FEDERAL COURT OF AUSTRALIA Krpina v Arrow Sun Australia Pty Ltd [2015] FCA 63 Citation: Krpina v Arrow Sun Australia Pty Ltd [2015] FCA 63 Appeal from: Krpina v Arrow Sun Australia Pty Ltd & Ors [2014] FCCA 1007 Parties: MIRO KRPINA v ARROW SUN AUSTRALIA PTY LTD (ACN 136 865 408), KENNETH STEWART SELLERS and ALICE FAYE RUHE File number: VID 293 of 2014 Judge: BEACH J Date of judgment: 13 February 2015 Catchwords: BANKRUPTCY – appeal against dismissal of review of sequestration order – various errors alleged in Federal Circuit Court decision – alleged defects in bankruptcy notice and creditor's petition – alleged solvency – alleged lack of procedural fairness – complaints about conduct of trustees – no error found – appeal dismissed Legislation: Bankruptcy Act 1966 (Cth) ss 41(1)(a), 44(1)(a), 47, 52, 306(1) Civil Procedure Act 2010 (Vic) Federal Circuit Court of Australia Act 1999 (Cth) s 104(2) Federal Circuit Court Rules 2001 (Cth) rr 12.02, 12.03 Federal Court of Australia Act 1976 (Cth) s 25(1AA)(a) Supreme Court Act 1986 (Vic) ss 33, 58(1) Cases cited: Adams v Lambert (2006) 228 CLR 409 Circle Credit Co Op Ltd v Lilikakis (2000) 99 FCR 592 Sandell v Porter (1966) 115 CLR 666 SZRUR v Minister for Immigration and Border Protection (2013) 216 FCR 445 Date of hearing: 15 October 2014 Date of last submissions: 24 October 2014 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 56 Counsel for the Appellant: The Appellant appeared in person Counsel for the First Respondent: Mr P Fary Solicitors for the First Respondent: Macpherson & Kelley Lawyers Counsel for the Second and Third Respondents: The Second and Third Respondent did not appear IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 293 of 2014 ON APPEAL FROM THE FEDERAL CIRCUIT COURT OF AUSTRALIA BETWEEN: MIRO KRPINA Appellant AND: ARROW SUN AUSTRALIA PTY LTD (ACN 136 865 408) First Respondent KENNETH STEWART SELLERS Second Respondent ALICE FAYE RUHE Third Respondent JUDGE: BEACH J DATE OF ORDER: 13 February 2015 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The appeal is dismissed. 2. The respondents' costs of and incidental to the appeal be treated as costs and expenses in the administration of the appellant's estate pursuant to s 109(1)(a) of the Bankruptcy Act 1966 (Cth). Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 293 of 2014 ON APPEAL FROM THE FEDERAL CIRCUIT COURT OF AUSTRALIA BETWEEN: MIRO KRPINA Appellant AND: ARROW SUN AUSTRALIA PTY LTD (ACN 136 865 408) First Respondent KENNETH STEWART SELLERS Second Respondent ALICE FAYE RUHE Third Respondent JUDGE: BEACH J DATE: 13 February 2015 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 The appellant is a bankrupt, with his estate being the subject of a sequestration order made on 6 August 2013 by Registrar Caporale. The sequestration order was made on a creditor's petition filed 1 July 2013 by the first respondent (Arrow Sun). The second and third respondents (the trustees) were appointed trustees of the appellant's estate. The appellant did not appear on the hearing of that petition before the Registrar. 2 On 26 August 2013, the appellant filed an application for review of the sequestration order. The application for review was heard by her Honour Judge Whelan of the Federal Circuit Court of Australia on 5 March 2014. On 20 May 2014, her Honour dismissed the application for review and affirmed the sequestration order. 3 The appellant has appealed her Honour's decision by a notice of appeal filed on 29 May 2014 containing 45 grounds, many of which are diffuse and misconceived. 4 In dealing with his appeal as a single judge of this Court, I am exercising appellate jurisdiction under s 25(1AA)(a) of the Federal Court of Australia Act 1976 (Cth). 5 I have reviewed the careful reasons of her Honour and do not detect any error of the type asserted by the appellant. The appeal will be dismissed. Background 6 On 6 August 2012, Arrow Sun obtained a default judgment in the Magistrates' Court of Victoria in the sum of $5,648.61 against the appellant (judgment debt). The sum of $5,648.61 consisted of the principal underlying debt of $4,371.52, interest of $468.61 from 8 May 2012 to the filing of the complaint, interest of $116.96 from the filing of the complaint to judgment, and legal costs of $691.52. 7 On 7 November 2012, Arrow Sun issued a bankruptcy notice based on the judgment debt. The bankruptcy notice was served on 7 January 2013. 8 On 29 January 2013, the appellant filed an application in the Magistrates' Court to set aside the default judgment and seeking a rehearing. The appellant did not appear on that application and it was struck out. On 29 January 2013, the appellant also filed an application to set aside the bankruptcy notice, but this ultimately did not proceed; its sub-stratum, ie the application in the Magistrates' Court to set aside the default judgment, failed. 9 As I have said, on 1 July 2013, Arrow Sun presented its creditor's petition in the Federal Circuit Court, claiming that the appellant owed it $5,789.59, being the judgment debt plus post judgment interest of $140.98. The available act of bankruptcy asserted was non-compliance with the bankruptcy notice. The sequestration order was made on 6 August 2013 by Registrar Caporale and the second and third respondents were appointed trustees of the appellant's estate. 10 There was no stay of any proceedings under the sequestration order. 11 On 26 August 2013, the appellant's application for review was filed in the Federal Circuit Court. During the period of October 2013 to March 2014, various interlocutory steps including the setting and vacation of hearing dates occurred (see her Honour's reasons at [10] to [14]). 12 Ultimately, the application for review was heard on 5 March 2014. The appellant was self-represented at all times. 13 At the hearing on 5 March 2014, various affidavits were read, including affidavits of the appellant sworn on 26 August, 8 October, 24 October and 11 December 2013 (this last affidavit has a typed date on its face of 10 October 2013 and also an apparently incorrect reference to 11 October 2013) and affidavits of Arrow Sun's solicitor, Thiam-Jin Chu sworn 9 and 29 October and 12 December 2013. At the hearing on 5 March 2014, each of the deponents was cross-examined. 14 Much of the appellant's case was addressed to the solvency question (s 52(2)) including the assertion that the then appellant's financial state had somehow been produced by misfeasance on the part of the trustees. As there had been no stay of any proceedings under the sequestration order, from 6 August 2013 the trustees had taken steps to deal with the appellant's estate in accordance with the requirements of the Bankruptcy Act 1966 (Cth) (the Act). 15 Another part of the appellant's case sought to challenge aspects of the default judgment and the calculation of the judgment debt, the bankruptcy notice and whether the $5,000 or more debt condition referred to in s 41(1)(a) or s 44(1)(a) of the Act had been satisfied. 16 In terms of how one might characterise the quality of the evidence adduced by the appellant before her Honour, the following is a description given by her Honour with which, having reviewed the material before her Honour, I agree (at [15]): 15. The affidavit material produced by the Applicant Debtor provides little material with respect to his solvency. Much of the affidavit material produced is in the form of submission, rather than statement of fact. From the affidavit material, it would appear that the Applicant Debtor contends that the Bankruptcy Notice was invalid because the amounts specified in the order of the Magistrates Court are incorrect. 17 On 20 May 2014, her Honour dismissed the application for review and affirmed the sequestration order. Grounds of Appeal 18 As I have said, the appellant's notice of appeal contains 45 grounds of appeal raising diffuse and disjointed asserted errors. It is not productive to set them out in the body of these reasons; for convenience, I have set them out in a schedule. During the course of submissions, some focus was brought to bear on identifying the appellant's principal complaints to be derived from the notice of appeal, the appellant's various written submissions (in excess of 100 pages) and the appellant's yet further affidavit material. It is convenient to group the appellant's complaints under various subject headings and to deal with his grounds of appeal in that matrix. 