Mulrooney, R.F. v R & I Bank of Western Australia Ltd

[1994] FCA 239

234 1 9F

JUDGMENT NO. ....., ,,,,, ,,,,,, W,,,, ,,,,,,

IN THE FEDERAL COURT OF AUSTRALIA )

GENERAL DIVISION

BANKRUPTCY DISTRICT OF THE	NO. WP 831 of 1993
STATE OF WESTERN AUSTRALIA

RE :  ROBERT FRANCIS MULROONEY

Debtor

EX PARTE :  R & I BANK OF WESTERN AUSTRALIA

CORAM:  HILL J

PLACE	:	PERTH
DATED	:	29 MARCH

EX TEMPORE REASONS FOR JUDGMENT \AT- p<$'34

The R & I Bank of Western Australia Limited ("the Bank") applies to the Court for orders, inter alia, that the order of the District Registrar made on 8 November 1993 dismissing the Bank's petition presented against Mr Mulrooney be set aside. In the alternative, the Bank applies to review the decision of the District Registrar, notwithstanding that the period of 21 days, as stipulated in r.158, Bankru~tcv

Rules, has not been complied with.

made or petition presented by himself. At the outset I	whom the Bank is but one, before any sequestration order is
indicated that I was not inclined to grant Mr Mulrooney an adjournment on the question of whether or not the District Registrar's order should be set aside, but I would adjourn the hearing of the petition in the event that such an order was made. I did this, in part, because of the fact that additional costs would be incurred by merely adjourning the legal question. In any event, there was no dispute by Mr Franco Romanin, a senior solicitor in the employ of the Bank, as to the facts upon which the Bank's application was made. These facts are set out in an affidavit of Mr Romanin.
It appears that the Bank presented a petition against Mr Mulrooney in June 1993. That petition came on for hearing before the District Registrar on 8 November 1993. Prior to the hearing, an agreement was reached between Mr Mulrooney and the Bank whereby Mr Mulrooney agreed to pay to the Bank $140 per month over a period of 3 years upon the condition that the petition be dismissed by consent. Accordingly, at the hearing on 8 November 1993, the petition
was dismissed by consent.
Subsequently, Mr Mulrooney failed to make any repayment pursuant to the agreement. In these circumstances the Bank submits that the Court has power to set aside the order, or alternatively to rescind it under s.37(1) of the Bankruptcv Act 1966 (Cth) ("the Act"). It is said that the power to rescind is the same as the power to set aside, that the discretion of the Court is general and unfettered and should be exercised in the present case. In support of the submission that s.37 gave power, reference was made to the decision of Lee J in Re Uratoriu: Ex Darte MS McLeod Limited (15 June 1989, unreported), a case which concerned the Court's power to rescind, vary or discharge or suspend an order made under s.52(5) of the Act.
I do not find it necessary to decide whether the Court does have power under S. 37 (1) or S. 30, absent a review of the Registrar's decision, to set aside or rescind an order dismissing a petition in a case such as the present. There can be no doubt, as cases such as Cameron v (1944) 68 CLR 571 make clear, that an order of a court can properly be rescinded in cases involving fraud, or cases where, for example, a party, having a necessary right to be heard, has not been notified of the hearing. The present is not such a case.
I should say that if power to rescind did exist in the case of an order, made by consent, following an agreement to pay money, then the present would clearly be an appropriate case to exercise that power. The simpler course seems to me to deal with the matter as a matter of review of the Registrar's discretion. The failure to act within 21 days in the present case is a matter which should be excused, having regard to the fact that default only became apparent one month after the making of the order dismissing the petition, as the first instalment was only required to be paid on that day. Indeed it was no doubt appropriate for the Bank to let some time pass to afford Mr Mulrooney the opportunity to bring the payments up to date if he was able to.

Mr Mulrooney, the debtor, appears in person having not sought legal representation following the service of the application upon him. No doubt part of the explanation for his not having done so was the cost which he would incur and he desires to be able to put an offer to his creditors, of

I have dealt previously, in Re Brindle: Ex ~arte FB

& FA McMahon Ptv Ltd (1992) 108 ALR 470, with the Court's

power to act on a review of a Registrar's decision. A review operates as a re-hearing and has regard not merely to the evidence that was before the Registrar, but to the evidence as it exists at the date the review takes place. For present purposes that means that I can, in deciding whether to dismiss the petition, have regard to two matters. The first that the dismissal occurred by consent and the second, and more important matter, being that Mr Mulrooney has defaulted in the agreement which was a condition of the petition being dismissed.

In these circumstances I would set aside the decision of the registrar to dismiss the petition and the consequence of that order would be that the petition remained on foot, yet to be determined.

I make the following orders:

(1) I give leave to the applicant to amend its application to include an application to the Court to review the decision of the District Registrar made on 8 November 1993.

(2) I would excuse compliance with the provisions of r.158

requiring such an application to be brought within 21

days from the date of the Registrar's order.

(3) I would set aside the decision of the District Registrar

made by consent to dismiss the petition against the

debtor.

(4) The costs of the application to be costs in the petition.

(5) I direct that the petition be set down for hearing before a judge of the Court on a date to be advised to the parties. I will make such directions as the parties desire me to make as to the further conduct of the proceedings.

(6) I order that Mr Mulrooney advise other creditors of the date to give them an opportunity should they desire so to do to be present.

(7) I order the debtor, on or before 19 April, to file and serve any notice of opposition to the petition together with any affidavit evidence upon which he might propose to rely.

I certify that this and the
preceding four (4) pages
are a true copy of the Reasons
for Judgment herein of his Honour
Mr Justice Hill.

Associate: &

Date: 2 May 1994

Mr Robert Francis Mulrooney appeared for himself.

Solicitors for Creditor:	Garth Berg
Date of Hearing:	29 March 1994
Date Judgment Delivered:	29 March 1994