Federal Court of Australia

Nyoni v Beadle in her capacity as Trustee of the Bankrupt Estate of Emson Clever Nyoni (No 4) [2020] FCA 1572

Appeal from:

Beadle in her capacity as Trustee of the Bankrupt Estate of Nyoni v Nyoni & Anor [2019] FCCA 1723

File number:

WAD 343 of 2019

Judgment of:

CHARLESWORTH J

Date of judgment:

29 October 2020

Catchwords:

PRACTICE AND PROCEDURE – interlocutory application to set aside orders dismissing an appeal from a decision of Federal Circuit Court – where appellants failed to appear at hearing of appeal – where appeal dismissed pursuant to Federal Court Rules 2011 (Cth)36.75(1)(a)(i) – principles guiding Court’s discretion to reinstate appellate proceedings – where related proceedings sought to judicially review a decision of a court constituted of another Judge and so were incompetent – where no adequate explanation for non-attendance – where applicants did not avail themselves of an opportunity to amend grounds of appeal to include a ground with arguably strong prospects of success – where delay in filing application to reinstate appeal – where respondent has partially executed orders sought to be appealed from - application dismissed

Legislation:

Bankruptcy Act 1966 (Cth) s 58

Federal Court of Australia Act 1976 (Cth) s 25

Federal Court Rules 2011 (Cth) rr 36.75, 39.05

Cases cited:

Beadle in her capacity as Trustee of the Bankrupt Estate of Nyoni v Nyoni & Anor [2019] FCCA 1723

McDonald v Federal Court of Australia [2017] FCA 1216

Murphy & Ors v Nyoni [2017] FCCA 143

MZYEZ v Minister for Immigration and Citizenship [2010] FCA 530

Nyoni v Beadle in her Capacity as Trustee of the Bankrupt Estate of Emson Clever Nyoni [2019] FCA 1116

Nyoni v Beadle in her Capacity as Trustee of the Bankrupt Estate of Emson Clever Nyoni (No 2) [2019] FCA 1375

Nyoni v Beadle in her Capacity as Trustee of the Bankrupt Estate of Emson Clever Nyoni (No 3) [2019] FCA 1794

Nyoni v Cho [2019] FCA 560

Nyoni v Murphy [2017] FCA 941

Nyoni v Murphy (No 2) [2017] FCA 1479

Nyoni v Murphy (2018) 261 FCR 164

Re Francis; Ex parte Official Trustee in Bankruptcy (1988) 82 ALR 335

Re Holland; Ex parte Official Trustee in Bankruptcy (1985) 5 FCR 165

Division:

General Division

Registry:

Western Australia

National Practice Area:

Commercial and Corporations

Sub-area:

General and Personal Insolvency

Number of paragraphs:

68

Date of last submission/s:

Appellants: 17 September 2020

Date of hearing:

13 August 2020

Counsel for the Appellants:

The Appellants appeared in person

Counsel for the Respondent:

Ms K Britton

Solicitor for the Respondent:

Dentons Australia

ORDERS

WAD 343 of 2019

BETWEEN:

EMSON NYONI

First Appellant

AMIRA NYONI

Second Appellant

AND:

KIRSTEN JENNIFER BEADLE IN HER CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF EMSON CLEVER NYONI

Respondent

order made by:

CHARLESWORTH J

DATE OF ORDER:

29 OCTOBER 2020

THE COURT ORDERS THAT:

1.    The interlocutory application dated 5 May 2020 is dismissed.

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

REASONS FOR JUDGMENT

CHARLESWORTH J

1    The applicants, Mr Emson Nyoni and Mrs Amira Nyoni are husband and wife. Mr Nyoni is an undischarged bankrupt. On 20 June 2019 a judge of the Federal Circuit Court of Australia made orders on the application of the trustee of Mr Nyoni’s bankrupt estate. I will refer to those orders as the Property Orders.

2    By a notice of appeal filed in this proceeding Mr and Mrs Nyoni sought to have the Property Orders set aside.

3    Mr and Mrs Nyoni were absent when their appeal was called on for hearing. As a consequence of their non-attendance, the appeal was dismissed by Jackson J under r 36.75(1)(a)(i) of the Federal Court Rules 2011 (Cth):  Nyoni v Beadle in her Capacity as Trustee of the Bankrupt Estate of Emson Clever Nyoni (No 3) [2019] FCA 1794 (Nyoni 3).

4    Now before the Court is an interlocutory application filed by Mr and Mrs Nyoni seeking an order that their appeal be “re-opened”. In addition, they seek to have the execution of the Property Orders stayed pending the determination of the appeal.

5    For the reasons that follow, the order in Nyoni 3 should not be disturbed. In the circumstances it is unnecessary to decide the application for a stay.

