FEDERAL COURT OF AUSTRALIA

Cristovao v Scott [2012] FCA 1009

THE COURT ORDERS THAT:

1.    The application for an urgent injunction to stay the execution of the costs order of Registrar Scott dated 17 March 2011 is dismissed.

2.    Orders 1, 2 and 3 of the Orders of Justice Middleton dated 31 August 2012 be vacated and in their place the following orders are made:

(a)    The applicant in each proceeding, Mr Rogerio Cristovao, is to file in Court and serve upon the solicitors for Forensic Document Examiners Pty Ltd, being Page Seager Lawyers, level 2, 179 Murray Street, Hobart, Tasmania (marked to the attention of Mr Mark Rapley), all evidence and material to be relied upon in the applications by 4 pm on Monday, 17 September 2012. Service is to be effected by both fax transmission and by ordinary post that day.

(b)    Forensic Document Examiners Pty Ltd is to file in Court and serve upon Mr Cristovao all evidence and materials in response to the applications brought by Mr Cristovao including any submissions, by 4 pm on Wednesday, 19 September 2012.

(c)    Mr Cristovao is to file in Court and serve upon the solicitors for Forensic Document Examiners Pty Ltd (at the same address and by the same method as in Order 1 of these Orders) any reply evidence or materials including any submissions, by 4 pm on Thursday, 20 September 2012.

3.    The hearing date of the applications in each proceeding remains fixed at 11:15 am Melbourne time on Friday, 21 September 2012.

Note:    Entry of orders is dealt with in Order 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    This judgment relates to an urgent interlocutory application made by the applicant, Mr Rogerio Cristovao, for a stay of execution of a costs order of Registrar Scott dated 17 March 2011. I heard the application last night largely outside normal court hours. Mr Cristovao is self represented. The application was opposed by Mr Adrian Lacroix, a director of the respondent, Forensic Document Examiners Pty Ltd ("Forensic"). The application sought to stay a sale the following day by Baycorp (WA) Pty Ltd (“Baycorp”) of at least Mr Cristovao's interest in real property at 28 Duffield Avenue, Beaconsfield, WA ("the property"). The property was the subject of a seizure and sale order made in the Magistrates Court at Perth in execution of a costs order made by this Court.

2    The application was not made in compliance with rr 2.13 or 17.01 of the Federal Court Rules 2011, that is, it did not comply with the rules in form. The application was made by letter dated 10 September 2012 addressed to two registrars of the Court (“the 10 September 2012 letter”), copied to Page Seagers Lawyers the solicitors for Forensic and to K Homan, Assistant Bailiff, Baycorp. The failure to comply with the rules affected the application as the letter did not contain any return date or time and did not indicate who were the parties to the application. Although the letter was copied to Baycorp it is difficult to know what that organisation made of it, and whether they were given sufficient information to decide whether to seek to be heard on the application. The application was also short served as the letter was sent on 10 September 2012 and the application was to be heard no later than 11 September 2012.

3    As the sale was listed for the following day and the application had real urgency I set aside the requirement for the applicant to comply with the rules and decided to hear his application, notwithstanding the various shortcomings. This was not without some disadvantage for the respondent, Forensic, and perhaps also for Baycorp. The solicitors for Forensic were unable to appear on the few hours notice given. Baycorp did not appear but I have no information as to the reason for its non-appearance.

4    Mr Lacroix sought to appear for Forensic. However r 4.01(2) of the Rules provides that a corporation must not proceed in the Court other than by a lawyer. By r 1.34 the Court may dispense with compliance with this rule. In Deputy Commissioner of Taxation v Compumark Pty Ltd [2012] FCA 583 I discussed the operation of the discretion to allow a person who is not legally qualified to represent a company.

5    In my view it is appropriate that Mr Lacroix be given leave to appear for Forensic because it is appropriate for the orderly disposition of the application that the company be represented. His submissions were of assistance. It is relevant too that he is a director of the company with a detailed knowledge of the facts relevant to the application by Mr Cristovao. He is the deponent of an affidavit which Mr Cristovao contends is central to the dispute. I note also that the company is not before the Court unable to represent itself out of choice. It is a respondent. In these proceedings it is usually represented by solicitors but on this occasion the application was brought on by Mr Cristovao with such urgency and on such short notice that its solicitors were unavailable.

