Boglari v Coadys (A Firm) - [2008] FMCA 1277

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BOGLARI & ANOR v COADYS (A FIRM)

[2008] FMCA 1277

BANKRUPTCY – Application to set aside bankruptcy notice – application to set aside orders of County Court and revisit trial of matters before the County Court – application dismissed.

First Applicant:

SANDOR BOGLARI

Second Applicant:

SUSANNA BOGLARI

Respondent:

COADYS (A FIRM)

File Number:

MLG 1008 of 2008

Judgment of:

Burchardt FM

Hearing date:

1 September 2008

Date of Last Submission:

1 September 2008

Delivered at:

Melbourne

Delivered on:

1 September 2008

REPRESENTATION

The Applicants:

In person (First Applicant only)

Counsel for the Respondent:

Mr P. Fary

Solicitors for the Respondent:

Wisewoulds

ORDERS

The application be dismissed.
The Applicants pay the Respondent's costs.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 1008 of 2008

SANDOR BOGLARI

First Applicant

SUSANNA BOGLARI

Second Applicant

And

COADYS (A FIRM)

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

By an application filed on 15 August 2008, Mr and Mrs Boglari apply to set aside a bankruptcy notice served upon them. They also apply to “set aside judgment/orders of the County Court” in a proceeding that clearly forms the basis of the bankruptcy notice. Finally, they require, if successful in this Court, to “revisit/go behind the judgment of the Honourable Judge Holt of the County Practice Court.”
It is also said that the judgment should be dismissed on the basis, amongst others, that the debt was fictional or non-existent and that there was a denial of justice by Judge Holt making remarks to the effect that because Mr Boglari did not have legal representation, he could not succeed.
During the course of the proceeding, I have asked a number of questions of Mr Boglari in an endeavour to better understand his case and during that process, the Court and Mr Fary, who appears for the creditor, have been provided with certain excerpts of transcript from proceedings in the County Court.
From a combination of that documentation, together with what is in Mr Boglari's affidavits and what he has himself told me from the bar table, the following narrative which Mr Boglari has expressly confirmed is correct, at least as far as he is concerned, emerges: Mr Boglari was the subject of some sort of property dispute either in or arising out of in some way his property in Ballarat. It appears that in some fashion, a kindergarten was thought to be the purchaser. Mr Boglari's accounts before me seem to differ from time to time but the net effect was that he was discomfited by the process whereby the land was purchased and it would appear that this involved in some way a solicitor from Ballarat who was involved, it would appear, with the kindergarten and/or the purchase process and it would appear that that solicitor either is and/or was a State Magistrate.
This gave rise to proceedings in the Victorian Civil and Administrative Tribunal in which Mr Boglari says he was substantially successful. However, it would appear that some aspect of the dispute remained extant and was the subject of proceedings in the Magistrates Court of Victoria. Mr Boglari engaged Coadys, who were and are the creditor, to act on his behalf in that proceeding.
Coadys, he says, were paid three tranches of money and have, in the ultimate, asserted a debt to them in excess of those amounts already paid. It is clear that Coadys thought they were owed moneys because they issued a claim in the Magistrates Court which would appear to have been in the sum of $3,211.15. It is clear that that sum must have been for what was said to have been outstanding fees.
The case, as it emerges from the transcript before the County Court, was transferred to the County Court because Mr Boglari and his wife made a counterclaim in negligence well in excess of the jurisdictional limit of the Magistrates Court, although I do not know how much. That naturally enough gave rise to a case transfer, thus the matter came to the County Court.
Before coming to the County Court, I should just go back a step for the moment. The judgment in the Magistrates Court, which was said at one point by Mr Boglari to be unsuccessful from his point of view, was said by him to have been pursued to the Supreme Court of Victoria, the Court of Appeal of Victoria and indeed by way of special leave application which in some way dissipated because it is said that one of the Respondent parties disappeared, whether by absconding or by legal dissolution or otherwise.
That account, which I have indicated I was prepared to accept in Mr Boglari's favour, does not upon reconsideration sit very readily with the fact that it appears that the original Magistrates Court proceeding, if I can so describe it, was transmitted to the County Court because of the size of Mr Boglari's counterclaim.
It is not necessary for me to form any concluded view as to that aspect of this matter because on any view the matter came to the County Court.
From the transcript of the proceeding on 29 January 2007, it is apparent that the matter was before her Honour Judge Lawson in the Practice Court on 12 December 2006. Affidavit material as to what then occurred apparently was put on by Coadys which then was before Judge Holt on 29 January 2007. I do not have the affidavit material but it appears from the transcript before Judge Holt that Judge Lawson told Mr Boglari he would have to serve and file a defence in the proper form and his counterclaim also.
