Application of Official Trustee in Bankruptcy in the Matter of Bankrupt Estate of David Austin Kelly (No 4)

[2016] FCCA 468

FEDERAL CIRCUIT COURT OF AUSTRALIA

APPLICATION OF OFFICIAL TRUSTEE IN BANKRUPTCY IN THE MATTER OF BANKRUPT ESTATE OF DAVID AUSTIN KELLY (NO. 4) [2016] FCCA 468

Catchwords:
PRACTICE AND PROCEDURE – Application for an adjournment – whether adequate explanation for not being ready has been given – whether there would be utility in granting an adjournment – adjournment refused.

Applicant: APPLICATION OF OFFICIAL TRUSTEE IN BANKRUPTCY IN THE MATTER OF BANKRUPT ESTATE OF DAVID AUSTIN KELLY

File Number: SYG 1925 of 2014

Judgment of: Judge Manousaridis

Hearing date: 4 March 2016

Delivered at: Sydney

Delivered on: 4 March 2016

REPRESENTATION

Counsel for the Applicant: Mr T Cleary

Solicitors for the Applicant: TressCox Lawyers

Ms L Williams appeared in person by telephone

ORDERS

1. The application for an adjournment made by Ms Williams is dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1925 of 2014

APPLICATION OF OFFICIAL TRUSTEE IN BANKRUPTCY IN THE MATTER OF BANKRUPT ESTATE OF DAVID AUSTIN KELLY

Applicant

REASONS FOR JUDGMENT

(revised from transcript)

1. On 13 November 2015 I delivered reasons for judgment in this matter which dealt with, among other things, whether Ms Williams had any arguable claim to any asset of the bankrupt estate of Mr Kelly, who is now deceased.  On that day, I made orders granting Ms Williams leave to reopen her case to the extent she claimed she held a security interest over the land situated at 91 Ourimbah Road, Mosman as a result of work she claims she undertook pursuant to an alleged agreement dated 31 July 2007 purportedly contained in the document which is annexure 1 to an affidavit that Ms Williams had made and to which I've referred in my reasons for judgment.  I also ordered that there be set down for hearing on a date to be fixed the question whether Ms Williams and Mr Kelly entered into an agreement to the effect  of the alleged agreement made on 31 July 2007.  I also made other orders, but it is not necessary for me to repeat those for present purposes.

2. At the time I published those reasons for judgment, further orders were made, one of which was to set down for hearing the question whether Ms Williams and Mr Kelly entered into the agreement to which I have already referred.  At 9.30 am on 13 November 2015, directions were made requiring Ms Williams to file and serve all additional evidence on which she intended to rely by 7 January 2016 and consequential directions that the Trustee file material in response.

3. Ms Williams did make an attempt to comply with those directions.  On 8 January 2016 Ms Williams lodged electronically with the Court registry an affidavit made on 7 January 2016.  The affidavit is a short one.  Ms Williams deposes that she made an agreement with Mr Kelly on 31 July 2007, and that she had a work relationship with Mr Kelly. Ms Williams also annexed a bill.  The bill is dated 7 January 2016.  It is addressed to the estate of David Austin Kelly and claims an amount of $829,600 for the period of July 2007 to March 2012 for work done for Mr Kelly.

4. On 7 January 2016 Ms Williams also sent an email to the Court registry in which she stated that she was filing an affidavit and a bill as required “as per orders”.  Ms Williams further stated that:

   Due to the December workloads and January holidays, I have been unable to get an appointment for expert legal advice in relation to some matters, and witnesses providing evidence in support say they need more time.

5. Ms Williams requested an extension of time for one month for her to file better and further particulars and other evidence as required.  That email came to my attention, and I arranged for my Associate to send an email to Ms Williams and to the solicitors for the Trustee.  That email attached the email from Ms Williams and stated, among other things:

   As for Ms Williams request for further time to file evidence, his Honour will not make any order in chambers in relation to the request without the consent of all parties. If, therefore, Ms Williams wishes to seek an order for the extension of time for the filing of evidence and the Trustee does not consent to such order, an application should be made for the matter to be listed before his Honour.

