FEDERAL COURT OF AUSTRALIA

Wyse Accounting Pty Ltd v Rubino (as executor of the estate of the late Alfio Rubino) [2019] FCA 1417

ORDERS

THE COURT ORDERS THAT:

1.    The applicants’ interlocutory application for an order staying the delivery of judgment in bankruptcy proceedings NSD 1245 of 2018 be dismissed.

2.    The originating application filed on 14 March 2019 be dismissed.

3.    The applicants pay the fourth respondent’s costs.

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

REASONS FOR JUDGMENT

WIGNEY J:

1    This proceeding has its origins in a commercial dispute which arose as long ago as 2012. The parties to that dispute included the parties to this proceeding, but many others were also involved. The dispute ultimately found its way into the Equity Division of the Supreme Court of New South Wales and was eventually heard by White J (the main proceeding). On 30 June 2016, his Honour delivered a judgment and made orders in that matter: Rubino v Pineview Property Holdings Pty Ltd & Ors [2016] NSWSC 904. The orders made by White J relevantly included judgment in favour of Pineview Property Holdings Pty Ltd against Wyse Accounting Pty Ltd, Mr George Dimitriou and Wyse & Young International Pty Ltd in the sum of $1,276,389.29 plus interest. Wyse Accounting, Mr Dimitriou and Wyse & Young are the first, second and third applicants in this matter. Wyse Accounting and Wyse & Young (collectively the Wyse companies) are companies associated with or controlled by Mr Dimitriou. Pineview is the fourth respondent in this matter. The first and second respondents in this matter, Ms Lee Rubino (as executor of the Estate of the late Alfio Rubino) and Ms Biagina Rubino, were plaintiffs and cross-defendants in the proceedings before White J and the third respondent, Mr Francesco Rubino, was a cross-defendant. For convenience, the first, second and third respondents in this proceeding will be referred to by their first names or collectively as the Rubino parties.

2    The judgment of White J did not put an end to the dispute between the parties. Far from it. Relevantly, Mr Dimitriou and the Wyse companies filed an appeal against the judgment of White J. That appeal was eventually dismissed on procedural grounds and Mr Dimitriou’s subsequent attempts to revive it failed. Mr Dimitriou has also filed various types of process in the Supreme Court in an attempt to have the judgment of White J, or its enforcement, stayed. His efforts in that regard have to date been unsuccessful, though a further application is apparently still pending.

3    For its part, Pineview has attempted to enforce the judgment through, amongst other things, the issue and service of a bankruptcy notice on Mr Dimitriou in April 2018. Mr Dimitriou did not comply with the bankruptcy notice and, in July 2018, Pineview filed a creditor’s petition seeking a sequestration order against Mr Dimitriou. Mr Dimitriou opposed the creditor’s petition. The proceeding in this Court concerning Pineview’s creditor’s petition (NSD 1245 of 2018 – the bankruptcy proceeding) was, after some delay, heard in mid-December 2018 and, after a successful application by Mr Dimitriou for leave to reopen his case, late August 2019. Judgment was reserved.

4    In this proceeding, Mr Dimitriou and the Wyse companies seek a number of declarations and orders against the Rubino parties and Pineview. It suffices for present purposes to note that the orders and declarations relate to the judgment of White J and raise legal and factual issues which traverse or are otherwise intimately related to the legal and factual issues that were directly or indirectly the subject of consideration and determination by White J in the main proceeding. Some of the relief sought also traverses issues which have or might arise in the bankruptcy proceeding. To give but two examples, the relief sought includes a declaration that White J’s judgment “is not a proper judgment for the purposes of the bankruptcy of” Mr Dimitriou, or is a judgment that the Court is “entitled to go behind”, and an order restraining Pineview from seeking to enforce White J’s judgment.

5    Mr Dimitriou and the Wyse companies also sought interlocutory relief. That relief includes an order that delivery of judgment in the bankruptcy proceeding be stayed pending determination of this proceeding. The interlocutory relief sought by Mr Dimitriou and the Wyse companies itself reveals the obvious overlap between this proceeding and the bankruptcy proceeding.

