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[2003] FCA 274
Federal Court of Australia
2003-03-28
Kirby J, Lindgren J
Original judgment source is linked above.
INTRODUCTION 1 The applicant ("Ms Teese") applies for an extension of time in which to file and serve a notice of appeal from a judgment of the Federal Magistrates Court ("FMC"). The judgment was pronounced on 20 August 2002, in exercise of the bankruptcy jurisdiction which is vested in the FMC and this Court concurrently by subs 27(1) of the Bankruptcy Act 1966 (Cth) ("the Act"). This Court is given the relevant appellate jurisdiction by s 24(1)(d) of the Federal Court of Australia Act 1976 (Cth) ("the FCA Act"). 2 Subrule 15(1) of O 52 of the Federal Court Rules had the effect, relevantly, that the notice of appeal was required to be filed and served within twenty-one days after the date when the judgment appealed from was pronounced. That period expired on 10 September 2002, but subrule 15(2) empowers the Court or a Judge for "special reasons" at any time to give a person leave to file and serve a notice of appeal. 3 Subsection 25(2) of the FCA Act provides, relevantly, that applications for an extension of time within which to institute an appeal to the Court may be heard and determined by a single Judge or by a Full Court. Even where, as at present, the jurisdiction is being exercised by a single Judge, it is the Court's appellate jurisdiction which is being exercised: Thomas Borthwick & Sons (Pacific Holdings) Ltd v Trade Practices Commission (1988) 18 FCR 424; Wati v Minister for Immigration & Multicultural Affairs (1997) 78 FCR 543. 4 In order to establish "special reasons", Ms Teese must demonstrate circumstances which take the case out of the ordinary run of cases, since the latter are clearly intended to be governed by the general time limit of twenty-one days: Jess v Scott (1986) 12 FCR 187 at 195; Hannpost Pty Ltd v Mita Copiers Australia Pty Ltd (1996) 67 FCR 416 at 427-428; and see Jackamarra v Krakouer (1998) 195 CLR 516 at 539-543 per Kirby J.
BACKGROUND FACTS 5 The orders of the FMC made on 20 August 2002 against which Ms Teese wishes to appeal were made by Driver FM and were as follows; "1. A sequestration order be made against the estate of Ann-Carolyn Teese. 2. The Applicant Creditor's costs (including reserved costs, if any) be paid from the estate of the Respondent Debtor in accordance with the Bankruptcy Act 1966. 3. A copy of these orders is to be provided to the Official Trustee within 2 days of entry of these orders. 4. Pursuant to Section 52(3) of the Bankruptcy Act 1966, all proceedings under the sequestration order be stayed for 21 days after today's date." The court notes that the date of the act of Bankruptcy is 5 June 2001." 6 Ms Teese filed her application for an extension of time, which commenced this proceeding, on 9 December 2002. The respondents are a firm of solicitors who formerly acted for Ms Teese. They were substituted as petitioning creditors in the bankruptcy proceeding in the FMC. I will refer to them as "Clinch Neville Long". 7 Ms Teese, who appears unrepresented, has filed a draft notice of appeal setting out the following grounds of appeal which she would wish to raise: "1. His Honour erred in refusing applications for adjournment. 2. His Honour erred in not going behind the judgment in [sic - on] which the substituted petitioning creditor relied. 3. His Honour erred in accepting the bald statement of the substituted petitioning creditor that there was no written Costs agreement. 4. His Honour erred in making a Sequestration Order and granting a Stay of 21 days, as the making of a Sequestration Order, defeated the purpose and object of a 21 day stay." 8 In order to deal with grounds 1 and 2, it is necessary that I refer to the unfortunately complex historical background to the position in which Ms Teese now finds herself. As well, it is necessary that I refer to that background in addressing the reason for the lateness in Ms Teese's attempt to file a notice of appeal. I will summarise the background in the following numbered paragraphs:
On or about 13 August 1998 Ms Teese instructed Clinch Neville Long to act for her in relation to the following proceedings:
(a) proceeding number 10174 of 1989 brought by the State Bank of New South Wales against Ms Teese in the Supreme Court of New South Wales; and
(b) proceeding number 8573 of 1998 brought by Alfred Joseph Fox against Ms Teese in the District Court of New South Wales.
