Home | Databases | WorldLII | Search | Feedback Federal Circuit Court of Australia

You are here: 

Blue Diamond Sales & Marketing v Liveris [2018] FCCA 3711 (19 December 2018)

Last Updated: 20 December 2018

FEDERAL CIRCUIT COURT OF AUSTRALIA

Cases cited: ACT Visiting Medical Officers Association v Australian Industrial Relations Commission [2006] FCAFC 109; (2006) 153 IR 228; (2006) 232 ALR 69 Bank of Australasia v Hill [1907] HCA 78; (1907) 4 CLR 1514; (1907) 14 ALR 51 Blair v Curran [1939] HCA 23; (1939) 62 CLR 464; (1939) 13 ALJ 131; (1939) 35 Tas LR 1 Bryant v Commonwealth Bank of Australia [1995] FCA 1299; (1995) 57 FCR 287; (1995) 130 ALR 129; [1995] ATPR 41-421 Building Workers Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104; (1991) 37 IR 380; (1991) 99 ALR 735; [1991] ATPR 41-092; (1991) 33 AILR 163 Cam & Sons Pty Ltd v Sargent (1940) 64 CLR 659; (1940) 14 ALJ 162 Carl-Zeiss-Stiftung v Rayner & Keeler Ltd (No 2) [1966] 2 All ER 536 CEPU (Western Australia Division) v Fortescue Metals Group Ltd [2016] FCCA 1227; (2016) 310 FLR 1 Climaze Holdings Pty Ltd v Dyson & Anor (1995) 13 WAR 487; (1995) 58 IR 260 Combis v Harding [2014] FCA 1391; (2014) 12 ABC(NS) 398 Cummings & Anor v Claremont Petroleum NL (1996) 185 CLR 124; (1996) 70 ALJR 616; (1996) 137 ALR 1 Damevski v Giudice & Ors [2003] FCAFC 252; (2003) 133 FCR 438; (2003) 129 IR 53; (2003) 202 ALR 494; (2003) 54 AILR 100-124 De Santis v Aravanis & Anor [2014] FCA 1243; (2014) 227 FCR 404; (2014) 322 ALR 475; (2014) 13 ABC(NS) 1 Egglishaw v Australian Crime Commission [2007] FCAFC 183; (2007) 164 FCR 224; (2007) 69 ATR 210; (2007) 243 ALR 177 Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd & Ors [2015] HCA 45; (2015) 256 CLR 137; (2015) 90 ALJR 107; (2015) 255 IR 229; (2015) 326 ALR 470; (2015) 67 AILR 102-490 Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd (No 2) [2013] FCA 582 Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21; (2001) 75 ALJR 1356; (2001) 47 ATR 559; (2001) 106 IR 80; (2001) 181 ALR 263; [2001] Aust Torts Reports 81-615; (2001) 50 AILR 4-476 House v The King (1936) 55 CLR 499 Hoystead & Ors v The Federal Commissioner of Taxation [1925] UKPCHCA 3; (1925) 37 CLR 290; (1925) 32 ALR 33 International Alpaca Management Pty Ltd v Ensor [1999] FCA 72 Kimber v Owners of Strata Plan No 48216 [ 2017] FCAFC 226 ; (2017) 15 ABC(NS) 540 Ling v Commonwealth [1996] FCA 1646; (1996) 68 FCR 180; (1996) 139 ALR 159 Ling v Enrobook Pty Ltd [1997] FCA 226; (1997) 74 FCR 19; (1997) 143 ALR 396 Massih v Esber [2008] FCA 1452; (2008) 250 ALR 648 Meriton Apartments Pty Ltd & Anor v Industrial Court of New South Wales & Anor [2008] FCAFC 172; (2008) 171 FCR 380; (2008) 251 ALR 19; (2008) 6 ABC(NS) 370 Minister for Immigration & Multicultural & Indigenous Affairs v SZANS [2005] FCAFC 41; (2005) 141 FCR 586; (2005) 215 ALR 733; (2005) 86 ALD 583 Nand v Fuji Xerox Australia Pty Ltd [2014] FCA 757 Pattison v Hadjimouratis [2006] FCAFC 153; (2006) 155 FCR 226; (2006) 236 ALR 1; (2006) 4 ABC(NS) 367 Pollnow v Queensboro Pty Ltd (unreported, Federal Court of Australia, 19 October 1988) Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589; (1981) 55 ALJR 621; (1981) 36 ALR 3 Pupazzoni v Fremantle Fisherman’s Cooperative Society Ltd [1981] AILR 168 Ramsay Healthcare Australia Pty Ltd v Compton [2017] HCA 28; (2017) 261 CLR 132; (2017) 91 ALJR 803; (2017) 345 ALR 534; (2017) 15 ABC(NS) 222; (2017) 122 ACSR 115 Re Gillies; Ex parte Official Trustee in Bankruptcy v Gillies [1993] FCA 289; (1993) 42 FCR 571; (1993) 115 ALR 631 Re Porter; Re Transport Workers’ Union of Australia [1989] FCA 226; (1989) 34 IR 179; (1989) 31 AILR 382 Re Sanders; Knudsen and Yates (t/a The Hargreaves Practice) v Sanders [2003] FCA 1079; (2003) 1 ABC(NS) 408 Sanders v Snell (No 2) [2000] HCATrans 303; (2000) 174 ALR 53 Spalla v St George Motor Finance Ltd (No 6) [2004] FCA 1699 Stevens v Brodribb Sawmilling Company Proprietary Limited [1986] HCA 1; (1986) 160 CLR 16; (1986) 60 ALJR 194; (1986) 63 ALR 513 Suh & Ors v Minister for Immigration & Citizenship & Anor [2009] FCAFC 42; (2009) 175 FCR 515; (2009) 108 ALD 470 The Director of the Fair Work Building Industry Inspectorate v Linkhill Pty Ltd (No 7) [2013] FCCA 1097 Totev v Sfar & Anor [2008] FCAFC 35; (2008) 167 FCR 193; (2008) 247 ALR 180; (2008) 5 ABC(NS) 691 Tran v Pu [2015] FCA 97; (2015) 228 FCR 562; (2015) 12 ABC(NS) 418 Truthful Endeavour Pty Ltd v Condon [2015] FCAFC 70; (2015) 233 FCR 174; (2015) 321 ALR 483; (2015) 13 ABC(NS) 162 Wong v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 51; (2004) 204 ALR 722 Zdrilic v Hickey [2016] FCAFC 101; (2016) 246 FCR 532; (2016) 14 ABC(NS) 232

REPRESENTATION

ORDERS

(1) The application in a case filed 7 February 2017 by the applicant be dismissed.
(2) In the:

• (a) affidavit sworn by Paul Steven Liveris on 7 December 2016, paragraphs 3-7 inclusive, 8 (but only the first sentence), 10-13 inclusive, 16, 18, 19-25 inclusive, 26 (but only the first sentence) and 28 be struck out;
• (b) affidavit sworn by Paul Steven Liveris on 18 January 2017, paragraphs 8 (but only in relation to the words “who of course made some derogatory comment about my affidavit”, “without giving any due consideration to my opposition” and “to my knowledge Registrar Jan did not read them”), 9, 10, 12-19 inclusive, 22, 23 (but only the second sentence), 28, 30-36 inclusive, 38-46 inclusive, 48, 51-54 inclusive, 57, 58, 60-62 inclusive, 64 and 65 be struck out; and
• (c) affidavit sworn by Paul Steven Liveris on 12 May 2017, paragraphs 4-63 inclusive be struck out.

(3) The application filed 23 December 2016 by the respondent for a review of a Registrar’s decision dated 13 December 2016 to issue a Sequestration Order against the estate of the respondent be dismissed, and the Registrar’s orders of that date be confirmed.
(4) The applicant’s costs of the respondent’s application for review of the Registrar’s decision dated 13 December 2016 to issue a Sequestration Order be paid from the respondent’s bankrupt estate in accordance with the provisions of the Bankruptcy Act 1966 (Cth), such costs, if not agreed, to be taxed by a Registrar of the Court in accordance with Part 40 of the Federal Court Rules 2011 (Cth), but otherwise there be no order as to the costs of these proceedings.

PEG 481 of 2016

Applicant

And

Respondent

REASONS FOR JUDGMENT

Introduction

1. By an application filed 23 December 2016 the respondent, Paul Steven Liveris (“Mr Liveris”), seeks to have the Court review (“Review Application”) a sequestration order made by a Registrar of the Court on 13 December 2016 (“Sequestration Order”) pursuant to s.104(2) and (3) of the Federal Circuit Court of Australia Act 1999 (Cth) (“FCCA Act”). The Sequestration Order was made on the application of the applicant, Blue Diamond Sales & Marketing (ACN 145 697 507) (“Blue Diamond”).
2. By application in a case filed 7 February 2017 Blue Diamond sought summary dismissal of the Review Application pursuant to s.17A of the FCCA Act or r.13.10 of the Federal Circuit Court Rules 2001 (Cth) (“FCC Rules”) (“Summary Dismissal Application”). The Court heard the Summary Dismissal Application and the Review Application together.

