Mogensen. Jan v Conway, Gerard

[1998] FCA 1565

FEDERAL COURT OF AUSTRALIA

BANKRUPTCY – sequestration order – appeal - whether order made in error of law – whether primary judge correct to hold final judgment or order could not have been stayed – whether primary judge correctly interpreted time limit on application for rehearing of consumer credit claim as barring claim made out of time – proper approach to interpretation of section imposing time limit.

Consumer Claims Tribunals Act 1987 (NSW) ss 10(3), 12, 25(1), 25(4)
Bankruptcy Act 1966 (Cth) s 40(1)(g)
Consumer Claims Tribunals Act 1974 (NSW)ss 32(2), 49

David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265, considered
Australian Heritage Commission v Mount Isa Mines Ltd(1997) 187 CLR 297, considered
Re McJannet; Ex Parte Minister For Employment, Training And Industrial Relations (Qld) (1995) 184 CLR 620, considered
Parisienne Basket Shoes Pty Ltd v Whyte(1938) 59 CLR 369, considered
Grzybowicz v Smiljanic [1980] 1 NSWLR 627, referred to
Ex Parte Hulin; Re Gillespie(1965) 65 SR (NSW) 31, referred to
Adams v Chas S Watson Pty Ltd(1935) 60 CLR 545, referred to
Project Blue Sky Inc v Australian Broadcasting Authority(1998) 72 ALJR 841, applied
Jet 60 Minute Cleaners Pty Ltd v Brownette(1982) ASC 55-203, considered
Bull v Attorney‑General (NSW) (1913) 17 CLR 370, considered
R v Kearney; Ex Parte Jurlama(1984) 52 ALR 24, considered
Zangzinchai v Milanta(1994) 125 ALR 265,  considered
Federal Airports Corporation v Aerolineas Argentinas(1997) 76 FCR 582, distinguished
Grundt v  Great Boulder Pty Gold Mines Ltd(1937) 59 CLR 641, considered

JAN MOGENSEN v GERARD CONWAY
NG 944 of 1998

HILL, R D NICHOLSON AND EMMETT JJ
SYDNEY

9 DECEMBER 1998

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 944 of 1998

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT

BETWEEN:	JAN MOGENSEN APPELLANT
AND:	GERARD CONWAY RESPONDENT
JUDGES:	HILL, R D NICHOLSON AND EMMETT JJ
DATE OF ORDER:	9 DECEMBER 1998
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The appeal be dismissed.

2.The appellant pay the respondent’s costs of the appeal.

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	NG 944 of 1998

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT

BETWEEN:	JAN MOGENSEN APPELLANT
AND:	GERARD CONWAY RESPONDENT

JUDGES:	HILL, R D NICHOLSON AND EMMETT JJ
DATE:	9 DECEMBER 1998
PLACE:	SYDNEY

REASONS FOR JUDGMENT

THE COURT:  This is an appeal from a decision of Beaumont J in which he ordered that a sequestration order be made against the estate of the appellant.

The relevant facts are short in compass and were found by Beaumont J as follows:

“In December 1997 a claim was made by the creditor [the respondent] against the debtor [the appellant] in the Consumer Claims Tribunal (“the Tribunal”) pursuant to the provisions of the Consumer Claims Tribunals Act 1987 (NSW) (“the Act”).The matter was listed for hearing on 5 December 1997 before the Tribunal.It appears that the debtor sent a message by facsimile transmission to the Tribunal that he was unable to appear on that date.However, an order was then made by the Tribunal that the debtor pay the creditor the sum of $15,321.

On 16 December 1997 the debtor received notice of this order.On 15 January 1998 the creditor registered the order of the Tribunal as a judgment of the Local Court at Sutherland pursuant to the provisions of Division 4 of Part 4 of the Act.On 19 January 1998 a certificate of judgment was issued by the Local Court.On 28 January 1998 the debtor applied pursuant to s 25(1) for a re-hearing of the matter before the Tribunal.