BACKGROUND

6    Mr and Mrs Nyoni are self-represented in this proceeding and have been so in the multiple actions referred to below.

7    Mr Nyoni was made bankrupt on a creditors’ petition lodged by Ms Jillian Murphy, Ms Theresa Beech and the Chief Executive Officer of the Department of Health WA:  Murphy & Ors v Nyoni [2017] FCCA 143. The petition was founded on unsatisfied costs orders made against Mr Nyoni in this Court in 2013 and 2014 in actions WAD154 of 2013 and WAD382 of 2013. As will be seen, Mr Nyoni feels aggrieved at the circumstances that resulted in the cost orders and has sought to agitate those issues in this and other proceedings.

8    Ms Helen Joyce was appointed as the trustee of Mr Nyoni’s bankrupt estate. She was replaced as trustee by Ms Kristen Beadle on 5 March 2019.

9    Prior to Mr Nyoni’s bankruptcy, Mr and Mrs Nyoni owned as joint tenants, a property situated at 6 Bedford Street Kellerberrin in the State of Western Australia, being the whole of the land contained in Certificate of Title Lot 101 on diagram 98332, Volume 2178, Folio 990 (Kellerberrin property). Upon his bankruptcy, Mr Nyoni’s interest in the Kellerberrin property vested in the trustee of his bankrupt estate pursuant to s 58(1) of the Bankruptcy Act 1966 (Cth) and the joint tenancy was severed:  Re Holland; Ex parte Official Trustee in Bankruptcy (1985) 5 FCR 165 at 168 (Fisher J); Re Francis; Ex parte Official Trustee in Bankruptcy (1988) 82 ALR 335 at 339 – 340 (Forster, Woodward and Spender JJ).

10    By letter dated 31 March 2017, Ms Joyce wrote to MrNyoni stating that there were three ways in which the trustee’s interest in the property could be realised:

1.    The Property is sold via the open market, and on settlement, 50% of the net sale proceeds are paid to the Bankrupt Estate, and the remaining 50% is paid to you as joint owner.

 2.    That you, or a third party, purchase the Estate’s interest in the Property.

3.    If you do not consent to either option 1 or 2 above, I can apply to the Court for an Order for Sale. This has the effect of me taking possession of the Property and selling it without your consent. On sale, you will still be entitled to 50% of the net sale proceeds however, it is likely that the amount that you receive will be significantly less than if the Property is sold under option 1 above.

11    A letter to the same effect was sent to Mrs Nyoni at a different address and by email transmission in April 2017. The letter requested that Mrs Nyoni notify Ms Joyce within 14 days of her preferred option. Further letters setting out the three options were sent on 18 August 2017 and 11 October 2017. Correspondence to similar effect continued into 2018. Over that period, Mr Nyoni had commenced and was unsuccessful in an application for an extension of time to appeal from the sequestration order:  see Nyoni v Murphy [2017] FCA 941 and, relatedly Nyoni v Murphy (No 2) [2017] FCA 1479 and Nyoni v Murphy (2018) 261 FCR 164.

12    On 12 December 2018 Ms Joyce made an application to the Federal Circuit Court for orders providing for the vacant possession and sale of the Kellerberrin property and the distribution of the sale proceeds (the trustee’s application) (Action PEG663 of 2018). Ms Beadle was substituted as the applicant in that proceeding following her appointment as trustee.

13    The trustee’s application was heard on 20 June 2019. The primary judge refused an application for the hearing to be adjourned and delivered judgment that day. Reasons were delivered orally. Written reasons were subsequently published as Beadle in her capacity as Trustee of the Bankrupt Estate of Nyoni v Nyoni & Anor [2019] FCCA 1723.

14    The primary judge made a declaration to the effect that Ms Beadle and Mrs Nyoni were the “beneficial owners as tenants-in-common in equal shares” of the Kellerberrin property. The judge made orders compelling Mr and Mrs Nyoni to deliver up vacant possession, and to deliver up all keys and security codes for all improvements on the property within 30 days. The orders further required Mr and Mrs Nyoni to remove all vehicles, rubbish and chattels (other than those that had vested in the trustee) from the property.

15    The primary judge made further orders for the sale of the Kellerberrin property in the following terms:

(10)    Pursuant to sections 30(1) and 77(1)(g) of the Act and section 126 of the Property Law Act 1969 (WA), the Applicant:

(a)    have the sole conduct of the sale of 6 Bedford Street and be authorised to instruct an agent or auctioneer for the purpose of the sale of 6 Bedford Street;

(b)    may solely decide whether 6 Bedford Street is to be sold by public auction or private treaty;

(c)    may solely decide whether or not to set a reserve for any auction of 6 Bedford Street and, if so, at what price having regard to any advice received from a licenced valuer; and

(d)    be empowered to sign any contract of sale, transfer and any other documents on behalf of the First Respondent necessary to give effect to the sale of 6 Bedford Street, in the event that the First Respondent does not sign such documents within such time as required by the Applicant’s solicitors.

