FEDERAL COURT OF AUSTRALIA

Burnett v Browne (No 2) [2019] FCA 1597

ORDERS

THE COURT ORDERS THAT:

1.    The Applicant’s interlocutory application for a stay of the orders made by Justice O’Callaghan on 8 August 2019 be dismissed.

2.    The Applicant pay the Respondents’ costs of the application.

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

REASONS FOR JUDGMENT

KERR J:

1    This is an interlocutory application for a stay of orders made by O’Callaghan J on 8 August 2019 dismissing an appeal from a decision of a judge of the Federal Circuit Court of Australia: see Fitzgerald & Anor v Burnett [2018] FCCA 2866. That decision dismissed an application by the Applicant in these proceedings, Ms Burnett, for review of a decision and sequestration order made by a Registrar of that court. His Honour O’Callaghan J found that the appeal had no reasonable prospects of success. Accordingly his Honour dismissed it with costs: see Burnett v Browne [2019] FCA 1233.

2    Justice O’Callaghan summarised the background to these proceedings at [3]-[15] of his Honour’s reasons. For the purpose of these reasons it is unnecessary to set out that background, except to note that the parties have a lengthy history of litigation arising out of an action by the petitioning creditor for unpaid professional fees for work originally undertaken by her then solicitor in relation to proceedings in the Magistrates Court of Tasmania. That work originally resulted in a judgment debt of $4,559.42 being owed by Ms Burnett. Ultimately that was paid, but additional costs were incurred by Ms Burnett and owed to the petitioning creditor as a result of the unsuccessful proceedings she had pursued in the Supreme Court of Tasmania seeking to overturn that decision. It was in respect of those unpaid taxed costs that a Bankruptcy Notice was issued.

3    Ms Burnett seeks a stay of the orders made by the primary judge, pending an application for special leave being filed in the High Court of Australia.

Jurisdiction

4    Mr Browne not only contests the application on its merits but also submits that this Court has no jurisdiction to stay Order 1, being the order dismissing the appeal.

5    Mr Browne further submits that this Court presently lacks jurisdiction to stay Order 2, being the order for costs. Only the High Court would have jurisdiction to grant such a stay pending an application for special leave being filed. Mr Browne however accepts that if an application for special leave had been filed, this Court would have jurisdiction to stay Order 2.

Consideration: jurisdiction

6    I reject Mr Browne’s submission that a single judge of the Court would be without jurisdiction to entertain the application in question. Nor is this Court’s jurisdiction to grant a stay of its orders conditioned upon an application for special leave having actually been made, rather than merely foreshadowed. Applications of the kind made by the Applicant are not infrequently made. I am unaware of any instance where the failure of an application has been on the basis that an application for special leave has yet to be filed: see for example National Road Transport Association Ltd v Road Safety Remuneration Tribunal (No 2) [2016] FCAFC 58.

7    Mr Browne’s submission, if accepted, would require a party otherwise having 28 days in which to file a well-considered application for special leave to rush to file a hasty application, potentially incurring the requirement of amendment and increased costs, in order to invoke the protective jurisdiction of this Court. There is nothing in either the Federal Court Act 1976 (Cth) (Federal Court Act) or the Federal Court Rules 2011 (Cth) (Rules) as would require such an unattractive outcome.

8    The very premise of the jurisdiction as was referred to by Brennan J in Jennings Construction Limited v Burgundy Royale Investments Pty Ltd ( No 1) [1986] HCA 84; 161 CLR 681 (Burgundy Royale) at 683 is to the contrary:

The jurisdiction to grant a stay in the present case depends on whether a stay is necessary to preserve the subject-matter of the litigation.

9    This Court is well capable of crafting any orders for a stay such that they would lapse if a foreshadowed application for special leave were not in fact made within a reasonable time.

10    In Carter v Geoff Layton & Co Pty Ltd (1993) 43 FCR 392 (Carter) Cooper J said with respect to former Order 37 Rule 10:

[I]t is clear, in my opinion, that a single judge of the court has the power, concurrently with a Full Court, to stay a judgment, which is a final order of the Full Court, pending determination of a special leave application to the High Court of Australia.

11    Since Carter was decided the Federal Court has acquired a significantly enhanced appellate jurisdiction, capable of being exercised or required to be exercised as was the case in the matter before O’Callaghan J, by a single judge of the Court. Those changes reinforce the position stated by Cooper J.

