Foyster v ANZ Banking Group Ltd S220/2000

[2000] HCATrans 765

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S220 of 2000

B e t w e e n -

LLOYD FOYSTER

Applicant

and

AUSTRALIAN AND NEW ZEALAND BANKING GROUP LIMITED

Respondent

Application for special leave to appeal

KIRBY J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 15 DECEMBER 2000, AT 2.58 PM

Copyright in the High Court of Australia

MR L.J.W. AITKEN:   I appear for the applicant in this matter.  (instructed by kings lawyers)

MR A.W. STREET, SC:   May it please the Court, I appear with my learned friend, MS J.E. STUCKEY-CLARKE, for the respondent.  (instructed by Blake Dawson Waldron)

MR AITKEN:   I have belatedly handed up to your Honours by way of opening a very recent decision of the Full Federal Court.  I would invite your Honours’ attention to paragraphs 79 and following on page 22, which illustrates why the ‑ ‑ ‑

KIRBY J:   Have you seen this, Mr Street?

MR STREET:   I have, your Honour.

MR AITKEN:   The central issue in this case is an appropriate one, as we would submit, for the grant of special leave by the Court.  Your Honours are aware that over a recent series of cases there has been a question agitated with respect to the operation of section 27 of the Federal Court Act and collateral provisions in the Family Court Act to do with the reception of further evidence.

KIRBY J:   We are aware of that, but the fundamental problem that you seem to face – and I think you are going to have to deal with this right at the threshold – is that their Honours in your case said that even if they could have admitted this evidence, in the exercise of discretion they would not.  It was apparently cobbled together on the very day before the hearing.

MR AITKEN:   With respect, perhaps not cobbled together.  It was provided on the day of the hearing.

KIRBY J:   If that is so, then you do not really get to the big question.

MR AITKEN:   We do, with respect.

KIRBY J:   The issue is a big question and, with respect to their Honours, I find it difficult to distinguish the position of the Federal Court and the Family Court.

MR AITKEN:   We get right to the big question, your Honour, because the uncontroversial facts at the time that the matter was on before the Full Federal Court – and we were overwhelmed, in a sense, by the approach, no doubt, Justice Beaumont advisedly took as presiding officer – but the fact was that we ‑ ‑ ‑

KIRBY J:   He was not the presiding officer; he was the presiding judge – Chapter III.

MR AITKEN:   Presiding judge.  We had at that time something which was admitted by the other side, paid them a bank cheque for the full moneys which had been outstanding, we had offered payment on the day of the hearing, and there was no question, if one looks at the schedule which appears at page 56, that we were at that stage a net creditor of the Australian and New Zealand Banking Group Ltd.  What I think led their Honours into error – and it is my fault of course because I did not correct it at the time – was the notion that there needed to be detailed cross‑examination with respect to evidence which was also put on with respect to metallurgical reports and the like.

That did not take the matter anywhere with respect to our solvency because the simple fact was, being a recalcitrant debtor, as your Honours are aware, we had tendered payment on the day.  That payment was refused under the doctrine of McIntosh’s Case.  That case of course is designed to protect a payee in cases of preference in the hands of the trustee.  No question of that could arise because the evidence which we would have led before their Honours, if they had been minded to admit it, demonstrated that we had satisfied all the extant costs orders up to the day of the hearing.  We are a net creditor and I think the position is – but no doubt Mr Street will correct me – that I do not think any further cost order has been issued.

Your Honours will see from the correspondence between the parties that various cheques for the amount of $97,000‑odd are at present being held by the Bank.  Your Honours will see that at pages 54 and 55.  If your Honours go to page 55, your Honours will see a letter, politely couched, pointing out that at present some $97,000‑odd as at 26 June was in the trust account of Messrs Blake Dawson Waldron on behalf of the Bank.  So the bare fact – and this is how we say, with respect, we bring ourselves squarely within the dictum of the majority in CDJ v VAJ – was that there were incontrovertible facts, if one looks at the majority dictum in that case, which would have had to have been admitted by the Bank which demonstrated at that time that we were solvent – no doubt about that – and we still are solvent because there is no other debt according to the affidavit sworn by Mr Foyster apart from sundry or miscellaneous creditors who are owed any money.

