Re Ling, Noel Ex Parte Commonwealth of Australia Re Ling, Noel Ex Parte Enrobook Pty Ltd

CATCHWORDS

Practice and procedure - application for adjournment pending outcome of appeal in related proceedings - whether sufficient cause - alleged delay in commencing proceedings - whether there is a strong prospect that the appeal will succeed

Bankruptcy - application for adjournment of creditor's petitions - whether sufficient cause

Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287 referred

RE: NOEL LING; EX PARTE: COMMONWEALTH OF AUSTRALIA
No. NP 1571 of 1995

RE: NOEL LING; EX PARTE: ENROBOOK PTY LIMITED
No. NP 168 of 1996

CORAM:Lehane J
PLACE:Sydney
DATE:13 May 1996

IN THE FEDERAL COURT OF AUSTRALIA              )
GENERAL DIVISION  )
BANKRUPTCY DISTRICT OF NEW SOUTH WALES )   Nos. NP 1571 of 1995
  NP 168 of 1996

Matter No. NP 1571 of 1995

RE:NOEL LING
Debtor

EX PARTE:COMMONWEALTH OF AUSTRALIA
Creditor

Matter No. NP 168 of 1996

RE:NOEL LING
Debtor

EX PARTE:ENROBOOK PTY LIMITED

Creditor

CORAM:Lehane J
PLACE:Sydney
DATE:13 May 1996

MINUTE OF ORDERS
THE COURT ORDERS:

THAT the debtor's application for the adjournment of the Commonwealth's petition is dismissed.

THAT the debtor's application for the adjournment of Enrobook Pty Limited's petition is dismissed.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA              )
GENERAL DIVISION  )
BANKRUPTCY DISTRICT OF NEW SOUTH WALES )   Nos. NP 1571 of 1995
  NP 168 of 1996

Matter No. NP 1571 of 1995

RE:NOEL LING
Debtor

EX PARTE:COMMONWEALTH OF AUSTRALIA
Creditor

Matter No. NP 168 of 1996

RE:NOEL LING
Debtor

EX PARTE:ENROBOOK PTY LIMITED

Creditor

CORAM:Lehane J
PLACE:Sydney
DATE:13 May 1996

EXTEMPORE REASONS FOR JUDGMENT

LEHANE J: There are before me applications on the part of the debtor for the adjournment of two creditors' petitions. One is the petition of the Commonwealth of Australia in proceeding NP 1571 of 1995, the other is the petition of Enrobook Pty Limited in proceeding NP 168 of 1996.

The applications arise in this way: the debtor claims to have a cause of action against the Commonwealth for negligent misrepresentation; on 29 April 1996 I dismissed proceedings commenced by the debtor on that cause of action on the footing that the debtor was precluded from suing on it by the Anshun principle as expounded by the
Full Court of this Court in Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287.

The debtor has indicated that he proposes to appeal against my decision and the Court in turn has indicated that it is likely that the appeal will be heard later this month, possibly on 27 or 28 May. In those circumstances the debtor says that I should adjourn the two petitions pending the outcome of the appeal, on the footing principally that the existence of the claimed cause of action against the Commonwealth amounts to a sufficient cause on the basis of which, as a matter of discretion, the Court, on either petition, would refuse a sequestration order. It is of course possible also that the existence of the cause of action may go to the question of solvency.

The Commonwealth, with the support of the other petitioning creditor, submits that I ought not grant an adjournment, and that submission is put on a number of grounds. Crucial to the submission of the Commonwealth however are two related arguments, one based upon the somewhat late commencement of the proceedings against the Commonwealth in the history of the rather long course of litigation between the debtor and the Commonwealth, and indeed the somewhat late time in the course of that history at which the claim by the debtor first emerged.

The other argument is based on what is said to be the evident weakness of the debtor's case on the appeal against my decision. The Commonwealth puts that
substantially in two ways. It says first, as is true, that the debtor, though he has contended that I was wrong in concluding that Bryant cannot be distinguished, has not suggested the basis on which a distinction might be made. Secondly, it asserts that the debtor's foreshadowed contention that Bryant itself will be overruled or substantially distinguished by the Full Court is doomed to failure, Bryant being a recent decision of the Full Court of this Court which itself followed a recent decision of the Court of Appeal of New South Wales.

