestion at paragraphs 35 and 33.

    The trustee’s costs, charges and expenses are likely to exceed the net recovery from the property, due to the amount of litigation between the parties.

    Mr Reaper’s assertion that he is not seeking annulment of his bankruptcy is incorrect, as it was an alternative ground of relief sought in his application below.

    The balance of convenience does not favour Mr Reaper, despite his claims, as does not take into consideration the significant amount of litigation he has subjected the trustee too and the expenses that the trustee would be seeking.

    The trustee acted appropriately and in accordance with orders of the FCC in seeking vacant possession and sale of the bankruptcy property.

    The Court should not grant Mr Reaper a further 28 days to vacate the property as he is already in breach of the orders of the FCC to provide vacant possession and as this request is merely an attempt to seek the same relief refused in the Court below.

    2 December 2016 is not the date that the trustee is seeking vacant possession, as this was required months ago. Rather it is the date that the Sherriff will enforce enforcing the order of the FCC for vacant possession.

22    In reply to the respondents’ submissions, Mr Reaper argued in summary, through his submissions filed on 28 and 29 November 2016, that:

    A number of the paragraphs are commentary rather than submissions and other submissions used language that the appellant found difficult to follow.

    The provisional Judge made the orders on basis that the matters were to be heard and determined on 20 October 2016.

    The respondents did not respond to a number of Mr Reaper’s submissions.

    The respondents’ submissions contained many errors.

    The first respondent does not outline the requisite ‘standard’ that Mr Reaper is required to demonstrate to show that the provisional Judge was in error and as such, Mr Reaper is unable to reply.

    Judge Hartnett had dealt with various matters in the proceeding below, prior to the provisional Judge dealing with them.

    Neither the first or second respondent established the existence of a relevant debt.

    Baycorp did not provide any basis for its claim that the principal application has no reasonable prospect of success.

    He did not allege fraud against Baycorp, other than a broad reference to r 16.05(2) of the Federal Circuit Court Rules 2011 (Cth).

    The trustee should have filed material pursuant to order 5 of the orders of this Court on 17 November 2016 and the trustee did not address various matters raised against him by Mr Reaper.

    A number of the paragraphs relating to costs likely recoverable by the trustee, the allegedly misconceived submissions of Mr Reaper and the fact that Mr Reaper is allegedly seeking annulment of his bankruptcy, are speculative.

    The petitioning creditor is subject to litigation from the trustee, as both the trustee and the creditor have admitted that the proof of debt is false or misleading.

    In the event that his counter claim or application to have in bankruptcy notice set aside or the creditor’s petition dismissed, Mr Reaper would not be liable for the expenses of the trustee.

    The primary Judge made the orders on the basis that Mr Reaper’s matters were to be heard on 20 October 2016 by Judge Hartnett. However, those matters were adjourned to 9 December 2016. Mr Reaper would suffer undue stress and he and his family would suffer irreparable injury for which damages would not be adequate compensation if a stay were not granted, as it is likely that the matters would not be determined for many months.

    Each party should bear their own costs.

Consideration

23    Mr Reaper submits that Order 1 of his Honour was not interlocutory. This is curious in circumstances where Mr Reaper’s application in a case was listed as a “hearing of interlocutory application”. More particularly however McHugh ACJ, Gummow and Heydon JJ in Re Luck [2003] HCA 70; (2003) 203 ALR 1 at [4] explained the meaning of “interlocutory” as distinct from “final” orders in the following terms:

As McHugh, Kirby and Callinan JJ stated in Bienstein v Bienstein ((2003) 195 ALR 225 at 230 [25]), the usual test for determining whether an order is final or interlocutory is whether the order, as made, finally determines the rights of the parties in a principal cause pending between them. That question is answered by determining whether the legal effect of the judgment is final or not. If the legal effect of the judgment is final, it is a final order; otherwise, it is an interlocutory order.

(footnotes omitted.)

24    His Honour refused a stay on orders of Judge Burchardt, and also refused an “injunction restraining the trustee from acting on the orders” of Judge Burchardt.

