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Wagner & Anor v Samootin [2006] FMCA 688 (24 May 2006)

Last Updated: 29 May 2006

FEDERAL MAGISTRATES COURT OF AUSTRALIA

Ahern v Deputy Commissioner of Taxation (Qld) [1987] FCA 312; (1987) 76 ALR 137 Aveyratn v Trkulja (1998) 90 FCR 253 Knudsen & Yates trading as The Hargreaves Practice, in the matter of Sanders v Sanders [2003] FCA 1079 Re Boscolo: Ex parte Botany Council (1996) 136 ALR 623 Re Finlayson; Ex parte Finlayson (1997) 72 ALJR 73 Re Sabri; Ex parte Sabri v Brien (1995) 60 FCR 131 Samootin v Shea & Ors  [2005] HCATrans 732  Samootin v Shea & Ors [2005] HCATrans 181 Samootin v Shea & Ors [2005] NSWCA 398 Samootin v Shea & Ors (No.2) [2003] NSWSC 695 Samootin v Wagner & Anor [2005] FMCA 1512 Sandell v Porter [1966] HCA 28; (1966) 115 CLR 666 Stankiewicz v Plata [2000] FCA 1185 Westpac Banking Corporation v Carver, in the matter of Carver [2003] FCA 221

REPRESENTATION

ORDERS

(1) The application filed 23 December 2005 to transfer the bankruptcy proceedings to the Family Court of Australia is dismissed.

(2) The respondent’s notice of a constitutional matter filed 23 December 2005 does not raise any genuine issue under the Constitution or as to its interpretation.

(3) The notice of intention to oppose petition filed 23 December 2005 is dismissed.

(4) The respondent’s application for an adjournment of the creditor’s petition is refused.

(5) The respondent shall pay the applicants’ costs, of and incidental to the application including reserved costs, if any, with costs to be taxed in default of agreement pursuant to order 62 of the Federal Court Rules (Cth).

SYG3197 of 2005

First Applicant

Second Applicant

And

Respondent

REASONS FOR JUDGMENT

The proceedings

1.	The matters before this Court for determination are:

a) The respondent debtor’s application to transfer the bankruptcy proceedings to the Family Court of Australia, filed 23 December 2005;
b) The respondent debtor’s notice of a constitutional matter, filed
23 December 2005;
c) The respondent debtor’s notice of intention to oppose petition filed, 23 December 2005; and
d) The creditor’s petition filed 2 November 2005.

2.	The respondent debtor, Ms Samootin, relies upon the following material in support of her application to transfer the bankruptcy proceedings to the Family Court:

a) Application filed 23 December 2005;
b) Affidavit of Ms Samootin, sworn on 22 December 2005 and filed on 23 December 2005;
c) Affidavit of Ms Samootin, sworn and filed on 6 February 2006.

3.	The applicant creditors rely on the affidavit of Tania Maree Noonan, sworn and filed on 25 January 2006, in opposition to the respondent debtor’s application to transfer the proceedings.
4.	The respondent relies on the following material in support of her notice of a constitutional matter under s.78B of the Judiciary Act 1903 (Cth):

a) Notice of a constitutional matter filed 23 December 2005;
b) Affidavit of Ms Samootin sworn 22 December and filed
23 December 2005 and Exhibits "AS1" and "AS2" to that affidavit;
c) Letter from the Australian Government Solicitor to Ms Samootin dated 19 January 2006.

5.	The applicants rely on the affidavit of Tania Maree Noonan, sworn on 25 January 2006, in response to their contention that no real or substantial constitutional issue arises in the proceedings.
6.	The applicants also rely on the following material in support of their creditor’s petition, and in response to Ms Samootin’s opposition to that petition:

a) Creditor’s petition filed 2 November 2005;
b) Affidavit of Giselle Monika Wagner (the first applicant creditor), verifying paragraphs 1, 2 and 3 of the creditor’s petition, sworn on 30 October 2005 and filed on 2 November 2005;
c) Affidavit of Judy Reid, verifying paragraph 4 of the creditor’s petition, sworn on 28 October 2005 and filed on 2 November 2005;
d) Affidavit of service of creditor’s petition, verifying affidavit of James Stephen Twigg, sworn on 22 November 2005 and filed on 4 December 2005;
e) Affidavit of service of James Stephen Twigg, sworn on
21 December 2005 and filed on 9 January 2006;
f) Affidavit of Tania Maree Noonan, sworn and filed on 25 January 2006, and the folder of documents annexed to that affidavit (Exhibit "TMN1");
g) Affidavit of final search and final debt of Tania Maree Noonan, sworn on 13 February 2006 and filed on 14 February 2006;
h) The revised calculations of the respondent’s maximum interest in the Oxford Falls Road properties (Exhibit "C1");
i) A revised chronology of the proceedings to replace tab 36 of the affidavit of Ms Noonan of 25 January 2006 (Exhibit "C2"); and
j) Affidavit of final search and debt sworn by Tania Maree Noonan, on 22 April 2006 and filed in Court.

7.	The respondent relies on the following material in opposition to the creditor’s petition:

a) Notice of intention to oppose petition, filed on 23 December 2005;
b) Affidavit of Ms Samootin, sworn on 22 December 2005 and filed on23 December 2005, and Exhibits "AS1" to "AS4" inclusive to that affidavit;
c) Affidavit of Ms Samootin, sworn and filed on 6 February 2006 in response to the affidavit of Tania Maree Noonan sworn on
25 January 2006, and Exhibit "AS5" to that affidavit.

8.	At the commencement of the hearing, Ms Samootin foreshadowed that she would make an application for an adjournment of these proceedings on the basis that she has applications pending before the High Court of Australia and the Supreme Court of New South Wales.

Factual background to the Family Court proceedings

9.

A convenient summary of the relevant background facts in respect of the proceedings before the Family Court is set out in the document "Applicant Creditors’ Outline of Written Submissions in Respect of Creditor’s Petition" prepared by Mr Stoljar, counsel for the applicants, and filed on 2 March 2006:

4. The following outline of the background facts relating to the respondent debtor’s proceedings under section 79 of the Family Law Act in the Family Court of Australia (Proceedings No. SYF 5191 of 1993) ("the Family Court Proceedings") are drawn from the affidavit of Tania Maree Noonan sworn 25 January 2006 and from the judgment of Boland J in those proceedings dated 5 September 2005. References which are otherwise unidentified are to paragraphs in that judgment.
5. The Family Court Proceedings commenced with an application for orders filed by the respondent debtor on 7 May 1998 seeking leave under s 44(3) of the Family Law Act to commence the proceedings out of time (at [3]).
6. The respondents to the Family Court Proceedings are the debtor’s ex-husband, Christopher George Shea, two companies and six other persons, including Mr Peter Deans (as the second respondent), and Shea Dealite Pty Ltd (as the third respondent).
7. Initially, Mr Shea was the only named respondent to the Family Court proceedings. By an amended application filed 28 May 1998, the respondent debtor joined Mr Deans as second respondent (at [4]).
8. On 21 April 1999 orders were made by Judicial Registrar Knibbs of the Family Court restraining Mr Shea and Mr Deans (as the first and second respondents to the Family Court Proceedings) from doing any act or thing that has the effect of transferring, disposing, selling, mortgaging or encumbering or purchasing the 24 and 26 Oxford Falls Road properties.
9. On 16 August 2005 the respondent debtor filed an application in a case in the Family Court Proceedings in which she sought orders, inter alia, pursuant to section 90AE(1) of the Family Law Act, to join the applicant creditors as third parties to those proceedings (at [8]). That application was dismissed by Boland J on 5 September 2005.
10. On 7 November 2005 the respondent debtor filed an application in a case in the Family Court Proceedings and on 9 November 2005, an amended draft notice of appeal, seeking leave to appeal from the judgment of Boland J. The respondent debtor subsequently filed a further amended draft notice of appeal on 3 February 2006. [That application and appeal were determined on 3 May 2006 – see [23] below]
11. The Family Court Proceedings under s 79 of the Family Law Act are yet to be determined, that determination having been delayed by the respondent debtor’s bringing Supreme Court Proceedings No. 1973 of 2001 and by the outstanding enquiry and accounting still to take place in those proceedings.
12. On 27 October 2005 orders were made, by consent, by Justice Boland of the Family Court standing the Family Court Proceedings over for mention for case management purposes only to 23 November 2006.
13. On 23 December 2005 the respondent debtor filed her application in these proceedings seeking orders, inter alia, that the proceedings be transferred to the Family Court of Australia under ss 35A (2A), (3) (a) and (c) of the Bankruptcy Act, and under 90AC of the Family Law Act.
14. On 10 January 2006 the solicitors for the applicant creditors wrote to the respondent debtor inviting her to withdraw her application to transfer the proceedings on the grounds, inter alia, that that application constituted an abuse of process and reserving their rights to seek costs orders against the respondent debtor on an indemnity basis. The respondent debtor declined that invitation and has elected to proceed with her application.

