Conde v Hunter

Case [2009] FCA 1016

FEDERAL COURT OF AUSTRALIA

Conde v Hunter [2009] FCA 1016

PRACTICE AND PROCEDURE – application to strike out notice of appeal from decision of Federal Magistrate for abuse of process – bankruptcy notice issued in respect of unpaid costs order made by District Court Judge at interlocutory hearing – application by respondent to set aside bankruptcy notice dismissed by Federal Magistrate – court’s jurisdiction to strike out a notice of appeal under s 25(2B)(aa) of the Federal Court of Australia Act 1976 (Cth) – relevance of s 31A of the Federal Court of Australia Act 1976 (Cth) – whether costs order of District Court a “final order” for the purposes of s 40(1)(g) of the Bankruptcy Act 1966 (Cth) – whether Federal Magistrate failed to take into account issues, affidavits or relevant legislation – whether failure by the applicant’s solicitor to comply with r 2.05 and r 2.06 of the Federal Court (Bankruptcy) Rules 2005 and whether relevant – application of s 41 of the Bankruptcy Act 1966 (Cth) – and exercise of judicial discretion – allegation of bias on part of Federal Magistrate – whether notice of appeal raises arguable issues – whether indemnity costs warranted

Held: notice of motion to strike out the notice of appeal for abuse of process successful – notice of appeal struck out – costs order made at interlocutory stage by District Court was a “final order” under s 40(1)(g) of the Bankruptcy Act 1966 (Cth) – no errors in the Federal Magistrate’s decision – the respondent to pay the applicant’s costs of the notice of motion on a party-party basis

Bankruptcy Act 1966 (Cth) s 40(1)(g), s 41(1)(a)(i), (3), (3)(a), (6A)(a), (b) and (6C)
Federal Court of Australia Act 1976 (Cth) s 25(2B)(aa), s 31A
Supreme Court of Judicature (Consolidation) Act 1925 s 31
Federal Court (Bankruptcy) Rules 2005 r 2.05(1), r 2.06(1), (2)(a)(b)(c)(d)

Bishop v Secretary, Department of Education, Employment and Workplace Relations [2008] FCA 1118 cited
Bozson v Altrincham Urban District Council [1903] 1 KB 547 cited
Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 cited
Colgate-Palmolive v Cussons (1993) 46 FCR 225 cited
Conde v Hunter [2009] FMCA 751 cited
Conway v Jackson (2001) 107 FCR 201 cited
Druett v Department of Families, Community Services & Indigenous Affairs [2007] FCA 995 cited
Dunstan v Human Rights and Equal Opportunity Commission [2007] FCA 1326 cited
Franks v Warringah Council, in the matter of Franks [2003] FCA 1047 cited
Genovese v BGC Construction Pty Ltd [2007] FCA 923 cited
Hall v Nominal Defendant (1966) 117 CLR 423 cited
House v The King (1936) 55 CLR 499 cited
InterTAN Inc v DSE (Holdings) Pty Ltd [2005] FCAFC 54 cited
Jenkins v National Australia Bank Ltd [1999] FCA 1758 cited
Kayo Contractors v Fernandez (1984) 71 FLR 34 cited
Latoudis v Casey (1990) 170 CLR 534 cited
Licul v Corney (1976) 50 ALJR 439 cited
Patten v New Holland Credit Australia Pty Ltd [2006] FCA 1724 cited
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AGLC
Conde v Hunter [2009] FCA 1016
Case
[2009] FCA 1016
Decision Date

CaseChat Overview and Summary

Conde v Hunter involved Mr Conde's appeal against the Federal Magistrate's decision to dismiss his application to set aside a bankruptcy notice issued by Mr Hunter. The bankruptcy notice was based on a costs order from a previous defamation case in the Queensland District Court. Mr Conde argued that the costs order was not a final order and that his appeal against that order in the Queensland Court of Appeal had prospects of success. The Federal Magistrate dismissed Mr Conde's application, finding that the costs order was a final order and that Mr Conde's appeal had no prospects of success. Mr Conde then appealed this decision to the Federal Court.

