FEDERAL COURT OF AUSTRALIA Gradara v Bolt [2001] FCA 77 BANKRUPTCY – appeal against the dismissal of an application for annulment of a sequestration order – whether trial judge erred in failing to set aside sequestration – sequestration order based on a judgment debt representing assessed costs APPEALS – misunderstanding by self-represented appellant of nature of appeal – attempt to re-litigate previous concluded proceedings Bankruptcy Act 1966 (Cth), s 153B TARCISIO GRADARA v WENDY BOLT AND SHARNEY BYRNE V 735 of 2000 SPENDER, EMMETT, CONTI JJ MELBOURNE 12 FEBRUARY 2001 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 735 OF 2000 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: TARCISIO GRADARA APPELLANT AND: WENDY BOLT FIRST RESPONDENT SHARNEY BYRNE SECOND RESPONDENT JUDGE: SPENDER, EMMETT AND CONTI JJ DATE OF ORDER: 12 FEBRUARY 2001 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: The appeal be dismissed with costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 735 OF 2000 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: TARCISIO GRADARA APPELLANT AND: WENDY BOLT FIRST RESPONDENT SHARNEY BYRNE SECOND RESPONDENT JUDGE: SPENDER, EMMETT AND CONTI JJ DATE: 12 FEBRUARY 2001 PLACE: MELBOURNE REASONS FOR JUDGMENT SPENDER J: 1 This appeal is an appeal against the order of Heerey J dismissing an application by Tarcisio Gradara to set aside the sequestration order made by Finkelstein J on 26 August 1999. An appeal against the making of the sequestration order had been heard and dismissed by an earlier Full Court. 2 It is clear that Mr Gradara misunderstands the nature of this proceeding and what this court can do on his appeal against the dismissal of his application for an annulment of the sequestration order. 3 Mr Gradara first issued a proceeding in the Federal Court in 1997, under the Crimes Act 1914 (Cth) claiming $3500 and alleging a conspiracy involving employees of the Commonwealth Bank in relation to a cheque that appears to have been drawn in 1984. Mr Gradara's basic claim in various forms concerning the cheque was made and determined in a number of courts and on each occasion, against various respondents, has been determined against Mr Gradara. 4 In 1984, after Mr Gradara had been involved in a motor car accident, he had instructed solicitors to act for him in proceedings which he instituted. The proceedings were settled and a sum of $15,000 was paid into a solicitor's trust account, with what was then the State Bank of Victoria. An amount of $1500 was paid to Legal Aid as the appellant's contribution to his legal costs. On 13 August 1984 a cheque in the sum of $13,500 was negotiated at the Brunswick branch of the State Bank of Victoria, now the Commonwealth Bank. In respect of the cashing of the cheque and what happened to the proceeds, there has been a great deal of disputation between Mr Gradara on the one hand, and his then solicitor on the other. Employees of the bank have been drawn into the dispute. From that time onwards Mr Gradara has been of the opinion that his solicitor stole a sum of money. He has maintained that he had been asked by his solicitor to sign a blank sheet of paper, which it transpired was the back of the cheque for $13,500, just prior to it being cashed. He has maintained that the conduct associated with the transaction constituted both fraud and forgery on the part of the solicitor. 5 The appellant sued his solicitor for the recovery of the money. He was unsuccessful in that proceeding. He complained to the Victoria Police. The solicitor was charged with a number of offences. Ultimately they were either dismissed or withdrawn. 6 He instituted proceedings in various state courts against the respondents, the employees of the bank. Mr Byrne was the manager of the relevant branch, and Ms Bolt worked as an employee. He pleaded a wide array of causes of action against them. The appellant's proceedings against the respondents were unsuccessful. Mr Gradara then commenced proceedings against them in this court. He alleged a criminal conspiracy, contrary to certain provisions of the Crimes Act 1914 (Cth) on their part. 7 On 1 August 1997 Merkel J dismissed those proceedings as disclosing no cause of action, with costs. In the hearing of that claim Merkel J said that the claim which Mr Gradara had made in the court against the bank officials did not appear on its face to raise any cause of action which would normally be within the jurisdiction of the Federal Court, although it may arguably be based on some cross-vesting jurisdiction. The case was brought in this court 13 years after the cause of action had accrued. In those circumstances it is not surprising that his Honour concluded that the application, brought so late, disclosed no reasonable cause of action that could be successfully prosecuted. 8 On 19 March 1998 Mr Gradara unsuccessfully appealed the decision of Merkel J to a Full Court of the Federal Court, constituted by Foster, North and Mansfield JJ. An application for special leave to appeal to the High Court of Australia was refused on 26 May 2000. In relation to that application, Hayne J said: "The complaints which the applicant makes stem from what he considers to be the wrongdoing of his former solicitor. That question has been examined in several proceedings instituted by the applicant. The present applicationis not made in any of those proceedings but concerns entirely separate questions about the operation of the Bankruptcy Act 1966 (Cth) in relation to a judgment debt owed by the applicant for costs. The decision of the Full Court of the Federal Court on that question is not attended by doubt. Special leave is refused." 9 The respondents, Ms Bolt and Mr Byrne, petitioned the court for a sequestration order. That application was based on a judgment debt representing the assessed costs of the appeal to the Full Court on 19 March 1998. 