Snowball v Singh
[2024] FedCFamC2G 414
•9 May 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Snowball v Singh [2024] FedCFamC2G 414
File number: MLG 1844 of 2023 Judgment of: JUDGE FORBES Date of judgment: 9 May 2024 Catchwords: PRACTICE AND PROCEDURE – bankruptcy – application for review of decision of Registrar to make sequestration order – application for adjournment of review hearing – where debtor foreshadows challenge to underlying default judgment – consideration of relevant factors including overarching obligations and case management – adjournment refused Legislation: Bankruptcy Act 1966 (Cth)
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 190 - 192
Cases cited: Owen v Sandhu [2024] FCA 198
Aon Risk Services Australia Ltd v Australian National University [2009] 239 CLR 175
Division: Division 2 General Federal Law Number of paragraphs: 18 Date of hearing: 24 April 2024 Place: Melbourne Counsel for the Applicant: Mr Boadle Solicitor for the Applicant: Sanicki Lawyers Solicitor for the Respondents: Hone Legal & Conveyancing ORDERS
MLG 1844 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
IN THE MATTER OF ASHIL ROHIT SINGH AND LOUISE NATALIE SINGH, BANKRUPTS
BETWEEN: THOMAS ERICK SNOWBALL
Applicant
AND: ASHIL ROHIT SINGH
First Respondent
LOUISE NATALIE SINGH
Second Respondent
ORDER MADE BY:
JUDGE FORBES
DATE OF ORDER:
24 APRIL 2024
THE COURT ORDERS THAT:
1.The Respondents’ oral application for adjournment made on 24 April 2024 is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
(ex tempore revised from transcript)JUDGE FORBES
On 29 February 2024, Judicial Registrar Ellis ordered that the estates of the respondents be sequestrated under the Bankruptcy Act 1966 (Cth). A trustee was appointed to administer the estates.
On 1 March 2024, shortly after the sequestration order, the respondents lodged an application for review of all of the orders that had been made by Registrar Ellis. The application for review simply indicates that all of the orders ought to be the subject of review and that the Registrar's determination should be dismissed. There is no indication set out in the application as to the basis upon which the application was made.
I made case management orders on 13 March 2024 including that the respondents, who are the applicants in this review, should file and serve any affidavits on which they intend to rely and an outline of submissions setting out the grounds and arguments about why the Judicial Registrar's decision should be set aside. I also made orders for the applicant, who is the respondent in this review, to file and serve any affidavits on which he intended to rely and an outline of submissions. The obvious purpose of those orders was to ensure that the applicant was put on notice of the grounds and argument as to why the Judicial Registrar's decision should be set aside, and also put the opposing party on notice as to the evidence that would be advanced in relation to the application.
The matter was listed for hearing before me this morning, 24 April 2024. Relevantly, the respondents had not filed any affidavits or outlines to support their application for the sequestration order to be set aside. However. shortly prior to the commencement of the proceedings, an affidavit was filed on behalf of the respondents; being an affidavit from the first respondent, Ashil Rohit Singh, which was sworn in the early hours of this morning.
Mr Hone, who appears on behalf of the respondents, has sought an adjournment of his clients’ review application and relies upon the affidavit of Mr Singh as the basis for that adjournment. Mr Hone indicated that the affidavit had only been filed in the early hours of this morning, but said that was because relevant material had only recently come to light following contact between Mr Hone and the respondents' former solicitors. Mr Hone said that based on information he had received, he had formed a view, albeit prima facie, that there may be an arguable defence to the claim which gave rise to the underlying County Court default judgment upon which the bankruptcy notice and creditor’s petition had been advanced. Mr Hone indicated that he had been given instructions to make an application to set aside the underlying judgment, albeit on the conditional basis that it depended upon the view he formed in relation to the underlying merit of that attack.
Mr Hone said that he sought an adjournment of these proceedings to give him sufficient time to obtain and review the file from the respondent's former solicitors and then, if appropriate, to make an application to set aside the County Court default judgment. He indicated that he hoped to receive the former solicitor’s file within 24 to 48 hours, and that it would take two to three weeks to form a view about merit. Mr Hone reminded me, and I take into account, the drastic consequences of the extant bankruptcy order.
Mr Boadle, on behalf of the applicant, opposed the application for an adjournment.
