Federal Court of Australia

Nugawela v Dudley (Trustee) (No 3) [2023] FCA 674

ORDERS

THE COURT ORDERS THAT:

1.    The application be dismissed.

2.    The applicant do pay the respondent's costs of the application, to be assessed by a Registrar if not agreed.

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

REASONS FOR JUDGMENT

(Revised from the transcript)

COLVIN J:

1    In October 2017, Dr Patrick Nugawela commenced an application against his trustee in bankruptcy, complaining about certain conduct allegedly undertaken by the trustee in the administration of his estate. The allegations made were to the effect that:

(a)    the trustee had failed to agree to assign rights of action to him to enable him to pursue actions against the Australian Tax Office said to be the major creditor of his estate;

(b)    the trustee had acted in the interests of the Australian Tax Office in the conduct of his estate, particularly in relation to actions concerning claims that might be pursued against the Australian Tax Office; and

(c)    the trustee had elected to abandon proceedings brought by Dr Nugawela against the Australian Tax Office when those proceedings should not have been abandoned.

2    The form of application also alleged that the trustee had not taken certain relevant considerations into account and had taken certain irrelevant considerations into account in relation to matters concerned with the possible pursuit by him personally of proceedings against the Australian Tax Office. The considerations that were alleged to be relevant and not to have been taken into account by the trustee included a reference to the fact that the trustee had placed caveats on various properties in June 2017 and frozen the bank accounts of Dr Nugawela so as to protect the assets of the estate. However, in context, there was no separate claim about matters extending beyond complaints about the action being taken by the trustee in relation to the proceedings that Dr Nugawela considered ought to have been continued against the Australian Tax Office either by the trustee or by the trustee agreeing to assign rights of action to him so that he was able to undertake that step personally.

3    On 6 April 2018, Dr Nugawela brought an interlocutory application for leave to amend the originating application and to raise complaints as to various other aspects of the administration of the estate by the trustee. In response to that application, the trustee indicated that security for costs would be sought and pressed for the hearing of the security for costs application prior to the hearing of any application to amend so that the trustee was not exposed to the risks of the costs of the proceedings.

4    When the matter came before me on 12 April 2018, I formed the view, as a matter of case management, that it would be appropriate to give Dr Nugawela an opportunity to file a chronological statement, setting out the main events and circumstances that he relied upon in order to demonstrate that there was a basis for complaining about actions which the trustee had taken and to adjourn the application for security for costs, pending the filing of that chronological list. That procedure was ordered to give Dr Nugawela, as a litigant in person conducting the proceedings on his own behalf, a fair opportunity to be able to set out in a non-contentious way what he complained about in relation to the conduct of his bankrupt estate. The orders made on that occasion were as follows:

1.    By 27 April 2018, the applicant do file a chronological list of no more than 20 pages of the main events and circumstances to which the applicant wishes to refer to support the claims he seeks to advance in these proceedings together with an affidavit verifying that the matters set out in the chronological statement are true and correct to the applicant's own knowledge or is otherwise based on matters that he has been told by the respondent or his agents or legal representatives or another identified party.

2.    The chronological list shall not contain any argument, submissions or references to legal authorities.

3.    The respondent's application for security for costs and the applicant's application to amend his application be adjourned to 10.15 am on 2 May 2018.

5    The matter then came back before me on 2 May 2018 at which time the chronological list of matters had not been filed, and there was no attendance by Dr Nugawela. On that occasion, further orders were made in the following terms:

1.    The respondent's application for security for costs and the applicant's application to amend his application be further adjourned to 10.15 am on 29 May 2018 for half a day.

2.    The applicant do on or before 22 May 2018 file and serve any affidavit explaining the applicants failure to attend at the hearing on 2 May 2018 and failure to comply with orders of this court made 12 April 2018.

3.    In absence of any adequate explanation for non-attendance, the applications referred to in order 1 proceed to hearing in the absence of the applicant if there is a failure to attend on 29 May 2018.

4.    Costs of today be reserved.

6    The matter was again considered on 29 May 2018 at which time the failure to comply with the orders of 12 April and 2 May 2018 continued. In those circumstances, orders were made staying the further conduct of the application until there was compliance with those earlier orders and adjourning the application for security for costs to a date to be fixed.

