Pham v ANZ Banking Group Ltd and; Duong v ANZ Banking Group Ltd
[2002] FMCA 49
•19 March 2002
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| PHAM v ANZ BANKING GROUP LTD and DUONG v ANZ BANKING GROUP LTD | [2002] FMCA 49 |
| BANKRUPTCY – Bankruptcy notice – application for extension of time for compliance with Bankruptcy Notice pending appeal to Court of appeal – stay order granted by Court of Appeal set aside due to non compliance with undertaking – whether desirable for bankruptcy court to allow extension of time in the absence of application to Court of Appeal to vary its order – application refused. PRACTICE AND PROCEDURE – whether court should disqualify itself having heard application based upon similar facts and circumstances – court to consider disqualification notwithstanding consent by unrepresented applicant to the matter proceeding – factors to consider. |
Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264 applied
Bankruptcy Act 1966 s 41(6A)
| Applicant: | LUU CONG PHAM |
| Respondent: | ANZ BANKING GROUP LTD |
| File No: | MZ 28 of 2002 |
| Delivered on: | 19 March 2002 |
| Delivered at: | Melbourne |
| Hearing Date: | 19 March 2002 |
| Judgment of: | McInnis FM |
REPRESENTATION
| Applicant: | In person |
| Solicitor for the Respondent: | Ms D Zaknic |
| Solicitors for the Respondent: | Freehills |
| Applicant: | LOC VAN DUONG |
| Respondent: | ANZ BANKING GROUP LTD |
| File No: | MZ 29 of 2002 |
| Delivered on: | 19 March 2002 |
| Delivered at: | Melbourne |
| Hearing Date: | 19 March 2002 |
| Judgment of: | McInnis FM |
REPRESENTATION
| Applicant: | In person |
| Solicitor for the Respondent: | Ms D Zaknic |
| Solicitors for the Respondent: | Freehills |
ORDERS
In application number MZ28 of 2002:
(1)The application be dismissed;
(2)the applicant shall pay the respondent's costs to be taxed in default of agreement pursuant to order 62 of the Federal Court Rules;
(3)The time for compliance with the bankruptcy notice be extended to 4 pm on 2 April 2002.
In application number MZ29 of 2002, I make the following orders:
(4)the application be dismissed;
(5)The applicant pay the respondent's costs to be taxed in default of agreement pursuant to order 62 of the Federal Court Rules;
(6)The time for compliance with the bankruptcy notice be extended to 4 pm on 2 April 2002;
I certify that in relation to each application that it was appropriate for the respondent to engage the services of counsel.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MZ 28 of 2002
| LUU CONG PHAM |
Applicant
And
| ANZ BANKING GROUP LTD |
Respondent
MZ 29 of 2002
| LOC VAN DUONG |
Applicant
And
| ANZ BANKING GROUP LTD |
Respondent
REASONS FOR JUDGMENT
The court has before it two applications. The first of those applications is application number MZ28 of 2002. The second application is application number MZ29 or 2002. They both seek to set aside bankruptcy notices which have been relied upon by the respondent, the ANZ Banking Group Ltd. Both applications contain similar affidavit material and relate to similar background information, facts and circumstances.
It is noteworthy that in relation to both of those applications that the applicants that is Mr Luu Cong Pham in application number 28 of 2002 and Mr Loc Van Duong in application number 29 of 2002 are both unrepresented. Both, however, have been allowed to rely upon the assistance of their younger brother, Kiet Minh Pham, who has also been permitted to act as an interpreter. I am satisfied that in the present case the assistance of the younger brother has indeed enabled both applicants to properly present what are in fact relatively straightforward submissions to this court.
In simple terms, both applicants are appellants in proceedings now fixed before the Court of Appeal in the Supreme Court of Victoria which is an appeal from Supreme Court proceedings before her Honour, Warren J, which have been the subject of a decision and orders made on 13 December 1999. It is common ground that the Court of Appeal has now fixed a hearing date of 27 May 2002 to enable the appeal to be heard for and on behalf of both applicants, amongst others, in the proceedings now before me.
