Tetlow v Department of Planning and Infrastructure
[2008] FMCA 535
•30 April 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| TETLOW v DEPARTMENT OF PLANNING & INFRASTRUCTURE | [2008] FMCA 535 |
| BANKRUPTCY − Whether bankruptcy notice ought be set aside − whether time for compliance with bankruptcy notice ought to be further extended. |
| Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264 Elliott v Water Wheel Holdings Pty Ltd (2004) 178 FLR 459; [2004] FMCA 37 Howarth; ex parte Mortgage Acceptance Nominees Ltd (1993) 43 FCR 587 Jackson v Conway [2000] FCA 1530 La Pegna v Deputy Commissioner of Taxation (2006) 204 FLR 364; [2006] FMCA 1643 McPhee v Glentham Pty Ltd [2006] FMCA 1508 O’Loughlin v Glenmont Investments Pty Ltd [2001] FCA 925 Richardson v Leonard Cohen & Co [2007] FMCA 78 Sidhom v Euphoric Pty Ltd [2006] FMCA 827 Tetlow v Department of Planning and Infrastructure [2007] WADC 28 Tetlow v Department of Planning and Infrastructure [2007] WASCA 252 Valassis v Bernard [2001] FCA 477 |
| Applicant: | BEVERLEY DIANNE TETLOW |
| Respondent: | DEPARTMENT OF PLANNING & INFRASTRUCTURE |
| File Number: | PEG 303 of 2006 |
| Judgment of: | Lucev FM |
| Hearing dates: | 7 February & 9 November 2007 |
| Date of Last Submission: | 9 November 2007 |
| Delivered at: | Perth |
| Delivered on: | 30 April 2008 |
REPRESENTATION
| Applicant: | Mr D Tetlow (Husband of the Applicant, by leave) and written submissions |
| Counsel for the Respondent: | Mr A Prentice and Mr B Wheatley and written submissions |
| Solicitors for the Respondent: | Mossensons |
ORDERS
That the Applicant’s application to set aside Bankruptcy Notice WA 423 of 2006 be dismissed.
That time for compliance with Bankruptcy Notice WA 423 of 2006 not be further extended.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 303 of 2006
| BEVERLEY DIANNE TETLOW |
Applicant
And
| DEPARTMENT OF PLANNING & INFRASTRUCTURE |
Respondent
REASONS FOR JUDGMENT
Application
By application made on 30 November 2006 Beverley Dianne Tetlow[1] applied to set aside a bankruptcy notice[2].
[1] “Applicant”.
[2] WA 423 of 2006 – the “Bankruptcy Notice”.
By order dated 7 February 2007 this Court extended time for compliance with the Bankruptcy Notice, to the time of delivery of this Judgment.
The manner in which the proceedings developed meant that the matter was argued both as a set aside application and an application in relation to extension of time for compliance with the Bankruptcy Notice.
State court judgments
The Bankruptcy Notice relates to a Certificate of Judgment issued on 20 July 2006 out of the Magistrates Court of Western Australia in relation to a judgment against the Applicant in favour of the Department of Planning and Infrastructure[3] for $8,316.53, plus interest.
[3] “Respondent”.
The Applicant has fought doggedly but in vain to overturn the judgment of the Magistrates Court of Western Australia giving rise to the judgment debt. Appeals to the District Court of Western Australia[4] and the Supreme Court of Western Australia, Court of Appeal[5] have been unsuccessful.[6]
[4] “District Court”.
[5] “Court of Appeal”.
[6] Tetlow v Department of Planning and Infrastructure [2007] WADC 28 (“Tetlow – District Court”); Tetlow v Department of Planning and Infrastructure [2007] WASCA 252 (“Tetlow – Court of Appeal”).
The Reasons for Judgment in Tetlow – Court of Appeal are those contained in the succinct judgment of Pullin JA (with whom Buss JA on a two judge Court of Appeal agreed), which this Court reproduces in full as follows:
1 PULLIN JA: This is an application relevantly pursuant to r 43(2)(f) of the Supreme Court (Court of Appeal) Rules 2005 (WA) to strike out the basis of appeal on the ground that none of them has a reasonable prospect of succeeding, and also pursuant to r 43(2)(g)(i) to dismiss the appeal for that reason.
2 The appeal is against a judgment of Judge Keen dismissing the appellant's application for an extension of time to appeal to the District Court from a judgment of Mr Bromfield SM in the Local Court, dated 24 February 2006. The judgment in the Local Court was for the sum of $6,569.02 due to the respondent for rent.
3 The time limited for an appeal was 21 days. The appellant lodged a notice of appeal in the District Court on 21 September 2006, which was nearly six months out of time, and then made an application for an extension of time which was heard by Judge Keen.
