Reaper v Baycorp Collections PDL

REASONS FOR JUDGMENT 1 Mr Brett Reaper has applied to the Court for an extension of time within which to file a notice of appeal from a judgment of Pagone J which was delivered on 28 January 2014: see Reaper v Baycorp Collections PDL (Australia) Pty Ltd [2014] FCA 13. 2 Mr Reaper had applied to the Court for an order under s 153B of the Bankruptcy Act 1966 (Cth) ("the Act") annulling a sequestration order which had been made by a Registrar of the then Federal Magistrates' Court on 7 March 2013. His Honour refused the application. 3 The application and a draft notice of appeal were filed on 26 February 2014, a week after the period prescribed by Rule 36.03 of the Federal Court Rules 2011 ("the Rules"), had expired. 4 The application came on for hearing before me, as duty judge, on 18 March 2014. Mr Reaper did not appear. I dismissed his application for want of prosecution. When a copy of the Court's order was provided to Mr Reaper, he advised the Registry that he had not been notified of the hearing date. Mr Reaper filed his notice for extension of time and associated documents through eLodgement. He claimed he understood eLodgement to be a method of lodging documents and he was not aware or notified that registry notifications were obtainable through eLodgement nor did he receive an email from eLodgement or the Registry advising him of the hearing date. In these circumstances I relisted the matter for mention this morning. Counsel for the first respondent advised the Court that it did not oppose an order vacating the orders made by the Court on 18 March 2014. I made these orders and the hearing of Mr Reaper's application proceeded. 5 The application for an extension of time was supported by an affidavit sworn by Mr Reaper. The affidavit is difficult to understand. He appears to suggest that his delay in lodging his appeal was attributable, in some way, to his prosecution of two charges of contempt of court against an officer of the Westpac Banking Corporation ("Westpac") and an employee of the first respondent, Baycorp Collections PDL (Australia) Pty Ltd ("Baycorp"). He also referred to an interlocutory application which he had made on 18 January 2014 "to block" what he described as "contemptuous documents." The contempt charges and the interlocutory application had not been dealt with at the time at which his Honour handed down his judgment or within the period allowed for an appeal from it. This had led Mr Reaper "to believe the hearing had not concluded." 6 In order to place these assertions in some context it is necessary to refer to some of the procedural history of the annulment application. It was made on 16 September 2013. At a directions hearing on 18 October 2013 it was fixed for trial on 18 November 2013. The trial was adjourned on several occasions. It proceeded on 22 January 2014. On 16 December 2013 Mr Reaper served a subpoena on the proper officer of Westpac. That proper officer was identified as a Mr Jim Stephenson. The subpoena sought production of various documents including credit card statements on two accounts maintained by Mr Reaper with Westpac. On 18 December 2013 Westpac produced various documents to the Court in purported compliance with the subpoena. On 23 December 2013 a Registrar ordered that Mr Reaper be granted access to the documents produced by Westpac. 7 On 17 January 2014 Baycorp served on Mr Reaper an affidavit, sworn by Mr Darryl Macey on the previous day, on which it proposed to rely at trial. That affidavit exhibited certain documents provided by Westpac which Mr Reaper considered should have been, but were not, produced pursuant to the subpoena. 8 When the proceeding was called on before the primary judge on 20 January 2014 Mr Reaper drew his Honour's attention to what he described as "[t]wo interlocutory applications in response to affidavits received on Friday." The applications were that the affidavits be "removed from the Court file." Mr Reaper objected that his affidavit had been based on documents which Westpac had produced and that the additional documents exhibited to Mr Macey's affidavit "might undermine" material in an affidavit which he (Mr Reaper) had filed. His Honour indicated that he was not minded to order that the documents be removed from the file. He indicated that he was sympathetic to the difficulties occasioned to Mr Reaper by the late production of documents and acceded to a request, made by Mr Reaper, that the hearing should be adjourned until 22 January 2014 so that he could consider the material filed by the respondents and, if need be, supplement his own material. 9 The circumstances in which the debt arose and the sequestration order made were explained by the primary judge in his reasons as follows: "1. The basis of the bankruptcy was a judgment debt on an amount due to Westpac Banking Corporation ("Westpac") from Mr Reaper which had been assigned to Baycorp Collections PDL (Australia) Pty Ltd ("Baycorp"). Mr Reaper did not contest, and did not establish, that the assignment was ineffective but contended that the debt was not due by him personally but had been due by a company of which he had been a director which had conducted a business of landscaping. Judgment was entered against Mr Reaper on 27 October 2011 in contested proceedings in the Magistrates' Court of Victoria for $22,552.40. On 15 May 2012 the Magistrates' Court dismissed with costs Mr Reaper's contested application for a rehearing. The creditor's petition against Mr Reaper was issued on 25 July 2012. 