FEDERAL COURT OF AUSTRALIA Combe v Pascoe [2004] FCA 90 BANKRUPTCY – no matters of principle involved FAYE DIANE COMBE v SCOTT DARREN PASCOE N 2507 OF 2003 CONTI J 12 FEBRUARY 2004 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 2507 OF 2003 BETWEEN: FAYE DIANE COMBE APPLICANT AND: SCOTT DARREN PASCOE RESPONDENT JUDGE: CONTI J DATE OF ORDER: 12 FEBRUARY 2004 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Notice of Motion filed 22 December 2003 by the applicant to stay the sequestration order against the applicant made on 2 December 2003 be dismissed. 2. Notice of Motion filed 22 December 2003 by the applicant to stay the application under Part 12 of the Federal Magistrates Court Rules for pro bono assistance be dismissed. 3. Notice of Motion filed today '… for leave to file fresh Notice of Motion for such relief as this court is empowered to give me' (under Order 80, Federal Court) be dismissed. 4. The applicant to pay the respondent's costs of the applications. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 2507 OF 2003 BETWEEN: FAYE DIANE COMBE APPLICANT AND: SCOTT DARREN PASCOE RESPONDENT JUDGE: CONTI J DATE: 12 FEBRUARY 2004 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The applicant was made bankrupt on 15 October 2002, by order of Federal Magistrate Raphael, on the application of Anthony Ziade, after Gyles J had dismissed her application to set aside the bankruptcy notice upon which the sequestration order was based. The respondent was appointed Trustee of the applicant's estate. That sequestration order had been in turn based on a District Court judgment entered by Judge Gibson against the applicant. 2 The applicant sought to appeal against that judgment 321 days out of time. On 9 September 2002, Handley JA refused leave to the applicant to appeal to the Court of Appeal of New South Wales. 3 Part of the property of the applicant is a property at Castle Hill. On 2 December 2003, Raphael FM made an order for vacant possession of the property at the instance of the respondent Mr Pascoe. The applicant filed a notice of appeal against that order, and has sought a stay of the same. The ground of appeal is that the District Court judgment, upon which the bankruptcy notice was based, was obtained by fraud and perverting the cause of justice. No particularity of those very serious assertions appears in the notice of appeal. 4 The applicant took out two notices of motion of 22 December 2003, for the following relief: (i) an application for pro bono assistance from a lawyer on the 'Probono Panel'; and (ii) the sequestration order be stayed and set aside. 5 The allegations in one accompanying affidavit were as follows: '… 2. Evidence has come to light regarding a "perverting the course of justice" or "fraud" on behalf of the petitioning creditor. 3. I have filed this Notice of Motion while awaiting a decision on the "fraud" by the NSW Attorney-General & Federal Attorney-General - at the request of the NSW Fraud Squad. 4. I have been informally advised that issues of "fraud" have been established but I await a formal notification.' 6 The allegations in the other affidavit are as follows: '1. I am living on a Disability Support Pension due to a blood disorder, which causes me to spontaneously haemorrhage and faint especially under stress. CRN 201-048-778V. 2. The effect of this sudden onset disability has caused me to be unable to properly prepare or present my case to the courts. 3. Applications to the Law Society schemes in the past have been unsuccessful, even with court orders by the judges, because of the Law Society's conflict of interest in acting for Lawcover and myself. 4. The new evidence regarding "fraud" or "perverting the course of justice" by the petitioning creditor which has been recently revealed has caused doubt as to the validity of the judgments on which he as obtained a sequestration order against me. 5. Applications and documentation necessary for the property conduct of further proceedings in this court which need to be made by me may be prejudiced by my inability to prepare these documents because of ill health and lack of financial resources now that my property has been seized by my Trustee. 6. Discrimination against me in the past has breached the Human Rights & Equal Opportunity provisions of the Act.' 7 On the first occasion that the proceedings came before me, I explained to the applicant that her affidavit, and the allegations she was asserting orally in Court, needed to put with precision on affidavit, so as to enable me to assess the existence of the merits of the complex case she was seeking to present to the Court. Two affidavits, each sworn on 11 February 2004 were sub-filed in Court this morning. 8 The first of those recent affidavits set out the following allegations: '… 3. On or about November 2002 I informed the respondent that I had the ability to pay out the bankruptcy notice as was listed on the sequestration order by way of a loan to me by a friend through her solicitor Mr Allan Farrar of White Barnes, solicitors. 4. At all times through our communications Mr Farrar myself and his client the lender, Mrs Therese Bachara were led to believe the respondent that he would accept cash payment of the debt as soon as Mr Farrar was made aware of the payout figure as at early 2003. 5. Mr Farrar quite correctly asked that proper Bills of Costs in an assessable form be presented to me or to Mr Farrar so that we could have them assessed and the money paid. That did not occur until late September 2003 by Mr Ziade and only on the day I moved house on 15 December did those bills be given to me by Lawcover. 6. The respondent has only just informed me in the last few days that those Bills of Costs are to be assessed. 7. At all time I have the ability to lease my home and pay out the debt by these means until the respondent went behind our backs and obtained duplicate transfer documents from my ex-husband without obtaining these documents from Mr Farrar. 8. At all times the respondent was informed that it was not necessary for me to leave the property which was my home in order to satisfy the alleged debt to the creditors. 