Federal Court of Australia

The Official Trustee in Bankruptcy v Shaw (No 2) [2023] FCA 444

ORDERS

THE COURT ORDERS THAT:

1.    The oral application made by the respondent for adjournment or stay of the interlocutory hearing on 23 May 2023 be refused.

2.    Costs be reserved.

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

REASONS FOR JUDGMENT

COLLIER J

1    At the case management hearing in this matter on 4 May 2023 the respondent to the substantive proceedings, Mr Shaw, made an oral application for the hearing of his interlocutory hearing currently listed for 23 May 2023 to be adjourned or stayed. After hearing both parties I refused that application.

2    By email, Mr Shaw has requested that I provide written reasons for this decision. These are my reasons.

Background

3    On 4 April 2023 I delivered judgment in The Official Trustee in Bankruptcy v Shaw [2023] FCA 298. I ordered that:

1. Compliance by the applicant with the following Notices to Produce be dispensed with:

(a) Notice to Produce filed in this proceeding on 28 February 2022;

(b) Notice to Produce served on the applicant on 24 January 2023; and

(c) Notice to Produce served on the applicant on 22 February 2023.

4    The Notices to Produce the subject of that judgment related to paras 3, 6 and 7 of an amended interlocutory application dated 11 November 2022 (and filed by Mr Shaw on 13 December 2022) (interlocutory application) in which he sought the following relief:

3. Leave to enter approved correspondence for the purpose of mediation or marked “without prejudice”, into evidence for the purposes of establishing whether mediation discussions have been unfairly compromised by the applicant’s demands/conduct and/or if this application constitutes an abuse of process.

6. Alternatively…an order that this application be dismissed in accordance with Fed Court rule 26.01 due to an abuse of process in making & maintaining this application for an illegitimate purpose and/or lack of authority or standing.

7. Alternatively… an order for the applicants to provide further & better particulars of the grounds of their application in a document that identifies with reasonable precision the dates & description of each instance of conduct alleged to be vexatious & brief reasons supporting each allegation.

(reproduced from original)

5    Mr Shaw had filed an affidavit in the proceeding on 17 November 2021. He also filed detailed submissions on 7 February 2023.

6    On 11 November 2022 I made the following case management orders:

THE COURT ORDERS THAT:

1.     This proceeding be transferred to the Queensland Registry of the Court.

2.     Leave is granted to the respondent to file the amended interlocutory application dated 11 November 2022.

3.     Paragraphs 3, 6 and 7 of the respondent’s amended interlocutory application dated 11 November 2022 be listed for hearing for half a day at 10.15am on 23 February 2023.

4.     By 4.00pm on 2 February 2023, the respondent file and serve written submissions (not exceeding 5 pages).

5.     By 4.00pm on 16 February 2023, the applicant file and serve written submissions in response (not exceeding 5 pages).

6.     No applications or material other than that specified in these Orders be filed in these proceedings until determination of the respondent’s amended interlocutory application dated 11 November 2022.

7.     The respondent’s application for leave to issue subpoenas to Mr Abid Hassan, Mr David Bergman and Ms Emma Denton is refused.

8.     The return date for the notice to produce, filed by the applicant, on 28 February 2022 be 23 February 2023.

9.     Costs be reserved.

7    These orders were subsequently varied, resulting in the interlocutory application being heard on 14 March 2023.

8    At the hearing the Court heard oral submissions only in respect of the three Notices to Produce served on the Official Trustee by Mr Shaw. Following submissions and after judgment was reserved on this point, I made the following orders:

THE COURT ORDERS THAT:

1.     No applications or material be filed in these proceedings until determination of the respondent’s amended interlocutory application filed 13 December 2022.

2.     The hearing in relation to paragraphs 3, 6 and 7 of the amended interlocutory application filed by the respondent on 13 December 2022 be adjourned to a date to be fixed.

