Nassar, A v Advance Bank Australia Ltd
[1995] FCA 341
•12 MAY 1995
CATCHWORDS
BANKRUPTCY - proceedings in connection with sequestration - appeal, review and variation of Order - applicant refused further adjournment to secure legal representation or to obtain file - whether natural justice denied - Bankruptcy Act 1966 s.239.
Sali v SPC Ltd (1993) 116 ALR 625
Maxwell v Keun (1928) 1 KB 645
Walker v Walker (1967) 1 WLR 327
Carryer v Kelly (1969) 90 WN(PT1) NSW 566
Bloch v Bloch (1981) 55 ALJR 701
Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137
Dietrich v R (1992) 177 CLR 292
Williams v Official Trustee in Bankruptcy (1994) 122 ALR 585
ABDO NASSAR v ADVANCE BANK AUSTRALIA LIMITED
NO SG 1 OF 1995
BURCHETT, O'LOUGHLIN & NICHOLSON JJ
ADELAIDE
12 MAY 1995
IN THE FEDERAL COURT OF AUSTRALIA )
SOUTH AUSTRALIAN DISTRICT REGISTRY )
GENERAL DIVISION ) NO SG 1 OF 1995
B E T W E E N: ABDO NASSAR
Appellant
and
ADVANCE BANK AUSTRALIA LIMITED
Respondent
MINUTE OF ORDER
CORAM:BURCHETT, O'LOUGHLIN and NICHOLSON JJ
DATE OF ORDER: 12 MAY 1995
WHERE MADE: ADELAIDE
THE COURT ORDERS THAT:
The appeal be dismissed with costs.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
SOUTH AUSTRALIAN DISTRICT REGISTRY )
GENERAL DIVISION ) NO SG 1 OF 1995
B E T W E E N ABDO NASSAR
Appellant
and
ADVANCE BANK AUSTRALIA LIMITED
Respondent
CORAM: BURCHETT, O'LOUGHLIN and NICHOLSON JJ
DATE:12 MAY 1995
PLACE:ADELAIDE
REASONS FOR JUDGMENT
NICHOLSON J (Delivering the first judgment at the request of the presiding Judge): This is an appeal against an order made on 4 January 1995 whereby pursuant to s239(2) of the Bankruptcy Act 1966 ("the Act"), a composition made in a meeting of creditors of the appellant held on 13 September 1994 was set aside and also whereby a sequestration order was made pursuant to s239(1) of that Act and a creditor's petition against the estate of the appellant.
The grounds of appeal are two-fold. The first is that the trial judge erred in not granting the appellant an adjournment to enable him to collect his file from former solicitors and, secondly, the trial judge erred in not granting the appellant an adjournment to enable him to arrange alternative legal representation.
The order was made as a consequence of proceedings on 21 December 1994 which are referred to as "the relevant proceedings" in each ground of appeal. These proceedings need to be understood in their context. It is sufficient for that purpose to go back to 29 September 1994. On that date there was filed with the Registrar in Bankruptcy an application by the respondent which sought various orders. The first was an order pursuant to s222(2) of the Act declaring that the composition previously referred to was void on grounds relating to voting procedures. Secondly, an order was sought declaring that the composition so made be declared void pursuant to subs224(4) of the Act in that it omitted material particulars. Thirdly, an order was sought pursuant to subs239(2) of the Act, which was in the event the order that was granted. The consequence of the filing of that application was that the respondent sought and obtained an injunction on 28 September 1994 which on 29 September 1994 was extended until further order. On that occasion the appellant was represented by his then firm of solicitors. At the same time further consideration of the application and the associated creditor's petition was adjourned until 10 October 1994.
On 10 October 1994 directions were given that the matters dealt with in the third paragraph of the application be dealt with as a separate issue, described as "the preliminary issue", and be set down for hearing on 12th and 13th December 1994. The balance of the application was stood over. On the occasion of those directions being made, the appellant was represented by the same firm of solicitors.
On 4 November 1994 that firm of solicitors ceased to act for the appellant.
On 7 November 1994 a new firm of solicitors were instructed on behalf of the appellant and filed an application for extension of time for filing of all affidavits in relation to the matters which had been set down for hearing pursuant to the directions previously referred to. On 9 December 1994 the firm of solicitors which made that application lodged a notice that it had ceased to act.
The consequence of this was that on 12 December 1994 the appellant appeared in person before his Honour. He then made application for adjournment for a minimum of three weeks and the reason which he gave in support of that application was that he wished to hire a lawyer who could represent him and give him natural justice. He further supported his application by saying that his prior legal representation had been unable to continue because of lack of money from his view point to pay the solicitors as requested by them. He further stated to the Court on that occasion that he had sought from his brother overseas a substantial sum of money which would enable him to engage a further legal representative.