At the commencement of these applications it was agreed by the parties that although there are two applications to which I have referred, that both applications should be heard together. It should also be made clear for the record that at the commencement I indicated to the parties that I had previously been involved in decisions relating to other matters arising out of the Supreme Court proceedings and the Court of Appeal application to which I have referred. In particular, it should be noted that on 17 September 2001 in proceeding number MZ582 of 2001 where Cha Van Pham and Others were the applicants and Lincolns Lawyers Pty Ltd were respondent, I delivered a judgment (2001) FMCA 85.
In that case the applicants had sought to extend the time for compliance with a bankruptcy notice pending appeal to the Court of Appeal. I will refer to that judgment presently as it relates to similar background to the material which is appropriate in the present case. I also brought to the attention of the parties the fact that I had decided a further case in relation to the service of a bankruptcy notice which also appeared to involve parties related to this action, in the matter of Australia and New Zealand Banking Group Ltd v Bha Thi Ha (2002) FMCA 30. That decision was delivered by me on 30 January 2002.
For the sake of completeness I should indicate that on that occasion an application seeking to review a registrar's decision was entertained, though dismissed, and apart from a minor alteration under the slip rule, to an order of a registrar, the orders of that registrar, which involved a sequestration order, were in fact upheld. In the other matter to which I have already referred, delivered on 17 September 2001, I have made orders after considering submissions made, that the application to extend time for compliance with the bankruptcy notice be dismissed.
At the outset of this case I thought it appropriate to alert the unrepresented applicants in particular to the fact that they may seek independent legal advice regarding the possibility of an application to this court that I should disqualify myself on the ground of perceived bias. I indicated that I was prepared to adjourn the matter for that purpose and/or stand the matter down to enable discussions to take place. The court has been greatly assisted by the presence and interpreting services which have been provided by the younger brother of the applicants, namely Kiet Minh Pham. Throughout this case, and indeed the other two cases to which I have referred, he has demonstrated an excellent command of English and ability to understand the issues and it is clear on the face of the documentary material that he has also, whilst not being a solicitor, managed to ensure that appropriate affidavit material has been placed before the court. On this occasion when I raised the issue of a perception of bias, I was assured by Mr Pham that both applicants had understood what I had raised and were content to allow the matter to proceed before me.
I did stand the matter down for a short period of time and requested that those instructions be confirmed by the respondents' counsel in the presence of his instructing solicitor. After a short break, upon resuming, I was advised from the bar table that confirmation had been received that both applicants wished to proceed in this matter before me, notwithstanding the fact that I had earlier decided two cases in related matters.
It is clear to me that the most important of those two matters which I had earlier considered is the matter decided on 17 September 2000 in the matter of Cha Van Pham and Others v Lincolns Lawyers Pty Ltd. In that case I had to consider and analyse, as I have in the present case, the Supreme Court decision of her Honour Warren J to which I have referred, together with the appeal notice and other documents, including an order of the Court of Appeal which had been on 5 May 2000 to which I will refer presently.
It seems to me, however, that where unrepresented applicants do not seek advice or pursue an application to disqualify the court on the ground of a perceived bias, it is still incumbent upon the court to form its own view as to whether it should, as a matter of procedural fairness and natural justice, continue to hear the case in the circumstances which I have described. In my view in the present case the findings I have made in earlier decisions were based upon the material then before the court. The findings, having reviewed the material in the current case in relation to the decision of Warren J, the grounds of appeal to the Court of Appeal and other matters which I had already made findings about on 17 September 2001, are not findings which should and indeed do have any influence on me in the present case to the extent that I make the same findings and would do so regardless of the earlier decision.
To that extent I am satisfied that it is not unfair to the applicants that I should proceed to hear and determine both applications, which as I have indicated, were agreed to be heard together.
It is appropriate therefore that I proceed to indicate in brief terms the nature of each application.