Factual background to the Federal Magistrates Court proceedings

10.

A convenient summary of the relevant background facts of these proceedings are set out in the document "Applicant Creditors’ Submissions in Respect of Transfer to the Family Court" also prepared by Mr Stoljar and filed on 2 March 2006. This summary provides an overview of the chronology of events which has led to a voluminous collection of material prepared by the respondent. Ms Samootin is unrepresented and does not appear to have had the benefit of legal advice in the document preparation for any for any of her applications. Consequently, there is a now a large amount of material which has general relevance to the proceedings but does not address any specific application. Much of the information is either irrelevant and/or repetitive. However, I believe it is important to record this background as the bulk of Ms Samootin’s submissions rely on close examination of this material to support her arguments before the Court. I refer to Mr Stoljar’s submissions:

10. The following facts are drawn from judgment of Palmer J in Supreme Court proceedings 1973 of 2001 (references which are otherwise unidentified are to paragraphs in that judgment).
11. In 1988 the respondent debtor became the registered proprietor as joint tenant with her then husband, Mr Shea, of a property of 82 Waterview Street, Mona Vale ("the Mona Vale Property") (at [19]).
12. On 27 July 1997 the respondent debtor and Mr Shea entered into a contract for the sale of the Mona Vale Property for $401,500 (at [21]).
13. On 18 October 1997 the respondent debtor and Mr Shea located another house, at 26 Oxford Falls Road, Beacon Hill ("26 Oxford Falls Road") and made an offer of $365,000 for the purchase of that property, which offer was accepted (at [23]).
14. On 24 October 1997 the sum of $36,500, being part of the deposit paid by the purchaser of the Mona Vale Property, was released to the respondent debtor and her former husband, and a contract was entered into for the purchase of 26 Oxford Falls Road. The contract was in the sole name of Mr Shea (at [23]).
15. On 25 October 1997 the respondent debtor and her family moved into 26 Oxford Falls Road (at [24]).
16. On or shortly after 25 October 1997 Mr Shea and a friend of his, Mr Deans, became aware that the neighbouring property, 24 Oxford Falls Road, Beacon Hill ("24 Oxford Falls Road"), was also for sale (at [24]).
17. Mr Shea and Mr Deans acquired a company, then known as Shea Dealite Pty Limited (now called Loan Design Pty Ltd), which they intended to use as the vehicle to develop the two properties at 24 and 26 Oxford Falls Road (at [26]).
18. On 27 October 1997 settlement of the sale of the Mona Vale Property took place. The net proceeds of the sale received by the debtor and her former husband were $226,809.79 (at [25]).
19. On 7 November 1997 the contract dated 24 October 1997 for the purchase in the name of Mr Shea of 26 Oxford Falls Road was rescinded, with the consent of the vendor and, in its place, a new contract for the sale of 26 Oxford Falls Road was entered into, this time with Shea Dealite Pty Limited as the purchaser (at [26]).
20. On 14 November 1997 Shea Dealite Pty Limited entered into a contract for the purchase of 24 Oxford Falls Road for $370,000 (at [27]).
21. Palmer J summarised the next events in the 2003 Judgment (at [29]) as follows:

Settlement of the purchase of the properties [namely, 24 and 26 Oxford Falls Road] was effected on 5 December 1997. Precise details of the source and application of funds for the settlement have not been ascertainable at this stage and will have to be determined in an accounting but the following appears from the available documentation. The total purchase price in respect of both properties was $735,000. The source of the deposits of $37,000 and $36,500 in respect of the purchases of numbers 24 and 26 respectively was the proceeds of sale of the Mona Vale property. The monies paid on settlement of the purchases totalled $666,351.79. Of that amount, $550,849 was provided by the St George Bank pursuant to a mortgage over numbers 24 and 26 and a mortgage over Mr Deans’ property at 33a Oxford Falls Road, Beacon Hill. The balance came from two bank cheques, the exact source of which is presently unknown but probably was the proceeds of sale of the Mona Vale property. Stamp duty on both contracts and other incidental costs and disbursements of the purchases were also paid out of the proceeds of the sale of the Mona Vale Property.

22. The first applicant creditor, Ms Wagner, was the solicitor on the sale of the Mona Vale Property and the purchase of 24 and 26 Oxford Falls Road (at [21], [28]).

SUBSEQUENT EVENTS

23. On 29 March 2001 the debtor commenced proceedings 1973 of 2001 against Mr Shea, Mr Deans and Shea Dealite Pty Limited in the Supreme Court of New South Wales (at [39]).
24. However, as Palmer J made clear in the 2003 Judgment, Mr Shea and Mr Deans never denied that the debtor had an equitable interest in 24 and 26 Oxford Falls Road commensurate with the proportion of her contribution to the parties’ equity in the properties (at [2]).

25. Thus, as Palmer J held in the 2003 Judgment (at [3]):

As far as I am able to determine, these proceedings and the proceedings in the Family Court were never necessary in order to establish Ms Samootin’s interest in the properties because that interest was not in contest.

26. The first applicant creditor, Ms Wagner, was joined as the fifth defendant to the statement of claim filed in proceedings No. 1973 of 2001 on 21 November 2001, pursuant to leave granted (on the application of the debtor) on 29 October 2001.
27. The second applicant creditor, Mr Holmes, was joined as the sixth defendant to proceedings No. 1973 of 2001 pursuant to leave granted by Palmer J on 3 June 2003, on the application of the debtor to join "Northern Beaches Legal Services" as a defendant to the proceedings. The joinder of the second applicant creditor is discussed further below.
28. The following does not purport to be an exhaustive account of all of the applications, proceedings and appeals brought by the debtor in the New South Wales Supreme Court and Court of Appeal, the High Court, the Family Court and the Federal Magistrates Court. Some are summarised in the chronology which is at Tab 36 of Exhibit "TMN1" to the affidavit of Tania Maree Noonan sworn 25 January 2006.
29. Briefly, on 4 July 2003 the Court of Appeal in proceedings 41053 of 2002 dismissed an application for leave to appeal from various interlocutory orders made by Justice Palmer, with costs.
30. On 1 August 2003 Palmer J delivered the 2003 Judgment. In effect, Palmer J dismissed the debtor’s claim against the applicant creditors (as the fifth and sixth defendants), with costs. The claims against the other defendants (including Mr Shea and Mr Deans) were referred to an enquiry and accounting, which is still not complete.
31. On 3 June 2004 the Court of Appeal dismissed an appeal from the 2003 Judgment but granted leave to the debtor to appeal limited to the formal orders made on 29 September 2003 by Palmer J.
32. The debtor has commenced an application for special leave to appeal to the High Court (S430 of 2004) from, among others, the judgment of the Court of Appeal of 3 June 2004 dismissing the appeal from the 2003 Judgment. That special leave application, and others, are yet to be determined by the High Court.
33. In a stay application heard in the High Court on 29 March 2005, Justice McHugh stated that the debtor’s said application for special leave did not "have any prospects of success".
34. On 13 May 2005, following an assessment of costs, the Supreme Court gave judgments in relation to the costs which the debtor was ordered to pay the applicant creditors in proceedings:

(a) 1973 of 2001 (being the proceedings before Justice Palmer which gave rise to the 2003 Judgment, including an application to the Court of Appeal on 10 July 2003) in the amount of $155,522.69; and

(b) 41053 of 2002 (being the proceedings for leave to appeal from earlier orders made by Justice Palmer, which were dismissed with costs by the Court of Appeal on 4 July 2003) in the amount of $9,006.40.

