Miller v LOYAL No. 46
[2001] FMCA 81
•31 July 2001
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MILLER v LOYAL No. 46 | [2001] FMCA 81 |
| BANKRUPTCY – Application to stay sequestration pending appeal – Whether prospects of success – Stay granted with security for Respondent’s costs – s.52(iii) Bankruptcy Act 1966. |
| Applicant: | JENNIFER DOREEN MILLER |
| Respondent: | LOYAL No. 46 |
| File No: | BZ 203 of 2000 |
| Delivered on: | 31 July 2001 |
| Delivered at: | Brisbane |
| Hearing Date: | 31 July 2001 |
| Judgment of: | Baumann FM |
REPRESENTATION
| The Applicant in person. |
| Counsel for the Respondent: | Mr Kidston |
ORDERS
That proceedings under the sequestration order made 23 May 2001 be stayed up to and including 24 August 2001.
If on or before 24 August 2001 security for the respondent's costs of the appeal in the sum of $2500, in a form satisfactory to the Registrar is provided by Ms Miller, then the stay referred to in order (1) above shall be extended up to the determination of the appeal provided that such appeal is prosecuted diligently and expeditiously.
The stay under order (1) shall lapse, if security as referred to in order (2) above is not provided on or before 24 August 2001.
The bankrupt shall pay the costs of today, fixed at $250 by 24 August 2001
ALIA AT
FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE
BZ 203 of 2001
JENNIFER DOREEN MILLER
Applicant
And
LOYAL NO 46
Respondent
REASONS FOR JUDGMENT
I have an application before me today made by the applicant, Jennifer Doreen Miller on 23 July 2001 seeking an order, that a sequestration order made by me on 23 May 2001 be stayed pending the hearing of an appeal against my judgement.
Ms Miller has provided me today with details of the appeal filed on
20 May 2001. The basis of that appeal appears to rely on the following facts or issues and some of those grounds have been further explained to me today in the handwritten submissions provided by Ms Miller, namely:
a)That even though in my reasons at paragraph 13:
“I indicated that the Debtor I had not asked that I look behind the judgment.”
Ms Miller says that:
“She did not ask me to do so” –
because she alleges that I had told her on 30 March that I would look behind the judgment.
b)She says that she has now made an application to the Cairns Magistrates Court to have the judgement upon which the original Bankruptcy Notice was founded set aside, and that she expects such application to be heard on or about 23 August.
c)She claims still to be solvent. In her written submission she expresses that view in this way, namely:
“I have a good credit rating and I do not wish my name spoken in the fashion that I cannot pay my debts when they fall due.”
Mr Kidston, who represented the petitioning creditor and the respondent to this application made oral submissions, the effect of which is that the appeal brought by Ms Miller is doomed to fail and that there is no basis upon which a stay ought to be granted in those circumstances. The alternate submission of Mr Kidston was that if a stay was to be contemplated, then it should only be given on the basis that the respondent's costs, which he estimates to be between $4,000.00 and $5,000.00, of any appeal, ought to be protected by way of security.
When I raised this matter with Ms Miller, she indicated that she would not be in a position to find that sum, but with some time would, perhaps be able to find $1500. It is a matter ultimately for the Appeal Court as to whether I erred in relation to my judgement and, as I am not in a position, I believe, to make a comment on that, I choose not to do so. Save only to say, that I note from my reasons that the basis upon which the debtor had given notice of intention to oppose the petition was that the debtor was solvent and, further, that the debtor was entitled to be indemnified for the claim of the creditor.
There was no notice given at the time of opposition that the debtor required the Court to go behind the judgement. I also note from my earlier reasons that at the time the matter was heard by me on
30 March 2001, there had been no application filed by Ms Miller to seek to set aside the judgement which had been obtained against her on 6 March 2000. The principles which need to apply in this matter were conveniently stated by His Honour, Von Doussa J, in the decision of Balnaves v The Deputy Commissioner of Taxation (FCA 20 November 1998), when he said:
“The approach taken by the Court when considering applications for stays in respect of sequestration orders pending an appeal, has been to grant the stay where there is any reason to doubt that the sequestration order was correctly made, or, in other terms, a stay will be granted when the appellant can demonstrate that there is a point that is arguable on appeal.”
His Honour also referred to the decision of Pincus J, in Evans v Heather Thiedeke Group Pty Ltd (1990), 95 ALR 424, where the issue of the basis upon which a stay ought to be granted was considered as well as to the fact that Pincus J, held that the general power to grant a stay given by Section 52(iii) of the Bankruptcy Act did not nullify the power under Order 52, Rule 17 of the Federal Court Rules. It is not clear on the basis of the application whether the notice of motion filed by Ms Miller on 23 July 2001 is based on that provision in the Federal Court Rules, but for the purposes of these proceedings, I infer that it was.
Mr Kidston brought to my attention, the decision of Emmett J, in the matter of Gould v Gould (2000), FCA 1427, (5 October 2000), in which His Honour was being asked to grant a stay in relation to a sequestration order made by another Judge. It seems that the basis of the appeal was an argument relating to bias, and to that extent, that matter is distinguishable to this matter before me. However, I am persuaded by the reasons identified in that judgment, that even if the grounds of appeal may be regarded by the person hearing the stay as having little prospect of success, then, provided the appeal is brought in good faith, the Court should contemplate preserving the right for that appeal to be heard. The respondent to the appeal should not be significantly disadvantaged as to the costs of defending the appeal.
I am satisfied from hearing Ms Miller, both today and on earlier occasions that she sincerely believes that she has a grievance against and that she has been unfairly treated by, the petitioning creditor. She continues to claim that she is solvent and she continues to wish to pursue her rights. It is my view that she should be given that opportunity to pursue her appeal, but only if she is able to provide security for costs for the respondent's legal representation on the appeal.
In this regard, I believe the appropriate order is that she provides security of costs to the amount of $2500. The order which I propose to make is as follows:
(1)That proceedings under the sequestration order made 23 May 2001 be stayed up to and including 24 August 2001.
(2)If on or before 24 August 2001 security for the respondent's costs of the appeal in the sum of $2500, in a form satisfactory to the Registrar is provided by Ms Miller, then the stay referred to in order (1) above shall be extended up to the determination of the appeal provided that such appeal is prosecuted diligently and expeditiously.
(3)The stay under order (1) shall lapse, if security as referred to in order (2) above is not provided on or before 24 August 2001.
(4)
The bankrupt shall pay the costs of today, fixed at $250 by
24 August 2001.
I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Baumann FM
Associate:
Date:
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