Rogers v Law Coast Mortgages Pty Ltd

Federal Court of Australia|2002-03-05|Before: Wilson J, Finn J

REASONS FOR JUDGMENT 1 This is an appeal to this court in the exercise of its appellate jurisdiction against the order of a Federal Magistrate dismissing the application of Gregory Eric Rogers to set aside a bankruptcy notice served by the respondent, Law Coast Mortgages Pty Ltd, ("Law Coast"). Mr Rogers was unrepresented in the proceedings before the Magistrate as also on the hearing of this appeal. 2 Stated shortly the appeal challenges the refusal of the Magistrate to adjourn the hearing of the application to set aside the notice which was then determined adversely to Mr Rogers. The basis of Mr Rogers' objection to the Magistrate so acting is that prior to the hearing he received a letter from the Registrar of the Federal Magistrates Court indicating that the hearing scheduled for the day in question was to be a directions hearing only. Mr Rogers' complaint is that in being forced to go on he was both denied natural justice and denied the opportunities to put on further evidence and to seek clarification of the issues that were to be agitated. To set his complaints in context it is necessary to refer to the previous history of the matter in some detail.

Background Setting 3 In 1997 a company of which Mr Rogers was a director, Perdon Pty Ltd ("Perdon"), borrowed money from Law Coast for property development purposes. Law Coast was the vehicle through which a firm of solicitors conducted a solicitor's mortgage lending business. Mr Rogers and his wife (also a director) provided personal guarantees of the loan. The loans were secured by mortgages over the property to be developed. 4 In April 1998 Perdon defaulted on an interest payment. On 4 January 1999 both Perdon and Mr Rogers commenced actions in the Federal Court seeking relief from the mortgage and personal guarantees respectively. The following day Law Coast commenced Supreme Court of Queensland proceedings seeking possession of the mortgaged lands. 5 The Federal Court proceedings were subsequently cross-vested to the Supreme Court. On 21 March 2000 Wilson J of that Court gave summary judgment dismissing Perdon's action against Law Coast on the basis it did not disclose a triable issue. An appeal to the Court of Appeal from that decision was struck out on 14 June 2001 for want of prosecution. Mr Rogers' own claim is yet undetermined. 6 It was an application made in Mr Rogers' own action that gave rise to the order on which the relevant bankruptcy notice was founded. He sought unsuccessfully to have dealt with for contempt a solicitor in the employ of the firm instructed by Law Coast in the various litigations mentioned above. In dismissing that application a judge of the Supreme Court made an order for indemnity costs against Mr Rogers. Those costs were later assessed and the assessment was not challenged. The bankruptcy notice was subsequently issued and the application to have it set aside was filed on 18 December 2000. 7 On 22 January 2001 the matter was listed for hearing on 19 April 2001. When the matter came on then, it was adjourned by the Magistrate who apparently directed the applicant to file further evidence in support of the cross-demand against Law Coast (that cross-demand relating to his own action in the Supreme Court). It would seem that Mr Rogers had already filed brief written submissions in support of his application but that he had not by then exhibited in the Magistrates Court the statement of claim in his own action. This he filed subsequently together with an affidavit of a solicitor, Gary O'Neill (who had explained the relevant documentation to him at the time of the loan), which had previously been filed in Perdon's action in the Supreme Court. 8 A further directions hearing was held on 13 June 2001 at which the matter was adjourned to 7 August. On 6 July 2001 the respondents' solicitor filed a short affidavit that noted that the Perdon appeal to the Court of Appeal had been dismissed for want of prosecution. 9 On 18 July 2001 the Registrar of the Federal Magistrates Court wrote to the parties indicating that the matter had been listed for hearing on 7 August 2001 and directed each to file a written summary of argument five days before that date. By letter dated the following day (19 July) the parties were notified that the matter was to be listed for directions on 7 August. No mention was made in it of filing written submissions. I would note in passing - though nothing was made of it before the Magistrate or on this appeal - that the latter letter probably in fact pre-dated the former. 10 The respondents sought and received clarification of the matter and were prepared for the hearing of the matter on 7 August 2001. While they had filed written submissions, these were not served on Mr Rogers. He had not filed further written submissions by that date.

