Supreme Court New South Wales Medium Neutral Citation: Singh v Owners, Strata Plan 11723 & Ors [2013] NSWSC 872 Hearing dates: 28 June 2013 Decision date: 28 June 2013 Jurisdiction: Equity Division - Duty List Before: White J Decision: Summons dismissed with costs Catchwords: BANKRUPTCY - application by bankrupt for injunction to restrain sale of property by trustee in bankruptcy - same application had been refused by Federal Circuit Court - application dismissed - no question of principle Cases Cited: Owners, Strata Plan 11723 v Singh [2012] FMCA 308 Singh v Owners, Strata Plan 11723 [2013] FCCA 506 Singh v Owners, Strata Plan No. 11723 [2012] FCA 538 Singh v Owners, Strata Plan 11723 (No. 3) [2012] FCA 1121; Singh v Owners, Strata Plan No. 11723 (No. 4) [2012] FCA 1180 Category: Principal judgment Parties: Jagjit Singh (Plaintiff) Owners, Strata Plan 11723 (1st Defendant) Paul Desmond Sweeney (2nd Defendant) Terry Grant van der Velde (3rd Defendant) Representation: Counsel: In Person (Plaintiff) S Quang (2nd & 3rd Defendants) Solicitors: Grace Lawyers (2nd & 3rd Defendants) File Number(s): 2013/194812 Judgment 1HIS HONOUR: The plaintiff was declared bankrupt on 5 April 2012. A sequestration order in relation to his estate was made by the Federal Magistrates Court on that day. The second defendant, Mr Paul Desmond Sweeney, and the third defendant, Mr Terry Grant van der Velde, were appointed as his trustees in bankruptcy. By this application the plaintiff seeks to restrain the trustees in bankruptcy from selling a property at Harris Park that was formerly owned by the plaintiff and is now vested in his trustees. 2As I understand his application, he particularly relies on three matters. First, he disputes the debt of the petitioning creditor on which the sequestration order was made. He says that the judgment debt the petitioning creditor obtained, was obtained by fraud, and that subsequent judgments in the District Court dismissing an appeal from the judgment of the Local Court, were also obtained by fraud. He also contends that the auction, which is scheduled for tomorrow, should be restrained because he has an appeal pending in the Federal Court from orders made by the Federal Circuit Court on 12 June 2013 dismissing his application to annul the bankruptcy, or to set aside the judgment debt that supported the sequestration order, and to stay the sale of the property. 3The plaintiff also said that he had made an application to the District Court to set aside the default judgment which had been obtained illegally, and his application to the District Court is listed for hearing on 8 August 2013. 4As I understand his submissions, he contends that the sale should be restrained so as to preserve the status quo whilst the applications to the District Court and Federal Court are determined. 5It is clear from the reasons of the Federal Magistrates Court on the making of the sequestration order (Owners, Strata Plan 11723 v Singh [2012] FMCA 308) that on the hearing of the creditor's petition, the plaintiff challenged the judgment debt on which the petition was based. Smith FM said in his reasons for making the sequestration order (at [10]) that: "Notwithstanding the many references by Mr Singh in his documents to fabrications, errors and defects, I have been unable to identify clearly in my mind how he argues that the default judgment obtained in the local court 'was incorrect'." 6His Honour then dealt with the plaintiff's submissions as he understood them. His Honour rejected the submission made by the plaintiff that he had been denied procedural fairness in the Local Court. His Honour observed the proceedings had been brought in the District Court by way of appeal from the judgment in the Local Court, but that appeal had been struck out. His Honour observed that, in his opinion, the District Court proceedings came to an end due to an inability of the plaintiff to present intelligible grounds of appeal. His Honour found that there was no substance to the plaintiff's challenges to the form of the bankruptcy notice. His Honour concluded that the plaintiff had been afforded more than enough time to challenge the judgment in the District Court during the pending bankruptcy proceedings, and saw no good grounds for going behind the judgment. 