Federal Court of Australia

Corporation of the City of Adelaide v Cosenza [2024] FCA 852

ORDERS

THE COURT ORDERS THAT:

1.    The interim application filed on 6 December 2023 be dismissed.

2.    Pursuant to r 10.11 of the Federal Court Rules 2011 (Cth), the creditor’s petition filed on 20 October 2023, the affidavit of Shane Eamonn Sankey filed on 18 October 2023 and the Declaration of Consent to Act as Trustee filed on 18 October 2023 be deemed to have been served on the respondent on 6 December 2023.

3.    By 4:00pm AEST on 16 August 2024, the respondent file and serve any amended notice of grounds of opposition, and any further affidavits in support including, if the respondent relies on grounds of solvency, an affidavit which sets out his current financial position, including details of all assets, liabilities, income and expenses.

4.    By 4:00pm AEST on 30 August 2024, the applicant file and serve any affidavits in reply and written submissions of no more than 10 pages in length.

5.    By 4:00pm AEST on 13 September 2024, the respondent file and serve written submissions of no more than 10 pages in length.

6.    By 4:00 pm AEST on 20 September 2024, the applicant file and serve any written submissions in reply of no more than 5 pages in length.

7.    The hearing of the creditor’s petition be listed on 2 October 2024 at 10:15am AEST.

8.    Costs be reserved.

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

REASONS FOR JUDGMENT

MEAGHER J

INTRODUCTION

1    By an interim application filed on 6 December 2023, the respondent, Mr Dean Cosenza, seeks declaratory relief in relation to the disputed service of a creditor’s petition and an injunction restraining the solicitors for the applicant, Wallmans Lawyers, from acting in this matter due to a purported conflict.

2    The substantive matter in respect of which this interim application is brought arises from litigation commenced several years ago in the Magistrates Court of South Australia. It appears that there has been considerable litigation flowing from the original matter and Mr Cosenza now relevantly owes the applicant, the Corporation of the City of Adelaide (CCA), a judgment debt in the amount of $16,000.00.

3    For the following reasons, the interim application is dismissed.

BACKGROUND

Procedural History

4    The background to this matter has been set out in some detail by the South Australian Court of Appeal (Court of Appeal) in Cosenza v Corporation of the City of Adelaide [2023] SASCA 142 (Appeal Decision) at [8] – [19], as is annexed to the affidavit of Mr Shane Sankey sworn on 23 February 2024. I gratefully adopt the background as set out below:

This litigation commenced as a minor civil action litigated in the Adelaide Magistrates Court during 2018. The applicant sued the respondent in damages, claiming that it had breached a duty of care. The applicant claimed to have relied on a sign that said that there was CCTV surveillance of a car park under the respondent's control. The applicant claimed that when he parked in the carpark he was assaulted and his vehicle damaged in circumstances where there was inadequate security and the CCTV cameras were not operating. He claimed damages for having been denied the opportunity of identifying the assailant and pursuing criminal charges and compensation in a civil action.

The respondent sought leave to be legally represented in the Magistrates Court, as well as leave to issue an application to have the minor civil action summarily dismissed. The Magistrate gave leave to the respondent to be represented. The applicant objected to the respondent being legally represented and so, later in 2018, he commenced a review in the District Court pursuant to s 38 of the Magistrates Court Act 1991 (SA).

The respondent was given leave to be represented at the review in the District Court for the hearing on 21 December 2018 on the basis that the applicant had legal training and was a very experienced litigant. The District Court eventually dismissed the applicant's review in mid-May 2019.

Before that occurred, in early May 2019 the applicant applied to commence judicial review proceedings in the Supreme Court, seeking expedition before the hearing in the Magistrates Court resumed. The application was not served on the respondent. The Judge's Associate contacted the respondent and attached the proceedings to an email. When the matter came on before Hinton J in the Supreme Court on 7 May 2019, the respondent appeared by counsel. No notice of acting was filed.

