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[2019] FCA 611
Federal Court of Australia
2019-04-17
Charlesworth J
Original judgment source is linked above.
CHARLESWORTH J: 1 On 17 April 2019 I made an order summarily dismissing this appeal pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth). I gave oral reasons on that day and now publish written reasons to the same effect. 2 By this proceeding Mr John William Bucky appeals from a sequestration order made by a single judge of the Court on 7 December 2018: Ark Energy Ltd v Buckby, in the matter of John William Buckby [2018] FCA 2095. The respondent, Ark Energy Ltd was the petitioning creditor. 3 By a notice of objection to competency dated 12 March 2019, Ark Energy seeks the following alternative orders: a. the appeal be dismissed for incompetency; or b. in the alternative, that summary judgment be entered in favour of the Respondent pursuant to s.31A of the Federal Court [of Australia] Act 1976 (Cth) on the basis that the grounds have no reasonable prospect of success and/or are an abuse of the Court's process; or c. in the further alternative, that individual grounds of appeal that are deemed incompetent by this Honourable Court be struck out prior to the hearing of the appeal. 4 It is convenient to deal first with the contention that the appeal should be summarily dismissed under s 31A of the Act on the basis that the appeal has no reasonable prospect of success. 5 The order is sought in the appellate jurisdiction of the Court. Section 25(1) of the Act provides that the Court's appellate jurisdiction shall, subject to s 25, be exercised by a Full Court. Section 25(2B)(aa) provides that a single Judge (sitting in Chambers or in open court) may give summary judgment. An application for the exercise of the power to give summary judgment on an appeal must be heard and determined by a single Judge unless: (a) a Judge directs that the application be heard and determined by a Full Court; or (b) the application is made in a proceeding that has already been assigned to a Full Court and the Full Court considers it is appropriate for it to hear and determine the application. 6 In this case there has been no direction that the application for summary dismissal be heard and determined by a single Judge. Nor is the application made in a proceeding that has been assigned to a Full Court. It follows that Ark Energy's application must be heard and determined by the Court as presently constituted of a single Judge. 7 Section 31A of the Act relevantly provides: 31A Summary judgment … (2) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is defending the proceeding or that part of the proceeding; and (b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. (3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be: (a) hopeless; or (b) bound to fail; for it to have no reasonable prospect of success. (4) This section does not limit any powers that the Court has apart from this section. 8 In Riva NSW Pty Limited v Official Trustee in Bankruptcy [2017] FCA 188, Perry J helpfully summarised the principles that may guide the exercise of the power to summarily dismiss a proceeding under s 31A: 45 First, the respondent as the moving party bears the onus of persuading the Court that the application has no reasonable prospects of succeeding: Australian Securities and Investments Commission v Cassimatis [2013] FCA 641; (2013) 220 FCR 256 (Cassimatis) at 271 [45] (Reeves J). 46 Secondly, the intention behind the enactment of s 31A is 'to lower the bar for obtaining summary judgment (including summary dismissal) below the level that had been fixed by such authorities as Dey v Victorian Railway Commissioners (1949) 78 CLR 62 at 91-92, and General Steel Industries Inc v Commissioner for Railways (NSW) [1964] (1964) 112 CLR 125 at 129-130 …': White Industries Aust Ltd v Commissioner of Taxation [2007] FCA 511; (2007) 160 FCR 298 (White Industries) at 310 [54] (Lindgren J); see also Cassimatis at 271 [46] (Reeves J). In the cases to which Lindgren J referred in White Industries, the requirement had been expressed in such terms as 'manifestly groundless' or 'hopeless'. As Hayne, Crennan, Kiefel and Bell JJ held in Spencer v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 (Spencer) at 139 [52]-[53]: 52. … effect must be given to the negative admonition in sub-s (3) that a defence, a proceeding, or a part of a proceeding may be found to have no reasonable prospect of successful prosecution even if it cannot be said that it is 'hopeless' or 'bound to fail'. … [I]t is important to begin by recognising that the combined effect of sub-ss (2) and (3) is that the inquiry required in this case is whether there is a 'reasonable' prospect of prosecuting the proceeding, not an enquiry directed to whether a certain and concluded determination could be made that the proceeding would necessarily fail. 53. In this respect, s 31A departs radically from the basis upon which earlier forms of provision permitting the entry of summary judgment have been understood and administered. 