Background

3. The background to the making of the Review Application and the Summary Dismissal Application is as follows:
   1. Mr Liveris was bankrupt from 6 September 2011 to 9 September 2014;
   2. on 13 January 2016 Mr Liveris commenced District Court of Western Australia (“District Court”) Matter No.98 of 2016 (“District Court Action”), a claim concerning commission allegedly owed to him by Blue Diamond for work performed between 25 May 2011 and 22 March 2012 (“Commission Claim”);
   100. on 27 July 2016 Blue Diamond obtained summary judgment in the District Court Action dismissing the Commission Claim and an order for costs in the amount of $7,927.83 against Mr Liveris (“Judgment”);
   4. on 1 September 2016 Mr Liveris was served Bankruptcy Notice No 197971 (“Bankruptcy Notice”): Affidavit of Service of Bankruptcy Notice sworn by Kate O’Brien on 10 October 2016 (“O’Brien Service Affidavit”);
   5. Mr Liveris failed to comply on or before 22 September 2016 with the requirements of the Bankruptcy Notice or to alternatively satisfy the Court that he had a counter-claim, set off or cross demand equal to or more than the sum claimed in the Bankruptcy Notice, being a counter-claim, set off or cross demand that he could not have set up in the action in which the Judgment, which was the judgment referred to in the Bankruptcy Notice, was obtained, therefore being an act of bankruptcy pursuant to s.40(1)(g) of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”);
   6. on 10 October 2016 Blue Diamond filed a creditor’s petition seeking a sequestration order against Mr Liveris’ estate pursuant to s.43 of the Bankruptcy Act (“Creditor’s Petition”);
   7. the total amount said to be owed when filing the Creditor’s Petition was $8,073.39, an amount of $145.56 interest having accrued since the Judgment (“Judgment Debt”);
   8. the Creditor’s Petition came before a Registrar of this Court on 22 November 2016 and was adjourned to a further hearing on 13 December 2016 to enable Mr Liveris an opportunity to file a Notice of Opposition and supporting affidavit;
   9. Mr Liveris filed a Notice of Opposition on 7 December 2016 in which the sole ground raised was that he had a cross demand that exceeded the sum of the Bankruptcy Notice; and
   10. on 13 December 2016 the Registrar issued the Sequestration Order.

Affidavit evidence

Blue Diamond’s affidavits

4. The affidavit evidence filed on behalf of Blue Diamond is as follows:
   1. the Creditor’s Petition verified by the affidavit of Richard Jan Pares affirmed 7 October 2016 (“Pares Affidavit”);
   2. the O’Brien Service Affidavit;
   100. an affidavit of search sworn by Kate O’Brien on 10 October 2016;
   4. an affidavit of service of the Creditor’s Petition sworn 19 October 2016 by Andrew Hunt (“Hunt Affidavit”);
   5. an affidavit of search sworn by Kate O’Brien on 21 November 2016 (“O’Brien Search Affidavit”);
   6. an affidavit of debt sworn by Richard Jan Pares on 21 November 2016 (“Pares Debt Affidavit”);
   7. an affidavit of search sworn by Kate O’Brien on 12 December 2016;
   8. an affidavit of debt sworn by Terry Graham Evans on 12 December 2016;
   9. an affidavit sworn by Kate O’Brien on 7 February 2017 (“O’Brien February 2017 Affidavit”);
   10. an affidavit sworn by Paul Francis Fletcher on 8 May 2017 (“Fletcher Affidavit”);
   11. an affidavit sworn by Kate O’Brien on 8 May 2017 (“O’Brien May 2017 Affidavit”);
   50. an affidavit of debt sworn by Kate O’Brien on 12 May 2017 (“O’Brien May 2017 Debt Affidavit”); and
   13. an affidavit of search sworn by Kate O’Brien on 12 May 2017 (“O’Brien May 2017 Search Affidavit”).
5. There were no objections to the affidavits filed on behalf of Blue Diamond.

Mr Liveris’ Affidavits

6. The affidavit evidence filed on behalf of Mr Liveris is as follows:
   1. an affidavit sworn by Paul Steven Liveris on 7 December 2016 (“First Liveris Affidavit”);
   2. an affidavit sworn by Paul Steven Liveris on 18 January 2017 (“Second Liveris Affidavit”); and
   100. an affidavit sworn by Paul Steven Liveris on 12 May 2017 (“Third Liveris Affidavit”).
7. In relation to the objections to the First Liveris Affidavit the Court finds that:
   1. paragraphs 3-7 inclusive, the first sentence of para.8, paras.10-13 inclusive, 18, 20, 21, 23-25 inclusive and the first sentence of para.26 are all irrelevant and are to be struck out;
   2. paragraphs 16 and 19 are argumentative and conclusionary, and are to be struck out; and
   100. paragraph 22 appears to endeavour to found an allegation of abuse of process, but it is so vague and lacking in particularisation, and because of that, is scandalous insofar as it alleges a legal practitioner was engaged in that activity, and in any event, is opinion (without any reasonable discernible foundation), and it is to be struck out.
8. The Court has not struck out the second sentence of para.8 of the First Liveris Affidavit which was objected to on the basis that it was unintelligible, because reading it together with para.9 of the First Liveris Affidavit it is plain that it was intended to assert that Mr Liveris was required to invoice Blue Diamond for commission.
9. Paragraphs 3 and 25 of the First Liveris Affidavit are also hearsay and are to be struck out.
10. Paragraph 25 of the First Liveris Affidavit appears to make some assertion endeavouring to connect Blue Diamond with the so-called “Panama Papers”. In the Court’s view, that is a scandalous allegation, because the company referred to in what may or may not be an extract from the “Panama Papers” annexed to the First Liveris Affidavit is not the same company as Blue Diamond, and there is no evidence of any connection at all between the two companies, and therefore para.25 is to be struck out as scandalous (as well as it being hearsay).
11. To the extent that para.28 of the First Liveris Affidavit is a submission the Court will treat it as such, but it is otherwise struck out as argumentative and conclusionary.
12. In relation to the Second Liveris Affidavit:
    1. paragraphs 9 (but only from the words “and then had to apply to have a review”), 12-19 inclusive, 22, the second sentence of 23, 31-36 inclusive, 38-46 inclusive, 54, 57, 58, 62 and 65 are all irrelevant and are to be struck out;
    2. paragraphs 8 (in relation to the words “who of course made some derogatory comment about my affidavit” and “without giving any due consideration to my opposition”), 9, 10, 22, the second sentence of 23, 32, 35, 36, 41, 42, 46, 48, 52-54 inclusive, 61, 64 and 65, are all argumentative and conclusionary and are to be struck out;
    100. on the basis that they are hearsay and conclusionary paras.28, 30 and 51 are to be struck out;
    4. on the basis that they are opinion and conclusionary paras.43-45 inclusive and 61 are to be struck out; and
    5. on the basis that they are conclusionary paras.8 (but only as to the words “to my knowledge Registrar Jan did not read them”), 57 and 60 are to be struck out.
13. The Court has not struck out para.11 of the Second Liveris Affidavit which was objected to on the basis of relevance as it deals with the dates of Mr Liveris’ first bankruptcy, which is relevant to the central issue as to Mr Liveris’ right to proceed with an action in relation to a time at which he was bankrupt.
14. Paragraphs 20 and 21 of the Second Liveris Affidavit were objected to on the basis of relevance, but they have not been struck out as they go to the potential contractual relationship, if any, between Blue Diamond and Mr Liveris.
15. Paragraph 29 of the Second Liveris Affidavit has been objected to on the basis of relevance but it appears to the Court to be relevant to the central issue as to Mr Liveris’ right to proceed with an action in relation to a time at which he was bankrupt.
16. Paragraph 56 of the Second Liveris Affidavit was objected to on the grounds of relevance but the Court again considers that to be relevant to the issue of whether or not Mr Liveris was an undischarged bankrupt at the time of the relevant events.
17. In relation to the Third Liveris Affidavit paras.4-63 inclusive are to be struck out on the basis that they are, in essence, submissions, and are argumentative and conclusionary. In addition, there are a number of paragraphs which are scandalous, including paras.14 and 15 (insofar as they make certain assertions concerning Registrar Jan), paras.18 and 51 (insofar as they assert engagement in sham contracting), and the last sentence of para.49 (insofar as it asserts that Blue Diamond is named in the so-called “Panama Papers”). It follows that paras.4-63 of the Third Liveris Affidavit inclusive are to be struck out. The Court will treat the submissions made in the Third Liveris Affidavit as submissions for the purposes of the Review Application.

