FEDERAL COURT OF AUSTRALIA Scully v Jones [2002] FCA 1396 PRACTICE AND PROCEDURE – application for extension of time within which to file notice of appeal – whether appeal would be futile – applicant becomes bankrupt while judgment below reserved – whether right of appeal would be property vested in trustee in bankruptcy – whether applicant has an "interest" in orders below which would give locus standi to appeal. BANKRUPTCY – application for extension of time within which to file notice of appeal – applicant becomes bankrupt while judgment below reserved – whether right of appeal would be property vested in trustee in bankruptcy – whether applicant has an "interest" in orders below which would give locus standi to appeal. Bankruptcy Act 1966 (Cth) subs 5(1) ("property") Cummings v Claremont Petroleum NL (1996) 185 CLR 124 discussed OLGA SCULLY v JEREMY JONES N 1026 OF 2002 LINDGREN J 8 NOVEMBER 2002 SYDNEY (VIA VIDEO LINK TO LAUNCESTON) IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1026 OF 2002 BETWEEN: OLGA SCULLY APPLICANT AND: JEREMY JONES RESPONDENT JUDGE: LINDGREN J DATE OF ORDER: 8 NOVEMBER 2002 WHERE MADE: SYDNEY (VIA VIDEO LINK TO LAUNCESTON) THE COURT ORDERS THAT: 1. The application for extension of time be dismissed. 2. The applicant pay the respondent's costs of that application. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1026 OF 2002 BETWEEN: OLGA SCULLY APPLICANT AND: JEREMY JONES RESPONDENT JUDGE: LINDGREN J DATE: 8 NOVEMBER 2002 PLACE: SYDNEY (VIA VIDEO LINK TO LAUNCSTON) REASONS FOR JUDGMENT 1 The applicant ("Ms Scully") seeks an extension of time in which to file and serve a notice of appeal against orders made by a Judge of the Court (Hely J) on 2 September 2002. The application for extension of time, together with a form of the proposed notice of appeal, was filed on 30 September 2002. Clearly the twenty-one day period allowed by O 52 r 15 of the Federal Court Rules had not long passed. The respondent ("Mr Jones"), through senior counsel, does not argue that he is prejudiced by the lateness. 2 When the application came on for hearing it appeared that the only issue to be determined was whether the granting of an extension of time would be futile because an appeal would be doomed to fail. However, senior counsel for Mr Jones raised a second issue. He established that Ms Scully presented her own petition for bankruptcy on 23 July 2002, a date between the reservation and delivery of judgment; that the petition was accepted on that date; and that the Official Trustee is trustee of Ms Scully's estate. Senior counsel submitted that Ms Scully's bankruptcy had the effect that the proposed appeal would be incompetent. 3 His Honour's orders of 2 September 2002 were as follows: "1. It be declared that [Ms Scully] has engaged in conduct rendered unlawful by Part IIA of the Racial Discrimination Act 1975 (Cth) by having distributed the following leaflets in letterboxes in Launceston, Tasmania and by selling or offering to sell such leaflets at a public market in Launceston being the leaflets described as: (a) 'The Inadvertent Confession of a Jew'; (b) 'The Jewish Khazar Kingdom'; (c) 'Russian Jews Control Pornography'; (d) Untitled document appearing at page 25 of applicant's affidavit; (e) 'The Most Debated Question of Our Time – Was There Really a Holocaust?'; (f) Untitled document appearing at page 30 of applicant's affidavit; and (g) Untitled document with handwritten annotations appearing at page 35 of applicant's affidavit. 2. [Ms Scully] be restrained from repeating or continuing such conduct. 3. [Ms Scully] be restrained from distributing, selling or offering to sell any leaflet or other publication which is to the same effect as any of the leaflets referred to in Order 1. 4. [Ms Scully] pay [Mr Jones's] costs." 4 The ground of appeal stated in the proposed notice of appeal is as follows: "The Court Order No 3 is an open-ended restriction limiting freedom of information in a very drastic way. The law (R.D. Act) [a reference to the Racial Discrimination Act 1975 (Cth)] is invalid because Parliament cannot legislate to remove common law rights of sovereign Australians. 5 Under the heading "Order Sought", Ms Scully states: Court Orders No 1 and 3 have brought censorship into effect, outlawing scientific evidence concerning historical controversy, most notably under Order 1(e) and centuries-long information has been prohibited by 1(b). Under Order 1(d) discussion of biblical information is prohibited, and a vast area of world history is outlawed by Order 1(g). All orders should be struck out as they conflictwith the Constitution." 