On 26 June 2019, the applicant discontinued the action. The respondent sought costs and the applicant opposed the making of any order for costs. The matter was argued and it the master dealt with it pursuant to the Supreme Court Civil Rules 2006 (SA). Later, on 6 September 2019 the master ordered that the Notice of Discontinuance have the effect of a final judgment against the applicant. The respondent was awarded party and party costs of the action to be agreed or taxed.

The respondent initially claimed costs in an amount of just under $11,000 but ultimately claimed just under $8,800. In the course of the taxation the applicant questioned whether the solicitors who appeared for the respondent had a retainer to act. It would appear that the applicant did not put forward any real basis for that question and it was countered by an affidavit from the respondent's solicitor dated 14 December 2021. The solicitor explained that he received instructions after the respondent received the email from the Judge's Associate. Those instructions were to act for the respondent and to retain counsel to appear before Hinton J.

In the course of his reasons delivered on 23 February 2022, the master referred to the authorities on which the applicant relied and found that the applicant failed to meet the onus of demonstrating that the solicitors acted without authority. The master relied on the fact that the same solicitors had represented the respondent in other litigation involving the applicant.

In connection with the taxation, the master determined to make an award of costs by way of a lump sum. He heard from the parties and considered an itemised claim for costs. Having earlier ordered an interim allocator of $3,500 on 11 May 2021, he awarded $8,000. Under the former rules, this was a provisional costs order which only became final in the absence of a review.

The applicant sought a review. By the time of that review the Uniform Civil Rules 2020 (SA) had commenced. The applicant filed evidence and submissions. One of his complaints was that the master had refused his application to cross-examine the solicitor. In his reasons delivered on 13 October 2022, the master explained that whether to allow cross-examination is a discretionary matter and that it is not usual to permit cross-examination. The master reiterated that there was no basis adduced by the applicant to go behind the solicitor's affidavit.

The master also rejected the applicant's complaints that costs were not awarded on a party and party basis, that the respondent had been permitted to respond to submissions made by the applicant and that it was unfair to allow costs to be assessed on a lump sum basis. The master's reasons explained that the lump sum award was made on a party and party basis only after the applicant had been heard. The master observed that if the costs had been taxed in the usual way, the award may well have been greater.

In fact, the applicant's opposition resulted in the need to incur costs in an amount which was higher than it need have been. The review was dismissed.

In the course of further reasons delivered on 28 August 2023, the master addressed the costs of the taxation. By that stage the respondent claimed the costs of the taxation on an indemnity basis of over $26,000 in respect of a costs award of $8,000. The master found that this was disproportionate to the amount in issue. Nonetheless, the respondent had earlier offered to accept $7,000 for costs which were ultimately awarded in an amount of $8,000. The master refused to award indemnity costs and awarded the respondent $6,000 for the costs of the taxation and $2,000 for the costs of the review.

(Citations omitted)

5    The decision and costs order of $8,000.00 made on 9 March 2022, referred to above, will, for the purpose of this judgement, be referred to as the First Costs Decision.

6    The reasons and costs order of $8,000.00 made on 28 August 2023 will, for the purpose of this judgement, be referred to as the Second Costs Decision.

7    On 4 September 2023, Mr Cosenza sent an email to Mr Alexander Bubner, a partner at Wallmans Lawyers, stating that an “appeal of all decisions involving the taxation process” will be commenced. Mr Cosenza also stated in that email:

…now I will be proceeding to initiate proceedings against you and Wallmans Lawyers for inter alia misleading and deceptive conduct (noting that you did not have authorisation, instructions etc to appear in the review proceedings as outlined repeatedly by me during the Taxation process which in effect meant you and your firm were not able or entitled to claim any costs. …

That email was annexed to Mr Cosenza’s affidavit affirmed on 4 December 2023 (Mr Cosenza’s First Affidavit).

