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

SZUMYLO v IXIA PTY LTD
[2001] SASC 262
Miscellaneous Appeal
WICKS J
Background

This is an appeal from an order dated 4 December 2000 of a Master in relation to various matters dealt with by the learned Master in the course of preparing a case for trial at first instance.
In 1997, proceedings were commenced in the Federal Court of Australia by IXIA Pty Ltd (“IXIA”) as applicant and Andrew Michael Szumylo (“Mr Szumylo”), Complete Systems & Solutions Pty Ltd and JACMM Nominees Pty Ltd as respondents.
In the Statement of Claim, various claims were made against Mr Szumylo personally, most of these claims being for the wrongful conversion of cheques the property of IXIA.
The respondents failed to file a defence and in consequence, a judgment was entered in favour of IXIA against the respondent Mr Szumylo in respect of various causes of action pleaded in the statement of claim. Judgment was entered for $435,810.16 together with interest in an amount of $122,980.66. Certain other claims by IXIA against the respondents in the action were adjourned for further consideration and determination. Judgment was given on 16 October 1998.
On 17 June 1999 the High Court handed down its judgment in Re Wakim; Ex parte McNally (1999) 198 CLR 511. In consequence of this decision certain judgments of the Federal Court were rendered ineffective and certain proceedings in that court were rendered invalid for want of jurisdiction.
A sequestration order was made against Mr Szumylo’s estate by the Federal Court on 26 July 1999.
In order to avoid the consequences of the Wakim decision the Federal Courts (State Jurisdiction) Act 1999 was enacted and came into force on 19 August 1999.
On 20 September 1999, the Federal Court ordered that the proceedings in the Federal Court between IXIA as applicant and Mr Szumylo and Others as respondents be stayed for want of jurisdiction.
Proceedings by Mr Szumylo against IXIA in this Court
On 11 October 1999 proceedings were commenced in this Court by Mr Szumylo, Complete Systems & Solutions Pty Ltd and JACMM Nominees Pty Ltd as plaintiffs against IXIA as defendant. The relief claimed was as follows:
"1.A declaration that the judgment entered on the 16th 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."
No pleadings were filed, Mr Szumylo being content to proceed on affidavits.
Complete Systems and Solutions Pty Ltd was struck off the register on 28 June 2000. JACMM Nominees Pty Ltd appear to have taken no part in this litigation and can, presumably, be disregarded.
Various applications in this action before the Master
I turn now to proceedings before a Master in this action which resulted in this appeal. Mr Szumylo, as plaintiff, had filed a number of applications which were heard by a Master on 4 December 2000. An order on this occasion was drawn up and sealed. It appears from the terms of the order that it applied to the following applications:
FDN 15(an application seeking a stay of the matter until determination of Mr Szumylo’s appeal to the Court of Criminal Appeal 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 16(an application that documents be produced relating to matters in question in this action in the possession etc of IXIA);
FDN 18(an application that documents be produced relating to matters in question in this action in the possession etc of the Commonwealth Director of Public Prosecutions).
The applications before the Master would appear from the terms of the formal order to include FDN 1 (the summons) and FDN 5 (an application setting out the terms of the relief claimed in the summons). There does appear to me to be an error in the formal order in that it refers to an application for directions dated 8 October 1999 and referred to as FDN 4. It would seem to me that the application concerned is FDN 5 and not FDN 4 as stated in the order. FDN 4 is an appearance on behalf of IXIA.
There are a number of further applications which are not mentioned in the order as sealed. I assume therefore that they were not before the Master on 4 December 2000 when he made his order. The applications in question are as follows:
FND 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).
The formal order made by the Master in the matter was as follows:
"Date of
Application:     8 October 1999          Summons  FDN1
  8 October 1998          Application for
Directions          FDN4
30 August 2000         Application for
stay etc               FDN15
4 September 2000     Application for
discovery etc     FDN16
11 September 2000    Application for
  disjoinder etc    FDN18
Applications
Made By:          The Plaintiffs
Date of Order: 4 December 2000
Attendances:    Mr Szumylo in person
  No appearance for the second and third Plaintiffs
  Mr Wells QC and Mr White for the Defendant
THE COURT ORDERS that:
1.     The applications be dismissed.
2.The Plaintiffs pay the Defendant’s costs of the application to set aside the action for costs in the other matter.
