Komba trading as Bora Homes Australia v Aim Site Hire Pty Ltd [2011] FCA 1329 (18 November 2011)

Last Updated: 21 November 2011

FEDERAL COURT OF AUSTRALIA

Komba trading as Bora Homes Australia v Aim Site Hire Pty Ltd [2011] FCA 1329

Citation:		Komba trading as Bora Homes Australia v Aim Site Hire Pty Ltd [2011] FCA 1329
Appeal from:		Emerald Komba v Aim Site Hire Pty Ltd [2011] FMCA 401
Parties:		EMERALD DAVID KOMBA TRADING AS BORA HOMES AUSTRALIA v AIM SITE HIRE PTY LTD and NATIONAL AUSTRALIA BANK LIMITED
File number:		VID 641 of 2011
Judge:		DODDS-STREETON J
Date of judgment:		18 November 2011
Catchwords:		PRACTICE AND PROCEDURE – Application for adjournment of hearing of appeal to amend notice of appeal and remove and add parties to the appeal – Unrepresented litigant recently obtained pro bono assistance of counsel COSTS – Whether costs of application should be made against appellant personally or against appellant’s estate
Legislation:		Federal Court Rules 2011 r 36.11
Cases cited:		Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 considered
Date of hearing:	18 November 2011
Date of last submissions:	18 November 2011
Place:	Melbourne
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	30
Counsel for the Appellant:	Mr D Guidolin (Pro Bono)
Counsel for the First Respondent:	Mr D Cafari
Solicitor for the First Respondent:	Ward Taylor
Counsel for the Second Respondent:	The Second Respondent did not appear

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 641 of 2011

BETWEEN:	EMERALD DAVID KOMBA TRADING AS BORA HOMES AUSTRALIA Appellant
AND:	AIM SITE HIRE PTY LTD First Respondent NATIONAL AUSTRALIA BANK LIMITED Second Respondent

JUDGE:	DODDS-STREETON J
DATE OF ORDER:	18 NOVEMBER 2011
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. The hearing of the appeal in this proceeding listed for 21 November 2011 be vacated.
2. On or before 25 November 2011, the Appellant file and serve:

(a) a further amended Notice of Appeal; and

(b) any application to join or remove any party to the appeal.

3. The appeal be listed for hearing on a date to be fixed in the Full Court and Appellate sittings of the Court in Melbourne in the sitting period commencing 13 February 2012 before a single judge of the court, pursuant to section 25(1AA)(a) of the Federal Court of Australia Act 1976 (Cth).
4. The hearing be listed for an estimate of ½ day, with time in the appeal to be allocated by agreement between the Appellant and Respondents.
5. By no later than 4pm on 2 December 2011, the Appellant file and serve on the Respondents his outline of submissions.
6. By no later than 4pm on 9 December 2011, the Respondents file and serve on the Appellant a copy of their outline of submissions together with a list of materials required to be included in Part C of the appeal book.
7. By 4pm on 16 December 2011, the Appellant file and serve a copy of any submissions in reply on the Respondents.
8. In accordance with practice note APP2, by no later than 4pm five clear working days before the appeal, the Appellant must file two copies and serve on the Respondents a copy of Part C of the appeal book.
9. Outlines of submissions are not to exceed 5 pages in length, including any annexures.
10. Each party file and serve a list of authorities and legislation in accordance with the practice note CM2.
11. The Appellant pay the Respondents’ costs of and occasioned by the vacated date of hearing and the amended Notice of Appeal as agreed and failing agreement to be taxed on the Federal Court scale, to be paid out of the Estate.
    