19 But before doing so, it is necessary to address one evidentiary matter. The appellant sought leave to rely upon fresh evidence in the form of his affidavit of 15 October 2014. This affidavit contained various annexures described as "My Business Records of Contract Sales", "My Business Records of Job Records", "My Wife's Bank Book Records", "Creditor List" and "Assets Analysis". This was all said to go to the evidence of his solvency. Most of this material pre-dated 5 March 2014, but some post-dated 5 March 2014, indeed post-dated 29 May 2014. As to the pre-dated material, the appellant has given no satisfactory explanation as to why such material was not adduced before her Honour. The appellant asserted that somehow her Honour had impermissibly barred him from relying on it. I do not accept his assertion. Her Honour had on a prior occasion (12 December 2013) made an order that no further affidavit material be filed thereafter, which was appropriate given what had transpired earlier. On 5 March 2014, from my review of the transcript, during closing address the appellant started giving yet further evidence from the bar table, and it would appear from documents in his possession which were not in evidence before her Honour. At T52 to 55 an unsatisfactory discussion ensued between her Honour and the appellant concerning his submissions, the use of such material, the quality of that material and the fact that the appellant had had four previous adjournments to get his evidence together. Unsurprisingly and correctly, her Honour in an appropriate exercise of her discretion did not allow the appellant to use this material. But lest there be a doubt, I am prepared to grant leave to the appellant to now adduce this material and to now rely upon it before me, whether pre-dating or post-dating the hearing before her Honour and notwithstanding the absence of any satisfactory explanation, at least in relation to material that was available and could have been adduced before her Honour, as to why it had not been properly adduced (both as to form and timing) before her Honour. I should say that having reviewed the material, it goes nowhere. It does not establish any error on the part of her Honour; it would not have changed her assessment of the facts or her determination of the issues. 20 It is appropriate to turn to the grounds of appeal. A. Default judgment/debt of petitioning creditor 21 Many complaints are made concerning the default judgment. Such complaints are then used as the springboard to attack the validity of the bankruptcy notice. Such complaints are also used to challenge whether the $5,000 or more condition in s 41(1)(a) or s 44(1)(a) of the Act was satisfied; it is to be noted that although there is reference to the same dollar amount, the conditions are different concepts; one is dealing with a final judgment or order; the other is dealing with the debt owing at the time of the presentation of the petition. The appellant's complaints are set out in grounds 1 to 9 and 29 of his notice of appeal. 22 First, it should be stated that no challenge or attack has been made to the underlying debt of $4,371.52 (see the appellant's affidavit sworn 24 October 2013 at [8]); grounds 3 and 8 relate more to how the judgment was entered and the judgment debt calculated. It is to be recalled that the default judgment of $5,648.61 consisted of the underlying debt of $4,371.52, statutory interest of $468.61 under s 58(1) of the Supreme Court Act 1986 (Vic) from 8 May 2012 to the filing of the complaint (pre-complaint interest), interest of $116.96 from the filing of the complaint to judgment (post-complaint interest) and costs of $691.52, although the interest and costs claims were contested by the appellant. 23 Second, the appellant before her Honour made various attacks in order to endeavour to bring the amount below $5,000. So it was said that the pre-complaint interest of $468.61 was not claimable, and as a consequence the post-complaint interest of $116.96 should have been reduced to $104.35. Moreover, it was said that the costs of $691.52 should not have been allowed. This was said to be on the basis that Arrow Sun should have issued proceedings in the Victorian Civil and Administrative Tribunal (VCAT) and that if it had done so, only $450 in costs would have been allowed. If one was to accept all of the appellant's assertions (and corresponding asserted errors made by her Honour), this would have brought the judgment debt below $5,000 with the bankruptcy notice then being defective. It would also it is said have brought the s 44(1)(a) debt below $5000. 24 Her Honour dealt with the matter at [65] to [70] in the following terms: 65. This issue can be readily disposed of without considering the validity of the amount of interest calculated on the basis of s.58(1) of the SC Act with respect to the interest up to filing of the complaint. If I were to accept the Applicant Debtor's contention that the debt should only have been the $4,371.32, which he acknowledges he owes and the interest awarded by the Magistrates Court therefore $104.35, the issue of costs would still be against him. The First Respondent was under no obligation to institute the proceedings in VCAT rather than the Magistrates Court and the costs awarded by the Court are not challenged on any other basis. On my calculations that would bring the debt to at least $5,167.19. 66. The Court has a discretion to go behind a judgment in proceedings such as these. However, it needs to be considered that the appropriate forum for review of a judgment is the court in which the judgment was issued. The default judgment was made on 6 August 2012. The Applicant Debtor did not seek a re-hearing to set aside that judgment until 29 January 2013, some 22 days after the Bankruptcy Notice was served on him. He then failed to appear at the hearing of his application and his application was struck out with costs. 67. The Applicant Debtor filed an application on 29 January 2013 to set aside the Bankruptcy Notice, on the basis of the re-hearing application but did not proceed with that application. When the First Respondent issued a Creditor's Petition, he failed to appear on the listed date. 68. The Applicant Debtor now seeks to go behind the judgment of the Magistrates Court only to dispute part of the claim for interest. In Emerson and Anor v Wreckair Pty Ltd (1992) [1992] FCA 16; 33 FCR 581, the Full Court of the Federal Court considered the exercise of the Court's power to go behind a judgment in similar circumstances. The Court said: ◦ The Court should not go behind a judgment where the grounds upon which the judgment is challenged are such that, if accepted, they would only support a finding that the amount of the debt be reduced and would not support a finding that there was in truth no debt at all ([1992] FCA 16; (1992) 33 FCR 581 at 589). 69. I am therefore not satisfied that there is a basis for the Court to go behind the judgment of the Magistrates Court in this case. 70. Further, as the Court noted in that matter, an act of bankruptcy is committed irrespective of whether it can be shown that the underlying judgment is defective. In this case, on the material before me, I am in any event not satisfied that the judgment was defective. 25 On the costs component of $691.52, in my view, her Honour was quite correct in her conclusion that Arrow Sun was under no obligation to go to VCAT; Arrow Sun was entitled to bring its proceedings in the Magistrates' Court. Grounds 4 to 6 of the notice of appeal have no substance. Accordingly, if the underlying debt of $4,371.52 plus the $691.52 costs are included (together with the post-complaint interest of $104.35), one is over $5,000 in terms of the judgment debt; indeed one does not even need the post-complaint interest component (I should say that this is post-complaint interest to judgment and not post-judgment interest (see Autron Pty Ltd v Benk (2011) 195 FCR 404 and the problems with the latter)). There is no genuine dispute that that amount was owing and was owing at the time default judgment was entered and also at the time of the issue of the bankruptcy notice. Further, it is not appropriate to go behind the judgment debt for the reason her Honour expressed at [68] and [69]. Moreover, even if one had gone behind the judgment, one would still have been over the $5000 threshold relevant to s 41(1)(a) and also the separate $5000 threshold relevant to s 44(1)(a). 