FEDERAL COURT OF AUSTRALIA

Winn v Blueprint Instant Printing Pty Ltd [2011] FCA 292

THE COURT ORDERS THAT:

1.    The further amended notice of appeal filed herein on behalf of Julene Winn on 26 November 2009 be treated as an application for leave to appeal from the orders of the Federal Magistrates Court on 17 October 2008 in proceedings MLG 1531 of 2007.

2.    The deemed application for leave to appeal referred to in paragraph 1 of this Order be refused.

3.    The applicant, Julene Winn pay the respondent’s costs of and incidental to the said deemed application for leave to appeal, such costs to be taxed in default of agreement.

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 Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

1    On 17 October 2008, Riley FM, in proceedings numbered MLG 1531 of 2007, dismissed an application by Julene Winn (“the appellant”), seeking a review of an order made by a Registrar on 11 February 2008. On the same date, her Honour refused to grant the appellant an extension of time within which to appeal from the Registrar’s decision.

2    The Registrar’s orders had been made in the absence of the appellant who had sought, by an affidavit filed by facsimile transmission on 8 February 2008, an adjournment of her application to set aside a bankruptcy notice. Exhibited to that affidavit were medical certificates to the effect that the appellant was suffering from hypertension and was therefore unable to attend Court on 11 February 2008 and would be unfit for normal work until 17 February 2008. On 11 February 2008, the Registrar made an order dismissing the appellant’s application to set aside a bankruptcy notice numbered VN 1372 (“the first bankruptcy notice”) which had been issued at the instance of the respondent, Blueprint Instant Printing Pty Ltd (“Blueprint”), on 25 June 2007. The first bankruptcy notice had been based on non-payment of costs which the appellant had been ordered, in proceedings in the Supreme Court of Victoria, to pay to Blueprint and which the Taxing Master of that Court had taxed at $16,639.20.

3    It is convenient to consider separately, and in order, each of the grounds of appeal set out in the appellant’s further amended notice of appeal dated 9 November 2009. (The original notice of appeal had been filed on 7 November 2009 and there has been no grant of leave to amend that notice. However, Blueprint, as respondent to the appeal, has addressed written and oral submissions to the grounds set out in a draft further amended notice of appeal filed by the appellant and I shall consider those grounds as if leave to amend to include them had been granted.)

Grounds 1 and 2

1.    The Court in misconstruing the nature of the application to be determined by the Court which was an application for Review of Registrar’s order and extension of time to file same.

2.    The Court failed to hear the application for extension of time to file the review and failed to give any proper or sufficient reason for that failure.

4    In my view, the learned Federal Magistrate clearly understood that the application before her was for a review of the Registrar’s decision to dismiss the appellant’s application to set aside bankruptcy notice VN 1372. In the introductory paragraphs of her reasons published on 17 October 2008, her Honour recited;

1.    This is an application filed on 11 August 2008 seeking firstly that orders made by the Registrar on 11 February 2008 be set aside pursuant to r.16.05(2)(a) of the Federal Magistrates Court Rules 2001 and secondly that the applicant be given an extension of time in which to seek review of those orders.

2.    Rule 16.05(2)(a) permits an order made in the absence of a party to be set aside. The applicant did not appear on 11 February 2008. The Registrar on that date dismissed the applicant’s application filed on 9 November 2007. That application sought orders that bankruptcy notice VN 1372 of 2007 be set aside.

5    Rule 16.05(2) of the Federal Magistrates Court Rules 2001 (“the Rules”) provides;

The Court may vary or set aside its judgment or order after it has been entered if:

(a)    the order is made in the absence of a party; or

(b)    the order is obtained by fraud; or

(c)    the order is interlocutory; or

(d)    the order is an injunction or for the appointment of a receiver; or

(e)    the order does not reflect the intention of the Court; or

(f)    the party in whose favour the order is made consents.

6    Understood in the light of that sub-rule, paragraphs 1 and 2 of the learned Federal Magistrates’ reasons make clear that she was dealing with an application by the appellant to set aside the order which had been made by the Registrar on 11 February 2008. That order was to the effect that the appellant’s application to set aside bankruptcy notice VN 1372 be dismissed by reason of her non-attendance on 11 February 2008. The power of the Registrar to make such an order was derived from s 103(1) of the Federal Magistrates Act 1999 (Cth) (“the Federal Magistrates Act”) which provides;

The Rules of Court may delegate to the Registrars any of the powers of the Federal Magistrates Court, including (but not limited to) all or any of the powers mentioned in subsection 102(2).

7    Sub-section 102(2) of the Federal Magistrates Act then provides, so far as is relevant:

The following powers of the Federal Magistrates Court may, if the Federal Magistrates Court or a Federal Magistrate so directs, be exercised by a Registrar:

(a)    the power to dispense with the service of any process of the Federal Magistrates Court;

(b)    the power to make orders in relation to substituted service;

(c)    the power to make orders in relation to discovery, inspection and production of documents in the possession, power or custody of a party to proceedings in the Federal Magistrates Court or of any other person;

(d)    the power to make orders in relation to interrogatories;

(e)    the power, in proceedings in the Federal Magistrates Court, to make an order adjourning the hearing of the proceedings;

(f)    the power to make an order as to costs;

(g)    the power to make an order about security for costs;

(h)    the power to make an order exempting a party to proceedings in the Federal Magistrates Court from compliance with a provision of the Rules of Court;

(i)    a power of the Federal Magistrates Court prescribed by the Rules of Court;

…

Rule 20.00A of the Rules provides, again, so far as is relevant;

20.00A    Delegation of powers to Registrars

    For subsection 103(1) of the Act, each power of the Court mentioned in an item of the following table is delegated to each Registrar who is approved, or is in a class of Registrars who are approved, by the Chief Federal Magistrate for the exercise of the power.

8    The effect of sub-ss 102(2) and 103(1) of the Act in combination with r 20.00A(1)(a) of the Rules was that a Registrar could exercise, amongst others, the power conferred by Rule 13.03A which, as in force on 11 February 2008, provided:

If a party to a proceeding is absent from a hearing (including a first court date), the Court may do one or more of the following:

(a)    adjourn the hearing to a specific date or generally;

(b)    order that there is not to be any hearing unless:

(i)    the proceeding is again set down for hearing; or

(ii)    any other steps that the Court directs are taken;

(c)    if the party absent is an applicant – dismiss the application;

(d)    if the party absent is a party who has made an interlocutory application or a cross-claim – dismiss the interlocutory application or cross-claim;

(e)    proceed with the hearing generally or in relation to any claim for relief in the proceeding.

9    As I understand it, the Registrar’s order of 11 February 2008 dismissing The appellant’s application to set aside the first bankruptcy notice was made in exercise of the discretion conferred by r 13.03A(c) in light of the appellant’s absence from the hearing on 11 February 2008.

10    A right to seek a review of that dismissal by the Registrar of her application was conferred on the appellant by s 104(2) of the Federal Magistrates Act which provides;

A party to proceedings in which a Registrar has exercised any of the powers of the Federal Magistrates Court under subsection 102(2) or under a delegation under subsection 103(1) may:

(a)    within the time prescribed by the Rules of Court; or

(b)    within any further time allowed in accordance with the Rules of Court;

apply to the Federal Magistrates Court for review of that exercise of power.