35. The circumstances in which these judgments were obtained are more fully set out in paragraphs [35]-[43] of the affidavit of Tania Maree Noonan sworn 25 January 2006.
36. The debtor has failed to pay the amount, or any of it, owing by her on these judgments.

Bankruptcy proceedings

37. On 17 June 2005 the applicant creditors caused a bankruptcy notice to be issued by the Official Receiver for the Bankruptcy District of New South Wales (Bankruptcy Notice NN 1906 of 2005), claiming a total debt of $164,529.13 from the respondent debtor founded on the above judgments.
38. On 2 August 2005 the respondent debtor filed an application to set aside the Bankruptcy Notice dated 1 August 2005 in Proceedings No. SYG 2039 of 2005 in the Federal Magistrates Court of Australia at Sydney. On 2 August 2005, Registrar Segal in the Federal Magistrates Court extended time for compliance with the bankruptcy notice until 9 August 2005.
39. On 30 September 2005, the respondent debtor’s application to set aside the Bankruptcy Notice was dismissed, with indemnity costs, by Federal Magistrate McInnis.
40. On 2 November 2005 the applicant creditors filed the Creditor’s Petition in these proceedings alleging failure by the respondent debtor, on or before 30 September 2005, to comply with the requirements of the Bankruptcy Notice served on her on 14 July 2005.
41. At the first return of the Petition on 8 December 2005, Registrar Hedge in the Federal Magistrates Court made the following orders:

(a) The respondent debtor to file and serve any interim motion or application and affidavit in support to transfer the proceedings to the Family Court, together with any notice of opposition and affidavit in support in the above proceedings, by 23 December 2005.

(b) The applicant creditors to file and serve any affidavit on which they rely in respect of transferring the proceedings to the Family Court, or in reply, on or by 25 January 2006.

(c) The respondent debtor to file any further affidavits on or by 6 February 2006.

(d) The proceedings to be stood over to 14 February 2006 at 10.15am.

42. On 23 December 2005 the respondent debtor filed her Notice of Intention to Oppose the Petition, Notice of a Constitutional Matter and her Application to Transfer the bankruptcy proceedings to the Family Court of Australia.
43. On 14 February 2006 the Petition and the respondent debtor’s applications were listed before Registrar Hedge and, on the basis that the parties were ready to proceed, were referred before Federal Magistrate Lloyd-Jones. On that date, the matters were specially fixed for hearing before Federal Magistrate Lloyd-Jones on 21 March 2006.

Reasons

11.	This matter was originally referred to me by Registrar Hedge on 14 February 2006 at the request of the parties to hear the application filed by Ms Samootin on 23 December 2005. Ms Samootin sought to have the matter transferred to the Family Court pursuant to ss.3(a)(c) and 35(2A) of the Bankruptcy Act 1966 (Cth) ("the Act") and s.90AC of the Family Law Act 1975 (Cth), so that it may be heard with proceedings already listed in that Court, in the matter of the marriage of Shea/Samootin, SYF5191/1993.
12.	In Ms Samootin’s opening submissions, she advised the Court that she would not press that application. This was the first time the applicants or the Court had been advised of this. When I asked Ms Samootin why she was withdrawing her application, she said that she was not, but she would not press the issue.
13.	At the conclusion of Mr Stoljar’s oral submissions, he indicated that he apprehended from a statement made by Ms Samootin during the morning that the application of the transfer to the Family Court was no longer pressed. At that point however, Ms Samootin submitted that she had not formally withdrawn her transfer application and that she now intended to proceed with it. As detailed above in [2], that application was filed on 23 December 2005. On the same date, Ms Samootin filed a notice of intention to oppose petition, making reference to the Family Court proceedings, and seeking interim or procedural orders for the transfer.
14.	The grounds upon which Ms Samootin seeks to transfer the proceedings to the Family Court are not entirely clear. I have adopted Mr Stoljar’s response to the transfer application in the "Applicant Creditors’ Submissions in Respect of Transfer to the Family Court". Mr Stoljar identified four issues (at [15]):

(a) the applicant creditors had the opportunity, but did not avail themselves of it, to consent to their joinder to the Family Court Proceedings and thus hold security over the respondent debtor’s estate under s 79 of the Family Law Act; Paragraphs 11(i) and (iii) of the respondent debtor’s notice of intention to oppose petition filed 23 December 2005, pp 8-9.
(b) the debt owing to the applicant creditors by the respondent debt or ought be transferred to the Family Court Proceedings to be dealt with as a debt in any future property settlement in the Shea/Samootin marriage under s 79 of the Family Law Act; Paragraph 10(i) of the notice of intention to oppose petition filed 23 December 2005, p 10.
(c) the Court has power and jurisdiction to transfer the proceedings under s 35A of the Bankruptcy Act and s 90AC of the Family Law Act; and
(d) the Court ought exercise its discretion under the above provisions to transfer the proceedings to the Family Court.

15.

The applicants do not dispute that the Court has jurisdiction under s.35A of the Act to transfer the proceedings to the Family Court. However, Mr Stoljar submits that contrary to the respondent’s contention, s.90AC of the Family Law Act does not confer power or jurisdiction on the Court to transfer the proceedings. That section provides:

(1) This Part has effect despite anything to the contrary in any of the following (whether made before or after the commencement of this Part):
(a) any other law (whether written or unwritten) of the Commonwealth, a State or Territory,
(b) anything in a Trust deed or other instrument.
(2) Without limiting subsection (1), nothing done in compliance with this Part by a third party in relation to a marriage is to be treated as resulting in a contravention of a law or instrument referred to in subsection (1).

16.	Mr Stoljar then addressed me on the exercise of the Court’s discretion to transfer the proceedings. He referred to Re Sabri; Ex parte Sabri v Brien (1995) 60 FCR 131 ("Re Sabri") in which Davies J made observations about how the Federal Court could exercise its discretion under s.35A of the Act to transfer proceedings to the Family Court. The primary developmental consideration outlined by His Honour was whether there would be a likelihood of conflict, or the appearance of conflict, between the orders of the Federal Court and those of the Family Court, if the matter were not transferred and separate orders made. Mr Stoljar submitted that in this matter, there was no potential conflict between the orders, pending proceedings in the Family Court and bankruptcy proceedings in this Court, which would warrant this Court exercising its discretion to transfer the matter. Further, that there was no factual or other question such that it was particularly appropriate that the Family Court should resolve the issues raised in the applicants’ creditor’s petition: see Re Boscolo: Ex parte Botany Council (1996) 136 ALR 623 ("Re Boscolo") per Sackville J. It was submitted that just because Family Court orders might need to be taken into account in determining the creditor’s petition, or in proceedings after a sequestration order has been made, does not imply inconsistency between future orders of the Family Court or the sequestration order (if it be made).
17.	Mr Stoljar referred to Ms Samootin’s Family Court application, seeking an injunction to prevent those proceedings from continuing. Mr Stoljar submitted that if Ms Samootin had filed a different application seeking to have the applicant creditors joined as respondents, that had already been dismissed by Her Honour Boland J on 5 September 2005.(unpublished judgment in Exhibit "TMN 1", tab 14 and 15, pp.141.54, 149.1)
18.	Ms Samootin sought leave to appeal against the judgment of Boland J and that appeal was determined on 3 May 2006 when the application was dismissed.
19.	Mr Stoljar submitted that the significant issue in those proceedings was that the debt in respect of which the creditor’s petition was issued are not matrimonial debts, but were incurred by Ms Samootin through Court proceedings in her own name. Those proceedings were initiated after the marriage came to an end and in which Ms Samootin’s former husband was a defendant.
20.	Justice Boland held in Her Honour’s judgment of September 2005:

47. The evidence before me does not suggest it is reasonably necessary or reasonably appropriate to make an order sought by the wife to affect a division of the property between the husband and the wife.
51. The practical consequence for the orders sought by the wife would be to the effect a stay of the bankruptcy proceedings pending determination of the s 79 proceedings. That does not, on the material before me, appear just and equitable.
52. Ms Wagner and Mr Holmes, who are complete strangers to the litigation in this Court, have a judgment of the Supreme Court of New South Wales which has not been stayed. The stay application has been taken to a level of an application to the High Court of Australia and been refused. They are entitled to the fruits of their judgment.