3. The debt in question arose from the use of a credit card issued by Westpac numbered 4564 7270 0170 3493 ("CC93") which, Mr Reaper contended was not due on his account but was due by a company. The identity of that company, until the hearing of his application, was said to be Urban Habitat Landscaping and Paving Pty Ltd ("Urban Habitat") of which he had been the director and which had conducted a landscaping business. Urban Habitat went into liquidation and a report as to its affairs was lodged on 31 July 2006 which was signed by Mr Reaper. The report included a list of creditors which did not disclose, contrary to Mr Reaper's contention in these proceedings, any debt due by it on the credit card. Indeed, the credit card continued to be used after the date of liquidation of Urban Habitat, with the last transactions on the card being on 15 November 2007. 4. Mr Reaper's claim about CC93 not being his personal credit card was based upon his evidence that in July 2002 he approached Westpac with the intention of opening a secondary company chequing account for the company. Mr Reaper said that he was advised by a Westpac representative that a corporate credit card account was more appropriate in light of the company's banking history, and Mr Reaper said that he had accepted Westpac's advice and completed an application then and there with the assistance of Westpac's employees. No application was tendered in evidence and none emerged from the issue of subpoenas. 5. The account upon which the debt accrued, and upon which the judgment was subsequently made, was, as I have said, numbered 4564 7270 0170 3493. Critical to Mr Reaper's evidence was that this account, CC93, was approved by Westpac in July 2002 as an account for the company rather than for him. Indeed, his evidence was that at no time during the CC93 application process, or until the company ceased trading, had he been informed by Westpac that he could personally be liable for a default and that had Westpac informed him during the process of the possibility of personal liability by him, that he would have insisted on the secondary company chequing account as initially intended. This evidence was in part supported by his wife, Ms Sharon Fisher, who had been the office manager in the exclusive employ of Urban Habitat during the period in question. Ms Fisher gave evidence, consistent with that of Mr Reaper, of her recollection of events in July 2002 and of her involvement in an application process for accounts to be linked with the company." 10 The trial judge accepted the evidence of an employee of Westpac which was given following an examination of the bank's business records. That evidence disclosed that account CC93 had replaced an earlier account (CC66) which had been in Mr Reaper's personal name. Like CC66, CC93 was in Mr Reaper's name. The periodic statements of account for both CC66 and CC93 were sent to Mr Reaper personally at his home address. His Honour concluded that the relevant debt was owed by Mr Reaper personally. He also found that Mr Reaper had not made good his claim to being solvent. 11 Mr Reaper complained that the statement to which his Honour referred (being the statement relating to account CC93 for the period 6 July 2001 to 6 August 2001) had not been produced by Westpac pursuant to the subpoena but had been available to Mr Macey at the time at which he swore his affidavit on 16 January 2014. 12 An application for an extension of time within which to file a notice of appeal may be made pursuant to Rule 36.04 of the Rules. The Court has an unfettered discretion to grant or refuse such an application. That discretion must, of course, be exercised judicially. This requires a balancing of potentially conflicting interests and regard to the peculiar circumstances of each case. The starting point in any given case is that the relevant legislation or rules have prescribed a period within which an appeal must be lodged. Such prescription serves the public purpose of bringing disputes to finality. There is, therefore, what has been described as a prima facie rule that applications or appeals brought out of time will not be entertained: cf Lucic v Nolan (1982) 45 ALR 411 at 416. It is, therefore, necessary for an applicant who seeks an extension of time to advance some plausible reasons which explain the delay in commencing the appeal and provide a foundation for the conclusion that it is in the interests of justice that an extension be granted: cf Duff v Freijah (1982) 62 FLR 280 at 285. One factor which may carry significant weight in determining where the justice of a case lies is the merits of any proposed appeal: cf Lucic at 417. Where an extension of time is sought in order to lodge a notice of appeal, it is to be borne in mind that "the respondent to the application has a vested right to retain the judgment, the subject of the appeal": see Jackamarra v Krakourer (1998) 195 CLR 516 at 519-20 (Brennan CJ and McHugh J). In assessing the merits of a potential appeal the Court is not required to examine a case in great detail. A "full rehearsal" of the argument on appeal is not required. Any assessment of "the merits" must necessarily be undertaken "in a fairly