In the event his Honour concluded that, although facts had not been put forward before him on that date which would justify him in granting an adjournment of the hearing of the preliminary issue, he was, nevertheless, prepared to adjourn that hearing until 21 December on the basis that it would go forward on that date. He did so in the face of the submission from the appellant that he, the appellant, could not do anything before money arrived to enable him to engage a legal practitioner. The appellant, of course, so far as his personal assets were concerned, remained the subject of the injunction to which reference has previously been made.
At the hearing on 21 December 1994 the appellant again appeared unrepresented. He again stated to his Honour that lawyers would not accept instructions to act for him before money arrived and that he could not obtain a copy of his file. He said that there was a fax available, which we are told on the hearing of this appeal was a reference to a fax from his brother, to the effect that money had been sent to him, but the appellant's submission from the bar table is that no money has, in fact, now or then been received. His Honour referred to the fact that opportunity had been given to the appellant to put these matters in place and he asked him to particularise why it was that he wanted the file to look at for the hearing. The appellant responded that there were many letters on it, that they related to Telecom, to American Express, and to letters sent by his solicitor. Those are references to debtors which appear in the statement of affairs, which had been completed by the appellant. His Honour responded to that by stating that it was not surprising to him that there would be correspondence with creditors in that a composition had been offered to them. The hearing then continued and submissions were made on the issues which were subsequently dealt with in the reasons of his Honour.
An opportunity was given in the course of those proceedings for the appellant to address the court, which he did. In the course of that he referred to the fact that the first of his solicitors had made an affidavit which, unfortunately, was on the file which was not in the appellant's hands and which was relevant to the proceedings. His Honour said he was not interested in that and did not want the appellant to worry about it. Subsequently the appellant also made submissions to his Honour indicating that there was evidence relating to the motive of other persons about which he could bring information from his file.
In the course of his delivery of reasons his Honour appears to have been interrupted by the appellant who made some further submissions. The most significant of those was that, again, the statement of affairs was being talked about and that he needed the file to be able to respond to the matters under consideration. In particular, in relation to two substantial debts, namely, of $300,000 and $750,000, there was information relating to them, and he needed both a lawyer and his file to
make submissions concerning the matters which were at that point the subject of his Honour's reasons and findings.
Following the completion of his Honour's reasons, similar submissions were again made by the appellant. In contentions on this appeal the appellant supports his grounds by stating that the prejudice which he has suffered is as follows. Firstly, if he had a lawyer who had seen the file, he would feel satisfied justice had been done, particularly as he had been told by the judge that matters pertaining to the statement of affairs were not to be taken up by him but those matters had, in fact, been referred to in the course of his Honour's reasons. Secondly, evidence that the majority accepting the composition had known of the overseas debts and their availability to them would have been available from the file. Thirdly, the file evidence would disclose that a settlement offer had been made through one of the solicitors, apparently on behalf of the respondent.
The law relevant to the appeal is as follows. So far as the application is an appeal from an interlocutory order, it would be appropriate that leave be granted and there is no necessity to dwell on that aspect. So far as the appeal involves the consideration of whether his Honour appropriately exercised his discretion in refusing to grant an adjournment for either of the two reasons relied upon by the appellant, the law is as follows. It is stated recently in Sali v SPC Ltd (1993) 116 ALR 625. In that decision the majority of the High Court cited Maxwell v Keun (1928) 1 KB 645, to the following effect: that although an appellate court will be slow to interfere with the discretion of a trial judge to refuse an adjournment, it will do so if the refusal will result in a denial of justice to the applicant and the adjournment will not result in any injustice to any other party. The majority regarded that proposition as firmly established, citing Walker v Walker (1967) 1 WLR 327 at 330, Carryer v Kelly (1969) 90 WN(PT1) NSW 566 at 569, and Bloch v Bloch (1981) 55 ALJR 701 at 703. Those authorities and, particularly, Carryer v Kelly (supra) were also relied upon by the minority in that decision. The principles as stated there and the authorities relied upon are those which were also relied upon by the Full Court of this court in Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137 at 146-7.
Before turning to the application of those principles in this particular instance, I refer to the fact that the appellant supported his submissions by a statement that as of right he should be entitled to legal representation. He relied upon the decision of the High Court in Dietrich v R (1992) 177 CLR 292. In that decision the High Court held that the common law of Australia does not recognise the right of an accused to be provided with counsel at public expense. It is important to note that the decision, so far as it provided positively for representation, was limited to criminal proceedings, to a situation usually where there is a serious offence charged, and where representation of an accused is essential to a fair
trial. It does not have any application to the position of the appellant.
