A Federal Court judge has ordered the dismissal of former Bendigo councillor and anti-mosque campaigner Julie Hoskin's appeal against her bankruptcy.
A sequestration order declaring Ms Hoskin bankrupt was issued in the Federal Circuit Court in September, after her former lawyer Robert Balzola and his company attempted to recoup costs associated with her legal fight against Bendigo's proposed mosque.
Ms Hoskin was a City of Greater Bendigo councillor at the time she was declared bankrupt and resigned from the council as a result.
She also ran for the seat of Bendigo in this year's federal election with Fraser Anning's Conservative Australia Party, attracting 1.64 per cent of first preferences.
Ms Hoskin lodged a notice of appeal against the order in October, within the 21-day limit, but filed it with the incorrect registry.
She again filed it three days later, which was outside the time limit, although Federal Court judge Justice Robert Bromwich noted it was not "exceeded by a substantial margin".
Justice Bromwich ultimately found Ms Hoskin established some legitimate grounds for an extension of time, but these grounds of appeal would fail and the remaining six would be dismissed if also subject to the extension.
Ms Hoskin outlined 10 grounds in her notice of appeal, the first of which was that the primary judge, Sandy Street, failed to give adequate reasons for the order as he only stated general conclusions and gave no "path of reasoning".
But Justice Bromwich said, "In this case, while the reasons are sparse and perhaps short of ideal, I consider that they were adequate for the task at hand".
Ms Hoskin also claimed that she was denied a fair hearing because the judge did not give her a proper opportunity to consider and respond to the affidavit from Mr Balzola, and should have invited her to seek an adjournment.
Justice Bromwich ruled this ground of appeal had to fail, as there was evidence the affadavit was sent on September 3, 2018, 10 days before the hearing, although it warranted an extension of time.
"There is no principled reason for an adjournment to be invited or granted simply because a self-represented litigant has not read evidence furnished well before a hearing, especially when no sufficiently compelling reason was provided to the primary judge for not having done so," he said.
In her notice of appeal, Ms Hoskin said she was denied permission to cross-examine Mr Balzola in relation to a New South Wales Law Society investigation.
Justice Bromwich noted Ms Hoskin cross-examined Mr Balzola over 17 pages of transcript, and it was when she sought to ask questions as to whether Mr Balzola rejected adverse findings of the Law Society of New South Wales that the primary judge rejected the question, stating it was not relevant to the case.
Ms Hoskin said this was wrong because it was potentially an "other sufficient cause" for dismissing the creditor's petition.
But Justice Bromwich was not satisfied the primary judge had erred in disallowing the question, as he could not see how it could have any bearing on dismissing a creditor's petition and it seemed aimed as a generalised attack on Mr Balzola's character.
He said it warranted an extension of time, but this ground of appeal would fail.
Ms Hoskin represented herself in the matter last year.
She claimed the primary judge did not adequately explain the matters she had to address to persuade the court to not issue a sequestration order.
However, Justice Bromwich found that the suggestion a judge should give legal advice went beyond the principles established by case law.
Ms Hoskin's notice said the judge did not identify which parts of her affidavits he considered irrelevant and did not invite her to make submissions in relation to these, but this too was rejected by Justice Bromwich.
Ms Hoskin also claimed Judge Street terminated her cross-examination of Mr Balzola because she had not "stated any relevant question", without asking her how the questions were relevant or giving reasons as to why he considered them irrelevant.
But Balzola and Associates submitted that she was given extensive opportunity to cross-examine and was assisted by the primary judge, who reframed questions for her.
Justice Bromwich ruled a trial judge was not obliged to spell out why evidence was not relevant, so this ground for appeal had to fail, although there was sufficient basis for an extension of time.
It was also alleged the primary judge did not advise Ms Hoskin that she could apply for an adjournment to seek proper evidence on her solvency after it became apparent she did not understand the legal definition of solvency.
But Justice Bromwich said Ms Hoskin at no point indicated she did not understand solvency or insolvency, using the word insolvency in her objections, affidavit and oral questions and submissions.