12    Section 25(2B) of the Federal Court Act provides as follows:  

(2B)  A single Judge (sitting in Chambers or in open court) or a Full Court may:

…

(ab)    make an interlocutory order pending, or after, the determination of an appeal to the Court;

13    Rule 41.11 of the Rules permits a party to apply to the Court for a stay of execution of a judgment or order.

14    I accept that the Court cannot stay the operation of the underlying sequestration order having regard to the provisions of s 37(2) of the Bankruptcy Act 1966 (Cth). However, that is not practically dispositive as the Court has jurisdiction to stay any proceedings under that order: Guss v Johnstone [2000] FCA 1593.

15    Having regard to the express provisions of s 25(2B)(ab) of the Federal Court Act and the broad terms in which of r 41.11 is now expressed I reject Mr Browne’s submission that I, as a single judge of this Court, would be without jurisdiction to entertain the Applicant’s application.

Merits

16    I turn therefore to whether such an order should be made.

The relevant principles

In Carter Cooper J set out (at 393-394) a number of factors which might favour the Court exercising its discretion to stay its orders pending an application for special leave to appeal to the High Court of Australia. I take them to include:

(i)    the need to ensure that any appeal was not rendered nugatory;

(ii)    the need to ensure that execution of judgment would not deprive the appellant of the means of prosecuting the appeal;

(iii)    whether a refusal to grant a stay would make the task of the High Court in determining the appeal more difficult;

(iv)    whether there is a substantial prospect of leave to appeal being granted;

(v)    whether the stay will cause loss to the respondent; and

(vi)    the balance of convenience.

17    While I accept all of those matters are potentially relevant, I reject the proposition that this list of factors is akin to a statute requiring attention to each such factor in every case. That would risk understating the ultimate burden that must be discharged by an applicant.

18    When a stay of an order is sought so that a party affected by the order may seek special leave to appeal to the High Court before the order applies in a practical way, it is well-established that the principle stated by Brennan J in Burgundy Royale is engaged. In that case Brennan J stated (at 684):

A stay to preserve the subject-matter of litigation pending an application for special leave to appeal is an extraordinary jurisdiction and exceptional circumstances must be shown before its exercise is warranted.

The merits of Ms Burnett’s application for a stay pending her filing an application for special leave.

19    In my opinion, no exceptional circumstances exist as would warrant the exercise of that extraordinary jurisdiction in this case.

20    When the parties appeared before me on 9 September 2019, Mr Browne submitted that Ms Burnett had not identified any special leave point or made an application for such leave notwithstanding that the period in which special leave might have been sought had expired on 5 September 2019. Mr Browne properly accepted nonetheless that there were precedents for the High Court granting special leave to appeal out of time if the merits of a proposed ground warranted that course.

21    With no disrespect intended to the difficult task of an unrepresented litigant, none of Ms Burnett’s oral submissions then made in response addressed the basis whereby it might reasonably be apprehended that the High Court might grant leave. I therefore gave leave to Ms Burnett to file written submissions in support of her application. I indicated that the issue was not at large. I said:

It would assist me greatly – and it would assist you – if you are proposing to seek such special leave, to identify at the start of any submissions you make to me what are the grounds that you are going to – or ground or grounds that you are going to put to the High Court….. So, I’m just giving you an indication that if you want this court to take into account your submissions, it would assist you if you identify what the special leave point is – or points – and deal with it in a very short way. You don’t need to write pages and pages and pages; you just need to persuade me that there’s some significant issue that was determined wrongly in these proceedings by O’Callaghan J that gives you an entitlement to the extraordinary relief that you’re seeking. So, it’s not my job to give you advice, but as the matter presently stands there’s a lot to be said for the proposition that Mr Browne has said that you just haven’t got far enough to enliven the jurisdiction that you’re seeking me to exercise.

22    On 23 September 2019 Ms Burnett filed written submissions pursuant to the leave I had granted. However, as Mr Browne’s reply submissions contend, there was nothing in those submissions to (a) identify any proposed ground of appeal or (b) to identify any basis upon which the High Court might grant special leave to appeal.

23    It is not for this Court to make Ms Burnett’s case for special leave for her. Nonetheless, because she is unrepresented I have taken some care to identify any plausible basis that might exist whereby she would be entitled to a grant of such leave. I discern none.

24    It is self-evident that O’Callaghan J was correct to have observed that the matter before him had had a lengthy prior history of litigation in the state courts of Tasmania. One of the applicant’s contentions (although never precisely articulated in those terms) before his Honour was that the judge in the court below had erred in failing to look behind the judgments upon which the debt was founded. That was the seventh of the points which his Honour in fairness to Ms Burnett accepted (on Mr Browne’s submission) as might have been said to arise from the notice of appeal and proposed amended notice of appeal.