11    The time limit and facility for its extension contemplated by s 104(2) are to be found in r 20.01 which stipulates:

20.01    Time for application for review

(1)    For subsection 104(2) of the Act, application for review of the exercise of a power by a Registrar must be made within:

(b)    for the exercise of a power of the Court under the Family Law Act mentioned in paragraph 20.00A (1) (b) — 28 days; and

(c)    otherwise — 7 days.

(2)    A time prescribed under subrule (1) may be extended in a proceeding:

(a)    by the Court or a Registrar on any terms as the Court or Registrar thinks fit; or

(b)    with the consent of the parties to the proceeding.

12    The way in which the power to review a decision of a Registrar is to be exercised by the Federal Magistrates Court is prescribed in these terms by r 20.03 of the Rules:

20.03    Procedure for review

The review of an exercise of power by a Registrar:

(a)    must proceed by way of a hearing de novo; and

(b)    may receive as evidence any affidavit or exhibit tendered before the Registrar; and

(c)    may with leave receive further evidence; and

(d)    may receive as evidence:

(i)    any transcript of the proceeding before the Registrar; or

(ii)    if there is no transcript, an affidavit sworn by a person who was present at the proceeding before the Registrar as a record of the proceeding.

13    Because the application for review of the Registrar’s decision had concededly been made outside the seven days from the date of the decision, being the period prescribed by r 20.01(c) of the Rules, the learned Federal Magistrate had first to consider whether to exercise the discretion conferred by r 20.02 to extend that time.

14    The appellant contended in support of this first ground of appeal that the learned Federal Magistrate had determined an application under s 16.05(2)(a) of the Rules whereas no such application had been filed. However, as I have already indicated, it is clear from her Honour’s reasons that she correctly apprehended that she was required, first, to decide whether to grant the appellant an extension of time within which to seek a review of the Registrar’s decision. It was only if that discretion had been exercised in the appellant’s favour that it would have been necessary to conduct a hearing de novo of the proceeding which had been before the Registrar on 11 February 2008.

15    However, in exercising her discretion as to whether to extend the time for seeking a review, the learned Federal Magistrate was required to bear in mind that, in the absence of any criteria governing its exercise, the discretion is unfettered. Principles which may be called in aid to guide the exercise of the discretion include those outlined by Wilcox J in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344, at 348-349. Foremost among the applicable criteria is the applicant’s prospect of success in the substantive application if the extension of time were granted. As Wilcox J observed in Hunter Valley Developments, at 349;

5.    The merits of the substantial application are properly to be taken into account in considering whether an extension of time should be granted.

See Lucic v Nolan (1982) 45 ALR 411, at 417 and Chapman v Reilly [1983] FCA 367 (unreported, Neaves J, 9 December 1983) at 6.

16    It was therefore entirely consistent with principle for the learned Federal Magistrate to have devoted most of her reasons to considering whether the appellant would have had an arguable prospect of success in the application to set aside the first bankruptcy notice if an extension of time had been granted in which to seek a review of the Registrar’s decision. It was a recognition of the centrality of the appellant’s prospects of success on the substantive application which led her Honour to observe, at [55] and [56] of her reasons;

55.    The matters to be considered in granting an extension of time are:

a)    the extent of the delay;

b)    the explanation for the delay;

c)    the prejudice to the respondent; and

d)    the prospects of success of the underlying application.

56.    The applicant’s grounds for seeking an extension of time to review the Registrar’s orders were essentially the same as her grounds for seeking that those orders be set aside under r.16.05(2)(a). For the reasons given in relation to that application, I do not consider the applicant has advanced an adequate basis for the court to exercise its discretion to extend the time in which to seek review of the Registrar’s decision of 11 February 2008. Accordingly, that application will also be dismissed.

17    It is true that the learned Federal Magistrate had, in the immediately preceding paragraph [54], concluded, after an extensive examination of the merits of the appellant’s application to set aside the first bankruptcy notice;

54.    The applicant has also sought an extension of time for the filing of the application for review. Rule 20.01 of the Federal Magistrates Court Rules 2001 specifies a seven day time limit for the filing of applications for review, although that time limit may be extended.

However, in the context of the reasons as a whole, her Honour’s conclusion that it was appropriate to dismiss the application under r 16.05(2)(a) was purely proleptic, anticipating, contrary to the result, that the necessary extension of time for review of the Registrar’s decision had been granted. (An order under r 16.05(2)(a) would have been a necessary consequence of a successful review, after a hearing de novo of the Registrar’s decision.) There were thus two levels at which the appellant’s prospects of success on her substantive application to set aside the first bankruptcy notice were relevant, namely at the stage of considering whether to extend the time for a review of the Registrar’s decision and, secondly, when considering de novo whether to dismiss the application by reason of the appellant’s non-appearance on 11 February 2008. I do not consider that, when her Honour conflated, as she did, her consideration of the merits of the substantial application, she mistakenly believed that she was immediately dealing with an application under r 16.05(2)(a) or otherwise misdirected herself in the exercise of the discretion conferred by r 20.01(2).

18    It follows from the conclusion which I have just expressed that her Honour’s reasons for concluding that the appellant had no prospects of successfully setting aside the Registrar’s order were entirely adequate in the sense required by, for example, Pettite v Dunkley [1971] 1 NSWLR 376 as explained by Gibbs CJ in Public Service Board (NSW) v Osmond (1985) 159 CLR 656, at 666. Because her Honour extensively examined the appellant’s prospects of success on her substantive application to set aside the first bankruptcy notice, there has been no denial of natural justice of the kind explained in Re Refugee Review Tribunal; Ex parte AALA (2000) 204 CLR 82.

Ground 3

The Court erred in basing its decision on impermissible evidence (pursuant to Federal Magistrates Court Rules 2001 Reg 20.03): the Registrar’s “bench sheet notes” and an affidavit of Fiona Jenkins who did not attend the hearing on 11 February 2008.

19    In support of this ground, the appellant contended, first, that r 20.03(d)(ii) of the Rules “permits the filing of an affidavit only by a person who attended the Registrar’s hearing”. That contention misstates the effect of rule 20.03 as a whole which is in these terms:

The review of an exercise of power by a Registrar:

(a)    must proceed by way of a hearing de novo; and

(b)    may receive as evidence any affidavit or exhibit tendered before the Registrar; and

(c)    may with leave receive further evidence; and

(d)    may receive as evidence:

(i)    any transcript of the proceeding before the Registrar; or

(ii)    if there is no transcript, an affidavit sworn by a person who was present at the proceeding before the Registrar as a record of the proceeding.

20    The only mandatory requirement imposed by the sub-rule is that imposed by paragraph (a) as indicated by the word “must”. That requirement is to conduct the review by way of a hearing de novo. The remaining paragraphs of the sub-rule, as indicated by the repeated introductory word “may”, only confer a discretion to receive various forms of evidence. It is open on the present appeal to infer that Ms Jenkins’s affidavit was received as further evidence by leave. It was admissible on the review proceedings because of the interlocutory nature of those proceedings; see s 75 of the Evidence Act 1995 (Cth) and Bray v F Hoffman-La Roche Ltd (2003) 130 FCR 317, per Carr J, at 335 [66].