3.The action be certified fit for counsel.
[Signed]
A/ DEPUTY REGISTRAR"
Mr Szumylo’s purported appeal
On 8 February 2001, Mr Szumylo filed notice of this appeal to a single Judge of the Court against the order of the Master to which I have referred. The matter came before me for hearing. I will deal with the various grounds of appeal in the order in which they appear in the Notice of Appeal. The grounds of appeal are repeated in these reasons and are set out in italics:
1The learned Judge erred as a matter of law by not hearing the appellant’s application by way of an ex parte summons for a habeas corpus application dated 17 September 2000 set down to be heard on 4 December 2000 to allow a named person (a prisoner) to be present for evidence in the appellant’s matter. (R 98 SCR).
The learned Master did in fact deal with the matter on 4 December 2000. He made the following observation:
"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."
The Chief Executive Officer of the Correctional Services Department has a discretion under s 27 of the Correctional Services Act 1982 to grant a prisoner leave of absence for such purpose as he thinks fit. Whether the Chief Executive Officer would be prepared to grant leave of absence to Mr Collins in this case is entirely for him. I do not propose to become involved. Speaking for myself, I would probably have been prepared to hear Mr Collins if he were able to get to Court; but it is not my place to lobby for him to have leave of absence. In any event, it is now too late. Submissions in this matter concluded on 26 April 2001 and I reserved my decision on that date.
The question of prisoners who are to be witnesses is, of course specifically dealt with under the rules, but that is as far as the rules appear to go. Rule 99.08 of the Supreme Court Rules provides:
"Orders to bring up prisoners to give evidence in any proceeding whether civil or criminal, before any Court or tribunal, shall be sought from a Judge in chambers on summons."
There is no evidence in the proceedings before the learned Master to suggest that Mr Collins had any evidence to give to the Court in the applications before the Master. So far as an appeal is concerned, it is only in exceptional circumstances that further evidence of any kind is permitted. In the ordinary case, an appeal is a re-arguing of the case on the evidence that was put before the Master.
It seems that Mr Szumylo does not really want Mr Collins to attend in order to give evidence but rather to act as a “McKenzie friend”: McKenzie v McKenzie [1970] 3 All ER 1034. The Court has a discretion whether to allow a McKenzie friend to be present; Smith v R (1987) 71 ALR 631. A McKenzie friend will generally not be allowed to act as an advocate and will not be permitted to address the Court. He may however assist by making suggestions.
2 The learned Judge erred as a matter of law after issuing a directions hearing notice and the non-appearance of the defendant should have given rise to an automatic order r 98 of the Supreme Court Rules.
There is no such thing as an automatic order of the kind referred to. It is not for the Court to issue process seeking relief. That is the responsibility of the parties to litigation. In my view, there is no substance whatever in ground No 2.
3The learned Judge erred as a matter of law and should have ordered the attendance of the appellant’s friend in default of the non-appearance of the General Manager of Yatala Labour Prison.
I have already answered that question. There is nothing I can usefully add.
4The learned Judge erred as a matter of law by not hearing the appellant’s applications for discovery against the defendant (r 58 SCR).
There is power under r 58.04 of the Supreme Court Rules to order discovery of documents. If discovery is unnecessary, the application may be dismissed. In an appropriate case, discovery may be limited to particular documents or clauses of documents.
It seems to me that the facts required to be put before the Court to determine the matters in issue in this case are minimal. It may be necessary to give a brief description of the proceedings in the Federal Court and a brief history of what has happened in the matter up to the issue of the summons. I imagine that none of that would be in any way controversial. That being so, I fail to see why it is necessary for applications to be made for discovery against the defendant. The documents sought to be discovered and produced occupy a very long list running into some hundreds of documents.
Mr Szumylo complains that the learned Master did not deal with this application at the hearing on 4 December 2000. From the notes accompanying the order of the learned Master on 4 December 2000, limited reference is made to the question of discovery and I take it from that that the question of discovery was voiced and discussed. It would certainly have been possible for Mr Szumylo to raise the matter for discussion should he have wanted to do so.
In order to be discoverable, a document must relate to a matter in question in the action - not in some other action. Documents which do not relate to a matter in question or in issue are not relevant to the action and need not be discovered. Of course, documents which are discovered in a particular action can be used only in that action. It would be an abuse of process to use such documents in some other action without leave of the Court. If such documents were used in some other action, steps could be taken by their owner to restrain their use to the purpose for which they were discovered in the first place: Distillers Co. (Biochemicals) Ltd v Times Newspapers Ltd [1975] 1 QB 613.
5The learned Judge erred as a matter of law by not hearing the appellant’s applications for discovery against a person not a party to the action (r 60 SCR).
The position here is similar in many respects to that of discovery against a party to the action although the courts look more closely at the matter. A non-party should not be burdened in making discovery to the same extent as a party to litigation and should not be troubled unduly in having to search for documents and produce them for inspection.
In relation to non-party discovery the following principles are applicable:
(1)It is sufficient if the discovery sought is relevant for the fair conduct of a party’s case or for the saving of costs.
(2)The Court must balance fairly the cost of what is sought to be done against the benefit to be achieved.
(3)The discovery need only be of assistance in determining whether a genuine basis of claim exists and is not decisive of it.
(4)There must be some grounds for the application, i.e. some foundation that discovery is necessary, and not a mere speculation and a hope that there might be a cause of action. An arguable case must be shown: Kinross v SA Health Commission (SASC Judge Burley Judgment S5130 26 June 1995, unreported).
In the present case, no proper justification for non-party discovery in terms of r 60 has been made.
In my opinion, there is no basis for non-party discovery in this case.
6The learned Judge erred as a matter of law by not allowing proper argument that the appellant was unable to present. The argument was to be presented by the appellant’s friend (r 75.00.30 and r 11.04.10 SCR).
This matter has already been dealt with in par 1 above.
There is no substance in this ground. As can be seen from the notes accompanying the learned Master’s order on 4 December 2000 he gave careful consideration to this matter. However, he was confident of the view that he did not have power to order the attendance of Mr Collins before the Court for the purpose of assisting Mr Szumylo in the presentation of his case. I think he was right in taking that view.
It is not open to the Judge himself to act as advocate for a party in civil litigation; nor does the Judge have a responsibility to arrange legal representation for a party in such litigation.
7The learned Judge erred as a matter of law by ordering that the appellant has to be supported by his trustee in bankruptcy.
I take these words on the part of the learned Master as merely words in passing. It seems to me that the point in issue here is irrelevant to the matters which the learned Master had to decide and to the matters which I have to decide. Irrespective of whether or not the right to the declaratory relief which Mr Szumylo claims in the action is property, Mr Szumylo does not have a sufficient interest to confer locus standi to bring the action in this Court to which I have earlier referred: Cummings v Claremont Petroleum NL [1995-1996] 185 CLR 124. On the other hand, if the action were to have the support of the trustee in bankruptcy, he could be joined as an additional appellant to pursue the matter. However, it is difficult to see how the trustee would have the slightest interest in these present proceedings. Plainly, there is nothing in it for his creditors, to the contrary; the reverse is probably the case.
8The 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.
It is far too late now to complain about the Federal Court’s judgment obtained on 16 October 1998. By the time the appeal from the Master’s order was instituted, over two years had elapsed since the judgment of the Federal Court on 16 October 1998. Mr Szumylo could have done something about the matter in the period May to October 1998. Instead, he elected to sleep on his rights and not file a defence to the statement of claim.
Mr Szumylo had a solicitor acting for him for at least part of that time. Even if hospitalised, sufficient instructions could have been obtained at the bedside to enable a defence of some sort to be filed, thus avoiding the entry of a judgment in default of defence.
Mansfield J gave directions for the exchange of pleadings in the Federal Court action on 19 May 1998. A statement of claim was filed on 2 June 1998 but not served until on or about 14 August 1998. Counsel for the respondents sought and obtained an extension of time within which to file an appearance to 28 August 1998, and within which to file and serve a defence and any cross-claim to 25 September 1998. An affidavit was filed in the Federal Court indicating that the orders to which I have referred were specifically brought to the attention of the respondents by their legal advisors.
