Young v Hughes Trueman Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Young v Hughes Trueman Pty Ltd [2016] FCA 1176

Appeal from: Application for extension of time: Young v Hughes Trueman Pty Ltd & Anor [2016] FCCA 989
File number: NSD 920 of 2016
Judge: BROMWICH J
Date of judgment: 30 September 2016
Catchwords: PRACTICE AND PROCEDURE – application for extension of time to file notice of appeal against refusal to set aside bankruptcy notice – where factual substratum of application is fallacious allegation of conspiracy – where no evidence to support factual or legal foundation for counter-claim, set-off or cross demand under s 40(1)(g) of Bankruptcy Act 1966 (Cth) or conspiracy – application dismissed with costs
Legislation:

Bankruptcy Act 1966 (Cth), s 40(1)(g)

Civil Procedure Act 2005 (NSW), s 98

Federal Court Rules 2011 (Cth), rr 36.03(a)(i), 36.05(3)

Cases cited:

ALA15 v Minister for Immigration and Border Protection [2016] FCAFC 30

Attwells v Jackson Lalic Lawyers Pty Ltd [2016] HCA 16; (2016) 331 ALR 1

AXQ15 v Minister for Immigration and Border Protection [2016] FCAFC 73

D’Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1

Johnson v Johnson [2000] HCA 48; 201 CLR 488

Margo Young v Brian Keith Hones & Ors [2015] HCASL 73

SZTRY v Minister for Immigration and Border Protection [2015] FCAFC 86

Young v Hones [2014] NSWCA 337

Young v Hones (No 2) [2013] NSWSC 1429

Young v King (No 9) [2016] NSWLEC 4

Young v King (No 8) [2015] NSWLEC 187

Young v King (No 6) [2015] NSWLEC 111

Young v King [2004] NSWLEC 93
Date of hearing: 21 July 2016
Registry: New South Wales
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Category: Catchwords
Number of paragraphs: 95
Solicitor for the Applicant: Mr R Newell, L.C. Muriniti & Associates
Counsel for the Respondents: Mr S Gray
Solicitor for the Respondents: Kennedys

ORDERS

NSD 920 of 2016
BETWEEN:

MARGO YOUNG

Applicant
AND:

HUGHES TRUEMAN PTY LTD

First Respondent

STEPHEN JOHN PERRENS

Second Respondent

JUDGE:

BROMWICH J

DATE OF ORDER:

30 SEPTEMBER 2016

THE COURT ORDERS THAT:

1.The application for an extension of time is dismissed.

2.The applicant must pay the respondents’ costs as agreed or assessed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

BROMWICH J:

Introduction

  1. This is an application under r 36.05 of the Federal Court Rules 2011 (Cth) for an extension of time to file a notice of appeal from orders made by a judge of the Federal Circuit Court of Australia on 29 April 2016. The primary judge dismissed an application to set aside a bankruptcy notice which was issued on the basis of an unmet order for costs made in the Supreme Court of New South Wales following the applicant’s failed negligence suit in that Court, those negligence proceedings having been appealed to finality and there being no basis for the costs order not to stand.

  2. The bases for seeking to set…

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Details
Case
[2016] FCA 1176
Decision Date

CaseChat Overview and Summary

In the matter of Young v Hughes Trueman Pty Ltd, the applicant sought an extension of time to file a notice of appeal against the refusal to set aside a bankruptcy notice. The application was dismissed by the court. The primary judge had found that the applicant’s grounds for appeal were without merit, and the appeal was unlikely to succeed. The applicant also sought to rely on a conspiracy allegation as a basis for setting aside the bankruptcy notice, but the court found that there was no evidence to support this claim.

The court had to determine whether the applicant had provided sufficient grounds for an extension of time to appeal. The applicant argued that there were errors in the primary judge’s assessment of the prospects of success of the appeal, and that there was a conspiracy that warranted setting aside the bankruptcy notice. The court found that the applicant’s claims were without merit, and that the primary judge’s assessment of the appeal’s prospects was correct. The court also found that there was no evidence to support the conspiracy allegation.

The court dismissed the application for an extension of time, finding that the applicant had not provided sufficient grounds for an appeal. The court also found that the applicant’s conspiracy allegation was baseless, and that there was no evidence to support it. The court ordered that the applicant pay the respondents’ costs. The dismissal of the application and the order for costs reflect the court’s view that the applicant’s appeal was unlikely to succeed, and that the application was an abuse of process.

