Boensch v Somerville Legal Pty Ltd

1. The appeal is incompetent.
2. Leave to appeal is refused.
3. The appellant to pay the costs of the respondent to be agreed or taxed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ABRAHAM J: 1 On 4 April 2019, a judge of the Federal Circuit Court of Australia dismissed with costs, an application by the appellant in respect to a bankruptcy notice issued on 7 February 2019. The creditor is the respondent in this matter, Somerville Legal Pty Ltd. The total debt amount stated in that bankruptcy notice is $109,956.75. 2 The appellant applied to this Court for interlocutory orders seeking that the time for compliance with the bankruptcy notice be extended until the final determination of the appeal in this proceeding, and an order staying the creditor's petition which was filed as a consequence of the dismissal of his application by the Federal Circuit Court. On 11 April 2019 this Court dismissed that application: Boensch v Somerville Legal Pty Ltd [2019] FCA 590. 3 On 26 April 2019, the appellant filed a notice of appeal pursuant to s 24(1)(d) of the Federal Court of Australia Act 1976 (Cth) (FCA Act), challenging the decision of the Federal Circuit Court. The respondent challenged the competency of the appeal, arguing that the decision of the Court below was an interlocutory decision, and therefore there is no right to appeal, rather leave to appeal is required pursuant to s 24(1A) of the FCA Act. 4 The appellant disputed the respondent's contention as to competency, but filed an application for leave to appeal and argued if leave was required, that it ought to be granted. The hearing of those two matters was heard together. 5 This judgment addresses both issues; the challenge to the competency of the appeal and, if leave is required, whether it ought to be granted. Needless to say the respondent opposed the grant of leave to appeal, if it is required. 6 The appellant's notice of appeal alleges seven grounds of appeal as follows: 1. The primary judge (Street FCCJ) erred by refusing to uphold the appellant's contention that the bankruptcy notice issued by the Official Receiver on 7 February 2019 upon the application of the respondent (the relevant bankruptcy notice) to him constituted an abuse of process and could not support, or give rise to, an act of bankruptcy being committed by the appellant within the meaning of s. 40(1)(g)(i) of the Bankruptcy Act. 2. The primary judge (Street FCCJ) erred by refusing to uphold the appellant's contention that the relevant bankruptcy notice was served upon him on 8 February 2019 by express post rather than, as the respondent had contended, by email on 7 February 2019. 3. The primary judge (Street FCCJ) erred by refusing to uphold the appellant's contention that the appellant's application to set aside the relevant bankruptcy notice filed on 4 March 2019 was filed within time for the purposes of s. 41(6A) of the Bankruptcy Act. 4. The primary judge (Street FCCJ) erred by dismissing the appellant's application to set aside the relevant bankruptcy notice filed on 4 March 2019 on the ground that the Federal Circuit Court of Australia had no jurisdiction to entertain the application pursuant to s. 41(6A) of the Bankruptcy Act because an act of bankruptcy had been committed. 5. The primary judge (Street FCCJ) erred by denying the appellant procedural fairness during the hearing on 4 April 2019 of the appellant's application to set aside the relevant bankruptcy notice filed on 4 March 2019, and, in particular, by failing to permit the appellant's solicitor from addressing oral argument to his Honour in support of the written submissions filed in Court on behalf of the appellant during the hearing on 4 April 2019, with particular reference to the appellant's contention concerning abuse of process. 6. The primary judge (Street FCCJ) erred by failing to give any reasons or, alternatively, adequate reasons for his extempore decision given on 4 April 2019 to dismiss the appellant's application to set aside the relevant bankruptcy notice filed on 4 March 2019. 7. The primary judge (Street FCCJ) erred by failing to give any reasons or, alternatively, adequate reasons for his extempore decision given on 4 April 2019 to order the appellant to pay the respondent's costs of the application to set aside the relevant bankruptcy notice filed on 4 March 2019. 7 For the reasons given below the Federal Circuit Court decision is interlocutory, the appeal is incompetent and leave to appeal is refused. Federal Circuit Court 8 The primary judge concluded that the "Court has no power to extend time for compliance with the bankruptcy notice and no power to set the same aside". The reasons given, which were very brief, were as follows: 1. These are proceedings within the Court's jurisdiction under s 27 of the Bankruptcy Act 1966 (Cth) ("the Act") in which the applicant is seeking to have set aside a bankruptcy notice which on the evidence before the Court was served on 7 February 2019. The 21-day period for compliance under the bankruptcy notice expired on Thursday, 28 February 2019. The proceedings are ones in respect of which the applicant seeks to have the bankruptcy notice set aside. Those proceedings are ones that must be brought before the act of bankruptcy occurs. 2. There is no power under s 41(6A) of the Act to extend time after the act of bankruptcy has occurred. These proceedings were not commenced within the time for the setting aside of the bankruptcy notice. Accordingly, it is not necessary for the Court to deal with the other arguments advanced by the applicant as to why the bankruptcy notice should have been set aside. 