Maxwell-Smith v Donnelly

THE COURT 1 The history of this matter, as relevant to this appeal, may be shortly stated. 2 Proceedings were commenced in 2004 against the respondent ('the Trustee'), who had been the trustee in relation to the bankruptcy of Mr and Mrs Maxwell-Smith. The bankruptcy had been annulled. Pursuant to a decision of the Full Court (Maxwell-Smith v Donnelly [2006] FCAFC 150), the primary judge conducted an inquiry under s 179 of the Bankruptcy Act 1966 (Cth) into the refusal of the Trustee to give permission to Mrs Maxwell-Smith to travel outside of Australia on or about 20 May 2004 (Maxwell-Smith v Donnelly (in the matter of Inge and Eugene Maxwell-Smith) [2007] FCA 894). In that inquiry Mr and Mrs Maxwell-Smith were represented by counsel, who appeared pro bono pursuant to a referral by the Full Court under O 80 r 4(1) of the Federal Court Rules. 3 The primary judge delivered reasons for judgment and proposed orders on 8 June 2007. Those proposed orders were: (1) Having inquired into the conduct of the respondent trustee, Max Christopher Donnelly in relation to the matters in order 3 of the orders of the Full Court of the Federal Court on 27 October 2006 and finding no basis for criticism of the conduct of the said trustee or of his manager, Mrs Angela Margaret Gallucci, the applicants, Mr Eugene and Mrs Inge Maxwell-Smith pay the costs of the respondent, Max Christopher Donnelly, of this inquiry as taxed in accordance with the Bankruptcy Act 1966 (Cth) and that the costs of the respondent trustee of this inquiry before [me] form part of the respondent trustee's costs and expenses of the administration of the former bankrupt estate of Mr and Mrs Maxwell-Smith; (2) Time be extended for the filing of any application for leave to appeal from the orders made today to a date 14 days after the date of the signing by [my associate] of the settled reasons for judgment; [and] (3) Leave be granted to the parties, through counsel only, to file and serve written submissions within seven days as to the form of order pronounced today. 4 Written submissions were filed on behalf of the Trustee. No submissions were filed by counsel for Mr and Mrs Maxwell-Smith. On 6 July 2007, the primary judge replaced order 1 as follows ('the 6 July order'): Having inquired into the conduct of the respondent trustee, Max Christopher Donnelly, in relation to the matters in order 3 of the orders of the Full Court of the Federal Court on 27 October 2006 and finding no basis for criticism of the conduct of the said trustee or of his manager, Mrs Angela Margaret Gallucci, the applicants, Mr Eugene and Mrs Inge Maxwell-Smith pay the costs, charges and expenses of the respondent, Max Christopher Donnelly, of this inquiry as taxed in accordance with the Bankruptcy Act 1966 (Cth) and that the costs, remuneration and expenses of the respondent trustee of this inquiry before [me] form part of the respondent trustee's costs charges and expenses of the administration of the former bankrupt estate of Mr and Mrs Maxwell-Smith. (amendments emphasised) 5 His Honour gave reasons for that amendment (Maxwell-Smith v Max Christopher Donnelly (in the matter of Inge and Eugene Maxwell-Smith) [2007] FCA 1005). He observed that, left to decide the issue free of authority, he would have characterised the Trustee's position, like any other litigant, as successfully defending himself against allegations in litigation and entitled simply to costs (at [3]). However, his Honour considered himself bound by and applied Pantzer v Wenkart (2006) 153 FCR 466 at [43] and made the 6 July order. 6 In further reasons delivered on 6 August 2007 (Maxwell-Smith v Donnelly (in the matter of Inge and Eugene Maxwell-Smith) [2007] FCA 1097) the primary judge noted that Mrs Maxwell-Smith had been in Court at the time of making the 6 July order and had sought to file submissions on the order made that day and the reasons that accompanied it (at [5]). Accordingly, his Honour stayed the 6 July order to give Mr and Mrs Maxwell-Smith the opportunity to file and serve any further written submissions in relation to the order by 20 July 2007. As set out by the primary judge at [6], no submissions had been received by the Court when the matter was called for hearing at 10 am on 20 July 2007. His Honour stayed the order again to protect the Maxwell-Smiths' position. His Honour then received a six page document from Mrs Maxwell-Smith. That document was headed "Argument by Inge Maxwell-Smith". It was appropriate and reasonable for his Honour to refer to that document as 'the submissions of Mrs Maxwell-Smith'. His Honour commented at [8]: No part of them deals with the question of the variation of order 1 made in the 8 June Orders. All the submissions relate to the substantive issues dealt with in my reasons as delivered on 8 June 2007. There was no leave to file such submissions. 7 His Honour then determined that the 6 July order was entitled to be entered (at [10]). 8 Mr and Mrs Maxwell-Smith filed a notice of appeal and then an amended notice of appeal. The Trustee filed a notice of motion seeking orders that the appeal be dismissed as incompetent and, subsequently, a second notice of motion seeking an order that Mr and Mrs Maxwell-Smith file and serve an amended notice of appeal that complies with O 52 r 13(2) of the Federal Court Rules. Mr and Mrs Maxwell-Smith filed a notice of motion seeking, in substance, a stay of the orders made by the primary judge and pro bono legal assistance. 9 The various notices of motion came before Madgwick J, who granted leave to Mr and Mrs Maxwell-Smith to file a notice of appeal in the form amended and initialled by his Honour. Consequently, the grounds of appeal before this Court are: