McIntyre, I.B. v Perkes, R.D

[1990] FCA 305

JUDGMENT NO ........ ........ .......-.,.,., 30-5~ 90-

NOT FOR DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA	)
1
NEW SOUTH WALES DISTRICT REGISTRY )	NO. NP2187, 2188

) of 1989

GENERAL DIVISION 1

BETWEEN:  A BELINDA MCINTYRE. NEVILLE

MCINTYRE

EX PARTE: RAYMOND DAVID PERKES

LOCKHART, BEAUMONT	and BURCHETT JJ.
27 JUNE, 1990	RECEIVED
FEDERAL COURT OF

REASONS FOR JUDGMENT AUSTAALIA PRINCIPAL REGISFRY

THE COURT:

These two matters have a long curial history in this Court and the Supreme Court of New South Wales. Two single judges of this Court heard certain aspects of the dispute and appeals were lodged against their judgments to Full Courts of this Court. On

6 April 1990 a Full Court differently constituted, gave judgment

Court. The other appeal from a single Judge of this Court	September 1988, in proceedings No 14411 of 1984 in the Supreme
(Einfeld J.) was stood over to await the result of the appeal from Hill J's judgment. We understand that the High Court has given special leave to appeal from the judgment of the Full Court of 6 April 1990 relating to the question of set off.
On 6 March 1990, that is before judgment was given by the Full Court on the set off question, though after the argument on that question had been heard by the Full Court, the petitions to sequestrate the estates of each of the debtors Itala Belinda McIntyre and Neville McIntyre came on for hearing before Einfeld
His Honour gave an ex tempore judgment which referred to the lengthy curial history of the matter, including the series of appeals to which we have referred and his Honour expressed the view that in the circumstances it would not be right for this Court to embark upon another substantive hearing at first instance. His Honour then purported to exercise the powers conferred by order 52 rule 41 of this Court's rules to refer the substantive issue between the parties to a Full Court, namely,
whether there is a debt upon which a sequestration order can properly be pronounced as between the petitioning creditor and
the debtor and if so, what the debt is.
His Honour stood the matter down for short minutes to be brought in. They were brought in by the parties and stated six questions which his Honour then referred to a Full Court. The questions are as follows in each of the two matters:
(1) Is there a debt owing by the debtor to the petitioning
creditor. (2) Is there a debt owing by the petitioning creditor to the debtor.
(3) What are the amounts of those respective debts;
(4) Is there a balance owing in favour of the petitioning
creditor. (5) If so, what is the balance.
(6) Assuming that all the formal elements of proof required for
a sequestration order have been duly satisfied and no relevant discretionary factors exist not to do so, is there any reason why a sequestration order should not be pronounced?
It is plain that the jurisdiction which his Honour purported to exercise was, as the form of the short minutes of order themselves state, pursuant to order 52 rule 41. We note from a perusal of the files that the formal orders have not been taken out pursuant to the short minutes of order made on 6 March 1990.
We raised with the representatives of the parties at the threshold of this morning's hearing, the question whether order 52 rule 41 was an appropriate vehicle for the references of the

in the appeal from one of those two single judges (Hill J.) and their Honours found that the appellant, who is the female debtor Itala Belinda McIntrye, was entitled to set off moneys due to her

by the petitioning creditor, Raymond David Perkes, under a

judgment entered in the Supreme Court of New South Wales in 1982

against moneys due by her to the judgment creditor under another judgment entered in the Supreme Court of New South Wales on 12

l

questions mentioned earlier to a Full Court. Each party argued that it is an appropriate vehicle for this purpose; but as these matters go to jurisdiction and power, this Full Court must itself be satisfied that the power exists before it embarks upon the hearing of the questions referred to it.

Order 52 is concerned, as its title suggests, with "Appeals"; that is appeals to Full Courts of the Federal Court of Australia. Order 52 is an order which deals essentially with the powers of Full Courts in the exercise of this Court's appellate jurisdiction. Some rules in the order specifically empower a single judge to exercise the powers of the Court in the appellate jurisdiction. Examples are rule 20 relating to security for costs, rule 29 as to the setting down of appeals and rule 37 concerning the expedition of appeals. Rule 37, for example, expressly empowers:

"The Court or a Judge -

to make orders that are just for the expediting of the

appeal. "

It is orders of this kind to which rule 41 is plainly directed and it provides:

"In any rule in this order where power is conferred on the Court or a Judge a single Judge may refer a

Hence, for example, if a judge hearing an application for security for costs of an appeal thinks it appropriate to do so, he may refer a question arising in that matter to the Full Court under rule 41. question to the Court if he considers it appropriate."

