Stuart Frumar and others v Leo Faibicher

Practice and Procedure - Application to extend time to appeal - Delay in filing appeal due to error of legal advisor - Appeal filed in incorrect jurisdiction - Principles to be applied - Application granted CATCHWORDS: Appeal - Extension of time to appeal - Delay in filing appeal due to error of legal advisor - Appeal filed in incorrect jurisdiction - Principles to be applied - Application granted.

LEGISLATION CITED: Industrial Relations Act 1996

Cavacuiti and Another v Toyota Motor Corporation Australia Ltd (2002) 122 IR 247 Faibicher v Frumar and Others [2006] NSWIRComm 327 Gallo v Dawson (1990) 64 ALJR 458 CASES CITED: Kirk Group Holdings Pty Ltd and Anor v WorkCover Authority of New South Wales (Inspector Childs) [2006] NSWIRComm 355 LEP International Pty Limited v Caine (1999) 97 IR 35 Skelly v Prouds Jewellers Pty Ltd (1993) 53 IR 3 Vilenius v Heinegar (1962) 36 ALJR 200 WorkCover Authority of New South Wales (Inspector Salmon) v Parkes Council (1996) 70 IR 298

APPLICANT Mr S Frumar in person

LEGAL REPRESENTATIVES: RESPONDENT Mr R Moore of counsel Solicitor: Mr S Lynch Somerville & Co

Application by Stuart Frumar and others to extend time to appeal from a judgment of Justice Backman given on 17 October 2006 in Matter No IRC 5177 of 2003

1 This is an application by Stuart Frumar (first applicant), Jasso Pty Limited (second applicant) and Stuart Frumar as trustee for the SS Frumar Family Trust (third applicant) for an extension of the time in which to appeal from a decision of Backman J given on 17 October 2006 in Faibicher v Frumar and Others [2006] NSWIRComm 327. 2 Her Honour's decision dealt with an application by Leo Faibicher, the respondent in this matter, for relief under s 106 of the Industrial Relations Act 1996. Backman J found that a shareholders' agreement, in the form of a deed, between the applicants and the respondent was unfair. Her Honour varied the deed and made money and costs orders against the applicants. 3 The orders made were in the following terms: (1) The shareholders' deed dated 24 January 2003 is varied from its inception to include the following terms: (a) Upon either the applicant or the first respondent taking over financial control of the second respondent to the exclusion of the other party, the other party may terminate the shareholders' deed forthwith ("the termination");

(b) Within 14 days after the termination the second respondent shall pay out the amount outstanding to the other party in the other party's loan account;

(2) The first, second and third respondents shall jointly and severally pay to the applicant the sum equivalent to the amount outstanding in the applicant's loan account with the second respondent as at 14 June 2003. (3) The first, second and third respondents shall jointly and severally pay to the applicant interest on the amount specified in Order 2 above in accordance with Schedule 5 of the Uniform Civil Procedure Rules 2005. The interest shall be payable from the date of the filing of the summons for relief on 16 September 2003 until the date of this judgment. (4) The first, second and third respondents shall pay the applicant's reasonable costs of the proceedings as agreed or assessed.

(5) In the absence of any agreement as to the amount ordered in Order 2 above, the parties have liberty to approach. That liberty should be exercised within 14 days. 4 Subsequently, on 30 November 2006, her Honour varied order 2 to read: The first, second and third Respondents shall jointly and severally pay to the Applicant the sum of $60,132.00, being the amount outstanding in the Applicant's loan account with the second respondent as at 14 June 2003. 5 On 6 December 2006, Backman J varied order 4 to read: The first, second and third respondents shall pay the applicant's reasonable costs up to 6 December 2004, and, thereafter, commencing from 6 December 2004, the first, second and third respondents are ordered to pay the applicant's costs on an indemnity basis, in addition to costs incurred before and on 6 December 2004 assessed on a party/party basis. 6 The applicants did not appear in the proceedings on 30 November and 6 December 2006 despite the applicants' solicitor being aware of the proceedings. The reason for this, in part, appears to have been that the solicitor was unable to obtain advice from counsel and that in respect of the proceedings on 30 November the applicants did not contest the amount of money being claimed, in any event. The reason why there was no attendance by the applicants' legal representatives on 6 December 2006 would appear to be because the applicants' solicitor ceased to act for them. Keith Hurst and Associates filed a notice of ceasing to act on 6 December. Why the first applicant did not appear is not immediately apparent. 7 On 14 December 2006 the applicants' former solicitor filed a Notice of Appeal Without Appointment in the Supreme Court. Subsequently, the first applicant learned that no appeal was available to the Supreme Court until an appeal had been heard and determined by the Full Bench of the Industrial Court or leave to appeal had been refused: s 179 of the Industrial Relations Act. 8 The applicants then filed their application on 22 December 2006 seeking an order extending time until 22 January 2007. When contacted by the Court for the purpose of listing the application prior to 22 January 2007, the first applicant indicated that he had booked a holiday with his family and was unable to attend. The applicants subsequently filed an amended application seeking an extension to 5 February 2007. 9 The grounds in support of the amended application were the same as those in the original application except for a reference to Mr Frumar's holiday. The grounds were that: (i) Refusing to extend the time to appeal will work an injustice against the Appellants. (ii) The unavailability of counsel to review the judgment of Backman J meant that the Applicants' (sic) were unable to obtain proper legal advice in the time required. (iii) The appellants have sustainable grounds for appeal. (iv) The First Appellant is taking pre-arranged leave with his family to the south coast of NSW (Mossy Point) and does not return until late January. 10 The reasons give in the amended application as to why the appeal was not filed within time were that: (i) The appellants' former solicitor, Keith Hurst, filed a Notice of Appeal Without Appointment in the Supreme Court of Appeal on 14 November 2006. I was not advised to file an appeal with this Court. (ii) The Appellants' counsel, Lionel Docker, was not available to review the judgment of Backman J and advice (sic) them of its implications. 11 The original application to extend time filed on 22 December 2006 was accompanied by an affidavit of Mr Frumar. The affidavit set out the reasons why the applicant believed he had a "sustainable appeal". In this respect, the affidavit referred to a number of paragraphs in the judgment of Backman J and in respect of each of them merely asserted they were in error. No explanation was provided as to how it was that her Honour erred. Moreover, no application for leave to appeal and appeal, in draft form or otherwise, has been filed by the applicants that would assist the Court in assessing the prospects of success. 12 The application to extend time was opposed by the respondent. Consideration

13 Section 189 of the Act provides: 189 Time and procedure for making appeals (1) An appeal to a Full Bench of the Commission under this Part must be made within 21 days after the date of the decision appealed against or within such further time as the Full Bench or the Commission constituted by a Presidential Member allows. (2) Further time may be allowed, either before or after the end of that 21-day period. 14 Rule 42 of the Industrial Relations Commission Rules 1996 provides: 42 Time to appeal (1) Unless otherwise provided, an appeal must be made within 21 days after the date of the decision appealed against (or such further time as the Commission allows, before or after the expiration of that period). (2) An application to extend time to appeal may be included in the notice of appeal or may be made by separate notice of motion. 15 Rule 4 of the Industrial Relations Commission Rules 1996 defines "date of decision" and "decision" as follows: date of decision , in relation to determining the period within which an appeal may be made, means the date on which the decision is announced, or where it is indicated that a written decision or reasons for decision are to be issued, the date when the written decision or reasons are made available, whichever is the later. decision includes an award, order, direction, contract determination or ruling. 16 In LEP International Pty Limited v Caine (1999) 97 IR 35 Wright J, President observed: 17 In the decision I delivered last week in New South Wales Teachers' Federation v New South Wales Office of the Board of Studies [2000] NSWIRComm 1 at 9 and following, I held that the "drafter" of r 42 did not appear to appreciate that the relevant time for lodging an appeal was specified in s 189 of the Act. Upon an analysis of those provisions, I concluded that the time for lodging an appeal was laid down by s 189 and not r 42 and that, in particular, r 42(1) had no relevant practical effect. Nothing has been put to me in these proceedings which has persuaded me that that view was incorrect. Accordingly, I proceed on the basis that the provision which I need to consider in the present proceedings is s 189 and r 42 has no present relevance. 17 In Kirk Group Holdings Pty Ltd and Anor v WorkCover Authority of New South Wales (Inspector Childs) [2006] NSWIRComm 355 at [23] the Full Bench considered Wright J was correct in LEP International. Consequently, it is s 189 that is relevant in determining whether an appeal has been filed within time. 18 At [25]-[27] of the decision in LEP International Wright J, after a consideration of the relevant authorities, concluded in respect of s 189(1) that: 25 It is clear from those authorities that the word "decision" used in the context of judicial proceedings usually refers to the final determination by the Court of the suit between the parties. That approach has been consistently applied by other courts although in varying contexts: see, for example, the judgments of the Full Federal Court in Ah Toy v Registrar of Companies for the Northern Territory (1985) 61 ALR 583 at 588 and Hannprint Pty Limited v Mita Copiers (Australia) Pty Limited (1996) 137 ALR 701 at 710; cf the judgment of the Court of Appeal in Bromley v Housing Commission of New South Wales (1985) 3 NSWLR 407. 26 Those authorities make clear that the normal approach to judicial proceedings and decisions therein is that the relevant legal act from which an appeal lies is the formal order made by a court which disposes of or deals with the proceedings before the court and not a judgment in the sense, as it is often used in other contexts, of a convenient abbreviation or reference to reasons for judgment.

27 It is also clear from those authorities that appeals lie not against reasons for decision but a judgment in the sense earlier referred to: see, for example, Hannprint Pty Limited v Mita Copiers (Australia) Pty Limited at 711 and the cases cited there. 19 The decision from which the applicants intend to appeal was made on 17 October 2006. Subsequently, Backman J made money orders in accordance with her decision on 30 November and costs orders on 6 December 2006. The original application to extend time to appeal was filed on 22 December 2006. The amended application was filed on 10 January 2007. 20 The amended application indicated that the extension of time was sought to bring an appeal from "a Judgment of Backman J on 17 October 2007". The application was not in respect of the subsequent orders made by her Honour but I am prepared to put that down to poor drafting and I will proceed on the basis that the appeal that the applicants intend to bring (if leave to extend time is granted) is from the judgment and subsequent orders. 21 Regardless of whether one applies the 21-day period in s 189 from the date of the judgment given on 17 October 2006 or from the date her Honour made the costs orders finally disposing of the proceedings on 6 December 2006, the fact is that at the time of hearing the applicants' application to extend time, no appeal had been filed. The applicants, therefore, are well out of time. 22 Whether the Court should allow further time to appeal pursuant to s 189(2) of the Act depends on discretionary considerations referred to in Gallo v Dawson (1990) 64 ALJR 458 at 459 per McHugh J, Skelly v Prouds Jewellers Pty Ltd (1993) 53 IR 3 at 5-6 and Cavacuiti and Another v Toyota Motor Corporation Australia Ltd (2002) 122 IR 247. In Cavacuiti Walton J, Vice President referred to the Full Bench decision WorkCover Authority of New South Wales (Inspector Salmon) v Parkes Council (1996) 70 IR 298, which summarised the relevant principles (at 299-301) as follows: The proper approach to adopt in a consideration of the application was common ground between the parties. Reference was made in that respect to the decision of the Full Commission ( Peterson and Schmidt JJ, and Connor CC) of the former Industrial Relations Commission of New South Wales in Skelly v Prouds Jewellers Pty Ltd (1994) 53 IR 3 at 5-6 as followed by the Full Commission ( Cahill VP, Maidment J and French CC) in Brookes v Watling (1995) 61 IR 163 at 166-167. In those two cases the Full Commission cited recent authorities formulating the way in which the grant of an extension of time for the filing of an appeal should be considered: see Gallo v Dawson (1990) 64 ALJR 458; Jess v Scott (1986) 12 FCR 187; and Salter Rex & Co v Ghosh [1971] 2 QB 597 at 601. From those cases, the following propositions may be drawn: (1) The grant of an extension of time is not automatic and the object of those rules which fix times for doing acts is to ensure they do not become instruments of injustice; the discretion to extend time is given for the sole purpose of enabling justice to be done between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262. (2) The discretion can only be exercised in favour of an extension of time upon proof that compliance with the rules will work an injustice upon the applicant therefore which necessarily requires regard be had to the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences for the parties of the grant or refusal of the application to extend time: see Avery v No 2 Public Service Appeal Board [1978] 2 NZLR 86 at 92; and Jess v Scott at 194-195.

(3) An application for an extension of time in which to file an appeal always requires consideration of the prospects of the applicant succeeding in the appeal see Burns v Grigg [1967] VR 871 at 872; Hughes at 263-264; and Mitchelson v Mitchelson (1979) 24 ALR 522 at 524.

(4) Upon the expiration of the time for appealing, the respondent has "a vested right to retain the judgment" unless the application is granted: see Vilenius v Heingar (1962) 36 ALJR 200 at 201.

(5) There must be material upon which it can be satisfied that to refuse the application to extend time would constitute an injustice: see Ratnam v Cumarasamy [1965] 1 WLR 8 at 12; [1965] 3 All ER 933 at 935.