8    Mr Shane Sankey, solicitor for the CCA, by his affidavit affirmed on 13 October 2023, deposed that on 15 September 2023, he served Mr Cosenza by way of email a bankruptcy notice with respect to the judgment debt of $16,000 arising from the First Costs Decision and the Second Costs Decision (the Bankruptcy Notice). The service of the Bankruptcy Notice is disputed and will be considered further below.

9    On 18 September 2023, the applicant brought an application to appeal the First Costs Decision and the Second Costs Decision in the Court of Appeal on several grounds. The applications were treated as applications for leave to appeal on the basis that the decisions sought to be appealed from related to costs: Appeal Decision at [21] – [24]. For present purposes, it is useful to note that the applicant relied on the following grounds as set out in his revised Notice of Appeal and as appears in the Appeal Decision at [25]:

6. The Court erred in failing to find that there was no evidence put before the Court that a separate retainer and/or written instructions were provided by the respondents to its solicitors for the Supreme Court matter (which it initiated);

…

8. There is no evidence of any written instructions given by the respondent whatsoever with respect to any of the conduct taken by the solicitors in regards to this matter. There was no valid authority given by the respondents to its solicitors for acting in the review/appeal matter. A separate retainer and written instructions were required for the solicitors to act in the review/appeal matter. In the absence of instructions properly given with respect to each item in the bill, the solicitors costs cannot be sought and allowed;

…

15. The Court erred within its 23.2.2022 determination at paragraph 15 therein in finding that “the solicitors now have authority “[sic] It is respectfully submitted that even if the solicitors do now have an authority to act that in the absence of any evidence that it was properly retained and instructed at the initiation of this matter that it should not be awarded its costs. It is an irrelevant consideration that a retainer and any written instructions may have been provided at a time post the initiating application for judgment of 5.7.2019 and the process for taxation post 18.8.2020;

10    On 20 October 2023, the CCA filed a creditor’s petition, seeking a sequestration order against the Mr Cosenza’s estate (the Creditor’s Petition). The service of the Creditor’s Petition is also disputed and forms one of the two issues that are presently before the Court. The circumstances relating to the service of the Creditor’s Petition will be considered further below.

11    On 25 October 2023, which I note is after the leave to appeal application was brought in the Court of Appeal, Mr Cosenza brought a minor civil claim in the Magistrates Court of South Australia against Mr Alexander Bubner, who acted as a solicitor for the Adelaide City Council in the review and appeal proceedings referred to in paragraph 4 above (Cosenza v Bubner proceedings). This application is annexed to Mr Cosenza’s affidavit affirmed on 7 March 2024 and includes the claim that Mr Bubner had engaged in misleading and deceptive conduct, the tort of deceit and the tort of fraudulent misrepresentation on the basis that he acted for the Adelaide City Council without a proper retainer.

12    On 15 December 2023, after Mr Cosenza brought the interim application to restrain Wallmans Lawyers from acting, Mr Cosenza brought another minor civil claim in the Magistrates Court against Wallmans Lawyers and the CCA. This application is also annexed to Mr Cosenza’s affidavit affirmed on 7 March 2024 and claims that the CCA and Wallmans Lawyers, either by themselves or collectively, had engaged in trespass to land and negligence, in relation to the conduct of the process server in attempting to serve Mr Cosenza with documents. Mr Cosenza further claims that the process server engaged in stalking, unlawfully tracking his location and entering his residence unlawfully.

13    On 21 December 2023, the Court of Appeal delivered judgment and held, inter alia, that there was “explicit evidence” that the solicitor for the CCA had a retainer to act: Appeal Decision at [31]. The application for leave to appeal was dismissed and the respondent was awarded costs fixed in the sum of $2,000.

Contested Service of the Bankruptcy Notice

14    As stated above, one of the issues which arises in this application is Mr Cosenza’s allegations that he has not been served with the Bankruptcy Notice nor has he been properly or validly served with the Creditor’s Petition. In Mr Cosenza’s First Affidavit, he also denies that he has committed an act of bankruptcy and deposes that he made attempts to set aside the Bankruptcy Notice.

