FEDERAL COURT OF AUSTRALIA Miao v Michell [2018] FCA 2000 Appeal from: Miao v Michell [2018] FCCA 1068 File number: VID 594 of 2018 Judge: STEWARD J Date of judgment: 11 December 2018 Catchwords: BANKRUPTCY AND INSOLVENCY – where Federal Circuit Court dismissed an application for an interim injunction by bankrupt applicant to prevent completion of contract of sale of property by trustee in bankruptcy – where applicant contended that bankruptcy had been annulled – where property has now been sold PRACTICE AND PROCEDURE – application for an extension of time to seek leave to appeal interlocutory decision of the Federal Circuit Court – where any appeal from the interlocutory decision would be futile Legislation: Bankruptcy Act 1966 (Cth) ss 83, 153A Federal Court Rules 2011 (Cth) r 35.13 Cases cited: Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 House v The King (1936) 55 CLR 499 Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 MZABP v Minister for Immigration and Border Protection (2015) 242 FCR 585 SZTRY v Minister for Immigration and Border Protection [2015] FCAFC 86 Date of hearing: 11 December 2018 Registry: Victoria Division: General Division National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Category: Catchwords Number of paragraphs: 26 Counsel for the Appellant: The appellant appeared in person Counsel for the Respondent: Ms C Gobbo Solicitor for the Respondent: SLF Lawyers ORDERS VID 594 of 2018 BETWEEN: SHIRLEY MIAO Applicant AND: STEPHEN JOHN MICHELL Respondent JUDGE: STEWARD J DATE OF ORDER: 11 DECEMBER 2018 THE COURT ORDERS THAT: 1. The application for an extension of time be dismissed with costs as agreed or as assessed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT STEWARD J: 1 By an application filed in the Federal Circuit Court of Australia earlier this year, the applicant sought an urgent injunction to restrain the sale of real property. The applicant was, and remains, bankrupt. The respondent to that proceeding was the applicant's trustee in bankruptcy. After a hearing before the learned primary judge, his Honour Judge Kelly, Q.C., her application for injunctive relief was dismissed. The applicant seeks to appeal that decision to this Court. To do so, she has to overcome two preliminary hurdles: (1) First, she needs leave, because the decision of the primary judge was interlocutory. (2) Secondly, she was late in filing the document which I will call a notice of appeal which, with the consent of the respondent, I have treated as an application for leave, given that the applicant was not legally represented. I also treated, with the consent of the respondent, her application for an extension of time to file a notice of appeal filed 7 September 2018 as an application for an extension of time within which to seek leave to appeal. Background 2 It is unnecessary for me to set out the background to this application for leave and for an extension of time, for reasons which will become clear, save in one respect. 3 It is agreed between the parties that the contract of sale of real property which was the subject of an application for urgent interim relief before the primary judge was never completed. Following his Honour's decision, a new and independent contract of sale was entered into. The applicant sought urgent relief again in the Federal Circuit Court to prevent the completion of that contract. Relief was refused by the primary judge, and the property has now been sold. It follows that whatever the merits of the applicant's original application for injunctive relief before the primary judge, any appeal from that decision concerning the refusal of that relief has been rendered futile and has no merit. Moreover, the interim application for a stay of the orders of the primary judge (described below) is equally futile. Grounds of Appeal 4 The applicant's proposed grounds of appeal derived from the notice of appeal filed by the applicant are as follows: 1. Judgment erred in denying there is a serious question to be tried. 2. Judgment failed to admit the fact that Official Receiver has discharged the Appellant with bankruptcy on 13 December 2017 and failed to admit the fact that the Respondent didn't object the annulment. 3. The Appellant's losses caused by dismissal with prejudice cannot be cured by compensation award. The Appellant suffers irreparable harm. 4. Judgment has errors in not looking at the Appellant's submission to prove the Respondent deposed the false third party costs and disbursements in 19 April 2018 affidavit. 5. Judgment erred in admitting the Respondent deposed the false Proof of Debt and the false outstanding remuneration in 19 April 2018 affidavit without evidence to prove them. 6. Judgment didn't hold the scale even between the Appellant's benefits and the Respondent's. Judgment out-weighted the Respondent's inconvenience. Judgment didn't consider the Appellant's losses and didn't deliver justice to the Appellant. 7. Judgment has errors in not looking at the section 82 (4) and (7) and the section 83 of the Bankruptcy Act 1966. 