21    In any event, I do not consider that the learned Federal Magistrate “based her decision” on either the affidavit of Ms Jenkins or the Registrar’s bench sheet notes. The references to those documents occur at [6] of her Honour’s reasons which takes its place under the heading “Background” and recites:

The applicant did not appear in person, or by a legal representative, on 11 February 2008. The respondent opposed the adjournment. The Registrar’s bench sheet notes that the Registrar read the applicant’s faxes before the hearing on 11 February 2008. An affidavit sworn by Fiona Jenkins on 22 August 2008 said that she was informed by the barrister who attended the hearing on behalf of the respondent on 11 February 2008 that the Registrar noted that the medical certificates seemed to only say that the applicant was then suffering from hypertension but, in any event, there was no explanation of why the applicant had not engaged legal representation for 11 February 2008. The Registrar refused the adjournment and dismissed the application filed on 9 November 2007 on the grounds of the applicant’s non-appearance.

Immediately after that paragraph of her reasons, her Honour went on to observe, at [7]:

In considering an application to set aside an order that was made in the absence of a party, the court must consider:

a)    the reason for the non-appearance;

b)    the extent of the delay in bringing the application to set aside;

c)    the reason for the delay;

d)    the prejudice to the respondent in setting aside the orders; and

e)    the applicant’s prospects of success in the substantive application.

22    That arrangement of her Honour’s reasons makes clear that up to [6] she was merely rehearsing the factual history which led to the making of the Registrar’s order. Her Honour’s findings of fact relevant to the exercise of discretion on the hearing de novo which she was required to conduct are those set out in the paragraphs following [7] in which she identifies the matters required to be considered when deciding whether or not to set aside an order made in the absence of a party.

23    Moreover, there has been no suggestion in support of the present appeal that what her Honour derived from the bench sheet notes or Ms Jenkins’s affidavit was inaccurate in any respect. For all of these reasons, Ground 3 does not support an allegation of denial of procedural fairness and cannot otherwise avail the appellant.

Ground 4

The Court erred in basing its decision on the irrelevant consideration that the applicant did not have legal representation and in failing to properly take into consideration that the applicant had legal representation at the time of the first hearing of the application on 6 December 2007, adjourned when her instructed solicitor did not appear, and until shortly before the hearing on 11 February 2008.

24    I do not consider that the learned Federal Magistrate based her decision on the fact that the appellant did not have legal representation at the time of the hearing on 11 February 2008 in the sense that the absence of such representation was the sole, or a determining, factor in her exercising her discretion as she did. Her Honour correctly identified at [4] of her reasons that it had been claimed on behalf of the appellant on 6 December 2007 that she was represented by a firm of solicitors, White Cleland, and that, on 4 February 2008, White Cleland had filed a notice of ceasing to act. Her Honour also recited at [5] of her reasons that the appellant had, on 8 February 2008, applied by facsimile transmission for an adjournment on medical grounds of the hearing listed for 11 February 2008. There is in that recital no implied criticism of the appellant. Nor can any such implication be gathered from [6] of her Honour’s reasons which is reproduced at [21] above and is no more than a summary of the reasons for decision of the Registrar. That is indicated by the terms of the paragraph and the place which it occupies in the reasons as a whole under the heading “Background”.

25    It is true that the learned Federal Magistrate went on to consider the matter of legal representation when examining whether the appellant had furnished an adequate explanation for her non-appearance, either in person or by counsel or solicitor, on 11 February 2008. Her Honour accepted at [8] of her reasons that the medical grounds indicated in the facsimile of 8 February 2008 constituted a satisfactory reason for the appellant’s non-attendance in person on 11 February 2008. However, the reasons below go on, correctly in my view, to indicate why there was no adequate explanation for the appellant’s failure to appear on 11 February 2008 by counsel or solicitor. As her Honour indicated at [9]-[11] of the reasons, the inference was available that, after 4 February 2008, when White Cleland ceased to act, the appellant could have instructed another legal practitioner to appear a week later, at least to support the application for an adjournment made by facsimile on 8 February 2008. The discretion to grant an extension of time within which to seek a review of the Registrar’s decision was unconfined so, consistently with what Mason J said in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24, at 40, it was open to take into account the absence of a satisfactory explanation for the non-appearance on 11 February 2008. His Honour there said;

In the context of judicial review on the ground of taking into account irrelevant considerations, this Court has held that, where a statute confers a discretion which in its terms is unconfined, the factors that may be taken into account in the exercise of the discretion are similarly unconfined, except in so far as there may be found in the subject-matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard: see Reg v Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd, adopting the earlier formulations of Dixon J in Swan Hill Corporation v Bradbury, and Water Conservation and Irrigation Commission (NSW) v Browning. (citations omitted)

26    For these reasons, Ground 4 of the amended notice of appeal cannot succeed.

Grounds 5 and 6

5.    The Court erred in failing to give proper consideration to the applicant’s medical evidence, her mother’s medical evidence and evidence of other extenuating circumstances as reason for delay.

6.    The Court failed to give sufficient reason for not accepting the applicant’s medical evidence, her mother’s medical evidence and evidence of other extenuating circumstances as reason for delay.

27    The appellant has not made out the foundation for either of these grounds insofar as they invoke a failure to take account of the evidence of the medical condition on 11 February 2008 of the appellant herself. Her Honour, at [8] of her reasons said;

The applicant said that she did not appear on 11 February 2008 because she was unwell. She said she had chronic fatigue syndrome, and a bowel disorder, as well as the hypertension mentioned in her application for the adjournment. I accept, for present purposes, that the applicant did have the health issues I have mentioned.

28    The other medical evidence related to the appellant which was before the learned Federal Magistrate established that the appellant had been diagnosed as suffering from chronic fatigue syndrome which the appellant claimed had impeded her ability, since 11 February 2008, to travel or take other active steps in relation to the subject proceeding or other litigation in which she was simultaneously engaged. In the same affidavits, the appellant referred to the recent finding of a lump in her breast for which she had to undergo tests at the North West Hospital and her need to care for her mother who had been hospitalised from 19 April to 16 June 2008.

29    Riley FM was not persuaded that the medical problems of the appellant and her mother had been of such a magnitude as to have precluded the appellant from at least filing, before 11 August 2008, an application for extension of time within which to seek review of the Registrar’s decision. Her Honour explained that conclusion in this way at [12]-[14] of her reasons for decision;

12    The delay in making the present application was 6 months. Rule 16.05(2)(a) of the Federal Magistrates Court Rules 2001 does not contain any time limit for an application. The applicant’s explanation for the delay is her ill-health. As well as the matters mentioned previously, the applicant said she recently found a breast lump which is now under investigation. Additionally, she said her mother was unwell with a life-threatening illness from April 2008, and needed the applicant to care for her.

13    In any event, the applicant filed an application in the Supreme Court of Victoria on 21 February 2008. That application was supported by a lengthy affidavit sworn by the applicant on 21 February 2008. The affidavit states that it was prepared by the applicant personally. It is 13 pages long and has about 30 pages of exhibits. The affidavit is well expressed, detailed and cogent. The applicant was also able to appear in the Supreme Court of Victoria on 29 February 2008.

14    The applicant has not explained how she could have filed the application in the Supreme Court of Victoria on 21 February 2008 and appeared in that court on 29 February 2008, but could not have filed the present application at about the same time. In my view, the delay is inordinate and not adequately explained.

