FEDERAL COURT OF AUSTRALIA

Craven v Ready Flowers Pty Ltd [2015] FCA 297  

Citation:	Craven v Ready Flowers Pty Ltd [2015] FCA 297 	
		
Appeal from:	Application for extension of time:  Craven v Ready Flowers Pty Ltd & Anor [2012] FMCA 1128	
		
Parties:	GORDON CRAVEN v READY FLOWERS PTY LTD ACN 115 489 480

READY FLOWERS PTY LTD ACN 115 489 480 v GORDON CRAVEN	
		
File numbers:	QUD 156 of 2014
QUD 251 of 2014	
		
Judge:	LOGAN J	
		
Date of judgment:	5 March 2015	
		
Catchwords:	BANKRUPTCY AND INSOLVENCY – where applicant applied for an extension of time to seek leave to appeal from an interlocutory judgment of the Federal Magistrates Court of Australia – application for leave to appeal dismissed with costs – order for costs as taxed forms basis for bankruptcy notice – whether the circumstances warrant the exercise of the Court’s discretion under s 52(2) of the Bankruptcy Act 1966 (Cth) to not accept the Federal Court’s costs order as proof of the debt concerned and therefore not make a sequestration order against applicant’s estate – whether director of the respondent gave false evidence before the Federal Magistrates Court and perpetuated a fraud on the Federal Court such as to amount to a perversion of the course of justice – alleged deliberate omission of evidence as to payment arrangements between respondent and entity to whom the respondent’s business was sold – whether leave application before this Court determined on a premise known by the respondent to be false – whether fraud proved on the balance of probabilities

Held:  fraud and perversion of justice not proved – costs judgments was evidence of debt in reality – sequestration order made 

CONSTITUTIONAL LAW – parliamentary privilege – evidence on which applicant sought to rely included right of reply statement given by director’s wife to the Australian Senate subject to parliamentary privilege under s 16 of the Parliamentary Privileges Act 1987 (Cth) – statement inadmissible as its use would impeach a question of proceeding in Parliament   	
		
Legislation:	Bankruptcy Act 1966 (Cth) ss 40, 52
Evidence Act 1995 (Cth) s 140
Parliamentary Privileges Act 1987 (Cth) s 16
Bankruptcy Act 1883 (UK) s 7
Bill of Rights 1688 (UK) Art 9 	
		
Cases cited:	Briginshaw v Briginshaw (1938) 60 CLR 336 considered
Craven v Ready Flowers Pty Ltd & Anor [2012] FMCA 1128 cited 
Craven v Ready Flowers Pty Ltd [2013] FCA 1308 cited 
Craven v Ready Flowers Pty Ltd [2014] FCA 467 cited 
Craven v Ready Flowers Pty Ltd [2014] FCA 693 cited 
Craven v Ready Flowers Pty Ltd [2014] FCA 865 cited 
Makhoul v Barnes (1995) 60 FCR 572 applied
McDonald v McDonald (1965) 113 CLR 529 applied 
Petrie v Redmond (1943) St RQd 71 cited 
Re Flautau; ex parte Scotch Whisky Distillers Limited (1888) 22 QBD 83 applied 
Re Lennox [Ex parte Lennox] (1885) 16 QBD 315 applied 
Simon v Vincent J O’Gorman Pty Ltd (1979) 41 FLR 95 considered 
Wren v Mahony (1972) 126 CLR 212 considered  	
		
Date of hearing:	3-4 March 2015	
		
Place:	Brisbane	
		
Division:	GENERAL DIVISION	
		
Category:	Catchwords	
		
Number of paragraphs:	49	
		
QUD 156 of 2014		
		
Counsel for the Applicant:	The Applicant appeared in person	
		
Counsel for the Respondent:	Ms C Muir	
		
Solicitor for the Respondent:	Archibald & Brown	
		
QUD 251 of 2014		
		
Counsel for the Applicant:	Ms C Muir	
		
Solicitor for the Applicant:	Archibald & Brown	
		
Counsel for the Respondent:	The Respondent appeared in person 	

IN THE FEDERAL COURT OF AUSTRALIA		
QUEENSLAND DISTRICT REGISTRY		
GENERAL DIVISION	QUD 156 of 2014	
 
BETWEEN:	GORDON CRAVEN
Applicant
	
AND:	READY FLOWERS PTY LTD ACN 115 489 480
Respondent

JUDGE:	LOGAN J	
DATE OF ORDER:	5 MARCH 2015	
WHERE MADE:	BRISBANE	

THE COURT ORDERS THAT:

1.	The application be dismissed.
2.	The applicant pay the respondent’s costs of the proceedings.

NOTE:  These orders were made prior to the making of the sequestration order in proceeding QUD 251 of 2014.

