Hounslow v Gill

[2008] FCA 587

FEDERAL COURT OF AUSTRALIA

Hounslow v Gill [2008] FCA 587

BRENTON EVAN HOUNSLOW v DIMITY GILL and COLIN L AMBROSE AS TRUSTEE OF THE BANKRUPT ESTATE OF BRENTON EVAN HOUNSLOW

SAD 46 OF 2008

BESANKO J
30 APRIL 2008
ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD 46 OF 2008

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN: BRENTON EVAN HOUNSLOW
Applicant

AND:

DIMITY GILL
First Respondent

COLIN L AMBROSE AS TRUSTEE OF THE BANKRUPT ESTATE OF BRENTON EVAN HOUNSLOW
Second Respondent

JUDGE:	BESANKO J
DATE OF ORDER:	24 APRIL 2008
WHERE MADE:	ADELAIDE

THE COURT ORDERS THAT:

1.The application for leave to appeal be refused.

2.The application for an injunction to restrain the holding of an auction at 12 noon today be refused.

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

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD 46 OF 2008

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN: BRENTON EVAN HOUNSLOW
Applicant

AND:

DIMITY GILL
First Respondent

COLIN L AMBROSE AS TRUSTEE OF THE BANKRUPT ESTATE OF BRENTON EVAN HOUNSLOW
Second Respondent

JUDGE:	BESANKO J
DATE:	30 APRIL 2008
PLACE:	ADELAIDE

REASONS FOR JUDGMENT

1. On 24 April 2008 the applicant, Mr Brenton Evan Hounslow, issued an application for leave to appeal from an order made by a Federal Magistrate on 23 April 2008. In addition to his application for leave to appeal, the applicant sought an injunction restraining the second respondent from selling at auction certain items of property described in a document attached to the application for leave to appeal. The auction was due to be held at 12.00 noon on 24 April 2008.

2. The application was listed before me as a matter of urgency. It came on in court at 11.15 am and the solicitor for the second respondent, who had become aware of the application only a short time before 11.15 am, appeared and made submissions. He told me that he was required in the Family Court of Australia at 11.30 am and he left the court at that time.

3. I had the file of the Federal Magistrates Court, although the order the Federal Magistrate made the previous day had not yet been recorded on the file.

4. I was told that the order made on the previous day was an order refusing the applicant’s application for an injunction restraining the holding of the auction and it was that order which was the subject of the application for leave to appeal.

5. I decided that the application for an injunction should be refused and made an order to that effect. In those circumstances, and bearing in mind that the application for leave to appeal related to an order of the Federal Magistrate refusing to grant an injunction, I also made an order that the application for leave to appeal be refused. These are my reasons for making those orders.

6. The matters that a court must consider on an application for an interlocutory injunction are well-known. They are summarised by Mason ACJ in Castlemaine Toohey’s Limited  v The State of South Australia (1986) 161 CLR 148 at 153. In this case, I am not satisfied that there is a serious question to be tried, or that the applicant has made out a prima facie case. Furthermore, I am not satisfied that the balance of convenience favours the granting of an injunction.

7. Due to the lateness of the application, the fact that the applicant was not represented, and the fact that the solicitor for the second respondent was required to leave the court after 15 minutes, neither party addressed the question of this Court’s power to issue an interlocutory injunction or the test to be applied. I proceeded on the basis that I would consider afresh whether an interlocutory injunction should be granted. That was an assumption very much in the applicant’s favour because in point of strict analysis the proper test would be whether it was arguable the Federal Magistrate had erred and, if so, whether the subject matter of the proposed appeal should be preserved in the meantime. However, I did not have any reasons from the Federal Magistrate. That is understandable in the circumstances.

8. The applicant relied on an affidavit which he had sworn on 24 April 2008. Relevantly, he asserted that he had an equitable interest in the items of property listed in the document attached to the application for leave to appeal. The items of property listed in the document were a number of motor cycles, other vehicles, and items of equipment. Counsel for the trustee submitted that this was the first occasion upon which the applicant asserted that he had an equitable interest in the property. Counsel for the trustee submitted that previously the applicant had asserted that various third parties had an interest in the items of property and that this was the reason the trustee could not proceed to auction the property. I asked the applicant to explain the basis upon which he asserted that he had an equitable interest in the items of property as that information was not included in his affidavit. He told me that he had sold the items of property to various third parties at an undervalue, on the understanding that he could repurchase the property when he had the money to do so. It was never made clear how the applicant’s assertion that he had an equitable interest in the items of property supported his application bearing in mind that he is a bankrupt. In any event, it is for an applicant to show that there is a serious question to be tried or to make out a prima facie case. I was not satisfied that the applicant had done that in the circumstances of this case.

9. The above conclusion is sufficient to dispose of the application but I have also considered the balance of convenience. The applicant asserted that he would “suffer irreversible detriment from the sale as the vehicles are collectors’ items and many are irreplaceable. Money will not be sufficient compensation for the loss of said vehicles.”

10. The applicant also asserted that:

    “The Trustee will not be in a position of loss if the sale does not proceed as the money obtained from sale of properties so far is sufficient to cover the bankruptcy debt.”

11. In an affidavit sworn on 22 April 2008, and put before the Federal Magistrate, the applicant’s trustee in bankruptcy deposed to the fact that the applicant became bankrupt by reason of an order made on 25 June 2007 and that he was appointed the applicant’s trustee in bankruptcy. His estimate of the costs of advertising the auction and of storage, insurance and time was approximately $10,558. He said that he had spoken to the auctioneers and that they had advised him that their advertising had canvassed motor cycle clubs around the country and overseas. He referred to the applicant’s previous assertion that the items of property belonged to third parties.

12. The trustee deposed to the fact that if the auction had to be cancelled or delayed then costs would have to be borne by the bankrupt’s estate because there would be a need for readvertising a new auction date, for storing the motor cycles and vehicles, for dealing with cataloguing and inquiries from interested parties and for all other functions related to the conduct of a public auction.

13. The applicant is bankrupt. I was told by counsel for the trustee that the Federal Magistrate had raised with the applicant the possibility of a payment into court of approximately $20,000. The applicant was not able to make such a payment. I raised this issue with the applicant and he indicated that he thought he could raise a sum of money and that he would need to make “a phone call”. That was said at about 11.30 am with the auction due to commence at 12.00 noon. In my opinion, the balance of convenience clearly favoured the refusal of an interlocutory injunction.

14. It was for the above reasons that I made the orders I did on 24 April 2008.

I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.

Associate:

Dated:       30 April 2008

The Appellant appeared in person
Counsel for the Respondents:	Mr G Gretsas
Solicitor for the Respondents:	Gretsas & Associates

Date of Hearing:	24 April 2008
Date of Judgment:	30 April 2008