Re Pacer, Nathan Francis Ex Parte Westpac Banking Corp Pty Ltd

[1995] FCA 1120

IN THE FEDERAL COURT OF AUSTRALIA )
BANKRUPTCY DISTRICT             ) No. NP 3620 of 1994
OF THE STATE OF NEW SOUTH WALES   )

Re:     NATHAN FRANCIS PACER
  Debtor

Ex parte:WESTPAC BANKING CORP. P/L

Creditor

REASONS FOR JUDGMENT

EINFELD J                 SYDNEY          5 SEPTEMBER 1995

The debtor and recipient of an application for a sequestration order applies for an adjournment of the hearing to await a judgment of the Court of Appeal which is expected to be available some time before the end of this year.  I do not comment on whether the appeal will or is likely to be disposed of by that time but it is certainly possible on the facts that have been presented to the Court.  The appeal to the Court of Appeal has been lodged against a judgment of Rolfe J given in the Commercial Division of the Supreme Court on 14 December 1994 in a cross claim brought by the debtor against a solicitor, Mr Tom Anthony Demanis.  The debtor and Demanis, together with a man named George Lazaridis, consented to judgment in favour of the creditor Westpac in February 1994.  A cross-claim brought by the debtor against Demanis claimed that he was entitled to a full indemnity from Demanis for his liability under that judgment.

Rolfe J held that the cross-claim failed and the Court of Appeal will be asked to reverse that finding and order a retrial of the issue.  Westpac is not a party to the proceedings on the cross claim between the debtor and Demanis.  Assuming that the retrial takes place, Westpac will still not be a party and as far as I can see, nothing will occur in the retrial which can affect the outstanding debt of the debtor to Westpac although there will be some interesting evidentiary issues raised.  In the event that the retrial finds in favour of the debtor, he will become entitled to an indemnity from Demanis which will cover and include the debtors outstanding indebtedness to Westpac of the order of $100,000 plus.  That would enable the debtor to pay the debt to Westpac but it seems quite unlikely that such a result can occur within even the next six months.

In the affidavit in support of the application for adjournment, the debtor says that in the event that there is a retrial, he will seek to have the Supreme Court set aside the consent judgment in favour of Westpac.  As I see the position, there is nothing to stop any such application being made now and, in fact, there has been nothing to stop it being made at any time since the judgment was entered.  Amongst other things, something in the nature of fraud will presumably have to be established if a consent judgment between adult apparently intelligent people is to be set aside at all.  The three debtors, Demanis, Lazaridis and Pacer, would have a common interest in setting aside the judgment because all cross claims would then obviously fall to one side, whatever their individual merits. 
As I see the position, nothing has been advanced in support of the adjournment which can bear upon the issues that have to be considered on such an application.  It is, of course, not uncommon for the Court to entertain applications for the adjournment of applications for sequestration on the grounds that there is an appeal pending against the judgment debt on which the sequestration order is to be based.  But this is a completely different case.  The appeal in view here will not affect the debt at all except peripherally or consequentially and it certainly will not do anything to reduce or ameliorate the indebtedness of the present debtor to Westpac under the consent judgment.  In those circumstances, no basis has been shown for an adjournment of the sequestration order and I refuse the application.