…

On 29 January 1998 a referee purported to order that the claim be reheard.On the same date, namely 29 January 1998, the subject bankruptcy notice was issued.It was served on the debtor on 4 February 1998.The notice required compliance within 21 days, that is, by 25 February 1998.On 6 March 1998 the re-hearing took place before the Tribunal.It was then again ordered that the debtor pay the creditor the sum of $15,321.On 26 March 1998 the present petition was presented.It was served on 9 April 1998.”

We adopt the definitions used by Beaumont J in this passage.

Before Beaumont J the petition was opposed on a number of grounds but he found it necessary to deal only with that based on subs 40(1)(g) of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”). That paragraph provides that a debtor commits an act of bankruptcy if a creditor who has obtained against a debtor “a final judgment or final order” has served on the debtor a bankruptcy notice which has not been complied with in accordance with the requirements of the paragraph. The paragraph contains an exception “being a judgment or order the execution of which has not been stayed”.

Before Beaumont J it was contended for the appellant that there was no “final judgment or final order” because the relevant order of the Tribunal had been stayed by the purported order for rehearing made on 29 January 1998. For the respondent it was contended such order could have had no effect because the Tribunal lacked jurisdiction to make it under subs 25(1) of the Act in that the application was not filed within the fourteen day time limit provided for in that sub‑section. Therefore, the respondent submitted to Beaumont J, neither on the issue nor the service of the bankruptcy notice was there any order staying the final judgment or order registered in the Sutherland Local Court.

Beaumont J accepted, and it is not here in contention, that the exception in subs 40(1)(g) is not to receive a narrow interpretation so that the exception is to be taken as also speaking of a situation where, under the general law, the person issuing the notice was not in a position to issue execution on the judgment or order. Beaumont J supported this by reference to the cases cited in McDonald, Henry & Meek, Australian Bankruptcy Law and Practice, C Darvall Q C and N T Fernon Eds, 5^th ed, vol 1, 2592.

It followed, in the reasoning of Beaumont J, that if under the general law the appellant as at either 29 January 1998 or 4 February 1998 (being the date of issue and of service respectively of the bankruptcy notice) had been able to show an entitlement to the grant of a stay of execution, he would have held there was no act of bankruptcy established in the present case.

However his Honour, for reasons which will be more fully set out in relation to each of the grounds of appeal, held that that position could not be reached because the application for rehearing had been made out of time and the existence of an application lodged within time was a jurisdictional fact and a condition precedent to the existence of the power to order a rehearing as contained in subs 25(1) of the Act. His Honour also rejected a contention, based on s 12 of the Act, that the course which he took was not open to him.

Power to order rehearing

Subsection 25(1) of the Act provides:

“(1)If a tribunal has decided an issue in dispute in the absence of a party to a consumer claim or a consumer claim has been dismissed under section 24(2), a referee may, on application in the approved form lodged at the registry within 14 days after receiving notice of the decision or the order dismissing the claim, order the claim to be reheard if satisfied that there was sufficient reason for the party’s absence.”

The effect of an order for rehearing is set out in subs 25(4) which reads:

“(4)Whenever a consumer claim is ordered to be reheard:

(a)the registrar must serve on each of the parties to the claim a notice of the order and of the time and place of the rehearing, and

(b)the order of the tribunal made at the previous hearing ceases to have effect unless restored in accordance with subsection (5).

Subsections 25(5) and (6) makes provision for the Tribunal to order such restoration in the event of non‑appearance by the party applying for the rehearing.

It is the application of subs 25(4) which the appellants case relied upon before Beaumont J to support the contention the Tribunal’s order for rehearing made on 29 January stayed the execution of the final judgment or final order.

Interpretation of statutory power

Beaumont J considered the referee’s power in subs 25(1) of the Act to order a rehearing was conditioned upon the existence of a claim made within time. In his view this was a “jurisdictional fact in that sense”.