Summary Dismissal Application

18. Section 17A of the FCCA Act and r.13.10 of the FCC Rules provide for means of summary relief, including summary dismissal of an application, in the premises there set out.
19. In Zdrilic v Hickey [2016] FCAFC 101; (2016) 246 FCR 532; (2016) 14 ABC(NS) 232 (“Zdrilic”) at [89] per Katzmann, Farrell, Markovic JJ the Full Court of the Federal Court said that:
    • An application for review of a registrar's decision filed pursuant to s 104 of the Federal Circuit Court Act is not an application which is prosecuted by a debtor/applicant for the review; it is a demand that a claim for relief (a sequestration order) brought by the creditor be heard by a judge as if no sequestration order had been made. The “prosecutor” of an application for a sequestration order based on a creditor's petition is the creditor; the only onus a debtor bears is the one (s)he assumes if (s)he seeks to resist the grant of an order based on proof of solvency or “any other sufficient cause” under s 52(2) of the Bankruptcy Act. In our opinion, the respondents should not have filed their application for summary dismissal and the primary judge should not have entertained it. Like Beach J, we find it hard to conceive of any case in which it would be appropriate to see summary dismissal of an application for review brought by a debtor challenging the making of a sequestration order.
20. In Zdrilic reference was made to Tran v Pu [2015] FCA 97; (2015) 228 FCR 562; (2015) 12 ABC(NS) 418 (“Pu”) at [28] and [31] per Beach J in which the Federal Court said as follows:
    • 28. Fourth, there may be cases where an application for review is brought mala fide, for an improper purpose or otherwise constitutes an abuse of process (Williams v Spautz [1992] HCA 34; (1992) 174 CLR 509 at 526-531 per Mason CJ, Dawson, Toohey and McHugh JJ). But in such a case, an application to stay the review (or summary dismissal) may be the appropriate process to follow. But in this case, no such application was brought. Further, no such circumstance was alleged. Further, I say this generally, for it is hard to conceive of such a case in the context where an application for review is brought by a debtor challenging the making of a sequestration order. Further, if the effect of the stay produces an impermissible absence of review of the Registrar's order, then yet further problems may arise.
    • 31. It was said that the Court had a power of summary dismissal (s 17A(2) of the FCC Act and r 13.10 of the FCC Rules) ... Further, if such a summary dismissal power was available, then it might be used in circumstances such as discussed in [28] above. But such circumstances were not the present case. Further, if it was to be used in circumstances such as the present, her Honour would first have been required to consider the matters set out in [20]-[27] above before considering whether to exercise her powers to summarily dismiss the application for review on the basis of the Deed alone being a bar. No such consideration occurred. More particularly in that context, her Honour would have been required to consider the public effect and third party consequences of exercising her powers of summary dismissal. ...
21. In Kimber v Owners of Strata Plan No 48216  [2017] FCAFC 226 ; (2017) 15 ABC(NS) 540 (“Kimber”) at [81]-[82] per Logan, Kerr and Farrell JJ the Full Court of the Federal Court said as follows:
    • 81. ... Further, debtors in the bankruptcy jurisdiction are often not legally represented. They often have a minimal grasp on the legal issues directly relevant to an application to set aside a bankruptcy notice or to resist a sequestration order. The essentially technical issues concerning pleadings and the form of evidence which arise on applications for summary judgment or dismissal can add to confusion and bewilderment at the process which seems to some litigants in person to have little or nothing to do with the underlying facts in circumstances where the proceedings have substantial consequences for them.
    • 82. Worse, such applications are often not time or cost efficient compared to a prompt hearing of the review application. As in this case, applications for summary judgment or dismissal may open new avenues of appeal and involve consideration of whether or not leave to appeal the summary judgment or summary dismissal should be given, all of which add to time and cost of resolving the proceedings. There should be no reason why review applications cannot be heard quickly, with primary reliance on the materials which were before the Registrar. Indeed, like Ms Kimber, it is likely that many debtors without legal representation make the unsafe assumption that evidence which was submitted to the Registrar will automatically be before the judge on the review application.
22. The judgments of the Full Court of the Federal Court in Zdrillic and Kimber, and the Federal Court in Pu, are binding on this Court: Minister for Immigration & Multicultural & Indigenous Affairs v SZANS [2005] FCAFC 41; (2005) 141 FCR 586; (2005) 215 ALR 733; (2005) 86 ALD 583 at [38] per Weinberg, Jacobson and Lander JJ; Suh & Ors v Minister for Immigration & Citizenship & Anor [2009] FCAFC 42; (2009) 175 FCR 515; (2009) 108 ALD 470 at [29] per Spender, Buchanan and Perram JJ; CEPU (Western Australia Division) v Fortescue Metals Group Ltd [2016] FCCA 1227; (2016) 310 FLR 1 at [51]- [54] per Judge Lucev. Having regard to what has been said by the Full Court of the Federal Court in Zdrilic and Kimber, and the Federal Court in Pu, the Court does not propose to summarily dismiss the proceedings pursuant to s.17A of the FCCA Act or r.13.10 of the FCC Rules. Instead, there will be an order that the Summary Dismissal Application be dismissed.

Review Application

Legal principles

23. A hearing under s.104(2) of the FCCA Act is a hearing de novo and the matter is considered afresh: Pattison v Hadjimouratis [2006] FCAFC 153; (2006) 155 FCR 226; (2006) 236 ALR 1; (2006) 4 ABC(NS) 367 (“Pattison”) at [3]-[20] per Nicholson J and [39] per Jacobson J.
24. The party seeking a sequestration order must still satisfy the Court that the necessary conditions required to be proved by s.52(1) of the Bankruptcy Act for a sequestration order have been met: Totev v Sfar & Anor [2008] FCAFC 35; (2008) 167 FCR 193; (2008) 247 ALR 180; (2008) 5 ABC(NS) 691 (“Sfar”) at [27]-[29] per Emmett J; Zdrilic at [66] and [72] per Katzmann, Farrell and Markovic JJ. Pursuant to s.52(1) of the Bankruptcy Act, at the hearing of a creditor’s petition there must be proof of:
    1. the matters stated in the creditor’s petition;
    2. service of the creditor’s petition; and
    100. the fact that the debt or debts on which the petitioning creditor relies is or are still owing.
25. Part 4 of the Federal Circuit Court (Bankruptcy) Rules 2016 (Cth) (“FCC Bankruptcy Rules”) requires that Blue Diamond file affidavits:
    1. verifying the Creditors’ Petition;
    2. of search of court records;
    100. of service of the Bankruptcy Notice;
    4. of search of the NPI Index; and
    5. of debt still owed by Mr Liveris,

those affidavits going to the fulfilment of the requirements of s.52(1) of the Bankruptcy Act, and, if the Court is satisfied with the proof of those matters, it may make (or on a review application confirm) a sequestration order against the estate of Mr Liveris: Sfar at [37] per Emmett J.

26. At the time a sequestration order issues:
    1. section 43 of the Bankruptcy Act requires presence of the debtor or his estate within Australia; and
    2. section 44(1)(a) of the Bankruptcy Act requires that "there is owing by the debtor to the petitioning creditor a debt that amounts to $5,000" (this follows from s.41 of the Bankruptcy Act which requires a bankruptcy notice to refer to a final judgment or order for an amount “of at least $5,000”).
27. Section 52(2) of the Bankruptcy Act imposes on Mr Liveris the obligation of satisfying the Court that he is able to pay his debts or that a sequestration order ought not be made for “other sufficient cause”: Ling v Enrobook Pty Ltd [1997] FCA 226; (1997) 74 FCR 19; (1997) 143 ALR 396 (“Enrobook”), FCR at 24 per Davies, Wilcox and Branson JJ.

Consideration – formal requirement of bankruptcy

28. The Court is satisfied the formal requirements in s.52(1) of the Bankruptcy Act are met in this case by reason of the following matters:
    1. on 27 July 2016, Blue Diamond obtained Judgment for the amount of the Judgment Debt ($7,927.83) against Mr Liveris: O’Brien May 2017 Affidavit, Annexure KO-2;
    2. on 1 September 2016, a Bankruptcy Notice was served on Mr Liveris by email: O’Brien Service Affidavit, KO-1;
    100. on 22 September 2016 Mr Liveris had failed to comply with the Bankruptcy Notice, and thus committed an act of bankruptcy: Bankruptcy Act, s.40(1)(g);
    4. on 10 October 2016, being within 6 months of the act of bankruptcy Blue Diamond filed the Creditor’s Petition verified by affidavit: Pares Affidavit;
    5. the Creditor’s Petition was personally served on Mr Liveris on 17 October 2016: Hunt Affidavit;
    6. pursuant to r.4.06(3) of the FCC Bankruptcy Rules, Blue Diamond undertook a search of the National Personal Insolvency Index (“NPI Index”) which did not reveal any relevant debt agreement on the day the Creditor’s Petition was filed or on the day when the search of the NPI Index was made: O’Brien May 2017 Search Affidavit; and
    7. prior to the hearing on 15 May 2017, Blue Diamond confirmed the Judgment Debt remains owing and accruing interest and enforcement amounts as required by r.4.06(4) of the FCC Bankruptcy Rules: O’Brien May 2017 Debt Affidavit and O’Brien May 2017 Search Affidavit.