(11)    The Applicant is authorised and empowered to sign on behalf of the First Respondent any contract of sale, discharge of mortgage authority, Transfer of 6 Bedford Street or any other documents required to effect a sale of 6 Bedford Street, in the event the First Respondent refuses, fails or neglects to sign such documents within such time as required by the Applicant's solicitors.

(12)    The First Respondent has liberty to bid at any auction sale of 6 Bedford Street, or to submit an offer to purchase 6 Bedford Street provided the bid or offer is genuine and the First Respondent has approved funding to be able to complete the purchase.

16    The primary judge ordered that the proceeds of the sale were to be distributed first in payment of the selling costs and the remainder equally between Mrs Nyoni and Ms Beadle.

17    The written reasons for judgment consist of five paragraphs. The first four paragraphs described the relief sought by Ms Beadle and explained why the application for the adjournment had been refused. The remainder of the reasons were expressed as follows (at [5]):

Affidavit evidence has been read identifying the title of the applicant as a result of the vesting of property upon bankruptcy in the applicant in respect of the relevant property. The Court is satisfied this is an appropriate matter in which to make orders to assist the trustee in recovering the property vested in the trustee for the benefit of the creditors. The orders proposed made appropriate provision for preserving the first respondent’s interests in the proceeds of sale. The Court is satisfied it is appropriate to make the orders in a form substantially in the nature of that identified in the application and it is also appropriate to make appropriate orders to ensure compliance with the Court’s orders.

18    The grounds of appeal relied upon in this Court alleged that the primary judge had denied Mr and Mrs Nyoni procedural fairness and that the judgment was affected by bias. Other grounds appeared to complain about factual circumstances leading up to Mr Nyoni’s bankruptcy and his ongoing disputes with the petitioning creditor and others. Other grounds appear to be founded on an argument that the orders could not be made for the benefit of Ms Beadle because she was not the trustee of the bankrupt estate when Action PEG663 of 2018 was commenced.

19    Execution of the Property Orders was stayed by Jackson J on 18 July 2019. The stay was expressed to remain in effect “until 5.00pm on the day on which orders allowing or dismissing the appeal are made, as the case may be”. Reasons for those orders were published as Nyoni v Beadle in her Capacity as Trustee of the Bankrupt Estate of Emson Clever Nyoni [2019] FCA 1116 (Nyoni 1). In the course of determining the stay application, Jackson J observed that the grounds of appeal had not raised any issue about the adequacy of the reasons of the primary judge. His Honour noted that Mr and Mrs Nyoni had nonetheless raised that issue in the course of argument. His Honour said there was a real prospect that Mr and Mrs Nyoni would obtain leave to amend the notice of appeal to incorporate that complaint and so turned to consider the merits of it:  Nyoni 1, [15]. His Honour summarised the circumstances in which inadequate reasons might give rise to appealable error:  Nyoni 1, [16]. His Honour continued:

18    Here, my necessarily provisional view is that there is a real prospect that the primary judge fell into error because he did not give adequate reasons for the orders he made. Perhaps detailed reasons were not necessary in relation to aspects of the matter that were straightforward. It may be that, prima facie, what had been the joint tenancy of the appellants was severed into tenancies in common as a result of the sequestration order, that Mr Nyoni’s share vested in the trustee, and that the trustee was entitled to orders enabling her to deal with that share. But the orders also affected Mrs Nyoni, who is not bankrupt. The trustee has, in effect, been given power to sell Mrs Nyoni’s share in the property, regardless of Mrs Nyoni’s wishes. The primary judge has not articulated, even in broad outline, why that was necessary or appropriate.

19    For example, one of the statutory bases for the orders was s 126 of the Property Law Act 1969 (WA). The reasons do not identify which sub-section of that provision applied here, but assuming it was s 126(1), that reads:

Where in an action for partition the party or parties interested, individually or collectively, to the extent of a half share or upwards in the land to which the action relates request the Court to direct a sale of the land and a distribution of the proceeds, instead of a division of the land between or among the parties interested, the Court shall, unless it sees good reason to the contrary, direct a sale accordingly.

20    So any requirement that the court direct a sale of the land and a distribution of the proceeds would only arise if the court did not see ‘good reason to the contrary’. The primary judge’s reasons display little engagement with whether any such reason existed here. The most he said was that the orders proposed made appropriate provision for preserving Mrs Nyoni’s interests in the proceeds of sale. That does not address the obvious question of why it was appropriate to permit the forcible conversion into money of her interest in the land.

21    I emphasise I have reached no view that it was not appropriate. It may be that after fuller consideration a court hearing the present appeal will identify a satisfactory answer to that question. But I cannot, in view of the brevity of the primary judge’s reasons, have confidence that this will be so.

20    Notwithstanding those statements, Mr and Mrs Nyoni made no application to amend their notice of appeal so as to include an allegation of appealable error founded upon the inadequacy of the reasons of the primary judge.

21    On 23 July 2019, the Chief Justice made a determination under s 25(1AA) of the Federal Court of Australia Act 1976 (Cth) that the appeal was to be heard and determined by a single judge. A copy of the determination was forwarded to Mr and Mrs Nyoni by email. The email stated (incorrectly) that there had been a determination that the appeal be heard by a Full Court. That was an unfortunate error. However, the operative instrument was the determination itself and Mr and Mrs Nyoni were under no misunderstanding as to its meaning.

22    On 31 July 2019 Jackson J dismissed an application previously filed by Mr Nyoni for the appeal to be referred to a Full Court. His Honour said that there was no basis to invite the Chief Justice to change the determination that had already been made:  Nyoni v Beadle in her Capacity as Trustee of the Bankrupt Estate of Emson Clever Nyoni (No 2) [2019] FCA 1375 (Nyoni 2) at [3]. The appeal was set down to be heard on 31 October 2019 at 10.15 am and orders were made to progress the matter toward that hearing date.

23    Mr Nyoni lodged an application for leave to appeal from the decision in Nyoni 2 on 14 August 2019 (Action WAD410 of 2019). That application was dismissed by Colvin J on November 2019.

24    On 10 September 2019, Mr Nyoni attempted to file a document in the New South Wales District Registry. The document appeared to be an originating application for judicial review of certain decisions or orders of Jackson J made in this and another proceeding. A District Registrar refused to accept the document for filing on the basis that the proposed proceeding was bound to fail. In a letter notifying Mr Nyoni of that decision, the District Registrar said (among other things):

The reason it is foredoomed to fail is that the Court (constituted by a Judge) cannot order that the Court (constituted of a Judge) do or not do an act or thing:  see Bird v Free (1994) 126 ALR 475.

25    On 25 September 2019, Jackson J vacated the programming orders and replaced them with a revised timetable to progress the appeal to hearing. The hearing date was left undisturbed.

26    On 11 October 2019 Mr Nyoni lodged for filing an originating application for judicial review in this Court (Action NSD1716 of 2019). The originating application relevantly stated:

The Applicant applies to the Court to review … the conduct of Colvin J and Jackson J in proceedings NSD810/2019, WAD343/2019 and WAD410/2019.

Details of claim

The Applicant is aggrieved by the decision and conduct because:

1.    Registrar Segal does not have jurisdiction to make his decision dated 13 September 2019.

2.    Justice Jackson’s conduct in proceeding WAD343/2019 negatively affected the rights and interests of the Applicant’s profession as a pharmacist, his livelihood.

3.    Justice Jackson’s interlocutory judgment to dismiss an application to hear appeal proceeding WAD343/2019 by a Full Court directly affects the right of the Applicant to be heard for a just resolution of dispute according to law and as quickly, inexpensively and efficiency as possible (s 37M of the Federal Court of Australia Act 1976).

4.    Justice Jackson failed, is failing or is likely to fail to take a relevant consideration into account in the exercise of his power in determining proceeding WAD343/2019.

5.    Bias has taken place, is taking place, or is likely to take place, in the course of the conduct of Justices Jackson and Colvin.

27    That judicial review application was discontinued by Mr Nyoni on 10 August 2020. Notwithstanding that, it is necessary to make some observations about the subject matter of that proceeding and the decisions to which it related.

28    Action NSD810 of 2019 was an application for an extension of time to appeal from a judgment of Griffiths J in proceedings NSD35 of 2019 and NSD168 of 2019. Griffiths J had refused Mr Nyoni’s applications for judicial review of decisions of Registrars of the Court to reject for filing originating processes seeking judicial review of the conduct of a Judge of the Court. The application for an extension of time to appeal was discontinued on 5 August 2020.

29    Action NSD410 of 2019 was an application for leave to appeal Jackson J’s decision of 31 July 2019 in Nyoni 2. As mentioned earlier, an application for leave to appeal that decision was refused by Colvin J.

30    The judicial review application was incompetent to the extent that it purported to seek relief that the Court did not have jurisdiction to grant. As Mr Nyoni had previously been informed, this Court (constituted of a judge) has no jurisdiction to judicially review a decision of the Court constituted of another judge:  Nyoni v Cho [2019] FCA 560 at [43]; McDonald v Federal Court of Australia [2017] FCA 1216 (Kerr J). To the extent that the judicial review application sought to challenge the decision of the District Registrar to refuse to accept like proceedings for filing, that challenge was doomed to failure. The reasons given by the District Registrar were plainly correct.

