Fitness First Australia Pty Ltd v Dubow [2012] NSWSC 962

Supreme Court New South Wales

Medium Neutral Citation: Fitness First Australia Pty Ltd v Dubow [2012] NSWSC 962 Hearing dates: 15/08/2012 Decision date: 15 August 2012 Jurisdiction: Common Law Before: Garling J Decision: (1) Order that each of the notices of motion in each of the proceedings filed 2 August 2012 be dismissed. (2) Order Ms Dubow to pay Fitness First's costs of $500 the motion. Catchwords: PROCEDURE - summary dismissal - defendant declared bankrupt - whether notices of motion brought by defendant are incompetent - each motion incompetent based on Bankruptcy Act 1966 (Cth) s 58 or s 60 Legislation Cited: Bankruptcy Act 1966 (Cth) Uniform Civil Procedure Rules 2005 Category: Procedural and other rulings Parties: Fitness First Australia Pty Ltd Yolande Victoria Frances Dubow Representation: Counsel: T Orlizki (P) No appearances (D) File Number(s): 2011/152563

EX TEMPORE Judgment 1This is an application by Fitness First Australia Pty Limited for the summary dismissal of a notice of motion filed on 2 August 2012 by Ms Victoria Frances Dubow. 2On 27 February 2012, I delivered judgment in respect of four proceedings between Fitness First and Ms Dubow. That judgment sets out all of the background to the disputes between these two parties. It is unnecessary, in light of the detail in that judgment, for me to refer to all of the facts and the complex and intertwined litigation between these parties. 3On 16 March 2012 I gave a further short judgment under the provisions of the slip rule by which I added a declaration to the orders made on 27 February 2012. 4On 2 August 2012 Ms Dubow filed a notice of motion in each matter in which she sought orders to the same effect. They are as follows: "Set aside: (i) judgment of 27 February 2012 on the basis of Uniform Civil Procedure Rules 36.15; an inference of Fraud, lack of good faith and further (ii) declaration of 16 March 2012 as to validity of deed of release on basis of lack of good faith and absence of applicant (iii) failure of consideration the solicitors for the respondent having in their possession as at 17 October 2011 verified intentions to negate their consideration for inducing entry into the deed and (iv) the hitherto unargued failure to reasonably mitigate loss." 5Filed with that notice of motion was an affidavit of Ms Dubow, apparently sworn on 24 July 2012. Ms Dubow, who is a solicitor admitted to practice in Queensland, informed the Court in that affidavit that she was declared bankrupt on 20 March 2012 upon the presentation of her own debtor's petition. 6On 26 April 2012, the Official Trustee in Bankruptcy transferred the administration of her estate to a different trustee who has administered her estate since that time. 7On 5 June 2012, Ms Dubow applied to the Federal Magistrates' Court to annul her bankruptcy. This application was heard on 25 June 2012 and judgment is presently reserved. 8It is plain from Ms Dubow's affidavit and from what Mr Orlizki, solicitor for Fitness First, has informed me from the bar table, that the current trustee in bankruptcy has not elected to continue any of the proceedings in this Court nor has the current trustee authorised or approved or otherwise joined in with the notice of motion filed on 2 August 2012. 9The proceedings on this motion were listed before the Court today. At the request of Fitness First, the proceedings were referred to me by the Common Law Registrar. 10On 7 August 2012, Mr Orlizki wrote by email to the Court, sending a copy to Ms Dubow and to her trustee, indicating that upon the return of the motion before the Common Law Registrar this morning he would ask the Registrar to refer the matter to me to for case management and hearing. Mr Orlizki said in that email the following: "It is my view that Ms Dubow's Notice of Motion is incompetent as any rights in relation to the proceedings became vested in Ms Dubow's bankruptcy trustee by virtue of her bankruptcy." 11Ms Dubow responded by email to the Common Law Register in the following terms. "I am the moving party on the notice of motion which was listed for 15 August, 2012 and had a process server file and serve the documents for me from my location in Bundaberg. I have not as yet received the returned documents and was awaiting same to file the request to appear by telephone. As it is less than two days prior to the listing and the matter seems to be requested to be placed before his Honour, I ask that the matter be administratively placed at a later date before that Court at a convenient time to his Honour An affidavit referring to the Application for Annulment of my Bankruptcy was filed with the Court at the same time as the Motion which is apparently listed, and accordingly, especially as the appointed trustee is not my nominated trustee, I have not included the legal representative for that non-party in this email." 