On 19 August 1998 Clinch Neville Long sent to Ms Teese a fees agreement in relation to the Supreme Court proceeding. It set out, inter alia, the hourly rates the solicitors would charge for their services. Importantly, for present purposes, although the letter provided for monthly billing, it stated that Ms Teese was to "pay our fees and expenses on conclusion of the matter as agreed with you". Also importantly for present purposes, under the heading "Terminating our services", the letter stated as follows:
"You may terminate our services at any time by advising us in writing. In that case we would be entitled to fees for work done up to that time and expenses incurred up to that time. We will not continue to do your work if you do not give us proper instructions, or if you fail to pay our bills, or if you fail to pay us money when required to cover fees and expenses that are to be incurred." In sum, there was a general provision for payment on the conclusion of the matter with an express qualification if Ms Teese terminated the firm's retainer. There is no reference to termination by the solicitors of their own retainer, except in the second paragraph set out above. As will appear below, Clinch Neville Long purported to terminate Ms Teese's retainer of them for her failure to give them "proper instructions". I think it was clearly implied that in such a case there would be a constructive termination of the retainer by Ms Teese with the result that the solicitors would be entitled to fees for work done and expenses incurred down to the termination. It would be preposterous that in a case in which the solicitors duly ceased acting for Ms Teese because she did not give them proper instructions, they should be disentitled to recover any fees for work done, or expenses incurred down to that time.
On 28 May 1999 Clinch Neville Long sent to Ms Teese a letter supplementary to the one dated 19 August 1998, also relating to the Supreme Court proceeding, and also relating to the basis of the charging of fees. It included the following paragraph:
"We confirm that Mr Clinch agreed that our fees would not be payable during the conduct of the hearing but will be payable by you on its completion, settlement of the proceedings or the retainer being terminated." (my emphasis)
This letter was to be read in the light of the earlier one. I think the reference to the retainer being terminated referred to a termination by Ms Teese at will at any time, and to a termination by Clinch Neville Long for cause, including a failure by Ms Teese to give proper instructions.
On 29 July 1999 Clinch Neville Long sent to Ms Teese a further letter regarding the charging of fees. This letter related to the District Court proceeding brought by Mr Fox as well as to the Supreme Court proceeding brought by the State Bank of New South Wales. In relation to the District Court proceeding it stated that the solicitors were prepared to conduct the hearing on the same basis as that set out in their letter dated 19 August 1998 for the Supreme Court proceeding, and stated:
"Our fees will be payable at the completion of the hearing but we confirm that payment is not conditional on you being successful. That is, we get paid in any event." (emphasis in original)
The reference to the firm's letter of 19 August 1998 incorporated a reference to the terms in that letter mentioned earlier as to a failure by Ms Teese to give proper instructions.
On 28 March 2000 Clinch Neville Long wrote to Ms Teese a letter referring to directions which had been made in both the Supreme Court and District Court proceedings, in respect of which she had not furnished them with instructions with the result that the directions of the Courts could not be complied with. The letter asserted that the lack of instructions placed the solicitors "in an impossible position". They gave Ms Teese notice that in respect of each proceeding, after seven days from the date of the letter, they would file a notice of ceasing to act.
On or about 6 April 2000 Clinch Neville Long filed a notice of ceasing to act in each proceeding.
On 18 June 2000 Ms Teese was personally served with a letter from Clinch Neville Long dated 31 May 2000 and a solicitor/client bill of costs in itemised form dated 29 May 2000. The total amount of the bill, including disbursements, was $68,265.64. The bill related to both the State Bank proceeding in the Supreme Court and the proceeding in the District Court.
On or about 3 August 2000 Clinch Neville Long applied to the Supreme Court of New South Wales for an assessment of their costs on a solicitor/client basis.
On 30 October 2000 Phillip A Wilkins, solicitor and costs assessor, to whom the Supreme Court of New South Wales had assigned for determination the application for assessment of costs pursuant to the Legal Profession Act 1987 (NSW) ("the LP Act"), wrote to Clinch Neville Long requesting further information, including a copy of the costs agreement between them and Ms Teese, and enclosing a copy of Mr Wilkins's letter to Ms Teese of the same date asking her whether she had any particular or general objections to the items in the bill.
The evidence does not establish whether Ms Teese responded to Mr Wilkins, but on 11 November 2000 Clinch Neville Long received a facsimile transmission from Ms Teese seeking a meeting in late 2000 or early 2001.
On 13 November 2000 Clinch Neville Long replied advising Ms Teese that a meeting prior to 17 December 2000 would be more convenient. Apparently no meeting took place.