Grounds of opposition

29. When Mr Liveris filed his Notice of Opposition he relied on one ground (“Ground 1”):
    • That the Bankruptcy Notice be set aside on the grounds that I have a cross demand exceeding the amount claimed in this Bankruptcy Notice.
30. In the Second Liveris Affidavit the following further grounds were raised:
    1. that the Registrar failed to consider the grounds of the Notice of Opposition because of a fault in the Registry processing his Notice of Opposition (“Ground 2”);
    2. the employment benefits that Mr Liveris is owed by Blue Diamond exceed the Judgment Debt: (“Ground 3”);
    100. there should be no debt as at the time Mr Liveris commenced the matter in the District Court and Judgment was awarded against him, and the costs order which is the source of the Judgment Debt made, he did not have legal standing to bring the District Court Action, and therefore the matter should never have been heard, and Blue Diamond’s legal representatives failed to notify him that he had no standing to commence the District Court Action (“Ground 4”);
    4. Mr Liveris is not insolvent, and he requires time to arrange for the sale of a property he and his wife own as his interest is currently vested in his trustee in bankruptcy and approval is required by his trustee in bankruptcy to effect a sale (“Ground 5”); and
    5. he is in the process of applying to the District Court to have the Judgment overturned and to void the Judgment Debt (“Ground 6”).
31. It is important to observe that Mr Liveris ran the Review Application on the basis that he was not seeking to re-litigate the Commission Claim, but rather to claim various so-called employee entitlements never claimed or considered in the District Court Action: Third Liveris Affidavit (treated as submissions: see [17] above) at paras.37, 48 and 50.