30    That passage makes it clear that the learned Federal Magistrate did not fail to consider the medical evidence related to the appellant and her mother. Nor did her Honour reject that evidence. She simply regarded it, in the light of other activity undertaken by the appellant in the same period, as failing to provide a plausible explanation for the appellant’s omission even to file an application for review before 11 August 2008. A court or tribunal obliged to give reasons for its decision is not required to give “the sub-set of reasons why it accepted or rejected individual pieces of evidence”; see Re Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham (2000) 168 ALR 407, per McHugh J, at 423 [67]. An applicant for discretionary relief, like the present appellant, is to be taken to be aware of the risks that some part of the evidence on which he or she relies will not be accepted as making out some consideration tending to a favourable exercise of the discretion. I can therefore discern no procedural unfairness or denial of natural justice in the learned Federal Magistrate’s treatment of the medical evidence related to the appellant and her mother.

31    For these reasons, Grounds 5 and 6 of the amended notice of appeal must be rejected.

Ground 7

The Court denied the applicant procedural fairness on 10 September 2008 by:

(a)    refusing to permit her to argue her point that the respondent had never filed an affidavit of service of the Bankruptcy Notice;

(b)    refusing to permit her to file a further affidavit sworn on 9 September 2008 in support of that point;

(c)    adjourning the hearing until 13 October 2008 to permit the respondent time to serve an affidavit of service and to respond to the issues raised in the applicant’s affidavit that the court had refused her leave to submit.

32    It is clear from the learned Federal Magistrate’s reasons that she considered herself bound to follow Hely J in Sunderland v G & J Drivas Pty Ltd [2000] FCA 1029 and leave the question of whether there had been proper service of the first bankruptcy notice to be resolved on the hearing of a creditor’s petition when the issue for determination would be whether, and when, the appellant had committed an act of bankruptcy constituted by non-compliance with the bankruptcy notice. The same approach, as her Honour noted, had been taken by Jacobson J in Lazar v Seccombe [2005] FCA 1652. In view of that body of authority, I am unable to find any error of law in her Honour’s having exercised her discretion as she did. It follows that any refusal to receive evidence or submissions from the appellant as to alleged defective service of the first bankruptcy notice could not have affected the outcome of the review of the Registrar’s decision. The consequence is that there was no denial of natural justice in this aspect of the conduct of the hearing in the Magistrate’s Court.

Grounds 8, 9 and 12

33    These grounds also assert a denial of procedural fairness arising from the reception of evidence from the respondent directed to establishing that the directions for substituted service of the bankruptcy notice which had been given by Registrar Moore had not been complied with. However, as explained at [32] above in relation to Ground 7, her Honour did not affirmatively decide that substituted service of the first bankruptcy notice had validly been effected in accordance with Registrar Moore’s direction. All that she decided was that it was not “plain that the bankruptcy notice was not properly served.” That decision led her Honour, in the circumstances, including binding authority, to conclude that the issue of service would not avail the appellant on her application to set aside the first bankruptcy notice if an extension of time for review of Registrar Luxton’s decision were granted. It has not been demonstrated on the appeal that the submissions which the appellant would have made, had she been permitted, would have established beyond argument that service of the first bankruptcy notice had been defective. It was therefore an appropriate exercise of discretion by the learned Federal Magistrate to leave the issue of service of the first bankruptcy notice to the hearing of a creditor’s petition based on non-compliance with that notice when Blueprint, or other petitioning creditor, would have borne the onus of proving service. It follows that none of Grounds 8, 9 or 12 makes out a denial of procedural fairness or other error in relation to her Honour’s treatment of the question of whether there had been effective service of the first bankruptcy notice.

Grounds 10 and 11

10.    The Court denied the applicant procedural fairness in that it:

(a)    failed to inform the applicant of the date of handing down of judgment; and

(b)    failed to give the applicant any opportunity to make submissions as to costs.

11.    The Court erred in the exercise of its discretion in failing (in the absence of the applicant on 17 October 2008) to award costs to the applicant for the adjournments caused by the respondent’s:

(a)    failure to serve its affidavit before the hearing on 25 August 2008; and

(b)    request for an adjournment from 10 September until 13 October 2008 in order to serve an affidavit of service that was purportedly in its possession.

34    It appears that the orders of the Federal Magistrates Court refusing to set aside the order of Registrar Luxton of 11 February 2008 and dismissing an application for extension for time within which to seek a review of that order were made on 17 October 2008. On the same date, the learned Federal Magistrate published the reasons for judgment from which I have already extensively quoted earlier in these reasons. The appellant contends that the Federal Magistrates Court failed to inform her of the proposed date and time for pronouncing the orders and publishing the reasons. Instead, she was notified by email, after the event, in the following terms;

Dear Ms Winn,

Re: Winn v Blueprint Instant Printing Pty Ltd

Please find attached a copy of the judgment handed down this morning in Court 6H at the Federal Magistrates Court in Melbourne at 9.15 am in the above matter.

I will also send you a copy of the judgment in the post.

Regards,

Catherine Wilson

Deputy Associate to Federal Magistrate Riley

35    The essential complaint underlying these grounds of appeal is that, by publishing the orders and reasons without prior notice to the appellant, the Court deprived her of an opportunity to make submissions in support of an order that Blueprint should pay at least part of her costs of the hearings on 25 August 2008, 10 September 2008 and 13 October 2008. However, it does not appear that the learned Federal Magistrate made any orders for the costs of those hearings, either for or against the appellant. In those circumstances, even if the orders actually made on 17 October 2008 be taken as impliedly providing that there should be no order as to the costs of the hearings on any of the three days instanced by the appellant, it was open to the appellant to request that the order of 17 October 2008 be varied or set aside and an order for costs be made in favour of the appellant. Power to accede to such a request is conferred by Rule 16.05 of the Rules which, so far as is relevant, provides;

(1)    The Court may vary or set aside its judgment or order before it has been entered.

(2)    The Court may vary or set aside its judgment or order after it has been entered if:

(a)    the order is made in the absence of a party; or

…

(c)    the order is interlocutory; or

…

(e)    the order does not reflect the intention of the Court; or

…

(3)    This rule does not affect the power of the Court to vary or terminate the operation of an order by a further order.

36    Alternatively, if, on the view which I prefer, the learned Federal Magistrate intentionally left open the question of what orders as to costs should be made in consequence of the orders of 17 October 2008 to enable such costs to be the subject of later submissions by the parties, the appellant could have availed herself of that opportunity by requesting arrangements to be made to receive relevant submissions either orally or in writing.

37    On either view of the effect on costs of the learned Federal Magistrate’s orders of 17 October 2008, the appellant has not demonstrated any entitlement to relief in that respect by way of appeal to this Court invoking the concept of denial of procedural fairness.

Ground 13

The Court erred in finding that the notice was not capable of misleading in that it:

(a)    failed to take relevant evidence into consideration;

(b)    made errors of fact and law

(c)    failed to give any or sufficient reasons for such finding.

38    This ground refers to the first bankruptcy notice which the appellant had sought to set aside. The contention which the appellant desired to advance, that the first bankruptcy notice was reasonably capable of misleading her was apparently based on a proposition that satisfaction of none of the four conditions for substituted service imposed by Registrar Moore had been established by evidence adduced by Blueprint up to 5 October 2008. The learned Federal Magistrate dealt with this issue in her reasons by observing, at [24];

The applicant also argued that the manner in which the bankruptcy notice was served meant that it was misleading, because she did not know what she had to do, and when she had to comply. However, the applicant acknowledged service of the bankruptcy notice and order for substituted service. They were in a standard form and, in my view, not misleading. I do not consider that the applicant has a reasonable prospect of setting aside the bankruptcy notice on this ground.