The central question therefore, in the application of the authorities which relate to an adjournment, is whether any injustice was done to the appellant in the hearing of 21 December. I am unpersuaded that that is the case. Firstly, the appellant was given in every sense of the words a real opportunity to arrange representation. Then, as now, there is no evidence before the Court that funds have been transferred to the account of a legal representative from the overseas sources which the appellant insists are still available to him. He has not been represented on this appeal.
Secondly, and in my view importantly, the matters which the appellant has pointed to from the file are matters which were not necessarily relevant before his Honour on 21 December 1993. I direct attention in particular to a paragraph in his Honour's reasons where he said that:
"Although the debtor wished to offer an explanation about the insufficiency of his statement of affairs, and to offer a further explanation on some other of the alleged possible assets, that was not the question before [the Court]."
He continued by stating in those reasons that:
"The fact is that the evidence advanced by the applicant creditor shows there is a reason for the investigation, and it was for a trustee if one was appointed to make that investigation, and not for the court."
Thirdly, in relation to the matters pertaining to the two major debts, these were regarded by his Honour as debts of considerable significance in the exercise of his discretion in relation to whether the composition should be regarded as unreasonable. After his consideration of matters pertaining to those he concluded that it was very important in the interests of the creditors as a whole that the possibility of effecting a recovery from one or other of those sources be investigated. In my opinion nothing which the appellant has advanced in relation to those two debts vitiates in any way that conclusion of his Honour or makes it unjust that he so concluded.
There is also the evidence to which the appellant pointed, or wished to point, from his file, of alleged motives of either the respondent or other creditors in relation to him. In my opinion that also, if present, would not create any injustice by either the failure to have legal representations made in relation to it or to be available to the appellant at the given date of 21 December for the reason that it would not vitiate the conclusion that the composition was properly seen to be unreasonable.
In my opinion this is not a case where an injustice has resulted to the appellant either by refusal of an adjournment to obtain his file or to obtain legal representation. I therefore consider that the appeal should be dismissed.
I certify that this and the preceding 8 pages are a true copy of the Reasons for Judgment of his Honour Justice R D Nicholson.
Associate:
Date:
IN THE FEDERAL COURT OF AUSTRALIA )
SOUTH AUSTRALIAN DISTRICT REGISTRY )
GENERAL DIVISION ) NO SG 1 OF 1995
B E T W E E N ABDO NASSAR
Appellant
and
ADVANCE BANK AUSTRALIA LIMITED
Respondent
CORAM:BURCHETT, O'LOUGHLIN and NICHOLSON JJ
DATE:12 MAY 1995
PLACE:ADELAIDE
REASONS FOR JUDGMENT
BURCHETT J: I am of the same opinion. So far as the argument based on the decision of the High Court in Dietrich v R (1992) 177 CLR 292 is concerned, the same proposition was raised in the course of the argument in Williams v Official Trustee in Bankruptcy (1994) 122 ALR 585. It failed in that case and special leave to appeal was refused in the High Court on 17 February 1995. The application for special leave had been presented on the basis that the decision of the High Court in the criminal case Dietrich (supra) applied also in bankruptcy proceedings. Mason CJ is reported in (1995) 4 Legal Reporter page SL3 as saying:
"This case commands no prospect of success whatsoever. The application is therefore refused."
I agree for the reasons that Nicholson J has stated, that Dietrich does not avail the appellant in the present matter either.
I certify that this is a true copy of the Reasons for Judgment of his Honour Justice Burchett.
Associate:
Date:
IN THE FEDERAL COURT OF AUSTRALIA )
SOUTH AUSTRALIAN DISTRICT REGISTRY )
GENERAL DIVISION ) NO SG 1 OF 1995
B E T W E E N ABDO NASSAR
Appellant
and
ADVANCE BANK AUSTRALIA LIMITED
Respondent
CORAM:BURCHETT, O'LOUGHLIN and NICHOLSON JJ
DATE:12 MAY 1995
PLACE:ADELAIDE
REASONS FOR JUDGMENT
O'LOUGHLIN J: I also agree that the appeal must be dismissed. There is nothing further I wish to say.
I certify that this is a true copy of the Reasons for Judgment of his Honour Justice O'Loughlin.
Associate:
Date:
APPEARANCES
Mr Abdo Nassar appeared in person
Counsel for the Respondent: Mr J Cudmore
Solicitors for the Respondent: Ward & Partners
Date of Hearing: 12 May 1995
Date of Judgment: 12 May 1995
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