FEDERAL COURT OF AUSTRALIA Winn v Brian Ward & Partners Pty Ltd [2007] FCA 1520 PRACTICE AND PROCEDURE – leave to file notice of appeal out of time – consideration of different principles relevant where decision is substantive or interlocutory in character Federal Court of Australia Act 1976 (Cth) ss 24 and 25 Federal Court Rules O 52 Carr v Finance Corp of Australia Ltd (No 1) (1980) 147 CLR 246 cited Cubillo v Commonwealth (2001) 112 FCR 455 cited Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 applied Griffiths v Boral Resources (Qld) Pty Limited (2006) 154 FCR 554 referred to Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 applied Merit Protection Commissioner v Nonnenmacher (1999) 86 FCR 112cited Newcrest Mining (WA) Limited v Commonwealth of Australia (1993) 40 FCR 507cited Ogawa v University of Melbourne (No 2) [2004] FCA 1275cited Parker v The Queen [2002] FCAFC 133 applied JULENE WINN v BRIAN WARD & PARTNERS PTY LTD VID 682 OF 2007 GORDON J 2 OCTOBER 2007 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 682 OF 2007 BETWEEN: JULENE WINN Applicant AND: BRIAN WARD & PARTNERS PTY LTD Respondent JUDGE: GORDON J DATE OF ORDER: 2 OCTOBER 2007 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The amended application dated 2 August 2007 is dismissed. 2. The applicant is to pay the respondent's costs of the proceeding, such costs to be taxed in default of agreement. 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 VID 682 OF 2007 BETWEEN: JULENE WINN Applicant AND: BRIAN WARD & PARTNERS PTY LTD Respondent JUDGE: GORDON J DATE: 2 OCTOBER 2007 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 This proceeding is the latest between the applicant ("Ms Winn") and the respondent ("Brian Ward"). Since 2005, various proceedings between the two parties have been heard, or are presently filed in, the Magistrates' Court of Victoria ("the VMC"), the Supreme Court of Victoria, the Federal Magistrates' Court ("the FMC") and, of course, the Federal Court of Australia. The substantive issues giving rise to those proceedings are connected and have a long and unfortunate history. 2 On 11 July 2007, McInnis FM determined three applications brought by Ms Winn against Brian Ward, namely: (1) an application to set aside a costs order of $1,500 ("the costs order") made by Registrar Mussett against Ms Winn in her application to set aside a bankruptcy notice issued by Brian Ward, a notice which had been set aside by consent: Winn v Brian Ward & Partners Pty Ltd [2007] FMCA 1090 ("the Costs Decision"); (2) an application that McInnis FM disqualify himself from determining the application relevant to the Costs Decision and hearing the application relevant to the decision described at (3) below on the basis of the Magistrate's previous employment 30 years earlier by Brian Ward and the manner in which the hearing relevant to the Costs Decision before him proceeded: Winn v Brian Ward & Partners Pty Ltd (No 2) [2007] FMCA 1210 ("the Bias Decision"); and (3) an application for a stay of the application described in (1) above pending the resolution of separate proceedings in the Supreme Court of Victoria: Winn v Brian Ward & Partners Pty Ltd (No 3) [2007] FMCA 1211 ("the Stay Decision"). Each application was dismissed by McInnis FM. 3 By an Amended Application dated 2 August 2007, Ms Winn seeks what is described as an extension of time in which to file and serve a notice of appeal "from the judgment of [the FMC] given on 11 July 2007." A copy of a draft notice of appeal was attached to an affidavit affirmed by Ms Winn dated 1 August 2007 which was sent by facsimile to the Federal Court. The facsimile transmission header on the affidavit which was sent by facsimile transmission to the Victorian Registry of the Federal Court reads 17.35 pm on 1 August 2007. The draft notice of appeal was prolix, listing some 46 "grounds of appeal". Ten of the "grounds of appeal" contained numerous sub-paragraphs. On the morning of the hearing of the application for leave to appeal out of time (25 September 2007), Ms Winn provided the Court with a further draft notice of appeal comprising some 16 paragraphs. It was this draft Notice of Appeal that Ms Winn sought to rely on in relation to the application for leave to appeal out of time. 4 Putting the current application to one side for the moment, the substantive issue between the parties is the costs order in relation to proceedings commenced by Ms Winn in the FMC to set aside a bankruptcy notice that were otherwise resolved by consent. In addition to that liability, Ms Winn's efforts before McInnis FM generated a further costs order in the Bias Decision against her fixed in the sum of $1,800. In the Costs Decision and the Stay Decision, Ms Winn was also ordered to pay Brian Ward's costs. Her total liability now well exceeds $3,300 and is rising. 