Finikiotis v Sandhurst Trustees Ltd - [2002] FCA 341

FEDERAL COURT OF AUSTRALIA
Finikiotis v Sandhurst Trustees Ltd [2002] FCA 341
EFSTATHIOS FINIKIOTIS & CHRISAFINA ZERVOS v SANDHURST TRUSTEES LTD
S 154 OF 2001
NORTH J
27 FEBRUARY 2002
ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

S 154 OF 2001

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:

EFSTATHIOS FINIKIOTIS
FIRST APPELLANT

CHRISAFINA ZERVOS
SECOND APPELLANT

AND:

SANDHURST TRUSTEES LTD
RESPONDENT

JUDGE:

NORTH J

DATE OF ORDER:

27 FEBRUARY 2002

WHERE MADE:

ADELAIDE

THE COURT ORDERS THAT:
1.The appeal be dismissed.
2The motion, notice of which was filed by the appellants on 13 December 2001, is dismissed.
3The appellants are to pay the costs of the respondent.
4.The trustee of the bankrupt estates of the appellants is entitled to take his costs of this application from the estates of the appellants.

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

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

S 154 OF 2001

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:

EFSTATHIOS FINIKIOTIS
FIRST APPELLANT

CHRISAFINA ZERVOS
SECOND APPELLANT

AND:

SANDHURST TRUSTEES LTD
RESPONDENT

JUDGE:

NORTH J

DATE:

27 FEBRUARY 2002

PLACE:

ADELAIDE

REASONS FOR JUDGMENT

Before the Court is an appeal against orders made by Federal Magistrate Raphael on 23 August 2001. The magistrate dismissed an application for review of orders made by Registrar Baldwin on 19 February 2001. Registrar Baldwin made a sequestration order against the estates of each of the appellants, Dr Finikiotis and Mrs Zervos. The orders were made under s 52(1) of the Bankruptcy Act 1966 (Cth) (the Act). The registrar acted under s 102(2)(i) of the Federal Magistrates Act 1999 (Cth) and rule 1.4(1) in item 8 Federal Magistrates Court (Delegation to Registrars) Rules 2000.
The registrar considered and rejected an argument that the hearing of the creditor’s petition should be adjourned because Dr Finikiotis and Mrs Zervos were engaged in a number of pieces of litigation connected with the debt upon which the bankruptcy notice was based.
The magistrate reviewed the orders of the registrar under s 104(3) of the Federal Magistrates Court Act 1999 (Cth). This was a hearing de novo: r 20.03 Federal Magistrates Court Rules. Again, the focus of the argument was on whether the creditor’s petition should be adjourned pending the determination of the outstanding litigation.
The appeal to this Court is heard by a single judge pursuant to a direction made by the Chief Justice on 12 October 2001 under s 25(1A) of the Federal Court of Australia Act 1976 (Cth). The appeal is brought under s 24(1)(d) of the Federal Court of Australia Act 1976 (Cth).
It is necessary to examine the approach taken by the magistrate to the question of the adjournment. He expressly proceeded on the basis of the principle enunciated in Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137 at 148:
“It is also well established that in general a court…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2002] FCA 341
Decision Date: 27 FEBRUARY 2002

CaseChat Overview and Summary

In the matter of Finikiotis v Sandhurst Trustees Ltd, the parties were Dr Finikiotis and Mrs Zervos, who were involved in litigation against Sandhurst Trustees Ltd. The primary issue was the denial of an adjournment application, which Dr Finikiotis sought on the grounds that the valuation used in a loan application to Sandhurst was incorrect, leading to damages. The court had to determine if the magistrate's decision to deny the adjournment was correct, considering the grounds of appeal and the discretionary nature of such decisions.

The legal issues centred around the correctness of the magistrate's decision to deny the adjournment application, which involved a discretionary judgment. The court examined whether the magistrate had erred by acting upon a wrong principle, giving weight to irrelevant matters, or failing to consider relevant factors. Dr Finikiotis argued that the incorrect valuation led to a mistaken loan, which caused damages. The court considered whether the magistrate's decision was clearly wrong, as per the principle established in Australian Coal and Shale Employees’ Federation v Commonwealth.

The court found that the magistrate had correctly applied the principle from Ahern, ensuring no irrelevant matters were considered and no material facts were misapplied. Dr Finikiotis's arguments focused on the damages caused by the incorrect valuation but did not persuade the court that the magistrate's decision was clearly wrong. The Supreme Court's dismissal of the appeal further confirmed the magistrate's stance.

ORDERS:
1. The appeal is dismissed.
2. The motion filed by the appellants on 13 December 2001 is dismissed.
3. The appellants are to pay the costs of the respondent.
4. The trustee of the bankrupt estates of the appellants is entitled to take costs of this application from the estates of the appellants.

Orders

Orders of the court

1. The appeal be dismissed.

2 The motion, notice of which was filed by the appellants on 13 December 2001, is dismissed.

3 The appellants are to pay the costs of the respondent.

4. The trustee of the bankrupt estates of the appellants is entitled to take his costs of this application from the estates of the appellants.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

NORTH J

The magistrate, after setting out the passage from Ahern previously referred to, then applied that principle to the circumstances of the litigation in which Dr Finikiotis and Mrs Zervos were involved. He carefully examined the stage which each of the proceedings had reached and determined that none of the appeals were based on genuine or arguable grounds. In the case of the Supreme Court proceedings, this view has been confirmed by the dismissal of the application for leave to appeal after the magistrate’s decision. That fact serves to underscore that the view expressed by the magistrate was open to him. It should also be noted that Dr Finikiotis referred to the fact that an application for special leave to appeal to the High Court has been lodged in relation to the Full Court decision.CONCLUSION The appeal in this Court is by way of re-hearing. The decision of the registrar was a discretionary decision: see Ahern at 147. The approach of an appeal court to such a decision has been restated many times. For instance, in Australian Coal and Shale Employees’ Federation v Commonwealth (1953) 94 CLR 621 at 627, Kitto J said:“[T]he true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgment is that there is a strong presumption in favour of the correctness of the decision appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it was clearly wrong. A degree of satisfaction sufficient to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts. Again, the nature of the error may not be discoverable, but even so it is sufficient that the result is so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise the discretion which the law reposes in the court of first instance: House v R(1936) 55 CLR 499 at 504-5.” In respect of the adjournment application, the magistrate acted on the correct principle enunciated in Ahern. He did not give weight to irrelevant matters or fail to give weight to relevant considerations and he made no material mistake of fact. The arguments put by Dr Finikiotis, who appeared on his own behalf, and with the acceptance of Sandhurst, on behalf of Mrs Zervos, took the form of elaborating, by reference to material, the basis of the damage which he claims has been suffered as a result of this unfortunate transaction. He explained in detail his criticisms of the valuation procured by Knight Frank in support of the application for a loan to Sandhurst. He explained that the valuation would have caused Sandhurst to lend the money but, as the valuation was wrong, it followed that the loan was made on a mistaken basis. This meant that, had the proper valuation been made, the loan would not have been made and the damage inflicted would not have occurred.

Ratio Decidendi

Legal Principle Established

Established by: NORTH J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	S 154 OF 2001

BETWEEN:	EFSTATHIOS FINIKIOTIS FIRST APPELLANT CHRISAFINA ZERVOS SECOND APPELLANT
AND:	SANDHURST TRUSTEES LTD RESPONDENT
JUDGE:	NORTH J
DATE OF ORDER:	27 FEBRUARY 2002
WHERE MADE:	ADELAIDE

JUDGE:	NORTH J
DATE:	27 FEBRUARY 2002
PLACE:	ADELAIDE