39    It is clear that her Honour’s evaluation of this issue was not intended to be conclusive but was merely part of her assessment of the appellant’s prospects of succeeding on an application to set aside the first bankruptcy notice if an extension of time for reviewing Registrar Luxton’s order were granted. The alleged capacity of the first bankruptcy notice to mislead the appellant was bound up with the efficacy of the steps taken to effect substituted service in accordance with Registrar Moore’s directions. For the reasons explained at [33] above, it was not erroneous for the learned Federal Magistrate to have regarded that issue, at least prima facie, as appropriate to be resolved on the hearing of a creditor’s petition (if any) rather than on the presumptive application to set aside the first bankruptcy notice.

Ground 14

The Court made an error of fact and an error of law in deciding that the applicant had not applied for an extension of time to comply with the notice.

40    The learned Federal Magistrate did not find that the appellant had not applied for an extension of time within which to comply with the first bankruptcy notice. Rather, her Honour expressly stated at [3] of her reasons, that the time for compliance had twice been extended by a Registrar, first on 12 November 2007 and then on 6 December 2007 when it was extended to 11 February 2008, obviously to preserve the rights of the appellant until, at least, the adjourned hearing set down for that day. In these circumstances, Ground 14 cannot avail the appellant.

Ground 15

The Court made errors in applying the law in deciding:

(a)    that ineffective service of the notice was not relevant to the determination of the application to set aside the notice or a ground to set aside the notice;

(b)    that an order of the Taxing Master subject to a review is a final order;

(c)    that the Registrar was not obliged to extend time until the court had determined the issue of the applicant’s counterclaim;

(d)    that the overstatement / misstatement of the amount on the notice, as notified by the applicant to the respondent would be argued as a ground to have the notice set aside, was not a ground to have the notice set aside;

(e)    that the overstatement/misstatement of the amount of interest on the notice, as notified by the applicant to the respondent would be argued as a ground to have the notice set aside, was not a ground to have the notice set aside;

(f)    that it was not appropriate to go behind the judgment.

41    I have not been persuaded that any of the errors imputed to the learned Federal Magistrate under this ground has been committed. I shall set out seriatim my reasons for that conclusion.

(a)    Her Honour did not decide that ineffective service of a bankruptcy notice was irrelevant on an application to set aside the notice. What was decided, applying the observations of Hely J in Sunderland v G & J Drivas Pty Ltd [2000] FCA 1029 and Jacobson J in Laza v Seccombe [2005] FCA 1652 was that, unless the Court were satisfied that the alleged service had been clearly defective, the preferable course would be to allow the issue of service to be resolved on the hearing of the creditor’s petition. In the present case, her Honour considered, correctly in my view, that it had not been shown, particularly in light of the Registrar’s order for substituted service, that service of the bankruptcy notice had been clearly defective.

(b)    The learned Federal Magistrate fully understood this contention because she referred at [29] of her reasons to r 63.56 of the Supreme Court (General Civil Procedure) Rules 2005 which has been invoked by the appellant in support of this sub-ground. However, her Honour went on to note that the appellant’s application for review of the order of the Taxing Master had been struck out. In the absence of a pending application for review, her Honour concluded, I think correctly, that the order of the Taxing Master was a final order, notwithstanding that it might become subject to review or appeal or have been set aside or otherwise made inoperative; see Clyne v Deputy Commissioner of Taxation (NSW) (1983) 48 ALR 545, at 548.

(c)    In support of this sub-ground, the appellant claimed that “the Bankruptcy Regulations” require an extension of time for the purpose of enabling the Court to determine whether the debtor has a counter-claim, set-off or cross demand. It seems that by this reference to “the Regulations” the appellant intended to invoke s 41(7) of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”) which provides;

Where, before the expiration of the time fixed for compliance with the requirements of a bankruptcy notice, the debtor has applied to the Court for an order setting aside the bankruptcy notice on the ground that the debtor has such a counter claim, set off or cross demand as is referred to in paragraph 40(1)(g), and the Court has not, before the expiration of that time, determined whether it is satisfied that the debtor has such a counter claim, set off or cross demand, that time shall be deemed to have been extended, immediately before its expiration, until and including the day on which the Court determines whether it is so satisfied.

In her reasons dealing with this point, the learned Federal Magistrate noted that in her application to set aside the bankruptcy notice the appellant had not referred to the existence of a counterclaim. However, her supporting affidavit did assert a counterclaim. Nevertheless, as noted by her Honour, that counterclaim had been based on an enforcement proceeding instituted by the appellant on 21 July 2004 which had been dismissed by Bongiorno J in the Supreme Court of Victoria on 27 March 2006. That asserted counterclaim, it follows, was not available on or after 9 November 2007 to enliven the operation of s 41(7).

(d) and (e)    It seems from her written submissions in support of the appeal that the appellant bases these sub-grounds on s 41(5) of the Bankruptcy Act, which provides;

A bankruptcy notice is not invalidated by reason only that the sum specified in the notice as the amount due to the creditor exceeds the amount in fact due, unless the debtor, within the time allowed for payment, gives notice to the creditor that he or she disputes the validity of the notice on the ground of the misstatement.

These sub-grounds of appeal are based on a misunderstanding of the effect of s 41(5). That sub-section does not stipulate that an alleged overstatement or misstatement in a bankruptcy notice which has been notified by the debtor to the creditor necessarily constitutes the grounds for setting aside the bankruptcy notice. All the sub-section does is to provide that notification within the time allowed for payment of the debt is a condition precedent for the debtor’s seeking to invalidate the notice by reason of the alleged overstatement.

(f)    In support of this sub-ground of appeal, the appellant referred to Wren v Mahony (1972) 126 CLR 212, at 224 where Barwick CJ observed;

Lord Esher in emphasizing that the Bankruptcy Court did not go behind a judgment as a matter of course but only if appropriate circumstances were shown to exist, said in Re Flatau; Ex parte Scotch Whisky Distillers Ltd.[(1888) 22 QBD, at pp 85-86]:

“There is no statute which imposes any such obligation on the Court of Bankruptcy. Section 7 [of which s. 52 (1) is a counterpart] does no more than give a discretion.”

His Lordship, in using this expression, was not intending, in my opinion, to weaken the emphasis he had always placed on the need for the Court of Bankruptcy to be satisfied of the existence of the petitioning creditor’s debt. Rather, if one reads all his expressions in the several cases I have cited, he was pointing out that the Bankruptcy Court could in general accept a judgment debt as sufficient proof of that debt particularly where it resulted from a fully heard contest between parties but that it always had the power to go behind the judgment and if the case was a proper one, should do so. The judgment is never conclusive in bankruptcy. It does not always represent itself as the relevant debt of the petitioning creditor, even though under the general law, the prior existing debt has merged in a judgment. But the Bankruptcy Court may accept the judgment as satisfactory proof of the petitioning creditor’s debt. In that sense that court has a discretion. It may or may not so accept the judgment. But it has been made quite clear by the decisions of the past that where reason is shown for questioning whether behind the judgment or as it is said, as the consideration for it, there was in truth and reality a debt due to the petitioning creditor, the Court of Bankruptcy can no longer accept the judgment as such satisfactory proof. It must then exercise its power, or if you will, its discretion to look at what is behind the judgment: to what is its consideration. It is not the law, in my opinion, that whether in any case the Court of Bankruptcy will consider whether there is satisfactory proof of the petitioning creditor’s debt is a mere matter of its own discretion. Nothing in Corney v. Brien [(1951) 84 CLR 343] lends support for such a view. Rather the emphasis is upon the paramount need to have satisfactory proof of the petitioning creditor’s debt. The Court’s discretion in my opinion is a discretion to accept the judgment as satisfactory proof of that debt. That discretion is not well exercised where substantial reasons are given for questioning whether behind that judgment there was in truth and reality a debt due to the petitioner.