The key legal issues in the appeal were whether the Federal Magistrate erred in dismissing Mr Conde's application and whether he failed to consider Mr Conde's submissions and relevant legislation. The Court found that the Federal Magistrate had properly considered the relevant legislation and Mr Conde's submissions. The Court held that the costs order was a final order as it disposed finally of the issue of who should pay the costs of the application to set aside Mr Conde's pleading. Additionally, the Court found that Mr Conde's appeal to the Queensland Court of Appeal had no prospects of success because leave to appeal was required, which was not granted in time.

Consequently, the Court dismissed the appeal and struck out the Notice of Appeal. The Court ordered Mr Conde to pay Mr Hunter's costs of the Notice of Motion on a party-party basis. The Court's decision was based on a thorough review of the Bankruptcy Act and relevant rules, ensuring that all legal principles were properly applied in reaching the outcome.

Orders

Orders of the court

1. The Notice of Appeal filed 3 August 2009 be struck out pursuant to section 25(2B)(aa) of the Federal Court of Australia Act 1976 (Cth).

2. Mr Conde pay Mr Hunter’s costs of the Notice of Motion filed 7 August 2009 on a party-party basis.

Note:

Background

Background to the litigation

Before determining the issues I will outline the background to the notice of motion.Background facts The relevant bankruptcy notice, issued on 30 June 2009, was served on Mr Conde on 4 July 2009. It appears from the bankruptcy notice that the person who applied for the bankruptcy notice to be issued was Mr Anthony Macklin, the solicitor for Mr Hunter and who appeared for Mr Hunter in the proceedings before me. The bankruptcy notice relied upon a costs order of Searles DCJ in the District Court of Queensland dated 14 November 2008. From the bar table in an explanation which was not contested, Mr Conde explained the context in which the judgment of Searles DCJ was delivered, namely that Mr Conde had commenced defamation proceedings against Mr Hunter in the District Court of Queensland and Searles DCJ had made interlocutory orders in the course of those proceedings. Those interlocutory orders of Searles DCJ were as follows:1. The Amended Statement of Claim be struck out.2. That the Plaintiff be given leave to replead within twenty-one (21) days.3.Order that Plaintiff pay Defendant’s costs of today’s Application to be assessed on the standard basis.4.Order that proceedings be stayed pending payment of the Defendant’s costs of today’s application by the Plaintiff. The key order for the purposes of these proceedings was Order 3 with respect to costs. It is also not in dispute that on 1 July 2009 Mr Conde filed an application in the Court of Appeal of Queensland seeking to contest Orders 3 and 4 of Searles DCJ. The bankruptcy notice, a copy of which was annexed to the application before the Federal Magistrate filed on 14 July 2009, stated that Mr Conde owed Mr Hunter a debt of $7,980.87. The Schedule to the bankruptcy notice identified the amount of $7,980.87 as “Legal costs if ordered to be paid and a specific amount was not included in the judgments or orders”. Annexed to the bankruptcy notice were also:·a copy of the orders of Searles DCJ of 14 November 2008;·a costs assessor’s certificate; and·a certificate issued by the District Court of Queensland. The costs assessor’s certificate, dated 13 March 2009 and bearing a stamp of the District Court of Queensland as having been filed on that date, provided:I, Stephen Kenneth Hartwell, of Level 1, 44A George Street, Brisbane, certify that –1.I am an approved costs assessor appointed under the Uniform Civil Procedure Rules 1999.2.I was appointed to assess the costs in this matter pursuant to the Order made 12 February 2009.3.I have assessed the costs payable by the Plaintiff to the Defendant pursuant to the Order made 14 November 2008 in the amount of seven thousand nine hundred and eighty dollars and eighty-seven cents ($7,980.87) comprising:a. Professional Fees $2,715.79b. Disbursements $5,265.084.My fees of $412.50 is payable by the Defendant and has been included as a disbursement.5.The party entitled to be paid the costs of the assessment is the Defendant. Those costs are assessed at $393.00 and have been included as a disbursement.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