21.	Mr Stoljar submitted that the practical consequence of an order to transfer these proceedings would be a determination that would defer these proceedings pending the outcome of the accounting ordered by the Family Court, numerous other applications and the proceedings in the High Court, the Supreme Court, and the Family Court. He submitted that a stay order could be in order of years. His Honour McHugh J of the High Court expressly refused to stay the execution of Palmer J’s judgment, including the costs orders, which was the subject of the bankruptcy notice and the creditor’s petition: Samootin v Shea & Ors [2005] HCATrans 181.
22.	In respect of the exercise of my discretion as to whether to transfer the proceedings under s.35A of the Act, I have been referred to Re Sabri and Re Boscolo. I pay particular attention to the latter.
23.	In Re Boscolo, His Honour Sackville J discussed Re Sabri, which was a transfer application, regarding a risk that orders which were sought by the trustee would conflict with the orders that might ultimately be made by the Family Court. Justice Sackville summarised Re Sabri, in Re Boscolo at 625:

There, a sequestration order had already been made against the debtor's estate. The transfer related to proceedings brought by a trustee for the recovery of the very property which had been the subject of specific orders in the Family Court. If the trustee succeeded, the likelihood was that orders would be made which would conflict or, at least, appear to conflict with those previously made by the Family Court in relation to the same property.

The issue in Re Sabri related to real property. The trustee brought proceedings in respect of dealings with the matrimonial home, while the Family Court had already made orders regulating the disposal of that home. Justice Sackville continues in Re Boscolo at 625 and 626:

In the present case, the issue is whether a sequestration order should be made on the creditor's petition. That involves determining whether, inter alia, the debtor has committed an act of bankruptcy (see s43(1)(a)) and, if so, whether a sequestration order should be made (see s52(1)). It may also involve determining whether the debtor is able to pay her debts: see s52(2)(a). A sequestration order will not involve, in my opinion, any conflict with the restraining orders made by the Family Court against the debtor.

In Re Boscolo, His Honour held that the proceedings should not be transferred.

24.	Since the hearing in this matter on 27 April 2006, solicitors for the applicants, with the consent of the respondent, forwarded advice to my chambers that the respondent’s notice of appeal, seeking leave to appeal from the decision of Boland J of the Family Court, was listed for hearing before the Full Court of the Family Court (Bryant CJ, Kay and Coleman JJ) on 3 May 2006. On that date, the Full Family Court delivered an ex tempore judgment dismissing the application for leave to appeal. At the time of completing this judgment, I have not yet had the advantage of reading the Full Family Court’s written reasons. However, the dismissal is relevant to the exercise of my discretion in respect of Ms Samootin’s application to transfer the bankruptcy proceedings to the Family Court.
25.	Before exercising my discretion in determining whether to transfer these proceedings to the Family Court, I am obliged to take into account the following issues. First, this is not a matrimonial debt. Secondly, there does not appear to be any risk of conflict between a set of orders made in the Family Court and this Court. Therefore, the need to transfer the matter to the Family Court to avoid this conflict does not exist. In the circumstances, this is the appropriate Court to deal with the creditor’s petition and justification for the transfer does not exist.
26.	Consequently, the respondent’s application filed on 23 December 2005 to transfer these proceedings to the Family Court is dismissed. As I have noted at [10] above, on 10 January 2006, the solicitors for the applicants wrote to the respondent inviting her to withdraw her application to transfer the proceedings on the grounds, inter alia, that the application constituted an abuse of process. Also that the applicants reserved their right to seek cost orders against the respondent on an indemnity basis. The respondent declined that invitation and elected to proceed with her application.

Notice of a constitutional matter

27.	On 23 December 2005, the respondent filed in these proceedings a notice of a constitutional matter, in which she alleged that the second applicant, Mr Holmes, did the following for the purposes of obtaining cost orders against the respondent:

a) Joined himself to Supreme Court proceedings 1973/2001 (Equity Division);
b) Joined himself to Supreme Court proceedings 11966/2005 (Common Law Division).

Ms Samootin alleged that this contravenes s.51(xxxi) of the Commonwealth of Australia Constitution Act ("the Constitution"), which provides for the acquisition of property "on just terms" from any state or person In the notice, Ms Samootin set out the history of all of the proceedings in considerable detail over 122 paragraphs, under the heading ‘Facts of the Matter’. This substantially repeats the information contained in [10] and [11] above albeit in greater detail. That detailed chronology and factual background does not contain any information that significantly alters the general understanding of the issues being pursued by the respondent.

28.	It has also been brought to my attention at the directions hearing before me on 14 February 2006, Ms Samootin had filed on 21 February 2006 a notice of a constitutional matter in the High Court proceedings S430/2004 and S280/2005 (to which the first and second applicant creditors are the fifth and sixth respondents respectively), and a summons seeking leave of the High Court to include her application before the Court by a notice of a constitutional matter. I was advised that in that notice, the respondent reiterated her contention that Mr Holmes was joined by Palmer J to the Supreme Court proceedings (file number 1973/2001) in order to obtain costs orders against her. Further that this joinder was a contravention of s.51(xxxi) of the Constitution. I was further advised that a return date for the summons has yet to be fixed.
29.	In respect of s.78B of the Judiciary Act regarding the service of the notice of a constitutional matter, the respondent records in that notice that four parties were notified. They are the first and second applicant creditors, together with the Commonwealth Attorney-General and the New South Wales Attorney-General. No other State Attorney-General was named in the notice and there is no evidence before the Court that other than the four named parties, any other notices were issued. At the hearing on 14 February 2006, Ms Samootin tendered a letter from the Australian Government Solicitor, dated 19 January 2006, which indicated that the Commonwealth Attorney-General would not be intervening in these or any of the other of Ms Samootin’s proceedings in the Supreme Court and the Family Court. That correspondence also indicated that the Commonwealth Attorney-General would not be applying to have any of these matters transferred to the High Court.
30.	The solicitors for the applicants advised the Court that despite requests to Ms Samootin for copies of correspondence between herself and the Commonwealth and New South Wales Attorney-Generals in respect of Ms Samootin’s notice of a constitutional matter filed in these proceedings, they had not received any. They had only received the Australian Government Solicitor’s letter referred to above. The applicants’ solicitors reserved the right to make further submissions in respect of the contents of that material when they receive it.
31.	Mr Stoljar submitted that on the basis of the material currently before the Court, it should be satisfied that it is entitled to proceed to determine the creditor’s petition and applications in these proceedings on the basis that the requisite notice of the respondent’s claim has been provided to both the Commonwealth and New South Wales Attorney-Generals. Also that a reasonable time has elapsed since the New South Wales Attorney-General received notice of these proceedings.
32.	The affidavit of Tania Maree Noonan, sworn on 25 January 2006 at [30] to [34] sets out the circumstances of the joinder of the second applicant creditor (Mr Holmes) to the Supreme Court proceedings 1973/2001. The second applicant creditor was joined as a defendant to those proceedings on the respondent debtor’s own application to join ‘Northern Beaches Legal Service’ as a defendant to those proceedings. The second applicant creditor purchased the goodwill of the practice of the first applicant creditor at some time considerably later than the date of the transaction in question in the Supreme Court proceedings. Although, as found by Palmer J, the respondent debtor made no allegations against the second applicant creditor for wrong doing on his part in the proceedings, and no basis was shown in the evidence upon which Mr Holmes could be liable for any wrong doing the first applicant creditor may have committed in relation to the plaintiff as alleged: Samootin v Shea & Ors (No.2) [2003] NSWSC 695. Those matters were not evident at the time of Mr Holmes’ joinder and, in any event, were relevant considerations in the Court’s exercise of its discretion as to whether or not an award of costs against the respondent debtor. Mr Stoljar submits that the joinder of the second applicant creditor as an "otherwise proper party" to the proceedings was appropriate and did not convene the provisions of part 54A, r.4(3) and 4(4) of the Supreme Court Rules.
33.	The affidavit of Tania Maree Noonan, sworn on 25 January 2006, sets out the circumstances in which the applicants entered judgment against the respondent in Supreme Court proceedings 11966/2005. (Affidavit of Ms Noonan at [35]-[39]) Further that the total debt they claimed the respondent owed was $164,529.13. The amount of $9,006.47, the subject of judgment entered in proceedings 11966/2005 is only claimed by the first applicant creditor.(Affidavit of Ms Noonan at [43]) The balance of the total debt claimed of $155,522.69 is claimed jointly by the first and second applicant creditors.
34.	The essential element of the Ms Samootin’s complaint is the joinder of Mr Holmes, to Supreme Court proceedings 1973/2001 and 11966/2005 for the alleged purposes of obtaining costs orders against her: see [27] above. Aside from the constitutional issue, Ms Samootin also contended that this contradicts r.4(3) of the Supreme Court Rules 1970 (NSW). The difficulty with that proposition is that Ms Samootin herself made an application to join Mr Holmes (the sixth defendant to the Supreme Court proceedings). This occurred when she sought to join the "Northern Beaches Legal Service" to those proceedings. However, that was a business name of which Mr Holmes was a proprietor and was carrying out the business at the relevant time. As the Supreme Court Rules do not permit an unincorporated business name to be named as a party, the proprietor of the business is the appropriate party to be joined. Justice Palmer thus made the relevant order joining Mr Holmes. I note that this alleged constitutional issue was not previously raised by Ms Samootin before Palmer J, the Court of Appeal in the Supreme Court of New South Wales, or McInnis FM (in her application to set aside the bankruptcy notice).
35.	The Judiciary Act s.78B notice to the High Court was not filed until 26 February 2006. I further note that there has been no complaint in respect of the legislative powers of the State of New South Wales to pass the Supreme Court Act 1970 (NSW) and the Supreme Court Rules, although the alleged contravention has occurred under the operation of these legislative provisions. Section 78B of the Judiciary Act does not suggest that the mere assertion that a cause involves a matter arising under the Constitution or involving its interpretation, establishes that proposition: Re Finlayson; Ex parte Finlayson (1997) 72 ALJR 73 at [74] per Toohey J. Again, the Commonwealth and New South Wales Attorney-Generals have indicated that they do not wish to participate in the proceedings.
36.	I am satisfied that the notice of a constitutional matter filed on 23 December 2005 does not raise a genuine issue under the Constitution or as to its interpretation.