6    Pineview opposed the interlocutory relief sought by Mr Dimitriou and the Wyse companies. It also filed an interlocutory application seeking an order that the proceeding be summarily dismissed pursuant to r 26.01(1) of the Federal Court Rules 2011 (Cth) on the basis that it is frivolous and vexatious, discloses no reasonable cause of action and is an abuse of process. The Rubino parties have played no active role in the proceeding to date.

7    This judgment addresses and determines both the interlocutory relief sought by Mr Dimitriou and the Wyse companies and Pineview’s interlocutory application.

BACKGROUND TO THIS PROCEEDING

8    The essence of Mr Dimitriou and the Wyse companies’ interlocutory application to stay the delivery of judgment in the bankruptcy proceeding until this proceeding was heard and determined was that the judgment of White J in the main proceeding was not a “proper” judgment for the purposes of the bankruptcy proceedings against Mr Dimitriou or that they, or at least Mr Dimitriou, should be permitted to “go behind” that judgment. The main thrust of Pineview’s application that the proceeding be summarily dismissed was that the proceeding constitutes a collateral attack on White J’s judgment in the main proceeding and a collateral attack on, or attempt to delay, the bankruptcy proceeding. It followed, in Pineview’s submission, that the proceeding was an abuse of process.

9    Before considering the merits of those arguments, it is necessary to summarise the key features of the main proceeding and the bankruptcy proceeding. It is also necessary to say something more about the relief sought by Mr Dimitriou and the Wyse companies and the apparent basis upon which that relief is sought.

The main proceeding

10    The dispute in the main proceeding arose from a financing and property transaction that went horribly wrong. What follows is a highly simplified summary of the relevant dealings or transactions between the parties, the dispute that arose from those dealings and transactions and the findings of White J in the main proceeding in respect of the liability of Mr Dimitriou and the Wyse companies.

11    In 2011, Alfio and Biagina owned properties in Galston and Arcadia. They were also indebted to the Australia and New Zealand Banking Group Limited (ANZ Bank), which held mortgages over the properties. In early 2012, Francesco, who was Alfio and Biagina’s son, retained the services of Mr Dimitriou and some or all of the Wyse companies with a view to them assisting Alfio and Biagina to obtain finance to discharge the ANZ Bank’s mortgage over two of the properties. The scheme that Mr Dimitriou came up with involved a number of steps. Those steps included: first, Mr Dimitriou securing short term finance to enable the discharge of the mortgage over one of the properties; second, the incorporation of Pineview; third, the transfer of two of the properties to Pineview to be held on trust for Alfio and Biagina; and fourth, Pineview obtaining a loan of about $2 million from the ANZ Bank using those two properties as security.

12    It would appear that the scheme went awry essentially because Mr Dimitriou applied a significant portion of the $2 million loan obtained by Pineview from the ANZ Bank other than in accordance with instructions or directions received from Pineview or its sole director, Ms Susan Huybers. That, at least, was one of the key findings against Mr Dimitriou which was made by White J. Justice White found that Mr Dimitriou and the Wyse companies owed fiduciary duties to Pineview and Ms Huybers and that they breached those duties by disbursing the loan funds other than in accordance with the instructions of Pineview and Ms Huybers. Justice White also found that in disbursing the loan funds as they did, Mr Dimitriou and the Wyse companies committed the tort of deceit and engaged in unconscionable conduct contrary to s 20 of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)).

13    Mr Dimitriou claimed that he disbursed the loan funds on the instructions of, or with the authority of Francesco, apparently on the basis that Francesco was acting as agent for his parents, who were the beneficiaries of the trust. It would seem that Francesco denied that was the case, however White J found, in any event, that the issue was moot. His Honour reasoned that even though Alfio and Biagina were beneficially entitled to the loan funds, Mr Dimitriou needed to have the authority of the legal owner, Pineview, for the disbursement of the loan funds. It would also appear that Mr Dimitriou claimed that he had been authorised by Ms Huybers to disburse the loan funds in the way he did. That claim was also rejected by White J.

