FEDERAL COURT OF AUSTRALIA
Conde v Hunter [2009] FCA 1016
Bankruptcy Act 1966 (Cth) s 40(1)(g), s 41(1)(a)(i), (3), (3)(a), (6A)(a), (b) and (6C)
Federal Court of Australia Act 1976 (Cth) s 25(2B)(aa), s 31A
Supreme Court of Judicature (Consolidation) Act 1925 s 31
Federal Court (Bankruptcy) Rules 2005 r 2.05(1), r 2.06(1), (2)(a)(b)(c)(d)
Bozson v Altrincham Urban District Council [1903] 1 KB 547 cited
Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 cited
Colgate-Palmolive v Cussons (1993) 46 FCR 225 cited
Conde v Hunter [2009] FMCA 751 cited
Conway v Jackson (2001) 107 FCR 201 cited
Druett v Department of Families, Community Services & Indigenous Affairs [2007] FCA 995 cited
Dunstan v Human Rights and Equal Opportunity Commission [2007] FCA 1326 cited
Franks v Warringah Council, in the matter of Franks [2003] FCA 1047 cited
Genovese v BGC Construction Pty Ltd [2007] FCA 923 cited
Hall v Nominal Defendant (1966) 117 CLR 423 cited
House v The King (1936) 55 CLR 499 cited
InterTAN Inc v DSE (Holdings) Pty Ltd [2005] FCAFC 54 cited
Jenkins v National Australia Bank Ltd [1999] FCA 1758 cited
Kayo Contractors v Fernandez (1984) 71 FLR 34 cited
Latoudis v Casey (1990) 170 CLR 534 cited
Licul v Corney (1976) 50 ALJR 439 cited
Patten v New Holland Credit Australia Pty Ltd [2006] FCA 1724 cited
QBE Insurance Ltd v Switzerland Insurance Workers Compensation (NSW) Ltd (1996) 134 ALR 433 cited
Minister for Immigration and Multicultural and Indigenous Affairs v Jia Legeng (2001) 205 CLR 507 cited
Rana v University of Adelaide (No 2) [2008] FCA 941 cited
Re a Debtor (No 5982 of 1979) (1981) 78 Law Society Gazette Reports 631 cited
re Black ex parte Jeffery (1932) 4 ABC 157 cited
Re Gibbs; Ex parte Triscott (1995) 65 FCR 80 cited
re McAlister ex parte McAlister (1936) 8 ABC 283 cited
SBBS v Minister for Immigration and Multicultural and Indigenous Affairs (2002) 194 ALR 749 cited
Stec v Orfanos [1999] FCA 457 cited
VFAB v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 131 FCR 102 cited
Zambini v Secretary, Department of Employment and Workplace Relations [2006] FCA 1773 cited
MILTON ARNOLDO CONDE v JOHN LAWRENCE HUNTER
QUD 189 of 2009
COLLIER J
11 SEPTEMBER 2009
BRISBANE
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IN THE FEDERAL COURT OF AUSTRALIA |
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QUEENSLAND DISTRICT REGISTRY |
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GENERAL DIVISION |
QUD 189 of 2009 |
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ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA |
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MILTON ARNOLDO CONDE Appellant
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AND: |
JOHN LAWRENCE HUNTER Respondent
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JUDGE: |
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DATE OF ORDER: |
11 SEPTEMBER 2009 |
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WHERE MADE: |
BRISBANE |
THE COURT ORDERS THAT:
1. The Notice of Appeal filed 3 August 2009 be struck out pursuant to section 25(2B)(aa) of the Federal Court of Australia Act 1976 (Cth).
2. Mr Conde pay Mr Hunter’s costs of the Notice of Motion filed 7 August 2009 on a party-party basis.
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.
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IN THE FEDERAL COURT OF AUSTRALIA |
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QUEENSLAND DISTRICT REGISTRY |
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GENERAL DIVISION |
QUD 189 of 2009 |
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ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA |
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BETWEEN: |
MILTON ARNOLDO CONDE Appellant
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AND: |
JOHN LAWRENCE HUNTER Respondent
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JUDGE: |
COLLIER J |
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DATE: |
11 SEPTEMBER 2009 |
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PLACE: |
BRISBANE |
REASONS FOR JUDGMENT
1 Before me is a notice of motion filed by Mr Hunter, who is the respondent to a notice of appeal filed by Mr Conde against a decision of the Federal Magistrates Court. Mr Conde was served with a bankruptcy notice, which he unsuccessfully sought to have set aside in the Federal Magistrates Court. Mr Hunter now seeks an order striking out Mr Conde’s appeal on the basis that the appeal constitutes an abuse of process.
2 The notice of motion is heard by me as a single judge in the Court’s appellate jurisdiction: s 25(2B)(aa) of the Federal Court of Australia Act 1976 (Cth)) (“Federal Court Act”).
3 In deciding whether Mr Conde’s appeal constitutes an abuse of process such that it should be struck out pursuant to s 25(2B)(aa) of the Federal Court Act it is necessary to consider:
· the nature of the Court’s jurisdiction to strike out a notice of appeal pursuant to s 25(2B)(aa);
· whether Mr Conde’s notice of appeal discloses any grounds of appeal which are arguable. In determining this issue it is necessary to consider each of the grounds of appeal.
4 Before determining the issues I will outline the background to the notice of motion.
Background facts
5 The relevant bankruptcy notice, issued on 30 June 2009, was served on Mr Conde on 4 July 2009. It appears from the bankruptcy notice that the person who applied for the bankruptcy notice to be issued was Mr Anthony Macklin, the solicitor for Mr Hunter and who appeared for Mr Hunter in the proceedings before me. The bankruptcy notice relied upon a costs order of Searles DCJ in the District Court of Queensland dated 14 November 2008. From the bar table in an explanation which was not contested, Mr Conde explained the context in which the judgment of Searles DCJ was delivered, namely that Mr Conde had commenced defamation proceedings against Mr Hunter in the District Court of Queensland and Searles DCJ had made interlocutory orders in the course of those proceedings. Those interlocutory orders of Searles DCJ were as follows:
1. The Amended Statement of Claim be struck out.
2. That the Plaintiff be given leave to replead within twenty-one (21) days.
3. Order that Plaintiff pay Defendant’s costs of today’s Application to be assessed on the standard basis.
4. Order that proceedings be stayed pending payment of the Defendant’s costs of today’s application by the Plaintiff.
6 The key order for the purposes of these proceedings was Order 3 with respect to costs. It is also not in dispute that on 1 July 2009 Mr Conde filed an application in the Court of Appeal of Queensland seeking to contest Orders 3 and 4 of Searles DCJ.
7 The bankruptcy notice, a copy of which was annexed to the application before the Federal Magistrate filed on 14 July 2009, stated that Mr Conde owed Mr Hunter a debt of $7,980.87. The Schedule to the bankruptcy notice identified the amount of $7,980.87 as “Legal costs if ordered to be paid and a specific amount was not included in the judgments or orders”. Annexed to the bankruptcy notice were also:
· a copy of the orders of Searles DCJ of 14 November 2008;
· a costs assessor’s certificate; and
· a certificate issued by the District Court of Queensland.
8 The costs assessor’s certificate, dated 13 March 2009 and bearing a stamp of the District Court of Queensland as having been filed on that date, provided:
I, Stephen Kenneth Hartwell, of Level 1, 44A George Street, Brisbane, certify that –
1. I am an approved costs assessor appointed under the Uniform Civil Procedure Rules 1999.
2. I was appointed to assess the costs in this matter pursuant to the Order made 12 February 2009.
3. I have assessed the costs payable by the Plaintiff to the Defendant pursuant to the Order made 14 November 2008 in the amount of seven thousand nine hundred and eighty dollars and eighty-seven cents ($7,980.87) comprising:
a. Professional Fees $2,715.79
b. Disbursements $5,265.08
4. My fees of $412.50 is payable by the Defendant and has been included as a disbursement.
5. The party entitled to be paid the costs of the assessment is the Defendant. Those costs are assessed at $393.00 and have been included as a disbursement.
9 The certificate issued by the District Court of Queensland appears to bear the signature of the Deputy Registrar, Supreme and District Courts, Brisbane, and provides as follows:
I HEREBY CERTIFY THAT THIS PHOTOCOPY CONSISTING OF ONE PAGE IS A TRUE AND CORRECT COPY OF THE ORIGINAL DOCUMENT IN MY CUSTODY AND CONTROL WHICH WAS LODGED AT THIS COURT ON THE 13TH DAY OF MARCH 2009.
DATED THIS 23 June 2009.
10 Mr Conde commenced proceedings in the Federal Magistrates Court to have the bankruptcy notice set aside and interim orders granting an extension of time for him to comply with the bankruptcy notice. The matter came before Wilson FM, who dismissed the application to set aside the bankruptcy notice (Conde v Hunter [2009] FMCA 751). In his reasons for decision, his Honour found in summary as follows:
· Mr Conde made no attack on the form of the bankruptcy notice itself.
· Although Mr Conde contended that Mr Hunter did not have a final judgment or final order (the execution of which had not been stayed in terms of s 40(1)(g) of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”)) the argument was misconceived. His Honour continued:
A final order is one that disposes finally of an issue between the parties. The concept of what is a final order is discussed in cases such as Hall v Nominal Defendant (1966) 117 CLR 423. In this case, the issue was who should pay the costs of the application to set aside the applicant’s pleading. The order made by Judge Searles was a final order, insofar as it concerned that issue. His Honour ordered that the applicant pay the respondent’s costs. There is no merit in the first ground sought to be advanced by the applicant. (at [3])
· Notwithstanding Mr Conde’s prospective challenge to Orders 3 and 4 of Searles DCJ, it was clear on the material before his Honour that:
o because the order sought to be challenged on appeal was only as to costs, leave to appeal was required by the Court of Appeal;
o the application for leave to appeal was filed many months out of time and therefore required an order from the Court of Appeal granting an extension of time.
The Federal Magistrate noted that no contest had been made against the Orders 1 and 2 made by Searles DCJ, namely to strike out Mr Conde’s amended statement of claim and give leave to Mr Conde to replead in that Court. The Federal Magistrate considered that, in those circumstances and having read Mr Conde’s application to the Court of Appeal and supporting affidavit, that application to the Court of Appeal has no prospects of success.
· It followed that no good reason was shown for either setting aside the bankruptcy notice or extending time for compliance with it to await the outcome in the Queensland Court of Appeal. Accordingly the Federal Magistrate dismissed the application to set aside the bankruptcy notice.
Appeal from decision of the Federal Magistrate
11 Mr Conde filed a notice of appeal in this Court from the decision of Wilson FM on 3 August 2009. The grounds of appeal are as follows:
1. The Learned Federal Magistrate Wilson erred by dismissing the Applicant/Appellant’s Application in contravention of the Bankruptcy Act 1966.
2. The Learned Federal Magistrate Wilson failed to justify in which sections of the Act and Rules he relied to dismiss the Appellant/Applicant’s Application.
3. The Learned Federal Magistrate Wilson failed to take into account the Act, Rules the Appellant’s Application and Affidavit filed on 14 July 2009, to make his decision or order.
4. The Learned Federal Magistrate Wilson erred in taking into account to make his decision or order, only the Respondent’s Outline of Submissions served on 23 July 2009, at the hearing prepared by Anthony James Macklin, Solicitor for the Respondent and totally ignored the Applicant or Appellant’s Application and Affidavit.
5. Anthony James Macklin, Solicitor for the Respondent, failed to comply with the Federal Court (Bankruptcy Rules 2005, rr 2.05(1), 2.06(1)(2)(a)(b)(c)(d).
6. Sections 40(1)(g) of the Act, was wrongly used by Anthony James Macklin, Solicitor’s for the Respondent and Federal Magistrate Wilson.
7. Section 40(1)(g) of the Act does not apply to the Applicant/Appellant.
8. Section 41(1)(a)(i), (3) does not apply to the Appellant/Applicant and was wrongly and unlawfully used by Anthony James Macklin, Solicitor’s for the Respondent to obtain the Bankruptcy Notice and issued by A. Carder, Official Receiver for the Bankruptcy District of Queensland, Insolvency and Trustee Service Australia (ITSA), on the 30th June 2009.
9. Anthony James Macklin, Solicitor’s for the Respondent, to obtain the Bankruptcy Notice, Order or Decision committed offences to the administration of justice and the Criminal Code 1899, Fraud – s 408C(1)(d)(e) and mislead the Court.
10. The Respondent’s Bankruptcy Notice has a tendency to prejudice or delay the fair trial of the Proceedings Numbers: BD 395 of 2008 and CA 7008 of 2009.
11. The Respondent’s Notice of Bankruptcy is unnecessary, scandalous, vexatious, frivolous, an abuse of the process of the Court, discriminatory, malicious and should be set aside or dismissed by this Honourable Court and award costs in favour of the Appellant.
12. His Honour Wilson failed to take into account section 41(1)(a)(i), (3)(a), (6A)(a)(b)(6C) of the Act.
13. There were clear errors of law in the proceedings that could have materially affected his Honour’s decision.
14. The Learned Federal Magistrate Wilson’s decision and order are biased against the Applicant or Appellant.
(emphasis in original)
12 Mr Conde has sought orders including that the appeal be allowed, that the decision of the Federal Magistrate be set aside, costs on an indemnity basis and orders with respect to “disciplining of its officers”.
Orders sought by Mr Hunter
13 In his notice of motion currently before me, Mr Hunter has sought the following orders:
1. That the Appellant’s Notice of Appeal filed 3 August 2009 be struck out forthwith as an abuse of process and as an appeal which has, on its face, no prospects of success.
2. The Appellant pleads no valid ground of appeal, and each of the Grounds of Appeal 1 to 14 ought to be summarily struck out.
3. The several allegations of unlawful and unprofessional conduct by Anthony James Macklin are vexatious, oppressive and an abuse of process, are wrong, have no proper or pleaded basis in law or fact, and Grounds 8 and 9 ought to be struck out on this basis as well.
4. There is no basis for the allegation of bias pleaded in Ground of Appeal 14; the allegation is wrong in law and fact, is vexatious and oppressive, and is an abuse of process and ought to be struck out on that basis.
5. An order, if necessary and required, that the time and date for the Directions Hearing set out in respect of the Appellant’s Notice of Appeal be abridged, and that the date of Tuesday 22 September 2009 be vacated and a time and date for a Directions Hearing be allocated at an earlier time on the grounds of urgency, and on the further grounds that the Notice of Appeal is filed for the purposes of delay only, and is an abuse of process.
6. An order that the Respondent, JOHN LAWRENCE HUNTER be at liberty to file and serve a Creditor’s Petition forthwith upon MILTON ARNOLDO CONDE as Judgment Creditor, and further that the hearing and determination of the Creditor’s Petition be heard and determined with, after or at the same time as, this Notice of Motion is heard and determined.
7. An order that the Appellant pay the Respondent’s costs of and incidental to the appeal on the full indemnity basis, and that such costs be fixed at the hearing of this Notice of Motion.
8. An order that the Appellant be restrained and prevented from instituting any appeal against the dismissal of his appeal in these proceedings without first applying for and obtaining leave of this Honourable Court to bring such an appeal.
9. Such further or other adjournments, enquiries, directions and other orders as to this Honourable Court seem appropriate.
Issue 1 – what is the nature of the Court’s jurisdiction to strike out a notice of appeal pursuant to section 25(2B)(aa) of the Federal Court Act
14 Section 25(2B)(aa) provides that a single judge or the Full Court may give summary judgment in an appellate matter. That a single judge may give judgment summarily dismissing an appeal from a decision of the Court is clear from decisions applying the section: Druett v Department of Families, Community Services & Indigenous Affairs [2007] FCA 995, Bishop v Secretary, Department of Education, Employment and Workplace Relations [2008] FCA 1118.
15 In this case however Mr Hunter has sought an order striking out Mr Conde’s notice of appeal. As a general proposition the Court may strike out a notice of appeal if the notice does not disclose any arguable basis for granting the appeal: cf Patten v New Holland Credit Australia Pty Ltd [2006] FCA 1724. Such an order is clearly by way of summary judgment. In my view the jurisdiction of the Court under s 25(2B)(aa) contemplates an order striking out a notice of appeal.
16 At the hearing before me Mr Macklin on behalf of Mr Hunter stated that he also relied on s 31A of the Federal Court Act. Section 31A provides that the Court may give judgment if, inter alia, the Court is satisfied that a party has no reasonable prospect of successfully prosecuting a proceeding (s 31A(2)(b)). For the purposes of that section, a proceeding need not be hopeless or bound to fail for it to have no reasonable prospect of success: s 31A(3).
17 A question arises whether, in considering s 25(2B)(aa), it is necessary for the Court to also have recourse to s 31A. In a number of cases the Court has exercised power pursuant to s 25(2B)(aa) and given summary judgment without reference to s 31A: Druett v Department of Families, Community Services & Indigenous Affairs [2007] FCA 995, Zambini v Secretary, Department of Employment and Workplace Relations [2006] FCA 1773, Dunstan v Human Rights and Equal Opportunity Commission [2007] FCA 1326, Rana v University of Adelaide (No 2) [2008] FCA 941. However in other cases the Court has linked the power under s 25(2B)(aa) to the jurisdiction of the Court under s 31A and summarily dismissed an appeal on the basis that the appellant had no reasonable prospect of success in prosecuting its grounds of appeal: Genovese v BGC Construction Pty Ltd [2007] FCA 923, Bishop v Secretary, Department of Education, Employment and Workplace Relations [2008] FCA 1118.
18 In the context of this case no issue turns on the application of s 31A. Mr Hunter has pleaded that Mr Conde’s notice of appeal should be struck out as an abuse of process because, inter alia, it does not disclose arguable grounds of appeal. In my view s 25(2B)(aa) provides the Court with a separate head of power to give summary judgment in an appellate matter on the basis submitted by Mr Hunter. (The Court does not need to have specific recourse to s 31A in delivering summary judgment pursuant to s 25(2B)(aa).) In circumstances where a notice of appeal does not disclose any arguable basis for granting the appeal, the Court may in appropriate circumstances strike out the appeal pursuant to s25(2B)(aa).
Issue 2 - does Mr Conde’s notice of appeal disclose any grounds of appeal which are arguable?
19 Mr Conde’s grounds of appeal are lengthy, with considerable overlap. Mr Conde, who was self-represented, made written as well as oral submissions, which are helpful in considering his grounds of appeal.
Grounds 1, 6, 7, 11: Was the costs order of Searles DCJ a “final order” for the purposes of section 40(1)(g) of the Bankruptcy Act?
20 Although Mr Conde did not specifically frame these grounds of appeal in terms of whether the basis of the bankruptcy notice was a “final order” for the purposes of s 40(1)(g), it is clear from both his written and oral submissions that this is a key issue in his grounds of appeal. Grounds 1, 6, 7 and 11 relate to this issue.
21 In particular, Mr Conde submitted that:
· final orders of the District Court of Queensland have the words “FINAL ORDER” stamped in bold capital letters in red;
· the order of Searles DCJ of 14 November 2008 did not bear those words;
· based on this the order of Searles DCJ of 14 November 2008 was not a final order.
22 Mr Conde raises an interesting point. So far as concerned the defamation proceedings before Searles DCJ, orders 1 and 2 of 14 November 2008 did not finally dispose of that matter and to that extent were interlocutory orders. However, was the costs order of 14 November 2008 a “final order” for the purposes of s 40(1)(g)?
23 In this context a “final order” is an order which “finally disposes of the rights of the parties”: Bozson v Altrincham Urban District Council [1903] 1 KB 547 at 548-549, Hall v Nominal Defendant (1966) 117 CLR 423 per Taylor J at 439-440 (Owen J concurring), Windeyer J at 443-444; Licul v Corney (1976) 50 ALJR 439 at 444; Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 at 253-254. It is clear however that an order may in one sense be interlocutory but in another sense final: re Black ex parte Jeffery (1932) 4 ABC 157 at 161. There is long-standing authority that a costs order made at an interlocutory stage during proceedings is nonetheless a final order for the purposes of the Bankruptcy Act: re Black ex parte Jeffery (1932) 4 ABC 157, re McAlister ex parte McAlister (1936) 8 ABC 283, Kayo Contractors v Fernandez (1984) 71 FLR 34 and Re Gibbs; Ex parte Triscott (1995) 65 FCR 80. This will be the case only if a certificate of taxation has been issued: Stec v Orfanos [1999] FCA 457 at [18], Franks v Warringah Council, in the matter of Franks [2003] FCA 1047.
24 In this case the order for costs made by Searles DCJ’s on 14 November 2008 was made in respect of the interlocutory issue before his Honour – namely whether Mr Conde’s amended statement of claim in the District Court proceedings should be struck out and Mr Conde given leave to replead. In respect of that issue the costs order of 14 November 2008 was a final order disposing of the liabilities of the parties, precluding any further application for costs in respect of the striking out of Mr Conde’s amended statement of claim, and was enforceable by execution. Subsequently, as is clear from the evidence, a certificate of taxation was issued in respect of the relevant costs amount.
25 A helpful comparison may be drawn between the facts of the case before me, and those in an English case Re a Debtor (No 5982 of 1979) (1981) 78 Law Society Gazette Reports 631 (Brightman and O’Connor LJJ and Fox J, 30 January 1981). In Re a Debtor bankruptcy notices issued by petitioning creditors were based, inter alia, on orders for costs granted to them following successful summonses to strike out an application brought against them by the debtor. Certificates had been issued by the taxing officer in respect of the costs awarded. Brightman LJ, with whom O’Connor LJ and Fox J agreed, said that:
the principal issue was whether the orders for costs read with the taxing officer’s certificates were final orders at the date of issue of the bankruptcy notices. The debtor started with the proposition that the order striking out his cause of action was interlocutory for the purposes of s.31 of the Supreme Court of Judicature (Consolidation) Act 1925. But it did not follow, as the debtor contended, that the orders for costs contained in the master’s order and the judge’s order must also be interlocutory. In his Lordship’s view, in each case the order for taxation and payment of costs read with the taxing officer’s certificate was a final order. (at 631)
26 In this case the costs order made by Searles DCJ was clearly a final order for the purposes of s 40(1)(g). It follows that there was no error in the decision of the Federal Magistrate in respect of this finding, and accordingly there is no merit in Mr Conde’s grounds of appeal in respect of this issue.
Ground 2: the Federal Magistrate failed to identify the relevant legislation on which he relied to dismiss Mr Conde’s application
27 In my view this ground of appeal has no merit. In his judgment the Federal Magistrate specifically referred to the Bankruptcy Act and s 40(1)(g) upon which his Honour relied. His Honour’s reasons for dismissing Mr Conde’s application were clear, and identified relevant principles.
Grounds 3, 4: The Federal Magistrate took into account only Mr Hunter’s submissions, and failed to take into consideration Mr Conde’s application and affidavit or the relevant legislation
28 While failure of a Court to consider an issue before it and supporting submissions may constitute a miscarriage of justice (QBE Insurance Ltd v Switzerland Insurance Workers Compensation (NSW) Ltd (1996) 134 ALR 433) I can draw no inference that his Honour had regard only to the submissions filed by Mr Hunter and ignored either the substance of Mr Conde’s case or the provisions of the Bankruptcy Act and rules. It is clear from reviewing the decision of the Federal Magistrate (Conde v Hunter [2009] FMCA 751) that his Honour:
· considered the application before him and the orders sought (at [1]);
· recognised that, at first instance, Mr Conde made no attack on the bankruptcy notice itself (at [2]);
· considered that Mr Conde’s case could be summarised by reference to two issues, namely whether the bankruptcy notice was founded on a final order, and prospects of success of Mr Conde’s appeal to the Queensland Court of Appeal (at [3]-[5]). His Honour was not satisfied in respect of either issue;
· had read both Mr Conde’s application and supporting affidavit (at [6]).
29 The fact that his Honour found against Mr Conde does not mean that his Honour failed to take into consideration Mr Conde’s submissions. In my view this ground of appeal has no merit.
Ground 5: Mr Macklin failed to comply with the Federal Court (Bankruptcy) Rules 2005, rr 2.05(1), 2.06(1), (2)(a)(b)(c)(d)
30 The Federal Court (Bankruptcy) Rules 2005 relevantly provide:
Regulation 2.05
Appearance at application or examination
(1) A person who intends to appear at the hearing of an application or petition, or take part in an examination, must file a notice of appearance in accordance with Form 4.
(2) Rules 12 and 13 of Order 4 of the Federal Court Rules (alteration of hearing date) do not apply to the hearing date fixed for a creditor's petition.
Regulation 2.06
Opposition to application, interim application or petition
(1) In this rule:
“application” includes an interim application
(2) A person who intends to oppose an application or petition must, at least 3 days before the date fixed for the hearing of the application or petition or, with the leave of the Court, at the hearing:
(a) file a notice of appearance in accordance with Form 4; and
(b) file a notice in accordance with Form 5 stating the grounds of opposition; and
(c) file an affidavit in support of the grounds of opposition; and
(d) serve the notices and supporting affidavit on the applicant.
31 Regulation 2.05 and reg 2.06 are procedural provisions. Mr Conde has not particularised why, if there has been failure by Mr Hunter’s solicitor to comply with these regulations, such failure forms the basis for an appeal against the decision of the Federal Magistrate. I am unable to identify any reasons why a failure to comply with these regulations would justify an order setting aside the bankruptcy notice in this case.
32 In my view this ground of appeal has no merit.
Grounds 8, 12: application of section 41 of the Bankruptcy Act
33 Mr Conde makes reference in his grounds of appeal to s 41(1)(a)(i), (3), (3)(a), (6A)(a), (b) and (6C).
34 Section 41(1)(a)(i) and s 41(3)(a) supplement s 40(1)(g) with respect to the requirement for a final order to support the issue of a bankruptcy notice. Specifically, these sections provide:
41(1) An Official Receiver may issue a bankruptcy notice on the application of a creditor who has obtained against a debtor:
(a) a final judgment or final order that:
(i) is of the kind described in paragraph 40(1)(g); and
…
41(3) A bankruptcy notice shall not be issued in relation to a debtor:
(a) except on the application of a creditor who has obtained against the debtor a final judgment or final order within the meaning of paragraph 40(1)(g) or a person who, by virtue of paragraph 40(3)(d), is deemed to be such a creditor.
35 I have already observed that the order of Searles DCJ upon which the bankruptcy notice was issued was a final order within the meaning of s 40(1)(g). Mr Conde’s claims that s 41(1)(a)(i) and s 41(3) do not apply to him have no merit because these sections clearly do apply to him. Similarly, Mr Conde’s claims that the Federal Magistrate failed to take those sections into account are not supported by any material before the Court.
36 Mr Conde’s reliance on s 41(6A) and (6C) raise other issues.
37 Both provisions relate to the possibility of a debtor receiving an extension of time for compliance with the relevant bankruptcy notice.
38 Section 41(6A) provides:
Where, before the expiration of the time fixed for compliance with the requirement of a bankruptcy notice:
(a) proceedings to set aside a judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; or
(b) an application has been made to the Court to set aside the bankruptcy notice;
the Court may, subject to subsection (6C), extend the time for compliance with the bankruptcy notice.
39 Section 41(6C) provides:
Where:
(a) a debtor applies to the Court for an extension of the time for complying with a bankruptcy notice on the ground that proceedings to set aside a judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; and
(b) the Court is of the opinion that the proceedings to set aside the judgment or order:
i. have not been instituted bona fide; or
ii. are not being prosecuted with due diligence;
the Court shall not extend the time for compliance with the bankruptcy notice.
40 An application for leave to appeal from the order to which a bankruptcy notice relates can constitute “proceedings to set aside a judgment or order in respect of which the bankruptcy notice was issued” for the purposes of s 41(6A) and (6C) (Jenkins v National Australia Bank Ltd [1999] FCA 1758, Conway v Jackson (2001) 107 FCR 201 at [20]). However the exercise of the Court’s power under s 41(6A) to extend time for compliance with the bankruptcy notice is discretionary: Conway v Jackson (2001) 107 FCR 201. In this case the Federal Magistrate refused to grant an order extending time to Mr Conde to comply with the bankruptcy notice. This is because, after consideration of the nature of the prospective application to the Court of Appeal of Queensland, the Federal Magistrate was satisfied that Mr Conde had no prospects of success in relation to either his application for an extension of time to apply for leave to appeal from the orders of Searles DCJ, or the actual application for leave to appeal. As is well known from the decision of the High Court in House v The King (1936) 55 CLR 499 at 504 in respect of appeals against the exercise of judicial discretion:
It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is reasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. (at 504-505)
41 In neither his notice of appeal nor his submissions has Mr Conde disputed his Honour’s conclusions with respect to Mr Conde’s prospects of success in his applications to the Court of Appeal of Queensland. It is clear that his Honour considered whether he should make an order extending time for Mr Conde to comply with the bankruptcy notice, and concluded that an application for an extension of time was unmerited in the circumstances. In light of the principles articulated in House v The King (1936) 55 CLR 499 I am unable to find that his Honour failed to properly exercise the discretion vested in him by s 41(6A).
42 Section 41(6C) was of no apparent relevance in relation to Mr Conde’s application before his Honour.
43 In my view Mr Conde’s grounds of appeal with respect to s 41(6A) and (6C) have no merit.
Ground 9: alleged conduct of Mr Hunter’s solicitor
44 Mr Conde’s allegations as found in ground 9 of his notice of appeal are not supported by any evidence. In my view they are scandalous and vexatious as claimed by Mr Hunter. I also do not see the relevance of the allegations to the question whether the bankruptcy notice served on Mr Conde should be set aside.
45 In my view this ground of appeal has no merit.
Ground 10: the bankruptcy notice prejudices or delays the fair trial or proceedings in the State Courts
46 In my view there is no merit to this ground of appeal for three reasons.
47 First, I see no error in the view taken by the Federal Magistrate of the prospects of success of Mr Conde in his application for leave to appeal to the Court of Appeal of Queensland in respect of the orders of Searles DCJ. In my view the Federal Magistrate accurately identified likely difficulties Mr Conde will experience in respect of his appeal to that Court.
48 Second, as was observed in Re a Debtor (No 5982 of 1979) at 631 the mere fact that an order is subject to a pending appeal is not a reason for treating it as other than a final order and did not prevent the issue of a bankruptcy notice.
49 Third, the Bankruptcy Act allows a petitioning creditor to apply for the issue of a bankruptcy notice based on a final judgment or final order. As I have already observed, it is clear on the material before the Court that the bankruptcy notice served on Mr Conde was founded on a final order of the District Court of Queensland, and properly issued. The fact that there may be related proceedings in other Courts does not prevent the proper issue of a bankruptcy notice and steps taken in pursuance of that notice.
Ground 13: whether there were clear errors of law in the proceedings that could have materially affected his Honour’s decision
50 I agree with Mr Hunter that ground 13 is vague and non-specific. In my view it has no merit.
Ground 14: the Federal Magistrate was biased against Mr Conde
51 Mr Conde submitted that the Federal Magistrate was not open-minded in hearing the application to set aside the bankruptcy notice, and was biased.
52 Mr Conde correctly submitted that a judge may be disqualified in the event of either actual bias or the reasonable apprehension of bias. However bias is a very serious allegation which must be clearly articulated and proved by admissible evidence. Without more, the fact that a decision records findings adverse to the complainant is insufficient to establish bias: SBBS v Minister for Immigration and Multicultural and Indigenous Affairs (2002) 194 ALR 749 at 756, VFAB v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 131 FCR 102. This is particularly so where the Court’s findings were open on the material before it: Minister for Immigration and Multicultural and Indigenous Affairs v Jia Legeng (2001) 205 CLR 507 at 519 and 531-532.
53 In this case, Mr Conde’s bare allegation of bias in the Federal Magistrate is without merit. No material is produced from which bias may be inferred. It follows that this ground of appeal is without merit.
Conclusion
54 Mr Conde’s notice of appeal does not disclose any grounds of appeal which are arguable. The appropriate order is that the notice of appeal filed 3 August 2009 be struck out forthwith as an abuse of process. In light of that order I do not consider it necessary to make the order sought by Mr Hunter with respect to future directions hearings in relation to the appeal. Further, at the hearing Mr Macklin did not press for an order that Mr Conde be restrained and prevented from further litigation in respect of these particular proceedings (TS p 7 ll 29-31) and I make no such order.
55 The usual rule is that costs follow the event; accordingly the appropriate order is that Mr Conde bear Mr Hunter’s costs in respect of this notice of motion. Mr Hunter has sought an order that the costs be awarded on an indemnity basis, however I am not prepared to make an order to that effect. The purpose of an order for costs is to indemnify or compensate the person in whose favour it is made, not to punish the person against whom it is made: Latoudis v Casey (1990) 170 CLR 534. A well-known summary of the principles relevant to the exercise of judicial discretion to award indemnity costs can be found in Colgate-Palmolive v Cussons (1993) 46 FCR 225 at 231-234 and InterTAN Inc v DSE (Holdings) Pty Ltd [2005] FCAFC 54 at [11]. Circumstances in which an award of indemnity costs may be warranted include commencement of proceedings where the litigant properly advised should have known there was no chance of success, allegations of fraud by the litigant knowing them to be false, evidence of particular misconduct in the litigant, and where the justice of the case justifies such an order. In this case, while I have found that Mr Conde’s grounds of appeal have no arguable basis, it does not automatically follow that he should be liable to Mr Hunter for indemnity costs. The fact that a number of his claims required some consideration, and the absence of any apparent delinquency or extraneous or improper purpose in Mr Conde, in my view warrant an order for party-party costs only.
56 Finally, Mr Hunter has sought an order that he be at liberty to file and serve a creditor’s petition forthwith upon Mr Conde as judgment creditor, and that the hearing and determination of the creditor’s petition be heard and determined with, after or at the same time as, this notice of motion is heard and determined. No submissions were made by Mr Macklin on Mr Hunter’s behalf in relation to this order – indeed Mr Macklin stated during the hearing that a creditor’s petition had in fact been filed (TS p 10 l 45-46). In such circumstances I am not persuaded of the utility of making this order.
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I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. |
Associate:
Dated: 11 September 2009
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Solicitor for the Appellant: |
The Appellant appeared in person |
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Solicitor for the Respondent: |
Mr T Macklin of Connor Hunter Lawyers |
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Date of Hearing: |
26 August 2009 |
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Date of Judgment: |
11 September 2009 |
