Federal Court of Australia
Renet v The Owner – Strata Plan SP22143 [2023] FCA 631
ORDERS
Appellant | ||
AND: | THE OWNER - STRATA PLAN SP22143 Respondent | |
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. The appeal be dismissed.
2. If a costs application is to be made, within seven (7) days of the date of this judgment, any such application, any evidence in support of that application and written submissions (not exceeding two pages in length) which address the reasons why a costs order should be made, must be filed.
3. Any party opposing the costs application may, within fourteen (14) days of the date of this judgment, file any evidence in opposition of that application and written submissions (not exceeding two pages in length) which address the reasons why a costs order should not be made.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
RAPER J
1 On 6 August 2021, a bankruptcy notice was served on the appellant, Mr Mark Renet (Mr Renet). The bankruptcy notice demand payment of $12,487.11. Mr Renet failed to comply with the requirements of that notice by the specified date being 27 August 2021.
2 On 2 February 2022, the respondent, The Owner – Strata Plan SP22143 (the Strata Plan), served a creditor’s petition seeking a sequestration order against the estate of Mr Renet. This was in circumstances where the Strata Plan alleged it was owed the sum of $12,365.19 by Mr Renet for outstanding strata levies pursuant to a judgment of the Local Court dated 8 June 2021.
3 As noted by the primary judge, the matter first came before a Registrar of the Federal Circuit and Family Court of Australia (Division 2) (FCFCOA) on 25 March 2022. There was no appearance by or on behalf of Mr Renet. In these circumstances the matter was adjourned until 27 May 2022, with procedural orders directing that the Strata Plan notify Mr Renet of the adjournment, and that any further adjournment was to be supported by an affidavit, and that in the event that this was not complied with and there was no appearance on behalf of Mr Renet at the hearing, the application may proceed on the petition for the sequestration order and the Court would determine the application on the evidence available.
4 On 27 May 2022, Mr Renet again did not appear, and the Registrar made orders for a sequestration order against his estate and for the Strata Plan’s costs to be fixed in the sum of $8,172.47 to be paid from Mr Renet’s estate.
5 Mr Renet applied for a review of the sequestration order made by the Registrar under s 256(1) of the Federal Circuit and Family Court of Australia Act 2021 (Cth). Mr Renet attended the hearing of his application on 19 August 2022, made submissions and was permitted to file further submissions after the hearing. On 16 November 2022, the FCFCOA made orders dismissing the application for review with costs: The Owner – Strata Plan SP22143 v Mark Renet [2022] FedCFamC2G 953 (J). Mr Renet now appeals from those orders.
Background
6 At an early case management hearing in this matter, I ordered that the Strata Plan file all documents that were before the primary judge. It is upon my review of those documents that I note the following background facts.
7 On 8 June 2021, the Local Court of New South Wales ordered that Mr Renet pay the Strata Plan $12,365.19 (the Judgment Debt). The debt arose from Local Court proceedings No. 2020/00252979.
8 On 5 August 2021, a bankruptcy notice was issued for the amount of $12,487.11, to which Mr Renet did not comply.
9 On 2 February 2022, the Strata Plan filed a creditor’s petition applying to the FCFCOA for a sequestration under s 43 of the Bankruptcy Act 1966 (Cth) against the estate of Mr Renet with respect to the Judgment Debt.
10 On 25 March 2022, a Registrar of the FCFCOA, made orders for the hearing of the creditor’s petition to be adjourned until 27 May 2022. Mr Renet was not in attendance when the Registrar made those orders. The Registrar made orders that Mr Renet be notified by representatives of the Strata Plan of the hearing date. There was evidence before the primary judge that Mr Renet was informed, by email, dated 25 March 2022, at 2:12pm of the hearing being adjourned until 11am on 27 May 2022.
11 On 27 May 2022, a Registrar of the FCFCOA made a sequestration order against the estate of Mr Renet, and ordered the creditor’s cost fixed in the sum of $8,172.47 be paid from his estate. Mr Renet did not attend. There was evidence from Mr Renet that attempted to dial in unsuccessfully to the hearing. The Strata Plan made a submission to the primary judge that it appeared from Mr Renet’s evidence of call logs that he dialled into the incorrect number.
Proceedings before the FCFCOA
12 On 31 May 2022, Mr Renet filed an application for review on 31 May 2022 in relation to the orders made by the Registrar on 27 May 2022, and sought the following orders:
Details of orders sought to be reviewed
1. A sequestration Order against Mark Renet.
2. Applicant creditors [sic] costs fixed sum [sic] $8,172.47 of respondent debtor.
Orders sought
1. Cancel judgment to hear matter of defendant
2. “As above [sic]-(see orders sought 1).
(Emphasis in original.)
13 As noted by the primary judge, Mr Renet sought the following relief (at J[7]):
By way of apparent relief and in response to that part of the Application entitled “terms of the Order(s), Mr Renet stated: “Re list hearing” and “To re list hearing to address matter with all parties.”
14 In response to Mr Renet’s application for review, the Strata Plan filed its own “Notice stating grounds of opposition to application, interim application or petition” on 21 June 2022, the content of which the primary judge extracted as follows (at J[9]):
Strata Plan filed a Notice Stating Grounds of Opposition to Application, interim application or petition on 21st June 2022. Strata Plan’s Grounds of Opposition and Orders sought were as follows (emphasis in original):
Grounds of opposition
The Applicant, who is the Respondent to the Application for Review and the creditor (the Applicant/Review Respondent/Creditor), intends to oppose the Application for Review filed by the Respondent (the Respondent/Review Applicant/Debtor) on the following grounds:
1. Order 1 dated 25 March 2022 stated that the hearing was adjourned to 11 am on 27 May 2022, to be conducted via MS Teams.
