Cranney v National Australia Bank

[2011] FCA 1336

FEDERAL COURT OF AUSTRALIA

Cranney v National Australia Bank [2011] FCA 1336

Citation:		Cranney v National Australia Bank [2011] FCA 1336
Appeal from:		National Australia Bank Ltd v Cranney & Anor [2011] FMCA 169
Parties:		ROHAN GEOFFREY CRANNEY and DAVID KENNETH CRANNEY v NATIONAL AUSTRALIA BANK and CHRISTOPHER MEL CHAMBERLAIN
File number(s):		NSD 516 of 2011 NSD 517 of 2011
Judge:		MCKERRACHER J
Date of judgment:		22 November 2011
Catchwords:		PRACTICE AND PROCEDURE – urgent interlocutory applications on the morning of hearing of the appeals to adjourn the hearing of the appeals – Federal Court of Australia Act 1976 (Cth) s 37M – whether it is in the interests of justice to adjourn the hearing – was there reasonable explanation for the delay – apparent inaction by solicitors - comparison of relative prejudices to each party - ability to relist without substantial delay - capacity of costs fixed and to be paid within 28 days to partially overcome prejudice to opposing party - ongoing sale of secured assets proceeding in the meantime - possibility of costs order personally against allegedly delaying solicitor if appropriate
Legislation:		Federal Court of Australia Act 1976 (Cth) s 37M
Cases cited:		Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Date of hearing:	21 November 2011
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	27
Counsel for the Appellants:	J Chambers
Solicitor for the Appellants:	Jackson Lalic Lawyers
Counsel for the First Respondent:	JT Johnson
Solicitor for the first Respondent:	TurksLegal

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 516 of 2011

BETWEEN:

ROHAN GEOFFREY CRANNEY
Appellant

AND:

NATIONAL AUSTRALIA BANK
First Respondent

CHRISTOPHER MEL CHAMBERLAIN
Second Respondent

JUDGE:	MCKERRACHER J
DATE OF ORDER:	21 NOVEMBER 2011
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.Upon the Appellant’s solicitors giving an undertaking to pay the requisite filing fees, grant leave to the Appellant to file in Court the Interlocutory Application dated 18 November 2011 and an affidavit in support sworn by Rohan Cranney on 18 November 2011.

2.The Interlocutory Application be returnable instanter.

3.The time for service of the Interlocutory Application and affidavit in support be abridged to 6.00 pm on 18 November 2011.

4.The hearing listed on 21 November 2011 be adjourned to 17 February 2012 at 10.15 am.

5.The appeal be heard concurrently with proceedings NSD 517 of 2011.

6.The Appellant file and serve 5 copies of an outline of submissions, as described in Practice Note APP 2, not later than 4.00 pm twenty (20) clear working days before the date fixed for the hearing of the appeal.

7.The Respondents file and serve 5 copies of their outline of submissions, as described in Practice Note APP 2, not later than 4.00 pm ten (10) clear working days before the date fixed for the hearing of the appeal.

8.Outlines of submissions are not to exceed 10 pages in length (including any annexures).

9.The Appellant file and serve 5 copies of the Part C Appeal Book, as described in Practice Note APP 2, not later than 4.00 pm five (5) clear working days before the date fixed for the hearing of the appeal.

10.Each party file and serve a list of authorities and legislation in accordance with Practice Note CM 2.

11.Within 28 days, the Appellant do pay the First Respondent’s costs thrown away by reason of the adjournment in both NSD 516 of 2011 and NSD 517 of 2011 fixed in total for both applications at $5,900, including the costs of the interlocutory applications.