So we would submit, and we did submit to the Full Court – and no doubt they were annoyed because we came late to the party with the evidence – that we fell squarely within the dictum of Justices McHugh, Gummow and your Honour Justice Callinan at 157 ALR at paragraph 114.

KIRBY J:   But that goes to the admissibility of it.  It is not as to whether, in the exercise of discretion, they should in this particular case admit it.  There you run into the problem that you tendered it so late.

MR AITKEN:   But, your Honour, that cannot, with respect ‑ ‑ ‑

KIRBY J:   Their Honours did say that even if they could admit it, they would not in this particular case because of the fact that you had tendered it so late.  I know you do not like that concept but it is a double hurdle you have to get over to get into this Court.  This is an application for special leave to appeal against an interlocutory decision of a discretionary kind.

MR AITKEN:   With respect, all we can submit in relation to that is that it was a perverse finding by their Honours, or a perverse ruling, in this sense, that there was no doubt at all on the facts between the parties that we had paid the full amount.  If we start back with Justice Hely’s judgment, we tendered the amount on the day of the hearing.  We were a recalcitrant debtor.  We had been engaged in a long, long dispute with the Bank in relation to all sorts of foreign currency and other matters over a protracted period of time.  We did not want a trustee appointed and we did not want to pay them.  We said we were solvent.

Justice Hely put us down, putting it too colloquially perhaps, on the basis that he could not be sure that moneys which we said would come to our account by the sale of certain shares, which your Honours are aware of, would come to account.  He said, “No, I can’t believe, looking at your solvency now, that you will actually receive any moneys with respect to these shares”.  That appears at the bottom of pages 12 and 13.  Evidence was given by Mr Foyster that he expected to sell, if your Honours would go to that - page 12 at the bottom – and see Justice Hely’s primary finding:

Still less could I assume that the shareholding could be realised, or borrowed against so as to raise any particular sum of money within a comparative short time frame.

We had said – and I do not think Mr White below before Justice Hely cross‑examined at all about this – we said, “No, we expect to sell and we will sell 1 per cent for something like $35,000”.  No doubt of course, to Justice Hely that had the usual Micawberish quality to it in the sense that we often say something will turn up and nothing turns up, but ‑ ‑ ‑

CALLINAN J:   Was there any application for a stay of the sequestration order?

MR AITKEN:   The stay has been in place, your Honour.  Justice Gummow extended a stay until the hearing of the matter today.  That of course, with all due respect, is what no doubt, on a fair reading of it, flavoured the view of the Full Court.  Your Honours will have seen from the transcript in relation to the hearing as it opened that their Honours found it absurd, I think, to use the word of Justice Beaumont, that this matter was still being ventilated.  In other words, their Honours were saying, “Why don’t you simply take the section 153A or B annulment route?”, and we said to their Honours, “Well, we don’t want the stigma of ever having been made bankrupt.”  If your Honours would go to page 83, you will the see the passage - I am not saying it is a passage of arms; that is putting it too highly – the polite discourse between myself and Justice Beaumont in relation to ‑ ‑ ‑

CALLINAN J:   But I suppose that is the risk you run, that you might be put to that procedure rather than resistance of the sequestration order if you come very, very late to the court to try to satisfy the debt.

MR AITKEN:   There is a difficulty implicit in this discretionary notion being put against us arguendo, and that is this, that you are dealing here with a question of civil status which is going to be determined from time to time in the same sense as whether one has relied on 1 June or dead on 31 July.  In terms of solvency – and maybe there was an error – we took the view that we needed the most up‑to‑date evidence – that is to say, evidence which was right up to date – because what would have happened if some debt had come in or some other creditor had made a claim if the affidavit had been sworn two months before?

CALLINAN J:   You would just do what often happens in these situations:  you put in a supplementary affidavit on the day.

MR AITKEN:   Your Honours will see that my friend Mr Street was invited to say what was contentious in relation to the evidence we wanted to put on.  He never actually answered that question because we were overwhelmed in a sense by the way in which the matter was resolved.  There was in fact nothing at all contentious about the fact of the payment on the day, the offer of tender and the fact of the subsequent payments of the cheques which fully discharged and covered the costs orders, so there was nothing at all.  There was no prejudice which an experienced counsel could not have dealt with immediately.  Those were the facts.  There is no question of examining them.  The Bank was holding cheques for that amount.

