Theo v Official Trustee in Bankruptcy B9/1997 [1997] HCATrans 400 (5 December 1997)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B9 of 1997

B e t w e e n -

SOL THEO

Applicant

and

OFFICIAL TRUSTEE IN BANKRUPTCY

Respondent

Application for special leave to appeal

GAUDRON J

McHUGH J

KIRBY J

TRANSCRIPT OF PROCEEDINGS

FROM BRISBANE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 5 DECEMBER 1997, AT 12.55 PM

Copyright in the High Court of Australia

MR S. THEO: If the Court pleases, I appear in person.

MR P.E. HACK: If the Court pleases, I appear for the respondent. (instructed by the Australian Government Solicitor)

GAUDRON J: Yes, Mr Theo.

MR THEO: Your Honours, please, I am a bit emotional in this case, so please - - -

McHUGH J: Well, just be calm, take your time and do not move much because it distorts the image on the screen. Try and keep still and just be calm.

MR THEO: Thank you. On 4 August 1996 Justice Heerey made some orders. In September 1996 an application was heard by Justice Kiefel requesting a stay of execution in regard to Justice Heerey's orders. This application was dismissed on the assumption by Justice Kiefel that there was no error made by Justice Heerey and that the appeal against same would fail. That was the reasons Justice Kiefel gave. However, on 7 November 1996 the Full Court unanimously found that Justice Heerey had erred in August 1996 and the Full Court unanimously set aside Justice Heerey's orders. At the same sitting they were hearing the leave to appeal against Justice Kiefel's orders of September 1996.

GAUDRON J: Yes. Now, your leave to appeal with respect to Justice Kiefel's orders, what did you seek to challenge in that proceeding?

MR THEO: I am challenging the right to appeal against Justice Kiefel's order. Now, it is just incidental - I am sorry.

GAUDRON J: Yes, but when you appealed against the order of Justice Kiefel, what did you ask for? What did you ask the Full Court to do in relation to Justice Kiefel's - - -

MR THEO: I asked the Full Court, at the time, to approve of the - I am just going from memory, your Honour - to allow the stay of execution as well as to cancel the costs that were part of Justice Kiefel's order. So it was a dual situation. My appeal was a dual one.

GAUDRON J: But you did not join the Trustees for sale, who had the benefit of that costs order.

MR THEO: That is correct. Because the appeal was against the Public Trustee, not against the Trustees for sale. They were not a party to the case.

GAUDRON J: No, but they have an order in their favour, have they not?

MR THEO: But without them being party to the case.

GAUDRON J: They are the ones who are trying to enforce the order against you now?

MR THEO: Yes, as well as the Public Trustee.

KIRBY J: Did you raise an objection before the Full Court of the Federal Court to the order in favour of a stranger to the case, the Trustees for sale?

MR THEO: I did. And the gentleman in question, Mr Hack, undertook their case at the court and you can see that in the copy of the transcript, last page, where he undertakes, especially pages, if I may refer to my transcript, your Honours, pages 28 and 29 where he is talking on behalf of them and he was not employed by them and he was, on page 27, he was saying, that in regard to another appeal that I had against Justice Kiefel, he says:

All I am saying is that it would be advisable that either by informing Mr Theo that it is unnecessary, or making an order about it, it be got out of the court's list rather than - - -

In other words, it was Mr Hack's own opinion that the cases were defunct as a result of the Full Court of Appeal's decision. So, for this reason - - -

KIRBY J: If one looks at page 11 of the application book, the actual order made by Justice Kiefel in her reasons seems to be:

In these circumstances, the application for stay will be dismissed with costs.

and the party given on the heading of the order is yourself and the Official Trustee in Bankruptcy. But then, when one goes to page 13, there seems to be an ellipsis between the reasons of her Honour and the actual minute of order of the court - I do not know who took this out - which extends the order to pay the costs from the costs of the Official Trustee - the party to the case - to the Trustees for sale who are strangers to the case. I do not see how that could have been done, at least without some further explanation or reasons by her Honour or some basis of joining them as a party to the case in order to be the beneficiary of an order for costs.

MR THEO: The point is that it was, if I may use a colloquial expression, it was, with all due respects to the justice, she was hoodwinked by the presence of the Trustees for sale. They turned up without being party of it and they said, "Can we claim for costs?" So the point is that when we reached on the Full Court situation, and please refer to the transcript and in particular page 28 line 25 to the end of the page, where I said:

GAUDRON J: Yes.