Note:	Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA		
QUEENSLAND DISTRICT REGISTRY		
GENERAL DIVISION	QUD 251 of 2014	
 
BETWEEN:	READY FLOWERS PTY LTD ACN 115 489 480
Applicant
	
AND:	GORDON CRAVEN
Respondent

JUDGE:	LOGAN J	
DATE OF ORDER:	5 MARCH 2015	
WHERE MADE:	BRISBANE	

THE COURT ORDERS THAT:

1.	A sequestration order be made against the estate of Gordon James Craven.
2.	The applicant creditor’s costs be taxed and paid from the estate of the respondent debtor in accordance with the Bankruptcy Act 1966 (Cth).

The Court notes that the date of the act of bankruptcy is 2 May 2014.

Note:	Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA		
QUEENSLAND DISTRICT REGISTRY		
GENERAL DIVISION	QUD 156 of 2014	
 
BETWEEN:	GORDON CRAVEN
Applicant
	
AND:	READY FLOWERS PTY LTD ACN 115 489 480
Respondent

IN THE FEDERAL COURT OF AUSTRALIA		
QUEENSLAND DISTRICT REGISTRY		
GENERAL DIVISION	QUD 251 of 2014	
 
BETWEEN:	READY FLOWERS PTY LTD ACN 115 489 480
Applicant
	
AND:	GORDON CRAVEN
Respondent

JUDGE:	LOGAN J	
DATE:	5 MARCH 2015	
PLACE:	BRISBANE	

REASONS FOR JUDGMENT
(REVISED FROM TRANSCRIPT)
1		By a creditor’s petition presented to the Federal Circuit Court of Australia (Federal Circuit Court) on 13 May 2014, Ready Flowers Pty Ltd, a company incorporated in Australia (RFPL), applies for a sequestration order against the estate of Mr Gordon James Craven.
2		The act of bankruptcy alleged in the petition is a failure on the part of Mr Craven to comply on or before 2 May 2014 with the requirements of a bankruptcy served on him on 4 April 2014, or to satisfy a court having jurisdiction in bankruptcy, that he had a counter-claim, set off or cross-demand equal to, or more than, the sum claimed in the bankruptcy notice.  The bankruptcy notice concerned is based upon a debt grounded in an order for costs to be paid by Mr Craven to RFPL, made in this court on 5 December 2013 by Greenwood J, and a related certificate as to the amount of those costs subsequently issued by a registrar of this Court.
3		The bankruptcy proceedings were, by order of the Federal Circuit Court made on 23 May 2014, transferred to this Court.  The reason for that transfer will become apparent later in these reasons for judgment.  
4		On 5 December 2013, Greenwood J dismissed, with costs, an interlocutory application filed by Mr Craven on 11 December 2012, by which he sought leave to appeal from an interlocutory judgment of what was then known as the Federal Magistrates Court of Australia (Federal Magistrates Court) on a separate question, determined at the outset of a trial in that court in respect of proceedings instituted by Mr Craven against RFPL and another person;  see respectively Craven v Ready Flowers Pty Ltd [2013] FCA 1308 as to the leave to appeal application, and Craven v Ready Flowers Pty Ltd & Anor [2012] FMCA 1128, Jarrett FM (as his Honour then was), as to the interlocutory judgment given in the Federal Magistrates Court.  It will be necessary later in these reasons for judgment further to detail the issue determined in the interlocutory judgment in the Federal Magistrates Court, and also to give details of the basis upon which leave to appeal was refused.  
5		Mr Craven applied for an extension of time within which to apply to set aside the bankruptcy notice to which I have referred.  That application was heard and determined on 2 May 2014 by Dowsett J.  The application was unsuccessful.  On that day, for reasons his Honour delivered ex tempore, the application was dismissed with costs:  see Craven v Ready Flowers Pty Ltd [2014] FCA 467.  He then appealed against the order dismissing his application for an extension of time within which to apply to set aside the bankruptcy notice.  On 18 June 2014, Rangiah J ordered that Mr Craven provide security for costs in respect of the appeal in the amount of $10,000.  His Honour further ordered that day that if such security was not provided by 16 July 2014, the appeal would stand dismissed:  see Craven v Ready Flowers Pty Ltd [2014] FCA 693.  Mr Craven failed to provide the security by the date specified.  His appeal therefore stood dismissed.  
6		RFPL later sought its costs in respect of the dismissed appeal.  These were awarded to it by Rangiah J on 14 August 2014: see Craven v Ready Flowers Pty Ltd [2014] FCA 865.  
7		The bases upon which Mr Craven opposes the making of a sequestration order are set out in his notice of opposition.  They are these:
(1)	Proceeding QUD 156 of 2014 that the respondent has a counter claim, set off or cross demand, as is referred to in paragraph (40)(1)(g) of the Bankruptcy Act, have been instituted. 