14    Mr Dimitriou and the Wyse companies claimed that in any event Pineview was required to give them credit for various payments that they made on its behalf or for its benefit and that the amount of those payments should be set-off against any amount for which they were found to be liable to Pineview. Justice White considered and made findings concerning each of the payments that were said to fall into that category. The money judgment in favour of Pineview in the sum of $1,276,389.29 was arrived at by deducting the amounts that were found to be properly the subject of a set-off from the amount of the loan funds received by Mr Dimitriou and the Wyse companies.

15    Justice White also found that Mr Dimitriou and the Wyse companies were liable to pay damages or equitable compensation to Ms Huybers in respect of the portion of the loan funds which should have been, but were not, repaid to her. That amount was $580,000. Mr Dimitriou claimed that Ms Huybers was required to give credit for monies that he said had been invested or paid on her behalf or for her benefit. Justice White considered and made findings concerning each of the payments that were said to fall into that category. The money judgment of $535,151.62 in favour of Ms Huybers was arrived at by deducting the amounts that were found to be properly the subject of a set-off from the amount that Mr Dimitriou and the Wyse companies would otherwise have been liable to pay Ms Huybers.

16    It should finally be noted that in his judgment, White J acknowledged that Pineview would hold any money it recovered from Mr Dimitriou and the Wyse companies pursuant to the judgment on trust for Alfio and Biagina. His Honour noted that Pineview would have to account to Alfio and Biagina Rubino in respect of the money recovered, except insofar as it was entitled to have recourse to the money to indemnify itself against liabilities it had properly incurred in execution of the trust (see Rubino v Pineview at [302]. His Honour also observed that Pineview might be liable, and Ms Huybers as Pineview’s director personally liable, to the ANZ Bank in connection with the mortgages and might be liable to the Rubinos in respect of payments made or liabilities incurred by Pineview otherwise than in the proper performance of the trust. Justice White declared that Mr Dimitriou and the Wyse companies were liable to indemnify Pineview against any such liabilities (see Rubino v Pineview at [376(e)]).

The bankruptcy proceeding

17    Mr Dimitriou did not pay the judgment debt of $1,276,389.29 to Pineview. On 18 April 2018, the Official Receiver issued a bankruptcy notice in relation to Mr Dimitriou on the application of Pineview. The bankruptcy notice stated that the creditor, Pineview, claimed that Mr Dimitriou owed it $1,276,389.29 under the judgment of White J. Mr Dimitriou did not pay the judgment debt referred to in the bankruptcy notice within the period specified in the bankruptcy notice. Nor did he make any arrangements to Pineview’s satisfaction for settlement of the debt. On 12 July 2018, Pineview filed a creditor’s petition in this Court seeking a sequestration order against Mr Dimitriou. It alleged that Mr Dimitriou committed an act of bankruptcy in failing to comply with the bankruptcy notice.

18    Mr Dimitriou opposed the creditor’s petition. Unfortunately, Pineview’s attempts to have the creditor’s petition heard and determined in a timely fashion were frustrated by repeated adjournment applications, changes of legal representation and other procedural applications by Mr Dimitriou. Mr Dimitriou’s grounds for opposing the application also changed over time and for the most part lacked clarity.

19    The creditor’s petition was eventually heard on 14 December 2018. There was a further hearing on 21 August 2019 as a result of a successful application by Mr Dimitriou to reopen his case and some consequential further amendments to his grounds of opposition to the creditor’s petition.

20    It is unnecessary to discuss in any great detail the grounds of Mr Dimitriou’s opposition to the creditor’s petition which were ultimately pressed at the hearings. It suffices to note that Mr Dimitriou initially relied on three grounds of opposition. The first ground involved a fairly technical argument concerning the validity of the bankruptcy notice and its capacity to mislead. The second ground involved the proposition that Mr Dimitriou did not owe Pineview any money because he had a counter-claim, set-off or cross-demand against Pineview which exceeded the judgment debt. The alleged set-off or cross-demand appeared to be the one which had been considered by White J, though Mr Dimitriou contended that White J had not looked at all of his claims in that regard. He contended, in that context, that the Court should go behind the judgment of White J for the purpose of considering the set-off or cross-demand and whether he was in fact indebted to Pineview as alleged. The third ground was that Mr Dimitriou only had a temporary lack of liquidity and would be able to pay his debts in the near future once one or more of the Wyse companies, or companies associated with them, were able to recover certain debts owed to them.

