Strangio v Westpac Banking Corporation - [2008] FCA 1408

FEDERAL COURT OF AUSTRALIA
Strangio v Westpac Banking Corporation [2008] FCA 1408
PRACTICE AND PROCEDURE – appeal from judgment and sequestration order of the Federal Magistrates Court – final and interlocutory orders – applications for extension of time – application for leave to appeal – no adequate explanation – no real prospects of success –applications dismissed
Federal Court of Australia Act 1976 (Cth) s 24(1A)
Federal Court Rules (Cth) O 52 r 15(1), 52 r 15(2), O 52 r 10
Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137 referred to
Jess v Scott (1986) 12 FCR 187 followed
Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 referred to
Adamopoulos v Olympic Airways SA (1990) 95 ALR 525 cited
House v The King (1936) 55 CLR 499 cited
Australian Coal and Shale Employees’ Federation v Commonwealth (1953) 94 CLR 621 cited
BRUNO STRANGIO v WESTPAC BANKING CORPORATION ACN 007 457 141
VID 661 OF 2008
KENNY J
16 SEPTEMBER 2008
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 661 OF 2008

BETWEEN:

BRUNO STRANGIO
Applicant

AND:

WESTPAC BANKING CORPORATION ACN 007 457 141
Respondent

JUDGE:

KENNY J

DATE OF ORDER:

16 SEPTEMBER 2008

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1.The application for an extension of time under O 52 r 15(2) of the Federal Court Rules (Cth) and any associated applications be dismissed.
2.The applicant pay the respondent’s costs, such costs, to be taxed in default of agreement, and paid out of the bankrupt estate of the applicant.

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

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 661 OF 2008

BETWEEN:

BRUNO STRANGIO
Applicant

AND:

WESTPAC BANKING CORPORATION ACN 007 457 141
Respondent

JUDGE:

KENNY J

DATE:

16 SEPTEMBER 2008

PLACE:

MELBOURNE

REASONS FOR JUDGMENT
INTRODUCTION

Mr Bruno Strangio has applied for an extension of time in which to file and serve a notice of appeal from a judgment of the Federal Magistrates Court of 28 July 2008 ordering the making of a sequestration order against his estate.
The procedural history of the matter can be briefly summarised as follows.
The respondent, Westpac Banking Corporation (“Westpac”), filed a creditor's petition (“the petition”) in the Federal Magistrates Court against Mr Strangio on 14 December 2007. The petition alleged, and was founded on, a failure on Mr Strangio’s part to comply with a bankruptcy notice served on him on 5 October 2007 (“the bankrupty notice”). The bankruptcy notice was to the effect that Mr Strangio owed Westpac a debt of $36,144.75, being the amount of a taxed order for costs (“the costs orders”) in the County Court of Victoria (“County Court”).
Also in the Federal Magistrates Court, on 25 February 2008, Mr Strangio filed a notice stating grounds of opposition to the petition (“the notice of opposition”). Mr Strangio supported his notice of opposition by an affidavit sworn 25 February 2008. The notice of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2008] FCA 1408
Decision Date: 16 September 2008

CaseChat Overview and Summary

In the case of Strangio v Westpac Banking Corporation, the issue before the Court was whether the respondent, Mr Strangio, should be granted an extension of time to appeal against the Federal Magistrates Court's sequestration order and refusal to adjourn the hearing of the bankruptcy petition. Westpac Banking Corporation had issued a bankruptcy notice to Mr Strangio, who had subsequently filed a petition to have the order set aside. Mr Strangio's application for an extension of time to appeal was based on the grounds that the Federal Magistrate had erred in law and denied him natural justice. The Court considered whether the application for an extension of time should be granted and whether leave to appeal the interlocutory decision should be allowed.