31    Notwithstanding its defects, the judicial review application in NSD1716 of 2019 was accepted for filing about nine days before the appeal in this proceeding was to be heard.

32    On 30 October 2019, Mr and Mrs Nyoni filed an interlocutory application in this proceeding for an order adjourning the appeal sine die, pending the outcome of the judicial review application.

33    As has been mentioned, Mr and Mrs Nyoni were absent when the appeal was called on for hearing on the following day. They did not attend to advance any arguments in support of an application to adjourn the hearing.

34    In Nyoni 3, Jackson J set out the relevant background before turning to consider the consequences of their absence.

35    His Honour noted that Mr and Mrs Nyoni had the benefit of the reasons in Nyoni 1, that they had been afforded the opportunity to file an amended notice of appeal by 15 August 2019 to incorporate a ground of appeal concerning the inadequacy of the reasons of the primary judge, but had not done so. As a result, his Honour considered the grounds of appeal to have weak prospects of success. His Honour said that Mr and Mrs Nyoni had not complied with case management orders for the filing of written submissions. His Honour continued:

9    In the current circumstances, three matters are relevant to the exercise of the discretion whether or not to dismiss the appeal and applications for default in appearance. I have already mentioned two, namely the weak prospects of success of the appeal as currently framed, and the appellants’ default in taking important case management steps as directed.

10    The third relevant matter is that the court has communicated with the appellants on many occasions, in order to ensure that they were aware of the possible consequences for them if they persisted in their default and, in particular, if they did not appear at the hearing of the appeal:

(1)    On 31 July 2019 my chambers sent an email to the parties attaching a copy of the orders which had been made on that day, and noting the final hearing date of 31 October 2019 at 10.15 am, that is, today.

(2)    On 16 September 2019, in reply to a request on behalf of the respondent for a further case management hearing, my chambers responded to advise that the matter had been listed for a case management hearing on 25 September 2019 and requested the parties to confirm receipt of the email and their attendance at the case management hearing. No response was received by the appellants. They were reminded of the case management hearing a few days before 25 September 2019 but did not confirm receipt. While they sent a copy of proposed orders for the case management hearing to Chambers on 24 September 2019, they did not appear at the case management hearing. After that, Chambers emailed the parties confirming that no request for an adjournment or explanation as to why the appellants were unable to appear had been received, and reminding the parties that it is important they attend all court dates in the proceeding. The listing of the appeal for today’s date was reiterated in that communication, which also said that if the appellants did not attend it would be open for the respondent to apply for an order that the appeal be dismissed.

(3)    Another email from my chambers on 7 October 2019 reiterated the listing date and the potential consequences of non-appearance.

(4)    Similar communications were made on 10 October 2019, 22 October 2019 and 25 October 2019.

(5)    Today the court officer called outside the court three times for the appellants, but they have not appeared.

11    Therefore the appellants have had ample notice of the need to appear today, and of the possible consequences for them if they did not.

12    That, together with the appellants’ history of default in the proceedings, and the weak merits of the grounds of appeal, all support the exercise of my discretion to dismiss the appeal, due to the failure of the appellants to appear today. It follows that the two interlocutory applications I have identified should also be dismissed.

13    I confirm that the dismissal takes place under r 36.75(1)(a)(i), and note that under r 36.75(2) the appellants have a right to apply to set aside the order and to apply for an order concerning the further conduct of the appeal.

36    The dismissal of the appeal had the effect that the stay of execution of the Property Orders no longer operated.

37    In an affidavit filed on 25 May 2020 Ms Beadle deposes to the events that have occurred since the appeal was dismissed. Her evidence is not subject to effective challenge and I accept it.

38    The orders dismissing the appeal were served on Mr and Mrs Nyoni on 6 November 2019. On 22 November 2019 the trustee arranged for the Kellerberrin property to be inspected and an occupancy report was prepared.

39    On 20 December 2019 the Federal Circuit Court issued a Property (Seizure and Delivery) Order (PSDO) in respect of the Kellerberrin property in accordance with the Property Orders. The PSDO was executed on 13 March 2020. By letter dated 26 March 2020, Ms Beadle notified Mr and Mrs Nyoni that she was in possession of the Kellerberrin property and requested that they remove all rubbish and chattels from the property within 30 days.

the power to set aside

40    The orders sought on the present application are as follows:

1.    Proceeding WAD343/2019 is re-opened.

2.    Orders of Street J of 20 June 2019 are stayed pending determination of this proceeding.

3.    Orders of Jackson J of 31 October 2019 are stayed pending determination of proceeding NSD1716/2019.

4.    Alternatively, the Order of Jackson J of 31 October 2019 is set aside pursuant to Rule 39.05(a) and (c) of the Federal Court Rules 2011 (Cth).