On 25 May 2001 Mr Wilkins forwarded to Clinch Neville Long his "Certificate as to Determination of Costs" and "Certificate as to Determination of Costs of Costs Assessor". His determination was that the total amount of costs determined to be fair and reasonable was $68,060.00 and the total amount of disbursements determined to be fair and reasonable was $205.64, making a total of $68,265.64. Mr Wilkins's own costs as costs assessor amounted to $484.45. Under s 208J of the LP Act, the Certificate as to the Determination of Costs, upon filing in the office or registry of a court having jurisdiction, is taken to be a judgment of that court for the amount of unpaid costs.
On 6 June 2001 the Certificate as to the Determination of Costs was registered as a judgment of the District Court of New South Wales upon which the certificate was taken to be a judgment of that Court (cf s 208J of the LP Act). There is in evidence a Certificate of Judgment issued by that Court on 7 June 2001 (File No 5497/01) to the effect that Clinch Neville Long recovered judgment against Ms Teese on 6 June 2001 in the sum of $68,948.30.
On 17 July 2001 Clinch Neville Long caused a writ of execution to be issued out of the District Court to enforce the judgment but by Notices of Non-Levy dated 21 August 2001, 15 November 2001 and 27 November 2001, the Sheriff's Officer reported lack of success in attempted levies under the writ of execution.
In the meanwhile, on 25 September 2000, Mr Fox had issued a bankruptcy notice in respect of a final judgment or order in his favour against Ms Teese and that notice had been served on her on 30 January 2001. Ms Teese applied to the FMC to set aside the bankruptcy notice but that application was dismissed on 5 June 2001. On 3 August 2001 Mr Fox filed a creditor's petition against Ms Teese (proceeding SZ 450 of 2001 in the FMC).
Also in the meanwhile, on 5 February 2001, McClellan J in the Supreme Court of New South Wales had entered Judgment against Ms Teese in favour of the State Bank of New South Wales.
On 9 October 2001 Ms Teese filed a notice of opposition to Mr Fox's petition in the FMC. Mr Fox's creditor's petition was listed and adjourned several times.
On 12 February 2002 Matthew Hourn, a solicitor employed by Clinch Neville Long, appeared before Registrar Hedge in the FMC. Apparently, Ms Teese paid out Mr Fox. On 18 February 2002 Clinch Neville Long filed an application to be substituted as petitioning creditors. The order for substitution was made on 26 March 2002.
The hearing of the creditor's petition was adjourned to 30 April 2002. Registrar Hedge, who made the orders in the FMC, noted that "[a]ny District Court application to set aside the judgment is to be filed and served as soon as possible, preferably within 1 week". No doubt this was a reference to the District Court judgment in favour of Clinch Neville Long.
In the meanwhile, Ms Teese had appealed against the judgment of McClellan J in the State Bank proceeding to the New South Wales Court of Appeal. On 26 April 2002 Ms Teese served on Clinch Neville Long a notice of motion returnable on Monday 29 April 2002 before the Court of Appeal, making various complaints. On 29 April 2002 Handley JA struck out the motion in so far as it related to Clinch Neville Long and ordered Ms Teese to pay their costs.
On 2 August 2002 the FMC made an order extending the life of the creditor's petition and the further hearing of the petition was adjourned to 20 August 2002 and Ms Teese was directed to file an affidavit of means by 16 August 2002, which she failed to do.
On 20 August 2002 Ms Teese sought an adjournment of the hearing of the creditor's petition and a Registrar referred the matter to Driver FM. The transcript of the hearing before his Honour on that day is in evidence. His Honour heard submissions in support of the application for adjournment but refused the application, referring to fact that the creditor's petition had been before the FMC for more than twelve months. The hearing of the petition was, however, adjourned to 4.00 pm the same afternoon.