Application MZ28 of 2002
Application number 28 of 2002 by Mr Luu Cong Pham is an application filed on 17 January 2000 seeking an order that the time for compliance with the bankruptcy notice in number VN1842 of 2001 be extended pending what I interpret to be effectively the determination of the Court of Appeal hearing in relation to the matter to which I have referred.
The applicant in that application has relied upon affidavits sworn by him on 17 January 2002 and has also relied in part on other affidavit material, namely the affidavit of Kiet Minh Pham, sworn 4 March 2002 and a further affidavit of the applicant, likewise sworn on 4 March 2002. It is appropriate, in considering the background of both applications before me, that I refer to the first affidavit relied upon by the applicant, Mr Pham, as the contents of that affidavit are similar to, if not identical with the affidavit relied upon by the applicant in application MZ29 of 2002. Mr Pham, in his affidavit sworn 17 January 2002, says the following:
“2.This is a declaration with regards to bankruptcy notice VN1842/01 in the Federal Magistrates Court dated 7th November 2001. I received the bankruptcy notice on the 12th of December 2001.
3.I am seeking an extension of time to comply with this bankruptcy notice on the following grounds:
4.I have filed proceedings in the Supreme Court of Victoria to set aside the judgment in respect of which this Bankruptcy Notice has been issued.
5.I am currently waiting for the Supreme Court of Victoria to hear my case, being proceeding number 2039 of 1998.
6.The hearing date has been repeatedly put back since September 2001, due to the workload of the Supreme Court of Victoria and now may be heard in April/May 2002.
7.I seek the court to grant an extension of time up until the Supreme Court of Victoria hears my case or as long as it is permissible by law.”
As I have indicated, it is common ground in this application and the other application that the hearing date of the Court of Appeal hearing of the appeal by the applicants has now been fixed for 27 May 2002.
Mr Pham also relies upon a second affidavit which he has sworn on 4 March 2002. In that affidavit he states, after omitting reference to his earlier affidavit, the following:
“4.I believe it would be unfair if the ANZ Bank is given the opportunity to declare myself bankrupt, whilst an appeal against the judgement that resulted in the bankruptcy notice being issued, is awaiting trial.
5.If I am declared bankrupt, then the trustee, which will be appointed by the ANZ Bank, will not permit me to proceed with my appeal in the Supreme Court of Appeal. Reason for this being is that it is the trustee's objective to reduce my judgment debt in favour of the ANZ bank by as much as possible from the sale of my assets. By permitting me to take the ANZ Bank to the Supreme Court of Appeal, which would cost the ANZ bank money, it would work against the trustee's objective.
6.Justice Warren’s Supreme Court judgment of December 1999 has resulted in the ANZ bank seizing and selling all possible assets of mine, mainly being the factory at 18 Harper Street Abbotsford, which I have worked so hard for since arriving in Australia in 1982. All I have now is my pride and the possibility of rebuilding my future again.
7.The stigma of being a bankrupt would adversely affect my life. I will find it difficult to find future employment. Relatives, friends and the Vietnamese community will look down on me. My name as a bankrupt would be on a public record forever. My future for at least 3 years as a bankrupt, will be filled with furthermore complications, as I will for example, find it difficult to get financing, rent or travel. The adverse effects of the bankruptcy on me will be irreversible and the damage done permanent.
8.The appeal is the only source of possible vindication that I have against Justice Warren’s judgment of December 1999 and avoidance of being made bankrupt by the ANZ.
9.If the ANZ bank is given the opportunity to declare myself bankrupt now, before the appeal is even given a chance, then I question the practicality of even having a process of appeal in our legal system, when in actual practice, bankruptcy laws can be abused and used as an instrument to prevent unsuccessful litigants from rightfully accessing the appeal process.
10.I seek the Federal Magistrates' Court to at least give my appeal in the Supreme Court of Appeal a chance to proceed, by extending the time for compliance with the bankruptcy notice, until the appeal is heard. If I am granted this, then I am satisfied that I have been fairly treated by the law. If I prove to be successful in my appeal in the Supreme Court of Appeal, then I will find vindication against Justice Warren’s judgement and I would have avoided living life through the anguish, shame and agony as a bankrupt.”