Orders

Orders of the court

1. The application for an extension of time is dismissed.

2. The applicant must pay the respondents’ costs as agreed or assessed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Ground 11 in support of the extension of time application must fail, and further would enjoy no reasonable prospect of success in this Court if leave were granted to rely upon it in a substantive appeal.Ground 12 – error in finding no admissible evidence that the [claimed] award of costs in favour of the applicant against the respondents would exceed the amount of the bankruptcy notice Again, this ground misstates what his Honour in fact found. His Honour said that there was no admissible evidence that established to his Honour’s satisfaction that any award of costs in favour of the applicant against the respondents in the L&E Court would exceed the amount of the bankruptcy notice. His Honour noted that no costs agreement was tendered and no time sheets or tax invoices were relied upon, noting also that the asserted overall quantum of $3 million of costs owing to the applicant’s lawyers was remarkable. I endorse the primary judge’s conclusion, not least because the situation was not remedied in this Court. There was no basis at all, let alone any proper basis, for being able to ascertain at all, let alone with any degree of precision, what the quantum of costs liability of the respondents to the applicant might be. Even that conclusion assumes that there would likely be any entitlement to a costs order against the respondents at all, which I consider to be at best extremely remote. Ground 12 in support of the extension of time application must fail, and further would enjoy no reasonable prospect of success in this Court if leave were granted to rely upon it in a substantive appeal.Ground 13 – denial of natural justice [procedural fairness] in holding that the application in Young v King (No 9) was an abuse of process having informed the applicant’s legal representative that there was no need to hear him on the question of “abuse of process” This ground also misrepresents the effect of the primary judge’s reasons. His Honour did not himself find that the application in Young v King (No 9) was an abuse of process, but rather did no more than record in his reasons the fact that Sheahan J had made such a finding in that case, albeit that his Honour agreed with that finding. In any event, the primary judge said that he did not need to hear the applicant about abuse of process in the course of argument as to whether certain affidavit evidence (an affidavit of John (Jack) Davies of 8 October 2015) should be allowed to be read, not on the question of abuse of process at large. A ruling on that evidence immediately followed, without any reliance on abuse of process, such that there was no denial of procedural fairness. The evidence was not permitted to be read because it was hearsay and did not meet the requirements for the expert evidence exception to apply to prevent it from being inadmissible opinion evidence. Ground 13 in support of the extension of time application must fail, and further would enjoy no reasonable prospect of success in this Court if leave were granted to rely upon it in a substantive appeal.Ground 14 – alleged apprehended bias or actual bias on the part of the primary judge

Decision

Reasons for decision

Success on the first limb in the Court of Appeal would be difficult in the extreme, although not conceptually impossible. It is not unheard of, even without an offer of compromise or the like, for the unsuccessful party to litigation nonetheless to obtain a favourable costs order. I hasten to add that there was nothing to indicate that this was such a case, let alone sufficient to warrant setting aside a bankruptcy notice. In fact, the applicant’s case was even weaker than that, because the second limb was fanciful and ludicrous, relying as it did on establishing an entitlement to an asserted $3 million in costs based upon a wildly improbable conspiracy, without any precise expression of its terms and formation, let alone evidence. There is no foundation that I can see for any such entitlement to be established, let alone to the degree required to set aside a bankruptcy notice by reason of a counter-claim, set-off or cross demand equal to or exceeding the costs order upon which the bankruptcy notice was based. As the applicant had to succeed on both limbs, and neither had any proper foundation, this was a hopeless basis for seeking to set aside the bankruptcy notice.Grounds 6 to 9 – grounds referring to the decision of Sheahan J in Young v King (No 6) and the appeal from that decision Each of grounds 6 to 9 rely upon asserted errors in the treatment by the primary judge of either the judgment of Sheahan J in Young v King (No 6), or in the assessment of the prospects of the Court of Appeal granting leave to appeal from that decision. Each of those asserted grounds, which were not developed or addressed in either written or oral submissions on behalf of the applicant, are devoid of merit. In particular:(1)it was open to the primary judge to conclude that Sheahan J’s reasons were adequate, but even if that was not so, no basis has been advanced for permitting an appeal to be conducted on such a finding which could not of itself be a basis for overturning the primary judge’s orders or any part of his Honour’s substantive reasons (ground 6);(2)the primary judge was not obliged to find that Sheahan J’s reasons were inadequate, nor to consider whether the applicant’s appeal in that case might succeed on a procedural point concerning the adducing of evidence, including the evidence of Dr Stephen John Perrens and Warwick Davies, especially in light of his Honour independently not being satisfied that there was any evidence of the conspiracy upon which the applicant relied in the Federal Circuit Court (ground 7);(3)it was open to the primary judge to conclude that there were strong discretionary reasons for the Court of Appeal to refuse leave to appeal against an unsuccessful application for costs, especially in protracted proceedings (ground 8); and(4)there is no apparent reason why the primary judge had to have regard to any particular aspect of the application for costs upon which the applicant relied – it was sufficient for his Honour to identify why that application for costs had poor prospects both at first instance and on appeal (ground 9).

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.