Gomez v Carrafa

Case [2023] FCA 719

FEDERAL COURT OF AUSTRALIA

Gomez v Carrafa [2023] FCA 719

Appeal from: Gomez v Carrafa [2022] FCA 1013
File number(s): VID 589 of 2022
Judgment of: O'BRYAN J
Date of judgment: 30 June 2023
Catchwords: PRACTICE AND PROCEDURE – application for an extension of time in which to appeal a decision of the Court – where applicant alleges malicious prosecution by trustee in bankruptcy – where applicant alleges misfeasance in public office by trustee in bankruptcy – where primary judge found that the pleading failed to allege facts in support of essential elements of each claim – where leave to file amended pleading refused and proceeding dismissed – where decision is interlocutory in nature and leave to appeal required – where proposed grounds of appeal have no reasonable prospect of success – application for extension of time refused
Legislation:

Federal Court of Australia Act 1976 (Cth), s 24(1A)

Federal Court Rules 2011 (Cth), rr 35.13, 36.03, 36.05
Cases cited:

A v New South Wales (2007) 230 CLR 500

Commonwealth Life Assurance Society v Brain (1935) 53 CLR 343

Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397

Gomez v Carrafa [2022] FCA 1013

Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344

Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564

MZABP v Minister for Immigration & Border Protection [2016] FCAFC 110

Re Luck [2003] HCA 70; 203 ALR 1

Tu'uta Katoa v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] HCA 28; 403 ALR 604

Weatherall v Satellite Receiving Systems (Australia) Pty Ltd (1999) 92 FCR 101
Division: General Division
Registry: Victoria
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Number of paragraphs: 36
Date of hearing: 19 June 2023
Counsel for the applicant: The applicant appeared in person
Counsel for the respondent: B E Barr
Solicitors for the respondent: Zervos Lawyers

ORDERS

VID 589 of 2022
BETWEEN:

KALAISELVI GOMEZ

Applicant
AND:

MICHAEL CARRAFA

Respondent

ORDER MADE BY:

O'BRYAN J

DATE OF ORDER:

30 JUNE 2023

THE COURT ORDERS THAT:

1.The application for an extension of time in which to file an appeal be dismissed.

2.The applicant pay the respondent’s costs of the application.

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


REASONS FOR JUDGMENT

O’BRYAN J:

Introduction

  1. By application filed on 11 October 2022, the applicant seeks an extension of time under r 36.05 of the Federal Court Rules 2011 (Cth) in which to appeal a decision of this Court made on 23 August 2022 in Gomez v Carrafa [2022] FCA 1013 (PJ or primary judgment). By that decision, the primary judge refused the applicant leave to file an amended statement of claim (being the pleading exhibited to the applicant’s affidavit affirmed on 1 August 2022) and dismissed the proceeding.

  2. The applicant was self-represented before the primary judge and on this application. The application was supported by an affidavit affirmed by the…

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Gomez v Carrafa [2023] FCA 719
Case
[2023] FCA 719
Decision Date

CaseChat Overview and Summary

In the case of Gomez v Carrafa, the applicant, Mrs Gomez, sought an extension of time to appeal a decision of the Federal Court that dismissed her proceeding and refused her leave to file an amended statement of claim. Mrs Gomez alleged malicious prosecution and misfeasance in public office against the respondent, Mr Carrafa, who was her trustee in bankruptcy. The primary judge found that the pleading failed to allege facts in support of the essential elements of each claim and dismissed the proceeding. The applicant then sought an extension of time to appeal this decision.

The legal issues before the court were whether the decision of the primary judge was attended with sufficient doubt to justify reconsideration on appeal and whether the proposed grounds of appeal had any prospect of success. The court had to determine whether the interlocutory nature of the decision warranted leave to appeal and whether the proposed grounds of appeal were arguable and had a reasonable prospect of success.

The court found that the decision of the primary judge was not attended with sufficient doubt to justify reconsideration on appeal. The proposed grounds of appeal were not expressed clearly, framed as questions rather than contentions of error, and failed to identify any arguable error on the part of the primary judge. The court considered that the applicant's proposed grounds of appeal had no prospect of success. Therefore, the application for an extension of time was dismissed, and the applicant was ordered to pay the respondent's costs of the application.

In summary, the court denied the applicant's request for an extension of time to appeal the primary judge's decision, finding that the proposed grounds of appeal had no reasonable prospect of success and that the decision did not warrant reconsideration on appeal. The applicant was also ordered to pay the respondent's costs of the application.