In that same application, MZ28 of 2002, the respondent has relied upon a response filed 19 February 2002 where it seeks orders that the application be dismissed. The respondent has relied upon an affidavit of Glenn Robert Sadler which was sworn on 19 February 2002 and a further affidavit sworn by the same deponent on 4 March 2002. In his affidavit of 19 February 2002, Mr Sadler exhibits the orders made by Warren J on 13 December 1999 and further seeks to exhibit the reasons for her Honour's decision. In addition, the notice of appeal in relation to the appeal from her Honour's decision is exhibited together with orders made by the Court of Appeal on 5 May 2000.
It is appropriate, in my view, in summarising those proceedings, to refer back to the judgment I delivered on 17 September 2001. On that occasion I referred to the orders made by her Honour and in particular referred to the orders made in relation to costs and orders made which of course had the effect of dismissing the claim in entering judgment for the defendants.
In the orders made by the Court of Appeal on 5 May 2000 which are set out as an attachment to exhibit GRS4 of the affidavit of Mr Sadler to which I have referred, the court states:
“Upon the Applicants by their counsel undertaking to the court.
1. To pay to the Respondent bank the total sum of $8,750.00 per calendar month, commencing with the month of May 2000, such payment to be made by 12 May 2000, and thereafter monthly payments in advance on the first day of each month,
2. To take all reasonable steps to expedite the hearing of this appeal”
and then makes orders as follows:
“1.Execution on the judgment of the Honourable Justice Warren given on 13 December 1999, save as to paragraphs 4 thereof, is stayed until the hearing and determination of the appeal or further order.
2.The appeal be taken not to be abandoned.
3.In the event that the Applicants do not make payment of the sum of $8,750.00 by the due date, the order in paragraph 1 of these orders shall deemed to be forthwith set aside.”
Other orders were made by the Court of Appeal which are not relevant to this application.
On the previous occasion I was required to consider, as I am required in this present case to consider, the issue in part at least, of the merit of the appeal to the Court of Appeal. I will return to the principles of law later in this judgment but essentially I am mindful of the fact that in this case, as indeed in the previous case, this court should be very careful not to engage in a process of effectively usurping the role of the Court of Appeal as to the merits of the appeal yet to be decided by that court. It is, however, appropriate at least that the court draw some conclusions about the prospects of success of that appeal and it is at least possible in the present case to draw conclusions about the nature of that appeal.
In my view, the opinion I expressed in the earlier decision which I delivered in September 2001 applies to the present case. It does seem to me, as submitted on a previous occasion by counsel for the respondent, that the appeal essentially seeks to agitate that the decision by Warren J should be overturned and should be overturned in relation to findings of fact by that trial judge. It is clear to me that in cases where there is an appeal to an appeal court, based essentially on agitating issues of fact found by a trial judge, that this court can take note of the well-accepted principles applying to the duty of appeal courts, that in circumstances where findings of fact have been made, the task is often more difficult on appeal than might otherwise be the case, if there was an error of law to be argued before the Court of Appeal. I say no more about it than that and otherwise refer to the comments I made in the decision to which I have referred, delivered in application number MZ582 of 2001, to which I have already referred.
Application MZ29 of 2002
Application MZ29 of 2002 similarly makes application for an extension of time for compliance with a bankruptcy notice. In that case the bankruptcy notice is number VN1843 of 2001. The applicant has relied upon affidavits sworn by him on 17 January 2002, an affidavit also sworn by Kiet Minh Pham on 4 March 2002 and the respondent in that case has similarly relied upon affidavits by Mr Sadler sworn 19 February 2002 and 4 March 2002. Because the content of the affidavits relied upon by the respective parties in that application are similar to, almost identical with, the affidavits to which I have referred in application MZ28 of 2002, I do not intend to repeat the contents of those affidavits.
Counsel for the respondent in the present case referred me to the decision of the Federal Court of Australia in Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264 (Byron’s case). In that case his Honour the late Lehane J had to consider the issue of an extension of time for compliance with a bankruptcy notice. In particular, it is useful to refer to certain passages from that judgment. In my earlier decision in September of 2001, I had simply referred to the head note from that judgment but I think it is appropriate in the present case that I should refer in more detail to the law that his Honour had referred to following the decision in the unreported case of Re Geard ex Parte Reid, a decision of Sheppard J delivered 11 February 2994. That decision, it should be noted, was cited with approval by Lehane J and it is noted in his judgment has also been followed by Whitlam J in the matter of Re Smith, unreported, decision delivered 4 May 1994 from Sackville J and the unreported decision of Agrillo v Codisposlo delivered 16 December 1994.
Byron’s case at page 270 his Honour states the following, after referring to an earlier decision of Ahern's case. His Honour states:
“Evidently her Honour was not referred to Re Geard; Ex Parte Reid (unreported, Federal Court, 11 February 1994), in which Sheppard J took a somewhat different view, or later decisions in which Geard was followed. In Geard an appeal to the Court of Appeal had been instituted from the judgment of the Supreme Court of New South Wales which founded a bankruptcy notice served on the judgment debtor. His Honour refused an application for an extension of time pending the determination of the appeal. His Honour's approach to the way in which the discretion should be exercised appears in the following passage from the judgment”.
His Honour sets out an extensive quotation from that judgment as follows:
“The critical question then is how that discretion should be exercised. As earlier stated, the parties have made, both orally and in writing, detailed submissions concerning the issues which will arise for determination on the appeal and have invited the Court in effect to express a view, provisional though it may be, on the likely outcome of the appeal. To a degree I have felt obliged to look at the matter for myself, but I think it most undesirable that a judge of this Court should in effect undertake some provisional review to determine the correctness or otherwise of the judgment of another court especially when that judgment is under appeal to the Court of Appeal which has jurisdiction to hear appeals in the normal course. I prefer to approach the matter in a different way.
The debtor has not made any application for a stay of proceedings pending the outcome of the appeal. Why he has not done so it not clear to me but the judgment which has been recovered against him is a final judgment and execution upon it has not been stayed it would seem to me to require quite special circumstances before a court exercising jurisdiction in bankruptcy would, in effect, do what has not been done in the court in which the judgment has been obtained by extending the time for compliance with the bankruptcy notice when no application to stay the judgment has been made. If one were to contemplate the taking of such a course, one would usually require evidence of means of the debtor and would wish to consider whether or not it were appropriate to order that security for the amount of the judgment should be provided. Those are matters which a court exercising jurisdiction to stay the execution of a judgment would wish to consider.
A further factor is that this is an application to extend time for compliance with a bankruptcy notice; it is not the hearing of a bankruptcy petition. The refusal of the application will not affect the status of the debtor but it will mean that he, in all probability, will commit an act of bankruptcy. That act of bankruptcy will be available to the petitioning creditors or to any other creditor upon which to base a bankruptcy petition at any time in the period of six months after the act of bankruptcy has been committed. Otherwise the debtor'’ position will remain unaffected by what the Court does.
If the appeal is ultimately dismissed and the judgment stands with the consequence that the bankruptcy proceedings go on, it may be quite important to the petitioning creditor, whoever he or she may be, to the general body of creditors and to the trustee in bankruptcy, that there be, for the purposes of the administration of the bankrupt estate, an act of bankruptcy committed at an earlier time than would be the case if this application were acceded to”.
In that passage which I shall incorporate, it is significant to note that his Honour Sheppard J referred to the principles to be applied as to how the discretion should be exercised by a court considering the issue of whether to extend time for compliance of a bankruptcy notice. It is noteworthy that in that extract his Honour refers to the fact that the debtor had not made any application for a stay of proceedings pending the outcome of the appeal. I should interpolate that that was the same situation that confronted this court in the decision delivered by this court on 17 September 2001. It is different in the present case.
In the present case both applicants have indeed applied for a stay and a stay of proceedings was granted by the Court of Appeal.