Application for adjournment

37.

There is no formal application filed in this Court by Ms Samootin seeking the hearing of the creditor’s petition to be adjourned. However this arose during submissions from the bar table by Ms Samootin during her opening address. I raised with her for clarification which matters she wished to put to the Court. Ms Samootin made a number of references to proceedings in the Family Court and in the High Court. She indicated to the Court that there remained outstanding submissions yet to be filed in the High Court in respect of the special leave applications. I put to Ms Samootin the following question:

Before we go to those, let us clarify that the application to transfer to the Family Court is abandoned or not being pursued, is that correct?

Ms Samootin responded:

Yes. I am just seeking an adjournment of the hearing.

38.	To put this in context, I believe it is necessary to briefly review the various steps leading up to the hearing of the creditor’s petition. A brief summary of that litigation history is as follows:

a) Judgment obtained by first and second applicant creditors against the respondent debtor in proceedings 11966/2005 in the Supreme Court of New South Wales on 13 May 2005;
b) A bankruptcy notice NN1906/2005 was issued on 17 June 2005 and served on the respondent debtor on 14 July 2006;
c) The respondent debtor failed to comply with the bankruptcy notice on or before 30 September 2005, or alternatively satisfy the Court that she had a counter claim, set off or cross demand equal to or exceeding the amount specified in the notice;
d) An application to set aside the bankruptcy notice was filed on
6 August 2005 seeking to either delay the effect of the bankruptcy notice or set it aside. Alternatively, to adjourn the application pending resolution of proceedings filed in the Supreme Court of New South Wales’ Court of Appeal on 14 September 2005. That matter sought to re-open a case and set aside the judgment of Palmer J of Samootin v Shea & Ors (No.2) [2003] NSWSC 695 ("the Palmer J decision") dated 1 August 2003;
e) Orders were made by a Registrar of this Court on 2 August 2005 extending the time for compliance of the notice up to and including 9 August 2005;
f) Further orders were made by this Court on 9 August 2005 when the matter came before a Federal Magistrate. His Honour ordered that the parties file and serve further evidence and fixed the matter for hearing on 29 September 2005.
g) The matter was heard by His Honour McInnis FM on
30 September 2005. On that date the application seeking to set aside the bankruptcy notice and/or extend the time for compliance was dismissed;
h) No application seeking review of the decision of McInnis FM has been filed;
i) The creditor’s petition was filed on 2 November 2005 and returnable on 8 December 2005;
j) On 23 December 2005, Ms Samootin filed a "Notice of Intention to Oppose Petition".

39.	A ground that would warrant an adjournment arises under s.33(1)(a) of the Act, which gives the Court power to adjourn any proceedings before it. Such a situation would arise if there was an appeal pending against the judgment relied on as foundation of the bankruptcy proceedings, provided that the appeal was based on genuine and arguable grounds: Ahern v Deputy Commissioner of Taxation (Qld) [1987] FCA 312; (1987) 76 ALR 137. The bankruptcy notice and subsequent creditor’s petition in these proceedings rely on a decision of the Supreme Court of New South Wales, 11968/2005, handed down on 30 May 2005. There is no evidence before the Court that this decision has been appealed in respect of validity. I acknowledge that the filing of an appeal against that decision is unlikely. Ms Samootin accepts that the debt is due and owing and does not cavil with any aspect of its quantum.(see Ms Samootin’s affidavit, sworn 22 December 2005, at paragraphs 2(h) and 3(xiii))
40.	The power to grant the adjournment of the hearing of the creditor’s petition is a broad discretionary one which must be exercised with a view to doing justice between the parties: s.33(1)(c) of the Act; Aveyratn v Trkulja (1998) 90 FCR 253.
41.	Mr Stoljar referred me to Samootin v Wagner & Anor [2005] FMCA 1512 per McInnis FM. Mr Stoljar submitted that many of the arguments that were first before McInnis FM, in an application to set aside the bankruptcy notice and/or extend time for compliance, were again agitated before this Court in this adjournment application. Samootin v Wagner & Anor at [2] states both "the adjournment of the application and the application to set aside and/or extend the time for compliance with the bankruptcy notice, relates specifically to pending proceedings which have been filed by the applicant in the Court of Appeal in the Supreme Court of New South Wales." That was in relation to the Palmer J decision. Federal Magistrate McInnis refers to the Palmer J decision, reciting what is described as a tragic case for all involved in it: Samootin v Wagner & Anor at [20]. His Honour cites the Palmer J decision at [20]:

2. The reality is that, while Ms Samootin’s share of the net proceeds of sale of her jointly owned former matrimonial property was invested in the properties the subject of these proceedings and her name did not appear on the title to those properties, Mr Shea and Mr Deans have never denied that Ms Samootin had a beneficial interest in the properties commensurate with the proportion of her contribution to the parties’ equity in the properties. Indeed, at Ms Samootin’s request Mr Shea and Mr Deans signed an acknowledgement to that effect in July 1998, well before Ms Samootin commenced these proceedings.
3. As far as I am able to determine, these proceedings and the proceedings in the Family Court were never necessary in order to establish Ms Samootin’s interest in the properties because that interest was not in contest."

