FEDERAL COURT OF AUSTRALIA Perrett v Ray [2007] FCA 1920 PAUL JOHN PERRETT v GREG RAY NSD 2141 OF 2007 LINDGREN J 27 NOVEMBER 2007 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2141 OF 2007 BETWEEN: PAUL JOHN PERRETT Applicant AND: GREG RAY Respondent JUDGE: LINDGREN J DATE OF ORDER: 27 NOVEMBER 2007 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application brought by notice of motion filed on 29 October 2007 be dismissed. 2. The applicant, Paul John Perrett, pay the costs of the respondent, Greg Ray, of the proceeding on the indemnity basis. 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 NSD 2141 OF 2007 BETWEEN: PAUL JOHN PERRETT Applicant AND: GREG RAY Respondent JUDGE: LINDGREN J DATE: 27 NOVEMBER 2007 PLACE: SYDNEY REASONS FOR JUDGMENT 1 By a notice of motion filed on 29 October 2007 the applicant (Mr Perrett) seeks leave to appeal from orders made by Graham J in proceeding NSD 1975 of 2007 on 26 October 2007 (see Ray v Perrett [2007] FCA 1672). His Honour dismissed a motion brought by Mr Perrett seeking interlocutory orders and ordered that Mr Perrett pay Mr Ray's costs of the motion on an indemnity basis. 2 An application for leave to appeal from an interlocutory order of the Court is made in the Court's appellate jurisdiction under s 24(1A) of the Federal Court of Australia Act 1976 (Cth) and O 52 r 10 of the Federal Court Rules. The order made by Graham J dismissing Mr Perrett's motion was an interlocutory order. 3 According to the notice of motion by which he brings his present application for leave to appeal, Mr Perrett seeks the following orders: 1. Leave be given to appeal the interlocutory decision to refuse to grant to the applicant the right to choose whomsoever he desires to be his advocate in bankruptcy, by reference to s 308(d) of the Bankruptcy Act 1966 by Justice Peter Ross Graham on the 26th October 2007. 2. Leave be given to appeal the interlocutory decision of Justice Peter Ross Graham, refusing to grant a jury trial to the respondent on the same day. 3. That the matter be heard by a Full Court in compliance with s 24 of the Federal Court of Australia Act 1976. 4 The notice of motion is supported by an affidavit by Mr Perrett sworn on 29 October 2007, the date on which the notice of motion was filed. 5 It is not necessary to give many of the background facts. Proceeding NSD 1975 of 2007 is a bankruptcy proceeding in which Mr Ray seeks a sequestration order. The alleged act of bankruptcy is Mr Perrett's failure to comply with a bankruptcy notice. The bankruptcy notice was based on an order that Mr Perrett pay Mr Ray's costs associated with the discontinuance by Mr Perrett as against Mr Ray of a proceeding for defamation that he had brought against Newcastle Newspapers Pty Ltd and Mr Ray. Apparently on the final hearing of the creditor's petition Mr Perrett will ask the Court to go behind that order. 6 By the amended notice of motion that was before Graham J, Mr Perrett sought the following relief: ... an order that the questions of fact stated below be tried and determined by a jury as a "feigned issue" and the jury determine the following facts: 1. The fact that at the Federation of Australia in 1900, Section 118 Constitution came into effect and all "courts" in the New Nation of Australia became, by the "autochthonous expedient" federal courts, and were charged with exercising the Judicial power of the Commonwealth on behalf of Her Majesty Queen Victoria as the Majesty and only Majesty in the now complete New Nation. 2. That unless a "court" is constituted as a "court" with a judge and jury, or consent of all the parties, the Federal Court of Australia refuse to receive and give full faith and credit to the proceedings, and refuse to accept any orders made in such a Court, for the purposes of bankruptcy. 3. That before the Federal Court of Australia makes a sequestration order, it order an account under s 86(1) Bankruptcy Act 1966 under section 30(2) Bankruptcy Act 1966 and determines such inquiry into the mutual dealings between the parties as a feigned issue. 4. That Newcastle Newspapers Pty Ltd, as the employer of Greg Ray, and the real instigator of these proceedings be joined as a party. 7 Mr Perrett has not addressed submissions to paragraph 1 of his notice of motion seeking leave to appeal (set out at [3] above). In fact, Mr Perrett appeared before Graham J by Dr Walsh of counsel instructed by Robert G Christie, solicitor. Graham J does not appear to have made an order refusing to allow Mr Perrett to appear by Mr PA Gargan, who was not a legal practitioner and who, apparently, was authorised by Mr Perrett to appear for him. If his Honour had gone so far as not to allow Mr Gargan to appear for Mr Perrett, it would be futile to grant leave to appeal from that interlocutory order. The refusal would be appropriately considered as a ground why leave should be granted to appeal from the ultimate order of dismissal itself. If the refusal had denied to Mr Perrett the benefit of s 308(d) of the Bankruptcy Act 1966 (Cth) (the Act), I would not have given Mr Perrett leave to appeal from the order of dismissal on that account, because Mr Perrett lost nothing by not having Mr Gargan, rather than Dr Walsh, pursue a manifestly hopeless cause on his behalf. 8 I turn now to the second paragraph of the notice of motion. The Court is given express power to direct that the trial of a question of fact in a proceeding before the Court under the Act be had before a jury. Section 30(3) provides: If in a proceeding before the Federal Court under this Act a question of fact arises that a party desires to have tried before a jury, the Federal Court may, if it thinks fit, direct the trial of that question to be had before a jury, and the trial may be had accordingly in the same manner as if it were the trial of an issue of fact in an action. 