Dubois v Di Carlo
[2008] FMCA 1308
•29 August 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DUBOIS v DI CARLO | [2008] FMCA 1308 |
| BANKRUPTCY – Adjournment of creditor’s petition. |
| Bankruptcy Act 1966, s.52 |
| Applicant: | PHILIP JAMES DUBOIS |
| Respondent: | SALVATORE DI CARLO |
| File Number: | BRG 995 of 2006 |
| Judgment of: | Wilson FM |
| Hearing date: | 29 August 2008 |
| Delivered at: | Brisbane |
| Delivered on: | 29 August 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr McQuade |
| Solicitors for the Applicant: | Flower & Hart Lawyers |
| Counsel for the Respondent: | Mr Morris Q.C. |
| Solicitors for the Respondent: | Australian Government Solicitor |
ORDERS
Upon the amended undertakings of the respondent given to the court and attached hereto, the Creditors Petition is adjourned to 10.00am on 28 November 2008 in the Federal Magistrates Court of Australia at Brisbane.
If the respondent fails to comply with undertaking 1(VI), the Substituted Applicants are at liberty to re-list the matter on not less than 2 business days notice in writing to the respondent, such notice to be given at his professional address.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 995 of 2006
| PHILIP JAMES DUBOIS |
Applicant
And
| SALVATORE DI CARLO |
Respondent
REASONS FOR JUDGMENT
The applicant for adjournment is a practising barrister in Brisbane. He brought litigation in his private capacity against the substituted applicants in the Supreme Court of Queensland. He was unsuccessful in those proceedings. He was also unsuccessful, on appeal, to the Queensland Court of Appeal and failed to obtain special leave to appeal to the High Court of Australia. As a consequence, the applicant for adjournment has incurred adverse costs orders totalling some $185,000.
In reliance on those costs orders, the substituted applicants have become involved in proceedings by which the previous creditor sought to obtain a sequestration order against the debtor. The debtor applies today for an adjournment of the proceedings. The adjournment is opposed.
The debtor commenced further action against the substituted applicants in the Supreme Court of Queensland. Those proceedings were struck out. After considerable delay, the debtor sought an extension of time within which to appeal to the Queensland Court of Appeal. That application was refused.
The debtor has now applied for special leave to appeal against that decision to the High Court of Australia. His application for special leave has not yet been heard. Apparently, as a self represented litigant the debtor must first obtain leave of a High Court Justice to serve the proceedings. Pursuant to directions made by the High Court, the debtor must file an outline of argument and draft notice of appeal by 2 September next.
The creditor's petition in this matter was initially presented on 20 December 2006. It has been extended but only until 19 December 2008. It must be dealt with prior to that date.
The debtor seeks an adjournment of the hearing of the creditor's petition, as I understand it, on two bases: the first is whether to consider whether he will, in fact, proceed with the application for special leave and if he decides to do so, as I have said, he will be required to file documents within a very short period of time.
The debtor also seeks to avoid the stigma of bankruptcy by paying the substituted applicant's debt or to provide security for the payment of that debt satisfactory to the substituted applicants. There is no evidence presently before the Court that the debtor has any other creditors other than the substituted applicants. There is no evidence that bankruptcy per se would preclude the debtor's practice as a barrister but one can expect that it may present an impediment in a number of respects not the least to which the debtor's professional standing.
In effect, as his counsel submitted, what the debtor seeks is some time to put his affairs in order so that he can, if possible, avoid bankruptcy. The substituted applicants say, and it was not contested, that the debtor has committed an act of bankruptcy, that he has not paid their debt and that there is no present evidence on foot to show any merits in his application for special leave to appeal. However, those submissions are primarily directed to whether there is any other sufficient cause not to make a sequestration order pursuant to s.52(2)(b) of the Bankruptcy Act 1966.
As I understood counsel for the applicants to submit there was no point in granting an adjournment because the debtor could never show such other sufficient cause. However, that is only one of the reasons, as I understand it, for which an adjournment is sought. The other is to enable the substituted applicant's debt to be paid out in full.
In deciding whether or not to exercise my discretion to grant an adjournment, I must consider how such an order will affect both parties and any prejudice that they may potentially suffer. In the case of the substituted applicants, there will be further frustrating delay. They will also incur costs both of today and potentially of any further hearing and there is the risk, hypothetical at this stage, that the late payment of the moneys will somehow have to be disgorged by them. I put that third consideration to one side because, as I have said, it is purely hypothetical.
The issue of wasted expenditure on the part of the substituted applicants can, in my view, be met by requiring the debtor as a condition of an adjournment to meet the substituted applicant's costs. On the other side, there is the fact that if an adjournment is not allowed, the debtor will be made bankrupt with all of the consequences that that entails. That may, in practical terms, spell the end to any further litigation that he wishes to pursue against the substituted applicants. It may also have the consequence, although the evidence is not sufficiently clear at this stage to draw any firm conclusions, that if the debtor is made bankrupt the substituted applicants may, in fact, receive less than they would under the debtor's proposal.
I say that because it is at least implicit in the undertakings which have been offered by the debtor that others may be assisting him in the payment of the moneys which are outstanding. Those persons would not be obliged to do so if a sequestration order is made.
In the circumstances, I think that the balance favours the grant of an adjournment albeit subject to the condition to which I have referred and so as to ensure that the matter comes back before the Court within the life of the creditor's petition.
I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Wilson FM
Associate: Lynnette Chin
Date: 17 September 2008
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