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 641 of 2011

BETWEEN:	EMERALD DAVID KOMBA TRADING AS BORA HOMES AUSTRALIA Appellant
AND:	AIM SITE HIRE PTY LTD First Respondent NATIONAL AUSTRALIA BANK LIMITED Second Respondent

JUDGE:	DODDS-STREETON J
DATE:	18 NOVEMBER 2011
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. On 18 November 2011, I made the orders set out above for the following reasons.
2. The appellant, Emerald Komba, trading as Bora Homes Australia, sought an adjournment of the hearing of the appeal made by amended notice of appeal dated 29 July 2011. The hearing is fixed for 21 November 2011. The appellant who had been legally unrepresented in relation to the appeal and the decision appealed from, was recently referred for assistance pursuant to O 4 r 12 of the Federal Court Rules 2011 (“the Federal Court Rules”) and was consequently now assisted by counsel who appeared pro bono.
3. The appellant’s amended notice of appeal filed 29 July 2011, pursuant to the orders of Gray J made 19 July 2011, was evidently drafted by the appellant, or a person who is not legally qualified. The respondent to the appeal is Aim Site Hire Pty Ltd (“Aim”), and a “Third Party Respondent” is stated to be the National Australia Bank Limited (“NAB”).
4. The first respondent, Aim, opposed the application. The NAB had not entered an appearance and did not appear at the hearing of the application.
5. By order made 22 December 2010, Registrar Caporale made a sequestration order against the appellant’s estate. Mr Clyde Peter White and Mr David Charles Quinn (“the trustees”) were appointed, pursuant to a consent, to act as the joint and several trustees of the appellant’s estate.

AMENDING THE GROUNDS OF APPEAL

6. Rule 36.11 of the Federal Court Rules states:

(1) A party may apply to the Court, constituted by a single Judge, for directions in relation to the management, conduct and hearing of an appeal.
(2) Without limiting subrule (1), a party may apply to the Court for an order for the following:

(a) an extension of the time within which to appeal;
(b) giving leave to amend the grounds of appeal;
(c) joining or removing of a party to the appeal;
(d) security for costs;
(e) giving summary judgment;
(f) making an interlocutory order pending, or after, the determination of an appeal to the Court;
(g) making an order by consent disposing of an appeal including an order for costs;
(h) dismissing an appeal for want of prosecution;
(i) vacating a hearing date;
(j) making an order that an appeal to the Court be dismissed for:

(i) failure to comply with a direction of the Court; or
(ii) failure of the appellant to attend a hearing relating to the appeal;

(k) the conduct of the appeal including:

(i) contents of the appeal book; and
(ii) the use of written submissions; and
(iii) limiting the time for oral argument;

(l) the conduct of the appeal without an oral hearing subject to the condition that the parties be entitled to present written submissions;
(m) the staying of an order of the Full Court.

7. As counsel appearing for the appellant submitted, the amended notice of appeal raised 21 separate grounds, which frequently contained sub-parts. The document was lengthy, unclear and lacked coherence. Although relief was sought against the NAB, to which some grounds related, the basis for its inclusion as a respondent to the appeal was not apparent. The appellant therefore proposed to amend the grounds of appeal in order to identify the real question in controversy for determination.
8. It was submitted that the appellant intended to reformulate, revise and greatly reduce the grounds of appeal to focus principally on whether the Federal Magistrate erred by failing to go behind the default judgment of the Magistrates’ Court of Victoria made on 13 May 2008. Such amendment would both limit the material in the Appeal Books and reduce the time required for oral argument in the appeal.
9. In relation to the proposed amendment of the amended notice of appeal, the appellant also sought:

(a) leave to discontinue the appeal against the second respondent, NAB; and

(b) joinder of the trustees in bankruptcy of the appellant’s estate, Clyde Peter White and David Charles Quinn, who, as persons affected by the order, might wish to be heard on the appeal.

BACKGROUND

10. The appellant appeals from the decision of the Federal Magistrate given on 30 May 2011.
11. The Federal Magistrate refused the appellant’s application for a review of a Registrar’s decision made on 22 December 2010 to grant a sequestration order sought by the respondent creditor.
12. The sequestration order was apparently based on failure to comply with a bankruptcy notice issued on 23 December 2009, based on a default judgment against the appellant obtained in the Magistrates’ Court of Victoria and entered on 13 May 2008.
13. The default judgment was for the sum $4,203.09 in relation to the hire of goods and services, although approximately $1,669.37 had been paid by the date of a creditor’s petition lodged by Aim on 29 March 2010.
14. The proceeding has a complex history but before the Federal Magistrate the appellant apparently principally alleged that he did not owe the underlying debt, as he was not liable for the goods the respondent delivered to particular building sites, in circumstances where the appellant’s previous partnership had ended and he had not authorised a deed of settlement signed for and on his behalf by the alleged former partner.
15. Although the appellant denied that he had authorised the partner to sign the deed on his behalf, the State Magistrate accepted the contrary evidence of the partner and the solicitor.
16. The Federal Magistrate concluded that issue estoppel applied in relation to the question of the appellant’s authority for the deed of settlement and, in the light of the factual finding, did not accept that the underlying debt was not due and owing. Further, the Federal Magistrate did not accept that the appellant had demonstrated his solvency.