6. No such application was made.  At 4.01 pm on 1 March 2016, however, Ms Williams lodged electronically with the registry an affidavit made on 1 March 2016.  That affidavit dealt with a number of matters.  First, it dealt with Ms Williams’ health.  In her affidavit, Ms Williams deposed she has a health disability and “I am not fit for court and the court process”. She refers to a medical certificate which is annexed.  She further says that she is under a treatment plan by a registered psychologist and that her health problems make it difficult to work.  The medical certificate which is annexed is one issued by a doctor practising from the Ibuki Health and Wellness office.  The certificate notes that Ms Williams was seen in consultation on 22 February 2016 and that she has been suffering with depression.  She has a depressed mood, loss of interest, insomnia, fatigue, impaired thinking and concentration, and has had suicidal thoughts.  The certificate further stated that these symptoms are worse with stress.  This affects her normal daily living activities, and she is unfit to keep the deadlines of the court processes. 

7. The second matter dealt with by Ms Williams in her affidavit of 1 March 2016 is her means of obtaining legal advice.  She deposes that she is of limited means and capacities and has limited access to legal advice and that she has relied mostly on community-based legal services.  Her affidavit then refers to attempts she has made to consult with a community legal centre.  She also there deposes to having obtained a small loan from a friend to pay for one or two hours of specialised legal advice.  She also says that she contacted the Law Society and was referred to three law firms, “one of whom agreed to look at the matter and give me advice, and I am collating information requested”.  She says that she has requested evidence of New South Wales court records of proceedings in which she assisted Mr Kelly.  She is awaiting the court to produce information from archived files.  She also says that she’s awaiting evidence from other backup files as well as evidence from witnesses about the work she did for Mr Kelly.

8. In a separate paragraph, Ms Williams deposes that she does not have the resources of a law firm and she has experienced a number of setbacks which take a long time to rectify because of her limited means.  She there refers to her car breaking down, which prevented her from getting into town, technical deficiencies and breakdowns with her computer, and general difficulties of communicating through her computer system with the Trustee’s solicitor.  Another matter with which the affidavit deals is Ms Williams’ claims.  Objection was taken to this part of the affidavit, but I admitted it for the purpose of evidencing Ms Williams’ beliefs as to the claims she believes she had or has against the Trustee. 

9. On the morning before today’s hearing, Ms Williams also sent another email to the registry in which she stated the following:

   I request an adjournment of hearing on medical grounds. I am not fit for court process. I refer you to the Disability Discrimination Act 1992 and request that I be given equal opportunity and fairness. 

   I further request leave to file any further evidence required to resolve the issues properly. 

   An affidavit was filed yesterday and is attached again today. 

   Further, I am of limited means with limited access to legal assistance, had other setbacks such as equipment breakage and malfunction which also added to difficulties. 

   With the limited legal advice which I was able to obtain it is clear that the matter requires substantial effort in compilation of court documents and evidence and I don’t have the resources of a large law firm like AFSA have. 

   The money in the estate, which is approximately $56k comes from the equity in David Kelly’s property, which was secured by my caveat as payment to me for work done for David Kelly.  The money is mine and I want to be paid.  I filed the bill pursuant to orders on 7/1/2016.

10. Ms Williams requested that she appear by telephone today, and that request was granted.  Ms Williams applied for an adjournment.  The grounds on which Ms Williams applied for the adjournment were as follows.  First, she said she was medically unfit to have been in a position to be ready for the hearing.  And, in that regard, she relied on the medical certificate that was attached to her affidavit of 1 March 2016, and to medical certificates she had filed previously. Secondly, she said that the purpose of the adjournment was to give her an opportunity to retain lawyers so that she could effectively present her case, and, thirdly, she submitted she would be prejudiced if she were denied the adjournment, the prejudice being she would be denied the opportunity of presenting her case.

11. The Trustee opposed the application for an adjournment.  Counsel for the Trustee accepted that Ms Williams suffered from a medical condition.  He submitted, however, that the medical condition was not such that Ms Williams could not express cogently to the Court matters she wished to express.  He submitted that the Court had granted Ms Williams every indulgence the Court could have granted to Ms Williams, and that she has had sufficient time to prepare for today’s hearing.  The Trustee also submitted that the creditors would be prejudiced.  He pointed to the costs that had been incurred to date by the Trustee.  A figure was given, but I do not take notice of that figure. There can be no doubt, however, that, given the tortuous history of this proceeding, the legal costs the Trustee has incurred to date and will continue to incur if an adjournment is granted is substantial and particularly significant in proportion to the value of the estate. Counsel submits that these costs are unlikely to be recovered from Ms Williams. 