21    Following his successful application to reopen his case, Mr Dimitriou relied on two further grounds. The first additional ground was that he was able to pay his debts. The second ground concerned the fact that Pineview held the judgment debt on trust for Alfio and Biagina and that they, as part of a settlement that they had reached with Mr Dimitriou and the Wyse companies, wanted Pineview to transfer the judgment debt to them so they could release Mr Dimitriou and the Wyse companies from any liability under the judgment debt. That circumstance was said to constitute another reason why the sequestration order should not be made.

22    Judgment in respect of the creditor’s petition was reserved after the parties had been given the opportunity to adduce evidence and make submissions in respect of their competing positions concerning the creditor’s petition.

23    Mr Dimitriou commenced this proceeding after the hearing on 14 December 2018 and before judgment was able to be handed down. The further hearing on 21 August 2019 occurred after this proceeding was commenced and after the hearing of the competing interlocutory applications which are the subject of this judgment.

Claims and relief sought by the applicants in this proceeding.

24    The originating application, which was filed on 14 March 2019, relevantly sought the following relief:

1.    A Declaration that the Fourth Respondent (Pineview) was the holder of the legal estate of the interest in monies borrowed from the “ANZ Banking Group Limited (held on account for each of the First and Second Respondents) and to which each of the First and Second Respondents were entitled to call for upon and in respect of the use and application of those monies and those funds;

2.    A Declaration that the First Respondent (Lee Rubino as the Executor of the Estate of Alfio Rubino) ‘Father’ and the Second Respondent (Biagina Rubino) ‘Mother’ appointed the Third Respondent (Francesco Rubino) ‘Son’ as their authorized agent for the purposes of giving and providing instructions in relation to the disbursement of monies borrowed on their behalf from the ANZ, and to wit the holder of the legal estate in those monies and in those funds was the Fourth Respondent, (Pineview);

3.    A Declaration that the Third Respondent (and within the scope of his authority and agency) directed the Second Applicant or gave instructions to the Second Applicant to direct the ANZ as to how the funds (being the monies advanced by the ANZ) were to be dealt with, and as to how those funds were to be disbursed;

4.    A Declaration that the Second Applicant dealt with the monies advanced by the ANZ, by giving a direction to the ANZ in accordance with the instructions issued to him by the Third Respondent concerning them and that the disbursement of the monies by the ANZ abided that direction;

5.    A Declaration that the interest of the Fourth Respondent in the whole of the funds that were borrowed from the ANZ (from the time at which the funds were disbursed) was and to the extent of the quantum of the disbursed amount(s), held by it a mere or as a bare equity, and in which the interest of the Fourth Respondent was subject of the dealings that the Second Applicant had caused to occur in respect of those monies;

6.    An Order setting off the whole of the quantum of the disbursed funds against the judgement of the Fourth Respondent obtained by it (and against each of the Applicants) in the Supreme Court proceedings numbered 2013/00301976;

7.    A Declaration that the judgement in the proceedings 2013/00301976 is not a proper judgement for the purposes of bankruptcy of the Second Applicant, or for the purposes of any winding up of the corporate Applicants, and that if it is a Judgment that the court is entitled to go behind;

8.    An Order restraining the Fourth Respondent from seeking to enforce the Judgment in the proceedings 2013/00301976;

9.    Alternatively, judgement in favor of the Applicants as against the First, Second or Third Respondent(s), as to the amount or value of the disbursed funds, together with costs and interest on that amount;

25    The originating application also included a claim for interlocutory relief. The interlocutory relief included a claim that the matter be docketed to “Judge Wigney”, that the delivery of judgment in the bankruptcy proceedings “be stayed pending the hearing and determination of this action” and that this proceeding be “referred out to mediation” along with the bankruptcy proceeding.

