Szumylo v Ixia Pty Ltd No. Scciv-99-1205

SZUMYLO v IXIA PTY LTD
[2002] SASC 7
Full Court: Debelle, Williams & Besanko JJ

DEBELLE J. This is a purported appeal from the decision of a judge of this Court dismissing an appeal from the decision of a Master concerning interlocutory orders.
Where an appeal is made against an interlocutory order or an interlocutory judgment, the intended appellant must obtain leave to appeal: s 50(3) of the Supreme Court Act 1935. Mr Szumylo, the intended appellant in this matter, has not obtained leave to appeal. The appeal is therefore incompetent. With the consent of the defendant, we dealt with the intended appeal on the footing that it was an application for leave to appeal.
Mr Szumylo is a prisoner at Cadell Training Centre. He did not appear on this appeal either personally or by counsel. He has filed written submissions. He has informed the court that he did not wish to appear in person and that all he wished to say was included in his written submissions. The court has had regard to those written submissions.
The Events Leading to the Appeal
The circumstances leading to the appeal are as follows. I will refer to the appellant as “Mr Szumylo” and to the respondent as “IXIA”.
Mr Szumylo used to be employed by IXIA. As already mentioned, he is now a prisoner at Cadell Training Centre. In March 2000 he was convicted on his plea of guilty of defrauding IXIA. The information was dated 13 February 1998. In 1997 IXIA commenced proceedings in the Federal Court of Australia against Mr Szumylo and two other parties, Complete Systems & Solutions Pty Ltd (“Complete Systems”) and JACMM Nominees Pty Ltd (“JACMM”). The claims in those proceedings included claims against Mr Szumylo for wrongful conversion of cheques, the property of IXIA. Mr Szumylo and the other respondents to the action failed to file a defence. On 16 October 1998 judgment in default of defence was entered in favour of IXIA in the sum of $435,810.16 together with interest in an amount of $122,980.66. The judgment was entered only against Mr Szumylo. A sequestration order was made against Mr Szumylo’s estate by the Federal Court on 26 July 1999.
On 17 June 1999 the High Court delivered its reasons in Re Wakim; ex parte McNally (1999) 198 CLR 511. In consequence of that decision, certain judgments of the Federal Court were rendered ineffective and certain proceedings in that court were rendered invalid for want of jurisdiction. In order to avoid the consequences of the Wakim decision, the Federal Courts (State Jurisdiction) Act 1999 (“the Jurisdiction Act”) was enacted and came into force on 19 August 1999.
In consequence of the decision in Wakim, Mansfield J made an order in the Federal Court on 20 September 1999 that the proceedings in that court between IXIA as plaintiff and Mr Szumylo and the other respondents be stayed for want of jurisdiction.
On 11 October 1999 Mr Szumylo, Complete Systems and JACMM instituted proceedings in this Court against IXIA. For reasons which appear below, it is necessary to note that the application was dated 8 October 1999. I will refer to it as the “application dated 8 October 1999”. The application claimed the following relief.
1.A declaration that the judgment entered on the 16^th of October 1998 in the Federal Court of Australia in Action No SG 3033 of 1997 whereby the Applicant recovered against the Respondents in the action the sum of $558,790.82 and costs to be taxed is an “ineffective judgment” within the meaning of Section 4 of the Federal Courts (State Jurisdiction) Act, 1999.
2That the said judgment be revoked or alternatively set aside.
3That the said Federal Court action be removed into this Honourable Court and proceed as a proceeding in this Court.
In his affidavit in support of that application, Mr Szumylo denied any wrongdoing but did not otherwise depose as to any facts as to the merits of his alleged defence. By that time Mr Szumylo had been charged with offences of fraud but had not been convicted.
On 28 June 2000 Complete Systems was struck off the register. JACMM appears to have taken no part in the litigation. The matters the subject of this application for leave to appeal do not affect the interests of either Complete Systems or JACMM and they can therefore be disregarded.