12The Common Law Registrar responded in the following way to Ms Dubow: "The matter is listed 15 August 2012, if it is referred Justice Garling will not deal with it over the telephone, I would suggest that you attend." 13Ms Dubow responded in the following terms: "I am already bankrupt...(in Queensland that is a show cause event...). The trustee has all my money, including rental properties that were in advance and the expedited annulment application of 25 June is still reserved... There are negative amounts of money at my disposal... The Magic Carpet was repossessed by whatever moron organised this world! What else can possibly happen!" 14I am satisfied from this exchange of emails that Ms Dubow has notice that the matter is listed today, that Mr Orlizki will be asking for it to be referred to me for management and hearing and that she has chosen not to attend. 15I am also satisfied from that email exchange that Ms Dubow has not notified her trustee in bankruptcy of these proceedings and accordingly it has not been possible for the trustee to give his consent or approval to the bringing of the notice of motion in these proceedings. 16Mr Orlizki, on behalf of Fitness First Australia submits that the motion is incompetent. He does so based upon the provisions of s 58 of the Bankruptcy Act 1966 (Cth). That section, insofar as it is relevant, provides as follows: "(1) Subject to this Act, where a debtor becomes a bankrupt: (a) The property of the bankrupt, not being after-acquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee; and (b) After-acquired property of the bankrupt vests, as soon as it is acquired by, or devolves on, the bankrupt, in the Official Trustee or, if a registered trustee is the trustee of the estate of the bankrupt, in that registered trustee." 17Mr Orlizki submits that the property the subject of the litigation which resulted in the judgment of 27 February 2012 is property of the bankrupt which has, as a consequence of her bankruptcy and in accordance with the automatic vesting provisions of s 60 of the Bankruptcy Act (Cth) vested in the trustee. 18The actions brought by Ms Dubow, which were the subject of the judgment of 27 February, are actions in which she claims a right to moneys from Fitness First. These actions are clearly property within the meaning of the term in the Bankruptcy Act (Cth) and are now vested in the trustee. 19I am satisfied that to the extent that the notices of motion are brought in those proceedings it is incompetent for Ms Dubow to have brought the motions and the motions will need to be dismissed. 20The motions were also brought in two proceedings commenced by Fitness First Australia seeking various orders with respect to steps which Ms Dubow had taken in other proceedings. It seems to me that in those proceedings it is at least arguable that Ms Dubow does not have any rights which she is seeking to claim. 21I do not need to resolve this, perhaps difficult, question because if those actions are proceedings brought by Fitness First, then, by reason of s 60 of the Bankruptcy Act (Cth), the Court is able to stay those proceedings. 22Accordingly, either as a consequence of the effect of the provisions of s 58 or else s 60 of the Bankruptcy Act (Cth) each of the motions brought by Ms Dubow is incompetent and will be dismissed. If Ms Dubow succeeds in having her bankruptcy annulled, then it is open to her, so it seems to me, assuming that there is a proper evidentiary basis for the orders which she claims in the present notice of motion, about which I am far from convinced, to again bring a motion under r 36.15 of the Uniform Civil Procedure Rules seeking relief of the kind she seeks in the present notices of motion. 23I do not wish by this ex tempore judgment to indicate there is an adequate basis or there is not an adequate basis for the bringing of any such motion. It is simply my intention to note that insofar as Ms Dubow might be prejudiced by the dismissal of the present notice of motion as incompetent, it is open to her, assuming these motions can be properly brought in the event of the annulment of her bankruptcy to again bring the motion. 24In all of the circumstances, I am persuaded I should make the following orders: (1)Order that each of the notices of motion in each of the proceedings filed 2 August 2012 be dismissed. (2)Order Ms Dubow to pay Fitness First's costs of $500 of the motion.