Gough v Myall Pty [2001] FCA 1692

FEDERAL COURT OF AUSTRALIA

Gough v Myall Pty [2001] FCA 1692

PRACTICE AND PROCEDURE – application for leave to appeal out of time from judgment of Federal Magistrates Court – whether special reason – applicant unfamiliar with court procedures – appeal weak on facts – no question of law raised

Federal Court Rules O 52 r 15 Howard v Australian Electoral Commission [2000] FCA 1767 followed Jess v Scott (1986) 12 FCR 187 followed TONY GOUGH v MYALL PTY V 885 of 2001 GRAY J 27 NOVEMBER 2001 MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY V 885 of 2001

BETWEEN: TONY GOUGH

APPLICANT

AND: MYALL PTY

RESPONDENT

JUDGE: GRAY J

DATE OF ORDER: 27 NOVEMBER 2001

WHERE MADE: MELBOURNE

THE COURT ORDERS THAT: 1. The application for leave to file a notice of appeal out of time be dismissed. 2. The appellant pay the respondent's costs of the appeal, including the costs of the application for enlargement of time. 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 V 885 of 2001

BETWEEN: TONY GOUGH

APPLICANT

AND: MYALL PTY

RESPONDENT

JUDGE: GRAY J

DATE: 27 NOVEMBER 2001

PLACE: MELBOURNE

REASONS FOR JUDGMENT

The nature of the application 1 Mr Tony Gough ("the appellant") seeks to appeal from a judgment of a Federal Magistrate delivered on 2 July 2001. The Federal Magistrate dismissed an application by the appellant to set aside a bankruptcy notice. On 24 August 2001, the appellant filed three documents in the Court. One is described as an application for extension of time to file and serve a notice of appeal; the second is a handwritten notice of appeal and the third is a handwritten affidavit.

The facts 2 The facts of the matter may be recounted shortly. A solicitor's practice under the name of Cornwall Stodart was carried on by a company called Myall Pty ("Myall"). On 4 April 1996, Myall commenced a proceeding in the Melbourne Magistrates Court, claiming from the appellant the sum of $1,650 together with interest and costs. On 17 May 1996, Myall entered judgment in that proceeding in default of appearance by the appellant. The appellant subsequently applied to set aside that judgment and was granted a rehearing. The rehearing took place on 12 March 1997. As a result of the rehearing, the Magistrates Court gave judgment for Myall against the appellant in the sum of $1,650 together with $281 interest and $799 costs. The appellant made no application to the Supreme Court of Victoria seeking to review or to set aside that judgment. 3 On 12 April 1999, the appellant underwent an oral examination in respect of the judgment debt. In the course of that examination, he proposed that he should pay the judgment debt by instalments at the rate of $50 per month. This proposal was apparently accepted and the appellant paid amounts totalling $600. The last payment he made was on 9 March 2000. Myall then issued a bankruptcy notice, dated 30 March 2001, which it served on the appellant on 18 April 2001. On 8 May 2001, the appellant applied to the Federal Magistrates Court to set aside the bankruptcy notice. On 2 July 2001, McInnis FM dismissed the application with costs. As I have said, on 24 August 2001, the appellant filed his notice of appeal in this Court.

The Court's power 4 The notice of appeal was therefore outside the time fixed by O 52 r 15(1)(a)(i) of the Federal Court Rules. That period is twenty-one days after the date when the judgment appealed from was pronounced. It is therefore necessary for the appellant to seek the exercise of the power of the Court pursuant to O 52 r 15(2) for special reasons to give leave to file and serve a notice of appeal at any time. In effect, the application is one to enlarge the time for appeal. 5 The meaning of O 52 r 15(2) of the Federal Court Rules has been elucidated by a Full Court in Jess v Scott (1986) 12 FCR 187 at 195, where the Full Court said: "What is needed to justify an extension of time is indicated in r 15(2) by the words "for special reasons". It is that there be shown a special reason why the appeal should be permitted to proceed, though filed after the expiry of twenty-one days. In that context, 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." 6 Subsequently, in Howard v Australian Electoral Commission [2000] FCA 1767 at [7], Branson J expressed the view that it is appropriate for the Court in the exercise of the discretion under O 52 r 15(2) to take into account the importance of the question sought to be raised by the proposed appeal, the bona fides of the proposed appeal and the prima facie strength of the proposed ground of appeal.