So we were caught in a bizarre situation, in effect.  We had an allegation put against us below before Justice Hely that we were insolvent.  We had offered the money.  We then said, “We’ll get some more money in relation to future costs orders”.  Following Sandell v Porter of course, his Honour is saying, “I’ve got to take into account matters which will accrue to your costs, so you’ve got to look at those over the horizon”, and we said, “Well, that’s correct, your Honour, but you’ve also got to take into account the money we expect to get in”.  He has gone ahead and said, “No, I don’t think you’re going to get any money in”, and we subsequently were able to say happily, “No, we’ve got a lot of money in.  We can pay that debt”.

So the real question is whether or not we fall squarely, in our respectful submission, within the CDJ dictum which is simply that the court will readily admit further evidence which is not in dispute which the court is able to evaluate and take into account in considering the appeal without the necessity to have the proceedings re‑heard.  That is us.  Nothing needed to be re‑heard.  The Bank would have had to have said, “Yes, thank you, we’re holding the cheques in trust.  We haven’t cashed them, so that aspect is met.  You’ve offered us the money at trial.  We didn’t want that.  You’re solvent”.  Solvency is being able to pay your debts as and when they fall due and that is a position which this Court and the Full Federal Court, if it had been so minded, was in the position to satisfy itself of on the occasion.  As your Honours will see from the decision in Stirling Harbour Services that I have handed up ‑ ‑ ‑

KIRBY J:   All they seem to say there is it will have to be reconsidered one day.

MR AITKEN:   That is just to give flavour and effect to the fact that is a very live issue.

KIRBY J:   Well, so it should be.

MR AITKEN:   It should be and we would submit that this is an ideal vehicle for that ‑ ‑ ‑

KIRBY J:   There is no difference, is there, between the statutory formula in the Federal Court of Australia Act and the Family Court of Australia Act, or is there?

MR AITKEN:   Not that I am aware of, no.

KIRBY J:   I think we were told in CDJ that there was not.

MR AITKEN:   Of course, your Honours have also recently passed on this whole difficult area in Coal and Allied Operations v Australian Industrial Relations Commission which is ‑ ‑ ‑

KIRBY J:   What is the relevance of that case?

MR AITKEN:   Simply to indicate that ‑ ‑ ‑

KIRBY J:   That was mainly about jurisdictional fact, was it not?

MR AITKEN:   It was, but also a question there as to the nature of the appeal though, whether it was in fact an appeal de novo, and paragraph [13] applies at page 590 in 174 ALR, whether or not the appellate tribunal can receive further evidence and whether its powers are restricted, as it were, on the appeal strictu sensu.  Of course, below we were simply confronted very early on by the fact that Duralla v Plant said no further evidence at all in relation to this matter.  We simply say we are in what one might call a Kafkaesque position.  We are solvent.  If leave is not granted and the order is made, the stay is lifted.  Presumably a trustee will be appointed.  We are then in the difficult position that under section 153A one assumes that a trustee on our facts would have to be satisfied that the debts have been paid and therefore the bankruptcy is immediately annulled.  So I am not quite sure where that leaves us in relation to our status, whether we in fact have ever been bankrupt.  The reasons for us not ever wanting to be bankrupt of course, with respect, are so obvious we do not really need to state them.  We do not want the stigma of ever having been made bankrupt rather than the other alternative escape route of having been made bankrupt but having it automatically annulled or immediately annulled.

With respect, when one looks at the Full Federal Court’s treatment of the matter, it is quite clear on a fair reading, particular at pages 81 through to 83, that the court just, as it were, could not understand why we simply have not rolled over, to use a colloquialism or a vulgarism, and simply said, “Oh, that’s all right, we don’t mind being bankrupt on the order.  We’ll just annul it immediately”.  Your Honours can see that from the middle of page 83, Justice Beaumont saying, “It’s absurd.  This is just a ridiculous application.  Why don’t you just go away and get annulled?”.  So, in our submission, we are entitled to have the matter heard.  The court should have heard the evidence and, in the absence of that evidence, it has committed a palpable error, an obvious error, because, if you apply Sandell v Porter, we never were not able to meet our debts as and when they fell due.  May it please the Court.

KIRBY J:   Mr Street, a formal approach to this would be to say there are two obstacles.  One is the obstacle that this is a discretionary interlocutory decision; secondly, that the Full Court said that even if they did have power to admit the further evidence, they would not do so in the exercise of the discretion because the evidence came late.  But if one cuts through and looks at the reality of the matter, it was a decision which the Full Court was confirming that affected the status of the applicant which would have ramifications forever in terms of the applicant’s creditworthiness and so on.  You were said to have the cheques which indicated that the foundation for

the order made below was wrong and that the basic reason the Full Court gave – certainly two of the judges – was what at least arguably is a misunderstanding of the principles in CDJ.  What is wrong with that reasoning?

MR STREET:   Your Honour, the nature of the evidence that was sought to be adduced was in essence evidence of the kind which would not meet other than a usefulness test.  It was not evidence that one could have formed a view would have resulted in a different order in the court below.  When one looked at the material, it was contentious material.  It was being sought to be adduced not for the purpose of proving a state of facts as at the date of hearing by the Full Court but rather to try and prove that there was an error in the findings by his Honour Justice Hely.  If I could take your Honours to the judgment at page 32, your Honours will see at about line 25, after a reference to the assertion that the trial judge had reached an incorrect conclusion:

But such a course would require (as indeed counsel contemplated) that the Bank have the opportunity to cross-examine the deponents of affidavits and also that the Bank have an opportunity to lead evidence in response, not usually a procedure appropriately engaged in on an appeal:  and all directed, apparently, not towards ascertaining the position at the time the matter was before the Full Court but at the time, some months ago, when the matter was before the primary Judge.

In other words, the nature of this fresh evidence was not in fact evidence that proved solvency as at the date of the hearing.  The matter was contentious.  The assertion by my learned friend that there were cheques that had been received by my client is not correct.  There were payments that were being held in a solicitor’s trust account.  The assertion that they exceeded what I might describe as the outstanding orders that had been made was contentious; it was in issue.  The assertion that the other material was in some way incontrovertible facts was the subject of hot contest.

KIRBY J:   I take the force of that, but it may be that the misdirection of the target, that is to say what the position was when the primary judge was dealing with it, was because of a common view that was held in the Federal Court as to the nature of the appellate process in that court and the powers of the Full Court consequently on the basis of that character of the appellate process to the Full Federal Court.  CDJ rather undermines that.

MR STREET:   I accept that there may be a question that will arise in an appropriate case.  The real question is whether this is an appropriate vehicle.  There, as your Honour said at the outset, it is clear from the joint judgment that their decision in relation to rejecting the fresh evidence was only in part based on Duralla v Plant and the balance of the reason why it was rejected was because of, if I can put it in sequence, the non‑compliance with the Federal Court Rules for service, the belated presentation of it at the last minute, the absence of any explanation in respect of that late service or any explanation as to why this material was being produced at such a late stage.

In those circumstances, it is clear that when goes to the interlocutory judgment – perhaps I could take your Honours to it very briefly.  If one turns to page 22, your Honours will see at about line 30:

The present evidence is, as I have indicated, of events that occurred after the making of his Honour’s orders.  In my opinion, that material would not be relevant for our purposes and I would have refused the application on that ground alone, but there are additional considerations to be taken into account in the exercise of the Court’s discretion…..

Furthermore, I am deeply troubled by the lateness of the arrival of this material.  It is apparent that much of it would be contentious.

Your Honours, it is not correct to say one looks at the transcript.  We had given written submissions to the court obviously seeking to deal with the suggestion that some fresh material might be introduced.

I have no doubt that Mr Street, Counsel for the respondent, would need to cross-examine upon it.

That is correct, in respect of every affidavit.

That scenario alone would have been, in my mind, sufficient reason as a matter of discretion to refuse the application.

If one turns to the judgment of Justice Lehane at page 23 line 37:

I also agree with the presiding Judge.  I would only add this by way of reinforcement of the view, expressed by the learned presiding Judge, that he was troubled by the lateness of the appearance of this further evidence.

CALLINAN J:   Mr Street, I see ground 2(b) of the notice of appeal at page 39 raises the question of solvency at the date of the hearing of the appeal and not just at the date of the hearing before Justice Hely.

MR STREET:   Yes, your Honour.

CALLINAN J:   Say somebody had come into a lot of money whilst a sequestration order was stayed, why should not the court receive evidence and say, “This person isn’t bankrupt.  The sequestration order hasn’t become effective.  It’s been stayed.  The person has the capacity to pay.  He isn’t bankrupt”?  Why should not a Full Court receive that evidence and act on it?

MR STREET:   Your Honour, I would accept that in circumstances such as your Honour has outlined, one would have a position where one could conclude that the nature of the evidence would have resulted in a different order from the court below, but this is not a case ‑ ‑ ‑

CALLINAN J:   Did you ask for leave to cross-examine on the affidavits that were sought to be filed?  Did you say that you would want to cross‑examine on them if they were received?

MR STREET:   I had plainly indicated it was contentious and I would have cross-examined.  In that regard this was material on which I had detailed material to cross-examine.  When one looks at the affidavits, they hardly address what I might describe as the scenario of the solvency in a detailed way as at the date of the hearing.

CALLINAN J:   What is the best of the affidavits?  I did look at them but ‑ ‑ ‑

MR STREET:   The scenario where one wins the lottery after the making of the order by the court at first instance may be a different issue, but that is not this case.  This was an endeavour, as identified at page 32, to adduce evidence in essence to try and show that the prediction by his Honour Justice Hely was wrong, and that is the basis upon which the applicant sought to argue.  In relation to the discretionary interlocutory decision, that is to reject the evidence because of its lateness, that is a discretionary decision in respect of which no error of principle has been identified, no reason to interfere with that discretionary rejection or that ground of discretionary rejection of that evidence ‑ ‑ ‑

KIRBY J:   I am just a little troubled that it is formalistic.  After all, a decision is being made altering the status of the applicant which really redounds still for the rest of that person’s life in terms of credit ratings and so on.

MR STREET:   Your Honour would have seen from the material in our written submission that the applicant had entered into a part-tenant arrangement in 1991 and then there was a history of, I think, the proceedings.  There were endeavours to set aside the bankruptcy notice which were unsuccessful.  There was an application before Justice Einfeld under section 153B.  The applicant has a means of seeking relief if it is in fact the case that he is solvent under section 153A.  That is a matter hotly contested by the respondent and it is one where in essence, because of that independent ground upon which the rejection was based, in our respectful submission, it is not an appropriate vehicle ‑ ‑ ‑

KIRBY J:   I suppose that if the Full Court took the view that they should not, even if they had the power, admit such evidence, some credence has to be given to that, otherwise no primary judge’s decision in bankruptcy, or few, will be final.  Everybody will go up to the Full Court and tender up‑to‑date evidence which will be marginally different from that which existed at trial.  But it is said in this case that the particular feature that takes it out of that class is that here was proof positive that the applicant was not insolvent.

MR STREET:   But, your Honour, that is an assertion, a conclusion, not supported, contentious, and it is one which one has not identified what I might describe as some finding that supports that.

KIRBY J:   What was the debt to the Bank and how much were the cheques?

MR STREET:   The cheques were received and held in the trust account.  At that time I think there was an amount in the order of some $91,000 further outstanding debts that the ‑ ‑ ‑

CALLINAN J:   97,000, was it not?

MR AITKEN:   We had paid 97, your Honour.

MR STREET:   I think the full amount that the Bank said was due or about to be due was about 188,000 at the time of that payment.  This is a matter which was not then explored in cross‑examination so that one does not have the opportunity to what I might describe as rebut this material.  It would be inappropriate for this Court to be looking at an assertion that “I provided some cheques during the course of the period after the making of a sequestration order which had been placed into a trust account and assert because of that, I am not solvent”. 

KIRBY J:   You mean the reality is that if every time an application for leave to appeal comes before the Full Court and some up‑to‑date material is given, especially at the last minute, the lawyers for the creditors will have to ask for an adjournment in order to get instructions and get countering information and evidence and that will just spin out these proceedings in a way that I doubt the Act intended?

MR STREET:   Yes, your Honour, we would respectfully adopt that proposition.  This in essence was an application which would obliterate the distinction between the original and the appellate jurisdiction, and the nature of the material that was sought to be adduced does not fall into the category, as your Honour Justice Callinan has identified, of one where there is a clear receipt of an estate or the winning of the lottery in which one has incontrovertible facts that give rise to solvency.  Here this is contentious material that would have been the subject of challenge and in those circumstances its belated service without explanation is not one which, in our respectful submission, would justify a grant of special leave.

Your Honours, I should also indicate that this is not a case where there was not an opportunity given to the applicant to seek an adjournment during the course of the trial before his Honour Justice Hely.  The applicant was given the opportunity to seek an adjournment to redress what I might describe as the evidentiary position and that application was not pursued.

CALLINAN J:   Mr Street, you say the material was contentious.  Was it contentious so far as the debt owed to your client was concerned?  First of all, was that in an established amount or was there some question of costs that remain to be assessed?

MR STREET:   There were further costs orders that were the subject of assessment or in the process of assessment.

CALLINAN J:   But I think Mr Foyster’s solicitor filed an affidavit in which he made an estimate of those costs, is that right?

MR STREET:   And he would have been cross-examined on that because we did not accept his estimate of those costs.

CALLINAN J:   All right, he had been cross-examined on it but, if he had been correct about that amount, was there evidence that there was sufficient money to satisfy the debts owed to your client including the costs if they were of the amount that his solicitor said?

MR STREET:   No, it was inadequate.  That was our primary position.

CALLINAN J:   It was still inadequate?

MR STREET:   Yes, your Honour.

CALLINAN J:   To what extent, Mr Street?

MR STREET:   To the extent of something like 91,000.

CALLINAN J:   I did not think that was right, but you may be correct.

MR STREET:   Your Honour is quite right in terms of saying the position before Justice Hely but, if one is going to say the position before the Full Court ‑ ‑ ‑

CALLINAN J:   I am asking about the position before the Full Court.

MR STREET:   The position before the Full Court is that is what I would have been cross-examining and putting, that there was 91,000 not brought into account that was imminent, either assessed or about to be assessed.  So one has a significant difference between ‑ ‑ ‑

CALLINAN J:   What were the two amounts of $70,000 and $27,000 at page 55 in satisfaction of – the cheques that your client was holding?

MR AITKEN:   With respect, it is page 56, your Honour, which sets out the quantum and how much was paid.

MR STREET:   Yes.  If your Honours look at the amount identified, it is still in dispute even on that schedule on page 56, your Honours will see 78,000.  That was contentious.  We said it was higher than that.  But that was the matter upon which he would have been cross-examined.  In our respectful submission, it is one where, with no explanation for the lateness of the material, no compliance with the Federal Court Rules relating to service of material and notification, no ground of appeal raising a matter relevant to specifically the fresh evidence, the fresh evidence being sought to be adduced in a way which was not trying to prove solvency at the date of the hearing but rather to advance an argument that Justice Hely’s predictions were wrong, it is not an appropriate vehicle, in our respectful submission, for reconsidering Duralla v Plant because of that independent discretionary basis upon which the material was rejected, quite apart from what we would respectfully submit the absence of any error identified in that discretionary basis for rejecting material.  The respondent has the means available under section 153B of the Bankruptcy Act to seek an annulment if in fact he is solvent, which is a matter which I have indicated is contentious.  If the Court pleases.

MR AITKEN:   Your Honours, with respect to this question which has been raised by his Honour Justice Callinan, I think by your Honour Justice Kirby, page 56 sets out the various amounts which were in dispute and the amounts which were paid.  Your Honours will appreciate of course that in terms of a Sandell v Porter issue, which is the key issue in this case at base - your Honours will recall in Sandell v Porter 115 CLR that the decision made by the bankruptcy judge when he is hearing the matter is to make a future assessment of two things:  first of all, what debts are likely to occur in the immediate future; secondly, what moneys will be able to be brought to account by the judgment debtor within a reasonable time by realising assets.

We said to Justice Hely, “We are going to realise some assets”, and he said, “No, I’m sorry, I cannot believe that you’re going to be able to sell – this is pie in the sky stuff – 5 per cent or 1 per cent of this thing for $35,000 a point”, and we said, “Yes, we are” – page 12 – “We’ve already got 148,000 in.  More is coming in”.  “No, I’m sorry”, he said.  “Still less could I assume you’ll do that, or you can borrow against it”.  Totally wrong.  He is totally wrong about that.  We have sold it.  More money came in.  We paid the cheques to the other team and we said, “There’s the money.  What else do you want to know about it?”.  Mr Street when he is talking about contentious, what he is saying is that over the horizon in terms of…..not yet issued, more debt may have been brought to account and we would have to pay it.

