FEDERAL COURT OF AUSTRALIA Jackson-Grose v Minter [2002] FCA 275 BANKRUPTCY – appeal from order of Federal Magistrates Court dismissing application to set aside bankruptcy notice – appellants failed to comply with directions and attend hearings – appeal dismissed for want of prosecution. DAVID JACKSON-GROSE and CATHERINE HELENE JACKSON-GROSE v DIANA LOUISE MINTER N 1201 of 2001 GOLDBERG J 13 MARCH 2002 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY N 1201 of 2001 ON APPEAL FROM THE FEDERAL MAGISTRATES' COURT OF AUSTRALIA BETWEEN: DAVID JACKSON-GROSE and CATHERINE HELENE JACKSON-GROSE Appellants AND: DIANA LOUISE MINTER Respondent JUDGE: GOLDBERG J DATE OF ORDER: 13 MARCH 2002 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The appellants pay the respondent's costs of and incidental to the appeal, including the motion filed 15 February 2002. 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 N 1201 of 2001 ON APPEAL FROM THE FEDERAL MAGISTRATES' COURT OF AUSTRALIA BETWEEN: DAVID JACKSON-GROSE and CATHERINE HELENE JACKSON-GROSE Appellants AND: DIANA LOUISE MINTER Respondent JUDGE: GOLDBERG J DATE: 13 MARCH 2002 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 By notice of appeal filed on 14 August 2001, the appellants appealed from an order of the Federal Magistrates' Court made on 24 July 2001 whereby the Court dismissed an application by the appellants to set aside a bankruptcy notice addressed to the appellants dated 1 June 2001, which was served on the first appellant on 11 June 2001 and on the second appellant on 6 June 2001 and ordered that the appellants pay the respondent's costs of the application to set aside the bankruptcy notice, including reserved costs, to be taxed in accordance with the Federal Court Rules in default of agreement. 2 The grounds set out in the notice of appeal were in the following terms: "1. That the Magistrate erred in law. 2. That the Magistrate incorrectly excluded evidence that was essential to proving the Appellants' case. 3. That the Magistrate deprived the Appellants of natural justice." 3 On 3 October 2001, a Registrar of the Federal Court gave directions in relation to the prosecution of the appeal which included a direction that the appellants file and serve appeal books by 31 October 2001. The appellants failed to comply with that direction and no appeal books were filed by the appellants. The appeal was placed in the list of appeals to be called over by Sackville J on 31 October 2001. The appellants did not appear at the callover. Sackville J gave directions in relation to the hearing of the appeal which included the usual order regarding the filing and service of the appellants' outline of submissions, namely, in accordance with Practice Note No 1, that the appellants file and serve their outline of submissions five clear working days before the date of hearing of the appeal, and that the respondent file and serve her outline of submissions two clear working days before the date of hearing of the appeal. Orders were also made in relation to the filing of any notice of motion by the respondent to strike out the appeal. Sackville J directed that the respondent notify the appellants of the orders he had made within seven days by a letter directed to the appellants at their address for service. This was done by the respondent's solicitors by letter dated 8 November 2001, which referred to Sackville J making the usual order regarding the lodgment of submissions and enclosed a copy of Practice Note No 1. 4 By 15 February 2002, the appellants had not filed or served any appeal books, nor had they filed or served any outline of their submissions on the appeal. On 15 February 2002, the respondent filed a notice of motion seeking orders that the appeal be dismissed and that the appellants pay the respondent's costs of the appeal and the motion. This notice of motion was returnable on the date and at the time fixed for the hearing of the appeal. 5 At approximately 1.30pm on Wednesday, 20 February 2002, the Duty Registrar of the Court received a letter from the first appellant sent by facsimile transmission in which he stated that due to health reasons he would be unable to attend the hearing on the following day. In the letter, the first appellant sought an adjournment of the appeal. The Duty Registrar sent a letter by facsimile transmission to the first appellant on the same day referring to his letter of 20 February 2002 and informing him that the appeal was set down for hearing the next day and that the appellants should appear at the hearing if they wished to make any submissions to the Court. 6 At approximately 6.45am on the next day, 21 February 2002, the first appellant sent two pages of written submissions and a nine page affidavit in support of his submission that he could not appear at the hearing on that day. He exhibited to the affidavit a medical certificate from a doctor stating that he was "suffering from a personal illness" and would be unfit for work from 18 to 21 February 2002 inclusive. The personal illness was not identified. In the affidavit, the first appellant referred to an asthmatic condition. 7 The respondent opposed any adjournment of the hearing of the appeal and submitted that the appeal should be dismissed with costs. I gave the appellants another opportunity to comply with the directions to bring on the hearing of the appeal and I made orders that they file and serve appeal books in accordance with the orders of Registrar Koller dated 3 October 2001 by 4 March, that they file and serve an outline of submissions by 4 March 2002 and that the respondent file and serve her submissions by 8 March 2002. I also required the respondent to lodge with the Court by 4.00pm on Monday, 25 February 2002, copies of exhibits tendered in the Federal Magistrates Court because the appellants had intimated in their material that they had been unable to access those exhibits for the purpose of preparing the appeal book. At that time, I adjourned the hearing of the appeal to 2.15pm this day. 8 The hearing on 21 February took place in Sydney but I decided to hold today's hearing in Melbourne for the purpose of giving the appellants the opportunity to attend the hearing in Melbourne, rather than incur the inconvenience and cost of travelling to Sydney. The appeal is being heard by videoconferencing facilities with Sydney where the respondent appears. The appellants were notified by letter dated 21 February of the orders which I had made. Earlier today the Court received an affidavit and an outline of submissions from the first appellant indicating that he and the second appellant would be unable to attend the hearing today due to the fact that he maintained that he was seriously ill and he indicated a history of illness. I have read those submissions and that affidavit. 9 There is a considerable history and background to the appeal which is necessary for me to consider in determining how I should deal with the appeal today. The genesis of the sequence of events leading up to the appeal occurred in January 1998 when the respondent lent the appellants $100,000 for three months, which loan was secured by an unregistered second mortgage over the appellants' home. The appellants defaulted under the loan, the secured property was sold and after payment to the first mortgagee of the amount due under the first mortgage, the respondent received only $6,000. The respondent and the appellants executed a further loan agreement in respect of the balance payable under the original loan, namely $128,000. This further loan was unsecured. The appellants defaulted in the payments to be made under the second loan agreement and the respondent commenced proceedings in New South Wales District Court in February 1999 to recover damages pursuant to the second loan agreement. 10 The appellants filed a defence to the respondent's claim and subsequently issued separate proceedings alleging that the respondent had agreed to vary the second loan agreement and that the respondent in fact owed the appellants money. The two proceedings were consolidated and were set down for hearing on 10 and 11 October 2000. On 10 October 2000, new solicitors appeared for the appellants and on 11 October the District Court vacated the hearing dates and rescheduled the proceeding for hearing on 5 and 6 December 2000. 11 On 5 December 2000, the matter came on for hearing and the appellants' solicitors were given leave to withdraw from the proceeding as they had been unable to obtain proper instructions from the appellants. The first appellant applied to vacate the hearing dates on the basis that he required time to seek other legal advice. The application for the adjournment was granted on 6 December and the matter was set down for hearing on 7 and 8 March 2001. 12 The matter came on for hearing on 7 March 2001. The appellants were represented by counsel instructed by a third firm of solicitors. Counsel informed the Court that he had only been instructed the previous day and that he and the solicitors required time to read the material and prepare the case. Counsel sought an adjournment of the hearing and the matter was adjourned to 7 May 2001. The matter came on for hearing on that date and the appellants' solicitor was given leave to withdraw from the proceeding on the basis of his inability to obtain proper instructions from the appellants. The appellants were not present in court on that date but an unqualified friend of the first appellant informed the Court that the first appellant was then in Melbourne and would be filing a summons seeking to remove the proceeding into the Supreme Court and to join other parties, and that in those circumstances the appellants sought an adjournment. The Court was not given any reason why the appellants were not present at the Court for the hearing. The judge stood the matter down until 2.00pm to enable the appellants to appear and requested the unqualified friend to telephone the first appellant to inform him of the adjournment. The matter was called on later that day and there was no appearance by or on behalf of the appellants. 13 The hearing then proceeded ex parte and the Court entered judgment for the respondent in the sum of $290,840 with costs and dismissed the proceeding commenced by the appellants who were ordered to pay the respondent's costs of that proceeding up to the date when the two matters were consolidated. The solicitor for the respondent has estimated that the costs payable by the appellants in respect of the District Court proceeding will, when assessed, exceed $100,000. 14 The appellants filed a notice of appeal in the Court of Appeal of the Supreme Court of New South Wales on 5 June 2001. There was no application for a stay of the proceeding and as no grounds of appeal were filed within three months, the appeal was deemed to have been discontinued. A motion subsequently filed by the appellants for leave to restore the appeal and to file grounds of appeal outside the time was dismissed on 3 December 2001 when there was no appearance by or on behalf of the appellants. 15 On 15 June 2001, the respondent was served with a summons filed in the Supreme Court of New South Wales on 8 May 2001 in which the appellants were plaintiffs and the respondent and twenty‑five other persons and corporations were defendants. The summons sought unspecified damages against the defendants as a result of an alleged conspiracy against the plaintiffs to damage their trade exchange business. After various directions hearings, a motion was filed on behalf of the respondent to strike out the proceeding for want of prosecution for failure to comply with directions of the court. On 16 October 2001, a Master made an order dismissing the summonses against all defendants and ordered the appellants to pay the costs of the defendants. 