26    The following points may be made concerning the relief sought by the applicants in this proceeding.

27    First, the Court’s jurisdiction to make any of the declarations or orders sought by Mr Dimitriou and his companies is far from apparent. The only possible exception to that observation is the declaration in paragraph seven concerning bankruptcy, though as will be seen, that declaration is problematic for other reasons.

28    Second, it is readily apparent that, for the Court to consider and determine whether any of the relief sought in the proceeding should be granted, it would be necessary for the Court to traverse many of the facts, evidence and issues which were before White J in the main proceeding. Indeed, some of the relief, if granted or made, would contradict or be inconsistent with findings made by White J in the main proceeding. To give but one example, the essence of what appears to be Mr Dimitriou and the Wyse companies’ case in this proceeding is that the money borrowed from the ANZ bank by Pineview was held on trust for Alfio and Biagina and was disbursed at the direction or with the authority of Francesco, who was the authorised agent of Alfio and Biagina. It is readily apparent that those very claims were made and considered by White J in the main proceeding: see, for example, Rubino v Pineview at [266], [268] and [269]. The findings made by White J in respect of that issue are inconsistent or incompatible with the declaratory relief sought by Mr Dimitriou and the Wyse companies in this proceeding.

29    Third, most of the declarations and orders appear, on their face, to amount to a form of collateral challenge to the judgment of White J in the main proceedings. The clearest example of that would appear to be the declaration in paragraph seven. That declaration is also problematic for a number of reasons. It is, for example, entirely unclear what is meant, as a matter of fact or law, by the claim that the judgment is not a “proper judgment for the purposes of bankruptcy”.

30    Fourth, some of the declarations and orders would also appear, on their face, to amount to a form of collateral challenge to the separate bankruptcy proceedings. The clearest example of that is again the declaration in paragraph seven. The problem with the assertion that the judgment of White J in the main proceeding is not a “proper judgment for the purposes of bankruptcy” has already been adverted to. There is an additional problem with the alternative claim in paragraph seven that the judgment is one which the Court is “entitled to go behind”. The question whether a court should “go behind” a judgment is quintessentially one for the court which is hearing bankruptcy proceedings based on a debt arising from the judgment. Indeed, as has already been noted, one of Mr Dimitriou’s grounds of opposition to the creditor’s petition which had been filed against him essentially involved the contention that the Court should go behind the judgment of White J.

31    Fifth, the apparent purpose of the proceeding is made all the more obvious by the interlocutory relief sought by the applicants. It is tolerably clear from the relief that is sought, including the interlocutory relief, that the purpose of the proceeding is to enable Mr Dimitriou to essentially re-agitate or re-litigate claims that had, or should have been, litigated in the main proceeding and the bankruptcy proceeding, and to delay judgment being handed down in the bankruptcy proceeding until that had occurred.

32    A statement of claim was filed along with the originating application. It is unnecessary to refer to the contents of the statement of claim. Suffice it to say that the pleading of the applicants’ case does not greatly assist in identifying the nature and basis of the relief sought in the originating application. To the extent that the pleading assists at all, it simply reinforces the points that have already been made about the nature and purpose of this proceeding.

THE APPLICATION TO STAY DELIVERY OF THE BANKRUPCTY JUDGMENT

33    Mr Dimtriou and the Wyse companies relied on affidavits sworn by Mr Dimitriou in support of their interlocutory application to stay the delivery of judgment in the bankruptcy proceedings pending the hearing and determination of this proceeding. Mr Dimitriou was briefly cross-examined by counsel for Pineview.

34    It is unnecessary to deal at length with Mr Dimitriou’s affidavit evidence. In short, it described the relationship between the parties, gave a brief summary of the nature of the main proceeding and the judgment of White J and included Mr Dimitriou’s understanding of the “legal effect of the judgment” and his understanding or belief concerning his authorisation to distribute the loan funds that Pineview had borrowed from the ANZ bank on the instructions of Francesco.