The 7 August 2001 Hearing 11 The transcript of what transpired at the hearing in relation to the preparedness of Mr Rogers to go on and the Magistrate's refusal to countenance an adjournment is brief and unilluminating. The matter opened (after appearances) with the Magistrate noting that he had not received submissions from Mr Rogers, though he had from the respondents. Mr Rogers explained he thought that the hearing was to be a directions hearing, and drew the correspondence to the Magistrate's attention. 12 The Magistrate then asked whether Mr Rogers was saying he was not ready to proceed. Mr Rogers indicated he was not ready and that he had not received the respondents' submissions. Counsel for the respondent accepted that Mr Rogers did not have the submissions so that he did not have "the advantage that the Court has had of having them for a little time", but that Mr Rogers had already put on his further material and he was in consequence in a position to argue his own case. 13 The Magistrate then observed (inter alia): "as far as I was concerned it is a short point. All the evidence is there. I may be prepared, Mr Rogers, to give you an opportunity to review the written submissions. My next matter doesn't start till 11. I had set it back allowing for an hour and a half for this matter, which I thought would be more than sufficient time to hear any oral argument on the written submissions. I mean, I think I understand what your point is because you have made it clear in your material. The written submissions are really an aide memoir to me. They don't form part of the evidence, of course." He went on to observe that Mr Rogers provided written submissions in April and nothing had really changed since then. 14 Discussion then ensued about Mr O'Neill's affidavit and the fact that the respondents had required that he be at the hearing for cross-examination. For their part the respondents took the view that Mr O'Neill's evidence was really inadmissible so that his presence would not be required. 15 The hearing of the matter then occurred without any further discussion of an adjournment although Mr Rogers was given some time to read the respondents' submissions.

The Magistrate's Decision 16 I need only refer to this matter briefly. The Magistrate correctly acknowledged that Mr Rogers was required to satisfy him that he had a bona fide and real cross-demand that had a reasonable probability of success. He noted that the Perdon statement of claim was struck out in the Supreme Court as disclosing no triable issue. That statement of claim was not in evidence before him. He referred to a letter of 2 November 1999 written by solicitors then acting for Mr Rogers which stated (inter alia) that: "The action brought by the guarantors, Mr and Mrs Rogers, depends on the action brought by the principal debtor, Perdon Pty Ltd and duplicates almost all the issues in that action." 17 The Magistrate inferred from this that an issue in the Rogers action relating to the existence of a particular interest guarantee scheme was an issue relied upon in the Perdon action and was in consequence found not to be capable of making out a triable issue in that action - hence it would not give rise to a reasonable prospect of success in the Rogers action. The Magistrate went on that even if that issue was not raised in the Perdon action he was not satisfied that it was likely to be of relevance to Mr Rogers' action for damages or other relief. 18 Accordingly he dismissed the application to set aside the bankruptcy notice.

The Present Appeal 19 The parties' rival contentions can be put shortly. The appellant submits, first, that in consequence of his being misled as to the nature of the 7 August hearing he was not given an adequate opportunity to prepare his own case and to respond to the respondents'; and secondly, because he did not believe the hearing was to be other than a directions hearing, he was denied the opportunity to put in further evidence (which he identified) in support of his case. 20 The respondents reiterated the views put before the Magistrate; they contended that Mr Rogers had ample opportunity since the April hearing to put on further evidence and had done so; no prejudice was shown to have been occasioned by the refusal of the adjournment; Mr Rogers had not adduced evidence showing his own action was different from, or had any better prospects than the Perdon action; the further evidence he proposed would be of no assistance; and he had been amply indulged already. There had been no denial of natural justice. Reference was made to Squire v Rogers (1979) 27 ALR 330 at 337-338 and Bloch v Bloch (1981) 37 ALR 55 at 58-59.

