Cheung v Maxims Entertainment Pty Ltd

[2003] FCA 227

FEDERAL COURT OF AUSTRALIA

Cheung v Maxims Entertainment Pty Ltd [2003] FCA 227

WING CHEUNG v MAXIMS ENTERTAINMENT PTY LTD

N 82 of 2003

MOORE J
SYDNEY
13 MARCH 2003

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 82 OF 2003

BETWEEN:	WING CHEUNG APPLICANT
AND:	MAXIMS ENTERTAINMENT PTY LTD RESPONDENT
JUDGE:	MOORE J
DATE OF ORDER:	13 MARCH 2003
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The application for extension of time is dismissed.
2. The applicant pay the costs of the application, those costs to be payable out of the estate of the applicant.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 82 OF 2003

BETWEEN:	WING CHEUNG APPLICANT
AND:	MAXIMS ENTERTAINMENT PTY LTD RESPONDENT

JUDGE:	MOORE J
DATE:	13 MARCH 2003
PLACE:	SYDNEY

REASONS FOR JUDGMENT
(Revised from Transcript)

1. This is an application by Mr Wing Cheung (“the bankrupt”) filed on 5 February 2003, seeking an extension of time in which to appeal against a judgment of a Federal Magistrate given on 17 December 2002.  The Federal Magistrate dismissed an application by the bankrupt to annul his bankruptcy.  The sequestration order was made on 16 July 2002.

2. In the application for annulment, two grounds were raised.  The first was that both the bankruptcy notice and the creditor's petition had not been served on the bankrupt.  The Federal Magistrate concluded both had been served.  The second was that the bankrupt was solvent.  Accepting that solvency was relevant in an application to annul (a matter put in issue by the petitioning creditor at the hearing before the Federal Magistrate) the Federal Magistrate concluded that the evidence did not establish solvency.  In my opinion, that emerges from a fair reading of paragraphs 12, 13 and 15 of the Federal Magistrate's reasons.

3. The first issue sought to be raised in the appeal concerns the finding of the Federal Magistrate that both the bankruptcy notice and the creditor's petition were served on the bankrupt.  If time is extended, the bankrupt proposed to argue in the appeal that it was inappropriate for the Federal Magistrate to have received oral evidence from the process server, Mr Mullen.  He gave oral evidence about what occurred when service, of both the bankruptcy notice and the creditor’s petition, was said to have been effected.  The Federal Magistrate’s finding that service had been effected was based on the evidence of Mr Mullen.  The bankrupt now says (and proposes to argue in the appeal) that in allowing Mr Mullen to give oral evidence, the bankrupt was taken by surprise and was denied the opportunity to call other evidence to rebut the evidence of Mr Mullen.

4. I have been informed by counsel for the bankrupt that no direction was made that the only evidence to be received during the hearing before the Federal Magistrate was affidavit evidence and that no application was made to adjourn the proceedings after Mr Mullen gave his evidence about how service was effected.  In those circumstances, in my opinion, the point sought to be raised in the appeal about the oral evidence concerning service is without substance.

5. The second issue sought to be raised in the appeal relates to the observations of the Federal Magistrate at paragraph 13 of his reasons, about the payment of the mortgage of a property owned by the bankrupt as joint tenant and also what was revealed by the consumer credit information in evidence before his Honour.

6. Ultimately, however, the relevant factual issue the Federal Magistrate had to determine was whether the bankrupt had demonstrated, as he sought to do in the proceedings, that he was solvent.  As I indicated earlier, on a fair reading of the Federal Magistrate's decision, his Honour concluded the bankrupt had failed to demonstrate he was solvent.  I invited counsel for the bankrupt in this application to draw my attention to any evidence that might suggest that this finding was wrong.  No evidence of substance was referred to which would cause me to doubt the ultimate finding of the Federal Magistrate that the bankrupt had failed to demonstrate he was solvent.  Accordingly, in my opinion, the point sought to be raised about paragraph 13 is again a point without substance.

7. The delay in instituting this application for an extension of time has not been great.  The basis upon which I propose to dismiss the application to extend time is that the appeal sought to be maintained has no prospects of success.  I think it is unnecessary in this matter to deal with one submission made on behalf of the petitioning creditor, namely that the bankrupt should, in these circumstances, be seeking leave to appeal on the basis that the judgment was interlocutory and not final.

8. I order that the application for an extension of time be dismissed.  I order that the bankrupt pay the costs for the proceedings, those costs to be paid out of the bankrupt’s estate.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.

Associate:

Dated:            20 March 2003

Counsel for the Applicant:	Ms Winfield
Solicitor for the Applicant:	William Chan & Co
Counsel for the Respondent:	Mr White
Solicitor for the Respondent:	Aubrey F Crawley & Co
Date of Hearing:	13 March 2003
Date of Judgment:	13 March 2003