Stankovic v Magee trading as Armstrong Legal

History

1. On 12 May 2009 the Federal Magistrates Court made a sequestration order against the estate of the appellant. The sequestration order resulted from an unsatisfied costs order made against the appellant in proceedings in the Land and Environment Court.
2. In April 2010, the appellant retained the respondent, a solicitor, to represent him in Family Court proceedings. The parties entered into a costs agreement pursuant to the provisions of the Legal Profession Act 2004 (NSW). At the conclusion of the proceedings, the respondent rendered an invoice with respect to the professional costs of the proceedings. The appellant failed to pay the invoice. The respondent commenced proceedings in the District Court.
3. The appellant filed a defence in which he disputed a number of material facts pleaded by the respondent. He put in issue the provision of legal services pursuant to the costs agreement and asserted that payment of legal fees was contingent upon the appellant winning his Family Court action and also on the development and sale of a property which the appellant owned in Kellyville. He also asserted that the payment of legal fees was contingent upon the respondent following his instructions to remove the trustee in bankruptcy and remove another firm of lawyers from the Family Court proceedings and that these instructions had not been followed. Finally, he disputed receiving the invoices for the legal fees.
4. He filed a cross-claim alleging negligence and breach of contract by the respondent in the conduct of the proceedings and claimed damages in the sum of $35 million. Put briefly, the appellant claimed that as a result of the respondent's negligence, a property that he, the appellant, owned at Kellyville was sold and that had he had the opportunity to develop and sell the property, he would have received $35 million. He claimed that the respondent failed to draw the attention of the Family Court to the relevant material. The respondent filed a defence to the cross-claim denying negligence and breach of contract and relying on the doctrine of advocate's immunity.
5. On 29 December 2015, the appellant filed a summons seeking leave to appeal, stating that the application was brought under s 101 of the Supreme Court Act 1970 (NSW). This was erroneous on two bases: first, the right of appeal was conferred by s 127 of the District Court Act 1973 (NSW); second, because the judgment was for an amount in excess of $100,000, an appeal lay as of right. At some point, the date of which is not clear, the appellant filed a draft notice of appeal and a summary of argument. At a directions hearing on 8 February 2016, the respondent pointed out that leave was not required and that the initiating process ought to have been an appeal under s 127 of the District Court Act. The appellant was directed to file and serve a notice of appeal together with submissions by 9 March 2016. He did not do so.
6. Nevertheless, on 6 April 2016, the Registrar of the Court of Appeal ordered that the draft notice of appeal stand as a notice of appeal and that the summary of argument stand as the appellant's submissions. The respondent filed a response to the summons and has filed submissions on the appeal. He submits that the appellant requires an extension of time in which to appeal and that having regard to what he asserts is the absence of any merit in the appeal, such an extension ought not to be granted.

The primary judgment

1. The primary judge rejected the factual bases on which the appellant defended the respondent's claim. He also rejected the factual basis upon which the appellant advanced the cross-claim. Specifically, he held, in effect, that the asserted failure of the respondent to challenge the validity of the sequestration order in the Family Court was irrelevant: first, because the Family Court was bound by the sequestration order and had no power to do anything about it; second, because the issue had already been considered and determined by Davies J in earlier proceedings brought in the Common Law Division of the Supreme Court by the appellant: Stankovic v Peter Michael Magee t/as Armstrong Legal [2014] NSWSC 873. Davies J characterised the claim as "entirely hopeless and … doomed to fail".

