Yap v Granich & Associates [2004] FCA 1566

FEDERAL COURT OF AUSTRALIA

Yap v Granich & Associates [2004] FCA 1566

BANKRUPTCY – application to set aside sequestration order – abuse of process – attempt to re-litigate issues previously determined at first instance and appeal – application dismissed

Yap v Granich & Associates [1999] FCA 1039 cited

Yap v Granich & Associates [1999] FCA 1867 cited

Yap v Granich & Associates [2001] FCA 1735 cited

Yap v Granich & Associates [2002] FMCA 284 cited

Yap v Granich & Associates [2004] FCA 647 cited

YAP CHENG SEE v GRANICH & ASSOCIATES

W200 OF 2004

FRENCH J

1 DECEMBER 2004

PERTH

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY W200 OF 2004

BETWEEN: YAP CHENG SEE

APPLICANT

AND: GRANICH & ASSOCIATES

RESPONDENT

JUDGE: FRENCH J

DATE OF ORDER: 1 DECEMBER 2004

WHERE MADE: PERTH

THE COURT ORDERS THAT: 1. The application is dismissed. 2. The applicant pay the respondent's costs of the application. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY W200 OF 2004

BETWEEN: YAP CHENG SEE

APPLICANT

AND: GRANICH & ASSOCIATES

RESPONDENT

JUDGE: FRENCH J

DATE: 1 DECEMBER 2004

PLACE: PERTH

REASONS FOR JUDGMENT 1 On 19 August 2004, Yap Cheng See filed an application for an order to set aside a sequestration order made against her by District Registrar Jan on 10 December 1998. On 12 October 2004, I directed that the application be determined on the papers unless otherwise ordered. Affidavits and written submissions have been filed by the parties pursuant to those directions. 2 It is immediately apparent from the application and supporting materials that Mrs Yap seeks, yet again, to agitate matters already determined against her in the Supreme Court of Western Australia, in the Federal Court and in the Federal Magistrates Court. 3 On 30 July 1999, I dismissed a motion by Mrs Yap seeking to set aside the 1998 sequestration order – Yap v Granich & Associates [1999] FCA 1039. Mrs Yap appealed against that decision to the Full Court which dismissed her appeal on 29 November 1999 – Yap v Granich & Associates [1999] FCA 1867. Carr J in his judgment set out a factual background incorporating a summary of the procedural history leading up to the appeal to the Full Court. The summary was based upon my reasons for judgment at first instance. It was in the following terms: '10. On 15 March 1989 a company named P. Vivante & Co Pty Ltd sued the appellant in the District Court of Western Australia for the recovery of a debt of $39,034.17, said to have been owing pursuant to a deed of acknowledgment of debt. The appellant failed to enter an appearance and, on 10 April 1989, a default judgment was obtained against her. A writ of fi fa was issued on 26 April 1989 and some of the appellant's property was seized. The appellant approached Messrs Melsom Robson & Co, Chartered Accountants for help, and the processes of Part X of the Bankruptcy Act 1966 (Cth) were invoked on her behalf. The Part X proceedings were later abandoned. 11. In February 1992 a bailiff called and left his card at the appellant's front door informing her that her house would be sold to satisfy the District Court default judgment. 12. On 10 April 1992, three years after the default judgment had been obtained against her, the appellant made an application, in person, to have the default judgment set aside. 13. On 29 May 1992 the appellant's application to set aside the default judgment was dismissed on the basis of her non-appearance at court. A further application to have the default judgment set aside was made by her on the same day. The application was heard before Registrar Kingsley on 23 June 1992. The default judgment was set aside and the appellant was granted leave to defend the action. However, leave was conditioned upon the appellant being required to pay $39,000 into court by 7 July 1992, failing which the plaintiff would again be able to enter default judgment against her. 14. The appellant failed to comply with the condition imposed by Registrar Kingsley, but sought to appeal against Registrar Kingsley's order. On 3, 10 and 21 August 1992 Judge Viol heard the appellant's application for leave to appeal out of time against Registrar Kingsley's order. 15. By then the appellant had engaged the respondent, Messrs Granich & Associates, barristers and solicitors, to act on her behalf. Judge Viol observed that the application for leave to appeal was made broadly on two grounds: 1. That the appellant was unrepresented at the time the proceedings originally took place and that, had she been represented, a different order might have been made; 2. That there was fresh evidence available suggesting an overpayment by her to P Vivante & Co Pty Ltd, and therefore that the sum originally claimed was not owing and that it would be unfair in the circumstances for the condition imposed by Registrar Kingsley to continue to exist. 16. Judge Viol, however, dismissed the application, concluding that there was no sufficient basis for leave to be granted to the appellant to file and serve a notice of appeal out of time against the orders and, in particular, the condition imposed by Registrar Kingsley. 