Background
Background to the litigation
In order to establish “special reasons”, Ms Teese must demonstrate circumstances which take the case out of the ordinary run of cases, since the latter are clearly intended to be governed by the general time limit of twenty-one days: Jess v Scott (1986) 12 FCR 187 at 195; Hannpost Pty Ltd v Mita Copiers Australia Pty Ltd (1996) 67 FCR 416 at 427-428; and see Jackamarra v Krakouer (1998) 195 CLR 516 at 539-543 per Kirby J.BACKGROUND FACTS The orders of the FMC made on 20 August 2002 against which Ms Teese wishes to appeal were made by Driver FM and were as follows;“1.A sequestration order be made against the estate of Ann-Carolyn Teese.2.The Applicant Creditor’s costs (including reserved costs, if any) be paid from the estate of the Respondent Debtor in accordance with the Bankruptcy Act 1966.3.A copy of these orders is to be provided to the Official Trustee within 2 days of entry of these orders.4.Pursuant to Section 52(3) of the Bankruptcy Act 1966, all proceedings under the sequestration order be stayed for 21 days after today’s date.”The court notes that the date of the act of Bankruptcy is 5 June 2001.” Ms Teese filed her application for an extension of time, which commenced this proceeding, on 9 December 2002. The respondents are a firm of solicitors who formerly acted for Ms Teese. They were substituted as petitioning creditors in the bankruptcy proceeding in the FMC. I will refer to them as “Clinch Neville Long”. Ms Teese, who appears unrepresented, has filed a draft notice of appeal setting out the following grounds of appeal which she would wish to raise:“1. His Honour erred in refusing applications for adjournment.2.His Honour erred in not going behind the judgment in [sic – on] which the substituted petitioning creditor relied.3.His Honour erred in accepting the bald statement of the substituted petitioning creditor that there was no written Costs agreement. 4.His Honour erred in making a Sequestration Order and granting a Stay of 21 days, as the making of a Sequestration Order, defeated the purpose and object of a 21 day stay.” In order to deal with grounds 1 and 2, it is necessary that I refer to the unfortunately complex historical background to the position in which Ms Teese now finds herself. As well, it is necessary that I refer to that background in addressing the reason for the lateness in Ms Teese’s attempt to file a notice of appeal. I will summarise the background in the following numbered paragraphs:1.On or about 13 August 1998 Ms Teese instructed Clinch Neville Long to act for her in relation to the following proceedings:(a)proceeding number 10174 of 1989 brought by the State Bank of New South Wales against Ms Teese in the Supreme Court of New South Wales; and(b)proceeding number 8573 of 1998 brought by Alfred Joseph Fox against Ms Teese in the District Court of New South Wales.2.On 19 August 1998 Clinch Neville Long sent to Ms Teese a fees agreement in relation to the Supreme Court proceeding. It set out, inter alia, the hourly rates the solicitors would charge for their services. Importantly, for present purposes, although the letter provided for monthly billing, it stated that Ms Teese was to “pay our fees and expenses on conclusion of the matter as agreed with you”. Also importantly for present purposes, under the heading “Terminating our services”, the letter stated as follows:“You may terminate our services at any time by advising us in writing. In that case we would be entitled to fees for work done up to that time and expenses incurred up to that time.We will not continue to do your work if you do not give us proper instructions, or if you fail to pay our bills, or if you fail to pay us money when required to cover fees and expenses that are to be incurred.”In sum, there was a general provision for payment on the conclusion of the matter with an express qualification if Ms Teese terminated the firm’s retainer. There is no reference to termination by the solicitors of their own retainer, except in the second paragraph set out above. As will appear below, Clinch Neville Long purported to terminate Ms Teese’s retainer of them for her failure to give them “proper instructions”. I think it was clearly implied that in such a case there would be a constructive termination of the retainer by Ms Teese with the result that the solicitors would be entitled to fees for work done and expenses incurred down to the termination. It would be preposterous that in a case in which the solicitors duly ceased acting for Ms Teese because she did not give them proper instructions, they should be disentitled to recover any fees for work done, or expenses incurred down to that time.3.On 28 May 1999 Clinch Neville Long sent to Ms Teese a letter supplementary to the one dated 19 August 1998, also relating to the Supreme Court proceeding, and also relating to the basis of the charging of fees. It included the following paragraph:“We confirm that Mr Clinch agreed that our fees would not be payable during the conduct of the hearing but will