15    After the purported service of the Bankruptcy Notice on 15 September 2023, Mr Cosenza replied by way of email on 18 September 2023, to the effect that he cannot receive documents through email as he has difficulty receiving attachments from Wallmans Lawyers’ email addresses. In his email, Mr Cosenza states that he has not been served with any documents but acknowledges that the header to the email ‘appears to infer something about a bankruptcy notice’. He also refers to correspondence in which he states that Wallmans Lawyers were advised that he was in the process of initiating proceedings against them.

16    On the same day, Mr Sankey replied by email relevantly stating the following:

…I understand your email to suggest only that you have had difficulties in the past with accessing attachments in that you say

“have difficulty receiving any attachment for your firms (sic) email address”

17    In that email, Mr Sankey also confirmed that the CCA relies on the first email as service of the Bankruptcy Notice and supporting documents. Mr Sankey also included a link which contained the documents as well as noted that a copy of the documents may be delivered to Mr Cosenza personally and invited Mr Cosenza to indicate a date, time and location for this to occur.

18    If service was effected on 15 September 2023 as maintained by the CCA, the date for compliance therewith would have been 6 October 2023.

19    Mr Cosenza deposes in his First Affidavit that on 6 October 2023, he attempted to file an application to set aside the Bankruptcy Notice. However, it was not accepted for filing on the basis that the Bankruptcy Notice is required to be attached to the application. On the same day, Mr Cosenza sent an email to Mr Sankey which relevantly stated:

I refer to previous communications and notice to you that I have not been served any bankruptcy notice.

Out of an abundance of caution, I today attended to filing an application to set aside the purported bankruptcy notice.

Registry advised and confirmed that as I have not been properly served in compliance with 16.01 of Bankruptcy Regulation 1996, they could not accept the application as I have not been served any actual bankruptcy notice which is required to be attached to the affidavit in support.

I rely upon this and previous communications in that should you or your client take any action in furtherance of this purported application in absence of proper service, I will seek an order for costs be made payable forthwith with respect to any application I must attend to as a consequence.

20    There was further communication by email between Mr Cosenza and Mr Sankey in which Mr Sankey sought the correspondence to which Mr Cosenza had referred. It appears that the correspondence was not provided. On 11 October 2023, Mr Sankey sent an email to Mr Cosenza advising that the CCA would be proceeding with the issuing of a creditor’s petition on the basis that there had been non-compliance with the Bankruptcy Notice.

21    Consistent with Mr Cosenza adopting the position that he has not been served with the Bankruptcy Notice, compliance with it has not occurred. He also deposed that, in any case, he is not insolvent and that he has attempted to pay the outstanding amount, but the CCA will not advise him of the details of the bank account into which he can make the payment.

this application

22    By an interim application filed on 6 December 2023, Mr Cosenza seeks the following relief:

1. A declaration that the applicant has not properly or validly served the creditors petition upon the respondent in compliance with the Court Rules;

2. A declaration that the affidavit of proof of service of creditors petition filed on 5.12.23 is invalid or in the alternative contains falsely sworn information by the deponent;

3. An order that the applicant solicitors Wallmans Lawyers be prohibited from acting in this matter as they are in a direct conflict with the applicant and the respondent;

4. Any other order deemed necessary in the interests of justice

23    Mr Cosenza also invited the Court, by way of order 4, to dismiss the Creditor’s Petition pursuant to s 52(2) of the Bankruptcy Act 1966 (Cth). Section 52(2) of the Act provides that if the Court is not satisfied that, inter alia, there has been service of the Creditor’s Petition, the Court may dismiss the petition.

24    Mr Cosenza relied on the interim application filed on 6 December 2024, his affidavits affirmed on 4 December 2023 and 7 March 2024, and his written submissions. He also referred to the Affidavit of Service of Tylor Newlyn affirmed on 6 November 2023 (Affidavit of Service) and the affidavit of Mr Sankey sworn on 23 February 2024. The CCA relied upon the affidavit of Mr Sankey sworn on 23 February 2024 and the Affidavit of Service.

