Jones v Thomson

Case [2017] FCA 125

FEDERAL COURT OF AUSTRALIA

Jones v Thomson [2017] FCA 125

Appeal from: Application for leave to appeal: Jones v Thomson [2016] FCCA 687
File number: NSD 382 of 2016
Judge: FARRELL J
Date of judgment: 20 February 2017
Catchwords: PRACTICE AND PROCEDURE – application for leave to appeal a judgment of the Federal Circuit Court of Australia dismissing an application for summary judgment – whether respondents failed to comply with r 2.06(2) of the Federal Circuit Court (Bankruptcy) Rules 2006 (Cth) – whether first Court date constituted the “date fixed for the hearing of the application”– whether substantial injustice would result from refusing leave to appeal –application for leave to appeal dismissed
Legislation:

Acts Interpretation Act 1901 (Cth)

Bankruptcy Act 1966 (Cth) s 139ZQ

Federal Circuit Court of Australia Act 1999 (Cth) Div 8, ss 15, 81(2)

Federal Court of Australia Act 1976 (Cth) ss 24(1A), 25(1AA)

Migration Act 1958 (Cth)

Federal Circuit Court (Bankruptcy) Rules 2006 (Cth) rr 1.03, 2.05, 2.06, 5.01

Federal Circuit Court (Bankruptcy) Rules 2016 (Cth) rr 1.04, 2.04, 2.05, 2.06

Federal Circuit Court Rules 2001 (Cth) rr 1.03, 1.05(2), 4.03, 13.03, 13.03B, 13.07, 10.01, 10.02, 10.03, 44.11, 44.12

Federal Court Rules 2011 (Cth)

Cases cited:

Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397; [1991] FCAFC 844

House v The King (1936) 55 CLR 499; [1936] HCA 40

Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 ; [2000] FCA 1572

Jones v Thomson [2015] FCCA 896

Jones v Thomson [2016] FCCA 687

Jones v Thomson (No 2) [2016] FCCA 931

Jones (Bankrupt), in the matter of Jones v Porter (Trustee) [2015] FCA 644

Rothnie v St John of God Hospital (Subiaco) [2014] FCCA 159

Samsung Electronics Company Ltd v Apple Inc (2011) 217 FCR 238; [2011] FCAFC 156

Shrestha v Migration Review Tribunal (2015) 229 FCR 301; [2015] FCAFC 87
Date of hearing: Heard on the papers
Date of last submissions: 12 October 2016
Registry: New South Wales
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Category: Catchwords
Number of paragraphs: 83
Counsel for the Applicant: The applicant appeared in person
Solicitor for the Respondents: Mr J Bamford of Bamford Lawyers

ORDERS

NSD 382 of 2016
BETWEEN:

RICHARD JONES

Applicant
AND:

FRASER THOMSON

First Respondent

JASON PORTER

Second Respondent

PAUL GERARD WESTON

Third Respondent

JUDGE:

FARRELL J

DATE OF ORDER:

20 FEBRUARY 2017

THE COURT ORDERS THAT:

1.Leave to appeal is refused and the application is dismissed.

2.The applicant must pay the respondents’ costs as agreed or taxed.

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


REASONS FOR JUDGMENT

APPLICATION

  1. The applicant, Mr Jones, seeks leave to appeal a judgment of the Federal Circuit Court of Australia (FCCA) delivered on 3 March 2016: see Jones v Thomson [2016] FCCA 687. The primary judge dismissed Mr Jones’ application for summary judgment and orders setting aside a…

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Jones v Thomson [2017] FCA 125
Case
[2017] FCA 125
Decision Date

CaseChat Overview and Summary

In the case of Jones v Thomson, the applicant, Mr Jones, sought leave to appeal a decision of the Federal Circuit Court of Australia (FCCA) that dismissed his application for summary judgment. Mr Jones, a discharged bankrupt, sought to set aside a s 139ZQ notice issued by the Official Receiver regarding a property at Waterfall Way, Dorrigo, and to make various other claims against the respondents, including the Official Receiver and the trustee of his bankrupt estate. The primary judge dismissed Mr Jones’ application for summary judgment, finding that the respondents had not failed to comply with r 2.06(2) of the Federal Circuit Court (Bankruptcy) Rules 2006 (Cth) as Mr Jones contended. The primary judge also found that, although the respondents were in breach of timetabling orders made by the Court, this breach did not warrant the exercise of the discretion under r 13.03B(2) of the FCCA Rules to grant summary judgment. Mr Jones appealed to the Federal Court of Australia seeking leave to appeal the primary judge’s decision.

The legal issues before the Federal Court of Australia included whether the respondents failed to comply with r 2.06(2) of the Federal Circuit Court (Bankruptcy) Rules 2006 (Cth) by not filing and serving a notice of appearance or notice of grounds of opposition at least three days before the hearing of the substantive application on 29 September 2014, and whether the first Court date constituted the “date fixed for the hearing of the application” within the meaning of that rule. The Court was also required to determine whether substantial injustice would result from refusing leave to appeal.