41    The application was heard before me on 13 August 2020. On that date I made orders for the filing of supplementary submissions (following which judgment in this matter was reserved). I granted a stay of any further execution of the Property Orders.

42    Rule 36.75 relevantly provides:

(1)    If a party is absent when an appeal is called on for hearing, the opposing party may apply to the Court for an order that:

(a)    if the absent party is the appellant:

(i)    the appeal be dismissed; or

(ii)    the hearing be adjourned; or

(iii)    the hearing proceed only if specified steps are taken; or

(2)    If a hearing proceeds in a party’s absence and during or at the conclusion of the hearing an order is made, the party who was absent may apply to the Court for an order:

(a)    setting aside or varying the order; and

(b)    for the further conduct of the hearing.

43    The power to reinstate an appeal that has previously been dismissed for non-attendance derives from s 25(2B) of the Act. It relevantly provides:

(2B)    A single Judge (sitting in Chambers or in open court) or a Full Court may:

(bb)    make an order that an appeal to the Court be dismissed for:

    (i)    failure to comply with a direction of the Court; or

(ii)    failure of the appellant to attend a hearing relating to the appeal; or

(bc)    vary or set aside an order under paragraph (ab), (ba) or (bb)

44    In MZYEZ v Minister for Immigration and Citizenship [2010] FCA 530, Ryan J summarised some of the relevant considerations to be weighed in the exercise of the power to set aside as follows (at [7]):

In circumstances where, as in the present case, a proceeding has been dismissed in a party’s absence and reinstatement is sought, a discretion falls to be exercised by the court before which the application for reinstatement is returnable. That discretion requires the consideration of three factors, and whether, on balance, they tend for or against the reinstatement. Those factors are:

(a)    whether there was a reasonable excuse for the party’s absence from the hearing in which the proceeding was struck out;

(b)    the existence and nature of any prejudice which might flow to the other party from the reinstatement, and the extent, if any, to which that prejudice can be assuaged by an adjournment, an order for costs or other relief which the court is empowered to grant;

(c)    whether the applicant has a reasonably arguable prospect of success on the substantive application. As North J said in MZKAJ v Minister for Immigration and Multi-Cultural and Indigenous Affairs (2005) FCA 1066 at [18]:

The decision whether to reinstate the appeal depends, however, not only on the existence of a reasonable explanation for the need to adjourn the appeal, but also whether the appeal, if reinstated, has a reasonable chance of success. If not, there is no purpose in reinstatement.

(emphasis added)

45    The interlocutory application filed on 5 May 2020 also seeks, as an alternative, an order setting aside the judgment in Nyoni 3 under r 39.05(a) or (c) of the Rules, which provide:

The Court may vary or set aside a judgment or order after it has been entered if:

(a)    it was made in the absence of a party; or

(c)    it is interlocutory …

46    For Ms Beadle it was argued that this rule does not apply because the order dismissing the appeal was not interlocutory in nature. Whether that argument is correct is unnecessary to decide. Irrespective of whether or not r 39.05 applies, I do not consider the rule to erect any different test to that erected under s 25(2B) of the Act. In either case, the application to set aside the order in Nyoni 3 does not operate to permit a revisitation of the correctness of the reasons as an alternative to an appeal process:  Nyoni v Murphy (2018) 261 FCR 164 at [46].

Consideration

Explanation for non-attendance

47    I am not satisfied that Mr and Mrs Nyoni have provided an adequate explanation for not attending on the day of the hearing of the appeal. The explanation advanced before me was that they had filed their application for judicial review and their application for an adjournment. They submit that their appeal ought not to have been dismissed until that application was determined. The difficulty with that submission is that Mr and Mrs Nyoni did not attend at the commencement of the hearing to make any submissions in support of their adjournment application before Jackson J. They did not attempt to explain to Jackson J the significance of their judicial review application as they perceived it to be. Even if they had done so, Jackson J would have been bound to conclude that the judicial review application was incompetent and so foredoomed to failure. Mr and Mrs Nyoni had previously been notified by the District Registrar that an application for judicial review of a decision of a justice of this Court could not be commenced in this Court. It may reasonably be inferred that Mr and Mrs Nyoni were not prepared to accept the guidance they had previously received on that topic. In oral submissions on this question Mr Nyoni (speaking for himself and Mrs Nyoni) advanced further complaints about the judgment in Nyoni 2 by which Jackson J refused to make a determination that the appeal be heard by a Full Court. The circumstance that Mr and Mrs Nyoni were discontent with that decision does not provide an adequate explanation for their non-attendance on the day that their appeal was listed for hearing.

48    Moreover, as Jackson J observed in Nyoni 3, in the weeks leading up to the hearing of the appeal, the Court had communicated with Mr and Mrs Nyoni in terms reminding them of the importance of attending at hearings related to the appeal. The communications included notification that if they did not attend on the hearing date, the respondent may apply for an order that the appeal be dismissed. Two further communications from the Court reiterated that advice.

49    I consider the absence of an adequate explanation for the non-attendance to weigh heavily against the grant of relief.

The merits of the appeal

50    In Nyoni 1, Jackson J considered the merits of the appeal on the basis that there was a strong prospect (at that time) that Mr and Mrs Nyoni would be granted leave to amend their notice of appeal so as to include a ground alleging inadequacy in the reasons of the primary judge:  at [13] – [28]. The reasons in Nyoni 1 provided unequivocal guidance to Mr and Mrs Nyoni as to an argument available to them, but not articulated on their notice of appeal. More than that, Mr and Mrs Nyoni were afforded an opportunity to amend their notice of appeal to raise that argument. Had they availed themselves of that opportunity, I would myself have regarded their prospects of succeeding on the appeal to be strong, especially when proper consideration is given to the interests of Mrs Nyoni, separate and apart from those of her husband.

51    Mrs Nyoni is not a bankrupt. She is not to be equated with a defaulting vendor, tenant or mortgagor. Rather, she is a co-owner as tenant in common, with another co-owner (the trustee). Her proprietary rights are equal to those of the trustee. The co-owners were at odds as to whether, when and how the interest of one of them could and should be realised.

52    The circumstance that the trustee seeks to realise her interest in the property for the benefit of the creditors of the bankrupt estate does not mean that Mrs Nyoni is in breach of any law. In the absence of a court order, the trustee had no substantive right to demand that Mrs Nyoni vacate a property of which she was the co-owner. To secure an entitlement to vacant possession, it was necessary for the trustee to satisfy the criteria for such an order under the applicable statutory regime. Even if orders for vacant possession and sale were considered to be appropriate, the orders of the primary judge deprived Mrs Nyoni of any entitlement to participate in commercial decisions to facilitate the sale and so maximise the sale proceeds, including the choices of sales agent, conveyancer, marketing and (most critically), the choice of whether to fix a reserve price, and in what amount. Whether or not the evidence before the primary judge might have been capable of justifying the Property Orders is not to the point. If the orders were considered to be appropriate, the task of the primary judge was to explain why that was so.

53    In Nyoni 3, Jackson J concluded that Mr and Mrs Nyoni understood the nature of the argument that was available to them concerning the apparent inadequacy of the reasons of the primary judge. Mr and Mrs Nyoni did not contest that finding on the present application. Mr Nyoni’s submissions displayed a continued fixation with perceived injustices leading up to and resulting in the sequestration of his bankrupt estate. He did not indicate any intention to amend the notice of appeal should the order dismissing the appeal be set aside so as to include any argument concerning the adequacy of reasons. Mrs Nyoni made no submissions of her own on the question.

54    At the time that the appeal hearing commenced, Mr and Mrs Nyoni were in default of an order requiring that they file written submissions in support of their grounds of appeal as then framed. Jackson J considered those grounds to have weak prospects of success for the same reasons he had given in the course of deciding the stay application in Nyoni 1. On that occasion, Jackson J did not have before him the transcript of the proceedings before the primary judge, and so gave little weight to the grounds alleging a want of procedural fairness:  Nyoni 1, [24].

55    In assessing the prima facie merits of the appeal for myself, I proceed on the basis that there is little prospect that Mr and Mrs Nyoni would be granted leave to now introduce new grounds of appeal based on the arguments identified by Jackson J in Nyoni 1.

56    To the extent that the grounds of appeal complain of past events leading to the making of the sequestration order, I consider the grounds to enjoy no reasonable prospects of success. Mr Nyoni has exhausted his attempts to have the sequestration order set aside. The circumstance that he remains fixated on his underlying disputes with his creditors weighs against the grant of leave because it is unlikely he would be willing or able to confine his grounds in a way that focuses attention on the legality of the Property Orders in the context of his undisputable bankruptcy. Likewise, there is no merit in the contention that Ms Beadle could not be substituted as the applicant in the proceedings at first instance upon her appointment as trustee of the bankrupt estate.

57    I have given separate consideration to the allegation that there was a denial of procedural fairness in the proceedings at first instance with particular regard to Mrs Nyoni’s interests.

58    As I have already observed, Mr and Mrs Nyoni appeared self-represented on this application. Mrs Nyoni adopted the submissions made by Mr Nyoni, then supplemented those submissions with oral arguments of her own. Among other things, Mrs Nyoni submitted that she had asked for an opportunity to be heard in the Federal Circuit Court proceedings but her request had been refused. She submitted that she had not had any opportunity to make submissions as to the law, including as to her status and rights as tenant in common. She further submitted that she was not cross-examined and was not afforded the opportunity to cross-examine other witnesses. She submitted that she had not been able to make any submissions about losing “her home” (as to which see below).

