FEDERAL COURT OF AUSTRALIA

Kimber v The Owners Strata Plan No. 48216 [2017] FCA 364

ORDERS

THE COURT ORDERS THAT:

1.    The application for leave to appeal is granted but limited in substance to the ground of whether the primary judge erred in failing to consider whether the applicant had a reasonable prospect of success in her claim that bankruptcy notice BN 188465 was invalid having regard to s 41(5) of the Bankruptcy Act 1966 (Cth).

2.    The application is otherwise dismissed.

3.    The applicant file and serve a notice of appeal limited to the ground referred to in order 1 by 26 April 2017.

4.    Costs of the application for leave to appeal be costs in the appeal.

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

REASONS FOR JUDGMENT

1    Ms Kimber owns Lot 110 in strata plan 48216, a residential apartment on the north shore of Sydney. She resides in northern New South Wales. Ms Kimber regards the apartment as an investment, in the nature of superannuation. The respondent is the Owners Corporation for the strata plan.

2    Ms Kimber seeks leave to appeal a judgment delivered and orders made on 8 September 2016 by a judge of this Court: see Kimber v The Owners Strata Plan No. 48216 [2016] FCA 1090. The primary judge summarily dismissed Ms Kimber’s application for review of a decision made by a Registrar on 4 May 2016. The dismissal was pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act). The Registrar dismissed Ms Kimber’s application to set aside bankruptcy notice BN 188465, discharged an order made on 20 April 2016 extending time for Ms Kimber to comply with the bankruptcy notice and ordered that she pay the Owners Corporation’s costs.

Introduction

3    The Official Receiver issued the bankruptcy notice on 19 February 2016. It required Ms Kimber to pay an aggregate amount of $12,369.48 to the Owners Corporation. The amount claimed comprised a judgment debt entered on 7 May 2014 in the Local Court of New South Wales in favour of the Owners Corporation for $10,767 ($10,000 plus solicitors’ fees of $767) and post judgment interest of $1,602.48. A copy of the Local Court’s order was attached to the Notice.

4    The primary judge explained the background to the judgment debt in her reasons at [9]-[13]:

9    These proceedings originated in proceedings instituted by the Owners Corporation in 2009 in the Local Court of New South Wales against Ms Kimber for unpaid levies, interest and costs in the sum of $2521.58 (the Local Court proceeding). Default judgment was entered by the Local Court in the sum of $952.31 on 25 May 2009 (the Default Judgment).

10    On 16 September 2013, Ms Kimber filed a notice of motion to set aside the Default Judgment. At the hearing of the notice of motion on 10 October 2013, the Local Court made orders setting aside the Default Judgment, requiring a defence to be filed within 28 days and for costs to be costs in the cause. The last of these orders meant that the party who was ultimately successful in the litigation would bear the other party’s costs of Ms Kimber’s notice of motion. The solicitors for the Owners Corporation in these proceedings, Grace Lawyers, were also the solicitors in the Local Court proceeding.

11    Ms Kimber filed a defence in the Local Court proceeding on 7 November 2013 disputing service of the levy notices and that the Owners Corporation had not received the outstanding levies. She also denied any liability for the costs incurred by the Owners Corporation of recovery on the basis that the strata managing agent for the Owners Corporation was unreasonable and unprofessional and had caused the applicant personal and professional harm and loss. That defence was struck out on 13 December 2013 on application by the Owners Corporation and the parties were directed to amend the claim and defence.

12    On 29 April 2014, Ms Kimber filed a further amended defence, together with a proposed statement of cross-claim, in which she sought recovery from the strata managing agent for the Owners Corporation and from Grace Lawyers for the claim made against her by the Owners Corporation for the unpaid recovery expenses, plus damages. On 5 May 2014, Ms Kimber filed a notice of motion seeking orders, among others, for leave to file the proposed statement of cross-claim and to join the strata managing agent and Grace Lawyers to the Local Court proceeding.

13     The Local Court proceeding was heard on 7 May 2014. On that day the Court made orders dismissing Ms Kimber’s motion filed on 5 May 2014, refusing leave to file the statement of cross-claim, and found that there was no evidence to support her allegations, and no cause of action, against the strata managing agent and Grace Lawyers. Judgment was entered in favour of the Owners Corporation in the sum of $10,767.00, being comprised of $10,000 for recovery expenses plus $767.00 in costs pursuant to the Local Court scale (the Local Court judgment). The time to pay was 28 days.

