Dennis v Cranitch

[2005] FMCA 168

FEDERAL MAGISTRATES COURT OF AUSTRALIA

DENNIS v CRANITCH [2005] FMCA 168

BANKRUPTCY – Review of decision of Registrar extending time for compliance with a Bankruptcy Notice – where bankruptcy notice founded on a judgment debt of the District Court – where further stay only sought after the bankruptcy notice had been issued - whether decision of Registrar to extend time for compliance was made without jurisdiction – whether s.41(6A) Bankruptcy Act allows the Court to extend time for compliance in circumstances where a notice of appeal without appointment is filed against the judgment on which the bankruptcy notice is based.

Bankruptcy Act 1966 (Cth), s.41(6A)

Conway v Jackson (2001) 182 ALR 185
Martin v Commonwealth Bank of Australia [2001] FCA 87

Applicant: BRUCE VERNON DENNIS

Respondent: M J CRANITCH SC

File No: SYG 424 of 2005

Delivered on: 28 February 2005

Delivered at: Sydney

Hearing date: 22 February 2005

Judgment of: Raphael FM

REPRESENTATION

Solicitors for the Applicant: Watson & Watson

Counsel for the Respondent: Mr  J T Johnson

Solicitors for the Respondent: Sally Nash & Co

ORDERS

1. Order of Registrar Lackenby made on 18 February 2005 set aside.

2. Application to set aside Bankruptcy Notice NN 61 of 2005 dismissed.

3. The applicant debtor to pay the respondent creditor’s costs to be taxed if not agreed according to the Federal Court Act and Rules.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 424 of 2005

BRUCE VERNON DENNIS

Applicant

And

M J CRANITCH SC

Respondent

REASONS FOR JUDGMENT

1. These proceedings involve an application by a creditor for review of a decision of Registrar Lackenby made on 18 February 2005 which extended the time for compliance with a Bankruptcy Notice No. NN 61 of 2005 served upon the debtor on 31 January 2005 up to and including 8 March 2005.

2. The debt which founded the bankruptcy notice was a judgment of the District Court of New South Wales dated 26 November 2004 pursuant to which the Court ordered that the defendant pay to the plaintiff the sum of $108,003.40 subject to a stay for 28 days. That stay had expired by the date upon which the bankruptcy notice was taken out.

3. The respondent is a senior counsel who specialises in personal injury litigation. According to the judgment of Geraghty DCJ he had been urgently retained by an applicant, a solicitor, to appear on behalf of an infant who was brain damaged in an accident. Mr Cranitch’s intervention was successful and the plaintiff in the proceedings received an award. Mr Cranitch submitted his bill based upon the appropriate disclosures as required under Part 11 of the Legal Profession Act 1987 (NSW) but the applicant solicitor has declined to pay it. There is apparently a requirement that the solicitor’s bill be assessed because the plaintiff is both an infant and brain damaged. Judge Geraghty came to the view that this was a matter between the solicitor and his client and not between the barrister and solicitor. The claim was settled on 15 October 2002 and the settlement was approved by the Court on 4 December 2002. Mr Cranitch’s account has therefore been outstanding for over two years and it is not disputed that the solicitor has sufficient funds in his trust account to pay it. I am not aware of any suggestion that in the event there was some decision binding upon Mr Cranitch which would require him to repay any part of his fee that this would not be done in an appropriately timely manner.

4. The decision of Judge Geraghty was handed down on 26 November 2004. I have no evidence about when the transcript of that decision was received and I believe that I am entitled to draw an inference from the fact that there was no evidence put on to the effect that the obtaining of the transcript was subject to some unreasonable delay that it must have been obtained before the end of 2004.

5. It is possible that the transcript was received before that date because on 20 December 2004 Mr Dennis filed a notice of appeal without appointment in the registry of the Court of Appeal of New South Wales. A notice of appeal without appointment in sometimes described colloquially as a “holding” appeal. It gives no grounds upon which the appellant seeks to upset the decision of the Court below.

6. On 12 January 2005 the bankruptcy notice issued. By that date no attempt had been made by Mr Dennis to file a notice of appeal with appointment setting out the grounds of appeal or to request from the Court of Appeal or the Court below a stay. I can understand why no further attempt was made to seek a stay from the Court below. That is because one had already been obtained and the time had expired. It was not until 18 February 2005 that a notice of motion was filed in the Court of Appeal seeking a stay. As at the date of the hearing before me no notice of appeal with appointment had been filed and I am unaware of the grounds upon which it is said that the judgment of Geraghty DCJ is being impugned.

7. Mr Johnson who appears on behalf of Mr Cranitch argues that the decision of the Registrar to extend time for compliance with the bankruptcy notice until 8 March 2005 was a decision made without jurisdiction. He argues that although it is now accepted that an appeal is constituted within the definition of “proceedings to set aside the judgment or order in respect of which the bankruptcy notice was issued” under s.41(6A) Bankruptcy Act the appeal must in reality seek to have that judgment or order set aside: Conway v Jackson (2001) 182 ALR 185 at [20]. He argues that the filing of a notice of appeal without appointment is not such an appeal and there will only be the requisite proceeding when the notice of appeal with appointment is filed which this Court can clearly see seeks to set aside the whole of the judgment of Geraghty DCJ. For until such a document is filed a court in bankruptcy can not know whether or not there might remain from the original judgment a sum sufficient to found a bankruptcy notice.

8. A review of a Registrar’s decision is a hearing de novo: Martin v Commonwealth Bank of Australia [2001] FCA 87 and I am entitled to look at the matter in the light of the evidence which exists today. Had a notice of appeal with grounds been filed prior to my determination I would have been entitled to look at it. But that has not occurred. All that has occurred is that I am told that the Court of Appeal is to be approached to grant a stay. It has not done so yet.

9. I accept the argument put forward on behalf of Mr Cranitch. I do not think that there is before me an appeal which in reality seeks to have the judgment or order set aside. I accept that in those circumstances neither the Registrar nor myself have jurisdiction under s.41(6A) to extend the time for compliance with the bankruptcy notice. No other grounds for setting aside the notice have been put forward. In the circumstance I have no alternative but to substitute for the order of the Registrar an order dismissing the application and an order that the applicant debtor pay the respondent creditor’s costs to be taxed if not agreed according to the Federal Court Act and Rules.

I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Raphael FM

Associate: 
Date:  28 February 2005