be payable by you on its completion, settlement of the proceedings or the retainer being terminated.” (my emphasis)This letter was to be read in the light of the earlier one. I think the reference to the retainer being terminated referred to a termination by Ms Teese at will at any time, and to a termination by Clinch Neville Long for cause, including a failure by Ms Teese to give proper instructions.4.On 29 July 1999 Clinch Neville Long sent to Ms Teese a further letter regarding the charging of fees. This letter related to the District Court proceeding brought by Mr Fox as well as to the Supreme Court proceeding brought by the State Bank of New South Wales. In relation to the District Court proceeding it stated that the solicitors were prepared to conduct the hearing on the same basis as that set out in their letter dated 19 August 1998 for the Supreme Court proceeding, and stated:“Our fees will be payable at the completion of the hearing but we confirm that payment is not conditional on you being successful. That is, we get paid in any event.” (emphasis in original)The reference to the firm’s letter of 19 August 1998 incorporated a reference to the terms in that letter mentioned earlier as to a failure by Ms Teese to give proper instructions.5.On 28 March 2000 Clinch Neville Long wrote to Ms Teese a letter referring to directions which had been made in both the Supreme Court and District Court proceedings, in respect of which she had not furnished them with instructions with the result that the directions of the Courts could not be complied with. The letter asserted that the lack of instructions placed the solicitors “in an impossible position”. They gave Ms Teese notice that in respect of each proceeding, after seven days from the date of the letter, they would file a notice of ceasing to act.6.On or about 6 April 2000 Clinch Neville Long filed a notice of ceasing to act in each proceeding.7.On 18 June 2000 Ms Teese was personally served with a letter from Clinch Neville Long dated 31 May 2000 and a solicitor/client bill of costs in itemised form dated 29 May 2000. The total amount of the bill, including disbursements, was $68,265.64. The bill related to both the State Bank proceeding in the Supreme Court and the proceeding in the District Court.8.On or about 3 August 2000 Clinch Neville Long applied to the Supreme Court of New South Wales for an assessment of their costs on a solicitor/client basis.9.On 30 October 2000 Phillip A Wilkins, solicitor and costs assessor, to whom the Supreme Court of New South Wales had assigned for determination the application for assessment of costs pursuant to the Legal Profession Act 1987 (NSW) (“the LP Act”), wrote to Clinch Neville Long requesting further information, including a copy of the costs agreement between them and Ms Teese, and enclosing a copy of Mr Wilkins’s letter to Ms Teese of the same date asking her whether she had any particular or general objections to the items in the bill.10.The evidence does not establish whether Ms Teese responded to Mr Wilkins, but on 11 November 2000 Clinch Neville Long received a facsimile transmission from Ms Teese seeking a meeting in late 2000 or early 2001.11.On 13 November 2000 Clinch Neville Long replied advising Ms Teese that a meeting prior to 17 December 2000 would be more convenient. Apparently no meeting took place.12.On 25 May 2001 Mr Wilkins forwarded to Clinch Neville Long his “Certificate as to Determination of Costs” and “Certificate as to Determination of Costs of Costs Assessor”. His determination was that the total amount of costs determined to be fair and reasonable was $68,060.00 and the total amount of disbursements determined to be fair and reasonable was $205.64, making a total of $68,265.64. Mr Wilkins’s own costs as costs assessor amounted to $484.45. Under s 208J of the LP Act, the Certificate as to the Determination of Costs, upon filing in the office or registry of a court having jurisdiction, is taken to be a judgment of that court for the amount of unpaid costs.13.On 6 June 2001 the Certificate as to the Determination of Costs was registered as a judgment of the District Court of New South Wales upon which the certificate was taken to be a judgment of that Court (cf s 208J of the LP Act). There is in evidence a Certificate of Judgment issued by that Court on 7 June 2001 (File No 5497/01) to the effect that Clinch Neville Long recovered judgment against Ms Teese on 6 June 2001 in the sum of $68,948.30.14.On 17 July 2001 Clinch Neville Long caused a writ of execution to be issued out of the District Court to enforce the judgment but by Notices of Non-Levy dated 21 August 2001, 15 November 2001 and 27 November 2001, the Sheriff’s Officer reported lack of success in attempted levies under the writ of execution.15.In the meanwhile, on 25 September 2000, Mr Fox had issued a bankruptcy notice in respect of a final judgment or order in his favour against Ms Teese and that notice had been served on her on 30 January 2001. Ms Teese applied to the FMC to set aside the bankruptcy