Buckby v Ark Energy Ltd

Case [2019] FCA 611

FEDERAL COURT OF AUSTRALIA

Buckby v Ark Energy Ltd [2019] FCA 611

Appeal from: Ark Energy Ltd v Buckby, in the matter of John William Buckby [2018] FCA 2095
File number: SAD 1 of 2019
Judge: CHARLESWORTH J
Date of judgment: 17 April 2019
Catchwords: BANKRUPTCY – appeal from sequestration order –
alleged error affecting order of primary judge to refuse an adjournment – alleged denial of procedural fairness – where power to summarily dismiss an appeal exercisable by a single Judge – appeal having no reasonable prospect of success having regard to principles stated in House v The King (1936) 55 CLR 499 – appeal summarily dismissed
Legislation: Federal Court of Australia Act 1976 (Cth) ss 25, 31A
Cases cited:

Ark Energy Ltd v Buckby, in the matter of John William Buckby [2018] FCA 2095

Riva NSW Pty Limited v Official Trustee in Bankruptcy [2017] FCA 188

House v The King (1936) 55 CLR 499

Date of hearing: 17 April 2019
Registry: South Australia
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Category: Catchwords
Number of paragraphs: 34
Counsel for the Appellant: The Appellant appeared by telephone
Counsel for the Respondent: Mr T Mehrtens represented the Respondent

ORDERS

SAD 1 of 2019
BETWEEN:

JOHN WILLIAM BUCKBY

Appellant
AND:

ARK ENERGY LTD

Respondent

JUDGE:

CHARLESWORTH J

DATE OF ORDER:

17 APRIL 2019

THE COURT ORDERS THAT:

1.The respondent, Ark Energy Ltd, have leave to be represented on the hearing of its Notice of Objection to Competency by Mr Thomas Quinlan Mehrtens.

2.The appeal be dismissed pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth).

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

CHARLESWORTH J:

  1. On 17 April 2019 I made an order summarily dismissing this appeal pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth). I gave oral reasons on that day and now publish written reasons to the same effect.

  2. By this proceeding Mr John William Bucky appeals from a sequestration order made by a single judge of the Court on 7 December 2018: Ark Energy Ltd v Buckby, in the matter of John William Buckby [2018] FCA 2095. The respondent, Ark Energy Ltd was the petitioning creditor.

  3. By a notice of objection to competency dated 12 March 2019, Ark Energy seeks the following alternative orders:

    a.        the appeal be dismissed for incompetency; or

    b.in the alternative, that summary judgment be entered in favour of the Respondent pursuant to s.31A of the Federal Court [of Australia] Act 1976 (Cth) on the basis that the grounds have no reasonable prospect of success and/or are an abuse of the Court’s process; or

    c.in the further alternative, that individual grounds of appeal that are deemed incompetent by this Honourable Court be struck out prior to the hearing of the appeal.

  4. It is convenient to deal first with the contention that the appeal should be summarily…

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Buckby v Ark Energy Ltd [2019] FCA 611
Case
[2019] FCA 611
Decision Date

CaseChat Overview and Summary

In the case of Buckby v Ark Energy Ltd, the Federal Court of Australia considered an appeal against a sequestration order. The appellant, Mr Buckby, sought to challenge the primary judge's decision to refuse an adjournment, claiming procedural unfairness and error in the exercise of discretion. The legal issues revolved around whether the primary judge erred in denying the adjournment and if there was a reasonable prospect of success for the appeal. The Court assessed the appeal under section 31A of the Federal Court of Australia Act 1976 (Cth), which allows for summary dismissal if the other party has no reasonable prospect of success.

The Court found that the primary judge's reasons for denying the adjournment were clear and did not reveal any error of principle. The judge had appropriately considered the available evidence and the procedural steps taken. The Court concluded that the primary judge had provided reasonable notice and adequate time for Mr Buckby to prepare for the hearing. Additionally, the Court found that Mr Buckby had been aware of the requirements for making a contested application for a timetable variation. As a result, Mr Buckby had no reasonable prospect of success in his appeal, and the Court dismissed the appeal under section 31A.

The Court granted Ark Energy Ltd leave to be represented by Mr Thomas Quinlan Mehrtens at the hearing of its Notice of Objection to Competency. The appeal was dismissed, and the sequestration order remained in place. The orders were entered in accordance with Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. The respondent, Ark Energy Ltd, have leave to be represented on the hearing of its Notice of Objection to Competency by Mr Thomas Quinlan Mehrtens.