Various orders were made, but despite those orders, no defence was filed. The matter came before Mansfield J again on 14 October 1998 on which occasion a default judgment against Mr Szumylo only was sought. On that occasion, Mrs Szumylo appeared and asked that the matter be adjourned. After some argument, Mansfield J adjourned the matter to 16 October 1998 to enable the respondents to file and serve such affidavits as they were advised in relation to the filing of a defence. No defence was filed and Mrs Szumylo was unable to specify any timeframe within which that might be done.
By October 1998 Mr Szumylo claimed that he was under the care of a psychiatrist treating his mental state, that his solicitors had withdrawn from the matter due to a lack of funds and the outstanding accounts not paid, and that legal aid could not be obtained.
It seems to me that Mansfield J went out of his way to accommodate Mr Szumylo. Of course, he has had to consider the interests of the applicant, IXIA, as well bearing in mind that if money is owed to IXIA, that company is not required to be kept out of its money indefinitely. There may or may not be something wrong with the Federal Court’s judgment, but the issues which Mr Szumylo now seeks to agitate should have been attended to in the period from May to October 1998 when Mr Szumylo had every opportunity to check whether the amount claimed by the plaintiff was or was not correct. In my view, this ground of appeal is without merit.
9The appellant complains about the way he was treated in the hearing and the way the matter was disposed of.
I cannot comment on this paragraph as no particulars are given of the conduct complained of and without such particulars I am not in a position to deal with this ground. In any event, it is not my place to comment on the behaviour of some other judicial officer. This is not an appropriate ground of appeal.
10The appellant complains that the learned Judge did not give the proper assistance in accordance with law for an unrepresented person (r 75.00.30 & r 11.04.10 SCR).
This matter was dealt with in par 1 and par 6 of these grounds of appeal. I do not propose to discuss it further.
In my opinion, for the reasons I have given, there is no merit in any of the purported grounds of appeal set out above.
The summons and the application issued and filed on 11 October 1999

Although no mention was made of the summons and application issued and filed on 11 October 1999 but dated 8 October 1999 in the grounds of appeal, I note that the learned Master made an order dismissing the summons dated 8 October 1999 and issued on 11 October 1999 and an order dismissing an application in the same terms bearing the same date.
It seems that the summons and application are before me on this application. They are referred to in the Master’s order and as such they are before me. The Notice of Appeal says that Mr Szumylo, as appellant, complains about the whole of the Master’s order. I should point out that if the summons (FDN 1) is dismissed, that must be the end of the action. I am of opinion that the summons must be dismissed on two grounds.
Invalid Relief
First, it seems to me that the declarations and orders claimed in the summons issued on 11 October 1999 to which I have referred are invalid because they interfere directly with the procedures and authority of the Federal Court of Australia. Paragraph 1 of the summons seeks a declaration about an order made by the Federal Court. That is a direct and unwarranted interference. Secondly, par 2 speaks of the judgment referred to in par 1 as being revoked or alternatively set aside. It is clearly not within the capacity of the Supreme Court to revoke or set aside a judgment of the Federal Court. Thirdly, it is not within the capacity of the Supreme Court to remove an action in the Federal Court into the Supreme Court.
No locus standi
Secondly, Mr Szumylo is bankrupt, a sequestration order having been made in respect of his property on 26 July 1999. As an undischarged bankrupt, he had no locus standi to commence or maintain this action. That is because it is fundamental to the law of bankruptcy that the bankrupt is divested of both his interest in his property and liability for his provable debts: Cummings v Claremont Petroleum NL [1995-1996] 185 CLR 124 at p 138.
Declaratory relief
It seems to me that the declaratory relief sought in this action could serve no useful purpose. Substantive relief such as an order for the payment of a debt or damages or an injunction can be enforced. On the other hand a declaration simply remains a declaration. If the plaintiff obtaining such a declaration seeks to enforce it, he must bring fresh substantive proceedings setting out the relief sought. A declaration is a useful thing to have where two parties seek a ruling on the meaning of a contract or statute. The present case is however, unsuitable for declaratory relief.
Conclusion
For the reasons given I dismiss this appeal against the Master’s order dated 4 December 2000.

[2001] SASC 262

3 August 2001