8. Judgment erred in accepting the Respondent incompliance with proceeding rules. (Errors in the original.) Interim Relief 5 The applicant also filed an amended interim application on 5 June 2018 seeking the following order: 1. Stay the orders made on 3 May 2018 by Judge Antony Kelly in case No. MLG 1004/2018. Evidence 6 The applicant filed two affidavits upon which she relied. The first, affirmed on 29 August 2018, set out or described a number of underlying or inter-related disputes arising out of her bankruptcy or otherwise connected to it. Very little of what was deposed to appeared to relate to the identification of appealable error in the judgment of the primary judge. Complaints were made in this affidavit about not being able to inspect documents in another Federal Circuit Court proceeding. Allegations were made that the respondent made false oaths and fabricated evidence and that the contract of sale was not genuine. These allegations are not reflected in any finding of the primary judge, nor do they sound in the identification of any error of fact found below. 7 The second affidavit was affirmed on 5 September 2018 and appears to explain the reasons for the delay in filing the document called "notice of appeal". It stated that whilst the primary judge dismissed the applicant's application for relief on 20 April 2018, he only delivered reasons on 3 May 2018. Thereafter, the document called "notice of appeal" was filed on 21 May 2018. However, r 35.13 of the Federal Court Rules 2011 (Cth) requires that an application for leave to appeal from an interlocutory decision must be made within 14 days after the relevant date on which the order was made or judgment pronounced. The giving of reasons on 3 May 2018 was not the date upon which the primary judge made his order and gave his judgment. That was 20 April 2018. But even if 3 May 2018 were the correct date, the applicant, I find, was still late. She filed a document entitled "application for an extension of time" on 7 September 2018, more than four months after the decision below. 8 There was also before me a document prepared by the applicant entitled "statement of facts and contentions" which I have considered. It again accused the respondent of perjury and complained about the suppression of documents in another proceeding. It also complained that the applicant had suffered "monetary losses" and under the heading "serious errors in Judge Kelly's judgment", the following appeared at [11]: Judge Kelly admitted the non-admitted Proof of Debt, the remuneration amount, 3rd party costs and legal expenses claimed by the Respondent without any documentary evidence to prove those amounts. There is then a reference to s 83 of the Bankruptcy Act 1966 (Cth) as follows: Section 83 Debt not to be considered proved until admitted of the Bankruptcy Act 1966 states: For the purposes of this Act, a creditor shall be taken not to have proved a debt until a proof of debt lodged by him or her in respect of that debt has been admitted. Paragraph [12] states: Judge didn't look at the appellant's submission to prove the false 3rd party costs And disbursement amounts claimed by the respondent. (Errors in the original.) Submissions 9 Both parties filed written submissions, and the respondent also filed a notice of objection to competency which raised the proposition that the appeal could not proceed, save with the leave of the Court. 10 The applicable principles for determining whether to extend time within which to file a notice of appeal are uncontroversial, as well as whether to extend time within which to file an application for leave. They include a consideration of the length of delay, the explanation for delay, any prejudice to the respondent and the prospects of success of the appeal: Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344; SZTRY v Minister for Immigration and Border Protection [2015] FCAFC 86 at [6]. The latter issue of merits is to be assessed in an impressionistic way: MZABP v Minister for Immigration and Border Protection (2015) 242 FCR 585. 11 The applicable principles for determining whether to grant leave from an interlocutory decision are also well established. They are: (1) whether in all circumstances the decision is attended by sufficient doubt to warrant it being reconsidered by an appellate court; and (2) whether a substantial injustice would result if leave were refused, supposing the decision to be wrong: Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397. Disposition 12 I should address the applicant's application for an extension of time first. In my view, there are considerations which favour, and considerations which do not favour, a grant of further time. The length of the delay was significant; as already mentioned, it was over four months. However, the delay in filing the document called "notice of appeal" was made about only 31 days after the decision below. The explanation of the delay, which I have interpreted as being a belief held by the applicant that she thought she had 21 days after receipt of the written reasons of the primary judge within which to file what she thought was a notice of appeal, is believable. The applicant was, and remains, unrepresented. It cannot be said that she has not pursued her claims with vigour. 