FEDERAL COURT OF AUSTRALIA
Nadarajapillai v Naderasa [2015] FCA 1022
Citation: Nadarajapillai v Naderasa [2015] FCA 1022 Parties: PIRAPAKARAN NADARAJAPILLAI v RAVINDRAN NADERASA File number: NSD 923 of 2015 Judge: MARKOVIC J Date of judgment: 15 September 2015 Catchwords: BANKRUPTCY AND INSOLVENCY – stay of sequestration order sought under r 36.08 of the Federal Court Rules 2011 – consideration of relevant principles – arguable point – balance of convenience – bankrupt able to prosecute appeal – balance of convenience not supportive of a stay – stay application dismissed Legislation: Bankruptcy Act 1966 (Cth) ss 5, 37(2)(a), 52(3), 58(1), 60(2), 178
Federal Court Rules 2011 r 36.08Cases cited: Endresz v Australian Securities and Investment Commission [2014] FCA 1139 followed
Kellow v Dudzinski [2003] FCA 238 followed
Nolten v Groeneveld Australia Pty Ltd [2011] FCA 1494 followed
Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65 followedDate of hearing: 7 September 2015 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 24 Solicitor for the Applicant: Mr J M Patel Solicitor for the Respondent: Mr M Campbell of Mark Campbell & Co
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 923 of 2015
BETWEEN: PIRAPAKARAN NADARAJAPILLAI
ApplicantAND: RAVINDRAN NADERASA
Respondent
JUDGE:
MARKOVIC J
DATE OF ORDER:
15 SEPTEMBER 2015
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The applicant’s interlocutory application filed on 6 August 2015 be dismissed.
2.The applicant pay the respondent’s costs of the interlocutory application.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 923 of 2015
BETWEEN: PIRAPAKARAN NADARAJAPILLAI
ApplicantAND: RAVINDRAN NADERASA
Respondent
JUDGE:
MARKOVIC J
DATE:
15 SEPTEMBER 2015
PLACE:
SYDNEY
REASONS FOR JUDGMENT
BACKGROUND
On 17 July 2015, a sequestration order was made against the estate of the applicant by Judge Smith in the Federal Circuit Court. The Official Trustee (Trustee) is the trustee of the applicant’s estate.
The bankruptcy notice served on the applicant was based on a judgment of the District Court of New South Wales which was subsequently the subject of an appeal to the New South Wales Court of Appeal. That appeal was dismissed. The applicant has filed an application for special leave to appeal in the High Court of Australia (High Court). That application has not yet been heard by the High Court.
The applicant failed to comply with the bankruptcy notice and a creditor’s petition was filed by the respondent and later served on the applicant. The applicant filed a notice stating grounds of opposition to the petition in the Federal Circuit Court of Australia. The sequestration order against the estate of the applicant was made by Judge Smith after hearing argument on the notice of opposition.
On 6 August 2015, the applicant filed a Notice of Appeal against the judgment and the order made by Judge Smith. On the same…
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- Case
- [2015] FCA 1022
- Decision Date
CaseChat Overview and Summary
The court first considered whether there was an arguable point on appeal. The bankrupt's grounds of appeal included challenges to the proof of the debt, the exercise of judicial discretion, and the validity of the underlying judgment. The court found that, for the purposes of this application, there was an arguable point to be raised on appeal. The second issue was whether the balance of convenience favoured a stay. The court noted that the appeal, if successful, would not be rendered nugatory in the absence of a stay and that the respondent would suffer prejudice if a stay was granted.
Ultimately, the court dismissed the application for a stay. The court found that the balance of convenience did not support a stay of the sequestration order. The court also ordered the applicant to pay the respondent's costs of the interlocutory application.
Orders
Orders of the court
1. The applicant’s interlocutory application filed on 6 August 2015 be dismissed.
2. The applicant pay the respondent’s costs of the interlocutory application.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Mr Patel submitted that his client’s rights of appeal, namely his special leave application filed in the High Court and his right to pursue the current appeal filed in this Court, both vest in the Trustee upon the sequestration order being made and it is in relation to those matters that the stay is sought. That is, the applicant seeks to prevent the sequestration order from operating in relation to those proceedings. CONSIDERATION The first issue to consider is whether there is an arguable point on appeal. In his Notice of Appeal, the applicant relevantly includes the following grounds:1.The Orders of the Federal Circuit Court … be set aside on the ground that the sequestration order made by the Federal Circuit Court of Australia was wrong and incorrect in so far and in as much as there was no satisfactory proof of the petitioner [sic] creditor’s debt.2.The Federal Circuit Court … was wrong and incorrect in concluding that there was no reason to question whether behind the judgment there was in truth or reality a debt due and owing as alleged for which he obtained his judgment and on which the Bankruptcy Notice is founded, when there was clear overwhelming evidence to the effect that in truth and reality, no debt was due and owing in respect of matters which formed the basis of the judgment and the Bankruptcy Notice.3.The Courts [sic] judicial discretion to accept the judgment of the District Court as satisfactory proof of that debt was not well exercised and has thus resulted in [a] miscarriage of justice. Mr Patel, on behalf of the applicant, elaborated on these grounds setting out the history of the proceedings upon which the bankruptcy notice was founded, including the basis of the appeal to the New South Wales Court of Appeal and the application for special leave to appeal filed with the High Court. Mr Patel submitted that, in summary, it was his client’s case that there was an error in the underlying judgment upon which the bankruptcy notice had been founded. He further submitted that, if the underlying judgment is set aside then it will follow that there will be no debt and the bankruptcy notice will be set aside. Mr Patel also submitted that Judge Smith had erred by not going behind the judgment which founded the bankruptcy notice and testing whether a debt was due from the judgment debtor to the judgment creditor. The solicitor for the respondent, Mr Campbell, submitted that the appeal to this Court is without merit and that the grounds contained in the Notice of Appeal are nothing more than bald assertions. The relevant threshold of arguable point is relatively low: see Nolten v Groeneveld Australia Pty Ltd [2011] FCA 1494 (Nolten) at [29]. In the circumstances, and for the purpose of this application, I am prepared to accept that there is an arguable point to be raised on appeal. That then leaves the question of balance of convenience. In Nolten, Kenny J noted at [30] that:In determining where the balance of convenience lies, relevant considerations include whether the appeal, if successful, will be rendered nugatory in the absence of a stay, and the prejudice to the other party should a stay be granted.