rough and ready way": see Jackamarra at 522. See also: Jess v Scott (1986) 12 FCR 187 at 191-2 and the authorities therein referred to. 13 Mr Reaper's draft notice of appeal contains nine grounds. The first five all allege error on the part of the primary judge because he admitted in evidence and gave consideration to what is described as the "contemptuous material". That material is the bank statement which Mr Reaper asserts should have been, but was not, disclosed by Westpac in answer to the subpoena served on it. These grounds cannot succeed. Even if it be accepted, for the purposes of argument, that Westpac failed in its duty to the Court and that Baycorp managed to obtain the statement from Westpac that was not provided to Mr Reaper, Mr Reaper does not contend that the documentary evidence was irrelevant or otherwise inadmissible. Mr Reaper was provided with the material prior to trial. This occurred belatedly and the primary judge ensured that Mr Reaper was not prejudiced by postponing the hearing to a date nominated by Mr Reaper in order to ensure that Mr Reaper had the opportunity of considering and responding to the material on which the respondents sought to rely. 14 Mr Reaper considered that Westpac had committed a contempt of court by failing to comply with its obligations under the subpoena and that, in some way, Baycorp was also in contempt by relying on material which it had obtained from Westpac but which Westpac had failed to provide to him. This led Mr Reaper, as he was entitled to do, to file statements of charge against employees of Westpac and Baycorp. Under the Rules these charges and the associated applications fell to be determined in the proceeding: see Rule 42.11(1). The issue raised by the charges and applications were collateral to the substantiative issues raised by Mr Reaper's application under s 153B of the Act. The existence of the contempt charges did not operate as an inhibition on the trial judge's power to proceed to hear and determine the principal application. This he did. There was no reason (apart from the allegation that the relevant material was "contemptuous") why he should not do so, once he had ensured that Mr Reaper had had time to examine and respond to that material. 15 Ground six alleges that the trial judge identified the wrong company as being "liable for the debt". It was also alleged that Mr Reaper had not, at trial, as the trial judge recorded in his reasons, sought to suggest that a company, other than the one he originally nominated, was responsible for the debt which was attributed to him. Nothing turned on this point. The trial judge found, on the evidence before him, that it was Mr Reaper who, at all times, owed the relevant debt to Westpac. It was Mr Reaper who asserted that the debt had been incurred by a particular company of which he was a director. The trial judge did not accept that the debt could be attributed to either of the two companies to which reference was made. 16 The remaining grounds each related to Mr Reaper's contention that he was solvent and that his solvency was irrevocably established by his statement of affairs. In holding that Mr Reaper had not substantiated his claim to be solvent, the trial judge had regard, in addition to the statement of affairs produced by Mr Reaper, to correspondence from the Australian Taxation Office which indicated that Mr Reaper had a tax debt significantly higher than that which he acknowledged in his statement of affairs. His Honour also took into account evidence from Mr Reaper's trustee in bankruptcy. Mr Reaper owed him in excess of $50,000 for costs, expenses and legal fees. These debts were not acknowledged in the statement of affairs. Mr Reaper was unable to point to any authority which supported his assertion that the trial judge ought not to have had regard to such material. The trial judge was not bound to accept Mr Reaper's statement of affairs as being accurate and determinative. Mr Reaper bore the "heavy burden" of placing before the Court "all relevant material with respect to his … financial affairs so that the Court [could] be properly informed and [could] make a judgment that [was] based on [his] actual circumstances …": Re Papps; Ex Parte Tapp (1997) 78 FCR 524 at 531. The trial judge did not err by having regard to the trustee's evidence. 17 It follows, in my opinion, that Mr Reaper's proposed appeal enjoys no reasonable prospect of success. 18 I make due allowance for the fact that, as an unrepresented litigant, Mr Reaper labours under considerable disability. As his submissions indicated he has an imperfect appreciation of the rules relating to the conduct of litigation and the lodging of appeals. Had he demonstrated an arguable case on appeal I would not have refused him an extension of time simply because his notice of appeal was filed a week late. I would have taken that view notwithstanding the absence of any reasons for lateness apart from some apparent misconception of the status of the proceeding once he had made his interlocutory applications and filed statements of charge. The absence of viable appeal grounds and the interests of the respondents in maintaining the judgment in their favour, in my opinion, weigh against the granting of Mr Reaper's application and warrant its refusal. 19 I will so order. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey.