Benjamin and Khoury Solicitors v KESSLY

[2019] FCCA 1976

FEDERAL CIRCUIT COURT OF AUSTRALIA

BENJAMIN & KHOURY SOLICITORS v KESSLY [2019] FCCA 1976

Catchwords:
PRACTICE & PROCEDURE – Oral application for an adjournment – whether an adjournment is warranted in the interests of the administration of justice – no compliance with the Court’s previous orders – oral application for an adjournment is refused.

Legislation:

Bankruptcy Act 1966 (Cth), s.27

Applicant: BENJAMIN & KHOURY SOLICITORS

Respondent: EVANGELINA KESSLY

File Number: SYG 317 of 2019

Judgment of: Judge Street

Hearing date: 18 July 2019

Date of Last Submission: 18 July 2019

Delivered at: Sydney

Delivered on: 18 July 2019

REPRESENTATION

Solicitors for the Applicant: Mr W Khoury
Benjamin & Khoury Pty Limited

Solicitors for the Respondent: Mr A Attapalli
Lexes Lawyers

ORDERS

1. Grants leave to Vaikom Rajeev, Rudra Legal Corporation, to withdraw from the proceedings.

2. The oral application for an adjournment is refused.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 317 of 2019

BENJAMIN & KHOURY SOLICITORS

Applicant

And

EVANGELINA KESSLY

Respondent

REASONS FOR JUDGMENT

1. These are proceedings within the Court’s jurisdiction under s 27 of the Bankruptcy Act 1966 (Cth) that were commenced on 14 February 2019.

2. The petitioning creditor is seeking to pursue a sequestration order against the respondent. There had earlier been contested proceedings in respect of the bankruptcy notice that were dealt with before a different Judge of this Court. Relevantly, on 30 May 2019, a Registrar of the Court made orders giving the respondent an opportunity to put on affidavit evidence in opposition to the sequestration order by 11 June 2018. No such affidavit evidence has been filed.

3. There was an order made by this Court on 6 June 2019 vacating the hearing date that had been made by the Registrar and fixing the matter for hearing on 27 June 2019. On 12 June 2019, a lawyer was appointed to represent the respondent, being Vaikom Rajeev, Rudra Legal Corporation Pty Ltd. On 14 June 2019, this Court made orders vacating the hearing date on 27 June 2019 and fixing the matter for hearing today on 18 July 2019.

4. At the time of commencement of the hearing, Mr Johnson of counsel, who appeared on behalf of the lawyers for the respondent who had filed the appointment of lawyer dated 12 June 2019, sought leave to withdraw from the proceedings. Mr Johnson identified that there was a solicitor present, Mr Attapallil, who had apparently been recently instructed. In the course of seeking to withdraw, Mr Johnson handed up to the Court a medical certificate from a Dr Moore which identified having examined the respondent and stated that she is suffering from neck and arm pain and insomnia and that she had been referred back to her usual doctor and alleging that she was unfit to be present in Court. There was also handed up to the Court a bank cheque from Westpac dated 14 June 2019 in the sum of $347,000 and what appears to be a customer receipt deposit from Westpac into a particular account number in the amount of $347,000.

5. Mr Johnson did not make an adjournment application but indicated that he was instructed to seek leave to withdraw in circumstances where the solicitor was identified as being present on behalf of the respondent. The Court is satisfied it was an appropriate matter in which to grant leave to Mr Johnson to withdraw and granted leave for that withdrawal.

6. The Court notes that it had also had available by telephone a Spanish interpreter which was dispensed with as the respondent has not attended Court.

7. Mr Attapallil informed the Court that he only received instructions yesterday and has not been in a position to prepare a notice of appointment as lawyer, to take proper instructions, to put on an affidavit in relation to the circumstances giving rise to the adjournment application, or in relation to the substantive proceedings. The last minute appointment of a legal practitioner is not a proper basis upon which an adjournment should be granted. The medical certificate does not explain why no affidavit could have been obtained from the respondent articulating in detail why it was that she was unable to attend Court, what steps she had taken to instruct lawyers, and why there was being a change of lawyers.

8. A change of lawyers at the last minute is not a tactic that can be permitted to frustrate proceedings that had been properly brought before this Court and that were the subject of orders fixing the same for hearing. Further, the last minute change of lawyers is not something this Court would lightly entertain to support an adjournment in circumstances where the respondent had failed to comply with the order made by the Registrar on 30 May 2019 to file affidavit evidence. Furthermore, no explanation has been advanced beyond the potential inference to be drawn from the bank cheque that is an amount that exceeds the petitioning creditor’s debts or why there is other sufficient cause a sequestration order ought not to be made or that the bankrupt is solvent.

9. The Court raised with Mr Attapallil that it was willing to consider whether the matter should be adjourned upon the assumption that the petitioning creditor would be paid out in full, together with costs, and on the basis that there was identified that the amount of $347,000 is still held in credit in a bank account. Mr Attapallil informed the Court that the amount is still held in credit in a bank account but that the respondent is not willing to pay out the petitioning creditor together with costs.

10. There is no evidence before the Court to support a contention that the respondent is in fact solvent beyond the existence of the cheque. The bank account, whilst exceeding the petitioning creditor’s debt, does not without affidavit evidence explaining the same establish solvency.

11. The medical certificate falls short of explaining why the respondent was unable to provide information in respect of her financial circumstances or to provide information in respect of why there is other sufficient cause, or why she is solvent and why an adjournment should be granted.

12. No criticism is made of Mr Attapallil who has endeavoured to explain, but his position is one where he is not able to further assist the Court, and sought an adjournment. Given the history of these proceedings where there have been a contested bankruptcy notice and the proceedings were commenced on 14 February 2019 and orders were made by the Registrar on 30 May 2019 that the respondent has not complied with, the Court is not satisfied that it is appropriate to adjourn the matter in the interests of the administration of justice.

13. The Court also takes into account in that regard, on the material filed in Court, the respondent is not solvent and has not paid out the bankruptcy notice dated 19 February 2018. The existence of a bank cheque does not displace, in the circumstance of the present case, the evidence before the Court that the respondent is unable to pay her debts as they fall due.

14. The unwillingness to engage in trying to resolve the matter gives the Court further concern in that regard as to the financial position of the respondent. Once the Court was informed that the amount of 347,000 is still held in a credit account, the fact that the respondent, on the evidence before the Court, is insolvent is a further reason why a sequestration order ought to be made if the evidence before the Court supports the making of the same so as to ensure a proper distribution to the creditors of the estate of the bankrupt.

15. The petitioning creditor opposed the adjournment and the Court takes into account the nature of bankruptcy proceedings in which there is a public interest and obligation under the Act to determine the same expeditiously. In all the circumstances, the Court is not persuaded that an adjournment is warranted in the interests of the administration of justice.

16. Accordingly, the oral application for an adjournment is refused.

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of Judge Street

Associate:

Date: 5 September 2019