The Federal Court of Australia found that the failure to file either a notice of appearance or a notice of opposition or affidavit three days prior to 29 September 2014 was not a failure to comply with the Bankruptcy Rules because that date was not the “date fixed for the hearing of the matter” within the meaning of r 2.06(2) of the Bankruptcy Rules. The Court found that the first Court date was not the date fixed for the hearing of the matter because the Bankruptcy Rules and FCCA Rules contemplated that the first court date will not be used finally to determine a proceeding. The Court found that the primary judge was correct to conclude that the failure to file and serve a notice of appearance or notice of opposition or affidavit three days prior to 29 September 2014 did not constitute a failure to comply with the Bankruptcy Rules. The Court also found that the trustees’ breach of timetabling orders made by the primary judge did not warrant the exercise of the discretion under r 13.03B(2) of the FCCA Rules to grant summary judgment as there was no evidence of nefarious conduct on the part of the solicitors for the trustees.

Accordingly, the Court dismissed the application for leave to appeal and ordered that the applicant pay the respondents’ costs as agreed or taxed.

Orders

Orders of the court

1. Leave to appeal is refused and the application is dismissed.

2. The applicant must pay the respondents’ costs as agreed or taxed.

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

Background

Background to the litigation

As the primary judge’s decision was interlocutory, the applicant requires leave to appeal to this Court: s 24(1A) Federal Court of Australia Act 1976 (Cth). For the reasons which follow, leave is refused.BACKGROUND Mr Jones is a discharged bankrupt although his estate is not fully administered. The trustees were appointed as the trustees of his bankrupt estate. It appears that Mr Porter is now the sole trustee. The first respondent (Mr Thomson) is an officer of the Official Receiver. The s 139ZQ notice had been issued to Mr Jones’ former de facto partner (Ms Hombsch) in relation to a property at Waterfall Way, Dorrigo. Mr Jones transferred that property to Ms Hombsch before his bankruptcy. Ms Hombsch complied with the s 139ZQ notice by executing a transfer of the property in favour of the trustees. Substantive application On 8 September 2014, Mr Jones filed the substantive application and an affidavit sworn by him in support of it in the FCCA. The substantive application was in the format of a “Form 2 – Application” set out in Schedule 1 of the 2006 Bankruptcy Rules (Form 2). Mr Jones completed a Form 2 as indicated in bold below:[Name of Applicant(s)Applicant[s] Richard Jones[Name of Respondent(s)]Respondent[s] Fraser Thomson (for the Official Receiver)Jason Porter (Trustee)NOTICE TO RESPONDENT[Complete this section if there is a respondent]TO the respondents: [addresses inserted]This application has been set down for the time and place stated below. If you or your legal representative do not attend the Court at that time, the application may be dealt with and judgment may be given, or an order made, in your absence. As soon after the time mentioned as the business of the Court will allow, any of the following may happen:(a) the application may be heard;(b) directions may be given for the further conduct of the proceeding;(c) any application for interim orders may be heard.…Before any attendance at Court you must file a notice of appearance in the Registry.Time and date for hearing: [to be entered by Registry unless fixed by the Court] 10 am on 29 Sept 2014Place [address of Court] [stamped on form with the address of John Maddison Tower]Date: 8/9/14 [seal of Court and signature]______________________________________________________________[signed, District Registrar/Deputy District Registrar/Authorised Officer]*Registrar/*Deputy District Registrar/*Authorised OfficerA.FINAL ORDERS SOUGHT BY THE APPLICANTOn the grounds raised in the supporting affidavit or statement of claim,1.Set aside the 139ZQ Notice –Waterfall way, Dorrigo (Ss139ZS)2.That the Trustee breached the Privacy Act3.That the Trustee has a conflict of interest and should not be using Bamford Lawyers4.That the Trustee acted unlawfully and oppressively5.That the Trustee acted unlawfully in breach of S170(2) of the Bankruptcy Act6.That the Official Receiver acted unlawfully in failing to provide to the plaintiff (Applicant) a copy of the 139ZQ Notice (Ss139ZQ(5))B The applicant seeks the following Interim Orders1.That the Applicant be granted leave to appear by phone for Directions hearings2.That the Official Receiver serve on the Applicant within 14 days all of the evidence tendered by the Trustee on which he relies

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

On 3 November 2014, Registrar Segal made orders that the substantive application and the interim application filed on 28 October 2014 be adjourned until 10 am on 1 December 2014.Application for summary judgment On 28 November 2014, Mr Jones filed the application for summary judgment. The application was made under Division 8 and s 15 of the Federal Circuit Court of Australia Act 1999 (Cth), r 1.03 of the 2006 Bankruptcy Rules and rr 13.03 and 13.07 of the Federal Circuit Court Rules 2001 (Cth) (FCCA Rules). Mr Jones sought orders setting aside the s 139ZQ notice and other relief on the basis of an alleged failure by the respondents to comply with the 2006 Bankruptcy Rules (in particular r 2.06(2)) in relation to the substantive application. In an affidavit in support of his application for summary judgment dated 28 November 2014, Mr Jones deposed that (as written):…3.The First Respondents did not file and serve at least 3 days before the hearing on 29th September, 2014 any Notice of Appearance or Notice of Grounds of Opposition as required by the Federal Bankruptcy Court Rules and Federal Circuit Rules.4. The hearing of 29th September was adjourned until November, 3rd, 2014.5.The court record shows that First Respondents did not file any Notice of Appearance until 28th October, 2014, 3 days before the hearing was to be resumed. The Notice shows that the First Respondents are legally represented by Bamford Lawyers.6.As at the date of this deposition, the First Respondents have not filed nor served any Notice of Grounds of Opposition or supporting affidavit as required by the Federal Court Bankruptcy Rules (FCBR) 2.06 and alternately Federal Circuit Court Rules (FCCR) 29.07.7.The Applicant drew to the court’s attention at the resumed hearing on the 3rd November, 2014 that the First Respondents had not complied with the Rules (FCBR 2.06 and FCCR 29.07). The hearing was adjourned until December 1st, 2014 for further directions.8.The First Respondents in their covering letter of 29th October, 2014, enclosing an affidavit of Chris Bryett, undertook to serve additional affidavits in support of the interim application filed on October 28th, 2014 (Annexure 4RCJD 01). The court record as at the date of making this affidavit, shows that no further affidavits have been filed and none have been served.9.The court record does not show any Notice of Appearance or Submitting Appearance by the Second Respondent. At the hearing on September, 29th before the Registrar, Mr Bamford for the First Respondent, gave oral notice of submitting appearance by the Second Respondent and admitted he had not filed an appearance for the First Respondent.10.Mr Bamford stated at the hearing on 3rd November, 2014 “It would be a complete waste of money and time to come back twice” and he has appeared twice and most likely 3 times by the 1st December, 2014 without complying with the rules to file and serve a Notice of grounds of Opposition, wasting both the court’s time, my time and his client’s money.

Ratio Decidendi

Legal Principle Established

The primary judge referred (at J[9]) to the decision of the Full Court of the Federal Court in Shrestha v Migration Review Tribunal (2015) 229 FCR 301; [2015] FCAFC 87 at [61], saying that in that case the Full Court had regard to the FCCA Rules, particularly rr 10.01 and 10.03, and noted that r 10.03 contemplated that the first court date will not be used finally to determine a proceeding. The primary judge went on to find, at J[10]-[11] (as written):In my view, in those circumstances, what occurred on 29 September 2014 was not a date fixed for the hearing of the matter within the meaning of r.2.06(2) of the Bankruptcy Rules. That is so even though the application form itself suggests that the application may be heard or that directions may be given for further conduct of the hearing or that any application for interim orders may be heard. Those matters accurately reflect that there is a power in the Court to do any of those things, but no more.The fact that there is a power does not suggest that the first Court date falls within the description of r.2.06 of the Bankruptcy Rules of the date fixed for the hearing. For those reasons, I find that the failure to file either a notice of appearance or a notice of opposition or affidavit three days prior to 29 September 2014 was not a failure to comply with the Rules, and so in that respect, the respondents were not in default. In respect of Mr Jones’ contention that the trustees had been in breach of timetabling orders made by Registrar Segal on 1 December 2014 (see [14] above), the primary judge found that the reference to “further evidence” or “any evidence” in the those orders was “simply focused on giving a party liberty to do a certain matter within a particular time” and that a failure to file further evidence at all was not a failure to comply with the Registrar’s directions: J[12]-[13]. The primary judge found that the trustees were in breach of the orders he made on 20 November 2015, even though they were to the same effect as the orders made by Registrar Segal, because the trustees filed affidavits on or about 18 and 25 February 2016, which was “well outside” the time allowed: see [16] above. The primary judge next considered whether that delay would warrant the exercise of the discretion conferred by r 13.03B(2) of the FCCA Rules on the basis suggested by Mr Jones that there was “an intent to avoid the final determination of this matter in a timely and efficient manner”. The primary judge found that, although the failure to comply with directions is “ordinarily deplorable”, the “bulk of the delay” had been caused by the decision of the judge in [2015] FCCA 896 to dismiss the application for summary judgment in circumstances where that was not expected and the subsequent litigation history referred to at [15] above. The primary judge found that these were “matters outside the conduct of the matter by the respondents”: J[14]-[18]. Further, from all the material submitted by Mr Jones, the primary judge did not see that there had been nefarious conduct on the part of the solicitors for the trustees sufficient to warrant summary judgment: J[19].