Searle, John Weslyn v Lincoln Contractors Pty Ltd

[1981] FCA 118

Ex TEWORE

Sankruptcy Act 1966

IN THE FEDERAL COURT OF AUSTRALIA	)
1
) No. G6 of 1981
QUEENSLAND DISTRICT REGISTRY
1
GENERAL DIVISION	1

ON APPEAL FROM THE SUPREME COURT OF

QUEENSLAND EXERCISING FEDERAL JURISDICTION

IN BANKRUPTCY

JOHN WESLYN SEARLE

Appellant

LINCOLN CONTRACTORS PROPRIETARY LIMITED

Respondent

Coram: Fox, McGregor and Sheppard JJ

9 July 1981

Brisbane

FOX J:

We are hearing an appeal against a sequestration

order made by Matthews J on 24 March last. The debtor has

appealed on two grounds. One is to the effect that neither

the petition, nor the evidence subsequently adduced, showed

the authority of Mr. Schulz to sign the petition on behalf

of the petitioning creditor Lincoln Contractors Proprietary

Limited. The other ground is in effect that his Honour

wrongly exercised his discretion i refusing an application

on behalf of the debtor to adjourn the hearing	of the
petition.

We have been assisted by the researches of

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c o u n s e l i n r e s o l v i n g t h e s e q u e s t i o n s , b u t it seems t o me

tha t the appea l should be d i smissed . I s h a l l make some

b r i e f comments about the two grounds.

As t o t h e f i r s t , wi thou t t he necess i ty o f go ing

i n t o t h e way i n which the pet i t ion might have been drawn,

t h e fact is t h a t a t a l a t e r s t a g e t h e r e was f i l e d a n

a f f i d a v i t b y Mr. Schulz in which he deposed to the fact

t h a t h e h a d t h e a u t h o r i t y of t h e company a t t h e t i m e t h e

p e t i t i o n was execu ted and con t inued to have tha t au tho r i ty .

T h i s a f f i d a v i t was r e c e i v e d i n e v i d e n c e b e f o r e h i s Honour

wi thou t ob jec t ion . This i n i t s k l f , I bel ieve, would be

enough	t o d e f e a t t h e p o i n t r a i s e d , b u t	the	mat te r goes
f u r t h e r .

A t a n e a r l y d a t e , o n t h e a p p l i c a t i o n o f t h e

debtor , there had been an ad jou rnmen t o f t he pe t i t i on on

the grounds of the ill h e a l t h o f t he deb to r and the po in t

now r a i s e d was n o t p r e s s e d a t t h a t s t a g e . When l a t e r t h e

m a t t e r was being decided by Matthews J h e t o o k c a r e t o go

th rough the g rounds se t ou t i n the no t i ce o f oppos i t i on ,

and it appears from a r e a d i n g o f t h e t r a n s c r i p t t h a t

a l though the poin t appeared as one of the grounds of

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oppos i t i on , it was then abandoned. If t h e r e f o r e t h e r e w e r e

any i r r e g u l a r i t y i n r e l a t i o n t o t h e e x e c u t i o n of t h e

p e t i t i o n , o r i t s p r e s e n t a t i o n , it has been waived and

overcome by subsequent events. I t i s n o t a mat ter which

can now b e r a i s e d on t h e h e a r i n g o f t h i s a p p e a l .

A s t o t h e s e c o n d matter, w h i c h r e l a t e s t o t h e

a p p l i c a t i o n t o a d j o u r n t h e p e t i t i o n , it should be sa id

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t h a t t h e m a t t e r o f t h e d e b t o r ' s d e b t t o t h e p e t i t i o n i n g

c r e d i t o r h a s a l ong h i s to ry go ing back t o 1 9 7 6 . The

judgment upon which the bankruptcy notice was based, and

f a i l u r e t o comply with which was t h e act of bankruptcy

r e l i e d o n , was ob ta ined on 1 7 October 1978. I t i s n o t of

p a r t i c u l a r c o n c e r n t o us , b u t it i s par t o f the background

t h a t t h e p e t i t i o n i n g c r e d i t o r seems t o have given the

deb to r a number o f o p p o r t u n i t i e s i n w h i c h t o p a y o r i n some

way s a t i s f y t h e d e b t i n ques t ion .

The bankruptcy not ice was i s s u e d i n May 1 9 8 0 and

a n o r d e r f o r s u b s t i t u t e d s e r v i c e o f it was made i n August

o f t h a t y e a r . The p e t i t i o n i t s e l f was p resen ted on 16

October o f l a s t year and aga in there had to be an order

f o r s u b s t i t u t e d s e r v i c e w h i c h was made on 1 9 February.

Se rv ice	seems	t o	have been effected on	28	Februa ry o f t h i s
year .

A s I have already mentioned, when t h e p e t i t i o n

came o n f o r h e a r i n g on an e a r l i e r o c c a s i o n , i n March o f

t h i s y e a r , Andrews J o f t h e Supreme Court of Queensland,

g ran ted the deb to r an ad jou rnmen t and a t t ha t t ime

s p e c i f i c a l l y made a comment t o t h e e f f e c t t h a t it was

d e s i r a b l e t o know what concre te promises the debtor could

make towards pay ing h i s c r ed i to r s . I t was w i t h t h a t b a c k -

g r o u n d t h a t t h e m a t t e r came before Matthews J on 24 March.

The l e a r n e d j u d g e c o n s i d e r e d t h e a p p l i c a t i o n f o r

an adjournment with care and he discussed with counsel the

var ious grounds i n t h e n o t i c e o f o p p o s i t i o n . I quote from

what h i s Honour s a i d i n r e l a t i o n t o t h e a d j o u r n m e n t m a t t e r .

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It was this:

"Mr. Paratz, if there was any material

placed before me to suggest in any shape

or form that this man was able to, given

a little time, pay his debts, I would have

adjourned the matter, but on the material

before me, he has failed time and time

again to meet his obligations when he said

he would meet them and he has not put

before me one detail of evidence to suggest

that he is other than unable to pay his

debts; s o even though he be a sick man, I

am going to make him bankrupt today."

His Honour then proceeded to make the sequestration order.

In my estimation his Honour quite adequately

summarised the position. The application for an adjourn-

ment was essentially on the basis that the debtor was sick.

That is a mattei- with which the Court has sympathy and I

have no doubt his Honour had sympathy, and in some

situations, it will be a very important matter, but having

in mind the history of this case, what was important on this

second application f o r an adjournment was that the Court

sitting in bankruptcy be able to see that in granting the

adjournment it would be able to do justice between creditors

and debtor. This at least involved the Court in being able

to see that there was some concrete prospect o f the debtor

being able to meet his debts o r to make some other arrange-

ment which would be satisfactory to creditors.

As his Honour observed, there was no evidence to

this effect. We have been referred to authorities, with

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which in any event we have a familiarity, dealing with the

circumstances in which an appellate Court will interfere

with the exercise of a discretion by a judge or a Court from

which it is hearing an appeal. The granting or refusal of

an adjournment, as has been pointed out, is an especially

discretionary matter. It is not s o much that the content o f

the rule is any different. It is rather that its application

is different, having in mind that what is being considered is

the due progress of the litigation.

For myself I am quite unable to see any error at

all in what his Honour did. With respect to him, my present

impression is that if I had been in his place I would have

done the same thing.	In my opinion, therefore,	the appeal
should be dismissed.
McGREGOR J:

I agree.

SHEPPARD J:

I also agree.

FOX J:

As I said, we are obliged to counsel for their

asslstance, and the appeal will be dismissed.