12.The First Respondent have leave to file and serve within 28 days an interlocutory application seeking a third party costs order against the solicitor referred to in the affidavit of Mr Rohan Geoffrey Cranney dated 18 November 2011 to be listed for hearing on 17 February 2012 at 10.15 am.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 517 of 2011

BETWEEN:

DAVID KENNETH CRANNEY
Appellant

AND:

NATIONAL AUSTRALIA BANK
First Respondent

CHRISTOPHER MEL CHAMBERLAIN
Second Respondent

JUDGE:	MCKERRACHER J
DATE OF ORDER:	21 NOVEMBER 2011
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.Upon the Appellant’s solicitors giving an undertaking to pay the requisite filing fees, grant leave to the Appellant to file in Court the Interlocutory Application dated 18 November 2011 and an affidavit in support sworn by Rohan Cranney on 18 November 2011.

2.The Interlocutory Application be returnable instanter.

3.The time for service of the Interlocutory Application and affidavit in support be abridged to 6.00 pm on 18 November 2011.

4.The hearing listed on 21 November 2011 be adjourned to 17 February 2012 at 10.15 am.

5.The appeal be heard concurrently with proceedings NSD 516 of 2011.

6.The Appellant file and serve 5 copies of an outline of submissions, as described in Practice Note APP 2, not later than 4.00 pm twenty (20) clear working days before the date fixed for the hearing of the appeal.

7.The Respondents file and serve 5 copies of their outline of submissions, as described in Practice Note APP 2, not later than 4.00 pm ten (10) clear working days before the date fixed for the hearing of the appeal.

8.Outlines of submissions are not to exceed 10 pages in length (including any annexures).

9.The Appellant file and serve 5 copies of the Part C Appeal Book, as described in Practice Note APP 2, not later than 4.00 pm five (5) clear working days before the date fixed for the hearing of the appeal.

10.Each party file and serve a list of authorities and legislation in accordance with Practice Note CM 2.

11.Within 28 days, the Appellant do pay the First Respondent’s costs thrown away by reason of the adjournment in both NSD 516 of 2011 and NSD 517 of 2011 fixed in total for both applications at $5,900, including the costs of the interlocutory applications.

12.The First Respondent have leave to file and serve within 28 days an interlocutory application seeking a third party costs order against the solicitor referred to in the affidavit of Mr Rohan Geoffrey Cranney dated 18 November 2011 to be listed for hearing on 17 February 2012 at 10.15 am.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 516 of 2011

BETWEEN:

ROHAN GEOFFREY CRANNEY
Appellant

AND:

NATIONAL AUSTRALIA BANK
First Respondent

CHRISTOPHER MEL CHAMBERLAIN
Second Respondent

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 517 of 2011

BETWEEN:

DAVID KENNETH CRANNEY
Appellant

AND:

NATIONAL AUSTRALIA BANK
First Respondent

CHRISTOPHER MEL CHAMBERLAIN
Second Respondent

JUDGE:	MCKERRACHER J
DATE:	22 NOVEMBER 2011
PLACE:	SYDNEY

REASONS FOR JUDGMENT

INTRODUCTION

1. In each of these matters, the appellants sought yesterday what is described as a ‘brief’ adjournment of the hearing of the appeal due to the fact that, at the last minute, they have had to change solicitors and appoint counsel. 

2. For reasons which follow, the adjournment was granted on terms. 

   BACKGROUND

3. The appeals relate to a decision of a Federal Magistrate given on 31 March 2011 (National Australia Bank Ltd v Cranney & Anor [2011] FMCA 169) in which the personal insolvency agreements of each of the appellants was set aside pursuant to s 222(1) and s 222(5) of the Bankruptcy Act 1966 (Cth) (the BA).  Sequestration orders were made against each of the appellants and they were ordered to pay costs of the first respondent.

4. It is unnecessary at present to go into detail as to the reasoning of the judgment save to observe that a number of features of the appeals appear to challenge factual findings in the judgment.  It is not possible at this stage, however, to express any concluded view as to the strength of the appeals.

5. The circumstances giving rise to the adjournment applications were outlined in detail in an affidavit of Mr Rohan Geoffrey Cranney (Mr Cranney) sworn on 18 November 2011, the appellant in proceeding NSD 516 of 2011, both on his own behalf and on behalf of his brother, Mr David Kenneth Cranney, the appellant in proceeding NSD 517 of 2011. 