16 On 22 June 2001, the appellants had filed a notice of motion in the District Court of New South Wales seeking to set aside the judgment of the Court on 7 May 2001. That motion came on for hearing on 21 September 2001 when there was no appearance on behalf of the appellants and the motion was dismissed with costs. 17 A bankruptcy notice dated 1 June 2001 issued on the application of the respondent was served on the first appellant on 11 June 2001 and on the second appellant on 6 June 2001. On 25 June 2001 an application to set aside that bankruptcy notice was filed in the Federal Magistrates' Court and came on for hearing before Federal Magistrate Driver on 10 July 2001. On that date, the first appellant appeared for the appellants and sought an adjournment to file additional evidence. The application was adjourned to 24 July 2001 for hearing. On that date the first appellant again appeared for the appellants, the hearing proceeded and the application to set aside the bankruptcy notice was dismissed with costs. 18 This brief recitation of the history of the matter both in this Court and in other courts demonstrates that on almost every occasion on which the appellants have been given directions by a court or have been required to attend court and present argument on the issues before a court they have either failed to comply with the directions, or have failed to turn up, or they have sought an adjournment through legal representatives who have subsequently sought and being given leave to withdraw from the proceedings due to an inability to obtain instructions from the appellants. 19 In the letter received by the Court on 20 February 2002, the first appellant indicated that he had been seriously sick with bronchial asthma for most of the time since mid 2001. This condition has not been independently verified or supported. The first appellant in the letter said that his asthma became much worse earlier that week and that he went to his general practitioner on 18 February 2002 who considered it impossible for him to work at that time. The letter enclosed a medical certificate. The medical certificate stated no more than the opinion of the doctor that the first appellant was "suffering from a personal illness" and would be unfit for work from 18 to 21 February 2002 inclusive. There was no indication given by the doctor as to what the personal illness was or as to why or under what circumstances the first appellant was unable to attend a court hearing. 20 Although the first appellant has said in his material that he has been too ill and therefore unable to prepare the material, the outline of submissions and the documents required for this hearing, he has been able to prepare affidavits and written submissions both in February 2002 and also leading up to today which indicates an ability to prepare material and to address the issues which are required to be addressed in the proceeding. Although there has been medical material filed by the first appellant and referred to by the appellants in their material today, I am not satisfied on the basis of that material that the appellants have not been able to prepare for this appeal, to file the documents required to be filed in accordance with my earlier directions, and to appear at the hearing of the appeal. 21 The first appellant referred to a letter of 27 February 2002 from Dr Mark Sweet saying that he would be unfit for work and travel until 8 March due to persistent asthma. This was followed up by a medical certificate dated 12 March, which again indicated that the first appellant was "suffering from a personal illness" and would be unfit for work from 12 March to 15 March 2002, which includes the date set down for this appeal. That medical certificate does not indicate again what the nature of the personal illness is. It appears that the first appellant has been able to go out and see doctors but has not been able to prepare material which he has been required to prepare, notwithstanding his ability to prepare substantial written submissions and a substantial affidavit. 22 In all the circumstances, I am satisfied on the material before me that the appellants have had sufficient time and an adequate opportunity to prepare the relevant material required to be prepared in accordance not only with the directions I gave on 21 February 2002, but also the directions given in this proceeding on earlier occasions. In those circumstances, the jurisdiction provided for under O 52 r 38(1)(a) has been invoked by the respondent. Order 52 r38(1)(a) provides: "(1) Where an appellant has not done any act required to be done by or under these Rules, or otherwise has not prosecuted his appeal with due diligence, the Court may – (a) order that the appeal shall be dismissed for want of prosecution;" I am satisfied in all the circumstances, having regard to the failure of the appellants to comply with earlier directions and their failure to attend at the hearing of the appeal today, that the appeal should be dismissed. The formal orders of the Court will be that the appeal be dismissed and that the appellants pay the respondent's costs of and incidental to the appeal, including the motion filed 15 February 2002. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg. Associate: Dated: 18 March 2002 There was no appearance by or on behalf of the appellants Counsel for the Respondent: Mr B Skinner Solicitor for the Respondent: TRB Law Date of Hearing: 21 February, 13 March 2002 Date of Judgment: 13 March 2002