25    I note that Mr Cosenza’s submissions were prolix and that his affidavits, as well as containing evidence, contained submissions some of which were based on conjecture. However, as he is a litigant in person, I have made every endeavour to fairly distil his complaints as fully as reasonably possible.

declarations as to service

26    Pursuant to r 4.05(a) of the Federal Court (Bankruptcy) Rules 2016 (Cth), a creditor’s petition must be served upon the respondent debtor at least 5 days before the date fixed for the hearing of the creditor’s petition. A creditor’s petition is an originating process and must be served personally: CSR Ltd (t/as CSR Construction Materials) v Barillaro (2001) 184 ALR 308; [2001] FMCA 23 approved in Skalkos v T & S Recoveries Pty Ltd (2004) 141 FCR 107; [2004] FCAFC 321 at [31].

27    Rule 10.11 of the Federal Court Rules 2011 (Cth) provides the following in respect of deemed service:

10.11 Deemed service of originating application

Unless an application has been made under rule 13.01, if a respondent files a notice of address for service, defence or affidavit, or appears before the Court in response to an originating application, the originating application is taken to have been served personally on the respondent:

(a) on the date on which the first of those events occurred; or

(b) if personal service on the respondent is proved on an earlier date—on the earlier date.

28    As to whether an application has been made under r 13.01 of the Rules, Mr Cosenza himself submitted that the rule is not applicable on the facts. However, even if r 13.01 had been advanced by Mr Cosenza’ application, as correctly submitted by the CCA, Mr Cosenza has not complied with the obligations pursuant to r 13.01(2) and (3) of the Rules so as to invoke the operation of that rule.

29    Mr Cosenza submitted that r 10.11 of the Rules is not applicable as the Creditor’s Petition has still not been served and as “the Court’s jurisdiction was not invoked properly or validly” on the basis of the purportedly falsely sworn Affidavit of Service.

30    Mr Cosenza’s contentions in this regard amount to no more than mere assertion and are misconceived. His claim that he has not been served with the creditor’s petition is without merit. As noted by the CCA, Mr Cosenza filed a notice of appearance, affidavit and notice stating grounds of opposition to application on 6 December 2023. It cannot be said that Mr Cosenza does not have notice of the Creditor’s Petition. At the very least, the Creditor’s Petition is taken to have been served personally on Mr Cosenza on 6 December 2024.

31    Accordingly, order 1 should not be made.

32    The second order sought relates to the Affidavit of Service. In that affidavit, Mr Newlyn deposes as to the personal service of the Creditor’s Petition and supporting documentation on the respondent on 31 October 2023. In his affidavit, he relevantly deposed:

8. I continued with my mobile surveillance and followed the Respondent to Adelaide Dental Solutions located at 1/850 Port Road, Woodville South SA 5011.

9. At approximately 11:35am I set up surveillance near the entrance/exit for Adelaide Dental Solutions.

10. At approximately 12:31pm I sighted the Respondent exiting the building. I approached the Respondent who turned toward me and smiled.

11. At this time, I commenced a voice recording on my mobile phone. I said “Dean” and at the same time I handed him the aforementioned Documents. The Respondent took the documents and then dropped them to the ground shouting; “No” and ran to his motor vehicle.

12. I continued with my voice recording, whilst returning to my motor vehicle, detailing the events of the document service effect on the Respondent.

33    Mr Cosenza contended that the Affidavit of Service is invalid or contains falsely sworn information. To that end, Mr Cosenza sought to rely upon video evidence which he presented to the Court during the hearing, reliance upon which he maintained was to be confined to credit. Mr Cosenza did not put this recording into evidence or provide it to the CCA prior to the hearing.