6. Mr Cranney explained that each of the appellants in April 2011 instructed an identified solicitor (the solicitor) to appeal the Federal Magistrate’s decision.

7. Notices of appeal were filed on 21 April 2011.  Mr Cranney says that in about late July or early August 2011, he received from the solicitor a copy of the orders made by Emmett J in relation to the conduct of the appeals.  Thereafter, during the period between August and early November 2011 the solicitor sent ‘numerous requests’ for documents which had been relied upon in the Federal Magistrates Court proceedings.  This was necessary because the solicitor had not then appeared on behalf of the appellants in those proceedings.  Mr Cranney says that he and his brother complied with those requests to the best of their ability but the circumstances were very difficult as:

   (a)my family, my brother’s family and our parents were on notice that were to be evicted from the family farm at Collendina, New South Wales in July or August 2011;

   (b)in about mid-July 2011, my brother relocated his family to central New South Wales;

   (c)in anticipation of the eviction, I packed up the records held by me and my brother in relation to the Federal Magistrate Court proceedings into boxes and placed them in storage in Albury for safe keeping on about 11 August 2011;

   (d)on 12 August 2011, my family and my parents were evicted from the family farm;

   (e)upon being evicted, I had to relocate my wife and children to Sydney;

   (f)I spent 3 weeks from the date of the eviction in Corowa packing up the contents of my family’s home and those of my parents at the family property; and

   (g)thereafter, I relocated to Sydney to join my family and find work. 

8. Mr Cranney says that since the commencement of the appeals, either he and/or his father, Mr Geoff Cranney, have been in contact with the solicitor.  As a result of a discussion with the solicitor, he understood that the solicitor was able to and presumably would attend to any outstanding matters so as to be in a position to run the appeals on its scheduled date of 21 November 2011. 

9. However, during the period from institution of the appeals to the hearing date there were issues arising concerning fees.  Mr Cranney says that on various occasions in May, April and October 2011, the solicitor was paid fees in excess of $17,000 in respect of the proceedings.  On or about 9 November 2011, the solicitor made a request to the father, Mr Geoff Cranney (who had been paying the fees), for the payment of a further $17,000 in connection with the proceedings.  A further request for fees in the sum of $4,500 was made on 14 November 2011.

10. Neither of those requests or demands was met.  Mr Cranney objected to the payment of any further fees on the basis that the solicitor was not, it seemed to him, taking any steps to prepare the proceedings for hearing.  I should say that little on the Court record would support a contrary assertion. 

11. On 15 November 2011, that is last week, Mr Cranney and his brother instructed Mr David Lalic of Jackson Lalic Lawyers to take over the conduct of the appeals.  Funds were deposited into the trust account of Jackson Lalic to take over the matters and counsel was briefed in the late afternoon of Thursday, 17 November 2011 (before the hearing date of Monday, 21 November 2011). 

12. Counsel had various difficulties including the fact that Mr Cranney and his brother did not have in their possession a copy of all of the documents that Jackson Lalic required in order to prepare for the hearing of the appeals.  On 17 November 2011, Jackson Lalic wrote to the solicitors for the first respondent to request a copy of the pleadings, which was complied with on the same day.  They also wrote to the former solicitor requesting access to the solicitor’s file.  The following day, access was denied until such time as alleged outstanding fees were paid.

13. Documents not held by Jackson Lalic are:

    (a)the transcript of the proceedings below;

    (b)an appeal book;

    (c)the appellants’ submissions (if any); and

    (d)the appellants’ list of authorities and legislation (if any).

14. On that basis, on Friday, 18 November 2011, Jackson Lalic were instructed to prepare applications to adjourn the hearing of the appeals today.  The appellants extended an apology to the Court and other parties for any inconvenience caused. 

