Zegarac v Dellios

NORTH J 1 Before the court is a notice of motion filed by Paul Dellios, trading as Dellios West and Co, the respondent to the appeal in proceeding VID 58/2007. Paragraph 1 of the motion seeks an order that, pursuant to Order 52 Rule 18 of the Federal Court Rules, the appeal be dismissed as incompetent. Alternatively in paragraph 2, Mr Dellios sought that the appeal be stayed pending the hearing and determination of Ms Zegarac's special leave application to the High Court Number M5 of 2007. Mr Nixon of counsel, who appeared on behalf of Mr Dellios, indicated that the relief sought in paragraph 2 is no longer pursued. 2 Ms Zegarac appeals against orders made by Marshall J on 15 December 2006. His Honour dismissed Ms Zegarac's application seeking that a sequestration order made by Registrar Mussett on 18 May 2006 be set aside. The sequestration order was made in reliance on a judgment obtained in the Heidelberg Magistrates Court on 26 April 2005 by Mr Dellios against Ms Zegarac for legal costs. 3 His Honour's order was made in the absence of Ms Zegarac. Later, when Ms Zegarac arrived at court subsequent to the making of the order, his Honour heard and rejected Ms Zegarac's application to reopen the proceeding. 4 A Bankruptcy Court has a discretion to go behind a judgment in order to ascertain whether a real debt exists: Wren v Mahony (1972) 126 CLR 212. Before Marshall J, Ms Zegarac argued that the judgment in the Magistrate's Court had been obtained by fraud. His Honour rejected that argument and held that Ms Zegarac had not established that the judgment had been obtained by fraud. 5 On 29 January 2007, Ms Zegarac filed a document entitled 'Notice of Appeal'. In argument in support of the motion, Mr Nixon submitted that the notice of appeal was incompetent because it does not comply with Order 52 Rule 13(2) which requires a notice of appeal to state briefly but specifically the grounds in support of the appeal. 6 To comply with Order 52 Rule 13(2), Ms Zegarac must state briefly the grounds on which she asserts that his Honour erred in holding as he did. It is clear that the document does not comply with Order 52 Rule 13(2). The question then is whether a failure to comply with Order 52 Rule 13(2) necessarily renders an appeal incompetent. 7 In my view, it does not follow that a failure to comply with Order 52 Rule 13(2) renders an appeal incompetent. If the notice is incomprehensible or entirely unrelated to the issues dealt with in the judgment, an appeal may be incompetent. Examples relied upon by Mr Nixon are indeed cases of incomprehensibility: Lindsey v Philip Morris Limited [2004] FCAFC 40; Kendrick-Smith v Australian Competition & Consumer Commission [2003] FCAFC 155; Zambini v Secretary, Department of Employment and Workplace Relations [2006] FCA 1773. However, in this case the notice of appeal, while prolix and not in compliance with Order 52 Rule 13(2), is not incomprehensible. It is clear from the document as a whole that Ms Zegarac contends that his Honour erred in holding that she had not established that the judgment in the Magistrates Court was obtained by fraud. Thus, the relief sought in paragraph 1 of the motion should be refused. 8 It is desirable that the proceeding go to a hearing so that Ms Zegarac's complaints can be ventilated fully. Further interlocutory applications, although they may be available to Mr Dellios, are unlikely to assist in the ultimate resolution of the matter and some latitude should be granted in applying the requirements of the Rules in the case of litigants, such as Ms Zegarac, who appear unrepresented. On the other hand, Ms Zegarac should try to comply with Order 52 Rule 13(2) by setting out on one page the reasons why she says Marshall J was wrong to hold that she did not show that the Magistrates Court judgment was obtained by fraud. 9 The Full Court which hears the appeal may also need to consider whether the appropriate subject of argument is the order made by Marshall J refusing to reopen the hearing, and whether that is an interlocutory order which would require Ms Zegarac to obtain leave to appeal. Those are matters, however, for another day. On the notice of motion presently brought, I would make orders dismissing the notice of motion. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice North.