Van Reesema v Giameos

VAN REESEMA v. GIAMEOS (1979) 41 FLR 86
Bankruptcy - Practice and Procedure

COURT

FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION
Bowen C.J.(1), Fisher(1), Lockhart(1) JJ.

CATCHWORDS

Bankruptcy - Sequestration order - Appeal - Stay of sequestration order - Motion for lift of stay - Motion for dismissal of appeal for want of prosecution - Federal Court of Australia Rules, O.52, rr. 17, 26, 27, 38.

Practice - Procedure - Appeal - Motion for dismissal of appeal for want of prosecution - Federal Court of Australia Rules, O.52, rr. 17, 26, 27, 38.

HEADNOTE

In September 1979 the Court of Insolvency of South Australia exercising federal jurisdiction in bankruptcy made a sequestration order against the estate of the appellant. Some days later the appellant filed a notice of appeal in the Federal Court of Australia against the sequestration order together with a notice of motion for a stay of proceedings. When the motion for a stay came on for hearing shortly thereafter Fisher J. made, inter alia, the following order: "That proceedings under the sequestration order be stayed until the determination of the appeal or further order. "In November 1979 the respondent filed a notice of motion to lift the stay of proceedings granted by Fisher J. and to dismiss the appeal for want of prosecution.

Held, per curiam, that the appeal should be dismissed for want of prosecution and the stay of proceedings under the sequestration order made on 14th September, 1979, should be removed because of the dismissal of the appeal.

Allen v. Sir Alfred McAlpine & Sons Ltd., (1968) 2 QB 229; Birkett v. James, (1978) AC 297; Republic of Peru v. Peruvian Guano Co. (1887), 36 ChD 489; Le Mesurier v. Connor (1929), 42 CLR 481, referred to.

HEARING

Sydney, 1979, December 11, 20. #DATE 20:12:1979

MOTION.

The facts appear from the judgment.

P.F. Marker, for the appellant.

D. W. Smith, for the respondent.

Cur. adv. vult.

Solicitors for the appellant: Peter Marker & Associates.

Solicitors for the respondent: Wallman & Partners.

E. F. FROHLICH

JUDGE1

December 20.

THE COURT delivered the following written judgment.

This is an application for an order that the appeal by Ernst Abraham Siewertsz van Reesema ("the appellant") from a sequestration order against his estate be dismissed for want of prosecution and for an order lifting a stay of proceedings under the sequestration order. (at p62)