9 In his reasons for judgment, Graham J discussed all four paragraphs of the amended notice of motion and observed, correctly with respect, that paragraphs numbered 1 and 2, if they could be seen to pose questions at all, posed questions of law, not of fact. 10 As his Honour also correctly observed, paragraphs 3 and 4 in Mr Perrett's amended notice of motion did not identify questions of fact either. Paragraph 3 asked that the Court make an order and determine an inquiry. Paragraph 4 sought joinder of a party. 11 There was an attempt by Dr Walsh, who had appeared for Mr Perrett before Graham J, to read five affidavits. His Honour upheld an objection to all five affidavits on grounds of relevance. On the hearing this morning, Dr Walsh submitted that the material in the affidavits could be relevant to demonstrate that paragraphs 1 to 4 of the amended notice of motion stated questions of fact. They could not be. 12 Notwithstanding paragraph 3 of the present notice of motion (see [3] above), it is clearly appropriate that the present application be heard and determined by a single Judge. I should note that the question of whether the present application for leave to appeal should be heard and determined by a single Judge or a Full Court is a matter of the administration of the Court and, 13 Graham J concluded by stating that the motion before him was totally without merit and involved an enormous waste of expense in the preparation of affidavit material that had no bearing whatsoever on the issues raised by the motion. Although no further affidavit material beyond a single short supporting affidavit of Mr Perrett was prepared for the purpose of the present application for leave to appeal, a generally similar observation must be made about this application also. Mr Ray's legal advisers have been put to inconvenience and expense in having to respond to a hopeless application for leave to appeal. 14 I propose to dismiss the application for leave to appeal and to order Mr Perrett to pay Mr Ray's costs on an indemnity basis. 15 In addition to its obvious futility, there have been other aspects of the present application that have given cause for concern. Dr Walsh said that he was instructed by Mr Knaggs, solicitor, and was troubled by the fact that Mr Knaggs had not appeared at Court, although Dr Walsh said he had seen him in the coffee shop in the Law Courts Building earlier in the morning. Mr Knaggs had not filed a notice of appearance. Mr Spencer, counsel for Mr Ray, expressed his concern over the difficult position in which Mr Ray was placed because there was at least a question as to whether Mr Knaggs had instructed Dr Walsh with Mr Perrett's authority. Dr Walsh confirmed in Court that Mr Perrett did know that Dr Walsh was appearing for him on the application for leave to appeal. 16 Mr Spencer then sought an order that Mr Knaggs pay the costs of the present failed application for leave to appeal. I would not order Mr Knaggs to do so without giving him an opportunity to be heard but he was not in Court at the time. While this issue was being discussed Mr Knaggs arrived. He explained that he had, in effect, only "come into" the matter during the course of the morning and had been willing to lend his name to enable Dr Walsh to be instructed by a solicitor. He offered the observation that his own opinion was that the idea of expecting the trial of the questions concerned to take place before a jury was "crazy". As Dr Walsh then aptly responded, that pronouncement by his instructing solicitor seemed to shoot him in the foot. 17 Mr Knaggs said that he really had no idea what this proceeding was about except that it had to do with a request that a civil matter be determined by a jury. 18 Mr Knaggs also said that it had been his intention, in substance, to ask the Court whether or not he should continue to instruct Dr Walsh, having regard to the unusual circumstances in which he had found himself placed earlier this morning. 19 At this point I took a short adjournment. 20 It is important to note that the brief to appear had been delivered to Dr Walsh before Mr Knaggs ever came into the picture, and that Dr Walsh had been in possession of the brief for quite some time before he met with Mr Knaggs in the coffee shop of the Law Courts Building this morning. Perhaps the brief was prepared by Mr Christie, solicitor, who, as noted earlier, was the solicitor for Mr Perrett in the bankruptcy proceeding, and instructed Dr Walsh on the motion in that proceeding. On the other hand, the brief to Dr Walsh may have been prepared by Mr Perrett himself. 21 It is also noteworthy that Mr Christie's notice of appearance was filed in the bankruptcy proceeding on 26 October 2007, the day of the interlocutory hearing before Graham J. Mr Christie filed a "notice of withdrawal of solicitor" only three days later on 29 October 2007. 22 The circumstances are, frankly, bizarre. What appears to have happened in both the bankruptcy proceeding and again today is that a solicitor has "come into the matter" on the day of the hearing just for the purpose of formally instructing Dr Walsh. 23 In my opinion, Mr Knaggs should not be ordered to pay the costs that I propose to order Mr Perrett to pay. It seems clear that he has done nothing to encourage the bringing of the present application for leave to appeal, which others have apparently instigated. However, the entire episode does demonstrate the unwisdom of a solicitor's "lending his name" to a proceeding about which he knows virtually nothing, even though the solicitor may feel that he is assisting at a late stage in a difficult situation. Such a solicitor could easily find himself on the receiving end of an adverse costs order. 24 For the above reasons, the Court will order that the application be dismissed, and that the applicant, Mr Perrett, pay the costs of the respondent, Mr Ray, on the indemnity basis. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate: Dated: 12 December 2007 Counsel for the Applicant: Dr J Walsh Solicitor for the Applicant: Mr D Knaggs Counsel for the Respondent: Mr A P Spencer Solicitor for the Respondent: Freehills Date of Hearing: 27 November 2007 Date of Judgment: 27 November 2007