Pearce v Howard - [2008] FMCA 1032

FEDERAL MAGISTRATES COURT OF AUSTRALIA

PEARCE v HOWARD

[2008] FMCA 1032

BANKRUPTCY – Hearing of Petition – where debtor seeks adjournment because of non response to notice to produce by creditor – where debtor requires creditor for cross examination – where creditor wishes to recall debtor to give evidence to establish if she is already bankrupt – offer of certificate under s.128 Evidence Act 1995 – where debtor is found to have been made bankrupt under another name.

Evidence Act 1995, s.128
Civil Procedure Act 2005
Uniform Civil Procedure Rules 2005
Federal Magistrates Court (Bankruptcy) Rules 2006

Applicant:

GEOFFREY PEARCE

Respondent:

ELEANOR (ELANOR) HOWARD

File Number:

SYG 509 of 2008

Judgment of:

Raphael FM

Hearing date:

15 July 2008

Date of Last Submission:

15 July 2008

Delivered at:

Sydney

Delivered on:

15 July 2008

REPRESENTATION

Solicitors for the Applicant:

Goldsmith Laywers

For the Respondent:

In person

ORDERS

Application dismissed.
Applicant's costs to be paid from the bankrupt estate of Elanor (Eleanor) Howard without priority and to be taxed if not agreed pursuant to Federal Magistrates Court (Bankruptcy) Rules 2006.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 509 of 2008