notice but that application was dismissed on 5 June 2001. On 3 August 2001 Mr Fox filed a creditor’s petition against Ms Teese (proceeding SZ 450 of 2001 in the FMC).16.Also in the meanwhile, on 5 February 2001, McClellan J in the Supreme Court of New South Wales had entered Judgment against Ms Teese in favour of the State Bank of New South Wales.17.On 9 October 2001 Ms Teese filed a notice of opposition to Mr Fox’s petition in the FMC. Mr Fox’s creditor’s petition was listed and adjourned several times.18.On 12 February 2002 Matthew Hourn, a solicitor employed by Clinch Neville Long, appeared before Registrar Hedge in the FMC. Apparently, Ms Teese paid out Mr Fox. On 18 February 2002 Clinch Neville Long filed an application to be substituted as petitioning creditors. The order for substitution was made on 26 March 2002.19.The hearing of the creditor’s petition was adjourned to 30 April 2002. Registrar Hedge, who made the orders in the FMC, noted that “[a]ny District Court application to set aside the judgment is to be filed and served as soon as possible, preferably within 1 week”. No doubt this was a reference to the District Court judgment in favour of Clinch Neville Long.20.In the meanwhile, Ms Teese had appealed against the judgment of McClellan J in the State Bank proceeding to the New South Wales Court of Appeal. On 26 April 2002 Ms Teese served on Clinch Neville Long a notice of motion returnable on Monday 29 April 2002 before the Court of Appeal, making various complaints. On 29 April 2002 Handley JA struck out the motion in so far as it related to Clinch Neville Long and ordered Ms Teese to pay their costs.21.On 2 August 2002 the FMC made an order extending the life of the creditor’s petition and the further hearing of the petition was adjourned to 20 August 2002 and Ms Teese was directed to file an affidavit of means by 16 August 2002, which she failed to do.22.On 20 August 2002 Ms Teese sought an adjournment of the hearing of the creditor’s petition and a Registrar referred the matter to Driver FM. The transcript of the hearing before his Honour on that day is in evidence. His Honour heard submissions in support of the application for adjournment but refused the application, referring to fact that the creditor’s petition had been before the FMC for more than twelve months. The hearing of the petition was, however, adjourned to 4.00 pm the same afternoon.23.When the hearing of the proceeding commenced at 4.04 pm, Mr PA Gargan, who claimed to be a law student, said that Ms Teese had appointed him as her agent under s 308 of the Act. He handed up a written authority. Ms Teese was also present. Mr Gargan made submissions on her behalf and Ms Teese also made statements to the Court. In the course of the hearing, the following exchange took place:“Mr Gargan: ... Now, the respondent tells me that she has an agreement in writing by the petitioner/creditor ... that he agreed in writing to wait for his money until such time as the matter that he was being instructed in was settled. Obviously, prima facie, the lady has enough assets to meet the debt. I haven’t seen the evidence yet and I’m sorry I can’t take you to it right now.His Honour: “If there is an agreement in writing I’d be interested in seeing it. It should be put before me now and not used as a justification for an adjournment.” [the adjournment had previously been refused]Mr Gargan:I’ve asked the respondent to try and find it and if you can bear with us.His Honour: I don’t know, Mr Chippindall?Mr Chippindall: There is no such agreement in[sic – on] my instructions.His Honour: All right, thank you.Ms Teese:That’s a lie.Mr Gargan:Please, don’t say things like that.Ms Teese:Well, it is.Mr Gargan:Yes, I’ve got to admit I haven’t spotted it. Could you indicate to me what your current thinking is? Whether you feel that you could make a sequestration order this afternoon.His Honour: That is my present inclination, Mr Gargan. I’m influenced by the facts that these proceedings have had a long and somewhat tortured history and Ms Teese has been given indulgence on several occasions by way of adjournments in order to ventilate various issues and await various development.”I have set out at [5] above the orders made by Driver FM at the end of the hearing.24.On 21 August 2002 Clinch Neville Long forwarded a copy of the creditor’s petition and Driver FM’s orders to the Insolvency Trustee Service Australia (“ITSA”). Apparently ITSA caused details of the sequestration order to be entered in the National Personal Insolvency Index (“NPII”) on 23 August 2002.25.On 5 September 2002 Ms Teese filed in the FMC an application under s 153B of the Act for an annulment of her bankruptcy. The application for annulment was set down for hearing on 24 September 2002.26.On 10 September 2002 Ms Teese filed in the FMC an application for an extension of the stay which had been granted by Driver FM on 20 August 2002. That application was heard on the same day and dismissed when Driver FM held that he had no jurisdiction to extend the stay.27.The application