(6) "The difference between two weeks and four weeks is not much (by which the time is to be extended)… We never like a litigant to suffer by the mistake of his lawyers": per Lord Denning in Ghosh at 601. In accepting the approach inherent in the above propositions, the Full Commission observed in Skelly (at 6):

"The Commission's Rules require an appeal to be filed within 28 days of a decision. There is a public interest in the prompt institution and prosecution of litigation before the Commission. Indeed the Act is designed with this as a feature. It follows that a successful litigant before the Commission is generally entitled to proceed on the basis that a decision in its favour will stand, in the absence of an appeal being filed within the time prescribed. There is a discretion in the Commission to extend the time for filing an appeal. Such a discretion will not however be lightly or automatically exercised, particularly if the application is made after the time for appeal has expired. The fact that there will be no prejudice to a respondent party by an extension of time being granted is one factor which the Commission will take into account, but will not be solely determinative of the matter. In this context the cost and inconvenience of litigation not brought within the limitation period prescribed is a matter to which regard may properly be had when an application for extension of time is made. The Commission in taking all relevant matters into account must endeavour to do justice between the parties having regard to all the circumstances before it."

23 After referring to these authorities Walton J, in Cavacuiti, stated:

42 In applying those principles to this matter I note some particular points of emphasis: 1. The exercise of the Commission's discretion to extend time to appeal is not constrained by the requirement of some court rules that special circumstances be demonstrated: Brady v Kennedy t/as "Sardines" (at 264). 2. There is a wide discretion to extend time where the justice of a particular case requires that outcome: Brady v Kennedy t/as "Sardines" (at 264); Tadic v Beslic at [22]. In exercising the discretion to extend time the Commission may consider a number of factors, such as the length of delay (see Jess v Scott (1986) 12 FCR 187 (at 195); Gallo v Dawson (1990) 64 ALJR 458 (at 481); and Salter Rex & Co v Ghosh [1971] 2 QB 597 (at 601); whether any prejudice would be suffered by the respondent by reason of the granting of the extension of time (see Skelly v Prouds Jewellers Pty Ltd (1994) 53 IR 3 (at 6) and LEP International v Caine (at [57]); whether there is a reasonable explanation for the failure to file the appeal within time (see LEP International v Caine (at [50]); whether the delay was due to an error or mistake by a legal advisor (see Brady v Kennedy t/as "Sardines" (at 269) and Skelly v Prouds Jewellers (at 6) and the prospects of the appellant succeeding in the appeal (see WorkCover Authority of New South Wales (Inspector Salmon) v Parkes Council (at 299). However, the ultimate exercise of discretion is governed by the requirements of justice in a particular case. In Skelly v Prouds Jewellers it was held (at 6): "The Commission in taking all relevant matters into account must endeavour to do justice between the parties having regard to the circumstances before it." 24 As well as there being no application for leave to appeal or appeal yet filed, no evidence in any appropriate form was tendered by the applicants as to the asserted reasons why the appeal was not filed within the prescribed time. All the Court has, in effect, are statements from the bar table. 25 If I am to accept Mr Frumar's version of events after Backman J gave judgment on 17 October 2006, it is apparent that Mr Frumar was poorly advised. In that respect, Mr Frumar stated that the applicants' former solicitor filed a Notice of Appeal Without Appointment in the Supreme Court of Appeal on 14 November 2006, which was within the prescribed 28-day period for filing such a Notice. Mr Frumar subsequently discovered, on 21 December, the Court of Appeal was the wrong forum for filing the appeal and the next day he filed the application in this Court seeking leave to extend time to appeal. 26 Mr Frumar is unrepresented. Whilst his assertions were not in evidentiary form, I am prepared to accept them. Further, whilst I consider there has been some delay on Mr Frumar's part in deciding his family holiday was more important than attending to the appeal, I do not consider it was such that I should refuse an extension of time. The main reason why the appeal was not filed within the prescribed time was because of the mistake by Mr Frumar's legal adviser. The fact that no appeal has yet been filed is because Mr Frumar appears to have been of the understanding that because there is a three-month period allowed under the Supreme Court Rules to file the appeal in circumstances where a Notice of Appeal with Appointment has been filed, the same rule applied to proceedings in the Industrial Court. I am prepared to give Mr Frumar the benefit of the doubt in respect of that explanation. 27 I am conscious of the fact that the respondent has a vested right to retain the fruits of the judgment the subject of the appeal: Vilenius v Heinegar (1962) 36 ALJR 200 at 201. I consider, however, in the circumstances, it would cause an injustice to the applicants if I were to refuse the application to extend time. 28 As for the applicants' prospects of success I have found that difficult to assess and the best that can be said in the applicants' favour in that regard is that I could not conclude there is no chance of success. 29 I have decided, on balance, to grant the application to extend time to appeal. Orders

30 The Court makes the following orders: (1) The applicants shall have until 4.00 pm on Wednesday 28 February 2007 to file an application for leave to appeal and to appeal the decision and orders made by Backman J on 17 October 2006, 30 November 2006 and 6 December 2006 in Matter No. 5177 of 2003. (2) Costs are to be determined on the appeal.

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