Moussa v Commonwealth Bank of Australia

REASONS FOR JUDGMENT 1 On 14 September 2009 the Commonwealth Bank of Australia ("the Bank") filed a writ in the County Court of Victoria in which Mr Mario Moussa was named as the defendant. The writ sought payment by him of $252,406.10 plus interest which the Bank alleged was owed pursuant to a loan agreement and mortgage. 2 On 6 October 2009 the County Court entered judgment for the Bank in default of appearance by Mr Moussa. On 4 November 2009 Mr Moussa made an application to the County Court to have the default judgment set aside. 3 On 27 November 2009 Judge Kennedy ordered that Mr Moussa file and serve any further affidavits on which he relied to support his application on or before 4 December 2009. Her Honour also adjourned the further hearing of the application until 11 December 2009. 4 Mr Moussa failed to file and serve any further affidavit material. Mr Moussa did not appear at the adjourned hearing of the application on 11 December 2009. Judge Kennedy ordered that his summons be dismissed and that he pay the Bank's costs of the summons. 5 On 21 December 2009 the Bank issued a bankruptcy notice against Mr Moussa. Mr Moussa failed to comply with the bankruptcy notice thereby committing an act of bankruptcy on or about 8 February 2010: see s 40(1)(g) of the Bankruptcy Act 1966 (Cth) ("the Act"). 6 On 11 February 2010 the Bank filed a creditor's petition in the Federal Magistrates Court. 7 On 1 June 2010 Registrar Luxton ordered that a sequestration order be made against Mr Moussa's estate and that the Bank's costs be paid from the estate. 8 On 22 June 2010 Mr Moussa made an application in the Federal Magistrates Court for review of the decision of Registrar Luxton. 9 Mr Moussa swore a short affidavit in support of his application for review. In that affidavit he said he would like the opportunity to present his case for natural justice and defend what he described as "the false allegations" made by the Bank. He contended that he did not owe the bank the money claimed by it. He provided no evidence to support this claim. 10 The application for review came on for hearing before Turner FM on 12 July 2010. Mr Moussa appeared at the hearing in person. He sought review of the Registrar's decision on the ground that he had been denied natural justice because the Registrar had refused an adjournment application which Mr Moussa had made on 1 June 2010. The adjournment had been sought so that Mr Moussa might seek legal representation. 11 The Federal Magistrate found that Mr Moussa had known of the hearing on 1 June 2010 since 13 April 2010. Despite this Mr Moussa left Australia without seeking to obtain legal assistance. He returned from overseas about 18 May 2010 and only then sought to obtain legal aid and to instruct private legal firms. These attempts to obtain representation were unsuccessful. 12 The Federal Magistrate ordered that the application for review be dismissed and that Mr Moussa pay the Bank's costs. 13 By notice of appeal filed on 2 August 2010 in this Court Mr Moussa appeals from the Federal Magistrate's decision. His grounds of appeal were that he was "denied the opportunity for natural justice" and that he was "denied the opportunity to have legal representation and natural justice." I understand these grounds to refer to the hearing before the Registrar and not before the Federal Magistrate. He seeks an order "that the hearing be adjourned so I can have the opportunity to defend myself and avoid bankruptcy." 14 By notice of motion filed on 20 September 2010 the Bank seeks orders that Mr Moussa provide security in the sum of $21,337.50 for the Bank's costs of responding to the appeal. The Bank also seeks an order that if such security is not provided the appeal be dismissed forthwith. 15 The Bank's motion was listed for hearing on 16 November 2010. On 15 November 2010 Mr Moussa sent a letter, by facsimile transmission, to my Associate in which he asked for an adjournment of the hearing until after 8 February 2011 because he was suffering from complications following major surgery. A medical certificate was attached which said that he would be unfit for work until 8 February 2011. The hearing was, accordingly, adjourned until today. Mr Moussa did not appear. 16 The notice of motion and supporting affidavits have been served on Mr Moussa. 17 The costs estimate upon which the figure of $21,337.50 is based has been made by Ms Megan Austin, a legal costs consultant. She has prepared a draft bill of costs detailing the party/party costs incurred in the litigation to date and the further party/party costs likely to be incurred by the Bank in the appeal. She has calculated these costs in accordance with the Federal Court scale. 18 Section 56 of the Federal Court of Australia Act 1976 (Cth) confers power on a judge to make an order that an appellant in an appeal to the Court gives security for the payment of costs that might be awarded against the appellant in the event that the appeal fails. By O 28 of the Federal Court Rules the Court may order that a proceeding be stayed until security is provided. Order 52 r 20 provides that: "[u]nless the Court or a Judge otherwise directs no security for costs of an appeal to the Court shall be required." 19 These are broad discretionary powers. In Burgess v Centrelink (2007) 159 FCR 500 at 503 Greenwood J identified a range of considerations which, depending upon the circumstances of the case, may guide the exercise of the discretion. His Honour said: "The considerations include whether the application for security for costs has been brought promptly; an assessment of the strength of the merits of the appeal and the bona fides of the appellant in bringing the appeal; whether the impecuniosity of the appellant was caused and, I might add, contributed to by the conduct of the respondents; whether the application for security for costs, in all the circumstances, is oppressive having regard to the circumstances of the appellant; whether there are persons who otherwise have an interest in the outcome of the proceedings; and other general discretionary questions going to the public interest." 20 The Bank has brought the application for security for costs promptly. 21 I am not called on, in dealing with the present application, to determine the appeal. It is, however, relevant to form a judgment as to the strength of the merits of the appeal brought by Mr Moussa. As I understand the notice of appeal Mr Moussa proposes to argue that the Federal Magistrate should have found that he (Mr Moussa) was denied natural justice by the Registrar when the Registrar refused to grant Mr Moussa an adjournment so that he might seek legal representation. 22 An appeal to a Federal Magistrate from a Registrar requires a hearing de novo. The material placed before the Registrar and the Federal Magistrate by the Bank established Mr Moussa's indebtedness to the Bank and his failure to comply with the bankruptcy notice which had been served on him. Although Mr Moussa had deposed that he was not indebted to the Bank he provided no evidence to support the claim. There was nothing in the material before the Federal Magistrate which would have warranted him taking a different view from that of the Registrar on the making of the sequestration order. 23 The only issue which was argued before the Federal Magistrate was the natural justice point. 24 It is not a requirement of natural justice that, in civil proceedings or non-curial administrative proceedings, a hearing should not proceed until a party is able to obtain legal representation: see New South Wales v Canellis (1994) 181 CLR 309 at 328-330. Nor is there a requirement that adjournments should routinely be granted to afford a party the opportunity of obtaining legal representation. There is certainly no requirement that civil proceedings be adjourned indefinitely, as Mr Moussa appears to desire, until such time as a party can find a lawyer to represent him. What is required is that a party be given the opportunity to present his case to the Court. 25 Mr Moussa had such an opportunity. He had over six weeks' notice of the hearing before the Registrar. He chose to proceed overseas without seeking to obtain legal representation. On his return, some two weeks before the hearing, he made unsuccessful attempts to obtain legal assistance. Had he obtained such representation he would no doubt have had to provide instructions to his lawyer which would have supported the claim that he was not indebted to the Bank. Had there been a foundation for such instructions, Mr Moussa would have been able to provide the necessary material and make submissions relating to it to the Registrar. He did not do so. Nor did he do so before the Federal Magistrate. 26 In these circumstances Mr Moussa's appeal would have little prospect of success. 27 Mr Moussa has failed to satisfy costs orders made against him in the County Court and by the Registrar. He has failed to satisfy the judgment debt to the Bank. He is, therefore, not likely to be in a position to meet any order for costs on this appeal. 28 The Bank is not acting oppressively in seeking security for its costs. Mr Moussa has had an opportunity, both before the Registrar and before the Federal Magistrate, to advance a case (if he has one) that he is not indebted to the Bank. He has not availed himself of these opportunities. 29 For these reasons I consider it appropriate to make an order for security for the costs of the appeal. 30 In the circumstances I consider that an appropriate figure is $15,000.00 31 I will order that Mr Moussa is to provide security for the costs of the Bank in the amount of $15,000.00 and that, if security is not provided on or before 28 February 2011, the appeal stand dismissed. Mr Moussa should pay the costs of the Bank's motions. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey.