Vetter t/as Excess Baggage Co v Powerhouse Logistics Pty Ltd
[2008] FCA 515
•6 June 2008
FEDERAL COURT OF AUSTRALIA
Vetter t/as Excess Baggage Co v Powerhouse Logistics Pty Ltd [2008] FCA 515
Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397
RAPHAEL ALBERT VETTER T/AS EXCESS BAGGAGE CO v POWERHOUSE LOGISTICS PTY LTD
NSD 664 OF 2008
BUCHANAN J
6 JUNE 2008
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 664 OF 2008
ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA
BETWEEN:
RAPHAEL ALBERT VETTER T/AS EXCESS BAGGAGE CO
Applicant
AND:
POWERHOUSE LOGISTICS PTY LTD
Respondent
JUDGE:
BUCHANAN J
DATE OF ORDER:
4 JUNE 2008
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
The application is dismissed with costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 664 OF 2008
ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA
BETWEEN:
RAPHAEL ALBERT VETTER T/AS EXCESS BAGGAGE CO
Applicant
AND:
POWERHOUSE LOGISTICS PTY LTD
Respondent
JUDGE:
BUCHANAN J
DATE:
6 JUNE 2008
PLACE:
SYDNEY
REASONS FOR JUDGMENT
BUCHANAN J:
The matter before the Court is an application for leave to appeal from a judgment of Driver FM of the Federal Magistrates Court of Australia (‘the FMCA’) delivered on 24 April 2008 (Vetter v Powerhouse Logistics Pty Ltd [2008] FMCA 602). The matter with which his Honour dealt was an application to annul Mr Vetter’s bankruptcy and to set aside a sequestration order and other orders made on 19 December 2007 by Lloyd-Jones FM.
At the hearing of the application on 4 June 2008, at the conclusion of Mr Vetter’s submissions in support of his application, I indicated that the application would be dismissed. Mr Gower, who appeared for the respondent (and mentioned the matter for the trustee) sought costs. I am satisfied that costs should follow the event. No costs have been incurred by the trustee. I ordered that the application was dismissed with costs and indicated I would publish my reasons today. What follows are my reasons for the order which I made on 4 June 2008.
As recorded by Driver FM the history of matters was as follows:
·A bankruptcy notice was served upon Mr Vetter on 26 July 2005. Mr Vetter had, before service of the bankruptcy notice twice obtained instalment orders with respect to the relevant debt. They were discharged for non-compliance.
·After service of the bankruptcy notice, on 11 August 2005, Mr Vetter obtained a third instalment order. Over the period which followed Mr Vetter made a number of payments under the instalment order but also failed to make a number of payments or made them late.
·Driver FM found that the issue of the instalment order did not operate as a stay on the judgment debt at the time the bankruptcy notice was served. Non-compliance with the bankruptcy notice established an act of bankruptcy supporting the creditor’s petition.
·The creditor’s petition was filed on 25 January 2006. There were numerous hearings in relation to it both before a registrar and before Lloyd-Jones FM.
·On 4 December 2007, when the matter was before Lloyd-Jones FM, Mr Vetter was present and the creditor pressed for the making of a sequestration order. On that date Mr Vetter conceded that he was not in a position at that time to repay the debt. Nevertheless he was given a final opportunity to put his affairs in order and the matter was adjourned to 19 December 2007. Lloyd-Jones FM made clear that if the position had not by then been rectified it was almost inevitable that a sequestration order would be made.
·Mr Vetter did not attend court on 19 December 2007 due, he says, to a proven medical condition.
·The sequestration order was made on 19 December 2007. Driver FM observed that Mr Vetter’s medical condition was well-known to Lloyd-Jones FM and there was nothing that Mr Vetter could have said, if he had attended, that would have prevented the sequestration order and other orders being made as in the intervening period he was not able or willing to rectify his financial position and was unable to meet his debts as and when they fell due and was insolvent.
Driver FM found, in those circumstances, that the making of orders in Mr Vetter’s absence on 19 December 2007 was not procedurally unfair. He also found that the mere existence of the third instalment order in respect of which Mr Vetter was undoubtedly in default, did not prevent the making of a sequestration order. Accordingly he found that the sequestration and other orders made on 19 December 2007 were properly made.
Driver FM then considered, although it was not strictly necessary to do so, whether the Court might have exercised its discretion in favour of Mr Vetter. He identified (at [13]) a number of circumstances which told against the exercise of any discretion in Mr Vetter’s favour.
The application to this Court for leave to appeal from the judgment of Driver FM was supported by an affidavit sworn by Mr Vetter. In it he makes various complaints against the respondent and about the fact that Lloyd-Jones FM proceeded in his absence, notwithstanding that he had forwarded a medical certificate to the FMCA on 17 December 2007 which said that he would ‘be unfit for giving evidence’. The affidavit states that ‘the majority of the debt was repaid although some instalments were not made due to prevailing health conditions’. In his oral submissions to me Mr Vetter also accepted that the debt had not been discharged, either before the sequestration order was made or later. Although some criticism is also made in the affidavit of the discussion by Driver FM of the reasons why the discretion of the FMCA would not be exercised in favour of Mr Vetter, if that was necessary, there was nothing in the affidavit, or in Mr Vetter’s submissions to me, which made any case to the effect that the findings made by Driver FM, which I have set out above, were incorrect or unavailable.
There was evidence before Lloyd-Jones FM on 4 December 2007 that, as at that date, Mr Vetter remained indebted to the creditor in the sum of $19,497.62 and had not made any payment since 13 July 2007. I have looked at the transcript of proceedings before Lloyd-Jones FM on 4 December 2007 for myself. His Honour made it quite clear to Mr Vetter that it would be necessary for all of the outstanding debt to be paid by 18 December, including the costs of proceedings on 4 December. The opportunity was a final one. The creditor’s petition had been filed on 25 January 2006, almost two years earlier.
There was no indication before the resumed hearing on 19 December 2007 that Mr Vetter had taken advantage of the final opportunity allowed to him. It is clear that he had not. On 19 December 2007 Lloyd-Jones FM made the following orders:
‘1.I am satisfied that the Debtor(s) committed the act(s) of bankruptcy alleged in the Petition (as amended).
2.I am satisfied with the proof of the other matters required by s. 52 of the Bankruptcy Act 1966.
3.I make a sequestration order against the estate(s) of Raphael Albert Vetter.
4.I order the Applicant Creditor’s costs (including any reserved costs) be taxed (in accordance with the Federal Court Rules) and paid from the estate of the Respondent Debtor in accordance with the Act.
5.Under the Bankruptcy Regulations a copy of this sequestration order be given to the Official Receiver in Sydney within 2 days.
6. The Court notes the date of act of bankruptcy is 1 October 2006.
7.I note that a consent to act as a trustee has been signed by Hugh Charles Thomas and has been lodged with the Official Receiver in Sydney.’
The test to be employed when dealing with Mr Vetter’s application for leave to appeal is stated in Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397. Without limiting the Court’s overall discretion, the question to be addressed, is whether in all the circumstances, the decision under challenge is attended with sufficient doubt to warrant its being reconsidered and whether substantial injustice would result if leave to appeal was refused, supposing the decision to be wrong. In my view the decision in respect of which the application for leave to appeal is brought is not attended with sufficient doubt to warrant its being reconsidered, or any doubt, and nor, in the circumstances, would any substantial injustice result if leave to appeal was refused. There was no cogent argument available before Driver FM that the sequestration order was not properly made. In particular, I agree with Driver FM that it was not procedurally unfair that the sequestration order was made on 19 December 2007. That contention is unsustainable. There is no other basis upon which to argue that the sequestration order was not properly made. There is therefore no basis upon which to argue on an appeal, if leave to appeal was granted, that the judgment of Driver FM should be set aside.
For those reasons the application for leave to appeal was dismissed with costs. No order for costs was necessary with respect to the trustee.
I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. Associate:
Dated: 6 June 2008
The applicant appeared in person Solicitor for the First Respondent: Insight Litigation
Date of Hearing: 4 June 2008 Date of Judgment: 6 June 2008
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