(2)	Proceeding QUD156 of 2014, to set aside the judgment or order in respect of which a Bankruptcy Notice was issued to the respondent, have been instituted. 

(3)	The Form 2 application, QUD158 of 2014, for an extension of time to comply with the said Bankruptcy Notice is under appeal; QUD191 of 2014, by the respondent.  

(4)	Pursuant to the order of Justice Logan on 6 June 2014, this QUD251 of 2014 proceeding is to be heard at the same time as proceeding QUD156 of 2014, in November 2014 for two days, the dates to be fixed by the Court after consultation with the parties and following allocation of appellate jurisdiction cases for that month.  

8		The reference in paragraph (1) of the grounds of opposition to proceeding QUD 156 of 2014 is a reference to a proceeding instituted by Mr Craven against RFPL by the filing of an originating application in this Court on 15 April 2014; more as to the basis of that application shortly.  
9		The reference to a “counter-claim, set off or cross demand” in paragraph (1), as is referred to in s 40(1)(g) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act), seems to me to be based on a misconception, namely that it is possible to apply to set aside a bankruptcy notice in the context of opposing a creditor’s petition.  It is not possible to do this on the basis of a counter-claim, set off or cross-demand.  The existence of a counter-claim, set off or cross-demand is a subject for an application to the Court under s 40(1)(g) of the Bankruptcy Act.  As I have noted already, an application for an extension of time within which to make such an application was refused.  Further, Mr Craven’s appeal against that appeal has been dismissed.  
10		Even though the bankruptcy notice concerned has not been set aside, it does not follow that Mr Craven is precluded from contending, on the basis of circumstances proved by him, that those circumstances are such as to warrant the court not to accept the judgment of 5 December 2013, and the related costs certificate, as proof of the debt upon which the bankruptcy notice and for that matter the creditor’s petition are based.  It remains open to Mr Craven to prove that there are circumstances such that the Court should exercise the discretion possessed by a Court having jurisdiction in bankruptcy under s 52(2) of the Bankruptcy Act not to make a sequestration order against his estate:  see as to this Makhoul v Barnes (1995) 60 FCR 572 (Makhoul v Barnes).  That case establishes that, even where there is an earlier judgment of a court capable of supporting a bankruptcy notice, it does not necessarily follow that there is an issue estoppel constituted by a failed application to set aside the bankruptcy notice if the judgment concerned is questioned at the creditor’s petition stage, see in particular Makhoul v Barnes at 579 - 583.  It must, in my view, follow that, even though Mr Craven failed to secure an extension of time within which to set aside the bankruptcy notice concerned, and even though an appeal against that order was refused, he is not precluded from, on the hearing of the creditor’s petition, asking the Court to exercise its discretion not to accept the underlying judgment; ie the judgment of 5 December 2013, and related costs certificate, as proof of the debt concerned.
11		I propose, therefore, to proceed on the basis upon which Mr Craven, on a fair reading of his notice of opposition, asks that the Court proceed; namely, that the case is one where the circumstances are such that the Court should exercise a discretion not to treat the judgment concerned as proof of the debt and further to exercise a discretion consequentially not to make a sequestration order.  
12		I use the description “fair reading” having regard also to ground 2 of the notice of opposition and, further, to ground 4.  
13		Ground 3, in its reference to the extension of time application being under appeal, has been overtaken by the events which I have related.  It need not further be referred to.
14		Read together, and as I have observed, fairly, grounds 2 and 4 constitute opposition to the making of a sequestration order on the basis which Mr Craven pleads in proceeding QUD 156 of 2014.  That pleading is to be found in an amended statement of claim filed by Mr Craven on 20 June 2014.  
