Chetwynd, B.G. v Meridien International Credit Corporation Pty Ltd

[1985] FCA 676

IN THE FEDERAL COURT OF AUSTRALIA )

EAJIKRTJPTCY DISTRICT OF THE STATE )

OF ? I 3 1 SOTJTH NALES AJIE THE ) No. B5240 of 1 9 8 5

AUSTXALIAN CAPITAL TERPITORY >

BETEEN :

Debtgrs

Ex PARTE:

L I MI 'I'YU

C r e d l t o r

MINUTES OF ORDER

,JGDGE MAY.INC	ORDER :	ZBCKSON J .
DATE OF ORDER:	1 9 Eecember 1985

L4HEP.E MFJjE: Sy?r.eg.

THE CCVRT ORDERS THAT:

1.	The	a p p l i c a t i o n fcr	lsave	t o a p p e a l be	r 9 f u s e d .
7

-. T h e a p p l i c a n t t o p a y t o the r e s p o n d e n t the c a s t s of th?

a p p l l c a t i o n t o b e taxed inc ludmq reserved c o s t s If a n y .

W: S e t t l e m e n t and e n t r y of orders 1 s d e a l t wlth i n Order

1 2 4 of the E a n k r u p t c y R u l e s .

- 1 -

' IN TEE FTDEFAL CCISrRT OF AUSTFALIA )

i l IVISION GENEI iAL )

EAMKRrJPTCP D I C T X C T OF THE STATE OF ) No. E5240 of 1985

NEW SOUTH [ATALES N J D )

THE AUSTRALIAN L'APITK T E R R I T Q F 9 )

BETbEEN :	BRIAN GLENN CHETbiYNC
GLYXIS FCISE

Eebtors

-

- 2 -

I khen refused the appllcation, glving short reasons for my

tdeclslon. Those reasons, in summary, were that: !a) although I

was not affirmatively satlsfled cf the matters'refsrred to In

s.41!6C)(b), I considered that I get had 3 discretion :&ether to

extend the time for compllance under the power conferred by

s.41(6A); !b) I refused to exercise the discretisn under s..1;(6A)

in favour of the applicant, mentionlng specifically one natter

which I regarded as signlficant, namely that the applicant had a

large and uncontested, though not exactly quantified, llaSlllty

to the respondent.

Later that day an appllcatlon was made for leave to ap~e3.l agalnst the declsicn winch I had earller given, che need for

leav? to appeal belng seld to arise from s.24!1-\4) of the Federal

Court of F-ustralia Act 1976 whch provldes t k t :

"(M) 9n appeal shall not be brought from a 3udgmer.z

referred to in sub-section !l) that 1 s sn

mcerlocutory ~udqment	u n l s s s the	C o u r t	or	a Judge
9 1 V 2 S leave to appeal.	"

'3rd.52, r.10 provic',es the procedure f o r obtaining such leave.

Two questions thus arise. Flrst, I s the ]udgmer!t refuslng

the applizaclon for sn estenslun of time for compllance ar!

"mterlocutory ~udgment" In terms of s.74!1A)? Second, if 1'. 15,

should. leave to appesl be 3ranted?

Turnlng to the firs? question, tne term ":udqmen+" use? 13

s .Zd! lP . ) 1s deflned by 5 . 4 of the Act to mesn a "judgment,

- 3 -

decree cr order, whether flnal or interlocutory, of a sentence,"

and it is thus clear that the order whhlch I made is 3 "~udqment"

for the purposes of s.24(19!.

The test to be applied in determinlng whether an order 1s

final or lnterlocutory has been dlscussed in 2 number of cases

and the ultlmate questlon appears to be whetner the ~udgmenr; cr

order, 3 s made, flnally dlsposes of the rights of t h e partles.

See, for example, v. Finance Coreoratlon of Ausr;ralis LLd

!fJo. 1) (1991) 147 C.L.R. 24rj;and Sanofl v. Tarke D a v l s Ptv

Llmlted (No. 1) (1983 ! l49 C.L.R. 147 at 152-153; and Csmcuter

Edqe Pt-77 Lmlted v A p p l e Compclter Inc. (1984) 54 A.L.R. 767.

?.

clrcumstance In whlch an order wlll not be f m a l 1 s lf, as a

matter of law as dlstinct frcm a matter of pc-acricallty, the

~ s s u e is capabls of belng litigated agaln on a further

appllcatlon.

It is possible. 05 course, far m appllcaclon for m

extension of time for compliance to be made after the time when

the perlod for csmpllance wlth the bankruptcy notlce has expired

LStrelmer v. Tamas (1981) 37 A.L.R. 211). It is by no means clear to me that a further appllcation mlqht not be made for m estenslon of time, notwithstandmq that an orlginal applicatlon

inr an ext?nslon of time has not been acceded to. it is 9 matter

3f frequent occdrreEce that appllcatlons for further extensions

of t m e pursuant to s.ai(EA) are made, and conclnue to be made, notwithstandlng the fact that the further applicatlons are made

I appreciate, of course, that a declslon on an appllcatlon may he final if disposed of in one wag, and In 7rlocutcry If

dlsposed of m another way. See the remarks of TrIlndeyer J. ln

TT The Nominal Defendant (1956) 117 C.L.R. 423 at 443.

PJonetkless there seems to me to be no compelling reason to

regard a declsion m to extend the time fgr compliance with a

bankruptcy notlce as precluding the ap2llcanc fnr such 3n

extension from applyin3 afresh for sdzh an extensian.

Situations may readlly be contenplated in whlch It wGuld he

approprlatt for r-he mzklng of a secor.3. appllcatlcn cf an

extznslon ~f t m e , notwithstandmg that an 3arlier 3pplicltion

had been refused. To take one example, lt rnlghc well be the case

that m an applicatlon far an entenslon of t m e for compliance

m t h a bankruptcy notice, the grant of an excension was refusz?

because a judgment was then belleved. to be immlnent 'on the

questlon whether the ~udqment or order In resp?ct of whlch the

bankruptcy notice was issued should be set 2slde, a bellef whlsh

proved Incorrect.

I eo not mean to convey by what I have sald that "secon.'

applications" for extensicns of tlme are necessarlly to be

treated entlrely wlthout reference to the fact tLat an earlier

appllcatlon of a slmllar nazure has been refcs.-J. As I have

- 5 -

sald, however, the questior, whether the order 1 s a "final

judgment" In terms of S. 2 4 ( 1 A ) turns not on che likelihood that

it will be set aside or .Jarled, but on the posslb~llty,	3 s a
matter of law, that it may be.

In these circumstances my vlew is Ynat the order whlch I

made on 17 Deceaber refuslng the zpplicatlon was an

"lnterlccutory judgment" in terms of s.24!1_4).

It 1s thus necessary to cdns1c?er whether the presmt case 1 s one In whlch leave to appeal should be granted and In determlnmq that questlon It is necessary to turn first to the legislative

purpose appearlng From s.24(lB!. !I'hat purpose is t o state its a

general proposltlon that the declsion of a Judge of the Court on

m lnterlscutory macter should not Se the sub~ect of zppeal SUE

to provlde for relaxation of that principle in slrcumstances

where lt 1 s approprlate that the derlsion at f l r s t lnstanc?

should be reconsldered by a Full Court.

There arz no doubt cases where the issues of law, cr fact,

ar? such, r3r the m2act of a declsion upon procedural matters is

such, that leave to appeal should be glven. Equally tkere are

cilses where It is apparent that the circumstances pcesent ns

feacure whzch should result In a relaxaclon of the qeneral rule

that the mterlscutory jud3mer.t of a Judge st first Instance

should be final. Whllst recognizing t3at c3ses exiss i? whlck

the l l k s l y result of an appllcatxon for leave t o appeal 13 clear,

- 6 -

the question depends very much on the particular case m yuestlon

at any tine, and ~t would be quite inapproprlate to atternpc to

state exhaustively the circumstances in whlch leave to appeal

3gainst an Interlocutory ~udgment should be granted. Nith these

consldetntions in mind, I turn to the particular case.

The 3.I)pllcant was sued In the District Court on a guarantee by hlm of the obligatlons of a company, Intaplex Industries Tt;r

Llmlted, of whlch he was a dirsctor. The guarantee a l s o

contamed a clause ic1.5) under whlch the appllcant agreed to be tre-ted as a prlnclpal debtor. Th? applicant allowed a judgment to go agalnst hlm by default In the Eistrict Court for 3.

prmclpal sum of $47,320.56 and Interest and costs thereon

anounting ln total to $54,260.59. 9y the tlme of Issue 05 r,he

bankruptcy notice Interest	had made che sum lncrease	to
$63,185.59.

