Smedley, D.A. v Ex parte St George Building Society Ltd

[1991] FCA 257

JUDGPLEIVT NO. 257, 91

NOT SQITABLE FOR DISTRIBUTIQPI

IN THE FEDERAL COURT OF AUSTRALIA )

GENERAZ, DIVISIOY	1
BANKRUPTCY DISTRICT OF THE STATE	) NP 161 of 1991
gF NEW SOUTH WALES	1

RE :  DAvID ABIGAIL SMEDLEY

RECEIVED	Debtor
FEDERAL COURT OF
AUSTRALIA	ST GEORGE BUILDING SOCIETY LIMITED
PRINCIPAL REGISTRY

Creditor

CORAM: Burchett J.
PLACE: Sydney

DATE : 30 April 1991

EX TEMPORE REASONS FOR JUDGMENT

BURCHETT J . ' .

This is a creditor's petition for a sequestration order, in which a document has been filed giving notice that the debtor intended to appear at the hearing and raising grounds of opposition to the petition. The debtor, Mr Smedley, has in fact appeared, and has shown very considerable capaclty in representing himself. The grounds set out in the document are:

2. The allegations contained in para. 2 as to the amount of the indebtedness differ from the judgment and notice therein. -

1.    The notice giving rise to the petition and the petit~on differ as to fonn, content and the sums alleged due.

claim actually specifically referred to in the ground, and
secondiy, certain other claims related to it.

Proceedings number G814 of 1989 are proceedings which were launched, partly in reliance on the Trade Practices Act 1974, in this court, following upon the taking out of the bankruptcy notice. They were, at some point, transferred by order of Mr Justice Gummow to the District Court, where they appear to have languished. Mr Smedley has tendered correspondence which indicates that a request was made, to solicitors acting for the petitioning creditor, that they obtain their client's instructions to consent to an enlargement of the jurisdiction of the District Court. This was sought on the basis that, within two months of the order of transfer, the debtor or those advising him had come to the conclusion that the limit of $100,000 upon the jurisdiction, as to amount, of the District Court was too low for the purposes of the claims which were desired to be advanced. The evidence indicates that it was agreed between the legal

advisers that the proceedings would be allowed to rest without	any steps being taken to pursue them, pending the
determination of other proceedings to which I shall now turn.
The other proceedings arose more directly, that is, in the procedural sense, out of the proceedings which have led to the creditor's petition. The creditor's petition was based on a District Court judgment. The District Court proceedings brought by the petitioning creditor related to the- balance
followbg which no further extension was granted.
At the hearing of the appeal, the decision was reserved, and it was handed down on 17 October 1990. (It is as yet unreported.) The decision was by majority, the majority consisting of Gleeson C.J. and Mahoney J.A., with the President, Kirby P., dissenting. Mahoney J.A. agreed with the reasons of the Chief Justice, and also with an order for a stay which he proposed. The Chief Justice referred to the evidence which had been before the District Court upon the application to strike out the amended defence and cross-claim. He considered that, as he said:

"The supporting affidavit went into a good deal of factual detail directed at demonstrating that there was no substance in either the defence or the cross- claim. No affidavit in reply was filed on behalf of the appellant, and when the matter came on for hearing there was no appearance on behalf of the appellant."

(I have already pointed out that there was an explanation for

the failure of the appellank to attend, which was, of course,	later relied on, both in this court and for the grant of leave
to appeal.) The Chief Justice said: "In my opinion it was
well open to the learned judge" - that is, to his Honour,
Judge Sinclair - "to reach the conclusion that there was no
substance in the relevant parts of the cross-claim, and that
the appellant's case in relation to the alleged breach by the
mortgagm [g&] of its obligations was hopeless. On the *
material before him, that was the proper conclusion". His

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at any rate anything of any significance, wae done pursuant to the opportunity held out by the Court of Appeal when the stay of execution was extended for that further period of 21 days. The president, in his dissent, referred to the stay in these terms. He said:

"The respondent conceded that it could not resist a short extension of the stay earlier granted by the court on the execution of the judgment entered in its favour, whilst M r Smedley and his representatives decided whether to bring the cross- claim again and, if so, in which jurisdiction."

He went on to refer to the bankruptcy proceedings and to their effect on Mr Smedley's status. He said:

"He does not now contest the judgment. which the respondent has secured against him. But he does wish to pursue the cross-claim before execution is had on that judgment. He also wishes to be protected by a stay of the execution of the judgment lest his trustee should decline to pursue the cross- claim he wishes to bring."

The matter has now come before this court, pursuant to the creditor's petition, after the lapse of a number of months	during which no progress seems to have been made in respect of
the prosecution of the claim to which the court of appeal was referring.
I am faced with the position that any defence to the judgment seeme to have been quite expressly withdrawn in the Court of Appeal. At the very least the defence hae certainly not been pursued. In the circumetances, a cross-claim has
next, including that day, you will not make any payments other

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than in the ordinary course. And you will in no case make a payment of $5,000 or more, without the consent in writing of the solicitors for the petitioning creditor.

Do you give that undertaking to the court?

Mr Smedley:  I give that undertaking to the court your

Honour, yes I do.

Very well, that is noted, and upon that undertaking'^ refrain from making any order at the moment, and I stand the matter over to 4 June 1991. It will be before me at 9.30 in the morning, because I don't expect it to involve any length of time on that occasion. I expect either to be told that something has been achieved or that it has not, and if it has not been achieved, it is my intention to make a sequestration order.

pages are a true copy of the Reasons for Judgment	I certify that this and the preceding eight (8)
herein of his Honour Mr Justice Burchett.
Dated: 30 April 1991 I/ Associate