DISCUSSION

17. In Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 (“Aon”), the vacation of a trial date was occasioned by reason of substantial and unexplained late amendments. The High Court made clear that, contrary to the tenor of previous authority, there was no automatic right to amend merely because the proposed amendments constituted triable issues and there was no prejudice not compensable by costs.
18. The plurality (Gummow, Hayne, Crennan, Kiefel and Bell JJ) stated (at [98]) that the “just resolution of proceedings remains the paramount purpose” of the procedural rule considered in Aon. Their Honours stated that all matters relevant to the exercise of the power to permit amendment of pleadings should be weighed and “[t]he fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend” (at 217).
19. In Aon, the plurality stated (at 214) that the objectives of the rule under consideration in that case did not require:

every application for amendment to be refused because it involves the waste of some costs and some degree of delay, as it inevitably will. Factors such as the nature and importance to the party applying cannot be overlooked... [i]t is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter its case.

20. The plurality also stated that where there was delay in seeking to amend, the stage of the litigation and the provision of an explanation may be important.
21. In the present case, the application to amend, which would necessarily occasion vacation of the hearing date, was foreshadowed only two business days and made one business day prior to the hearing date fixed for the appeal.
22. The explanation, while not advanced in the form of an affidavit, was manifestly that the appellant had very recently obtained pro bono assistance and counsel, having examined the unwieldy (and at points incoherent) material in the amended notice of appeal, proposed to reduce and revise it to focus on the real points of controversy. Doubtless due to the late stage at which pro bono assistance was obtained, no proposed amended notice of appeal was drafted by the time of the adjournment hearing, although the desirability of amendment was, as the respondent conceded, clear.
23. While the matter has a complex history and the vacation of the hearing date would necessarily occasion further delay, the respondent did not allege or depose to any particular or special prejudice. The High Court in Aon nevertheless recognised the impact on litigants of non-compensable inconvenience and stress occasioned by delay. However, as the appellant submitted, an appeal was unlikely to involve further evidence.
24. Further, the matter was of very great importance to the appellant, as it involved his status as a bankrupt and the significant consequences entailed. He had hitherto not obtained legal assistance in relation to the appeal and now had it on a pro bono basis. It was not disputed that the assistance was provided as soon as possible. The consequent proposed reduction and clarification of the issues was likely to assist the court, and all parties.
25. In my opinion, in the circumstances, it was appropriate to vacate the hearing date in order to enable the appellant to file and serve a further amended notice of appeal to identify and clarify the real issues.
26. It was, in my view, premature to make particular orders associated with the proposed amendment at this stage. For example, rather than discontinuance against NAB, its removal as a party pursuant to r 36.11 may be appropriate.

Costs

27. The respondent should have its costs occasioned by the vacation of the hearing date. Before me, the appropriate form of the costs order in favour of the respondent was disputed.
28. The appellant submitted:

In the circumstances, the appropriate order is that the Appellant pay the Respondents’ costs of and occasioned by the amendment to be agreed and in default of agreement taxed in accordance with the appropriate Federal Court scale, with such costs to be paid out of the Estate. Similar orders were made by the learned Federal Magistrate on 30 May 2011.

29. The respondent submitted that the costs order should be against the appellant personally, because the appeal may result in the annulment of the bankruptcy and if so, an order against the bankrupt estate would be futile. Further, the respondent might benefit from a costs order against the appellant, who is currently an undischarged bankrupt, should the appellant’s financial circumstances improve in the long term, although immediate benefit was unlikely.
30. As the appeal court would be empowered to address the question of costs on the basis of its findings and determinations, I considered the costs order proposed by the appellant appropriate.

I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dodds-Streeton.

Associate:

Dated: 18 November 2011