47 Thirdly, the assessment required by s 31A of whether a proceeding has no reasonable prospects of success necessitates the making of value judgments in the absence of a full and complete factual matrix and argument, with the result that the provision vests a discretion in the Court: Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117; (2009) 178 FCR 401 (Kowalski) at 408-409 [28] (the Court). That discretion includes whether to deal with the motion at once or at some later stage in the proceedings when the legal and factual issues have been more clearly defined: Butorac v WIN Corporation Pty Ltd [2009] FCA 1503 at [19] (Buchanan J); Cassimatis at 272 [50] (Reeves J). 48 In the fourth place, despite the threshold for summary dismissal having been lowered, the discretion must still be exercised with caution (Spencer at 131 [24] (French CJ and Gummow J) and 141 [60] (Hayne, Crennan, Kiefel and Bell JJ)). Consistently with this, the discretion is concerned 'with the bringing and defending of proceedings, not just with pleadings; with substance, not just with form': White Industries at [50] (Lindgren J) (approved in Kowalski at 409 [30] (the Court); see also Spencer at [23] (French CJ and Gummow J)). 49 Finally, in his Honour's helpful explanation of how these principles are to be applied, Reeves J in Cassimatis further explains at 271-272 [46] that: … the determination of a summary dismissal application therefore does not require a mini-trial based upon incomplete evidence to decide whether the proceedings are likely to succeed or fail at trial. Instead, it requires a critical examination of the available materials to determine whether there is a real question of law or fact that should be decided at trial. Each application for summary judgment or summary dismissal has to be determined according to its particular circumstances. What is required is a practical judgment of the case at hand. ... 9 The events leading up to the hearing of the creditor's petition are summarised in the reasons of the primary judge. Mr Buckby did not contend that his Honour's factual account of the events was inaccurate. The following narrative is drawn from the reasons of the primary judge and is in some part evident on the face of the materials before me. 10 Ark Energy filed its creditor's petition on 2 July 2018. 11 On 19 September 2018, Mr Buckby filed a notice stating his grounds of opposition to the creditor's petition. By that notice, Mr Buckby asserted that he was solvent. He also asserted that he had been attempting to deal with the creditor's petition while receiving treatment for cancer. The treatment, he said, had caused him to be "considerably unwell and genuinely stressed as to his prognosis". Mr Buckby also asserted that he should be afforded a reasonable period within which to be able to deal further with his illness and to provide evidence concerning his insolvency. 12 On 25 September 2018, a Registrar made orders progressing Ark Energy's creditor's petition to a hearing in the following terms: 1. The Respondent is to file and serve any further affidavits upon which he wishes to rely in support of the grounds set out in his notice of opposition filed on 19 September 2018 by 29 October 2018. 2. Should the Respondent seek a variation to these orders because of the medical condition referred to in his affidavits filed on 19 September 2018 and 24 September 2018, such application is to be supported by an affidavit from his treating specialist that addresses: a. The nature of the condition/illness suffered by the Respondent; and b. How the condition/illness impacts upon the Respondent dealing with these proceedings. 3. The Applicant is to file and serve any affidavits in reply upon which it wishes to rely by 26 November 2018. 4. The parties are to file and serve any objections to the affidavits filed in the proceedings by 30 November 2018. 5. The parties are to file and serve any written submissions upon which they wish to rely by 3 December 2018. 6. The Creditor's Petition be referred to a Judge of the Federal Court to be heard at a date and time to be advised. 7. Costs of today are reserved. 13 At the time that the Registrar's orders were made, Mr Buckby was represented by the law firm Case Legal and in particular by a member of that firm, Mr Raj. 14 On 9 October 2018, the Associate to the primary judge sent an email to the parties by their legal representatives informing them that the creditor's petition was set down for hearing on 7 December 2018. 15 On 26 October 2018, Mr Buckby sent an email to the Court. The content of that email and the Court's response to it are explained in his Honour's reasons: 9 The respondent has not complied with either of the orders. He did, on 26 October 2018, send an email to the Court informing the Court that he could not comply with the timelines in the Registrar's order. He explained in the email that he had not been able to obtain a report from the treating specialist by reason of the time it was taking to obtain an appointment and set out some details of the medical condition, said to be a malignant thyroid cancer, from which he suffers. The respondent set out some details of stress and pressure to which he is subject, and said that he has provided instructions for the preparation of a solvency report but expected that this would be at least two weeks away from completion. 