4 Under s 79 of the District Court of Western AustraliaAct 1969 (WA), the appellant requires leave to appeal to this court because Judge Keen's decision was not a final judgment. It was an interlocutory judgment. Ordinarily, leave will only be granted where the decision was wrong or attended with sufficient doubt to justify the grant of leave and substantial injustice would occur if the decision were left unreversed.
5 Judge Keen correctly directed himself as to the law governing the application for an extension of time - see [21] of his reasons. The reasons given by the appellant for the delay in appealing to the District Court and referred to by Judge Keen, were specious for the reasons given by Judge Keen.
6 On behalf of Mrs Tetlow, Mr Tetlow asserted in this court that his wife believed she could not appeal unless she had received the certificate of judgment from the Magistrates Court, and that she did not see a copy of such a certificate until September 2006. No affidavit filed in this court contains that evidence, but Mr Tetlow referred to affidavits filed in the District Court which were said to be to that effect.
7 In fact, there appear to be no affidavits of Mrs Tetlow to which this court has been referred, but there were affidavits of Mr Tetlow which might be read as suggesting what Mr Tetlow has put forward; although they may also be read as meaning that Mrs Tetlow wanted to secure the certificate to obtain details of the terms of the judgment. It is clear, however, that Mrs Tetlow did know of the amount of the judgment a long time before the notice of appeal was filed in the District Court.
8 However, even if Mrs Tetlow did have an explanation for the delay, there is still a question about whether or not the grounds of appeal were arguable, and that was something which Judge Keen considered. It is clear that no extension of time should be granted merely for the purpose of advancing an unmeritorious case.
9 As to the merits of the appeal proposed in the District Court, Judge Keen considered that the appellant had not demonstrated any arguable error on the magistrate's part. There are six grounds of appeal in this court. The first three are grounds directed to demonstrating error in the magistrate's reasons for decision, and the second three grounds are directed to Judge Keen's reasons for decision.
10 The first identifiable point raised is in ground 1(b) of the first set of three grounds, and in ground 1(b) of the second set of three grounds. The contention is that the respondent did not give notice pursuant to s 81 of the Property Law Act 1969 (WA). This section is irrelevant because it does not apply to proceedings brought for payment of rent. Those grounds therefore have no reasonable prospect of succeeding.
11 A second point - a contention raised in the submissions and the subject of most of the grounds of appeal before Judge Keen but not raised in grounds of appeal to this court - was that the offer of a lease was not stamped. However, Judge Keen concluded that the instrument was not chargeable with duty and had in fact been 'marked by the stamping authorities' to that effect. There is no challenge to that conclusion.
12 That contention, even if contained in a ground of appeal, has no reasonable prospect of succeeding. All the other grounds are frivolous or vexatious, or do not have a reasonable prospect of success, because they are either argumentative or meaningless or do not demonstrate any arguable error on the part of the judge in the District Court. Indeed, Judge Keen was correct to dismiss the appellant's application for an extension of time for the reasons that he gave.
13 As a result, all grounds should be struck out and the appeal should be dismissed.
The Applicant’s case to set aside the Bankruptcy Notice rests largely on the contention that an offer of a lease document admitted into evidence in the Magistrates Court of Western Australia ought not to have been admitted into evidence because it was not stamped in relation to duty. The offer of lease document was however ultimately stamped as not chargeable with duty,[7] and dealt with on that basis in Tetlow – District Court. Both of the judgments in Tetlow – Court of Appeal[8] and Tetlow – District Court[9] with which this Court respectfully agrees dispose of that issue in terms fatal to the Applicant’s case.
[7] A copy of the offer of lease document stamped “No Duty Payable” is in evidence in this Court: Affidavit of Anthony Prentice, sworn 7 February 2007, Annexure A.
[8] Tetlow – Court of Appeal at paras. 11-12 per Pullin JA.
[9] Tetlow – District Court at paras. 12 (“the appeal on this issue goes nowhere at all and cannot succeed”), 13 and 28 per Keen J.
The Applicant’s case to set aside the Bankruptcy Notice also rests to some extent on an underlying dispute about the real terms of the lease, and the quantum of rent payable under that lease. That dispute was dealt with in Tetlow – District Court, as follows:
There is an underlying dispute in this matter as identified by Mr Tetlow, as to what the real terms of the lease were between the parties. Mr Tetlow says what he offered the Department. Mr Tetlow in his affidavit, (the copy before me is not sworn but has a November date or a December date) says in par 9 that he stated to Jane Wales on behalf of the Department that the building was 40 years old and clad with asbestos and in view of poor access along with low height that a figure of $650 per month was more realistic.
In par 10 of that affidavit he says, “Desmond Tetlow suggested an offer of $1600 per month inclusive.” He goes on say, “On 2 July 2004 Jane Wales informed Desmond Tetlow that the Department would accept his offer as presented.” The document which was signed by Mrs Tetlow, the agreement for lease, in fact states the figure of $1,800 per month plus GST as the rent.