Conclusion 21 It is unfortunate, but nonetheless necessary, that this appeal must be allowed and the matter remitted to the Magistrate for rehearing. 22 The question whether or not to grant an adjournment was a matter within the discretion of the Magistrate to be resolved according to the overall requirements of justice in the particular circumstances: Squire v Rogers, above, at 337. In consequence it is accepted that appellate courts will be slow to interfere with the discretion of a court to refuse an adjournment, but that they will do so if the refusal will result in a denial of justice to the applicant and the adjournment will not result in any injustice to any other party: Sali v SPC Ltd (1993) 116 ALR 625. 23 It has, though, been acknowledged in this Court that for a court to refuse an adjournment of the hearing of a proceedings sought by an applicant on the day of the hearing on the basis that he or she is not in a position to proceed, and thereby to dismiss those proceedings, is a significant step not lightly to be taken: Scott v Handley (1999) 58 ALD 373 at 379. Such a refusal can involve a denial of procedural fairness. 24 As was said in R v Thames Magistrates' Court; ex parte Polemis [1974] 2 All ER 1219 at 1223: "… nothing is clearer today than that a breach of the rules of natural justice is said to occur if a party to proceedings … is not given a reasonable chance to present his case. It is so elementary and so basic it hardly needs to be said. But of the versions of breach of the rules of natural justice with which in this court we are dealing constantly, perhaps the most common today is the allegation that the defence were prejudiced because they were not given a fair and reasonable opportunity to present their case to the court, and of course the opportunity to present a case to the court is not confined to being given an opportunity to stand up and say what you want to say; it necessarily extends to a reasonable opportunity to prepare your case before you are called on to present it. A mere allocation of court time is of no value if the party in question is deprived of the opportunity of getting his tackle in order and being able to present his case in the fullest sense." 25 The factors of which account properly can be taken in ensuring justice is done extend beyond the interests of the parties to such matters as congestion of court lists and case management: see Scott v Handley, above. One factor that may, in the circumstances, be of no little importance is that the party asserting he or she is not in a position to proceed is a litigant in person who suffers the disadvantage of being opposed by parties having legal representation: Scott v Handley. 26 The courts have emphasised on many occasions that, subject to the need for a court to maintain its position of neutrality in litigation, a court should provide some advice and assistance to an unrepresented litigant, and should otherwise be conscious of the disadvantage of such a litigant, so as to ensure a fair and just trial: see Minogue v Human Rights and Equal Opportunity Commission (1999) 84 FCR 438 at 445-447; see also Australian Institute of Judicial Administration, Litigants in Person Management Plans: Issues for Courts and Tribunals (2001). 27 In some number of the instances in which a litigant has unsuccessfully appealed against a refusal on the day to grant an adjournment of what was known to be the hearing of a trial or of an appeal, that person was found to be "the author of his own misfortune": Sali v SPC Ltd, at 631; Bloch v Bloch. The present is far removed from that type of case. The appellant was not seeking the adjournment of what he knew was to be the hearing of his application. Through no fault of his own he was misled into believing he was attending a directions hearing; he had no reason to believe that he would not have the opportunity to put on any further evidence prior to the actual hearing - and it should be noted that the respondents had recently done so; and he had not been furnished with the respondents' submissions prior to the hearing. 28 Distinctly, the only prejudice that the respondents were likely to suffer from the grant of the adjournment were the costs of the day and the delay in finalisation of the matter. On the appeal they have sought to argue that any order remitting the matter to the Magistrate would be futile as the result will be the same in any event, the further evidence being incapable of altering the conclusion already arrived at by the Magistrate. 29 For my own part, while it is "not possible to identify a particular error of principle": cf Neil v Nott (1994) 121 ALR 148 at 151; committed by the Magistrate - no express reasons for the decision were given - I am satisfied that his exercise of discretion did miscarry. Even though Mr Rogers had been given an earlier opportunity to put on evidence, there were unexceptionable reasons for his claimed unpreparedness to go on. When one considers his consequent application for an adjournment in the light of (a) the disadvantage he experienced on the day as a litigant in person without prior access to the respondents' submissions, (b) the demands of procedural fairness and (c) the lack of clear evidence of prejudice or injustice to the respondents flowing from an adjournment, I consider that the Magistrate's attention was diverted from material considerations. 30 As to the futility submission, I am by no means satisfied on the material before me that the same result necessarily would be reached on a rehearing. And even if such a result in fact ensues it is likely it will be arrived at on a more satisfactory evidentiary basis than was the case in present instance. I refer in particular to the inferences drawn about a document in the Perdon case that was not in evidence before the Magistrate. Further, I am far from satisfied that such evidence as may be likely to be given by the solicitor, Mr O'Neill, would, if permitted to be given, be as unhelpful as the respondents suggest. 31 I will order that the appeal be allowed, with costs; that the order of the Federal Magistrates Court be set aside; and that the matter be remitted to the Magistrate to be heard and determined again. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn.

Solicitor for the Respondents: McColm Matsinger

Date of Hearing: 22 February 2002

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