15		I mean no disrespect to Mr Craven in observing that, even in its amended form, the statement of claim is by no means a model of how to follow the pleading rules of this Court.  Even so, it is tolerably clear from the pleading that Mr Craven’s allegation is that the interlocutory judgment of the Federal Magistrates Court was procured by a fraud perpetuated by RFPL and, in particular, via the testimony before that court in affidavit and oral evidence of one of its directors, Mr Peter Hegarty.  It is alleged by Mr Craven that Mr Hegarty gave false evidence such that the resultant interlocutory judgment of the Federal Magistrates Court was based on a premise known to be untrue by RFPL (because Mr Peter Hegarty knew it to be untrue) with the result that there was, so Mr Craven alleges, a perversion of the course of justice.  His further allegation, reading the amended statement of claim fairly, is that this particular alleged fraud and perversion was perpetuated in this Court before Greenwood J by RFPL, in effect by knowingly permitting this Court to determine the leave to appeal application on the basis of a premise known by RFPL, and in particular Mr Peter Hegarty, to be false.
16		As a result, in QUD 156 of 2014, Mr Craven seeks, in effect, to have the judgment as to costs set aside on the basis of fraud.  He also makes a claim for damages in QUD 156 of 2014.  
17		Even in its originally-pleaded form, it was apparent to me, when QUD 156 of 2014 came before me for a directions hearing, and when it became known to me that there was an opposition to a bankruptcy proceeding in the Federal Circuit Court on the same basis, in effect, that it was desirable for the two proceedings to be heard together.  To that end, the Federal Circuit Court, upon joint application by RFPL and Mr Craven, transferred the bankruptcy proceeding to this court.  
18		It was originally envisaged that the two proceedings might be heard together in November 2014.  This did not prove to be possible, and instead, they were heard together on 3 and 4 March.  At the commencement of the hearing on 3 March 2014, and at my suggestion, the parties agreed that it was convenient for the issue as to liability, if any, in QUD 156 of 2014, to be heard first as an issue separate from any assessment of damages.  That was on the basis that if liability were not established, it would become unnecessary to consider any question of damages.  It was also on the basis that the pleaded grounds in respect of liability were, in effect, incorporated by reference in the notice of opposition to the making of a sequestration order.
19		A Court exercising jurisdiction in bankruptcy unquestionably has a discretion to go behind a judgment grounding the relevant debt.  A bankruptcy court does not do this as a matter of course; rather there must be a substantial reason proved by evidence for doubting whether there is a debt:  see Wren v Mahony (1972) 126 CLR 212.  The categories of case in which a bankruptcy court will go behind a judgment are not closed:  see Simon v Vincent J. O’Gorman Pty Ltd (1979) 41 FLR 95 at 111, per Lockhart J.
20		A well established example of when a bankruptcy court will go behind a judgment is where that judgment was procured by fraud, collusion, or a miscarriage of justice:  see Re Lennox [Ex Parte Lennox] (1885) 16 QBD 315;  Petrie v Redmond (1943) St RQd 71 (High Court of Australia).  As to this ground upon which a court will go behind a judgment, observations made by Lord Esher, Master of the Rolls, with whom Fry and Lopes LJJ’s agreed in Re Flautau, ex parte Scotch Whisky Distillers Limited (1888) 22 QBD 83 at 85 - 86, are enduringly apt:
If evidence is brought before the Court of Bankruptcy of circumstances tending to show that there has been fraud or collusion, or miscarriage of justice, the Court of Bankruptcy has power to go behind the judgment and to inquire into the validity of the debt.  But that the Court of Bankruptcy is bound in every case as a matter of course to go behind a judgment is a preposterous proposition.  There is no statute which imposes any such obligation on the Court of Bankruptcy.  Section 7 does no more than give a judicial discretion.

