Lawrence v McKean Park

REASONS FOR JUDGMENT 1 On 14 December 2011 the applicant, Tess Lawrence, instituted a proceeding in the court by way of an application for an extension of time to appeal from a judgment given by North J on 11 November 2011. This application was made under r 36.05 of the Federal Court Rules 2011 and, as required by that rule, was accompanied by an affidavit stating the facts on which the applicant relied and why the notice of appeal was not filed within time. The 21-day period within which the notice of appeal ought to have been filed expired on 2 December 2011, which means that the applicant's application for an extension was made 12 days after the expiration of that period. 2 When the court is required to entertain an application of this kind, the considerations by reference to which it will be guided are those identified by Kenny J in Luck v The University of Southern Queensland [2011] FCA 1335 at [23]: (1) The application should not be granted unless the court is satisfied that it is proper to do so and the prescribed period is not to be ignored. (2) An acceptable reason for the delay is expected and would normally be required. (3) Any prejudice to the respondent, including any prejudice in defending the proceedings occasioned by the delay, is a material fact in militating against the grant of an extension. (4) The mere absence of prejudice is not enough to justify the grant of an extension. (5) The merits of the appeal are properly to be taken into account in considering whether an extension of time should be granted. 3 The order of 11 November 2011 was a sequestration order against the estate of the applicant under s 43 of the Bankruptcy Act 1966 (Cth). The applicant did not appear on 13 October 2011 when North J dealt with the application for such an order. That application was based upon an act of bankruptcy on the part of the applicant of the kind identified in s 40(1)(g) of the Bankruptcy Act, namely: … if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not: (i) where the notice was served in Australia - within the time specified in the notice; or (ii) where the notice was served elsewhere - within the time fixed for the purpose of the order giving leave to effect the service; comply the requirements of the notice or satisfy the Court that he or she has a counter-claim, set-off or cross-demand equal to or exceeding the amount of the judgment debt or some payable under the final order, as the case may be, being a counter-claim set-off or cross-demand that he or she could not have set up in the action or proceeding in which the judgment or order was obtained;… According to the reasons of North J, the judgment debt referred to in the Bankruptcy Notice was for the sum of $10,793.00, to which was added interest in the sum of $1,369.67. In the absence of the applicant to resist the making of a sequestration order, the only matter of substance dealt with by his Honour on 11 November 2011 was one which related to the validity of the bankruptcy notice upon which the application for sequestration was based. In the case which has been presented to me in court today by the applicant, who has represented herself, no point is made about the correctness of his Honour's disposition of that question. 4 The position is, therefore, that on the case presented to North J, there was an obvious justification for a sequestration order, and there is now no complaint made as to his Honour's reasons for proceeding to make such an order. The essence of the difficulty in which the applicant now finds herself arises from the circumstance that she was not present on 13 October when North J heard argument on the now respondent's application for a sequestration order. Her case today is that she was not aware of the proceedings before North J and, for that matter, did not become aware of his Honour's judgment of 11 November 2011 until some time subsequent to the expiration of the 21-day appeal period. Those two circumstances relate to two of the five considerations referred to by Kenny J in Luck. 5 The applicant's failure to appear before North J, and the case which she presumptively might have made in other circumstances, are relevant to the question of the merits of the appeal. That is to say, they relate to the question whether, if time were extended and an appeal were lodged, the appeal would have a sufficient prospect of success, at least on what is now known, to justify extending time. The second aspect of the ignorance claimed by the applicant is concerned with when she became aware of the order made by North J. That relates not to the merits of the appeal but rather to the question whether she has provided an acceptable reason for her delay. I shall return to that aspect later, but I propose first to give some consideration to what the merits of an appeal would be if time were extended as sought by the applicant. 6 The creditor's petition was originally filed in the Federal Magistrates Court of Australia on 21 January 2011. There commenced a proceeding in that court which was subsequently transferred to this court, and ultimately dealt with by the orders made by North J on 11 November 2011. The applicant accepts that she had an address for service in that proceeding, both in the Federal Magistrates Court and in this court, which was PO Box 1273, Collingwood. There is no suggestion, therefore, that she was not properly a party to, and a participant in, that proceeding. 