42.	Federal Magistrate McInnis goes on to say:

33. In the material relied upon by the applicant it is clear in my view that the application currently pending in the Court of Appeal of the Supreme Court of New South Wales seeking to re-open the case relies, as indicated earlier, upon claims of fraud and/or discovery of fresh evidence.
34. It is noted that in her material before this court, exhibit AS1 to the affidavit sworn by the applicant on 27 September 2005, that the applicant refers to paragraph 26 of a judgment of their Honours Bryson and Gyles JJ delivered on 16 May 2005. That judgment contains the following in paragraph 26:

"However, it is not proper to re-open consideration of what in substance was considered on the earlier appeal an application for leave to appeal. With such applications as with other interlocutory applications there ought to be some substantial new ground or circumstance warranting reconsideration before the power to give renewed interlocutory consideration is exercised."

36. The pending proceedings in the Court of Appeal on the face of it, I find, appear to be without merit and do not, in my view, appear to raise what could properly be regarded as an arguable case, given that both issues concerning whether there is fresh evidence and whether it could properly be argued that there is now evidence of fraud could not be sustained in circumstances where considerable time has passed. In any event, during the course of his judgment, Palmer J accurately and succinctly identified the grievance then felt by the applicant before his Honour and properly characterised that grievance as being one where the applicant felt she had been deprived of her home by the fraudulent conduct of others.

43.

The issue of depriving Ms Samootin of her home by fraud was one that was agitated before Palmer J and the fresh evidence really alleges similar points in a different form. The Court of Appeal found that, in any event, it could not alter the decision. Federal Magistrate McInnis described his assessment of the material and that it would appear to be a hopeless case: Samootin v Wagner & Anor at [38]. His Honour goes on to state at [44]:

In dismissing the application before this court it should also be noted that during the course of the submissions, what I take to be effectively an application to simply adjourn this application to set aside the bankruptcy notice was made. That application, in my view, is inextricably connected with the proposal that there should be some further delay, having regard to the pending appeal in the Court of Appeal of the Supreme Court of New South Wales.

44.

Similar applications are currently before this Court. I have on one hand, an application to adjourn today’s proceedings. On the other hand, Ms Samootin’s submissions that the creditor’s petition should not proceed in light of the pending proceedings. Since the decision of McInnis FM, the Court of Appeal has dismissed Ms Samootin’s application to re-open the Palmer J decision. Ms Samootin now institutes fresh proceedings, agitating in substance the underlying factual matters from previous proceedings.

45.

Mr Stoljar informed the Court that in respect of the adjournment application, he had anticipated that the respondent would adopt the approach she did. Instead of treating it as a separate issue, he proposed to distil the main issues using his outline of written submissions on the creditor’s petition, which would address the adjournment application. This overlapped the submissions made by Ms Samootin in respect of delaying the proceedings pending resolution of all proceedings in other jurisdictions. Therefore, it was decided to proceed to the notice of intention to oppose petition.

Notice of intention to oppose petition

46.

The notice of intention to oppose petition sets out 15 grounds, most of which are particularised. However, much of the material contained within the particulars relates to the factual background of this matter which are set out at [10] above. To provide a convenient framework for analysis, I have identified the following grounds that need to be addressed:

a) There are current proceedings in the Family Law Court of Australia, Sydney registry, proceedings SYF5191/93.
b) Anomalies in the creditor’s petition, item 1(a). This relates to the judgment obtained by the applicant creditors against the respondent debtor in proceedings 11967/2005 in the Supreme Court of New South Wales on 30 May 2005. Ms Samootin raised the issue of transfer from the Equity Division to the Common Law Division, and the joining of the second applicant creditor.
c) An anomaly in the creditor’s petition, item 1(b). This raises an alleged contravention of the "Supreme Court Procedures New South Wales Part 52, r.4(3)". Ms Samootin claimed this was a breach of the Australian Constitution s.51(xxxi), which resulted in the filing of Form 53 "Notice of a Constitutional Matter" under s.78B of the Judiciary Act.
d) An application against the applicant creditors and others pursuant to r.36.15 of the Uniform Civil Procedures Rules 2005 (NSW) to set aside the judgment for fraud.
e) Solvency.

47.	Details of the current proceedings in the Family Court, proceedings SYF5191/1993 are summarised in [9] of this judgment. The issue yet to be determined are proceedings under s.79 of the Family Law Act which have been deferred pending the outcome of other proceedings in the Supreme Court. The s.79 proceedings are listed for mention on 23 November 2006 before Boland J. Orders were made on 21 April 1999 by Judicial Registrar Knibbs of the Family Court, restraining Mr Shea and Mr Deans (as the first and second respondents to the Family Court proceedings) from dealing with the properties known as 24 and 26 Oxford Falls Road. Further, the Palmer J decision found that Ms Samootin held a beneficial interest in the two properties in proportion to her contribution of their purchase. That interest was not denied by Mr Shea and Mr Deans and hence is not in contest.
48.	I do not believe there is any dispute that the only equity that Ms Samootin has any entitlement to is her interest in the two properties. Her relative share in that equity will be ultimately determined in the s.79 proceedings before the Family Court. Clearly, Ms Samootin has a cause of action to resolve that entitlement and the trustee in bankruptcy would pursue the prosecution of that cause of action if a sequestration order was made. In this notice of intention to oppose petition Ms Samootin did not specifically refer to or identify other proceedings still to be resolved. In particular, I refer to the special leave applications before the High Court and the recently filed action in the Supreme Court seeking to re-open the Palmer J matter. This issue is addressed in further detail below at [65] to [72] inclusive.
49.	The issues raised above at [46] in (b) and (c) concern the transfer of proceedings previously before the Equity Division of the Supreme Court to that Court’s Common Law Division. The nature of the complaint is not clearly stated but appears to object the validity of the judgment obtained by the applicant creditors against the respondent debtor in proceedings 11967/2005. Ms Samootin alleged anomalies in respect of this judgment, but did not specifically identify or particularise the nature of those alleged anomalies. The written submissions and supporting affidavit material filed in Court by her raise complaints about associated proceedings being transferred in an alleged strategy by the applicants, and possibly other parties, to gain a more beneficial costs order arrangement. I am not satisfied that any document accurately reflects the specific allegation or a connection between the disparate proceedings which would lead to the alleged anomalies in the decision of proceedings 11967/2005. Numerous options have been pursued by Ms Samootin to challenge the various decisions that form the overall body of this litigation. Other than the final resolution of the special leave applications, all these avenues have been pursued without success by Ms Samootin.
50.	The new application referred to above at [46] in (d) is the statement of claim filed on 7 December 2005 in the Equity Division of the Supreme Court in proceedings 6169/2005. This is an application to set aside a judgment on the grounds that it was obtained by fraud. These proceedings appear to have been filed in conjunction with the notice of a constitutional matter. As I indicate at [67] and [71] below, it was the view of the Court of Appeal that the material submitted in support of the allegations of fraud was available to Palmer J at the time of that hearing in 2003, and that there was an appropriate opportunity to ventilate this issue at that time.
51.	The question of Ms Samootin’s insolvency is considered in detail in [55] to [64] below.
52.	The respondent’s notice of intention to oppose petition is a lengthy document which contains a mixture of historical background and quotes on legal principles on a range of issues, which I have attempted to briefly summarise at [46] above. I acknowledge the difficulty that the respondent faces as a self-represented litigant, pursuing multiple proceedings in a range of jurisdictions without legal assistance. A number of the issues raised in this notice have also been brought to the Court’s attention in other applications, filed in an attempt to avoid the determination of the creditor’s petition and a subsequent sequestration order. I have not identified any new issue raised by this application which I have not considered as part of the other applications currently before this Court.

Creditor’s petition

53.	The substantial issue in this case is whether a sequestration order should be made on the creditor’s petition which was filed on 2 November 2005. Before making that order, I must be satisfied that:

a) The debtor has committed an act of bankruptcy (s.43(1)(a) of the Act);
b) The respondent debtor is not solvent and not able to pay her debts (s.52(2)(a) of the Act);
c) For other sufficient cause a sequestration order not be made (s.52(2)(b) of the Act).