2. Order 4 dated 25 March 2022 required the Applicant/Review Respondent/Creditor to notify the Respondent/Review Applicant/Debtor of the adjournment and the Orders dated 25 March 2022.
3. The Applicant/Review Respondent/Creditor complied with Order 4 dated 25 March 2022 by providing a copy of the Orders dated 25 March 2022 to the Respondent/Review Applicant/Debtor by email and by express post.
4. No requests for any adjournment were made by the Respondent/Review Applicant/Debtor pursuant to Order 2 dated 25 March 2022.
5. The Respondent/Review Applicant/Debtor did not appear at the hearing on 27 May 2022.
6. The Applicant/Review Respondent/Creditor was entitled to rely on Order 3 dated 25 March 2022 and proceed on the petition for a sequestration order.
7. Even if the Respondent/Review Applicant/Debtor's attempts to appear on 27 May 2022 had been successful, Order 3 dated 25 March 2022 prevails and the Court would have determined the Applicant/Review Respondent/Creditor's petition for a sequestration on the evidence available, those being the Respondent/Review Applicant/Debtor has committed an act of bankruptcy, which was the basis for the petition; the petition was served on the Respondent/Review Applicant/Debtor; and that the debt relied on by the Applicant/Review Respondent/Creditor is still owing.
Evidence before the primary judge
15 Mr Renet relied upon three of his own affirmed affidavits.
16 In the first affidavit, dated 27 May 2022, he attempted to explain why he had not been able to attend the hearing before the Registrar on the same day. He annexed what appeared to be screenshots of live chat sessions with the Federal Court’s support staff providing him with details on how to access the hearing online and screenshots of his call history showing purported attempts to attend the hearing.
17 In the second, dated 18 July 2022, he listed three documents that he had annexed to the affidavit, describing them as “1. Bill for legal fees”, “2. Value of Strata Levies”, “3. Legal obligation, not meet [sic] under Strata Scheme Management Act”. The first annexure was an invoice billed to the Strata Plan on 15 July 2022 for “Legal fees” amounting to $9000. The second was a document that appeared to enumerate the levies charged for Strata Plan 22143 between June 2017 and August 2022. The third appeared to be a standard form strata resolution providing for a payment plan for the repayment of strata fees, which referred to s 85(5) of the Strata Schemes Management Act 2015 (NSW).
18 In the third, dated 22 July 2022, Mr Renet listed eight documents that he had annexed to the affidavit. Some of these documents appeared to conflate a previous dispute over strata fees before the Local Court in Queanbeyan, which had seemingly settled on 4 April 2017, with the current dispute. Other annexures included correspondence from 2019 between Mr Renet and Civium (the strata manager), and between Mr Renet and his then-lawyer, Mr O’Keefe, as well as ledgers, transaction lists and an excerpt from an affidavit of Ms Connie Park dated 21 June 2022.
19 The Strata Plan relied on an affidavit of service of the bankruptcy notice, an affidavit of search and two affidavits of debt (the first just prior to the May 2022 hearing dated 26 May 2022, and then one dated 18 August 2022). In addition, the Strata Plan relied upon an affidavit of Ms Connie Park, solicitor for the Strata Plan.
Hearing on 19 August 2022
20 The matter was heard on 19 August 2022. Both parties attended and made submissions.
21 The primary judge made further orders on that date for the parties to file further written submissions in relation to the 2021 proceedings in the Local Court precipitating the Judgment Debt which was the subject of the sequestration order.
22 Mr Renet filed further “closing (or supplementary) written submissions”, which were emailed to the primary judge’s Chambers on 16 September 2022, which were extracted in his reasons (at J[12]), and which stated:
Further written submissions:
• Lawyer John O’Keefe withdrew after not concluding on settlement
• Magistrate - Identified that while there is money owing the value was unsubstantiated.
• Record goes back to 2014. Breaching settlement.
• An itemized account has been produced to conclude settlement Respondent Affidavit (22/7/2022) see item 8 page 2. An additional instalment for 1/9/2022 - 31/11/2022 Levies 4th Quarter $626.10 being indemnified of all other charges to pay no more than settlement on April 2017 in addition to charging my legal fees of $9000, less $13,774.20. Leaves a balance of $447.10 to be paid up to 31/11/2022
In addition to the applicant having to spend 30 years in prison. Subject to fraud. Under the crimes act of 1990. Section 192E. 1 count - maximum jail sentence of 10 years in prison. Beach of settlement – See Item 1 Respondent Affidavit (Filed 22/7/2022 4:20pm) Committing fraud of opening balance – See Item 5 Respondent Affidavit (22/7/2022) show that account goes back to 2014 in previous submissions by Applicant. 3. Violating section 85(5) of strata scheme management act of 2015 - See Item 8 page 3 Respondent Affidavit (22/7/2022)
Summary of the primary judge’s reasons
23 The primary judge undertook, as required of him, a de novo hearing. The reasons commenced by outlining the principles governing the nature of such a hearing by reference to (at PJ[23]) Emmett J’s statement in Totev v Sfar [2008] FCAFC 35; 167 FCR 193 at [10] that “…there must be a complete rehearing of the facts and the law as they exist when the judge reviews the order may by the registrar” and, at [13], “…the judge reviewing the order begins afresh and exercises for himself or herself any discretion exercised by the registrar”, citing the following:
Because the hearing of an application for review of a sequestration order is a hearing de novo, it would not be sufficient for the reviewing judge to be satisfied that the registrar made no error and simply to dismiss the application for review. The judge who hears the review application must hear the petition afresh and must be satisfied as to the matters referred to in s52 of the Bankruptcy Act. Thus, the reviewing judge must herself or himself be satisfied with the proof of:
• the matters stated in the petition;
• the service of the petition; and
• the fact that the debt or debts on which the petitioning creditor relies is or are still owing.
The reviewing judge must also exercise afresh the discretions conferred by s 52(2).
24 As the primary judge understood it, Mr Renet’s “regular complaint (made primarily in open court as opposed to his written submissions)” was as follows:
The judgment debt
29 Although not formalised, Mr Renet’s regular complaint (made primarily in open Court as opposed to in his written materials) related, in part, to the judgment debt in the Queanbeyan Local Court, which ultimately led to the bankruptcy proceedings and the sequestration Order. In relation to the judgment debt, I note that:
(a) The judgment was never appealed or Application made to set it aside;
(b) In his own submissions, Mr Renet confirmed that he was legally represented, at least for part of the litigation that resulted in the judgment debt (as noted below, he claims a significant sum, apparently by some sort of “cross-claim” arising from these legal fees); and
(c) Mr Renet regularly contended that a “settlement” between the parties regarding strata fees precluded the judgment debt standing.
30 The formulation of Mr Renet’s contention, set out in the preceding sub-paragraph (c), is drawn from an annexure to his Affidavit, filed 22nd July 2022, described as “Item 1 – Settlement”. This document, dated 4th April 2017, purports to reflect a settlement between the parties at that time regarding outstanding strata fees.
31 In the other Annexures to his Affidavit (all described as “Item” followed by a number), there is something of a history, and at other times, a conflation, of contest between the parties invariably over payment of strata fees by Mr Renet. For example, there is correspondence between Mr Renet and his then lawyer (Mr O’Keefe), dated 2nd September 2016, regarding him requiring legal representation concerning a civil matter (seemingly, again, over strata fees) and some criminal matter that Mr Renet alleges against the Strata Manager of the property in which Mr Renet’s unit is located. He contended in this correspondence that there had been a fraud perpetrated against him, which would result in the Strata Manager (or others involved) in being liable for imprisonment for 10 years.
32 Another annexure (described as “Item-5 Failed record of accord”) is described as “Owner ledger from 1/1/15 to 20/7/22”. Mr Renet is recorded as the “owner” of Unit 7 in the property complex. This document has obviously been produced (and provided) by the Strata Managers of the property, Civium Property Group. The final entry on this document shows a debit balance of $19,073.80 (at 1st April 2022) as the amount of strata fees owing by Mr Renet. The outstanding amount includes interest. This ledger statement records that, the “opening balance” as at 1st January 2015 was $0. As at 27th May 2015, the debit balance was $9,144.75; and as at 30th May 2021, the balance owing by Mr Renet for strata levies totalled (with interest) $14,773.51. I recall that the judgment debt of $12,365.19 was entered on 8th June 2021.
33 Two other annexures to Mr Renet’s Affidavit should be noted. First is an Affidavit of Ms Park, filed in the current proceedings on 21st June 2022. Mr Renet contends that this Affidavit is “false.” I consider this Affidavit below.
34 The second annexure to note here is “Item 8”, being an Affidavit of Mr Renet, filed in this proceeding, on 20th July 2022. This earlier Affidavit of Mr Renet has annexed to it what purports to be an Invoice (dated 15th July 2022), addressed to “Strata Plan 22143, Civium …” This invoice seems to claim “legal fees” he has incurred of $9,000.00, together with what seems to be his assessment of levies due, but notably with no component of interest for outstanding levies.
35 According to his written submissions, Mr Renet then contends that when one takes account of the 2017 settlement, his legal fees, and the outstanding strata fees (apparently without interest), the only amount due and payable by him is $447.10, which seems to cover the period up to 1st November 2022. As an observation only, the figures set out in his written submissions and those set out in his “Invoice” recorded above do not “add up”, that is, they are not readily reconcilable.
36 For the reasons set out above, the oral submission by Mr Renet on 19th August 2022 that there was some kind of deficiency regarding the judgment debt that was entered in the Queanbeyan Local Court on 8th June 2021, has no substance. No evidence was provided to support this assertion. And as already recorded, there was no appeal from that judgment, or Application to stay it or to set it aside.
25 His Honour found that first, there could be no doubt as to the validity of the default judgment obtained by the Strata Plan on 8 June 2021. There was no appeal against it, nor any application to set aside that judgment (J[41]). Secondly, two affidavits of debt were filed on 26 May and 18 August 2022 (J[42]). Ms Park, solicitor for the Strata Plan, deposed that the 2017 settlement relied upon by Mr Renet was, and is, unrelated to the outstanding strata levies that were the basis for the judgment debt in the Local Court (J[43]). Thirdly, Mr Renet had provided no clear or intelligible evidence (or submissions) that would, or could, warrant the FCFCOA to challenge or otherwise question (a) the judgment of the Local Court, or (b) any of the processes in the FCFCOA before the Registrar that resulted in the sequestration order made on 27 May 2022. The Court was satisfied that (a) there was a properly entered judgment debt, (b) Mr Renet was properly served with all notices by the Strata Plan, and (c) the terms of s 52 of the Bankruptcy Act had been satisfied. Further, Mr Renet was granted extra time to file material, and was advised to obtain legal advice. There is no evidence that he sought or obtained any advice regarding the bankruptcy proceeding (J[44]). Fourthly, the evidence and submissions on behalf of the Strata Plan confirmed that proper processes and notices given to Mr Renet, and that significant opportunities had been given to him to pay the debt owing and/or properly to engage with the bankruptcy proceedings (J[45]).