2. The appeal be dismissed pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth).

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Section 31A of the Act relevantly provides:31A Summary judgment…(2)The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:(a)the first party is defending the proceeding or that part of the proceeding; and(b)the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.(3)For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:(a) hopeless; or(b) bound to fail;for it to have no reasonable prospect of success.(4)This section does not limit any powers that the Court has apart from this section. In Riva NSW Pty Limited v Official Trustee in Bankruptcy [2017] FCA 188, Perry J helpfully summarised the principles that may guide the exercise of the power to summarily dismiss a proceeding under s 31A:45First, the respondent as the moving party bears the onus of persuading the Court that the application has no reasonable prospects of succeeding: Australian Securities and Investments Commission v Cassimatis [2013] FCA 641; (2013) 220 FCR 256 (Cassimatis) at 271 [45] (Reeves J).46Secondly, the intention behind the enactment of s 31A is ‘to lower the bar for obtaining summary judgment (including summary dismissal) below the level that had been fixed by such authorities as Dey v Victorian Railway Commissioners (1949) 78 CLR 62 at 91-92, and General Steel Industries Inc v Commissioner for Railways (NSW) [1964] (1964) 112 CLR 125 at 129-130 …’: White Industries Aust Ltd v Commissioner of Taxation [2007] FCA 511; (2007) 160 FCR 298 (White Industries) at 310 [54] (Lindgren J); see also Cassimatis at 271 [46] (Reeves J). In the cases to which Lindgren J referred in White Industries, the requirement had been expressed in such terms as ‘manifestly groundless’ or ‘hopeless’. As Hayne, Crennan, Kiefel and Bell JJ held in Spencer v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 (Spencer) at 139 [52]-[53]:52. … effect must be given to the negative admonition in sub-s (3) that a defence, a proceeding, or a part of a proceeding may be found to have no reasonable prospect of successful prosecution even if it cannot be said that it is ‘hopeless’ or ‘bound to fail’. … [I]t is important to begin by recognising that the combined effect of sub-ss (2) and (3) is that the inquiry required in this case is whether there is a ‘reasonable’ prospect of prosecuting the proceeding, not an enquiry directed to whether a certain and concluded determination could be made that the proceeding would necessarily fail.53. In this respect, s 31A departs radically from the basis upon which earlier forms of provision permitting the entry of summary judgment have been understood and administered.47Thirdly, the assessment required by s 31A of whether a proceeding has no reasonable prospects of success necessitates the making of value judgments in the absence of a full and complete factual matrix and argument, with the result that the provision vests a discretion in the Court: Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117; (2009) 178 FCR 401 (Kowalski) at 408-409 [28] (the Court). That discretion includes whether to deal with the motion at once or at some later stage in the proceedings when the legal and factual issues have been more clearly defined: Butorac v WIN Corporation Pty Ltd [2009] FCA 1503 at [19] (Buchanan J); Cassimatis at 272 [50] (Reeves J).48In the fourth place, despite the threshold for summary dismissal having been lowered, the discretion must still be exercised with caution (Spencer at 131 [24] (French CJ and Gummow J) and 141 [60] (Hayne, Crennan, Kiefel and Bell JJ)). Consistently with this, the discretion is concerned ‘with the bringing and defending of proceedings, not just with pleadings; with substance, not just with form’: White Industries at [50] (Lindgren J) (approved in Kowalski at 409 [30] (the Court); see also Spencer at [23] (French CJ and Gummow J)).49Finally, in his Honour’s helpful explanation of how these principles are to be applied, Reeves J in Cassimatis further explains at 271-272 [46] that:… the determination of a summary dismissal application therefore does not require a mini-trial based upon incomplete evidence to decide whether the proceedings are likely to succeed or fail at trial. Instead, it requires a critical examination of the available materials to determine whether there is a real question of law or fact that should be decided at trial. Each application for summary judgment or summary dismissal has to be determined according to its particular circumstances. What is required is a practical judgment of the case at hand. ...

Ratio Decidendi

Legal Principle Established

The primary judge made the sequestration order on the basis that Mr Buckby had not disputed the existence of the debt upon which the creditor’s petition was founded and that the formal requirements for the making of a sequestration order had been established.CONSIDERATION For the purposes of s 31A(2)(b) I am satisfied that Mr Bucky has no reasonable prospect of succeeding on his appeal. The power to grant an adjournment of a proceeding involves the exercise of a discretionary judgment. To succeed on his appeal, Mr Buckby must establish that the order appealed from may be disturbed in accordance with the principles stated in House v The King (1936) 55 CLR 499 at 505:It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellant court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. The present case is one in which the reasons for the result arrived at by the primary judge are made plain in the reasons for judgment. The reasons do not disclose an error of principle. In all of the circumstances, the result arrived at by the primary judge is not plainly unreasonable, nor is it plainly unjust. There is nothing from which a court on appeal may infer that the primary judge has in some way failed to properly exercise the discretion, nor is there appealable error on the face of the reasoning itself. The primary judge did not fail to take into account the considerations that properly bore on the exercise of the discretion. Mr Buckby does not have reasonable prospects of succeeding with the arguments he raises to the contrary. The conclusion that the Court at first instance had provided Mr Buckby reasonable notice of the hearing date by way of the Associate’s email to Mr Buckby’s solicitor was open to the primary judge, as was the conclusion that Mr Buckby had been provided with sufficient time to obtain a report in relation to his solvency. It is clear that his Honour placed considerable weight, as his Honour was entitled to do, on the circumstance that the Registrar’s orders had provided a mechanism by which Mr Buckby might apply to have the orders fixing the timetable varied on the basis of his medical condition and on the circumstance that Mr Buckby was aware, by reason of the Associate’s correspondence of 29 October 2018, that a contested application for a variation of the timetable should be made by way of an interlocutory application and supporting affidavit, which was not filed.