MR THEO:

If I may suggest, your Honours, the situation is that the trustees for sale are part and parcel of Heerey's decision. Once this collapses, everything else collapses. They do not exist.

And the Chief Justice, in his wisdom, said:

Mr Hack, it may be that what Mr Theo has said is right, I just do not know. But would it meet the situation if we stayed the operation of our orders for seven days and reserved liberty to the trustees to apply to a judge of the court.

So, further to this, they were allowed either 14 or 21 days, your Honours. But they never took any action - such trustees of sale - other than persecuting me for a pound of flesh.

GAUDRON J: But what other action have you taken? Have you applied to have this matter relisted before the same Full Bench?

MR THEO: Because I am acting - yes, I tried on another case, and the Full Bench that examined the second appeal against Justice Kiefel said they had no authority to deal with the case because it was a matter - sorry.

GAUDRON J: Have you tried to get it back before the same Full Bench? You went to a different Full Bench.

MR THEO: Well, I was told that only through the High Court I can get that because they - - -

GAUDRON J: Well, where was that told to you? That is not what was told to you, is it? You were told that you could go back to the same Full Bench.

KIRBY J: Did you apply for that in the registry of the court? I mean, you do not constitute the court. Did you ask to have the court reconstituted by Chief Justice Black, Justice Sackville and Justice Finn? None of them are Brisbane judges. It may be that it would be rather rare to have them sitting together in Brisbane again.

MR THEO: Yes, orally I did, and that is exactly what you said, your Honour, I was told. So, for this reason I was - my humble sources of advice dictated me that it was the High Court that could either adjust such a mistake, or send it back, as far as order No 5 of the Full Court is concerned, to be retried either by the same judges, or by somebody else, to clarify what the situation is. So, in this situation I am deprived of natural justice, your Honours.

GAUDRON J: Well, do not worry about your natural justice, you are getting a quota of it here today. The question is, you have applied to the registry to have the matter relisted before the original Full Bench, have you?

MR THEO: Orally, yes.

GAUDRON J: Orally, with no success. With no success?

MR THEO: No success. And it was the alternative that I had to come to you people - to you, your Honours, and seek - - -

GAUDRON J: And that was told to you by another Full Bench, was it?

MR THEO: The other Full Bench said to me for the second appeal that they had no authority and the only way that I could do it is go through the same panel of - or through the High Court. So, it was - and I can give you the date that it was said so.

GAUDRON J: And, at that stage, you went to the registry, did you?

MR THEO: Yes.

GAUDRON J: And asked to have the matter listed before the same Full Bench - your earlier Full Bench?

MR THEO: Orally.

GAUDRON J: Orally.

MR THEO: Orally.

KIRBY J: I suppose your point is where it says in order 5:

The application for leave to appeal from the orders of Kiefel J refusing a stay -

is refused on the basis that it is unnecessary in view of the other orders we have made that the reason that is given by the Full Court does not really sustain the order that they made, namely that it was unnecessary. You say it is still necessary?

MR THEO: That is correct because the orders of Justice Kiefel are not just for the stay of execution, but they are also for costs. So it is not a question of looking at it which is the logical thing to say seeing that Justice Heerey case was dismissed then it goes without saying that it is not necessary to look into that aspect of the stay of execution. So the situation is that I am claiming that Justice Kiefel's complete orders are part of my appeal and this is - - -

GAUDRON J: We understand your case and what we really - - -

MR THEO: Yes, it is a comprehensive one.

GAUDRON J: And prima facie at least you seem to have some merit on your side, but there is a problem about this Court dealing with it at least in the sense that we do not know who or what is - well, we do not know what is the position of the trustees for sale. It might be more convenient I think if we hear from Mr Hack.

KIRBY J: You are asking us to make an order which would, in effect, take away rights that are enjoyed under the order of Justice Kiefel by the trustees for sale and when you talk about natural justice, we have to think of the natural justice of others. We would not normally take away their rights without hearing from them and they are not here because you have not joined them. Do you understand that?

MR THEO: Yes. Now, your Honours, the extracts of the transcript that I submitted shows exactly the atmosphere of that particular day.