Orders

Orders of the court

1. The application for an extension of time in which to file an appeal be dismissed.

2. The applicant pay the respondent’s costs of the application.

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

Background

Background to the litigation

For the reasons that follow, I consider that the grounds of appeal stated in the draft notice of appeal have no prospect of success. The application for an extension of time is therefore refused.Background facts The following facts are largely drawn from the primary judgment and are uncontroversial. The applicant was made the subject of a sequestration order in August 2014 and the respondent was appointed as her trustee in bankruptcy (PJ [2]). Mrs Gomez was discharged from her bankruptcy in September 2017 (PJ [2]). On 9 June 2020, the applicant commenced the proceeding below in the Supreme Court of Victoria (as proceeding S ECI 2020 02533) (PJ [2]). However, the proceeding was transferred to this Court pursuant to orders made on 13 October 2020 (PJ [2]). On 22 October 2020, the applicant filed in this Court a copy of the statement of claim from the Supreme Court proceeding. The applicant’s primary claim against the respondent was for malicious prosecution in respect of criminal charges that were laid against the applicant in about 2018 and subsequently withdrawn. Those charges were laid by the Commonwealth Director of Public Prosecutions (CDPP), with the Australian Financial Security Authority (AFSA) as informant. The applicant has been given numerous opportunities to re-plead. On 23 February 2021, Anastassiou J made orders which gave leave to the applicant to file and serve any proposed amended statement of claim by 24 March 2021 (PJ [3]). On 29 June 2021, Anastassiou J gave leave to file and serve any further amended statement of claim by 27 July 2021 and adjourned an application by the respondent to strike out the extant statement of claim (PJ [3]). On 28 July 2021, orders were made extending the time to file and serve the amended statement of claim to 2 August 2021 (PJ [4]). On 4 February 2022, various orders were made, including one requiring the respondent to file and serve any amended strike out application by 4 March 2022 (PJ [4]). On 5 July 2022, following a case management hearing, the primary judge struck out the applicant’s statement of claim and, relevantly, ordered that any further interlocutory application by the applicant for leave to amend be filed and served by no later than 2 August 2022 (PJ [5]-[6]). On 5 August 2022, the applicant filed an application for leave to amend in accordance with the form of the proposed amended statement of claim that was attached to her affidavit made on 1 August 2022 (PJ [7]). The respondent sought orders that all iterations of the statement of claim advanced by the applicant be struck out, that leave to further amend be refused and that the proceeding be dismissed with costs (PJ [8]). The applicant’s application for leave to amend, and the respondent’s application for striking out and dismissal, were heard by the primary judge on 23 August 2022. His Honour made orders on that day refusing the application for leave to amend and dismissing the proceeding.Reasons of the primary judge The primary judge described the claims sought to be made by the applicant in the proposed statement of claim, and the legal elements of the claims, in the following manner (at [16]-[30]):16I have carefully considered the proposed amended statement of claim that is now the subject of the application for leave to amend by Mrs Gomez. It seeks, on my analysis, to articulate four claims. The first and primary claim is for malicious prosecution, the central element of which is the preferring of charges by the Australian Financial Security Authority (AFSA) as initiated by the Commonwealth Director of Public Prosecutions (CDPP) on 18 July 2018 which proceeding was subsequently discontinued. Secondly, breach of statutory and fiduciary duties by the respondent in his capacity as trustee in bankruptcy. Thirdly, abuse of process. And, fourthly, that which is described as official misconduct, but which I have interpreted to mean misfeasance in public office.17The central contention that underpins each of these claims is that it was wrong for the prosecuting authority to assert that Mrs Gomez dealt unlawfully with otherwise divisible property in her bankrupt estate before the presentation of the creditor’s petition in that she concealed or otherwise dealt with such property contrary to sections 265(3), 265(4), 265(7), or 266(1), of the Bankruptcy Act 1966 (Cth). On her contention, such property was subject to what is known as an equity of exoneration in favour of her husband which extended over joint matrimonial assets, primarily real property, and with the consequence that there was no, or little, divisible property left for the benefit of the creditors of the bankrupt estate.18It follows from that broad contention that, if made out, she could not have wrongly dealt with otherwise divisible property. The reason is that an equity of exoneration, when it applies in bankruptcy, operates to charge the bankrupt’s interest in the property with an equity in favour of another to the extent of the equitable obligation to indemnify that other person: see, in particular, the Full Court decision in Parsons v McBain (2001) 109 FCR 120; [2001] FCA 376, particularly at [21], Black CJ, Kiefel and Finkelstein JJ. The property is not then divisible amongst creditors generally because it is charged and must be held by the trustee subject to it.19Mrs Gomez insists that she provided all information relevant to the claim to her trustee which he failed to disclose to AFSA, with the consequence that the prosecution was brought on a false or, at least, an incomplete factual basis. That contention of Mrs Gomez, as now sought to be framed involves two steps: (1) if the facts had been disclosed to AFSA by the respondent, it was clear that the prosecution would not have been commenced; and (2) once these facts were given by her to the CDPP the error was discovered and the prosecution was discontinued.20Central to those claims are four sub-contentions that the respondent acted firstly, without properly investigating the claimed equity of exoneration; secondly, by knowingly failing to provide available evidence to AFSA; thirdly, maliciously towards Mrs Gomez; and, fourthly, that, deliberately and dishonestly, the respondent was the actor in procuring a prosecution of her that was unjustified in the circumstances. 21A contention that looms large in the proposed pleading is that the respondent had in his possession certain court books that Mrs Gomez had provided to him in connection with a bankruptcy proceeding brought by the trustee in the Federal Circuit Court against her husband for the recovery of divisible property in proceeding MLG 2642 of 2014, but that the trustee, in turn, failed to provide that material to AFSA and only chose to provide court books that he had prepared for that proceeding which, one infers, were only favourable to the case that the prosecution sought to make out.22Mrs Gomez contends that the material in her books, together with other documents she had provided or was prepared to provide to the trustee, established that her husband did have the benefit of the equity of exoneration as claimed.23The elements essential to prove a case of malicious prosecution, which I take from A v New South Wales at [1], Gleeson CJ, Gummow, Kirby, Hayne, Heydon and Crennan JJ, are, firstly, that a proceeding of a criminal character was initiated against the plaintiff by the defendant; secondly, that the prosecution was terminated in favour of the plaintiff; thirdly, that the defendant in initiating or maintaining the prosecution acted with malice; and, fourthly, that the defendant acted without reasonable and proper cause.24Establishment of each of those elements is essential. As to the first, the prima facie difficulty is that the proceeding was initiated not by the respondent, but by the CDPP and named AFSA as the informant or complainant. However, as the authorities demonstrate, that is not a fatal difficulty if Mrs Gomez can identify a case in her pleading that the respondent was actively instrumental in causing the prosecution to be commenced or maintained.25As to that, it must be asserted and pleaded that the respondent is the person who played the active role in causing the proceeding to be commenced: see Commonwealth Life Assurance Society v Brain (1935) 53 CLR 343 at 379, Dixon J, and A v New South Wales at [34] where the plurality speak to the undertaking of an active role in instigating the prosecution.26Those elements may be difficult to establish on the evidence where AFSA and the CDPP were responsible for the prosecution, but that is not the issue before me. The question is whether the pleading identifies the material facts to ultimately make good that contention if the case proceeds to a trial. There is no issue in this case about the second element. As to the third element, malice, it must be pleaded explicitly, though it may be a matter of inference drawn from explicitly pleaded facts that the respondent acted with malice which is clear from A v New South Wales at [93].27The final element, that is, acting without reasonable and proper cause, requires proof of the absence of honest belief that the person charged is probably guilty of the offence: see A v New South Wales at [58]. Pausing there, that is an onus which falls on Mrs Gomez. That is not something that the respondent has to establish.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