Grounds 1 and 3

32. Grounds 1 and 3 raise the same contention, namely that Mr Liveris’ cross demand is for an amount substantially more than is owed by him under the Creditor’s Petition. Mr Liveris asserts that:
    1. Blue Diamond employed him from 6 August 2013 until 5 August 2014;
    2. Blue Diamond paid $95,000 into his family trust account during that period; and
    100. he received no employee entitlements, by which it appears that Mr Liveris means Pay As You Go (“PAYG”) taxation (although he refers to “PAYE” he presumably means “PAYG”), fringe benefits tax (“FBT”), superannuation and annual leave.
33. Section 40(1)(g) of the Bankruptcy Act refers to a “cross-demand” which has been described as “something that could not have been brought in the action, something that still lies outside a counterclaim, but is of a nature which can be specified and which is of such a nature that it equals or exceeds the amount of the judgment debt”: Pollnow v Queensboro Pty Ltd (unreported, Federal Court of Australia, 19 October 1988) at [9] per Burchett J).
34. In Massih v Esber [2008] FCA 1452; (2008) 250 ALR 648 (“Massih”) at [23]-[24] per Flick J the Federal Court dealt with the nature of and differences between counter-claims, set-offs and cross demands as referred to in ss.40(1)(g) and 41(7) of the Bankruptcy Act as follows:
    • 23 In In re Judd, Ex parte Pike, supra, Maughan AJ observed that the word “counter-claim” most probably refers to “those claims which might be the subject of a counter-claim in equity”; the term “set-off” was said to refer to “those claims which might be the subject of a set-off at common law”. And the term “cross demand” was said to be “not a technical term and must ... refer to claims other than those which would be comprised in the two expressions ‘counter-claim’ and ‘set-off’”: [1924] NSWStRp 59; (1924) 24 SR (NSW) 537 at 539. An “unrestricted meaning”, it was said, was to be given to the word “cross demand” (at 540). The meaning of each of these terms was also explored in In re A Bankruptcy Notice [1934] 1 Ch 431. Declaratory relief sought in the Chancery Division as to an entitlement to a charge on the proceeds of property was held not to be a “counter-claim, set-off or cross demand”. Lord Hanworth MR there observed that “set-off” was “a word well known and established in its meaning” (at 437). Of the term “cross demand” it was observed (at 438):
      • I turn, therefore, to what to my mind is the wider word, “cross-demand.” If a cross-demand is only to be interpreted as meaning something which could have been introduced into the action by way of counterclaim, it adds nothing to the word “counterclaim.” “Cross-demand” seems to me to be a word introduced in order to give a wider ambit to the meaning of these claims, something that would not be described, certainly, as a set-off, something that could not have been brought in the action, something that still lies outside a counterclaim, but is of a nature which can be specified and which is of such a nature that it equals or exceeds the amount of the judgment debt. I do not desire to say what “cross-demand” may include, but it is not difficult to say that it does not include a claim of such uncertain nature as appears in these Chancery proceedings. That claim does not appear to be one which it would be proper to describe as a cross-demand; it is a claim of right which may inure ultimately for the benefit of the judgment debtor. Therefore, it appears that there is no sufficient ground for setting aside this bankruptcy notice; the bankruptcy notice stands good and must be complied with.
    • Romer and Maugham LJJ delivered separate judgments but agreed with Lord Hanworth MR.
    • 24. A claim for unliquidated damages for breach of contract can fall within the term “cross demand” (Re Griffin, Ex parte Soutar (1890) 1 BC (NSW) 29); as can a claim for unliquidated damages for a tort (In re Judd, Ex parte Pike, supra at 539–40). A claim for relief under the Industrial Relations Act 1996 (NSW), being a claim that the creditor pay the debtor any money that may be found owing under an arrangement as varied by the Industrial Relations Commission may also be a cross-claim or counter-demand: Re Zakrzewski; Zakrzewski v Rodgers [2000] FCA 1187 at [33]–[34][2000] FCA 1187; , 178 ALR 694 at 704–5 per Madgwick J. A “cross demand” need not have any connection with the cause of action out of which the judgment debt arose: cf In re a Debtor [1914] 3 KB 726. A judgment debtor is thus able to “buy up a claim against the judgment creditor in order to have a ‘cross demand’”: In re Judd; Ex parte Pike [1924] NSWStRp 59; (1924) 24 SR (NSW) 537 at 540 per Maughan AJ.
35. Mr Liveris’ claims are best characterised as cross demands, and if the claims are capable of being made out, they will, therefore, fall within the statutory phrase “counter-claim, set-off or cross demand”: compare Massih at [25] per Flick J.
36. To the extent that Mr Liveris alleges he is entitled to $8,550 in PAYG, FBT and superannuation, these are not employee entitlements payable into the hands of an employee, but rather liabilities and obligations to be paid by an employer to the Australian Taxation Office (“ATO”) and an employee’s nominated superannuation fund, and in respect of superannuation, it is an amount which, generally speaking, Mr Liveris may only be able to access (if he is entitled to do so) once it is paid to his nominated superannuation fund. As such, the $8,550 is not a sum to which Mr Liveris is entitled, even if he can establish that Blue Diamond was his employer (which, for reasons set out at [39]-[43] below, the Court considers he cannot establish).
37. Mr Liveris otherwise confirmed that the employee entitlements now claimed, being 4 weeks annual leave in the amount of $7,307 were not claimed in the District Court Action. That amount does not exceed the Judgment Debt, and as already referred to above the additional entitlements of $8,550 are not sums that can be included in the cross demand.
38. In order for Mr Liveris to establish that he was owed employee entitlements, he had to establish that he was an employee of Blue Diamond.
39. Whether a person is an employee or not is a question of law: ACT Visiting Medical Officers Association v Australian Industrial Relations Commission [2006] FCAFC 109; (2006) 153 IR 228; (2006) 232 ALR 69 (“Visiting Medical Officers Association”); Damevski v Giudice & Ors [2003] FCAFC 252; (2003) 133 FCR 438; (2003) 129 IR 53; (2003) 202 ALR 494; (2003) 54 AILR 100-124 (“Damevski”), and there are many factors which may point to a contract being a contract of employment, with their relative importance varying with the circumstances. Control of the employee exercisable by the employer is a prominent factor, but not the sole criterion, and is one of a number of possible indicia of employment, including but not limited to “the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and the provision of holidays, the deduction of income tax and the delegation of work by the putative employee”: Stevens v Brodribb Sawmilling Company Proprietary Limited [1986] HCA 1; (1986) 160 CLR 16; (1986) 60 ALJR 194; (1986) 63 ALR 513; CLR at 24 per Mason J (with whom, on this point, Brennan and Deane JJ agreed, CLR at 47 and 49 respectively); Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21; (2001) 75 ALJR 1356; (2001) 47 ATR 559; (2001) 106 IR 80; (2001) 181 ALR 263; [2001] Aust Torts Reports 81-615; (2001) 50 AILR 4-476 at [43]- [45] per Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ; Visiting Medical Officers Association at [19] per Wilcox, Conti and Stone JJ. Payment of wages by a third party is not fatal to the existence of a contract of employment between an employee and an employer: Building Workers Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104; (1991) 37 IR 380; (1991) 99 ALR 735; [1991] ATPR 41-092; (1991) 33 AILR 163; Damevski, and employees may have so-called “host” employers: Damevski at [76] per Marshall J. The rendering of invoices is usually “quite foreign to an ordinary employment relationship”: Climaze Holdings Pty Ltd v Dyson & Anor (1995) 13 WAR 487; (1995) 58 IR 260; (1995) 8 ANZ Insurance Cases 61-245 (“Climaze Holdings”); WAR at 495, and see also 497, per Steytler J (with whom Malcom CJ, WAR at 489 and Rowland J, WAR at 489 agreed). Of course, the rendering of invoices and the labelling of an employment relationship in a particular way has never been determinative of a person not being an employee if the invoices and labelling are part of a sham arrangement designed to avoid the persons being designated as employees: Cam & Sons Pty Ltd v Sargent (1940) 64 CLR 659; (1940) 14 ALJ 162 at 163 per Dixon J; The Director of the Fair Work Building Industry Inspectorate v Linkhill Pty Ltd (No 7) [2013] FCCA 1097 at [282] per Judge O’Sullivan. In a now oft quoted passage the Federal Court in Re Porter; Re Transport Workers’ Union of Australia [1989] FCA 226; (1989) 34 IR 179; (1989) 31 AILR 382; IR at 184 per Gray J (“Porter”) it was said “the parties cannot create something which has every feature of a rooster, but call it a duck and insist that everybody else recognise it as a duck.” Additionally, s.357(1) of the Fair Work Act 2009 (Cth) (“FW Act”) (referred to by Mr Liveris in submissions) now prohibits an employer from misrepresenting to an employee that the employee performs work as an independent contractor under a contract for services with a third party, and in Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd & Ors [2015] HCA 45; (2015) 256 CLR 137; (2015) 90 ALJR 107; (2015) 255 IR 229; (2015) 326 ALR 470; (2015) 67 AILR 102-490 (“Quest South Perth-High Court”) at [21] per French CJ, Kiefel, Bell, Gageler and Nettle JJ the High Court adverted to the Porter metaphor in finding that there had been a contravention of s.357(1) of the FW Act.
40. In support of the contention that he was employed by Blue Diamond Mr Liveris made the following submissions:
    1. he was paid an expense allowance of $1000 a week, for which he did not invoice Blue Diamond;
    2. he invoiced Blue Diamond for a fixed amount each month, which was his outstanding commission, with the invoice being generated by a family trust, with a registered Australian Business Number, and with the invoiced amounts payable by Blue Diamond to that family trust;
    100. he was provided with a 101 Residential uniform;
    4. he was required to work hours that “they” determined as far as home opens;
    5. he was provided with an office in the offices of 101 Residential; and
    6. he has gone to the Australian Taxation Office (“ATO”) to place eight tax returns since 2014, and the “ATO Test” has told him he is an employee.
41. There are four matters which tell significantly against the establishment of an employment relationship between Mr Liveris and Blue Diamond:
    1. first, the means of payment, that is the payment by Blue Diamond to the Liveris Family Trust of both the amounts invoiced for services rendered and the expense allowance is a means of payment “quite foreign to an ordinary employment relationship”: Climaze Holdings WAR at 495 per Steytler J (with whom Malcolm CJ, WAR at 489 and Rowland J, WAR at 489 agreed). Here, not only was Blue Diamond invoiced for the services rendered by Mr Liveris, but the invoices were rendered on behalf of the Liveris Family Trust, not Mr Liveris himself, thus removing Mr Liveris even further from any possible employment relationship. That arrangement was, however, plainly one in respect of which both the Liveris Family Trust and Mr Liveris acquiesced;
    2. second, the payment of a fixed amount of an expense allowance, which does not appear to bear any relationship to time worked or expenses incurred does tend to point to the relationship not being one of employer and employee. Absent a specific clause dealing with expenses, an employee would ordinarily only be entitled to be reimbursed expenses actually incurred: Pupazzoni v Fremantle Fisherman’s Cooperative Society Ltd [1981] AILR 168;
    100. third, there is no written contract of employment between Blue Diamond and Mr Liveris in evidence. Indeed, no such document was sought to be tendered by Mr Liveris, presumably because it does not exist; and
    4. fourth, the fact that Mr Liveris made no claim for employee entitlements in the District Court Action is, of itself, some indication that at a point much closer in time to the alleged relationship between Mr Liveris and Blue Diamond being in existence, he conceived of it not being an employment relationship, and an inference to that effect can be drawn by the Court, although the weight to be attributed to it in this context is relatively slight.
42. The other matters adverted to by Mr Liveris do not, in the overall context, weigh significantly in favour of his being held to be an employee of Blue Diamond. Although he may have been provided with a uniform, there is no evidence of when, or if, he was required to wear it, or precisely what, if anything, the uniform consisted of, other than it was a 101 Residential uniform, and there is no evidence that it identified Blue Diamond as the employer. The fact that Mr Liveris might have had to work at hours at which homes were open is entirely unremarkable whether he be an employee or an independent contractor: if a house is for sale, and open to allow people to look at it with a view to it being sold, it is unremarkable that a person either employed or engaged to assist in selling it would be there at those times. The provision of an office in the offices of 101 Residential to Mr Liveris is somewhat ambiguous as it does not identify who actually provided that office, or why they did so. There is no evidence as to what the “ATO Test” consists of, and the fact that it apparently indicated that Mr Liveris was an employee, in that context means little, and is not binding on this Court in any event. Finally, there is no evidence of any substance as to who, if anyone, exercised any control over the activities engaged in by Mr Liveris at the relevant time.
43. Overall, the significant factors for which there is evidence weigh against a finding that Mr Liveris was an employee, and the other factors, some of which are either unhelpful or quite equivocal, do not outweigh those matters. In the final analysis, the Court is not satisfied that Mr Liveris was an employee of Blue Diamond, or at the very least, that there is sufficient evidence to establish that he might have been an employee of Blue Diamond.
44. In circumstances where Mr Liveris has not established that he was an employee of Blue Diamond, or there is insufficient evidence to establish that fact, Mr Liveris cannot establish his claim for “employee entitlements” as a cross demand in these proceedings.
45. Blue Diamond submitted that at para.37 of the Second Liveris Affidavit Mr Liveris made an admission that Blue Diamond had no contractual obligations to him. The Court does not accept this was an admission, but rather considers that Mr Liveris was trying to state what he thought the District Court Registrar had found in relation to the Commission Claim.