As judges in similar positions to mine have said on numerous past occasions, to ask me to form a conclusion on those latter submissions is to ask me to perform a task which is somewhat invidious. It is nevertheless a task which I am required to perform. I formed and expressed, in my judgment of 29 April, the clear view that there was no relevant point of distinction between Bryant and the circumstances with which I was then dealing. I think it is fair to say that no substantial point of distinction was then put nor, it is equally true to say, was any point of distinction suggested to me this morning, nor, I should add, on reflection, can I see any now. It may be that a point of distinction exists but if it does it is yet to be revealed.

I see also the force of Mr Biscoe's submission to me this morning that Bryant is a very recent decision of the Full Court which has itself a firm foundation in authority and which the Full Court is unlikely either not to follow or significantly to confine.

My conclusion in the end, although I accept that the debtor has successfully sought to have his appeal dealt with promptly, is that given what I must say seems to me his less than strong position in relation to the appeal, this is not an appropriate case for an adjournment. Accordingly, I think all I need do is dismiss the debtor's application for adjournment of the Commonwealth's petition and, because no separate ground was suggested on which I should adjourn Enrobook Pty Limited's petition, to refuse the application for adjournment of that matter also. Any further questions that may arise, for example in relation to a stay, must of course await the outcome of the hearing of the petitions listed for tomorrow.

I certify that this and the preceding 3 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lehane.
Associate:

Dated: 15 May 1996

Heard: 13 May 1996

Place: Sydney

Decision: 13 May 1996

Appearances: Mr M R Aldridge of counsel instructed by Gadens Ridgeway appeared for the debtor in both proceedings NP 1571 of 1995 and NP 168 of 1996.

Messrs P M Biscoe QC & F Kunc of counsel instructed by the Australian Government Solicitor appeared for the petitioning creditor in proceedings NP 1571 of 1995.
Ms S Nash appeared for the petitioning creditor in proceedings NP 168 of 1996 and for a supporting creditor in proceedings NP 1571 of 1996.

The Federal Court of Australia heard two related applications from Noel Ling, the debtor, seeking an adjournment of creditor's petitions filed by the Commonwealth of Australia and Enrobook Pty Ltd. The debtor's application was made in the context of an appeal against a prior decision dismissing his claim of negligent misrepresentation against the Commonwealth. The court had to determine whether there was sufficient cause to grant the application for an adjournment pending the outcome of the appeal. Furthermore, the court considered whether the debtor's delay in bringing the claim against the Commonwealth and the weak prospects of success in the appeal warranted denying the adjournment.

The primary legal issue the court had to address was whether the debtor had demonstrated sufficient cause to warrant an adjournment of the creditors' petitions. The court also considered the debtor's delay in bringing the claim against the Commonwealth and the strength of his appeal against the earlier dismissal of his claim. The debtor argued that the existence of the claim against the Commonwealth provided a sufficient cause to adjourn the petitions, potentially affecting the question of solvency. The Commonwealth and Enrobook Pty Ltd opposed the adjournment, contending that the debtor's late commencement of the proceedings and the weak prospects of success in the appeal made the adjournment inappropriate.

Justice Lehane dismissed the debtor's application for an adjournment. The court found that the debtor's position in relation to the appeal was less than strong, with no substantial point of distinction suggested between the earlier decision and the current circumstances. The court also considered the recent nature of the decision in Bryant v Commonwealth Bank of Australia, which provided a firm foundation for the earlier dismissal of the debtor's claim. Given these factors, the court concluded that it was not an appropriate case for an adjournment. Consequently, both applications for adjournment were dismissed.

The court's final orders were to dismiss the debtor's applications for the adjournment of the Commonwealth's petition in proceeding NP 1571 of 1995 and Enrobook Pty Ltd's petition in proceeding NP 168 of 1996. Any further questions regarding a potential stay would await the outcome of the hearings of the petitions scheduled for the following day.

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