Maher v Commonwealth Bank of Australia & Ors

[2007] HCATrans 197

[2007] HCATrans 197

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M105 of 2006

B e t w e e n -

DENNIS MAHER

Applicant

and

COMMONWEALTH BANK OF AUSTRALIA

First Respondent

GREG FIRTH

Second Respondent

GRAY & JOHNSON (A FIRM)

Third Respondent

Summons for reinstatement

CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 4 MAY 2007, AT 11.34 AM

Copyright in the High Court of Australia

MR D. MAHER appeared in person.

MR R.D. SHEPHERD:  If the Court pleases, I appear on behalf of the respondents.  (instructed by Commonwealth Bank Group Legal Services)

HER HONOUR:   Yes, Mr Maher.

MR MAHER:   It is an application before your Honour for extension of time in which to comply with submitting submissions.  Just a brief history, your Honour.  It is appealing against costs order of setting aside a bankruptcy notice, that if it had not been issued I would not be here.  The bankruptcy notice was set aside.  I have been reliably informed that costs should follow the event but they did not, so I am appealing that decision. 

HER HONOUR:   What sort of an extension of time are you seeking, Mr Maher?

MR MAHER:   Not a lot, 28 days, something like that.

HER HONOUR:   Twenty-eight days.Yes, very well, I will hear from Mr Shepherd.

MR SHEPHERD: The application is opposed, your Honour. In this matter, your Honour, the primary contention of the respondents is that there is no reason in this application why the Court should extend the time which is prescribed by rule 41.10.3 of the Rules as there is on the material before the Court no reason to doubt the correctness of the decision of the court below and, having regard to the matters in section 35A of the Judiciary Act 1903 (Cth) and all other relevant matters, an appeal against it would have no prospect of success.

In that regard, your Honour, before the Court is the applicant’s summons filed 4 September, affidavit of the applicant 4 September 2006 and an affidavit which we have been served with of 3 May 2007 and the affidavit which is filed for the respondents of Michelle Kumarich of 24 April 2007 in the exhibits. 

At present, as your Honour is aware, the application for special leave to appeal is deemed to be abandoned.  The applicant failed to file his written case and, effectively, now if he applies for an order or direction under rule 41.10.4, as I would understand it, if the application is not deemed to be abandoned, then consequently he would then seek under rule 4.02 enlargement of the time for filing his written case. 

In relation to his applications, the respondents contend that the principles considered in the judgment of his Honour Justice McHugh, as he then was, in Gallo v Dawson (1990) 93 ALR 479 should be considered, although the discretion to make the orders sought is unfettered. I have copies of the judgment for your Honour and for the applicant if that would assist and if I may hand that up to your Honour.

HER HONOUR:   Thank you.

MR SHEPHERD:   In that case, your Honour, the application was an application by an unrepresented litigant under Order 60 rule 6 of the High Court Rules to enlarge the time appointed by the Rules for lodging a notice of appeal “upon such terms, if any, as the justice of the case may require”.  The right to appeal in that matter was as of right.  His Honour considered at page 480, lines 30 to 45 as follows:

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 –

In this particular matter, in relation to the matters that his Honour Justice McHugh considered relevant in respect of that application, the history in this matter is of the Federal Magistrates Court proceeding being an application by the applicant to set aside a bankruptcy notice.  Whilst that application was pending in the Federal Magistrates Court he made several applications to adjourn his application and in respect of these applications costs were reserved.

After these applications had been made he succeeded in another application in the Federal Court proceeding under P/VID 2004 of 2001.  In respect of that, I refer your Honour to paragraph 7 of the affidavit of Michelle Kumarich sworn 24 April 2007 the effect of which was that the bankruptcy notice could not be maintained as the order of the Deputy Registrar Bardsley, upon which it was based, was set aside.  As the learned federal magistrate found, in the event, his application to set aside the bankruptcy notice was somewhat strengthened on a ground not previously raised formally in the material before the Federal Magistrates Court. 

The respondents, for whom I act, at the first available opportunity consented to the bankruptcy notice being set aside and the question of the costs of the application and reserved costs fell for determination by the learned Federal Magistrate McInnis.  The orders ultimately made concerned only reserved costs of the adjournments and the orders were for $2,000 comprising only part of the costs of the respondents. 

The applicant, before the learned federal magistrate and on appeal to the court below, contended that the bankruptcy notice should never have been issued and as a result he should not have to pay any costs in respect of the application that set it aside.  He also contended that as the successful party in that the notice was set aside by the court, he should not have had costs awarded against him.  He further contended that the conduct of the respondent disentitled him to costs. 