KIRBY J: Do not worry about the atmosphere. You I suppose could say, "I have not joined them because I say they are strangers to the proceedings. They were strangers before Justice Kiefel; they were strangers in the Full Court and they are strangers before this Court and they should not have had an order for costs in their favour as strangers."

MR THEO: Correct.

GAUDRON J: But we cannot do anything unless we hear what they say.

MR THEO: So where do we go from there, your Honour?

GAUDRON J: Perhaps we could hear from Mr Hack at this stage. Now, Mr Hack, there is clearly something wrong in this matter, is there not?

MR HACK: Your Honours, the hearing before Justice Kiefel occupied two days. On the first day - - -

GAUDRON J: It does not matter whether it occupied two days or not. The statement of the Full Court that it was unnecessary to consider the issue was wrong, was it not?

MR HACK: So far as the substance of the application, that is correct, but the fact remains - - -

GAUDRON J: So far as the costs orders are concerned, it was at least necessary for them to attend to it, was it not?

MR HACK: Had it been brought to their attention by Mr Theo, that is correct.

GAUDRON J: Well, Mr Theo was unrepresented and it is not his job to formulate the orders on no view, and what is the position of the Trustees for sale?

KIRBY J: You appeared for them last time, can you appear for them now?

MR HACK: No, with respect, I did not appear for them. All I was concerned to do at the end was to make sure that there were not procedural difficulties which arose and that their position was, at least, preserved and they had a right to apply to a single judge if there were difficulties in working out the order.

KIRBY J: But how can an order be made in their favour for costs if they are not joined as a party to the proceedings and Mr Theo heard as to objection to that course, giving them the costs by a side wind. It seems very odd.

MR HACK: This is where I started to explain about this hearing over two days. On the first day they were not represented but Mr Theo sought relief against them and her Honour raised the point that if he sought relief against them they ought to be heard on the application and then the result - - -

GAUDRON J: They should have been made parties. If he sought relief against them they had to be made parties.

MR HACK: That is undoubtedly correct and the difficulty was - - -

GAUDRON J: There have been a lot of procedural difficulties in this case from day one, it seems, a goodly number of them referable to the course taken by the Official Trustee. Now you come to this Court and there are still procedural difficulties. It does not speak well of the Official Trustee that he stood by, or his legal representatives stood by, while these procedural difficulties occurred, does it? Were you the representative at all times?

MR HACK: Yes.

GAUDRON J: Well.

McHUGH J: Mr Hack, surely having regard to your own concession that the Full Court was wrong, the proper course is for this matter to be listed before the same court, by consent of the parties, and have the matter dealt with. That is the least one would expect from somebody in the position of the person whom you represent.

GAUDRON J: Together with an undertaking that no action will be taken to enforce the costs order pending the resolution of the matter by that same Full Bench.

MR HACK: Your Honour, we have not been asked to concur in that course but, if asked, we would. Could I point out, though, to your Honours, Mr Theo has said to this Court that the basis upon which Justice Kiefel refused the stay was that she was not dissuaded that the first decision was incorrect. Can I take your Honours to page 10 of the appeal book where her Honour, commencing about point 7 of the page, sets out what she describes as Mr Theo's main point and can I invite your Honours to read from there to the end of the judgment.

GAUDRON J: That does not alter the fact that the Full Court has not considered the application for leave to appeal, taking the view that it was unnecessary. Now it may be that at the end of the day the costs orders would remain for those reasons but it does not alter the fact that no consideration has been given to the question by the Full Court, does it?

MR HACK: It goes to whether it would be an exercise in futility to send it back to that court.

KIRBY J: I would like to get this very clear. Will you be submitting before that court that they are functus officio and that they cannot alter their order under the slip rule because, if that is so, the only remedy would be in this Court, but a preferable remedy would be for the Full Court to, having made its order, apparently, by oversight, if it can, to determine the matter for itself. What would be the position of the Official Trustee before the Full Court?

MR HACK: I would have thought it would come within the slip rule, for my part.

KIRBY J: Would the Official Trustee consent before the Full Court to the full extent that was necessary to have the order made in relation to the proceeding before Justice Kiefel in respect of the issue of costs set aside, so that the Full Court, if it needs to, can have that relief from the order that it has made so that it can determine this matter properly on its merits, considering the issue of the necessity of a change of the orders, which does not appear to have been considered yet?