5    The bankruptcy notice was served personally on Ms Kimber on 17 March 2016.

Application to set aside the bankruptcy notice and filing of the creditor’s petition

6    Ms Kimber lodged an application to set aside the bankruptcy notice on 5 April 2016. Based on an error in the title to the proceedings on the application, it was not accepted for filing immediately. On 20 April 2016, the application was accepted for filing and an order was made by a Registrar extending time for compliance with the bankruptcy notice to 4 May 2016. An affidavit affirmed by Ms Kimber on 20 April 2016 was also filed. In the meantime, on 18 April 2016, the Owners Corporation lodged a creditor’s petition in the Federal Circuit Court of Australia based on Ms Kimber’s failure to comply with the bankruptcy notice by 8 April 2016 and relying on searches at the Registry which did not reveal Ms Kimber’s application to set aside the bankruptcy notice.

7    The creditors’ petition claimed that Ms Kimber owed Owners Corporation:

(1)    the judgment debt of $10,767.00 entered by the Local Court on 7 May 2014 for “unpaid recovery expenses and interest”;

(2)    post judgment interest of $1,727.22;

(3)    $1,027.63 for unpaid levies of $587.70 (administrative fund), $428 (sinking fund) due on 1 March 2016 and interest pursuant to ss 76, 78, 79 and 80 of the Strata Schemes Management Act 1996 (NSW); and

(4)    an aggregate amount of $5,123.76 for “expenses incurred for the recovery of unpaid levy contributions pursuant to section 80 of the Strata Schemes Management Act 1996 not claimed in the Proceedings [the Local Court proceedings resulting in the judgment debt] and up to but before… 8 April 2016”.

8    Ms Kimber’s application to set aside the bankruptcy notice was served on the Owners Corporation on 21 April 2016. Ms Kimber also filed a “statement of claim” on that day, naming as respondents the Owners Corporation, certain of its officeholders, members and former members of the “committee”, the “Managing Agent” and certain of its officers, the “company owner” and Grace Lawyers (including some named solicitors). On 22 April 2016, the Owners Corporation lodged a notice stating grounds of opposition to Ms Kimber’s application to set aside the bankruptcy notice. On 2 May 2016, Ms Kimber lodged a “genuine steps statement”. As noted above, on 4 May 2016, a Registrar dismissed Ms Kimber’s application.

Application to review the Registrar’s decision

9    On 20 May 2016, Ms Kimber filed an interlocutory application seeking review of the Registrar’s decision. It was accompanied by an affidavit which she affirmed on 19 May 2016; it was accepted as filed on 30 May 2016. The affidavit comprises 471 pages, most of which are annexures. Many of the annexed documents have handwritten comments which appear to have been made by Ms Kimber. The annexures included Ms Kimber’s affidavit which was accepted as filed on 20 April 2016 and its annexures.

The primary judge’s decision

10    The primary judge noted that Ms Kimber’s application was ambiguous on the issue of whether Ms Kimber sought review only of the second order made by the Registrar on 4 May 2016 (relating to costs) or whether Ms Kimber sought review of all of the orders made by the Registrar on that day. Her Honour (at J[27]) also noted that:

Ms Kimber sought other orders including an injunction against the strata management company for alleged negligence and unspecified dishonest and other conduct. However, the document … contains a very confused series of assertions and quotations, and it was not at all clear from the application precisely which orders made by the Registrar on 4 May 2016 were challenged and on what grounds.

11    On 1 June 2016, a Registrar made orders including a grant of leave to Ms Kimber to file an amended interlocutory application to “seek review of all the orders made by [the Registrar] on 4 May 2016”. On 11 July 2016, Ms Kimber filed an amended application but the primary judge found that it did little to resolve the ambiguity. The Owners Corporation submitted that the other orders claimed in the amended application went well beyond the original application to the Registrar to set aside the bankruptcy notice and the power of the Court to make: J[3], [28].

12    The Owners Corporation sought to have Ms Kimber’s application struck out or summarily dismissed on the basis that the amended application was “ambiguous, is likely to cause prejudice, embarrassment or delay in the proceedings, discloses no cause of action and is an abuse of court process”. It also claimed that the amended application was vexatious and contained scandalous allegations against it, its officers, officers of the Court and others: J[4]. The primary judge accepted that the amended application suffered from all of those deficiencies and difficulties and that the preceding should be summarily dismissed under s 31A(2) of the Federal Court Act. Her Honour also found (at J[5]) that:

… in so far as Ms Kimber seeks to challenge the Registrar’s decision to dismiss the application to set aside the bankruptcy notice, she seeks to raise claims for which no evidence has been proffered before the Registrar or in this Court to support the vague and conclusory allegations of dishonest or other improper conduct made against the Owners Corporation and others.

