Federal Court of Australia

Scott v Nimlaw Pty Ltd (No 2) [2024] FCA 1330

ORDERS

THE COURT ORDERS THAT:

1.    The appeal is dismissed.

2.    The appellant is to pay the respondent’s costs to be agreed or taxed.

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

REASONS FOR JUDGMENT

O’SULLIVAN J:

1    On 13 March 2024, a Registrar of the Court made a sequestration order against the appellant following the presentation of a creditors petition on 1 December 2023.

2    On 4 July 2024, the Federal Circuit and Family Court of Australia (Division 2) dismissed an application for review of the Registrar’s orders: Nimlaw Pty Ltd v Scott, in the matter of Scott [2024] FedCFamC2G 647 (Reasons).

3    The appellant appeals from that decision.

4    The question for determination on appeal is whether the orders of the primary judge should be affirmed, varied or reversed.

5    It is for the reasons which follow that the appeal is dismissed.

The primary judge’s reasons

6    This matter has an extensive history which the primary judge summarised in his Reasons at [1]-[4] and [8]-[9].

7    The primary judge set out the applicable legislation and rules noting that a review of a Registrar’s decision proceeds as a hearing de novo.

8    The primary judge found that the legislative and procedural requirements for the making of a sequestration order had been met, such that the only matter remaining for consideration was whether the appellant had shown sufficient cause why a sequestration order should not be made.

9    The primary judge identified the appellant’s five grounds of opposition: Reasons [11]. His Honour noted the first four grounds of opposition make reference to the bankruptcy notice and in particular, whether the appellant had, in fact, committed an act of bankruptcy: Reasons [15].

10    It is in that context that the history of this matter assumes particular relevance.

11    The primary judge noted that on 15 November 2023, Charlesworth J dismissed an application by the appellant to set aside the relevant bankruptcy notice: Scott v Nimlaw Pty Ltd [2023] FCA 1420. In so doing, her Honour ordered that the operation of the bankruptcy notice be stayed until 48 hours following the transmission to the applicant of the Court’s reasons for judgment. The Court’s reasons were published on 17 November 2023.

12    On 19 November 2023, the appellant filed an interlocutory application seeking leave to appeal from the decision in Scott v Nimlaw.

13    On the same day, the appellant filed an interlocutory application seeking a stay of Charlesworth J’s orders. On 24 November 2023, that application was refused by O’Bryan J on the basis that the appellant’s proposed grounds of appeal from the decision in Scott v Nimlaw did not identify any error in the judgment, and for the purposes of consideration of the application for a stay, had no prospect of success: Scott v Nimlaw (No 2) [2023] FCA 1472 at [16].

14    On 25 January 2024, McElwaine J dismissed the applicant’s application for leave to appeal from the stay judgment in Scott (No 2): Scott v Nimlaw Pty Ltd [2024] FCA 26 (refusal of leave to appeal).

15    On 16 February 2024, McElwaine J dismissed the appellant’s appeal from Charlesworth J’s decision in Scott v Nimlaw in circumstances where the appellant did not appear before his Honour. In so doing, his Honour noted the appellant’s extant notice of appeal bordered on incoherence and failed to identify what errors had been committed by the primary judge and why. An amended notice of appeal suffered from the same defects.

16    Subsequently, the appellant applied to the High Court for the issue of a constitutional or other writ. Jagot J, sitting alone in In the matter of an application by Susan Jane Scott for leave to issue or file [2024] HCASJ 23, dealt with that application in which her Honour said:

1.    On 24 April 2024, Gordon J made a direction under r 6.07.2 of the High Court Rules 2004 (Cth) that the Registrar refuse to issue or file an application by the applicant in this matter for a constitutional or other writ without leave of a Justice first had and obtained. On 10 May 2024, pursuant to r 6.07.3 of the High Court Rules, the applicant filed an ex parte application seeking such leave. The ex parte application is supported by an affidavit filed by the applicant on 11 May 2024. These reasons explain why the ex parte application for leave is dismissed.

...