7    Since then, Dr Nugawela has pursued claims in other proceedings, in which he has sought to advance claims against the Commissioner of Taxation in his own name. Amongst other things, he has alleged that the Administrative Appeals Tribunal (in its decision Nugawela, Bankrupt and Commissioner of Taxation [2018] AATA 979) should have adjourned various proceedings until the outcome of the application in these proceedings in which he challenges the decisions by his trustee in relation to those actions.

8    Ultimately, Dr Nugawela was unsuccessful in those proceedings: Nugawela v Commonwealth Bank of Australia [2018] FCA 960; Nugawela v Deputy Commissioner of Taxation [2018] FCA 1457; Nugawela v Commissioner of Taxation [2018] FCA 1458; Nugawela v Commissioner of Taxation (No 2) [2019] FCA 512; Nugawela v Commissioner of Taxation [2019] FCAFC 206; Nugawela v Commissioner of Taxation (No 3) [2020] FCA 773; Nugawela v Commissioner of Taxation (No 4) [2020] FCA 1128; Nugawela and Commissioner of Taxation [2021] AATA 1636; and Nugawela v Commissioner of Taxation [2022] FCA 1474.

9    In the meantime, Dr Nugawela has taken no further action in the present proceedings against the trustee. They have remained stayed by reason of his failure to comply with the orders to file a chronology and an explanation for his failure to meet the previous orders.

10    Eventually, on 6 June 2023, Dr Nugawela was notified by the Court that a case management hearing had been convened for today. He was also informed that he would be expected at the hearing to show cause as to why the matter should not be dismissed in circumstances where the matter has been stayed for non-compliance with orders since 29 May 2018.

11    Dr Nugawela has today provided an affidavit, which purports to set out a chronological list of main events and circumstances to which he says he wishes to refer in support of the application. It includes events as to the conduct of his bankruptcy since the application was commenced in 2017. He says that the reason for doing so was to identify the matters that he seeks to raise by way of amendment.

12    The affidavit itself provides no explanation for the delay and previous non-compliance with court orders for a very extensive period of time. However, it does demonstrate that the administration of his estate has proceeded and steps have been taken that include attempts to sell the premises for his medical practice, amongst other things.

13    In his affidavit, he says that there is an appeal at the Magistrates Court disputing his failure to file a statement of financial affairs in relation to his bankruptcy. It appears that is a reference to a prosecution being conducted in respect of an alleged failure by him to file a statement of affairs. He also makes reference to an appeal, and he says that those proceedings, in his words, 'assert untoward … failures on the part of the trustee which require review'.

14    The affidavit does say that he had no intention of delaying the filing of the requested chronology but rather to ensure efficient use of court resources by filing an effective and useful final chronology that reflects the outcomes of these 'pending litigations'.

15    I do not accept that explanation. At best, it could only explain delay since those 'litigations' were commenced. For example, the appeal to the Supreme Court is said to have an action number in 2020, which does not explain the delay up until that point in time. In any event, as the proceedings currently stand, they are confined in the way in which I have explained, and the pending application to amend to include other claims has never been advanced because of the extreme unexplained delay by Dr Nugawela in the conduct of the proceedings.

16    Therefore, it appears to me that there is no explanation for that delay, even taking account of the difficulties in relation to Dr Nugawela's personal health to which he has made reference in the course of oral submissions.

17    It is now many years since the trustee elected to abandon the various proceedings against the Australian Tax Office and declined to agree to any assignment of the claims against the Australian Tax Office. As I have explained, in the meantime, Dr Nugawela has sought to take action to preserve those proceedings, but they have now been dealt with by the Administrative Appeals Tribunal. To the extent that Dr Nugawela seeks to agitate about other aspects of the administration of his estate, then it seems to me that it is not justifiable, having taken no steps in the current proceedings for many years, to now seek to incorporate them by way of amendment. Rather, these proceedings and their subject matter should be addressed separately and it is appropriate in all the circumstances for these proceedings to be dismissed.

18    In relation to costs, Dr Nugawela raises matters that bear upon his capacity to meet those costs orders. I am not satisfied that is a reason as to why costs orders should not be made against him in respect of these proceedings. So, I will make a further order that the applicant do pay the respondent's costs of the application. I will include provision that those costs be assessed by a registrar if not agreed.

Associate:

Dated:    22 June 2023