21		The reference by the Master of the Rolls in the passage quoted to s 7 was a reference to s 7 in the Bankruptcy Act 1883 (UK).  A like discretion is to be found in s 52 of the Bankruptcy Act.  It is that discretion which Mr Craven asks the Court to exercise.  
22		Going behind a judgment can permissibly entail a two-stage process;  the first being an inquiry into whether there is sufficient reason to question the existence of the debt concerned;  the second determining whether or not, in truth and reality, there is a real debt.  It is alternatively possible to consider those two issues together:  see Makhoul v Barnes at 584.  In this case, the parties chose to have the two heard together. Indeed that was the very basis of Mr Craven’s notice of opposition, incorporating by reference his grounds of pleading in QUD 156 of 2014.  RFPL, for its part, very fairly treated the notice of opposition as an endeavour by Mr Craven to do just this;  ie to show that there had been a procuring by fraud and miscarriage of justice of the costs liability constituted by the judgment of 5 December 2013, and the related, consequential registrar’s certificate as to the amount of those costs.
23		Some observations should be made in relation to Mr Craven’s ground of opposition based in fraud, which also constitutes the basis upon which he seeks to have the costs order set aside.  In McDonald v McDonald (1965) 113 CLR 529 at 532 to 533, Barwick CJ stated:
The discovery subsequent to verdict of admissible credible evidence, which could not have been sooner discovered by the exercise of reasonable diligence in the circumstances, and which is of such probative value and significance that, taken with the evidence already given at the trial, it will in all probability be decisive of the issues between the parties in a sense opposite to that of the verdict, is a ground for the granting of a new trial.  If the Court is satisfied that the fresh evidence fulfils these requirements, it will generally conclude that, therefore, the interests of justice demand that the issues be tried afresh.  In that event, the circumstances that the fresh evidence may tend to support the conclusion that the verdict was obtained by fraud, or by surprise, or by subornation of witnesses will not prevent the grant of a new trial on the ground of the discovery of fresh evidence, or require the Court to satisfy itself of the fraud, surprise or subornation of witnesses, as the case may be: McCann v. Parsons.  Nor, in my opinion, does that circumstance lessen in any respect the stringency of any of the rules which apply to the grant of a new trial upon the ground of the discovery of fresh evidence. The fresh evidence, though it suggests fraud, surprise or subornation of witnesses, must yet fully satisfy all the criteria laid down with respect to fresh evidence warranting a new trial although it may be that, in some cases, the tendency of the evidence to show fraud may make it more likely to be conclusive. In my opinion, it would be a misreading of Lord Buckmaster’s speech in Hip Foong Hong v H. Neotia & Co to conclude otherwise.

[footnote references omitted]