He was therefore of the view that notwithstanding the Tribunal had purported on 29 January 1998 to order a rehearing, any application for a stay would have been refused. Accordingly he concluded that the requirements of the exception of subs 40(1)(g) of the Bankruptcy Act were not satisfied either at the date of issue or service of the bankruptcy notice.

Beaumont J cited in support David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265. In David Grant three companies upon which statutory demands had been served by a creditor failed to apply to set aside the demands within twenty-one days of service.  Section 459G of the Corporations Law (Vic) provided that such an application “may only be made within twenty-one days” after the service of the demand.  The High Court held that s 459G defined the jurisdiction of the court to consider such an application.  Gummow J, with whom the other members of the Court agreed, said at 276-7:

“In providing that an application to the court for an order setting aside a statutory demand ‘may only’ be made within the twenty‑one day period there specified and that an application is made in accordance with s 459G only if, within those twenty‑one days, a supporting affidavit is filed and a copy thereof and of the applications are served, sub-ss (2) and (3) of s 459G attach a limitation or condition upon the authority of the court to set aside the demand.In this setting, the use in s 459G(2) of the term ‘may’ does not give rise to the considerations which apply where legislation confers upon a decision‑maker an authority of a discretionary kind and the issue is whether ‘may’ is used in a facultative and permissive sense or an imperative sense (Ward v Williams (1955) 92 CLR 496 at 505‑506; Commissioner of State Revenue (Vict) v Royal Insurance Australia Ltd (1994) 182 CLR 51 at 63, 84‑85, 97‑98).Here, the phrase ‘[a]n application may only be made within 21 days’ should be read as a whole.The force of the term ‘may only’ is to define the jurisdiction of the court by imposing a requirement as to time as an essential condition of the new right conferred by s 459G.An integer or element of the right created by s 459G is its exercise by application made within the time specified.To adapt what was said by Isaacs J in The Crown v McNeil (1922) 31 CLR 76 at 100‑101 (See also (1922) 31 CLR 76 at 96, per Knox CJ and Starke J and Australian Iron & Steel Ltd v Hoogland (1962) 108 CLR 471 at 488‑489, per Windeyer J), it is a condition of the gift in sub‑s (1) of s 459G that sub‑s (2) be observed and, unless this is so, the gift can never take effect.The same is true of sub‑s (3).”

For the appellant it is contended that subs 25(1) of the Act does not contain words such as “may only be made within”. It is submitted that the absence of those or like words predicates the existence of the power of the referee to order a rehearing notwithstanding the failure of the appellant to lodge an application in the approved form (or at all) at the registry within the time limit set by subs 25(1).

The contentions for the appellant on the issue of interpretation of subs 25(1) commence with the submission that the jurisdictional fact doctrine should no longer form part of Australian law: M Aronson and B Dyer, Judicial Review of Administrative Action, LBC Information Services 1996 at pp 2270-271 and Crowell v Benson (1932) 285 US 22 at 54-63. However it was later conceded for the appellant that the High Court in Australian Heritage Commission v Mount Isa Mines Ltd (1997) 187 CLR 297 and in Re McJannet; Ex parte Minister for Employment, Training and Industrial Relations (Qld) (1995) 184 CLR 620 did not question whether or not the doctrine is part of Australian Law, nor were submissions made in those cases to that effect. The appellant maintains the submission only formally in this Court to the extent that the High Court has not ruled on the question and has, to date, implicitly accepted it as part of Australian law. In our opinion, for reasons which will be developed, we do not consider that the doctrine plays any part in the resolution of this appeal.

