Re Ids Collie v Ex parte Forsyth, N

[1994] FCA 114

.	I	.II
,

I :

119 99

JUDGMENT NO. .....B.....e...J m e . e . . . n . . . .

IN THE FEDERAL COURT OF AUSTRALIA	) )
VICTORIA DISTRICT REGISTRY	1 No. VP 400 of 1994
)
GENERAL DIVISION	)
B E T W E E N :

m: I D S COLLIE

Judgment Debtor

EX PARTE: N PORSYTH

Judgment Creditor

JuM;e:	Heerey J
m:	2 March 1994

PLACg: Melbourne

EX TEMPORE REASONS FOR JUDGMENT

i

This matter was before me on 1 September 1993 when I adjourned the hearing of the petition until today. I shall not repeat the reasons that I gave for that order; they are on the file.

I shall briefly state the relevant events that have occurred

since then.

On 30 September 1993 the creditor's solicitors wrote to the debtor's solicitors indicating that they were agreeable to the Listing Master of the Supreme Court being asked on 1 October to fix the civil appeal on the first possible date in 1994.

December. At the callover on 8 December the representative of	the debtor told the Listing Master that the debtor's
application for special leave to appeal to the High Court had been fixed for 15 December but was unlikely to be heard on tbat date. He asked that the appeal be adjourned to the next callover.
The creditor's solicitor subsequently protested. I infer that up until that time the adjournments of the matter, from the callover in October to November and thence to December, had not been opposed. It may be that these earlier adjournments would have happened in any case because of the existence of prior business in the Full Court lists. The material before me is not clear on that point. In any event, by 8 December the creditor's solicitor confirmed to the debtor's solicitors that he was "not happyv about the debtor having again asked for the civil appeal to be adjourned.
It was further said that the creditor's solicitor had spoken to the secretary to the Listing Master and asked her if an application could be bought at that stage for an order fixing
been that the fixing of other matters had meant that the the appeal for hearing in February 1994. The response had
Listing Master would not be able to fix a date in February for hearing of the appeal and that the matter would be called over on 1 February for fixing in March.
On 22 December the debtor's solicitor advised that the special leave application had been fixed for hearing in the week ending 4 February and that the debtor was willing to consent
to the civil appeal being set down for hearing in either March or April.
On 31 January the debtor's solicitor advised that he had been instructed to apply for the civil appeal to be adjourned until the next callover.
On 4 February 1994 the debtor's special leave application was dismissed by the High Court. At the callover on 1 March the Listing Master fixed the hearmg of the appeal for Monday 11 April with an estimate of four days.
The petition, which was presented on 14 April 1992, has already been extended. The last date on which a sequestration
order can be made is 14 Apr~l 1994: see Bankruptcy Act 1966
(Cth) ss.52(4) and (5). In that setting counsel for the creditor urges that I ought to proceed with the hearing of the petition today. He points out that the act of bankruptcy occurred in early November 1991 and if there is no hearing
period of relation back will be lost. However, as he before the expiration of the petition, the benefit of the
conceded, he was not able to point to any specific transaction which might be affected by relation back of a sequestration order to early November 1991.
Counsel also said that the debtor appeared to be clearly insolvent. In an application to the Supreme Court for relief under the Judgment Debt Recovery Act 1984 (Vic) he swore to the truth of a statement of f~nancial situation as at 24 October 1991 which showed gross weekly income of "less than
$100" and his only assets as furniture, household and personal
goods as being "nominal only". He claimed as a contingent asset a damages claim of $6 million against the petitioning creditor. He also listed contingent liabilities under guarantees estimated at $2 million. He also stated that he was the defendant in a Supreme Court action commenced in 1990 in which the Deputy Commissioner of Taxation is claiming a sum in excess of $16 million, but said he believed he would succeed in his defence to that action. The debtor filed an affidavit in the present proceedings sworn on 22 October 1992 in which he deposed that he was "solvent and able to pay his debts as and when they fall due". No further detail was given of that assertion.
I agree that the long delay in this matter is extremely unsatisfactory. However, I do think I am obliged to apply the
general rule established by Full Courts in Ahern v Deputy Commissioner of Taxation (1987) 76 =R 137-148 and Adamopoulos
v Olympic Airways SA (1990) 95 ALR 525 referred to in my
reasons for the order made last September.
Essentially, the position in critical respects remains as it did last September. There is an appeal on foot. I think I must accept that it is a genuine appeal for the reasons I then gave. The long delay has really been due to both parties accepting that the prosecution of the civil appeal ought to await the determination of the application for special leave to appeal to the High Court in the criminal proceedings. As I said in argument, I remain unpersuaded that there is necessarily that connection. But that is perhaps being wise after the event and it does seem, as I say, that both parties have accepted the delay in the progress of the civil appeal which has the consequent effect that the bankruptcy proceedings ought, as a general rule, to be postponed until the status of the judgment on which the petition is based is finally established in the appellate process.
It would also seem from the remarks of the Full Court in Adamopoulos that dilatoriness on the part of a debtor in prosecuting the appeal does not necessarily render that general principle inapplicable, because procedural remedies are always ava~lable to a creditor respondent to have the matter brought on.
I propose to adjourn the matter in accordance with Mr
Gardiner's alternative submission to Thursday, 14 April 1994,
which is the last day on which the sequestration order can be made. It is possible, although admittedly unlikely, that the appeal may be resolved in the creditor's favour by that date. If the appeal were determined favourably to the creditor but after 14 April it would be open to the creditor to petition again. It is true that the benefit of relation back to November 1991 would be lost, but in the absence of some specific evidence as to any particular transaction or items of
property that might be affected I do not think I should let that factor outweigh the application of the general rule that bankruptcy proceedings should await the prosecution of the civll appeal. I will therefore adjourn the hearing of the petition to 14 April. I will reserve costs of the petitioning creditor and the debtor.

At the callover on 1 October the Listing Master adjourned the matter to the callover on 1 November. On that date the Listing Master adjourned the matter to the callover on 8

I certify that this and the

preceding six (6) pages are a true copy of the reasons for judgment of his Honour Mr Justice Heerey.

Dated: 2 March 1994

p k Associate

Counsel for the judgment debtor:  P K Searle

Solicitor for the judgment debtor: Coltmans

Counsel for the judgment creditor: S Gardiner

Solicitor for the judgment

creditor :  Ebsworth & Ebsworth

Date of hearing:  2 March 1994

JUDGES' CHAMBERS

FEDERAL COURT OF AUSRALIA
450 LIT1 LE BOURKE STREET

MELBOURNE, 3000

15 March 1994

5onla Cornale
Federal Court of Australia
Principal Reglstry
Law Courts Building

Queens Square

SYDNEY NSW 2000

Dear Sonia,

Re: I D S Collie Ex parte: N Forsvth

No. VP 400 of 1994

I enclose a copy of the judgment delivered by his Honour Mr

Just~ce Heerey in ihe above matter on 2 March 1994.

This judgment is not for general distr~bution.

Regards,

Davld Brennan	/J&
Associate to Heerey J