3.     Costs be reserved.

9    In an email from Mr Shaw to the Federal Court Registry dated 28 April 2023, Mr Shaw sought “that the matter be adjourned or stayed until the leave to appeal application is determined as success on any of the grounds”. Specifically in that email Mr Shaw wrote:

I have filed a leave to appeal application of all of the orders dated 4 April 2023

File no QUD145/2023

The hearing date is not yet listed.

VID361 is listed again on 23 May but I request that the matter be adjourned or stayed until the leave to appeal application is determined as success on any of the grounds, I raise would affect the proceeding.

I have asked the applicants for consent but they have refused.

Please advise if an adjournment or stay can be granted or whether you require a hearing to decide.

(reproduced from original)

10    The Registry brought this email to the attention of my Associates, and I listed the matter for case management.

11    At the case management hearing of 4 May 2023 the Official Trustee was represented by Ms Meghan Sullivan. The following oral submissions were made:

HER HONOUR: All right. Ms Sullivan, what’s your position?

MS SULLIVAN: Thank you, your Honour. It’s the applicant’s position is that it would like to maintain the hearing on 23 May if possible. If your Honour is conscious that the decision in the application for leave to appeal may impact upon the outcome of the hearing on 23 May, it could potentially be dealt with by the hearing proceeding on 23 May – just the decision being reserved pending the outcome of the application for leave to appeal. If Mr Shaw is unsuccessful in that application, a judgment could be delivered. And if, alternatively, Mr Shaw is successful in that application for leave to appeal and any subsequent appeal, the parties could potentially make written submissions to your Honour in respect of any documents produced on those notices to produce. And your Honour could have regard to those prior to delivering the reasons for judgment in respect of the interlocutory application.

(transcript 4 May 2023 page 3 line 42 – page 4 line 8)

12    Mr Shaw was self-represented, and made the following oral submissions:

HER HONOUR: Thank you. Mr Shaw.

MR SHAW: Well, I think that that’s totally impractical, your Honour. I’ve filed my leave to appeal application to – asking to set aside the orders made on 4 April, which, if – even if in part successful, would have a huge impact on the way I present my case to you in any subsequent – the other matters. And what Ms Sullivan is suggesting is that we do a – in effect, a dry run with potentially not all the information that I might be able to get, which would severely prejudice me and also the court because it would – really would waste everybody’s time to go through matters that may have to be redone again if I’m even partially successful. I really don’t think that’s practical at all or fair.

HER HONOUR: All right.

MR SHAW: I mean, it’s only – you know, I’m available my right to at least seek leave to appeal. And as I say, even if partially successful, it makes a huge impact. And one of the – one of the grounds of the appeal is that if I’m successful, the matters might be heard by a different judge, your Honour. So as I say, to have a dry run with all these things outstanding would be a total waste of time, in my submission.

(transcript 4 May 2023 page 4 lines 10-29)

Consideration

13    In the judgment delivered on 4 April 2023 I noted that the substantive proceedings before the Court concerned an application by the Official Trustee pursuant to s 37AO of the Federal Court of Australia Act 1976 (Cth). Section 37AO focuses on the conduct of a respondent to such proceedings – in this case Mr Shaw.

14    The notices to produce served by Mr Shaw concerned material relevant to his interlocutory application, which in turn was referable to the substantive proceedings. Both Mr Shaw and the Official Trustee have filed material in the proceedings. As my judgment of 4 April 2023 demonstrates, I was satisfied that the Official Trustee ought not be required to comply with the notices to produce the additional material sought by Mr Shaw.

15    Turning now to Mr Shaw’s oral application, although he sought orders by way of adjournment or stay, the nature of the relief he sought was essentially the same, namely the adjournment of the hearing of the interlocutory application pending the determination of his application for leave to appeal my judgment of 4 April 2023.