17. In an ex tempore judgment on 10 June 1993 the Full Court of the Supreme Court of Western Australia refused an application on behalf of the appellant for leave to appeal against the decision of Judge Viol. 18. Subsequently, the appellant instituted proceedings against the respondent alleging that the firm had been negligent in representing her. 19. On 7 May 1996 Commissioner K Martin QC in the District Court heard the appellant's action against the respondent. The appellant had identified five grievances against the respondent. However, she abandoned two of the grounds during the hearing. The remaining complaints against the respondent were that: * The circumstances surrounding her contention that the deed of acknowledgment of debt was not to be treated as valid or binding upon her, had not been adequately dealt with in the three affidavits prepared on her behalf by the respondent; * Mr Smallbone, the solicitor in the respondent's firm who represented her, had not used his professional skills to explain adequately her reasons for the time lapse between the obtaining of a default judgment against her on 10 April 1989 and her application precisely three years later to set it aside; * The circumstances surrounding the appellant's abandonment of the proposed Part X Bankruptcy Act arrangements, in early 1990, had not been satisfactorily explained. 20. The following passage is taken from the reasons of the trial judge at first instance in this matter: "Commissioner Martin referred to the background circumstances particularly the substantial period of delay in seeking to set aside the default judgment, the fact that she was seeking to resile from the clear terms of the deed acknowledging her indebtedness and that she was seeking to resile from an express acknowledgment in her statement of affairs in the Part X proceedings of the existence of a debt to P. Vivante for $33,000. On the basis of those circumstances, Commissioner Martin concluded that Mrs Yap's defences, accepting that they were arguable, would be regarded by a court with knowledge of the circumstances as "weak and shadowy". She faced "an almost insurmountable task … in persuading a court that a routine protective condition imposed by way of security by Registrar Kingsley in the exercise of his discretion should be removed". Commissioner Martin concluded, having heard what she now said about those matters and given the fact that no amount of explanation in her affidavits could have persuaded a court that her defences were anything other than shadowy, that it was appropriate to remove the protective condition." In a finding strongly adverse to the appellant's credibility Commissioner Martin said: "In summary, I do not regard Mrs Yap's evidence as reliable, where it is not corroborated independently." 21. The Commissioner referred to the circumstances "as a set of circumstances which cried out for the imposition of the security condition imposed by Registrar Kingsley against Mrs Yap …". He accepted Mr Smallbone's statement in evidence: "I always acted on your instructions. That's the way I did things and I believe I did the best I could. It was very difficult to deal with at times. Your instructions were very, very confused…". 22. Having regard to this background, Commissioner Martin found that the three remaining complaints or grievances of Mrs Yap against Mr Smallbone and Granich & Associates were all "completely without merit". The matters raised were not causative of any loss to Mrs Yap and it was inevitable that the prudent security condition imposed by Registrar Kingsley would remain in place. 23. Commissioner Martin gave an ex tempore judgment dismissing the appellant's action for professional negligence against the respondent, with costs. 24. On 17 May 1996 the appellant filed an appeal to the Full Court of the Supreme Court of Western Australia against the decision of Commissioner Martin. The respondent filed a motion to strike out the appeal. On 16 April 1997 the Full Court of the Supreme Court adjourned that motion and directed the appellant to apply to the Master for leave to amend the grounds of appeal. 25. On 2 May 1997 the application to amend the notice of appeal in terms of the minute submitted was dismissed by Master Bredmeyer on the basis that the minute of substituted notice of appeal was "wholly defective". The application was adjourned to 12 May 1997. On 12 May 1997 the appellant did not attend court and no new document was before the court. Her application was dismissed. On 23 May 1997 the matter came on again before Master Bredmeyer. However, the notice was still considered to be defective. He dismissed the appellant's application to amend the notice of appeal and did not give her leave to bring in another minute. 26. On 21 July 1997 the appellant's appeal against the decision of Commissioner Martin to the Full Court of the Supreme Court was dismissed for want of prosecution and because there were no grounds of appeal which complied with the Rules. 