When the hearing of the proceeding commenced at 4.04 pm, Mr PA Gargan, who claimed to be a law student, said that Ms Teese had appointed him as her agent under s 308 of the Act. He handed up a written authority. Ms Teese was also present. Mr Gargan made submissions on her behalf and Ms Teese also made statements to the Court. In the course of the hearing, the following exchange took place:
"Mr Gargan: ... Now, the respondent tells me that she has an agreement in writing by the petitioner/creditor ... that he agreed in writing to wait for his money until such time as the matter that he was being instructed in was settled. Obviously, prima facie, the lady has enough assets to meet the debt. I haven't seen the evidence yet and I'm sorry I can't take you to it right now. His Honour: "If there is an agreement in writing I'd be interested in seeing it. It should be put before me now and not used as a justification for an adjournment." [the adjournment had previously been refused] Mr Gargan: I've asked the respondent to try and find it and if you can bear with us. His Honour: I don't know, Mr Chippindall? Mr Chippindall: There is no such agreement in[sic - on] my instructions. His Honour: All right, thank you. Ms Teese: That's a lie. Mr Gargan: Please, don't say things like that. Ms Teese: Well, it is. Mr Gargan: Yes, I've got to admit I haven't spotted it. Could you indicate to me what your current thinking is? Whether you feel that you could make a sequestration order this afternoon. His Honour: That is my present inclination, Mr Gargan. I'm influenced by the facts that these proceedings have had a long and somewhat tortured history and Ms Teese has been given indulgence on several occasions by way of adjournments in order to ventilate various issues and await various development."
I have set out at [5] above the orders made by Driver FM at the end of the hearing.
On 21 August 2002 Clinch Neville Long forwarded a copy of the creditor's petition and Driver FM's orders to the Insolvency Trustee Service Australia ("ITSA"). Apparently ITSA caused details of the sequestration order to be entered in the National Personal Insolvency Index ("NPII") on 23 August 2002.
On 5 September 2002 Ms Teese filed in the FMC an application under s 153B of the Act for an annulment of her bankruptcy. The application for annulment was set down for hearing on 24 September 2002.
On 10 September 2002 Ms Teese filed in the FMC an application for an extension of the stay which had been granted by Driver FM on 20 August 2002. That application was heard on the same day and dismissed when Driver FM held that he had no jurisdiction to extend the stay.
The application for annulment came before a Registrar of the FMC on 24 September 2002. The Registrar made directions for the filing of appearances and notices of opposition and directed that Ms Teese's application be fixed for hearing on 29 October 2002 before such Federal Magistrate as might be available. The Registrar also directed Ms Teese to file a statement of her affairs with her trustee in bankruptcy, Geoffrey Giles Woodgate ("the Trustee"). She has never filed a statement of her affairs.
MY REASONING ON THE APPLICATION FOR EXTENSION OF TIME
Explanation for delay 9 Ms Teese states that on 10 September 2002 she filed in the Registry of this Court "notices of motion in the same matter to be heard by the Magistrates court" and that at that time she inquired from the Registry about the filing of a notice of appeal and "was told that [she] could not file an appeal until the matter was complete". She states that during her appearances in the FMC, she became aware that "to have the Sequestration Order stayed [she] needed to have an appeal on foot". She states that she "again inquired at the Federal Court Registry about filing an appeal and was told [she] was out of time, but ... could file [an] appeal out of time, but seeing that [she] was already out of time [she should] wait until the matters before Magistrate Driver were complete and appeal the whole matter if [she should] need to". Finally, she asserts that the matters before Driver FM were completed on 5 December 2002 (it is not clear to me where this date comes from) and that she applied for the extension of time on 9 December 2002 "as a result of being told by the Federal Court Registry that [she] was out of time to appeal". 10 I have not caused inquiries to be made of Registry staff. Registry staff are trained not to give legal advice and I think it unlikely in the extreme that a person in the Registry would inform Ms Teese to the effect that she need not file a notice of appeal within the twenty-one day time limit. But I am able to resolve Ms Teese's application without exploring her explanation further and will assume that either someone in the Registry did tell her that or that she erroneously understood someone in the Registry to have done so. 11 In my view, the application for an extension of time should not granted because there is insufficient doubt as to the correctness of the orders made by the learned Federal Magistrate.
Refusal of adjournment 12 First, it was a totally supportable exercise of his Honour's discretion to refuse the adjournment. The proceeding in the FMC had already had a long and tortuous history. Whether to grant an adjournment called for an exercise of discretion. It is not shown that his Honour's discretion miscarried.
Failure to go behind the District Court judgment in favour of Clinch Neville Long 13 Secondly, I do not think his Honour erred in failing to go behind the District Court judgment in favour of Clinch Neville Long. The LP Act lays down procedures according to which objections may be made to a solicitor's bill of costs. Mr Wilkins invited Ms Teese to put any objections before him as the assigned cost assessor. She either did or did not do so. Section 208K of the LP Act provides that a costs assessor's determination is binding on all parties to the application and that no appeal or other review lies in respect of the determination, except as provided by Division 6 of Part 11 of that Act. Ms Teese did not seek a review of Mr Wilkins's determination by the proper officer of the Supreme Court under s 208KA of the LP Act.