The draft notice of appeal

1. The draft notice of appeal begins with "The plaintiff relies on the following facts and assertions". It consists of ten paragraphs which are discursive in nature and refer to what the appellant says is the invalidity of the sequestration order. No reference is made in that part of the draft notice of appeal to the primary judgment. No attempt is made to identify any error of fact or law in the primary judgment. It is reasonably apparent that the appellant is focused upon the sequestration order. It is beyond the power of this Court, as it was beyond the power of the Family Court, to embark upon any consideration of the validity of that order. The primary judge was correct to treat that issue as an irrelevancy. The draft notice of appeal does not identify any arguable ground of appeal and should be dismissed.
2. In oral argument in this Court, the appellant sought to re-agitate issues that had previously been agitated and resolved. These issues concern the proceedings brought by the Baulkham Hills Shire Council against the appellant in the Land and Environment Court in 2005, following which the costs order that led to the sequestration order was made. The point, briefly, was that an order had been made in the Land and Environment Court dismissing the proceedings, but they had subsequently been reinstated. The appellant claims that the reinstatement was unlawful and invalid.
3. The short answer to this is that in 2014, the appellant sought leave to appeal against the costs order which, as I have said, was made in 2005. Leave to appeal was refused: Stankovic v The Hills Shire Council [2015] NSWCA 279. The appellant sought to draw a link between the costs order in the Land and Environment Court, the sequestration order and the conduct by the respondent of the Family Court proceedings. There is no clear or obvious or logical connection between these events. The oral argument put by the appellant in this Court did nothing to advance the appeal as it was set out in the draft notice of appeal.
4. I would, accordingly, dismiss the appeal. It is unnecessary to take time considering whether the appellant requires an extension of time. There is no question that he filed the document which was an application for leave to appeal within time. That, subsequently, was treated as a notice of appeal. The respondent has never been in any doubt that the appellant wished to challenge the decision of the primary judge. To the extent that it is necessary, I would grant an extension of time.
5. The orders I propose, therefore, are: 1. To the extent necessary, the time in which to appeal be extended to 6 April 2016; 2. Appeal dismissed; 3. The appellant to pay the respondent's costs of the appeal.
6. BASTEN JA: I agree with the orders proposed by Simpson JA and with her reasons. I would add the following observations.
7. The primary matter relied upon by the appellant by way of cross-claim in the District Court was that the respondent's negligence had caused the appellant to lose his interest in the property at Kellyville and, hence, the opportunity to develop the land. However, the property was lost because, well prior to engaging the respondent, a sequestration order had been made in relation to the appellant. As a result, the appellant was bankrupt from May 2009 until July 2012. He claimed that the sequestration order was made on a false basis; namely, that there were unpaid costs due to the Shire Council with respect to proceedings in the Land and Environment Court in relation to use of his property. His reason for asserting that such costs were not due and owing was that the proceedings in the Land and Environment Court had been dismissed without an order being made as to their costs. After the sequestration order was made, the appellant tendered payment of his costs but it was not accepted by the Council, no doubt on legal advice.
8. The appellant has for many years considered that the dismissal of the proceedings in the Land and Environment Court was final and that the subsequent costs order was therefore made without jurisdiction. That dispute has, however, been resolved against him. The proceedings were reopened and the costs order duly made on the application of the Council. An attempt to appeal from that judgment was rejected by this Court on 9 September 2015. [1]
9. In any event, the respondent, as the applicant seemed to acknowledge by the form of the pleading, was not in any sense responsible for those circumstances. The complaint was rather that the respondent had failed to inform the Family Court that the sequestration order should not have been made. As the judge rightly concluded, that was not a matter which could have affected the proceedings in the Family Court. Accordingly, the failure to inform the Family Court of that fact had no causal relationship to any loss he suffered with respect to the opportunity to develop and sell the land. On that basis, in addition to those already given, the judge was correct to dismiss the cross-claim.
10. There were two other issues which arose in the appeal to which reference should be made. There was a complaint that a solicitor employed by the respondent, Ms Randall, did not give evidence in the District Court. The appellant said that she had sworn an affidavit but, whether she had or not, no affidavit was relied upon by the respondent, nor indeed by the appellant, and she was not given proper notice that she was required to attend to give evidence. Nevertheless, inquiry was made as to whether she was available and it appeared that she was unavailable on the following day when the case was to proceed. In those circumstances, the appellant sought an adjournment. The trial judge refused the adjournment and gave reasons for doing so, but the reasons are not before this Court because it was not raised in the notice of appeal, nor in any written submissions. No reason has been given as to why the judge erred in refusing the adjournment, nor to demonstrate that any miscarriage of justice resulted in any event.
11. The second matter raised in the course of oral argument today, was a submission that the appellant should not have been required to pay for the services provided by the respondent because the solicitors did not do particular work he had instructed them to do. That appeared to refer to instructions as to why the property in dispute in the Family Court should have been treated as exempt under s 116(2) of the Bankruptcy Act 1966 (Cth). This appears not to have been the subject of either evidence or submissions in the District Court, nor was it raised in the notice of appeal. Putting all those matters to one side, it was nevertheless a matter which could not have been raised in the Family Court which had no jurisdiction in respect of the sequestration order, nor in respect of the functions conferred on the trustee in bankruptcy.
12. As those additional matters also do not provide a ground on which the appeal should be allowed, it follows that the orders should be as indicated by Simpson JA.
13. LEEMING JA: I also agree with the orders proposed by Simpson JA and with her Honour's reasons. I agree also with the reasons of Basten JA.
14. BASTEN JA: The orders of the Court are, accordingly, as indicated by Simpson JA.

Endnote

1. Stankovic v The Hills Shire Council [2015] NSWCA 279.

Amendments 24 May 2016 - correct typographical error - [17] and [19] DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 May 2016