Mijac Investments Pty Ltd (ACN 084 820 280) v Graham

REASONS FOR JUDGMENT 1 The motions before the Court today are filed in an appeal from a judgment of a single judge of the Court. The judgment the subject of the appeal was given by Gordon J on 22 July 2009. Her Honour dismissed an application to the Court by the appellant, but made no order as to costs. In substance, her Honour found that there had been a failure to comply with the duties of a mortgagee in possession on the part of one or more of the respondents in selling the security. As a result of events that had occurred in the interim, however, her Honour found that it was not possible to grant any remedies to the appellant. See Mijac Investments Pty Ltd (ACN 084 820 280) v Graham (No 2) [2009] FCA 773. For the purposes of dealing with these motions, I am prepared to assume that the appellant has an arguable case in the appeal. 2 The motions are the subject of a notice of motion filed on 22 December 2009. Most importantly, the respondents seek an order pursuant to s 25(2B)(bb)of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act"), that the appeal be dismissed for failure by the appellant to comply with directions of the Court. There are alternative orders sought, including: summary judgment in favour of the respondents; the dismissal of the appeal as incompetent because it was not served within 21 days from the date of judgment sought to be appealed, and no application for leave has been brought; or the striking out of a further amended notice of appeal dated 17 December 2009. The respondents, of course, also seek an order that the appellant pay the respondents' costs of the appeal. 3 The history of the appeal can be stated briefly. The time within which the appellant was required to file and serve the notice of appeal by O 52 r 15(1)(a)(i) of the Federal Court Rules was 21 days from the date when the judgment appealed from was pronounced. On the last day of that period, a Mr Jorgensen, who was the sole director of the appellant, presented to the registry of the Court a notice of appeal, along with an application for the appellant to be relieved from the obligation to pay the normal filing fee. 4 The notice of appeal so submitted contained some 35 paragraphs, many of them quite lengthy. Its tone overall was narrative and argumentative. Mr Jorgensen was advised by an officer in the Court's registry that the deadline for payment of the filing fee had been extended for 14 days so that the application for waiver of that fee could be determined. He was also advised that if the fee was paid within that time, the filing of the notice of appeal would be regularised. Strangely, the appellant did not take any step to serve that notice of appeal on the respondents within the required time. An unsigned and unsealed copy was sent by email to the solicitors for the respondents a week later, on 19 August 2009. 5 The solicitors for the respondents indicated to the Court that they proposed to file a notice of motion, seeking to have the appeal dismissed as incompetent for three reasons. The first reason was that the appellant is a corporation and the appeal had been filed otherwise than by a solicitor, without the leave of the Court, contrary to O 4 r 14 of the Federal Court Rules. The second was that the notice of appeal was served outside the period provided for in O 52 r 15(1)(a)(i) of the Federal Court Rules. The third ground was that the notice of appeal failed to comply with the requirement of O 52 r 13(2)(b) of the Federal Court Rules by stating briefly but specifically the grounds relied upon in support of the appeal. All of these defects were capable of being remedied if circumstances existed that were favourable to their remedy. The respondents were dissuaded from moving the Court to dismiss the appeal on any of the bases proposed. The respondents entered a conditional appearance to the appeal and filed both a notice of contention and a notice of cross-appeal. The notice of cross-appeal relates to her Honour's failure to award costs against the appellant at first instance. The respondents have stated that it is their intention only to proceed with the cross-appeal if the appellant pursues its appeal. 6 On 8 September 2009, a solicitor advised the solicitors for the respondents that she now acted for the appellant, and attached a notice of change of practitioner. On 10 September 2009, Ryan J dealt with a motion relating to matters arising out of the proceeding at first instance. The respondents sought to reopen the proceeding in relation to the order for costs. His Honour ordered that their motion to that effect be referred to Gordon J for hearing on a date and at a time to be fixed. At the same time, Ryan J ordered that any motion for an extension of time within which to bring this appeal, or for an amendment of the notice of appeal, be made returnable in the first instance before Gordon J, with a view to having it heard and determined at the same time as the motion relating to the costs of the proceeding at first instance. 7 Despite this order of Ryan J no motion for any extension of time within which to serve the notice of appeal has ever been filed. No application for such an extension of time has ever been made. No material has ever been put before the Court that would justify the granting of such an extension or would explain why the delay occurred. 8 On 23 September 2009, an appointment to settle the index to the appeal papers was aborted because the appellant had failed to file and serve a draft index of appeal papers, in contravention of O 52 r 27 of the Federal Court Rules. A further appointment was made for 4 November 2009. 9 On 20 October 2009 the appeal was mentioned at a callover before Middleton J. On that occasion, his Honour ordered that, on or before 26 October 2009, the appellant file and serve through solicitors an amended notice of appeal, stating briefly but specifically the grounds relied upon, a draft index of appeal papers, and any notice of motion for an extension of time within which to bring the appeal. The only purported compliance with this order was that, on 26 October 2009, Mr Jorgensen sent by email to the respondents' solicitors an amended notice of appeal. There was no attempt to comply with the orders to file a draft index of appeal papers or a notice of motion to extend the time within which to bring the appeal. The amended notice of appeal so forwarded bears the name of the solicitor then acting for the appellant, but was not forwarded by that solicitor to the respondents' solicitors. 