Makucha v Canon Australia Pty Ltd

[2004] FCA 1221

FEDERAL COURT OF AUSTRALIA

Makucha v Canon Australia Pty Ltd [2004] FCA 1221

PAUL MAKUCHA v CANON AUSTRALIA PTY LIMITED
N 1327 OF 2004

STONE J
16 SEPTEMBER 2004
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1327 OF 2004

BETWEEN:	PAUL MAKUCHA APPLICANT
AND:	CANON AUSTRALIA PTY LIMITED RESPONDENT
JUDGE:	STONE J
DATE OF ORDER:	16 SEPTEMBER 2004
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The notice of motion be dismissed with costs.

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	N 1327 OF 2004

BETWEEN:	PAUL MAKUCHA APPLICANT
AND:	CANON AUSTRALIA PTY LIMITED RESPONDENT

JUDGE:	STONE J
DATE:	16 SEPTEMBER 2004
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. On 3 August 2004, Registrar Hedge, sitting as a registrar of the Federal Magistrates Court, dismissed the applicant’s motion to set aside a bankruptcy notice issued by the respondent.  On 6 September 2004 Federal Magistrate Raphael dismissed an application to review Registrar Hedge’s decision.  On the same day the respondent filed a creditor’s petition in the Federal Magistrates Court and was granted a return date of 22 September 2004. The creditor’s petition was served on Mr Makucha on 13 September 2004.

2. On 10 September 2004 Mr Makucha filed in this Court a notice of appeal from the decision of the Federal Magistrate.  He now seeks, by way of interlocutory relief pending the outcome of the appeal to this Court, an order to stay or set aside the bankruptcy notice and the creditors’s petition. 

3. The background to this matter was summarised by the respondent in a chronology provided at the hearing of Mr Makucha's stay application.  Although Mr Makucha disputed the legal correctness of decisions made at various stages I do not understand him to take issue with the broad outline of that chronology.  The following summary relies on that chronology.

4. The debt underlying the bankruptcy notice arose from a costs order made by the New South Wales District Court in June 2003. Those costs were assessed and a certificate of determination of costs was issued in favour of the respondent. On 6 April 2004 judgment for those costs was awarded in the New South Wales Local Court pursuant to s 208J(3) of the Legal Profession Act 1987 (NSW).

5. The hearing of the application for interlocutory relief was complicated by Mr Makucha representing himself without legal assistance.  In support of his application Mr Makucha submitted that he disputes:

   • the debt claimed by the respondent;
   • the correctness of the creditor’s petition and bankruptcy notice on which it is based; and
   • that he has committed an act of bankruptcy

6. Mr Makucha also claims that if the interlocutory relief he seeks is not granted he will not be able to prosecute his appeal in this Court or certain other applications that he has made in the Supreme Court of New South Wales and in the Local Court of New South Wales. As I understand it his concern is based on the limitations that arise once a sequestration order has been made and, pursuant to s 58 of the Bankruptcy Act 1966 (Cth), the property of the bankrupt vests in the trustee. The argument assumes that without the relief sought the creditor’s petition would, inevitably, be granted and a sequestration order would issue.

7. Mr Makucha also referred to his claimed grounds of appeal from the Federal Magistrate’s decision, which included that the Federal Magistrate erred in law and denied Mr Makucha natural justice in not taking proper account of his medical condition and his status as a litigant in person.

8. In relation to the submissions Mr Makucha made about his ability to pursue his applications in other courts, I note that similar claims were put to the Federal Magistrate who observed that the debtor was seeking to prolong the time for compliance with the bankruptcy notice while he attempts to argue that the original judgment should not stand.  His Honour quoted his own remarks in Porter v OAMPS Limited [2004] FMCA 272 at [22]-[24]where he said:

   ‘With respect, this approach appears to overlook the fact that the service of a bankruptcy notice simply marks the start of a process and that the commission of an act of bankruptcy while undoubtedly of significance to the debtor, does not affect the actual status of the debtor. …The Court in these cases when considering whether to grant an extension of time for compliance with a bankruptcy notice has been mindful of balancing the interests of creditors, noting the potential impact of a later act of bankruptcy in the event that the appeal is unsuccessful and proceedings continue.’

9. His Honour then referred to the comment made in Re Nguyen; Ex parte Commissioner of Taxation (1995) 54 FCR 403 at 407 by Heerey J who said:

   ‘Extension of time for compliance with a bankruptcy notice may have important adverse consequences for the judgment creditor.  For example, if a sequestration order is subsequently made the commencement of the bankruptcy may be later than would otherwise have been the case, which in turn may affect rights of recovery by the trustee in relation to property.’

10. On this basis Federal Magistrate Raphael concluded that it was not appropriate for him to extend the time for compliance with the bankruptcy notice.  I am of the same opinion in relation to the interlocutory relief sought today.  The concerns that Mr Makucha has raised in relation to his ongoing proceedings in this Court and the New South Wales courts are more appropriately ventilated at the hearing of the creditor’s petition where, in an appropriate case, the Court may exercise its discretion to adjourn the proceeding pending the resolution of other matters. 

11. For these reasons the notice of motion is dismissed with costs.

I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone.

Associate:        

Dated:             16 September 2004

Counsel for the Applicant:	The applicant appeared in person
Solicitor for the Respondent:	Deacons
Date of Hearing:	16 September 2004
Date of Judgment:	16 September 2004