54.	The existence of the debt upon which the judgment and, in turn, the bankruptcy notice and the creditor’s petition were based, not subject of any genuine dispute:

a) Ms Samootin is not contesting that the judgment has been obtained and the amounts are unpaid.(see respondent debtor’s affidavit sworn 22 December 2005 at paragraphs 2(h) and 3(xiii))
b) Ms Samootin’s application for special leave to appeal to the High Court in respect of the Palmer J judgment in 2003 was refused for the reason that the application had no reasonable prospects of success: Samootin v Shea & Ors  [2005] HCATrans 732  per Hayne and Callinan JJ (also in affidavit of Tania Maree Noonan sworn 25 January 2006, tab 16).
c) The other applications, proceedings and appeals currently brought on by Ms Samootin relating to the Palmer J judgment, in so far as they have any practical or theoretical consequences on the judgment on which the bankruptcy notice and creditor’s petition are based, are not reasonably arguable and are without merit.
d) There is no other sufficient cause why the sequestration order ought not to be made.

55.

The first substantive issue raised in the respondent’s notice of intention to oppose petition is the question of insolvency. Mr Stoljar submits that the onus is on the respondent to establish that her assets are such as to enable her to pay the debt owing. Alternatively, that the assets are such that the money would be realisable in a "reasonably short period of time". Mr Stoljar submitted that that has not been established. Further, that the respondent did not establish that she has a surplus of assets to liabilities in any event.

56.

These principles are found in Knudsen & Yates trading as the Hargreaves Practice, in the matter of Sanders v Sanders [2003] FCA 1079 per Bennett J:

22. The onus of proving that the debtor is able to pay his debts is on Mr Sanders. As noted by Hely J in Australia and New Zealand Banking Group Ltd v Foyster [2000] FCA 400 (`Foyster') at [17] it is not sufficient for the respondent simply to establish that he has assets which exceed his liabilities in value. It must also be established that the assets are available to be realised and capable of ready realisation.
23. ...the debtor should then demonstrate that the petitioning creditor will be satisfied from the ordinary remedies such as execution and guarantee. Even if a debtor establishes solvency, the Court retains a discretion whether or not to dismiss the petition.
24. As pointed out by the Full Court in Trojan v Corporation of Hindmarsh [1987] FCA 276; (1987) 16 FCR 37 (`Trojan') at 48, a sterile demonstration of an ability to achieve payment which was not in reality likely to occur, may still result in a sequestration order...the situation where there is no alternative remedy because the assets are insufficient to meet the debt relied upon in the petition. In the present case, the evidence is that an attempt at execution demonstrated this was not an alternative remedy and that the assets were insufficient. There is no question of guarantee.

57.	Mr Stoljar submitted that the present case is of the kind in which there no alternative remedy exists. To the extent that the respondent debtor is entitled to an equitable interest in the real property, that interest will not be realised at any time in the near future and is not ascertainable by ordinary remedies such as an execution guarantee.
58.	Mr Stoljar referred me to Sandell v Porter [1966] HCA 28; (1966) 115 CLR 666 per Barwick CJ:

15. But the debtor's own moneys are not limited to his cash resources immediately available. They extend to moneys which he can procure by realization by sale or by mortgage or pledge of his assets within a relatively short time...(emphasis added)

59.	In Stankiewicz v Plata [2000] FCA 1185 per Drummond, Sackville and Dowsett JJ, Their Honours said:

31. Under the terms of the Family Court orders, the matrimonial home was to be sold "upon discharge of the mortgage". That event was expected to occur by February 1999, just under one year after the sequestration order was made...In our view, the evidence before the trial Judge was insufficient to establish that the bankrupt was able to pay his debts at the date the sequestration order was made.

The significant issue in Stankiewicz v Plata was that there was some possibility that the debtor would be able to discharge his debt within 13 months or so. There was a definite "end point" upon the sale of the home. In the present case, no definite end point exists. The properties have to be sold to realise the assets, however there is no definite end point. In Mr Stoljar’s first proposition regarding insolvency, he says that there are assets but the accounting procedure would need to occur and the hearing before Boland J is yet to conclude. It was submitted that it is unclear what will be the outcome of that accounting and what assets may be realised at the end of the process.

60.

On her own evidence, the respondent’s only material assets are her interest in the properties, 24 and 26 Oxford Falls Road. Ms Samootin has therefore not proved that, even if it is assumed that she has valuable interest in the properties at 24 and 26 Oxford Falls Road, such assets may be realised in a "relatively short time", so as to establish solvency.

61.

Mr Stoljar contends as a second proposition, that in any event, the respondent has not proved that she has a surplus of assets to liabilities on the disposal of the two properties. Mr Stoljar referred to Exhibit "C1" where the applicants have attempted to identify on the evidence available to them what may be the "balance sheet" as of the hearing date, in respect of the two properties. The valuation on which the respondent relies claims an amount of $1.4 million. It was submitted that for the sake of argument, there exists the following outstanding distribution to be made on realisation:

a) The outstanding balance of the mortgage owed to St George Bank is $241,163.00 as estimated in Exhibit "C2". It was noted that the respondent stated that she is not personally liable for that amount, which is secured by a mortgage over the properties, which presumably will need to be paid out. The question of who faces this liability will be dealt with on the accounting.
b) There are amounts owing for land tax and council rates to Warringah Council, interest payable.
c) Other debts owing, which include judgment debts owed to the first and second applicant creditors, $164,529.14; amount owed to Mr Deans for legal costs, $160,000; and amount owed to St George Bank also for legal costs $150,000. This results in Ms Samootin having "available" assets to meet her debts owing between $310,824.10 and $284,248.61.

62. Mr Stoljar submitted that the available assets seem to realise a deficiency of assets to liabilities in any event. In fairness to the respondent, Mr Stoljar referred to the statements that she made, that her husband may have in some way agreed to give her the benefit of his interest in the Oxford Falls Road properties, such that she would be entitled to that in addition to what might be said to be her own interest. The evidence in this regard is far from clear, but for the purpose on the development of the current argument, that assumption was accepted. Despite this concession, the "debtor’s maximum proportion of interest" could be substantially more than the figure contained in Exhibit "C1". It may even be double the figure contained in the Exhibit. Regardless of what figure is used, there remains a deficiency of assets to liabilities. Assuming that the interest payment is taken as being significantly beneficial to the respondent, there will still be a deficiency.

63.

Mr Stoljar submitted that the list of debts contained in Exhibit "C1" were taken from Ms Samootin’s own evidence in her affidavit of 22 December 2005 at paragraph 3(a)(xiii). It was acknowledged that there is an issue with respect to the veracity of the mortgage statement. However, that a repayment of $232.50 was paid weekly by Ms Samootin.

64. It was drawn to my attention that exist are a series of further costs orders which have been made, adverse to Ms Samootin, in the Supreme Court at various times. Those costs have not been assessed and no certificate of assessment has been issued. When assessing Ms Samootin’s potential liability, these matters could properly be taken into account. I accept Ms Samootin’s statement from the bar table that a Local Council was paid $20,000 and that the mortgage payments have been met at least in respect of the obligation owed by Ms Samootin. These adjustments need to be made and will occur during the accounting process. However, once the accounting adjustments are made, they do affect the calculation contained in Exhibit "C1" in any material way.

65. Ms Samootin, in support of her argument that a sequestration order should not by made against her, raised the existence of other proceedings associated with this case that are to be heard in other jurisdictions. She contends the proceedings in the Supreme Court, 1973/2001, "from which the debt, the subject of the creditor’s petition originated from are still going and have not been concluded". Mr Stoljar submitted that this claim was incorrect in so far as those proceedings involve the applicant creditors. Final orders for judgment for the applicant creditors, with costs, were made by Palmer J on 27 August 2003.(affidavit of Tania Maree Noonan, sworn 25 January 2006, Exhibit "TMN 1", tab 4, p.39) The applicant creditors were excused on 1 August 2003 from further attendance in those proceedings.(affidavit of Tania Maree Noonan, sworn 25 January 2006, Exhibit "TMN 1", tab 2, p.33) In such circumstances, the making of costs orders in the applicant creditors’ favour, prior to the conclusion of the accounting proceedings, was not an appropriate exercise of the Court’s power and discretion as to costs: r.5 of the Supreme Court Rules.