46. Blue Diamond submits that Mr Liveris should be estopped from pursuing these proceedings as he is essentially seeking to re-litigate an issue that arose in the District Court Action. Blue Diamond says that the issue of whether Mr Liveris was employed arose in the District Court Action and was determined by the District Court Registrar who found that there were no contractual obligations as between Blue Diamond and Mr Liveris: O’Brien February 2017 Affidavit, Annexure KO 11 (at p.25 of the transcript of proceedings in the District Court on 13 May 2016). Blue Diamond submits that the District Court Registrar’s finding is all-encompassing, and includes an employment contractual relationship, and therefore an issue estoppel arises: Blair v Curran [1939] HCA 23; (1939) 62 CLR 464; (1939) 13 ALJ 131; (1939) 35 Tas LR 1 (“Blair”). Further, Blue Diamond submits that an Anshun estoppel arises because the question of whether Mr Liveris was employed was directly relevant to the issues before the District Court, and it was unreasonable not to rely upon or seek to set up an employment relationship in the District Court Action.
47. Issue estoppel is a judicial determination directly involving an issue of fact or law which has disposed of the issue so that it cannot thereafter be raised by the same parties: Blair. Issue estoppel differs from res judicata in that res judicata relates to the entire claim, rather than just one issue: Hoystead & Ors v The Federal Commissioner of Taxation [1925] UKPCHCA 3; (1925) 37 CLR 290; (1925) 32 ALR 33. Three requirements need to be satisfied before an issue estoppel arises:
    1. the same question has been decided;
    2. the judicial decision which is said to create the estoppel was final; and
    100. the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies: Carl-Zeiss-Stiftung v Rayner & Keeler Ltd (No 2) [1966] 2 All ER 536 at 565 per Lord Guest.
48. The Anshun estoppel principle is derived from the judgment of the High Court in Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589; (1981) 55 ALJR 621; (1981) 26 ALR 3 (“Anshun”).
49. In Truthful Endeavour Pty Ltd v Condon [2015] FCAFC 70; (2015) 233 FCR 174; (2015) 321 ALR 483; (2015) 13 ABC(NS) 162 (“Truthful Endeavour”) at [10] per Allsop CJ, Katzmann and Gleeson JJ the Full Court of the Federal Court of Australia said that “in order to understand how the [Anshun estoppel] principles operate, it is useful to recall the circumstances in which they were enunciated” and then further observed as follows at [11]-[14] per Allsop CJ, Katzmann and Gleeson JJ:
    • 11. Before the proceeding with which Anshun was concerned, a dock worker who had suffered injury by the operation of a crane brought a suit for damages against the Port of Melbourne Authority, the owner of the crane, and his employer, Anshun Pty Ltd, which had hired it. By notices given under the Supreme Court (General Civil Procedure) Rules 2005 (Vic), the defendants sought contribution from each other under the Wrongs Act 1958 (Vic). The notice served by the Authority did not claim an indemnity, although the hire agreement contained a clause obliging Anshun to indemnify the Authority in respect of actions and claims in relation to injury or loss of life arising out of the hire, the Wrongs Act provided for an indemnity in an appropriate case, and the indemnity would have been a defence to Anshun’s claim for contribution. The jury found in favour of the worker and apportioned liability 90% to the Authority and 10% to Anshun. Judgment was entered accordingly. In Anshun the Authority sued to enforce an indemnity under a clause in the hiring contract, a claim that could have been made in the earlier proceeding. Gibbs CJ, Mason and Aickin JJ said at 602-603, in a passage cited by the primary judge at [101] of her reasons, that in a situation in which a plaintiff is said to be estopped because of its omission to plead a defence in an earlier action:
      • [T]here will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff’s claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. In this respect, we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings, e.g. expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few ...
      • It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment ...
    • 12. The Authority’s application failed because the High Court held that a judgment enforcing the indemnity would conflict with the earlier judgment for 10% contribution. The Anshun principle is based on unreasonable conduct in litigation. It should be noted that in Anshun, Gibbs CJ, Mason and Aickin JJ referred to the inutility of founding the test on abuse of process: Anshun at 602-603; see generally Champerslife Pty Ltd v Manojlovski [2010] NSWCA 33; (2010) 75 NSWLR 245 (Champerslife) at [1]- [4], [89].
    • 13. Anshun was itself an application (possibly even an extension) of the principle expressed by Wigram VC in Henderson v Henderson [1843] EngR 917; (1843) 3 Hare 100 at 115; [1843] EngR 917; 67 ER 313 at 319:
      • [W]here a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.
    • 14. The Anshun principle may apply to cross-claims as well as defences: Bryant v Commonwealth Bank of Australia [1995] FCA 1299; (1995) 57 FCR 287 (Bryant).
50. In Truthful Endeavour the Full Court of the Federal Court made a number of further observations in relation to Anshun estoppel, including the following:
    1. the question of whether conduct was unreasonable called for an evaluative judgment as to the proper conduct of modern litigation: at [71] per Allsop CJ, Katzmann and Gleeson JJ;
    2. whether a case of the kind to be propounded in a court could have been part of the case in an earlier court is relevant to an Anshun enquiry, but that alone is insufficient for the Anshun estoppel to operate, and merely because a matter could have been raised in earlier proceedings does not mean it should have been raised, and whether it should have been raised depends on whether the matter was so relevant as to make it unreasonable not to raise it: at [74] per Allsop CJ, Katzmann and Gleeson JJ;
    100. a mechanistic approach should not be taken to the identification of common factual issues because there are a variety of circumstances which might justify a party who has not raised an issue in one proceeding agitating it in another: at [75] per Allsop CJ, Katzmann and Gleeson JJ; and
    4. in each case it is necessary to decide whether the issues raised in the later proceedings were so relevant to the issues raised in the earlier proceedings that it would be unreasonable to permit them being agitated in the later proceedings: at [77] per Allsop CJ, Katzmann and Gleeson JJ.
51. In Spalla v St George Motor Finance Ltd (No 6) [2004] FCA 1699 at [65] per French J the Federal Court said that the application of the Anshun principle “requires the evaluative judgment whether it would have been ‘reasonable’ to have raised in the first proceedings the matter now raised in the second”, or whether, as the Full Court of the Federal Court observed in Bryant v Commonwealth Bank of Australia [1995] FCA 1299; (1995) 57 FCR 287; (1995) 130 ALR 129; [1995] ATPR 41-421, FCR at 295 per Beaumont, Wilcox and Moore JJ that it was unreasonable for the party asserting the cause of action in the second proceeding to refrain from raising it in the earlier proceeding against the same opponent.
52. For the purposes of determining the unreasonableness required for Anshun estoppel to operate, the possibility of conflicting judgments has been said to be strongly indicative of unreasonableness: Egglishaw v Australian Crime Commission [2007] FCAFC 183; (2007) 164 FCR 224; (2007) 69 ATR 210; (2007) 243 ALR 177 (“Egglishaw”) at [32] per Finn, Kenny and Edmonds JJ; Anshun, CLR at 603 per Gibbs CJ, Mason and Aickin JJ. Where the Anshun estoppel test is met, a court still has a discretion to allow the later proceeding to continue if “special circumstances” exist: Egglishaw at [35] per Finn, Kenny and Edmonds JJ; Wong v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 51; (2004) 204 ALR 722 (“Wong”) at [49] per Lindgren J. More recently the Full Court of the Federal Court has observed that the approach adopted in Australia “is to focus at the outset on all the relevant circumstances or, as Wilcox J put it in Ling v Commonwealth at 184, ‘all aspects of the case’”: Truthful Endeavour at [112] per Allsop CJ, Katzmann and Gleeson JJ (but in which case it is not apparent that the attention of the Full Court of the Federal Court was drawn to the earlier judgment of the Full Court of the Federal Court in Egglishaw, or the judgment of the Federal Court in Wong).
53. In Ling v Commonwealth [1996] FCA 1646; (1996) 68 FCR 180; (1996) 139 ALR 159 (“Ling”) (a case preceding both Egglishaw and Wong) the Federal Court said regard must be had to all aspects of the case, including the extent of the overlap between the underlying facts in each claim and difficulties that existed, or might reasonably have been perceived to exist, in raising the matter earlier, and that where a cross-claim, in particular, involved additional facts it was a question of degree as to whether the additional facts were substantial, and whether it may be appropriate to accept the reasonableness of separate proceedings where they were substantial: Ling, FCR at 183-184 per Wilcox J.
54. The High Court judgment in Ramsay Healthcare Australia Pty Ltd v Compton [2017] HCA 28; (2017) 261 CLR 132; (2017) 91 ALJR 803; (2017) 345 ALR 534; (2017) 15 ABC(NS) 222; (2017) 122 ACSR 115 (“Ramsay Healthcare”) suggests that a debtor is not bound by the conduct of their case in the proceeding that led to the Judgment and Judgment Debt as there is a need to protect the interests of third parties who were not parties to that proceeding: Ramsay Healthcare at [67] per Kiefel CJ, Keane and Nettle JJ. In circumstances where the debtor may not have presented their case on the merits at a contested trial, and the merits of a claim and counterclaim have not been tested in adversarial litigation, the judgment debt may not be the outcome of the rigorous processes of litigation and a reliable indication of the real debt: Ramsay Healthcare at [65]-[68] and [70]-[72] per Kiefel CJ, Keane and Nettle JJ.
55. In the Court’s view no question of issue estoppel arises in these proceedings. That is because the same question was not decided by the District Court Registrar (assuming for present purposes that the District Court Registrar has made a judicial determination, which might be open to doubt). Although the District Court Registrar determined that there was no contractual relationship between Blue Diamond and Mr Liveris that determination was made in the context of the Commission Claim, which in its terms was not a claim made on the basis of an employment contract being in existence. The Court is not prepared to draw an inference that the District Court Registrar intended to make any determination with respect to any possible employment contract between Mr Liveris and Blue Diamond when determining that there was no contractual relationship between Mr Liveris and Blue Diamond, and that that determination is restricted to a non-employment contractual context.
56. In relation to Anshun estoppel there can be no doubt that Mr Liveris could have made the claim for the employee entitlements in the District Court Action if, at that time, he considered himself to be an employee of Blue Diamond. Whether Mr Liveris did so consider himself at the time he commenced the District Court Action is problematic. There was nothing to prevent Mr Liveris from making a claim for the employee entitlements in the District Court Action in the alternative to his Commission Claim. The Court notes that given its finding that the District Court Registrar did not make a determination in relation to the question of whether there was an employment contract between Mr Liveris and Blue Diamond, because that issue was not properly before the District Court Registrar, there is no possibility of a judgment of this Court on that question conflicting with the District Court Registrar’s determination.
57. In all the circumstances, it is difficult to avoid the conclusion that the question of employee entitlements is only being raised now by Mr Liveris in an endeavour to avoid the consequences of bankruptcy, and that if Mr Liveris truly considered that there was an employment relationship between himself and Blue Diamond then that is a matter that he would have raised for determination in the District Court Action.
58. This is not a case like Ramsay Healthcare where there was evidence before the primary bankruptcy judge in this Court that there may have been some doubt as to whether cogent evidence suggesting that the debt found was not truly owing was not presented in the proceedings giving rise to the Judgment Debt. The matters which Mr Liveris now raises are concerned with employee entitlements, and as the Court has found he has not established that he was an employee of Blue Diamond, and therefore there is no right to be paid the employee entitlements claimed. Further, some of the employee entitlements claimed are not entitlements per se, or seemingly presently realisable by Mr Liveris to offset any debt he owes. The Court has, to the extent necessary, considered the issues raised by Mr Liveris in relation to the Judgment and Judgment Debt, and in those circumstances it is unnecessary to determine whether or not Mr Liveris was Anshun estopped from making a claim for the employee entitlements, but the Court observes that it may have been inappropriate to make such a finding given what was said by the High Court in Ramsay Health Care at [65]-[68] and [70]-[72] per Kiefel CJ, Keane and Nettle JJ. Having examined the issue, however, the Court is of the view that in this case the Judgment and Judgment Debt is the most reliable indication of the true state of Mr Liveris’ indebtedness as claimed by the creditor (Blue Diamond) in these proceedings. It is therefore unnecessary to make any finding with respect to the issue of Anshun estoppel.
59. In relation to the assertions by Mr Liveris that the arrangement he entered into with Blue Diamond was a sham contracting arrangement, this is no more than a bare unparticularised assertion by Mr Liveris. There is hardly anything extraordinary about a company paying another company to provide services to it, and the second company engaging persons, whether as employees or independent contractors, to provide those services. Mr Liveris’ assertions in these proceedings were that this arrangement in this case amounted to a sham contract. In the absence of proper particulars, and more particularly, detailed evidence, that is an assertion which is not made out, and does not warrant further investigation by this Court. In that regard, it suffices to observe that to establish a case of misrepresentation under s.357 of the FW Act is invariably a matter of considerable complexity and a lengthy hearing in which all of the relevant contracts are examined and evidence is taken from all of those making claims or otherwise affected by the claims made in relation to the alleged sham contracts. In that regard the Court notes that the first instance decision which led to the judgment of the High Court in Quest South Perth-High Court was a judgment of a single Judge of the Federal Court arising from a trial over four days and resulting in a judgment of some 257 paragraphs: Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd (No 2) [2013] FCA 582. In these proceedings there is no, or no sufficient, evidence upon which the Court can make any findings with respect to the bare allegation of sham contracting made by Mr Liveris.
60. In all the above circumstances, Mr Liveris has failed to establish his claimed cross demand, and it therefore follows that grounds 1 and 3 are not made out.