24		That case also establishes that fraud must be distinctly alleged and proved.  It is, both in the creditor’s petition proceeding and in QUD 156 of 2014, for Mr Craven to prove the fraud which he alleges.  As to that, the proceedings concerned are in each instance civil proceedings, albeit that bankruptcy proceedings involve – if a sequestration order is made - a change of status on behalf of the debtor to that of bankrupt, and significant restrictions flowing from the Act in respect of the bankrupt.  The standard of proof, in my view, though it is a civil one, is subject to the reminder offered by s 140(2) of the Evidence Act 1995 (Cth) (Evidence Act).  In other words, even though, in respect of each of the cases, the fraud alleged need only to be proved on the balance of probabilities (see s 140(1) of the Evidence Act), the court nonetheless may take into account, in deciding whether or not that fraud is proved, the nature of the cause of action, the nature of the subject matter of the proceeding and the gravity of the matters alleged.  Such matters are not, as Sir Owen Dixon remarked in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362, proved by inexact proofs or indirect references.  
25		It is necessary now to return to the interlocutory judgment of the Federal Circuit Court, which underpins the failed application for leave to appeal and the consequential costs order.  As it happens, final judgment in respect of that proceeding, now one in the Federal Circuit Court, has yet to be delivered.  I was informed by the parties in the course of the trial that they had received notice from the Federal Circuit Court that final judgment in respect of that proceeding was to be delivered by his Honour Judge Jarrett (as his Honour now is) tomorrow, 6 March 2015.  
26		Neither party sought an adjournment of the proceedings in this Court on the basis of the impending final judgment in the Federal Circuit Court; nor was it submitted that that imminence of final judgment otherwise had relevance.  Even so, one reason why I considered it desirable to give judgment today in respect of the proceedings in this Court was that, if it were concluded that the interlocutory judgment in the then Federal Magistrates Court had indeed been procured by fraud, such that the interlocutory judgment constituted a miscarriage of justice, there may be a question as to orders which ought then to be made, particularly at the request of Mr Craven, as against RFPL in relation to that proceeding in the Federal Circuit Court.
27		What then was the nature of the proceeding in, at the time, the Federal Magistrates Court, its procedural history and the interlocutory judgment given in that court?  As to these questions, I have been much assisted by a summary offered by Greenwood J in Craven v Ready Flowers Pty Ltd [2013] FCA 1308, under the heading “Background and introduction”, and “The elements of the interlocutory decision”.  The pleadings in the Federal Magistrates Court are in evidence before me; so, too, is that court’s reasons for judgment.  Having considered each of these, I am in agreement with the recitation of events and summary offered by Greenwood J under the headings mentioned.  I therefore incorporate these by reference.  
28		The interlocutory judgment delivered by Jarrett FM concluded against Mr Craven, and on the basis of evidence given as to the preliminary issue, that no estoppel arose against RFPL preventing it from denying that it was carrying on the Ready Flowers business.  Mr Craven sought to prove, in that court, as he did before me, that there was to be found in the evidence an assumption that persons dealing on the Internet through websites which included readyflowers.com.au, and other Ready Flowers related websites, would assume that they were dealing with an Australian company, namely RFPL.  On the basis of the evidence before him, Jarrett FM found that no estoppel arose.  In turn, Greenwood J found, in refusing leave to appeal, that there was no appealable error in the interlocutory judgment of Jarrett FM.  
29		Mr Craven did not distinctly, in the end, so I thought in the course of the trial, abandon a proposition that a sale, said on the evidence of Mr Peter Hegarty before the Federal Magistrates Court, and repeated in this court, of the business known as Ready Flowers by RFPL to Ready Flowers Limited (RFL) (incorporated in Hong Kong), was a sham.  This apart, his allegation was, in effect, that Mr Peter Hegarty had, by deliberate omission in evidence, oral and affidavit, before the Federal Magistrates Court, perpetuated, or created, and then perpetuated by corporate conduct in resisting leave to appeal in the Federal Court, a fraud.
30		That fraud was said to be constituted by an omission of evidence as to payment arrangements between RFL and RFPL.  In particular, Mr Craven contended that fraud, and that omission, arose from the fact – and it is a fact – that in some instances those who ordered flowers across the Internet from a Ready Flowers website found on their credit card statement an entry which recorded RFPL.  
