Re McCallum, W.M. v Ex Parte Q.U.F. Industries

[1990] FCA 786

Re: WILLIAM MICHAEL McCALLUM
Ex parte: Q.U.F. INDUSTRIES
No. DP 68 of 1990
FED No. 786
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

BANKRUPTCY DISTRICT OF THE NORTHERN TERRITORY OF AUSTRALIA
Foster J.(1)

CATCHWORDS

Bankruptcy - creditor's petition listed for hearing - application for adjournment - debtor with limited legal representation - no material prejudice to petitioning creditor if adjourned.

HEARING

DARWIN

#DATE 6:12:1990

For the creditor: D. Kersh (Loftus and Cannon)

For the debtor: S.R. Southwood (Ward Keller)

ORDER

The matter be adjourned until the next sitting of the Federal Court.

Costs be reserved.

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

JUDGE1

This matter has been before me on three occasions this week. On the first occasion, Monday, the debtor appeared in person. He made submissions to me based upon discussions he had had with his solicitor. His solicitor was not present as he was interstate and was to be interstate effectively for the whole of this week. The submissions amounted to an application for an adjournment and for directions to be given as in a contested case. The matter had been listed for hearing but I am satisfied, from what I have been told during the occasions that the matter has been debated before me, that there is at least a strong possibility of confusion having occurred in that regard. It appears that the matter was before the Registrar last Friday on which occasion an application was made by counsel for the debtor for directions to be given appropriate to the matter being a full contested petition. The matter did not proceed before the Registrar as he expressed the view that he did not have the necessary jurisdiction to make the directions. The matter was accordingly placed before me, and I am satisfied it was placed before me not simply for hearing but for directions if necessary and otherwise for hearing.

1. I did not accede to the submissions made by the debtor on Monday, particularly in light of the fact that the petitioning creditor, through his counsel, was seeking an immediate hearing. There was very little before the Court to indicate the nature of the opposition to the hearing of the petition or to its granting. The notice of opposition is by no means full or self-explanatory.

2. I adjourned the matter at that stage to enable the debtor to further confer with his legal advisers and obtain some representation in the matter. That has occurred, although the representation on the previous occasion was limited to a further application for an adjournment. In light of the continued and apparently quite reasonable opposition of the petitioning creditor to a further adjournment, I dealt with the matter on the basis that the major interlocutory requirement then sought by the debtor, namely the provision of a list of documents by the creditor, be complied with so that in the light of the provision of that list the matter could be looked at in greater detail.

3. That list has been provided and the matter has come before the Court again today. Some preliminary objections were taken to the list. Those matters have been dealt with in argument and I am satisfied that the documents referred to in the list are sufficiently referred to and those that are not fully described have now been fully described and there should be no prejudice flowing to the debtor from that fact.

4. I have been concerned that nothing has really been placed before the Court as to the actual defence sought to be relied upon. When the matter came before me this morning it was adjourned after further debate for further mention today on the basis that the Court would be supplied at least with an indication of the matters upon which the debtor would seek to rely at a full hearing.

5. The result is that Mr Southwood, of counsel, has indicated to me a number of matters. I have some hesitation in accepting that if they were established they would necessarily provide a defence. It has been submitted on behalf of the petitioning creditor that they would not. The difficulty is, however, that circumstances as they have been this week have prevented those who have appeared for the debtor from doing more than obtaining from him for presentation to the Court this week a somewhat sketchy outline of what he seeks to rely on.

6. I have been very much minded to bring the matter to a head by insisting that it be heard, on the basis that the debtor, after a reasonable opportunity being given to him today or tomorrow, simply give evidence viva voce without the prior necessity of placing on affidavit the evidence upon which he seeks to rely. Indeed, counsel for the petitioning creditor had indicated that for his part he would be satisfied with such a course.

7. Counsel for the debtor, however, has indicated to me that whilst the general proposition of his client giving viva voce evidence would not be objected to, there is, nevertheless, in the constraints of time no reasonable opportunity for him to consider the ramifications of the debtor's case with a view to it being presented properly at the factual level. He has also indicated to me that he will not have time fully to examine the law bearing upon the particular section of the Bankruptcy Act 1966 upon which the petitioning creditor relies.

8. I have found this a most difficult matter to determine. I am fully cognisant of the petitioning creditor's desire to have the matter disposed of and of the facts urged upon me fully and comprehensively by his counsel, that there would appear to be little or no defence available in respect of the material relied upon by the petitioning creditor and that nothing that has been put before the Court really indicated anything of substance being available by way of defence. I fully appreciate those arguments and have felt considerable concern about it.

9. In the upshot I have some to the conclusion that I should bear in mind potential prejudice in the matter if it should be adjourned. The petitioning creditor has suffered the irritation of being present throughout this week. He has naturally hoped that the matter would be disposed of. The matter in the ordinary course of events would have proceeded by affidavit evidence so that his presence as such could not be said to have been necessarily required in the circumstances. If, however, the matter goes over to the next sittings the only prejudice that is put forward and that can be put forward in these circumstances is that of delay in the finalisation of the matter. It is not suggested in anything put before me that any other prejudice may occur.

10. On the other hand if the debtor should become bankrupt through some error of fact or law occurring because the matter has not been fully presented to the Court on his behalf, that would be a severe matter of prejudice.

11. As I have said, I have had considerable difficulty weighing up what should be done between these parties, but I have finally come to the conclusion that justice requires that I should adjourn the matter and I propose to do so.

12. It is desirable that the matter be ready to be heard at the next sittings of the Court. I should indicate that there would be, in my view, little or no reason whatever for any further adjournment and that the matter should on that occasion proceed.

13. Accordingly, if any directions are sought to enable the matter to be fully prepared they should be sought and given at this sittings of the Court. I do not mean by that that I would deal with them now, but I consider that the legal representatives of the parties should agree upon any directions regarded as necessary in the circumstances and I will give orders giving effect to these directions before the end of this week.

14. I consider that the question of costs of the proceedings so far are best reserved until the actual hearing of the matter and I so order.