26 His Honour concluded, by way of summary (at J[49]):
Having particular regard to this outline of principle, by way of summary from what has already been said earlier in these reasons:
(a) The evidence from the petitioning creditor before this Court (as it was before the Registrar) readily satisfies the requirements of s.52(1) of the Bankruptcy Act. This includes that the judgment debt is patently owed; the debtor has not paid any sum to satisfy it; his claim regarding a prior settlement (in 2017) is unsupported by the limited evidence he provided to the Court, as well as being clearly rebutted by the evidence from the petitioning creditor;
(b) On the basis of the evidence and submissions presented by both parties at the hearing de novo, and in the exercise of the Court’s discretion, I am relevantly satisfied that there has been compliance with the requirements of s.52(1) of the Act and that the original sequestration Order made by the Registrar should be confirmed.
The appeal
27 On 2 December 2022, Mr Renet filed a notice of appeal in which he contends as follows:
Grounds of appeal
1. Neither parties attended
2. Medical Certificate for absense [sic] exemption
Orders sought
1. For appellant to be liable for legal fees
2. To serve 30 years in prison for fraud, under section 192E of the crimes at [sic] of 1990
3. To be awarded legal fees as appeallant [sic]
4. Sort for the order of the court to correct/review respondents incorrect name submittion [sic]
Procedural steps leading to the appeal
28 This matter was first before the Court for case management on 15 March 2023. Orders were made to give Mr Renet time to obtain legal representation. In addition, the Strata Plan was ordered to provide Mr Renet with names of “any community legal centres of which they [were] aware of within the Australian Capital Territory and Queanbeyan, New South Wales, as soon as possible”.
29 Mr Renet filed an affidavit affirmed on 3 April 2023 to which he annexed a two-page document titled “Amendment of further information”, an account of the strata levies, an “Account of Legal Fees to be paid by respondent [sic]”, a medical certificate dated 18 November 2022 which purportedly explained why Mr Renet could not attend the FCFCOA on 16 November 2022, and a handwritten document titled “TERMS OF SETTLEMENT”.
30 The matter returned before me for case management on 4 April 2023. Mr Renet explained that the documents annexed to his affidavit affirmed on 3 April 2023 were “duplications for the appeal which was filed”. At that case management hearing, Mr Renet submitted that it may take “two or three months” in order to find legal representation. Mr Renet informed the Court that he had an appointment to obtain legal assistance on 21 April 2023. As a consequence, orders were made that the Court provide Mr Renet with a copy of the transcript of the case management hearing on 4 April 2023, and that the Strata Plan provide the Court and Mr Renet with a copy of the evidence, applications and submissions which were before the FCFCOA for the purposes of the primary judge’s decision made on 15 November 2022. A timetable was set allowing both parties to file any further evidence and written submissions, and the appeal was listed for hearing on 2 June 2023.
31 Mr Renet was ordered to file any further evidence and written submissions by 5 May 2023, but did not do so. On that date, Mr Renet filed an affidavit in which he appeared to seek to vacate the hearing date. The matter was relisted for case management on 15 May 2023 in which Mr Renet made a formal application, which the Strata Plan opposed. Mr Renet’s application was rejected. However, further time was allowed for the parties to file any additional evidence and written submissions.
Mr Renet’s submissions
32 Mr Renet filed an affidavit on 26 May 2023, dated 24 May 2023, in an irregular form in which he affirmed the following:
See attachment re points 1 to 7
Item 8 account descrepency [sic] for violation up to $-2,863.67
33 There were four separate pages attached to this affidavit. The first being an email forwarded to the ACT Registry of the Federal Court, dated 24 May 2023, which is set out in full as it appeared to comprise Mr Renet’s written submissions:
1. Set aside judgment of sequestration for counter claim
As adviced [sic] by 2 legal representatives.
2. Discrepency [sic] with the account. The account will show that settlement wasnt [sic] reached to conclude the matter in 2017
Indemnity
3. Invoice for ammendment [sic] for 2023 legal fees of Mark Renet $3,000. TBC (on the povision [sic] of time).
4. Indemnity - An indemnity clause is a contractual transfer of risk between two or more contractual parties generally to prevent loss or compensate for a loss which may occur as a result of a specific event.
5. Breach of settlement 2017 - Failure to comply with settlement is in break [sic] of the crimes act of 1990 [sic] under section 192E where the party taking ownes [sic] of this act of fraud is subject to a maximum jail sentence term. The matter has already been lodged with police with an event number however currently under investigation.
The matter has never been about if I owe money but about the value owed. As addressed at the local court [sic], who [sic] refused to hear my case and the registra’s [sic] office refused to accept an appeal application without charging fee for service regardless of if I am entitled to waver [sic].
The matter has remained unresolved without being able to address the matter at hearing.
6. The opposition is also at fault for failure to comply with legal obligation for payment.
See attachment 9 Payment Plan (Ordinary resolution)
7. Record of account for there [sic] failure to comply with ammendment [sic]
Tue 18/6/2019 civium
34 The second being, what purportedly appears to be (although not complete nor verified in the affidavit) an email from a “Patrick”, dated 2 May 2023, purportedly from Justice Connect, stating “If you need advice on what to expect that at the hearing or related questions, we can look at providing this”.
35 The third, a portion of an unidentified document containing a form a resolution an Owners Corporation may make under s 85(5) of the Strata Schemes Management Act. The fourth, being an unexplained spreadsheet.
36 In addition, by email on 31 May 2023, the Registry received an email from Mr Renet attaching an invoice rendered by Mr Renet to the Strata Plan for “Legal fees” purported rendered on four occasions, each for $3,000 between April 2017 and 24 May 2023, including on two occasions on 25 July 2022 and 24 May 2023, by Mr Renet, as “Self Represented Mark Renet – Owner”.