6    I heard submissions from both Mr Cristovao and Mr Lacroix, and was taken to various of the documents filed. On several occasions I offered Mr Cristovao the opportunity to determine the substantive proceedings, rather than dealing only with the application to stop the sale, because that appeared to be the most efficient way to deal with the application. However Mr Cristovao declined to take that course, contending that he was only ready to make the urgent application to stop the sale. Mr Lacroix also said that Forensic was not ready to deal with the substantive proceedings.

7    Perhaps inevitably because both parties were not legally represented, and because the application was made urgently and not in a proper format, both parties made submissions which, in part, amounted to “giving evidence from the bar table." I took that into account in reaching my decision.

Relevant legal principles

8    The principles to be applied in an application for interlocutory relief are well established. The first question is whether the applicant has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the applicant will be held entitled to relief. A prima facie case means that the applicant must show a sufficient likelihood of success to justify, in all the circumstances, the preservation of the status quo pending trial. It does not mean that the applicant must show that it is more probable than not, or in excess of a 50% chance, that the applicant will succeed at trial. How strong this probability needs to be depends on the nature of the rights the applicant asserts and the practical consequences likely to flow from the orders sought.

9    The second inquiry relates to the "balance of convenience". That is, whether the inconvenience or injury which the applicant would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the respondent would suffer if an injunction was granted.

10    I am not required to embark upon anything resembling a trial of the action when dealing with an application for interlocutory relief. In particular, I am not required to attempt to reach a conclusion as to the facts or matters in dispute beyond satisfying myself as to whether a prima facie case has been established and about matters that may bear on the balance of convenience.

The applications

11    There are two proceedings before the court. The first proceeding is number TAD 56 of 2010 which was an application by Forensic against Mr Cristovao to set aside a statutory demand dated 23 November 2010. The setting aside application was supported by an affidavit apparently sworn by Mr Lacroix at Hobart before a Justice of the Peace on 24 December 2010. The signature of the JP is not legible.

12    On 17 February 2011 Registrar Scott ordered by consent that the statutory demand dated 23 November 2010 be set aside, and that the application for costs by Forensic be adjourned to 17 March 2011. The parties were ordered to file and serve outlines of argument regarding costs. On 17 March 2011 Registrar Scott ordered that Mr Cristovao pay Forensic’s costs as taxed.

13    Mr Cristovao sought to review the costs order of 17 March 2011 but was out of time to do so. He made an application for an extension of time within which to bring an application for review. On 28 July 2011 Marshall J, after considering and rejecting the merits of his application, refused to extend the time. His Honour held that Mr Cristovao had advanced no material which satisfied the Court that there were any special circumstances which justified a different order than that costs should follow the event.

14    On 30 September 2011 Middleton J heard an application by Mr Cristovao for leave to appeal the decision of Marshall J. His Honour held that Marshall J had correctly decided the matter and correctly exercised his discretion in not granting an extension of time to seek a review because any review would be futile and bound to fail.

15    Notwithstanding the failure of his application for review, and the failure of his application for leave to appeal the decision, Mr Cristovao then lodged an interlocutory application dated 7 May 2012 in which he seeks an injunction to stop the execution of the costs order. He contends in this application that the affidavit of Mr Lacroix dated 24 December 2010 was in fact unsworn. In his oral submissions before me Mr Cristovao described the affidavit as fraudulent, although when pressed he appeared to be saying no more than that the affidavit had not been properly sworn. Mr Cristovao contends that the matter is not res judicata because his argument as to the unsworn affidavit has never been put before the Court, because he was unaware of this at the relevant time.

16    Mr Lacroix asserted from the bar table that his affidavit was properly sworn, and that there is no defect in it. Mr Cristovao refused the opportunity to have the substantive issues determined and I am unable in this urgent hearing (and perhaps without Mr Cristovao having the opportunity to cross examine Mr Lacroix) to determine whether the affidavit was properly sworn or not. Given that Mr Cristovao refers to Mr Lacroix's conduct as fraud, the burden of proof is high for him.

17    I am not satisfied at this stage that Mr Cristovao has established even a prima facie case that the affidavit was not properly sworn, let alone fraudulent. The extent of any irregularity in the affidavit, and the consequences of any such irregularity remain live issues which will need to be determined at hearing: see Fastlink Calling v Macquarie Telecom (2008) 217 FLR 366. These matters must await trial.

