Keane, John Aloysius & Ex Parte: Bobo Nominees Pty Ltd

[1995] FCA 1187

IN THE FEDERAL COURT OF ~ ~ ~ ~ - I A	)
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BANKRUPTCY DISTRICT OF VICTORIA	i No VP 510 of 1995

RE : JOHN ALOYSIUS KEANE

Judgment Debtor

EX PARTE: BOB0 NOMINEES PTY LIMITED

Petitioner

REASONS FOR JUDGMENT

LOCKHART J . :

This is an application by the debtor to adjourn the hearing of the petition. The application for the adjournment is opposed by the petitioner. The proceeding has a complex history both in this Court, the County Court of Victoria and the Supreme Court of Victoria, some of which needs to be recited.

The act of bankruptcy upon which the petition is based is the failure by the debtor to comply with the requirements of a bankruptcy notice served upon him. That in turn is based upon a judgment obtained by the petitioner in the County Court of Victoria on 8 March 1995 in default of appearance of the debtor.

The bankruptcy notice was served upon the debtor soon

thereafter, and this was followed by a summons being filed by

the debtor in the County Court to set aside the default

judgment. That summons was heard on 21 April this year by Fricke J. of the County Court, and his Honour ordered, amongst other things that, subject to the payment into Court by the debtor (or another defendant to the proceedings in the County Court) of the sum of some $90,949.47 (the whole amount claimed by the petitioner) within 30 days of the judgment being set aside, the judgment be set aside.

The money was not paid into Court by the debtor or the other defendant in the County Court proceedings within the time limited by Fricke J., or indeed at all. Thereupon the petitioner filed a creditor's petition seeking to obtain a sequestration order against the estate of the debtor, returnable on 27 June 1995 in this Court. In the meantime, a second summons was filed by the debtor in the County Court on 19 May 1995 seeking orders that the earlier order of Fricke J. be set aside, or alternatively amended, and that the debtor be given unconditional leave to defend the County Court proceedings.

The next round in the curial saga began on 16 June 1995 when the debtor issued out of the Supreme Court of Victoria an originating motion seeking orders in the nature of certiorari to bring up the record of the County Court concerning the judgment against the debtor, and to quash the judgment on more than one ground. The petitioner responded a few days later by filing an application with the Supreme Court seeking an order

that there be a stay of the proceedings in the County Court, or an order that there be judgment entered in the petitioner's favour in the Supreme Court proceedings.

The Supreme Court proceeding came, in accordance with the practice of that Court, before a Master who adjourned it to a date in late June. On that date the Master ordered that the Supreme Court proceeding be stayed pending the hearing and determination of the debtor's second summons in the County Court, and he made certain orders for costs in favour of the petitioner.

The second summons of the debtor was heard by the Chief Judge of the County Court, who on 7 July 1995 refused the debtor's application and made orders for costs in favour of the petitioner. The present position of the Supreme Court proceeding is, I am informed, that it is to come before a Master of the Supreme Court in a week or so. When the Supreme Court will actually deal finally with the application by the debtor is not clear.

In the meantime the petition in this Court seeking a sequestration order against the estate of the debtor has been in the list for directions on four previous occasions, two before a Registrar and two before Judges of the Court. Directions have been given for the filing of affidavits by the debtor, and also by the petitioner, with a view to the issues

outstanding in the petition being heard before the Court

today.

The debtor filed grounds of opposition to the petition on 31 July 1995. It is a slightly elusive document because it

relies on a number of matters to support the proposition that the judgment debt which the petitioner asserts is owed to it is not in fact owing, and relies on technical points surrounding the orders of the County Court to which I have referred. The debtor also asserts that he is solvent, save for the judgment debt, to the petitioner.

The debtor has filed an affidavit in this Court in support of his assertion that he is not indebted to the petitioner and the petitioner has filed an affidavit in response thereto. The debtor has not filed affidavits in reply.

Furthermore, the debtor left some little time ago for Ireland where it seems, meagre though the evidence is, that his father is unwell and the debtor wishes to look after him for some time until he regains his health. There is evidence that the debtor left Australia notwithstanding that he had previously had a discussion with a law clerk in the employ of his solicitors, and was requested to notify the law clerk of any definite plans he had for travel, in case his attendance was required in this matter or in case he was required to

provide any further affidavit material. The debtor nevertheless chose to leave this country without conveying that information to the law clerk.

Thus the position before the Court today is that it is asked to adjourn the petition for a further period of time, sufficient to enable the Supreme Court to dispose one way or the other of the matters before it, and sufficient to enable the debtor to return and, if necessary, give further evidence or be cross-examined on his affidavit in opposition to the petition. The petition has been, as I said earlier, before judges and registrars for directions, and it was adjourned until today for the purpose of hearing the petition or dealing with any extant motions. Hence I am hearing first the application for adjournment, which if it fails will lead to the hearing of the petition.

It may be as counsel for the debtor says that, if the Supreme Court proceeding succeeds, the result will be a setting aside of Fricke J. 'S order, although counsel for the debtor has foreshadowed that he will be asking the Supreme Court not to do that, but to set aside the order in part, that is to have the condition for the payment of money (being the amount of the judgment debt set aside) removed, leaving in force the order of his Honour actually setting aside the default judgment. I take that into account as one matter relevant to the question of whether or not the petition should

be adjourned. The pendency of proceedings in other courts, including the Court in which the judgment (on which the bankruptcy notice is based) was obtained, is an important matter to be considered by this Court exercising its bankruptcy jurisdiction, but the weight to be given to it varies from case to case according to the circumstances.

On the other hand, there is evidence filed by both parties that goes to the substance of the debt itself as to whether it exists or not, and that seems to me to be central to the dispute between the parties.

Nor is there evidence supporting the debtor's assertion that he is solvent.

The debtor is not here for the reasons I have mentioned earlier. Counsel for the petitioner has indicated that Mr Szanto (a director of the petitioner and the deponent of the petitioner's affidavit previously mentioned) is here in response to a notice from the debtor to attend for cross- examination. Counsel for the petitioner does not wish to cross-examine the debtor on his affidavit.

In all the circumstances, in my opinion, the case for adjournment has not been established, and the court should

proceed to hear the petition. Accordingly, the application

for adjournment is refused.

I certify that this and the preceding six (6) pages are a true copy of the reasons for judgment herein of the Honourable Justice Lockhart.

Associate &m# Dated :

Counsel for the Judgment Debtor	M r D Perkins
Solicitors for the Judgment Debtor :	C o r r s C h a m b e r s
Westgarth

Counsel for the Petitioner	.	MS J Davies
Solicitors for the Petitioner	Trumble Szanto Braham
Date of Hearing	14 August 1995
Date of Judgment	.	14 August 1995