5 For the reasons below: (1) in relation to the Costs Decision, I would not grant Ms Winn leave to file and serve the notice of appeal under O 52 r 15(2) of the Federal Court Rules. No special reasons were shown; (2) in relation to the Stay Decision and the Bias Decision, I would not grant Ms Winn leave to appeal under s 24(1A) of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act"). Neither decision is attended with any doubt, let alone sufficient doubt and further, no injustice, let alone substantial injustice to Ms Winn has been shown if leave were not granted. Background 6 On 2 May 2007, Ms Winn applied to the FMC for a review of orders made by Registrar Mussett on 12 April 2007 setting aside a bankruptcy notice issued by Brian Ward ("the substantive application"). The effect of the Registrar's orders was to relieve Ms Winn of the burdens attached to her status as the debtor in bankruptcy proceedings. The Registrar required, however, that Ms Winn pay Brian Ward's costs fixed at $1,500. The bankruptcy notice related to a debt for legal costs of approximately $6,600 ("the debt") incurred in connection with legal services provided by Brian Ward to Ms Winn. 7 Approximately 2 years ago, on 26 October 2005, Brian Ward had filed a complaint in the VMC seeking repayment of the debt. In advance of the hearing before the VMC, Ms Winn sought a stay of the hearing on the basis that the complaint contravened s 106(1) of the Legal Practice Act 1996 (Vic) ("the Legal Practice Act"), which provision had been repealed in advance of the VMC proceeding by Part 8.1 of the Legal Profession Act 2004 (Vic). Ms Winn did not appear at the hearing of the proceeding before the VMC on 2 October 2006 and judgment was entered for Brian Ward for the amount of debt ("the VMC judgment"). 8 A series of events followed the VMC judgment. On 9 March 2007, Brian Ward served a bankruptcy notice on Ms Winn in relation to the debt. A solicitor of Brian Ward ("Ms Phillips") received an email on 15 March 2007 from Ms Winn which asserted the VMC judgment was unenforceable on the basis of the alleged breaches of the Legal Practice Act. Ms Winn requested Brian Ward to discontinue the proceedings in bankruptcy against her by further email dated 21 March 2007. Brian Ward subsequently undertook not to proceed with the bankruptcy notice on the basis that Ms Winn had applied for a re-hearing of the VMC proceeding. Ms Winn served a copy of that application on Brian Ward on 28 March 2007 and the re-hearing application took place before the VMC on 11 April 2007. At the commencement of the re-hearing application, the VMC judgment was set aside by consent on the basis that Ms Winn pay Brian Ward's costs. Ms Winn was ordered to pay costs of $1,276. This event is significant. The setting aside of the judgment debt on which the bankruptcy notice was based took away the foundation of the bankruptcy notice before the FMC. In an affidavit sworn by Ms Phillips dated 25 May 2007 and filed in the FMC, Ms Phillips deposed to the fact that Counsel for Brian Ward had told Ms Winn on the same day as the rehearing before the VMC (11 April 2007), that Brian Ward would withdraw its bankruptcy notice on the basis that no order be made as to costs and Ms Winn declined this offer. Ms Winn submitted before me from the bar table that she heard the offer of consent to withdraw the bankruptcy notice but did not hear the offer in relation to costs. The affidavits filed by Ms Winn in the FMC sought to challenge a number of aspects of the affidavits filed by Ms Phillips in that court, including her affidavit of 25 May 2007. None of the affidavits filed by Ms Winn sought to challenge the conversation on 11 April 2007 which I have just described. 9 In any event, on 12 April 2007, the orders to which this proceeding ultimately relate were made when the parties came before Registrar Mussett (see [6] above). The proceedings before McInnis FM 10 Ms Winn sought review of the orders made by Registrar Mussett on 12 April 2007, including the order that the bankruptcy notice against her be set aside (see [6] above). The logic of this course is not obvious. However, it appears from the amended draft notice of appeal that Ms Winn was dissatisfied that she was ordered to pay Brian Ward's costs in circumstances where the bankruptcy notice was invalid. The substance of her argument appears to be that the invalidity of the bankruptcy notice was beyond doubt and that Brian Ward had consented to the setting aside of the bankruptcy notice. Ms Winn has also taken issue, at various stages in the proceedings before the FMC and the VMC, with the identification of the respondent as Brian Ward & Partners, the trading name used by the firm prior to its incorporation in February 2004. The bankruptcy notice and the orders made by Registrar Mussett on 12 April 2007 referred to Brian Ward & Partners. This was said by Miss Winn to involve an error which made the orders, including the costs order, unenforceable. This contention was dealt with by McInnis FM in the Costs Decision at [7]-[9]. 