It is also submitted in the alternative for the appellant that a general presumption operates against characterising certain issues as jurisdictional facts unless the legislative intention in that regard is clearly expressed:  Australian Heritage Commission at 362; Re McJannet at 207.  It is conceded for the appellant there is no explicit statement in the authorities to the effect that a general presumption operates against the characterisation of statutory provisions as jurisdictional facts.  Nevertheless the submission is put on the basis that the common law as outlined in these authorities can be construed as providing such a “general presumption”.  It is submitted that such an approach would not be inconsistent with the majority of the High Court in Emanuelev Australian Securities Commission (1997) 188 CLR 114, especially at 147 per Kirby J. Again, because we consider the issue on this appeal falls to be resolved as a matter of statutory interpretation without reference to the jurisdictional fact doctrine, it is not necessary to consider these submissions further.

In further development of the same line of submission it is contended for the appellant that the true effect of the words “on application in the approved form lodged at the registry within fourteen days after receiving notice of the decision or the order dismissing the claim” as they appear in subs 25(1) of the Act should have been seen by Beaumont J as indicating the procedure to be followed by persons applying for re-hearing of consumer claims. It is submitted that procedural matters in inferior courts, such as time limits and locus standi rules, have usually been treated as non-jurisdictional.

The principal authority relied on for the appellant in support is Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369 at 391. There Dixon J, with whom Evatt and McTiernan JJ agreed, said:

“It cannot be denied that, if the legislature see fit to do it, any event or fact or circumstance whatever may be made a condition upon the occurrence or existence of which the jurisdiction of a court shall depend.But, if the legislature does make the jurisdiction of a court contingent upon the actual existence of a state of facts, as distinguished from the court’s opinion or determination that the facts do exist, then the validity of the proceedings and orders must always remain an outstanding question until some other court or tribunal, possessing power to determine that question, decides that the requisite state of facts in truth existed and the proceedings of the court were valid.Conceding the abstract possibility of the legislature adopting such a course, nevertheless it produces so inconvenient a result that no enactment dealing with proceedings in any of the ordinary courts of justice should receive such an interpretation unless the intention is clearly expressed.”

See also Latham CJ at 374 and Starke J at 385.

Parisienne was a case where a writ of prohibition was refused where a Court of Petty Sessions held it had jurisdiction because time limitations imposed had not been exceeded.  The distinction was drawn between want of jurisdiction and the manner of its exercise.  A case involving the former is one where the decision was of no effect; a case involving the latter is one where the decision stands until set aside by some other procedure, appeal or other prerogative writ.

It is correct, as the submissions for the appellant contend, that among the decisions in which Parisienne has been applied are decisions holding the time limits in legislation should not be construed as matters of jurisdiction:  Grzybowicz v Smiljanic (1980) 1 NSWLR 627; Ex parte Hulin; Re Gillespie (1965) 65 SR (NSW) 31; and Adams v Chas S Watson Pty Ltd (1935) 60 CLR 545. However we note, as contended for the respondent, that Parisienne played no part in the resolution of David Grant and little part in other relevant decisions.  In Australian Heritage Commission it was only referred to by the High Court in summarising the Commission’s submissions.  In Re McJannet it was only cited as the source of the observation that a court may be empowered to determine the facts upon the existence of which its jurisdiction depends and provided those facts do not mark the constitutional limits of the power to confer jurisdiction, prohibition will not ordinarily lie to correct a wrong determination:  at 207 per Brennan CJ.  In Project Blue Sky Inc v Australian Broadcasting Authority (1998) 72 ALJR 841 at 860 it was referred to as one of the sources of the traditional view that courts have distinguished between acts done in breach of essential preliminary conditions to the exercise of a statutory power or authority and acts done in breach of a procedural condition to the exercise of a statutory power or authority, the former requiring mandatory compliance.

For the respondent it is submitted that as David Grant is the most recent pronouncement of the High Court on the subject of a temporal requirement defining the jurisdiction of a court, it is to be treated as having impliedly overruled Parisienne.  As we do not consider that the principle in Parisienne is the principle applicable for resolution for this appeal, it is not necessary for us to rule on that submission.

