Slack v Bottoms English Solicitors

REASONS FOR JUDGMENT 1 This is an application to extend time within which to appeal a judgment of Federal Magistrate Coker given 2 August 2002. Richard John Slack ("the applicant") seeks to set aside a bankruptcy notice issued jointly by the three respondents to the present application: Bottoms English Solicitors (a partnership), Steindl Solicitors (a partnership) and Miller Harris Lawyers (a partnership). In the proceedings before Federal Magistrate Coker, the applicant submitted that he had a counter-claim, set-off or cross-demand equal to or exceeding the amount of the judgment debt, and that the bankruptcy notice ought to be set aside. 2 The Federal Magistrate found that there was no mutuality between the creditor's claim against the debtor, and the claims on which the applicant relied. Those claims include proceedings 180 of 2001 in the Supreme Court of Queensland, but there are, it seems, other proceedings as well. The effect of those other proceedings, it seems to be conceded, is that they involve some or all of the issues in the proceedings on which the bankruptcy notice was founded (namely, proceedings 50 of 2001 in the Supreme Court of Queensland.) 3 It also seems to be conceded that those proceedings lack mutuality in the sense that the respondents to the various other Supreme Court proceedings are not identical to the three respondents to the present application. The Federal Magistrate found that there was no mutuality between the creditor's claim against the debtor and his claim in the other proceedings, and consequently dismissed the application in so far as it relied on that ground. 4 Further, it was submitted before Federal Magistrate Coker that proceedings had been brought in circumstances from which one could infer that the purpose was to require payment of the debt. 5 Federal Magistrate Coker said at pars [4] to [5]: "It is contended upon the part of the applicant that these proceedings have been brought in, what might be termed, an inappropriate manner in that there have been no steps taken by the creditors to enforce the Judgment or the order obtained by them in the Supreme Court at Cairns by enforcement procedures available under the Uniform Civil Procedures Rules. It is the case that, as I understand it, no such steps have been taken but it is contended on the part of the solicitor and counsel for the respondents that there is no such obligation to do so. I agree with that particular submission and it is clear that the provisions of the Bankruptcy Act do not require enforcement proceedings to have been taken under some other form of legislation or by some other means before the institution of proceedings." His Honour dismissed the application, noting at par [9]: "I agree that there is an absolute opportunity on the part of the applicant, if served with a creditors petition, to contest that creditors petition and that will be a matter that will be determined if it is necessary to do so at another time. It is certainly the case that one of the legitimate considerations in relation to whether the creditors petition should lead to sequestration is whether in fact the respondent to the creditors petition is solvent. That will be a matter for determination then." 6 The application for an extension of time was filed 28 days after the judgment was given by Federal Magistrate Coker. Order 52 r 15(1) of the Federal Court Rules requires a notice of appeal to be filed and served within 21 days of the judgment. 7 The requirement for special reasons to extend time has been considered in a number of cases, importantly by Wilcox J in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348-349, where his Honour set out the considerations ordinarily relevant to such an application as follows: "1. Although the section does not, in terms, place any onus of proof upon an applicant for extension an application has to be made. Special circumstances need not be shown but the court will not grant the application unless positively satisfied that it is proper so to do. The 'prescribed period' of twenty-eight days is not to be ignored (Ralkon Agricultural Co. Pty Ltd v Aboriginal Development Commission (1982) 43 ALR 535 at 550). Indeed, it is the prima facie rule that proceedings commenced outside that period will not be entertained (Lucic v Nolan (1982) 45 ALR 411 at 416). It is a pre-condition to the exercise of discretion in his favour that the applicant for extension show an 'acceptable explanation of the delay' and that it is 'fair and equitable in the circumstances' to extend time (Duff at 485; Chapman v Reilly unreported (Federal Court of Australia, Neaves J, 9 December 1983) at 7). 2. Action taken by the applicant, other than by making an application for review under the Act, is relevant to the consideration of the question whether an acceptable explanation for the delay has been furnished. A distinction is to be made between the case of a person who, by non-curial means, has continued to make the decision-maker aware that he contests the finality of the decision (who has not 'rested on his rights': per Fisher J in Doyle v Chief of Staff (1982) 42 ALR 283 at 287) and a case where the decision-maker was allowed to believe that the matter was finally concluded. Compare Doyle, Chapman, Ralkon and Douglas v Allen (1984) 1 FCR 287 with Lucic at 414-415 and Hickey v Australian Telecommunications Commission (1983) 48 ALR 517 at 519. The reasons for this distinction are not only the 'need for finality in disputes' (see Lucic at 410) but also the 'fading from memory' problem referred to in Wedesweiller v Cole (1983) 47 ALR 528. 3. Any prejudice to the respondent including any prejudice in defending the proceedings occasioned by the delay is a material factor militating against the grant of an extension: see Doyle at 287, Duff at 484-485, Hickey at 525-527 and Wedesweiller at 533-534.