It needs to be remembered, first, that his Honour was referring in that passage to the discretion to go behind a judgment which arises when a court is considering whether or not to make a sequestration order on a creditor’s petition. The passage is not to be regarded as applying with equal force when the decision under contemplation is whether or not to set aside a bankruptcy notice. In the second place, I have discerned nothing in the reasons of the learned Federal Magistrate to suggest that she was unaware of the eventual “paramount need to have satisfactory proof of the petitioning creditor’s debt.” On the contrary, the reasons are replete with consideration of the circumstances in which the Taxing Master’s order and the costs orders which underlay it have come to be made and the principles to be distilled from the relevant law of costs.

Grounds 16 and 22

16.    The Court erred in that it:

(a)    misunderstood the point that the costs subject of the order on which the notice is based are not the costs of the respondent only but the costs also of another party Goodwin and the costs of his two proceedings;

(b)    failed to give any consideration to the applicant’s evidence that the costs claimed by the respondent are also the costs of Goodwin;

(c)    failed to properly consider the evidence that on the bill of costs as taxed Blueprint was awarded full scale costs on nearly all items when all of these items relate to all three proceedings and that those errors constitute 140 Objections in the applicant’s Notice of Review.

(d)    failed to take into consideration that the respondent claimed over $17,000 as its costs only for an application for leave to appeal in respect of an amount of $1,887, being an application for leave that the applicant did not instruct her solicitor to file because the order was in her favour;

(e)    failed to properly apply the principle of apportionment of costs in consolidated proceedings;

…

22.    The Court erred in that it failed to properly consider the evidence of Mr Goodwin that his costs are included in the respondent’s costs as taxed.

42    These grounds are misconceived. The learned Federal Magistrate clearly understood the appellant’s contention that the costs which were the subject of the Taxing Master’s order should have been apportioned between those referable to the appellant herself and those referable to Mr Goodwin so that only one-third fell on the appellant. However, her Honour concluded that, even if that argument were accepted, it would not entail a reduction of the foundational debt to below $2,000. That conclusion is to be found in these paragraphs of the reasons at first instance;

27.    Blueprint’s costs were taxed at $16,639.20. One third of that figure would have been $5,546.40. To the extent that the applicant raised the argument about the amount of the taxation as a reason for going behind the judgment, the Full Federal Court in Emerson v Wreckair Pty Ltd (1992) 33 FCR 581 at [28] held that:

It would, therefore, seem appropriate that upon an application to a court exercising jurisdiction in bankruptcy to set aside a bankruptcy notice, the court should not go behind a judgment where the grounds upon which the judgment is challenged are such that, if accepted, they would only support a finding that the amount of the debt be reduced and would not support a finding that there was in truth no debt at all.

28.    The applicant did not dispute that she was liable to pay Blueprint’s costs. As well as saying that the amount should have been reduced by one third, she also said that some items should not have been claimed at all. However, I see no basis on which it could reasonably be concluded that the applicant’s costs, properly taxed, might be reduced to an amount that meant the applicant had no debt to Blueprint at all, or even a debt of less than the statutory minimum for a bankruptcy notice of $2,000. Accordingly, I do not consider that the applicant has reasonable prospects of being able to go behind the judgment and then having the bankruptcy notice set aside.

I regard that analysis as fully consistent with principle. Accordingly, these grounds do not establish any error of law which led her Honour’s exercise of discretion to miscarry.

Ground 17

The Court denied procedural fairness in that it:

(a)    informed the applicant that it would award costs against her if she left the hearing following her informing the court of her perception of unfair procedure;

(b)    made sarcastic comments to the applicant including as to her medical symptoms.

43    At the hearing of the appeal, the appellant, who appeared in person, was unable to supply references to the transcript of the hearing in the Federal Magistrates Court which were said to substantiate these claims. However, I have carefully examined for myself the transcript of the hearings on each of 25 August, 10 September and 13 October 2008. The only reference to an award of costs being made against the appellant if she were to leave the hearing is to be found at p 37 of the transcript of the hearing on 10 September 2008. The appellant, who was again self-represented, appeared by video-link in Brisbane while the learned Federal Magistrate and Ms Treleaven of Counsel for Blueprint were in Melbourne. The appellant was addressing submissions to her desire to have completed a review of the taxation of costs which had occurred in the Supreme Court of Victoria. The transcript record continues:

44    After further discussion about the sufficiency of Ms Treleaven’s chronology, the appellant resumed her submissions about aspects of the proceedings in the Supreme Court of Victoria and the hearing continued until a luncheon adjournment was taken at 12.46 pm.

45    The transcript record of the exchange which I have reproduced makes it clear that it was not the learned Federal Magistrate who told the appellant that costs would be awarded against her if she were to leave the hearing. Rather, on the appellant’s having intimated that she was not feeling well and would have to go home, her Honour sought the response of Counsel for Blueprint to that suggestion. When Ms Treleaven said that she would apply for the appellant’s application to be dismissed with costs, her Honour, entirely properly, warned the appellant that if she were to leave the hearing before completing her submissions she would be at risk of having her application dismissed and an order for costs made against her. Moreover, although there are references by the appellant in the passage extracted above to the hearing having been guided in a way that favoured Blueprint, that complaint appears to have focused on the use of what was said to have been a piecemeal and inaccurate chronology furnished by Counsel for Blueprint. At all events, the hearing proceeded after the interruption which I have recounted without any further reference to the prospect of costs being awarded against the appellant.

46    The transcript of the hearings to which I have referred contains numerous references to medical conditions from which the appellant was suffering from time to time. Most of those references were made by way of excusing or explaining delays by the appellant in prosecuting various claims for relief in the Supreme Court of Victoria or the Federal Magistrates Court. In support of that part of her case, the appellant sought to rely on a medical certificate of a Dr Brockett. Ms Treleaven objected to the admissibility of that document after which the following exchange is recorded in the transcript of the hearing on 10 September 2008:

47    There is further reference at pp 74-75 of the same transcript to the admissibility of the medical evidence on which the appellant sought to rely. However, I have been unable to detect in that passage or the earlier exchange set out at [46] above any comment made by the learned Federal Magistrate which even remotely suggested the use of sarcasm. On the contrary, I consider, after detailed review of the whole transcript that her Honour conducted the proceedings with exemplary tact and forbearance. It follows that neither limb of Ground 17 of the amended notice of appeal has been made out.