35    It is equally unnecessary to deal at length with the evidence given by Mr Dimitriou when cross-examined. It suffices to say that it was put to Mr Dimitriou that he had only commenced this proceeding to delay the bankruptcy proceedings or have a “second go at determining issues relevant bankruptcy proceedings”. He denied that proposition. He was, however, unable to give any reasonable or rational reason why he had only commenced this proceeding after the bankruptcy proceedings had been heard and judgment was reserved. His explanation appeared to be that he had been prepared to raise the issues which are the focus of this proceeding in the bankruptcy proceedings, but that he had been advised or persuaded by his legal advisers not to do so. Mr Dimitriou was also asked questions about his appeal from the judgment of White J and its eventual dismissal and his ultimately unsuccessful applications in the Supreme Court to stay the execution of the judgment of White J. His evidence concerning his appeal and unsuccessful stay applications was far from persuasive.

36    In the course of Mr Dimitriou’s oral submissions, it became readily apparent that his case that the delivery of the judgment in the bankruptcy proceedings should be stayed pending the determination of these proceedings essentially hinged on two contentions. The first contention was that he should be permitted, in this proceeding, to traverse or go behind the findings and judgment of White J in the main proceeding to deal with issues which he claims were not dealt with, or not properly dealt with, by White J in that proceeding. The second contention was that he had in fact been authorised to distribute the loan funds that Pineview had secured from the ANZ bank in the way he did. That authorisation supposedly came from Francesco, though at one point Mr Dimitriou appeared also to contend that he was authorised by Ms Huybers. Mr Dimitriou’s case appeared to be that this issue was not properly determined by White J, or that he had new evidence which supported his contention concerning authority.

37    There are fundamental problems with both of those contentions.

38    The main problem with the first contention is that the question of whether or not this Court should go behind the judgment of White J can only properly arise in the context of the bankruptcy proceeding. The problem for Mr Dimitriou is that he had every opportunity in the bankruptcy proceeding to persuade the Court that it was proper to go behind the judgment. He initially raised that claim in his notice of opposition to the creditor’s petition. That ground of opposition was not included in his amended notice of opposition. As events transpired, however, at the hearing of the creditor’s petition on 14 December 2018, Mr Dimitriou’s solicitor advanced detailed submissions in support of the proposition that the Court should go behind the judgment of White J and consider the merits of a counter-claim, set-off or cross-demand which Mr Dimitriou claimed that he had against Pineview. That counter-claim, set-off or cross-demand was different to the supposed set-off that Mr Dimitriou and the Wyse companies now apparently wish to agitate in this proceeding.

39    Mr Dimitriou gave inconsistent, ambiguous and ultimately unpersuasive explanations for why the contentions or arguments for going behind the judgment of White J which he apparently now wants to litigate in this proceeding were not raised in the bankruptcy proceeding. Ultimately he appeared to claim that his legal advisers in the bankruptcy proceeding either forced him to abandon those claims, or effectively acted contrary to his instructions. His claims in that regard, which were mostly made in submissions from the bar table, not in his sworn evidence, have no proper foundation and are rejected. In any event, even if those claims had any foundation, the proper course for Mr Dimitriou was to apply to re-open his case in the bankruptcy proceedings, not commence this fresh proceeding. The course that Mr Dimitriou ultimately pursued in the bankruptcy proceeding is explained in the separate judgment in that proceeding.

40    It should also be noted in this context that Mr Dimitriou’s further amended notice of opposition, which was the subject of the further hearing on 21 August 2019, did not include any ground which involved going behind the judgment of White J. Nor did it raise any of the contentions or arguments that Mr Dimitriou and the Wyse companies apparently now wish to advance in this proceeding.

41    The fundamental problem with the second contention advanced by Mr Dimitriou is that the question whether he had authority to distribute the loan funds that Pineview obtained from the ANZ bank was expressly dealt with by White J in the main proceeding. Justice White expressly found that Mr Dimitriou did not have the authority of Ms Huybers, the director of Pineview, to deal with the loan funds and that, while Mr Dimitriou claimed that he had the authority of Alfio and Biagina to disburse the funds, through the agency of Francesco, that issue was “moot” because Mr Dimitriou required the authority of the legal owner of the funds, Pineview, not the authority of the beneficiaries: see Rubino v Pineview at [266], [268] and [269].

