Re Collie, I.D.S Ex Parte Forsyth, N - [1993] FCA 636

6 3 6 1 4 3

JUDGMENT NO. ........ ..... m . . ~IIW-*-

IN THE FEDERAL COURT OF AUSTRALIA

)

GENERAL DIVISION

1	No. VP 400 of 1992

BANKRUPTCY DISTRICT OF

)

THE STATE OF VICTORIA

)

B E T W E E N :

RE: I D S COLLIE
Judgment Debtor
EX PARTE: N FORSYTH
Judgment Creditor

JUDGE :

Heerey J

1 September 1993

PLACE :

Melbourne

HE^^^^^^

REASONS FOR JUDGMENT '5 SEP 1993

FEOERA~ COURT nc

The debtor seeks an adjournment of the hearing of the creditor's petition. The grounds for that application are based on a complex history of civil litigation between the parties and also criminal proceedings which led to that civil litigation.

The petitioning creditor is a Queen's Counsel practising at the Victorian Bar who had advised the debtor in relation to tax matters. The debtor was prosecuted in relation to those matters, convicted and sentenced to imprisonment. The debtor sued the petitioning creditor alleging negligent advice.

bankruptcy notice was issued on 3 September 1991 and the

$113,307.28. It is that debt which founds the petition. The

petition on 15 April 1992.

In the meantime the debtor had appealed against Gobbo 3's judgment by notice dated 15 February 1991. The petitioning creditor sought an order for security for costs on that appeal. An order was made that the debtor pay $20,000 security and that order has been complied with. The parties gave an estimate to the Supreme Court of a hearing of four days for the appeal. It was set down for hearing on 2 February 1993. In late January 1993, the appeal was by consent taken out of the list. The reason for that is connected with the progress of the criminal proceedings.

I was told by counsel for the debtor that the debtor claims that material which emerged in the course of the hearing before Gobbo J raised questions as to whether the debtor should have been convicted. The debtor brought a petition for mercy which was referred to the Victorian Court of Criminal

Appeal and dismissed on 18 December 1992, that is to say of

course before the civil appeal was taken out of the list. But

in the meantime the debtor had filed an application for special leave to appeal to the High Court in the criminal proceedings.

The special leave application will apparently be heard by the High Court in October or December this year. The reason for that delay is said to be that the debtor moved to live in Queensland, retained a Queensland solicitor who in turn briefed senior counsel from Sydney. Counsel asked for the formulation of certain material about the issue of intent as raised in the criminal proceedings. This involved the Queensland instructing solicitor in very extensive researches into the previous history of the criminal proceedings.

What is of more direct relevance to the present application for adjournment is the question of what happened to the civil appeal to the Appeal…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1993] FCA 636
Decision Date: 1 Sep 1993

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Re Collie, I.D.S Ex Parte Forsyth, N involved a debtor seeking an adjournment of a hearing of a creditor's petition. The creditor, a Queen's Counsel, had advised the debtor on tax matters, which led to criminal proceedings against the debtor. The debtor sued the creditor for negligent advice and a bankruptcy notice was issued on 3 September 1991 for the debt of $113,307.28. The debtor appealed against the judgment in the civil litigation, and an order was made for security for costs. The appeal was taken out of the list in late January 1993, and the debtor filed an application for special leave to appeal to the High Court in the criminal proceedings. The creditor's petition was adjourned to 1 September 1993, and the debtor sought an adjournment of the hearing of the creditor's petition.

The court had to decide whether the existence of a pending appeal against the judgment founding the bankruptcy petition justified an adjournment of the hearing of the creditor's petition. The court considered the principle that a court exercising jurisdiction in bankruptcy should not proceed to sequestrate the estate of a debtor where an appeal is pending against the judgment relied on as the foundation of the bankruptcy proceedings, provided that the appeal is based on genuine and arguable grounds. The court noted that the debtor had complied with an order for security for costs, which indicated that the appeal was being proceeded with in good faith. The court also considered whether the appeal was being progressed with reasonable diligence and whether the existence of the special leave application was a reason for not pursuing the civil appeal in the ordinary way. The court found that the appeal was based on genuine and arguable grounds and that the appeal was not being progressed with reasonable diligence.

The court decided to extend the life of the petition until 15 April 1994 and to adjourn the hearing of the creditor's petition to a date to be fixed in March 1994. The court ordered that the petitioning creditor's costs be reserved. The debtor was on notice that if no steps were taken to relist the civil appeal in the meantime, the judge hearing the petition may take a different view as to whether the petition should then proceed.

Orders