Jagatramka v Coeclerici Asia (Pte) Limited

[2015] FCCA 2446

FEDERAL CIRCUIT COURT OF AUSTRALIA

JAGATRAMKA  v COECLERICI ASIA (PTE) LIMITED [2015] FCCA 2446

Catchwords:
PRACTICE AND PROCEDURE – Application for leave to reopen case – whether evidence for which leave to reopen case is sought relates to an issue in the proceeding – whether ground raised in submissions but which is not contained in notice of grounds of application is an issue that is before the Court – application for leave to reopen dismissed.

Legislation:

Federal Circuit Court (Bankruptcy) Rules 2006 (Cth), r.3.02

Banque Commerciale SA v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279
Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22

Applicant: ARUN KUMAR JAGATRAMKA

Respondent: COECLERICI ASIA (PTE) LIMITED

File Number: SYG 691 of 2015

Judgment of: Judge Manousaridis

Hearing date: 4 September 2015

Delivered at: Sydney

Delivered on: 10 September 2015

REPRESENTATION

Counsel for the Applicant: Mr G M McDonald

Solicitors for the Applicant: Gillard Consulting Lawyers

Counsel for the Respondent: Mr C Colquhoun

Solicitors for the Respondent: Holman Fenwick Willan

ORDERS

1. The application filed by the respondent for leave to reopen its case is dismissed.

2. The applicant have liberty to file and serve by 17 September 2015 an application in the case for leave to amend his Further Amended Notice of Grounds of Application to include as an additional ground that the bankruptcy notice which is the subject of these proceedings was not served in the manner required by the orders for substituted service made by this Court on 13 January 2015 because the bankruptcy notice was posted by registered post rather than by ordinary post.

3. The costs of the application to reopen case are reserved.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 691 of 2015

ARUN KUMAR JAGATRAMKA

Applicant

And

COECLERICI ASIA (PTE) LIMITED

Respondent

REASONS FOR JUDGMENT

Introduction

1. The respondent (Coeclerici) applies for leave to reopen its case. That application arises in a proceeding in which the applicant, Mr Jagatramka, applies to set aside a bankruptcy notice issued against him.

2. To understand the grounds on which the application for leave to reopen is made, and on which it is opposed, it will be necessary to set out the procedural history of the matter.

Procedural background

1. On 30 October 2014, on the application of Coeclerici, a bankruptcy notice was issued demanding that Mr Jagatramka pay to Coeclerici $9,191,591.94. That amount purports to represent the Australian dollar equivalent of two amounts expressed in foreign currency for which Coeclerici obtained judgment against Mr Jagatramka in the Federal Court, together with interest less payments made. The two amounts are USD8,804,336.42, and GBP12,232.85. The amount claimed in the bankruptcy notice has been calculated by applying to the two amounts for which judgment was obtained what the bankruptcy notice states was the “opening telegraphic transfer rate of . . . Westpac Banking Corporation as at . . . 28 October 2014”.

2. By an application filed on 13 March 2015 Mr Jagatramka applied to set aside the bankruptcy notice. That application was supported by an affidavit sworn by Mr Gillard, the solicitor for Mr Jagatramka. It appears the affidavit was filed to fulfil the requirements of r.3.02 of the Federal Circuit Court (Bankruptcy) Rules 2006 (Cth) (Bankruptcy Rules). That rule requires that an application to set aside a bankruptcy notice must be accompanied by, among other things, an affidavit stating the grounds in support of the application and the “date when the bankruptcy notice was served on the applicant”.

3. In his affidavit, Mr Gillard says that orders for substituted service of the bankruptcy notice made by a Registrar of this Court on 13 January 2015 (Substituted Service Orders) “operate to deem the Bankruptcy Notice served on 20 February, 2015 subject to certain conditions of service as outlined in the”.[1] Mr Gillard did not complete this sentence, but I infer that Mr Gillard intended to complete the sentence by including the word “Orders” which Mr Gillard would have intended to be a reference to the Substituted Service Orders. Mr Gillard then deposed as follows:[2]

   Annexed hereto and marked “A” is a copy of the Bankruptcy Notice as served on the Applicant in accordance with orders of the Federal Circuit Court.

