Healey, Gregory Harrison v Commonwealth Bank of Australia

[1998] FCA 1003

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 7592 of 1998

IN THE MATTER OF GREGORY HARRISON HEALEY

BETWEEN:	GREGORY HARRISON HEALEY APPLICANT
AND:	COMMONWEALTH BANK OF AUSTRALIA RESPONDENT
JUDGE:		WHITLAM J
DATE OF ORDER:		6 AUGUST 1998
WHERE MADE:		SYDNEY

THE COURT ORDERS THAT:

1. The application is dismissed.

1. The time for compliance with the bankruptcy notice is extended for a period of seven days from today.

1. The applicant pay the respondent's costs of the application

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 7592 of 1998

IN THE MATTER OF GREGORY HARRISON HEALEY

BETWEEN:	GREGORY HARRISON HEALEY APPLICANT
AND:	COMMONWEALTH BANK OF AUSTRALIA RESPONDENT

JUDGE:	WHITLAM J
DATE:	6 AUGUST 1998
PLACE:	SYDNEY

REASONS FOR JUDGMENT (EX TEMPORE)

This application was filed on 2 June 1998.  It seeks orders (1) setting aside a bankruptcy notice served on the applicant on 13 May 1998, and (2) extending the time for compliance with the terms of that bankruptcy notice.  In the event, the first of those orders has not been pressed, and the only matter requiring determination is the application for an extension of time.

The bankruptcy notice was issued at the request of the respondent, which had obtained judgment against the applicant in the Supreme Court of New South Wales on 19 March 1998.  At the time that the present application was filed, it was somewhat uncertain whether an appeal from that judgment had been instituted.  Both parties now accept that an appeal is on foot.  The important thing, for the purposes of this proceeding, is that an application to stay the judgment obtained in the Supreme Court was heard in the Court of Appeal and disposed of by an order made by the President on 17 June 1998 when the application for a stay was refused.

Mr Skinner, who appears for the applicant today, accepts that amongst the factors, to which the Court will have regard in the exercise of its discretion, are the prospects of the appeal, whether a stay has been sought, and whether expedition has been sought.  In the circumstances, this is, though not unnaturally Mr Skinner does not say so, a difficult application to press from the applicant’s point of view.  The President, in refusing the stay, observed that the prospects of success on the appeal were “quite low”.  However, more significantly for present purposes, the Court of Appeal, which is charged with superintending the process of the appeal in the Supreme Court, refused a stay.   In that respect, therefore, I am not placed in the invidious position that judges in this Court in the exercise of bankruptcy jurisdiction so often are where there is no such ruling.  Mr Skinner, however, submits correctly that the fact that the stay in the Supreme Court was refused does not dispose of the matter.  Indeed, his Honour the President was astute to refer to the fact that the disposition of any application such as the present one remains a matter for this Court. 

In the event, the applicant has been obliged to rely, as counsel for the respondent correctly submits, on factors that may weigh with the law in deciding whether to make a sequestration order, in the event that a petition is presented in reliance on an act of bankruptcy constituted by the failure to comply with this bankruptcy notice.  Mr Skinner puts at the forefront of the matters to be taken into account the status of the applicant.  The applicant is a solicitor.  He conducts a personal injury practice.  In the event that he is made bankrupt, he says that any partnership of which he is a member will be dissolved.  In addition, the Law Society would not permit him, of course, to operate a trust account.  The inability to operate a trust account would, the applicant says, impede his ability to pursue the area of practice in which he specializes, namely, personal injuries, on account of his consequent inability to obtain funds for litigation from financiers in order to pay barristers, doctors, and all the other persons whose fees require payment in the conduct of a personal injury practice.  All those matters are important, and they are matters that may be taken into account in consideration of an application to extend the time for compliance with the bankruptcy notice until the appeal has been disposed of.  However, in the circumstances of this case it would lie in the mouth of the applicant to assert these matters again in the event that a petition is presented against him. 

The other matter which counsel for the applicant relied on, and one to which he returned briefly in reply, was the impact of the applicant becoming bankrupt upon the further conduct of his appeal in the Supreme Court.  Again no doubt that is a matter that may be considered at this stage, but I do not think much weight can be attached to it.  It is also something that may be considered upon the hearing of any petition.  Of course, it is also trite to say that, in any event, even if the conduct of the appeal rested with the trustee of his bankrupt estate, the applicant would have rights in relation to the conduct of that appeal by proceedings in the bankruptcy jurisdiction against the trustee. 

There is a further factor which both parties accept is relevant to take into account.  That is referred to in Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264 at 269-70, where Lehane J followed the view of Sheppard J in the unreported case of Re Geard; Ex parte Reid (11 February 1994).  The refusal of the present application will not, as I have already mentioned, affect the status of the applicant, but as the judgment of Lehane J and the reference to the excerpt from Sheppard J’s judgment show, it may be important that there be an act of bankruptcy.  The relevant considerations are referred to in that passage and do not need to be repeated.

Having regard to all the above matters, the application is dismissed with costs.

I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Whitlam

Associate:

Dated:           6 August 1998

Counsel for the applicant:	B J Skinner
Solicitors for the applicant:	G H Healey & Co
Counsel for the respondent:	J W J Stevenson
Solicitors for the respondent:	Shaw McDonald
Date of hearing:	6 August 1998
Date of judgment:	6 August 1998