Ground 2

61. The Court does not propose to address or consider Mr Liveris’ second ground of opposition regarding the alleged failure of the Registrar to consider the Notice of Opposition in any detail.
62. Given this is a hearing de novo, commenced pursuant to s.104(2) of the FCCA Act, Mr Liveris is under no obligation to demonstrate error on the part of the Registrar, and is not required to prove that the Registrar's exercise of power miscarried in the sense described by the High Court in House v The King (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ; Pattison at [153]-[154] per Lander J; Nand v Fuji Xerox Australia Pty Ltd [2014] FCA 757 at [24]- [28] per Yates J. This is not to say the Court agrees or accepts the basis for ground 2, but rather that the Court considers the assertions about the alleged conduct of the Registrar to be irrelevant to its de novo consideration of the matter.

Ground 4

63. In ground 4 Mr Liveris asserts that:
    1. if he had no right to bring an action for the commission claims in the Commission Claim, then the costs order founding the Judgment Debt ought not to have been made, because the action ought not to have been able to be brought; and
    2. Blue Diamond’ lawyers ought to have advised him that he was unable to pursue, or lacked the capacity to pursue, the Commission Claim in the District Court Action.
64. The question arises as to whether or not Mr Liveris did have the right to bring the District Court Action for the Commission Claim.
65. Sections 5, 58 and 116 of the Bankruptcy Act are as follows:
    • Property means:
      • ... real or personal property of every description, ... and includes any estate, interest or profit, whether present or future, vested or contingent, arising out of or incident to any such real or personal property.
    • 58 Vesting of property upon bankruptcy—general rule
    • (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.
    • 116. Property divisible among the bankrupt's creditors.
    • (1) Subject to this Act:
      • (a) all property that belonged to, or was vested in, a bankrupt at the commencement of the bankruptcy, or has been acquired or is acquired by him or her, or has devolved or devolves on him or her, after the commencement of the bankruptcy and before his or her discharge; and
      • (b) the capacity to exercise, and to take proceedings for exercising all such powers in, over or in respect of property as might have been exercised by the bankrupt for his or her own benefit at the commencement of the bankruptcy or at any time after the commencement of the bankruptcy and before his or her discharge; and
    • is property that is divisible among creditors...
    • (2) Subsection (1) does not extend to the following property:
      • (g) any right of the bankrupt to recover damages or compensation:
        • (i) for personal injury or wrong done to the bankrupt, the spouse or de facto partner of the bankrupt or a member of the family of the bankrupt; or
        • (ii) in respect of the death of the spouse or de facto partner of the bankrupt or a member of the family of the bankrupt;
    • and any damages or compensation recovered by the bankrupt (whether before or after he or she became a bankrupt) in respect of such an injury or wrong or the death of such a person;
66. In Cummings & Anor v Claremont Petroleum NL & Anor (1996) 185 CLR 124; (1996) 70 ALJR 616; (1996) 137 ALR 1; CLR at 136 per Brennan CJ, Gaudron and McHugh JJ said:
    • A bankrupt has no right to bring or prosecute proceedings to protect, enhance or add to the property of which he has been divested on bankruptcy.
67. It is necessary to have regard to the Commission Claim, noting that this is not a case in which the Court is asked to go behind the Commission Claim, and Mr Liveris does not put the actual determination reached by the District Court Registrar in the Commission Claim in issue (as opposed to arguing that no order ought to have been able to be made because no action ought to have been able to be brought).
68. The Commission Claim was plainly a claim alleging that Blue Diamond owed Mr Liveris monies as a result of services rendered by Mr Liveris to Blue Diamond. The question arises as to whether that was a claim that Mr Liveris was entitled to bring when the monies said to be owed for services rendered were said to have been earned during a period in which Mr Liveris was an undischarged bankrupt, namely, the period from September 2011 to September 2014.
69. Whether Mr Liveris made the Commission Claim as an alleged employee or independent contractor does not matter for these purposes: the question remains whether the Commission Claim was one which was capable of being made.
70. On the assumption that Mr Liveris was claiming that the monies owed were payable to him (as opposed to the Liveris Family Trust) the monies earned were classifiable as income derived by Mr Liveris, as a bankrupt, for the purposes of s.139L of the Bankruptcy Act.
71. In Meriton Apartments Pty Ltd & Anor v Industrial Court of New South Wales & Anor [2008] FCAFC 172; (2008) 171 FCR 380; (2008) 251 ALR 19; (2008) 6 ABC(NS) 370 at [138]-[139] per Greenwood J the following was said:
    • 138 Division 4B of Pt VI establishes the regime by which a bankrupt who derives income during the bankruptcy is required to pay income contributions to the estate. The Division recognises that a bankrupt will derive income during the bankruptcy (ss 139L, 139M, 139N) and by s 139P or s 139Q the bankrupt is liable to pay a “contribution amount” (s 139S) to the trustee, of income of the bankrupt that exceeds an “actual income threshold amount” (s 139K), during a contribution assessment period (s 139K). The bankrupt must provide evidence of income (s 139U). Division 4B establishes an assessment of income and a contributions review procedure. A contribution is payable at such time as the trustee determines (s 139ZG). The payment of contributions might be managed by a supervised account regime under Div 4B. Otherwise, the bankrupt is entitled to derive and receive income.
    • 139 Income is not property under the Bankruptcy Act.
72. In Combis v Harding [2014] FCA 1391; (2014) 12 ABC(NS) 398 (“Combis”) the Federal Court was dealing with an appeal from a judgment of this Court which declared that quarterly payments under a testamentary trust were not after-acquired property for the purposes of the Bankruptcy Act. The Federal Court held that this Court did not err in holding that the quarterly payments due under the testamentary trust were income for the purposes of s.139L(a)(iv) of the Bankruptcy Act and were therefore not after-acquired property: Combis at [24] per Siopis J. The foundation for that finding was set out in prior paragraphs where the Federal Court observed (by reference to Re Gillies; Ex parte Official Trustee in Bankruptcy v Gillies [1993] FCA 289; (1993) 42 FCR 571; (1993) 115 ALR 631) as follows at [21]-[23] per Siopis J:
    • 21 First, as was the case with the income earned by Mr Gillies, Mr Landers’ right to the fruits of the administration of his deceased mother’s estate is capable of falling within the definition of “after-acquired property” for the purposes of s 58(1)(b) and s 116(1)(a) of the Bankruptcy Act.
    • 22 Secondly, the definition of “income” in s 139L of the Bankruptcy Act has been expanded beyond its ordinary meaning, and, specifically, includes an amount received by a bankrupt as a beneficiary under a trust to the extent that the amount was paid out of income of the trust. This definition is wide enough to include the income payable to Mr Landers under the testamentary trust established by his mother’s will. There is nothing which precludes the definition from applying to income received by a beneficiary of a trust in circumstances where there has been a delay between the vesting of the right to income and the actual receipt of that income. Nor is there anything in the definition which limits the income to income which is payable pursuant to an income stream which commenced flowing before the date of the bankruptcy. Accordingly, in my view, there is no substance in the distinction which the appellant sought to draw during oral argument, to this effect.
    • 23 There is, therefore, in my view, no meaningful distinction between this case and Gillies. Thus, although Mr Landers’ right to the quarterly payments is capable of falling within the definition of “after-acquired property” for the purposes of s 58(1) and s 116 of the Bankruptcy Act, as French J observed, the legislative scheme as enacted with effect from 1 July 1992, is “quite inconsistent” with the application of s 58 and s 116 to after-acquired income which falls within the ambit of s 139L(1)(a)(iv). In this regard, I would also observe, that s 58(1) of the Bankruptcy Act is prefaced by the phrase: “Subject to this Act”.
73. The earning of income by a bankrupt serves the useful purpose of allowing a bankrupt to generate income which optimises contributions under the scheme under Div.4B of Part VI of the Bankruptcy Act which operates so as to allow a bankrupt to contribute part of the income earned for the benefit of creditors, and also benefits the bankrupt both as to income earned and their being usefully employed: De Santis v Aravanis & Anor [2014] FCA 1243; (2014) 227 FCR 404; (2014) 322 ALR 475; (2014) 13 ABC(NS) 1 at [99] per Farrell J.
74. The fact that Mr Liveris was unsuccessful in the Commission Claim does not alter the fact that the income earned was not property for the purposes of the Bankruptcy Act, and therefore not property in respect of which rights vested in Mr Liveris’ bankruptcy trustee. In those circumstances, Mr Liveris was not precluded from bringing the action, at a time that he was no longer bankrupt, in respect of a period during which he was bankrupt, but where the monies claimed were not property for the purposes of the Bankruptcy Act, but in respect of which he would have had to have made the contribution envisaged by Div.4B of Part VI of the Bankruptcy Act. It follows from that conclusion that ground 4 is not made out.
75. Notwithstanding the conclusion that the Court has reached above, ground 4 could not be made out in any event. That is because, contrary to what is put by Mr Liveris, the written submissions made by Blue Diamond in respect of the District Court Action did assert that Mr Liveris was not entitled to bring the District Court Action for the Commission Claim: O’Brien February 2017 Affidavit, Annexure KO 8 at [17]-[19]. Wrong as the Court has found that submission to be, it is nevertheless a complete answer to the assertion now made by Mr Liveris that Blue Diamond’s lawyers ought to have put on notice that he could not bring the action. It is unnecessary to determine whether or not Blue Diamond’s lawyers owed Mr Liveris, as a self-represented litigant, a duty to put him on notice, because they did in fact do so. In doing so, Blue Diamond also put the District Court Registrar on notice of their contentions as to the law in that regard, and albeit that it was in the Court’s view wrong in that view, it nevertheless fulfilled the duty that it had to the District Court Registrar (and through the District Court Registrar to the District Court) to be frank with the Court, as in making those submissions they drew to the Court’s attention Mr Liveris’ bankruptcy status at the time of the events relevant to the Commission Claim: Legal Profession Conduct Rules 2010 (WA), r.34(1)-(3).
76. In the above circumstances, Mr Liveris cannot make out the assertions in ground 4, and, therefore, even if the Court’s view with respect to ground 4 previously expressed is wrong, ground 4 cannot be made out in any event.

