McVey, Ernest Andrew v Carswell & Co

[1997] FCA 959

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 4  OF   1997

BETWEEN:	ERNEST ANDREW MCVEY APPLICANT
AND:	CARSWELL AND COMPANY RESPONDENT
JUDGE:		SPENDER J
DATE OF ORDER:		16 SEPTEMBER 1997
WHERE MADE:		BRISBANE

THE COURT ORDERS THAT:

The application filed 14 January 1997 seeking an extension of time in which to file and serve a notice of appeal from the judgment of Cooper J dated 17 November 1995 be dismissed with costs, to be taxed if not agreed.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 199  OF   1996

BETWEEN:	ERNEST ANDREW MCVEY APPLICANT
AND:	CARSWELL AND COMPANY RESPONDENT
JUDGE:		SPENDER J
DATE OF ORDER:		16 SEPTEMBER 1997
WHERE MADE:		BRISBANE

THE COURT ORDERS THAT:

The application filed 16 December 1996 seeking an extension of time in which to file and serve a notice of appeal from the judgment of Cooper J dated 22 May 1996 be dismissed with costs, to be taxed if not agreed.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 4 OF 1997

BETWEEN:	ERNEST ANDREW MCVEY APPLICANT
AND:	CARSWELL AND COMPANY RESPONDENT

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 199  OF   1996

BETWEEN:	ERNEST ANDREW MCVEY APPLICANT
AND:	CARSWELL AND COMPANY RESPONDENT

JUDGE:	SPENDER J
DATE:	16 SEPTEMBER 1997
PLACE:	BRISBANE

REASONS FOR JUDGMENT

These are two applications by Ernest Andrew McVey (‘Mr McVey’), each of which seeks an extension of time in which to file and serve a notice of appeal.

The application in QG 4 of 1997 is an application filed on 14 January 1997 seeking an extension of time in which to file and serve a notice of appeal in respect of orders made by Cooper J on 17 November 1995 whereby his Honour dismissed an application by Mr McVey seeking an order for the extension of time for complying with a bankruptcy notice.

The application in proceedings QG 199 of 1996 is an application filed on 16 December 1996 seeking an extension of time in which to file and serve a notice of appeal from the judgment of Cooper J given on 22 May 1996.  On that day Cooper J made a sequestration order against the estate of Mr McVey.

In each case an extension of time is required because a notice of appeal was not filed and served within the time limited by O 52 r 15 of the Federal Court Rules.  Order 52 r 15(1) provides:

"The notice of appeal shall be filed and served:

(a)      within 21 days after -

(i)the date when the judgment appealed from was pronounced;

(ii)the date when leave to appeal was granted; or

(iii)any later date fixed for that purpose by the court appealed from; or

(b)within such further time as is allowed by the Court or a Judge upon application made by motion upon notice filed within the period of 21 days referred to in the last preceding paragraph."

Order 52 r 15(2) provides:

"Notwithstanding anything in the preceding subrule, the Court or a Judge for special reasons may at any time give leave to file and serve a notice of appeal."

In Jess v Scott (1986) 12 FCR 187, a Full Court of the Federal Court (Lockhart, Sheppard and Burchett JJ) said, at 195:

“What is needed to justify an extension of time is indicated in r 15(2) by the words ‘for special reasons’.  It is that there be shown a special reason why the appeal should be permitted to proceed, though filed after the expiry of twenty-one days.  In that context, the expression ‘special reasons’ is intended to distinguish the case from the usual course according to which the time is twenty-one days.  But it may be so distinguished (nor necessarily will, for the rule gives a discretion) wherever the Court sees a ground which does justify departure from the general rule in the particular case.  Such a ground is a special reason because it takes the case out of the ordinary.  We do not think the use of the expression ‘for special reasons’ implies something narrower than this.”