37 Despite prompting at hearing, Mr Renet was unable to identify which evidence, from the numerous affidavits he has filed this year, he was seeking to rely upon on appeal. Mr Renet made no application for leave to rely on this additional evidence pursuant to s 27 of the Federal Court of Australia Act 1976 (Cth). The Court’s power to admit fresh evidence is remedial so as to ensure that proceedings do not miscarry. In exercising this discretion, I would normally need to be satisfied that the further evidence, had it been adduced at trial, would very probably have meant that the result would have been different, and Mr Renet was, at the hearing before the primary judge, unaware of the evidence and could not have been, with reasonable diligence, made aware of the evidence: Toki v Minister for Immigration, Citizenship and Multicultural Affairs [2022] FCAFC 164 at [66] citing with approval BVZ21 v Commonwealth of Australia [2022] FCAFC 122 at [12].
38 I have assumed that Mr Renet sought to rely on all affidavits he had filed since instituting the appeal. To the extent that those affidavits included documents that were not before the primary judge, Mr Renet did not identify them for me. Given that the Strata Plan did not ultimately contest leave being granted when I raised the issue with them, and given Mr Renet was unrepresented, from an efficiency perspective, I will not refuse leave for him to rely on them. For the reasons, set out below, even if leave is granted, Mr Renet’s appeal must fail.
39 At hearing, Mr Renet submitted (expanding on the submission he had made in his document entitled “Amendment of further information” annexed to his affidavit of 3 May 2023):
(a) that, in effect, he had been denied procedural fairness by being absent from the delivery of judgment on 16 November 2022, where he submitted he had a medical certificate which evinced his inability to attend;
(b) that there was an error at [35] of the primary judgment, which recorded a sum of $447.10 owing for which he claimed that the primary judge provided no logical or coherent basis for such a conclusion;
(c) that the primary judge erred and a sequestration order ought not be made because of:
(i) the fact of Mr Renet entering into a settlement with the Strata Plan in 2017 which was not complied with and for which he should be “indemnified” for any “further charges”;
(ii) that he had a claim of equal or more value himself as against the Strata Plan, for reasons which included “legal fees” including him claiming his legal costs for representing himself at a charge out rate of $3,000 per day, as well as his former legal representative in the Local Court proceeding and his brother, Mr Evan Renet, who is a real estate agent;
(iii) that the Strata Plan had an obligation under s 85(5) of the Strata Schemes Management Act to offer to enter into payment plans in respect of overdue contributions, with plans to be limited to a period of 12 months, and which must be supported by the completion of the lot owner by a statement of financial position;
(iv) where he variously baldly asserted that the Strata Plan had committed fraud by the content of various strata levy ledgers in the period between 2014 and the present;
(v) that he had undertaken over many years to try and be reasonable and resolve it with the Strata Plan and that he is in this predicament by virtue of the Strata Plan’s unreasonable failure to resolve the matter with him;
(vi) where he asserted that the primary judge’s costs orders, both arising from the making of the sequestration order and Mr Renet’s failed review application should be rejected on the basis that the latter was “unsubstantiated” and the former “fraudulent”; and
(vii) where he further made submissions with respect to a number of paragraphs arising from the judgment for which he asserted that, in addition, by reason of what is perceived to be the “false value” that is referred to by the primary judge at [35] such that the primary judge has engaged in criminal conduct under s 192E of the Crimes Act 1900 (NSW).
Strata Plan’s submissions
40 In summary, the Strata Plan submits that the matter was heard de novo, consistent with the requirements of the Bankruptcy Act and bankruptcy principles. Mr Renet attended the hearing before the primary judge and was given an opportunity to file further submissions after that hearing.
41 In response to Mr Renet’s grounds of appeal, as expressed in his Notice of Appeal dated 1 December 2022, the Strata Plan submitted the following.
42 In response to Mr Renet’s first ground, that “neither parties attended”, the Strata Plan expressed confusion. They submitted that if the reference was made to the hearing before the Registrar on 27 May 2022, this was incorrect as the Strata Plan’s legal representatives attended. If the ground refers to the hearing on 19 August 2022, both parties attended and made submissions. They also submitted that it was immaterial that Mr Renet had not been present for the delivery of judgment on 16 November 2022.
43 In response to Mr Renet’s second ground, that he had a “Medical Certificate for absense [sic] exemption”, the Strata Plan submitted that the reason for his non-attendance at the delivery of judgment was immaterial as he had been able to participate in the hearing and make submissions.
44 In relation to Mr Renet’s efforts to challenge the judgment debt, the Strata Plan referred the Court to Ramsay Healthcare Australia Pty Ltd v Compton [2017] HCA 28; 261 CLR 132 as the basis for two principles: (1) that a judgment will usually be sufficient evidence of a debt (Ramsay at [68] and [110]); and (2) that a Court will only revisit a debt where the debtor establishes substantial reasons for doing so (Ramsay at [65]). The Strata Plan submitted that the onus was on Mr Renet to establish that the primary judge’s judgment contained errors in law or fact, and Mr Renet had not provided any material to do so. The Strata Plan also submitted, as acknowledged by the primary judge, that there was a properly entered debt in the Local Court, Mr Renet had never appealed the judgment debt or made any application to have it set aside, and he was legally represented for at least part of the litigation in the Local Court. As a result of Mr Renet providing the Court with no reason to enable it to revisit the debt, the Strata Plan submitted that the appeal must be limited to questioning whether the primary judge’s decision was made in accordance with s 52 of the Bankruptcy Act.