42    Mr Dimitriou had the opportunity to challenge White J’s findings in relation to his authorisation. His appeal was, however, dismissed. In his submissions in support of his interlocutory application, Mr Dimitriou appeared to claim that he did not, in the main proceeding, raise all of the arguments that he now wishes to raise concerning his authorisation to disburse Pineview’s loan funds. Exactly what those arguments were and why he did not raise them in the main proceeding remained entirely unclear.

43    Mr Dimitriou appeared to assert that at the time of the main proceeding he did not have certain evidence in relation to his authorisation and that he now has that evidence. That evidence appeared to be a power of attorney that Alfio and Biagina had given to Francesco. The problem for Mr Dimitriou, however, is that even if he had been able to tender that evidence in the main proceeding, it plainly would have made no difference to White J’s ultimate finding. Mr Dimitriou also appeared to contend that, for reasons that remained entirely unclear, if not opaque, the way the case was run before White J did not call for the evidence or arguments concerning his authorisation that he now wishes to advance. His contentions in that regard were difficult to understand, highly questionable and entirely unpersuasive. Finally, Mr Dimitriou appeared to contend that White J’s findings concerning his authorisation were simply wrong, though his arguments in that regard were difficult to understand and not at all persuasive.

44    In any event, if Mr Dimitriou wanted to advance the contentions or arguments he now apparently wishes to advance in relation to his authorisation, or White J’s findings concerning that issue, the appropriate course for him would have been to advance those contentions and arguments in his appeal from the judgment of White J. It may have been open to him to adduce fresh evidence on the appeal. It is not at all apparent why Mr Dimitriou did not take that course. Mr Dimitriou did file an appeal, but it was ultimately dismissed. While his appeal was dismissed on procedural grounds, it remained open to Mr Dimitriou to seek an extension of time to file a new appeal which raised the very issues which he now seeks to raise. He did not do so and has provided no explanation for not having done so.

45    Mr Dimitriou could also perhaps have raised the arguments which he now wishes to raise in his applications in the Supreme Court to stay the execution of the judgment of White J. It is somewhat unclear whether he did so. If he did, those applications have in any event been dismissed, though it appears that Mr Dimitriou has filed further applications in the Supreme Court in relation to the execution of the judgment. If he did not raise the arguments in those applications, he has provided no, or no reasonable or adequate, explanation for why he did not do so. If he has raised those contentions or arguments in proceedings in the Supreme Court which have not yet been resolved, the Supreme Court, not this Court, is plainly the appropriate forum for those arguments to be considered and determined.

46    As has already been discussed, it would also have been open to Mr Dimitriou to raise the contentions and arguments that he now wishes to raise concerning his authorisation to disburse the Pineview loan funds in the bankruptcy proceeding. He could have raised those contentions and arguments in support of an application that the Court should exercise its discretion to go behind the judgment of White J. While Mr Dimitriou, through his solicitor, did advance arguments in support of the proposition that the Court should go behind the judgment, he did not raise the arguments that he apparently now wishes to raise. Mr Dimitriou failed to provide any believable or reasonable explanation for why that was so.

47    In all the circumstances, Mr Dimitriou failed to make out any proper basis for staying the delivery of the judgment in the bankruptcy proceedings pending the hearing and determination of this proceeding. His interlocutory application must accordingly be dismissed.

Pineview’s application for summary dismissal

48    As already indicated, the essence of Pineview’s application for summary dismissal was that this proceeding was nothing more than a collateral attack on White J’s judgment in the main proceeding and a collateral attack on, or attempt to delay, the bankruptcy proceeding. It was therefore an abuse of process. There is considerable merit in that contention.

49    It is an abuse of process to commence proceedings in this Court which have the purpose, or which have the effect or likely effect, of making a collateral attack on a judgment of another court, including a State or Territory court: Stergiou v McGrail (unreported, Federal Court of Australia Full Court, Burchett, Ryan and Gummow JJ, 22 April 1994); Shaw v MAB Corporation Pty Ltd [2013] FCA 1231 at [44]; Shaw v MAB Corporation Pty Ltd (2014) 220 FCR 425 at [60]; Smits v Loel [2014] FCA 1341 at [67]; application for an extension of time to seek leave to appeal refused in Smits v Loel (No 3) [2015] FCA 77.

