I Pty Ltd and Phong - [2019] FamCAFC 247

FAMILY COURT OF AUSTRALIA

I PTY LTD & PHONG

[2019] FamCAFC 247

FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – Application for reinstatement of an appeal against the primary judge’s dismissal of an Application in a Case on the basis that it was an abuse of process – Where there is no adequate explanation for the applicant’s delay in filing the draft index to the appeal book – Where the appeal has no merit – Application for reinstatement dismissed – Applicant to pay the respondent’s costs in a fixed sum.

Corporations Act2001 (Cth)
Family Law Rules 2004 (Cth) rr 8.01, 22.13, 22.44

Bahonko v Sterjov (2008) 166 FCR 415; [2008] FCAFC 30
De Winter and De Winter (1979) FLC 90-605
Gallo v Dawson (1990) 93 ALR 479; [1990] HCA 30
Henry v Henry (1996) 185 CLR 571
Jackamarra v Krakouer (1998) 195 CLR 516; [1998] HCA 27

APPLICANT:

I Pty Ltd

RESPONDENT:

Mr Phong

FILE NUMBER:

SYC

2010

APPEAL NUMBER:

2019

DATE DELIVERED:

16 December 2019

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Aldridge J

HEARING DATE:

7 November 2019

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

2 August 2019

LOWER COURT MNC:

[2019] FamCA 549

REPRESENTATION

THE APPLICANT:

Mr M as alternate director for I Pty Ltd

COUNSEL FOR THE RESPONDENT:

Ms McNeil

Orders

The Application in an Appeal filed on 21 October 2019 for reinstatement of appeal EA 80 of 2019 be dismissed.
The applicant pay the respondent’s costs of the application fixed in the sum of $3,300.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym I Pty Ltd & Phong has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA
AT SYDNEY