The application dated 8 October 1999 was adjourned on at least four occasions, usually on the application of counsel for Mr Szumylo. On 18 May 2000 counsel for Mr Szumylo again applied to adjourn the application. When granting the application and adjourning the hearing to 1 June 2000, Master Burley informed Mr Szumylo that if he was not then in a position to proceed with the application he intended to dismiss it. The application was next heard by Master Burley on 1 June 2000. Counsel for Mr Szumylo again applied to adjourn the application but Master Burley refused that application. Mr Szumylo’s counsel had informed Master Burley that Mr Szumylo wished to pursue the application to remove the Federal Court proceedings to this Court if the application for the adjournment was refused. Master Burley therefore made an order on Mr Szumylo’s application dated 8 October 1999 removing the Federal Court action into this Court. That application was not opposed by IXIA.
The order made by Master Burley was in these terms:
“1.The Court declares that the Federal Court Judgement is an ‘ineffective judgment’ within the meaning of Section 4 of the Federal Courts (State Jurisdiction) Act (SA) 1999.
2.The Court declares that the Federal Court Proceedings are proceedings relating to State matters within the meaning of Section 3 of the Federal Courts (State Jurisdiction) Act 1999.
3.Pursuant to Section 11(2) of the Federal Courts (State Jurisdiction) Act 1999, the Federal Court Proceedings are to be treated as a proceeding in the Supreme Court.
4.Liberty to the parties to apply.
5.Pursuant to Rule 123A.05 (2)(a)(i) the Federal Court file be transferred to this Court.
6.Costs reserved.”
Thus, by consent on 1 June 2000, Master Burley made orders which granted the relief sought in para 1 of the summons and went as far as the court was authorised to go by s 11 of the Federal Courts (State Jurisdiction) Act 1999 in granting the relief sought in para 3 of the summons.
Given that Mansfield J had on 20 September 1999 ordered that the proceedings in the Federal Court be stayed for want of jurisdiction, Master Burley had jurisdiction to make the order pursuant to s 11(2) of the Jurisdiction Act. It might be added in parenthesis that, by s 6 of the Jurisdiction Act, the judgment in default of defence made by the Federal Court on 16 October 1998 was deemed to be a valid judgment of this Court. For that reason also, Mr Szumylo was at liberty to apply to set aside the judgment. However, for reasons which appear later, the application was doomed to fail. In other words, there were in effect two routes by which it was open to Mr Szumylo to apply to set aside the judgment in default of defence.
On 1 June 2000 Master Burley adjourned further consideration of Mr Szumylo’s application dated 8 October 1999 to 14 June 2000 but on that date the hearing was adjourned to 14 July 2000, then again to 5 October 2000 and, finally, to 4 December 2000. At least one of those adjournments was ordered on the application of Mr Szumylo.
On 4 December 2000 the application was heard by Master Kelly. Mr Szumylo was then unrepresented. By this time, Mr Szumylo had lodged a number of additional applications. Master Kelly heard the application dated 8 October 1999 as well as the following applications:
(a)an application seeking a stay until determination of Mr Szumylo’s appeal to the criminal court against his sentence and that a friend of the court, Mr Robert W Collins be permitted to assist Mr Szumylo in the preparation and presentation of his case (FDN 15);
(b)an application that documents be produced relating to matters in question in this action in the possession of IXIA (FDN 16); and
(c)an application that documents be produced relating to matters in question in this action in the possession of the Commonwealth Director of Public Prosecutions (FDN 18).
Mr Szumylo had filed two other applications which were not heard on 4 December.
Master Kelly dismissed each of the applications listed before him. Mr Szumylo appealed from the order of the Master to a judge of this Court, Wicks J. Wicks J dismissed the appeal. From that decision, Mr Szumylo has purported to appeal to this Court.
The Application to Set Aside the Default Judgment
Before dealing with the grounds of the purported appeal, it is necessary to deal first with Mr Szumylo’s application to set aside the judgment in default of defence. I am satisfied that this application was heard by Master Kelly on 4 December 2000 and that Mr Szumylo knew that it was going to be heard on that date. As already mentioned, that application had been adjourned on a number of occasions and the court record shows that it was before Master Kelly on 4 December. In addition, Master Kelly refers to the application, albeit briefly, in ex tempore reasons delivered on 4 December. It is convenient to set them out now.