50    It would, by parity of reasoning, also be an abuse of process to commence proceedings in this Court which amounted to a collateral challenge to separate bankruptcy proceedings. In any event, where bankruptcy proceedings are on foot in this Court, it would be an abuse of process to commence new proceedings which make claims or seek relief which could, with reasonable diligence, have been brought forward in the bankruptcy proceedings: Shaw v MAB at [42], applying Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 598 in that context. It would also amount to an abuse of process to commence separate proceedings for the purpose of delaying a bankruptcy proceeding, particularly where the claims raised in the new proceeding could have been, but were not, raised in the bankruptcy proceedings.

51    For the reasons that have effectively already been given, it is abundantly clear that the effect of this proceeding, if permitted to proceed, would be to collaterally attack or challenge the judgment of White J in the main proceeding. That attack would be mounted in circumstances where Mr Dimitriou and the Wyse companies’ appeal from that judgment has been dismissed and where Mr Dimitriou and the Wyse companies have to date failed in their endeavours in the Supreme Court to have the execution of that judgment stayed. It is equally clear that, despite Mr Dimitriou’s denials, that was one of the substantial purposes for which these proceedings were commenced. The other substantial purpose, which will be addressed next, relates to the bankruptcy proceeding.

52    It could equally be concluded that this proceeding is an abuse of process because it seeks to raise factual and legal claims which could, with reasonable diligence, have been brought forward in the main proceeding, or the appeal therefrom: Anshun at 598.

53    It is also abundantly clear, for the reasons already given, that the effect of this proceeding, if permitted to proceed, would be to collaterally challenge or delay the bankruptcy proceeding, or at least to raise factual and legal claims that could, with reasonable diligence have been raised in that proceeding. It is equally clear that, again despite his denials, that was one of Mr Dimitriou’s substantial purposes in commencing this proceeding.

54    Even putting those findings of abuse of process to one side, this proceeding should, in any event, be struck out on the basis that the Court has no apparent jurisdiction to entertain the claims or grant the relief sought by Mr Dimitriou and the Wyse companies. The Court has no jurisdiction to declare that a judgment of a State Supreme Court is not a “proper” judgment for the purposes of bankruptcy or winding up proceedings. It is not clear exactly what that means, though in substance it amounts to a claim that the judgment should effectively be set aside. It is clear that the Court has no jurisdiction or power to set aside orders made by State courts in this context: see Re Baxter; Ex parte Official Receiver v Baxter (1986) 10 FCR 398 at 401; Smits v Loel at [76]. While the Court has jurisdiction to go behind a judgment of a State court in bankruptcy proceedings, this is not a bankruptcy proceeding.

55    Mr Dimitriou has failed to demonstrate how or why the Court would have jurisdiction to make any of the other orders or declarations sought by him in this proceeding. It follows that Mr Dimitriou has failed to demonstrate that he has a reasonable cause of action or claim that can be litigated in this Court.

56    It may be accepted that the power to dismiss a proceeding for abuse of process is a power which ought to be very sparingly exercised and only in exceptional circumstances: Burton v Shire of Bairnsdale (1908) 7 CLR 76 at 95; Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275 at 279. For the reasons effectively already given, this is an exceptional case in that regard.

CONCLUSION AND DISPOSITION

57    The interlocutory application by Mr Dimitriou and the Wyse companies to stay the delivery of the judgment in the bankruptcy proceedings pending the hearing and determination of this proceeding has no merit and should be dismissed.

58    The originating application should be dismissed on the basis that it is an abuse of process and no reasonable cause of action is disclosed.

59    The applicants should pay the fourth respondent’s costs. The other respondents took no active part in the proceeding or this application and it is therefore not appropriate to make any costs order in their favour.

Associate:

Dated:    30 August 2019

SCHEDULE OF PARTIES