Frost v Sheahan (Trustee)

Case [2009] FCAFC 20


FEDERAL COURT OF AUSTRALIA

Frost v Sheahan (Trustee) [2009] FCAFC 20

BANKRUPTCY – appeal – exercise of Court’s discretion under Bankruptcy Act 1966 (Cth) s 178 – notices of objection to automatic discharge from bankruptcy – power to make such order as court thinks just and equitable – whether primary judge erred in not ordering withdrawal of the notices of objection – substantial compliance with bankrupt’s obligation to provide particulars of income – other discretionary factors

Held: appeal dismissed

Bankruptcy Act 1966 (Cth)

Frost v Sheahan (2005) 220 ALR 733; [2005] FCA 1014
Frost v Sheahan (2008) 249 ALR 538; [2008] FCA 1073
House v The King (1936) 55 CLR 499
Macchia v Nilant 110 FCR 101; [2001] FCA 7
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24
Re Asset Risk Management and Others (1995) 130 ALR 605
Re Tyndall; Ex parte Official Receiver (1977) 30 FLR 6; 17 ALR 182; [1977] FCA 15

ALLEN GORDON FROST v JOHN SHEAHAN AS TRUSTEE OF THE BANKRUPT ESTATE OF ALLEN GORDON FROST

SAD 126 of 2008

RYAN, MANSFIELD AND JAGOT JJ
27 FEBRUARY 2009
ADELAIDE


IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA

SAD 126 of 2008

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:

ALLEN GORDON FROST
Appellant

AND:

JOHN SHEAHAN AS TRUSTEE OF THE BANKRUPT ESTATE OF ALLEN GORDON FROST
Respondent

JUDGES:

RYAN, MANSFIELD AND JAGOT JJ

DATE OF ORDER:

27 FEBRUARY 2009

WHERE MADE:

ADELAIDE

THE COURT ORDERS THAT:

1.The appeal is dismissed.

2.The appellant is to pay the respondent’s costs of the appeal as agreed or taxed.

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


The text of entered orders can be located using eSearch on the Court’s website.


IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

SAD 126 of 2008

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:

ALLEN GORDON FROST
Appellant

AND:

JOHN SHEAHAN AS TRUSTEE OF THE BANKRUPT ESTATE OF ALLEN GORDON FROST
Respondent

JUDGES:

RYAN, MANSFIELD AND JAGOT JJ

DATE:

27 FEBRUARY 2009

PLACE:

ADELAIDE

REASONS FOR JUDGMENT

THE COURT:

  1. The appellant, Mr Frost, is a bankrupt.  The respondent is the trustee of Mr Frost’s bankrupt estate.  Mr Frost applied to the Court to set aside the trustee’s decision not to withdraw objections to Mr Frost’s discharge from bankruptcy.  The primary judge dismissed the application (Frost v Sheahan (2008) 249 ALR 538; [2008] FCA 1073). In this appeal Mr Frost contends that the primary judge erred in dismissing his application and seeks an order that the trustee withdraw all objections to the discharge from bankruptcy.

  2. Although the submissions of both parties on the appeal emphasised a range of discretionary considerations said to make it just and equitable (or not) for an order to be made under s 178 of the Bankruptcy Act 1966 (Cth) (including matters arising after the decision of the…

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Frost v Sheahan (Trustee) [2009] FCAFC 20
Case
[2009] FCAFC 20
Decision Date

CaseChat Overview and Summary

In the case of Frost v Sheahan (Trustee), the appellant, Mr Frost, sought to appeal against the decision of the primary judge to refuse his application to discharge notices of objection to the bankrupt's discharge. The appellant argued that various factors supported the withdrawal of the notices of objection, and that the primary judge had erred in deciding against this. The primary judge had found that the bankruptcy should continue, and dismissed Mr Frost's application on 25 July 2008. The appeal was brought before the court for review of the primary judge's decision.

The legal issues for the court to consider included whether the primary judge had erred in his assessment of the factors favouring the withdrawal of the notices of objection and whether the decision was unreasonable or plainly unjust. The court noted that the primary judge had already considered each of the factors put forward by Mr Frost, and that the weight to be given to those factors was a matter for the primary judge. The court held that the decision of the primary judge was not unreasonable or plainly unjust upon the facts as they stood at the date of judgment. The fact that the utility of the bankruptcy might have reduced in the time since the primary judge's decision did not support any conclusion of error.

The court found that Mr Frost had not identified any error of the requisite kind by the primary judge. The evidence of circumstances arising after the primary judge’s decision and the submissions of the parties on the merits of making or not making orders under s 178 were immaterial. The court held that there was no occasion for the exercise of any power by this Court other than the making of an order dismissing the appeal with costs.

ORDERS:
1. The appeal is dismissed.
2. The appellant is to pay the respondent’s costs of the appeal as agreed or taxed.

Orders

Orders of the court

1. The appeal is dismissed.

2. The appellant is to pay the respondent’s costs of the appeal as agreed or taxed.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

RYAN, MANSFIELD AND JAGOT JJ
Mr Frost submitted that a range of other factors favoured withdrawal of the notices of objection and the primary judge erred in concluding to the contrary. This submission is difficult to reconcile with the limits on appellate review of discretionary decisions identified in House v The King. First, it is apparent that the primary judge considered each of the seven matters on which Mr Frost relies as a factor favouring discharge. Mr Frost did not submit to the contrary. Second, the weight to be given to those factors was a matter for the primary judge (Peko-Wallsend at 41). Third, the decision of the primary judge was not “unreasonable or plainly unjust” (House v The King at 505) upon the facts as at the date of judgment (25 July 2008). The fact that the further passage of time has possibly reduced the utility of the bankruptcy continuing from that found by the primary judge is immaterial and does not support any conclusion of error. CONCLUSION AND ORDERS Mr Frost has not identified any error of the requisite kind by the primary judge. It follows that the evidence of circumstances arising after the primary judge’s decision and the submissions of the parties on the merits of making or not making orders under s 178 are immaterial. There is no occasion for the exercise of any power by this Court other than the making of an order dismissing the appeal with costs.

Ratio Decidendi

Legal Principle Established

Established by: RYAN, MANSFIELD AND JAGOT JJ

Full text does not contain this section.