26 As to the pre-complaint interest component, her Honour found it unnecessary to deal with the point. Nevertheless ground 7 of the notice of appeal asserted error in its original inclusion in the default judgment and presumably her Honour's failure to so find. It seems to me that interest under s 58(1) of the Supreme Court Act 1986 (Vic) was properly claimable (see s 33 which makes s 58 applicable to the Magistrates' Court); one was dealing with a "debt or sum certain" under unpaid invoices. Ground 7 is without merit. But even if it was an error to include the pre-complaint interest component, it goes nowhere; to omit it does not affect the validity of the bankruptcy notice and nor does it mean that s 41(1)(a) or s 44(1)(a) were not satisfied. 27 Grounds 1 and 2 make various assertions said to support the conclusion that the bankruptcy notice was a nullity. In my view, none of the asserted errors in the bankruptcy notice are established. Further, even if such defects were established, they were cured by s 306(1) of the Act (see also Adams v Lambert (2006) 228 CLR 409). Her Honour's analysis at [73] and [74] was correct. Further, ground 2 is misconceived. The bankruptcy notice cannot be corrected by the creditor after service; corrections by or under the authority of the Official Receiver between issue and service may be permissible, but not those made by a creditor – Circle Credit Co-Op Ltd v Lilikakis (2000) 99 FCR 592 at [18] to [19] per Heerey J. 28 Ground 3 asserts that the judgment debt was incorrect and arrived at "by fraud". There is no detail given or substance as to this suggestion beyond a repetition of what has gone before in terms of calculation, which I have already dealt with. The ground is without merit. 29 Ground 8, which is of a slightly different character, asserts that Arrow Sun breached the Civil Procedure Act 2010 (Vic) by not alerting the appellant to hearing dates in the Magistrates' Court. The appellant filed an application to set aside the default judgment and sought a rehearing in the Magistrates' Court. It was a matter for him to properly pursue it, which he did not do so. Second, Arrow Sun was under no such duty to alert him. Third, this hardly impugns the bankruptcy notice or justifies looking behind the underlying judgment. Fourth, this is all remote to the question as to whether the sequestration order was properly made or her Honour carried out the appropriate review required of her. Fifth, an error made by her Honour is not identified in ground 8. 30 Ground 9 contains a bare assertion that the petition did not meet the requirements of s 47. There is no substance to this ground. I have reviewed the affidavits relied upon by Arrow Sun below. The petition was verified by a person "who [knew] the relevant facts" (s 47(1)). It was in the form prescribed (s 47(1A)). Further, the proofs required by s 52(1) were provided and were adequate. Moreover, to the extent that this ground of appeal relies upon establishing grounds 1, 2 and 4, the foundation for this ground is not established for the reasons given above. 31 Ground 29 is not established for the reasons given at [21] to [28] above. B. The appellant's financial position – solvency 32 Generally grounds 10 to 44 of the notice of appeal raise various issues concerning the appellant's financial position and the cause thereof. They relate to the appellant's apparent invocation of s 52(2)(a), which he had the onus of establishing. 33 It is appropriate to make a number of preliminary observations. 34 First, the appellant has made reference to the nature of the review proceedings in the Federal Circuit Court; see for example grounds 10 to 16. The review in accordance with s 104(2) of the Federal Circuit Court of Australia Act 1999 (Cth) is a rehearing de novo; this flows from the statutory text and context and from the constitutional imperative. Such a review is to be decided on the facts and the evidentiary landscape at the time of the review. There is no obligation to demonstrate error on the part of the Registrar or that his discretion miscarried. So much is not in doubt. But on the hearing of the review, the onus of proof does not change. The petitioning creditor had the onus of establishing the matters in s 52(1). The appellant had the onus of establishing the matters under s 52(2) and establishing that the Court, in the exercise of its discretion, should decline to make a sequestration order (or in the present case, set aside the order of the Registrar on this s 52(2) basis). To the extent that the appellant suggests otherwise, his position is misconceived. 35 Second, it is suggested by the appellant that on the review, given that the sequestration order had been made by the Registrar, that the trustees of the estate were or had to be parties (see ground 11). That was the case and is not in issue. But it is then said in grounds 12, 13, 14 and 16 that the trustees somehow bore an onus of proof and that it was somehow up to the trustees to prove insolvency (or for the "litigants opposing the application" to do so). 36 There are a number of misconceptions, and I will mention some briefly. Section 52(2) puts the onus on the appellant to establish an ability to pay his debts. That position does not change upon the application for review and even if trustees by that time had been appointed and were parties to the review application. There is no onus of proof on the petitioning creditor, let alone the trustees in that regard; moreover one would expect trustees not to take an active role on the question of whether a sequestration order should be made on the creditor's petition, whether before the Registrar or on the application for review, although they might assist the Court to provide up to date financial information if requested by another party or the Court. It might also be anticipated that the results and reports of their investigations, which they have published to creditors, might also be tendered in evidence by the petitioning creditor on the review application. To the extent that grounds 11 to 16 are based upon the misconceived premise of this change in onus, they are flawed. Grounds 11 to 16 are not made out. Ground 10 is merely a correct statement of the legal position that is not in issue. Ground 15 has no independent work to do beyond what I have already said. 37 Third, in terms of the evidence of solvency (see for examples grounds 17 to 24, 28, 38, 41 and 43), which the appellant had the onus of establishing under s 52(2), her Honour made the following findings at [75] to [82]: 75. The Applicant Debtor has contended since the filing of his first affidavit that he is solvent. He seems, however, to be under the misapprehension that the onus lies with the First Respondent to prove that he is insolvent. Having established compliance with the requirements of s.52 of the Act, of which I am satisfied, the onus is on the Applicant Debtor to establish that a Sequestration Order should not be made because he is solvent. 76. The hearing of this application was adjourned on several occasions because of the Applicant Debtor's inability to present evidence in an appropriate form. The Applicant Debtor has consistently made statements about his affairs which are not supported by any documentary or other probative evidence. He frequently made statements from the bar table, despite directions that evidence be given by way of affidavit, that were riddled with hearsay. He denied debts existed on the basis that he disputed them even where judgment had been entered against him. He maintained that a debt did not exist because the owner of the business had been declared bankrupt. It was telling that, when he was asked, "Did you take much care when you were filling in this statement of affairs?" he replied "No, I didn't take that much care at all". 77. The only tangible assets identified by the Trustee, apart from two motor vehicles and the Applicant Debtor's tools of trade, were the property from which he operated his business and the business stock. There was no sworn valuation of the property. Kerbside valuations obtained by the First Respondent varied between $160,000.00 and $230,000.00. On that basis, the Trustee valued the property at $200,000.00. 78. The Applicant Debtor, in his Statement of Affairs, valued the property at $220,000.00 but later submitted a one-page appraisal which suggested that it could fetch $235,000.00 in the market. There was no evidence that the Applicant Debtor had taken any steps prior to August 2013 to realise the value of the property in order to meet his debts. He agreed that there was a debt to Westpac of $125,000.00 which was secured against that property. 