Hudson v Whalan

[1999] FCA 201

FEDERAL COURT OF AUSTRALIA

Hudson v Whalan [1999] FCA 201

ROBERT HUDSON JNR V STEPHEN WILLIAM MICHAEL WHALAN & THOMAS JAMES DONALD

NG 931 OF 1998

SACKVILLE, NORTH & HELY JJ
SYDNEY

3 MARCH 1998

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 931 OF 1998

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

ROBERT HUDSON JNR
Appellant

AND:

STEPHEN WILLIAM MICHAEL WHALAN
First Respondent

THOMAS JAMES DONALD
Second Respondent

JUDGE:	SACKVILLE, NORTH & HELY JJ
DATE:	3 MARCH 1999
PLACE:	SYDNEY

RULING ON EVIDENCE

THE COURT

1. The appellant has sought to tender three documents for the purposes of the appeal, namely:

   ·    a letter dated 19 August 1998 from Tonkin Drysdale Partners, the solicitors for the respondents, to the solicitor for Gosford City Council (“the Council”);

   ·    a cheque statement for the period 21 to 24 August 1998; and

   ·    a cheque voucher dated 10 August 1998 for $34,719 relating to a cheque payable to Tonkin Drysdale Partners.

2. These documents tend to demonstrate that, at some time after 19 May 1998, the date the sequestration order was made against the appellant, an arrangement was entered into between the Council and the respondents, whereby the Council agreed to and did pay the costs of the respondents arising out of their litigation with the appellant.  It is not necessary to express any view as to the legal effect of this arrangement.

3. The appellant wishes to rely upon these documents to show that the sequestration order “ought not to have been made”, within the meaning of s 153 of the Bankruptcy Act (Cth) 1966 (“Bankruptcy Act”), because the arrangement has the consequence that the respondents are no longer his creditors.  It follows, according to the appellant, that this would allow the Court to make an order for annulment pursuant to s 153B of the Bankruptcy Act.  Section 153B provides that:

   “If the Court is satisfied that a sequestration order ought not to have been made…, the Court may make an order annulling the bankruptcy.”

   The key words in the section are “ought not to have been made”.

4. An analysis of the case law shows that s 153B of the Bankruptcy Act can be invoked, subject to the exercise of the Court’s discretion, where the bankrupt can establish that, in the light of facts which existed at the time the sequestration order was made, the Court ought not to have made the order.  As Ryan J said in Re Ginnane; Ex parte Ginnane (1994) 60 FCR 429, at 445, while the facts relied on must have been in existence at the time of the order, they need not have been before the Court at that time and may be established by proof of events occurring after the order was made: see also Re Raymond; Ex parte Raymond (1992) 36 FCR 424 (Spender J).

5. The evidence now sought to be adduced by the appellant relates to events which occurred after the date of the sequestration order.  These events do not shed light on the facts as at the date of the order.  In order to advance the appellant’s case, it would be necessary to adduce material that demonstrated that, as at the date of the sequestration order, the debts due to the respondents had been discharged or were no longer in existence.  This documentation does not tend to support that factual conclusion.  Accordingly, the tendered documents are simply not relevant to any matter that is presently before the Court.  The tender is accordingly rejected.

6. The appellant tenders a portion of a letter dated 16 March 1998 from P J Donnellan and Co, solicitors, to the General Manager of the Council. The paragraph on which the appellant particularly relies does not establish that there was any binding arrangement between the Council and the respondents prior to 19 May 1998, the date of the sequestration order.  That being the case, the letter is not capable of advancing the appellant’s case on this appeal.  Accordingly, that tender is also rejected.

I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Sackville, North & Hely JJ.

Associate:

Dated:             3 March 1999

Counsel for the Appellant:	Self represented
Counsel for the Respondent:	Ms R Winfield
Solicitor for the Respondent:	Tonkin Drysdale Partners
Date of Hearing:	3 March 1999
Date of Judgment:	3 March 1999