   [1] Affidavit of B J Gillard, 13.03.15, [5]

   [2] Affidavit of B J Gillard, 13.03.15, [5]

4. The only ground raised by Mr Gillard in his affidavit in support of Mr Jagatramka’s application to set aside the bankruptcy notice is Mr Jagatramka’s commencing and pursuing proceedings in the High Court at Calcutta, India, and that the claims Mr Jagatramka makes in those proceedings constitute “a counter-claim, set-off or cross demand relevant to the final judgment the Respondent purports to have relied upon in obtaining the bankruptcy Notice”.[3]

   [3] Affidavit of B J Gillard, 13.03.15, [12]

5. On 21 April 2015 a Registrar directed that by 12 May 2015 Mr Jagatramka file and serve a notice or affidavit stating the particular grounds relied upon for the exercise of the Court’s discretion to set aside the Bankruptcy Notice. A Notice of Grounds of Application was prepared on behalf of Mr Jagatramka on 12 May 2015 and, I will assume, served on Coeclerici on or around that date. That notice raised additional grounds to the ground Mr Gillard identified in his affidavit. Ground 3 stated that service of the bankruptcy notice “was not effected in accordance with the order for substituted service made and, it follows, that there has not been effective service of the Bankruptcy Notice (Ground 3)”.[4] The respect in which it was claimed that the bankruptcy notice was not served in the manner required by the Substituted Service Orders is that the “envelope referred to in Order 2(2) was not handed to a person apparently over the age of 16 years, apparently residing or working at [the relevant address] and there is otherwise no evidence the envelope was placed in the letter box at that address”.[5]

   [4] Applicant’s Notice of Grounds of Application, 12.05.15, [1.c.]

   [5] Applicant’s Notice of Grounds of Application, 12.05.15, [52]

6. Pursuant to an order I made on 21 May 2015, an Amended Notice of Grounds of Application dated 28 May 2015 was prepared on behalf of Mr Jagatramka and, I assume, served on Coeclerici on or around that date. The Amended Notice of Grounds of Application removed Ground 3. On 15 July 2015, there was lodged with the Court on behalf of Mr Jagatramka a document titled “Outline of Applicant’s Submissions”. At page 3 of that document there is the heading “Ground 3 (abandoned)” under which there is no text.[6] On 23 July 2015 Coeclerici lodged with the Court a document titled “Outline of Submissions of Coeclerici” which did not make any submissions in relation to Ground 3.

   [6] Applicant’s Outline of Submissions, 15.07.2015, page 3

7. At 4.56 pm on Friday, 24 July 2015, the solicitor for Mr Jagatramka lodged with this Court a document titled “Outline of Applicant’s Submissions on Grounds 1.1-1.6 and re-instatement of Ground 3”. Attached to that document was a document titled “Further Amended Notice of Grounds of Application” which contained a new Ground 3. It claimed that order 2(2) of the Substituted Service Orders was not satisfied because “[p]rior to placing the Documents in the letter box, the Respondent was required to determine that no person over the age of 16 years, apparently residing or working at the premises was in attendance and that personal delivery was not possible”.[7]

   [7] Further Amended Notice of Grounds of Application, 24.07.2015, [52]

8. At the hearing of the application to set aside the bankruptcy notice, which commenced on Monday 27 July 2015, counsel for Coeclerici made no complaint about the late amendment to Mr Jagatramka’s Further Amended Notice of Grounds of Application. He only asked that he be given an opportunity to put on evidence to deal with the point. I granted Mr Jagatramka leave to file the Further Amended Notice of Grounds of Application, and directed that all issues other than the issue raised by Ground 3 of that document be dealt with at the hearing on 27 July 2015. At the end of the hearing on that day, I made directions permitting Coeclerici to file additional evidence on issues relating to service, and adjourned the hearing to 20 August 2015.

9. Pursuant to the directions I made on 27 July 2015, Coeclerici filed four affidavits, all of which were read at the hearing on 20 August 2015. Only two of those affidavits are relevant to the issues with which these reasons are concerned. The first affidavit was that of the solicitor for Coeclerici, Mr Gamboni, made on 7 August 2015. Mr Gamboni deposed that he collated documents, including the bankruptcy notice and the orders of Foster J on which the bankruptcy notice was based, placed those documents in a registered post envelope, and then completed the address for delivery on the front of the envelope and the lodgement receipt on the back which he retained for his records.[8] The second affidavit was that of Ms La Rosa made on 7 August 2015. Ms La Rosa deposed that she mailed the envelope to which Mr Gamboni refers in his affidavit of 7 August 2015 by placing the envelope in the post box at a location in the central business district of Melbourne on 27 January 2015 at 5.06 pm.

   [8] Affidavit of S A Gamboni, 07.08.15, [2]-[4]

10. At the hearing on 20 August 2015 counsel for Mr Jagatramka raised an additional ground for challenging the service of the bankruptcy notice. That ground is stated in a document titled “Outline of Applicant’s Submissions in Reply” dated 20 August 2015. In paragraph 14 of that document, it is submitted that Coeclerici did not comply with the Substituted Service Orders because the bankruptcy notice was allegedly posted by registered post rather than by ordinary post.[9] Counsel for Coeclerici attempted to make submissions about the point although, as he said, he professed ignorance about how registered post operated “because this point was only – it wasn’t identified in any of the notices of grounds”, that the point “was only raised against me this morning”, and that he was “dealing with it as best I can”. [10] At the end of the hearing, I made directions permitting the parties to provide written submissions on, among other things, the meaning of “registered post” and “ordinary post”.