3.    The background to this application concerns a dispute between the applicant and Nimlaw about the liability of the applicant to pay Nimlaw for legal services provided to her. This dispute resulted in a judgment debt being entered against the applicant in favour of Nimlaw in the District Court of South Australia in June 2023 and the service of a bankruptcy notice on the applicant by Nimlaw in July 2023. The applicant subsequently filed an originating application in the Federal Court of Australia seeking to set aside the bankruptcy notice. Charlesworth J dismissed that originating application on 15 November 2023, her Honour stating that although the applicant's "sense of grievance [was] a genuine one ... the grievances to which [the applicant referred were] not grievances that affect[ed] the private rights and obligations as between her and [Nimlaw]". On 19 November 2023, the applicant lodged a notice of appeal against the dismissal of the originating application and sought, in a separate interlocutory application, a stay of the bankruptcy notice until the determination of that appeal. O'Bryan J dismissed the interlocutory application on 24 November 2023 on the basis that the grounds of appeal had "no prospects of success". On 30 November 2023, the applicant lodged a further originating application seeking leave to appeal against O'Bryan J's orders dismissing the interlocutory application for a stay of the bankruptcy notice. On 25 January 2024, McElwaine J dismissed this further originating application on the basis that the applicant’s contentions did "not identify why O'Bryan J erred in his reasoning". On 16 February 2024 McElwaine J also dismissed the applicant's appeal against the earlier decision of 15 November 2023 (which had dismissed the application to set aside the bankruptcy notice).

4.    In the application for a constitutional or other writ proposed to be filed in this Court, the applicant seeks multiple writs of certiorari, as well as writs of mandamus, quashing these previous decisions. As best as it can be ascertained from the material filed before this Court, the application relies on generalised complaints such as a "denial of [her] legal rights" and a "refusal of procedural fairness... against [her] reasonable and legitimate expectations, against the incompatibility doctrine of the constitutional judicial role and as actual bias". The applicant also describes the decisions below as involving an "abuse of power as errors of fact, law and equity" and asserts that the "actions of the Federal Court [represent] the abrogation of their constitutional role... to uphold the constitution and the [r]ule of [l]aw". None of these contentions, or any of the material in the application or supporting affidavit (which, including its exhibits, totals over 1000 pages), identity any legal error in the decision below or advance any legally intelligible basis for the relief sought. The application, on its face, exposes that it is both frivolous and vexatious and, accordingly, an abuse of process.

5.    ...

6.    Consistent with these principles, the ex parte application filed on 10 May 2024 for leave to issue or file an application for a constitutional or other writ must be dismissed.

17    The primary judge observed that on 1 July 2024 the appellant had filed an application for special leave to appeal from Jagot J’s decision which made reference to the International Convention on Civil and Political Rights but without reference to any statutory adoption of those principles in Australian Law.

18    At the date of this appeal, that application for special leave to appeal has not been determined. Nonetheless, the basis upon which Jagot J dismissed the application filed by the appellant for a constitutional or other writ was that it did not identify any legal error in the decision below, nor advance any legally intelligible basis for the relief sought. It was for that reason that her Honour considered the application was both frivolous and vexatious and accordingly an abuse of process.

19    The primary judge proceeded on the basis that given Jagot J’s findings and the content of the application for special leave to appeal to the High Court, there was no realistic possibility that special leave will be granted.

20    It was against that history that the primary judge was satisfied the appellant had committed an act of bankruptcy at some point between Charlesworth J’s judgment on 15 November 2023 and O’Bryan J’s judgment on 24 November 2023: Reasons [13].

21    The primary judge concluded that was sufficient to dispose of the first four grounds of opposition.

22    The primary judge observed the fifth ground of opposition invited the Court to go behind the judgment of the District Court of South Australia upon which the bankruptcy notice was based. His Honour declined to do so, noting that at the hearing before the primary judge neither the judgment nor the transcript of any evidence relevant to those proceedings had been placed before the Court so as to give that issue any consideration of any sort. His Honour was not satisfied that the Court should go behind the considered judgment of another court following a trial: Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28; (2017) 261 CLR 132 at 151 [68].

Consideration of the notice of appeal

23    The appellant raises three grounds of appeal:

(a)    Jurisdictional error: error in law, refusal of procedural fairness, breach of rule of natural justice;

(b)    Jurisdictional error: error in law and in fact; and

(c)    Jurisdictional error: miscarriage of judicial discretion.

24    The appellant filed and served written submissions for the purposes of this appeal and made oral submissions when the matter was called on for hearing.

25    The oral submissions bore little resemblance to the grounds of appeal, save for the contention that the Court should go behind the District Court judgment.

26    The appellant’s written submissions ranged across all the grounds without any apparent differentiation.

27    The first written submission is that in refusing leave to appeal from the Court’s interlocutory decision in Scott (No 2) refusing a stay, McElwaine J exhibited actual bias in his decision. That is not a matter which arises from the judgment under appeal. In any event, there is no basis whatsoever put forward by the appellant for that submission and I do not accept it.