11 On 23 May 2007, prior to the hearing before McInnis FM on 18 June 2007, Ms Phillips forwarded an "Offer of Settlement" to Ms Winn in respect of the outstanding orders for costs made by the VMC and the Registrar of the FMC. The offer was contained in a letter which provided, relevantly: "As you are aware, you have not paid our legal costs (which you argue you should not be required to but with which we strongly disagree). In addition, you have caused me incredible stress and you have ensured that our firm has also suffered substantial costs. We do not want to deal with you in any way any longer. We are prepared to release you from any claims we may have against you relating to the work performed by us on your behalf, including obtaining an order dismissing our current Magistrates' Court action and dismissing the two outstanding costs orders we have against you. This agreement would be in full and final settlement of all matters between us and you would withdraw your current Federal Magistrates Court application. This offer is open for acceptance by 12 noon tomorrow, Thursday 24 May 2007. If you refuse to accept this offer, we will vigorously defend both your current Federal Magistrates' Court application and we will actively pursue our Magistrates' Court action and we will produce this letter on the question of indemnity costs." Ms Winn did not respond and later gave evidence before McInnis FM that she received the letter by email on 26 May 2007 after the offer it contained had expired but that she did not seek an extension because its terms were unsatisfactory. 12 McInnis FM reserved his judgment at the conclusion of the hearing on 18 June 2007. On 4 July 2007, before McInnis FM had delivered his judgment, Ms Winn made the application to the FMC relating to the Stay Decision. Ms Winn requested that the decision on the costs order be deferred until the determination of proceedings in the Supreme Court of Victoria. The proceedings in the Supreme Court of Victoria were said to relate to the question of the validity of the decision of the VMC and, in particular, the existence of the debt on which the creditor's petition was based. By those proceedings, Ms Winn apparently sought to re-agitate, in the Supreme Court, her contention that the debt was unenforceable due to provisions of the now repealed Legal Practice Act: see [7] above. As already noted, on the re-hearing application before the VMC, the order of the VMC for repayment of the debt had been set aside by consent with an order that Ms Winn pay Brian Ward's costs. Ms Winn, it would seem, sought to use the Supreme Court application for the same objectives and in the same manner as the proceedings before the FMC: that is, to avoid an adverse costs order on the basis that there was no debt in circumstances where Brian Ward had voluntarily agreed not to pursue the debt. McInnis FM agreed to hear the application for a stay of the Costs Decision before delivering his reasons for decision on 11 July 2007. 13 On the morning of 11 July 2007, Ms Winn sent by facsimile a further application to the FMC requesting that McInnis FM disqualify himself from determining the substantive application. Ms Winn's complaint of apprehended bias was said to be based on: (1) remarks made by the FMC prior to the commencement of the hearing on 18 June 2007 (at [10] of the Bias Decision); (2) a perception of "unfavourable treatment" (at [28] of the Bias Decision); (3) the different "manner in which her submissions were dealt with compared with those of [Brian Ward]" (at [28] of the Bias Decision); (4) negative comments by McInnis FM about the delay in applying for review of Registrar Mussett's orders and their impact on Ms Winn's reputation (at [31]-[33] of the Bias Decision); (5) the narrowing of issues to the question of the validity of the costs order given on the basis that the bankruptcy notice had been set aside and its validity could not be a live issue between the parties (at [34]-[35] of the Bias Decision); and (6) the prior employment by Brian Ward of McInnis FM as an articled clerk some thirty years earlier. At the commencement of the hearing on 18 June 2007, McInnis FM had informed the parties of this fact. Ms Winn did not object to McInnis FM hearing the application (at [13]-[14, [19] and [25]-[27] of the Bias Decision). 14 A further complaint was made by Ms Winn about the name of the Respondent. On 11 July 2007, in the context of the Costs Decision, the name of the respondent was formally amended. 