In bankruptcy court they hang you before your appeal

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When you are declared bankrupt, the court doesn’t wait for the appeals process to be exhausted before it allows your possessions to be taken — or trashed. Brigid O'Carroll Walsh from The Network reports on IA contributing editor-at-large Tess Lawrence’s appeal on Tuesday in the Federal Court in Melbourne.

I meant to write this post yesterday. But I dragged my heels. I knew what I wanted to say. But still I dragged my heels. Why? The previous two days had been busy. I'm not as young as once I was so I need a longer recovery period than once I did.  But I don't think that was the whole story.  I think it was a mix of sadness, frustration, and outrage.  Perhaps when I get to the end of this post you might share those feelings with me.

Regular readers of The Network may have taken time to read of the Tess Lawrence battle against injustice. Tess's battle continued on Tuesday in the jurisdiction of the Federal Bankruptcy Court of Australia. Tess was in court to plead for an extension of time to appeal against orders declaring her bankrupt. It is difficult to write about the numerous proceedings arising out of Tess's plight because the words I write might not be intelligible amidst the complexity of what has been going on.

In short, Tess's bankruptcy has come about because of proceedings brought about by McKean Park Lawyers. The reasons for this take many twists and turns, which include a threat to Tess's life which left her incapacitated with Post Traumatic Stress Disorder (PSTD).

Piggy-backing on this was a sequestration order issued in October in favour of the National Bank of Australia (NAB) as the priority creditor.

What left me frustrated and outraged were what I consider to be two systemic flaws in operations of the bankruptcy proceedings which militate against defendants, particularly people like Tess who are self-representing litigants, and favour plaintiffs, legal professionals, and bankruptcy trustees. These three categories comprise a powerful phalanx against those who can't afford legal representation.

It might be one thing for the bigger or more corporate fish such as Alan Bond to appear as a defendant and perhaps laws and systems have been put in place to deal with such people and/or corporations.  However, I believe – from what I saw on Tuesday – that there is no justice for the minnows trying to find their way in this legal and financial ocean.

Tess has missed out on at least one important hearing — and the really important one was the October one where Justice North handed down his sequestration order. Tess missed out for two reasons.

  1. For a lot of the past few months or so, Tess has not been functioning well because of the PSTD which is a direct result of adverse treatment by a particular person in the legal profession on court premises at the time of an earlier hearing and the failure of the judiciary and the legal system to take any action in the matter. In fact, it was only due to accessing effective psycho-therapeutic treatment that Tess was on her feet stating her case and defending herself on Tuesday.

  2. She did not know the hearing was on. That's right she received no notice, no documents telling her that her case was being heard on a particular day.  Nor – and this is where the legal system disadvantages people other than those making their living from or attached to the legal profession – is there any need for proof of service (by affidavit or any other means) that the defendant has been advised of the forthcoming legal proceedings. The only obligation is that, at the very beginning of what can be quite protracted and continuing proceedings, there is a requirement for proof of service at the first hearing. After that, the legal system doesn't require anyone to even bother!

  3. I was amazed at the energy, and intelligence, and sheer fight with which Tess put her case on Tuesday.  I am not a lawyer, but I have worked in and around the law for a substantial part of my working life.  As a union official, I had to prosecute many cases within the Industrial Relations Commission and the Industrial Magistrates Courts — and I didn't lose any cases. So, I was quite satisfied with the way Tess acquitted herself on Tuesday. I was more than satisfied, since I knew the distress she has been in for some considerable time. At one stage, I thought there might have been a 60-40 chance of Tess succeeding, but as the hours passed this optimism receded.

    As the morning's hearing proceeded to a dismal end, one fact – which outrages me more than words can express – became clear. There is an appeal process available following the declaration of bankruptcy and the sequestration order. Now, when capital punishment was still in operation, the powers-that-be couldn't hang a person until the very last possibility of appeal was exhausted. Not, so it appears, in bankruptcy proceedings. The Federal Bankruptcy Court appoints a trustee to carry out all the disposition of property and so on. To put it not so nicely, the trustee picks over the financial bones of the defendant. However, the trustee does not have to wait until the appeals process is exhausted before doing this. They take up their tasks immediately, if not sooner!

    From what was said in court, I understand that the reason that the trustee does not wait for the appeals process to be exhausted is that there are so few appeals. For all intents and purposes, it appears the general intent is to allow the trustee to go and get on with whatever is necessary to do. And there are consequences from this attitude — this system of legal convenience.

    Because work has already begun, because costs are thereby incurred by the trustee, and because the trustee has priority in any costs awarded by the court, there is a hesitancy – because otherwise things would get really complicated – from the presiding judge to allow the appeal to succeed. Because, they figure, if the appeal was allowed to succeed, how would the already scrambled eggs be unscrambled? And if they could be unscrambled, what costs would be incurred – not to mention red faces and inconvenience – in so doing this unscrambling.

    • As the priority creditor, NAB (NAB by name, nab by nature?) has long since repossessed Tess's home at Daylesford. NAB – or those acting on its behalf – have changed the locks and incurred much destruction to Tess's personal belongings; her tools of trade as a working journalist and media analyst; and made the pursuance of her rights difficult, insofar as all her files relating to the bankruptcy were taken.

    • Tess brought forward in court that she had placed a number of files and documents – some relating to the bankruptcy case and others of no concern to the case whatsoever – in the custody of a lawyer friend whose offices were subsequently visited by personnel acting for the Law Institute of Victoria who proceeded to take her files. She has not seen or had access to those files and documents from that day to this.

    • Tess made clear to the court that those who were prosecuting her have now taken to persecuting her.

    • I want to record the appreciation of myself and of Tess to Keith Kaulfuss for his support at court on Tuesday. Keith is a faithful fighter against injustice and, even though he had never met Tess, he was prepared to spend time in court in support.

      The saga continues. Tess is taking every avenue open to her to pursue her case. The next episode will be in the Supreme Court of Victoria.

      (This story was originally published today on The Network website and has been republished with the author’s permission.)  
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