FEDERAL COURT OF AUSTRALIA
Guss v Johnstone [2000] FCA 1593
JOSEPH GUSS V RAYMOND JOHNSTONE & GEELONG BUILDING SOCIETY (IN LIQUIDATION)
V 1 of 1999
SACKVILLE J
SYDNEY (BY VIDEOLINK)
8 NOVEMBER 2000
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
V 1 OF 1999
BETWEEN:
JOSEPH GUSS
APPELLANTAND:
RAYMOND JOHNSTONE
FIRST RESPONDENTGEELONG BUILDING SOCIETY (in liquidation)
SECOND RESPONDENTJUDGE:
SACKVILLE J
DATE OF ORDER:
8 NOVEMBER 2000
WHERE MADE:
SYDNEY (BY VIDEOLINK)
THE COURT ORDERS THAT:
1.The appellant’s motion filed on 1 November 2000 be dismissed.
2.The second respondent’s costs of the motion, including the costs of the hearing on 18 October 2000, be taxed and paid out of the appellant’s estate in accordance with s 109(1)(a) of the Bankruptcy Act 1966 (Cth).
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
V 1 OF 1999
BETWEEN:
JOSEPH GUSS
APPELLANTAND:
RAYMOND JOHNSTONE
FIRST RESPONDENTGEELONG BUILDING SOCIETY (IN LIQUIDATION)
SECOND RESPONDENT
JUDGE:
SACKVILLE J
DATE:
8 NOVEMBER 2000
PLACE:
SYDNEY (BY VIDEOLINK)
REASONS FOR JUDGMENT
This is an application seeking a stay of proceedings under a sequestration order made on 21 December 1998 against the estate of the appellant. The appellant seeks a stay of proceedings pending the hearing and determination of his application to the High Court of Australia for special leave to appeal against a judgment of the Full Court of the Federal Court given on 18 October 2000. In that judgment (Guss v Johnstone [2000] FCA 1455) the Full Court dismissed an appeal from orders, including the sequestration order, made by the primary Judge, Kenny J, on 21 December 1998. The appellant also seeks a stay of the orders in respect of costs made by the Full Court.
On 20 May 1999, a differently constituted Full Court ordered a stay of the orders made by Kenny J until the hearing and determination of the appeal to the Full Court or until further order. The stay was granted because on 14 May 1999 the High Court granted the present appellant special leave to appeal from a decision of another Full Court rejecting the appellant’s challenge to a bankruptcy notice. It was the appellant’s failure to comply with that bankruptcy notice that constituted the act of bankruptcy upon which the sequestration order was ultimately founded, albeit after the second respondent (“the Society”) was substituted as the petitioning creditor. In the event, the High Court unanimously dismissed the appeal: Guss v Johnstone (2000) 171 ALR 598.
On 18 October 2000, I extended the stay that had been granted by the Full Court on 20 May 1999 until 4 pm on 8 November 2000. The extension was granted in order to give the appellant an opportunity to file an application for special leave to appeal to the High Court from the judgment of the Full Court dismissing the appeal from the orders made by Kenny J.
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- AGLC
- Guss v Johnstone [2000] FCA 1593
- Case
- [2000] FCA 1593
- Decision Date
CaseChat Overview and Summary
The legal issues in the case were whether the stay of proceedings under the sequestration order should be extended and whether the costs orders made by the Full Court should be stayed. The appellant argued that the stay should be extended due to the public interest in bankruptcy proceedings and the need to protect the interests of other creditors and the community. The respondents argued that additional delays were not lightly to be countenanced, given the lengthy delays that had already occurred in giving effect to the sequestration order.
The court held that the stay of proceedings under the sequestration order should not be extended and that the costs orders made by the Full Court should not be stayed. The court considered the public interest in bankruptcy proceedings and the need to protect the interests of other creditors and the community. However, the court also took into account the fact that the appellant had already been unsuccessful in his attempts to set aside the bankruptcy notice and the sequestration order, and that there had already been lengthy delays in giving effect to the sequestration order. The court held that additional delays were not lightly to be countenanced, and that the balance of convenience favoured dismissing the appellant's motion.
The court dismissed the appellant's motion and made an order for the second respondent's costs of the motion, including the costs of the hearing on 18 October 2000, to be taxed and paid out of the appellant's estate in accordance with s 109(1)(a) of the Bankruptcy Act 1966 (Cth).
Orders
Orders of the court
1. The appellant’s motion filed on 1 November 2000 be dismissed.
2. The second respondent’s costs of the motion, including the costs of the hearing on 18 October 2000, be taxed and paid out of the appellant’s estate in accordance with s 109(1)(a) of the Bankruptcy Act 1966 (Cth).
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Moreover, the public interest is involved in bankruptcy proceedings. In Bryant v Commonwealth Bank, a case involving an application to stay a sequestration order pending an application for special leave to appeal to the High Court, Kirby J said this (at 309):“it is clear that the status of the bankrupt is affected [by the sequestration order]. But so are, potentially, the interests of third parties. So too is the interest of the community. It would be therefore a mistake to approach the present application as if the only interests affected by its outcome were those of the applicant and the respondent. Also to be kept in mind are the interests of other creditors, particularly unsecured creditors and of the community which has its own concerns in the due administration of the Act in respect of the estate of persons found to be bankrupt.” (Emphasis added.)There was evidence before the primary Judge that the appellant had creditors other than the Society. There was no evidence before me as to whether the position has changed since her Honour delivered judgment. It must also be borne in mind that the appellant’s act of bankruptcy was committed some three and a half years ago. The sequestration order was made against him nearly two years ago. The appellant’s attempt to set aside the bankruptcy notice failed before Sundberg J. The Full Court and the High Court (both unanimously) rejected appeals. His opposition to the making of a sequestration order failed before Kenny J and the Full Court (unanimously). The appellant was entitled to oppose the making or implementation of the sequestration order by any means lawfully open to him. Doubtless he will continue to do so. Nonetheless, it is relevant in assessing the balance of convenience to take into account the fact that, despite the appellant’s lack of success, there have already been lengthy delays in giving effect to the sequestration order made by the primary Judge. Additional delays are not lightly to be countenanced. This is so regardless of whether or not the Society is the appellant’s only creditor. For these reasons, I decline to extend the stay of proceedings under the sequestration order or to stay the orders as to costs made by the Full Court. The motion should be dismissed and the usual costs order made.