MR HACK: Could I put it this way: my client would not suggest that the court lacked jurisdiction; it may argue that it ought not exercise the jurisdiction but it would not argue that it lacked jurisdiction.

KIRBY J: That is true; but you would know, Mr Hack, that every court must first satisfy itself, for itself, that it has jurisdiction. Whilst the preferable course would seem to be that the matter goes back to the Full Court of the Federal Court to redetermine the issue that appears to have miscarried, if the Full Court came to the view that it did not have the power to do so, then there is nothing more certain than that Mr Theo would be back here, asking us to do it. It would be better for us to do it here and now rather than to be coming back twice; it is a waste of your time, Mr Theo's time, but more importantly, and most importantly, our time.

Can I just explain it. Justice Gaudron asked you, I think, earlier, would the Official Trustee consent, to the full extent that was necessary, to the Full Court removing any obstacle to its jurisdiction to determine this matter properly, or is it necessary for this Court to set aside the order so that it can do that. If the second is the only course, would the Official Trustee consent to that course?

MR HACK: Would your Honour give me a moment to seek instructions - - -

KIRBY J: Because we could do that here and now. Justice Gaudron raises the point of whether we could do it without hearing from the Trustees for sale, who are not here; therefore, one has to contemplate another hearing and more costs.

MR HACK: Would your Honours give me a moment to get some instructions on the first of those propositions?

GAUDRON J: Yes, Mr Hack.

MR HACK: Your Honours, my present difficulty is there was no one from the office of the Official Trustee in the Court to get those instructions. I can put it no higher than - - -

GAUDRON J: I understand your position.

MR THEO: May I butt in, your Honours?

GAUDRON J: You may not be doing yourself a favour, Mr Theo. We will call upon you shortly, Mr Theo. Do you have any position on this matter now, Mr Hack?

MR HACK: Your Honour, I am not in a position to undertake to consent. What I can say is that it seems to me that it does come within the slip rule and I could not argue that it does not come within the slip rule.

GAUDRON J: Yes, thank you. Well, perhaps we will now hear from Mr Theo.

MR THEO: Your Honours, in addition to this particular appeal that we are talking about, there is the second one which was an appeal against the same Justice Kiefel, so the situation is that if your Honours would be kind enough to do what it was said before, it might be advisable to make reference to Justice Heerey's decision that ab initio it is dead and buried, the order that he - and everything that resulted from it.

GAUDRON J: No, Mr Theo, we will see what we can do to sort out this problem, but there are considerable problems in this case, including procedural problems which you must confront. Now, one of those problems is that you did not join the Trustees for sale in the Full Court. Now, I understand why you did not, but you did not. Now, we understand your position. We will hear whether Mr Hack has anything further to say on the matter.

MR THEO: In regard to these Trustees, your Honour, if I may draw your attention at the last page where they were given two or three weeks to do something about any right that they might have and they did nothing. For what it is worth, if I may - - -

GAUDRON J: Well, that is beside the point. They have an order for costs in their favour. At this stage they have an order for costs in their favour. Yes, Mr Hack.

MR HACK: Your Honours, there is nothing further that I would want to add as a matter of procedure. No doubt if Mr Theo were to apply to the court constituted by the Chief Justice, Justices Sackville and Finn, that application would need to be directed as well to the Trustees for sale and procedurally I do not doubt the matter could be dealt with and probably without the court having to reassembled to hear the matter. That is all I wanted to - - -

GAUDRON J: Very well.

KIRBY J: You would not object to the joinder for that purpose of the Trustees for sale?

MR HACK: No. I think it would be quite necessary for it to be done.

KIRBY J: Do you know who the names of the Trustees for sale are? Can you put that on the record so that Mr Theo has that or could you provide that to him so that - I do not think he could ask for them to be joined as Trustees for sale. He would have to put their name I would think.

MR HACK: It is Mr Bennett and Mr Philp. Mr Anthony Bennett is a - - -

McHUGH J: They were the solicitors, were they not?

MR HACK: They were both the solicitors and the trustees. They were two solicitors who were nominated as the statutory trustees for sale.

GAUDRON J: Yes, thank you.

MR HACK: Thank you, your Honours.

