FEDERAL COURT OF AUSTRALIA

SMS Technology Australia Pty Ltd v Abdullah M Al Hamed[2009] FCA 451

PRACTICE AND PROCEDURE — appeal — leave to — where leave to appeal not obtained within statutory time limit — from default judgment — Federal Magistrates Court — practice and procedure in — caution in reviewing — relevant considerations — width of discretion to grant leave — absence of application in Federal Magistrates Court to set aside default judgment of that court — held no ground for extension of time or grant of leave to appeal — application dismissed —  (CTH) Federal Court of Australia Act 1976 s 24(1A)

Federal Court of Australia Act 1976 (Cth) s 24

Federal Court Rules O 1 r 8, O 45 r 7, O 52 r 5

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170

Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397

Nguyen v Minister for Immigration & Citizenship [2007] FCAFC 38

SMS TECHNOLOGY AUSTRALIA PTY LTD ACN 117 358 728 and GAVIN JAMES HUTCHESON v ABDULLAH M AL HAMED

QUD48 of 2009

SMS TECHNOLOGY AUSTRALIA PTY LTD ACN 117 358 728 and GAVIN JAMES HUTCHESON v GULF HORIZON MEDICAL EQUIPMENT EST

QUD51 of 2009

LOGAN J

1 MAY 2009

BRISBANE

THE COURT ORDERS THAT:

1.                  The appeal is dismissed.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

THE COURT ORDERS THAT:

1.                  The appeal is dismissed.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

REASONS FOR JUDGMENT

1                     On 17 February 2009, SMS Technology Australia Proprietary Limited (SMS Technology Australia) and Gavin James Hutcheson filed what purports to be a notice of appeal against a judgment given in the Federal Magistrates Court on 29 January 2009.  The respondent named in that purported appeal is one Abdullah M.A. Hamed. 

2                     Three days later SMS Technology Australia and Mr Hutcheson filed what again purports to be a notice of appeal in respect of what seems to be a separate, but not unrelated, proceeding in the Federal Magistrates Court in which judgment had also been given on 29 January 2009.  In that purported appeal, Gulf Horizon Medical Equipment Est [sic] was named as respondent.  It is convenient to hear and determine each of the purported appeals together.  Some recitation of procedural history in this Court is necessary.

3                     On 13 March 2009, the first directions hearing in respect of each of these matters was held.  At that time the “appellants” appeared by counsel.  There was also then an appearance on an amicus basis on behalf of each of the named respondents.  The appearance was on an amicus basis and without any admission as to service because neither of the purported notices of appeal had been served on the named respondents.  Counsel for the “appellants” had been briefed only that morning. 

4                     At that time, I drew to the attention of counsel for the “appellants” what seemed to me to be a procedural difficulty with the purported appeals.  That was that the judgment in each instance in the Federal Magistrates Court seemed to be a default judgment, and therefore interlocutory in character.  That being so, I intimated to counsel that it seemed to me that a grant of leave to appeal would be necessary and, further, that, in that regard, a material consideration would be that there had not been, it seemed, any application to the Federal Magistrates Court to set aside the judgment given in each instance in default. 

5                     I then adjourned the proceedings to a date to be fixed to enable the “Appellants” to reflect upon their position.  Later, there having been no apparent prosecution or discontinuance of the purported appeals, the Registrar listed each for hearing today. 

6                     When each matter was called on for hearing at the appointed time, there was no appearance either by or on behalf of either of the “appellants”.  There was, though, on file, an affidavit of one Craig Allan DoRozario, a solicitor of Potts Lawyers on the Gold Coast, which was sworn and filed today.  In that affidavit Mr DoRozario attests to his having had the carriage of the matters from on or around 13 March 2009 on behalf of each of the “appellants”.  He further attests to having given notice to them last month of an intention to withdraw from acting for each of them.

7                     The practice adopted, as is evident from the affidavit by the solicitor, was a little unorthodox having regard to O 45 r 7.  I say that because that rule contemplates that, before a solicitor withdraws and files notice of the change as a consequence of ceasing to act, notice of an intention so to do should be given not less than seven days beforehand to the former client.  Compliance with the terms of the latter requirement, which flows from O 45 r 7(2), may be dispensed with by leave of the Court. 

8                     The practice adopted in this instance was to send to the “appellants” the proposed notice of withdrawal.  In substance, though, what seems to have happened is compliance with O 45 r 7 in the sense that it was not until seven days thereafter that the notice of change was filed.  Strictly speaking, the solicitors ought to have given a notice of intention not less than seven days beforehand.  As I say, though, the substance and spirit, if not the strict letter of O 45 r 7, seems to have been adopted. 

9                     I am quite satisfied, having regard to Mr DoRozario’s affidavit, that both SMS Technology Australia and Gavin James Hutcheson have had notice of today as the date fixed for the hearing of the proceedings.  Also, when the matter was called on, and again as a matter of courtesy, there was an amicus appearance by the solicitors for the named respondents.  Again, I record that that appearance was on an amicus basis and without concession as to service because, in each instance, the purported appeal had still not, so I was informed, been served.