16    In relation to an application for adjournment, I note the following observations of Burley J in Zetta Jet Pte. Ltd v The Ship "Dragon Pearl" [2018] FCA 878 at [38], citing Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; [2009] 239 CLR 175, 179:

37.    As the High Court made clear in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 (AON), the types of matters that should be considered in the context of an adjournment application include: (a) the explanation for the adjournment; (b) the detriment to other parties; (c) the detriment to the court and other litigants, and; (d) the choices made by the parties as to the claims to be made and how they are to be framed. That, of course, is not an exhaustive list.

38.    In the current context it is also apposite to note that in the exercise of its discretion it is appropriate for the Court also to consider the position of other litigants and confidence in the judicial system generally: AON at [5] (French CJ) and [111] (Gummow, Hayne, Crennan, Kiefel and Bell JJ). It is for the plaintiffs to persuade the Court, on sufficient material, that an adjournment is appropriate. As the plurality in AON said at [103], [106], [107], if an application that would result in an adjournment is sought and no, or no sufficient explanation is given then the application should be refused. French CJ said (at [4]) that where an application is made “late in the day”, without adequate explanation and necessitating the vacation of a trial date, the applicant bears a heavy burden to show that the exercise of the Court’s discretion should be in its favour.

17    To the extent that Mr Shaw’s oral application also seeks stay of the 4 April 2023 judgment pending the determination of his application for leave to appeal, I note comments of Keane J in Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd [2008] QCA 322; [2008] 2 Qd R 453 at [12] where his Honour said:

The decision of this Court in Berry v Green suggests that it is not necessary for an applicant for a stay pending appeal to show "special or exceptional circumstances" which warrant the grant of the stay. Nevertheless, it will not be appropriate to grant a stay unless a sufficient basis is shown to outweigh the considerations that judgments of the Trial Division should not be treated as merely provisional, and that a successful party in litigation is entitled to the fruits of its judgment. Generally speaking, courts should not be disposed to delay the enforcement of court orders. The fundamental justification for staying judicial orders pending appeal is to ensure that the orders which might ultimately be made by the courts are fully effective: the power to grant a stay should not be exercised merely because immediate compliance with orders of the court is inconvenient for the party which has been unsuccessful in the litigation.

(emphasis added in original)

18    Materially, principles relevant to applications for stays pending appeals were considered by White J in Bethell v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCA 756 at [9]:

[9]     In many respects, the present application is analogous to an application for a stay of enforcement of a judgment pending an appeal. Accordingly, I consider it appropriate to refer also to the principles governing the Court’s exercise of the discretion to grant such a stay:

(a)    prima facie, a successful party is entitled to the benefit of the judgment which it has obtained and the Court should commence with a presumption that the judgment is correct: Power Flex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65 at 66 citing Mahoney JA in Re Middle Harbour Investments Ltd (in liq) (CA (NSW), 15 December 1976, unreported); Citrus Queensland Pty Ltd v Sun State Orchards Pty Ltd [2008] FCA 1867 at [39]; and Esco Corporation v PAC Mining Pty Ltd [2008] FCA 1018 at [19]. A final judgment is not to be regarded as provisional, contingent or operating only subject to confirmation on appeal.

(b)    nevertheless, the Court has a broad discretion under r 36.08 of the Federal Court Rules 2011 (Cth) to grant a stay pending an appeal in an appropriate case: Power Flex at 66 67; Citrus Queensland at [39];

(c)    an applicant for a stay should demonstrate that there is “a reason or an appropriate case” warranting an exercise of the discretion departing from the prima facie position. The mere filing of a notice of appeal is not sufficient: Power Flex at 66; Alexander v Cambridge Credit Corp Ltd (recs apptd) (1985) 2 NSWLR 685 at 694; Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd [2008] QCA 322; [2008] 2 Qd R 453 at [12];

(d)    an applicant for a stay must usually demonstrate that the appeal has at least reasonably arguable prospects of success. The threshold is low and, in order to see whether an appellant has discharged it, the Court makes a “preliminary non-speculative assessment”: Citrus Queensland at [40];

