Federal Court of Australia

Williamson v Bendigo and Adelaide Bank Ltd [2021] FCA 451

ORDERS

THE COURT ORDERS THAT:

1.    The application for an extension of time be dismissed.

2.    The applicant pay the respondent’s costs, as agreed or taxed.

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

REASONS FOR JUDGMENT

GRIFFITHS J:

1    The applicant seeks an extension of time to appeal from a judgment and orders of Judge Driver, which is reported as Williamson v Bendigo and Adelaide Bank Ltd [2021] FCCA 296. Judge Driver dismissed an amended application which sought to set aside a bankruptcy notice issued on 21 December 2018. The basis for the bankruptcy notice is a final judgment obtained by the respondent against Mr Williamson in proceedings in the Supreme Court of New South Wales.

2    Mr Williamson sought to have the bankruptcy notice set aside relying on a cross-claim which he says he has against the respondent.

3    For the reasons that follow, the application to extend time will be dismissed, with costs.

Summary of background matters

4    As Judge Driver noted at [10], the matter has a long procedural history dating back in the first instance to 5 April 2019, when Mr Williamson first sought to have the bankruptcy notice set aside. On 12 February 2021, Judge Driver granted Mr Williamson leave to amend his application filed on 5 April 2019. This amended application sought orders that the bankruptcy notice be set aside on the basis of a counter-claim, set-off or cross-demand against the Bank.

5    Mr Williamson’s counter-claim arises from his purchase in 2007 of a property known as “Reevesdale”. He claims that the selling agent (Mr Hannan) misled him about the vendor’s reasons for the sale and failed to inform him about a proposed quarry development. Mr Hannan was employed by Elders Rural Services Australia Ltd.

6    The vendor’s mortgagee was Rural Bank Limited. At the time of the 2007 sale, the respondent held 50 per cent of the shares in that company. Mr Williamson’s counter-claim is based on an assertion that the respondent received the proceeds of fraud upon the sale of Reevesdale. Separately, Mr Williamson claims that the respondent otherwise “assisted” the outgoing mortgagee to conceal fraud, by taking steps to enforce its judgment, including serving the bankruptcy notice which he subsequently sought to have set aside.

The primary judge’s reasons summarised

7    The primary judge gave three reasons for dismissing Mr Williamson’s amended application. First, Mr Williamson adduced no evidence before Judge Driver to establish an effective counter-claim and, instead, simply relied upon a pleading filed in the NSW Supreme Court and assertions made by him in an affidavit. This was found to be insufficient, having regard to caselaw.

8    Secondly, even if Mr Williams had adduced some evidence of a prima facie case to support his counter-claim, his claims had been dismissed by the Supreme Court no less than three times, in circumstances described by Judge Driver at [27]-[29].

9    Thirdly, in proceedings in the Supreme Court in 2019, Mr Williamson had argued that re-litigation of issues previously determined adversely to him ought to be permitted because a previous Supreme Court judgment had been procured by fraud and also because Mr Williamson claimed to be under a disability during that proceeding. Those arguments were rejected by Bellew J in his judgment published in July 2020.

10    Justice Bellew’s reasons for judgment in Williamson v Elders Rural Services [2020] NSWSC 933 contains a useful summary of some of Mr Williamson’s earlier litigation. Mr Williamson commenced proceedings in the Supreme Court in 2015 alleging inter alia a fraudulent misrepresentation by Mr Hannan, who was a licensed real estate agent. Mr Williamson claimed that Mr Hannan fraudulently misrepresented to him that the reason why the vendor was selling Reevesdale was because of the presence of ghosts in the property, whereas the real reason (as known to the employee but not by Mr Williamson) was that the property was on the market because an application had been made for a quarry to be built on a nearby property.

11    Mr Williamson’s proceedings were dismissed on 19 December 2018 by Johnson J in Williamson v Elders Rural Services Australia Ltd (No 2) [2018] NSWSC 1986. Justice Johnson made the following findings in dismissing Mr Williamson’s proceeding:

    any loss suffered by Mr Williamson was statute barred by s 14(1)(b) of the Limitation Act 1969 (NSW);

    Mr Williamson had not established that the pleaded representation had been made by Mr Hannan;

    there was no evidence to establish that the pleaded representation was false;

    Mr Williamson did not rely upon anything he was told by Mr Hannan about the reasons for the vendor selling the property;

    as at the date Mr Williamson purchased the property, it was worth at least the amount of money he paid for it; and

    any losses suffered by Mr Williamson were not, in any sense, caused by anything said or not said to him by Mr Hannan.