79. The Applicant Debtor conceded that his business, Grand Carpets, had made a loss of $73,000.00 in the 12 months prior to the making of the Sequestration Order. In his Statement of Affairs, the Applicant Debtor claimed stock of the value of $90,000.00 and plant and equipment of $26,000.00. He subsequently made various statements about the value of the stock. He produced no evidence of the value and would not co-operate with the First Respondent in obtaining a sworn valuation despite Court orders. The only documented evidence of the value of the stock and equipment was therefore that of Lockwoods who valued the business assets on an auction basis at $18,830.00. 80. An asset cannot be taken into account in bankruptcy proceedings to assess solvency without reference to the time it would take to effect realisation and produce cash. As at 6 August 2013, I am satisfied that the only reliable evidence of the value of the business assets was the valuation by Lockwoods of what could be realised on an auction basis. Further, by the time of the final hearing, the business assets were no longer in the hands of the Applicant Debtor or the Trustee. It is also reasonable to assume that if the Norton Drive property was to be auctioned it might realise between $200,000.00 and $220,000.00. 81. The situation with the Applicant Debtor's liabilities is even less clear. The Trustee estimated the Applicant Debtor's liabilities at $246,355.00. While the Applicant Debtor disputed some of these debts, his evidence concerning the basis on which he did so was not reliable. 82. On the material before me, I am unable to be satisfied that the Applicant Debtor was solvent either at the time Registrar Caporale made the original Sequestration Order or when the Application for Review was heard by the Court. 38 Her Honour made reference to material sourced from the trustees. But it is apparent that the trustees were not represented before her Honour although they were parties to the application for review. What was before her Honour were various reports of the trustees as referred to in [6] to [9] of her reasons, having been exhibited to an affidavit of Arrow Sun's solicitor. At [6] to [9] her Honour said: 6. On 19 August 2013, the Trustees forwarded a report to the creditors setting out their preliminary investigations. A further report was forwarded on 3 October 2013. On 26 August 2013, the Applicant Debtor served the Trustees with the Application to Review the Sequestration Order. 7. The Trustees Report of 3 October 2013 estimated the Applicant Debtor's total known assets at $218,830.00. Of this: • $200,000.00 was the value of real property; and • $18,830.00 was the value of business assets. 8. The Applicant Debtor valued his assets, in his Statement of Affairs, at $343,500.00. This was comprised of: • Real property valued at $220,000.00; • Business assets of $117,500.00; • Tools of trade of $3,000.00; and • A motor vehicle also valued at $3,000.00. 9. The Trustees found the Applicant Debtor's liabilities to be $246,355.00 with secured creditors of $131,999.00 and unsecured creditors of $114,356.00. The Applicant Debtor, in his Statement of Affairs, claims secured creditors of $125,994.00 and unsecured creditors of $88,422.00. 39 Her Honour also referred to further evidence from Arrow Sun's solicitor at [37] to [41] in the following terms: 37. Mr Chu also gave evidence about the attempts made by the First Respondent to obtain agreement with the Applicant Debtor to the appointment of a qualified expert to provide valuations on the stock of the business of Grand Carpets. Despite their attempts to obtain the agreement of the Applicant Debtor, they were unable to do so. 38. Mr Chu gave evidence that the Trustees had instructed Lockwood & Company Pty Ltd to inspect the Applicant Debtor's business assets and to prepare a report as to value of these assets on the following basis: • Market value for existing use; and • Realization at auction. 39. The Trustees had received the valuation report from Lockwood which valued the business assets at $41,140.00 based on market value for existing use and $18,830.00 based on realization at auction. 40. The Trustees had also invited three real estate agents to conduct kerbside appraisals of the Norton Drive property. The three valuations received valued the property at between: • $165,000 and $180,000; • $210,000 and $230,000; and • $200,000. 41. Mr Chu was cross-examined by the Applicant Debtor about the valuer's report. He agreed that the Applicant Debtor had told him that his assets were worth more than what was listed in the Trustee's report. 40 In my view, the appellant has not demonstrated any error in: (a) her Honour's careful findings of fact; (b) her Honour's reliance upon the material identified to support her Honour's findings; or (c) her conclusion that the appellant had not discharged the onus required of him under s 52(2). 41 Her Honour thoroughly analysed the evidence and there is no reason at all to doubt her conclusions. In particular, there is no substance to any of grounds 17 to 25, 28, 32 and 42. It is appropriate to elaborate on several features that the appellant particularly focused on in the hearing before me. 42 First, in his grounds of appeal, particularly ground 17, and particularly in argument before me, emphasis was placed by the appellant on the value of stock and equipment said to come to a value of $199,000. But as her Honour rightly explained, the only documented evidence of value was the Lockwood & Co valuation of $18,830 (see at [79] and exhibit TJC-5 to the affidavit of Thiam-Jin Chu sworn 12 December 2013). The appellant did not tender evidence before her Honour demonstrating otherwise apart from his own assertions. His assertions of value were entitled to be discounted by her Honour and given little weight. Ground 42 has no substance. Her Honour's statement that the appellant "produced no evidence of the value and would not co-operate with the first respondent in obtaining a sworn valuation despite Court orders" was also correct in terms of evidence beyond his mere assertions (see the orders of 19 November 2013 and the affidavit of Thiam-Jin Chu sworn 12 December 2013 at [6]-[18]). Further, the statements set out in ground 24 are more in the nature of a proffered excuse by the appellant for his failure to produce probative evidence of value rather than positive evidence. In any event, ground 24 is not substantiated. There is likewise no substance in the related ground 25. A review of the material before her Honour establishes to my satisfaction both a lack of evidence tendered by the appellant and a lack of co-operation on his part in obtaining valuation evidence beyond the Lockwood & Co valuation material. Further, it must be said that the appellant's assertions on the topic proceed on the premise of a valuation methodology inappropriate to the context and different from the Lockwood & Co method. And in terms of the appellant's own assertions on the topic, her Honour was also justified in using the description set out in [76] of her reasons. 43 Ground 32 is an apparent reference to the Lockwood & Co valuation of stock, that being the only probative and at least independent evidence before her Honour. No objection appears to have been taken to its admission before her Honour as I read the transcript of hearing before her Honour (a copy of which was provided to the appellant before the hearing before me, with an opportunity to file short written submissions thereafter). Further, it was not established that its author lacked the necessary credentials. The reference to the Supreme Court practice is misconceived. The assertion of fraud is baseless. Ground 42 is a further reference to the stock question. It is also baseless for the reasons set out at [42] above. Finally, on the question of stock, at the time of the hearing before her Honour, the stock was no longer the property of the appellant but Concord Floor Coverings Pty Ltd, a company owned by the appellant's son. As the appellant accepted before me, when I put the question "So your rolls of carpet were transferred to your son's company?", the appellant responded "That's right – eventually". 