Gounder v Superior Alignments Pty Ltd

Case [2019] FCA 2093

FEDERAL COURT OF AUSTRALIA

Gounder v Superior Alignments Pty Ltd [2019] FCA 2093

Appeal from: Superior Alignments Pty Ltd v Gounder [2019] FCCA 1607
File number: QUD 321 of 2019
Judge: DERRINGTON J
Date of judgment: 6 December 2019
Catchwords: PRACTICE AND PROCEDURE – application for extension of time in which to appeal from Federal Circuit Court of Australia – leave required to rely on new grounds and new evidence – no prospects of success – application dismissed
Legislation:

Bankruptcy Act 1966 (Cth)

Evidence Act 1995 (Cth)

Bankruptcy Regulations 1996 (Cth)
Cases cited:

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

Jackamarra v Krakouer (1998) 195 CLR 516

Jess v Scott (1986) 12 FCR 187

Parker v R [2002] FCAFC 133

Superior Alignments Pty Ltd v Gounder [2019] FCCA 1607

Totev v Sfar (2008) 167 FCR 193

VUAX v Minister for Immigration, Multicultural and Indigenous Affairs (2004) 238 FCR 588
Date of hearing: 6 December 2019
Registry: Queensland
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Category: Catchwords
Number of paragraphs: 57
Counsel for the Applicant: The applicant appeared in person
Solicitor for the Respondent: Mr B Long of Celtic Legal

ORDERS

QUD 321 of 2019
BETWEEN:

SHOBNA KUMARI GOUNDER

Applicant
AND:

SUPERIOR ALIGNMENTS PTY LTD

Respondent

JUDGE:

DERRINGTON J

DATE OF ORDER:

6 DECEMBER 2019

THE COURT ORDERS THAT:

1.The application be dismissed.

2.The respondent’s costs be costs in the applicant’s bankruptcy.

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


REASONS FOR JUDGMENT

DERRINGTON J:

Introduction

  1. The applicant is bankrupt.

  2. On 11 October 2018, a Registrar of the Federal Circuit Court of Australia (FCC) sequestrated her estate pursuant to s 52 of the Bankruptcy Act 1966 (Cth). The applicant applied in the FCC for review of the Registrar’s decision.

  3. On 12 April 2019, the FCC dismissed the application for review of the Registrar’s decision: Superior Alignments Pty Ltd v Gounder [2019] FCCA 1607.

  4. On 17 May 2019, the applicant filed an application for an extension of time in which to appeal the decision of the primary judge. That application is necessary because no appeal was filed in the time prescribed by r 36.03 of the Federal Court Rules 2011 (Cth).

    Background

  5. So far as can be ascertained from the judgment below and the limited material filed in this Court, the relevant background is as follows.

  6. The appellant’s underlying liability arose from invoices issued by the respondent (Superior Alignments) for repair work completed on a truck or trucks, in July and August 2017. The invoices went unpaid. Proceedings were brought in the Magistrates Courts of Queensland for the unpaid amounts. On 15 January 2018, judgment by default was given in those proceedings for $11,081.89. On 20 April 2018, further judgment was given for $383, in respect of the costs of an unsuccessful attempt to set the default judgment aside.  Further costs orders have been made in the Magistrates Court in addition…

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AGLC
Gounder v Superior Alignments Pty Ltd [2019] FCA 2093
Case
[2019] FCA 2093
Decision Date

CaseChat Overview and Summary

In the matter of Gounder v Superior Alignments Pty Ltd, the applicant sought an extension of time to appeal a decision of the Federal Circuit Court of Australia. The underlying dispute involved an unpaid debt for repair work on a truck, which led to a creditor's petition and subsequent bankruptcy order against the applicant. The key legal issues centred on whether the court should grant an extension of time to file an appeal and whether the applicant could rely on new grounds and new evidence that were not presented at the earlier hearing.

The court examined the principles governing extensions of time for appeals, emphasizing the importance of the finality of litigation and the prospects of success of any appeal. The applicant's reasons for the delay were considered, including personal health issues and a period overseas. However, the court noted that the delay was relatively short, and the weightiest factor was the merits of the appeal itself. The proposed grounds for the appeal were scrutinized, and the court found that they lacked merit and did not present a reasonable prospect of success.