The history of the matter is as follows: (at p87)
On 17th September, 1979, the Court of Insolvency of the State of South Australia exercising federal jurisdiction in bankruptcy (Sangster J.) made a sequestration order against the estate of the appellant. It is not necessary to set out the events which led to the making of that order as they are fully stated in the reasons for judgment of his Honour. (at p87)
On 1st October, 1979, the appellant filed a notice of appeal in this Court against the sequestration order together with a notice of motion for a stay of proceedings. (at p87)
The motion for a stay came on for hearing before Fisher J. on 5th October, 1979. Upon the appellant, who appeared in person, giving the following undertakings to the court: (a) that he would prosecute the appeal without delay; (b) that he would file within fourteen days with the official receiver a statement of his affairs as at 14th September, 1979; and (c) that he would refrain from dealing with his assets otherwise than in the ordinary course of business; his Honour made the following orders with the consent of the appellant: 1. That proceedings under the sequestration order be stayed until the determination of the appeal or further order. 2. That the appellant pay $100 within fourteen days as security for costs of the appeal. 3. That the appeal be heard in Adelaide on Tuesday 11th December, 1979. 4. That either party be at liberty to apply to discharge the stay or vary any of the orders upon forty-eight hours' notice to the other. (at p87)
The appellant filed a statement of affairs in accordance with his undertaking and paid the sum of $100 into court in accordance with Fisher J.'s order. (at p87)
Before 5th October, 1979, the District Registrar of the court had fixed Monday 22nd October, 1979, at 10 a.m. before him to settle the index to the appeal papers. The solicitor for Emmanouil Giameos, the petitioning creditor in the proceedings before the Court of Insolvency, the respondent in the appeal and the applicant for the removal of the stay and the dismissal of this appeal ("the respondent") attended before the District Registrar at the appointed time notwithstanding that no draft index to the appeal papers had been served on him as required by O. 52, r. 26 of the rules of this Court. There was no appearance by or on behalf of the appellant before the District Registrar. (at p87)
On 21st November, 1979, the respondent filed a notice of motion in the court to lift the stay of proceedings granted by Fisher J. on 5th October, 1979, and to dismiss the appeal for want of prosecution. At the date of filing the notice of motion the solicitor for the respondent had not heard from the appellant or anyone on his behalf. (at p87)
The notice of motion came on for hearing before Fisher J. on 26th November, 1979. His Honour adjourned the application to lift the stay to 3rd December, 1979, at the request of the solicitor who then appeared for the appellant who had informed his Honour that he had insufficient instructions at that stage. His Honour referred the application to dismiss the appeal for want of prosecution to the Full Court of this Court to be heard in Adelaide on 11th December, 1979. (at p88)
The application to lift the stay was further heard by Fisher J. on 3rd December, 1979, in the presence of counsel for the appellant whose firm was also acting as solicitors for the appellant and his Honour made the following orders with the concurrence of counsel for the appellant who assured him that the appeal could be ready for hearing: 1. That the index for the appeal papers be settled before the Deputy Registrar at 9 a.m. on 4th December, 1979. 2. That the appeal books be filed with the Deputy Registrar and served on the respondent by 2.30 p.m. on 6th December, 1979.3. That each party file a list of authorities in the form required by the court with the Deputy Registrar by 1 p.m. on 7th December, 1979. 4. That the appeal be set down for hearing by the appellant by 1 p.m. on 7th December, 1979.5. That the application to lift the stay be adjourned until 11th December, 1979, and that the question of costs be adjourned until that date. (at p88)
Order 1 was complied with. Orders 2, 3 and 4 have not been complied with by the appellant. Indeed, when the application to dismiss the appeal for want of prosecution came on for hearing before this Court on 11th December, 1979, not only were there no appeal books filed with the Deputy Registrar or before us but it was the solicitor for the respondent who prepared a book of documents for the assistance of the court relevant to the application to lift the stay. (at p88)