The judgment of the District Court was glven on 21 Septsmber

1986. No actlon was taken to seek to set 1'. aside uncll nearly 15 months later, namely on 13 December 1925, a cours? of artlon prompt?d 30 doubc by the service upon the appilcant on 3 December

1585 of the bankruptcy natlce In question. I have decllned, In

my earller ~udgment, ko arrlve at an opinlon of the natue

speclfi-d in s.41(6C)(b) but	I regard the 12ngth gf time ;J>-ich
elapsed between the ~udgmezr;	snd the maklnq 3f tne appllcatiorl 50

set lt aside, a period the length of which was noc soughc 50 be

explained In the evidence before me, as belng a relevant natter

- 7 -

for the purposes of the present appllcatlon

Mere importantly, however, there 18 no den la1 In the

proceedlngs of an obllgatlon to the creditor under the guarantee,

an obligatlon whlch presently sounds In money and is, and for a

considerable tlme has been, unsatlsfle?. Rather the contentions

are that the ~udgment In the District Court should be set aslde

because the procedure adopted was bg a Statement of Llquidated agreement as to the rat? of Interest applicable. The correctness

of the assertion that there was no such agreement 15, of COUCSE,

m Issue. Further ~t is contended that the clalrn in che DiscrlcL-

Court relstlnq to prlncipal was agaln a claim contalning an

element of mter?st, the lolnder of which was inapproprllte in

proce?dmgs by way of Statement of Llquidated Clalm.

I should also sag that the appllcant contends that slnce

Intaples Inductrles Ptjr Limited was placed in receivershlp on 10

November 1983 he has had considerable dlfficultles In obtalnlng

access ts the books of account Gf that company. He also said

that nelther that company nor himself had been provldec! bg the

creditor wlth a sufflclently detailed statement to enable hlm t3

establish the prlnclpal cwed, the perlod for whch lnterest hat

been clalmed, and '_he rate of Interest appllsd. iIe sal?. too that

'durlnq the period following servlce upon him of the Statement sf

Llquldated Clalm he had been under conslderable strain Loth financlal and emotlonal follcwin? thc placizg cf Intaples

- 8 -

Industries Pty Llmlted. Into receivershlp.

The suggested dlfficultles cmcernmg identiflcaclon of the

exact anount due would have been resolved, no doubt, lf the

proceedmgs In the Dlstrict Court had been defended but no such

course was taken. The "financial and emotional strsln" ts xkich

the applicant refers 1 s a mar;ter whlch I took icto account ar; the

tune of my original order.

In these circumstances the situation whlch appears to me tr,

obtaln 1 s that the applicant 1 s admlttediy liable to the credltcr

in an amount whlch is not ezsccly identlfi?d but 1 s l l k e l g to be

substantial. It may be that the appllcatlsn to the Dlstric:

Court to set asld2 the ~udqment will be succzssful and if that 1 s

so the effect wlll be that a 5ifferent procedure wlll have to Se

adopted to recover the mon?y, or che correct asount of money,

frcrm the applicant. But s . 4 l ! r ; A ) Itself reccgnlzes tl-at

notwithstanding that an sppllcatlon say be made, and 2erhaps mad?

successfdly, to set aside a judgment, th? Court yet has a

discretion to refuse tcr extecd the perlcd for com2llance x c h a

bankruptcy notlce. Further ~.24(1A) of the Federal Court of

Australla Act as does any other provislon of a sinilar nature,

contemplates the FOSSlbilltg that there wlli be ~~Agrnents whlck,

lf there had been an appeal as of rlght, 'Jould have been reversed.

on appeal but whlch m 1 1 not be the sublrct of appeal because

they present no feature whlch dlstlngulshes them frcm tke

ordlnary run sf cases.

- 9 -

There are two other matters whlch seem CO me to 3e relevant to the exerclse of dlscrec:lon whether to grant leave to appeal.

The first 1s that the appllcant makes no offer to pay or

provide any security for the payment of the amounts wh1-h it 1 s

llable to pay the creditor. It 15, of course, not essentlal that

an appllcant for leave to appeal should do s o , but fallure to cl3

so 1 s In my n e w a relevant matter.

Secondly, I would be more inclined to grant leave to appeal

If I were of the view that an irremedlsble change had occurred by

reason of my orlqinal order. it 30es wlthout saying that the

result of the order is that an act of bankrcptcg 'nss occurred, or

is likely shortly to occur. It does not follow, hcwever, frqm

the makir.9 of my order tnzt the matters set out :n :he bankruptcy

rlotlce are thereafter unesaainable.	See s . 5 2 ( 2 ) of the
Sankruptcv Act.

In summary then, the case appears to me to present no

leaturp whlch merits the grant of leave CO appeal ar.6 I refust to

?rant sclch leave.