TADROS v WAKIM
[2010] FMCA 601
•29 July 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| TADROS v WAKIM & ANOR | [2010] FMCA 601 |
| BANKRUPTCY – Application to set aside bankruptcy notice – application for leave to reopen case to adduce further evidence after judgment reserved. |
| Bankruptcy Act 1966 (Cth), ss.40, 52 |
| Bing! Software Pty Ltd v Bing Technologies Pty Limited (No.2) [2008] FCA 1761 Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 Murray v Figge (1974) 4 ALR 612 |
| Applicant: | ANTHONY TADROS |
| First Respondent: | JOSEPH WAKIM |
| Second Respondent: | RITA WAKIM |
| File Number: | SYG 568 of 2010 |
| Judgment of: | Barnes FM |
| Hearing date: | 29 July 2010 |
| Delivered at: | Sydney |
| Delivered on: | 29 July 2010 |
REPRESENTATION
| Solicitors for the Applicant: | Morgan Ardino & Co |
| Counsel for the Respondents: | Mr Robinson |
| Solicitors for the Respondents: | Cambridge Law |
ORDERS
The application to reopen the case in accordance with paragraph 87 of the applicant’s submissions filed on 21 July 2010 is dismissed.
The parties have liberty to apply on two (2) days notice.
The applicant pay the respondent’s costs of today as agreed and in the absence of agreement taxed in accordance with the Federal Court Rules.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 568 of 2010
| ANTHONY TADROS |
Applicant
And
| JOSEPH WAKIM |
First Respondent
| RITA WAKIM |
Second Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
In the substantive proceedings the applicant seeks that a bankruptcy notice be set aside on the basis that he has a counter-claim within s.40(1)(g) of the Bankruptcy Act 1966 (Cth).
This is an oral application by the applicant to reopen proceedings after the hearing and while judgment is reserved. The applicant relied on the court’s power to allow evidence to be adduced prior to final determination. The evidence in question is an affidavit of Mr Maurizo Gazzara said to have been sworn on 26 June 2007 in earlier Federal Court proceedings between the parties which were dismissed and which involved causes of action now said to constitute the counter-claim under s.40(1)(g) of the Act.
The applicant submitted that this evidence should be considered by the court in relation with the application to set aside a bankruptcy notice on the basis that it was relevant to “wrongdoings” of the respondents towards the applicant and to alleged contributions of the creditors to the applicant’s losses and liabilities.
This issue was initially raised in post-hearing written submissions. No formal application was made for leave to reopen at that time. I listed the matter so that the issue could be determined. Leave is now sought to adduce evidence consisting of Mr Gazzara’s affidavit. The submissions stated that a copy of the affidavit would be made available to the court. However this has not occurred.
Nonetheless, the applicant submitted that the court should give leave to reopen proceedings on the basis that the evidence is relevant and would be persuasive. It was said to be fundamental to why the debtor was in the position he was now in and to his impecuniosity. The affidavit is said to make certain allegations about wrongdoing of the creditors and to allege a propensity for wrongdoing generally on their part.
I was not addressed by the solicitor for the applicant on the relevant principles in relation to adducing further evidence-in-chief after a trial of proceedings has concluded and while judgment is reserved.
It is well established that the court does have such jurisdiction (see for example Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22, in which Kenny J set out the circumstances in which the court will permit further evidence to be adduced and Bing! Software Pty Ltd v Bing Technologies Pty Ltd (No.2) [2008] FCA 1761).
In Bradshaw Kenny J suggested there were four recognised classes of cases in which the court may grant leave to reopen, although there may also be other circumstances and there is some overlap between such classes. First, are those cases in which there is fresh evidence. However an affidavit that was sworn in other proceedings involving the parties on 26 June 2007 is not fresh evidence. A second class is when there has been some inadvertent error such that there is a need to recall a witness, tender answers to interrogatories or some other shortcoming to address. There is nothing in the present case to suggest that there has been any such inadvertent error. Nor is there any suggestion that the matter is within the third and fourth recognised classes of cases in which a court may grant leave to reopen: mistaken apprehension of the facts or of the law.
Further, there is no explanation for the failure to put the evidence in question before the court at the appropriate time. Mr Ardino did make submissions in relation to the willingness of Mr Gazzara to give evidence, but leave is not sought to enable Mr Gazzara to give fresh affidavit evidence. Rather, what is sought to put before the court is an affidavit that was sworn by Mr Gazzara in other proceedings.
I have borne in mind generally that the overriding principle is whether the interests of justice are better served by allowing the application for leave to reopen. Insofar as possible, on the material before the court, I have had regard to the principles considered by Muirhead J in Murray v Figge (1974) 4 ALR 612, including whether or not the evidence is so material that the interests of justice require it; whether if believed it would most probably affect the result; whether it could not by reasonable diligence have been discovered before; whether any inadvertence is established; and whether any prejudice would be suffered by the other party by reason of its introduction at a late point of time.
A number of difficulties face the applicant in this regard. There is no evidence of inadvertence. There is no clear explanation as to why there was no earlier attempt to put before the court a copy of the affidavit sworn in June 2007 in other proceedings that have been the subject of submissions in this case. The relevance of those proceedings was clearly a matter that should have been in the contemplation of the parties. This is not a case in which the evidence could not by reasonable diligence have been discovered before the present time, having regard to the involvement of the applicant in those prior proceedings.
In relation to prejudice, I am told from the bar table that the solicitor for the respondents has not received a copy of the affidavit. Had Mr Ardino made a copy of the affidavit available with the submissions in which he sought to put that affidavit before the court, I may have been able to address more clearly the issue of prejudice. Instead, I am faced with an application where it is simply not clear whether allowing such an affidavit will in fact cause prejudice to the respondent.
More generally and critically, I am not satisfied on the basis of what I am told that this evidence is so material that the interests of justice require it to be before the court in these proceedings. I cannot be satisfied that, if believed, the affidavit of Mr Gazzara would most probably affect the result of these proceedings, particularly as the affidavit in question is not before the court.
I have borne in mind that, as discussed in Bradshaw, the court should be conscious of the principle of the finality of litigation in deciding whether to exercise such a discretion.
Moreover, this is an application to set aside a bankruptcy notice on the basis that the applicant has a counterclaim, set-off or cross demand equal to or exceeding the amount of the bankruptcy notice. It is not the hearing of a creditor’s petition where issues relating to suggested wrongdoing on the part of the creditors might be relevant under s.52(2)(b) of the Act. It has not been satisfactorily explained how an affidavit filed in the Federal Court proceedings is directly relevant and so material that the interests of justice require that it be before me in order that I determine whether there is a counterclaim, set-off or cross demand within s.40(1)(g) of the Bankruptcy Act.
I have borne in mind that I have a discretion in relation to setting aside a bankruptcy notice, but the general allegations that the applicant makes are not relevant to the ground that he relies on in connection with his application to set aside the bankruptcy notice (which is that he has is a counterclaim, set-off or cross demand within s.40(1)(g) of the Act).
In the circumstances, the evidence before the court is not such as to satisfy me that it would be in the interests of justice to allow the applicant to reopen his case in order to adduce a copy of an affidavit of Mr Gazzara sworn on 26 June 2007 in Federal Court proceedings.
Accordingly, the application to reopen the case is dismissed.
I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of Barnes FM
Date: 28 September 2010
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