9. During the course of obtaining these Bills of costs evidence was revealed in these Bills which supported Gibson J's assessment of "fraud" on behalf of the creditors during the course of the hearing before her. 10. Subsequent investigations by the Law society of New South Wales. The Legal Services Commissioner and the police have confirmed these observations by Judge Gibson. 11. I in fact complied with the orders of Raphael FM by leaving the house by 15 December 2003 with arrangements that my children's belongings and those of a friend John Harris were to negotiated with them by the respondent as he had no right to seize or otherwise interfere with their belongings. 12. The respondent did in fact go against an undertaking to my children and my fiend to allow them to collect their things from the house after 15 December 2003 and in fact threw out my daughter's food and other necessary items prior to the arranged date she could collect them. 13. The respondent also refused to allow me to tidy or otherwise imrove my home in order that I be able to lease the premises for the mortgage arranged with Therese Bachara. 14. At no time did I go against any order or request of the respondent which he had made. 15. Mr Farrar is now out of pocket for believing the respondent would accept the cash instead of seizing my home. 16. I refer also to other affidavits filed on my behalf in the Federal Court previously and in the federal Magistrates Court. 17. Mr Allan Farrar properly requested that the respondent provided proper proof of the debt before he received the cash which he demanded. He has yet to do so.' 9 The second of the recent affidavits set out the following allegations: '1. I am living on a disability Support Pension due to a blood disorder, which causes me to spontaneously haemorrhage into the soft tissue, an I faint especially under stress. My pension card no. is 201-048-778V. 2. The effect of this sudden onset disability has caused me to be unable to property prepare or present my case to the courts. 3. Applications to the Law Society Probono Schemes have been unsuccessful even with court orders by judges because of the conflict of interest the Law Society has with my matters against Lawcover and a solicitor who is a member of their society. 4. New evidence has emerged regarding "fraud" as labelled by Gibson J. in the District Court in Sydney as regards incidents which have affected the outcome of my matters against the petitioning creditor Anthony Ziade and his barrister Mr Brian Skinner. 5. These matters are currently being investigated by the NSW Fraud Squad and the Office of the Legal Services Commissioner (OLSC) and the Law Society of NSW and Mr Ziade has until 27 February 2004 to OLSC. 6. Annexed and marked with a "A" is a copy of the most recent letter sent to myself from the OLSC dated 2 February 2004. 7. The new evidence regarding "fraud" or "perverting the course of justice" by the petitioning creditor has undermined the validity of the judgments he has obtained against me on which his sequestration order is based. 8. Applications and documentation necessary for the proper conduct of proceedings may be prejudiced by my inability to access legal assistance.' 10 None of that material demonstrated any viable basis for setting aside the sequestration order or for staying the same. Justice Gyles has effectively resolved already the former issue and as to the latter, it is a matter for the applicant, not the Court, to obtain the pro bono assistance she seeks. 11 The bankrupt informed the Court this morning that what she particularly wishes to do is improve the physical condition of the property, which she believes would then fetch a sale price in the order of $800,000. Upon that footing, she claims that she would be solvent. 12 The former home of the bankrupt was held in the joint names of herself and her former husband, he not being a party to the proceeds. It is subject to two building society mortgages and four caveats lodged respectively by Mr Ziade, the applicant, Scott Darren Pascoe and Paula Ann-Charlotte Jensen. 13 Mr Pascoe has filed a detailed affidavit demonstrating the following matters additionally to an historical tracing of the events in the various court proceedings; those material includes the following: (i) the applicant vacated the property on 17 December 2003; (ii) real estate agents have been retained for sale; (iii) the property is in a poor and neglected condition; (iv) expense has been incurred with respect to the property being sold at auction on 18 February 2004; and (v) the applicant has not paid any sum in satisfaction of her debts, including the various costs orders made against her. 14 It is readily apparent that the applicant's claims for relief have no merit, and that Mr Pascoe's proposed disposal of the property in its present vacant state should not be delayed. I accordingly dismiss the notices of motion before me. That effectively brings in reality to an end her attempts to avoid the inevitable consequences of the sequestration order existing against her. Doubtless, as in most situations of human conflict, the true picture here is not entirely one-sided, as my foregoing narrative events tends to demonstrate. I impressed upon the applicant the need, in her own best interests, in effect to accept and co-operate in the inevitable. The appellant presented herself courteously to the Court, both in her manner and appearance, and is obviously intelligent, but, perhaps understandably through lack of legal training, she has no perception of the implications of the issues she seeks to agitate. It is in her own best interests to withhold from the further pursuit of litigation, which is causing her obvious distress, yet taking her nowhere. The history which I have outlined indicates sufficiently that her best interests lie in active co-operation with Mr Pascoe in order to obtain the best price in the circumstances. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. Associate: Dated: 12 February 2004 Applicant appeared in person Counsel for the Respondent: B Skinner Solicitor for the Respondent: Haylen McKenzie Date of Hearing: 12 February 2004 Date of Judgment: 12 February 2004