"Ms Hoskin's real problem was not that she did not understand solvency and insolvency, but rather that she could not prove that she was solvent to the satisfaction of the primary judge," he said.
Another ground for her appeal was that the primary judge did not inform her she could apply for an adjournment to serve a subpoena on a witness.
However, Justice Bromwich agreed with Balzola and Associates that this witness' report was not relevant to the proceedings.
Ms Hoskin also argued she should not have been found insolvent because her failure to demonstrate her solvency was not proof of insolvency and Mr Balzola did not seek to prove this, but Justice Bromwich refused to grant an extension of time on this ground.
She also submitted the primary judge erred in not dismissing the matter because the debt Mr Balzola relied upon was allegedly connected to funds paid into a trust account that was the subject of a NSW Law Society investigation, and there was a public interest in not allowing the law firm to obtain a sequestration order in these circumstances.
Related: Mosque objectors apply to High Court
Justice Bromwich found that the judge made no error and Ms Hoskin's submissions suggested nothing more than the primary judge could have formed a different view, although he was prepared to grant an extension of time to appeal on this ground.
Justice Bromwich granted an extension of time on four of the grounds and ordered the notice of appeal addressing these be submitted within seven days.
But having found all grounds submitted by Ms Hoskin must fail or would have failed, he ordered the appeal be dismissed and Ms Hoskin pay Robert Balzola and Associates' legal costs.
Ms Hoskin had opposed the sequestration order because she said she was able to pay her debts, was not indebted to Robert Balzola and Associates, and a Law Society of New South Wales investigation into the lawyer's handling of funds was sufficient cause to not grant the order.
Her grounds for appeal argued that she received an unfair hearing; the primary judge erred in making a finding of insolvency; he did not give adequate reasons as to his finding; and he failed to dismiss the creditor's petition against her.
Ms Hoskin wanted an extension of time to appeal, the primary judge's orders be vacated and the creditor's petition be dismissed, or if not dismissed, then reheard.
In a submission to the Federal Court filed by her lawyer, it was said it was clear Ms Hoskin had not seen Mr Balzola's affidavit, but she was given just 15 minutes to read it.
It was claimed the size of the file was an "obvious explanation" as to why she had not received the affidavit in her inbox.
Ms Hoskin repeatedly stated she needed time to understand the affidavit, her submission said, and the judge ought to have invited her to apply for an adjournment, but instead the document was entered into evidence.
It was submitted Ms Hoskin was then unable to give any satisfactory objection.
"The Applicant was taken by surprise by a large body of evidence and was not given any opportunity - let alone any reasonable or meaningful opportunity - to lead evidence in response to the issues it raised or to make considered submissions on it," the submission said.
"Further, as an unrepresented litigant complaining of surprise and needing advice, it was incumbent on the primary judge to advise the Applicant of her procedural options in the circumstances."
It was also argued Ms Hoskin's cross-examination of Mr Balzola in relation to a Law Society investigation was relevant to the matter, but the primary judge disallowed this questioning.
Ms Hoskin submitted that it was incumbent on the primary judge to inform her of what she had to prove to the court, but he did not explain what constituted "sufficient cause" to not grant a sequestration order.
It was also asserted the primary judge did not identify which parts of Ms Hoskin's affidavits were irrelevant or ask her to give evidence as to their relevance, and as such, she could not make proper submissions.
During Ms Hoskin's cross-examination of Mr Balzola, it was claimed, the primary judge told her "You haven't asked any relevant question", but did not invite her to explain her questions' significance nor give reasons why he thought they were irrelevant.
In her submission, it was alleged this put Ms Hoskin in a "hopeless position" and was therefore unfair.
Ms Hoskin argued it was also apparent that she did not understand the legal meaning of solvency, but the primary judge did not explain it to her.
"Had his Honour properly explained to her the matters that she needed to prove about solvency, the Applicant would have appreciated the need for further evidence," the submission reads.
"It followed that the Applicant ought to have been put in the position to make an effective choice about whether to seek an adjournment."
It was submitted that was refused, without reason, an informal application for an adjournment to seek evidence, despite the primary judge knowing this would hinder her case.