13 As to the issue of prejudice to the respondent, in my view, it is not trivial, but it would not in and of itself be a sufficient basis for denying an extension of time. 14 Of much greater concern are the prospects of success. In my view, the application has no such prospects. Any appeal would be futile. The contract of sale that was the subject of the interim application before the primary judge is spent and is no more. The applicant cannot otherwise seek relief on any other ground, if any, that is still before the primary judge, as these have yet to be determined, nor can she raise before me any complaint she might wish to make about Judge Wilson Q.C.'s recent dismissal of her claims concerning the second contract of sale, which I am now told has been performed to completion. 15 All the applicant can do is to attack the specific dismissal of her interim application. But even if appealable errors of law might have been demonstrated to exist in relation to the reasons for decision below, this Court would still be obliged to deny the relief sought. One cannot enjoin a purported exercise of rights under a contract which no longer binds the parties. 16 For the sake of completeness, I have considered the applicant's submissions and grounds of review. I have also carefully read the reasons for judgment of Judge Kelly Q.C. and, in particular, the paragraphs identified by the applicant as demonstrating error, namely [19] - [21]. With respect to the applicant, I can see no error in the reasons of the primary judge. 17 As to the applicant's proposed grounds of appeal, I am not persuaded that the primary judge erred in deciding that there was no serious question to be tried. The findings of fact made at [19] - [21] were based on an affidavit which was before his Honour and were open to him to make. Contrary to the applicant's belief, at an interlocutory stage, there was no need for the sworn affidavit to be supported by any contemporaneous documents before that evidence could be accepted as true by the judge. The applicant's complaint about, for example, the finding of fact below that the respondent's outstanding remuneration was said to be some $155,451 did not grapple with the primary judge's fundamental rejection of the applicant's case, which was that she wrongly thought that her bankruptcy had been annulled. 18 The second ground seeks to attack the finding that the applicant was still a bankrupt. The primary judge, however, was not satisfied that all of the bankrupt's debts had been paid in full for the purposes of s 153A(6) of the Bankruptcy Act 1966 (Cth). It has not been shown to me that his Honour was mistaken in reaching that conclusion. 19 The third proposed ground of appeal contended that an award of damages would not be an acceptable remedy here. But whether acceptable or not, because the property has now, in fact, been sold, damages are the only potential remedy left for the applicant to pursue. My understanding is that such an action is being pursued by the applicant in the Federal Circuit Court. 20 Proposed grounds four and five contend that the primary judge erred is accepting the respondent's claims concerning the proofs of debt and third party costs and disbursements. These grounds appear to be another complaint about [19] and [20] of the reasons below which I have already dealt with. I otherwise note that these claims could possibly be pursued in other proceedings for damages, and in that respect, I note that at [35] of the reasons for decision, the primary judge said: The applicant also deposes that the respondent has misappropriated moneys and otherwise been guilty of misconduct in a variety of ways. I agree, in the submission of the respondent's counsel that the complaints of this kind are matters which would, if established, sound in damages. They are, in any event, on one view of the evidence, complaints which have been in play for some considerable time. 21 Proposed ground six is a complaint that the primary judge did not find that the balance of convenience favoured the applicant. His Honour considered the balance of convenience at [29] - [34] and [36] of his Honour's reasons for decision. No identifiable error of law can be discerned in these paragraphs. The conclusion reached by the primary judge was, I find, entirely open to him. 22 Proposed ground seven also raises matters which, if correct, might support an award of damages, but would not have supported the grant of an injunction of the kind sought by the applicant here. 23 Finally, proposed ground eight was difficult to follow. It seemed to be no more than a repeat in some form of the complaints made in the preceding grounds. 24 Before me, the applicant raised a new ground relating to the awarding of costs against her. She submitted that costs ought to be shared on the basis that the trustee had failed to make proper disclosure or information to her. However, in my view, even if true, that would not be sufficient for me to interfere with his Honour's discretion in awarding costs. No error of law of the kind described in House v The King (1936) 55 CLR 499 was identified by the applicant in the exercise of that discretion. 25 For these reasons, I dismissed the application for an extension of time. For that reason, it is also unnecessary for me to deal with the application for leave, but given the futility of the matter before me, I would have refused leave in any event. 26 The application should be dismissed with costs. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Steward. Associate: Dated: 4 February 2019