44 Second, in terms of liabilities to financial institutions (see her Honour's reasons at [78] and [81]), the appellant has not challenged the relevant findings but says (grounds 17 to 20) that at particular dates such liabilities were serviced. When one considers her Honour's findings on assets and liabilities, there was more than sufficient evidence before her Honour to readily conclude that there was an excess of liabilities over assets. Further, in terms of various financial facilities that the appellant had, there was little in the way of material at the time of the hearing showing whether or not they were current liabilities, particularly the Westpac facility (an overdraft facility on the appellant's evidence below (T16)) and particularly at the time of the hearing (the only evidence at the time of the hearing was a Westpac bank statement showing a negative balance of $131,998.66 and "Funds available $0.00+"); one might also assume at the least that they become due and owing (if not already) at the time the sequestration order was made and consequently were due and owing at the time of the hearing before her Honour. Moreover, there has been no challenge to her Honour's findings concerning the losses made by the appellant's business [79] and that at the time of the hearing the appellant no longer held the business assets [80], nor were they held by the trustees. Further, apart from what her Honour identified, and subject to one matter that I will discuss in a moment, there was little if anything in the way of probative evidence of assets or income adduced by the appellant. At all events, the appellant did not advance detailed evidence on such matters. Her Honour's conclusion at [82] was not only restrained but perhaps inevitable on the material before her. The appellant had an onus which he failed to discharge. 45 Third, the appellant sought to tender before me additional material that had not been before her Honour, some of which post-dated the hearing before her Honour, indeed her decision. The material was exhibited to an affidavit of the appellant sworn 15 October 2014 and consisted of records of contract sales, job records, "wife's bank records", a "creditor list" and asset analysis. The asset analysis was a construct of the appellant, endeavouring to explain how his assets exceeded liabilities as at 6 August 2013. It has no probative value and is in the nature of assertion rather than evidence. Further, it does not demonstrate solvency at all at the time of the hearing before her Honour (5 March 2014) as distinct from 6 August 2013. Further, many of the figures for assets set out in the assets analysis as at 6 August 2013 were not substantiated, including the value of stock (see [42]) above), "goodwill" of $1,055,262.00 (which in any event does not sit well with the findings of her Honour at [79] dealing with the prior losses of the business) and "losses incurred due to shop closure" said to be calculated at $120,880.50; this last item on its very description was not a readily available asset as at 6 August 2013 or at the time of the hearing before her Honour, to say the least. Further, the additional material contained an ANZ bank statement which showed a credit balance of $10,765.17 as at 14 July 2013 and a NAB bank statement which showed a credit balance as at 29 November 2013 of $2,285.27. But none of this spoke to the position at the time of the hearing before her Honour. Further, the "creditor list" (on its face it appears to be a debtors listing) went nowhere; it did not state on its face in a legible let alone coherent form what precise amounts were still owing at the time of the hearing before her Honour, let alone their recoverability. Moreover, it is unclear to whom the amounts were owed. The contract sales and job records were for modest amounts and many of the contract documents seemed to relate to Concord Floor Coverings Pty Ltd. Further, there was some material showing the sale of some rolls of carpet which it was said showed the value of carpet at an earlier point in time. Finally, there was some material which the appellant asserted showed that he did not owe money to the ATO. Much of the material relied upon is not probative and does not support the assertions made. I have considered all of this material. In my view, if it had been before her Honour it would not have discharged the appellant's onus to establish the matters under s 52(2)(a) at the time of the hearing before her Honour. Moreover, even if s 52(2)(a) had been established, there was still the question of the discretion to be exercised under s 52(2). 46 There are other problems for the appellant on this aspect of his case, including the following: (a) There is no challenge to the concessions made by the appellant in cross-examination that point against establishing s 52(2)(a) (see her Honour's reasons at [23]). (b) He did not challenge her Honour's finding that he had ceased to operate his business and started working for his son, again pointing against establishing s 52(2)(a) (reasons at [24] and [34]). (c) Further, he did not take issue with what was recited by her Honour at [29] to [32]. C. The conduct of the trustees 47 There is another theme of the appellant's case. Many of his complaints are made against the trustees that, somehow it is said, caused him loss. It will be recalled that the sequestration order had been made on 6 August 2013. But the hearing before her Honour occurred on 5 March 2014. The appellant's financial position changed during that time, and was, unsurprisingly, affected by the trustees' lawful discharge of their duties. Because the review was a rehearing de novo, her Honour was bound to consider the position and evidence at the time she heard the matter on 5 March 2014. It was said before me that the trustees had somehow evicted the appellant from his business and that "extreme damage" had been caused to him. It was said that this all occurred prior to the hearing before her Honour. There are a number of difficulties. First, there was no such probative evidence before her Honour that the trustees had acted inappropriately let alone unlawfully (see for example a recitation of the steps taken by the trustees in the affidavit of Thiam-Jin Chu sworn 29 October 2013 which was not challenged below). Further, the appellant has not challenged [25] of her Honour's reasons. Second, even if the assertions were good, they merely establish that the appellant was in a poor financial position at the time of the hearing before her Honour. In other words, all that he was advancing was an excuse for his parlous position. But none of it assisted him to discharge the onus under s 52(2)(a). Moreover, even if such circumstances could, alternatively, fall under s 52(2)(b), which I very much doubt, on his own assertions they were actions of the trustees and not the petitioning creditor. It is difficult to see how the independent actions of the trustees could be used as a basis to deny the creditor's petition or in form to have the application for review allowed and the sequestration order set aside. There was no evidence that the trustees' conduct was linked to any act or omission (wrongful or otherwise) of Arrow Sun after the sequestration order had been made. Such complaints do not appropriately fit into s 52(2)(b) save perhaps in an unusual case and where the petitioning creditor's conduct may also be impugned, although I accept that this latter aspect may not strictly be necessary in all cases given the width of s 52(2)(b). Finally, if there was any substance to the complaints against the trustees, the Act provides appropriate review mechanisms and remedies. 48 The appellant put a submission to me that: I said to her [Honour] - essentially, what we're now discussing is, the trustee has seized my shop and killed my cash flow, and killed my goodwill. In essence, he appeared to accept that he was in a parlous state at the time of the hearing before her Honour, but that if the trustees had not acted as they did, he would have been solvent. As I say, that does not discharge any onus under s 52(2)(a). Moreover, there was no probative evidence before her Honour to support such a counterfactual in any event. 49 Ground 26 is misconceived in fact and law and is rejected (see also [51] below). I will return to ground 27 shortly. 50 Ground 28 falls with what I have discussed earlier and no error has been established in her Honour's treatment of the issue under s 52(2)(a). He did not discharge the onus under s 52(2)(a) (see [33]-[46] above). Moreover, on the evidence before her Honour, he seems to have been in a parlous state at the time of the review (see [46] above). 