(e)    an applicant for the stay should also satisfy the Court that the proposed stay is “fair to all parties” having regard to the balance of convenience (ie, the balance of risks and irremediable harm) and the competing rights of the parties”: Alexander v Cambridge Credit at 694; Citrus Queensland at [39] and [47]; Esco Corp at [20]; and

(f)    the existence of a real risk that the appeal will be rendered nugatory if the stay is not granted is a substantial factor in favour of granting the stay, but it is not conclusive. It is to be weighed against the risk of prejudice to the successful party at first instance if execution of the judgment is stayed: Citrus Queensland at [41]; Alexander v Cambridge Credit at 695

19    Taking these principles into account I find as follows.

20    First, my judgment of 4 April 2023 was in favour of the Official Trustee. The Official Trustee is entitled to the benefit of that judgment, and my consideration of Mr Shaw’s oral application should commence with a presumption that the judgment is correct.

21    Second, Mr Shaw’s reason for claiming that the exercise of my discretion to stay the effect of the 4 April 2023 decision was that to do otherwise would prejudice him and be inefficient when the hearing would be “in effect, a dry run with potentially not all the information that I might be able to get”. While it is possible that Mr Shaw may be successful in obtaining leave to appeal, and subsequently obtain orders referable to the notices to produce by the Full Court in appeal:

    He did not make any submissions explaining why his appeal had at least reasonably arguable prospects of success, other than the following:

… But I just do want to point out that part of the grounds of my appeal is I say that you have already predetermined some maters that relate directly to items 3, 6 and 7 of my application, which is part of the grounds of my appeal. So if it was to go on – if a matter was to go on and, you know, you heard or made further determinations on those three items, that might – if I was successful on my leave to appeal, that would punch – that would have to be undone.

(transcript 4 May 2023 page 6 lines 9-14)

    The hearing of 14 March 2023 was set down for the purpose of considering the notices to produce served by Mr Shaw and paras 3, 6 and 7 of the interlocutory application. The matter was listed for half a day, however the hearing of both the notices to produce and the interlocutory application was not completed within that time. It is plain that both Mr Shaw and the Official Trustee were in a position to have paras 3, 6 and 7 heard on 14 March 2023, irrespective whether the Court ordered compliance with the notices to produce, on the basis of extensive submissions and material already filed. I can only assume that Mr Shaw was prepared for the hearing to continue, not as a “dry run” on 14 March 2023.

    In any event, as the Official Trustee submitted, paras 3, 6 and 7 of the interlocutory application can be heard, and judgment reserved, pending determination of the application for leave to appeal. At the hearing I indicated agreement with this course of action to the parties (see transcript page 5 lines 22-30). In my view such a course answers Mr Shaw’s concerns regarding a “dry run”. Importantly, it also addresses Mr Shaw’s concerns that any appeal against the judgment of 4 April 2023 would be rendered nugatory.

22    Finally, Mr Shaw was required to demonstrate that the proposed stay was fair to all parties, having regard to the balance of convenience. Mr Shaw is plainly entitled to seek leave to appeal the judgment of 4 April 2023, however to date leave to appeal has not been granted. Section 37M of the Federal Court of Australia Act requires facilitation of the just resolution of disputes according to law, as quickly, inexpensively and efficiently as possible.

23    In my view it is appropriate that paras 3, 6 and 7 of the interlocutory application proceed to hearing in accordance with the orders made on 4 April 2023. If Mr Shaw’s application for leave to appeal my judgment of 4 April 2023 is not determined by 23 May 2023, judgment will be reserved as anticipated by these reasons.

CONCLUSION

24    I consider that the appropriate order was to refuse the oral application for adjournment or stay. While costs generally follow the event (Oshlack v Richmond River Council [198] HCA 11; 193 CLR 72] the Official Trustee did not press for costs at this stage. Accordingly, I ordered that costs be reserved.

Associate:

Dated:    9 May 2023