45 The Strata Plan sought orders dismissing the appeal and requiring Mr Renet to pay its costs on an indemnity basis.
Consideration
46 The nature of an appeal of this kind was recently described in a fulsome way by Wheelahan J in Whiteman v Deputy Commissioner of Taxation [2022] FCA 975 at [61]–[63] as follows:
61 This appeal comes before me as a single judge exercising appellate jurisdiction pursuant to the Federal Court of Australia Act 1976 (Cth), s 25(1AA)(a). The appeal is by way of re-hearing, in which the primary judge enjoyed no relevant advantage over this court. However, unlike the review that was before the primary judge, the appeal to this court is not a re-hearing de novo. The court’s powers on appeal are engaged only if, upon this court considering for itself the evidence and other material that was before the primary judge, some legal, factual, or discretionary error is demonstrated in the orders that were made: Allesch v Maunz [2000] HCA 40; 203 CLR 172 at [23] (Gaudron, McHugh, Gummow and Hayne JJ).
62 For the purposes of the demonstration of error on appeal, the engagement of s 52(2)(b) of the Bankruptcy Act involves two related levels of decision-making. The first is whether the primary judge was satisfied that there was some “other sufficient cause” for which a sequestration order ought not be made. This does not involve the evaluation of facts and circumstances against some legal norm: cf, Dwyer v Calco Timbers Pty Ltd [2008] HCA 13; 234 CLR 124 at [40] (Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ); Templeton v Australian Securities and Investments Commission [2015] FCAFC 137; 108 ACSR 545 at [23] (Besanko, Middleton and Beach JJ). Rather, it is the type of decision to which Mason and Deane JJ referred in Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513 at 518, which calls for value judgments in respect of which there may be room for reasonable differences of opinion, no particular opinion being uniquely correct. See also, Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; 264 CLR 541 at [43]-[49] (Gageler J). Because the powers on appeal are exercisable only upon the demonstration of error, the primary judge’s evaluation of whether there was “other sufficient cause” for the purposes of s 52(2)(b) must be shown to have been wrong. Error is not shown merely by persuading an appellate court to make a different evaluation, which may be no better than the first: see, Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 211-212 (Mason CJ, Deane and McHugh JJ), and the approval of the comments of Kirby P in Golosky v Golosky (unreported, NSW Court of Appeal, 5 October 1993). The second and related level of decision-making is whether upon the judge being satisfied of some “other sufficient cause”, the court should in the exercise of its discretion dismiss the petition: Endresz v Australian Securities and Investments Commission (No 2) [2015] FCAFC 33; 228 FCR 334 (Endresz) at [34], [37] (Edmonds, Gordon and Beach JJ).
63 Therefore, in relation to this appeal from the decision of the primary judge to the extent that it challenges the judge’s rejection of the appellant’s claim that the power under s 52(2)(b) should have been exercised to dismiss the petition, the principles essayed in House v The King [1936] HCA 40; 55 CLR 499 at 504-505 apply, such that it must be demonstrated that the decision miscarried. Within those principles, the correctness standard applies to any challenge on appeal to the legal principles that were applied, or to findings of material fact upon which the evaluation took place, but not to the primary judge’s evaluation, or to the exercise of the statutory discretion. The principles in House v The King also apply to the appellant’s challenge to the primary judge’s discretionary decision to fix the review for hearing. If the court is satisfied that error is established, then in a case such as the present where the primary judge enjoyed no relevant advantage over this court, the court may proceed to make its own findings and evaluative conclusions, and formulate its own reasoning: Robinson Helicopter Company Inc v McDermott [2016] HCA 22; 331 ALR 550 at [43] (French CJ, Bell, Keane, Nettle and Gordon JJ).
(Emphasis added.)
47 I respectfully adopt these statements of principle.
48 For the reasons which follow, the primary judge considered and disposed of the arguments made by Mr Renet for why the sequestration order should be set aside. It is appropriate to set out what s 52(1) of the Bankruptcy Act provides:
(1) At the hearing of a creditor’s petition, the Court shall require proof of:
(a) the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient);
(b) service of the petition; and
(c) the fact that the debt or debts on which the petitioning creditor relies is or are still owing;
and, if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor.
49 As can be seen from the submissions of Mr Renet above, he does not challenge the findings made by the primary judge in relation to whether the requirements of s 52(1) of the Bankruptcy Act were satisfied. However, as his Honour noted, the power under s 52(1) of the Bankruptcy Act to make such an order is subject to subs (2), which provides:
(2) If the Court is not satisfied with the proof of any of those matters, or is satisfied by the debtor:
(a) that he or she is able to pay his or her debts; or
(b) that for other sufficient cause a sequestration order ought not to be made;
it may dismiss the petition.
50 Mr Renet made no submission, nor was there any evidence, as to whether he is able to pay his debts, such that this is not a matter where s 52(2)(a) arises. Rather, his submissions were made on the basis, it appears, that the primary judge should have been satisfied of the fact that there was “other sufficient cause” (s 52(2)(b)) as to why it ought not be made.
51 Turning to the first issue, namely, on the basis of Mr Renet’s non-attendance at the delivery of judgment, I do not accept, in the circumstances, that this was a basis upon which an appeal could be substantiated. The delivery of a judgment in circumstances where the judgment disposes of all issues, including costs (as is set out in the primary judgment), did not require attendance of the parties and, to the extent that they do not attend, whether for medical reasons or otherwise, could not give rise to a denial of procedural fairness.
52 As to the second issue raised by Mr Renet, namely, what he perceived to be a purported error at [35] of the primary judgment, [35] of the primary judgment sets out a summary of what was understood by the primary judge to be Mr Renet’s submission, as follows:
According to his written submissions, Mr Renet then contends that when one takes account of the 2017 settlement, his legal fees, and the outstanding strata fees (apparently without interest), the only amount due and payable by him is $447.10, which seems to cover the period up to 1st November 2022. As an observation only, the figures set out in his written submissions and those set out in his “Invoice” recorded above do not “add up”, that is, they are not readily reconcilable.