The Court held that the application for an extension of time under the Federal Court Rules should be dismissed. The Court found that Mr Strangio's application was filed seven days outside the prescribed appeal period and did not meet the criteria for 'special reasons'. The Court also noted that Mr Strangio had not expressly sought leave to appeal the interlocutory decision, but his submissions at the hearing were treated as an application for leave to appeal and an application for an extension of time. The Court concluded that there was insufficient prospect of satisfying the test for leave to appeal and that the application for an extension of time should be dismissed.

The Court further held that the application for leave to appeal should be dismissed as well, as it did not meet the criteria for granting leave to appeal an interlocutory decision. The Court found that there was not sufficient doubt about the Federal Magistrate's decisions to warrant reconsideration and that no substantial injustice would result if leave were refused. Therefore, the application for an extension of time and any associated applications were dismissed, and Mr Strangio was ordered to pay Westpac's costs.

Orders

Orders of the court

1. The application for an extension of time under O 52 r 15(2) of the Federal Court Rules (Cth) and any associated applications be dismissed.

2. The applicant pay the respondent’s costs, such costs, to be taxed in default of agreement, and paid out of the bankrupt estate of the applicant.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

KENNY J

Mr Hinton’s affidavit stated that, on 21 May 2007, in a proceeding between Westpac and Mr Strangio in the County Court, Judge Holt had ordered that Mr Strangio pay Wetpac’s costs from 24 April 2007 until 21 May 2007, to be taxed failing agreement. A Registrar of the County Court taxed the costs in the sum of $36,144.75. On 7 August 2007, Westpac issued a bankruptcy notice based on Judge Holt’s costs order as taxed. The affidavit referred to Mr Strangio’s unsuccessful application for an extension of time in which to comply with the bankruptcy notice and to the further curial history of various relevant proceedings. The affidavit recorded that a judge of the Victorian Supreme Court (Justice Williams) had dismissed Mr Strangio’s application for judicial review of the costs orders on 3 July 2008 and that Mr Strangio had subsequently served a signed notice of appeal on Westpac “four days late”.THE DECISION OF THE FEDERAL MAGISTRATE The Federal Magistrate held that service of the petition had been duly effected on Mr Strangio – a finding supported by several affidavits filed on Westpac’s behalf. Her Honour noted that Mr Strangio had not challenged these affidavits. Her Honour held that there was no appeal to this Court, as Mr Strangio alleged. Her Honour also held, in substance, that there was insufficient or no evidence to support Mr Strangio’s solvency ground. A further ground of opposition was that “the creditor’s petition should be adjourned pending the determination of an application for judicial review of the orders made by Judge Holt on 21 May 2007 which is presently returnable in the Supreme Court of Victoria on 1 April, 2008”. As to this, the Federal Magistrate said (see Westpac Banking Corporation v Strangio [2008] FMCA 1102 (“Westpac Banking Corporation v Strangio”) at [6]-[7]):A further ground of opposition was that the hearing of the [petition] should be adjourned pending the determination of an application for judicial review of the orders made by Judge Holt on 21 May 2007 such application being then returnable in the Supreme Court of Victoria on 1 April 2008. Judgment has been handed down in those proceedings. On 3 July 2008 Her Honour Williams J delivered judgment in proceeding number 6701 of 2007 dismissing [Mr Strangio’s] application for judicial review.I note that [Mr Strangio] has appealed against the decision of Her Honour Williams J. I accept the evidence, as set out in the affidavit sworn by Mr Robert Thomas Hinton of 28 July 2008 that on 21 July 2008 [Westpac] was served with a signed notice of appeal. That notice of appeal was served four days late. As at this day, no application for an extension of time to serve the notice of appeal out of time has been served on [Westpac]. I reject the evidence of [Mr Strangio] which was changing and contradictory in its nature and as the transcript would reveal fashioned to meet the case against him. Further, the Federal Magistrate declined to adjourn the hearing of the petition until the determination of the appeal to the Court of Appeal. After noting the curial history of the matter, including the judgment delivered by Justice Williams in the Supreme Court, her Honour stated (at [19]-[20]):The determination as to whether or not to grant an adjournment in the proceedings is a discretionary one. Whilst the court is mindful that it should not proceed to sequestrate the estate of a debtor where an appeal is pending against the judgment relied on as the foundation of the bankruptcy proceedings, in this case the judgment relied on as the foundation of the bankruptcy proceedings is a judgment of Judge Holt and nowhere is there evidence before the court that the appeal to the Court of Appeal in the Supreme Court of Victoria is based on genuine and arguable grounds (Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137 at 148). [Mr Strangio] has had ample opportunity to place such evidence before the court including any as contained in the two affidavits relied upon and filed this day. No material persuasive of the granting of an adjournment or that could even properly found such an application was before the court.Having determined to refuse the application for an adjournment the court proceeded to hear the petition. Each of the grounds of opposition are rejected. All formal evidence as necessary has been filed and the court is satisfied with the proof of those matters. No opposition to the granting of the petition was put in submissions made by Counsel for [Mr Strangio]. The court exercises the discretion conferred by section 52 of the [Bankruptcy Act 1966 (Cth)] in favour of [Westpac].THE PARTIES’ POSITIONS IN THIS COURT

Ratio Decidendi

Legal Principle Established

Established by: KENNY J

A proposed notice of appeal was attached to Mr Strangio’s application for an extension of time. The grounds stated were:1.The learned Magistrate erred in law by making a sequestration Order against the appellant in disregard of the principles enunciated by the Federal Court of Australia in Ahern v Deputy Commissioner of Taxation(Qld) (1987) 76 ALR 137 at 148 (“Ahern”).2.The learned Magistrate erred in law by finding that “no opposition to the granting of the petition was put in submission” made by Counsel for the appellant when, in fact, the appellant’s Counsel had submitted that the petition should be dismissed on the basis of the principles enunciated in Ahern.3.The learned Magistrate denied the appellant natural justice by failing to accede to the appellant’s application to adjourn the hearing of the petition pending the making of an application to stay execution of the judgment debt to the Court of Appeal.CONSIDERATION Under the Federal Court Rules (“the Rules”), the applicant was required to file and serve a notice of appeal against the sequestration order within 21 days from the date of the Federal Magistrates judgment, namely, on or before 18 August 2008: see O 52 r 15(1). Mr Strangio filed his application for an extension of time in which to appeal some 7 days outside the prescribed appeal period. Pursuant to O 52 r 15(2), the time limit in O 52 r 15(1) may be extended at any time for ‘special reasons’. In Jess v Scott (1986) 12 FCR 187, a Full Court of this Court said, at 195:“…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 (not 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.” As counsel for Westpac pointed out, Mr Strangio also requires leave to appeal from her Honour’s refusal of an adjournment since this decision is interlocutory in character: see Federal Court of Australia Act 1976 (Cth), s 24(1A). Mr Strangio, who as I have said was not represented in this Court, did not expressly seek leave to appeal before or at the hearing. It is plain enough, however, that he challenges her Honour’s refusal of an adjournment. I would treat his submissions at the hearing as in substance an application for leave to appeal against this refusal and an application for an extension of time in which to file and serve an application for leave to appeal: see O 52 r 10. I would dispense with the need for a notice of motion. In determining whether leave to appeal against an interlocutory decision should be granted, the Court must be satisfied that the decision under challenge is attended with sufficient doubt to warrant it being reconsidered, and that substantial injustice would result if leave were refused, supposing the decision under challenge were wrong: see Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397, at 399-400 per Sheppard, Burchett and Heerey JJ. The question on the extension of time is whether this test has sufficient prospect of being satisfied.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 661 OF 2008

BETWEEN:	BRUNO STRANGIO Applicant
AND:	WESTPAC BANKING CORPORATION ACN 007 457 141 Respondent

JUDGE:	KENNY J
DATE OF ORDER:	16 SEPTEMBER 2008
WHERE MADE:	MELBOURNE

JUDGE:	KENNY J
DATE:	16 SEPTEMBER 2008
PLACE:	MELBOURNE