We should for completeness simply refer to the definition of Court in order 52 rule 1 which is defined as meaning "the Court exercising its appellate or related jurisdiction under part 111 division (2) of the Act".

Order 52 rule 41 is therefore a convenient vehicle for a single judge, where empowered by any rule in order 52 itself, in the exercise of the Court's appellate jurisdiction to refer a questlon arising in the exercise of that power to a Full Court. Rule 41 cannot in our view be called in aid by a single judge exercising the original jurisdiction of the court.

The dichotomy between this Court's original and appellate

jurisdiction is fundamental to the Court's jurisdiction and

powers and is reflected in the Federal Court of Australia Act 1976 ("the Act") and the Federal Court Rules. In the present case, the learned primary Judge was hearing petitions to sequestrate the estates of debtors and those are powers to be exercised within the Court's original jurisdiction. It was, therefore, not open for the powers conferred by order 52 rule 41

to be invoked in the present case.

The Act and the Federal Court Rules do contain provisions enabling matters before single judges in the exercise of the Court's original jurisdiction to be brought before Full Courts. For example, S. 20(1A):

Empowers the Chief Justice, if he considers that a matter coming before the Court in the original jurisdiction of the Court is of sufficient importance to justify the giving of a direction under that subsection, may direct that the jurisdiction of the Court

in that matter shall be exercised by a ~ u l l Court.

That, is not, of course, this case.

Again, S. 25(6), which we note appears in division 2 of part

111 of the Act and relates to the exercise of appellate

jurisdiction:

empowers the Court constituted by a single judge to state any case or reserve any question concerning a matter with respect to which an appeal would lie from a judgment of the judge to a Full Court of the Court for the consideration of a Full Court of the Court in the relevant division of the Court; and the Full Court is expressly empowered by that subsection to hear and determine the case in question.

Order 50 of this Court's rules then gives expression to the power conferred by S. 25(6) in various ways, though that is an order which, of course, has wider application than the powers conferred by S. 25(6), though it includes them, and it is plaln that the power exercised pursuant to that statutory provlslon must result in a special case where generally facts wlll be found by the judge at first instance, either by agreement or otherwise. That again is not this case.

The Court does not, therefore, have jurisdiction to hear the matter presently before it. The evidence that we have seen and the helpful arguments that we have heard thus far suggest to us that, despite the lengthy curial history of the matter which seems unfortunate, singularly appropriate for the determination of the residual issues by a single judge in the exercise of the Court's original jurisdiction. Whether that then leads to the bringing of subsequent appeals is, of course, a matter for the parties to determine in the light of the findings that are made.

There is, therefore, strictly no matter properly before us and it is not necessary that the Court make any specific orders. We observe, however, that the petitions ought to be brought on for hearing as soon as possible before a single judge who will have the benefit of the Full Court's judgment of 6 April 1990 on the set off question.

We draw the parties attention to the fact that the petitions were presented on 13 October 1989 and, unless their life is	extended pursuant to the requisite power conferred by the
Bankruptcv Act 1966, the petitions will expire 12 months thereafter.

We notice, as mentioned earlier, that the orders of Einfeld

3 . referring the matters to the Full Court have not been taken

out, passed and entered. It is, therefore, open to his Honour to be freshly seized of the matters and to determine the appropriate course that should follow with respect to them, having the benefit in the meantime of the judgment which his Honour did not have at the time, of the Full Court's judgment of 6 April 1990.

If the position had been otherwise under the provisions to which we have referred, account would have to be taken of order 1 rule 11 which makes the Federal Court rules generally inapplicable to bankruptcy proceedings.

On the question of costs, as all parties have supported the Court's jurisdiction, which the Court has regrettably found that it does not have, there shall be no order as to the costs of any party of the proceedings before this Full Court.

I certify that this and the preceding seven (7) pages are a true copy of the reasons for judgment herein of the Court.

Associate (kLt

Dated: 27 June 1990