    ARGUMENTS IN SUPPORT OF THE ADJOURNMENT APPLICATIONS

15. Counsel appearing for the appellants relies on s 37M of the Federal Court of Australia Act 1976 (Cth) which provides as follows:

    37M    The overarching purpose of civil practice and procedure provisions

    (1)The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes:

    (a)according to law; and

    (b)as quickly, inexpensively and efficiently as possible.

    (2)Without limiting the generality of subsection (1), the overarching purpose includes the following objectives:

    (a)the just determination of all proceedings before the Court;

    (b)the efficient use of the judicial and administrative resources available for the purposes of the Court;

    (c)the efficient disposal of the Court’s overall caseload;

    (d)the disposal of all proceedings in a timely manner;

    (e)the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.

    (3)The civil practice and procedure provisions must be interpreted and applied, and any power conferred or duty imposed by them (including the power to make Rules of Court) must be exercised or carried out, in the way that best promotes the overarching purpose.

    (4)The civil practice and procedure provisions are the following, so far as they apply in relation to civil proceedings:

    (a)the Rules of Court made under this Act;

    (b)any other provision made by or under this Act or any other Act with respect to the practice and procedure of the Court.  (emphasis added)

16. Reference was also made to the principles in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175. Counsel for the appellants stressed that an adjournment should be granted when a proper basis is shown and serious prejudice would be sustained if an adjournment was refused. That broad submission is supported by five sub-points. First, it was argued that the adjournment was necessary to prepare the appeals fully and adequately. If the adjournment applications are refused, both counsel and solicitors indicated they would withdraw from the record which would leave the Court in a difficult position without the benefit of proper argument. In contrast, an assurance was made that providing the lawyers were placed in funds, the appellants would be represented.

17. The second point was that there was an adequate explanation for the delay being that outlined above. 

18. Thirdly, if an adjournment was granted there was no need for it to be extensive. 

19. The fourth point was that a refusal would severely prejudice the appellants by closing off any avenue for relief that they might have should the decision under appeal be erroneous. 

20. Finally, there was no demonstrable prejudice insofar as the first respondent was concerned as no stay had been sought in relation to the bankruptcy and the farm was to be sold by auction on Thursday, 24 November 2011. 

21. The adjournment applications were opposed by the first respondent who also made the point that for at least a substantial part of the proceedings, Jackson Lalic had also acted in the Federal Magistrates Court proceedings.  The point was also made that the appeals were not strong because they turned primarily on questions of fact. 

22. Further, there was no guarantee that there would be legal representation for the appellants as it was made clear and there was no evidence to support the fact that there would be capacity to put Jackson Lalic in funds sufficient for the purposes of the appeals and to brief counsel. 

    CONSIDERATION

23. I accept the submission for the first respondent that the state of affairs is very unsatisfactory and that the apparent absence of any steps at all by the solicitor requires explanation.

24. That said, there appears also to be extenuating circumstances insofar as the personal affairs and circumstances of the appellants are concerned.  At least on the face of the matter at present, it would be difficult to hold them directly responsible for the absence of steps taken to prosecute the appeals. 

25. I accept the submissions for the appellants that the interests of justice may be more efficiently served in the most constructive way if the appellants are legally represented.  There is no prospect, it seems, of representation if the adjournment applications were to be refused.  Further, it is possible to re-list the appeals within a relatively short timeframe. 

26. As to prejudice to the first respondent, I was informed that the sale of the farm is continuing.  At no time had the appellants sought a stay.  It was not evident that there was to be an obvious prejudice suffered by the first respondent.  From the first respondent’s perspective, while the uncertainty surrounding the situation was unsatisfactory, it was possible to make some provision for that prejudice by orders for costs to be payable within a short period of time (if not forthwith as sought by the first respondent) and also giving the first respondent liberty to apply for a costs order against the solicitor personally, if such a course were deemed to be appropriate.  I stress that at this stage the solicitor has had no opportunity to be heard in relation to the matter. 