for annulment came before a Registrar of the FMC on 24 September 2002. The Registrar made directions for the filing of appearances and notices of opposition and directed that Ms Teese’s application be fixed for hearing on 29 October 2002 before such Federal Magistrate as might be available. The Registrar also directed Ms Teese to file a statement of her affairs with her trustee in bankruptcy, Geoffrey Giles Woodgate (“the Trustee”). She has never filed a statement of her affairs.29.On 29 October 2002 the application for annulment came on for hearing before Driver FM. He ordered that the Commonwealth Bank of Australia, which Ms Teese had joined as a party, cease to be a party. His Honour fixed the application for annulment for hearing on 28 November 2002, presumably, to allow time for Ms Teese to file a statement of her affairs, to see if she could pay her debts and by that means obtain an annulment under s 153A of the Act.30.On 28 November 2002, the date fixed for hearing of the application for annulment, Driver FM gave Ms Teese leave to file in Court a notice of discontinuance of the annulment application, which she did. His Honour ordered that no further application for annulment be accepted for filing without leave of the FMC. He also ordered that the costs of Clinch Neville Long and of the trustee be paid by Ms Teese and, if not paid, form part of Clinch Neville Long’s costs on the obtaining of the sequestration order and of the expenses of the trustee. He also ordered that a certificate of title to certain land and a discharge of mortgage be delivered by Ms Teese to the trustee by 5 December 2002.31.As noted earlier, Ms Teese’s application which commenced this proceeding was filed on 9 December 2002.32.The trustee provided a report to creditors on 17 December 2002 referring to the non-cooperation of Ms Teese.MY REASONING ON THE APPLICATION FOR EXTENSION OF TIMEExplanation for delay
Decision
Reasons for decision
LINDGREN J
First, it was a totally supportable exercise of his Honour’s discretion to refuse the adjournment. The proceeding in the FMC had already had a long and tortuous history. Whether to grant an adjournment called for an exercise of discretion. It is not shown that his Honour’s discretion miscarried.Failure to go behind the District Court judgment in favour of Clinch Neville Long Secondly, I do not think his Honour erred in failing to go behind the District Court judgment in favour of Clinch Neville Long. The LP Act lays down procedures according to which objections may be made to a solicitor’s bill of costs. Mr Wilkins invited Ms Teese to put any objections before him as the assigned cost assessor. She either did or did not do so. Section 208K of the LP Act provides that a costs assessor’s determination is binding on all parties to the application and that no appeal or other review lies in respect of the determination, except as provided by Division 6 of Part 11 of that Act. Ms Teese did not seek a review of Mr Wilkins’s determination by the proper officer of the Supreme Court under s 208KA of the LP Act.The statement made to the Federal Magistrate The third ground of appeal is met by the fact that the costs agreement provided that costs were payable not only after completion of the proceeding but also upon termination of the retainer of the solicitors. Perhaps this would have been so even if the terms of the costs agreement did not say so, but they did say so. I have given my reasons earlier for thinking that in a case of termination of their own retainer by the solicitors themselves for cause, they were entitled to be paid for work done and expenses incurred down to the time of termination. Accordingly, Mr Chippindall’s instructions that there was no costs agreement providing simply that the solicitors were to wait for payment until the matter in which they were instructed was settled were correct instructions.Defeat of the twenty-one day stay by the making of the sequestration order There is no substance in the fourth ground of appeal either. That ground was put in various ways by Ms Teese. Her chief submission was that Clinch Neville Long wrongly, and inconsistently with the twenty-one day stay, caused particulars of the sequestration order to be recorded in the NPII. Subsection 52(1A) of the Act provides as follows:“If the Court makes a sequestration order, the creditor who obtained the order must give a copy of it to the Official Receiver for the District in which the order was made.”The FMC had no power to relieve Clinch Neville Long of the obligation to comply with that statutory provision, but even if the FMC had had power to do so, it did not purport to do so by its orders of 20 August 2002. By ordering that a copy of his orders be provided to the “Official Trustee” within two days of entry of the orders, Driver FM made it clear that the stay of all proceedings “under” the sequestration order for twenty-one days did not include a stay on the discharge of the obligation imposed on the solicitors to provide a copy of the orders to the Official Receiver.