What appears to be quite clear from the analysis given to me by Mr Prentice on behalf of the Department, in how the Magistrate came to his assessment of the sum to be set aside, is that the Magistrate adopted the figure of $1,600 as the figure per month. In other words, that, plus other figures, which I need not go into for the purposes of these reasons, was the figure the Magistrate obviously thought that there was no arguable defence to, but there was an arguable defence as to the balance of the lease figure and the other items to which he referred in his reasons on 24 February 2006.
With respect, I am bound to agree with the learned Magistrate that if in fact there was a triable issue at all it was only to the extent of whether or not the lease should have been at $1,800 per month plus GST or whether it should have been $1,600 per month. I do not accept that there is any credible evidence before the court to show that the lease was for $650 per month. Indeed, my exchange with Mr Tetlow during the course of this hearing would suggest to me that Mrs Tetlow has been fortunate to obtain that indulgence from the Magistrate, because the document appears quite clear, and whilst Mr Tetlow attempted to suggest that his wife must have signed the document in blank and the figures put in afterwards, there was absolutely no evidence to support such a proposition.
It is evident in this case that the Magistrate had some considerable difficulties with the figures and with great respect to Mr Tetlow and the appellant, they are as much to blame for this as anyone else and probably more so. It was the appellant who was applying to set aside a judgment that had been regularly obtained and bore the onus of showing an arguable defence to the claim or part thereof.[10]
[10] Tetlow – District Court at paras. 16–20.
The judgment in Tetlow – District Court is unimpeachable: both on its reasoning and on the evidence now before this Court there is no basis for arriving at a conclusion different to that of the District Court.
There is no evidence before the Court of any appeal, or an application for special leave to appeal to the High Court of Australia, from the judgment in Tetlow – Court of Appeal.
Conclusion – set aside application
There is nothing in the materials before this Court to warrant the setting aside of the Bankruptcy Notice. There will be an order dismissing the application to set aside the Bankruptcy Notice.
Extension of time for compliance
Principles
The issue of extension of time for compliance arises in a negative sense – the Respondent submitting as part of its case that no further extension of time for compliance ought to be granted.
Whether there ought be an extension of time for compliance with the Bankruptcy Notice is a matter to be determined by the exercise of the Court’s discretion. The Court has summarised the facts to be taken into account as follows:
Where proceedings to set aside a judgment debt and order have been instituted by way of an appeal factors to be taken into account when determining whether to exercise the discretion include:
a) whether there is an arguable case on appeal;
b) whether a stay of execution has been sought or obtained;
c) prejudice to the debtor;
d) prejudice to the creditor and other creditors;
e) the impact on the date of bankruptcy;
f) the impact on any related legal proceedings;
g) delay; and
h) whether or not undertakings have been given, or conditions can be imposed, in relation to, for example:
| i) | payment of monies on trust by the debtor; |
| ii) | non-disposal of assets by the debtor; |
| iii) | notification of significant expenditure by the debtor; and |
| iv) | further borrowings on real property owned by the debtor, |
and the debtor’s ability to fulfil or comply therewith. [11]
[11] McPhee v Glentham Pty Ltd [2006] FMCA 1508 at para. 20 per Lucev FM, (“McPhee”) citing Howarth; ex parte Mortgage Acceptance Nominees Ltd (1993) 43 FCR 587 at 592-593 per Einfeld J; Valassis v Bernard [2001] FCA 477; O’Loughlin v Glenmont Investments Pty Ltd [2001] FCA 925 at paras. 17 and 19 per Mansfield J.
Arguable case
An extant appeal, and whether there is or is not an arguable case, are factors for consideration on an extension of time application.[12]
[12] Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264 at 270–271 per Lehane J (“Byron”); Richardson v Leonard Cohen & Co [2007] FMCA 78 at para. 46 per Lucev FM (“Leonard Cohen”).
In this case, there is no evidence that any appeal is any longer on foot. Thus, this factor must weigh against an extension of time.
The Applicant did suggest at the hearing on 9 November 2007 that the matter might be the subject of a special leave application to the High Court of Australia. There is no evidence of such a special leave application having been made.
Whilst a special leave application is not of itself an appeal, not dissimilar principles apply in determining whether to grant an extension of time for compliance with a bankruptcy notice on the basis of a special leave application.[13] In short, it is not for the Court to make a preliminary assessment of the appeal or special leave application, but rather, to form a view as to whether the appeal or special leave application may be arguable or not.[14] Having regard for the Reasons for Judgment in both Tetlow – Court of Appeal and Tetlow – District Court, and for the nature of the materials before this Court, it has to be said that the prospects of the High Court granting special leave to appeal (if such an application were to be made) are absolutely negligible.