51 Grounds 26, 32, 33 to 40 and 44 assert a litany of complaints about the trustees' conduct. None of them go anywhere. First, they reflect a lack of appreciation of the duties and roles of the trustees. Second, there is no substance to the assertion that the reports were prepared fraudulently or in breach of any legislative requirement (ground 33). Third, and more generally, complaints against the trustees have little to do with the review before her Honour and the issues she had to decide, unless bearing upon a matter under s 52(2). Further, ground 34 is a mixture of what it is said the trustees did and then the appellant's interpretation. It goes nowhere. The conclusion is not established. And even if it was, it is difficult to see how that impacts on the decision of her Honour. Ground 35 is a bare recitation of what it is said the trustees did. In terms of seeking to impugn her Honour's decision, it goes nowhere. Ground 36 is baseless. Ground 37 is merely a recapitulation of the assertions I have rejected elsewhere. Ground 38 is not established on the facts and in any event is misconceived; "lost earnings" are not necessarily to be equated with cash resources immediately available or money that can be procured by the realisation of assets within a relatively short time (cf Sandell v Porter (1966) 115 CLR 666 at 670-1 per Barwick CJ). Moreover, these are "lost earnings" that the trustees' conduct is said to have brought about (see the assertions in ground 37); but that did not establish s 52(2)(a) at the time of the hearing before her Honour. Grounds 39 and 40 refer to some direct or indirect intimidatory behaviour on the part of the trustees. This is not established on the evidence and appears to be an excuse to explain an evidentiary deficiency before her Honour. Whatever be the position, the appellant has now had the opportunity that he would wish to put and has now put all relevant evidence. None of it in anyway undermines her Honour's finding that the appellant had not discharged the onus under s 52(2)(a). Ground 41 is not established on the evidence and in any event would not have changed her Honour's finding. Ground 43 is creative. Moreover, even if good, it would not have changed her Honour's finding concerning s 52(2)(a). At best it speaks to a reduction in tax on future income (if ever earned). As for ground 44, it is not established that the trustees gave away anything or that the trustees owe anything to the appellant. Generally, most of these grounds are tangential to the central issues that her Honour was required to determine. D. Procedural fairness type issues 52 Ground 27 complains of a failure of the Federal Circuit Court to appoint a pro bono lawyer. There is no right to such an appointment or indeed any entitlement to apply for such a referral (see r 12.02 and r 12.03 of the Federal Circuit Court Rules 2001 (Cth)). In any event, there has been no lack of procedural fairness in the appellant representing himself. 53 Ground 30 complains that neither Arrow Sun nor the Court advised him of the definition of "solvency" or "insolvency" in relation to the Act; strictly, the language is "able to pay his or her debts". Neither the Court nor Arrow Sun was obliged to so advise. Further, the present case is distinguishable from SZRUR v Minister for Immigration and Border Protection (2013) 216 FCR 445. In the present case, the appellant was well aware of the practice and procedure being followed. Further, from the appellant's evidence, written submissions and how he conducted himself before her Honour, he seems to have well understood what evidence was required by him to establish his financial position and his ability to pay his debts. He demonstrated an adequate appreciation of the commercial concepts involved. There is no evidence supporting or substance to his other complaints under ground 30. 54 Ground 31 asserts the denial of an opportunity to put forward affidavit evidence. This ground has no substance. First, the chronological sequence of events recited by her Honour at [10] to [16] and [76] negates such a suggestion. Second, in any event, I have now taken into account the fresh material which the appellant says he was denied the opportunity to rely upon. It goes nowhere. Conclusion 55 I have sought to synthesise from the numerous and discursive grounds of appeal the key complaints of the appellant. I have also perused all affidavit material and taken into consideration the three sets of written submissions filed by the appellant on the appeal, viz: written submissions filed on 26 August 2014 (87 pages); written submissions filed on 15 September 2014 (16 pages); and written submissions filed on 24 October 2014 (8 pages). 56 None of the appellant's grounds of appeal have any substance, including the "catch all" ground 45 which, on scrutiny, had no additional content beyond grounds 1 to 44. The appeal will be dismissed. I certify that the preceding fifty-six [56] numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Beach. Associate: Dated: 13 February 2015 Schedule No: VID 293 of 2014 Federal Court of Australia District Registry: Victoria Division: General Appellant's grounds of appeal 1. The Bankruptcy Notice on which the Petition is grounded is a Nullity. It doesn't state correctly, a) the amount owed, b) the interest owed on the Judgment Debt from the Magistrates Court Hearing Date to the Bankruptcy Notice date, and c) the enabling or the entitling legal provision to charge the amount of interest that was calculated on the schedule attached to the Bankruptcy Notice d) the consequences if this Notice wasn't complied with by the Appellant in the specified period of time. Nothing was right and every item was wrong. 2. The Bankruptcy Notice is a Nullity because the First Respondent made no corrections to the Bankruptcy Notice or the Petition after being shown the errors in the Bankruptcy Notice and the Petition and requested to do so by the Appellant during the entire period of the proceeding. 3. The Judgment Debt on which the Bankruptcy Notice is foundered is incorrect and was arrived at in the Magistrates' Court by Fraud. 4. Arrow Sun PTY LTD had no legal right to choose unilaterally as to what venue to use in their debt recovery process, that is, a Magistrates Court or VCAT if it affected the interests of the Appellant without the consent of the Appellant. The proper purpose of the proceeding was Debt recovery only. The proper purpose is the only purpose allowable by law. The First Respondent made it his purpose and intention to affect the interests of the Appellant distinctly from his debt recovery action and in addition to the Debt recovery Action. This is in breach of the VCAT ACT 1998 SECTION 5. It is also a breach of section 129(4) & 181(b) and (a) of the Corporations Act 2001. If the First Respondent had chosen VCAT for the venue for the Debt recovery action the Appellant would not have suffered bankruptcy proceedings levelled and brought against him. 5. If the Complaint had have been heard in VCAT and the Appellant had been in attendance, Arrow Sun Pty Ltd would not have had any costs awarded to them due to section 109 VCAT 1998. 6. Arrow Sun PTY LTD had no legal right to costs in the Judgment debt as it was obtained in a Melbourne Magistrates' Court and Arrow Sun PTY LTD had not obtained permission from the Appellant to use this Court for this Action. 7. Arrow Sun PTY LTD had no legal right to the figure of sum of money claimed as interest under section 58 of the Supreme Court Act of Victoria in the Melbourne Magistrates Court. The interest can only be claimed if a "Date Certain" existed which is the date for payment specified in a letter of "Final Demand" or letter of "Last Demand". The letter of last or final demand is to be "written" and can't be orally communicated. This date isn't a date in an invoice as by error understood by judge Whelan or in a contract. Contracts are constantly varied by trading parties either in writing or orally when the Debtor is finding it hard to make the payment. The letter of final or last demand is legal proof that no further variations on the payment date is permitted by the Creditor to the Debtor. 8. The Magistrates Court proceedings were held in Victoria where the the conduct of litigants is governed by the "Civil Procedure Act 2010". The plaintiff's solicitor breached this act in not gently co-operating with the Appellant and alerting him as to Hearing Dates so that he would not miss the Hearings. This is required as the Appellant was self represented. 