The reason why we do not consider Parisienne contains the relevant principle is that where, as here, the matter arises in bankruptcy the question is different.  Ultimately the question will be whether the debt (in the form of a judgment) upon which the sequestration order is to be based, is a true debt.  The question is not one of form but one of substance.  The distinction is important.  To illustrate it, we would take the example used by Latham CJ in Parisienne (at 377).

“Justices have jurisdiction to hear complaints for the recovery of certain debts.The law so provides.The law also provides that such debts shall not be recoverable unless the proceeding is commenced within six years after the cause of action arose.The justices will act wrongly if they make an order for a complainant either in a case where there is no debt or in a case where the proceedings are out of time.But they have jurisdiction to determine (subject to such review as the law provides) whether or not there is a debt.”

In bankruptcy, the issue is not the choice between prerogative writ or appeal but rather whether there is a real debt. There would be no real debt if a judgment was based upon an order liable to be set aside on an appeal or prerogative writ other than prohibition anymore than there would be a real debt if the judgment were set aside or liable thus to be set aside by means of a writ of prohibition. The issue before Beaumont J was whether it was arguable the exception in subs 40(1)(g) of the Bankruptcy Act could apply because the debt could be stayed. That was a question of the existence of a real debt, not a jurisdictional question.

We also consider that the issue in this appeal is not to be resolved by reference to any distinction between mandatory and directory provisions.  In Project Blue Sky at 860 it was said that such classifications had outlived their usefulness because they deflect attention from the real issue which is whether an act done in breach of the legislative provision is invalid, the classification being the end of the inquiry, not the beginning.

In our view the correct approach to the resolution of this appeal - as submitted additionally on behalf of the appellant and also on behalf of the respondent - is to have regard to the language of the relevant provision and the scope and object of the whole Act:  Project Blue Sky at 860‑861. This involves also having regard to the purpose of the Act.

Commencing with the words of the subsection itself, it is submitted for the respondent that unless the words imposing the time limit are interpreted to the same effect as that given to them by Beaumont J, there would be no purpose in having them there. This submission takes as its starting point the submission for the appellant to the effect that the way the subsection should operate, interpreted procedurally, is to allow the referee to consider the circumstances in which any application is lodged outside the time limit when considering his or her satisfaction that there was “sufficient reason” for the party’s absence on the occasion of the rehearing, it being common ground that a referee will resolve the application for rehearing in the absence of the parties. It is said in support that the existing discretion in subs 25(1) would allow such circumstances to be so considered: Jet 60 Minute Cleaners Pty Ltd v Brownette (1982) ASC 55-203 at 5692 per Glass JA. There is some weight in the respondent’s submission which, more importantly, is enhanced as a matter of first impression by the reading of the subsection itself.

We are required to consider the subsection in the context of other provisions of the same section, and the whole of the Act. The parties were unable to take us to any other provision in the Act with a time limit akin to that appearing in subs 25(1). Section 10(3) precludes the Tribunal from having jurisdiction in respect of a consumer claim made more than three years before the date on which the claim is lodged. That subsection, however, appears in a part and section directed to the jurisdiction of tribunals. The presence of s 12, which provides for the immunity of the Tribunal from judicial review except in limited circumstances, is consistent with the interpretation given to subs 25(1) by Beaumont J. We do not consider anything can properly be made of the absence of any provision for extension of time for compliance with any requirement of the Act.

The legislative history of the subsection offers some instruction.  Legislation to provide for the constitution of Consumer Claims Tribunals was first introduced in New South Wales in the Consumer Claims Tribunals Act 1974 (NSW) (“the 1974 Act”). Subsection 32(2) of that Act provided:

“32(2)Where an issue in dispute has been resolved in the absence of any party to the proceeding, a referee, on application made to the registrar within seven days after the party receives notice of the order made on the consumer claims which gave rise to the dispute, may, if it appears to him that there was sufficient reason for the party’s absence, order that the claim be re‑heard.”