The statement made to the Federal Magistrate 14 The third ground of appeal is met by the fact that the costs agreement provided that costs were payable not only after completion of the proceeding but also upon termination of the retainer of the solicitors. Perhaps this would have been so even if the terms of the costs agreement did not say so, but they did say so. I have given my reasons earlier for thinking that in a case of termination of their own retainer by the solicitors themselves for cause, they were entitled to be paid for work done and expenses incurred down to the time of termination. 15 Accordingly, Mr Chippindall's instructions that there was no costs agreement providing simply that the solicitors were to wait for payment until the matter in which they were instructed was settled were correct instructions.
Defeat of the twenty-one day stay by the making of the sequestration order 16 There is no substance in the fourth ground of appeal either. That ground was put in various ways by Ms Teese. Her chief submission was that Clinch Neville Long wrongly, and inconsistently with the twenty-one day stay, caused particulars of the sequestration order to be recorded in the NPII. 17 Subsection 52(1A) of the Act provides as follows: "If the Court makes a sequestration order, the creditor who obtained the order must give a copy of it to the Official Receiver for the District in which the order was made." The FMC had no power to relieve Clinch Neville Long of the obligation to comply with that statutory provision, but even if the FMC had had power to do so, it did not purport to do so by its orders of 20 August 2002. By ordering that a copy of his orders be provided to the "Official Trustee" within two days of entry of the orders, Driver FM made it clear that the stay of all proceedings "under" the sequestration order for twenty-one days did not include a stay on the discharge of the obligation imposed on the solicitors to provide a copy of the orders to the Official Receiver. 18 It is clear beyond argument that when Clinch Neville Long provided a copy of the orders to ITSA, they both performed the statutory obligation incumbent upon them and obeyed Driver FM's orders. 19 The terms of the proposed fourth ground of appeal suggest inconsistency between the twenty-one day stay and the making of a sequestration order. They are not inconsistent. The expression "under the sequestration order" in subs 52(3) of the Act and in Driver FM's fourth and final order does not refer to the obligation to notify imposed by subs 52(1A) of the Act and ordered by Driver FM. There remained ample work for the stay to do since there are many other steps required to be taken under the sequestration order. 20 In the evidence, there is reference to Ms Teese's assets. She claims that she has the means with which to pay her debts. A particular claim which she has made is that she obtained shortly after 20 August 2002 approval of a loan of $385,000 and that it was the entry of particulars of the sequestration order in the NPII which, coming to the notice of the intending lender, caused that lender to withdraw its offer. There is in evidence a strange document purporting to come from "Sergio Perkowitz (LLB, MBA), Director Serper Pty Ltd". The letter is unsigned. It purports to have been sent to Ms Teese on 22 September 2002 at 12.33.26 pm. It is addressed "To whom it may concern" and states (solecisms preserved): "Please note that Ann Carolyne Teese applied for the loan $385,000 on the end of August. She paid the application fee of $785 and the loan was preliminary approved, subject to valuation and credit cheque. She also paid the valuation fee and the satisfactory valuation was done on her property. Suddenly, the listed bankrupcy was found to be on her credit rating - listed on 20.08.2002. The lender indicates that their loan will still be in place in the case that bacrupcy is removed from Credit Bureaux." There are no facsimile machine imprints on the letter. 21 Ms Teese submits that Clinch Neville Long prevented her obtaining finance by having caused particulars of the sequestration order to be registered prior to expiry of the twenty-one day stay. I have already held that they were entitled to do precisely what they did within two days following the making of a sequestration order. But even if the twenty-one day stay had meant that they were not entitled to do it until after the expiry of that period, Ms Teese's submission would still lack any merit. It would be a submission that she was entitled to deceive a financier in the hope of obtaining funds within the twenty-one day period before details of the sequestration order were recorded and known to the financier.
CONCLUSION 22 For the above reasons, I think it so clear that an appeal would fail, that the extension of time sought by Ms Teese should not be granted. The application for an extension of time will be dismissed with costs. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.
Associate: Dated: 28 March 2003 The Applicant appeared in person
Counsel for the Respondent: Mr J K Chippindall
Solicitor for the Respondent: Clinch Neville Long Lawyers
Date of Hearing: 6 February 2003 and 17 March 2003
Teese
Clinch Neville Long
(1988) 18 FCR 424
(1997) 78 FCR 543
(1986) 12 FCR 187
(1996) 67 FCR 416
(1998) 195 CLR 516