COLLIER J
Mr Conde commenced proceedings in the Federal Magistrates Court to have the bankruptcy notice set aside and interim orders granting an extension of time for him to comply with the bankruptcy notice. The matter came before Wilson FM, who dismissed the application to set aside the bankruptcy notice (Conde v Hunter [2009] FMCA 751). In his reasons for decision, his Honour found in summary as follows:·Mr Conde made no attack on the form of the bankruptcy notice itself.·Although Mr Conde contended that Mr Hunter did not have a final judgment or final order (the execution of which had not been stayed in terms of s 40(1)(g) of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”)) the argument was misconceived. His Honour continued:A final order is one that disposes finally of an issue between the parties. The concept of what is a final order is discussed in cases such as Hall v Nominal Defendant (1966) 117 CLR 423. In this case, the issue was who should pay the costs of the application to set aside the applicant’s pleading. The order made by Judge Searles was a final order, insofar as it concerned that issue. His Honour ordered that the applicant pay the respondent’s costs. There is no merit in the first ground sought to be advanced by the applicant. (at [3])·Notwithstanding Mr Conde’s prospective challenge to Orders 3 and 4 of Searles DCJ, it was clear on the material before his Honour that:obecause the order sought to be challenged on appeal was only as to costs, leave to appeal was required by the Court of Appeal;othe application for leave to appeal was filed many months out of time and therefore required an order from the Court of Appeal granting an extension of time.The Federal Magistrate noted that no contest had been made against the Orders 1 and 2 made by Searles DCJ, namely to strike out Mr Conde’s amended statement of claim and give leave to Mr Conde to replead in that Court. The Federal Magistrate considered that, in those circumstances and having read Mr Conde’s application to the Court of Appeal and supporting affidavit, that application to the Court of Appeal has no prospects of success.·It followed that no good reason was shown for either setting aside the bankruptcy notice or extending time for compliance with it to await the outcome in the Queensland Court of Appeal. Accordingly the Federal Magistrate dismissed the application to set aside the bankruptcy notice.Appeal from decision of the Federal Magistrate Mr Conde filed a notice of appeal in this Court from the decision of Wilson FM on 3 August 2009. The grounds of appeal are as follows:1.The Learned Federal Magistrate Wilson erred by dismissing the Applicant/Appellant’s Application in contravention of the Bankruptcy Act 1966.2.The Learned Federal Magistrate Wilson failed to justify in which sections of the Act and Rules he relied to dismiss the Appellant/Applicant’s Application.3.The Learned Federal Magistrate Wilson failed to take into account the Act, Rules the Appellant’s Application and Affidavit filed on 14 July 2009, to make his decision or order.4.The Learned Federal Magistrate Wilson erred in taking into account to make his decision or order, only the Respondent’s Outline of Submissions served on 23 July 2009, at the hearing prepared by Anthony James Macklin, Solicitor for the Respondent and totally ignored the Applicant or Appellant’s Application and Affidavit.5.Anthony James Macklin, Solicitor for the Respondent, failed to comply with the Federal Court (Bankruptcy Rules 2005, rr 2.05(1), 2.06(1)(2)(a)(b)(c)(d).6.Sections 40(1)(g) of the Act, was wrongly used by Anthony James Macklin, Solicitor’s for the Respondent and Federal Magistrate Wilson.7.Section 40(1)(g) of the Act does not apply to the Applicant/Appellant.8.Section 41(1)(a)(i), (3) does not apply to the Appellant/Applicant and was wrongly and unlawfully used by Anthony James Macklin, Solicitor’s for the Respondent to obtain the Bankruptcy Notice and issued by A. Carder, Official Receiver for the Bankruptcy District of Queensland, Insolvency and Trustee Service Australia (ITSA), on the 30th June 2009.9.Anthony James Macklin, Solicitor’s for the Respondent, to obtain the Bankruptcy Notice, Order or Decision committed offences to the administration of justice and the Criminal Code 1899, Fraud – s 408C(1)(d)(e) and mislead the Court.10.The Respondent’s Bankruptcy Notice has a tendency to prejudice or delay the fair trial of the Proceedings Numbers: BD 395 of 2008 and CA 7008 of 2009.11.The Respondent’s Notice of Bankruptcy is unnecessary, scandalous, vexatious, frivolous, an abuse of the process of the Court, discriminatory, malicious and should be set aside or dismissed by this Honourable Court and award costs in favour of the Appellant.12.His Honour Wilson failed to take into account section 41(1)(a)(i), (3)(a), (6A)(a)(b)(6C) of the Act.13.There were clear errors of law in the proceedings that could have materially affected his Honour’s decision.14.The Learned Federal Magistrate Wilson’s decision and order are biased against the Applicant or Appellant.(emphasis in original)