13    The primary judge summarised the terms of the amended application filed on 11 July 2016 at J[29]-[32]. It is useful to set out the passages at [29] and [31]:

29.    ... The amended application contained a preamble in which [Ms Kimber] asked the Court:

…to assist to direct my case on a growing set of complex legal issues involving related matters that are in concurrently and presently in process in the Federal Court, Federal Circuit Court and the NSW Supreme Court

Much needed relief from the oppressive circumstances of having multiple proceedings in multiple courts involving multiple parties and need to address court(s) errors took toll. I ask the Honourable Justice to decide to completely and finally determine ALL related matters by constitutional laws, to ‘reign in’ this controversy and to bring ALL matters together and deal with how an erroneous $154 set aside default created a $10000 judgement order, 2 bankruptcy notices and a creditors petition.

(emphasis and errors in the original)

…

31.    In the body of the amended application, Ms Kimber sought a number of orders which can be summarised as follows.

(1)    An order that the Registrar’s order on 4 May 2016 for Ms Kimber to pay the Owners Corporation’s solicitor’s costs be annulled and substituted by an order that the Owners Corporation pay Ms Kimber’s costs.

(2)    The joinder of parties to the proceedings, including the solicitors for the Owners Corporation, strata managing agents and members of the executive committee “to counter claim & cross claim or start vital ‘restoration’ proceedings”. These claims seem to be related to the request that the Federal Court “go behind” the judgment of the Local Court based on allegations which were described as scandalous by the solicitor for the Owners Corporation and appear to be the same claims which Ms Kimber had sought to raise in the Local Court proceeding in her proposed statement of cross-claim (see above at [11]–[13]).

(3)    An estoppel on the creditor’s petition before the Federal Circuit Court based upon (it would appear) the delay in the Federal Court accepting the application to set aside the bankruptcy notice for filing.

(4)    An order that these proceedings be “‘cross-vested’ with the power of accrued jurisdiction” — an order which seems to be related to the request in the preamble to the amended application for relief from multiple proceedings in multiple courts with multiple parties.

(5)    An injunction against the respondent’s solicitors and strata manager on the grounds that they continue to promote “immoral and illegal activities with no constitutional authorisation from Owners Strata Plan 48216”, have acted oppressively in issuing her with invoices for allegedly “false arrears”, and other allegations described by the Owners Corporation as scandalous.

(6)    An order that the Orders made on 20 April 2016 extending the date of compliance to 4 May 2016 not be discharged but that Ms Kimber be given additional time to submit further materials to “go behind the judgements”.

14    In relation to the “statement of claim” filed by Ms Kimber on 21 April 2016, her Honour commented (at J[21]) that:

Aside from the Owners Corporation, none of those persons [named as parties in the statement of claim] were or are parties to the proceedings. In the statement of claim, a series of courses of action are asserted on the basis of allegations which lack any pleading of material facts or particularity in what can only be described as a confused and impenetrable document.

15    The primary judge found that the allegations in the amended application filed on 11 July 2016 fell into two categories: (1) the costs order made by the Registrar on 4 May 2016; and (2) the remainder of the amended application which “seeks orders unrelated to the challenge to the Bankruptcy Notice before the Registrar”: J[56].

16    Her Honour found that there was no basis for interfering with the Registrar’s decision as to costs unless the amended application raised reasonable prospects of succeeding on the substantive ground of overturning the Registrar’s decision not to set aside the bankruptcy notice: J[58].

17    In relation to the remainder of the application, the primary judge found (at J[59]) that it makes a series of vague, scandalous and conclusory assertions in support of relief beyond the subject-matter of the Registrar’s decision and apparently on the assumption that other parties, including Grace Lawyers, the strata managing agent and the committee of management of the Owners Corporation, would be joined in the proceedings. Similarly, her Honour noted that Ms Kimber’s claims were designed not simply to review “one set of decisions made by one decision maker on one day, the 4th May 2016” (Ms Kimber’s phrasing), but also actions by registries of the Federal Court and Federal Circuit Court, with the intended result that the primary judge would order an “Estoppel En Pais” preventing the Federal Circuit Court from considering the creditor’s petition: J[61].

18    The primary judge found that there were no material facts pleaded in support of the relief sought nor did the pleadings otherwise disclose a reasonable cause of action. The Federal Court was not seized of the creditor’s petition and the application “[did] not disclose any intelligible basis for finding that the Owners Corporation is estopped from pursuing the creditors petition”. Her Honour did not accept Ms Kimber’s submission that the Owner Corporation’s lawyers should be able to decipher an “‘unusual’ document in a form style received from a self represented person” and noted that while some greater allowance may be made for non-compliance with the rules in the case of an unrepresented party, the Court has to be fair to both parties: see Hamod v New South Wales [2011] NSWCA 375 at [309]-[310], approved by the Full Court of the Federal Court in AMF15 v Minister for Immigration and Border Protection [2016] FCAFC 68 at [39]. Accordingly, while the Court looks beyond compliance with particular rules of Court and seeks to address the substantive merit of an application (particularly in the case of an unrepresented party), it must ensure that the respondent is not prejudiced or disadvantaged or give the impression of a lack of impartiality, relying on Arifin v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2014] FCAFC 61 at [30]. Any “latitude” afforded to an unrepresented litigant does not detract from the need ultimately to determine whether the substantive application for review has any merit: J[62]-[65]. The primary judge rejected the proposition that the Owners Corporation’s objections were limited to mere technicalities and accepted that it objected on substantive grounds: J[66].