31		Mr Peter Hegarty gave both affidavit and oral evidence in these proceedings.  I had the benefit, therefore, of observing him over the course of the two days of the trial, during which he was cross-examined by Mr Craven.  I am quite satisfied, on the basis of those observations, and also the evidence as to the conduct after February 2009 of the Internet selling of flowers in the business name Ready Flowers, that Mr Peter Hegarty gave truthful evidence.  I thought his oral evidence was given in a patient, measured way, even though Mr Craven’s questions were, again without any disrespect, at times rather difficult to follow.  The business was, I find, indeed sold in February 2009.  It was sold on the basis that it purported to be sold; in other words by RFPL to RFL.  RFL is a company controlled and managed by Mr Peter Hegarty’s son, Mr Tom Hegarty.  It is clear on the evidence, and I find, that the content, post February 2009, of Ready Flowers’ websites, is that of RFL. Contracts which are made over the Internet for the facilitation of the delivery of flowers are contracts which are made for that facilitation with RFL.  There is no sham entailed in the sale of the business.  
32		I accept Mr Hegarty’s evidence that after February 2009, RFPL did not conduct that Internet-based business of procuring delivery of flowers in response to requests made over the Internet by customers.  It was RFL which thereafter did that.  
33		Mr Craven has not shown that Mr Peter Hegarty gave knowingly false evidence to the Federal Magistrates Court prior to the giving of the interlocutory judgment by that court.  His affidavit evidence was certainly abbreviated.  It was, though, in paragraph 5, not false.  It was not RFPL which operated various Internet sites.  RFPL remained the holder of domain names, but it was RFL which operated those by agreement with RFPL.  Mr Craven cross-examined Mr Peter Hegarty before the Federal Magistrates Court gave the interlocutory judgment. Again, I am not satisfied that there was false testimony given such that a fraud was perpetuated, or was effected, on the Federal Magistrates Court.  It is apparent from the cross-examination, the transcript of which is before me in evidence, that Mr Craven was at the time well aware of the existence of the readyflowers.com.au website, and that there were credit card entries which showed RFPL.  As it happened, his questions did not descend in detail as to how that was so, such as would have permitted Mr Peter Hegarty to have given an explanation as to that subject in detail.  That detail was certainly given by him in his evidence before me.  Suffice it to say, it transpired, in the conduct, post-sale, of what was thereafter, I find, RFL’s business, that there were cost savings to be made by RFL if it utilised the merchant facilities already established with credit card operators by RFPL, rather than continue to utilise more expensive facilities available from banks such as Hong Kong and Shanghai Banking Corporation.  
34		Likewise, it is apparent on the evidence before me that there was a call centre arrangement in existence between RFL and Globe Valley Proprietary Limited (Globe Valley), another company controlled by Mr Peter Hegarty.  That company had previously provided call centre services to RFPL when it conducted the Internet-based flower delivery facilitation business.  Globe Valley continued to do this by arrangement with RFL after the sale of the business.  The arrangement with RFPL in relation to merchant facilities by RFL came about on and from April 2013.  That was after the Federal Magistrates Court gave the interlocutory judgment.  
35		Even if the Federal Magistrates Court had had before it evidence of an arrangement in relation to merchant facilities, and even if that had antedated the interlocutory judgment, and even if there had been evidence in relation to the call centre arrangement with the separate company, Globe Valley, that could not, in my view, in any event, have led to any different outcome in respect of the interlocutory judgment.  What would remain was an absence of sham, and further, no conduct on the part of RFPL that could give rise to an estoppel in any way, shape or form.  The websites concerned at the time and, for that matter, to this day, make it plain that it is RFL with whom one contracts when one places an order over the Internet.  That it turns out that one’s payment is processed via a merchant arrangement that RFPL has with credit card operators does not alter this.  
36		There were a number of items of evidence that Mr Craven introduced on the basis that they were “fresh”.  One of these I have already referred to; namely, RFL’s use of merchant facilities, including those of RFPL.  The second item of so-called fresh evidence was evidence given by Mr Peter Hegarty’s wife and fellow director of RFPL, Mrs Deborah Hegarty, in response to a speech made in the Australian Senate in relation to the Ready Flowers business.  
37		Mr Craven sought to rely upon a response given by Ms Deborah Hegarty pursuant to resolution 5(7)(b) of the Senate of 25 February 1988.  That particular Senate resolution creates a “right of reply”.  Ms Deborah Hegarty’s response was made in reply to a speech given by Senator Mark Ferner in the Senate on 14 May 2013:  see Hansard Senate Debates, Tuesday, 14 May 2013, page 2515, collectively with the response by Ms Deborah Hegarty, exhibit “GC1/6”.
38		Objections as to evidence were by agreement of the parties reserved to the delivery of the judgment.  Upon noticing in the course of the trial that Mr Craven was seeking to rely upon a statement given by Ms Deborah Hegarty to the Senate pursuant to the resolution mentioned, I raised with the parties a question as to whether in so doing Mr Craven was endeavouring, contrary to s 16 of the Parliamentary Privileges Act 1987 (Cth), and its provision in respect of the operation in respect of the Australian Parliament of Art 9 of the Bill of Rights 1688 (UK), to have this Court impeach or question a proceeding in Parliament.  In my view, the forensic use which Mr Craven sought to make of Ms Deborah Hegarty’s response to support the drawing of an adverse inference against RFPL would entail an impeaching or questioning of a proceeding in Parliament.  I therefore rule that neither the speech given by the Senator, nor Ms Hegarty’s response, is admissible in evidence.  
