A. Hartrodt Australia v Tan
[2020] FCCA 3017
•29 July 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| A. HARTRODT AUSTRALIA v TAN | [2020] FCCA 3017 |
| Catchwords: BANKRUPTCY – Sequestration order – review of registrar’s decision – McKenzie friend involvement – extended opportunity to file material – applicants failure to file documents – appeal to another court regarding an application for a rehearing – adjournment sought – application refused – application for review of registrar’s decision dismissed. |
| Legislation: Bankruptcy Act 1996 (Cth), s.43 Federal Circuit Court Rules 2001, r.16.05 |
| Cases cited: DKX17 v Federal Circuit Court of Australia [2019] FCAFC 10 EPH17 v Minister for Immigration and Border Protection [2019] FCA 824 Gallo v Dawson (1990) 93 ALR 479 Sali v SPC Limited (1993) 67 ALJR 841 |
| Applicant: | A. HARTRODT AUSTRALIA PTY LTD |
| Respondent: | MIAO LING TAN |
| File Number: | MLG 4461 of 2019 |
| Judgment of: | Judge A. Kelly |
| Hearing date: | 29 July 2020 |
| Date of Last Submission: | 29 July 2020 |
| Delivered at: | Melbourne |
| Delivered on: | 29 July 2020 |
REPRESENTATION
| Counsel for the Applicant: | Mr P. Fabris |
| Solicitors for the Applicant: | SLF Lawyers |
| For the Respondent: | Ms E Von Rise as McKenzie friend |
ORDERS
The oral application made on behalf of the bankrupt for an adjournment of the application for review of a Registrars decision be refused.
The interlocutory application filed on 12 March 2020 be dismissed.
The petitioning creditor’s costs of and incidental to the interlocutory application be taxed and paid in the bankruptcy to the petitioning creditor.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 4461 of 2019
| A. HARTRODT AUSTRALIA PTY LTD |
Applicant
And
| MIAO LING TAN |
Respondent
REASONS FOR JUDGMENT
(Revised from ex tempore reasons)
These reasons for judgment explain orders made upon an application for review of a Registrar’s decision made on 20 February 2020. On that date, a Registrar an order for the sequestration of the debtor’s estate. The applicant this day makes application for an adjournment.
On 17 December 2019, the applicant filed a creditor’s petition in this court seeking an order pursuant to section 43 of the Bankruptcy Act 1996 (Cth) (Act). The application for the sequestration order was based upon a judgment debt in the sum of $8,833.95, together with post-judgment interest. That judgment had been obtained in a Magistrates Court on 6 March 2019 (Judgment).
The act of bankruptcy relied upon by the creditor was the respondent’s failure to comply with the requirements of a bankruptcy notice served on the respondent debtor on 22 November 2019. She sought to satisfy this court that she had a counterclaim, set-off or cross-demand equal to or more than the sum claimed in the bankruptcy notice (being a counterclaim, set off or cross-demand that could not have been set up in the Magistrates Court in which the Judgment was obtained).
At the first return of the creditor’s petition on 23 January 2020, a Registrar adjourned the further hearing of the petition until 20 February 2020 so as to allow the bankrupt time to address the matter. Then, on 20 February 2020, a Registrar made an order for the sequestration of the debtor’s estate.
On 12 March 2020, the bankrupt filed an interlocutory application seeking to set aside the order for the sequestration of her estate. Since that date, the procedural history of this matter has been somewhat unsatisfactory. The application was an application for review of the Registrar’s decision. Two grounds were relied upon by the debtor:
a)pursuant to rule 16.05(2)(a) of the Federal Circuit Court Rules 2001, the order should be set aside as it had been made in her absence;
b)there was pending in another court an application to set aside the Judgment which application was listed on 14 April 2020.
On 18 March 2020, when the interlocutory application was called on for hearing, initially, the respondent did not appear and an order was made in her absence dismissing the application. However, after the solicitor for the petitioning creditor had left the court, the respondent appeared and sought to be represented by her mother-in-law as a McKenzie Friend.
The solicitor for the petitioning creditor was persuaded to return to court and I heard an oral application which was made at the court’s suggestion for the order made earlier that day to be set aside and for there to be a directions hearing to be held immediately. Although the solicitor for the petitioning creditor initially opposed the course suggested by the court, upon mature reflection, instructions were provided by the petitioning creditor to agree that the order dismissing the application in the absence of the bankrupt be set aside and a directions hearing was then held.
In consequence of the matters discussed in the course of the directions hearing, an order was made that the application for review of the Registrar’s decision be set down for hearing. Directions were made affording the bankrupt an extended opportunity to file and serve any affidavits and submissions on which she intended to rely. It was explained to the bankrupt by the court that she needed to make a considered decision whether to engage actively with her application. This occurred in circumstances where the affidavit upon which she had relied to that point provided no substantive basis for the relief sought.