Ratio Decidendi

Legal Principle Established

Established by: COLLIER J

In my view this ground of appeal has no merit. In his judgment the Federal Magistrate specifically referred to the Bankruptcy Act and s 40(1)(g) upon which his Honour relied. His Honour’s reasons for dismissing Mr Conde’s application were clear, and identified relevant principles.Grounds 3, 4: The Federal Magistrate took into account only Mr Hunter’s submissions, and failed to take into consideration Mr Conde’s application and affidavit or the relevant legislation While failure of a Court to consider an issue before it and supporting submissions may constitute a miscarriage of justice (QBE Insurance Ltd v Switzerland Insurance Workers Compensation (NSW) Ltd (1996) 134 ALR 433) I can draw no inference that his Honour had regard only to the submissions filed by Mr Hunter and ignored either the substance of Mr Conde’s case or the provisions of the Bankruptcy Act and rules. It is clear from reviewing the decision of the Federal Magistrate (Conde v Hunter [2009] FMCA 751) that his Honour:·considered the application before him and the orders sought (at [1]);·recognised that, at first instance, Mr Conde made no attack on the bankruptcy notice itself (at [2]);·considered that Mr Conde’s case could be summarised by reference to two issues, namely whether the bankruptcy notice was founded on a final order, and prospects of success of Mr Conde’s appeal to the Queensland Court of Appeal (at [3]-[5]). His Honour was not satisfied in respect of either issue;·had read both Mr Conde’s application and supporting affidavit (at [6]). The fact that his Honour found against Mr Conde does not mean that his Honour failed to take into consideration Mr Conde’s submissions. In my view this ground of appeal has no merit.Ground 5: Mr Macklin failed to comply with the Federal Court (Bankruptcy) Rules 2005, rr 2.05(1), 2.06(1), (2)(a)(b)(c)(d) The Federal Court (Bankruptcy) Rules 2005 relevantly provide:Regulation 2.05Appearance at application or examination(1) A person who intends to appear at the hearing of an application or petition, or take part in an examination, must file a notice of appearance in accordance with Form 4.(2) Rules 12 and 13 of Order 4 of the Federal Court Rules (alteration of hearing date) do not apply to the hearing date fixed for a creditor's petition.Regulation 2.06Opposition to application, interim application or petition(1) In this rule:“application” includes an interim application(2) A person who intends to oppose an application or petition must, at least 3 days before the date fixed for the hearing of the application or petition or, with the leave of the Court, at the hearing:(a)file a notice of appearance in accordance with Form 4; and(b)file a notice in accordance with Form 5 stating the grounds of opposition; and(c)file an affidavit in support of the grounds of opposition; and(d)serve the notices and supporting affidavit on the applicant. Regulation 2.05 and reg 2.06 are procedural provisions. Mr Conde has not particularised why, if there has been failure by Mr Hunter’s solicitor to comply with these regulations, such failure forms the basis for an appeal against the decision of the Federal Magistrate. I am unable to identify any reasons why a failure to comply with these regulations would justify an order setting aside the bankruptcy notice in this case.