    CONCLUSION

27. In those circumstances I acceded to the adjournment applications and made the following orders:

    NSD 516 of 2011:

    1.Upon the Appellant’s solicitors giving an undertaking to pay the requisite filing fees, grant leave to the Appellant to file in Court the Interlocutory Application dated 18 November 2011 and an affidavit in support sworn by Rohan Cranney on 18 November 2011.

    2.The Interlocutory Application be returnable instanter.

    3.The time for service of the Interlocutory Application and affidavit in support be abridged to 6.00 pm on 18 November 2011.

    4.The hearing listed on 21 November 2011 be adjourned to 17 February 2012 at 10.15 am.

    5.The appeal be heard concurrently with proceedings NSD 517 of 2011.

    6.The Appellant file and serve 5 copies of an outline of submissions, as described in Practice Note APP 2, not later than 4.00 pm twenty (20) clear working days before the date fixed for the hearing of the appeal.

    7.The Respondents file and serve 5 copies of their outline of submissions, as described in Practice Note APP 2, not later than 4.00 pm ten (10) clear working days before the date fixed for the hearing of the appeal.

    8.Outlines of submissions are not to exceed 10 pages in length (including any annexures).

    9.The Appellant file and serve 5 copies of the Part C Appeal Book, as described in Practice Note APP 2, not later than 4.00 pm five (5) clear working days before the date fixed for the hearing of the appeal.

    10.Each party file and serve a list of authorities and legislation in accordance with Practice Note CM 2.

    11.Within 28 days, the Appellant do pay the First Respondent’s costs thrown away by reason of the adjournment in both NSD 516 of 2011 and NSD 517 of 2011 fixed in total for both applications at $5,900, including the costs of the interlocutory applications.

    12.The First Respondent have leave to file and serve within 28 days an interlocutory application seeking a third party costs order against the solicitor referred to in the affidavit of Mr Rohan Geoffrey Cranney dated 18 November 2011 to be listed for hearing on 17 February 2012 at 10.15 am.

    NSD 517 of 2011:

    1.Upon the Appellant’s solicitors giving an undertaking to pay the requisite filing fees, grant leave to the Appellant to file in Court the Interlocutory Application dated 18 November 2011 and an affidavit in support sworn by Rohan Cranney on 18 November 2011.

    2.The Interlocutory Application be returnable instanter.

    3.The time for service of the Interlocutory Application and affidavit in support be abridged to 6.00 pm on 18 November 2011.

    4.The hearing listed on 21 November 2011 be adjourned to 17 February 2012 at 10.15 am.

    5.The appeal be heard concurrently with proceedings NSD 516 of 2011.

    6.The Appellant file and serve 5 copies of an outline of submissions, as described in Practice Note APP 2, not later than 4.00 pm twenty (20) clear working days before the date fixed for the hearing of the appeal.

    7.The Respondents file and serve 5 copies of their outline of submissions, as described in Practice Note APP 2, not later than 4.00 pm ten (10) clear working days before the date fixed for the hearing of the appeal.

    8.Outlines of submissions are not to exceed 10 pages in length (including any annexures).

    9.The Appellant file and serve 5 copies of the Part C Appeal Book, as described in Practice Note APP 2, not later than 4.00 pm five (5) clear working days before the date fixed for the hearing of the appeal.

    10.Each party file and serve a list of authorities and legislation in accordance with Practice Note CM 2.

    11.Within 28 days, the Appellant do pay the First Respondent’s costs thrown away by reason of the adjournment in both NSD 516 of 2011 and NSD 517 of 2011 fixed in total for both applications at $5,900, including the costs of the interlocutory applications.

    12.The First Respondent have leave to file and serve within 28 days an interlocutory application seeking a third party costs order against the solicitor referred to in the affidavit of Mr Rohan Geoffrey Cranney dated 18 November 2011 to be listed for hearing on 17 February 2012 at 10.15 am.

I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

Associate:  

Dated:       22 November 2011