    [9] Outline of Applicant’s Submissions in Reply, 20.08.2015, [14]

    [10] T89.30-45 (20.08.15)

11. Mr Jagatramka filed submissions that went beyond the leave I granted the parties. Mr Jagatramka attached to his submissions evidence in the form of a document apparently published by Australia Post titled “Letter products and services guide”.[11] Mr Jagatramka’s submissions rely on this document as evidence of the scope of ordinary post services and registered post services provided by Australia Post. Coeclerici also filed submissions which dealt with the meaning of “registered post” and “ordinary post”. In addition, however, Coeclerici filed submissions in support of an application to adduce further evidence.

    [11] Outline of Applicant’s Further Submissions, 28.08.2015, Annexure B

12. The additional evidence Coeclerici seeks leave to adduce are documents generated by Australia Post in relation to the envelope Mr Gamboni and Ms La Rosa depose had been posted to the address specified in the Substituted Service Orders. The Australia Post documents are said to suggest that there was in place at the address to which Mr Gamboni addressed the envelope containing the bankruptcy notice a redirection notification which required all mail to be sent to the relevant post office, that the letter Ms La Rosa posted was redirected to the relevant post office, and that some person collected the envelope from the post office.

Principles for leave to reopen

1. The principles governing the exercise of the discretion to permit a party to reopen the case were summarised by Kenny J in Inspector-General in Bankruptcy v Bradshaw. Her Honour said:[12]

   The authorities indicate that, broadly speaking, there are four recognised classes of case in which a court may grant leave to re-open, although these classes overlap and are not exhaustive. These four classes are:

   (1) Fresh evidence;

   [12] [2006] FCA 22 at [24]

   (2)    Inadvertent error;

   (3)    Mistaken apprehension of the facts; and

   (4)    Mistaken apprehension of the law.

2. Her Honour also said:[13]

   [T]he overriding principle requires that the Court consider whether, taken as a whole, the justice of the case favours the grant of leave to re-open.

   [13] [2006] FCA 22 at [26]

Do the principles for leave to reopen apply in this case?

1. The principles stated by Kenny J in Bradshaw presuppose that the evidence for which leave is sought to be adduced at the hearing by way of reopening relates to an issue in the proceeding in question. That cannot be said of the evidence for which Coeclerici seeks leave to adduce. The evidence it seeks leave to adduce is directed to a ground raised by Mr Jagatramka in his submissions in reply at the hearing of 20 August 2015. The ground is that the bankruptcy notice was not served on Mr Jagatramka in accordance with the Substituted Service Orders because it was sent by registered post rather than by ordinary post (the Registered Post Ground). The Registered Post Ground, however, is not raised in the Further Amended Notice of Grounds of Application; and Mr Jagatramka has not applied for leave to amend the Further Amended Notice of Grounds of Application to include the ground as a ground on which he relies for setting aside the bankruptcy notice.

2. No pleadings were required to be filed in these proceedings. Rule 3.02 of the Bankruptcy Rules, however, requires that an application to set aside a bankruptcy notice must be accompanied by, among other things, an affidavit stating the grounds in support of the application and the “date when the bankruptcy notice was served on the applicant”. The purpose of this rule is to give the respondent notice of the grounds on which the bankruptcy notice is sought to be set aside. In the proceedings before me, Mr Jagatramka elected to state the grounds on which he seeks to set aside the bankruptcy notice in a document titled “Further Amended Notice of Grounds of Application”.[14]

   [14] Further Amended Notice of Grounds of Application, 24.07.2015

3. In my opinion, an affidavit under r.3.02 of the Bankruptcy Rules, or a document such as the Further Amended Notice of Grounds of Application, serves in a proceeding to set aside a bankruptcy notice the same function as a pleading. That being so, what Mason CJ and Gaudron J said in Banque Commerciale SA v Akhil Holdings Ltd[15] about the role of pleadings applies with equal force to the grounds raised in an affidavit filed under r.3.02 of the Bankruptcy Rules or in any other document an applicant is directed to file which states the grounds on which the applicant relies to set aside a bankruptcy notice. Mason CJ and Gaudron J said:[16]

   The function of pleadings is to state with sufficient clarity the case that must be met . . .  In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party’s right to this basic requirement of procedural fairness. Accordingly, the circumstances in which a case may be decided on a basis different from that disclosed by the pleadings are limited to those in which the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities. . .