7 The order fixing 13 October 2011 as the date for the hearing of the petition was made by North J on 1 August 2011. It seems that the applicant did not appear on that occasion, but as a party to the proceeding it was her obligation to appear on those occasions upon which the case was listed in court, and to keep abreast of the orders which the court made from time to time. Whether or not the applicant did so in relation to the listing of the matter on 1 August 2011, the fact is that on 2 August 2011, she was sent a letter by the then petitioner, the now respondent, setting out the terms of the orders which his Honour had made the previous day, including the order that the petition be listed at 10.15 am on 13 October 2011. Although the applicant has told me from the bar table today that she was not aware of that listing, there is nothing in her affidavit in support of the present application which directly deals with the notification to her from the respondent on 2 August 2011. It is true that Mr Brett's affidavit was sworn and filed some time subsequent to the applicant's own affidavit, but this is an important question, particularly since the applicant accepts that the post office box to which Mr Brett has sworn a letter was sent was her address for service in the proceeding. I am not prepared to find, by reference only to submissions made from the bar table, that the applicant was not notified of the hearing on 13 October 2011, as Mr Brett swore she was. There are, therefore, two reasons why I should not accept the applicant's justification for absenting herself from the hearing before North J on 13 October 2011. 8 I mention next what was a central aspect of the applicant's submissions in support of her application for an extension of time, namely, the indisposition from which she was suffering for some months in 2011, resulting, so she says, from an unhappy encounter which she experienced in the State Magistrates' Court in May of that year. The respondents have not put in issue any of the matters to which the applicant referred in this respect in her affidavit, and the applicant has additionally produced medical certificates covering a period through until about the last week of September 2011, from which it ought to be accepted that she was not in a condition to conduct proceedings on her own account in court. However, those reports stop short by about a fortnight of the date of North J's hearing on 13 October 2011. Furthermore, there was a proceeding in the Supreme Court in late September 2011 in which these reports were put to that court, and a submission was apparently made on behalf of the applicant that she was unable to participate in those proceedings. As it happens, that submission was not accepted by that court, but it is not necessary to express a view as to whether it might have been accepted by North J. The fact is the applicant had available to her the wherewithal, and at least the understanding as to what was necessary, if it was thought appropriate to seek an adjournment of a proceeding in which she was involved. 9 The applicant has not put to me that she was unable, by reason of her medical condition, to appear before North J, or to make some kind of communication to his Honour seeking an adjournment. Rather, her case is that she was not even aware of the hearing before his Honour on 13 October 2011. Regrettably from her point of view, I am unable to accept in point of fact that she was unaware of that hearing. I reject her submissions to the contrary for reasons which I have already summarised. I am not persuaded that the applicant's foreshadowed case on appeal, to the extent that it is based upon an allegation of a departure from the principles of natural justice, has such apparent merits as would justify an extension of time. 10 Insofar as the reason for the applicant's failure to file a notice of appeal within the 21 days is concerned, the evidentiary basis of the applicant's proposition that she was not aware of North J's sequestration order is unsatisfactory. The matter is not confronted directly in her affidavit in support of the present application, but is mentioned only tangentially in a paragraph substantially dealing with other matters. The applicant said: At all times the [respondents were] - … acutely aware of my medical situation - and that they had caused it - but it is apparent in the Orders of Justice North on 11 November 2011 that they not only misled the Court about my severe medical condition - but that they deliberately and unethically withheld evidence that I had sent them, from the Court and His Honour in order to prejudice the Court against me and to create the impression that I missed appearances through indifference or disrespect for the Court, rather than through a medical condition that they themselves had triggered; with the impression being created that I had no objection to any events and procedings [sic] and Orders made in my absence and without my knowledge and not even posted to me. If the last six words of this passage are meant to stand as evidence of the fact that the applicant never became aware of the orders of North J until well after the 21 days had elapsed, I take the view that that is a most unsatisfactory position in which to leave the matter. When I asked the applicant directly, during the course of her submissions this morning, when she found out about the sequestration order made by his Honour, and under what circumstances she did so, she said that she could not recall. For someone who seeks an extension of time, that is not a satisfactory response, even granted that it was given from the bar table rather than by way of evidence. In a case of this type, an acceptable reason for delay ought to be, as the Rules of Court require, made the subject of a careful affidavit and, if it is the case that the applicant claims not to have known of the making of the order by the court, then the circumstances in which the applicant did become aware eventually of the order should be explained in some detail. As I say, I am not persuaded by the imprecise, almost fudgy, way in which the matter was put to me by the applicant that she found out about the orders made by his Honour only after the 21-day period had elapsed. 11 There is, of course, another matter which arises in this respect, and that is that the applicant, as a party to the proceeding, ought to have appeared before his Honour, and ought to have kept abreast of the progress of her case in the court, so as to know when judgment was going to be handed down. In the normal course, parties are notified of the delivery of judgments. I do not know what happened in this case, but the applicant has not given me any reason to think that the normal procedure was not followed. In the normal course, the delivery of a judgment is advertised in the daily law list and on the website of the court. Again, I do not know whether the normal course was followed in this case, but once again, I am not given any cause by the applicant to think that the normal course was not followed. 12 The conclusion I reach in relation to an acceptable reason for delay is that the applicant has failed to cross that part of the threshold laid out by the considerations referred to in Luck. 13 The other matter to which I should advert is the question of prejudice to the respondent and, in this case, prejudice to the trustee. Prejudice is a strong word, but, in the context of an application for an extension of time, and in the context of what is a broad and flexible discretion given by r 36.05, I consider that it refers to any disadvantage or circumstance which would make it legitimate for either the respondent to the case, or for some other person with a proper interest, to resist the application for an extension. The trustee has appeared before me today and has filed a short affidavit, the essence of which really goes no further than to say that he has commenced to undertake the administration of the applicant's estate, and has produced his first report to creditors. It is pointed out on his behalf that, if time were extended, and if ultimately an appeal were allowed and the sequestration order set aside, everything done to that point would be set at nought, and the trustee might not have a legitimate claim for his remuneration of the kind that would presumptively arise if a bankruptcy were annulled. 14 I am not disposed to think that that is a consideration of any particular weight, because a bankrupt has a right of appeal from the making of a sequestration order, so long as that appeal is filed within 21 days. I am not persuaded that the slight tardiness displayed by the applicant would have been such as to increase to any real extent the disadvantage or detriment which the trustee might encounter over and above what would inevitably be his lot in the case of an appeal filed within time. However, I do take into account the fact that this is a bankruptcy appeal, and that, although to an extent it depends upon the way in which any such appeal would be determined, there must in all such cases be a concern, which cannot be dismissed as inconsequential, that the more proceedings take place, the more the estate of the bankrupt might ultimately be run down by the accretion of costs both to the applicant's detriment ultimately, and also to the detriment of creditors. 15 If there were a quite apparent reasonable case on the merits, and if there were a readily acceptable reason for not filing an appeal within the required 21 days, this might be a prospect which would simply have to be borne by all concerned. However, since I have found that the merits of the appeal on the material before me are weak, and since I am not persuaded that there is an acceptable reason for delay, I do take into account the prospect that further proceedings might achieve nothing for anyone other than to lead to the incurring of additional costs which may, depending on how things are determined, ultimately come out of the estate, to the detriment of the creditors and ultimately to the detriment of the applicant. 16 For the reasons I have explained, I propose to dismiss the present application for an extension of time. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.