Lehane J further states in the Byron decision at page 270 the following:
“… In my view the considerations to which Sheppard J refers indicate that the principles to be applied where the question is whether a petition should be adjourned or dismissed are not necessarily those which should guide the exercise of the discretion to set aside, or extend time for compliance with a bankruptcy notice. The commission of an act of bankruptcy is, undoubtedly, a serious matter; it is, however, of a different order of gravity from the change of status brought about by the making of a sequestration order; and there is also to be taken into account in the interest of both the judgment creditor and other creditors of the judgment debtor in ensuring that, if ultimately a sequestration order is made, the relevant act of bankruptcy occurs either earlier rather than later”.
His Honour goes on to say:
“I think, therefore, that considerable weight should be given to the circumstances that here, as in Geard, no stay has been granted (or, apparently, sought) of the judgment supporting the bankruptcy notice. It does not follow that other matters are not to be taken into account: the discretion is `at large’ (Re Taylor; Ex Parte Deputy Commissioner of Taxation (Cth) (1983) 74 FLR 377 at 379). For example, the authorities suggest that, reluctant as the Court may in most cases be to enter into the merits of an appeal, the merits may be relevant, at least where the Court is able to regard the prospects of success as `slight’ (for example Bryant) or, possibly, in a case where it is apparent that the prospects of success are unusually strong”.
In the present case, applying the principles in those decisions to which I have referred, it is important to first of all note the difference in the facts confronting this court with the facts confronting certainly his Honour Lehane J in Byron's case.
During the course of submissions, it was evident that in the present case there has indeed been a stay granted. It is equally evident that when the Court of Appeal granted the stay it did so upon receiving undertakings. It did so on 5 May 2000. It is equally clear on the affidavit material before me that the undertaking was breached to the extent that payments, it would seem, after August 2000 have not been made in relation to those orders that were made or the undertaking given to the Court of Appeal. I accept and find as a matter of fact that in the present case that payments were made, it would appear, on a number of occasions up to and including 1 August 2000. In his affidavit, Mr Sadler makes it clear in fact that payments were made in May, June, July and August 2000.
No payments were made after that date and hence the effect of the breach of payment on and from 1 September 2000 means that order (3) of the orders made by the Court of Appeal on 5 May 2000 would become operative and that order (1) of those orders was deemed to be forthwith set aside. That means in the present case that order (1), which provided for a stay upon execution on the judgment of her Honour Warren J given on 13 December 1999 is set aside and so at least from 1 September 2000 it would appear that the parties were at risk.
The evidence before me suggests that from the date of failure to pay that instalment, no application has been made to seek to vary that order in the Court of Appeal. There has been no attempt to place before this court or the Court of Appeal reasons which might explain in some detail a failure to meet those payments. I accepted, however, from both applicants before me, that they are both in financial difficulties. Property has been seized by the ANZ Bank and that in the circumstances they were unable to make the instalment payments beyond August 2000 as a result of financial difficulties. I further accept that they have been unable to pursue perhaps legal remedies which they might otherwise pursue as a consequence of not being represented and not perhaps having sufficient funds to arrange appropriate representation. I note in passing, however, that they do appear to have representation for the purpose of the appeal on 27 May 2002.
The applicants both essentially submitted by way of affidavit material and through their interpreter and brother, Mr Kiet Minh Pham, that in the present case it would be unfair to not grant an extension of time within which to comply with the bankruptcy notice. It was argued that to not grant the extension of time would effectively provide a significant impediment to the applicants in pursuing their appeal. If I were to not grant the extension of time even though the consequences might be that there would be some further delay in the hearing of a creditors' petition if any which I would find in all probability is likely in the present case, even though there might be some delay in the bringing of that creditors' petition, it is said on behalf of the applicants that that would involve them returning to court and seeking to make a further argument that that creditors' petition should perhaps likewise be adjourned pending the determination of the appeal in the Court of Appeal.