“I have an application before me, among others, that the Department of Correctional Services be ordered to present a Mr Collins before the court for the purpose of assisting Mr Szumylo in his applications in this action. I know of no legislation nor any principle of general law which would permit me to order the attendance of a prisoner to assist another prisoner. I will say this - my own view is that the attendance of Mr Collins in the past has been of benefit to the court but it is for the prison authorities to determine whether that will continue to be permitted. I have seen a letter from the Acting Deputy Registrar reporting a view said to be Mr Pagets doubting whether the prison authorities themselves have power to permit such an attendance. I have not researched that question but think it strange if the power not be there that Mr Collins has been present on a number of occasions in the past. Be that as it may, in my view I certainly do not have the power to order his attendance.
Mr Szumylo has raised during the course of this morning’s discussion questions of natural justice, fairness, habeas corpus and the like. What he is talking about in legal terms is the possibility of an application for judicial review. That application is not before me but I am asked to adjourn so it can be made. I cannot see that a judge would make an order in the nature of judicial review in the circumstances of this case, even if such proceedings were commenced at this stage. Therefore I am disinclined to grant any adjournment for that purpose. I will proceed with the other applications.
I have perused and considered the contents of the book of documents submitted by Ixia Pty Ltd and I have heard from both sides on the merits of this application.
Mr Szumylo is a guest of Her Majesty arising out of a sentence of imprisonment for defrauding his employer. He pleaded guilty and was convicted. He seeks to challenge his sentence but not his conviction. There is no reason to wait for the result of this exercise. Ixia Pty Ltd, his former employer, has a judgment against him largely made up of the money he defrauded and the subject of his conviction. It was obtained by default in circumstances set out by the presiding judge. He has been declared bankrupt. He is clearly not supported by his trustee in bringing an application to set aside judgment.
Quite apart from my view that on the information before me there is simply no proper ground to set aside, without his trustee’s support he cannot, as I interpret the law, prosecute his application. Nor for the same reason can he take other action against his former employer as he seeks to do via something like pre-action discovery.
In these circumstances, I must dismiss all of his applications.” [My emphasis.]
The words I have underlined refer to the application to set aside the judgment. Master Kelly is deciding that there is no ground to set aside the judgment. That conclusion is reinforced by the terms of the formal order which lists the application as one of the applications determined by him. In the order it is referred to by the date of the document, 8 October 1999, and not to the filing date of 11 October 1999. The order can only refer to those parts of the application which had not already been determined, namely, paras 1 and 2 of the application dated 8 October 1999. As the application was dismissed, it follows that the application to set aside the judgment was dismissed.
In his appeal to Wicks J, Mr Szumylo did not challenge the order dismissing his application dated 8 October 1999 to set aside the default judgment. Instead, he appealed against other aspects of the orders and the reasoning of Master Kelly. Thus, if there is any attack on the order dismissing the application of 8 October 1999, it is a collateral attack. Similarly, in his purported appeal to this Full Court, Mr Szumylo did not directly challenge the order dismissing his application dated 8 October 1999. Instead, he appealed against the orders made by Wicks J, the grounds of appeal reagitate most of the issues he had argued before Wicks J.
No Ground to Set Aside Default Judgment
There is no ground which justifies setting aside the default judgment. In his affidavit in support of the application, Mr Szumylo denied that he had acted wrongfully. However, those denials are entirely at odds with his conviction. Although he appealed against his conviction and sentence, he later withdrew his appeal against conviction and appealed only against sentence. Although there might be a debate as to the effect of s 34A of the Evidence Act 1929 (compare the views of Lord Denning MR and Buckley LJ in Stupple v Royal Insurance Co Ltd [1971] 1 QB 50 at 72 and 76), that provision, however viewed, justifies a court deciding not to give any credence to his denial. Mr Szumylo has not advanced any other ground which would justify setting aside the judgment.