7On 24 May 2012, Griffiths J of the Federal Court heard and dismissed an application brought by the plaintiff for a stay of the sequestration order made by Smith FM (Singh v Owners, Strata Plan No. 11723 [2012] FCA 538). His Honour held that the present plaintiff had not identified any particular error of law or fact in Smith FM's reasoning, and had not demonstrated that the appeal, which had been filed in the Federal Court, had rational prospects of success. In reaching that conclusion, his Honour went through the particular grounds raised by the present plaintiff, many of which appear to be repeated in the affidavit relied on by the plaintiff in support of the present application. Subsequently, Griffiths J struck out the grounds of appeal and ultimately the appeal in the Federal Court was dismissed (Singh v Owners, Strata Plan 11723 (No. 3) [2012] FCA 1121; Singh v Owners, Strata Plan No. 11723 (No. 4) [2012] FCA 1180). [The plaintiff interrupts me to say that that last sentence was not an accurate summary of the position.] 8The orders made in the Federal Court in 2012 included that a notice of appeal filed on 24 April 2012 be struck out as an abuse of process. On 26 October 2012, Griffiths J ordered that the present plaintiff's application to amend the notice of appeal was dismissed. The notice of appeal filed on 24 April 2012 was dismissed for want of prosecution and failure to comply with the court's directions. 9On 12 February 2013, trustees in bankruptcy obtained default judgment for possession of the Harris Park property. An order for the stay of the writ of possession was set aside by Adamson J on 9 April 2013. 10Further proceedings were commenced by the present plaintiff in the Federal Circuit Court, as the Federal Magistrates Court is now called. The reasons of Driver J of the Federal Circuit Court (Singh v Owners, Strata Plan 11723 [2013] FCCA 506) record that the present plaintiff filed the application on 4 June 2013 seeking the annulment of the bankruptcy and a stay of the sale of the property, amongst other relief. In dismissing those applications, Driver J observed, amongst other things, that the trustees' then estimate of the costs of administration exceeded $100,000. His Honour observed that the petitioning creditor's debt had increased over time, both because of additional strata levies and substantial costs of recovery, the dominant cause of which was the plaintiff's own resistance. 11His Honour was not persuaded that the present plaintiff's continuing allegations of fraud were a sufficient reason to restrain the sale of the properties. 12An appeal from those orders was filed in the Federal Court yesterday. The grounds of appeal appear to me to seek to revisit the alleged errors that have been the subject of numerous other judgments, including alleged errors that were dealt with by Griffiths J. A qualification to this may be that the grounds of appeal referred to the fact that the Federal Circuit Court judge had said that there may be a question in relation to the debts provable in bankruptcy concerning the debt claimed by the Child Support Department. The plaintiff says it is now clear, and there is evidence from the Department, that the Department does not claim the sum of $21,444.61. However, the Federal Circuit Court judgment was not based upon an assumption that that debt was a debt provable in bankruptcy. The judge expressly said that there may be a question about that debt. 13Nothing said by the plaintiff, nor anything appearing in his affidavit, indicates that he has arguable grounds of appeal to the Federal Court. Even if he did, it is an abuse of process for him to apply to this court for an injunction to restrain the trustee in bankruptcy from exercising his powers as trustee, where that matter was before the Federal Circuit Court, and would be properly before the Federal Court on an application for interim relief in support of the appeal. 14The other ground on which the injunction is sought is based upon proceedings said to be pending in the District Court to be heard on 8 August this year to set aside the default judgements underlying the creditors' petition. The plaintiff filed a notice of motion on 19 June 2013 seeking an order in the District Court that the Local Court default judgment obtained on 6 May 2011 was irregular and "is not executable" and that the sale proceedings should be stayed. That application was an abuse of process having regard to the fact that the District Court had already dealt with and dismissed an appeal from that Local Court judgment. 15Also, it may be doubted whether any cause of action to set aside the Local Court judgment was still maintainable by the bankrupt after his bankruptcy. In any event, that application in the District Court was dismissed by Delaney DCJ on 21 June 2013. 16I see no proper basis for restraining the trustees in bankruptcy from exercising their powers as trustee to sell the property that is now vested in them. 17I order that the plaintiff's summons be dismissed with costs. 18The exhibits to the affidavit of Ms Quang of 28 June 2013 will be returned in due course. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 July 2013