I understand the force of that argument and appreciate that in circumstances of this kind the distinction made between the legal effect of refusal to grant an extension of time for compliance with a bankruptcy notice compared with the legal effect and stigma attached to the consequences of sequestration order, that is, declaring a person bankrupt, may not be a distinction readily apparent to the applicants. However, during the course of submissions I endeavoured to indicate that there is that distinction to be made and that even if the extension of time is not granted on these applications, there will be some further delay, perhaps up to or even beyond 27 May 2002 and that certainly a court in bankruptcy would need to entertain and hear on merit any application then made by a respondent to a creditors' petition for an adjournment of that creditors' petition based on material that may then be available to the parties so applying.
It is my view that in a case of this kind, despite the economic hardship which is evident in relation to the applicants and notwithstanding their language difficulties and difficulties in pursuing this claim which they believe is a genuine appeal against the Supreme Court decision of Warren J, this court needs to consider further the issue of whether it should extend time for compliance with the bankruptcy notice which has been properly based upon a judgment which although stayed for a short period of time, by way of self‑executing order, that stay has now been lifted and execution of the judgment can proceed.
I accept that in fact the ANZ Bank has been able to achieve a degree of satisfaction for the debt by the sale of property which is referred to in the material. I further accept that it is therefore the balance of that judgment debt that is being pursued and that there is at the very least a potential inconvenience and disruption which may occur if I do not grant an extension of time within which to comply with the bankruptcy notice for each applicant.
However, the court needs to be mindful of the fact that even part satisfaction of a judgment debt by way of sale of assets does not therefore preclude a creditor from pursuing rights under the Bankruptcy Act, nor does it seem to me, in circumstances where the Court of Appeal has granted a stay on condition of an undertaking being complied with, that it is appropriate for this court to effectively seek to usurp the role of the Court of Appeal which may, on proper application, be prepared to further vary the orders it made in relation to this matter on 5 May 2000. Given there has been no payment since August 2000 and the breach has occurred since 1 September 2000 with the consequences of the stay being set aside, it is my view that this court, sitting as a court of bankruptcy, should not in all the circumstances seek to interfere with the discretion which the Court of Appeal may have in governing the practice and directions of that court prior to the hearing of an appeal. It is still open in my view for each of the applicants to seek to persuade that court to vary the orders or make other orders as it sees fit.
In the present case I am satisfied that due to the inactivity on the part of the applicants in seeking to persuade the Court of Appeal to vary the orders made by it on 5 May 2000, and having regard to the chronology of events which in my view in all probability may well result in the creditors' petition not being heard and determined in any event and that other matters should affect the court's decision-making powers upon hearing a creditors' petition against each applicant, it would be inappropriate in the exercise of my discretion, applying the principles to which I have referred, to grant the extension of time for compliance in this case. Although I am careful to distinguish the present case from earlier decisions to the extent that a stay was at least granted for a short period of time, it is my view that having regard to the matters that I have referred to, the impact and effect of that stay is not sufficient to persuade this court to exercise its discretion in favour of each of the applicants.
Accordingly, it is appropriate that I make the following orders, in application MZ28 of 2002:
(1)The application be dismissed;
(2)the applicant shall pay the respondent's costs to be taxed in default of agreement pursuant to order 62 of the Federal Court Rules;
(3)The time for compliance with the bankruptcy notice be extended to 4 pm on 2 April 2002.
(4)I certify that it is appropriate for the respondent to engage the services of counsel.
In application number MZ29 of 2002, I make the following orders:
(1)The application be dismissed;
(2)The applicant pay the respondent's costs to be taxed in default of agreement pursuant to order 62 of the Federal Court Rules;
(3)The time for compliance with the bankruptcy notice be extended to 4 pm on 2 April 2002;
(4)I certify that it is appropriate for the respondent to engage the services of counsel.
I direct that the reasons which I have just given shall be transcribed and upon review shall constitute my reasons for judgment.
I certify that the preceding forty three (43) paragraphs are a true copy of the reasons for judgment of McInnis FM
Associate:
Date: 19 March 2002
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