19    The primary judge found that Ms Kimber had not pleaded any discernible ground on which the bankruptcy notice should be set aside and therefore for setting aside the Registrar’s decision to dismiss application. No irregularity or non-compliance with requirements for the issue and service of the bankruptcy notice were discernible or pleaded: J[68]. The primary judge acknowledged that it is possible to set aside a bankruptcy notice by “going behind” a judgment where there is reason for questioning whether there was in truth a debt due. However, in this case, the Local Court’s judgment was not a default judgment, it was a judgment delivered after a contested hearing and the Local Court refused leave to file a statement of cross-claim against the strata managing agent and Grace Lawyers on the ground that there was no evidence to support Ms Kimber’s allegations against them. The primary judge found that a “bare assertion” in Ms Kimber’s submissions and in her affidavit filed on 30 May 2016 of dishonest conduct does not take the matter any further and her assertions were vague and conclusory. There was no evidence before the Registrar or the Court to warrant making such an assertion, contrary to Ms Kimber’s submission that “[t]here is an overwhelming amount of material evidence to support every claim” and that the material attached to Ms Kimber’s 30 May 2016 affidavit in support of her case that the Owners Corporation obtained an “ill-gained judgment order”. Neither the pleadings nor the evidence demonstrate a basis for the bald allegations of serious misconduct and they should not have been made: J[69]-[70].

20    The primary judge found that in all of the circumstances the amended application had no reasonable prospect of success for the purposes of s 31A of the Federal Court Act. The primary judge went on to consider whether or not the deficiencies were curable but noted that Ms Kimber had already been given an opportunity to replead her case but she instead pleaded “an unintelligible, groundless and embarrassing case” nor did it comply with the leave given by the Registrar: J[71]-[72].

Application for Leave to appeal

21    On 22 September 2016 Ms Kimber lodged an application for leave to appeal and a supporting affidavit affirmed that same day. That application and affidavit were accepted for filing on 30 September 2016.

Grounds of application for leave and other applications

22    With leave, Ms Kimber filed an amended draft application for leave to appeal on 7 December 2016. The document relevantly provided (as written):

Grounds of application

1.    [Deleted]

2.    That the judgment of 8 September 2016 is manifestly unreasonable and there exist questions of law and errors of law.

a.    That insignificant weight was given to evidence tendered to the court and handed to the Registrar on 4 May 2016 and that administrative oversights, errors and responses to an application of the Federal Court on 5 April 2016 opposing a bankruptcy notice had an impact on events that led to the issuance of a creditor’s petition raise further questions and errors of law.

Other applications

1.    The applicant requests that the court address the Statement of Claim 21 April 2016 which will seek to amend the claim if advised to by the solicitor pending after the new year.

2.    The appellant seeks to amend the Notice of Appeal to be reviewed after consultation with the solicitor of her choice

3.    The appellant seeks to submit the following documents with assistance from legal representation by the date provided for submissions on 14 December 2016

23    I take the reference to the “following documents” to be a reference to the “Accompanying documents” listed in the “Form 117 – Application for leave to appeal”, including the judgment or order to be appealed, the affidavit to accompany the leave application and the draft notice of appeal.

Draft notice of appeal

24    A draft notice of appeal was received by the Court as correspondence on 7 December 2016. It was incompletely transmitted. That document was re-lodged on 14 December 2016 by Ms Kimber and taken as received by the Court on 15 December 2016. It comprised 31 pages. On pages 2-3, Ms Kimber listed five grounds of appeal and sought seven orders (as written):

Grounds of appeal

The appellant claims that:

1.    The judgment of 8 September 2016 is manifestly unreasonable and unfair, against the principals of constitutional, international laws and laws of natural justice that give a judge discretionary power to ensure fair conditions for a fair trial on the real issues.

2.    Facts were available and witnesses were subpoenaed but given no admission and the judgment was overshadowed by a rigid focus on the legalistic flaws of a document attempting to respond to the limited criteria set down by Judge Perry herself who restricted the applicant’s response both in court and on paper, to the task of addressing the solicitor’s interlocutory dismissal document which made little or no reference to any substantive issues in reviewing the registrar’s decision.