It is clear from the transcript of 29 January 2007 that on that day, Mr Boglari had an extensive exchange with his Honour, the upshot of which was that his Honour gave Mr Boglari about three weeks to put on a defence and counterclaim in proper form and adjourned the matter to the Practice Court again. It returned to the Practice Court on 23 February 2007 and on that occasion, his Honour struck out the defence and counterclaim because they were not properly pleaded.
It is important to note that there is an aspect of that transcript to which I will need to return because it deals with another subset of Mr Boglari's complaint.
Thus, matters then stood. It should be noted that his Honour expressly refused to give judgment to the plaintiff, Coadys, on 23 February 2007. If I may respectfully say so, his Honour was alert to the fact that no formal application had been made and indicated that he was not prepared to proceed on an oral application for what in effect was summary judgment. He foreshadowed that a proper application would need to be made for that to occur.
The next court date appears to have been 16 April 2007. I do not have the originating process or application that gave rise to that hearing but I note that both counsel for Coadys and Mr Boglari were present. His Honour further ordered that the Boglaris pay the costs of the proceeding, including all reserved costs and the costs of relevant applications.
It is not clear in fact that his Honour dismissed the counterclaim which may, for all I know, still be on foot. Although as I say I do not have what I presume must have been an application for summary judgment, it must have been made for his Honour to make the orders he made on the 16th day of April 2007. Given what his Honour had earlier said on 23 February, I have no doubt whatever that a proper application was made to his Honour to enable that to occur.
Further and in any event, the order made by Judge Holt was plainly a final judgment on the claim made by the creditor and it was made following proper process.
Mr Boglari wants to go behind that judgment and examine whether or not ultimately he ever owed Coadys the $3,000.00 they claimed. It is sufficient to say that it is immediately apparent that the competing factual assertions to which that would give rise would doubtless be both lengthy and complicated.
This is not a case in which fraud is alleged. Rather, from the transcript it is quite apparent that his Honour dismissed the defence on the footing that there was no proper defence pleaded. His Honour had already given clear warning on two occasions that that might be the way things would proceed and indeed it would appear that Judge Lawson made remarks to not dissimilar effect.
In my view, the judgment was regularly made and it is not appropriate that this Court exercise its discretion to seek to go behind it. From the way in which the matter has proceeded today it is more probable than otherwise to me, to the extent that I have discretion, that I should exercise it in favour of the creditor. It is far more probable that this would give rise to a welter of further and unnecessary litigation.
That leaves consideration of the extract of transcript to which I have earlier made reference. During the hearing on 23 February, at one stage at page 17 of the transcript, the following exchange took place from line 7 onwards:
“MR BOGLARI: If the rules cannot be complied with but the person is not necessarily ignorant but unable to - but able to present the truth, the truth or the facts can be dismissed for the sake of - - -
HIS HONOUR: No, the facts won't be dismissed, they won't come to trial. They won't come to trial.
MR BOGLARI: So anybody who cannot get representation or cannot afford one is liable to lose. It doesn't matter how forceful or how wrongly they have been done. Is that correct?
HIS HONOUR: Basically, yes. Yes.
MR BOGLARI: I accept Your Honour's word. Thank you. Thank you, Your Honour.”
Looked at in isolation that exchange would be troubling but it needs to be borne in the context of the transcript of the two days during which Mr Boglari was before his Honour. His Honour was endeavouring, at great length and in a perfectly, if I may respectfully say so, appropriate and courteous way, to explain to Mr Boglari the necessity for him to comply with the Rules of the Court. Mr Boglari was, albeit understandably perhaps, indicating an incapacity and inability to do so.
His Honour's observations really amount to no more or less, looked at fairly in my view, than that a total failure to pay regard to these rules is only more likely in the event of lack of representation and is indeed liable to be very unfavourable as to outcome. It does not appear to me to involve anything in the nature of an abuse of process such as to ground the application that Mr Boglari presses.
These matters not being made out and these, as far as I can see, being the only bases upon which the application is pressed, it follows inevitably that the application to set aside the bankruptcy notice should be dismissed and I will so order.

ADDITIONAL NOTE:

Since dictating these extempore reasons I have realised that the reservation I expressed in paragraph 9, while immaterial, was wrong. It was the unsuccessful Magistrates Court action in which Coadys acted that went on appeal. It was Coadys’ action in which the Boglaris counterclaimed that was transferred to the County Court.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of Burchardt FM

Associate: Brooke Evans

Date: 1 September 2008