39		Even if that conclusion is incorrect, all that results from the response is a position consistent with Mr Peter Hegarty’s affidavit and oral evidence in these proceedings; namely, that RFPL had been used as a payment processing company in a business conducted after February 2009 by RFL.
40		As I have already observed in respect of the separate evidence given by Mr Peter Hegarty as to the payment processing, even if that evidence had been before the Federal Magistrates Court in 2012 at the time of the interlocutory judgment, that could not have led to any different result in relation to the ruling given with respect to no estoppel operating against RFPL with respect to Mr Craven’s allegation that it had conducted the business.  
41		Mr Craven also sought to rely upon a response statement given on behalf of readyflowers.com.au in March 2009.  This was evidence which was hardly fresh.  It was available to Mr Craven at the time of the proceedings before the Federal Magistrates Court.  Indeed, Mr Craven cross-examined Mr Peter Hegarty on this subject in that proceeding.  
42		What remains on the evidence before me is a business which was sold to RFL in February 2009.  
43		Mr Craven’s own review, which he chose to publish on 1 May 2009, of what allegedly occurred at a directions hearing held on 30 April 2009, in the Federal Magistrates Court before Jarrett FM, does no more than establish that a Mr Rough appeared for RFPL.  It does not show that there was any sham entailed in the sale of the business by RFPL to RFL.  
44		The evidence before me from Mr Peter Hegarty, which I accept, is that, after the sale, all of the employees of RFPL were terminated.  All that remained in respect of RFPL were two working directors, him and his wife.  RFPL, after the sale, derived income from permitting RFL to operate various Internet domain names which RFPL had registered to it and then, more latterly, by allowing RFL to use its merchant facilities.  
45		Mr Craven also gave evidence before me.  I do not consider that, Mr Craven was dishonest, either in evidence or submissions, only mistaken.  By that I mean that from the very outset, when he took it upon himself to institute proceedings in the Federal Magistrates Court, he has laboured under a misapprehension as to RFPL.  He has endeavoured to piece together a scenario to fit a conception, or better a misconception, which he has.  That it is RFPL which conducts, or is knowingly concerned in the conduct, of a business which since February 2009 has been conducted by RFL.  RFPL, after that date, has been nothing more than a service provider to a business conducted from Hong Kong by RFL.
46		Particularly having regard to the factors which intrude when deciding whether a finding of fraud should be made, I am not satisfied that Mr Craven has established that any fraud was perpetuated on the Federal Magistrates Court by RFPL via the testimony of Mr Peter Hegarty or otherwise, or continued before Greenwood J in the Federal Court.  I am not satisfied that Mr Craven has established a reason to question the judgment by which costs were ordered, much less that he has established any fraud at all.  I am, therefore, satisfied, on the basis of the judgment given on 5 December 2013, read in conjunction with the consequential certificate as to the amount of the costs, that there is a debt.
47		I am further satisfied on the evidence that that particular debt remains owing.  It has not been satisfied by Mr Craven.  I am further satisfied that the creditor’s petition has been presented with the authority of the company RFPL.  Indeed, Mr Craven’s questioning of Mr Peter Hegarty assumed as much in his questioning as to the company’s pursuit of him for the costs debt and Mr Hegarty’s response that that particular debt had not been paid, nor for that matter had other costs orders obtained been satisfied.  Mr Craven made no endeavour in his evidence to prove that he was solvent.  Indeed, his failure to pay the ordered security for costs is not at all consistent with his solvency.
48		I am satisfied further that the act of bankruptcy alleged in the petition has been committed.  I am further satisfied that at all times material Mr Craven has been and remains a resident of Australia.  In short, I am satisfied as to each of the matters alleged in the creditor’s petition on the basis of the evidence before me.
49		For the assistance of the registrar in relation to any taxation of costs, I make this further observation:  the costs of and incidental to the resisting by RFPL of the notice of opposition, were the principal costs incurred by that company in relation to the hearing before me.  In other words, the costs of and incidental to its separate defence of proceeding QUD 156 of 2014 did not, save to the extent necessary for singular appearances or discrete pleadings, constitute additional costs incurred by RFPL.  The costs relating to the meeting of the notice of opposition as to the evidence which had to be led, and the appearance which had to be made, were costs which RFPL inevitably had to incur in any event. 

I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.	

Associate:	

Dated:	1 April 2015