Case: Boglari &amp; Anor v Coadys (a firm) [2008] FMCA 1277
Outcome: cited
nature and history of the proceeding This appeal is from a judgment of the Federal Magistrates Court in Boglari &amp; Anor v Coadys (a firm) [2008] FMCA 1277. The learned federal magistrate dismissed an application by the appellants to set aside a bankruptcy notice. The bankruptcy notice was founded on a judgment of the County Court of Victoria, which was given in default of defence. The federal magistrate refused to exercise the discretion to go behind the judgment. The substantial question in the appeal is whether this exercise of discretion miscarried, because the federal magistrate did not apply the correct principle. The respondent is a firm of solicitors. The appellants engaged the respondent to act for them in litigation with another party or parties. The details of that litigation are not relevant to this appeal. The appellants paid the respondent three sums of money in respect of costs and disbursements in relation to the litigation. The respondent alleged that the appellants owed further money. The respondent sued the appellants in the Magistrates Court of Victoria. The appellants counterclaimed for alleged negligence by the respondent in the conduct of the litigation. Their counterclaim was for an amount that exceeded the jurisdiction of the Magistrates Court of Victoria. The proceeding was therefore transferred to the County Court of Victoria. On 12 December 2006, the proceeding came before a judge of the County Court for directions. The respondent then filed affidavit material and the proceeding came before another judge on 29 January 2007. That judge directed the appellants to file and serve a defence and counterclaim in proper form and adjourned the matter until 23 February 2007. On that occasion, his Honour struck out the defence and counterclaim because they were not properly pleaded. He refused to give judgment for the respondent then and there, without a formal application for judgment. On 16 April 2007, the judge gave judgment for the respondent for $3,211.15 plus interest of $848.68 and ordered the appellants to pay the costs of the proceeding in the Magistrates Court of Victoria and the County Court. On 9 July 2008, the respondent procured the issue of a bankruptcy notice directed to both appellants, claiming a debt of $4,659.77. This was made up of the total amount of the judgment, $4,059.83, and interest accrued since the date of the judgment of $599.94. The respondent did not claim anything in the bankruptcy notice in respect of the costs of the proceeding in the Magistrates Court of Victoria and the County Court. The appellants applied to the Federal Magistrates Court on 15 August 2008. Their application specified that they sought the following orders: 1) Set aside the Bankruptcy Notice 2) Set aside the judgment/ orders of the county court [ sic ] CI 06/ 02602 That the court revisit/ go behind the judgment of the Hon judge [ sic ] Holt of the County Practice Court To set aside/ or dismiss the above mentioned judgment on the basis that : a) the debt is fictional/ non existent b) the Practice Court was prejudice [ sic ] due to no legal representation c) Dismissal of counter claim Dismissal of defense [ sic ] (not even requested by the Plaintiff/ Defendant by counter claim (Coadys Firm) Not allowing the improved / clearly outlined Defense [ sic ] to go ahead in front of a judge and jury.