Ground 18

The Court failed (a) to give any or proper consideration to the applicant’s evidence and submissions in support of each of the grounds to set aside the notice, objections to the respondent’s affidavits and invalidity of orders of 9 November 2005 and 31 January 2006; and failed (b) to give proper or sufficient reason for finding that (i) each ground would not set aside the notice, (ii) the order of 9 November 2005 subject to review pursuant to r 63.56.1 is a final order, (iii) the application for review and appeal are not bona fide and (iv) 15(c).

48    Like Counsel who appeared for Blueprint in this Court, I have had difficulty in identifying any proper basis for appeal in this ground as formulated. It is sufficient to indicate that it is plain from the reasons of Riley FM that her Honour’s principal reason for refusing an extension of time in which to seek a review of the Registrar’s decision was that she considered the appellant to have insufficient prospects of successfully setting aside the bankruptcy notice if an extension of time were granted. Those prospects depended on an improbable account of the form in which the bankruptcy notice had been served, a favourable exercise of discretion to resolve that issue before the presentation of a creditor’s petition, or successfully persuading the Court that, on going behind the judgment embodied in the order of the Taxing Master in the Supreme Court, the foundational debt would be reduced to less than $2,000. As explained elsewhere in these reasons, I regard as entirely adequate the consideration given by the learned Federal Magistrate to these issues.

Ground 19

The Court denied procedural fairness in that it:

(a)    permitted the respondent to purportedly serve a Creditor’s Petition during the hearing of the application to set aside the bankruptcy notice;

(b)    failed to take any action in respect thereof and required the applicant to continue the hearing;

(c)    permitted the respondent to rely on affidavits, transcript, submissions and cases that had not been served before the hearing;

(d)    refused to permit the applicant to subpoena Antoinette Austin for cross-examination on 10 October 2008 re her affidavit sworn 22 September 2008;

(e)    denied the applicant the opportunity to make an application or submissions in regard to the costs of the videolink facilities for the three hearings.

19(a)

49    I am unable to understand this part of Ground 19. I have reviewed the transcript of the hearing on 13 October 2008 between pp 139 and 142 to which the appellant has referred in her written outline of submissions to this Court.

50    The discussion recorded in those pages of the transcript concerned an incident which the appellant said had occurred before the hearing commenced on that morning. After the luncheon adjournment on the same day the appellant complained to the learned Federal Magistrate that an unidentified man had entered the hearing room where the videolink equipment was set up and had thrown “some paper” at the end of the table where the appellant was sitting. After her Honour noted that, following the incident recounted by the appellant, the hearing had proceeded during the morning session, the transcript records the following exchange:

51    There is nothing in the transcript to indicate that the “paper” thrown on to the table by the unidentified man had been a bankruptcy petition. Even if it had and the man’s actions had constituted a contempt of court, it cannot reasonably be suggested that the incident impinged adversely on the fair conduct of the proceedings which gave rise to the present appeal.

19(b) and (c)

52    These sub-grounds of appeal cannot be sustained because they complain of a denial of procedural fairness in the course of a hearing which resulted in the orders against which the appellant wishes to appeal. In my view, those orders were made in the exercise of a discretion and, if this Court were persuaded that the discretion had miscarried, it would be open to it to exercise the discretion for itself and consider afresh any evidence bearing on the relevant discretionary factors; see e.g. Twist v Randwick Municipal Council (1976) 136 CLR 106, at 113-114.

53    In any event, I am not persuaded that the appellant’s lack of prior access to certain affidavits, transcript, written submissions or legal authorities caused any substantial injustice to the appellant. That is because she was given, in most respects, an opportunity to deal with the material in the course of the hearing or as a result of the adjournment from 10 September to 13 October 2008. In addition, none of the material was determinative of the result which flowed from conclusions of the learned Federal Magistrate on matters of law or discretion which I have upheld, e.g. at [32], [33], [39], [41](b) and [42] above.

19(d)

54    Ms Antoinette Austin was a costs consultant who had represented Blueprint before the Victorian Taxing Master on the taxation of costs which resulted in the making of the order on which was founded the judgment debt asserted in the first bankruptcy notice. Her affidavit recited what had taken place before the Taxing Master and explained the techniques which that officer had used in taxing off certain items in Blueprint’s bill. No cross-examination of Ms Austin, however extensive, could have affected the conclusion reached by Riley FM at [28] of her reasons which has been reproduced at [42] above.

19(e)

55    As noted at the outset of these reasons, the only orders made by Riley FM on 17 October 2008 were:

(1)    The application under r.16.05(2)(a) of the Federal Magistrates Court Rules 2001 to set aside the orders made on 11 February 2008 is dismissed.

(2)    The application for an extension of time in which to review the orders made by the Registrar on 11 February 2008 is dismissed.

It does not appear that her Honour made any order at all for the costs of the proceedings, let alone an order that the appellant pay the expenses incurred by the Court in providing her with videolink facilities for the three hearings on 25 August, 10 September and 13 October 2008. Accordingly, this sub-ground of appeal cannot be sustained.

Ground 20

The Court erred in that it failed to properly consider the applicant’s evidence that the review of taxation and the appeal had not been conducted, despite the applicant’s efforts to have the matters heard in a timely manner, as a result of some errors and omissions by the court and the frustration of her proceedings by the respondent.

56    For the reasons explained at [54] above, no consideration of the appellant’s evidence of the proceedings in the Supreme Court, even if she had been allowed to expand that evidence, could have led the learned Federal Magistrate to a different conclusion about the existence of the foundational debt. This ground of the purported appeal also fails.

Ground 21

The court failed to take into consideration the fact that the respondent issued the bankruptcy notice when the application for review (that the Taxing Master is required to conduct) and the appeal were pending.

57    The fact that the first bankruptcy notice had been issued while an application for review of the taxation of costs in the Supreme Court of Victoria or an appeal from the Taxing Master’s order was pending was irrelevant to an application to set aside the bankruptcy notice except for the question of whether it had relied on a debt supported by a final judgment. As indicated at [41](b) above, the learned Federal Magistrate’s conclusion on that question was unexceptionable.

Ground 23

The Court erred in that it does not have the jurisdiction to decide that the Taxing Master’s discretion had not miscarried.

58    It is clear that the Federal Magistrates Court has no jurisdiction to adjudicate directly on the correctness or otherwise of an order by the Taxing Master of the Supreme Court of Victoria. In the present case, Riley FM did not purport to exercise any such jurisdiction. All her Honour did, consistently with high authority, was to consider whether the appellant had an arguable prospect of persuading a Court of Bankruptcy that behind the Taxing Master’s order there was not “in truth and reality a debt due to” Blueprint.

Ground 24

The Court erred in failing to take into consideration that:

(a)    the Registrar’s order made on 11 February 2008 dismissing the application to set aside the bankruptcy notice pursuant to Federal Magistrates Court Rules 2001 r.16.05(2)(a) (party’s absence from hearing) was made in the applicant’s absence due to certified illness;

(b)    the applicant has been denied the right to a hearing of her application;

(c)    the application to set aside the notice was filed in time;

(d)    the Registrar denied procedural fairness by:

(i)    taking into consideration prejudicial material that the respondent had not served on the applicant;

(ii)    failing to facilitate the applicant’s appearance by telephone / videolink.

59    Each of the matters instanced in this purported ground of appeal could only have availed the appellant if the learned Federal Magistrate had first come to an affirmative view that, if the order of 11 February 2008 had been set aside, the appellant might arguably have succeeded in having the first bankruptcy notice set aside. Her Honour did not form such a view and, for the reasons explained at [32], [33], [39], [41](a), (b) and (f), [42] and [48] above this ground of the purported appeal also fails.