3.    Legalistic practices have over the rule of law principles that provide for a common person to have ‘equal access’ to justice and a right to ‘equal access to the law’ for ‘the right to be heard’ on adduced evidence with witnesses given the same right.

4.    This difficult and costly appeal procedure is limited to questions of law. Essentially considered by the applicant as unnecessary and burdensome adding complexity and costs to an already complex matter. NSW District Registry officers are held to account for errors that have had significant effect on the passage of the Federal Court case NSD562/2016 that sought to cross claim against a defective and illegally obtained bankruptcy notice.

5.    Under ‘the slip rule’ or any other rule that the judge considers applies, that the Federal Court is obliged to correct and address court based records or actions that have brought about circumstances of added legal risk and extra costs.

Orders sought

ORDER !:

The Appellant, the aggrieved party, appeals from the whole of the judgment of the Federal Court given on 8 September 2016 by Justice Perry

ORDER 2:

A Declaratory order based indisputable adduced evidence preserved and taken by the court proving an act of bankruptcy was not committed by J Kimber on 7 April 2016 who, as a Federal Court ‘Applicant’ on 5 April 2016 met the obligation to lodge forms within the 21 day period of being served a defective bankruptcy notice by solicitors who did not have proper client approval in place. The client being J Kimber’s own body corporate, the Owners SP 48216.

Seeking again to attempt to “order a review” of the relevant executive court matters that have had a direct bearing on exposing the aggrieved party to an untimely, unjustified creditor’s petition.

ORDER 3:

Orders dismissing opposition to a bankruptcy notice should be urgently reviewed.

ORDER 4:

Orders against misleading communications, illegal billing practices and unauthorised solicitors engaged by the manager for The Owners SP 48216

ORDER 5

Orders to discover and preserve evidence that goes ‘behind the judgements’ of the case.

ORDER 6

That despite the appeal platform, that relevant witnesses be subpoenaed to give evidence to prevent further injustice.

ORDER 7

That the court address all common issues, parties and core matters under one court.

25    The hearing of Ms Kimber’s application was set down for 22 December 2016. Ms Kimber appeared in person. It quickly became clear that Ms Kimber was not in a position to proceed on that day. The matter was adjourned to the following day to give Ms Kimber an opportunity to compose herself and be in a position to present argument in relation to her application.

26    Before adjourning, the Court confirmed that it would treat as the proposed grounds of appeal and orders sought by Ms Kimber those set out on pages 2-3 of the documents accepted as correspondence on 7 and 15 December 2016. The Court ruled that the following 28 pages in the document accepted as correspondence on 15 December 2016 were to be treated as submissions. Ms Kimber had also lodged submissions on 14 December 2016. The Owners Corporation was given leave to amend submissions it filed on 21 December 2016 to address the proposed grounds of appeal and orders sought and to respond to the submissions in the documents accepted as correspondence on 7 and 15 December 2016. Revised written submissions were tendered by the Owners Corporation at the hearing on 23 December 2016 and provided to Ms Kimber.

27    One of the points taken by the Owners Corporation was that Ms Kimber’s application for leave did not comply with the timeframe imposed by r 35.13 of the Federal Court Rules 2011 (Cth) (because it was not accepted by the Court as filed until 30 September 2016 even though it had been lodged within the required timeframe) and Ms Kimber had not applied for an extension of time under r 35.14. While accepting that this submission is technically correct, the Court was satisfied that Ms Kimber was not aware that this might be the case and she had, within the required timeframe, lodged documents which were ultimately accepted as filed. The Court determined that it should proceed to hear Ms Kimber’s application for leave to appeal. The requirement to comply with r 35.13 in relation to the timeframe for filing documents and r 35.14 relating to applying for an extension of time were dispensed with.

28    Owners Corporation also submitted that there were defects and deficiencies in the application for leave and the draft notice of appeal. In particular, it claimed that the draft notice of appeal is an abuse of process on the basis that it is embarrassing, confusing, vexatious, unintelligible, ambiguous and vague and likely to cause significant prejudice to it.

Principles relevant to the grant of leave to appeal

29    The principles relevant to exercise of the discretion to grant leave to appeal are those adopted by the Full Court of this Court in Décor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 844; (1991) 33 FCR 397 at 398-400 and Samsung Electronics Company Ltd v Apple Inc [2011] FCAFC 156; (2011) 217 FCR 238 at [26]-[30]. In summary, they are:

    whether the decision of the primary judge is attended with sufficient doubt to warrant it being reconsidered by a Full Court; and

    whether substantial injustice would result if leave were refused, supposing the primary judge’s decision to be wrong.