Appeal Number: EA 80 of 2019
File Number: SYC 59 of 2010

I Pty Ltd

Applicant

and

Mr Phong

Respondent

REASONS FOR JUDGMENT

By an Application in an Appeal filed on 21 October 2019, I Pty Limited (“the applicant”) seeks reinstatement of its appeal against orders made by a judge of the Family Court of Australia on 2 August 2019.
On 22 August 2018, the applicant filed an Application in a Case in property settlement proceedings in the Family Court of Australia between Ms Munayallan and Mr Scott seeking orders against Mr Phong (“the respondent”). Mr Scott sold a property at Suburb E to the respondent and Ms Phong on which he reneged. A flood of litigation in the Supreme Court of New South Wales followed. On each occasion in the Supreme Court of New South Wales, Mr Scott was unsuccessful. In the Family Court of Australia, the applicant asserted that it had an interest in the Suburb E property which, in effect, overrode any interest held by the respondent and Ms Phong, in particular. No explanation has been given as to why the latter is not named as a party in the appeal.
On 2 August 2019, the primary judge dismissed the applicant’s Application in a Case filed on 2 August 2018 as an abuse of process because a cross-claim filed in the Supreme Court of New South Wales was almost identical to the relief sought in the Family Court of Australia (at [62]).
On 30 August 2019, the applicant filed an appeal against the orders made by the primary judge on 2 August 2019. Pursuant to r 22.13(2) of the Family Law Rules 2004 (Cth) (“the Rules”), a draft index to the appeal book was to be filed within 28 days of the applicant filing the Notice of Appeal, namely 27 September 2019. The applicant did not file a draft index to the appeal book by that date. Accordingly, pursuant to r 22.13(3) of the Rules, the appeal was deemed to be abandoned.
The applicant now seeks the reinstatement of its appeal pursuant to r 22.44 of the Rules.
The principles relating to an application for an extension of time, which have equal application to the reinstatement of an appeal, are set out in Gallo v Dawson (1990) 93 ALR 479 per McHugh J at 480-481:
…The grant of an extension of time under this rule is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262. This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 at 92; Jess v Scott (1986) 12 FCR 187 at 194-5; 70 ALR 185. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal: see Burns v Grigg [1967] VR 871 at 872; Hughes, at 263-4; Mitchelson v Mitchelson (1979) 24 ALR 522 at 524. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has “a vested right to retain the judgment” unless the application is granted: Vilenius v Heinegar (1962) 36 ALJR 200 at 201. It follows that, before the applicant can succeed in this application, there must be material upon which I can be satisfied that to refuse the application would constitute an injustice. As the Judicial Committee of the Privy Council pointed out in Ratnam v Cumarasamy [1965] 1 WLR 8 at 12; [1964] 3 All ER 933 at 935:
“The rules of court must prima facie be obeyed, and in order to justify a court in extending the time during which some step in procedure requires to be taken there must be some material upon which the court can exercise its discretion.”
The hearing of such an application, therefore, involves the exercise of discretion to enable the Court to do justice between the parties. The Court will exercise its discretion in favour of the applicant if it can be seen that strict compliance with the Rules will lead to an injustice. In undertaking that consideration, the Court will look to a number of factors including whether or not there is an appropriate explanation for the failure to file the draft index to the appeal book within the time stipulated by the Rules, any delay in bringing the application, whether any prejudice flowed from the failure to comply with the Rules and the merits of the appeal.
As the applicant has exercised its right of appeal in a timely way, ordinarily, that right of appeal should not be lost due to a failure to comply with procedural rules. However, if the appeal entirely lacks merit it would be futile to order the reinstatement of it (Jackamarra v Krakouer (1998) 195 CLR 516 per Brennan CJ and McHugh J at 517). That would also lead to an injustice upon the respondent to the appeal.
This application for reinstatement was conducted on behalf of the applicant by Mr M, who is described in a recent Australian Securities and Investments Commission (“ASIC”) search as an “alternate director” of the applicant company. The definition of “director” contained within the Dictionary to the Corporations Act2001 (Cth) defines a director of a company as including an “alternate director”. Accordingly, Mr M was entitled to be heard on the application for reinstatement pursuant to r 8.01(2) of the Rules.
Mr M sought to explain the delay for the filing of the draft index to the appeal book by giving evidence that Mr A Scott, who was one of the directors of the company, had passed away in September 2019 (Affidavit of Mr M filed on 21 October 2019, paragraph 3). Mr A Scott had been admitted to hospital in June 2019 following a “heart attack and later developed two infections whilst in hospital” (Affidavit of Mr M filed on 21 October 2019, paragraph 2). Mr M then said:
[Mr A Scott] was the main director of [I] Pty Ltd, he had detail knowledged of the case in hand. I required to [consult] to him, but couldn’t over the last month due to the above paragraphs 2 and 3.
(Affidavit of Mr M filed on 21 October 2019, paragraph 4) (As per the original)
That evidence does not explain why Mr M was able to prepare and lodge a Notice of Appeal on 30 August 2019 (it appears to be signed by him on behalf of the company) but was not able to file a more routine document such as the draft index to the appeal book on time.
Mr M conducted the proceedings before the primary judge on behalf of the company.
It follows that Mr M had sufficient familiarity with the nature of the proceedings to be able to conduct the proceedings before the primary judge and, therefore, to prepare the draft appeal index to the appeal book. Mr M’s explanation that he was reliant on instructions from Mr A Scott to prepare the draft index to the appeal book is not at all persuasive.
There is no adequate explanation for the applicant’s delay in filing the draft index to the appeal book.
I turn now to the merits of the appeal.
There are no identified grounds of appeal. Rather, the Notice of Appeal filed on 30 August 2019 consists of a series of very discursive and unfocused complaints directed to particular aspects of his Honour’s conduct to the proceedings and a request that certain paragraphs of his Honour’s reasons for judgment be varied, corrected or deleted so as to conform to the factual assertions made by the applicant. It is very difficult to discern error from those paragraphs of the Notice of Appeal.
I turn now to a brief consideration of his Honour’s reasons.
The primary judge recorded that in 2015, Mr Scott sold a property at Suburb E to the respondent and Ms Phong. A number of difficulties then arose because, after that sale, Mr Scott purported to sell the property to P Pty Ltd. In the Supreme Court of New South Wales, that sale was set aside and the sale to the respondent and Ms Phong was enforced. Those proceedings in the Supreme Court of New South Wales were not concluded until May 2019.
In July 2018, in the course of that litigation, the applicant filed a cross-claim in the Supreme Court of New South Wales against Mr Scott, Ms Munayallan, the respondent and Ms Phong seeking the following relief (at [39]):
1.Declaration that the proceedings of sale of [the Suburb E property] are the subject of a charge in favour of the Cross-Claimant;
2.Declaration that the said charge operates in priority to any claim upon such proceeds of sale by the Second and Third Cross-Defendant or by the Fourth Cross Defendant;
3.Declaration that the Fourth Cross Defendant has no interest in such monies;
4.Order that such proceeds of sale are held in Court be paid to the Cross Claimant;
…
The primary judge recorded that the respondent and Ms Phong successfully applied to the Supreme Court of New South Wales seeking a stay of the hearing of the cross-claim outlined above, pending the payment of $100,000 by the applicant for security for costs (at [40]). That payment was made in March 2019. Therefore, according to the reasons of the primary judge, the applicant’s cross-claim remained on foot at the time of the hearing before his Honour in the Family Court of Australia.
As mentioned above, on 22 August 2018, the applicant filed an Application in a Case in the Family Court of Australia, in the property proceedings between Ms Munayallan and Mr Scott, seeking the following orders (at [1]):
That as against [Mr Scott] … and [the respondent] and [Ms Phong] …:-
(1)A declaration that [I Pty Ltd] as and from September 2005 “had equity and [a] charge interest” in land at … (“the [Suburb E] property”).
(2)That the said “equity and charge” in the [Suburb E] property operates in priority to the [Mr Scott], [the respondent] and [Ms Phong] and [Ms Munayallan] …
(3)A declaration that [the respondent] and [Ms Phong] hold the [Suburb E] property on trust for [I Pty Ltd].
(4)That the transfer of the [Suburb E] property to [the respondent] and [Ms Phong] in May 2018 be set aside.
…
A number of procedural orders were also sought in relation to the making of declarations, lodging of caveats, seeking possession of the property and judgment against the respondent and Ms Phong in the sum of $2,910,000.
Not surprisingly, his Honour found at [62] that “[t]he cross claim filed in the Supreme Court [of New South Wales] by [I Pty Ltd] seeks effectively the same relief as the proposed application for intervention in the Family Court [of Australia] proceedings.”
In Henry v Henry (1996) 185 CLR 571 at 591, the High Court (Dawson, Gaudron, McHugh & Gummow JJ) said “[i]t is prima facie vexatious and oppressive … to commence a second or subsequent action” in a Court when an action is already pending in another Court with respect to the matter in issue.
The only part of the applicant’s Notice of Appeal filed on 30 August 2019 that appears to deal with his Honour’s seminal finding states:
18.Paragraph 61, the cross claim relief are different, the family court application seek over 20 other orders which are different. They are not the same.
The reference to “[p]aragraph 61” in the Notice of Appeal is probably intended to be a reference to [62] of the primary judge’s reasons for judgment.
It is obvious that the core relief sought in the cross-claim in the Supreme Court of New South Wales and the Application in a Case filed on 22 August 2018 in the Family Court of Australia is precisely the same.
This ground of appeal, if it be one, cannot succeed.
Mr M also referred to paragraph 14 of the Notice of Appeal filed on 30 August 2019 in his submissions and suggested that this also challenged the finding at [62] of the primary judge’s reasons for judgment. However, paragraph 14 of the Notice of Appeal is an allegation that Mr A Scott was not permitted by the primary judge to give evidence or to be cross-examined. Mr M was quite unable to identify what evidence Mr A Scott intended to give that would bear upon the nature of the relief sought in the Supreme Court of New South Wales and the Family Court of Australia and the finding of the primary judge that they were “effectively the same relief” (at 62]).
It follows that there is no challenge to the key finding of the primary judge that the relief sought in the two claims in two different Courts was the same. Thus, the Application in a Case which was filed on 22 August 2018 in the Family Court of Australia must be an abuse of process, as was found by the primary judge.
The other grounds of appeal, insofar as they can be understood, seem to be intended to correct a variety of facts which, even if established, will not be remotely material to the outcome (De Winter and De Winter (1979) FLC 90-605 at 78,092).
It is not the Court’s function to rummage through the Notice of Appeal and the evidence in order to find an arguable ground of appeal (Bahonko v Sterjov (2008) 166 FCR 415 at [3]).
I am quite satisfied that the appeal has no merit, whatsoever, and it would be to foist an injustice upon the respondent to reinstate the appeal.
When that finding is coupled with the inadequate explanation for the delay of the filing of the draft index to the appeal book, it can be seen that the applicant has failed to make out a case for reinstatement of the appeal. Thus, the application for reinstatement will be dismissed.

Costs

The applicant accepted that if the application for reinstatement was unsuccessful, it would be appropriate to make an order for costs in favour of the respondent fixed in the sum of $3,300. An order will be made to that effect.

I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 16 December 2019.

Associate:

Date: 16 December 2019