GAUDRON J: Gentlemen, at this stage, what the Court is minded to do is to stand over this application to enable Mr Theo to make written application to the registrar of the Federal Court to have the matter relisted before the Full Court consisting of Chief Justice Black, Justices Sackville and Finn, attaching to that application the transcript of today's proceedings and serving notice of that application on the trustees for sale together with notice that Mr Theo will be applying to have them joined as parties in the proceedings in the Full Court should they be listed. We would reserve to both parties, in that event, leave to apply to this Court on seven days' notice. Does that position cause either of you any problems?

MR THEO: It does not cause me any problems, your Honour, only that lifespan is limited and I might be kicking the bucket one of these days. It is long winded.

GAUDRON J: If there is undue delay you can apply to have the matter relisted. We are not dismissing your case, we are standing it over.

MR THEO: Thank you.

GAUDRON J: Yes.

KIRBY J: It might be as well if the matter is sorted out in the Full Court, as one hopes that it will be, that the Registry of this Court could be informed so that the file can be closed.

GAUDRON J: Does it cause you any problems, Mr Hack?

MR HACK: The only question is that the question of costs of this application, if - - -

GAUDRON J: There will be no order for costs in your favour.

KIRBY J: Subject to hearing from you, of course.

GAUDRON J: As things presently stand, you would not obtain an order for costs in your favour.

MR HACK: With respect, your Honour - - -

GAUDRON J: The matter is being stood over at this stage. The suggestion is - - -

MR HACK: If the matter could be - what I would ask is that the costs be reserved.

GAUDRON J: Yes.

MR HACK: And in the fullness of time written submissions could be made as to the costs of today.

GAUDRON J: The costs should be reserved, yes, but may it not be that they should abide - yes, the costs will be reserved. We cannot give you costs just on the matter being stood over.

MR HACK: No, no, I appreciate that. Could I suggest that the costs be reserved. In the event that it is unnecessary for the matter to come back to the Court, that written submissions be put in by the parties as to the disposition of the costs. If the matter does come back to the Court, it can be dealt with on that occasion.

GAUDRON J: Yes.

MR THEO: May - - -

GAUDRON J: Mr Theo - - -

MR THEO: Your Honours, may I draw - - -

GAUDRON J: Yes.

MR THEO: May I draw your Honours' attention to the fact that the Full Court ordered against the respondent, as far as the costs of that Full Court's case. So in this instance - it is part of the transcript - your Honours, the situation is that it is no fault of the applicant in regard to this discrepancy in the wording.

GAUDRON J: You are in the - - -

MR THEO: So I do not see - - -

KIRBY J: You might get an order for costs in due course.

MR THEO: If, by any chance - - -

KIRBY J: Mr Theo, you might get an order for costs in your favour, in due course.

MR THEO: True.

GAUDRON J: At this stage, the matter is - - -

MR THEO: But if I kick the bucket I would not be around to - - -

KIRBY J: You are looking pretty healthy, on the video, Mr Theo, do not worry too much about that.

GAUDRON J: The matter is simply being - - -

MR THEO: I had a quadruple heart by-pass operation, your Honours.

GAUDRON J: The matter is being stood over, Mr Theo, in the hope that some of the procedural difficulties, for which you at least are partly responsible, can be sorted out.

MR THEO: Thank you.

GAUDRON J: Yes. The question of the costs of today's proceedings will be reserved, because the matter is not yet finalised.

KIRBY J: But we hope it will be finalised by the Full Court of the Federal Court, with the co-operation of all parties and the non-party.

GAUDRON J: And leave is reserved to you and to the Official Trustee to put in written submissions about costs, if that is a matter that is still outstanding in the event that the Federal Court solves the problem, and in the event that it is not then resolved, it will be considered if it becomes necessary for the matter to come back before this Court.

MR THEO: Thank you.

GAUDRON J: Yes, thank you. The order will simply be that the matter is stood over and costs are reserved. I trust, Mr Hack, that you will co-operate with Mr Theo to have this matter sorted out as best as can be done.

MR HACK: Certainly. The co-operation that we have extended in the past will be continued, your Honours.

MR THEO: Which was zero.

KIRBY J: Maybe just a little bit more, Mr Hack, in order to help the Federal Court to do the matter in the correct way.

GAUDRON J: Yes, otherwise it is taking up a very great deal of judicial time and resources to sort out procedural matters, which really should never have occurred. The Court will now adjourn.

MR THEO: Thank you, your Honours.

AT 1.29 PM THE MATTER WAS ADJOURNED