Carnemolla v eBay International AG

REASONS FOR JUDGMENT 1 On 5 June 2008, Stone J made an order under O 35A r 3 of the Federal Court Rules dismissing the applicant's proceeding. Her Honour did not give written reasons for the order, but the transcript of the hearing of 5 June 2008 indicates that her Honour relied, inter alia, upon O 35A r 2(1)(a), which provides that an applicant is in default under the rules if he or she fails to comply with an order of the Court. 2 The applicant, Mr Carnemolla, seeks leave to appeal against her Honour's order. Leave is required under s 24(1A) of the Federal Court Act 1976 (Cth) because the order dismissing the proceeding was interlocutory. 3 Order 52, rule 10(2A)(b) provides that an application for leave to appeal must be filed within seven days after the date on which the interlocutory judgment or order was announced, or within such further time as the Court or a judge may allow. The motion seeking leave to appeal was filed on 23 June 2008. It was therefore out of time under the rules, and no application for an extension of time was made. Nevertheless, in the circumstances of this case, I proposed to consider the matter as though such an application were made. 4 In Sharman License Holdings Ltd v Universal Music Aust Pty Ltd [2005] FCA 802 at [20] Lindgren J referred to the three preconditions to be satisfied for making such an order. In summary, they are: first, that there must be a satisfactory explanation for the delay; second, that the application for leave to appeal must have such prospects of success as not to render the extending of time an exercise in futility; and, third, the applicant must show "special reasons" for the extension of time. 5 I do not have any explanation for the delay in the present case, but for reasons set out below, I am satisfied that it would be a futile exercise to extend time under the rules. This is because I am satisfied that there is no basis for any attack upon the exercise of Stone J's discretion to order the dismissal of the proceedings under O 35A r 3. 6 The history of this matter is set out in some detail and length in an affidavit of Mr Kintis, a solicitor acting for eBay International AG, a company incorporated in Switzerland. It is fair to say that Mr Kintis' affidavit reveals that this is a matter which has a long and sad history. Indeed, that was further emphasised today when Mr Carnemolla appeared before me in person. 7 I permitted Mr Hamilton, solicitor, to appear amicus curiae. Mr Hamilton appeared when the matter was first called on for hearing on Wednesday, 6 August 2008, and he appeared with leave again today. The reason that Mr Hamilton appeared in that capacity relates to the medical and financial capacity of Mr Carnemolla. 8 Mr Carnemolla commenced the proceeding on 8 August 2007 by filing an Application and a Statement of Claim against eBay Pty Ltd. That company is unrelated to eBay International AG, although it is plain that Mr Carnemolla intended to sue the Swiss company rather than the unrelated Australian company which was named as the respondent in the proceeding. 9 The Application and Statement of Claim allege that Mr Carnemolla managed a number of websites on the eBay auction network system, which were closed as a result of dishonest actions taken by various dealers. The Statement of Claim refers to the actions that were taken. They included a form of harassment involving, what was said to be, the publication of pornographic and other images directed against Mr Carnemolla. He seeks very substantial damages under the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987 (NSW). The applicant served his Application and Statement of Claim, not on eBay Pty Ltd but on eBay International, care of its solicitors, Dibbs Abbott Stillman, who have continued to act for that company in the course of this proceeding. 10 On 18 September 2007, the matter was listed for first directions before Stone J. Mr Wood of counsel appeared for eBay International. He stated that he anticipated that this was the company that Mr Carnemolla intended to sue, and he, very fairly, took the position that if an Amended Statement of Claim were filed, his client would submit to the jurisdiction and the matter could therefore proceed in the ordinary way. 11 Her Honour then made consent orders that Mr Carnemolla file and serve an Amended Application and Statement of Claim no later than 9 October 2007. Provision was also made for particulars to be supplied, and the matter was listed for further directions on 15 November 2007. 12 Mr Carnemolla failed to comply with the order to file and serve his Amended Statement of Claim by 9 October 2007. On 13 November 2007, Messrs Dibbs Abbott Stillman wrote to Mr Carnemolla pointing out that he had failed to comply with Stone J's directions. The solicitors' letter stated in plain terms that if Mr Carnemolla continued to fail to comply with the orders of the Court, the solicitors would seek an order dismissing the proceedings. 13 The second directions hearing before Stone J took place on 15 November 2007. On that occasion, Mr Simpkins of counsel appeared for eBay International. He referred to the failure of Mr Carnemolla to comply with the directions for filing an Amended Statement of Claim. Her Honour said that the proceedings were important and brought to Mr Carnemolla's attention the fact that when the Court makes an order, it must be complied with. As her Honour said: They're not suggestions; they're not recommendations; they're orders and they must be obeyed. Her Honour went on to make consent orders which extended the time for Mr Carnemolla to file an Amended Application and Statement of Claim. The date which was fixed was 6 December 2007. The matter was listed for further directions before Stone J on 13 December 2007. 14 On or about 28 November 2007, the applicant purported to file and serve a document headed "DRAFT AMENDED" Application, and on 4 December 2007, he filed and served an affidavit. However, he did not file an Amended Statement of Claim as he had been directed to by her Honour. On 13 December 2007, Stone J made an order that the applicant be referred to a Registrar of the Court for referral to a legal practitioner on the pro bono panel in accordance with O 80 r 4. Her Honour provided for the matter to be relisted for further directions on 6 March 2008. 15 On 21 January 2008, the Associate to Stone J wrote to Mr Carnemolla, with a copy to Messrs Dibbs Abbott Stillman. The letter stated that the Registrar of the Court had informed her Honour that a practitioner on the pro bono panel had provided Mr Carnemolla with legal advice but had declined to represent him any further in the proceeding. The letter concluded by stating that her Honour had asked the Associate to inform Mr Carnemolla that unless her Honour were able to be satisfied that a competent person was in a position to pursue the matter further, she would consider dismissing the proceeding without further delay. The letter refers to a certificate signed by Dr Harry Pope which stated that Mr Carnemolla was unfit to represent himself in legal matters. 16 On 6 March 2008, the matter was again listed before Stone J. Mr Baker, solicitor, appeared for Mr Carnemolla. Mr Baker stated that he had been requested by Legal Aid to appear on behalf of Mr Carnemolla to seek an adjournment. Her Honour stated that the medical certificate was unsatisfactory, apparently because it was somewhat out of date, but she said that she considered the sensible thing to do was to accede to Mr Baker's request and stand the matter over "one more time." Her Honour said that she would grant to Mr Carnemolla one further short period of time in which to file a Further Amended Application and Statement of Claim or supporting affidavit. She said she thought it should probably be a Statement of Claim, but that: If no sensible application and statement of claim can be done within the time then I would summarily dismiss the matter without the need for further attendance by Mr Wood's client... I should interpolate here that Mr Wood of counsel appeared for eBay International on that day. 17 The transcript of that directions hearing reveals that her Honour indicated that Mr Carnemolla had difficulties but she thought that "perhaps one last chance might be in order." If that could not be done, then her Honour signalled, as she said, that she would not under any circumstances be prepared to extend the time. Her Honour concluded the directions hearing by ordering that Mr Carnemolla file and serve a Further Amended Application and Statement of Claim by Friday, 30 May 2008. She stood the matter over for further mention on 5 June 2008. 18 On 5 June 2008, Mr Sibir appeared before her Honour. Mr Wood again appeared for eBay International. Mr Sibir indicated that Mr Carnemolla had agreed for him to be the tutor, but it was apparent that no formal appointment had been made. Mr Sibir referred to the application for Legal Aid and asked for a further adjournment. 19 Her Honour said that the matter had gone on long enough. She said she had absolutely no hope that there would be Legal Aid granted, or that it would ever be in a position where the proceeding could be satisfactorily prosecuted. She observed that an appropriate Application and Statement of Claim had not been filed, and in the circumstances, all that she could do would be to dismiss the matter on the basis that there had been a failure to prosecute the proceeding and on a number of other bases open to her under O 35A of the Federal Court Rules. Accordingly, her Honour proceeded to make that order. 20 Mr Carnemolla addressed me this afternoon and reiterated some of the matters which are set out in the Application and Statement of Claim that were filed in August of last year. However, there is simply no answer to the proposition that Mr Carnemolla was in default of Stone J's orders for the filing of an Amended Application and Statement of Claim. I can see no error at all in the exercise of her Honour's discretion, and it is for this reason that there are no prospects of success on an appeal. Accordingly, it would be futile to extend time for the filing of an application for leave to appeal. 21 I therefore propose to order that the application be refused. 22 I have been addressed on the question of costs. Mr Wood seeks the costs of the application. He points, first, to the fact that his client successfully resisted the application. He also points to offers that were made to Mr Carnemolla which would have avoided the incurring of unnecessary costs in the proceeding. Mr Wood also refers to the history, and I accept his submission that the record reveals that eBay International has endeavoured to assist in the proper progress of the matter by not opposing the making of orders which would have, if complied with, regularised the proceedings. 23 I think that the matters that were put against the exercise of my discretion to make an order for costs cannot be supported, notwithstanding the difficulties which Mr Carnemolla faces. In those circumstances, I think the proper exercise of my discretion is to order that he pay the costs of the application, and I will so order. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.