25    I discern no error in his Honour, after having carefully set out the history of the earlier proceedings, accepting Mr Browne’s submission that “these issues were dealt with by the primary judge in appropriate terms”. While that conclusion was bluntly stated, and perhaps might have benefited from some further explanation, no plausible foundation was before his Honour as would have entitled him to reason that the judge in the court below should have gone behind the long series of judicial determinations in which the merits of Ms Burnett’s case had in every instance been rejected.

26    Ms Burnett is correct to submit that at least one of her review proceedings remains notionally on foot in the Supreme Court of Tasmania. However, that proceeding is permanently stayed pending her providing $15,000.00 as security for costs. In declining to grant leave against Brett J’s orders imposing that condition, Estcourt J stated, in terms clearly against there being any basis on which to look behind the judgment relied upon by the petitioning creditor:

As pointed out by the respondent in written submissions on this application, put simply, Pearce J could detect no error made by Magistrate Mollard and Brett J could detect no error in the decision of Pearce J. Now, for the purposes of this application, I record that I can detect no error on the part of Brett J. I regard the appellant's claims as totally without any prospect of ultimate success. Leaving to one side the appellant's complaint about the refusal by Pearce J to recuse himself and her dissatisfaction with his Honour's costs orders against her, and leaving aside Brett J's conclusions as to her delay, the core issues that she continues to agitate have in essence been determined against her not just by one judge, but by two judges, of this court. More importantly the appellant continues to agitate these issues without identifying any specific appealable error on the part of those judges.

27    Estcourt J expressly found that Ms Burnett’s appeal, which had been stayed until she provided security, lacked merit. In such a circumstance I reject the proposition that error can be established by a failure on O’Callaghan J’s part not to have identified error in the failure of the judge in the court below to look behind the judgments on which the petitioning creditor relied.

28    The Applicant’s affidavit filed in support of her application, which refers to “numerous grounds of appeal admitted by Mr Browne” also mischaracterises what Mr Browne did in presenting his case in fairness to the Applicant. His having proceeded in that manner was not an acknowledgement that the Applicant had 10 valid grounds of appeal.

29    What Mr Browne did was to ensure that he was fully complying with his duty as legal practitioner seeking summary dismissal of an unrepresented party’s appeal in a bankruptcy proceeding: Kimber v Owners of Strata Plan 48216 [2017] FCAFC 226; 258 FCR 575. In fulfilment of that duty he identified to O’Callaghan J all of the contentions that the unrepresented party, if properly advised, might have advanced.

30    I discern nothing that would entitle me to criticise the manner in which each of those posited propositions was then resisted by Mr Browne in argument.

31    Nor do I discern any error in the systemic, and reasoned, manner in which O’Callaghan J rejected in turn each of the remaining nine propositions (I have dealt with proposition 7 above) that Mr Browne had submitted had been possible to advance on her behalf.

32    In short, on the materials before me I am satisfied that there is no substantial prospect of the High Court granting special leave. In my view that is dispositive. The other factors that Cooper J referred to in Carter as might warrant consideration of staying the orders made by a single judge exercising appellate jurisdiction, or a Full Court, assume there is some, at least plausible, prospect of success of a proposed special leave application if such an application were made. I discern no such merit in any possible ground.

33    Against the prospect that I am mistaken and that the High Court might ultimately not only grant special leave, but uphold the appeal, I am satisfied that the balance of convenience would not be, in any event, in the Applicant’s favour.

34    A successful party will not normally be prevented from securing the benefit of what is essentially a money judgment (the Court having no jurisdiction to undo the underlying sequestration order) pending an appeal. I do not doubt that if the Applicant was ultimately to prevail, Mr Browne would be required to disgorge and repay to the Applicant’s estate the fruits of his litigation to which the High Court would have determined he was not entitled.

35    I accept that Ms Burnett still burns with indignation at the outcome of the original proceedings in the Magistrates Court of Tasmania. Ms Burnett was entitled to challenge that outcome. The consequence of her doing so repeatedly without success has resulted in her being ordered to pay cascading amounts by way of costs. On a human level it is possible to have sympathy for the predicament in which she now finds herself. However, Ms Burnett has pursued Mr Browne with failed applications that he had to respond to and in respect of which, as the successful party, he was entitled to have his costs met. This, sadly, is another such instance.

36    I would dismiss the application for a stay with costs.

Associate:

Dated:    25 September 2019