GEOFFREY PEARCE

Applicant

And

ELEANOR HOWARD

Respondent

REASONS FOR JUDGMENT

In this matter, which is the hearing of a petition, the debtor has filed a Notice of Intention to Oppose supported by an affidavit originally sworn on 9 May 2008 but refiled on 17 June 2008, together with some submissions. She sought an adjournment on the grounds that yesterday she sent a facsimile letter, Exhibit 1, to the creditor's solicitors which contained a Notice to Produce and, inter alia, a request that the petitioning creditor be available for cross-examination. The creditor objects to the adjournment. He says in relation to the Notice to Produce that there is no evidence before me that any particular document was sent to the solicitors and it is true that Ms Howard, the debtor, has not produced the Notice to Produce, or a copy of it, that was allegedly sent. She says that it is in her home. It is certainly not here.
Mr Goldsmith argues that I should not be satisfied that the creditor has failed to comply with the Notice to Produce without seeing it. To the extent that the document may contain a request for documents that may not be relevant to these proceedings there is force in his argument. Without the Notice to Produce I am unable to make any decision upon it. Whilst I am prepared to accept that a document of three pages was sent by fax to Goldsmiths Lawyers yesterday from Ms Howard I do not know what that document is and in the absence of the document I would be disinclined to grant an adjournment on the basis that it has not been responded to.
The other ground upon which Ms Howard requests an adjournment is that Mr Pearce, the judgment creditor, is not here to be cross-examined on his Affidavit of Debt. Mr Pearce appears to have sworn the Affidavit of Debt on 9 May 2008 in England. I do not know whether he is still there or whether he has returned to Scoresby in Victoria where he claims to live. I am satisfied that he was asked to come.
Mr Goldsmith argues that the debt upon which a creditor relies for the purposes of the petition is a debt in respect of which there is a judgment of the Supreme Court of New South Wales and interest on that debt. The existence of the judgment is a fact. A copy of the document is annexed to the Bankruptcy Notice. The existence of a debt for interest would follow from the provisions of the judgment under the Civil Procedure Act 2005 and Uniform Civil Procedure Rules 2005. To the extent that the creditor was going to be cross-examined about things that went behind the debt I would have normally been prepared to grant the adjournment but I would have needed some evidence from the debtor that the debt the judgment evidences is not truly due and payable.
The evidence which we have in the affidavit of 9 May, filed on 17 June, does not go into this matter. Paragraph 6 states:
“These proceedings in bankruptcy refer to default judgments obtained by the Applicant's Solicitors at a time the respondent was medically ill and also at a time the Respondent believed that the matter was being mentioned “by consent”. In fact the applicant's Solicitor/Counsel proceeded to a hearing of the matter and with documents not received by the Respondent until after the default judgment had been obtained; but upon which the Court relied to make its ex parte judgment.”
There is no evidence as to why the respondent debtor believed that the matter was being mentioned by consent if what she is referring to is the original judgment. If what she is referring to is the Bankruptcy Notice there is a letter attached dated 4 December 2007. It is addressed to a person called Victoria O'Tavski. I am not sure who she is. There is a heading, "SYG3567 of 2007" which I suspect is the file opened in this court in relation to the application to set aside the Bankruptcy Notice. The letter states that the applicant is sick and she apologises for not being able to attend the court personally. The debtor does not give evidence as to what occurred after that letter or why the Bankruptcy Notice was not set aside.
The creditor's petition, on the other hand, indicates that on 4 December 2007 the application to set aside the Bankruptcy Notice was dismissed, probably because of Ms Howard's non-attendance, but it indicates also that she applied on 24 December 2007 for a review of that decision and the application was also dismissed on 26 February 2008. Ms Howard told me from the bar table that she was not present on that occasion either. Again, I have no evidence about this or why she was not there.
The only document I have that shines some light on the possible cross-examination of Mr Pearce is some submissions filed by Ms Howard on 17 June. She refers to terms of settlement between the parties. She refers to part-performance of the agreement by the payment of $250,000. She refers to a condition of the agreement that the default judgment, presumably the one that founded this petition, should be set aside.
These are allegations made in submissions. They are not supported in any way by any evidence. At the very least I would have expected an affidavit from Ms Howard and perhaps some documentation establishing the agreement and the payment. Although this is not to say that the payment did not occur, because from what I learnt from the bar table this morning it may well have been made. But whether it was made pursuant to the arrangement that is referred to in the submissions is another matter entirely.
Taking all these matters into consideration and also the fact that the judgment which founds the basis of the petition was entered on 29 September 2006 and no application to set it aside or to appeal it has yet been made I do not propose to exercise my discretion to grant the debtor an adjournment. I propose to proceed with the hearing of the petition.
Before this matter adjourned, Mr Goldsmith, solicitor for the applicant creditor, sought leave to recall Ms Howard to the witness box. It will be recalled that Ms Howard gave evidence in relation to her application for an adjournment on the basis that a Notice to Produce has not been complied with and a witness for the applicant had not attended for cross-examination. I had dealt with that application, given judgment and was in the process of going through with Mr Goldsmith the requirements for the sequestration order.
It transpired that the creditor was unable to produce the Affidavits of Final Debt and Final Search. Mr Goldsmith told me that the reason for this was that he had lately come into possession of information which indicated that Ms Howard might already be bankrupt, albeit under a different name. He asked me to recall Ms Howard to the witness box for the purposes of him asking her some questions about this.
I was initially reluctant to grant that application because Ms Howard had finished giving her evidence and Mr Goldsmith had had an opportunity to ask her questions but had not taken it. However, after giving the matter some further consideration I have come to the view that it is in the interests of the proper administration of justice that the court finds out at as early a stage as possible whether or not Ms Howard is bankrupt and therefore I think she should be recalled.
However, I am also sensible of her rights against self-incrimination although I am not presently confident of any matter in which she might be capable of being prosecuted or subject to a civil penalty. What I propose to do is to recall Ms Howard and to require her to give evidence pursuant to s.128(5) and (6) of the Evidence Act1995 and offer her a certificate which will protect her against the effects of such evidence, although, of course, not from the effects of her giving false evidence.
I will then deal with the matter after that evidence is given on the basis of the evidence that she does give.
Ms Howard was called and I am satisfied from the evidence she gave that she is a bankrupt under the name Elanor Howard. This being the case the application is dismissed and the applicant's costs are to be paid from the bankrupt estate of Eleanor Howard, without priority, to be taxed if not agreed pursuant to Federal Magistrates Court (Bankruptcy) Rules 2006.

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of Raphael FM

Associate:

Date: