Clements v Mentha

REASONS FOR JUDGMENT 1 The applicant, Mr Clements, applies for an extension of time within which to file a Notice of Appeal from a judgment of Dodds-Streeton J published on 5 December 2012; see Australian Securities and Investments Commission v GDK Financial Solutions Pty Ltd (No 13) [2012] FCA 1389 ("the primary judgment"). 2 In the proceeding below, Mr Clements failed to establish an entitlement to an interest in the assets of an unregistered managed investment scheme known as "the Mews Scheme". The Court wound up the Mews Scheme in 2006. Its asset, "the Mews Land", has been sold. The proceeds of sale are held by the respondents who are the joint receivers of the Mews Land for the purpose of the winding up of the Mews Scheme. 3 The factual background to the contest between Mr Clements and the respondents is set out in full in the primary judgment. Those reasons should be read in conjunction with these reasons for judgment. 4 Mr Clements did not file his proposed Notice of Appeal within the 21 days prescribed by the Rules of the Court. Making an allowance for time not running from 24 December 2012 to 14 January 2013, the appeal period expired on 17 January 2013. 5 On 14 January 2013, Mr Clements purported to file a Notice of Appeal by facsimile transmission to the Victoria District Registry. On 23 January 2013, Mr Clements contacted the Victoria District Registry but the faxed document could not be located. On 18 January 2013, Mr Clements had informed the respondents' solicitors by email that he "was advised by the Court that a sealed copy will issue shortly". By 11 February 2013, Mr Clements discovered that he was required to pay a filing fee in the order of $3,360. The inability to pay the filing fee delayed his attempt to file a Notice of Appeal, which he belatedly did on 19 April 2013. 6 Time limits are placed in the rules of court for good reason. Compliance with those time limits is expected. An applicant for an extension of time carries the onus of showing that an appropriate case has been made out for the exercise of the court's discretion in that party's favour. 7 The Court is not satisfied that there should be an extension of time granted to file a Notice of Appeal. 8 No acceptable explanation for the delay from 11 February 2013 to 19 April 2013 has been given by Mr Clements. The reason for the delay was his failure to fund a filing fee. In an email exchange with the Victoria District Registry on 11 February 2013, Mr Clements became aware of the need for payment of the filing fee. There is no evidence of any attempt by Mr Clements to seek an exemption from the filing fee, or to seek a deferral of its payment. The inability to fund a filing fee is not, without some other compelling factor or factors, an acceptable reason for delay in the filing of a Notice of Appeal. So much is especially so in the absence of an attempt to seek an exemption from or a deferral of the payment of the fee. 9 Granting the application would cause prejudice to the respondents and to those persons entitled to a distribution from the monies held by the respondents in respect of the Mews Land. The programming and hearing of an appeal would unduly delay the making of the final distribution to those entitled to the proceeds of the sale of the land. Mr Clements's suggestion that an amount of about $180,000 be withheld from distribution would result in the respondents having to make multiple applications to the Court for distribution orders. I agree with the submission of counsel for the respondents that the granting of an extension of time in which to file a notice of appeal is likely to have the practical effect of delaying any distribution to investors to which they are entitled. 10 Although it is not necessary (and arguably inappropriate) to make a full assessment of the merits of the proposed appeal, the Court considers that its prospects of success are not strong. Many of the grounds quibble with factual findings which appear to have been open to the primary judge. Estoppel is raised as a ground of appeal but the particulars of that ground do not explain the application of that principle to the circumstances before the primary judge. Mr Clements attempted to do so orally in his submissions this morning but the nature of the estoppel asserted by him appeared to differ from that which was put to her Honour. Further, the primary judge's finding that Mr Clements did not have standing to claim as trustee for two other people (Mr and Mrs Atkins) is not dealt with in the Notice of Appeal but is nonetheless the subject of the proposed order he seeks. 11 Mr Clements also sought that the Court, in the exercise of its discretion, consider whether all the appropriate material that needed to be before her Honour was in fact before her. However, he conceded that her Honour could not possibly have erred in failing to consider material which was not before her. 12 It is sufficient for current purposes to say that the prospects of success of the proposed appeal, while not hopeless, do not appear to be strong. In that regard, it is critical that the respondents are persons who are in the process of distributing interests in the Mews Land. Mr Clements seeks to assert an interest in the Mews Scheme as distinct from the Mews Land. 13 Each of the considerations discussed above is a relevant factor in the exercise of the discretion whether or not to extend time for the filing of a Notice of Appeal; see Sutera v Nelson [2011] FCA 1470 at [7] per Kenny J. 14 For the foregoing reasons, I am not satisfied that Mr Clements has made out an appropriate case for the exercise of the discretion in his favour to extend the time for the filing of a Notice of Appeal from the primary judgment. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.