It is convenient at this stage to refer to the fourth ground of appeal which reads:
“The learned judge [erred] as a matter of law by ordering that the appellant has to be supported by his trustee in bankruptcy.”
That ground refers to the following part of the reasons by Master Kelly which have already been quoted:
“IXIA Pty Ltd his former employer, has a judgment against him largely made up of the money he defrauded the subject of his conviction. It was obtained by default in circumstances set out by the presiding judge. He has been declared bankrupt. He is clearly not supported by his trustee in bringing an application to set aside judgment.
Quite apart from my view that on the information before me there is simply no proper ground to set aside, without his trustee’s support he cannot, as I interpret the law, prosecute his application.”
A similar ground was argued before Wicks J who dismissed it noting that those remarks were made by the Master in passing and did not affect his conclusion.
IXIA relies on the decision in Cummings v Claremont Petroleum NL (1996) 185 CLR 124. Mr Szumylo argues that he has standing despite that decision. Given the conclusion that there is no ground which justifies setting aside the default judgment, it is unnecessary to consider this issue. I agree with Wicks J that the remarks were made by the Master as an additional observation to reinforce his conclusion. The remarks were not necessary for the decision. I add in passing that, although I do not think the decision in Cummings v Claremont Petroleum NL is relevant to this application, that conclusion does not assist Mr Szumylo. A bankruptcy court may, if it thinks fit, allow the debtor to contest the validity of the petitioning creditor’s judgment: Boaler v Powell [1910] 2 KB 229 at 232 ‑ 233. However, such an application can only be made on the hearing of the application for the sequestration order. Mr Szumylo unsuccessfully tried to raise issues concerning the default judgment on the hearing of the petition for bankruptcy. Once the sequestration order has been made and has not been set aside on appeal, there is no power in a bankruptcy court to set aside the order: see s 37(2) of the Bankruptcy Act 1966. Mr Szumylo did not appeal against the sequestration order. In addition, by virtue of s 58 of the Bankruptcy Act, any chose in action is vested in Mr Szumylo’s trustee in bankruptcy so that Mr Szumylo cannot institute legal proceedings without the concurrence of the trustee. Thus, the effect of the Bankruptcy Act is that Mr Szumylo has no capacity to set aside the judgment.
For all of these reasons, any application to set aside the judgment must fail.
The Remaining Grounds
It is convenient to deal with each of the remaining grounds of appeal in the order that they are listed in the notice of appeal. Each will be considered in turn for the purpose of determining whether leave to appeal ought to be granted.
A Next Friend?
The first two grounds of appeal refer to an application made by Mr Szumylo to have a fellow prisoner, Mr Robert Collins, attend at the court. The application, which had been prepared by Mr Collins, seeks an order “that a Friend of the Court Mr Robert W Collins in the preparation and presentation of this matter assist me”. The Master dismissed the application. In his appeal to Wicks J, Mr Szumylo appealed on the ground that the Master had not heard the application. It is necessary to set out that ground of appeal. It read:
“The learned judge erred as a matter of law by not hearing the appellant’s application by way of an ex-parte (sic) summons for a habeas corpus application dated 17^th September 2000 set down to be heard on 4^thDecember 2000 to allow a named person (a prisoner) to be present for evidence in the appellant’s matter. (R 98 SCR).”
Wicks J held that the Master had not erred in not making an order to allow Mr Collins to be present. His reasons were entirely correct. Mr Szumylo now appeals on slightly different grounds. They are set out in paras 1 and 2 of the notice of appeal to this Court. They read:
“1.The learned Judge erred as a matter of law by not ruling the learned Master did not have the authority to hear an application by the appellant under (R99 SCR).
2.The learned Judge erred as a matter of law by not ruling the learned Master erred by not ordering that R Collins could act as a friend for the appellant in these matters.”
