Mbuzi v AGL Sales Pty Limited

The primary judgment 17 Justice Edelman's judgment was given on 5 July 2016. His Honour described the procedural history of the matter as follows: 5 AGL applied to "strike out" Mr Mbuzi's application to reopen rather than to allow it to proceed to a hearing. Although AGL's application was described as a "strike out", the orders sought by AGL were that Mr Mbuzi's interlocutory application be dismissed without further hearing. At a directions hearing, I raised the issue of whether AGL's "strike out" application should be determined on the papers…Neither Mr Mbuzi nor AGL opposed the determination of AGL's application on the papers. Given the nature and circumstances of Mr Mbuzi's application, I made that order (Federal Court Rules 2011 (Cth) rr 1.31, 1.32). 18 Rule 1.32 of the Federal Court Rules 2011 (Cth) provides that, "The Court may make any order that the Court considers appropriate in the interests of justice". His Honour noted that as Mr Mbuzi's application was based only upon r 1.32, his application may be incompetent, citing Chen v Monash University [2016] FCAFC 66 at [50]. However, his Honour preferred not to decide the application on that basis. 19 His Honour stated that whether leave to reopen proceedings should be granted or refused depends on the interest of justice, citing Ashby v Slipper [2014] FCA 973 at [10] and Walsh v Greater Metropolitan Cemeteries Trust (No 2) [2014] FCA 456 at [48]. His Honour said that it was not in the interests of justice to reopen the proceeding for five reasons. The five reasons were:

1. There was no basis identified in Mr Mbuzi's affidavit evidence or in his submissions upon which Mr Mbuzi could have his notice of discontinuance set aside. He did not dispute that he filed the notice of discontinuance knowingly and voluntarily, and did not allege fraud or duress. Nor did any of the facts alleged by Mr Mbuzi come close to establishing any basis to set aside the notice of discontinuance.
2. The parties settled their dispute by deed and discontinued the proceeding by consent. The need for certainty and finality means that the jurisdiction to reopen proceedings is used sparingly.
3. Mr Mbuzi did not seek to reopen the proceeding by reference to matters in that proceeding. Instead, the application was based on an alleged breach of the settlement deed.
4. Relatedly, any proceedings for breach of the settlement deed could be commenced as a fresh proceeding. His Honour noted that a discontinuance is not usually a defence to a proceeding, referring to r 26.14 of the Federal Court Rules.
5. Even if Mr Mbuzi were permitted to reopen the proceeding and amend his claim to allege a breach of the settlement deed, it was extremely doubtful that he could obtain the relief which he sought in his email to AGL of 31 March 2016. 20 Justice Edelman concluded that Mr Mbuzi's application had no prospects of success. His Honour found that it could not be in the interests of justice to set aside the notice of discontinuance and reopen the proceeding. Accordingly, his Honour summarily dismissed Mr Mbuzi's application. 21 His Honour noted that Mr Mbuzi had objected to AGL's filing of affidavit evidence on the basis that it was filed without leave. His Honour accepted that the orders made no provision for AGL to file affidavits. However, his Honour noted that Mr Mbuzi had filed an affidavit in support of his application to reopen and that AGL's affidavit simply provided additional details to the matters set out in Mr Mbuzi's affidavit. His Honour considered that AGL should have leave to file "that evidence of context" in circumstances where Mr Mbuzi had been given substantial extra time to respond to that evidence and AGL's submissions. His Honour also noted that AGL's affidavits did not affect any of his conclusions. 22 His Honour considered that since AGL's vexatious proceedings application had not been foreshadowed, Mr Mbuzi should be given an opportunity to be heard orally in relation to that application.

Grounds of proposed appeal 23 Mr Mbuzi's draft notice of appeal sets out the following grounds: 1. Error of Law 2. Error of fact 3. Prejudice 4. Apprehended bias 5. Breach of the principles of natural justice 6. Discriminatory application of court requirements 24 Mr Mbuzi elaborated upon most of these proposed grounds in his written and oral submissions. He also argued that the judgment is, in fact, final, not interlocutory, so that he does not require leave to appeal.