59    It is neither appropriate nor necessary to express concluded views as to the substantive merits of those submissions. It is enough to observe that the transcript of the proceedings in which the Property Orders were made does not appear to support MrNyoni’s contention that she made an express request to be heard independently of Mr Nyoni. Rather, Mr Nyoni announced to the primary judge that he appeared both for himself and for Mrs Nyoni. If that statement was wrong, there was nothing to prevent Mrs Nyoni from coming forward to correct it. There is no evidence that Mrs Nyoni made any express request to make any submissions in addition to that which were made by Mr Nyoni. In my view she aligned her interests with those of her husband. That might have been to her ultimate detriment, but it does not disclose appealable error on the part of the primary judge.

60    As it turned out, Mr Nyoni made no submissions on matters of substance before the primary judge because he had not come to the hearing with the necessary documents, nor was he prepared in other respects. It may be inferred that Mr and Mrs Nyoni assumed that their application for an adjournment of the hearing would be allowed. Whilst they are dissatisfied that their adjournment application was refused, they have not demonstrated that the discretionary power to grant an adjournment miscarried in a way that would give rise to arguable appealable error.

61    Nonetheless, it is arguable that the primary judge conducted the proceedings in a manner that gave insufficient attention to the circumstance that the respondents were self-represented. The primary judge did not ask either Mr or Mrs Nyoni whether they sought to cross-examine the trustee’s witnesses. An affidavit was read that had not been provided to them until the day of the hearing. It appears that the primary judge made additional enforcement orders (being orders that had not been sought by the trustee) without notice to Mr and Mrs Nyoni.

62    In the circumstances, I will proceed on the basis that it is at least arguable that there was a breach of procedural fairness, although not a breach of the kind contended for in Mrs Nyoni’s submissions. The existence of an arguable ground is a relevant consideration weighing in favour of setting aside the order in Nyoni 3.

Prejudice

63    This application was filed on 5 May 2020, more than six months after Jackson J dismissed the appeal. In the meantime, the trustee has executed the Property Orders to the extent of securing vacant possession of the Kellerberrin property. The evidence adduced on this application shows that that property was vacant at the time that it was seized and may have been vacant for a considerable period beforehand. It also shows that Mr and Mrs Nyoni have given an address other than the Kellerberrin property in their sworn affidavits for some time. Whilst Mrs Nyoni at times referred to being removed from her “home” I am not satisfied that the Property Orders had the effect of forcefully removing Mrs Nyoni from her primary place of residence. Mrs Nyoni did not suggest that she would reside in the Kellerberrin property in the event that the Property Orders were set aside.

64    To the extent that Mrs Nyoni has the capacity to purchase the trustee’s share in the property she has not disclosed that capacity to the trustee or to this Court. If she does have the capacity, the Property Orders do not preclude her from bidding in the sale process. If she does not have the capacity, it would appear that she is in no position to resist orders providing for the realisation of the trustee’s interests for the benefit of Mr Nyoni’s creditors. The effective administration of Mr Nyoni’s bankrupt estate would in the ordinary course require that the trustee’s interest be realised and the proceeds distributed among all of his creditors. To the extent that Mr Nyoni submits that it is only the interests of the petitioning creditor to be considered in that analysis, that submission is rejected.

65    As I have already observed, Mr and Mrs Nyoni cannot resist orders for the sale of the property by revisiting the same disputes that led to the sequestration order being made. The appeal in this proceeding was not an appeal from the sequestration order. It was an appeal from orders facilitating the performance of the trustee’s duties.

66    Having been notified of the dismissal of their appeal, Mr and Mrs Nyoni delayed bringing the present application for reasons that have not been adequately explained. That circumstance weighs heavily against the grant of relief, as does the circumstance that the trustee has incurred expenses executing the Property Orders in the intervening period, at all times keeping Mr and Mrs Nyoni apprised of the steps that were being taken to secure possession of the property in readiness for its sale.

Conclusion

67    Weighing all considerations in the balance, I am not satisfied that it is in the interests of justice to set aside the order dismissing the appeal. I have reached that conclusion notwithstanding that there exists an arguable basis to conclude that the Property Orders are affected by appealable error. I have afforded considerable weight to the absence of any reasonable explanation for the non-attendance on the hearing of the appeal, and to the delay in commencing this application. I consider that Mr and Mrs Nyoni would have no reasonable basis to resist the sale of the property, even if an appeal from the Property Orders were allowed and the trustee’s application remitted to the Federal Circuit Court for hearing and determination by another judge.

68    If follows that the interlocutory application of 5 May 2020 should be dismissed. The parties should be heard as to costs.

I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Charlesworth.

Associate:

Dated:    29 October 2020