12. Whether or not a court grants an adjournment is a matter calling for the exercise of a discretion. The ultimate question is whether it is in the interests of the administration of justice that the adjournment be granted.  There is not a fixed list of matters the Court is bound to take into account whenever considering an application for an adjournment.  But there are three very important matters.  The first is whether there is an adequate or reasonable explanation for the party who seeks the adjournment not being in a position to deal with the case. The second matter goes under the name of utility. Assuming an adjournment is granted would there be any utility in doing so.  And the third matter is prejudice to the parties.  What prejudice will the person seeking the adjournment suffer if the adjournment is not granted?  And what prejudice will the party opposing the adjournment suffer if the adjournment is granted? There is a link between the question of prejudice and the utility in granting the adjournment.  If, for example, there would be no utility in granting the adjournment then there would correspondingly be less prejudice to the party seeking the adjournment if the adjournment is not granted. 

1. I then turn to the particular considerations in relation to the first matter, that is to say, why Ms Williams claims that she is not in a position today to proceed with the hearing. As I have noted, Ms Williams relies on two matters.  The first is her medical condition.  I accept Ms Williams has a medical condition.  I also accept that her medical condition is such that may well prevent her from keeping with the Court timetables.  I did not accept, however, that it prevents her from participating in a hearing.  And I do not accept that it wholly prevents her from preparing and submitting evidence.  The basis of my not accepting those matters is that Ms Williams has already filed substantial affidavits.  It is those affidavits which I considered at some length in my reasons for judgment of 13 November 2015.

2. The matters I reserved for hearing today I identified in those reasons for judgment.  The matters are relatively discrete. Those matters were whether Ms Williams entered into an agreement with Mr Kelly to the effect she alleged to undertake work, and, if so, whether she undertook the work, and, if so, what the value of that work was.  The tasks required for Ms Williams to prepare for that case was, and, in my opinion is, relatively straightforward.

3. I then turn to the second matter on which Ms Williams relies, and that is her means to secure legal representation.  A party’s inability to obtain legal representation does not, by itself, constitute a reasonable reason for not being available to conduct a hearing, particularly where, as in this case, the party has been given ample time to prepare for the hearing.  And there is another matter which reduces, substantially, the disadvantage Ms Williams may have by not having obtained legal representation, and that is the reasons for judgment I published on 13 November 2015. Unusually, it identified the very issue to be litigated.  Any careful attention to my reasons for judgment would have made it plain what would have been required for Ms Williams to prepare and be in a position to litigate the issues that I had reserved. 

4. To summarise this part of my reasons, therefore, I’m not satisfied that Ms Williams has given a reasonable or adequate explanation for her not being in a position to meet and deal with the case today.

5. I next turn to the question of utility.  I asked Ms Williams how long an adjournment she required.  Initially, she said she did not know.  Ultimately, she asked for six weeks.  Ms Williams, however, said that she did not know whether that amount of time will be sufficient for her to provide evidence.

6. Having regard to the previous history of this matter I cannot have any confidence that granting Ms William’s six weeks will result in Ms Williams preparing and filing evidence on which she intends to rely.  The likelihood is if I grant six weeks and set a new date Ms Williams will, again, apply for further time on the very grounds that she has applied for an adjournment today.  In effect, Ms Williams is seeking an indefinite adjournment.  So, in my opinion, there would be no utility in granting Ms Williams an adjournment.

7. I next turn to the question of prejudice.  On the face of it, there is no doubt that if I do not grant the adjournment Ms Williams will be prejudiced, because I assume Ms Williams will submit she will not be able to participate in a hearing, or at least not effectively.  The extent of her prejudice, however, depends on the probability of Ms Williams being in a position at some future time to obtain the necessary evidence, and being in a position to deal with her claim.  Having regard to the history of the matter I am of the view that the probability of Ms Williams ever being in a position to put before the Court evidence in support of her claim is relatively small.  That means that the prejudice Ms Williams will suffer if the matter proceeds today may, to at least some extent, be more apparent than real. 

8. Of course, it is not only prejudice to Ms Williams that I must address.  It is the prejudice to the Trustee that will accrue if an adjournment is granted. It is beyond doubt that the amount of the estate is relatively small.  Although there is no evidence of the cost the Trustee has incurred there is a basis for concluding, again having regard to the history of the matter, that those costs would be substantial. Given what Ms Williams has said about her limited means, the Trustee would not be protected by an order for costs, which would be the normal consequence of an adjournment being granted.

9. For all these reasons I am of the opinion that it would not be in the interests of justice that the hearing today be adjourned.  I therefore make the formal order that the application for an adjournment made by Ms Williams is dismissed.

I certify that the preceding twenty-one (21) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis

Date: 18 March 2016