25    There is ample authority to the effect that an application for a stay is an interlocutory application, and the grant of a stay is an interlocutory order (see, for example, Eastman v R (2000) 203 CLR 1 at [207]; Tampion v Anderson (1973) 48 ALJR 11; Port of Melbourne Authority v Anshun Pty Ltd (1980) 147 CLR 35 at [2]). It follows that an order dismissing an application for a stay is also an interlocutory order. So far as concerns this aspect of his Honour’s order Mr Reaper needs the leave of this Court to appeal pursuant to s 24(1A) of the Federal Court Act.

26    Clearly an order granting a permanent injunction can be a final order if that is the substantive relief sought by an applicant. However his Honour’s refusal to grant an injunction restraining Mr Vrsecky from acting on the orders of his Honour Judge Burchardt would appear to be an interlocutory order. Materially, Judge Burchardt had declared that Mr Reaper’s property vested in Mr Vrsecky, and ordered that, inter alia, Mr Vrsecky sell land and buildings comprising the property and execute any document reasonably required for the purpose of selling the property. There is authority that relief sought restraining a trustee from selling a bankrupt’s property is an interlocutory application, and that an order in such terms is an interlocutory order: see for example Mitry Lawyers v Barnden [2014] FCA 918; Francis v Eggleston Mitchell Lawyers Pty Ltd [2013] FCA 836; Lumsden v Snelson [2001] FCA 83; Shields v The Official Trustee in Bankruptcy [1994] FCA 1418; re Knight [1992] FCA 286. Again, it follows that an order refusing such relief is an interlocutory order. In any event, the injunctive relief sought by Mr Reaper in this case was clearly in the nature of a stay of orders of Judge Burchardt, in that the relief was framed in terms alternative to a stay.

27    In my view Mr Reaper also requires the leave of the Court to appeal this aspect of his Honour’s order.

28    The leading case in this Court on the Court’s approach to the grant of leave from interlocutory decisions is Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397. As was made clear by the Full Court in Décor Corporation, the questions for the Court are:

    whether in all the circumstances the decision is attended with sufficient doubt to warrant it being reconsidered on appeal; and

    whether substantial injustice would result if leave were refused, supposing the impugned decision to be wrong.

29    While the primary decision in this case was interlocutory, as the Full Court pointed out in Décor Corporation 33 FCR 397 leave will be more readily granted in respect of an interlocutory decision determining a substantive right. I am prepared to accept that this is such a case, in that I understand that the refusal of his Honour to stay orders of Judge Burchardt meant that property of Mr Reaper would be sold by his trustee in bankruptcy.

Whether sufficient doubt to warrant reconsideration

30    There is considerable overlap between Mr Reaper’s grounds supporting his application for leave, his draft grounds of appeal, and his submissions. In my view however, and even assuming the effect of his Honour’s orders on the status of the relevant property, none of Mr Reaper’s arguments supports a finding that his Honour’s judgment was attended by sufficient doubt to warrant reconsideration.

31    First, I note that Mr Reaper seeks leave to appeal against only paragraph 1 of the orders of the primary Judge. Therein the primary Judge ordered:

1.    Paragraphs 1 and 3 of the application in a case filed by the respondent on 13 September 2016 is dismissed.

32    Mr Reaper claims that the order is invalid because it incorrectly refers to “the application in a case filed by the respondent on 13 September 2016”. I note that, on the face of his application in a case, it was lodged for filing in the Federal Circuit Court on 3 September 2016, but accepted for filing in that Court on 13 September 2016. It is clear however that the “application in a case filed by the respondent” to which his Honour referred in the order was that lodged by Mr Reaper on 3 September 2016. The fact that his Honour in these particular orders identified the filing date of Mr Reaper’s application in a case by reference to the date of acceptance by the Registry rather than lodgement by Mr Reaper is, in my view, immaterial on the facts of this case. The orders sought by Mr Reaper in his application in a case were:

1.    An order staying paragraph 6 of the orders made by his Honour Judge Burchardt on 18 September 2015 as amended on 9 October 2015;

2.    …

3.    Alternatively, an injunction restraining the trustee from acting on the orders of his Honour Judge Burchardt made on 18 September 2015 as amended on 9 October 2015.

33    Order 1 of his Honour clearly related to paragraphs 1 and 3 of Mr Reaper’s application in a case lodged on 3 September 2016 and accepted on 13 September 2016. There is no ambiguity in his Honour’s order, which in my view is valid.