The Full Court later said:

“It should not be overlooked that r 15(2) enables leave to be given ‘at any time’; the ‘special reasons’ relevant to such a power cannot but describe an elastic test, suitable for application across a range of situations, from an oversight of a day to a neglect persisted in during a prolonged period.  It would require something very persuasive indeed to justify a grant of leave after, for example, a year; equally, it may be said, something much less significant might justify leave where a party is a few days late.  ‘Special reasons’ must be understood in a sense capable of accommodating both types of situation.  It is an expression describing a flexible discretionary power, but one requiring a case to be made upon grounds sufficient to justify a departure, in the particular circumstances, from the ordinary rule prescribing a period within which an appeal must be filed and served.“

In Gallo v Dawson (1990) 93 ALR 479, McHugh J was concerned with an application for an extension of time within which to file a notice of appeal against an order in the High Court. The application was made some sixteen months after the order in respect of which an appeal was sought to be brought. Order 70 r 8 of the High Court Rules required a notice of appeal to be lodged within twenty-one days of the date of judgment.  Order 60 r 6 permitted the court or a justice to enlarge the time appointed by the High Court Rules as the justice of the case may require.

McHugh J said, at 480:

“The grant of an extension of time under [O 60 r 6] 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 of 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. An 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.’”

At 481, his Honour continued:

“A case would need to be exceptional before a court would enlarge by many months the time for lodging an appeal simply because the applicant had refrained from appealing until he or she had researched the issues involved.  In Hughes, McInerney J pointed out (at 263) that one object of fixing time under court rules is ‘to achieve a time table for the conduct of litigation in order to achieve finality of judicial determinations’.  When the time for appealing has expired, the litigation is at an end; the successful party is entitled to the benefit of the judgment in his or her favour.  At that stage, the successful party has a ‘vested right to retain the judgment’.  It would make a mockery of O 70, r 3 if, months after the time for appealing had expired, the unsuccessful party could obtain an extension of time on the ground that he or she had delayed appealing because that person wanted to research the issues involved.  Lack of legal knowledge is a misfortune, not a privilege.”

The application in QG 4 of 1997 for an extension of time to file and serve a notice of appeal from the order of Cooper J of 17 November 1995, which dismissed Mr McVey’s application for an extension of time for complying with a bankruptcy notice, can be summarily dismissed. It was common ground before Cooper J, in respect of that matter, that, by the time the application for an extension of time to comply with the bankruptcy notice was filed, the time for compliance with the bankruptcy notice had expired. His Honour dismissed the application because the jurisdictional facts on which the power and jurisdiction of the Court to extend the time for compliance with a bankruptcy notice in the circumstances set forth in s 41(6A) of the Bankruptcy Act 1966 (Cth) (‘the Act’) had not been established. His Honour declined to adjourn the application in order to enable Mr McVey to amend his material and put in additional material to sustain an application for an extension of time under s 41(7). That sub-section requires the filing with the Registrar of an affidavit to the effect that the debtor has such a counter-claim, set-off or cross demand as is referred to in s 40(1)(g) of the Act before the expiration of the time fixed for compliance with the requirements of a bankruptcy notice. His Honour concluded in those circumstances that it was preferable, and with the avoidance of additional costs in mind, to refuse the adjournment and to allow Mr McVey to institute such further applications as he may wish or to raise as a matter of discretionary defence on the hearing of any petition the matters which he wished to be adjudicated in the Supreme Court proceedings.

The reference to Supreme Court proceedings is a reference to the fact that Mr McVey caused to be issued a writ out of the Supreme Court of Queensland claiming damages for negligence against the petitioning creditor.  An entry of appearance to that writ was filed on 16 October 1995.

It may be noted (since it is of relevance in the other application) that the proceedings in the Supreme Court have not advanced any further, no statement of claim having been delivered and no further step having been taken to date to prosecute that action.  His Honour’s judgment of 17 November 1996 is plainly right and the proposed or foreshadowed appeal against his Honour’s orders of that day enjoys no prospects of success.  The application for an extension of time in proceedings QG 4 of 1997 is refused, with costs to be taxed if not agreed.

