Statewide Secured Investments Pty Ltd v Tarrant
[2011] FMCA 861
•18 October 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| STATEWIDE SECURED INVESTMENTS PTY LTD v TARRANT | [2011] FMCA 861 |
| BANKRUPTCY – Application for adjournment – where the debtor is seeking special leave to appeal to the High Court against the refusal of the New South Wales Court of Appeal to grant leave to appeal an order of a single judge. |
| Bankruptcy Act 1966, s.52(1) |
| Port of Melbourne Authority v Anshun Pty Ltd (1981) 36 ALR 3 |
| Applicant: | STATEWIDE SECURED INVESTMENTS PTY LTD |
| Respondent: | SANDRA LEE TARRANT |
| File Number: | SYG 425 of 2011 |
| Judgment of: | Raphael FM |
| Hearing date: | 18 October 2011 |
| Date of Last Submission: | 18 October 2011 |
| Delivered at: | Sydney |
| Delivered on: | 18 October 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr P Cutler |
| Solicitors for the Applicant: | Carrolls Lawyers |
| Solicitors for the Respondent: | James Pope |
ORDERS
Application for adjournment declined.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 425 of 2011
| STATEWIDE SECURED INVESTMENTS PTY LTD |
Applicant
And
| SANDRA LEE TARRANT |
Respondent
REASONS FOR JUDGMENT
There comes before me today an application to adjourn the hearing of a petition that was presented to the court on 10 March in this year in respect of which a notice stating grounds of opposition was finally filed on 22 July 2011. The case is not an unfamiliar one to persons who practise in insolvency. The debtor is a borrower under a property loan who was unable to keep up the payments and who had the property sold by the mortgagee in exercise of its power of sale. The petition represents a demand in respect of the balance owing under the loan.
Equally familiar will be the fact that the borrower was involved in proceedings against the lender impugning the loan and the exercise of the power of sale. Those proceedings were heard in the Supreme Court of New South Wales. Judgment in the mortgagee’s application for possession was given by Adams J on 14 May 2009 and included the judgment sum of $2,675,419.31. The debtor filed a notice of appeal.
The judgment, which was signed on 19 June 2009, was stayed by Adams J until 27 July 2009 when McClelland CJ at common law ordered that the stay be removed. On 9 November 2010, over 15 months after the stay was lifted, the debtor filed a notice of motion seeking orders, inter alia, that the judgment be set aside and that it be further stayed. That notice of motion was heard by Garling J in the New South Wales Supreme Court and he dismissed it.
The debtor sought leave to appeal to the New South Wales Court of Appeal against the decision of Garling J. On 18 August 2011 the Court of Appeal, McColl JA and Basten JA, dismissed the application. I am advised by Mr Pope, who appears on behalf of the debtor, that an application for leave to appeal to the High Court was made but that, due to a delay in filing the appropriate documentation, the appeal was deemed to have been abandoned.
Mr Pope now asks that the hearing of the petition be adjourned on the basis that the debtor is taking steps to right the problems with the High Court and that the application for leave to appeal will be heard within a reasonable time if those steps are successful. He also makes reference to a further proceeding in the Supreme Court commenced by the debtor against the creditor arising out of the sale of the property which Mr Cutler, who appears for the creditor, tells me is seeking damages for failure to comply with a duty of care over the construction loan, including damages for loss of reputation and hurt feelings.
It would appear that the creditor has issued a summons in the Supreme Court striking out the statement of claim that has been heard by the Registrar. The Registrar has not delivered his decision on the matter and I gather from Mr Pope and Mr Cutler that there may be some problem about the jurisdiction of the Registrar in relation to the application. However the creditor argues that the majority of the statement of claim consists of matters that could have been agitated in the proceedings to which I have already referred and therefore are estopped from being re-litigated by the principle found in Port of Melbourne Authority v Anshun Pty Ltd (1981) 36 ALR 3. He also tells me that he does not believe that a claim for loss of reputation and hurt feelings is one known to the law outside, presumably, proceedings for defamation.
Courts dealing with insolvency matters, particularly personal insolvency matters, are used to debtors taking all possible steps to avoid the sequestration of their estate, which steps usually include multiple adjournments. The court is sensible of the quasi-criminal nature of bankruptcy proceedings and the effect upon any person who is declared to be bankrupt; but at the same time it is equally sensible of the public interest in ensuring that insolvent persons do not continue to exercise the rights and the privileges of persons who are solvent, including the rights and privileges to obtain credit and to conduct their own affairs.
Adjournments to allow appeals are considered at some length in the service under the heading in relation to s.52(1) of the Bankruptcy Act 1966 (the “Act”). It is generally considered that appeals against a first instance judgment that are being conducted with due diligence should be allowed to take place and that applications for adjournments to allow such a hearing should be considered sympathetically, but when it comes to a further appeal the service states:
“While an application for special leave to appeal to the High Court of Australia is not strictly speaking an appeal, either in form or in substance, similar principles apply to an application for an adjournment pending resolution of such an application, subject to an appropriate recognition of the fact that an appeal does not lie as of right and that the requirements for a successful application for special leave are different from those required for an appeal as of right.”
In the case of applications for special leave to appeal a court in bankruptcy is entitled to look at the nature of the appeal and would expect to see some submissions made upon its prospects of success.
In this case we are talking about an application for leave to appeal against the refusal by the Court of Appeal for leave to appeal a decision of another Supreme Court judge. Mr Pope tells me that he cannot say anything about the matter and I think in those circumstances I am entitled to be sceptical about the prospects to the extent that I would not permit an adjournment of a hearing of a petition on that basis alone.
The other proceedings which are referred to by Mr Pope are also the subject of objection as earlier discussed and, whilst I have not made any detailed analysis of the statement of claim or of the objections, it does seem to me that the Anshun principle would apply where matters are being raised that could have been raised (and possibly were raised) in the original proceedings or in the application to Garling J. I would also doubt whether any damages for loss of reputation and hurt feelings could amount to some $2,600,000.00 under any circumstances and thus there would still be a balance due to the creditor. For these reasons I am not prepared to grant the adjournment requested by Mr Pope and I will hear the formal parts of the petition before turning the matter over to Mr Pope to advocate for his client’s notice of objection.
I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of Raphael FM
Date: 8 November 2011
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