The first ground of appeal misstates the position. The Master did not purport to exercise power under Rule 99. The application had in fact been made pursuant to Rule 55 which deals with applications for directions. The Master’s reasons do not refer to Rule 99. Wicks J referred to that rule for the purpose only of identifying the limits of the powers of the court to make orders requiring prisoners to attend the court. This ground of appeal is, therefore, entirely misconceived.
I turn to the second ground of appeal. It is readily apparent that the purpose of the application was to enable Mr Collins to be present in court not for the purpose of giving evidence, as asserted at the hearing of the appeal before Wicks J, but to assist Mr Szumylo in some way. There was no evidence which Mr Collins could give in respect of the applications which Mr Szumylo was seeking to make. Furthermore, there was no evidence which could be advanced on the appeal before Wicks J. It is apparent from the application that Mr Szumylo’s purpose was to have Mr Collins present as a friend to assist him.
The court has power to make orders to bring up a prisoner to give evidence in the criminal or civil proceeding: see s 117 of the Supreme Court Act and Rule 99.08 which are the modern equivalent of the old writ of habeas corpus ad testificandum. See also s 28(2) of the Correctional Services Act 1982. The court has no power to order that a prisoner be brought to the court for any other purpose. It would be entirely inappropriate to issue a summons for writ of habeas corpus to do so.

As Wicks J noted, the Chief Executive Officer of the Correctional Services Department has a discretion under s 27 of the Correctional Services Act to grant a prisoner leave of absence for such purposes as he thinks fit. Whether Mr Collins should be given leave to assist Mr Szumylo is a matter for the Chief Executive Officer and not for the court to determine. If the Chief Executive Officer allows Mr Collins to attend, Mr Collins may, subject to the discretion of the court, act as a McKenzie friend. If the Chief Executive Officer does not allow him to attend, the court has no power to compel his attendance. Ground 2 does not justify a grant of leave to appeal.
In his notice of appeal the appellant included what he called “details” in respect of each ground of appeal. In relation to the second ground of appeal he complained of the fact that Wicks J had described Mr Collins as a “McKenzie friend”. He complains also of the extent to which Wicks J limited the powers of a McKenzie friend. It is unnecessary in this application to determine the extent to which an unrepresented litigant may be assisted by a friend who is not a legal practitioner or to decide whether Wicks J correctly described Mr Collins as a “McKenzie friend”.
A Non-Issue as to Discovery
The third ground of appeal is in these terms:
“The learned Judge erred as a matter of law by making reference to the appellant’s application for third party discovers (sic) (R 60 SCR).”
The details relating to this ground of appeal read:
“The non-party discovered all documents to assist the appellant. This application was made to the Commonwealth DPP and the Australian Securities and Investments Commission (ASIC). ASIC produced documents to the appellant and these documents supported the claims of the appellant.”
Mr Szumylo had applied for orders that documents be produced by the Australian Securities and Investment Commission and by the Commonwealth Director of Public Prosecutions (FDN 17 and 18). In each application the documents sought are
“all documents that are or have been in the possession, custody or power relating to Andrew Michael Szumylo, Complete Systems and Solutions Pty Ltd and Jacmm (sic) Nominees Pty Ltd”.
Since the Australian Securities and Investment Commission has produced the documents which Mr Szumylo seeks and as Mr Szumylo asserts that Wicks J was wrong in referring to the application for discovery from persons not parties to the action, there is nothing which justifies granting leave to appeal. I add that this ground of appeal is inconsistent with the relevant ground in the appeal heard by Wicks J which states that the Master had erred in not hearing the applications by Mr Szumylo for discovery against persons not party to the action. The reasons given by Wicks J for dismissing that ground were entirely correct.
There are no fifth or sixth grounds of appeal.
Delay
The ground said to be the seventh ground of appeal reads:
“The learned Judge erred as a matter of fact by making statement and comments at page 8 line 34-39.”
