Hadid v Schwartz (No.2)

[2013] FCCA 1104

FEDERAL CIRCUIT COURT OF AUSTRALIA

HADID v SCHWARTZ (No.2) [2013] FCCA 1104

Catchwords:
BANKRUPTCY – Bankruptcy notice – application to extend time for complying with bankruptcy notice – application to reopen case to extend time.

Legislation:  

Bankruptcy Act 1966 ss.41(6A)

Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22

Applicant: ALBERT HADID

Respondent: JERRY SCHWARTZ

File Number: SYG 1549 of 2013

Judgment of: Judge Manousaridis

Hearing date: 9 August 2013

Delivered at: Sydney

Delivered on: 9 August 2013

REPRESENTATION

The Applicant: Mr A. Hadid in person

Solicitors for the Respondent: Ms S. Borg
Neville & Hourn Legal

ORDERS

1. The Applicant’s application to reopen his case is dismissed. 

2. The Applicant pay the respondent’s costs of the application.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT SYDNEY

SYG 1549 of 2013

ALBERT HADID

Applicant

And

JERRY SCHWARTZ

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

1. On 2 August 2013, I heard an application pursuant to s.41(6A) of the Bankruptcy Act1966 for an order to extend time for complying with a bankruptcy notice issued by the respondent against the applicant.  At the conclusion of that hearing I reserved my decision on the application, and indicated I would deliver my decision at 9.30 am on 9 August 2013.  I extended the time for complying with the bankruptcy notice to 9 August 2013.

2. Yesterday my associate received an email from the applicant attaching a document which stated that the applicant wished to personally seek permission to make a submission set out in that document and to rely on the matters contained in an unsworn affidavit, which was also attached to the email.  When the matter was called before me this morning, the applicant appeared and applied to file in Court the affidavit which had been delivered to my associate, but now sworn and attaching various documents, and to make submissions on the basis of the matters contained in the affidavit.  That application was opposed by the respondent.

3. The matter in aid of which the applicant seeks to rely on this material is the application for an extension of time for compliance with the bankruptcy notice which I heard on 2 August 2013.  Having reserved my decision on that application, the application before me this morning is, in substance, an application by the applicant to reopen his case.  In order to succeed on such application, the applicant will need to satisfy me that, according to well-known principles which govern the power of the Court to permit a party to reopen is or her case, I should grant the applicant leave to do just that.

4. The principles governing the exercise of the discretion to permit a party to reopen the case were summarised by Kenny J in Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 at [24]. Her Honour said:

   The authorities indicate that, broadly speaking, there are four recognised classes of case in which a Court may grant leave to reopen, although these classes overlap and are not exhaustive.  These four classes are:

   (1)    Fresh evidence.

   (2)    Inadvertent error.

   (3)    Mistaken apprehension of the fact.

   (4)    Mistaken apprehension of the law.

5. At paragraph 26, Her Honour said:

   The overriding principle requires that the Court consider whether, taken as a whole, the justice of the case favours a grant of leave to reopen.

6. To determine whether these principles apply to the application to reopen that is before me, it is necessary to identify the additional material and submissions the applicant seeks to put to the Court.  That material is contained in the sworn affidavit of the applicant, a notice of motion filed in the Court of Appeal of the Supreme Court of New South Wales for a stay of execution of the judgment with respect to which the bankruptcy notice in issue in these proceedings was issued, and an affidavit sworn by the applicant filed in support of that notice of motion.  I did not admit these documents into evidence, but had them marked for identification.

7. The applicant identified a number of matters which he seeks to put before the Court in addition to those that were put at the hearing on 2 August 2013.  The first are the matters referred to in paragraph 5 of the first-mentioned affidavit, and two letters, being the letters at pages 8, 9, 10, 11 and 12 of the annexures to that affidavit.  The asserted relevance of these letters is that they show the respondent is motivated by a desire to prevent the applicant from pursuing legitimate claims the applicant says he has against the respondent.

8. The second matter is an alleged agreement, the terms of which are set out in a letter dated 2 August 2013 from John Mahony, solicitor, to the applicant.  Mr Mahony acted for the applicant, so the applicant informed me, in the litigation between the applicant and the respondent in the Supreme Court proceedings.  That letter contains the following two sentences:

   Finally, I also confirm that I did not understand why the bankruptcy notice was served on you, that is, there was, to my recollection, an agreement between Dr Schwartz, and you, communicated between the respective solicitors, that Dr Schwartz would not pursue moneys the subject of the case recently appealed on until such time as all the Court processes relating thereto had been finalised.

9. The third matter is the material referred to in paragraph 6 of the first-mentioned affidavit.  The asserted relevance was to show that it was the applicant’s limited financial capacity which accounted for his delay in filing the special leave application.  In response to my question whether paragraph 6 of the first-mentioned affidavit contained evidence additional to that which was before me on 2 August 2013, the applicant said that the paragraph did not.

10. The fourth matter is the material contained in paragraphs 10 and 11 of the first-mentioned affidavit and the letter at page 7 of the annexures to that affidavit. The asserted relevance is that this material shows that the respondent has acted unfairly or unjustly towards the applicant, and that this is relevant to the exercise of the discretion conferred by s.41(6A) of the Bankruptcy Act.

11. In the course of the applicant’s address, I directed the applicant to request that Mr Chee, the counsel who represented him on 2 August 2013, appear before me.  The purpose of my request was to obtain Mr Chee’s response to the claim the applicant made that the matters which the applicant wishes to put to the Court were matters he had requested Mr Chee to put to the Court but which Mr Chee did not put.  Mr Chee confirmed that these were matters which had been discussed between him and the applicant but Mr Chee, in the exercise of his professional judgment, decided they were not relevant or admissible.

12. In my opinion, the applicant has not persuaded me that leave should be granted to permit the applicant to reopen his case.  All of the material which the applicant seeks to put before the Court is material he discussed with his counsel before the hearing of 2 August 2013 and with respect to which he obtained and accepted his counsel’s advice as to whether such material should be used.  Thus, none of the information is fresh evidence, and the decision by the applicant’s counsel to not use the material was not the result of inadvertent error, mistaken apprehension of facts or mistaken apprehension of the law.  In my opinion the decision counsel made to not use the material certainly was one which a competent counsel would make.

13. Nor am I persuaded that the justice of the case favours the grant of leave to reopen.  On the contrary, it is in the interests of justice not to grant leave.  It is to be inferred that the applicant agreed with the decisions his counsel made not to attempt to introduce the material the applicant now seeks leave to introduce.  As I understand what the applicant said, before the hearing of 2 August 2013, he was provided with a copy of the written submissions that were provided to the Court by his counsel, yet the applicant apparently did not insist that the material be included in the written submissions or, if he did insist and his counsel resisted, dismiss his counsel.  Additionally, the applicant was in Court during the hearing of 2 August 2013.  He did not appear to insist then that his counsel put to the Court the materials he now seeks leave to put before the Court.

14. It would be intolerable to the proper administration of justice if a litigant, having accepted, perhaps even having reluctantly accepted, counsel’s judgment to not put before the Court specified material or submissions, is permitted to subsequently change his or her mind and rely on the fact that counsel did not put to Court the material and submissions as a ground for reopening his or her case.

15. For these reasons, I dismiss the applicant’s application to reopen his case.  I also order that the applicant pay the respondent’s costs of the application.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis.

Associate: 

Date:  22 August 2013