53 Mr Renet takes issue with what the primary judge understood to be “the only amount due and payable” by Mr Renet, being $447.10. However, it can be seen from the primary judge’s reasons at [12] that the basis for this amount arises from the primary judge’s understanding of the further written submissions that were provided by Mr Renet to his Honour’s chambers on 16 September 2022, as extracted at [12] of the primary judgment, which is as follows:
Pursuant to Orders dated 19th August 2022, the parties were directed to file further written submissions in relation to the 2021 proceedings in the Queanbeyan Local Court and the material produced by the Applicant (Strata Plan) from those proceedings. Mr Renet’s very brief closing (or supplementary) written submissions were emailed to Chambers on 16th September 2022. They were as follows:
Further written submissions:
• Lawyer John O’Keefe withdrew after not concluding on settlement
• Magistrate - Identified that while there is money owing the value was unsubstantiated.
• Record goes back to 2014. Breaching settlement.
• An itemized account has been produced to conclude settlement Respondent Affidavit (22/7/2022) see item 8 page 2. An additional instalment for 1/9/2022 - 31/11/2022 Levies 4th Quarter $626.10 being indemnified of all other charges to pay no more than settlement on April 2017 in addition to charging my legal fees of $9000, less $13,774.20. Leaves a balance of $447.10 to be paid up to 31/11/2022
In addition to the applicant having to spend 30 years in prison. Subject to fraud. Under the crimes act of 1990. Section 192E. 1 count - maximum jail sentence of 10 years in prison. Beach of settlement – See Item 1 Respondent Affidavit (Filed 22/7/2022 4:20pm) Committing fraud of opening balance – See Item 5 Respondent Affidavit (22/7/2022) show that account goes back to 2014 in previous submissions by Applicant. 3. Violating section 85(5) of strata scheme management act of 2015 - See Item 8 page 3 Respondent Affidavit (22/7/2022)
(Emphasis added.)
54 I can discern no error in the primary judge’s reasons.
55 Mr Renet variously described that the basis upon which the sequestration order could be set aside was because there was a continuing dispute as between the parties and, in circumstances where, by virtue of that dispute, he was in fact owed large sums of money himself.
56 The primary judge had set out in some detail the allegations made by Mr Renet. In particular, as set out at [29] of his decision, he described the “regular complaint” of Mr Renet as being with respect to the judgment debt in the Local Court, which ultimately led to the bankruptcy proceedings and sequestration order. His Honour noted the following at [29] of the primary judgment:
In relation to the judgment debt, I note that:
(a) The judgment was never appealed or Application made to set it aside;
(b) In his own submissions, Mr Renet confirmed that he was legally represented, at least for part of the litigation that resulted in the judgment debt (as noted below, he claims a significant sum, apparently by some sort of “cross-claim” arising from these legal fees); and
(c) Mr Renet regularly contended that a “settlement” between the parties regarding strata fees precluded the judgment debt standing.
57 Mr Renet on appeal takes no issue with paragraphs (a) and (b) of his Honour’s judgment. The fact that the judgment was never appealed, nor was an application made to set it aside, and that Mr Renet was in fact legally represented, at least in part of the litigation that resulted in the judgment debt being made on 8 June 2021, is of some significance.
58 There are limited circumstances where, when a judge is exercising appellate jurisdiction in relation to a bankruptcy, he or she has the capacity to go behind a judgment. As stated by the plurality in Ramsay, Kiefel CJ, Keane and Nettle JJ held that (at [68]), for the purposes of s 52 of the Bankruptcy Act, a judgment may usually be taken to be sufficient evidence of a debt in that judgment against a debtor in favour of a creditor obtained after a trial. This is because a trial is generally a reliable indication of the true state of indebtedness as between a creditor and debtor given its ordinary processes, as part of the adversarial system, involve a testing of the relative merits of a claim and counterclaim. However, a bankruptcy court is able to go behind a judgment and inquire into the validity of the debt where there has been fraud, collusion or miscarriage of justice and looks with suspicion on consent judgments and default judgments: Petrie v Redmond [1943] St R Qd 71 at 75–76; Ramsay at [67], [69]]). This reflects a logic propounded in Ex parte Kibble; In re Onslow (1875) LR 10 Ch App 373, 376–377 (quoted in Wren v Mahony (1972) 126 CLR 212, 232–233 (Menzies J, dissenting)):
It is the settled rule of the Court of Bankruptcy, on which we have always acted, that the Court of Bankruptcy can inquire into the consideration for a judgment debt. There are obviously strong reasons for this, because the object of bankruptcy laws is to procure the distribution of a debtor’s goods among his just creditors. If a judgment were conclusive, a man might allow any number of judgments to be obtained by default against him by his friends or relations without any debt being due on them at all; it is therefore necessary that the consideration of the judgment should be liable to investigation.
59 Accordingly, a court exercising bankruptcy jurisdiction has a discretion to accept or not accept a judgment as satisfactory proof of a debt. This discretion is possible because, while the prior existing debt will have merged with the judgment debt at general law when the judgment was handed down, it remains unmerged in bankruptcy law: Wren at 224 (Barwick CJ). The existence of this discretion reflects bankruptcy courts’ concern to protect the interests of third parties that did not participate in the litigation that led to the judgment debt: Ramsay at [67] (Kiefel CJ, Keane and Nettle JJ). The discretion to accept a judgment as proof of a debt “is not well exercised where substantial reasons are given for questioning whether behind that judgment there was in truth and reality a debt due to the petitioner”: Wren at 224–225 (Barwick CJ). Substantial reasons will not usually exist where a judgment debt has been obtained after the merits have been tested in adversarial litigation, and where there is no evidence of fraud, collusion or miscarriage of justice: Ramsay at [111] (Edelman J).