66.

On 7 December 2005, the respondent filed a statement of claim in the Supreme Court , proceedings 6169/2005, seeking to set aside the judgment of Palmer J on the ground of fraud.(affidavit of Tania Maree Noonan, sworn 25 January 2006, Exhibit "TMN 1", tabs 24, pp.211-238; respondent’s affidavit, sworn 22 December 2005, Exhibit "AS3") In her statement of claim filed in those proceedings and the affidavit filed in support of that pleading, Ms Samootin propounded that she had fresh evidence of the fraud committed against her. In particular, when 24 Oxford Falls Road was purchased, an alleged visit from Ms Wagner (first applicant) to Ms Samootin and an exchange of contracts for the purchase of 26 Oxford Falls Road.

67. This new material was ventilated before the Court of Appeal, in an application for leave to appeal against the orders made by Palmer J on 28 June 2004: Samootin v Shea & Ors [2005] NSWCA 398. Their Honours Giles and Bryson JJA, on dismissed the application, found that the suggested new evidence would have been available at the hearing before Palmer J. More importantly, Their Honours found that it would have not brought about a different result. The Court of Appeal found that there was no basis to re-open the appeal and it remained that leave should be refused. As a consequence of the Court of Appeal decision, the applicant filed a new statement of claim in proceedings 6169/2005. The applicant creditors (as the fifth and sixth defendants in those proceedings), and St George Bank Limited (as the seventh defendant), have filed notices of motion seeking to strike out and/or summarily dismiss those proceedings on the ground, inter alia, that they are frivolous and vexatious and constitute an abuse of process of the Court. Those motions were returnable before that Court on 10 March 2006. They have since been re-listed for 31 May 2006.

68. In Ms Samootin’s affidavit sworn on 18 April 2006, she draws this Court’s attention to proceedings before the High Court, S428/2004, S429/2004, S430/2004 and S280/2005. Submissions were made by Ms Samootin in respect of those special leave applications, indicating that the four remaining applications were consolidated and no further submissions would be accepted for filing. On 21 February 2006, Ms Samootin filed a summons in the High Court seeking leave of the Court to include in her application a notice of a constitutional matter concerning S430/2004 and S280/2005.

69. Ms Samootin said that she had some success in the High Court, although she did acknowledge a statement made by McHugh J who considered that that special leave application had no prospects of success. The success Ms Samootin referred to appears to be a decision of His Honour Gummow J in late 2005, which said that all remaining applications made by Ms Samootin would be dealt with in one hearing, rather than separately. There is no suggestion that any special leave application has had any success up to this point. The High Court has previously rejected a stay application: Samootin v Shea & Ors [2005] HCATrans 181 per McHugh J. The Family Court matter, SYF5191/93 in the marriage of Shea/Samootin, is listed before Boland J in November 2006.

70. In determining whether existing proceedings may have impact on a grant of a sequestration order, I was referred to Westpac Banking Corporation v Carver, in the matter of Carver [2003] FCA 221 per Beaumont J:

2. On behalf of the respondent debtors reliance has been placed upon the principle explained by Davies, Lockhart and Neaves JJ in Ahern v Deputy Commissioner of Taxation (Qld) [1987] FCA 312; (1987) 76 ALR 137 at 148 as follows:

"It is also well established that in general a court exercising jurisdiction in bankruptcy should not proceed to sequestrate the estate of a debtor where an appeal is pending against the judgment relied on as the foundation of the bankruptcy proceedings provided that the appeal is based on genuine and arguable grounds." (Emphasis added)
3. Their Honours went on to refer to the "broad principle" that:
"[B]efore a person can be made bankrupt the court must be satisfied that the debt on which the petitioning creditor relies is due by the debtor and that if any genuine dispute exists as to the liability of the debtor to the petitioning creditor it ought to be investigated before he is made bankrupt. Bankruptcy is not mere inter partes litigation. It involves change of status and has quasi-penal consequences."

71. Mr Stoljar submitted that while there are proceedings pending and while various applications have been made in various Courts, there are no reasonable and genuine grounds on which those proceedings will be successful in achieving the outcome Ms Samootin seeks. In regard to the application to re-open the hearing before Palmer J, it is useful to bear in mind Samootin v Shea & Ors [2005] NSWCA 398 it was held:

6. In her affidavits and submissions the claimant substantially traverses once more the bases for leave to appeal put to this Court on 3 June 2004 and before us on 16 May 2005. She propounds that she has fresh evidence of fraud practiced upon her, particularly in relation to when the property 24 Oxford Falls Rd, Beacon Hill was purchased and the circumstances of an attendance upon the solicitor Ms Wagner and the exchange of contracts for the purchase of 26 Oxford Falls Rd, Beacon Hill.

7. The evidence on which the claimant seeks to rely in these respects would have been available for the hearing before Palmer J, but more important we do not think that there is any prospect that, if put before the Court in an appeal, it would bring about a different result. Having considered all the materials and the submissions on which the claimant relies to re-open her application for leave to appeal, we consider that no basis has been shown for reopening and that it remains that leave to appeal should be refused.

72.

Mr Stoljar submitted that the proceedings now pending in the Supreme Court are new proceedings which essentially agitate the same matters and seek to put, presumably before a new Court, the re-opening application. A number of the defendants to those new proceedings have filed applications seeking to have them struck out on the ground that they are an abuse of process. Those strike out applications are currently listed for 31 May 2006.

73. Mr Stoljar submitted that if a bankrupt has a cause of action against any person, the trustee in bankruptcy can make a decision as to whether or not to prosecute the cause of action should the trustee be of the view that the proceedings are appropriate.

Conclusion

74.	The respondent seeks to transfer these current proceedings to the Family Court of Australia. She also opposes the creditor’s petition by a formal notice to that effect and raises the issue of constitutional matters in a further notice. Each of these notices and applications contain lengthy and detailed documents supported by affidavits and submissions which contain substantially similar information in greater detail. The focus of all documents addresses the circumstances surrounding the main dispute pleading ownership of two properties in Oxford Falls Road. This has resulted in a significant body of litigation. Although it is not expressly stated, the respondent is inviting this Court to go behind the previous judgments and in particular, the decision of His Honour Palmer J in the Equity Division of the Supreme Court of New South Wales. I believe that judgment has been subjected to review by two superior Courts, who have upheld the decision. It is inappropriate that I should accept Ms Samootin’s invitation. I acknowledge that Ms Samootin has great difficulty accepting the outcome of the Equity Division decision and has vigorously pursued that matter through every available avenue. A substantial part of all the documentation filed in these proceedings and the bulk of the oral submissions made during the hearing focussed upon the circumstances surrounding the ownership of those two properties, together with a series of unfortunate and highly distressing instances involving the death of one of her sons, the breakdown of her marriage, and a series of disputes with her ex-husband relating to all of these issues.
75.	I have examined in considerable detail the extensive applications, affidavits, written submissions supplemented by oral submissions during the hearing led by the respondent. I appreciate the difficulties she faces as a self-represented litigant presenting material in a complex and difficult litigation environment unaided by legal assistance. The vast bulk of all material submitted to the Court is a chronology and explanation of Ms Samootin’s participation in litigation focussing on the removal of her name from the title document of the properties. Only a small amount of the material before the Court directly addresses the application being considered. The application for an adjournment in the proceedings is not supported by any documentation and was made orally from the bar table during the course of oral submissions of Ms Samootin.
76.	On the material before the Court I must reject the application for transfer of these proceedings to the Family Court of Australia. In respect of the future progress of these proceedings in this Court I am not satisfied that a Constitutional issue arises. Neither can I find that there are grounds to adjourn the proceedings nor reject the creditor’s petition.

I certify that the preceding seventy-six (76) paragraphs are a true copy of the reasons for judgment of Lloyd-Jones FM.

Associate:

Date: 22 May 2006