KIRBY J:   Yes, but your theory of the operation of the Act, in which time is very important, seems to be that it is an open-ended caravan.  You just run the caravan through the primary court and then, if you are not happy with that, you come up and you run it again.  That really cannot be how bankruptcy law works.

MR AITKEN:   Not at all, your Honour.  With respect, the fear put by your Honour I think to my friend in argument is entirely chimerical about whether it is likely at all that people will be turning up troubling the Full Court with money which has come in, because most people, unhappily, are not in this position of either, to borrow Justice Callinan’s example, winning the lottery or having an auntie pass on or whatever or, on the other hand, being able to sell a large asset which Mr Foyster still has an interest in and finding extra money.  So it is nonsense, with respect, for my friend to say it is all contentious.  He would have cross‑examined about nothing, but debts were admitted at the time, the payments made were admitted, the costs orders in force were admitted.

The only question would have been whether or not an estimate of future costs would have been correct or incorrect at the date of the hearing of the Full Federal Court.  Then of course, if that matter had been in controversy, it would have proved that we would have had more money to come in.  I know there is an “on the never‑never” flavour to this and the light is on, but in this particular and unusual case, this is the very case in which the dictum in CDJ v VAJ must be applied, because otherwise the whole system is a nonsense in a sense, with respect, because we are entitled ‑ ‑ ‑

KIRBY J:   It is not a nonsense.

MR AITKEN:   It is.

KIRBY J:   It still does not answer the question of why you had to turn up on the very day of the proceedings in the Full Court with your affidavits.  If that becomes the general rule, parties, respondents, simply cannot defend themselves and then there is an adjournment and the whole thing spins out and that is really contrary to the policy of the Act.

MR AITKEN:   If there was an error in making that decision, it was my error entirely because I took the view that we needed to have the most up‑to‑date evidence.  No doubt we should have forewarned the Bank.  But look, the Bank and my client have been in disputation for many years on all sorts of fronts.  They are unreasonably holding cheques, we would submit.  They will not even cash the cheques.  Mr Foyster has sworn there is only $1,000 of other debt out there apart from other sundry creditors, so for them to raise really, with respect, captious points about fairness and the like is interesting.

KIRBY J:   Really it is a very proper statement for you to make that they were your fault, but we have to test propositions by what happens if they become a general rule.  Your theory applicable to this particular case is that it is a general rule you just turn up on the day with affidavits.

MR AITKEN:   Not at all, no, your Honour, because no one will be able to turn up on the day.

KIRBY J:   Well, that is what you did and the Full Court said if they had a discretion, they would have exercised it against you because it would be unfair to the respondent.

MR AITKEN:   Possibly.  A fair reading of the Full Court’s decision is, with respect, that they thought it was absurd that we had managed when solvent to stay an order from Justice Hely which was made in March all the way through to June or July when we simply could have taken the annulment route.  I must tell your Honours that we have actually sought to have an annulment because Justice Einfeld raised the matter with us and, when we turned up and offered the money, that was refused.

KIRBY J:   Yes.

By this application, the applicant seeks special leave to appeal from a discretionary judgment of the Full Court of the Federal Court of Australia.  Quite apart from the difficulties which that fact presents to the application, there is a further and, in our view, ultimately fatal difficulty.  This is that the evidence which the applicant sought to have admitted in the appeal before the Full Court was not tendered until very late.  The judges of the Full Court said that, in their discretion, they would not have admitted the evidence.  That was a conclusion which was open to their Honours.

In refusing special leave, this Court makes it clear that it does not necessarily agree in all of the reasoning of the Full Court and, in particular, as to that court’s treatment of the implications for the Full Court of the Federal Court of this Court’s decisions in CDJ v VAJ (1998) 197 CLR 172 and Allesch v Maunz (2000) 74 ALJR 1206 at 1210, 1214 [20] - [23], [44]. That question may, in due course, have to be considered by this Court, a fact that appears to be recognised by the Full Court itself. See Stirling Harbour Services Pty Limited v Bunbury Port Authority [2000] FCA 1381 at [79].

The application is refused.  The applicant must pay the respondent’s costs.

AT 3.34 PM THE MATTER WAS CONCLUDED