12    It is notable that Mr Williamson did not appeal Johnson J’s decision. In separate proceedings in the NSW Court of Appeal, that Court observed in Williamson v Elders Rural Services Australia Ltd [2019] NSWCA 137 that Johnson J’s findings gave rise to an issue estoppel which bound Mr Williamson.

13    In oral address in the present proceeding, Mr Williamson referred to another proceeding in the NSW Supreme Court before Campbell J. Apparently, this proceeding relates to an application to have Mr Williamson declared a vexatious litigant. I was told that judgment is reserved in that matter. No evidence was put before me relating to that proceeding and I give no weight to Mr Williamson’s unsupported contentions as to what Campbell J may have said during the course of that hearing.

The application for an extension of time and supporting affidavit

14    Mr Williamson, who is a retired solicitor and represented himself, filed an affidavit sworn by him on 29 March 2021 in support of his application. Mr Williamson’s draft notice of appeal raised the following five proposed grounds of appeal:

1.    In the proceedings in the Supreme Court of NSW under number 2015/226349 the witness Mrs Diana Moran did not know who lived on Mountain Ash Road. Williamson depended on her as she had been the Secretary for the Rural Lifestyle Residents Action Group in Bungonia.

2.    It was only in May/June 2020 that he learned that there was a written record.

3.    The record of Mrs Carmichael's status as the only person who lived on Mountain Ash Road was confirmed and it became apparent that Mr Hannan had lied.

4.    Prior to that Williamson's assertions about the claimed stop by Mr Hannan on Mountain Ash Road were rejected.

5.    So there was no relevant delay in bringing the claim for set-off.

15    In his affidavit, Mr Williamson deposed that “it seemed silly” to appeal Judge Driver’s judgment when he had not received the details of a proposed class action “which had been promised to bring justice to myself and thousands of others”. He said that the position changed when he received a letter dated 22 March 2021 relating to that potential class action. In particular, he said that the letter informed him that lawyers had been retained and they were looking at a potential legal action against the respondent in relation to the loans it bought from Great Southern, including Mr Williamson’s loans. Mr Williamson was asked in the letter to provide information relating to the total amount borrowed by him to invest in the Great Southern projects, whether there was more than one project and how much he had already paid out to the respondent.

16    In his affidavit, Mr Williamson sought to explain the bases for his counter-claim. First, in response to Judge Driver’s finding that he had not taken the first opportunity to set-off the debt against the greater debt the respondent owed him, he said that if he had raised this matter in August 2015 he would not have succeeded at trial.

17    Mr Williamson elaborated upon this ground in [9]-[22] of his affidavit which, appears to be directed to providing additional material in support of the alleged misrepresentation or fraud committed by Mr Hannan (omitting annexures, emphasis in original):

9.    This would have been the first point of challenge; had I said this in eg August 2015 I would not have succeeded at trial. There was a general disagreement from Mrs Moran that no one could have been there to meet with Mr Hannan because no one lived on Mountain Ash Road. Hannan had claimed to stop at someone's house on Mountain Ash Road. He was anonymous. He claimed to have been an “organiser”. He said that there was to be a quarry which CEAL were applying for and all sorts of dust and noise would result. Hannan claimed to pass that on to me. His affidavit was totally false. Except he did not mention the signs which had been up on the Old School House. They were massive. So he drove right past where they would have been. Yet he knew they were there generally because Mrs McGinity said that they were there from 2005 until July 2007 and he had been coming to the village fairly often since his appointment in August 2006 as selling agent for Reevesdale.

10.    So the signs were taken down to achieve a sale of the property.

11.    Mrs McGinity gave evidence that the signs had not come down and the first decision relied on her evidence.

12.    But they must have been down or otherwise Mr Hannan would have stopped and pointed the signs out. Not that he would have needed to because the signs were so big. So Hannan had organised for the signs to be taken down for a very short time. Mrs McGinity had not noticed and she gave evidence as if the signs had never come down. Elders knew very well that the signs were down. However, it did not stop them relying on Mrs McGinity's late-produced evidence that they were up.

13.    So Elders had a bet each way when they got Mrs McGinity's evidence. Hannan said the signs were down and she said that they were up.

14.    It became absolutely clear that Mrs McGinity was wrong when Mrs Moran gave the digitised evidence to me which she did in May 2020. Before that His Honour Justice Johnson had decided that there was too much indefinition around whether or not anyone lived on Mountain Ash Road. He did not hold that anyone lived there or not but he accepted Elders' evidence.

15.    The digitised evidence was produced and actioned in June 2020. That was just in time for the hearing in 2019/286765 before His Honour Justice Bellew. He dismissed the proceedings except he allowed a vexatious litigant application to be brought against me.