Consideration of whether the primary judge’s decision is attended by sufficient doubt to warrant reconsideration by a full court

30    It is useful to note that neither party has suggested that the primary judge erred in her statement of the relevant principles to be applied to an application for summary dismissal under s 31A(2) of the Federal Court Act. Nor has any party suggested that the primary judge erred in her understanding that it was common ground that a review of a decision of a Registrar conducted under s 35A(5) and (6) of the Federal Court Act obliges the judge to conduct a hearing de novo of the application to set aside the bankruptcy notice.

31    Owners Corporation submitted that both ground 2 of Ms Kimber’s application for leave and ground 1 of the proposed grounds of appeal fail to identify which findings of the primary judge are “manifestly unreasonable and unfair” or what the “errors of law” are or how the decision is “against the principles of constitutional, international laws and laws of natural justice” in relation to the power of a judge to “ensure fair conditions for a fair trial on the real issues”. It also submitted that Ms Kimber failed to identify to what evidence tendered to the Court and the Registrar insufficient weight was given as mentioned in paragraph a. of the grounds of the leave to appeal application.

32    The bare claim that a decision is “manifestly unreasonable” or “manifestly unreasonable and unfair” and claims of similarly wide ambit are commonly understood to be emphatic disagreement with the outcome of a process rather than revealing of error by the primary judge. Recognising that Ms Kimber does not appear to have had any significant legal assistance in drafting the application for leave or the proposed grounds of appeal, it is necessary to look at the submissions lodged on 14 December 2016 and the material set out on pages 4 to 31 of the draft notice of appeal accepted for filing on 15 December 2016 for any particulars, taking into account the oral submissions which she made on 23 December 2016.

33    In my view, paragraph a. of the grounds of the leave application should be taken to be the particulars of ground 2 of that application. From Ms Kimber’s submissions, there appear to be two matters which form the basis of Ms Kimber’s claim that insufficient weight was given to evidence tendered to the Court and the Registrar on 4 May 2016.

34    The first matter is the primary judge’s finding (at J[5] and J[69]) that “no evidence” was proffered by Ms Kimber to support the “vague and conclusory allegations of dishonest and other improper conduct made against the Owners Corporation and others”. Ms Kimber’s concern is that the affidavit filed on 30 May 2016 was taken to contain submissions rather than evidence.

35    It is plain from J[8] that the primary judge accepted that Ms Kimber relied on her affidavit filed on 30 May 2016 containing 471 pages. The affidavit is extremely difficult to follow. The first two pages contain statements by Ms Kimber in narrative form that are conclusory and at best might be accepted as statements of belief by Ms Kimber. While there are many documents annexed to the affidavit, Ms Kimber did not provide evidentiary foundation for them. Insofar as some of those documents related to negotiations for settling proceedings, they were inadmissible.

36    In my view it was open to the primary judge to find that the material did not establish a basis to “go behind” the Local Court’s judgment of 7 May 2014 or lend credence to the serious allegations of misconduct by Ms Kimber against members of the management committee, the strata manager and its employees and Grace Lawyers and their employees. Those allegations are replicated in Ms Kimber’s “statement of claim” dated 21 April 2016 and I see no error in the primary judge’s findings concerning it. In those circumstances it was plainly open to the primary judge to find that Ms Kimber had no reasonable prospect of establishing that she had a counterclaim which would outweigh the judgment debt or that there was doubt as to the existence of that debt which formed the basis of the bankruptcy notice. Insofar as some of the material in that affidavit related to amounts claimed in the creditor’s petition other than the judgment debt, that material was irrelevant to the decision whether the bankruptcy notice should be set aside. The primary judge was also plainly correct that it was inappropriate, in the context of an application which was in substance to set aside a bankruptcy notice, to bring together all of the matters to which Ms Kimber is a party in seeking to challenge the validity of the judgment debt, to seek damages from a wide range of people on the bases claimed by Ms Kimber and to dispose of the creditor’s petition of which the Federal Circuit Court is seized.

37    The second matter is Ms Kimber’s claim that no weight was given to an email of 1 April 2016 from Ms Kimber to Mr Scott Martin and others (1 April email) which Ms Kimber claims was handed to the Registrar on 4 May 2016 and tendered to the Court. This matter was raised in paragraph 39 of the material accepted as Ms Kimber’s submissions in the document received by the Court on 15 December 2016. The email was set out at page 27 of the 30 May 2016 affidavit. Among other things, the 1 April email says (as written, material in bold indicates Ms Kimber’s handwriting):

Dear Mr Martin

Thank you for sending my current Owner’s Statement. (NOT the ledger!)

I have question the column displaying ‘00’ allocation of levies. ‘00’ set against all levies banked does not seem right and I would rather have all the details not just partial on the one pag. I have always found your accounts confusing. At at this crucial moment I seek crystal-clear clarity. SO please also SEND THE LEDGER TOO … asap? Much appreciated.