15 Each of the applications before the FMC (namely the application to set aside the costs order made by Registrar Mussett, the application that McInnis FM not hear the matter and the application for stay) was dismissed on 11 July 2007. Ms Winn was ordered to pay Brian Ward's costs in each of those applications. In the Bias Decision, the costs were fixed at $1,800.00. Analysis 16 An appeal lies to the Federal Court from "judgments of [the FMC] exercising original jurisdiction under a law of the Commonwealth": s 24(1)(d) of the Federal Court Act. An application for leave to appeal may be heard and determined by a single judge: ss 24(1A), 25(1B) and 25(2) of the Federal Court Act. 17 The Costs Decision must be considered separately from the Stay and Bias Decisions. In relation to the Costs Decision, O 52 r 15(1) and (2) of the Federal Court Rules provides that leave is required to file and serve a notice of appeal not filed within the time specified by the rules – within 21 days after 11 July 2007. 18 In relation to the Bias Decision and the Stay Decision, leave is required but for a different reason - each is an interlocutory decision. Neither decision "finally" determined "the parties' substantive rights" (Cubillo v Commonwealth (2001) 112 FCR 455 and Carr v Finance Corp of Australia Ltd (No 1) (1980) 147 CLR 246 at 248 per Gibbs CJ and 253-54 per Mason J) but dealt with questions about how, when and by whom the substantive application should be determined. The Stay Decision dealt with the timing of the Costs Decision. The Bias Decision dealt with the capacity of the Federal Magistrate to determine the Costs Decision and the Stay Decision. 19 The principles governing the granting of leave to appeal from an interlocutory judgment are different from those relevant to an application under O 52 r 15(2) for leave to file a notice of appeal after expiry of the 21 day time limit. Costs Decision 20 As noted above, the application before the Court is an application for leave to file a notice of appeal out of time. It was common ground that any notice of appeal was required to be filed by 4.30 pm on 1 August 2007. 21 During the course of the oral argument and in a memorandum provided to the Court following the hearing on 25 September 2007, Ms Winn submitted that she had, in fact, filed but not served the notice of appeal on time. Despite being invited to file evidence to support the contention that a copy of the notice of appeal had been filed within the time specified by the Federal Court Rules, no documentary material in an admissible form was provided to the Court. The Court file records the receipt at 16.04 pm on 1 August 2007 of the application for extension of time to file and serve a notice of appeal. The facsimile header read "page 2". There is no record of page 1. Ms Winn handed to the Court a copy of a facsimile transmission record she held which purports to record that 21 pages were sent by facsimile to a facsimile number attached to the Victorian Registry of the Federal Court at 16.04 pm on 1 August 2007. Ms Winn submitted from the bar table that the facsimile (of 21 pages) recorded as having been sent at 16.04 pm comprised the application for leave to appeal and an unsworn affidavit which exhibited a draft of the notice of appeal. Whether the pages were received by the Court at 16.04 pm and, if so, what the 21 pages consisted of, I cannot and need not resolve. Even if evidence was provided to the Court that established that at 16.04 pm on 1 August 2007 a copy of an unsworn affidavit together with a copy of a draft notice of appeal was provided to the Court with the application for leave to appeal out of time, it would not constitute the institution of proceedings by way of appeal in this Court. O 52 r 12 provides that an appeal is instituted by filing a notice of appeal in the appropriate registry: cf Griffiths v Boral Resources (Qld) Pty Limited (2006) 154 FCR 554. That did not occur. 22 In the circumstances, I will proceed to determine the application for leave to file a notice appeal out of time. Leave to file out of time a notice of appeal in relation to the Costs Decision requires "special reasons": O52 r 15(2). In Parker v The Queen [2002] FCAFC 133 (applying Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348-49), the Full Court summarised the principles to be applied (at [6]) as follows: "1. applications for an extension of time are not to be granted unless it is proper to do so; the legislated time limits are not to be ignored. The applicant must show an "acceptable explanation for the delay"; it must be "fair and equitable in the circumstances" to extend time; 2. action taken by the applicant, other than by way of making an application for review, is relevant to the consideration of the question whether an acceptable explanation for the delay has been furnished; 3. any prejudice to the respondent in defending the proceedings that is caused by the delay is a material factor militating against the grant of an extension; 4. however, the mere absence of prejudice is not enough to justify the grant of an extension; and 5. the merits of the substantial application are to be taken into account in considering whether an extension of time should be granted." 