6 On the hearing Ms Scully made brief submissions in support of these grounds. She contended that the injunctions prohibited anyone from challenging commonly held views and common understandings of facts in relation to the Holocaust. I pointed out to Ms Scully that the orders have been made against her alone, and that they relate only to the particular leaflets identified in Order 1 and any leaflet or other publication which is "to the same effect as any of the leaflets referred to in Order 1". 7 Issues of constitutionality were dealt with by the learned primary Judge at pars [234]–[240] of his reasons for judgment. Ms Scully pointed to no particular error in those paragraphs; she did no more than make the general assertion that restrictions of the kind found in the orders were unconstitutional because they were an unwarranted inhibition of freedom of speech. A similar submission was answered fully and effectively, if I may say so with respect, by his Honour in the paragraphs to which I have referred. 8 In my view an appeal by Ms Scully would be doomed to fail and for this reason an extension of time for the filing of the notice of appeal should not be granted. 9 The bankruptcy question is an interesting one on which, in view of my conclusion just expressed, I refrain from expressing a final view. 10 Judgment was reserved by his Honour on 13 June 2002, the applicant became bankrupt on 23 July 2002, and judgment was delivered on 2 September 2002. Senior counsel for Mr Jones relied on Cummings v Claremont Petroleum NL (1996) 185 CLR 124 ("Cummings") as establishing that in these circumstances Ms Scully would lack locus standi to appeal. 11 Certainly the facts of that case have some similarities to those of the present one. In Cummings the plaintiffs sued two individuals for conspiracy to do unlawful acts including acts in breach of their duties as directors, deceit, breaches of fiduciary duty, breaches of subs 229(1) of the Companies (South Australia) Code and contraventions of the Fair Trading Act 1987 (SA). Judgment was reserved on 6 April 1993. On 20 and 21 May 1993, while judgment was reserved, sequestration orders were made against the estates of the two individuals. Judgment was delivered on 10 June 1993 against them in a sum of $44,450,000. At the same time the primary Judge granted the successful applicants leave to proceed "to the point of entering judgment". Judgment was entered on 15 June 1993. The judgment debtors filed notices of appeal on 1 July 1993. 12 The issue before the High Court was whether the appeals were competent, in view of the intervening bankruptcies. The Court held unanimously that they were not. The reasoning of the members of the Court differed as between the majority of Brennan CJ and Gaudron and McHugh JJ, and the minority of Dawson and Toohey JJ. The minority thought that the right of appeal conferred by s 24 of the Federal Court of Australia Act 1976 (Cth) was "property" as defined in subs 5(1) of the Bankruptcy Act 1966 (Cth) ("the Act") and vested in the trustee in bankruptcy. The majority disagreed, but held that the bankrupts lacked standing to appeal for a different reason. That reason was that the bankrupts had no interest in the judgment against them which would support the institution of appeals in their own names. This was because the judgment debt was a debt provable in the bankruptcies, could be satisfied only out of property vested in the trustee in bankruptcy and was not payable by the bankrupts themselves. 13 There are several features of the present case which suggest that it is distinguishable from Cummings. 14 The only order against Ms Scully which has a financial impact is the fourth: that Ms Scully pay Mr Jones's costs. The first order is declaratory and the second and third orders are injunctive. Even the fourth order has not yet, in the absence of a taxation of costs, attained the status of the judgment debt for $44,450,000 in Cummings. 15 It is arguable that Ms Scully does have an "interest", at least in the declaration and injunctions, which would give her locus standi to appeal against them. If so, she would also have locus standi to apply for an extension of time within which to appeal. 16 I refrain from exploring further the relevance of Cummings to the circumstances of the present case, in view of my conclusion above that an appeal would be futile. If I had thought an appeal would not be futile and would be competent, a question would have arisen whether Ms Scully should be ordered to provide security for costs – an order with which, in the absence of funding by a third party, she would not be able to comply in view of her bankruptcy. 17 The application for an extension of time should be dismissed with costs. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate: Dated: 21 November 2002 The Applicant appeared in person by video link to Launceston Counsel for the Respondent: Mr SC Rothman SC Solicitor for the Respondent: Geoffrey Edwards & Co Date of Hearing: 31 October 2002 Date of Judgment: 8 November 2002