The reason for the delay 7 The appellant has given an explanation of the reason for his delay in filing a notice of appeal. In his affidavit filed on 24 August he said: "I believed I had 30 day [sic] to appeal". From the bar table, he told me that he thought he had twenty-eight days in which to appeal. He also told me that he came to the Court's registry on the twenty-eighth day and was told that he was out of time. This is consistent with the statement in his affidavit that he received advice on the twenty-eighth day after judgment. He also told me, and said in his affidavit, that he endeavoured to obtain legal advice on a pro bono basis and was unable to do so, except that he was given general advice by a solicitor in Surrey Hills.

The nature of the appeal 8 The ground specified in the appellant's notice of appeal reads as follows: "Whereas respondent argued that you cannot go behind the decision of magistrated [sic], as I was not represented in the first instance I was unaware of procedures that did not allow new evidence. In the oath & affidavit statements were substantial in being untrue and therefore I will direct the D.P.P. to investigate fraud under the Crimes Act 1914 sect 35 and there I need further time to allow that course." 9 The appellant also attempted to argue before me that the Federal Magistrate had decided that he could not go behind the decision of the Victorian Magistrates Court and that therefore the evidence that the appellant sought to place before him could not be received. 10 It is necessary to examine the reasons expressed by the Federal Magistrate in order to test this proposition. Before I go to those reasons, however, I should say that the issue that the appellant sought to raise, apparently both in the Melbourne Magistrates Court and before the Federal Magistrate, was whether the appellant was a client of the firm of solicitors conducted by Myall. The appellant's contention was, and remained before me, that the real client was a Mr Higginbottom and that the appellant was not a client of the firm at all. On this basis, he says, he had a good defence to the claim of Myall, which was in respect of fees for advice given by a solicitor in the firm. 11 In his reasons for judgment, at [11] – [15], the Federal Magistrate said as follows: "I am urged by Mr Gough in this application to consider going behind the judgment, and in particular he has referred me to his own affidavit and correspondence from a Mr Higginbotham [sic] which, although undated has been cross-referenced to another letter, which is dated from Cornwall Stodart, so I interpret that the letter from Higginbotham [sic] is dated 8 September 1995. In any event, it is exhibit T1 attached to the affidavit of Mr Gough sworn 12 June 2001. I was urged by Mr Gough to take particular note of reference in that letter from Mr Higginbotham [sic] by which I should infer that Mr Gough was not the client but rather Mr Higginbotham [sic] is the client." It is relevant in cases of this kind to certainly look at all the material, which I have done, but before proceeding to be [sic] behind a judgment it should be noted that the principles of law are clear. A court does have jurisdiction to go behind a judgment to determine whether there is a debt owing to a petitioner. That has been established in a number of authorities and it is sufficient for me