28    Next, the appellant refers to what she described as the refusal of the presiding judge to supply reasons for refusing leave to appeal. In so far as that is directed to McElwaine J’s decision, delivered 25 January 2024, again that does not arise from the judgment under appeal, however self-evidently, the submission is wrong and I do not accept it.

29    The next written submission from the appellant appears to be that Charlesworth, O’Bryan and McElwaine JJ should all have gone behind the District Court judgment upon which the bankruptcy notice was based.

30    Yet again, that is not a matter which arises from the judgment under appeal insofar as their Honours are concerned. However, if the appellant wished to challenge the District Court judgment, she could have done so utilising the appeal procedures applicable to the State’s Courts.

31    Insofar as the primary judge is concerned, his Honour dealt with the same submissions when considering the appellant’s fifth ground of opposition. In declining to go behind the District Court judgment, his Honour gave what can only be described as compelling reasons for refusing to do so. The primary judge was correct not to go behind the District Court judgment.

32    The next written submission contends a failure to publish orders, I think concerning practice and procedure, as a failure of the judicial role by each of the Justices of this Court who had dealt with the appellant’s matter as well as the Registrar and the primary judge. The submission was not developed and its consequence is not immediately apparent. The submission concerning the three Justices of the Court and the Registrar does not arise from the judgment under appeal.

33    In any event, orders were made by each of their Honours, the Registrar and the primary judge such that this submission has no merit. If what is meant is there was a failure to publish reasons, that submission fails in relation to each of the justices. I deal with the same submission in relation to the Registrar below.

34    The submission continues that the primary judge exercised his discretion as an arbitrary abuse of power. No reason was developed why that should be the case. There is no merit in this submission and I do not accept it.

35    In the next written submission, the appellant contends that the primary judge was wrong to find the appellant had committed an act of bankruptcy in circumstances where there had been an application to the High Court for a constitutional writ of mandamus or certiorari to “make nullity of all judgements”. The appellant continues that the judgment of Jagot J was “without jurisdiction of the matter under application a prerogative writs.”

36    As I have noted, the primary judge was correct to find that the appellant had committed an act of bankruptcy on the material before him such that I do not accept the submission to the contrary.

37    As to the submission concerning the appellant’s application to the High Court, the primary judge observed that Jagot J had dismissed the appellant’s application to the High Court in its original jurisdiction as being, “… frivolous, vexatious and accordingly an abuse of process.”.

38    In all the circumstances, the submission that Jagot J’s judgment was “without jurisdiction” has no basis. To the extent the primary judge referred to Jagot J’s judgment, his Honour did not err in doing so. Nor did the primary judge err in considering it as a part of his reasoning process.

39    The appellant’s next written submission is that there were procedural violations by the Registry of the Court in refusing to accept for filing what it described as “opposition to creditors petition” with the consequence that the sequestration order made by the Registrar on 13 March 2024 was a nullity.

40    That is not a matter which arises from the judgment under appeal.

41    In any event, this matter has been before a Registrar of the Court, three Justices of the Court, a High Court Justice and the primary judge, with the latter conducting a review de novo. None found any merit in the appellant’s submissions. I have already noted that the primary judge was correct to find that the appellant had committed an act of bankruptcy on the material before him such that this submission fails.

42    The next written submission by the appellant appears to rely upon what is contended to be the Registrar’s failure to provide reasons for making the sequestration order. That is not a matter raised in the grounds of appeal, nor does it arise from the judgment under appeal.

43    Nonetheless, s 52 of the Bankruptcy Act 1966 (Cth) 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.

44    The section sets out the matters about which the Court is to be satisfied and expressly provides that the Court may accept the matters stated in the affidavit verifying the petition as sufficient. Under those circumstances the Court may make a sequestration order. That is what occurred. Accordingly, I do not accept the appellant’s submission.

45    The next written submission contends that there was a failure on the part of the Registrar and the primary judge to ensure the “legislated requirement of independence of Trustees”. That was not a matter raised before the primary judge. In any event, no basis for that submission was advanced, other than the contention itself and I do not accept it.