3. On the evidence before the Court, the Court finds that an act of bankruptcy occurred on 28 February 2019 and these proceedings were not commenced until 4 March 2019. Accordingly, the Court has no power to extend time for compliance with the bankruptcy notice and no power to set the same aside. Dismissal of interlocutory application 9 As noted above at [2], this Court heard and dismissed an interlocutory application in relation to the Federal Circuit Court judgment. While this Court had limited material before it when deciding the interlocutory application, many of the matters the appellant there relied on are those in issue in this application. Most obviously, the grounds of appeal. As the respondent correctly notes, the appellant has made his submission in this Court without any argument as to why some of those conclusions in relation to the grounds are incorrect. Indeed, the appellant's submission has been made without any reference to or consideration of the conclusions reached in that judgment. Final or interlocutory order 10 The appellant accepted that the refusal to extend the time for compliance with a bankruptcy notice is interlocutory: see Sharpe v W H Bailey & Sons Pty Ltd [2014] FCA 921; (2014) 317 ALR 738 at [36]. However, the appellant submitted that he applied for interlocutory and final relief in the Court below. In that context the appellant submitted that because the judgment he is seeking to appeal from also dismissed his application for final relief, that is, his application to set aside the bankruptcy notice, leave to appeal is not required. The appellant submitted that the primary judge dismissed the application for final relief, and in doing so dismissed the interlocutory relief on that same basis. The appellant submitted that the judgment of the primary judge "was a decision on a final hearing on the merits which resulted in the dismissal of the proceedings following a defended hearing". The appellant submitted that the primary judge dismissed the substantive application to set aside the bankruptcy notice as an abuse of process. He submitted that it was a final judgment made for interlocutory reasons. In oral submissions the appellant relied on Thai v Deputy Commissioner of Taxation (1994) 28 ATR 418 (Thai v DCT) and Thai v Commissioner of Taxation (1994) 53 FCR 252 (Thai v CT) (decisions not referred to in his written submission) to support his argument. 11 The respondent submitted that the appellant's argument is no more than a bare assertion that the decision is a final one with no authority cited in support of the proposition. The respondent submitted that the appellant proceeds on the assumption that because the primary judge dismissed his application for final relief, the decision was "final" in the relevant sense. The respondent submitted that s 24 of the FCA directs attention to the nature of the judgment made by the primary judge and not to the nature of the relief sought by the appellant. 12 The respondent provided examples to illustrate that point: a decision to summarily dismiss a claim for disclosing no reasonable cause of action is interlocutory: Rana v University of South Australia [2004] FCA 559; (2004) 136 FCR 344 at [10]-[15]; a decision to dismiss proceedings for want of prosecution is interlocutory: National Mutual Life Association of Australasia Ltd v Grosvenor Hill (Qld) Pty Ltd [2001] FCA 237; (2001) 183 ALR 700 at [8]-[9] and a decision to dismiss a claim as incompetent is interlocutory: SZAJB v Minister for Immigration and Citizenship [2008] FCAFC 75; (2008) 168 FCR 410 at [15]-[23]. 13 The respondent relied on the observations of Pagone J in Avetmiss Easy Pty Ltd v Australian Skills Qualifications Authority [2014] FCA 507 at [4] that: It may seem curious to a litigant who is not trained in law to describe as 'interlocutory' a decision which effectively brings an end to a proceeding, but such a decision is interlocutory, and not final, within the meaning of s 24(1A), because the judgment from which the appeal is sought was not made on the merits of the case. 14 The respondent also relied on the observations of French J (as he then was) in SZAJB v Minister for Immigration and Citizenship [2008] FCAFC 75; (2008) 168 FCR 410 at [23]: Where a court holds that it lacks jurisdiction to entertain an application and that the application is to be dismissed as incompetent, the dismissal order effectively disposes of the proceedings in the court in which the application is brought. The order does not 'finally dispose of the rights of the parties' in the sense necessary to characterise it as a final judgment. 15 The respondent submitted, based on those authorities, that the primary judge did not entertain the merits of the appellant's application to set aside the bankruptcy notice, which the respondent contends appears to be the appellant's complaint. 16 At the hearing of this application the transcript of the proceeding below, in so far as it related to his ground of appeal alleging a denial of procedural fairness, was raised with the appellant. This is in the context where there was no evidence of the events that occurred in the Court below which were said to have resulted in a denial of procedural fairness. Nor had the transcript of those proceedings been provided by the appellant. The appellant accepted that the transcript was required to prove that ground but informed the Court that he "was in the course of applying for the transcript but didn't take it any further". Unsatisfactory as the appellant's position was, and contrary to the objection of the respondent, a further opportunity was provided to the appellant to obtain that transcript and in relation to that ground, to put further written submissions in light of the transcript. The respondent also had the opportunity to file submissions in reply to those written submissions. 17 Suffice to say that the transcript was obtained and the appellant put on further written submissions. However, those submissions do not address the ground on which the opportunity was provided, but rather, based on the transcript, attempted to reargue that which already had been addressed in the hearing of this application. The appellant made further submissions in relation to Thai v CT based on the transcript of the hearing, and submitted that the primary judge considered that the hearing was a final hearing. The appellant argued that Thai v CT was on all fours with this case and that the decision of the primary judge was a final order, although for interlocutory reasoning. The respondent replied, taking issue with that argument. The respondent pointed out that the appellant did not address the issue of procedural fairness in his submission, and that the transcript supports his submission that there was no merit in the ground.