Whether the primary judgment is interlocutory or final 25 Section 24(1)(a) of the FCA Act provides that the Court has jurisdiction to hear appeals from judgments of the Court constituted by a single judge exercising the original jurisdiction of the Court. However, s 24(1A) provides that: An appeal shall not be brought from a judgment referred to in subsection (1) that is an interlocutory judgment unless the Court or a Judge gives leave to appeal. 26 Mr Mbuzi submits that the judgment is not interlocutory, but final. He submits that the judgment finally disposes of his rights as he is not able to proceed with his former proceeding. 27 Rule 26.12 of the Federal Court Rules provides, relevantly: (1) A party claiming relief may discontinue a proceeding in whole or in part by filing a notice of discontinuance, in accordance with Form 48. 28 There is no specific provision in the Federal Court Rules for an application to set aside a notice of discontinuance. 29 There are several cases which have assumed that an order of the Federal Circuit Court of Australia dismissing an application to set aside a notice of discontinuance is interlocutory, or held that such an order is interlocutory without providing reasons: Khadri v Minister for Immigration and Border Protection (2014) 140 ALD 136 at [8]-[10], Moussa v Minister for Immigration and Border Protection [2015] FCA 1280 at [3], BZAGD v Minister for Immigration and Border Protection [2016] FCA 670 at [12], [22], MZAOE v Minister for Immigration and Border Protection [2016] FCA 905 at [21]. Rule 13.01 of the Federal Circuit Court Rules 2001 (Cth) deals with discontinuance and is indistinguishable from r 26.12 of the Federal Court Rules. In my respectful opinion, the assumption made, or view taken, in those cases is correct for the following reasons. 30 An order refusing to set aside a discontinuance is analogous to an order refusing an application to set aside a default judgment. In each case the applicant seeks an order which would have the effect of allowing the applicant to prosecute a proceeding which has come to an end. In Carr v Finance Corp of Australia Ltd (No 1) (1981) 147 CLR 246, the High Court considered whether a judgment dismissing an application to set aside a default judgment was final or interlocutory. Gibbs CJ and Mason J held that whether a judgment is final depends on whether the judgment finally determines the rights of the parties. Their Honours held that an order refusing to set aside a default judgment does not as a matter of law finally dispose of such rights as it is open to the defendant to apply again to have the judgment set aside. Mason J said that as the setting aside of a default judgment is a matter under the control or generally within the discretion of the Court, there is no justification for imposing a rigid rule that the refusal of an application is a complete bar to a second application. An order refusing an application to set aside a summary judgment is interlocutory even though the practical effect of the order is that a second application must fail. 31 In Chen v Monash University, the Full Court held that the Court has the power to reinstate a discontinued appeal, either under an implied power or s 23 of the FCA Act. The Full Court held that this power can only be exercised to prevent an abuse of process of the Court or to protect the integrity of its processes, and not generally in the interests of justice. There is a difference between the effect of discontinuance of an appeal and the effect of discontinuance of a proceeding at first instance. Rule 36.73(2) of the Federal Court Rules provides that a notice of discontinuance of an appeal has the effect of an order of the Court dismissing the appeal, whereas there is no equivalent provision where a proceeding at first instance is discontinued under r 26.12(1). In my opinion, the Court's power to set aside a notice of discontinuance filed under r 26.12(1) can be exercised on a wider basis than the power under r 36.73(2). It can be exercised in the interests of justice. As is the position in respect of a second application to set aside a default judgment, there is no basis for the imposition of a rule that a second application to set aside a notice of discontinuance cannot be made. 32 As there is no legal barrier to Mr Mbuzi making another application to set aside his discontinuance of the proceeding and to reopen the proceeding - even though it may, in practical terms, have no prospect of success - the rights of the parties have not been finally determined. Therefore, the judgment is interlocutory, not final. 33 Accordingly, Mr Mbuzi requires leave to appeal.

