Case: Murdaca v Accounts Control Management Services Pty Ltd [2006] NSWSC 68
Outcome: considered
The chronology of events relevant to the present proceedings is: 29 July 2005 - decision of New South Wales Local Court adverse to the appellant handed down giving rise to judgment debt in favour of the respondent; 24 February 2006 - appeal from judgment of Local Court dismissed by Malpass AJ in Murdaca v Accounts Control Management Services Pty Ltd [2006] NSWSC 68 ; 6 and 23 July 2006 respectively - bankruptcy notice issued and served by the respondent; 2 August 2006 - appellant obtains ex parte stay on enforcement of judgment of Local Court granted to the appellant pending hearing of respondent's objection to the instalment order; 15 August 2006 - application to set aside the bankruptcy notice dismissed on the last date for compliance with the notice; 22 August 2006 - creditor's petition filed in Federal Magistrates Court; 7 September 2006 - Local Court ordered that the judgment debt be paid by weekly instalments commencing 1 October 2006; 29 September 2006 - sequestration order made; 9 October 2006 - the appellant's application to review the sequestration order filed in the Federal Magistrates Court; 16 or 17 October 2006 - appellant attempted to make instalment payments to the trustees; trustees refused to accept the payment; 24 October 2006 - stay of sequestration order granted on condition that the appellant lodges a completed Statement of Affairs; 26 October 2006 - statement of affairs completed; 9 November 2006 - Federal Magistrates Court dismisses application to set aside sequestration order; 17 November 2006 - notice of appeal from Federal Magistrate's decision filed in Federal Court of Australia. 3 The appellant's grounds of appeal can be summarised briefly. First, he claims that the Federal Magistrate erred by failing to go behind the judgment of the Local Court to determine if there was a debt owed to the respondent. Second, he claims that his Honour's discretion to make the sequestration order miscarried in that, in assessing the appellant's solvency, his Honour made errors of fact, took into account irrelevant matters and failed to give sufficient weight to other matters. 4 At the hearing of this appeal I refused the appellant's application to adduce evidence that was not put before the Federal Magistrate for the following reason. 5 Section 27 of the Federal Court of Australia Act deals with the Court's reception of evidence on appeal: 27. In an appeal, the Court shall have regard to the evidence given in the proceedings out of which the appeal arose, and has power to draw inferences of fact and, in its discretion, to receive further evidence... 15 It appears that there were some irregularities or discrepancies in the documentation of the debt and the assignment, but although the assignment was pleaded in the Local Court, the appellant did not take issue with that plea in his defence in the Local Court. Instead, while not admitting that there had been a default under the loan agreement with Avco, the appellant's defence was that the agreement with Avco had been fully satisfied by Avco taking possesson of the motor car. In his judgment in the Supreme Court appeal, Malpass AJ noted at [16]-[19]: The plaintiff conducted his case before the Local Court on the basis that there was no issue concerning the assignment. At the commencement of her judgment, the Magistrate made a finding that the interests, rights and entitlements under the agreement for loan had been assigned. In my view, she did not fall into error in making that finding. The plaintiff now complains that there was no evidence of the assignment before the court and that there was no evidence of service of notice of the assignment. The defendant disputes that contention. It looks to admissions, the documentary material that was before the court and to evidence given by the plaintiff during his cross-examination. ... ... There is a contest between the parties as to what inferences may be drawn from all of the material. It is unnecessary to enter into that debate. It suffices to say that the material leads to the conclusion that the plaintiff was aware of the assignment and was not concerned to make any challenge in relation to it. Leaving that consideration aside, it seems to me that it was unnecessary to tender the assignment, or any notice of it, in the light of the admissions that arise from the pleadings and the manner in which the plaintiff conducted his case in the Local Court. His Honour concluded: It would seem from the record of the proceedings that neither the parties nor the court noticed the discrepancies in the purported notice. No doubt, this was because the assignment and notice thereof were not seen as matters in issue. 16 This last comment may be a little confusing. The assignment of a debt is not complete in law until notice has been given to the debtor in this case the appellant; s 12 Conveyancing Act 1919 (NSW). Irrespective of the technicalities however, the point remains that the appellant did not raise the issue in the Local Court. It was raised in the Supreme Court where the appellant submitted that there was no evidence of the assignment before the Local Court. This is not surprising. As the appellant did not traverse the plea of assignment no evidence was required and no adverse inference can be drawn from its absence. 17 Malpass AJ considered whether the appellant should be bound by the course he adopted at the trial or should be allowed to raise a new point on appeal. His Honour concluded at [30]- [33]: In my view, the plaintiff [appellant] should be bound by the course adopted during the hearing before the Local Court. It is conceded that it is a case where, had the matters been placed in issue, the defendant may have led evidence which had the possibility of defeating the point. Further, in the circumstances of this case, I do not consider it to be either expedient, or in the interests of justice, to entertain the new point in this appeal. The purport of the appeal is to have the proceedings remitted back to the Local Court so that the case can be reheard. This would seem to be a pointless exercise. From what has been said from the bar table, it appears that the defendant may be in a position to prove all issues concerning the assignment and the plaintiff is faced with an insurmountable jurisdictional problem. It may further be observed that what is in dispute has been described as not being a significant sum. There has already been an arbitration, a purported re-hearing and an appeal. Neither the parties nor the public interest would be well served by a further hearing. I should add that changing times have seen the court adjusting the approach to be taken to cases where parties appear in person. No longer is it a rare event. It is now approaching an event of almost daily occurrence. Many are litigants in person because they choose so to be. Many have become experienced litigants running numerous cases before the court. The transcript of the Local Court proceedings presents a picture of this plaintiff conducting himself with skill. 18 The 'insurmountable jurisdictional problem' to which his Honour referred was apparently a consequence of the claim being for less than $10,000. As his Honour explained earlier in his judgment, given the amount of the claim the appellant was not entitled to a rehearing after he was unsuccessful in the arbitration; see ss 3 , 43 (2) Civil Procedure Act 2005 (NSW), s 4 Local Courts Act 1982 (NSW). His Honour commented that the jurisdictional issue had been overlooked but that if the proceedings were remitted to the Local Court, the respondent intended to agitate the issue before that court. 20 Although the validity of the assignment was never directly challenged in the Federal Magistrates Court, in asserting that his Honour should have considered the question, Ms Goodchild relied on the fact that the judgment of the Local Court and the judgment of Malpass AJ on appeal were before him and should have alerted him to consider the validity of the assignment. In my view the fact that the judgments were before his Honour is a long way short of what would be required for this submission to be accepted. There was no obligation on the Federal Magistrate to reconsider every issue that had been raised (and settled) in the past. From his Honour's point of view there was no reason to doubt that the issue, although the subject of contest in the past, was now accepted as having been resolved. 21 I also do not accept that it would be appropriate for this Court to allow the appellant to reopen that issue either in this Court or before the Local Court. Since the arbitration, purported re-hearing and appeal to which Malpass AJ referred, an application to set aside the bankruptcy notice has been dismissed by a registrar of this Court, a sequestration order has been made by a registrar of this Court, there has been an unsuccessful application to set aside the sequestration order in the Federal Magistrates Court and now an appeal to this Court. There are even greater reasons now to say, as did Malpass AJ, that it is not in the interests of the parties or the public for there to be a further hearing.