McKinnon v Commonwealth Bank of Australia

THE COURT: 1 This is an application by the Commonwealth Bank of Australia (the Bank) to dismiss a proceeding that Mr and Mrs McKinnon wish to pursue as an appeal to a Full Court of this Court. They wish to appeal against a decision of Gray J who was exercising the Federal Court's appellate jurisdiction in hearing an appeal from a decision of a Federal Magistrate (McKinnon v Commonwealth Bank of Australia [2005] FCA 576). 2 The Federal Magistrate had dismissed Mr and Mrs McKinnon's application to set aside a bankruptcy notice. They sought to have the notice set aside on the grounds that it had been served upon them at different times, that it was an abuse of process, and that an undertaking given on behalf of the bank in relation to the execution of the judgment that was behind the bankruptcy notice, was still operative. 3 Gray J dismissed the appeal from the Federal Magistrate. His Honour found that an application to the High Court of Australia for special leave to appeal from the judgment of the Supreme Court of Victoria which gave rise to the judgment debt on which the bankruptcy notice was based had been dismissed and that, accordingly, the Bank's undertaking not to execute upon the judgment was no longer operative. 4 Gray J also held that the fact that the bankruptcy notice was served on Mr McKinnon and Mrs McKinnon at different times was not a reason to set it aside. Finally, Gray J found that issues raised about the solvency of Mr and Mrs McKinnon and the Bank's sale of the security properties were not relevant to the validity of the notice. 5 On 28 April 2005, Mr and Mrs McKinnon filed in this Court a document headed "Notice of Appeal" by which they sought to appeal from the orders of Gray J. The Bank then filed a Notice of Motion by which it sought orders that the appeal be dismissed as incompetent and that the Bank's costs be paid by Mr and Mrs McKinnon. 6 The word "incompetent" is one that is not alone amongst legal terms in having the capacity to offend people who do not know that it is a term of art. It may be a term that needs revision and one that should be brought up to date. But in the context of this case, what it means to say that an appeal is incompetent is that the matter simply cannot proceed because the law does not allow it to. The Bank has brought a proceeding by way of Notice of Motion claiming that indeed this is such a case and that the appeal that Mr and Mrs McKinnon wish to bring to a Full Court cannot proceed for the reason that the law simply does not allow that to happen. 7 The problem that Mr and Mrs McKinnon have is that Gray J was exercising the appellate jurisdiction of the Court in an appeal from the Federal Magistrates Court. Parliament has made express provision for such a case by an amendment to the Federal Court of Australia Act that came into force well before these events. Under the heading "Appellate Jurisdiction", s 24(1AAA) of the Federal Court of Australia Act 1976, an Act of the Federal Parliament, provides: An appeal may not be brought to the Court from a judgment of the Court constituted by a single Judge exercising the appellate jurisdiction of the Court in relation to an appeal from the Federal Magistrates Court. 8 The section is quite explicit in its terms. The Parliament is saying that an appeal may not be brought to this Court from a single judge who was exercising the appellate jurisdiction of this Court. That is exactly the position here. Despite s 24(1AAA), such an appeal has been brought to the Court and the Court has no jurisdiction to hear it, so the Bank's submission that the Court cannot proceed with the appeal must be upheld. Mrs McKinnon explained to us, very clearly and in detail, the course that she and Mr McKinnon have taken in relation to their application for special leave to appeal to the High Court from the orders of Gray J and that course, no doubt, is what the legislature had in mind as being possible when it enacted that no appeal should come to a Full Court of this Court. 9 But be that as it may, the fact of the matter is that the Parliament has made it quite clear - clear beyond argument - that once a judge of this Court sitting alone as a single judge has exercised its appellate jurisdiction in an appeal from the Federal Magistrates Court, there may be no appeal to a Full Court of this Court. That is clear and it is what the Parliament has said. The language does not admit of any other construction. The Court simply must apply that law and the result, therefore, must be that as far as this Court is concerned there is no further possibility of proceeding. The application by the Bank that the appeal be set aside as incompetent, in the sense of that word that we have sought to explain, must be upheld. Accordingly, the appeal must be declared to be incompetent. The costs must follow the event. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Black and Justices Stone and Young.