By application filed on 11 October 2022, the applicant seeks an extension of time under r 36.05 of the Federal Court Rules 2011 (Cth) in which to appeal a decision of this Court made on 23 August 2022 in Gomez v Carrafa [2022] FCA 1013 (PJ or primary judgment). By that decision, the primary judge refused the applicant leave to file an amended statement of claim (being the pleading exhibited to the applicant’s affidavit affirmed on 1 August 2022) and dismissed the proceeding. The applicant was self-represented before the primary judge and on this application. The application was supported by an affidavit affirmed by the applicant on 8 October 2022 and a draft notice of appeal. Initially it proved difficult to find a convenient date for both the applicant and the respondent to attend a case management hearing. On 1 March 2023, to ensure that the applicant had an opportunity to respond to all issues that might be raised on the application, I made timetabling orders for the respondent to file outline submissions in opposition to the application and for the applicant to file responsive submissions. The applicant appeared at the hearing of the application for an extension of time and addressed the Court. The application for an extension of time was made on the basis that the applicant was entitled to appeal as of right from the primary judgment and that, by r 36.03 of the Federal Court Rules 2011 (Cth), the applicant had a period of 28 days in which to file her appeal. If that were correct, the applicant was required to file the appeal by 20 September 2022 and the application would have been about three weeks out of time. By affidavit affirmed 8 October 2022, the applicant deposed as follows:On the 29th Aug, 2022 I emailed the court requesting information regarding which documents I needed to file for appealing the decision in the matter VID690/2022 and what the procedure was.I was given a reply that I was needed to file Form 122. No further information was provided.Form 122 was titled 'Notice of Appeal'.The orders in the matter VI0690/2022 were dated the 23rd of Aug 2022.However, the orders were altered and stamped on the 2nd of Sep 2022.The reasons for the judgement were also only published on the 2nd of Sep 2022.Accordingly, I filed the Notice of Appeal (form 122) 28 days from the date the reasons were published, and the orders being altered and stamped.However, the registry rejected my application stating that further forms needed to be filed and the filed document does not comply with requirements.I would have filed all necessary forms within the 28 days if the registry had been more helpful with these formalities. As submitted by the respondent, the authorities establish that the decision of the primary judge was interlocutory in nature with the result that the applicant requires leave to appeal pursuant to s 24(1A) of the Federal Court of Australia Act 1976 (Cth): see Weatherall v Satellite Receiving Systems (Australia) Pty Ltd (1999) 92 FCR 101 at [2]-[9] per Burchett J; Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564 at [43] per French J, with whom Beaumont and Finkelstein JJ agreed; Re Luck [2003] HCA 70; 203 ALR 1 at [4]-[10] per McHugh ACJ, Gummow and Heydon JJ. However, where a proceeding is dismissed because it is frivolous or vexatious or because no reasonable cause of action is disclosed, leave will usually be granted if there is any doubt about the decision at first instance: Johnson Tiles at [43].