On 18 March 2020, the bankrupt was advised by the court, in effect, that her application would almost certainly fail on the basis of her existing material, particularly in light of the affidavits filed on behalf of the petitioning creditor. In addition, the bankrupt was urged to engage actively with the solicitors for the petitioning creditor who made clear that they were more than prepared to do so. The orders which were made on 18 March 2020 were pronounced in open court at the conclusion of the hearing and when the bankrupt and her mother-in-law were present in court.
Despite the extended opportunities afforded to the bankrupt by the order made on 18 March 2020, no further affidavits or submissions were filed by her in accordance with those orders.
A solicitor for the petitioning creditor filed a further affidavit proving, in addition, service of the court’s orders and deposing that no further affidavits or submissions had been served by the bankrupt upon the petitioning creditor. In addition, the affidavit deposed that as respects the Judgment obtained in the Magistrates Court, on 11 February 2020 an application for a rehearing had been refused by that court. The affidavit further deposed that, on 1 July 2020, a second application for a rehearing had also been refused. As I understood the bankrupt’s representative, the bankrupt complained of a breach of human rights, constituted by the refusal of the Magistrate on 1 July 2020 to entertain the application, particularly in circumstances where the bankrupt had no legal representation. It was also said that no one had appeared on behalf of the petitioning creditor before the magistrate.
The difficulty in the second complaint is that in accordance with established practice a party who has obtained an order in such circumstances is entitled to rely upon written submissions and not to appear at all. If a party elects not to appear in such circumstances it may be said that that is a choice they have freely made. When the matter was called on for hearing today, I again allowed the bankrupt’s mother-in-law to appear as her McKenzie Friend. Somewhat surprisingly, it was submitted that the court should adjourn the application again. The submissions made on behalf of the bankrupt were, in substance, that the bankrupt and her mother-in-law were not familiar with bankruptcy laws and that there was to be an appeal from the Magistrate’s refusal to grant the application for a rehearing, such appeal to be made, as I understood it, either to the County Court or the Supreme Court.
However, there is no evidence before this court supporting the circumstances which were explained by those submissions. Indeed there is no further affidavit filed on behalf of the bankrupt at all. More than four months have been afforded to the bankrupt to prepare material demonstrating a proper basis upon which to seek a review of the Registrar’s decision. While it was said to be very important for the bankrupt to be legally represented in this hearing, I am unable to accede to the proposition that this provides her with a proper basis for an adjournment, particularly in circumstances where, in light of the matters raised with the bankrupt and her mother-in-law in March 2020, an extended opportunity has been afforded to the bankrupt to secure such representation.
An application for an adjournment is not automatic but calls for the exercise of judicial discretion, see Gallo v Dawson (1990) 93 ALR 479, 480 (McHugh J). Indeed, inherent in the grant of a discretionary power is an assumption that such applications will sometimes be refused. Recently in DKX17 v Federal Circuit Court of Australia [2019] FCAFC 10, 53 at [83], the Full Court stated:
An adjournment is not granted merely for the asking, wider issues are in play even if they were not referred to by the trial judge.
As Toohey and Gordon JJ observed in Sali v SPC Limited (1993) 67 ALJR 841, 849:
The contemporary approach to court administration has introduced another element into the equation or, more accurately, has put another consideration onto the scales. The view that the conduct of litigation is not merely a matter for the parties but is also one for the court and the need to avoid disruptions in the court’s lists with consequent inconvenience to the court and prejudice to the interests of other litigants waiting to be heard are pressing concerns to which a court may have regard.
It may be accepted that an adjournment is a means by which prejudice to a party, especially an unrepresented party may avoid it. However, courts are not required to ensure that a party takes the best advantage of the opportunity to present her or his case and each case will depend upon the individual circumstances. The discretion to grant or refuse the application must be exercised judicially, see EPH17 v Minister for Immigration and Border Protection [2019] FCA 824, [16]-[14] (Kenny J).
In my view the present case is one in which the bankrupt has been given more than a reasonable opportunity to present her case. Despite that opportunity no such evidence or submissions have been filed since March 2020. Further, as stated above, while a party’s inability to have a lawyer may present them with some difficulty, it is a matter of notoriety that self-represented litigants appear in this court on a daily basis. The inability to have a lawyer is not always a sufficient or adequate reason to adjourn a proceeding. I also take into account the demands of the business upon this court and the considerations of case management require me to recognise that having listed this matter, now, for hearing on two occasions, other litigants have lost the opportunity for a hearing both in March and July 2020 at the times which have been allocated to this case.
I am not satisfied there is any sufficient merit in the request for an adjournment of the hearing. The application is refused. In all the circumstances, I am also not satisfied that any proper basis is shown to set aside the Registrar’s decision on this review. It follows that the application should be dismissed.
I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of Judge A. Kelly
Associate:
Date: 29 July 2020
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