Ms Hoskin claimed he should have advised her of the procedural tools available to her, but as this did not happen, she could not make an effective decision about how to conduct her case.
It was also argued that the finding of insolvency was "unnecessary and inappropriate", given the inability to pay debts was not a matter that required proof in support of a creditor's petition.
Ms Hoskin said she had also not quantified her assets and liabilities and as such, could not make a defence of solvency; the primary judge did not appear to consider her cash flow; and a failure to prove solvency was not proof of insolvency.
The primary judge, it was submitted, also did not provide sufficient explanation for his decision and no reference was made to the "volumes of evidence" provided by Ms Hoskin.
During the hearing Ms Hoskin argued Balzola and Associates' petition was based on a Local Court judgment that was predicated on a cost assessor's certificate that said she had paid $23,000, but she had paid at least $143,000.
While the court found there was insufficient evidence to "go behind the judgment", she submitted there was "other sufficient cause" to deny the sequestration order.
She submitted that there were deficiencies in the law firm's trust account that had led to a Law Society investigation, which meant it should not be permitted to pursue a sequestration order.
Robert Balzola and Associates
Robert Balzola and Associates submitted that the extension of time ought not be granted because there was a public interest in determining bankruptcy matters quickly; any extension would prejudice them and any of Ms Hoskin's other creditors; and her appeal lacked merit.
In response to Ms Hoskin's grounds for appeal, Balzola and Associates said she had sufficient opportunities to present evidence and make submissions.
"The obligation to afford a fair hearing is simply that, an obligation to ensure that a fair opportunity is given to the party to be heard, it does not extend to a Judicial officer providing advice as to the content and suitability of the evidence that has been filed and served, or to advise as to what submissions should be advanced," the submission prepared by counsel read.
The respondent said it was not incumbent on the primary judge to explain every legal principle and the impact of each piece of evidence.
It was also noted that the judge gave Ms Hoskin a week to pay her debt following the September 13 hearing, but she did not, which the respondent claimed was further evidence she was insolvent.
Balzola and Associates submitted Ms Hoskin never filed or served an application for an adjournment, despite being familiar with court procedures.
There was also a need for expediency in such proceedings, they argued, as there was an element of public interest in ensuring a person unable to pay debts did not continue to trade or accrue further debts.
The submission said the primary judge was satisfied Mr Balzola's affidavit was served on Ms Hoskin in sufficient time, and submitted there was no requirement for the court to ensure a party had read the evidence they had been served.
It was also argued that whether Mr Balzola was under investigation by the Law Society was irrelevant to the case.
"What may have been relevant was whether there were amounts paid by the Applicant to the Respondent that had not been brought to account," the submission said.
"Such a proposition was allowed by the Trial Judge to be put to Mr Balzola and squarely rejected by him."
The judge also found Ms Hoskin's challenge was "without substance".
Balzola and Associates said Ms Hoskin was given extensive time to cross-examine Mr Balzola, the judge reframed questions for her, and asked questions of Mr Balzola himself.
The submission also claimed the trial judge did not have to advise Ms Hoskin on what constituted "other sufficient causes", but nevertheless advised her of the real issues of the case.
It was put that the trial judge found there was no evidence to support Ms Hoskin's assertion that there were payments she had made that were not brought to account, and the judge also ruled that much of the evidence led by Ms Hoskin was "scandalous and vexatious".
Balzola and Associates also said Ms Hoskin bore the onus to prove her solvency but failed to do so, and there was no evidence to suggest she did not understand the meaning of the word; conversely, she had put forward arguments as to why she should be found solvent.
Their submission said the witness Ms Hoskin wanted to subpoena was not a compellable witness, and she had had sufficient time to approach the witness ahead of the hearing.
It was not incumbent on the judge to provide reasoning for each piece of evidence, it was also argued, and despite the volumes of evidence submitted, the amount that was relevant was sparse.
Balzola and Associates said Ms Hoskin failed to show in her submission that there was a miscarriage of judicial discretion when the judge found there was no "other sufficient cause" to warrant not granting the sequestration order.
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