for the purposes of this application to refer to two of those authorities, namely Wren v Mahony (1972) 126 CLR 212 and Corney v Brien (1951) 84 CLR 343. Before a court, however, will exercise its discretion to go behind a judgment debt, it has been held that it must be established that there are substantial reasons for questioning whether there is in truth and reality a debt owed to the creditor (see Re: Longo ex parte Longo [1995] [sic] 57 FCR 523). I also refer to the unreported decision of his Honour Finkelstein J in the Federal Court of Australia in the matter of Harrison v Charalambous (1999) [sic] FCA 902, where after reciting the authorities to which I have referred, his Honour goes on to say: "It is well established that if judgment is obtained by fraud or collusion or there has been some miscarriage of justice, a court can inquire into whether the judgment debt is a good debt. If a judgment has been obtained without any adjudication on the merits, for example, in the case of a default judgment, a court will more readily go behind that judgment to inquire whether there is a good debt." In this application, had the default judgment been entered and not been the subject of an application to set aside, and had there not been a rehearing where most if not all of the issues before me today were agitated before the magistrate, then this Court may have been more inclined to go behind the judgment. That is not to say that as a matter of law I am not entitled to go behind the judgment, even where there has been a hearing. However, in the present case on the material before me, I am not satisfied that it is appropriate to exercise my discretion to go behind the judgment. I am not satisfied that there is evidence the judgment was obtained by fraud or collusion, and on the material before me I am not satisfied that there has been established before me some miscarriage of justice. I can well understand that Mr Gough sincerely asserts and continues to assert that he was not the client and is not indebted. However, the events to a large extent confirm that the judgment, once obtained, was a judgment properly entered and I am entitled to have regard to the fact that at least $600 of that judgment was paid by instalments commencing 28 June 1999, concluding 9 March 2000." 12 It is apparent from that passage from his reasons for judgment that the Federal Magistrate did not take the view that he was not entitled as a matter of law to go behind the judgment. Rather, it is apparent that, having examined the evidence placed before him by the appellant, the Federal Magistrate was not satisfied that the appellant had made out any sufficient ground for going behind the judgment to ascertain whether there was a true debt. 13 The essential issue that the appellant seeks to agitate on appeal is one of fact. The appellant seeks to continue to have determined in his favour the question whether he was the client. He has twice lost that issue. He now claims that a solicitor has perjured himself. The appellant has had two opportunities to establish that proposition and has failed. Having looked at the documentary evidence that was before the Federal Magistrate, I am not surprised that the appellant failed on that issue. There are two letters relied on by Myall, written on the basis that the appellant, and not Mr Higginbottom, was the client. The appellant apparently made no attempt to refute that proposition until after he had been sued. To the extent that the Federal Magistrate's findings are based on the credit of witnesses, the authorities are clear that an appeal court will not disturb such findings, at least without having due regard for the fact that the primary trier of fact is in the best position to assess the credit of witnesses. 14 According to his affidavit, the appellant wishes to put forward "evidence that was not available at first hearing that fraud may exist in the respondent's case". This clearly demonstrates that he seeks to continue to agitate the question of fact. The appeal system does not allow a party to make repeated attempts to change findings of fact by introducing evidence that could have been introduced at an earlier stage. 15 It is clear that the appeal raises no significant issue of law. Prima facie, it is a very weak appeal on the question of fact. Insofar as the decision of the Federal Magistrate involved the exercise of discretion, it would be difficult for the appellant to appeal successfully from such an exercise. He has failed to refer to any material that would indicate that the exercise of the discretion by the Federal Magistrate miscarried.

Conclusion 16 For those reasons I am of the view that, despite the disadvantage of the appellant arising from his lack of familiarity with court procedures, no special reason exists to enlarge the time for filing a notice of appeal. I ought therefore to refuse the appellant leave to file his notice of appeal out of time. 17 In that notice of appeal, the appellant also indicated that he sought, as he put it, "a stay of execution of the proceeding until it is established that fraud was committed that would affect the judgment and decision of the Court". Since I am refusing leave to appeal out of time, there would be no point in considering the grant of such a stay. 18 Also before me today is a motion on the part of Myall to dismiss the appeal as incompetent on the ground that the notice of appeal discloses no proper grounds. Because I am refusing the appellant leave to appeal out of time, there will be no appeal. There is therefore no point in examining the notice of appeal from the standpoint of whether the appeal was in any event incompetent. 19 The order of the Court therefore will be that the application for leave to file a notice of appeal out of time be dismissed. 20 I also order that the appellant pay the respondent's costs of the appeal, including the costs of the application for enlargement of time. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray.

Associate: Dated: 30 November 2001

The Applicant appeared in person

Counsel for the Respondent: Mr S Collins

Solicitor for the Respondent: Cornwall Stodart

Date of Hearing: 27 November 2001

Date of Judgment: 27 November 2001