Re Huston, R.D. & Anor v Ex parte Kendall, McAdam & O'Dwyer

[1985] FCA 634

Re: ROBIN DAVID HUSTON and JILL LARRAINE HUSTON
Ex Parte: KENDALL, McADAM and O'DWYER (A FIRM)
No. QLD BN2129 of 1985
Bankrutcy Notice
8 FCR 355

COURT

IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT
OF THE STATE OF QUEENSLAND
Pincus J.(1)

CATCHWORDS

Bankruptcy Notice - application to set-aside bankruptcy notice by going behind judgment - late discovery by judgment creditor prior to the hearing out of which the judgment debt arose - failure by judgment debtors to seek an adjournment on the basis of late discovery - failure by judgment debtors to appeal against the judgment - application dismissed.

Bankruptcy - Application to set aside bankruptcy notice by going behind judgment - Lack of sufficient opportunity for counsel to examine relevant material prior to hearing out of which judgment debt arose - No application for adjournment by judgment debtors - No appeal from judgment.

HEADNOTE

Held: (1) Where judgment debtors sought to have a bankruptcy notice set aside by asking the court to go behind the judgment on the ground that their counsel did not have sufficient opportunity to examine and acquaint himself with relevant material prior to the hearing out of which the judgment debt arose, such circumstances did not justify treating the judgment as incorrect.

(2) The records of many trials, if examined by the unsuccessful litigants later, may disclose rather unsatisfactory features but the circumstances of this case, coupled with the fact that the judgment debtors neither sought an adjournment of the trial nor lodged an appeal against the judgment, were not such as to persuade the court to go behind that judgment.

HEARING

Brisbane, 1985, December 11. #DATE 11:12:1985
APPLICATION

Application to set aside a bankruptcy notice and, alternatively, seek a declaration as to compliance with terms of bankruptcy notice.

M D Hinson, for the applicants/judgment debtors.

D H Tait, for the respondent.

Solicitors for the applicants/judgment debtors: McAuliffe & Associates.

Solicitors for the respondents: Chapple Seymour & Company.

SMW

ORDER

1. The application be dismissed.

2. The costs of and incidental to this application, including
   reserved costs, be taxed and paid by the applicant judgment
   debtors to the respondent firm.
   

3. By consent, the time for compliance with the bankruptcy notice be extended until 5 p.m. on Friday, 13 December 1985.
   
   NOTE: Settlement and entry of orders is dealt with in Order 36
   

of the Federal Court Rules.

Orders accordingly

JUDGE1

This is an application made by Robin David Huston and Jill Larraine Huston for orders including an order that bankruptcy notice No. 2129 of 1985 be set aside or, in the alternative, a declaration that sufficient compliance with the notice shall be made by payment of $2957.17. The bankruptcy notice was issued on a judgment of Judge Pratt given in the District Court on 9 October 1985.

1. The material before me shows that counsel who then appeared for the judgment debtors had placed before him material, consisting of computer print-outs, on the eve of trial and had not sufficient opportunity to examine them and appreciate their significance. Mr. Huston, one of the judgment debtors, complains of this and says, in effect, that had he appreciated the significance of the computer print-outs matters at the trial would have taken a different course.

2. Although the figures at first sight seem rather complex, with the assistance of Mr. Hinson, counsel for the judgment debtors, they have been reduced to a much simpler picture.

3. Mr. O'Dwyer, who is one of the judgment creditors, being a member of the firm of Kendall, McAdam and O'Dwyer, has given evidence that the difference between the figure his firm would have charged had there been adherence to the charges disclosed by the computer print-outs, and the figure which was actually charged, was $2380.85. Mr Hinson frankly admits that that is not disputed. He points out, however, that on the evidence the computer print-outs were subject to a double process of adjustment. The first stage of adjustment is that discernible from exhibit 1, tendered before Judge Pratt which has become exhibit E to the affidavit of Mr. Huston, read before me. In that stage of adjustment the fee was taken up to $31,450.55. Mr. Hinson argues, and it seems to me correct, that subsequently a second stage or process of adjustment occurred which took that figure up to the higher sum of $37,040.55, and then by giving discounts reduced it back to the original figure. It does not seem to me clear, by any means, that the evidence placed before Judge Pratt disclosed this double process of adjustment, and Mr. Hinson relies particularly upon the fact that Mr. O'Dwyer, as appears from page 8 of the transcript, seems to have given the impression that the figure sued for in the District Court included not only a discount of $2000, which was agreed with Mrs. Huston, but a further sum for prompt payment. That was so only in the sense that a discount for prompt payment was allowed off the higher figure consequential upon the second process of adjustment, namely $37,040.55.

4. It is not really easy to follow why Mr. O'Dwyer did not explain to Judge Pratt the precise means whereby the final figure was arrived at. At least, I cannot derive from his evidence the explanation which he has made before me. Mr. Hinson argues that in the circumstances the court in exercise of jurisdiction under the Bankruptcy Act should go behind the District Court judgment and, in effect, require that the issue between the parties be reopened and relitigated. He does not suggest that the District Court made what might be called any mechanical error, but asserts that because of the late discovery, and because of the answer given by Mr. O'Dwyer at page 8, there is sufficient reason to go behind the judgment debt. He concedes that, since the matter is one which has produced a judgment after a trial, the task which he faces is substantially more difficult than it would have been had he faced merely a default judgment.

5. The point is really a short one, and forming the view that my consideration of it is not likely to be greater assisted by further reflection, I have determined to state my view now. The record of many trials, if examined by the unsuccessful litigants later, may disclose rather unsatisfactory features; that circumstance in itself cannot justify a process of going behind the bankruptcy notice. The principal unsatisfactory feature to which Mr. Huston points is the late discovery and the lack of appreciation on his side of the precise significance of the computer print-outs. Also, of course, it is argued that the judgment debtors did not have a reasonable opportunity to appreciate the way in which the figure sought in the District Court was arrived at. I am of the view that those circumstances do not justify what must be an unusual course, and that is to treat as incorrect a judgment after trial given by another court of competent jurisdiction and from which no appeal was brought.

6. I can understand Mr. Huston's feeling that he has not had such an examination of the claim made by Messrs Kendall, McAdam and O'Dwyer as he would have desired. Nevertheless, it is an important principle that the processes of litigation must not be engaged in to such an extent as to bring the administration of justice into disrepute and it seems to me that, except in circumstances considerably stronger than those revealed by the material before me, the court should not be prepared to go behind such a judgment as this.

7. I would add that it is a matter of considerable importance that Mr. Huston, through his counsel, decided not to seek any adjournment of the trial before Judge Pratt. It appears to be admitted that had he done so the difficulty would not have arisen. That is the sort of decision which, when made, must ordinarily be regarded as having been finally made. What Mr. Huston would now desire to do is to reverse that decision, in effect, and have the matter tried after a proper consideration of the material which was discovered on the eve of trial.

8. I am not prepared to accede to the application which is made on behalf of the judgment debtors, and it will be dismissed. I will order that the costs of and incidental to this application, including reserved costs, be taxed and paid by the applicant judgment debtors, Mr. and Mrs. Huston, to the respondent firm, Kendall, McAdam and O'Dwyer. By consent, I extend the time for compliance with the bankruptcy notice until 5 p.m. on Friday, 13 December 1985.