O’Shannassy v Sarina

FEDERAL COURT OF AUSTRALIA

O’Shannassy v Sarina [2024] FCA 378  

File number:

NSD 220 of 2024

Judgment of:

STEWART J

Date of judgment:

12 April 2024

Catchwords:

PRACTICE AND PROCEDURE – application for a stay of proceeding in the Court below pending application for leave to appeal – application dismissed

Legislation:

Bankruptcy Act 1966 (Cth) s 82, 82(2)

Federal Court of Australia Act 1976 (Cth) s 29(1)

Cases cited:

Sarina v O’Shannassy [2021] FCA 1649

Division:

General Division

Registry:

New South Wales

National Practice Area:

Commercial and Corporations

Sub-area:

General and Personal Insolvency

Number of paragraphs:

9

Date of hearing:

12 April 2024

Counsel for the Applicant:

The Applicant appeared in person

Solicitor for the Respondents:

V Kalantzis of Kalantzis Lawyers

ORDERS

NSD 220 of 2024

BETWEEN:

JOHN O'SHANNASSY

Applicant

AND:

CLINTON SARINA

First Respondent

MARTIN GREEN

Second Respondent

ORDER MADE BY:	STEWART J
DATE OF ORDER:	12 APRIL 2024

THE COURT ORDERS THAT:

1.The applicant’s application for a stay of the proceeding below be dismissed.

2.The costs of the application for a stay be costs in the application for leave to appeal.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
(delivered ex tempore)

STEWART J:

1. The immediate application before me is an informally brought application by the applicant to stay proceeding SYG1339/2018 in the Federal Circuit and Family Court of Australia (Division 2), pending the determination of his application for leave to appeal, and his appeal if leave be granted in this court.  The application for leave to appeal arises in the following way. 

2. The respondents before me in the underlying proceeding seek damages for defamation against the applicant before me. At first instance, the respondents were unsuccessful and their proceeding was dismissed. On appeal to this Court, the respondents were successful: Sarina v O’Shannassy [2021] FCA 1649. The Court determined that the applicant is liable for damages in defamation to the respondents and remitted the matter to the court below for the assessment of damages.

3. The estate of the applicant was then sequestrated on his own petition. An issue then arose as to whether the claim for damages was provable in the applicant’s insolvent estate. On 9 February 2024, the primary judge dealt with that issue as a preliminary issue, characterising it as whether any damages assessed in accordance with the orders of this Court on appeal would be a debt provable in the applicant’s bankruptcy.

4. The primary judge reasoned that defamation is a tort, and that damages for defamation are uncertain and depend on an assessment of the loss suffered, and so are unliquidated. With reference to s 82(2) of the Bankruptcy Act 1966 (Cth), his Honour reasoned that such damages are neither a debt, nor a liquidated demand. That being so, they are not a provable debt under s 82 of the Bankruptcy Act. The primary judge made no orders in consequence of that conclusion, other than programming orders for the assessment of…