34    Mr Cosenza presented two short videos which displayed two different angles of the purported service of the Creditor’s Petition and supporting documentation by Mr Newlyn. It showed Mr Newlyn following Mr Cosenza as he left the building and proceeded into a carpark. It then appeared that Mr Cosenza hurried to his car and Mr Newlyn “threw” the documents towards Mr Cosenza before he proceeded to enter his car. It appeared that the documents made contact with Mr Cosenza’s body. The video contained no sound.

35    During cross examination by Mr Cosenza, Mr Newlyn acknowledged that Mr Cosenza did not throw the documents to the ground, rather they fell to the ground off his body, but refused to concede that that was contrary to what he had sworn in the Affidavit of Service.

36    Mr Newlyn maintained that the contents of the Affidavit of Service were true throughout his examination. It appears that he considers that throwing the documents at Mr Cosenza is the same as handing them to him. Counsel for the CCA contended that the question as to whether Mr Newlyn handed or threw the documents is one of semantics and makes no meaningful difference.

37    Mr Newlyn was not an impressive witness and it is clear that his affidavit is not strictly accurate. However, I am not satisfied that he has wilfully falsified evidence or misled the Court. It is clear that he attempted to hand the documents to Mr Cosenza but ultimately threw them towards him and left them near Mr Cosenza as he was entering his car.

38     In the circumstances of this application, I do not consider it in the interests of justice to make a declaration that the evidence of Mr Newlyn, who is not a party to the litigation, was falsely sworn. I am satisfied that, at the very least, Mr Cosenza is deemed to have been served on 6 December 2023, and “ordinarily, a declaration should not be granted where it will produce no foreseeable consequence for the parties”; DMH20 v Minister for Home Affairs (2023) 296 FCR 256; [2023] FCAFC 31 at [20], relying on Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; [1992] HCA 10 at 581 – 582 (Mason CJ, Dawson, Toohey and Gaudron JJ).

39    Therefore, while I consider that the impugned paragraphs of the affidavit are less than satisfactory, I am not prepared to make the declaration sought.

40    With respect to service, the CCA made submissions in the alternate, namely as to the operation of the Rules in circumstances where a person refuses to accept a document that is required to be served personally.

41    However, I do not consider it necessary to consider whether service has been effected pursuant to r 10.12 of the Rules. The relevant documents are deemed to have been served on Mr Cosenza on 6 December 2023, being the date on which he filed a notice of appearance and an affidavit.

injunction

42    By order 3, Mr Cosenza seeks to restrain the CCA’s solicitors, Wallmans Lawyers, from acting on the basis that they are in a “direct conflict” with the CCA and himself. It appears that Mr Cosenza’s primary submission in this regard is that Wallmans Lawyers are parties to the two Magistrates Court proceedings which he has commenced, referred to respectively at paragraphs 11 and 12 above, and should therefore be restrained from acting for the CCA in this matter.

43    It ought to be noted that the Cosenza v Bubner proceedings largely relate to claims which appear to have been ventilated in the Appeal Decision. Namely, the claim that the CCA’s solicitor had acted for the CCA without being properly retained to do so was considered by the Court of Appeal, which held that there was ‘explicit evidence’ that the solicitor had a retainer to act: Appeal Decision at [31].

44    As correctly submitted by the CCA, the CCA’s solicitors do not owe Mr Cosenza any fiduciary duties or duties of confidence. Accordingly, it would appear that Mr Cosenza’s argument is with respect to the Court’s discretion to restrain a legal practitioner from acting to ensure the due administration of justice. The relevant principles in that regard are well-established. They have been comprehensively set out and summarised by Brereton J in Kallinicos v Hunt (2005) 64 NSWLR 561; [2005] NSWSC 1181 at [76] and Griffith J in Mumbin v Northern Territory of Australia (No 1) [2020] FCA 475. In Mumbin, Griffith J summarised the relevant principles at [39] as follows:

(a) The Court has an inherent jurisdiction to ensure the due administration of justice, to protect the integrity of the judicial process and to restrain legal practitioners from acting in a particular case as part of its supervisory jurisdiction (see, for example, Grimwade v Meagher [1995] 1 VR 446 at 452 per Mandie J and Dealer Support Services Pty Ltd v Motor Trades Association of Australia Ltd [2014] FCA 1065; 228 FCR 252 ; at [37] per Beach J).

(b) The test to be applied is whether a fair-minded, reasonably informed member of the public might conclude that the proper administration of justice requires that a solicitor be prevented from acting in the interests of the protection of the integrity of the judicial process and the appearance of justice (I prefer this formulation of the principle, as opposed to the use of the term “would”: see Timbercorp at [62] per Anderson J and the cases cited therein, as opposed to the different formulation adopted by Beach J in Dealer Support Services at [94], upon which the Jawoyn Claim applicant relied, but I would regard even that higher standard to have been met in the circumstances here).

(c) Due weight must be given to the public interest in a client not being deprived of the legal practitioner of its choice, however, this important value can be over-ridden in an appropriate case (Dealer Support Services at [95] per Beach J).

(d) This basis for disqualification is not discharged by it simply being demonstrated that there is no risk of the misuse of confidential information (Dealer Support Services at [96] per Beach J).

(e) This basis for disqualification is an “exceptional one” and is “to be exercised with appropriate caution” (Geelong School Supplies Pty Ltd v Dean [2006] FCA 1404; 237 ALR 612 at [35] per Young J).

(f) A legal practitioner may be restrained from acting in a matter not only where the practitioner has a conflict of interest viz a viz a former client, but also viz a viz a person who is “as good as” a client (Macquarie Bank Ltd v Myer [1994] VR 350 at 359 per J D Phillips J).

(Emphasis added)

45    Mr Cosenza’s submissions in relation to the purported direct conflict were as follows:

It is clear from the evidence submitted that consequent of the solicitors acting in relation to the underlying debt a claim has been initiated against the lawyers acting; there will be a requirement to give evidence at trial as a material witness[es] and potentially within these proceedings; while also having an interest in the proceedings in that should I become bankrupted, the claims for damages will vest with the trustee in bankruptcy and not me and would in all likelihood not be pursued. There is a real risk of misuse of confidential information (obtained during the various proceedings), or at the very least a minimal risk of misuse of confidential information, where a fair minded member of the public would say that the solicitors should not act.

46    Mr Cosenza advanced the argument that the CCA’s solicitors will not only be material witnesses to the Magistrate’s Court proceedings but would also be fettered by concerns about their personal reputational and financial interests, and therefore should be restrained from acting, relying on Mitchell v Burrell [2008] NSWSC 772 at [20].

47    The CCA submitted that the basis for disqualification is exceptional and is far from being met in these circumstances. The CCA contended that the circumstances upon which Mr Cosenza relies, being the Magistrates Court proceedings, have been “entirely orchestrated” by him and, in the case against Mr Bubner, are an abuse of process. This is because, the CCA submitted, the case against Mr Bubner seeks to relitigate matters which were determined in the Appeal Decision at [13], [29] – [32]. The CCA also contended that Mr Cosenza has intentionally commenced actions in the Minor Civil jurisdiction, as it is ordinarily a no-cost jurisdiction, one of the consequences of which is that the respondents in the proceeding would be unlikely to be permitted representation. It is those circumstances the CCA contended would lead a fair-minded reasonably informed member of the public to be sceptical of Mr Cosenza’s motives.

48    I am not satisfied that the fair-minded member of the public reasonably informed of the relevant circumstances would conclude that the proper administration of justice requires that Wallmans Lawyers to be restrained from acting for the CCA. Mr Cosenza did not advance persuasive submissions as to why this is an exceptional case in which the Court should exercise its discretion to restrain Wallmans Lawyers from acting. I do not consider that the solicitors for the CCA would be fettered by personal interests in acting for the CCA in this proceeding, notwithstanding that in one case, they, and in another, one of their partners, are parties to the Magistrates Court Proceedings. Further, there is a significant public interest in ensuring that the applicant is not deprived of the lawyer of its choice: Dealer Support Services Pty Ltd v Motor Trades Association of Australia Ltd (2014) 228 FCR 252; [2014] FCA 1065 at [95]. Such a discretion is not to be exercised lightly and this is not a circumstance which would warrant its exercise.

dismissal of the creditor’s petition

49    As stated above, while not sought in his interim application, Mr Cosenza invited the Court, through his written and oral submissions, to dismiss the Creditor’s Petition.