Also, I really would like to view the account/ledger dating from the’00’ zero balance evident in early 2014, just before Grace Lawyers were engaged and their costs were put onto Lot 110 during the 2013-2014 small claims case, unnecessarily and unlawfully instituted by Jim McDonald’s ‘SOLO-ONE (?)’ instructions to Grace Lawyers, Daniel Bradman in 2013.

…

Requests LISTED again?

1.    For the Owners Statement/Owners Ledger (LEDGER TOO PLEASE?)

2.    As Jim Donald’s employer, I appeal to you to inform your manager to advise the committee about the IRREGULARITIES of the bankruptcy Notice that I shared with you. RE: OVERSTATED AMOUNT.

3.     …

38    Ms Kimber submits that this email “nullified” the bankruptcy notice under ss 41(2) and (5) of the Bankruptcy Act 1966 (Cth).

39    Importantly, there is no reference in the primary judge’s reasons to the 1 April email or to a ground under s 41(5) of the Bankruptcy Act for setting aside the bankruptcy notice: see the primary judge’s summary of the issues raised at J[29]-[32] and in particular at J[31] which is set out at [13] above. Section 41(5) provides that a bankruptcy notice is not invalidated by reason only that the amount specified in the notice exceeds the amount in fact due to the creditor unless, before the time for compliance with the notice ends, the debtor has notified the creditor that he or she disputes the validity of the notice on the basis of the misstatement. Compliance with the bankruptcy notice required Ms Kimber to make payment of the amounts claimed by Owners Corporation by 7 April 2016.

40    The amended interlocutory application filed on 11 July 2016 considered by the primary judge contained 8 pages of material. The paragraphs were unnumbered. The following material appears on pages 2 to 3 (as written):

I CLAIM THE RESPONDENT’S SOLICITORS HAVE AGAIN DENIED RELEVANT EVIDENCE IN COURT

‘Where, a party is represented by competent and experienced lawyers and is opposed by a litigant in person, the party and its lawyers have a duty to assist the court to understand and give full and fair consideration to the submissions of the litigant in person. In particular such a party must refer the court to evidence in the proceedings that is relevant to those submissions”

Serobian v Commonwealth Bank of Australia [2010] NSWCA at [42]

‘Failure to provide information constitutes misleading or deceptive conduct where circumstances give rise to a reasonable expectation that if a relevant fact exists it will be disclosed to the other”

Demagogue [Pty Ltd v Ramensky (1990) 39 FCR 31 at 41; 110 ALR 608 at 618] Gummow J

This precedent did not occur (again) on 4 May 2016 when the last Grace Lawyers solicitor [name] knew statements to be false, but still conscientiously argued against the ‘bona fide’ emails and addressee details that confirmed that the bankruptcy notice had been invalidated when the applicant had spoken to the strata manager, sending a ‘CC’ email to S Martin and all (available) strata committee members email addresses before 21 days on 1 April 2016 under Bankruptcy Act 1966 ss 41 (2) and (5) that related to the ‘overstated’ amount in the defective bankruptcy notice. 12 days later the ledger was dramatically altered (‘Jimmied to-fit’) the flawed bankruptcy notice.

Evidence: Ledger 3 June 2106. Manager/Committee email 1 April 2016-Court email 6 April 2016

Based on the relevant correspondence and on the ‘balance of probabilities’ I believe it is probable that [the Registrar’s] ‘irregular’ and unprofessional court conduct with me, his choice to ‘silently read’ evidence(s) handed up in court, his need for a ‘prompted response’ from the solicitor to the evidence and his use of irrelevant facts and ‘deliberations’ to try to justify a dismissal of a valid application, was because he had pre-decided that it was “in the court’s best interests” (and possibly the Registrar’s) to solve the complex legal implications of how to deal with the anomalous production of the ‘hybrid’ creditors petition SYG 931/2016 in the circuit court of 19 April 2016 issued as a result of the court’s administrative errors. A Statement of Reasons was formally requested by the applicant of the decision to dismiss, but this was refused by a duty registrar on behalf of [a named Registrar]. See Reasons To Order An Estoppel pg 4

THE ORDER MADE BY REGISTRAR [NAME] ON 4 MAY 2016 FOR THE APPLICANT TO PAY THE RESPONDENT SOLICITOR COSTS SHOULD BE ANNULLED. THE APPLICANT’S COSTS SHOULD BE MET BY THE RESPONDENTS

41    There does not appear to be a document which answers the description of “Ledger 3 June 2016” (on the assumption that 2106 is an error). There was, however, at pages 27 and 28 of the 30 May 2016 affidavit in an annexure marked “JMK 1” what purports to be a copy of the 1 April email and there is written at the top of the page “Email to “creditor” Section 41 Notifying the Creditor Re: overstated amount”. This document is described in a form of table of contents to annexure “JMK 1” as “S41(5) Email to the Owners”.