10 The respondent did not provide a copy of that email to the applicant's solicitors. My Associate responded to that email on 29 October 2018. In addition to drawing the respondent's attention to the Court's Guide to Communications with Chambers and Registry Staff, my Associate said: Unless you have the consent of the respondent, you will need to apply by Interlocutory Application with a supporting affidavit for a variation of the timetable. Any application of this kind should be made as soon as practicable. 11 The respondent's response to that email on 2 November 2018 has a somewhat arch tone, but it is apparent that he had received the email, and can be taken to have been aware, accordingly, that, unless he obtained the consent of the applicant, an interlocutory application and supporting affidavit was required… 16 Mr Raj filed a Notice of Ceasing to Act on 9 November 2018. 17 Mr Buckby made no application (whether by his solicitor or on his own behalf) for a variation of the Registrar's orders in the manner specified in [2] of those orders. Nor did Mr Buckby file an interlocutory application in response to the email sent by the Associate to the primary judge. 18 On 3 December 2018, Mr Buckby sent to the Court a copy of an affidavit of an accountant made on 30 November 2018. The accountant deposed that he had received instructions to prepare a report concerning Mr Buckby's solvency and that he anticipated the report would be completed by 21 January 2019. 19 On the day before the hearing, Mr Buckby sent to the Associate to the primary judge an affidavit that had not been filed. By that affidavit, Mr Buckby deposed that he had not been able to comply with the Court's timeframes but had used his best endeavours to do so. He also deposed that he expected to have a medical report provided to him by his specialist and that he was expecting the preparation of a report by the accountant. 20 At the commencement of the hearing on 7 December 2018, Mr Buckby made an oral application for an adjournment of the hearing on four bases, identified in the reasons of the primary judge (at [5]) as follows: … First, he had not been aware of the hearing until yesterday when he received an email from the applicant's solicitors. Secondly, that he has had insufficient time to prepare for the hearing. Thirdly, because he suffers from a medical condition which impedes his ability to prepare and represent himself. Fourthly, because he wishes to obtain a report from an accountant to support his claim that he is solvent. … 21 The primary judge made an order dismissing Mr Buckby's oral application for an adjournment. On this appeal, it is Mr Buckby's case that the refusal of the adjournment application resulted in a breach of the rules of procedural fairness and so constituted an appealable error.
GROUNDS OF APPEAL 22 The grounds of appeal are expressed (without alteration) as follows: 1. That his Honour Justice White erred in failing to give adequate consideration or weight to the fact that the Appellant was in fact unrepresented and was provided inadequate notice of the hearing scheduled 7 December 2108 and in particular: (a) that the Appellant was not aware and could not reasonably have been expected to know the appropriate rules regarding filing a form regarding change of address for service. (b) that despite numerous communications with the court Registry stating the Appellant was unrepresented, the Registry failed to notify the Appellant of either the need to file a Notice of Change of Address for service nor advise the Appellant directly of the hearing listed on 7 December 2018. (c) that the Appellant had in reality been unrepresented since on or about 20 September 2018 when Niren Raj of Case Legal advised the Appellant by email he would no longer act due to personal and financial issues. (c) that the Appellants evidence given that he had no notification of the hearing listed 7 December 2018 and in failing to give the Appellant the opportunity to provide evidence of this by obtaining an Affidavit from Mr Raj to support the Appellants claims. (d) that the Appellant had no control over the omissions of Mr Raj in failing to notify him of the listed hearing on 7 December 2018. (d) that the Respondents Solicitor was well aware of the listed hearing and well aware that the Appellant was in reality unrepresented yet despite being an officer of the Court refused, neglected or omitted to give the Appellant proper notice of the listed hearing to the Appellant's detriment. (e) that the Appellant's Application lodged with the Court on 6 December 2018 was accepted by the Court on 7 December 2018 on the basis that the Appellant was unrepresented. (f) that the Appellant's previous solicitor, Mr Raj, was unstable and depressed and a recent bankrupt who was not focussed on his responsibilities and duties which should have included note of notifying the Appellant of the hearing of 7 December 2018. (g) that there was no proper evidence or reason to disregard the Appellant's evidence that he had not been notified of the hearing of 7 December 2018 until the afternoon prior. 2. That his Honour Justice White erred in failing to give adequate consideration to the Appellant's said Application and the evidence produced in support of it was not given adequate weight in making the Orders of 7 December 2018 and in particular: (a) that the Appellant used his best and all reasonable endeavours to comply with the orders made on 25 September 2018 but his Honour Justice White failed to consider or give proper weight to the evidence of this provided to the Court by means of various communications to the Court Registry and his Application lodged on 6 December 2018 advising his medical difficulties. (b) that the Court failed to give any or proper consideration or weight to the only medical evidence before the Court being Affidavit evidence provided by the Appellant on his condition. (c) that the Court failed to consider that the Appellant had no control over the timing of the provision of medical reports by his treating general practitioner or specialist and his evidence to this matter was not considered or given adequate weight. (d) that no or no adequate consideration was given to the fact that the Respondent would not have been prejudiced or significantly prejudiced by extending the time for compliance with earlier Court orders in reasonable circumstances and when the Respondent failed to produce any evidence to support otherwise. (e) that the Appellant gave evidence by way of Affidavit defining time constraints within which he would be able to comply with earlier Court orders made for provision of reports. (f) that the Appellant was denied the opportunity to produce either medical or accountancy evidence to the Court which circumstances the Appellant supported by evidence produced by both the Appellant and the Accountancy expert despite the fact that the question of Insolvency was crucial to the Courts findings. (g) that his Honour failed to give any or any proper consideration to evidence produced by the Appellant that a medical report was relatively imminent and he had been informed of this by his medical specialist whose schedule was extremely busy which is a common situation for medical experts. (h) that in all circumstances there has been a denial of fairness and Natural Justice to the Appellant. 3. That his Honour Justice White erred in failing to give adequate consideration or weight to evidence that the Appellant was in regular contact with the registry and had explained his situation and his inadequacies and medical difficulties in detail.
REASONS OF THE PRIMARY JUDGE 23 The reasoning of the primary judge proceeded as follows: (1) The Court had given proper notice to the parties of the hearing date by way of the Associate's email to the parties' legal representatives on 9 October 2018 and there was nothing to suggest that the email had not been received by Case Legal. (2) It would be surprising if Case Legal had not informed Mr Buckby of the hearing date on the receipt of the Associate's email or at the time that the firm ceased to act. (3) If Case Legal had not informed Mr Buckby of the hearing date, then that was a matter that lay primarily between Case Legal and Mr Buckby as the Court had given proper notice of the hearing date. (4) By [1] of the Registrar's orders, Mr Buckby was to file and serve any further affidavits upon which he relied in support of his grounds of opposition by 29 October 2018, such that Mr Buckby had been given five weeks to prepare his further evidentiary materials. (5) The Registrar had anticipated the prospect that Mr Buckby might require more time by reason of his asserted medical condition. Provision was made at [2] of the Registrar's orders for Mr Buckby to file an application for a variation of the timetable. (6) Mr Buckby had not complied with either of the orders. (7) By the Associate's email of 29 October 2018 and Mr Buckby's email in response, Mr Buckby could be taken to have been aware that unless he obtained the consent of Ark Energy, an interlocutory application and supporting affidavit would be required. There was no indication that Mr Buckby had sought Ark Energy's consent, nor had Mr Buckby filed an interlocutory application. (8) The material sent by Mr Buckby to the Court sufficiently indicated the basis upon which he sought more time to provide evidentiary material to defend the creditor's petition. 24 The primary judge went on to say: 15 In my view, the respondent has had a considerable period of time in which to obtain a solvency report, if that was intended. Just over five months have now elapsed since the creditor's petition was served, and over two months have elapsed since the Registrar made the orders on 25 September 2018. 16 The respondent did not comply with the orders made by the Registrar and did not take the action which he was informed was appropriate if he wished to seek an extension of the time in which to do so. 17 Just as pertinently, the respondent has not provided material on the basis of which it might be possible to conclude that there is some reasonable prospect of him establishing solvency. He has not provided anything at all in the nature of primary materials, bearing upon that prospect. 18 Naturally, the Court is concerned if a litigant is unable, by reason of ill health to give timely attention to matters before the Court, but in the present case the respondent has had the creditor's petition since about 3 July, over five months ago. I say that because an affidavit from a process server indicates that a copy of the creditor's petition was placed in the letterbox of the premises at 120 Esplanade, Toorbul, in Queensland, on 3 July 2018. That that is the address of the respondent is confirmed by the fact that it is the address given by him in the affidavit made on 6 December 2018. It appears that there may be some dispute or uncertainty as to whether the leaving of the petition in the letter box was effective service. Even if it was not, I consider it likely that the petition came to the respondent's attention at about that time. Even if that not be so, the respondent has had the creditor's petition since early September, and accordingly, has now had over three months in which to obtain and provide a solvency report or, at the very least, to put before the Court material on the basis of which one might be able to ascertain whether he has a reasonable prospect of establishing solvency. 19 The respondent has not provided a basis on which the Court could conclude that, even if given further time, the respondent would be able to obtain material with which to resist the creditor's petition. The respondent has been able to put it no higher than that he is expecting Mr Sloane's report to be 'positive'. The Court requires much more detailed evidence than that in order to be satisfied that there may be some utility in the grant of the adjournment. 25 The primary judge made the sequestration order on the basis that Mr Buckby had not disputed the existence of the debt upon which the creditor's petition was founded and that the formal requirements for the making of a sequestration order had been established.
CONSIDERATION 26 For the purposes of s 31A(2)(b) I am satisfied that Mr Bucky has no reasonable prospect of succeeding on his appeal. 27 The power to grant an adjournment of a proceeding involves the exercise of a discretionary judgment. To succeed on his appeal, Mr Buckby must establish that the order appealed from may be disturbed in accordance with the principles stated in House v The King (1936) 55 CLR 499 at 505: It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellant court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. 28 The present case is one in which the reasons for the result arrived at by the primary judge are made plain in the reasons for judgment. The reasons do not disclose an error of principle. In all of the circumstances, the result arrived at by the primary judge is not plainly unreasonable, nor is it plainly unjust. There is nothing from which a court on appeal may infer that the primary judge has in some way failed to properly exercise the discretion, nor is there appealable error on the face of the reasoning itself. The primary judge did not fail to take into account the considerations that properly bore on the exercise of the discretion. Mr Buckby does not have reasonable prospects of succeeding with the arguments he raises to the contrary. 29 The conclusion that the Court at first instance had provided Mr Buckby reasonable notice of the hearing date by way of the Associate's email to Mr Buckby's solicitor was open to the primary judge, as was the conclusion that Mr Buckby had been provided with sufficient time to obtain a report in relation to his solvency. 30 It is clear that his Honour placed considerable weight, as his Honour was entitled to do, on the circumstance that the Registrar's orders had provided a mechanism by which Mr Buckby might apply to have the orders fixing the timetable varied on the basis of his medical condition and on the circumstance that Mr Buckby was aware, by reason of the Associate's correspondence of 29 October 2018, that a contested application for a variation of the timetable should be made by way of an interlocutory application and supporting affidavit, which was not filed. 31 To succeed on the appeal it is not sufficient for Mr Buckby to show that a different judge might have weighed the relevant considerations differently so as to arrive at a different result. The weight to be afforded the competing considerations was a matter for the primary judge. 32 In opposition to the application for summary judgment, Mr Buckby repeated the arguments raised by the grounds of appeal and otherwise made submissions concerning the circumstance in which the debt that he owed to Ark Energy arose. To the extent that there is a residual discretion to refuse to make an order summarily dismissing the appeal, there is nothing raised in Mr Buckby's submissions that would cause me to refuse the relief sought by Ark Energy. 33 The appeal should be summarily dismissed pursuant to s 31A(2)(b) of the Act. 34 In the circumstances, it is unnecessary to consider whether the other relief sought on the notice of objection to competency should be granted. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Charlesworth.
Buckby
Ark Energy Ltd
(1936) 55 CLR 499
(2013) 220 FCR 256
(1949) 78 CLR 62
(1964) 112 CLR 125
(2007) 160 FCR 298
(2010) 241 CLR 118
(2009) 178 FCR 401