Consequently, the court dismissed the application for an extension of time. The respondent's costs were ordered to be costs in the applicant's bankruptcy. This decision underscores the stringent requirements for obtaining extensions of time in appellate proceedings and the need for compelling justification and viable grounds for appeal.

Orders

Orders of the court

1. The application be dismissed.

2. The respondent’s costs be costs in the applicant’s bankruptcy.

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

Background

Background to the litigation

On 17 May 2019, the applicant filed an application for an extension of time in which to appeal the decision of the primary judge. That application is necessary because no appeal was filed in the time prescribed by r 36.03 of the Federal Court Rules 2011 (Cth). Background So far as can be ascertained from the judgment below and the limited material filed in this Court, the relevant background is as follows. The appellant’s underlying liability arose from invoices issued by the respondent (Superior Alignments) for repair work completed on a truck or trucks, in July and August 2017. The invoices went unpaid. Proceedings were brought in the Magistrates Courts of Queensland for the unpaid amounts. On 15 January 2018, judgment by default was given in those proceedings for $11,081.89. On 20 April 2018, further judgment was given for $383, in respect of the costs of an unsuccessful attempt to set the default judgment aside. Further costs orders have been made in the Magistrates Court in addition to those, although the amounts are not in evidence before this Court. A bankruptcy notice was issued by the respondent and served by post. The notice is also not in evidence before this Court, nor is the affidavit of service filed below. The judge below found that the notice was taken to be served on 7 May 2018, pursuant to reg 16.01(2)(a) of the Bankruptcy Regulations 1996 (Cth) and s 160(1) of the Evidence Act 1995 (Cth). The bankruptcy notice required compliance by 28 May 2018. It was not complied with.Proceedings before the Registrar in the FCC On 9 August 2018, Superior Alignments filed a creditor’s petition in the FCC. The petition is not in evidence before this Court. On 18 September 2018, the applicant filed documents in the FCC opposing the petition. Those documents are not in evidence before this Court. The grounds of opposition (as identified by the judge below at [9]) may be summarised as follows:(a)that there was no debt;(b)that the bankruptcy notice was not served;(c)that the creditor’s petition was served in insufficient time prior to the hearing of the petition;(d)that there was another application on foot to set aside the default judgment in the Magistrates Court which should be heard first;(e)that a cross-claim was advanced against the petitioning creditor for loss of income; and(f)that the bankruptcy notice was “stale”. On 11 October 2018, the petition came on for hearing before the Registrar after having been adjourned. That matter had previously been called on before the Registrar on 21 September 2018. It did not proceed on that day, although the evidence is sparse as to what occurred. Today Ms Gounder has informed me that the adjournment was to allow her time to obtain information in relation to the issues surrounding whether a sequestration order should be made on the petition. It is to be noted that the creditor’s petition had been served on 18 September, being a very short time prior to the day for its hearing. In any event, as I have said, the matter came back before the Registrar on 18 October. The sequestration order was then made on that day. The judgment below

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

In any event, as I have said, the matter came back before the Registrar on 18 October. The sequestration order was then made on that day. The judgment below The applicant applied in the FCC for review of the Registrar’s decision. The hearing before that Court was a hearing de novo, where all of the issues pertaining to the creditor’s petition are examined and the parties were entitled to adduce whatever evidence they wished. The primary judge found that:(a)there was a debt which remained owing;(b)the bankruptcy notice was served in accordance with the Bankruptcy Regulations;(c)the petition was served sufficiently, in light of the fact that the hearing before the Registrar was adjourned;(d)the further application to set aside the default judgment in the Magistrates Court had been dismissed since it was raised in opposition to the petition (there then having been four unsuccessful applications to set aside that default judgment, with costs ordered in favour of the petitioning creditor on each occasion);(e)the cross-claim advanced by the applicant that might reduce her indebtedness to the petitioning creditor was for a value of $7,500, however, even if that claim were successful, it would not reduce the indebtedness below the threshold prescribed in s 44(1)(a) of the Bankruptcy Act, and as such would not be sufficient to allow the court to exercise its discretion against the making of the sequestration order; and(f)it followed that the material filed on the application did not show sufficient cause that a sequestration order not be made, and as such the order made by the Registrar ought to remain standing. The proceedings in this Court The applicant applies for an extension of time in which to appeal. The application attaches a draft notice of appeal, the grounds of which are set out below. Procedural steps On 19 August 2019 at 10.01 am, this Court’s Registry informed the parties by email that a first case management hearing would be held on 23 August 2019. On 19 August 2019 at 10.32 am, the applicant emailed the Registry to indicate that, due to her husband’s illness and attending a significant number of required medical appointments that week, she would be unable to attend that hearing, and would not be able to attend any hearing until at least 4 October 2019. On 20 August 2019 at 2.23 pm, the applicant again emailed the Registry to indicate that she was extremely unwell and requesting the hearing be adjourned, and that she was unable to engage in formal discussions or meetings. The applicant then also filed an affidavit annexing a letter issued that day under the hand of a Dr Sharareh Memary, suggesting that the applicant was “not mentally and physically capable of carrying out any formal engagements and attending formal discussions and meetings”. That affidavit asked that the case management hearing “be adjourned to a date after my doctors have given me a clearance may be [sic] on 10/09/2019”. That date was one month earlier than the early October 2019 date suggested in the previous day’s email as the earliest possible date for the applicant to be able to attend any hearing.

Ratio Decidendi

Legal Principle Established

On 4 December 2019, two days before the hearing, the respondent filed its submissions. Later that day, the applicant emailed the Registry noting her objection to the unexplained late filing of the respondent’s submissions. That was not an issue which she further agitated at today’s hearing. Consideration of the application for extension of time in which to appeal The respondent opposes the application for an extension of time. Although not adverted to in any great detail by the parties, the relevant principles governing the grant of an extension of time in which to appeal to this Court are well established: see eg Jess v Scott (1986) 12 FCR 187; Parker v R [2002] FCAFC 133 at [6] referring to the cognate decision in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348-349. For an authoritative discussion, and a helpful contrast with the principles in relation to other procedural steps, see further Jackamarra v Krakouer (1998) 195 CLR 516. I will turn then to whether there is any explanation for the delay in filing the appeal. Explanation for the delay In her affidavit supporting the application for an extension of time, the applicant deposes in general terms about her delay in filing an appeal, including some period of time overseas (although there appears to be some confusion in the dates deposed to), and she also relied on the very serious illness of her husband. She further deposes to some delay in becoming aware of the judgment of the FCC, although the evidence filed by the respondent might suggest there is some confusion in that respect also. There is no evidence filed as to any prejudice suffered by the respondent as a result of the delay in bringing the present application. That is not surprising, as the delay is a mere matter of weeks, not months. The Court is mindful of the potential harm to the administration of justice — in the particular case, and in general — resulting from any undermining of the finality of litigation. However, given the length of the delay in the present case, it is clear (including from the matters dealt with by the parties in their written submissions) that the weightiest factor for consideration in the present case is the prospects of success of any appeal.Merits of any appeal The draft notice of appeal identifies the following grounds:1. The real owners of the truck should be pursued but me, the lessee of the truck was someone else and lessor incorrectly registered the truck under my name, as per the lease contracts per the lessor at no stage I should be legally allowed to own the truck, this was an error. The actual lessee was supposed to be the owner and thus they are responsible for the repair costs.2. Creditors Petition was served to me by [the other side’s solicitor] on 18/09/2019, only 2 days prior to the Creditor’s Petition hearing on 21/09/2019. This only happened as I had visited [their solicitors] to submit some documents is when I was served the Creditor’s Petition and notice of hearing on 21/09/2019. The rule states that if Creditors Petition was not served within less than 3 days of the hearing then the Creditors Petition must be dismissed, and a new Creditors Petition must be submitted.3. The repair costs that the mechanic is claiming didn’t occur. The truck was taken for repairs of radiator only however the mechanic raised an invoice for approximately $5,900 claiming to have fixed the head gaskit and when asked for evidence of repair work that was completed, he struggled to provide sufficient information about the parts used and so on. I was to be the overall manager managing this business not the owner. (errors in original)