23 Although Ms Winn outlined her personal and other circumstances that were said to explain the delay in the filing of the notice of appeal, I do not consider that she has demonstrated "special reasons" sufficient to warrant a grant of leave to file a notice of appeal out of time. Especially is that so where: (1) The only real issue between the parties is Ms Winn's liability to pay the costs order. The nature of the costs order is not a "special reason" given the futility of the orders sought in the draft notice of appeal and the reluctance, in principle, to allow leave in relation to a disputed costs order: see eg, Merit Protection Commissioner v Nonnenmacher (1999) 86 FCR 112 and Ogawa v University of Melbourne (No 2) [2004] FCA 1275; (2) Ms Winn seeks to have the Court revisit a contention which she has pursued without success before Registrar Mussett and before McInnis FM. The contention is without foundation. The only substantive issue between the parties (a dispute about the validity of the bankruptcy notice) was resolved in her favour before the Registrar. Ms Winn seeks to re-agitate that issue when none exists. Registrar Mussett set aside the bankruptcy notice with Brian Ward's consent. Ms Winn cannot revive that question merely to seek to reverse the costs order against her; (3) Ms Winn's contentions do not take account of the nature of the Registrar's discretion to make orders as to costs under s 79 of the Federal Magistrates Act 1999 (Cth) ("the FMC Act"). Costs do not always follow the event. A variety of circumstances, including the conduct of the parties during or preceding the litigation, will be relevant: Cummings v Lewis [1992] FCA 334. Where a party unreasonably prolongs a proceeding or pursues issues and arguments which are untenable, an adverse costs order may result, even where the party succeeds on its substantive claims: Newcrest Mining (WA) Limited v Commonwealth of Australia (1993) 40 FCR 507. If Ms Winn had wished to file an appeal against the costs order made by the Registrar on the basis that the discretion under s 79 of the FMC Act had miscarried, then that is something she should have done before the FMC when she had an opportunity to do so. She did not. She should not now be permitted to do so by the current application; (4) the validity of the bankruptcy notice was resolved when Brian Ward voluntarily agreed that it be set aside and that the judgment debt, to which it related, was unenforceable; (5) Ms Winn's persistent pursuit of issues relating to the validity of the bankruptcy notice has resulting in numerous costs orders against her and the considerable expenditure of Court resources and the resources of Brian Ward in defending the proceedings. Brian Ward offered to settle the proceeding with no order as to costs prior to the hearing before McInnis FM and notified Ms Winn of its intention to pursue an order for indemnity costs if she refused that offer. Ms Winn did not respond. The proceedings have been unduly prolonged by the choices Ms Winn has made not only to the detriment and inconvenience of Brian Ward, but also, so far as the material before the Court reveals, to herself. 24 Though unassisted by an independent legal advisor, Ms Winn is not in the usual position of a self represented litigant. No particular indulgence should be permitted on this account. She is a barrister on the roll of the Supreme Court of Queensland. In the circumstances, I would not grant Ms Winn leave to file a notice of appeal out of time. Stay Decision and Bias Decision 25 To obtain leave to appeal these interlocutory decisions, Ms Winn is required to satisfy the Court in respect of each decision that: (1) it is attended by sufficient doubt to warrant reconsideration by a Full Court; and (2) substantial injustice would result if leave were refused, Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-99 (per Sheppard, Burchett and Heerey JJ). 26 It is well established that in cases where the interlocutory decision does not determine substantive rights, particular caution is required and a "tight rein" must be kept on appeals (Décor at 400). This is such a case. Ms Winn must satisfy both limbs of the test. She cannot. 27 Neither decision is attended with any doubt let alone sufficient doubt to warrant reconsideration by a Full Court. Even if either decision was attended with doubt, I am not satisfied that Ms Winn would suffer any injustice let alone "substantial injustice" in the event that leave was refused. The facts and matters set out above support that view. 28 In the circumstances, I would not grant Ms Winn leave to appeal the Stay Decision or the Bias Decision. conclusion and orders 29 The amended application is dismissed. Ms Winn is to pay the respondent's costs of the proceeding such costs to be taxed in default of agreement. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon. Associate: Dated: 2 October 2007 Counsel for the Applicant: The Applicant appeared in person Counsel for the Respondent: Mr T Scotter Solicitor for the Respondent Brian Ward & Partners Pty Ltd Date of Hearing: 25 September 2007 Date of Judgment: 2 October 2007