Section 49 of the Act in conjunction with Schedule 2 of the Act repealed the 1974 Act and enacted subs 25(1). Relevantly it will be observed that in subs 25(1), which took the place of the former subs 32(2), the time limit has been increased from seven days to fourteen days and the time commences to run not only from the notice of the order but after receipt of notice of the decision or the order dismissing the claim. The enhancement of the provisions in this way is consistent with the construction for which the respondent contends and which Beaumont J found. It provides a greater margin for compliance by a party to a consumer claim.

Regard is also to be had to the purpose of the legislation. The Act does not contain any express purposive provision. When the 1974 Act was introduced into Parliament, the Minister said in his Second Reading Speech that the system was to provide a “speedy informal and cheap method for the arbitration of disputes … which at the same time preserves the natural rights of the parties concerned”. He also stated that “the procedures laid down are designed to operate with a minimum of expense, formality and delay”: (New South Wales, Parliamentary Debates, Second Reading Speech, Consumer Claims Tribunals Bill, 12 March 1974, pp 1288, 1291). When the Act was introduced the Minister, in his Second Reading Speech, said that in substance the Act would re-enact the 1974 Act with a number of significant amendments following a major review. He said the Tribunals established under the 1974 Act “have provided consumers with an economic, informal and rapid means for resolving disputes with trades relating to goods and services.” (New South Wales, Parliamentary Debates, Second Reading Speech, Consumer Claims Tribunal Bill, 24 November 1987, p 17191).

For the appellant it is submitted that the interpretation of subs 25(1) of the Act arrived at by Beaumont J does not accord with the legislative intention. We are unable to agree. It must be understood that subs 25(1) relates not to a right of hearing but to a right of rehearing in circumstances where a party to a consumer claim has not appeared before the Tribunal at a hearing of which that party has had notice. The purpose of the legislature being to provide for the resolution of disputes of the character coming within the jurisdiction of the Tribunal, it is consistent with that intention for Parliament to have provided for a time limit on applications following the failure to attend such a hearing. The objectives of a speedy informal and cheap method of resolution of such disputes could be vitiated if the absent party had an unrestricted right to seek a rehearing, even if the exercise of that right were conditioned upon the exercise by the Tribunal of a discretion.

For the appellant it is submitted that nevertheless the result arrived at by Beaumont J would apply harshly in the case of a party only slightly out of time in lodging the application for rehearing.  It is said that such harshness is inconsistent with the liberal and beneficial approach to what should be viewed as a remedial subsection:  Bull v Attorney‑General (NSW) (1913) 17 CLR 370 at 384; R v Kearney; Ex parte Jurlama (1984) 52 ALR 24 at 28; and Zangzinchai v Milanta (1994) 125 ALR 265 at 272. The principle referred to in those cases is one applicable in a case of ambiguity in the relevant statutory provision. If we are right in the view we take of the subsection, there is no requisite ambiguity. In any event the beneficial purpose which the subsection is intended to serve includes the legislative purposes to which we have made reference. In our view the interpretation contended for on behalf of the appellant would least serve those purposes. Furthermore the Act only provides for a consumer to be a claimant and it is intended to reform or overcome the behaviour of recalcitrant traders. A construction should be adopted which is beneficial to the consumer, in this case the respondent.

In our opinion the first impression which the subsection gives is supported by reference to the history and purpose of the legislation and thus by the context of the whole Act.  For these reasons we consider Beaumont J was correct in the conclusion which he reached on this point.

Immunity from judicial review

Subsection 12(1) of the Act provides that, except as provided in subs 13(2), the Tribunal is immune from judicial review and no prerogative writ can be granted except as provided in the terms of that section “in respect of a consumer claim heard and determined or to be heard or determined by a tribunal in accordance with this Act or in respect of any ruling, order or other proceeding relating to such a claim”. It is accepted for the appellant that the excepting circumstances in subs 12(2) of the Act are not applicable here. Beaumont J held that no question arose before him of immunity or otherwise from judicial review of “any ruling order or other proceedings relating to such a claim” made before a Tribunal. He said that the question before him was whether the debtor could establish an entitlement to a stay. He was clearly correct in this conclusion. There was no ruling, order or other proceeding of the Tribunal relating to a claim in issue under review by him.