16.    What the digitised record achieved was to confirm that Mrs Carmichael was the only person who lived on Mountain Ash Road and had been an “organiser” of the Rural Lifestyle Residents Action Group (“RLRAG”). A copy of the digitised record is at annexure “HFAW1”. She is mentioned in the record of the meeting on 24 February 2007.

17.    So Mr Hannan, the Elders' agent, had been lying. He could not have met anyone on Mountain Ash Road. At annexure “HFAW2” is a “fleetlists” publication which states that Mr Carmichael had run several routes by bus but had died in 1995. Since then the route between Bungonia and Marulan had been run by Mrs Carmichael. So Mrs Carmichael had a real interest in what happened on Jerrara Road and therefore had got herself on RLRAG. However, she was the only person who was on RLRAG and who lived on Mountain Ash Road.

18.    At annexure “HFAW3” are several emails being those that sought the addresses of the members of RLRAG and the responses.

Me to Diana Moran dated 27 June 2020 (asking for confirmation of where the “organisers” lived as at 10 April 2007).

Diane to me dated 28 June 2020 stating the various addresses (none were in the direction of Mountain Ash Road).

Diane to me dated 3 July 2020 stating where each person lived (with the exception of Marlene Carmichael who lived in Mountain Ash Road).

19.    The truth was that the signs had come down. They had been down for a very short time and Mrs McGinity had not noticed. Her house is blocked from any view of the Old School House fence. It was the day after Easter Monday and Mrs McGinity was lame and the signs came down after Mrs Moran had left the Old School House on 10 April 2007 to go to work in Goulburn and were down from about 9am to 11.30am.

20.    This fraud was backed by Elders right up until now. Bendigo came into things in August 2009 at the earliest when they took Elders out of the name of the Bank which was to receive all of the money upon the sale of Reevesdale, thus changing Elders Rural Bank Limited into Rural Bank Limited. It had been a joint venture up till then. They took the shares in Rural Bank Limited in late 2010. But Elders still staffed the Bank.

21.    Then on 27 July 2015 Bendigo's solicitors wrote a letter which “happened” to coincide with the start of the trial against my conveyancing solicitors, Carneys. It was no coincidence that Mr Hannan had on 21 April 2015, written an affidavit which Bendigo wanted covering up.

22.    I am currently awaiting judgment from the NSW Supreme Court with regard to the vexatious litigant application but I believe that they will give the judgment on the basis that His Honour Justice Johnson was defrauded.

18    Secondly, Mr Williamson claimed that Judge Driver gave a bankruptcy order (sic) “on the mistaken ground that I could not take advantage of set-off because I had not brought the claim in time”. Mr Williamson repeated that had he brought the claim any sooner it would not have been successful because Mrs Moran did not recall the situation that existed on Mountain Ash Road until she had cause to get the digitised record in June 2020, prior to the hearing before Bellew J.

19    Thirdly, in explaining why he had decided not to appeal, Mr Williamson again stated that if he had brought the appeal within time he could not have succeeded for the reasons given above. He then added that if he had won “I would have to account anyway for the Great Southern loan”.

20    Somewhat confusingly, notwithstanding his evidence that he would have to account for the Great Southern loan, Mr Williamson then stated in his affidavit that he had never obtained a loan from Great Southern Finance Pty Ltd. He annexed to his affidavit a copy of his loan portfolio. Mr Williamson offered no further evidence regarding Great Southern or the alleged loan.

Bank’s evidence summarised

21    The Bank replied upon an affidavit by Mr Stephen Flamer-Smith, senior manager for Insolvency Risk and Litigation for Bendigo and Adelaide Bank Ltd, affirmed on 19 April 2021. He annexed to his affidavit copies of submissions filed below. In respect of the proposed class action against the respondent, Mr Flamer-Smith annexed a notice published by EQ Legal, which he obtained from the website https://www.bablgroupaction.com on 16 April 2021. The notice disclosed that the proposed class action is unlikely to be commenced in the immediate future due to difficulty in identifying a suitable lead applicant. The notice also stated that although the legal firm said that it is “possible that the case may still be able to proceed if we were able to secure litigation funding … realistically, due to the current regulatory environment concerning class actions, any litigation finance arrangements are unlikely to be finalised before February-March next year, if at all”. Mr Flamer-Smith said that he was not aware of any other proposal to commence a class action against the respondent in relation to Great Southern investments.

Mr Williamson’s submissions summarised

22    Mr Williamson’s outline of submissions took an unusual form. They commenced with a copy of an email he had sent to the Bank’s solicitor on 18 April 2021 regarding the appeal. The letter emphasised that it was not until the digitised records of the Rural Lifestyles Residents Action Group became available that Mr Williamson obtained evidence which was “crucial” to his fraudulent misrepresentation case.