The second application seeks an extension of time to file and serve a notice of appeal from the making of a sequestration order on 22 May 1996.  That application was filed on 16 December 1996, that is to say, more than six months after the expiry of the twenty-one day period referred to in O 52 r 15 of the Rules.

It is relevant to the present application to note that on 18 July 1996 Mr McVey wrote to Cooper J, which letter commenced:

“I am writing to ask you to draw back your verdict against me (as it is wrong) and let me have the matter go back to Court and have the truth come out.”

The remainder of the letter is a recitation of the complaints concerning his dealings with Mr Ponti and two other solicitors, Mr Bruce Dulley and Mr Bruce DaCosta.

On 24 July 1996, a Deputy District Registrar of the Court wrote to Mr McVey, which letter made plain the need for an application for leave to file and serve a notice of appeal out of time.  The letter, in part, said:

“Your letter dated 18 July 1996 and the attachments thereto have been referred to me.

If you wish to appeal from the Sequestration Order made on 22 May 1996 formal Court proceedings must be instituted to do so.  It is insufficient to write to the Court or to a Judge of the Court.

An appeal from a judgment of the Court is required to be filed within 21 days after the date on which the judgment was pronounced or within such time as the Court allows. Because more than 21 days has elapsed since the Sequestration Order was made on 22 May 1996 you will, if you wish to take proceedings, need to file an application for leave to file and serve a Notice of Appeal out of time. This application is made in accordance with Form 54A to the Federal Court of Australia Rules. I am enclosing a copy of the proforma. I also enclose a copy of Order 52 Rule 15 dealing with the time for filing and serving a Notice of Appeal. You will note that Order 52 Rule 15 requires the application in Form 54A to be accompanied by an affidavit. In that affidavit you must specify the nature of the case, the questions involved and the reason why leave should be given. It is normal practice that you annex to your affidavit a copy of the Notice of Appeal you intend to file should leave to file be granted. I enclose Form 55 (Notice of Appeal) proforma for you to use in preparing this annexure to the affidavit. I also enclose a guide to instituting an appeal to the Full Court of the Federal Court of Australia. Part D of that document is of relevance in your situation.”

Notwithstanding this letter of 24 July 1996, it was not until 16 December 1996 that the application in QG 199 of 1996 was filed.

The only explanation for this delay is that Mr McVey explains that he is not a legal person and, further, that he had no solicitor to tell him “what to do”.

The burden of his submissions concerning the present applications really start and finish with his vigorous contention that he does not owe Mr Ponti, a solicitor of Carswell & Company, “a cent”.  His present applications are yet further attempts to vindicate that contention.

In these circumstances, it is necessary to set out a little detail of the circumstances in which Cooper J made the sequestration order against the estate of Mr McVey.  Those circumstances are substantially taken from his Honour’s reasons for judgment of 22 May 1996.

In December 1992 Mr McVey and his wife, who lived together in a house property at Mungar which they held as joint tenants, were experiencing marital problems.  They resolved, according to Mr McVey, to “get a legal separation but still live under the same roof”.  Mr McVey approached Peter Francis Ponti of the petitioning creditor and gave him certain instructions.  The nature of those instructions is in dispute as between the parties.  Mr McVey says that he instructed Mr Ponti to have the joint tenancy over the matrimonial home “changed to a tenancy in common”.  Mr Ponti says he was instructed to apply to the Family Court for a family law property settlement.

There were various proceedings in the Family Court concerning an application for a property settlement which had been signed by Mr McVey with a cross-application by Mr McVey’s wife.  The matter was listed for trial on 13 September 1993.  Before the matter came on for trial, the parties reached agreement and a consent order reflecting this agreement was prepared, and signed by Mr McVey and by his wife.  On 9 November 1993, by consent of the parties, a Deputy Registrar of the Family Court ordered that the matrimonial home be sold by private treaty or, failing private treaty, by public auction and the net proceeds to be divided 65 per cent to the husband and 35 per cent to the wife.