Ratio Decidendi

Legal Principle Established

The applicant did not identify any authorities that were being referred to in those paragraphs.Consideration In my view, the decision of the primary judge is not attended with sufficient doubt to justify its reconsideration on appeal, applying the test stated in Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-399 (Sheppard, Burchett and Heerey JJ). To the contrary, I consider that the applicant’s proposed grounds of appeal have no prospect of success. The proposed grounds of appeal are not expressed clearly and are framed as questions rather than contentions of error. However, looking to the substance of each proposed ground, the following observations can be made. The first proposed ground of appeal asks whether the primary judge applied the correct principles in his conclusion (at PJ [24] and [36]-[39]) that the malicious prosecution was “initiated not by the respondent”. The ground appears to challenge the primary judge’s statement of the first limb of the test articulated in A v New South Wales (2007) 230 CLR 500 at [1] (Gleeson CJ, Gummow, Kirby, Hayne, Heydon and Crennan JJ): whether proceedings were initiated by the respondent against the applicant. The applicant does not identify any arguable error in the primary judge’s statement of the applicable principles. Further, and more significantly, the applicant fails to appreciate that the primary judge acknowledged that a claim for malicious prosecution can be maintained against a person who does not initiate the proceeding but is actively instrumental in causing the prosecution to be commenced or maintained (PJ [24]). The second proposed ground of appeal asks whether the primary judge correctly applied the principles of the definition of “actively instrumental” in reaching the conclusion that the malicious prosecution was “initiated not by the respondent”. The ground appears to challenge the primary judge’s application of the principles relating to whether a party is “actively instrumental” in initiating or maintaining a prosecution. However, the applicant does not identify where the primary judge erred in his application of the principles. His Honour correctly observed that it must be pleaded that the respondent is the person who played the active role in causing the proceeding to be commenced, relying upon Commonwealth Life Assurance Society v Brain (1935) 53 CLR 343 at 379 per Dixon J and A v New South Wales at [34]. The third proposed ground of appeal asks whether the primary judge erred by not addressing “on the face of the record” the reply provided by the applicant to his question at PJ [32]. The difficulty with the ground is that the applicant has not identified the content of the asserted reply. At PJ [32], the primary judge recorded that he raised with the applicant at the hearing the failure to identify the information being referred to at paragraphs 18 to 23 of the statement of claim, and that the applicant failed to identify the information being relied on. The proposed ground of appeal fails to identify any arguable error on the part of the primary judge.