Ground 25

The Court erred:

(a)    in failing to give proper consideration to the evidence that Blueprint and Goodwin are joint creditors;

(b)    in fact, in failing to find that the applicant has a counterclaim in excess of their joint costs;

(c)    in law, in failing to find that the issue of a bankruptcy notice by one only of joint creditors invalidates that notice.

60    The evidence did not establish that Blueprint and Goodwin were joint creditors in respect of the costs awarded by the Taxing Master of the Supreme Court of Victoria in proceedings 4215 of 2002 in that Court to which Blueprint alone and not Goodwin was a party. Indeed, the whole thrust of the appellant’s case in the Federal Magistrates Court was that the Taxing Master had been persuaded to “double count” when taxing Blueprint’s costs, by including some of Goodwin’s costs for which the appellant was severally liable to Goodwin alone. Similarly, the counterclaim on which the appellant had relied in 2003 to stultify bankruptcy notices issued against her by Goodwin had been against Goodwin alone. This ground of appeal would, therefore, be bound to fail.

Ground 26

The Court erred in failing to find that the respondent’s ‘service’ of a creditor’s petition by disruption of the hearing of the application on 13 October 2008 is:

(a)    an abuse of process;

(b)    contempt of court;

(c)    reason to:

(i)    strike out the respondent’s response;

(ii)    award costs of the hearing of the application to the applicant.

61    As explained at [51] above, assuming that there had been improper service of a bankruptcy petition while the subject proceedings in the Federal Magistrates Court were pending, Riley FM was not seised of that matter. There was no motion to charge Blueprint or anybody representing it with contempt of court or abuse of process. Nor was any application made to her Honour for an order striking out Blueprint’s defence or requiring it to pay the appellant’s costs of proceeding No MLG 1531 of 2007 in the Federal Magistrates Court. This purported ground of appeal is therefore misconceived.

Ground 27

The Court created an apprehension of bias in that the Court:

(a)    did not bring an impartial mind to the determination of the application in that the Court repeatedly referred to a creditor’s petition and to the matter proceeding to a creditor’s petition;

(b)    made orders and statements to assist and advance the respondent’s case;

(c)    permitted the creditor’s petition to be served in court during the hearing of the application;

(d)    Associate engaged in communications with the respondent that excluded the applicant; acted for the respondent in faxing its affidavit, submissions and precedents during each hearing and aided the respondent to access confidential information to deliver the petition in the application hearing.

27(a)

62    I have considered at [32], [33], [39], [41](a) and [48] above the learned Federal Magistrate’s references to the discretion to leave the validity of a bankruptcy notice to await the hearing of a creditor’s petition based on the notice. In my view, her Honour’s allusions to that matter during the hearing were consistent with the authorities to which she referred and could not have created a reasonable apprehension that she was biased against the applicant.

27(b)

63    As already indicated, I have carefully reviewed the transcript of the three days of hearings in the Federal Magistrates Court. I do not regard any of the directions given or statements made by her Honour as having been made for the purpose of assisting or advancing Blueprint’s case. They were like the comments characterised by Lord Walker of Gestingthorpe in Demarco Almeida v Opportunity Equity Partners Ltd [2006] UKPC 44, at [103], where his Lordship said;

[T]he judge’s interventions were motivated, not by partiality, but by the wish to understand the evidence (which was often obscure and inconsequential) and to push on the trial process.

That characterisation was adopted with approval by Gummow ACJ in Concrete Pty Ltd v Parramatta Design & Development Pty Ltd (2006) 229 CLR 577, at 583 [4].

64    As noted at [47] of these reasons, I regard as exemplary her Honour’s conduct during the appellant’s presentation of complex and often convoluted evidence and submissions which occupied the major part of three long days of hearings. I reject the appellant’s imputation of apprehended bias on the basis alleged in this sub-ground.

27(c)

65    This issue has been examined at [50] and [51] above. There is no suggestion that the Federal Magistrates Court “permitted” the service of a bankruptcy petition in its precincts or during the hearing which is the subject of the present appeal. If such service in fact occurred, that was incapable of impinging on the correctness of the reasons published on 17 October 2008 or on the validity of the orders pronounced on that day.

27(d)

66    My examination of the transcript of the hearings on each of 23 August, 10 September and 13 October 2008 reveals that communications in which the Associate to the learned Federal Magistrate engaged and the sending of material by facsimile to Brisbane were essentially to accommodate the appearance of the appellant by videolink while she remained in Brisbane. Those actions were to facilitate the hearing and expedite the determination of the appellant’s application and could not have given rise to any reasonable apprehension of bias against her. If a creditor’s petition was served on the appellant before the hearing on 13 October 2008, that signifies only that the date of that hearing and the arrangements for the appellant’s participation by videolink were known in advance by representatives of Blueprint.

Ground 28

Counsel for the respondent throughout the proceeding was not registered/entitled to practice and appear in the federal courts.

67    This ground is misconceived. Section 44 of the Federal Magistrates Act 1999 (Cth) provides, so far as is relevant;

A party to a proceeding before the Federal Magistrates Court is not entitled to be represented by another person unless:

(a)    under the Judiciary Act 1903, the other person is entitled to practise as a barrister or solicitor, or both, in a federal court; …

Blueprint was represented at the hearing on 25 August 2008 by Ms L Barrett and at each of the hearings on 10 September and 13 October 2008 by Ms J Treleaven. Each of those practitioners was instructed by Herbert Geer Rundle, the solicitors on the record for Blueprint for the duration of the hearing. There is no evidence to suggest that any of those legal representatives of Blueprint was not entitled under the Judiciary Act 1903 (Cth) to practise as a barrister or solicitor or both, in a federal court.

Conclusion

68    In my view, the orders made by Riley FM on 17 October 2008 were interlocutory so that the appellant can only appeal from them by leave. In the circumstances, it is appropriate to treat the appellant’s notice of appeal filed 7 November 2008 and her successive amended notices of appeal, including that filed on 26 November 2009, as an application for leave to appeal on the grounds set out in those notices. On that basis, I am required to apply the two limbs of the test enunciated by a Full Court of this Court in DÉcor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 (“DÉcor Corporation v Dart”) by asking;

(a)    “whether, in all the circumstances, the decision [of the Federal Magistrates Court] is attended with sufficient doubt to warrant its being reconsidered [on appeal]”; and

(b)    “whether substantial injustice would result if leave were refused, supposing the decision to be wrong.”

69    As the reasons outlined above reveal that the appellant has comprehensively failed to make out any of the grounds of appeal set out in her further amended notice of appeal filed on 26 November 2009, it follows that she has not satisfied the first limb of the test formulated in DÉcor Corporation v Dart. If I were wrong in characterising the orders of 17 October 2008, the reasons which I have explained would compel the dismissal of the appeal embodied in the appellant’s original notice of appeal and the successive amendments thereto.

70    As well, because Blueprint has subsequently abandoned any attempt to rely on the first bankruptcy notice as a foundation for a creditor’s petition against the appellant, there can be no substantial injustice if leave to appeal be refused. Accordingly, leave to appeal from the orders of the Federal Magistrates Court of 17 October 2008 must be refused with costs.

Associate:

Dated:    31 March 2011