Australian Guarantee Corp Ltd v Collard, Graham

[1997] FCA 1094

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 7397 of 1997

BETWEEN:	AUSTRALIAN GUARANTEE CORPORATION LIMITED APPLICANT
AND:	GRAHAM COLLARD RESPONDENT

JUDGE:	TAMBERLIN J
DATE:	30  SEPTEMBER 1997
PLACE:	SYDNEY

REASONS FOR JUDGMENT
(Ex-tempore Judgment)

In this matter a notice of motion was filed on 24 September 1997 seeking a review of the orders of Ryan JR made on 19 September 1997 pursuant to s 18AC(1) of the Federal Court of Australia Act1976 (Cth) and O 79 r 4 of the Federal Court Rules (“the Rules”).  There were also a number of further orders sought. An application has been made for leave to amend the notice of motion to seek an additional order concerning the appointment of the trustee.

The order which is pressed before me today relates to an application to stay proceedings under the sequestration order of Ryan JR until determination of the review. 

An application was made for adjournment of the proceedings today because the notice of motion had not allowed sufficient time in accordance with the Rules.  I am not disposed to grant an adjournment as I have heard full argument on the matter from legal representatives and I therefore make an order abridging the time for filing, hearing and serving the notice of motion.

So far as the application for a stay pending review is concerned the relevant principles were considered by Pincus J in relation to provisions under earlier legislation in Evans v Heather Thiedeke Group Pty Ltd (1990) 95 ALR 424 and in particular in the passages set out at 425. In that judgment his Honour indicated that there was support for the view that when there is a bona fide appeal challenging the existence of a debt, a stay of the sequestration order should fairly readily be granted.

His Honour, in the course of his judgment, referred to provisions of the Bankruptcy Act 1966 (Cth), namely s 52(3), and also to O 52 r 17 of the Rules. The latter rule empowered the court in relation to appeals to stay further proceedings under the judgment appealed from. In contrast, s 52(3) of the Bankruptcy Act empowers the court to stay all proceedings under a sequestration order for a period not exceeding 21 days.

There is no corresponding provision for an unlimited stay under the principles relating to review of decisions.  The case advanced for the applicant on the notice of motion is that the Court should be taken to have inherent jurisdiction, by which I understand implied necessary jurisdiction, which attaches to the Court to enable it to make all orders and do all things necessary to performing its function as a superior court.  Alternatively, it was suggested in the course of argument that the provisions of s 23 of the Federal Court Act would suffice to give it power to make an order staying proceedings in a case where there is a bona fide appeal instituted.  Section 23 of the Federal Court Act, of course, provides that:

“The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate.”

In the present case the application for a stay is clearly an interlocutory order and I think that, there having been demonstrated to be a bona fide appeal on what appear to me to be reasonably arguable grounds, it is appropriate for such a stay to be granted.

One matter which was raised in the course of argument was as to the question whether the "self-executing" order made by Judge Campbell of the County Court of Victoria on 10 October 1995 was capable of giving rise to a final judgment upon which execution has not been stayed within the meaning of s 40(1)(g) of the Bankruptcy Act.  The order made by his Honour was:

“(2)If the Defendant defaults in compliance with Order (1) herein, there shall be judgment for the Plaintiff against the Defendant for $32,787.14, plus interest in the sum of $1,174.14 for the period 17 July 1995 until 24 October 1995, and $11.86 for each day thereafter, together with cost to be taxed ... and when taxed paid by the Defendant to the Plaintiff.”

Order 1 of his Honour's orders of 10 October required the respondent to pay the sum of $30,671.20 to the Registry of the County Court on or before 24 October 1995. This order was not complied with and therefore order (2) was activated. In my view there is a reasonably arguable case as to whether or not the self-executing order quoted above satisfies the requirements of s 40(1)(g).

I have been referred to r 24.05 of the current County Court rules which provides as follows:

“24.05Nothing in this order shall affect the inherent power of the Court to dismiss any proceeding for want of prosecution or to order that upon the failure of a party to do any act ... the proceeding shall be dismissed or the defence struck out and that judgment may be entered or that there be judgment accordingly.”

A question arises as to the correct construction of this provision.  Having regard to previous authorities, in relation to earlier rules set out in Jacob’s County Court Practice, it appears that the practice of the County Court is for the parties, seeking the benefit of a self-executing order to file material with the Registrar evidencing the default.  The Registrar will then proceed to refer the papers to the judge who made the order.  If necessary or appropriate, the judge may call the parties before him. Otherwise he would make the formal orders without any further attendance.  There is reference in the Practice to the decision in Myer Melbourne Ltd v Hammond [1984] VR 40.

I do not attempt on this application to resolve the question whether the judgment itself is capable of giving rise to a final judgment upon which execution has not been stayed under s 40(1)(g). However, I consider the matter to be reasonably arguable. There is nothing to indicate that the application for review in the present case is not bona fide although some suggestion to that effect has been advanced.

Accordingly then, I grant the stay sought under notice of motion.  The consequence is that these proceedings under the sequestration order made on 19 September 1997 will be stayed until the determination of the review of those orders, or further order of this Court.  It seems to me that the matter has an element of urgency such that if possible it should be heard at an early date in order to consider the amended notice of motion.  I grant leave for the notice of motion to be amended. 

The notice of motion may be amended to seek, alternatively, a declaration that the Official Trustee in Bankruptcy is the trustee of the estate of the judgment debtor.

I have reached no conclusion on the question as to who has been appointed as trustee in this matter.  Suffice it to say that the question is arguable.

In relation to the question of costs I consider that the matter having been debated and the respondent having substantially succeeded the respondent should have the costs of this application.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin

Associate:
Dated:            30 September 1997

Counsel for the Applicant:	Mr J Stuart Bett
Counsel for the Respondent:	Mr J Carney
Solicitor for the Respondent:	Tetley McNamara & Murphy
Date of Hearing:	30 September 1997
Date of Judgment:	30 September 1997