50    Mr Cosenza submitted that the Court is empowered to make any orders it considers appropriate, and that it is therefore open to the Court to dismiss the Creditor’s Petition on the basis that there has been an abuse on the Court’s process. In that regard, Mr Cosenza also made allegations of bad faith on behalf of the CCA on the basis that Mr Cosenza has attempted to resolve the dispute by offering to pay the judgment debt but that the CCA has refused to provide him with the bank details to do so. He contended that this serves as evidence that the CCA is attempting to incur further unreasonable costs. Mr Cosenza also submitted that the CCA’s service by way of email evidences bad faith as they were aware that he is not able to accept service by email and it is therefore a tactic to obtain default judgment. Mr Cosenza also claimed that the CCA have acted in bad faith by relying upon the “falsified” Newlyn Affidavit.

51    Section 52 of the Act relevantly 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.

    …

(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.

52    As stated above, it is evident that Mr Cosenza has been served with the Creditor’s Petition. To the extent that Mr Cosenza is applying to dismiss the Creditor’s Petition on the basis that there is another sufficient cause for a sequestration order not to be made, I refer to the observations of the High Court in Cain v Whyte (1933) 48 CLR 639 at 646, wherein it is stated that the debtor must show:

…some cause overriding the interest of the public in the stopping of the unremunerative trading, and the rights of individual creditors who are unable to get their debts paid to them as they become due. Something has to be put before the Court to outweigh those considerations before it can be said that sufficient cause is shown against the making of the sequestration order.

53    I am not satisfied that any such cause has been established. The contention that the CCA has acted in bad faith is not substantiated. The CCA was entitled to serve the Bankruptcy Notice on Mr Cosenza by way of email and was not required to acquire his consent to do so: s 9 of the Electronic Transactions Act 1999 (Cth); r 102(3) of the Bankruptcy Regulations 2021 (Cth). Notwithstanding that, Mr Sankey offered to arrange for the personal service of the Bankruptcy Notice, inviting Mr Cosenza to provide the relevant details to facilitate the personal service. In that regard, the CCA acted quite properly.

54    Further, I reject Mr Cosenza’s contention that the CCA has acted in bad faith by ‘refusing’ to accept an offer to resolve the proceedings. In an affidavit affirmed and filed on 17 April 2024, one day before the hearing of the interim application, Mr Cosenza deposes the following:

I have attempted to resolve this matter by way of payment in amount of $16,000. The applicant has refused to resolve.

55    In that affidavit, Mr Cosenza annexes an email sent to Ms Janet Crook, Team Leader of the Corporate Governance and Legal Corporate Governance employed by the CCA, on 15 April 2024, wherein he seeks the CCA’s bank details to deposit the amount of $16,000.00. He deposes that Ms Crook has refused to provide the bank details. However, no other correspondence is annexed to that affidavit. The CCA made no submissions on this matter.

56    I am not satisfied that the CCA has acted in bad faith in any of the ways which are described by Mr Cosenza. It is not appropriate to dismiss the creditor’s petition.

57    As to costs, Mr Cosenza submitted that he would seek that costs be reserved in the event that the matter shall proceed to a hearing of the Creditor’s Petition. The CCA made no submissions on the matter of costs.

conclusion

58    For the above reasons, Mr Cosenza’s interim application filed on 6 December 2023 is dismissed and he is deemed to have been served with the relevant documents on 6 December 2023. Costs should be reserved.

Associate:

Dated:    2 August 2024