Ground (b) of the notice of appeal filed by the appellant in person states: "This matter involves a matter arising under the Constitution or involving its interpretation." No particulars were given of this ground indicating what was the matter which so arose or how the interpretation of the Constitution was involved. In view of the provisions of s. 78B of the Judiciary Act 1903 (Cth.), Fisher J. conducted a directions hearing in this matter on 4th December, 1979, and ordered that a notice in accordance with O. 51 of the rules of this Court be served on the Attorney-General of the Commonwealth and on the Attorney-General of the State of South Australia. His Honour dispensed with compliance with the requirements of O. 51 in so far as that order requires the appellant to give those notices and directed that they be given by the Deputy District Registrar of the court and that he otherwise comply, so far as possible, with the provisions of O. 51. His Honour further ordered that if the appellant proposed to direct argument to the Full Court, based on ground (b) he should file in this Court and deliver to the respondent a notice specifying the nature of the matter which it is contended arises under the Constitution or involves its interpretation and also indicating the facts upon which he relies to show that the matter arises under the Constitution or involves its interpretation. His Honour directed that the notice was to be filed and served by 1 p.m. on Friday 7th December, 1979. The costs of the application were reserved. (at p89)
The Deputy District Registrar duly gave notice to the Attorneys-General of the Commonwealth of Australia and the State of South Australia. No notice, as required by the order of 4th December to be filed and served by 1 p.m. on Friday 7th December, was filed or delivered to the respondent by or on behalf of the appellant. The applications came on for hearing before us on 11th December, 1979, in Adelaide. Both parties were represented by counsel. The Attorney-General of the Commonwealth was represented by counsel. There was no appearance by or on behalf of the Attorney-General of South Australia. (at p89)
By consent of the applicant we gave leave to the appellant to file in court and to read his own affidavit in which he said, inter alia, that he had complied with the undertakings given by him to Fisher J. on 5th October, 1979, as to the filing of a statement of affairs and refraining from dealing with his assets otherwise than in the ordinary course of business and that he had paid the sum of $100 to the court by way of security for costs. (at p89)
He deposed to the fact that he had informed Fisher J. on the hearing of the notice of motion that he would be travelling to the United States of America and Europe "for the purpose of earning a livelihood by promoting the product known as 'Busy Bag'"; that he had informed his Honour that he would be returning to Australia on 19th November, 1979, to prosecute the appeal which was set down for hearing on 11th December, 1979. He then narrated at some length details of his overseas travels from 16th October to 8th December, 1979, when he returned to Australia, including visits to the United State of America, London, The Hague, Frankfurt, France, Luxembourg and Brussels. He says that he then engaged in discussions with business people. (at p89)
He gave details of some personal misfortunes involving members of his family and relations which he says were responsible for delaying his return to Australia until 8th December, 1979. He said that upon his return to Australia he paid the equivalent in Australian currency of 500 Pounds sterling into the trust account of his solicitors, Messrs. Peter Marker & Associates of Adelaide in respect of prospective costs of his appeal to the Privy Council in litigation between himself and the applicant commenced in the Supreme Court of South Australia in 1975 which is referred to in the judgment of Sangster J. (at p89)
At the commencement of the hearing before us counsel for the parties agreed that we should consider not only the application to dismiss the appeal for want of prosecution but the application to lift the stay together with all ancilliary and related questions including questions of costs. (at p89)
Turning first to the application to dismiss the appeal for want of prosecution. (at p89)
The application is made pursuant to O. 52, r. 38 which provides as follows:

"38. (1) Where an appellant has not done any act required to be done by or under these Rules, or otherwise has not prosecuted his appeal with due diligence, the Court may -

(a) order that the appeal shall be dismissed for want of prosecution." (at p90)
The power to dismiss appeals for want of prosecution must not be lightly exercised. Each case depends on its own circumstances. See Allen v. Sir Alfred McAlpine & Sons Ltd. (1); Birkett v. James (2); Republic of Peru v. Peruvian Guano Co. (3); the Supreme Court Practice 1976 (English) 25/1/3A, 25/1/3D. (at p90)
In Birkett v. James Lord Diplock said: "The court may and ought to exercise such powers as it possesses under the rules to make the plaintiff pursue his action with all proper diligence, particularly where at the trial the case will turn upon the recollection of witnesses to past events. For this purpose the court may make peremptory orders providing for the dismissal of the action for noncompliance with its order as to the time by which a particular step in the proceedings is to be taken. Disobedience to such an order would qualify as 'intentional and contumelious' within the meaning of the first principle laid down in Allen v. McAlpine" (4). (at p90)
The sequestration order was made on 17th September, 1979, and the appellant filed his notice of appeal to this Court on 1st October, 1979. All that he has done to prosecute the appeal is to pay $100 into court as security for costs in accordance with the order of Fisher J. made on 5th October, 1979. Notwithstanding that he undertook to the court (Fisher J.) on 5th October, 1979, to prosecute the appeal without delay, he did not prepare or file in the registry a draft index of the appeal papers or serve it on the applicant (O. 52, r. 26); and he failed to attend before the District Registrar at the time appointed on 22nd October, 1979, to settle the appeal papers (O. 52, r. 27). (at p90)
He breached the order of Fisher J. made on 3rd December, 1979, by not filing the appeal books with the Deputy Registrar of the court or serving them on the applicant by the time appointed by Fisher J. or at all; he did not file a list of authorities in the form required by the court with the Deputy Registrar by the time appointed in the order and he did not set the appeal down for hearing by the time appointed by the order. Appeal books have not been prepared, filed or served. Indeed, at the time of the hearing of the applications by us on 11th December, 1979, appeal books had not been lodged with the court, no list of authorities had been filed by the respondent and the appeal had not been set down. (at p90)
Notwithstanding that the notice of appeal contained ground (b) (namely that there was a matter arising under the Constitution or involving its interpretation) and the order of Fisher J. made on 4th December, 1979, which we have referred to earlier, no notice specifying the nature of the matter which is said to arise under the Constitution or involve its interpretation and indicating the facts upon which the appellant relied to show that the matter arose under the Constitution or involved its interpretation, was filed or delivered to the respondent. It would be consistent with this that the appellant did not intend to pursue this ground of appeal; yet before us, his counsel said that he proposed to rely upon it. Fisher J. informed the appellant and his legal representatives at the hearing of the various applications before him that strict compliance with the orders of the court was essential and that noncompliance could constitute a ground for dismissing the appeal. Notwithstanding this, the appellant failed to comply with the rules of court relating to the prosecution of appeals, has breached orders of the court, and breached his undertaking to the court to prosecute his appeal without delay. The bare recital of the instances of default is eloquent enough; but the default is compounded when it is remembered that the appellant has the benefit of a stay of proceedings on the sequestration order and that the stay was granted by the court upon the appellant giving undertakings to the court, including his undertaking to prosecute the appeal without delay. (at p91)
It has never been suggested that the times fixed by Fisher J. for taking the various steps for prosecuting the appeal, including the filing of appeal books, were insufficient. Quite the contrary. They were fixed by his Honour after discussion with counsel. Indeed, counsel for the appellant informed his Honour that the times prescribed in the orders could be adhered to. (at p91)
The reasons given by the appellant for his failure to prosecute the appeal are unconvincing. He was overseas from 16th October, 1979, to 8th December, 1979; but he was in touch with his solicitor by telephone during that period and each step that he should have taken to comply with the rules and the orders of Fisher J., but did not take, could have been taken by his solicitor on his behalf. All that was required of him was his instructions. (at p91)
In any case, it is no excuse for breaching rules of court and special orders of the court, especially when the appellant has the benefit of a stay of execution of the order appealed from, that he has been overseas attending to business and personal matters. (at p91)
Not only is the respondent prejudiced by the fact of the failure of the appellant to prosecute his appeal without delay; but, as the order appealed from is an order sequestrating the appellant's estate, it does not operate merely inter partes; it affects the property of the appellant and the rights of his other creditors. (at p91)
Public policy demands that the business of the courts should be conducted with expedition and that its rules and orders should be complied with. (at p91)
The notice of appeal contains eighteen grounds of appeal, some in very general and amorphous terms. We invited counsel for the appellant to outline briefly to us the argument that would be put by the appellant if the appeal were to proceed to a hearing, so that we could determine if there was a reasonably arguable case for the appellant. (at p92)
After we extended this invitation an adjournment was sought by counsel for the appellant for a short time to enable him to receive instructions from the appellant and to prepare his argument. We adjourned for the time requested by counsel. Upon resuming the hearing, counsel for the appellant asked for a further adjournment for the same purpose. Again we adjourned. When the hearing resumed at 2.15 in the afternoon, counsel for the appellant addressed us only as to grounds (a), (b) and (c) in the notice of appeal. (at p92)
Ground (a) provides: "That the Honourable Mr. Justice Sangster ought to have disqualified himself from hearing this matter." (at p92)
Sangster J. was asked by counsel then appearing for the appellant to disqualify himself from sitting. His Honour declined to accede to the application and set out in his reasons for judgment (see Re van Reesema; Ex parte Giameos (5)) his reasons for so doing are as follows: (1) van Reesema's request that I not sit - Mr. Pertl, van Reesema's counsel, asked me to disqualify myself by reasons of matters referred to in correspondence between van Reesema or his solicitor and the Deputy Registrar in Bankruptcy, with emphasis on some words I had used some years ago in the Supreme Court of South Australia. I declined. There was and is no reason why I should not sit. Mr. van Reesema's previous belief that the words used by me referred to him must have been erased by the Deputy Registrar's letter pointing out that van Reesema's name did not appear on the file then before me and had not been mentioned, that I had not been referring to him, and that I had no recollection of ever seeing van Reesema or having any impressions of or concerning him which could in any case inhibit a fair hearing of any case in which van Reesema might be involved. In fact on the first day of the hearing of this matter I speculated as to which of the men then in court might be van Reesema, only to find next day that van Reesema had not been in court whilst I was there on the first day, and that when he did give evidence (on the second day) he appeared to me as a stranger" (6). (at p92)
Counsel for the appellant informed us that the matters relied on in the appeal to support this ground of appeal would be the same as those relied on before Sangster J. and which are referred to by his Honour in the passage from his reasons for judgment cited by us. (at p92)