Leave to appeal 34 In Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-399, the Full Court, while emphasising that the Court has a wide discretion, indicated that the principal considerations to be taken into account upon an application for leave to appeal under s 24(1A) of the FCA Act, are: (a) whether the decision is attended with sufficient doubt to warrant it being reconsidered by a Full Court; (b) whether substantial injustice would result if leave were refused, supposing the decision to be wrong. 35 If an order, while interlocutory in its legal effect, has the practical operation of finally determining the rights of the parties, a prima facie case exists for granting leave to appeal: Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 at [43]. I accept that this is such a case. 36 The outcome of Mr Mbuzi's application for leave to appeal turns upon his prospects of success in the proposed appeal. If there is no reasonably arguable case that the primary judge erred, Mr Mbuzi will suffer no injustice if leave is refused.

Error of law 37 Although the first ground of Mr Mbuzi's proposed notice of appeal is "Error of Law", he advanced no submissions in support of that ground.

Error of fact 38 Mr Mbuzi submits that the primary judge's reasons contain two errors of fact. The first is that his Honour is said to have found that AGL sent its invoice to Mr Mbuzi on 18 March 2016 in error. Mr Mbuzi contends that there is no evidence that the invoice was sent in error and, to the contrary, Ms Ching-Fei Chiu's email of 6 April 2016 indicates that it was sent purposely, knowingly and intentionally. 39 In the context of the fifth reason given in Edelman J's reasons for judgment, his Honour said that it was extremely doubtful that Mr Mbuzi would be entitled to $10,000 for any breach of the settlement deed "in circumstances where the invoice was not paid by Mr Mbuzi and, within a week or so, AGL apologised for its error". 40 In Ms Ching-Fei Chiu's email, she accepts that AGL deliberately sent the invoice to Mr Mbuzi (apparently because AGL perceived that there was a legislative obligation to do so). AGL apologised for not sending an explanation with the invoice or advising Mr Mbuzi as to its intention to credit his account with the amount of the invoice. AGL also apologised for any concern and confusion caused to Mr Mbuzi as a result. In this context, when his Honour said that "AGL apologised for its error", his Honour was referring to AGL's failure to provide an explanation for the invoice when it was sent and for the resulting concern and confusion. His Honour made no finding that the invoice was sent in error. Thus, his Honour did not make the factual error alleged by Mr Mbuzi. 41 Even if it is assumed that his Honour made the error alleged, it could not realistically have made any difference to the outcome of Mr Mbuzi's application. Mr Mbuzi submits that because AGL deliberately sent the invoice to him, breaching the terms of the settlement, an order for costs could not be made against him. He submits that making such an order contravenes a "public policy principle" that wrong-doing is not rewarded. However, it is not apparent that deliberately sending the invoice amounted to a breach of the terms of settlement. Under the terms of settlement, AGL agreed to waive any charges for the relevant period. The invoice was not payable until 8 April 2016 and by that date AGL confirmed that it had waived the charge. AGL made an error in failing to explain it intended to credit Mr Mbuzi's account with the amount stated in the invoice, but that error does not mean that it breached the settlement agreement. 42 Further, there were clear reasons why it was open to his Honour to award costs against Mr Mbuzi. Firstly, his application failed in circumstances where it had little prospect of success. Secondly, he did not withdraw his application after AGL had provided an explanation of its conduct, made it clear that it was not seeking payment and invited Mr Mbuzi to withdraw his application. 43 Mr Mbuzi submits that the second factual error made by his Honour was to refer to AGL as Mr Mbuzi's "former electricity supplier". Mr Mbuzi says that AGL remains his electricity supplier. 44 His Honour apparently inferred that AGL was no longer Mr Mbuzi's electricity supplier since the terms of settlement required him to change electricity suppliers, and there was no evidence before the Court that he had not done so by the time the application was decided. That inference was open to his Honour. In any event, any such error could not possibly have made a difference to the outcome of the application, and could not result in judgment being set aside on appeal.