It is apparent from the comment which follows this ground of appeal that the appellant means to refer to paras 34 ‑ 39 on page 8 and not lines 34 ‑ 39. In those paragraphs, Wicks J asserted that it was too late for Mr Szumylo to complain about the judgment obtained on 16 October 1998. He referred to Mr Szumylo’s delay in taking steps to set aside the judgment. When doing so, he was dealing with ground 8 of the notice of appeal from the decision of the Master which read:
“8.The appellant complains that the judgment amount is incorrect and in the circumstances says that there might be other inconsistencies in the judgment. Full discovery would produce the correct information to correct any of the amounts contained within the judgment. The appellant has been denied proper discovery since 1997.”
Wicks J summarised what is disclosed by the documents filed in this action. Mr Szumylo does not point to any error but to the fact that he was suffering a major depressive illness at all relevant times. It is unnecessary to deal with these issues. Ground 8 in the appeal from the Master was not a ground of appeal but an argument in support of the applications for discovery. It does not, in any sense, assist in determining those applications. Wicks J was correct in dismissing it. There is nothing in this issue which justifies an application for leave to appeal.
Procedural Fairness
Grounds 8 and 9 can be considered together. They read:
“8.The appellant complains that all matters before a single Judge has been heard without procedural fairness and there has been a breach of natural justice.
9.The appellant complains that he has not been allowed to present his matter to the Court in a proper and fair manner. The appellant was unrepresented, not by his own choice, and unaware of the procedures of the court and as a result of the court not ordering the assistant of a friend he has suffered a miscarriage of justice.”
The lack of procedural fairness refers to the fact that no order was made to enable Mr Collins to be present. That issue has already been addressed. The issues in ground 9 have also been addressed. For the reasons already given and for the reasons expressed by Wicks J in his reasons, the applications made by Mr Szumylo could not have succeeded. The absence of Mr Collins or Mr Szumylo’s inexperience did not in any way affect the outcome of his applications.
The final ground of appeal reads:
“The learned Judge erred, as a matter of fact by ruling the Master did not have all the application (sic) before him Page 3 Paragraph 13.”
Mr Szumylo points out that the Master did in fact have all applications before him. His complaint is that all of his applications have not been heard. In para 13 of his reasons, Wicks J identified two applications as being the applications which had not been heard in these terms:
“FDN 17(an application that documents be produced relating to matters in question in this action in the possession etc of Australian Securities and Investment Commission), and
FDN 20(seeking an order disjoining JACCM Nominees Pty Ltd and Complete Systems & Solutions Pty Ltd from these proceedings and that the proceedings be brought under r 50 so that they can be fast tracked).”
As already noted in the notice of appeal to the Full Court, Mr Szumylo points out that the Australian Securities and Investment Commission has produced documents to him. It is unnecessary, therefore, for any order to be made on FDN 17. In his appeal to Wicks J, Mr Szumylo did not complain that any applications had not been heard. If in fact the application (FDN 20) has not been heard, Mr Szumylo should apply to have the application listed for hearing. In any event, there is no judgment or order that the two companies are liable to IXIA. Only Mr Szumylo is subject to a judgment to pay a debt to IXIA.
Conclusion
All of the applications made by Mr Szumylo had been prepared by Mr Collins. The outcome of the appeal to Wicks J and the outcome of the purported appeal to this Court suggest that Mr Collins is not in fact assisting Mr Szumylo and indeed is causing him to incur a liability as to costs.
There is no substance in any of the points raised by Mr Szumylo. He has not adduced any argument which justifies granting leave to appeal. The application for leave to appeal is therefore dismissed.
After 1 June 2000, the only form of relief sought in the summons which was outstanding was that the judgment in the Federal Court action be revoked or alternatively set aside. Master Kelly refused that relief on 4 December 2000 when he expressed the view that there was simply no ground to set aside the judgment. There is no reason to interfere with the Master’s decision. In those circumstances, the whole of the action or application has now been dealt with. In other words, there is nothing left to be tried so that there is no reason to prosecute the two outstanding applications.
WILLIAMS J. I agree that the application for leave to appeal should be dismissed for the reasons given by Debelle J.
BESANKO J. I agree that the application for leave to appeal should be dismissed for the reasons given by Debelle J.

[2002] SASC 7

18 January 2002