27. On 11 October 1997 the respondent caused a bankruptcy notice to be served on the appellant. The notice required payment of $33,184.11. The debt comprised taxed costs of $29,790.45 which the appellant had been ordered to pay to the respondent upon the dismissal of her claim by Commissioner Martin on 7 May 1996, and post-judgment interest of $3,393.66. The costs had been taxed on 12 August 1996. 28. On 17 October 1997 the appellant filed an application to set aside the bankruptcy notice on the basis that she had a counterclaim based upon the negligence of the respondent. On 1 December 1997 the District Registrar of the Federal Court dismissed that application. The appellant did not seek review of or appeal from that order. 29. On 1 May 1998 the respondent filed a creditor's petition seeking sequestration of the appellant's estate. The act of bankruptcy relied upon was non-compliance with the bankruptcy notice served on 11 October 1997. 30. On 13 May 1998 the appellant filed a notice of intention to oppose the petition based on a pending application for special leave to appeal to the High Court of Australia in relation to her unsuccessful professional negligence action against the respondent. She also alleged: "Deliberate concealment of facts relating to the debtor's cause of action to conceal the petitioner's breach of duty to the debtor pursuant to the petitioner's retainer/contract to the debtor." 31. The High Court dismissed the appellant's application for special leave to appeal on 22 October 1998, stating amongst other things that her application was "entirely devoid of merit". 32. Between the filing of the notice of intention to oppose the petition and 10 December 1998, the hearing of the petition was adjourned five times and the appellant filed six affidavits. On 10 December 1998 the Registrar made a sequestration order against the appellant's estate. 33. The matter came before the trial judge as a result of a motion filed by the appellant on 16 December 1998 seeking an order that the judgment of the Registrar be set aside, the sequestration order be annulled, and that the respondent pay damages and costs. 34. The motion to review and set aside the sequestration order was dismissed by French J on 30 July 1999. The appellant filed this appeal on 18 August 1999.' 4 On 6 October 2000, Mrs Yap lodged an application for the annulment of her bankruptcy. On the respondent's motion RD Nicholson J dismissed the application on the basis, inter alia, that Mrs Yap was seeking in it to raise the same allegations which she had previously raised in the Full Court of the Federal Court. She applied for leave to appeal against the decision of Nicholson J and that application was dismissed by the Full Court on 29 November 2001 – Yap v Granich & Associates [2001] FCA 1735. Gyles J, with whom North and Merkel JJ agreed, said (at [14]): 'I cannot identify any matter which the applicant has proved has arisen since the decision of French J and the Full Court in relation to the earlier application to annul the sequestration order which was not and could not have been put forward in that proceeding and which would lead to any different result in this proceeding. I particularly refer here to his Honour's consideration of the merits of the application in par [36] of his judgment. That being so, in my opinion, his Honour was quite entitled to regard the proceedings as doomed to failure and so as an abuse of process and vexatious. I can see no proper basis for concluding that there is sufficient doubt about the decision of the primary judge to warrant the grant of leave to appeal. I would propose that leave to appeal be refused and that the applicant, Yap Cheng See, be ordered to pay the costs of the respondent of this application.' 5 Mrs Yap sought, yet again, to re-agitate the matter of her bankruptcy in proceedings in the Federal Magistrates Court which were dismissed on 30 October 2002 by McInnis FM – Yap v Granich & Associates [2002] FMCA 284. His Honour said (at [29]): 'It is my view that in cases of this kind it is not appropriate for the Federal Magistrates Court to continue to entertain an application of this kind where clearly the issues have been properly agitated in other courts and been the subject of considered decisions where there is in fact in the present case no additional material which would persuade me that I should exercise my discretion, which I undoubtedly have under s 153B of the Bankruptcy Act.' 6 Mrs Yap then appealed against that decision. The appeal was heard, at the direction of the Chief Justice, by a single judge, Marshall J. His Honour, in an ex tempore decision given on 21 May 2004, dismissed the appeal – Yap v Granich & Associates [2004] FCA 647. His Honour said that the learned federal magistrate was: '... correct in characterising the proceedings before him as an abuse of process.' 7 The same is true of these proceedings and the application is dismissed with costs. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French.