In our opinion, this ground of appeal is not reasonably arguable. Sangster J.'s reasons for judgment on the matter conclusively answer the point. (at p92)
Counsel for the appellant told us that the point to be argued in respect of ground (b) of the notice of appeal is that the bankruptcy petition was a nullity as it was not clear whether it was filed in the office of the Registrar in Bankruptcy or the office of the Deputy Registrar of the Court of Insolvency of South Australia. Counsel told us that ground (c) in the notice of appeal, notwithstanding the language in which it is couched, is intended to raise the same point and no other point. (at p93)
In our opinion there is no substance in this point for a number of reasons. The petition bears a stamp upon its face to the effect that it was filed on 19th June, 1979, with the Registrar in Bankruptcy at Adelaide and that the filing fee of $60 was paid. It thus complied with r. 12 of the Bankruptcy Rules which requires a creditor who presents a petition to do so "by filing the petition in the office of a Registrar in Bankruptcy". That is sufficient in itself to dispose of the point; but we endorse the additional reasons for judgment given by Sangster J. on this matter. (at p93)
Further, even if the petition had been filed with a Deputy Registrar of the court and not with a Registrar in Bankruptcy so as to result in noncompliance with r. 12, the appellant would have to surmount the hurdle that the noncompliance with the rules does not render the petition a nullity by reason of the provisions of r. 195 which, so far as relevant, provide that noncompliance with the rules does not render a proceeding void unless the court so directs. The appellant was unable to satisfy us that there was any substance in this point. (at p93)
The appellant submitted another ground relied on to support the contention that a matter arose under the Constitution or involved its interpretation. This point had not been taken by him in the proceedings before Sangster J. The point is that the Parliament of the Commonwealth of Australia had no power to make laws investing the Court of Insolvency of South Australia with federal jurisdiction in bankruptcy, and to the extent that it purports to do so the Bankruptcy Act 1966 (Cth.) is invalid. As the point was put but not argued or developed in any way, we do not pause to consider it save to say that, in our opinion, it appears to have no substance and to be contrary to the decision of the High Court in Le Mesurier v. Connor (7). (at p93)
In our opinion, there has been inexcusable delay on the part of the appellant and breach by him of his undertaking to the court and of the orders of the court. Additionally, we are not satisfied that there is any reasonably arguable case for the appellant on the appeal. Further delay will increase the prejudice to the respondent and any other creditors. (at p93)
For these reasons, in our opinion the appeal should be dismissed for want of prosecution. (at p93)
Turning to the application to remove the stay. The application to Fisher J. to stay execution of proceedings under the sequestration order was made pursuant to O. 52, r. 17 of the rules of this Court which provide that an appeal to the court shall not operate as a stay of execution or of proceedings under the judgment appealed from except so far as the court may direct. (at p94)
As the order of the court (Fisher J.) made on 5th October, 1979, was "that proceedings under the sequestration order made on 14th September, 1979, be stayed until disposal of the appeal instituted by Notice of appeal dated 1st October, 1979, or further order" it follows that the dismissal of the appeal for want of prosecution will automatically remove the stay. If we had been minded not to dismiss the appeal, we would in any event, have removed the stay for the reasons given by us for dismissing the appeal; in particular because the stay was granted upon the appellant giving undertakings to the court, including an undertaking that he would prosecute the appeal without delay, and clearly he has breached this undertaking. (at p94)
In addition, the statement of affairs filed by the appellant discloses that his only assets consist of cash in hand of $30 and cash deposited with his solicitor of $1,320, a total of $1,350; and that there are claims by unsecured creditors, which he disputes, totalling $130,858.24. This ignores the claim of the petitioning creditor of $12,384.91 for taxed costs in relation to action No. 1959 of 1975 in the Supreme Court of South Australia. Although the appellant disputes the claims referred to in his statement of affairs, we notice that the creditors mentioned therein include the Commissioner of Taxation in the sum of $9,638.86; A.N.Z. Banking Group Ltd. in the sum of $15,179.03 and Pembroke School $4,407.01 in respect of school fees for 1977 and 1978. (at p94)
The affidavit of the appellant filed by him and read in these proceedings discloses that he was absent overseas for almost two months. This could not have been inexpensive. His statement of affairs which was made out as at 14th September, 1979, discloses no potential source of moneys to fund such a trip. It may be that the trip was funded by moneys from sources other than himself; but he offered no explanation as to the source of these funds. (at p94)
We make the following orders: 1. The stay of proceedings under the sequestration order made on 14th September, 1979, be removed. 2. Appeal No. G9 of 1979 be dismissed for want of prosecution. 3. That the respondent's costs of proceedings before this Court in appeal No. G9 of 1979, including the costs of all applications heard by Fisher J. and the costs of the proceedings before this Full Court, be paid by the appellant. (at p94)

ORDER

Orders accordingly.

[1979] FCA 138

20 DECEMBER 1979