18    Even if the affidavit was not properly sworn, there must remain a question as to whether any failure to do so is causative of any error in the decision of Registrar Scott. The orders of 17 February 2011 to set aside Mr Cristovao’s statutory demand were apparently made by consent. The statutory demand having been set aside, Mr Cristovao did not take me to anything which illustrated that the affidavit was relevant to the later costs order made. Although his submissions were sometimes not clear to me, it appears that Mr Cristovao says that he would not have consented to the order setting aside the statutory demand had he known the affidavit was not properly sworn. However, if any failure is only a failure in form it possibly may have been rectified by the re-swearing of the affidavit without any real effect on the proceeding. Of course, the situation would likely be different if the affidavit was fraudulent, but no prima facie case in that regard has been shown.

19    The second application is TAD 27 of 2012. In this application Mr Cristovao seeks review under the Administrative Decisions (Judicial Review) Act 1997 (Cth) of the decisions of Registrar Scott and Registrar Caporale to refuse to accept documents he sought to file with the Court dated 22 February 2012 and 28 March 2012. The documents sought to be filed were attempts to set aside the costs order of Registrar Scott dated 17 March 2011. The real substance of the question to be determined today remains whether Mr Cristovao has established a prima facie case that the costs order should be set aside. I have set out my view in relation to that question already. Whether the registrars wrongly refused to accept documents can be determined at the hearing of the substantive proceeding, but not as much turns on this.

Balance of convenience

20    Even if I was satisfied that Mr Cristovao had established a prima facie case, I consider that the balance of convenience is against him. Mr Lacroix submitted, and I accept as likely, that a significant amount of time and effort and a great deal of legal expense had been incurred by Forensic in arranging for the auction to take place the following day. It appears that Forensic is based in Tasmania and Mr Lacroix said that he had flown to Perth that day in order to be sure that the auction would proceed as planned. He expressed a legitimate concern for the wastage of that expenditure and effort should the auction be stayed.

21    Also in the mix in relation to the exercise of my discretion is the delay by Mr Cristovao in making the application. It is apparent from documents filed by him that he was notified by letter dated 10 November 2011 from Messrs Squire Sanders, lawyers, of orders made on 14 October 2011 for the seizure and sale of the property, which orders were lodged for registration under s 133(4) of the Transfer of Land Act 1893 (WA) on 7 November 2011. Mr Cristovao also filed letters from Baycorp to him dated 30 April 2012 and 31 August 2012 advising of the proposed auction of his property.

22    Mr Cristovao did not indicate why he had waited until the day before the proposed sale to make his urgent application to this Court. Mr Lacroix submitted that since November 2011 Mr Cristovao had made several applications to the Magistrates Court seeking to set aside the seizure and sale order. His application to this Court for a stay of that order was not made until, in effect, the day before the proposed auction. He makes the application after significant time and expense had been incurred in relation to the auction when it was possible for him to properly bring an application before this Court much earlier.

23    Further, although Mr Cristovao did not volunteer this in his submissions, in the course of argument it appeared that the property in which his interest is to be sold is the subject of an agreement with his estranged wife under which he is to transfer his interest to her in exchange for a financial settlement. He indicated that this transfer would have already occurred except that his wife had been unable to obtain finance. Mr Cristovao is on a pension and I do not know whether he has any other assets. There must be a prospect that if the property sale does not go ahead that Forensic will lose its opportunity to execute the costs order.

24    As against this, Forensic is a trading company. If it eventuates that the costs order was wrongly made it is likely that it will be in a position to repay costs and any damages to Mr Cristovao. If it eventuated that the costs order was wrongly made because Mr Lacroix had fraudulently sworn an affidavit then there is a prospect that he would be made personally liable for costs and damages suffered by Mr Cristovao. In my view the balance of convenience in this regard falls in favour of Forensic.

25    There is also an unrealistic aspect to Mr Cristovao's application which arguably relates to the balance of convenience. I was informed that the judgement debt is in the order of $16,000. Mr Cristovao apparently has a half interest in a property of some significant value. It remains open to Mr Cristovao to pay the $16,000, (including by borrowing that amount if he does not have it available) and paying the judgement debt without prejudice to his rights to continue to contest the validity of the costs order. If he took that course the sale would not proceed and it is likely that any legal rights he has would remain extant.

Conclusion

26    For these reasons I reject the application for an urgent injunction to stop the sale. I reiterate that in doing so I am expressing no final view as to the prospects of Mr Cristovao’s case. Mr Cristovao made it clear that he intends to cross-examine Mr Lacroix as to his affidavit, and expresses confidence in establishing that it is fraudulent. The decision as to any irregularity, and its consequences, must await this and any other evidence which the parties seek to put before the Court.

Associate:

Dated:    12 September 2012