9. The Creditors Petition doesn't meet the requirements of section 47 of the Bankruptcy Act 1966 for premises contained in paragraphs 1., 2., 4., 10. This Hearing was an Application for review of a Registrar's Decision made under s. 103 of the FCCA Act by way of the provision 104(2). Under this provision the Court may hear other evidence than what was presented at the first original Hearing before the Registrar 11. The Proceeding under the provision of 104(2) of the FCCA is different to the proceeding for which a review is being sought. The Litigant composition in the cases are different in the two proceedings as are the remedies sought from the Defending Litigant by his opponents. In the original first Hearing the two Litigants were the Petitioning Creditor seeking, inter alia, recovery of his debt, and the Debtor (Miro Krpina). In the second Proceeding the Defendant Litigant remains the same, but his opponents are, the original Petitioning Creditor, and a third Litigant the "Trustee" constituted by the two Trustees who are in full control of the Defendant's property. The remedy that the third Litigant is seeking from the Defending Litigant is payment of their work Effort in their Administration of his Estate from the Date of the Sequestration Order. If the Sequestration Order is dismissed and not re-affirmed the third Litigant will not be paid for their effort by either the Defendant or the Petitioning Creditor or any other agency. 12. The rules of evidence are different in the two proceedings with regard to the issue of the Debtor's "solvency". The intentions of the Bankruptcy Act 1996 are that the Petitioning Creditor should be assisted as he doesn't have any of the Debtors' financial records to mount a proper case against the Debtor. To assist him they placed the onus of proof on the Debtor. In a case brought on under section 104(2) of the FCCA the rules want and speaks of "OTHER EVIDENCE", the intention being, since the Trustee has all of the Debtors' financial records, the power to investigate them, the power to seek clarification from the Debtor about the records, and the power to contact the Debtors creditors and business entities the Debtor had dealings with, the Trustee is to carry the burden of onus of proof as well as the Debtor. 13. The premise in paragraph 11 is the onus of proof isn't on the Applicant Debtor but is shared with the Third Respondent or the Trustee. 14. As the Trustee is working in an "Official Capacity" administrating the Debtor's estate and has training and expertise in the matters of "insolvency" recognised by the Courts, the Trustee must produce evidence to the Court as to insolvency of the Debtor to assist the Court. 15. In an Application under s. 104 (2) of the FCCA the Debtor and his property is under control of the Trustee thereby a legal situation exists in which a relationship is created where the Debtor is total dependent on the Trustee. This relationship is "Fiduciary" and such that it is of maximum strength. 16. For Reasons contained in the premises of paragraph 10, 11, 12, 13, 14,15 the onus of proof in an Application under s. 104 (2) of the FCCA lies with the Litigants opposing the Application and not with the Applicant Debtor. 17. On the 12 December 2013 Hearing the Appellant appeared in Court with evidence that he was solvent. Evidence was produced of his stock take on the floorcoverings materials and plant and equipment formally owned by him. This figure came to approximately $199,000.00. Evidence was produced that his real estate was worth a minimum of $235,000.00. Evidence was produced by the Appellant, that in the last nine months of trading by the Appellant prior to the date of the Sequestration Order, the appellant had successfully paid out of his overdraft bank account $191,429.29 in payment for purchases and that he had at his disposal just under $20,000.00 in this account to bay his currant bills. Evidence was produced that the current bills that needed paying on the 6 August amounted to less than the amount of money in the Appellant's cheque account that was at his disposal to spend. Evidence was produced that if the Appellants' assets were sold at auction (materials & plant and machinery) and the figure of $18,830.00 was realised as indicated and maintained by the Trustee, that if from this money was applied to pay of the Appellants' remaining Debts, other than Debts from financial institutions (banks and credit cards), the Appellant would have only a short fall of $6000.00 to be completely debt free. With the fact that he had accounts with suppliers of $15,000.00 per month in operation of his business. 18. It cannot be assumed that banking institutions want to be paid out if payments are made regularly and show security. They only make money if they have Creditors and having Creditors is their business. The Westpac overdraft loan and the credit card loan payments were serviced by directly debit by the bank from the Appellants' account. 19. The ANZ card loan was fully service and not in arrears on the 6 August 2013. 20. The Citibank loan payment needed on 6 August 2013 was approximately $2,600.00 and would have been paid that month. 21. All the assertions made in paragraphs contained was brought to the 12 December Hearing and presented to the Court. The respondent's solicitor (Prue Greenfield) studied the Documents for a period of one hour, in private session with me, and debated them with the Court and was offered the Documents to take with her for further study and analysis with the Trustee. 22. The documents that showed that the Appellant was solvent were presented to the Court and the Respondents. It was the Respondents official and Fiduciary Duty to make an official report verifying their accuracy. It is the Trustee's duty to make reports on a Bankrupt's solvency and inform the Court and the Creditors, impartially and honestly. The Trustee did not do any such thing as it was counter to their aims in the proceeding. 23. Sales contracts of materials that had been sold by the Appellant, which were formally owned by him, after the 12 December 2013 Hearing was presented as evidence at the final Hearing in the form of contracts of sale and invoices. This was 100% proof of the materials value. Her Honour rejected the opportunity to view this evidence. The amount came to $26,000.00 and approximately 10% of the stock had been sold. 24. The order that Her Honour made for proof and evidence of the value of the stock to be sold within a reasonable time by an "independent expert" was impossible to achieve by the Appellant or the Respondents. No such experts were available and the order was similar to asking for independent expert proof as to "what came first, the chicken or the egg?" The materials had to be sold first and the issue was what method would be employed to sell them and what was the expertise level of the seller. 25. The lawyer for the Respondents did not comply with Orders made by the Judge Whelan in relation to the key interlocutory processes. He did not respond with an Affidavit in reply to the Appellant's first Affidavit and again to the Appellant's second Affidavit as ordered by Judge Whelan. The Respondents were in Default by section 13.03A (2) (b) (ii). In relation to an Order by the Judge to find an independent expert witness he produced a firm that when requested to produce a report refused to do so or co-operate with the Appellant on the matter. This is a breach of 13.03A (2) (b) (iii) and a Default. 26. The second and third Respondents, the Trustees, committed in relation to the proceedings Malfeasance and misconduct in Public Office to the Detriment of the Appellant in this case. Their Malfeasance and misconduct in Public Office was used successfully to pervert the Course of Justice. This is determined by their duties in their role as the Trustees as specified by the Bankruptcy Regulations Act. Their conduct in a legal proceeding is governed by the Bankruptcy Act 1966 section Division 2.2 (1) &(2) 27. The Appellant should have had a pro bono lawyer appointed by the Court to defend him or at least to offer some kind of limited assistance in the Court proceedings as he was in urgent need of this. This right is conferred onto the Appellant by section 12.02 (1), (2), (3), (4) of the Federal Circuit Rules 2001. Her honour knew this but offered no help. 28. The Appellant was solvent and not insolvent and carrying on a sound commercial business at the date of making the Sequestration Order by Registrar Caporale on the 6 August 2013 and on the date of the Review Hearing on the 5/03/2014 before Judge Whelan. 29. The proper Judgment Debt was below the $5,000.00 and doesn't reach the threshold for the Application of the Bankruptcy Act 1966. 