That very submission was considered by the court below, the judgment of Justice Marshall, Maher v The Commonwealth Bank of Australia [2006] FCA 892 of 11 July 2006 at paragraph 12 which is exhibit MSK4, clearly establishes that the argument which, in our complaints, was not properly considered was in fact argued and considered by his Honour. His Honour, at paragraph 12 on page 3 of his judgment, said, under the heading, “Mr Maher’s contentions”:

Mr Maher contends that as the bankruptcy notice should never have been issued he should not have to pay any costs in respect of his application to set it aside.  He also submits that as the successful party, in that the notice was set aside by Court, he should not have costs awarded against him.  He further contends that the conduct of the respondents disentitles them to costs.

So he made the submission and it was considered by the court below.  The effect of the refusal of the application for extension of time in this Court is that the order for $2,000 is not set aside and the special leave application does not continue because it is deemed to be abandoned.  That is the consequence even if the application for extension is granted as the applicant has not obtained a stay upon payment of the order. 

Returning to the matters Justice McHugh considered in Gallo, his Honour at page 480, lines 43 to 50 and 481 at lines 1 to 7 said:

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.

I will take your Honour to the matters which, in my respectful submission, establish that the prospects of the applicant succeeding in the application for special leave to appeal are such that this application should not succeed.  His Honour further said:

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 it discretion.”

In my submission, in relation to the prospects in this matter of the applicant succeeding in the application for special leave, the following matters are relevant.  First, there is no reason, in my submission, to find in the events which happened that there is arguable error when the costs ordered were only part of the costs reserved as a result of the applicant seeking adjournments of his own application.  The ultimate success of the application to set aside the bankruptcy notice is but one matter to consider and it was, as I have contended, considered both by the learned federal magistrate and also the court below. 

The order about which the applicant complains is a small order for costs.  The applicant, in my submission, has not identified any error in the judgment of the learned federal magistrate.  His Honour considered the matters relied upon by the applicant and exercised a discretion.  In relation to that, I refer your Honour to exhibit 3 which is the judgment of the learned federal magistrate, page 2, paragraph 2 where his Honour said:

The applicant’s representative has sought to argue that the bankruptcy notice should never have been issued in the first place and as a result of recent proceedings in the Federal Court it should have been clear to the creditors that this notice should not have been issued.  It is difficult in matters of this kind to determine whether or

not a concession should be made at an early point by a creditor in relation to a Bankruptcy Notice where I am satisfied the precise point ultimately determined which has persuaded the creditor to consent to the order this day was not determined until recently

It is also apparent, your Honour, that a solicitor represented the applicant at the time of the application for costs. His solicitor’s submissions, which are in the main now repeated in this application, were heard and considered. The applicant, in my submission, has not identified any error. When one considers the matters in section 35A of the Judiciary Act, the matters upon which the respondents rely, in my respectful submission, auger against the special leave application having any prospects of success and establish there would be no injustice accordingly to the applicant in the event that the application is refused. 

HER HONOUR:   In the event that the application is granted, you would be seeking costs I would expect, Mr Shepherd.

MR SHEPHERD:   Yes, I would be, your Honour.  In the present application, in my respectful submission, the other aspect which appears is that the applicant has not satisfactorily explained his delay and why it was that he did not comply with the orders.  If I am wrong about that, in my respectful submission, that is but one matter to consider and that the important issue in this case is, is there any basis upon which the Court should find that there is any prospect of success in the special leave application.  They are the submissions I wish to make. 

HER HONOUR:   Thank you, Mr Shepherd, you have been most helpful.  Yes, Mr Maher.

MR MAHER:   Could I respond, your Honour?

HER HONOUR:   Yes, of course.  You realise the importance of the points made by Mr Shepherd in the context of it being most important that, if the extension is granted, you comply with the time limits which will then apply.

MR MAHER:   Yes, your Honour, we are happy with that. 

HER HONOUR:   May I just also ask you this.  In relation to Mr Shepherd’s suggestion that you have not properly explained your delay, I have of course read your affidavit and, as I understand it and I want you to confirm this understanding is correct, you are awaiting some advice from the firm of solicitors which you have approached in terms of whether or not they will act for you in this proceeding, is that the correct understanding?

MR MAHER:   They will act in this proceeding, your Honour, if the extension is granted and they have the time to finalise reading the paperwork that has been delivered to them and get advice from counsel.  The reason for the original delay when his Honour Justice Marshall gave a decision and to the filing of the original summons on 4 September was that I was trying to get an opinion then.  It did not happen and that is why it is not really so much out of time – I guess, theoretically, it is out of time, but it was done as quickly as I could do it then.  It is not as though I am bringing it on now, it was done within weeks after Justice Marshall’s decision was handed down. 

Mr Shepherd, with all due respects, has perhaps made a little bit light of and a little bit colourful in the way it has been portrayed to the Court.  He says that $2,000 is immaterial and it is not a big deal, but that is not the issue.  They issued a bankruptcy notice.  Had I not defended it, I would be sequestrated right now and it would have been a very large amount of money.  He says it was done by consent and that they did it as quickly as possible; it still dragged on until the final day of the hearing. 