Collateral challenge

For the appellant it is submitted that the respondent’s submissions before Beaumont J, being submissions directed to the situation where the Court may have decided to look behind the judgment, were a collateral challenge to the jurisdiction of the Tribunal to order a rehearing, independent of the provisions of s 12 of the Act. It is submitted that in the circumstances the Court should not have entertained the submissions unless the respondent had raised the issue of the Tribunal’s jurisdiction to order a rehearing before the Tribunal itself. No such point having been raised before the Tribunal subsequent to the order for rehearing made on 29 January 1998, when the rehearing took place on 6 March 1998 that issue did not arise although both parties were present.

For the respondent it is correctly submitted that there was no opportunity to bring any challenge on the making of the rehearing order (no parties being present) and that it was inappropriate and unnecessary on the rehearing as the Tribunal lacked power to reinstate the original award.  The original order, being void and a nullity, could safely be ignored by the respondent:  Mason-Jones v Jones (1987) 11 NSWLR 583 at 592.

The appellant’s contention in respect of collateral challenge is said to be supported by Federal Airports Corporation v Aerolineas Argentinas (1997) 76 FCR 582. However, there is here no basis whatsoever for the application of the principles of collateral attack either on the basis of that decision or otherwise. Beaumont J was considering whether a creditor’s petition should be granted under the Bankruptcy Act. As he said in his reasons, he engaged in a “hypothetical exercise” in order to consider whether any application for a stay of proceedings would have been refused. His inquiry was directed to the reality of the debt. There was no collateral attack on the decision of the Tribunal and there is no foundation for this ground of appeal.

Waiver or estoppel

Finally, it is submitted for the appellant that the respondent had either waived any objection to the jurisdiction of the Tribunal to order a rehearing by failing to raise the point before the Tribunal at any time subsequent to 29 January 1998 (Commonwealth v Verwayen (1990) 170 CLR 394) or, by his conduct in failing to raise the point, is estopped from alleging the Tribunal order for rehearing was a nullity. It is said the acceptance of the respondent’s allegation that the rehearing was a nullity would involve an unjust departure from an assumption of fact which the respondent had caused the appellant to accept for the purposes of these proceedings – namely, that the order for rehearing was valid and no objection to the jurisdiction of the Tribunal was taken: Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641; cf Multicon Engineering Pty Ltd v Federal Airports Corporation (Court of Appeal (NSW), 15 October 1997, unreported at 21).  The detriment which the appellant relevantly claims to have suffered was that no question of jurisdiction to grant the rehearing having been raised, a contested hearing occurred before the Tribunal.

The appellant applied to have the judgment of the Local Court set aside but the application was withdrawn after judgment was delivered by Beaumont J.  It was not until after 1 May 1998 that the respondent became aware the Local Court judgment was to be attacked.  The respondent’s contention that the order for rehearing was a nullity was raised thereafter in submissions before Beaumont J.  There is no evidence of the respondent having induced a relevant assumption, or of detriment or waiver.

Conclusion

For these reasons we consider that the appeal should be dismissed and that, in the normal course, the appellant should pay the respondent’s costs.

I certify that this and the preceding twelve (12) pages are a true copy of the Reasons for Judgment herein of the Honourable Justices Hill, R D Nicholson and Emmett

Associate:

Dated:             9 December 1998

Counsel for the Appellant:	I Mescher
Solicitor for the Appellant:	Lyon Lawfirm
Counsel for the Respondent:	D Francis
Solicitor for the Respondent:	Watkins Tapsell with David Francis & R J Gilleland
Date of Hearing:	11 November 1998
Date of Judgment:	9 December 1998