Re Evans, J.D. v Ex parte Evans, J.D. The Heather Thiedeke Group Pty Ltd

[1989] FCA 306

IN THE FEDERAL COURT OF AUSTRALIA	)
GENERAL DIVISION	) QLD BN443 of 1989
BANKRUPTCY DISTRICT OF THE SOUTHERN	1
DISTRICT OF THE STATE OF QUEENSLAND	)

RE: JOHN D. EVANS

EX PARTE:  JOHN D. EVANS

Applicant

THE HEATHER THIEDEKE GROUP PTY LTD

Respondent

MINUTES OF ORDER

JUDGE MAKING ORDER:	PINCUS J.
DATE OF ORDER:	13 JUNE 1989
WHERE MADE:	BRISBANE
THE COURT ORDERS THAT:

1.    the time for compliance with bankruptcy notlce no.

443 of 1989 be extended to Friday, 4 August 1989;

NOTE :	Settlement and entry of orders is dealt with in
Rule 124 of the Bankruptcy Rules.

2.    the costs of and incidental to the application for an extension of time be reserved.

IN THE FEDERAL COURT OF AUSTRALIA	1
GENERAL DIVISION	) QLD BN443 of 1989
BANKRUPTCY DISTRICT OF THE SOUTHERN	)
DISTRICT OF THE STATE OF QUEENSLAND	)

RE: JOHN D. EVANS

EX PARTE:  JOHN D. EVANS

Applicant

THE HEATHER THIEDEKE GROUP PTY LTD

Respondent

PINCUS J. 13 JUNE 1989

EX TEMPORE REASONS FOR JUDGMENT

The bankruptcy notice in this matter was served -n 5

April 1989, and it was a 14 days notice. On 20 April, that is, on the fourteenth day, an application was made to the Court that the

bankruptcy notice be set aside.

The bankruptcy notice was founded upon a judgment of the

Supreme Court of Queensland, which went on appeal to the Full Court of the Supreme Court. The judgment of the primary judge was upheld and an attempt was made to take the matter to the High Court, but special leave was refused.

On 19 May 1989, I dismissed the application to set aside the bankruptcy notice, declining to go behind the judgment of the Supreme Court for the reasons I gave on that day. 1 extended the time for compliance wlth the bankruptcy notice to 13 June, relying upon the decision in Streimer v. Tamas (1981) 37 A.L.R. 211. I then gave only a short extension, as my principal purpose was to enable Mr Evans, who appeared for himself, to consider his position.

The application made today is to further extend time for compliance with the notice, and the ground simply is that Mr Evans wishes to take the judgment I gave on 19 May to the Full Court.

Mr Freeburn, who has appeared for the creditor today, resists any further extension of time. He says the notice of appeal to the Full Court of the Federal Court was served late, and he says that the appeal in any event does not seem likely to succeed. He also submits that the history of the matter assists him, but the last point does not seem to me to have much substance.

The question is whether Mr Freeburn is right in saying

that I should dismiss the application on the ground that the

appeal has no real prospect of success and has no real substance.

In a sense, the most important case on that question is the decision of the Full Court in - Ahern v. Deputy Commissioner of

Taxation (Qld) (1987) 76 A.L.R. 137. That was a case where the situation was somewhat different, in that the question was whether a bankruptcy petition should be adjourned on the ground of a pending appeal. The pending appeal was not one of the sort in

question here, but was an appeal from the judgment on which the
bankruptcy notice was based.

However, the ~ e n e r a l tendency of what the Full Court said seems to me rather on Mr Evans' side. The Court said at p.147:

"... a court exercising bankruptcy jurisdiction has

undoubted discretion to go behind a judgment, particularly one obtained by default or compromise or vhere fraud or collusion is involved and inquire vhether the judgment is founded on a real debt ..."

The Court went on to say:

"Even vhere the judgment vas obtained folloving a hearing on the merits vhere both parties appeared,

if there are substantial reasons for questioning

vhether behind the judgment there is in truth and reality a debt due to the petitioning creditor, the court vill go behind the judgment and inquire into the consideration for it ..."

In that case, the Court said that the petition should have been adjourned, and, a s I understand the reasons, the essence of it is at p.148 line 20, where the Court said:

"It is also vell established that in general a court

exercising jurisdiction in bankruptcy should not proceed to sequestrate the estate of a debtor vhere 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 ..."

~t is clear that the statement of what, according to the

~ u l l Court, was "well established", does not directly apply here,

because the appeal in question is not one against the ~udgment
relied on as founding the bankruptcy notice, but is one against
the judgment refusing to set aside the notice.

Nevertheless, and although the statement made by the Full Court was concerned with sequestrating estates rather than extending the time for compliance with the notice, the general tendency of what the Full Court said seems to me to dictate caution in shutting out (or going, in this instance, towards shutting out) rights of appeal.

The problem, which I find somewhat embarrassing, is to determine whether the appeal is based on genuine and arguable grounds. The analysis which Hr Freeburn has made of the foundation of the appeal seems to me to have force, and I have some doubt as to whether the grounds are seriously arguable.

Nevertheless, I propose to grant a further extension of the time for compliance. I do so on the ground that the appeal, although it does not look at all promising, is not frivolous - at least, I do not think it is; and secondly, on the ground that the

further delay involved does not appear to be of any great	significance, since the Full Court will be sitting in Brisbane
next month. If, as MC Freeburn says, the appeal is without substance, no doubt the Full Court will dispose of it summarily.
Since the Full Court is due to sit on Monday, 24 July, I propose to extend the time for compliance with the bankruptcy notice to the end of that fortnight, which will be Friday, 4 August. ~t may be, of course, that the Full Court will consider
the matter before then, in which case a small amount of time will be lost, but not an amount of any great significance. In short, I have decided to extend the time for compliance with the bankruptcy notice until what is expected to be the end of the Full Court sittings.
It will therefore be ordered that the time for compliance with bankruptcy notice no. 443 of 1989 be extended to Friday, 4 August 1989; the costs of and incidental to the
zpp::cs:ioii f o r aii e ~ t e r ~ s i u r ~ ur' time wiii oe reserved, because the
fate of them depends upon some rather complicated alternatives.

I certify that t h i s and t h e four p r a c - d i n g pa9 . s

. r e tru. copy o f the r.msonl for judgn-nt h.r.1"