When it was set aside in the Federal Court, or directions were given that it would be set aside in the Federal Court to the Federal Magistrates Court where the matter was brought, they could have thrown their hands up and said, “Okay, it’s going to be set aside, we’ll quit now”.  But no, we had to go along again with another set of affidavits, another appearance in court, to argue further costs.  That extra day in court probably comes very close to that $2,000 and that could have been avoided. 

It was set aside because it was wrong and Mr Shepherd or counsel brought up, it is the conduct of the creditor in issuing a petition that was bad, that was invalid from the day of the start and that places an enormous consequence on a litigant in person.  Then he mentions injustice of the parties.  There is no injustice to them.  They stood to make a lot of money on a bad bankruptcy notice and so injustice is to the person who goes bankrupt on what?  On a bad bankruptcy notice which they took before ITSA, they took before the Federal Court, they swore that this was good.  This is not good.  It was set aside because it was bad.  So the issued it with ITSA, Commonwealth department, and said, “This is right.  We are saying this is right”.  So I am just saying it is wrong, completely wrong.

I believe the people that have taken this and referred to in the affidavit, too, said that costs should follow the event on a bad bankruptcy notice.  If there were adjournments it was only so I could obtain the actual facts.  You just cannot turn up the terminal and expect this person to know everything, it is just not possible, but I did turn up in person before the Federal Court and that is where it was actually found to be wrong and set

aside then.  They knew all this because they knew the order that it was based on was incorrect. 

They are solicitors, they hold a duty to this Court.  It is just not the solicitors, it is the creditor, they knew it was wrong.  So I would ask that you grant this application, your Honour, under the jurisdiction of this Court.  I further ask that you make an order of no orders as to costs.  I am appearing for myself.  I have outlined the basis of what will be argued.  I want it to be put in a proper form.  It seems that whatever I put in there gets objected to, it is not right, it is not this and that is why I have engaged this legal representation to do such a thing and I would strongly oppose any cost to it.

HER HONOUR:   Thank you, Mr Maher.  On 18 March 2005 the applicant applied to the Federal Magistrates Court of Australia for orders that a bankruptcy notice served on him be set aside.  After a number of adjournments primarily related to the applicant seeking pro bono counsel, consent orders were filed in May.  The respondents then sought costs in relation to those adjournments.  Federal Magistrate McInnis described each adjournment and the reasons for them and concluded:

In all the circumstances I am satisfied that it is not appropriate to award costs for 11 April 2005, part only of the costs sought for 30 May 2005 and I am prepared to accept that costs should be awarded for 20 July 2005.  On the material before me I am satisfied that an appropriate amount for the costs . . . making a total of $2,000.00.

The applicant appealed that decision to a judge of the Federal Court, Justice Marshall who, on 11 July 2006, determined that there was no basis to suggest that Federal Magistrate McInnis had failed to exercise his discretion judicially and accordingly dismissed the appeal with costs.  The applicant argued that because the bankruptcy notice should never have been issued he should not have to pay costs in relation to the application to set it aside.  Justice Marshall noticed however that the steps taken to set aside the bankruptcy notice did not occur until after the second last adjournment. 

The application today made by the applicant is seeking an extension of time until 8 June 2007 in which to file submissions in support of the application for special leave.  That application is opposed by Mr Shepherd, appearing for the respondents, chiefly on the basis that the material shows no reason to doubt the correctness of the decision of the court below.  Mr Shepherd has relied on the authority of Gallo v Dawson (1993) ALR 479 and in particular on a passage in the judgment of Justice McHugh appearing at 480.

Whilst that submission and other submissions concerning the merits of this case were advanced with considerable ability by Mr Shepherd and whilst he demonstrated that there was some merit in those submissions, that needs to be balanced against the applicant’s submissions in reply in which the applicant emphasised he is seeking a modest extension of time and he has also informed the Court from the Bar table that the solicitors, Starnet Legal, will act on his behalf if the extension of time is granted. 

Bearing in mind the modesty of the extension sought, the fact that Mr Maher has been representing himself, it appears to me that the appropriate order is as follows. 

If on or before 4.00 pm of 8 June 2007 the applicant files his draft notice of appeal and written case in support of that application for special leave, the application for special leave is not to be deemed abandoned. 

There has also been an application on behalf of the respondents for the costs of today and that has been opposed by the applicant.  It appears to me the best course today is to reserve those costs on the basis that the costs of this application will be costs in the application for special leave to appeal.  Nothing further?

MR SHEPHERD:   To the extent necessary, I would seek a certificate for counsel.

HER HONOUR:   If necessary, I would grant that certificate.  Thank you for your assistance, Mr Shepherd.

AT 12.01 PM THE MATTER WAS CONCLUDED