Re: Nolan; Ex Parte: Sergeant v Nolan

[1995] FCA 226

JUDGMENT NO. ....., 226 9 ,, ...,,... ,,/ , ,,,,,, S-

FEDERAL COURT OF AUSTRALIA 1

NEW SOUTH WALES DISTRICT REGISTRY ) No. NX 191 of 1993

GENERAL DIVISION 1

RE: JEREMY WILLIAM MMtDEN NOLAN

Debtor

BETWEEN :

DAVID LLEWELLYN SERGEANT

Applicant

AND :

JEREMY WILLIAM MARDEN NOLAN

Respondent

RECEIVED

CORAM:	SACKVILLE J.
PLACE :	SYDNEY
DATE :	TUESDAY, 4 APRIL, 1995

HIS HONOUR: I grant leave to M r Harper, for the respondent, to file in court a notice of motion. The notice of motion is undated, but will have today's date inserted as the return date. An affidavit of Dermot John Maxwell sworn 4 April 1995 in support of that notice of motion will also be filed in Court.

The notice of motion, as amended in the manner proposed by Mr Harper, seeks a stay of all declarations and orders made by me in the judgment that I delivered in these proceedings on 14 March 1995. The affidavit in support of Mr Maxwell simply annexes a notice of appeal from that judgment.

In my view, it is not appropriate to deal with the motion on the

Y

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basis of the debtor's prospects of success in the appeal. I cannot conclude that the appeal is without prospects of success.

Mr Harper has submitted that, in these circumstances, a stay

ought to be granted, since the effect of a refusal to grant a stay would be the making of a sequestration order. Although the sequestration order could be set aside in the event of a successful appeal, the reality is that the sequestration order would be effective for the period between the date of lifting of the stay and the date the successful appeal is determined. Accordingly, I think there is force in M r Harper's submission that, subject to other matters, a refusal to grant a stay would render the appeal nugatory.

I interpose that it is, perhaps, a pity that the resources that have gone into the conduct of this case and that are proposed to be invested in the appeal could not have been directed to the satisfaction of the undisputed debts due by the debtor to his creditors and, in particular, to the applicant in the present proceedings. The hearing before me took some four days and no doubt involved very considerable expense to the parties. An appeal will involve yet further expense. The debt, although no doubt considerably greater than the cost of the proceedings, nevertheless might have been significantly reduced by the resources that have been required to conduct these proceedings. However, I must deal with the matters that have been presented to me.

The further issues that have been raised by the applicant are the

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need for undertakings by the debtor not to dispose of assets, otherwise than in the ordinary course of business, and to pursue the appeal with all expedition. bfr Harper does not in substance resist the proposition that these undertakings are appropriate. Accordingly, any stay that I grant will be on condition that those undertakings are given by the debtor.

A further matter raised by M r Armstrong, for the applicant, has caused me concern. The evidence before me revealed that the property at Mill Hill Road, Bondi Junction is in the name of MS Ashman, who is the wife of the respondent. One of the grounds that prompted me to make a sequestration order was that there was a realistic possibility that a trustee in bankruptcy would seek to challenge the transaction under which the debtor transferred his half interest in the property to MS Ashman. MS Ashman, of course, is not a party to these proceedings.

In the absence of any undertaking as to the property at Mill Hill Road, the delay caused by the prosecution of an appeal might well result in the Mill Hill Road property being sold. This would mean that the trustee's opportunity to explore the transaction in the interests of creditors would be lost. In response to this concern, M r Harper has indicated that he may be able to obtain instructions for undertakings that would obviate this difficulty. It may be that issues will arise as to the appropriateness of an undertaking to the Court by a non-party. However, I am prepared to allow time for Mr Harper to obtain instructions and to grant a stay in the meantime, subject to the undertakings to which I

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have already referred.

The other matter that has been raised by Mr Armstrong is the question of security for costs. As at present advised, having regard to the fact that the proceedings were not brought by the debtor but against him, I would not be disposed to grant an order for security for costs in relation to the appeal. However Mr Armstrong has indicated that he wishes to draw to my attention some authorities on the question and I propose to give him the opportunity to do that.

In the circumstances I propose to grant the stay that has been sought until 5 pm on Thursday, 6 April 1995, but on the basis that the debtor undertakes not to dispose of his assets otherwise than in the ordinary course of business. Since Mr Harper has informed me he does not yet have instructions to give that undertaking, I will grant the stay until 5 pm on Thursday, 6 April 1995, on the basis that the debtor is ordered in the meantime not to dispose of assets otherwise than in the ordinary course of business. I note that Mr Harper does not submit that I do not have power to make such an order in conjunction with the stay.

I will stand the matter over until 9.30 am on Thursday, 6 April

1995. At that point I would expect that the written undertakings to which I have referred will be provided to the Court on behalf of the debtor. Any dispute about the form of the undertakings can be dealt with at that stage. I shall also deal with any

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undertaking that might be offered on behalf of MS Ashman. At that time I shall hear any application that Mr Armstrong wishes to make in relation to security for costs. I have indicated to

Mr Armstrong that it would be helpful if I could be supplied,

preferably in advance, with a written outline of the argument on

security for costs.

I certify that this and the preceding 4 pages are a true copy of the Reasons for Judgment of the Honourable Justice Sackville.

Dated: 4 April, 1995

Heard:	4 April, 1995
Place:	Sydney
Decision:	4 April, 1995
Appearances:	Mr A. Armstrong, Solicitor of Holmes &
Bevan, appeared for the applicant.
Mr R. Harper, instructed by Garland Hawthorn
Brahe, appeared for the respondent.