23    After setting out that letter, Mr Williamson then made various submissions in support of his application for time to be extended. Some of that material said why Mr Williamson challenged evidence given in the earlier proceedings by Mr Reardon.

24    Mr Williamson also responded to some of the Bank’s outline of written submissions. He said that the “set-off could not have been set up because there was a lack of knowledge” on his part.

25    He also emphasised that his counter-claim “is very much bound up with the Supreme Court litigation”. He described Mr Hannan’s affidavit in the earlier proceedings as “a load of rubbish”.

26    In a submission which was a little difficult to understand, Mr Williamson appeared to say that the earlier Supreme Court litigation should not stand in the way of him progressing his counter-claim because the Supreme Court was defrauded by Elders.

27    Mr Williamson’s claim of fraud relates to what he contends was false evidence given in the Supreme Court litigation. He also submitted that there was no evidence of any loan from Great Southern.

Consideration and determination

(a) Summary of relevant legal principles

(i) Extension of time

28    The relevant principles guiding the Court’s consideration of an application to extend time to bring an appeal are well settled. The applicant needs to provide an acceptable explanation for the delay in commencing the proceedings. The strength of the proposed grounds of appeal is another relevant and important matter (see generally Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176; 3 FCR 344 and Parker v R [2002] FCAFC 133). In assessing the prospects of the proposed appeal, the Court is not required to go into great detail and is entitled to assess the merits “in a fairly rough and ready way” (see Jackamarra v Krakouer [1998] HCA 27; 195 CLR 516). The Court is entitled to take into account the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences for the parties if time is extended or refused.

(ii) Setting aside a bankruptcy notice

29    The principles relating to the setting aside of a bankruptcy notice are also well settled. They may be summarised as follows. First, the power to set aside a bankruptcy notice is regarded as being within the general powers of the Court conferred by s 30(1) of the Bankruptcy Act 1966 (Cth) (the Act) (Bryant v Commonwealth Bank of Australia (1994) 217 ALR 251 at 253 per Davies, Foster and O’Loughlin JJ).

30    Secondly, and importantly, the power is a discretionary power. Accordingly, when its exercise by a trial judge is challenged in an appeal, the principles relating to the review of the exercise of a judicial discretion are those set out in House v R (1936) 55 CLR 499 at 504-505 apply. Some error of principle needs to be established so as to demonstrate that the discretion has miscarried.

31    Thirdly, the nature of the discretion in relation to a debtor’s counter-claim as referred to in s 40(1)(g) of the Act was described in Guss v Johnstone [2000] HCA 26; 171 ALR 598 at [38]-[40] as follows (footnotes omitted):

38.    The nature of the exercise upon which Sundberg J was engaged is well established by a long line of authority.

39.    In Vogwell v Vogwell, Latham CJ said, in relation to a corresponding provision:

[T]he authorities show that the matter to which the court looks is this, – whether it is just that the claim should be determined before the bankruptcy proceedings are allowed to continue; in other words, whether it is a claim which it is proper and reasonable to litigate.

40.    The state of satisfaction referred to in s 40(1)(g), and s 41(7), involves weighing up considerations as to the legal and factual merit of the claim relied upon by the debtor, and the justice of allowing the bankruptcy proceedings to go ahead or requiring them to await the determination of the claim.

32    Fourthly, the decision whether a counter-claim is of the relevant kind necessarily involves an evaluation on the part of the trial judge as to the strength of the claim (Barton v Malcolm Johns Legal Pty Ltd (No 2) [2015] FCA 166 at [64] per Gleeson J).

33    Fifthly, the debtor carries the onus of demonstrating the existence of a counter-claim within the meaning of s 40(1)(g) (Barton at [67]).

(b) Application of relevant principles to the circumstances here

34    Mr Williamson’s explanation for the delay in bringing the appeal is said to be because it was not until 22 March 2021 that he received the letter about the proposed class action against the respondent in relation to the loans it purchased from Great Southern. This is not easy to understand. As the Bank pointed out, the five proposed grounds in the draft notice of appeal did not relate to the foreshadowed class action. Rather, they refer to Mr Williamson’s claim for damages relating to his purchase of “Reevesdale”. These are the claims which have been dismissed by the Supreme Court three times, as outlined in [8] ff above. The draft notice of appeal does not seek to challenge the underlying judgment debt nor does it contain any allegation in respect of the foreshadowed class action.