[13] Byron at 271 per Lehane J.
[14] Leonard Cohen at para. 48 per Lucev FM; Elliott v Water Wheel Holdings Pty Ltd (2004) 178 FLR 459 at 475–476 per McInnis FM; [2004] FMCA 37 at para. 49 per McInnis FM.
Stay of execution
Whether a stay has been applied for and granted is a factor for consideration in an application for extension of time for compliance.[15]
[15] Jackson v Conway [2000] FCA 1530 at paras. 24–26 per Branson J.
If a stay has not been applied for that is a factor against extension of time for compliance, and, absent other relevant factors, an exceptional case, or at least quite special circumstances, are required for an extension of time for compliance to be granted, if no stay has been obtained. Nevertheless, it remains the case that the seeking or obtaining of a stay is but one factor in determining whether to grant an extension of time for compliance.[16]
[16] Leonard Cohen at para. 54 per Lucev FM, citing Byron at 270–272 per Lehane J and Sidhom v Euphoric Pty Ltd [2006] FMCA 827 at para. 35 per Barnes FM (“Sidhom”).
In this case there is no evidence that a stay of the judgment and orders in Tetlow – Court of Appeal has been applied for. In the circumstances, there having been no stay of any relevant judgments, and none having been applied for, this factor does not weigh in favour of an extension of time for compliance.
Prejudice to debtor
The usual and obvious difficulties attendant upon an act of bankruptcy having been committed are not alone sufficient prejudice to warrant an extension of time for compliance.[17]
[17] Leonard Cohen at para. 59 per Lucev FM; McPhee at para. 34 per Lucev FM.
Nothing in the evidence before the Court weighs in favour of an extension of time for compliance on this factor.
Prejudice to creditor or other creditors
Much delay has been occasioned in relation to this matter by the appeals filed by the Applicant in the District Court and the Court of Appeal. As is evident from the judgments in Tetlow – Court of Appeal and Tetlow – District Court those appeals had no merit whatsoever. Thus there has been prejudice to the Respondent as creditor, and any other creditors (if there are any, this being a matter about which there is no evidence), by reason of the delay.
In McPhee this Court observed that:
“It is in the interests of creditors generally, where a sequestration order ultimately follows, that the act of bankruptcy be earlier not later…because there are ‘potential adverse consequences’ if the act of bankruptcy is delayed…”.[18]
[18] McPhee at para. 40 per Lucev FM.
In La Pegna v Deputy Commissioner of Taxation this Court observed that:
“It must be remembered that issuance of a bankruptcy notice based on a properly issued final judgment, followed by a failure to comply with the bankruptcy notice, brings about an act of bankruptcy upon which all creditors, and not merely the Respondent, can found a petition. A bankruptcy notice founded upon a judgment debt provable in bankruptcy is not required. The legislative purpose is to “identify markers or criteria that point towards insolvency”. This is for the benefit of the public, and that is a benefit to which the Court must have regard in exercising the discretion. Part of that public interest, as well as a matter in the interests of creditors generally, is to ensure that in the determination of the relation back date no unfair advantage is obtained by the better informed or more resolute creditor.”[19]
[19] La Pegna v Deputy Commissioner of Taxation (2006) 204 FLR 364 at 369-370 per Lucev FM; [2006] FMCA 1643 at para. 27 per Lucev FM.
In this case, given the length of the present delays caused by the Applicant’s meritless appeals, and notwithstanding the small amount of the debt, this is a factor which weighs slightly against an extension of time for compliance.
Impact on date of bankruptcy
The issue of impact on the date of bankruptcy is sufficiently dealt with above. It is not a factor which weighs in favour of an extension of time for compliance.
Impact on related legal proceedings
There is no evidence of further proceedings instituted in respect of this debt by the Applicant. In any event, the Court reiterates what is said above with respect to the prospects of the High Court granting a special leave application and the complete lack of merit in previous appeals.
In the circumstances, impact on related legal proceedings is not a factor which weighs in favour of extension of time for compliance.
Delay
As indicated above there has been significant delay in the matter by reason of the meritless appeals prosecuted by the Applicant in this matter. Any further delay, combined with an extension of time for compliance, would be likely to affect the relation back date. A further delay in this matter is not desirable, and is a fact which weighs against, or at least does not weigh in favour of, an extension of time for compliance.
Undertakings and conditions
There is no evidence of undertakings or conditions so as to warrant this factor weighing in favour of an extension of time for compliance.
Conclusion – time for compliance
The factors considered do not weigh in favour of the extension of time for compliance with the Bankruptcy Notice. Qualitative assessment of all of the circumstances of this case lead the Court to conclude that no further time for compliance ought to be granted. There will be an order accordingly.
Costs
The Court will hear the parties as to costs.
I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate: S. Gough
Date: 30 April 2008
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