Frank, Re J.V. Frank, Ex Parte J.V.

[1988] FCA 666

JUDGMENT No. bh$..lY. .... g L

NOT FOR DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE STATE OF

SOUTH AUSTRALIA

- RE : JOSEF VICTOR FRANK

Appellant

EX PARTE:  JOSEF VICTOR FRANK

Respondent

CORAM :	Davies J.
-	DATE :	7 November 1988
Sydney	PLACE:

MINUTES OF ORDER

THE COURT ORDERS THAT:

The motion be dismissed.

NOTE :	Settlement and entry of orders is dealt with in
Rule 124 of the Bankruptcy Rules.

e

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION

BANKRUPTCY DISTRICT OF THE STATE OF )

AU TRALIA SOUTH 258 No. SA of 1987

RE :

- JOSEF VICTOR FRANK

Appellant

EX PARTE: JOSEF VICTOR FRANK

Respondent

CORAM :	Davies J.
DATE :	7 November  1988
PLACE :	Sydney

REASONS FOR JUDGMENT

This is an application for an order extending the

time within which the bankrupt, Josef Victor Frank, may appeal

from a judgment of Fisher J. given on 23 October 1987, (1987)

16 F.C.R. 396 in which his Honour refused to annul an order

made by FOr6ter J. on 9 March 1987 under s.52(1) of the

Bankruptcy Act 1966 (Cth)("the Act") sequestrating	Hr Frank's
estate.

Order 52 Rule 15(2) of the Federal Court Rules

provides that the Court or a judge may for special reasons

at any time give leave to file	and serve a notice of appeal.
L.

Pursuant to Order 52 Rule 15(3), the bankrupt has presented

hi6 case and his argument in writing.

Prior to the making of the requestration order, Mr

Frank had been involved in litigation, particularly

proceedings involving Mr Jozsef Piliczky. There	had been
judgments and orders against	Mr Frank which he then contended,
and continues to contend, were	not correct.

An effect of the sequestration order has been to

prevent Mr Frank from continuing with his litigation in these

matters. See s.60(2) of the Act. Mr Frank's case was well

put in the following submissions which e presented to me.

"Your Honour as a matter of fact, I pointed out to Mr.

Justice Fisher and to Mr. Justice Forster that the

making of the Sequestration Order prevented me from
bringing to the notice of the court the very serious
error made by Mr. Williams, S.M., when he gave credit

to Mr. Piliczky, the judgment creditor and to myself

as the judgment debtor the	sum of $10,500.00, which
was declared incapable of recovery under the terms	of

the order made by His Honour Senior Judge Brebner on

the 28th of November 1986.

The point that I make is that at least the amount that forms part of the Sequestration Order should

have been reduced by the sum of $5,250, because Mr.

Piliceky the judgment creditor was given credit for

the sum of $5,250.00.	In addition, I pointed out to
both the learned judges that	I had lodged previously

with the court a sum of $5,000 and a sum of $8,000 in

1980 and that amount was not taken into account	In
the final computation	of the amount in the
Sequestration Order.

Indeed, if interest was added to the sum of $13,000 since 1980, which I am assuming it would have earned, then the whole of the amount of the Sequestration

Order could have been discharged.

I point out that the interest was adjudged	by his
Honour, Senior Judge Brebner as	$7,464.48 in his
order of the 28th	of November 1986 and that in that
respect the amount of interest earned on the sum	of
$13,000 rince 1980 may	have discharged also the
amount ordered by His Honour Senior Judge Brcbner	in
the rum of $7,464.48 by way of interest.

Your Honour, I appreciate that the Federal Court is only concerned with an amount adjudged by a court of competent jurisdiction and in my case it was the

Supreme Court and the District Court of South

Australia. But	it would, I believe, have been fair
and just, if on the basis of what	I had put to Mr.

Justice Forstcr and Mr. Justice Fisher, a final
decision, particularly in the case of Mr Justice
Forster, was held over pending the determination of
the matters before the Supreme Court and the District
court .

In other words, by making the Sequestration Order on the 9th of March 1987, His Honour, Mr Justice Forster fettered me and left me in a state of litigious

immobility.

Your Honour, it is my belief that the matters which I

intended to canvass in the appeal in the District
Court and the Supreme Court of South Australia were
of sufficient substance and persuasion that the
probability was that I might have succeeded at least

in some number of those appeals."

Much the same case was put to Porster J. when the

petition f o r bankruptcy came on for hearing before his Honour.

Mr Frank sought an order that the petition be dismissed or

stood over until his litigation had concluded. However,

Porster J.	took the view that a sequestration order ought to
be made.

Hr Frank lodged notice of appeal against that order

but subsequently did not prosecute the appeal and,	in lieu
thereof, sought an order	of annulment under s.154(1) of the

Act.	On 23 October 1987, Fisher J.	refused to make that
order.	In (1987) 16 F.C.R.	396 at p.404, His Honour said,

inter alia:-

.

4 .

"In relation to each of these three alleged appeals
Forrter J found that the bankrupt had been unable to
perruade him that he had a reasonable prospect of
guccess. When the circumstances are added to the
fact that the bankrupt was unable to pay his debts as

they fell due, Forrter J was entitled to exercise his

dircretion and to make a Sequestration order if he

conridered such an order appropriate. Even if I

night have been inclined in the exercire of my

discretion to adjourn or dismiss the petition, which

as it happens is not the case, I cannot say	that
Forster J was 'bound'	not to make a sequestration
order and 'must, dismiss or adjourn. Because	he was

acting in the exercise of his discretion the
circumstances in which an appellate court would
intervene are limited. However, they must be even

more so when I am asked to determine 'whether an

order ought not to have been made'.'

After citing from the decision of the Full Court	in Ahern v.
Deputy Commissioner of Taxation (Qld)(1987)	76 A.L.R. 137, his
Honour went on to	say:-

"The circumstances are very different here in that it

was impossible for the primary judge to be satisfied

that an appeal was pending against the totality of

the three amounts specified in the petition.

Furthermore he found that he was not satisfied that the bankrupt had reasonable prospects of success on

the appeals. It cannot in these circumstances	be
said that he was not entitled,	in the exercise of his
discretion, to make a sequestration order.	It
follows that the bankrupt has failed to satisfy	me
that the order sought ought not to have been	made.

Even if he had, I am not convinced that it would have

been, in the light of the	bankrupt's insolvency,
proper to annul the order.	The application must be
dismissed with costs."
The submissions put by Mr Frank have not caused	me to

doubt the correctness	of the orders made by and of the reasons
for decision of Forster J. and of Fisher J..	The present was
not a case such as Ahern	v. Deputy Commlssloner of Taxation
(Qld), cited above, to which Fisher J.	referred. There were
judgments against Wr Frank and, subsequently thereto,	Wr Frank
had been involved in an appeal, applications to set aside	and
motion6 reeking a rehearing. In	the circumstances, it was
appropriate for Forster J. to take the view that	Mr Frank was
insolvent and that an order	for the sequestration of his
estate should be made.	Before Fisher J., Mr Frank did not put
any new or substantially different case	but again emphasised

the point that the effect of the sequestration order was to

preclude him from continuing his litigation. Fisher J. took

the same view as did Forster J. but, in addition, pointed out

that in the absence of new or additional material it would

have been improper for him to make an order by way of

annulment. Fisher	J. made it clear that he was not sittlng on
appeal but on a motion to annul.	The cogency of his Honour's

reasoning cannot I think seriously be doubted.

As Mr Frank's proposed appeal against his Honour's

order has no prospects of success, an extension of time should

not be granted.

For these reasons, the motion will be dismissed.

I certify that this and the 4

preceding pages are a true copy of the

Reasons for Judgment herein of

the lionourable Mr Justice Davies.

Associate:

Date :  (7 ovemb r 1900

U

.

6 .

The a plicant appearing for

hlmre P	f:	Mr J.F. Frank
Counrel for the respondent:	Mr W.H.	Hall

Solicitorr for the respondent: W.H.	Hall e Associates
Date of hearing:	20 September 1988
Place of hearing:	Adelaide