35    I am not satisfied that Mr Williamson has provided an adequate explanation for the delay.

36    Moreover, I consider that the proposed appeal has insufficient prospects to warrant time being extended. Proposed ground 5, which is focussed on Mr Williamson’s delay in bringing a counter-claim and in seeking to have the bankruptcy notice set aside is misconceived in circumstances where the issue of delay did not arise in any of the three Supreme Court proceedings.

37    As to the remaining grounds of appeal, although there is some difficulty in understanding their focus, if Mr Williamson’s objective is to allege error on the part of the primary judge in not accepting his contention that his counter-claim could not have been raised in the judgment debt proceeding because the counter-claim was not known to Mr Williamson at that time, it lacks sufficient prospects. That is because Mr Williamson must have been aware of his alleged counter-claim as at 19 December 2018 when the Bank obtained judgment against him from Johnson J. Mr Williamson had commenced these proceedings against the Bank in 2015 which raised his allegations of fraud and misrepresentation against Mr Hall.

38    In any event, even if he did not obtain this awareness until May or June 2020, the insufficiency of his prospects is not strengthened. That is because he had to have had a counter-claim which existed within the period for compliance with the bankruptcy notice. That period ended on 23 April 2019. Accordingly, a counter-claim which arose after that date (because awareness of it only arose in May or June 2020) could not form part of an application to set the notice aside.

39    The draft notice of appeal does not raise any error of principle on the part of the primary judge which has reasonable prospects of success. Indeed, it is difficult to see how any of the five proposed grounds of appeal relate to the judgment of Judge Driver, as opposed to the litigation in the NSW Supreme Court.

40    Finally, it is necessary to say something concerning what might be described as Mr Williamson’s primary proposition in support of his application for time to be extended, namely that a fraud has been perpetrated on the NSW Supreme Court. As noted above, the allegation of fraud seems to relate to the alleged falsity of evidence given by one or more witnesses called by the respondent in those proceedings. It is unnecessary to determine the merits of that allegation in this proceeding. It is well established that where an unsuccessful litigant wishes to have a judgment against it set aside, the proper course is for the litigant to commence a new proceeding in that Court seeking such relief. So much was made clear recently by the High Court in Clone Pty Ltd v Players Pty Ltd (In Liquidation) (Receivers and Managers Appointed) [2018] HCA 12; 264 CLR 165 at [32] (footnotes omitted):

In June 2010, Players brought two applications to set aside the judgment against it and to obtain an order for a new trial. The first application was brought in the same proceedings that had been the subject of the trial judge's perfected judgment, as amended by the Full Court. The second application was a new proceeding before a single judge of the Supreme Court to set aside the judgment. The second application was the appropriate way to proceed. Even where the separate procedure of a motion for a new trial might be concurrently available, if fraud is alleged then a fresh action will generally be the appropriate application relying upon the power to set aside a perfected judgment of any court for fraud. Independent proceedings, even where the application is to set aside an appellate court's decision, can permit "the whole issue [to] be properly defined, fought out, and determined.

(See also Clone at [61], McCann v Parsons (1954) 93 CLR 418 at 425-6 per Dixon CJ, Fullagar, Kitto and Taylor J and McDonald v McDonald (1965) 113 CLR 350 at 535 per Taylor J).

41    Mr Williamson provided no evidence that he had commenced proceedings in the NSW Supreme Court to have the orders made by Johnson J on 19 December 2018 set aside on the basis of the alleged fraud. He has had approximately 12 months in which to do so. This provides another reason why time should not be extended for him to appeal from the judgment and orders of Judge Driver.

42    At the hearing on 30 April 2021, Mr Williamson provided, somewhat belatedly, a notice of motion and statement of claim which he said he intended to file in the Equity Division of the NSW Supreme Court the following week. This material did not include any explicit claim of fraud. Rather, it appears that Mr Williamson’s intention is to seek to have a judgment dated 16 November 2018 (sic) set aside “on the grounds that there is no provable debt”. I assume this is an erroneous reference to Johnson J’s judgment dated 19 December 2018. According to the proposed statement of claim, the debt in question appears to be an agreement dated 18 August 2017 between Mr Williamson and the Bank in which it was agreed that Mr Williamson would pay the Bank $400,000 by no later than 30 September 2018. Mr Williamson apparently proposes to contend that there was no loan and that the agreement should be set aside. Putting to one side the problems of issue and/or Anshun estoppel which will presumably confront Mr Williamson if he commences such proceeding, I fail to see how this proposed belated action in the Equity Division has any bearing on Mr Williamson’s present application in this Court for time to be extended for him to appeal against the judgment and orders of Judge Driver.

Conclusion

43    For these reasons, the application for an extension of time will be dismissed, with costs.

Associate:

Dated: 3 May 2021