Ground 5

77. If Mr Liveris can prove to the Court that he is solvent the Court may dismiss the Creditor’s Petition: Re Sanders; Knudsen and Yates (t/a The Hargreaves Practice) v Sanders [2003] FCA 1079; (2003) 1 ABC(NS) 408 (“Re Sanders”) at [22] per Bennett J. Solvency, as defined in s.5(2) of the Bankruptcy Act, means being “able to pay all ... debts, as and when they become due and payable”. Mr Liveris must, therefore, be able to pay debts as they fall due out of his own money. This includes both cash on hand and money reasonably quickly realisable by asset realisation.
78. Account must also be taken of debts “which will fall due in the reasonably immediate future pursuant to existing obligations”: Re Sanders at [27] per Bennett J, and whether Mr Liveris will be able to pay them: Re Sanders at [26] per Bennett J; International Alpaca Management Pty Ltd v Ensor [1999] FCA 72 (“International Alpaca”) at [8]-[10] per Katz J; Bank of Australasia v Hill [1907] HCA 78; (1907) 4 CLR 1514; (1907) 14 ALR 51; CLR at 1527 per Griffith CJ.
79. What has to be proved is that assets are available to be realised and capable of ready realisation likely to result in payment of outstanding debts within a reasonable time: Re Sanders. In assessing solvency the Court ought not take account of realisable assets required to live a reasonably comfortable and dignified existence: International Alpaca at [15]-[16] per Katz J. Mr Liveris has provided no evidence of his:
    1. cash flow; or
    2. assets and liabilities.
80. Blue Diamond has provided evidence of Mr Liveris’ liabilities by way of various debts (including the Judgment Debt) owed to various parties including:
    1. to Blue Diamond a total amount of $15,286, comprising a separate amount of $7,213 and the Judgment Debt;
    2. to Mollar Holdings in the fixed sum of $30,324;
    100. to Bankwest in the fixed sum of $650,000; and
    4. to Citigroup in the fixed sum of $40,461.

See the O’Brien February 2017 Affidavit, Annexure KO 20.

81. Mr Liveris is indebted in the amount of $736,071.
82. Mr Liveris referred to a family home, however, Mr Liveris’ “share” of the ownership of the family home is vested in Mr Liveris’ trustee in bankruptcy and Mr Liveris’ wife as tenants in common. Mr Liveris has no interest in the property, and two caveats over Mr Liveris’ former share (now under the control of his trustee in bankruptcy) are lodged against the title of the property. There is nothing before the Court to suggest Mr Liveris’ wife is prepared to utilise the equity she possesses in the family home to satisfy Mr Liveris’ debts.
83. No proper evidence of a valuation of the family home was presented to the Court by Mr Liveris, and there is therefore no means of determining what, if any, surplus might arise as a result of a sale, or what equity Mr Liveris’ wife might have in the property if she chose to use it to satisfy Mr Liveris’ debts (a matter about which there is no evidence before the Court in any event). Mr Liveris provided no evidence at the hearing or otherwise to suggest that the caveats on the Certificate of Title to the property had been removed so as to allow the property to be sold, or that his trustee in bankruptcy had agreed for the property to be sold, and that the property was capable of ready realisation within a reasonable time: Re Sanders.
84. It is plain upon a consideration of the matters set out above that Mr Liveris is not solvent, having evinced no evidence, and demonstrating no means, by which he may pay his outstanding debts, either presently or within a reasonable time. There is therefore no basis for dismissing the Creditor’s Petition on the basis that Mr Liveris is able to pay his debts. It follows that ground 5 is not made out.

Ground 6

85. There is nothing before the Court to suggest that Mr Liveris has commenced any appeal against the Judgment. Rule 15(2) of the District Court Rules 2005 (WA) prescribes a time limit of 10 days in which to commence an appeal before leave to appeal is required. Unless an extension of time is granted, there is no appeal on foot and in any event there is no evidence an extension of time to bring the appeal was ever filed. The time to lodge an appeal against the Judgment had lapsed by some 282 days on the date of the hearing of the Review Application. It follows that ground 6 is not made out.

Conclusions and orders

86. The Court has concluded that:
    1. the Summary Dismissal Application is to be dismissed;
    2. as set out at [7]-[17] above various paragraphs of the First, Second and Third Liveris Affidavits are to be struck out;
    100. the Review Application is to be dismissed; and
    4. the applicant’s costs of the Review Application are to be paid from the respondent’s bankrupt estate in accordance with the provisions of the Bankruptcy Act, such costs, if not agreed, to be taxed by a Registrar of this Court in accordance with Part 40 of the Federal Court Rules 2011 (Cth), but otherwise there be no order as to the costs of these proceedings.
87. There will be orders accordingly.

I certify that the preceding eighty-seven (87) paragraphs are a true copy of the reasons for judgment of Judge Antoni Lucev

Date: 19 December 2018