10 The appeal was further mentioned before Middleton J on 27 October 2009. On that occasion, his Honour made a series of orders for the management of the appeal. Those orders included an order that the appellant file and serve a further amended notice of appeal in a form which is in accordance with the rules of the Court by 4.00 pm on 30 November 2009. His Honour also ordered that the appellant provide a draft index to the appeal books by the same time, and extended the settling of the index to the appeal book until 4 December 2009. 11 On 30 November 2009, the respondents' solicitors received a telephone call from another solicitor, advising that he now acted for the appellant. This solicitor also advised that the appellant was not in a position to provide a further amended notice of appeal and requested an extension for two weeks. The parties then consented to orders made by Registrar Luxton on 1 December 2009, adjourning the conference to settle the index to the appeal books until 18 December 2009, extending the time for the filing and serving of a further amended notice of appeal to 15 December 2009, and extending the time for the appellant to provide a draft index to the appeal book to 15 December 2009. 12 Despite having consented to these orders, the appellant failed to comply with them in time. On 17 December 2009, the solicitor then acting for the appellant delivered to the respondents' solicitors a further amended notice of appeal and a draft index of appeal papers. The respondents' solicitors took the view that both of these documents were defective. They took issue with the failure of the draft index of appeal papers to identify properly the documents the appellant sought to have included in the appeal book. In particular, they objected to the identification of documents by categories and to the abbreviation "TBA" in some places. They also took objection to the inclusion of documents irrelevant to the appeal, such as affidavits concerning interlocutory applications in the primary proceeding. 13 The appointment to settle the appeal papers commenced on 18 December 2009, but could not proceed and was adjourned to 27 January 2010. The appellant was not ready to proceed. On 21 December, the respondents' solicitors sent by email to the solicitor for the appellant a list of the objections the respondents took to the draft index of appeal papers and a list of objections to the further amended notice of appeal. As I have said, on the following day, 22 December 2009, the respondents applied to the Court by notice of motion to terminate the appeal. The notice of motion was served on 23 December 2009. This is common ground. 14 It might have been thought that the service of such a notice of motion would have prompted swift and thorough action on the part of the appellant to regularise its position, if the appellant had been truly interested in proceeding with the appeal. To the contrary, nothing occurred until an affidavit of Mr Jorgensen was filed in the Court yesterday, 19 January 2010. In Court today, the counsel for the appellant has produced a proposed second further amended notice of appeal. 15 Mr Jorgensen's affidavit explains some of the circumstances in which he filed the notice of appeal. Apart from saying that he emailed the original notice of appeal to the respondents' solicitors within the seven-day time frame after filing the notice of appeal (the seven-day time frame apparently being for dealing with the application for waiver of the fee), Mr Jorgensen offers no explanation and no reason for failing to serve the notice of appeal on 12 August itself, the last day for filing and service of it. Apart from saying that, on that day, he was flying to Beijing and arrived about 3.00 pm Melbourne time, he does not offer any explanation as to why a notice of appeal was not filed and served within time. He advances arguments about the adequacy of the grounds expressed in the notice of appeal and an argument that the time for technical objections to the appeal has passed. 16 Strangely, Mr Jorgensen offers no explanation at all for the appellant's failure to comply with the previous orders of the Court. There is no material whatsoever that would justify the failure to comply with the order of Ryan J of 10 September 2009 by filing a motion for extension of time within which to serve the notice of appeal. There is no material that would justify the failure to comply with the orders of Middleton J made on 20 October and 27 October 2009. There is no material that would justify the late purported compliance with the consent order made by Registrar Luxton. Having chosen to go on affidavit in relation to the circumstances of the appeal, Mr Jorgensen has chosen not to contest the allegations made against the appellant, or to seek to excuse the appellant's conduct in failing to comply with orders. Even more significantly, Mr Jorgensen has failed to offer any hope for the future. He has indicated that the appellant wishes to proceed with its appeal. He has not offered any assurance that, if it should be allowed to do so, the appellant will comply immediately with orders that have been made and will set about regularising its position. 17 The absence of any material that would justify what has occurred so far, and the absence of any expression of a determination to remedy the situation, is most troubling in the context of this case. Also troubling is the proposed second further amended notice of appeal, which is said to be in substitution for the further amended notice of appeal filed on 17 December 2009. A quick reading of this document reveals that it contains and expresses effectively 44 grounds of appeal from the judgment of the learned primary judge. The notice of appeal seems to take issue with a great number of findings of fact and conclusions that her Honour reached. It appears that the appellant has combed through her Honour's reasons for judgment and composed a ground of appeal challenging every finding and conclusion of her Honour. This does not justify any confidence that the appellant is aware of some good ground or grounds of appeal, likely to be able to be supported with weighty argument, if the appeal should proceed. It is also apparent that no step has been taken yet to remedy the defects in the draft index for the appeal papers, in advance of the adjourned conference to settle that index, which is due to take place in a week's time. 18 Consequent upon my pointing out to counsel for the appellant the obvious deficiencies in the material on which the appellant now relies, at a late stage of the hearing of the motions, counsel for the appellant sought an adjournment of the motion. They indicated an intention to make an application to regularise the service of the notice of appeal and to provide material that would explain, if not justify, the failures to remedy the appellant's situation up until now and to provide such material as they could in relation to what was to happen in the future. 19 There are a number of difficulties about this application for an adjournment. First, counsel for the appellant were not able to inform me as to what the nature of any material might be. They were not able to draw on any instructions as to any explanation for the failure to comply with orders that has occurred so far. It is axiomatic that there are dangers in encouraging people to submit further affidavit material when the Court has pointed out the deficiencies in what has been presented so far. In particular, it would be very easy now for Mr Jorgensen to swear an affidavit expressing his determination to do everything in the appellant's power to bring about the efficient hearing of the appeal. In the circumstances such material could hardly be credible. In the absence of any indication about what might be the explanation for failure to comply with orders so far, the application for an adjournment of these motions appears to have little merit. 20 There are further difficulties, however. As I have said, the appointment to settle the index to the appeal book is due to occur on Wednesday of next week, 27 January 2010. In the meantime, there is a public holiday. The length of any adjournment obviously begins to become critical. There would have to be sufficient time for the appellant to file further material and for the respondent to respond to it, if that were seen to be appropriate. A further adjournment of the conference to settle the index of the appeal papers would be extremely undesirable. In the context of an appeal that is listed for hearing on 22 February 2010, an adjournment of motions that may determine its outcome seems to be lacking in practicality. There has been no indication that the appellant would seek to prepare yet another notice of appeal that might contain a better focus in relation to errors on which the appellant might seek to rely. 21 In all of these circumstances, it seems to me to be utterly inappropriate to adjourn the notice of motion. There is absolutely no doubt that the respondents have established that the appellant has failed to comply with directions of the Court. The failures have been frequent. They have been persistent. They have been neither contested nor explained, and there has been no expression of any determination to remedy the situation. In those circumstances, the ground under s 25(2B)(bb)(i) of the Federal Court Act is clearly made out. There is a discretion to dismiss the appeal for failure to comply with those orders. 22 It is noteworthy that, in the relatively recent High Court judgment in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27 (2009) 239 CLR 175 at [89]-[103] per Gummow, Hayne, Crennan, Kiefel and Bell JJ, the High Court expressed a significant change of policy in relation to case management. Previously, the High Court had given primacy to procedural fairness over case management considerations. It seems now that such primacy will not always be given. In this case, I have assumed that the appellant would have an arguable appeal. It has shown a lack of commitment to having that appeal brought on for hearing in an orderly and efficient way. So bad is that lack of commitment that it could lead to the conclusion that the appellant is not really committed to having the appeal heard at all. The appellant has complied with an order to provide security for costs of the appeal, which makes it rather odd that it has not done any of the other things that it is required to do to have the appeal heard. 23 In the absence of explanation for this failure, and in the absence of expression of determination to remedy the matter in the future when those expressions were obviously required, it seems to me appropriate that I should grant the order sought in para 1 of the notice of motion filed on 22 December 2009 and dismiss the appeal. It is not appropriate, in those circumstances, to dismiss the appeal on any other ground or to strike out any notice of appeal. 24 Counsel for the respondents has conceded that it would follow from an order dismissing the appeal that the cross-appeal would also be dismissed. Such an order will be made. In the circumstances, it seems that there could not be any argument but that the appellant should pay the respondents' costs of the appeal. It would follow from such an order that those costs be paid from the funds held in Court as security for costs. 25 The orders I make are as follows: 1. The appeal instituted by notice of appeal filed on 12 August 2009 be dismissed. 2. The cross-appeal instituted by notice of cross-appeal filed on 7 September 2009 be dismissed. 3. The appellant pay the respondents' costs of the appeal, including the costs of the notice of motion filed on 22 December 2009. 4. Those costs, once taxed or agreed, be paid out of the security for costs ordered by Middleton J on 27 October 2009. 5. Any surplus in the security for costs be paid out to the appellant. 6. Otherwise, the motions the subject of the notice of motion filed on 22 December 2009 be dismissed. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the reasons for judgment herein of the Honourable Justice Gray.