Carswell & Company, at Mr McVey’s request, provided him with an account for costs dated 5 October 1993 and a further account dated 19 November 1993.  Mr McVey wished to dispute the account and new solicitors acting on his behalf filed a Notice Disputing Costs in the Family Court.  On 3 August 1994, a Deputy Registrar of the Family Court issued an assessment of costs specifying $7,731.22 as the proper amount to be paid by Mr McVey to the petitioning creditor, including an amount of $683.40 as the proper costs in relation to the taxation.  There was no application by Mr McVey for reconsideration of the assessment of costs and a Certificate of Taxation issued on 16 August 1994 certified that amount as the proper amount to be paid by Mr McVey to the petitioning creditor, Carswell & Company.

On 1 December 1994 the petitioning creditor filed a Plaint in the Magistrates Court at Maryborough claiming the amount in the Certificate of Taxation plus costs.  The matter came on for trial before Mr BD Barrett SM on 5 June 1995.  Mr McVey was represented by his then solicitor.  Mr Ponti, Mr Dulley (who was the town agent for Carswell & Company in relation to the Family Court proceedings) and Mr McVey gave evidence and, at the end of the trial, Mr Barrett SM gave judgment for the petitioning creditor.  There has been no appeal from that decision, nor has there been any attempt to set it aside.  The bankruptcy notice the subject of the earlier order of Cooper J of 17 November 1995 was issued on 15 September 1995.  The Supreme Court writ claiming damages for negligence against Carswell & Company was issued on 5 October 1995 and an entry of appearance was filed on 16 October 1995.  As indicated earlier, no further step has been taken to prosecute that claim.

The petition of Carswell & Company was served on Mr McVey on 8 January 1996. At the hearing of the petition, Cooper J declined the invitation of counsel for Mr McVey to exercise the discretion to "go behind" the Magistrates Court judgment and inquire as to whether there is in truth and reality a debt due and owing by Mr McVey to the petitioning creditor. Alternatively, it was submitted that it was a term of the retainer between Mr McVey and Carswell & Company that no costs were to be payable until the house property had been sold and the proceeds of sale became available for such payment. It was further submitted that the petition should be dismissed because Mr McVey was able to pay his debts within s 52(2)(a) of the Act and it was further, alternatively submitted the petition should be adjourned so as to permit Mr McVey to prosecute the Supreme Court action against Carswell & Company.

Cooper J gave detailed reasons for declining to go behind the judgment.  His Honour said:

“In the instant case the validity of the debt claimed by the petitioning creditor has been twice challenged by Mr McVey, and the issue has been twice determined in the petitioning creditor's favour.”

His Honour concluded that Mr McVey had not demonstrated “a substantial reason” of the kind spoken of in the authorities for a favourable exercise of the discretion to “go behind” the Magistrates Court judgment.  He rejected the other bases advanced on Mr McVey’s behalf.  In the present application, there does not appear to be any reliance on those grounds:  the focus of Mr McVey’s submission is his repeated claim that he owes nothing to Carswell & Company.

In the view I take of the material before me, Mr McVey misunderstands the nature of his present application.  He acknowledges that the conclusion at which his Honour arrived was based on the material that was before his Honour at the time.  His complaint is that his representatives should have put material before Cooper J vindicating Mr McVey’s contention that no debt was owing to Carswell & Company.  That submission does not provide a basis upon which an extension of time within which to file and serve the notice of appeal should be granted.

I am not satisfied that special reasons have been shown to exercise the discretion to enlarge time.  There is no valid explanation for the delay.  Mr McVey’s explanation that he had no solicitor to tell him what to do is not a valid reason for the grant of an extension of time.  Moreover, there is nothing in the material to show any arguable error of fact or law in relation to the bases on which Cooper J proceeded to make the sequestration order, and in particular, in my opinion, there is nothing to suggest that the declining to exercise the discretion to go behind the judgment debt was tainted.  The prospects of success realistically are nil.

For the above reasons, the application in proceedings QG 199 of 1996 should also be dismissed with costs, to be taxed if not agreed.

I certify that this and the preceding eight (8) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender

Associate:
Dated:             16 September 1997