46    The final submission raised by the appellant relies upon the principle of legality. The principle was explained by French CJ, Kiefel and Bell JJ in North Australian Aboriginal Justice Agency Ltd v Northern Territory [2015] HCA 41; (2015) 256 CLR 569, at [11]:

… the principle of legality favours a construction, if one be available, which avoids or minimises the statute's encroachment upon fundamental principles, rights and freedoms at common law. That presumption, which is well established, has been called "a working hypothesis, the existence of which is known both to Parliament and the courts, upon which statutory language will be interpreted". It is a presumption whose longstanding rationale is that it is highly improbable that parliament would "overthrow fundamental principles, infringe rights, or depart from the general system of law, without expressing its intention with irresistible clearness". Its object was set out in the joint judgment of Mason CJ, Brennan, Gaudron and McHugh JJ in Coco v The Queen (1994) 179 CLR 427 at 437–438:

"curial insistence on a clear expression of an unmistakable and unambiguous intention to abrogate or curtail a fundamental freedom will enhance the parliamentary process by securing a greater measure of attention to the impact of legislative proposals on fundamental rights."

It is a principle of construction which is not to be put to one side as of "little assistance" where the purpose of the relevant statute involves an interference with the liberty of the subject. It is properly applied in such a case to the choice of that construction, if one be reasonably open, which involves the least interference with that liberty. As TRS Allan has written:

"Liberty is not merely what remains when the meaning of statutes and the scope of executive powers have been settled authoritatively by the courts. The traditional civil and political liberties, like liberty of the person and freedom of speech, have independent and intrinsic weight: their importance justifies an interpretation of both common law and statute which serves to protect them from unwise and ill-considered interference or restriction."

(citations omitted)

47    Proceeding in accordance with the Act does not offend the principle of legality.

48    As part of this submission the appellant also refers to the Access to Justice (Civil Litigation Reforms) Amendment Act 2009 (Cth) ss 37M and 37P of the Federal Court of Australia Act 1976 (Cth).

49    Section 37M sets out the overarching purpose of the civil practice and procedure provisions of the Court. That is not a matter which arises from the judgment under appeal, however in any event, it provides no support to the appellant and no error has been demonstrated on the part of the primary judge.

50    Section 37P provides that the Court or a Judge may make directions about the practice and procedure to be followed in relation to a proceeding or any part of it. As with s 37M, that is not a matter which arises from the judgment under appeal. In any event, s 37P provides no support to the appellant and no error has been demonstrated on the part of the primary judge.

51    So too, the appellant’s mere reference to the Access to Justice Act does not arise from the judgment under appeal nor does it provide any support to the appellant.

Conclusion

52    It is for these reasons that the appeal must be dismissed.

53    There is no reason why the appellant should not pay the respondent’s costs.

Leave to institute proceedings

54    In view of the history in this matter, during the course of the appeal, the respondent sought an order that the appellant not be permitted to file any further appeals. That was clarified during argument as the appellant not being permitted to file any further proceedings without leave of the Court.

55    Such an order may be made pursuant to s 37AO(2)(b) and s 37AR of the FCA Act.

56    Those sections were considered by the Full Court in Storry v Parkyn (Vexatious Proceedings Order) [2024] FCAFC 100 (Lee, Feutrill and Jackman JJ).

57    The Full Court observed at [1]-[3]:

1    Section 78 of the Judiciary Act 1903 (Cth) relevantly provides that in every Court exercising federal jurisdiction, “the parties may appear personally”.

2    It has become increasingly common for litigants in this Court to exercise their right to appear in person. As was observed by Richard Morehead in his article “The Passive Arbiter: Litigants in Person and the Challenge to Neutrality” (2007) 16(3) Social & Legal Studies 405 (at 406), litigants in person often disturb the normal conventions of the courtroom and substantially challenge the well-ordered roles of judges and lawyers in that they are “classic outsiders – legally uninformed in a technical and rarefied atmosphere, unaware of procedure, often unknowingly in breach of convention”: see also the Hon M J Beazley AO, “Communicating the law: self-represented litigants in the Court of Appeal” (Speech, NCAT Annual Conference, 29 October 2001) (at 1).

3    Most self-represented litigants behave courteously and are often forced to do so because of circumstances outside their control and sometimes, of course, they present valid claims and defences. But a few self-represented litigants, unrestrained by the norms regulating the professional conduct of lawyers and aggrieved by a perceived wrong, become serial litigants obsessed with seeking vindication of their position and in doing so mount, often repeatedly, arguments which would never be advanced by a responsible practitioner. This phenomenon has occasioned significant problems for this Court in the efficient exercise of its original and appellate jurisdiction.

58    With respect, the observations in [3] of the judgment apply to the conduct of the appellant in this matter.

59    The matter was raised only in submissions and in the absence of a formal application by the respondent, I am not prepared to make an order in those terms. Nonetheless, if the appellant brings yet another application, it is open to the respondent to apply for such an order if so advised.

Associate:

Dated:    19 November 2024