Liati, Angela v Fitzsimons, Christopher Ronald

[1996] FCA 686

IN THE FEDERAL COURT OF AUSTRALIA                 ) 
  )  
BANKRUPTCY DISTRICT OF THE STATE          )
  )
OF NEW SOUTH WALES  )  No NG 552 of 1996
  )  
GENERAL DIVISION  )     

BETWEEN:  ANGELA LIATI   

Applicant

AND:  CHRISTOPHER RONALD      FITZSIMONS

Respondent

Coram:        Davies J.
Date:          24 July 1996
Place:         Sydney

REASONS FOR JUDGMENT

This application is brought under Order 52, rule 17 of the Federal Court Rules. It seeks an order staying a sequestration order which was made by the Registrar against the estate of the applicant, Angela Liati, on 3 February 1996.  The motion in terms seeks to stay an order of Finn J of 13 June 1996 which affirmed the order of the Registrar.  For the application to have any effect, it would have to deal both with the original sequestration order and with Finn J's order. 

Ms Liati's affairs are very complex.  One of the matters she puts in support of her application is that she wishes to continue with proceedings on foot in the Supreme Court of New South Wales and that the sequestration order will preclude her from doing so.  She not only has those proceedings on foot but, apparently, there are also other

proceedings.  In the list of creditors which are set out in the judgment of Finn J, there is, for example, a reference to the National Bank, "in dispute - subject to litigation", Thorntons, "in dispute - subject to litigation", Peter Warren, Warren's Motor Village, "in dispute - subject to litigation", costs re Waverley Court, "subject to appeal being considered".  So Ms Liati is involved in quite a deal of litigation. 

The order was originally made by the Registrar.  It was made on 23 February 1996, so it is now five months old.  Apparently, Ms Liati did not appear on the hearing before the Registrar because she was involved in a hearing before the Supreme Court, but nevertheless the fact remains that she did not appear when the Registrar made that order.

There was then an appeal to a Judge of the Court.  The rules of this Court provide for an appeal from an order of the Registrar but that appeal is to a single Judge, not to the Full Court.  When the matter goes before a single Judge, all matters are considered and the case is heard de novo.  In the present case, Finn J heard evidence from Ms Liati and from the petitioning creditor, Mr C.R. Fitzsimons.  His Honour preferred the evidence of Mr Fitzsimons and was satisfied with the judgment debt claimed, namely $4,186.26.  His Honour also considered the question of solvency.  I need not go into the facts of that matter.  Ms Liati's submission on solvency proceeded from the premise that it was not possible to establish whether or not she was solvent until an appeal which was on foot in the Supreme Court of New South Wales had been resolved. 

In those circumstances, his Honour, of course, proceeded on the basis that, the judgment debt not being satisfied, solvency was established.  Certainly Ms Liati was not
able to pay her debts as they fell due.  The amount of the judgment debt was only quite a small amount compared to some of the sums which Ms Liati owes and about which she is involved in litigation.  But the small amount of the sum shows just how difficult her position is. 

I accept the view put forward by Pincus J in Evans v Heather Thiedeke Group Pty Ltd (1990) 95 ALR 424 that, if there is a matter put forward which shows doubt about the order made below, then a court ought to be ready to grant a stay where there has been a sequestration order, for the making of the sequestration order might otherwise frustrate an appeal. But in the present case, it does not seem to me that any matter has been put forward to doubt Finn J's decision.

As I have said, there has been an appeal.  Ms Liati has had an opportunity to put forward everything that she wishes to put and it seems to me that the matters that she wished to put were fully and fairly considered.  In these circumstances, and having regard to the time during which the sequestration order has been on foot, it seems to me that no stay should be granted.  For those reasons the application will be dismissed.

I certify that this and the 2 preceding pages
are a true copy of the reasons for judgment herein of
the Honourable Justice Davies.

Associate:

Date: 24 July 1996

Counsel for the applicant:  R.H. Grace
Solicitors for the applicant:  Simon Gates
Counsel for the respondent:  M.E. France
Solicitors for the respondent:  Brown & Partners
Date of hearing:  24 July 1996
Date of judgment:  24 July 1996