30. The entire Proceedings were conducted without the Defendant (Miro Krpina) being made aware by either his opponents or the Judge as to the definition of "solvency or Insolvency" in relation to the Bankruptcy Act 1966 and nor did they point him in the direction where he might discover the definition. It was an absolutely essential requirement that he be informed as the definition is drawn from case law and contained in a case conducted in the Australian High Court in the year 1966.The Judge speaking from the bench and the Trustee Respondents in their financial reports on the Appellants' business affairs and during their conferences with him gave him the wrong definition and the Appellant was misled by both parties who both knew the definition. The Applicant was self-represented without the means to employ a lawyer and barrister to research the matter and advise accordingly on the Definition of "solvency/insolvency" so that he could mount and present the strongest defence possible by him in this case. 31. The trial was by Affidavit as determined by the Judge and the Judge ordered that there were to be no more Affidavits after the Hearing on the 12 December 2013. The period from 12 December 2013 to the final Hearing Date of 5 May 2013 when the Appellant could have put his evidence in Affidavit form, he was deprived of the opportunity to do so. The Appellant should have been able to present another Affidavit during the said period as this evidence would have had a strong bearing on the case. This is permitted by the Federal Circuit Rules 2001 as all happenings in the debtors business are taken into account right up to the Hearing Date. Without being able to put them into affidavit form the Appellant's Defence was destroyed as to Judge Whelan it wasn't "probative". 32. The Judge accepted as expert evidence material produced by a non-expert who was shown in court to be clearly a non-expert and with no credentials as such. This expert, contracted by the Respondents, showed no formal credentials stating his qualifications, training and experience and years in the floorcoverings business. Instead his official stationary and advertising material, created by him, was used by him to establish his "expert Knowledge" in the floor coverings business. His report did not satisfy the conditions and requirements as set out in the Supreme Court Act of Victoria for an Independent Expert's Report. The report was fraudulent and the trustees were in breach of section 2.2 (1), (2) of Division 2.2 of Bankruptcy Regulations 1966 by associating themselves with it. 33. The Trustees authored and sent to affected parties, two reports on the Appellant's financial situation purporting to have "investigated" his Financial Situation which they were required to do as part of their official duties in their administration of the Appellant's bankrupt estate. The two reports were used as evidence against the Appellant at the Hearing. They were fraudulent and in breach of 2.2 (1), (2) of Division 2.2 of the Bankruptcy Regulations 1966. 34. The Trustees three days after their appointment immediately began investigating the Appellants' business affairs. They demanded of him to fax to them his bank overdraft statements for the entire past last nine months period. The Appellant promptly complied. Only a quick glance of the statements was required to prove that the Appellant's business was solvent. At the start of that period the amount of funds available to the Appellant in his overdraft was from $1000.00-$3,000.00 and in the end on the period on 6 August 2013 just under $20,000.00. This proved that a constant and consistent surplus was being generated by the Appellant's business after all his incoming bills were paid. It proved that the Appellant had steadied his business removing all detrimental factors from it. The $20,000.00 could be used to pay his current bills. The Trustee concluded as trained accountants that the Appellant was solvent and made a decision to affect his interests and make him "insolvent". 35. They furthered their investigation on approximately 11 August 2013 during a conference with the Appellant probing him as to the reasons for his insolvency. The Appellant told them of the amount of money the business was generating on a weekly basis and that he expected to pay off all of the creditors within a four week period with the money that was available to him from the overdraft account and the money that would be streaming in from jobs in progress. 36. From the time of that meeting the Trustee did everything possible to make the Appellant "insolvent" in breach of their official duties as specified by the Bankruptcy Regulations Act 1966. 37. The Trustees took possession of the Appellants business premises at 3/8-10 Norton Drive Melton on the 15 August 2013, locking him out and preventing him from earning money with which he could pay of his creditors and have a means of supporting himself financially. They returned the premises to him on the 12 November 2013.They did this without the consent of the Appellant and against his wishes. For them to take possession they had to satisfy section 58 (2) of the Bankruptcy Act 1966. This they did not do and instead fraudulently kept the Appellant out of his business premises for a period of 89 days. In this period of time the Appellants business good will had been extinguished by the closure. The Appellant's clientele upon turning up to his premises saw his shop closed and if they asked the neighbours they would have been told "he is bankrupt". This story spread around the town and when the Appellant received his shop back from the Trustees nobody came to his premises to purchase services and materials as what previously had been the case. The Appellants' prospects of earning money from his business on a daily basis were unviable in commerce. He had to seek other employment for his economic survival. The Trustees locked his shop up in full view of his clients explaining to them "Miro is bankrupt". The Trustees were in breach of section 2.2 (1) & (2) of Division 2.2 of the Bankruptcy Regulations 1966. During this period of trading, normally a surplus of funds (money left over after all bills are paid) would have been generated in the order of in between $26,000.00-- $39,000.00. These funds would have been applied by the Appellant, to the Appellants' debts that needed to be paid and would have discharged his entire debts that needed discharging at the time. From information obtained from the Appellant, by his seized financial records and by his testimony to this to them, and by virtue of the fact that the Trustees were trained Accountants, the Trustees were abundantly aware that the Appellant was solvent. 38. These lost earnings ($26,000.00--$39,000.00) are to be considered in the assessment equation as to whether the Appellant is "solvent" by the Definition of "insolvency" in the case "Sandell v Porter" (1966) 115 CLR 666 39. The Appellant was intimidated by the Trustees, by their actions, to the extent that he preferred not to put into his affidavits evidence of work that that was in progress for which he would receive payments. The value of this work was about $34,000.00 and is to be considered in the assessment as to whether the Appellant is "solvent" by the Definition of "Solvency" 40. The intimidation and the perceived threats to the Appellant was the very physical survival of him and his family members, that is, starvation and loss of home and home utilities. They would starve to death on the streets of Melbourne, or die from exposure, unless taken care off by some charitable organisation. If the Trustee knew of any payments that were to be given to the Appellant they would have insisted on them taking them and dispossessing the Appellant of them. 41. The VCAT Hearing alluded to that the Appellant has with the Owners Corporation should net him approximately $6,000.00 42. Judge Whelan refused to accept evidence from the Appellant who was an expert on the value of his stock and business in general and could be considered legally as an expert for these proceedings. This is contrary to the Supreme Court Act of Victoria. 43. The loss $73,000.00 income loss is an asset to the Appellant from the date of the Sequestration Order as he will not have to pay taxes until his tax liabilities surpass $73,000.00. 44. The Trustee gave away the Appellants' non real estate assets for approximately $6,800.00. the Trustee owes to the Appellant in law approximately $12,000.00 based on their valuation of the stock and on the Appellant's valuation approximately $193,000.00 45. It is the belief of the Appellant that each and every point her honour made in her conclusion points is in error.