Prejudice and discriminatory application of the Federal Court Rules 45 Mr Mbuzi proposes to rely on grounds of "Prejudice" and "Discriminatory application of court requirements". I understand these grounds to be related. The complaint is that his Honour did not require AGL to make a formal application to "strike out" Mr Mbuzi's application, but decided to treat AGL's draft minutes of order as such an application. 46 AGL sought to have Mr Mbuzi's application summarily dismissed on the basis that it had no reasonable prospects of success. That was made apparent by AGL's written submissions. Rule 26.01(1)(a) of the Federal Court Rules makes provision for a party to apply to the Court for summary judgment on such a basis. Rule 17.01(1) requires such an application to be made in accordance with Form 35. However, r 1.34 provides that the Court may dispense with compliance with the Federal Court Rules, and r 1.35 provides that the Court may make an order that is inconsistent with the Rules. 47 On 3 May 2016, his Honour ordered the parties to file submissions concerning AGL's application to strike out Mr Mbuzi's interlocutory application, and ordered that the hearing of AGL's application be dealt with on the papers. Although his Honour did not expressly make orders under rr 1.34 or 1.35 of the Federal Court Rules, his Honour was empowered by those rules to treat AGL's application as an application for summary judgment. To the extent that Mr Mbuzi submits that his Honour lacked the power to treat AGL's draft minutes of order as an application for summary judgment, that argument cannot succeed. 48 Curiously, AGL seems to submit that his Honour did not treat AGL's draft minutes of order as an application for summary dismissal, but, rather, exercised the Court's power to grant summary judgment on its own initiative under r 1.40 of the Federal Court Rules. That submission finds no support in any of the material before me. His Honour's reasons clearly describe AGL as having brought an application to "strike out" Mr Mbuzi's interlocutory application (see [17] above). Further, Mr Mbuzi understood, even if AGL did not, that his Honour was treating AGL's minutes of order as an application to "strike out", or summarily dismiss, his interlocutory application. 49 Mr Mbuzi feels aggrieved and unfairly treated by the course taken by the primary judge. He points out that he, as a self-represented litigant, was expected to comply with the practices and procedures of the Court, but that AGL, which was represented by lawyers, was not. Mr Mbuzi's consternation is understandable, but it must be remembered that the rules of practice and procedure are not an end in themselves. Section 37M of the FCA Act provides that the overarching purpose of civil practice and procedure provisions is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. Section 37P(2) of the FCA Act allows a judge to give directions about the practice and procedure to be followed in furtherance of those purposes. The rules of practice and procedure exist to allow proceedings to be determined in the way described in s 37M of the FCA Act. 50 It can be inferred that his Honour did not require AGL to file a formal application for summary dismissal of Mr Mbuzi's interlocutory application because the latter application, read in light of the supporting affidavit, seemed to have substantial barriers in the way of its success. The only reason Mr Mbuzi gave for seeking to have the discontinuance set aside was his allegation that AGL had breached the terms of settlement. While parties are ordinarily required to comply with the rules of practice and procedure, his Honour plainly took the view that in the circumstances of the case it could be more efficient and less expensive for the parties to treat AGL's minutes of order as an application for summary judgment. This was to the advantage of both parties. Had his Honour required the filing of a formal application, Mr Mbuzi would have been liable to pay additional costs and the filing fee as part of the costs ultimately awarded against him. 51 Mr Mbuzi submits that AGL's minutes of order should not have been treated as an application for summary judgment because he was prejudiced by that course. However, it is clear from his written submissions that he understood the course his Honour proposed to take. When the directions were made on 3 May 2016, he was allowed until 3 June 2016 to file and serve written submissions, and that date was later extended at Mr Mbuzi's request to 4 July 2016. There is no plausible basis for suggesting that Mr Mbuzi was prejudiced by his Honour's treatment of AGL's minutes of order as an application for summary judgment. 52 In order to succeed in an appeal against the exercise of a judicial discretion, the appellant must demonstrate an error of the type described in House v R (1936) 55 CLR 499 at 505. In this case, his Honour apparently decided that the goals set out in s 37M of the FCA Act were best achieved by taking an irregular approach. Mr Mbuzi cannot demonstrate any arguable case of error in that approach.

Apprehended bias 53 Mr Mbuzi's next proposed ground of appeal is "Apprehended bias". He submits that his Honour treated him differentially and adversely in comparison to AGL. 54 Mr Mbuzi points to an email sent by his Honour's associate to the parties on 22 August 2016. That email reads, relevantly: Dear parties I refer to Mr Mbuzi's unsolicited email to the Court on 19 August 2016. His Honour has asked me to respond to the parties reminding them of the general practice of the Court that unsolicited communications with the Court should not occur without prior agreement of all parties. I refer the parties to paragraph 5.4.2 of Interim Practice Note NCF1 "National Court Framework and case management". His Honour has asked me to remind Mr Mbuzi of the importance of polite and civil communication at all times and of compliance with the court's processes and procedures… 55 Mr Mbuzi submits that AGL had also sent unsolicited emails to his Honour's associate, but that AGL's emails had not attracted the same criticism. 56 The associate's email of 22 August 2016 must be seen in the context of an earlier chain of emails that was placed in evidence before me. On 9 May 2016, Mr Mbuzi sent an email to the associate, copied to AGL's solicitor, stating that the respondent had not served any submissions as required by the orders of 3 May 2016. AGL's solicitor responded directly to Mr Mbuzi by an email on the same date, copied to the associate; and sent a further email to Mr Mbuzi on 12 May 2016, also copied to the associate. On 2 June 2016, Mr Mbuzi responded to AGL's solicitor, again copied to the associate. 57 In this context, his Honour's associate sent an email to the parties on 2 June 2016 which reads, relevantly: Dear parties Could I take this opportunity to remind the parties that unsolicited communications should not be sent to the Court without the consent of all the parties. It is appropriate that the respondent reply to Mr Mbuzi's email (without copying the Court in this correspondence)... 58 The associate's email of 2 June 2016 shows that his Honour reminded both parties that they should refrain from sending unsolicited emails to the Court. The email of 22 August 2016 of which Mr Mbuzi complains was prompted by an email from Mr Mbuzi, but his Honour's second reminder was directed to both parties, not merely to Mr Mbuzi. Mr Mbuzi was not singled out. 59 Mr Mbuzi has failed to demonstrate any reasonably arguable case that he was treated differentially and adversely by the primary judge.

Breach of the principles of natural justice 60 Mr Mbuzi's next proposed ground of appeal is "Breach of the principles of natural justice". I understand this ground to refer to Mr Mbuzi's submission that his Honour allowed AGL to rely on three affidavits that AGL had filed despite his Honour having made no direction allowing the parties to file affidavits. Mr Mbuzi disputed aspects of those affidavits and wished to cross-examine the deponents. 61 There are a number of difficulties with Mr Mbuzi's submission. He does not indicate what parts of the affidavits he disputes and what issues he wished to cross-examine witnesses upon. In fact, in this application his submissions as to the merits of his application to set aside the discontinuance and reopen the proceeding seem to rely upon documents annexed to those affidavits. For example, he relies on the deed of settlement, the invoice and Ms Ching-Fei Chiu's email of 6 April 2016. 62 His Honour, while indicating that AGL should have leave to file "that evidence of context", noted that the affidavits did not affect any of his conclusions. Further, his Honour noted that Mr Mbuzi had been given substantial extra time to respond to the affidavits. Mr Mbuzi did not file any responsive affidavits. 63 In these circumstances, Mr Mbuzi has not demonstrated any reasonably arguable case of denial of natural justice.

Further evidence 64 Finally, Mr Mbuzi sought leave to read and file a further affidavit in the course of the hearing. AGL objected on the basis that the affidavit is irrelevant. 65 The affidavit annexes a newspaper article published on 5 October 2016 which refers to a finding by an Ombudsman that AGL is amongst the worst electricity suppliers when it comes to billing customers erroneously. In my opinion, the article is clearly irrelevant to any issue in this application and Mr Mbuzi should be refused leave to read and file that affidavit.

Conclusion 66 Mr Mbuzi has not demonstrated that any of his proposed grounds of appeal are reasonably arguable. His proposed appeal does not have sufficient prospects of success to justify a grant of leave to appeal. In these circumstances, he will not suffer any injustice if leave to appeal is refused. 67 Mr Mbuzi's application for leave to appeal will be dismissed with costs. I certify that the preceding sixty-seven (67) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rangiah.