Fresh waywardness from Circuit Court … Bankruptcy petition over blueberry pallet bills … Shortcomings in reasons … Failure to go behind the judgment debt … Was money actually owed to the creditor? … Back it goes for rehearing 

Sandy Street and Sal Vasta are not the only FCFC judges being bollocked from upstairs.

The latest is Judge Alister McNab whose reasons in a bankruptcy case, Chep Australia v Russo, were dismantled by Justice Shaun McElwaine in the Federal Court. 

Domenico Russo ran a “grower, pacaging, packhose and merchant” [sic] business associated with Baby Blue blueberries in the Coffs Harbour area of NSW. He had been billed almost $30,000 for 586 pallets he said he never ordered, claiming they had been ordered by an unauthorised person. 

Aaron Singh was not employed by Russo’s company but had authority to order pallets from Chep using the Baby Blue Group email account. 

The evidence was that Singh had also placed orders for pallets using his personal Gmail address. Russo submitted that Singh was an independent blueberry grower conducting his own business, but he “assisted Baby Blue Group Pty Ltd and was supplied an email [aaron@babybluegroup.com.au] and phone owned and monitored by” Russo’s company. 

Russo’s company stopped trading in January 2020 and by this stage the proprietor was living in Sydney.  He insisted that he was not liable for the pallets ordered by Singh using his own Gmail address. 

Judge McNab, in a de novo review, upheld the sequestration order. The issue on appeal is whether McNab erred in not going behind the judgment debt in order to determine whether in reality money was due to the creditor. 

Justice McElwaine had trouble with the primary judge’s processes, finding that at no point were the affidavits of evidence read or taken to be formally read. 

“No opportunity was provided to either party to raise admissibility objection as to the contents of any of the opposing affidavits.” 

Russo, who appeared for himself before McNab, was not advised that he could object to evidence relied on by the petitioning creditor. 

“No attempt was made at the hearing to isolate the factual matters that were in dispute and no mechanism was suggested by the parties, or indeed by the primary judge, as to how disputed or conflicting evidence might be satisfactorily tested or resolved so as to assist his Honour in the task of making relevant findings of fact.” 

McNab also disclosed at the end of the hearing that he was having difficulty reviewing the affidavits, which also suggested a difficulty in comprehending the respective cases. 

“If his Honour was in difficulty, that fact ought to have been disclosed earlier so that the parties might have then afforded greater assistance to the court.” 

Further, there was missing from a relevant portion of the primary judgment how disputed questions of fact were resolved and what findings of fact were based on the evidence. 

“… a primary difficulty is that his Honour does not make clear whether these are his findings of fact and if so, how he resolved conflicts in the evidence in order to make them.” 

McNab decided not go behind the earlier Local Court default judgment. McElwaine sent it back to the FCFC for a rehearing of the creditor’s petition and to decide whether the discretion to dig deeper behind the default judgment should be exercised. 

Russo v Chep Australia – McElwaine J
Chep Australia v Russo – McNab J