60 This means that, while there is no general rule governing when a court may exercise its discretion to go behind a judgment, it will do so more readily where certain factors are present, including where:
(a) there is evidence of fraud, collusion or miscarriage of justice: Petrie at 75–76 (Latham CJ), citing Re Flateau; Ex parte Scotch Whisky Distillers Ltd (1888) 22 QBD 83, 85–86;
(b) the debt arises out of a consent judgment or default judgment: Petrie at 76; and/or
(c) there are circumstances which suggest a failure on the part of the judgment debtor to present his or her case on its merits in the litigation that led to the judgment: Ramsay at [70].
61 In addition, the Full Court has held that the discretion to go behind a judgment should not be exercised where the grounds upon which the judgment is challenged are such that, if accepted, they would only support a finding that the amount of the debt be reduced and would not support a finding that there was in truth no debt at all: Emerson v Wreckair Pty Limited (1992) 33 FCR 581 at 589 (Morling, Neaves and Spender JJ), cited in Katter v Melhem (No 2) [2014] FCA 1176; 319 ALR 646 at [77] (Wigney J). See also Olivieri v Stafford (1989) 24 FCR 413, 431–432 (Gummow J), quoting Re Riviere; Ex parte Original Mont de Piete Ltd (1919) 20 SR (NSW) 77, 84 (Owen AJ).
62 I am not satisfied by any of the submissions or additional evidence filed by Mr Renet that this is an occasion where the Court can exercise its discretion to not accept a judgment as satisfactory proof of a debt. Mr Renet made various assertions to the effect that there was fraud and that there had been an agreement in 2017 which was a responsive claim.
63 However, there is nothing on the evidence before me upon which I could be satisfied that such a case could be made out.
64 At the end of the hearing Mr Renet sought leave to rely on a snapshot of an email Mr Renet to Ms Mitchell, from Civium Strata People, dated 18 June 2019 and to 10 documents, which Mr Renet asserted (without evidence) were attached to this email. It appears that the email (but not the attachments) was contained in Mr Renet’s affidavit, affirmed on 22 July 2022, which was before the primary judge. The documents included Trust Account Receipts from Ray White Queanbeyan for monies received from Mr Renet in 2015, email communications from Mr Renet to Ms Guiren in 2016, appearing to attach receipts for payments he had made and in 2017 an email to a “Steven” at “office@ccaust.com.au” where Mr Renet where he asked that an adjustment be made regarding his levies given the fact of the 2017 settlement.
65 It is clear that, to the extent that there was a settlement in 2017, it related to unpaid levies for a period between 27 August 2014 and 1 September 2016. Further, the terms of settlement refer to Local Court proceedings No. 2016/00240542. The judgment debt arose in relation to proceedings with a different case number, No. 2020/00252979, some four years later, in circumstances where Mr Renet was represented (at least partially). Further, there is no evidence that Mr Renet appealed that decision or sought to have it set aside.
66 There was nothing in the additional documents referred to at [64] above would prove otherwise. Accordingly, I reject Mr Renet’s ability to rely on this new evidence on appeal.
67 To the extent that Mr Renet propounded that, by virtue of what he perceives is his own claim for legal costs (including for his own labour) to be set off against the judgment debt and, in essence, he has a claim of equal value against them, none of the material satisfied me that this was the case.
68 Further, to the extent that there is a claim made with respect to a purported breach by the Stata Plan of s 85(5) of the Strata Schemes Management Act, s 85(5) provides as follows:
An owners corporation may, by resolution at a general meeting, agree to enter into payment plans, either generally or in particular cases, for the payment of overdue contributions. A payment plan is to be limited to a period of 12 months but a further plan may be agreed to by the owners corporation by resolution.
(Emphasis added.)
69 Accordingly, as submitted by the Strata Plan, all that s 85(5) provides is a discretion to enter into a payment plan.
70 Mr Renet, at various points, made allegations of criminality as against the legal representatives of the Strata Plan, the Strata Plan itself, and the primary judge, in circumstances where it appears that he misapprehends how the law operates and where this Court has no jurisdiction to deal with such claims. I found the submissions he made in these respects irrelevant to my determination of the matters at hand.
71 To the extent that Mr Renet claims that the basis for the two costs orders were “unsubstantiated” or based on “fraud”, he made no comprehensible submission nor pointed to any evidence to substantiate the claims.
72 Accordingly, I am not satisfied that Mr Renet has put anything before me which could constitute some legal, factual or other discretionary error demonstrated in the orders made.
Conclusion
73 For these reasons, Mr Renet has failed to make out his grounds of appeal, and the appeal should be dismissed. As he has been unsuccessful, the ordinary costs order would be that Mr Renet should pay the Strata Plan’s costs of the appeal.
74 I note that both parties requested that they be given an opportunity to put on submissions and/or evidence in relation to the costs that they seek. I will accordingly make orders that if a costs application is to be made, within seven (7) days of the date of this judgment, any such application, any evidence in support of that application and written submissions (not exceeding two pages in length) which address the reasons why a costs order should be made, must be filed. Any party opposing the costs application may, within fourteen (14) days of the date of this judgment, file any evidence in opposition of that application and written submissions (not exceeding two pages in length) which address the reasons why a costs order should not be made. The parties agreed that the question of costs could be determined on the papers.
I certify that the preceding seventy-four (74) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Raper. |