10 On 26 April 1999 Finkelstein J sequestrated Mr Gradara's estate. In the course of his Honour's reasons, Finkelstein J said: "Whether Mr Gradara has suffered any injustice at the hands of his former solicitor is not for me to say, save to observe that other courts have taken the view that he has not. What is important for present purposes is that Mr Gradara has suffered no injustice by reason of the conduct of the petitioning creditors in this court in the proceedings that led to the making of the costs order. In relation to those proceedings, the petitioning creditors acted within their rights when they successfully obtained a dismissal of the claim brought against them. When he appealed that decision, Mr Gradara assumed the risk of having an order for costs made against him in the event that his appeal was unsuccessful. He was undoubtedly aware of that risk. I accept that Mr Gradara considers, and has always considered, that he has a good claim against the petitioning creditors and that it was wrong that his claim against them was dismissed without a hearing on the merits. But that is really beside the point. The incontrovertible fact here is that the proceeding that Mr Gradara brought against the petitioning creditors in this court was bound to fail, as was his appeal to the Full Court. There is no injustice in allowing the petitioning creditors to base and prosecute their petition on a costs order regularly made." 11 An appeal to a Full Court against the making of the sequestration order by Finkelstein J was heard and dismissed by a Full Court, constituted by Branson, Weinberg and Dowsett JJ, on 11 November 1999. 12 The present appeal is against the order of Heerey J in declining to set aside the sequestration order of Finkelstein J made on 26 April 1999. On 20 July 2000 the appellant had filed an application, being the application heard by Heerey J on 25 September, in which he sought the following orders: (1) to annul the bankruptcy; (2) to return the money due to Legal Aid and the applicant; (3) with interest and expenses. He also sought some interlocutory relief. 13 That application was brought by the appellant pursuant to section 153B of the Bankruptcy Act. That section provides: "If the court is satisfied that a sequestration order ought not to have been made or, in the case of a debtor's petition, that the petition ought not to have been presented or ought not to have been accepted by the Official Receiver, the court may make an order annulling the bankruptcy." Heerey J noted, in declining to annul the bankruptcy: "In the application before me today the applicant again sought to rehearse his original grievance. He made many allegations of perjury and the like against other parties concerned with the matter. There is, in my opinion, no reason why the sequestration order ought not to have been made." 14 His Honour referred to the observations which I have just quoted from Finkelstein J, directing attention to the irrelevance of the claims involving his former solicitor, and also to the fact that the proceedings brought against the petitioning creditors heard by Merkel J was bound to fail, as was his appeal to the Full Court, and therefore there was no injustice in allowing the petitioning creditor to base and prosecute the petition on the costs order that had been regularly made. 15 At the hearing of the appeal today, Mr Gradara again sought to demonstrate what he said is the truth of the matters concerning the cheque in 1984. In prosecution of that aim, he sought subpoenas directed to Wendy Bolt to appear in court to give evidence; a subpoena for the solicitor Dino De Marchi to produce the original receipt and to give evidence in the witness box; and for a solicitor employed by Herbert Geer and Rundle to produce the original cheque. This conduct emphasises that Mr Gradara unfortunately is unable to understand the nature of this appeal. 16 There is nothing to indicate any error in the judgment of Heerey J. Neither the application, nor the claim to interlocutory relief before Heerey J, nor Mr Gradara's material in relation thereto, in any way related to a basis for annulment of the bankruptcy, which was founded on a costs order of the Full Court on the dismissal of Mr Gradara's first appeal to it. 17 Today Mr Gradara has again misunderstood what this court is about. He has failed to appreciate that this is an appeal, which needs the demonstration of error in the judgment appealed against. Once again Mr Gradara has sought to revisit his claims arising out of a cheque in 1984, his obsession about which has blinded him, over many years and in many proceedings, to what truly has to be demonstrated in any particular proceeding. 18 No error having been shown in the judgment of Heerey J, this appeal in my opinion should be dismissed with costs. EMMETT J: 19 I agree. Mr Gradara sadly, as the presiding judge has said, is obsessed with the circumstances concerning the cheque which took place in August 1984. The material upon which a magistrate ruled against Mr Gradara was before Finkelstein J and before Heerey J. Whether or not the magistrate reached the right answer in his assessment of credit and in deciding the facts is not a matter which is before us and is not a matter about which we can express any view at all. 20 What Mr Gradara unfortunately fails to appreciate is that the proceeding that gave rise to the order upon which the bankruptcy notice was founded concerned the question of whether or not there was a good cause of action against the present respondents, Byrne and Bolt. Merkel J found there was not. The Full Court found there was not. In those circumstances there can be no doubt at all about the correctness of the order of the Full Court, ordering Mr Gradara to pay the costs of the present respondents. In those circumstances there can be no question but that the order for the sequestration of his estate was properly made. Accordingly I agree with the orders proposed by the presiding judge. CONTI J: 21 I agree with the presiding judge and also I agree with the reasons of Emmett J. SPENDER J: 22 The order of the court is that the appeal be dismissed with costs. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Spender, Emmett and Conti. Associate: Dated: 16 February 2001 The Applicant appeared in person Counsel for the Respondent: Mr John Nolan Solicitor for the Respondent: Herbert Geer & Rundle Date of Hearing: 12 February 2001 Date of Judgment: 12 February 2001