42    At pages 12-14, 21-23 and 24-26 of “JMK 1” are what purport to an “Owner Ledger” as at 13 April 2016, an “Owner Ledger” as at 6 January 2016 and an “Owner Ledger” as at 25 February 2015 respectively. The following is a summary of what appears in respect of accounts rendered by Grace Lawyers for “recovery action” prior to the judgment obtained in the Local Court on or before 7 May 2014:

++ The first item on this copy of the ledger is “balance brought forward $2,774.15”, followed by the information concerning 13 April 2014.

43    Having regard to the “Receipts” schedules to the 6 January 2016 ledger (which indicate to which levy number a receipt was banked), there may be reason to think that cheques for amounts which appear to equate to quarterly levies which were banked between 16 June 2014 and 1 December 2016 were applied to Grace Lawyers’ 14 February and 3 April 2014 invoices. It appears from the 13 April 2016 ledger, that this position was reversed in relation to the invoice dated 3 April 2014. It is not clear when this purported reversal occurred after 1 January 2016.

44    If Owners Corporation was legally entitled to allocate payments made by Ms Kimber to payment of Grace Lawyer’s February and April 2014 accounts in that way (which is likely to be an issue: see: see Owners – Strata Plan No 14120 v McCarthy [2017] FCA 242), then the failure to recognise that allocation in the bankruptcy notice resulted in it being overstated, as claimed by Ms Kimber in the 1 April email.

45    The Owners Corporation submits that the claim that the bankruptcy notice was defective by reason of s 41(5) was not pleaded in the application to set aside the bankruptcy notice accepted as filed on 20 April 2016. However, albeit obscurely, s 41(5) is referred to at hand numbered points 18 and 19. The Owners Corporation also submits that Ms Kimber did not raise the matter of the 1 April email before the primary judge, but the transcript is not in evidence. Whether or not it was raised at the hearing, the matter is addressed in the amended application which was before the primary judge and in the affidavit accepted as filed on 30 May 2016.

46    The pleadings prepared by Ms Kimber and the documentation provided by her in support of them are replete with claims which are misconceived and set out in ways which make it difficult to define the true issues. The documents lack form, even allowing for the fact that Ms Kimber is self-represented. Further, on 23 December 2016, Ms Kimber told the Court that she recognised that she has difficulty staying on point in oral presentations. This makes it difficult for a decision-maker to get a clear understanding of the point she tries to make. As can be seen from [40] above, the context in the amended application filed on 11 July 2016 in which the matter of whether the bankruptcy notice was “nullified” by reason of s 41(5) of the Bankruptcy Act obscures the force of the issue. It appears to relate to complaints about the conduct of the solicitor for Owners Corporation and the Registrar and appears to have been understood by the primary judge that way.

47    Having said that, there is a constitutional imperative that a decision of a Registrar be subject to review by a judge on the basis of a fresh consideration of the issues: see Zdrilic v Hickie [2016] FCAFC 101. If the primary judge (however understandably) failed to consider a ground based on s 41(5) of the Bankruptcy Act in determining whether the amended application lodged on 11 July 2016 in which that matter was raised had reasonable prospects of success, then in my view the decision is attended by sufficient doubt to warrant reconsideration by a Full Court.

48    For the sake of completeness, I was not otherwise satisfied that any of the proposed grounds of appeal disclose a matter on which there is sufficient doubt as to the correctness of the primary judge’s decision to warrant reconsideration on appeal.

Would substantial injustice result if leave were refused?

49    The primary judge’s decision does not finally determine rights but it does limit Ms Kimber’s avenues to avoid bankruptcy if the primary judge’s decision is wrong. While a valid bankruptcy notice does not necessarily result in a court of competent jurisdiction making a sequestration order, the onus falls on the debtor to satisfy the court either that he or she is not insolvent or there is “other sufficient cause” why a sequestration order should not be made. I have some concern that the grant of leave to appeal may ultimately expose Ms Kimber to further substantial liability for costs to which she would not be exposed if she were to be successful in opposing the creditor’s petition. However, I am satisfied that justice demands that she be given leave to appeal on a limited basis having regard to the very serious consequences which flow if an invalid bankruptcy notice is relied on.

Disposition

50    I will grant leave to Ms Kimber to file a notice of appeal on the limited ground of whether the primary judge erred in failing to consider whether Ms Kimber had a reasonable prospect of success in her claim that the bankruptcy notice was invalid having regard to s 41(5) of the Bankruptcy Act. I will order that costs of the application for leave be costs in the appeal.

Associate:

Dated:    7 April 2017