BANKRUPTCY – sequestration order – whether primary Judge applied incorrect test in assessing whether debtor had good claim against substituted creditor.
PRACTICE AND PROCEDURE – whether adjournment of hearing should have been granted pending application for special leave to appeal to the High Court – discretion of the Full Court to receive further evidence on appeal against the making of a sequestration order – principles governing admission of further evidence – cogency required.
Coleman v Lazy Days Investments Pty Limited (1994) 55 FCR 297, cited. Guss v Johnstone (2000) 171 ALR 598, cited. Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 136, cited. Adamopoulous v Olympic Airways SA (1990) 95 ALR 525, cited. Cockerill v Westpac Banking Corporation (unreported, Drummond J, 7 April 1997), cited. Sali v SPC Ltd (1993) 116 ALR 625, cited. Re Young; Ex parte Smith (1985) 5 FCR 204, cited. Re Schmidt; Ex parte Anglewood Pty Ltd(1968) 13 FLR 111, applied.
JOSEPH GUSS V RAYMOND JOHNSTONE & GEELONG BUILDING SOCIETY (IN LIQUIDATION)
V 1 of 1999
DRUMMOND, SACKVILLE & DOWSETT JJ
18 OCTOBER 2000 SYDNEY (HEARD IN MELBOURNE)
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
V 1 OF 1999
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:
JOSEPH GUSS APPELLANT
AND:
RAYMOND JOHNSTONE FIRST RESPONDENT
GEELONG BUILDING SOCIETY (in liquidation) SECOND RESPONDENT
JUDGES:
DRUMMOND, SACKVILLE & DOWSETT JJ
DATE OF ORDER:
18 OCTOBER 2000
WHERE MADE:
SYDNEY (HEARD IN MELBOURNE)
THE COURT ORDERS THAT:
1.The appeal be dismissed with costs.
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 APPELLANT
AND:
RAYMOND JOHNSTONE FIRST RESPONDENT
GEELONG BUILDING SOCIETY (IN LIQUIDATION) SECOND RESPONDENT
JUDGES:
DRUMMOND, SACKVILLE & DOWSETT JJ
DATE:
18 OCTOBER 2000
PLACE:
SYDNEY (HEARD IN MELBOURNE)
REASONS FOR JUDGMENT
DRUMMOND J:
I agree with the orders proposed by Sackville J and with his reasons.
I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Drummond.
Associate:
Dated: 18 October 2000
IN THE FEDERAL COURT OF AUSTRALIA
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
AGLC
Guss v Johnstone [2000] FCA 1455
Case
[2000] FCA 1455
Decision Date
CaseChat Overview and Summary
In the matter of Guss v Johnstone, the appellant sought to adduce further evidence on appeal from a decision of the Full Court. The appeal pertained to the admission of additional evidence in bankruptcy proceedings under section 27 of the Federal Court Act. The primary issue before the court was whether the appellant's motion to admit further evidence should be granted. The court had to determine the scope of the power to admit further evidence in bankruptcy proceedings and whether the evidence proposed would likely produce a different result had it been available at trial.
The court examined the statutory language of section 27, noting that it provides a discretionary power to admit further evidence where such evidence, if accepted, would demonstrate that the order under appeal is erroneous. The court referred to the principles established in CDJ v VAJ, which held that the statutory power must be construed liberally but not to the extent of obliterating the distinction between original and appellate jurisdiction. The court concluded that the Full Court is ordinarily satisfied that the further evidence would have produced a different result if it had been available at trial, before admitting it. The court found that the appellant had not demonstrated that the proffered evidence would be likely to produce a different result.
The court dismissed the appellant's motion to adduce further evidence and concluded that the appeal should be dismissed with costs. The orders proposed by the other judge were agreed with, and the appeal was dismissed. The stay order made by the Full Court on 21 May 1999 was not discharged as it had expired by its own terms.