Mr Boadle indicated that the respondent had not put his client on notice either as to the adjournment or as to this basis for the adjournment. Mr Boadle's primary position was that the affidavit upon which Mr Hone relies does not reveal a defence to the underlying claim which rises above mere assertion. “Mere assertion”, Mr Boadle submits, is not a proper basis for an adjournment application, nor is it a proper basis to challenge a creditor's petition or a bankruptcy notice. In support of this submission Mr Boadle relied upon the decision of Feutrill J in Owen v Sandhu [2024] FCA 198, in particular at paragraph 67 and following.
Mr Boadle also critically analysed the affidavit upon which Mr Hone relies and submitted, correctly in my view, that it is not clear whether the respondent's former solicitors have given any assessment of the merit of the claim on which the default judgment was obtained or whether there are any grounds to have it set aside. He submitted that, insofar as there has been any expression of an opinion, that has come from a Mr Petselis of the former solicitors, who is not, himself, a lawyer. Mr Boadle contends that Mr Petselis is not in a position to give legal advice as to the merit or strength of an asserted attack on the judgment.
I have considered the submissions from both parties, and I have taken into account a number of other facts which, I think, bear upon the question of adjournment.
The default judgment on which the creditor’s petition was based was entered in the County Court on 7 October 2022. The bankruptcy notice was issued on 12 March 2023, over 12 months ago. There has been no application made to set aside the judgment that was made in October 2022. There has also been no application to set aside the bankruptcy notice made on 12 March 2023, as I said, more than 12 months ago.
There has been no Form B5 notice filed by the respondents which sets out grounds of opposition to the creditor's petition, which includes reference to a proposed merit attack on the claim which gave rise to the default judgment. There has been no affidavit filed in support of grounds for opposition which deal with this proposed attack on the underlying judgment. Indeed, the affidavit that was filed before the Registrar opposing the creditor's petition asserted that the respondents relied on an assertion of solvency and an assertion that there were forthcoming funds to meet the judgment. There was no mention of seeking to set aside the underlying judgment.
I agree with Mr Boadle that mere assertion or a barely arguable claim or a subjective expression as to the strength of the claims raised, no matter how genuinely held and expressed by Mr Hone, is not sufficient to warrant an adjournment. The respondents in this proceeding have had ample time to instruct solicitors to make an application to set aside the judgment. They have had ample time to file affidavit evidence, including in response to the orders that I made in March 2024. They have had ample time to file an outline of submissions to foreshadow the grounds upon which they seek to rely. They have had ample time, in my view, to obtain legal advice over the period since the judgment was entered and the bankruptcy notice was issued.
I have to take into account, in determining an adjournment application, a number of considerations, including the case management demands of this Court. The High Court decision in Aon Risk Services Australia Ltd v Australian National University [2009] 239 CLR 175 stands as authority for the courts to take into account case management principles when exercising discretion in procedural applications even if that is to the prejudice of a party in a particular proceeding. I am also required by sections 190 to 192 of the Federal Circuit and Family Court of Australia Act 2021 (Cth), in dealing with any application to the Court, to take into account the overarching purpose of civil practice and procedure provisions. Those require me to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.
The overarching purpose also requires that I give consideration to the efficient use of judicial and administrative resources available within the Court, the efficient disposal of the Court's overall case load and disposal of all proceedings in a timely matter. Those obligations on the Court are also complemented by corresponding obligations on parties who participate in proceedings to ensure that they conduct themselves in accordance with that overarching purpose.
The respondents have initiated an application for a review of a decision made by a Registrar. They seek to have it set aside. The respondents must persuade the Court that there are proper grounds for an adjournment. It seems to me, having regard to the late filed affidavit which is advanced in support of the adjournment application, that there is insufficient merit in the evidence to warrant the granting of the adjournment, taking into account the case management responsibilities of this Court.
I agree with Mr Boadle, that the respondents do little more than assert that there might be some basis for advancing a defence to the County Court underlying claim. It is indeed mere assertion. I take into account, in particular, that the proposed attack on the underlying judgment is a potential claim that it was based on an agreement which the respondents believe was a sham arrangement. An asserted attack on the basis that the underlying agreement was a sham is a serious allegation, and it requires detailed particulars and proof to a very high civil standard. Given the seriousness of that application, it seems to me that the debtors were surely in a position well before now to have made the allegation, either to their former or current solicitors, and to have provided evidence in the form of an affidavit sufficient to persuade the Court that it has some real substance.
Having regard to all of those matters, the respondents’ application for an adjournment is refused.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Forbes. Associate:
Dated: 9 May 2024