34    Second, an order to stay or refusing to stay proceedings involves an exercise of judicial discretion (note for example Australian Securities and Investments Commission v Lanepoint Enterprises Pty Ltd [2011] HCA 18; Puttick v Tenon Limited [2008] HCA 54; Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538). Principles applicable to consideration of an appeal from a decision of a primary Judge exercising judicial discretion were explained by Dixon, Evatt and McTiernan JJ in House v R (1936) 55 CLR 499 at 504-505 where their Honours said:

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.

35    It follows that the key question in any appeal from the primary judgment would be whether an error was made by his Honour in exercising his judicial discretion to refuse a stay of Judge Burchardt’s judgment.

36    Mr Reaper claimed that the primary Judge acted on wrong principles in relation to whether a stay ought have been granted in respect of Judge Burchardt’s orders. The onus of proof rests upon an applicant for a stay to demonstrate that it is an appropriate case for a stay: Berg v Director of Public Prosecutions [2011] QCA 302. Generally a successful party in litigation is entitled to the fruits of its judgment, and decisions at first instance are not to be treated as merely provisional: Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685 at 694–5; Cook’s Construction Pty Ltd v Stork Food Systems Australia Pty Ltd [2008] 2 Qd R 453 at [12]. However it is also clear that the Court is empowered with a broad discretion to grant a stay of a decision in appropriate circumstances, including where an appeal has been commenced. As Greenwood J observed in Citrus Queensland Pty Ltd v Sunstate Orchards Pty Ltd [2008] FCA 1867 at [39]:

A reason tipping the balance in favour of an applicant in an appropriate case will take account of whether the applicant has discharged an onus of demonstrating that a stay order, in the terms proposed, is “fair to all parties” (Alexander v Cambridge Credit at 694F) having regard to the balance of convenience (ie the balance of risks and irremediable harm) and the competing rights of the parties …

37    In this case his Honour was clearly satisfied that Mr Reaper was, in substance, reagitating matters unsuccessfully raised by him in previous litigation, or which could be raised by him in another of his applications listed before the Federal Circuit Court. In the context of this matter I am unable to identify an obvious error of his Honour in doing so.

38    Third, no error is apparent in respect of his Honour’s references to decisions of Davies J and Pagone J in other, contemporaneous, litigation between Mr Reaper and Baycorp, particularly in light of the apparent similarity of issues arising in the case before his Honour and those in the Federal Court.

39    Fourth, it seems that before his Honour Mr Reaper sought to invite his Honour to go behind the judgment debt on which the bankruptcy was based. His Honour noted his exchange with Mr Reaper during the course of the hearing, in particular his reference to the decision of the Full Court in Compton v Ramsay Health Care Australia Pty Ltd [2016] FCAFC 106. His Honour observed that proceedings were imminent before Judge Hartnett of the Federal Circuit Court in which her Honour was expected to hear Mr Reaper’s application to set aside the creditor’s petition which led to the making of the sequestration order on 7 March 2013 pursuant to which Mr Reaper was made a bankrupt. Further, his Honour noted that Mr Reaper did not seek to address the Court in respect of Compton [2016] FCAFC 106.

40    Notwithstanding Mr Reaper’s submissions to the contrary, in these circumstances it is not surprising that his Honour did not consider any counter-claims Mr Reaper might have advanced in respect of the judgment debt, or investigate whether it was appropriate to set aside the bankruptcy notice. Not only does it appear that, at that stage, another Judge of the Court was listed to deal with relevant matters approximately five weeks after the hearing before the primary Judge, it further appears Mr Reaper did not properly pursue the matter before his Honour.

41    Fifth, his Honour dealt with Mr Reaper’s assertion that the Mr Vrsecky was “associating himself with a proof of debt he knows and is taken to have admitted, contains false or misleading documents”. As his Honour (as well as apparently other Judges in related cases) observed, this is an allegation tantamount to fraud which the respondents hotly denied. Indeed his Honour notes that in correspondence to the trustee Mr Reaper bluntly accused Baycorp of fraud and Mr Vrsecky of having a conflict of interest. His Honour clearly discounted these allegations on the basis that similar allegations had been made by Mr Reaper in other litigation, and similarly rejected. In the circumstances it was open to his Honour to do so.

42    Sixth, it is unclear exactly to which extraneous or irrelevant issues raised by the petitioning creditor’s lawyer his Honour allegedly (in Mr Reaper’s submission) attributed weight instead of to material before the Court.

43    Seventh, it is not apparent to me that the primary Judge made findings in respect of Judge Burchardt’s judgment contrary to that decision.

44    Eighth, his Honour discussed in detail the three notices to admit facts filed by Mr Reaper in July 2016. His Honour concluded that the documents described in the 22 July 2016 notice to admit did not provide any foundation for the assertions Mr Reaper had made, and rejected Mr Reaper’s contention that any alleged admission said to be founded by Baycorp’s admission of the authenticity of the documents was “fresh evidence”. Examining comments of Davies J in Reaper v Baycorp Collections [2016] FCA 579 at [18] it is clear why the primary Judge was satisfied that her Honour’s comments had “full force and effect to the facts of” the application before him.

45    Ninth, it is, with respect to Mr Reaper, somewhat embarrassing that he should have accused the primary judge of “re-raising matters previously dealt with” and causing “the parties to reagitate the same matters”. I note that the long and protracted history of litigation between Mr Reaper, Baycorp and Mr Vrsecky set out in the judgments of Pagone J and Davies J appears substantially to have been at the instigation of Mr Reaper. Indeed as his Honour observed, substantive matters before him had either been before other Courts (for example, the “deemed admissions” claim and Mr Reaper’s claim that his bankruptcy should be annulled) or were due to go before another Judge of the Federal Circuit Court (for example, Mr Reaper’s claim that he had a counter-claim in respect of the judgment debt founding the bankruptcy). To the extent that his Honour was required to consider such matters, it is reasonable to say that any fault lies largely at the feet of Mr Reaper.

46    Tenth, in the circumstances where there has been long and protracted litigation between the parties, it was open to the primary Judge to find that Mr Reaper’s purpose in requesting the Court to require the trustee to adjudicate upon Baycorp’s proof of debt was a tactic to exhaust the trustee’s willingness to pursue the trustee’s rights against Mr Reaper, and to further exhaust the trustee’s funds. I accept that his Honour was entitled to take into account Mr Reaper’s conduct in considering the exercise of the judicial discretion to refuse to stay Judge Burchardt’s orders. In any event, it is somewhat surprising that, in his submissions, Mr Reaper criticised the manner in which Honour dealt with this aspect of the case. Mr Reaper’s claim for adjudication, investigation and verification of the petitioning creditor’s debt was the subject of paragraph 2 of his Honour’s orders, in respect of which Mr Reaper has specifically not sought leave to appeal.

Whether substantial injustice

47    Finally, and in terms of the second question posed by Décor Corporation 33 FCR 397, I am unable to find that Mr Reaper would suffer substantial injustice should leave to appeal be refused, supposing his Honour’s decision to be wrong. I make this finding in circumstances where it is clear from his Honour’s decision that Mr Reaper has brought many applications in respect of his bankruptcy, has generally been unsuccessful, and in the proceedings before his Honour was reagitating the same unsuccessful points.

48    I also note his Honour’s observations that Mr Reaper was already listed to appear before the Federal Circuit Court on 20 October 2016 in respect of his challenge to the creditor’s petition. While I understand from Mr Reaper’s submissions that the hearing of 20 October 2016 before her Honour was subsequently adjourned to 9 December 2016, there is no evidence before me that Mr Reaper sought to appeal, or otherwise cavil with, that adjournment.

49    Further, I note that Mr Reaper has been subject to orders to vacate the property the subject of Judge Burchardt’s orders of 18 September 2015 since that date. It cannot be said that Mr Reaper has not had ample opportunity to challenge the circumstances in which he finds himself.

Costs

50    Notwithstanding that Mr Reaper is an undischarged bankrupt it is appropriate that costs should follow the event. Accordingly I order the costs of both respondents against him.

51    Baycorp claimed in its submissions that, as Mr Reaper’s application challenged the original sequestration order, its costs should be accorded the same priority as costs of the petitioning creditor pursuant to s 109(1)(a) of the Bankruptcy Act. In the circumstances I consider that this is a fair characterisation of these proceedings.

52    The appropriate order is to dismiss the application for leave to appeal with costs, with costs to Baycorp being in the terms it has sought.

Associate:

Dated:    2 December 2016