MICHAEL STEWART v FRANCOISE GRAUBY

[2012] FMCA 369

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MICHAEL STEWART v FRANCOISE GRAUBY & ANOR [2012] FMCA 369

PRACTICE & PROCEDURE – Application for adjournment – where Counsel believed matter only fixed for directions – utility of adjournment.

Bankruptcy Act 1966, Cth, ss.153A, 153B
Federal Magistrates Court (Bankruptcy Rules) 2006, r.7.04(1)

Applicant: MICHAEL STEWART

First Respondent: FRANCOISE GRAUBY

Second Respondent: SCOTT DARREN PASCOE

File Number: SYC 395 of 2012

Judgment of: Raphael FM

Hearing date: 18 April 2012

Date of Last Submission: 18 April 2012

Delivered at: Sydney

Delivered on: 18 April 2012

REPRESENTATION

Counsel for the Applicant: Mr A Martin

Solicitors for the Applicant: Law Society

Counsel for the Respondent: Mr B Skinner

Solicitors for the Respondent: J S Mueller & Co

ORDERS

1. Application for adjournment declined.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 395 of 2012

MICHAEL STEWART

Applicant

And

FRANCOISE GRAUBY

First Respondent

SCOTT DARREN PASCOE

Second Respondent

REASONS FOR JUDGMENT

1. There comes before me today an application for the annulment of a bankruptcy under s.153B of the Bankruptcy Act 1966[1].  The matter had come before me on 19 March 2012 at which time I made orders requiring the trustee to provide a report to the court pursuant to Rule 7.04(1) of the Federal Magistrates Court (Bankruptcy Rules) 2006 by 30 March.  I required the applicant to file and serve an affidavit confirming his compliance with Rule 7.04 and providing any further evidence as to solvency by 23 March.

   [1] “Act”

2. I required the respondents and the petitioning creditor to file and serve any evidence in reply by 30 March 2012 and I listed the matter for hearing on 13 April at 10.15a.m.  The 13 April proved to be a date that was unavailable to the court and so the court sought to provide an alternative date as soon as possible.  There were emails passing between my associate and the parties.  A series of dates which were available were discussed and 20 April was finally alighted upon.

3. We were then informed that counsel for the respondent was not able to attend on that day and after some more emails my associate wrote to the parties saying:

   “Pursuant to the below correspondence, the above mentioned matter will now be listed for hearing on 18 April at 2.15. 

   Apologies for any inconvenience caused.”

4. Regrettably that did not prove to be suitable to one of the counsel and so the time was moved to 3 pm.  The parties have now appeared and, Mr Martin who acts pro bono for the debtor, requests an adjournment.  He tells me that he needs the adjournment because he did not think that the appointment of today was for a hearing notwithstanding the clear words used in the email and he tells me that he is not ready to proceed because there are serious matters within the affidavit of the trustee that his client wishes to take up.  On pressing Mr Martin I was informed that the serious matters seem to involve his client's ex-wife and her agreement that the property should be sold.  He also says that his client filed a detailed affidavit and large exhibit.  I have not seen these.  I am not saying for one moment that they were not filed but they have not reached this part of the court and I am not sure upon what date they were filed and whether they were in fact filed on or before the due date.

5. Mr Skinner, who appears for the respondent, tells me that he did receive an affidavit on 23 March so to that extent the applicant has complied.  But the fact is that the applicant has had three weeks in which to deal with Mr Pascoe's affidavit, to issue subpoenas, and to bring further evidence but nothing has been done.  To my mind the real vice in the matter is what I can only describe as a lack of reality on the part of the bankrupt.  It is quite plain from all the information that has been provided, both by the trustee and the bankrupt himself, that his only asset is the property that is due to be sold by the trustee and the wife.  The bankrupt is currently resident in the property although a writ of possession has been issued.

6. Mr Martin tells me that his client wishes to remain in the property but he cannot do so and at the same time annul his bankruptcy because he has no other available funds with which to do this. The trustee has provided an estimate of the sale price of the property and the amount that will be paid to the trustee in the event of sale. It indicates that there will be a surplus. If there is a surplus then the applicant's bankruptcy will be annulled pursuant to s.153A of the Act and it will be as if the bankruptcy had never occurred, so any indignity suffered by the applicant as a result of his bankruptcy and any stain upon his financial character will be removed.

7. To my mind there is really very little benefit in the application that is currently being made for annulment and, with respect to Mr Martin, I cannot see how I will be able to grant the substantive application because the sequestration order was only made after a three day hearing before Barnes FM at which all aspects of the applicant's position was aired.  The proper course for the applicant to have taken would be to have appealed her Honour's decision and not to come to this court at this time seeking to effectively set it aside. 

8. Mr Martin has told the court that the fault in relation to the hearing is his and I respect the candour with which he has made that concession. But it does not assist.  The sooner this estate is wound up the better.  The original amount of money owed by the applicant was small but it has now taken on a life of its own with lengthy hearings in this court, in the Supreme Court of New South Wales and apparently to come in the Family Court.  I do not think that it is in the interests of justice that these proceedings should be further delayed and further costs expended.

9. The application for adjournment is declined.

I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Raphael FM

Date:  4 May 2012