Orders
Orders of the court
1. The appeal be dismissed with costs.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
The submission that the primary judge misapplied the appropriate test must be rejected.FURTHER EVIDENCE ON APPEAL The appellant filed a motion which sought orders, inter alia, that this Court receive further evidence, in the form of an affidavit by him, sworn 17 August 2000. The application to admit the additional evidence was based on s 27 of the Federal Court Act, which provides as follows:“27. In an appeal, the Court shall have regard to the evidence given in the proceedings out of which the appeal arose, and has power to draw inferences of fact and, in its discretion, to receive further evidence, which evidence may be taken:(a) on affidavit; or(b) by video link, telephone or other appropriate means in accordance with another provision of this Act or another law of the Commonwealth; or(c) by oral examination before the Court or a Judge; or(d) … .” The scope of the power conferred by s 27 of the Federal Court Act in bankruptcy proceedings was not fully explored in argument. It is neither necessary nor appropriate to examine that question in detail. Mr Garde did not dispute that, on the construction of s 27 most favourable to the appellant, it is ordinarily necessary for the party seeking to adduce further evidence to demonstrate that the evidence relied on is cogent; that is, the Court exercising appellate jurisdiction needs to be satisfied that the proffered evidence would be likely to have produced a different result had it been available at the trial. That this is so follows from the majority judgment in CDJ v VAJ (1998) 197 CLR 172 (McHugh, Gummow and Callinan JJ; Gaudron and Kirby JJ dissenting). In that case, the High Court was concerned with s 93A(2) of the Family Law Act 1975 (Cth) (“Family Law Act”), the terms of which the majority described (at 198) as “similar” although not identical with those of s 27 of the Federal Court Act. The majority held that the common law principles that had been laid down in cases such as Orr v Holmes (1948) 76 CLR 632 and Wollongong Corporation v Cowan (1955) 93 CLR 435 do not govern the construction of provisions such as s 93A(2) of the Family Law Act and s 27 of the Federal Court Act. In their Honours’ view the narrow common law approach must give way to the language of the legislation. They pointed out (at 200) that the purpose of the statutory power is to ensure that the proceedings do not miscarry. They said this (at 201):“[o]ne consideration in construing s 93A(2) is its remedial nature, its principal purpose is to give to the Full Court a discretionary power to admit further evidence where that evidence, if accepted, would demonstrate that the order under appeal is erroneous. The power exists to facilitate the avoidance of errors which cannot be otherwise remedied by the application of the conventional appellate procedures. A further, but in practice subsidiary, purpose it to give the Full Court a discretion to admit further evidence to buttress the findings already made”. The majority said that another consideration in construing s 93A(2) of the Family Law Act (and, by implication, s 27 of the Federal Court Act) is that the provision is to be construed liberally, without implied limitations not found in the statutory language (at 201). Even so, the majority considered (at 202-203) that it was“highly unlikely that Parliament in conferring jurisdiction on the Full Court to hear appeals intended that s 93A(2) should be construed in a way that would have the practical effect of obliterating the distinction between original and appellate jurisdiction. Nor can the availability of further evidence relevant to the issues in the appeal be treated as equivalent to a ground of appeal, proof of which prima facie entitles the appellant to a new trial. The power to admit the further evidence exists to serve the demands of justice. Ordinarily, where it is alleged that the admission of new evidence requires a new trial, justice will not be served unless the Full Court is satisfied that the further evidence would have produced a different result if it had been available at the trial. Without that condition being satisfied, it could seldom, if ever, be in the interests of justice to deprive the respondent of the benefit of the orders made by the trial judge and put that person to the expense, inconvenience and worry of a new trial. … [W]e cannot accept that the discretion to receive further evidence is so wide that the Full Court can admit further evidence merely because it is useful. Such a criterion is inconsistent both with the nature of the appellate jurisdiction exercised by that Court and with the perceived purpose of s 93A(2). (emphasis added).”
Decision
Reasons for decision
For these reasons, the appellant’s motion to adduce further evidence on the appeal should be dismissed.CONCLUSION The appeal should be dismissed, with costs. It is not necessary to discharge the order made by the Full Court on 21 May 1999, staying the orders of Kenny J, since the stay order has expired by its own terms. I agree with the orders proposed by my brother Sackville and with his Honour’s reasons.