O’Shannassy v Sarina

[2024] FCA 378

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 damages.

5. The programming orders were made on 23 February 2024. They provide for the respondents before me (that is, the applicants below) to file and serve any additional material and submissions on the assessment of damages by 8 March 2024 and for the applicant before me to do likewise by 30 April 2024 on the basis that the assessment would be done on the papers.

6. Mr O’Shannassy, the applicant, has explained that it is those orders that he wishes to, in effect, have stayed by staying the proceeding below. That is on the basis that if he succeeds in the appeal with the result that the debt is provable in bankruptcy, the effort put into the assessment below would have been wasted.

7. Assuming that I have power to stay the proceeding below under s 29(1) of the Federal Court of Australia Act 1976 (Cth), a point on which I was not addressed, I am not persuaded that a stay should be ordered. The respondents have already complied with the programming orders below. All that remains to be done by the parties in the proceeding below is for the applicant to file and serve any additional materials and submissions on the assessment of damages. An application was made by the applicant to the primary judge to stay that proceeding pending the application for leave to appeal (and the appeal if leave be granted in this court) but that was refused.

8. The conduct of the primary proceeding is principally a matter for the primary judge. There is very little burden on the applicant in having to fulfil the outstanding requirement on him in that proceeding. Any saving of the time and effort of the primary judge by the granting of a stay was no doubt considered by his Honour when he himself refused a stay, so I take no account of that. 

9. In the circumstances, I dismiss the applicant’s application for a stay of the proceeding below, and subject to either the applicant or the respondents applying for a variation to this order, I order that the costs of the application for a stay be costs in the application for leave to appeal. 

I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Stewart.

Associate:

Dated:       16 April 2024