   Ordinarily, the question whether the parties have chosen some issue different from that disclosed in the pleadings as the basis for the determination of their respective rights and liabilities is to be answered by inference from the way in which the trial was conducted. It may be that, in a clear case, mere acquiescence by one party in a course adopted by the other will be sufficient to ground such an inference. . .

   [15] [1990] HCA 11; (1990) 169 CLR 279

   [16] [1990] HCA 11 at [18]-[19]; (1990) 169 CLR 279 at pages 286-287

4. Consistent with this passage, it was open to Coeclerici to deal with the Registered Post Ground without insisting that Mr Jagatramka amend the Further Amended Notice of Grounds of Application. If Coeclerici had a reasonable opportunity to deal with the Registered Post Ground, and took advantage of that opportunity, it would be open to me to decide the Registered Post Ground without Mr Jagatramka obtaining leave to amend the Further Amended Notice of Grounds of Application to include the Registered Post Ground. It cannot reasonably be said, however, that counsel for Coeclerici had a reasonable opportunity to deal in any meaningful way with the Registered Post Ground, even though counsel attempted to do so. As counsel informed the Court on 20 August 2015, the point “was only raised against me this morning”, and counsel was “dealing with it as best I can”. [17]

   [17] T89.30-45 (20.08.15)

5. By seeking leave to reopen its case, Coeclerici is in effect offering to meet a ground that is not included in the Further Amended Notice of Grounds of Application. Mr Jagatramka, however, is opposed to Coeclerici doing that. Given my finding that Coeclerici has not been given a reasonable opportunity to deal with the Registered Post Ground, the inevitable consequence of Mr Jagatramka’s opposition to Coeclerici adducing evidence on that ground is that I cannot consider the Registered Post Ground as a ground on which Mr Jagatramka can rely in his application to set aside the bankruptcy notice. It follows that Coeclerici’s application for leave to reopen its case must fail.

6. Before I conclude, I will address two submissions Mr Gillard made in opposition to Coeclerici’s application for leave to reopen. The first is the submission that leave should not be given because Mr Gamboni “should have got it right” when he prepared his affidavit of 7 August 2015 deposing to the mailing of the bankruptcy notice and other documents. By that submission, I understand Mr Gillard intended to submit that Mr Gamboni should have included in that affidavit the documents that are annexed to the affidavit Coeclerici seeks leave to file. That submission cannot be accepted. At the time Mr Gamboni made his affidavit of 7 August 2015, the Registered Post Ground was not a ground on which Mr Jagatramka relied. It was not, therefore, reasonable to expect Mr Gamboni to prepare an affidavit in relation to a ground that had not been raised by Mr Jagatramka.

7. The second submission Mr Gillard made relates to prejudice. Mr Gillard submitted that Mr Jagatramka will suffer prejudice if I were to grant Coeclerici leave to file the additional affidavit of Mr Gamboni. The prejudice Mr Gillard submitted Mr Jagatramka will suffer is the potential unavailability or difficulty in obtaining evidence about the matters raised in Mr Gamboni’s affidavit. One asserted potential difficulty related to obtaining evidence from Mr Jagatramka’s son. I am not prepared in the absence of evidence to accept that Mr Jagatramka will suffer prejudice. Coeclerici notified Mr Jagatramka’s lawyers of its intention to apply for leave to reopen its case by no later than 1 September 2015. There is no evidence to suggest that Mr Gillard could not have obtained evidence that would support the submissions of prejudice he made before me on 4 September 2015. Nor did Mr Gillard apply for time to put on any such evidence.

Conclusions and disposition

1. Coeclerici’s application for leave to reopen its case will be dismissed. It will be dismissed because the issue to which the evidence would be directed, if leave to reopen were granted, namely, the Registered Post Ground, is not an issue that is before the Court.

1. I will, however, grant Mr Jagatramka leave to file an application in a case for leave to amend the Further Amended Notice of Grounds of Application if Mr Jagatramka wishes to rely on such ground. I propose to order that if Mr Jagatramka proposes to rely on such ground, he must file and serve an application in a case for leave by no later than 17 September 2015.

2. Subject to Mr Jagatramka making an application in a case to amend the Further Amended Notice of Grounds of Application, I propose to deliver judgment on the application to set aside the bankruptcy notice on 2 October 2015, and on the assumption that the Registered Post Ground is not an issue that arises on Mr Jagatramka’s application to set aside the bankruptcy notice. I will reserve the question of costs.

I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis

Associate: 

Date: 10 September 2015