10                  The question then becomes what to do with each of the purported appeals?  The appeal notice filed on 17 February 2009 (QUD 48 of 2009) was filed within 21 days of the default judgment.  The purported appeal in the other matter (QUD 51 of 2009) was filed on 20 February 2009, which is outside the 21 day appeal period.  However, that is a distinction without a difference because in each instance, insofar as it is possible to glean the nature of the proceeding from that which is on the court file, the judgment in the Federal Magistrates Court was a default judgment.  That being so, in each instance the judgment was interlocutory in character.  The effect of s 24(1A) of the Federal Court of Australia Act 1976 (Cth) is that an appeal shall not be brought from such a judgment unless the court or a judge gives leave to appeal. 

11                  In each instance, leave to appeal was not obtained within 21 days.  That being so, an order would have to be sought that the limitation of time be dispensed with:  see O 52 rule 5 and O 1 r 8.  In that regard, there is a very wide discretion, but it has been stated that casual disregard of the requirements of the rules is inappropriate:  see Nguyen v Minister for Immigration & Citizenship [2007] FCAFC 38 at [23]. 

12                  One gets a sense of the background to the proceeding in the Federal Magistrates Court in each instance from what are termed “grounds of appeal” in the notices of appeal filed.  One sees there recited that the solicitors for SMS Technology Australia and Gavin James Hutcheson, who had represented each of them for four years, gave notice to the Federal Magistrates Court on 15 January 2009 of their withdrawal from each proceeding which was due to be heard on 29 January 2009.

13                  The appeal notice further recites that those former solicitors did not supply the new solicitors for SMS Technology Australia and Gavin James Hutcheson:

…with the case files which were critical to the appellant’s case, due to the appellants’ former solicitors being on annual leave.

14                  The appeal notices further recite:

The Federal Magistrates Court were asked to postpone the trial date to allow time for the appellants’ new solicitors to review the case and make the necessary applications to the court.  No acknowledgement was ever received from the Federal Magistrates Court of that application.

The appellants vehemently claim their right to a fair trial under article 24(4)(b) of the ICTY statute, and the “equality of arms” principle dictates that each party must have a reasonable opportunity to defend its interests under conditions which do not place him at a substantial disadvantage vis-à-vis his opponent.  The appellants being unrepresented were, for the avoidance of doubt, at substantial disadvantage against the opponent.  The appellants’ rights were further breached by the Federal Magistrates Court under the Human Rights Act 1988, article 6, OG 71 A2, which clearly states that where the person or entity cannot present the case themselves due to the complexity of the court proceedings and the law, they MUST have the right to be represented. 

15                  Whatever the “ICTY statute” may be and whatever, further, may be “article 6 OG 71 A2”, they have nothing whatsoever to do with obligations cast on the Federal Magistrates Court.  That irrelevance aside, there is nonetheless an obligation on that court and, for that matter, on any court exercising the judicial power of the Commonwealth, to observe principles of procedural fairness.  If, truly, there was a situation where a default judgment was entered in circumstances which amounted to a denial of procedural fairness, then one might comfortably expect that, upon application to that court, the default judgment would be set aside.  Further, if that court did not observe the requirements of procedural fairness, or note their impact and apply that impact according to law, then a basis upon which leave to appeal ought to be granted would readily emerge.

16                  The difficulty, in substance, in each of the purported appeals is that there has been no application at all to the Federal Magistrates Court to set aside the default judgment entered in each instance.  Were this only a case of considering whether to grant leave to appeal, the principles which have been summarised by the Full Court in Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 would be applicable.  Those principles might be summarised as follows:

1.                  whether, in all the circumstances, the decision is attended by sufficient doubt to warrant its being reconsidered by the Full Court; and

2.                  whether substantial injustice would result if leave were refused, supposing the decision to be wrong.

17                  In this case, I also bear in mind that the entry of default judgment by the Federal Magistrates Court was a matter of practice and procedure.  It is well settled that appellant courts should exercise particular caution in reviewing decisions of such a kind;  see, for example, Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177. 

18                  The judgment below seems to have been given pursuant to the combined operation and application of r 13.03A (definition of “act of default”), r 13.03B(2) (proceeding when respondent in default) and r 13.03C (proceeding when a party is absent from hearing) of the Federal Magistrates Court Rules.  The basis for entering a default judgment in each instance appears to have been a failure on the part of each of the “appellants” to comply with a direction made by the Federal Magistrates Court, which occasioned the application for judgment in default, and, in turn, a failure on the part of each “appellant” to appear at the hearing of that application.

19                  Having regard to the absence of any application to the Federal Magistrates Court to set aside the judgment entered in default, I am satisfied that, these being matters involving questions of practice and procedure, there ought not to be any extension of time or an associate it with any grant of leave to appeal in each instance.  That being so, the purported appeals are incompetent and each should be dismissed.  Because neither has been served, there should be no order as to costs.

Associate:

Dated:         6 May 2009