Waif Gunnarison- Weines & Elfride Brigette Gannanssen-Weiner v The Attorney General of South Australia

[1980] FCA 144

.-.W

- \ IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY	S.A. No. G15 of 1980
GENERAL DIVISION

ON APPEAT, FROM THE COURT OF INSOLVENCY OF TXE

STATE Or’ SGUTH AUSTRALIA ZXZRCISING FED5FAL

JURISDICTION 111 SAKKRUPTCY

BETWEEN:

ELFRIEDE ZIGITTE GUNNARSSON-WIENER Appellant

and

c

THE ATTGRNEY-GENERAL OF SOUTH AUSTRALIA Respondent

ORDER

JUDGES	:	Northrop, Deane, McGregor,	JJ.
DATE :	16 October 1980

ViHEZfE MADE: Adelaide

ORDER : The appeal be dismissed wlth costs.

'	IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY S.A. No. G16 of 1980
GENERAL DIVISION

ON APPEAL FROM THE COURT OF INSOLVENCY OF TI3E

D A T E OF SOUTH AUSTRALIA EXERCISIXG FEilEFlkL

JURISDICTIOI\I IN BANKRUPTCY

BETWEEN:

W O L F GUNNARSSON-WIENZR Appellant

and

THE ATTORNEY-GENERAL OF SOUTH AUSTRALIA

Respondent

ORDER

JUDGES : Northrop, Deane, McGregor, JJ.

!l

DATE :	16 October 1980
WHERE MADE:	Adelaide
ORDER :	The appeal be dismissed with ccsts.

IN THE FEDERAL COURT OF AUSTRALIA	)
) S.A. No. G15 of 1980

SOUTH AUSTRALIA DISTRICT REGISTRY	)
1 S.A. No. G16 of 1980

DIVISION GENERAL )

ON APPEAL FROM THE COURT OF INSOLVENCY OF THE

STATE OF SOUTH AUSTRALIA EXERCISING FEDERAL

JURISDICTION IN BANKRUPTCY

BETWEEN :

WOLF GUNNARSSON-WIENER and ELFRIEDE

BRIGITTEE GUNNARSSON-WIENER Appellants

and

THE ATTORNEY-GENERAL OF SOUTH AUSTRALIA

Respondent

NORTHROP, DEANE, EX TEMPORE JUDGMENT	16 OCTOBER 1980
McGREGOR JJ.

- L -

NORTHROP J: The court has prepared a joint judgment In this

matter whlch I propose to read.

The appellants, Wolf Gunnarsson-Miener and

Elfrlede Brlgltte Gunnarsson-Wlener, are husband and wife. They appealed agalnst orders made on

13 August 1980 by the Court of Insolvency In the

State of South Australla constltuted by Judge

Rogerson exerclslng federal Jurlsdlctlon In

bankruptcy for the sequestratlon of thelr respectlve estates. The sequestratlon orders

were made upon a petltlon presented to the court

on 16 October 1979 on behalf of the respondent,

Attorney-General for the State of South Australla. The act of bankruptcy alleged was the fallure by the debtors to comply with a bankruptcy notlce

issued on 16 August 1979 and served on 30 August

1979.

The course of the proceedlngs before the

learned judge at flrst instance was complicated

by the fact that It would seem that after he had,

on 3 April 1980, reserved Judgment In the case

of the male appellant, a stay of proceedlngs,

applicable to the proceedlngs before his Honour,

was granted by the Hlgh Court. Thls stay of

proceedlngs apparently remalned operatlve untll

6 June 1980 when an appllcatlon for speclal leave

to appeal to the High Court from a number of orders

of the South Australlan Supreme Court, Mr Justlce

Sangster, was refused by that court. The Issues

raised by the appeal make It necessary that we

make reference not only to the proceedlngs before

the judge at first instance but also to the

proceedlngs before Mr Justlce Sangster and

assoclated proceedlngs In the Supreme Court of

South Australla, to the appllcatlon for speclal

leave to appeal to the High Court and to a

proposed appllcatlon for speclal leave to appeal

to the Judlclal Comlttee of the Prlvy Councll.

On 23 October 1975 inspectors were appolnted

to investlgate the affairs of a number of

co-operatlve companles. On 2 3 May 1076 they

recommended that the companles be wound up. There

followed a hearlng of an appllcatlon for that

purpose by Mr Justlce Sangster, who ordered that

the companies be wound up. That hearlng extended

over 39 hearlng days. HIS Judgment was dellvered

on 5 May 1978. The appellants appeared In person

as contrlbutorles to oppose the wlndlng up.

M r Justlce Sangster in hls judgment, ordered

that the appellants pay certaln of the respondent's

cost of the proceedlngs. These were taxed at

$31,472.70. Thls 1s the debt upon whlch the

bankruptcy proceedlngs was based. The a l l o c a t u r

In respect of the costs was signed on 27 Zune 1970.

On 23 August 1978 pursuant to leave to appeal granted to the appellants, a notlce of appeal to

the full court of the Supreme Court of South

Australla agalnst the declslon of M r Justice Sangster

was filed. The present respondent applled for securlty

for costs and, on 20 March 1979, M r Justlce Zelllng

of the Supreme Court of South Australla made an order

that the appellants glve securlty for the costs In

the sum of $7500 wlthin 28 days of the order. On

20 April 1979 M r Justlce Walters of the Supreme Court

of South Australla varled that order to extend the

time for glving the securlty for costs to 30 Aprll

1979. It was a term of the order made by M r Justlce

Walters that if security was not glven wlthln the period.

time speclfled the appeal should stand dlsmlssed.

On 26 November 1979 an appeal by the present

appellants agalnst the decision of M r Justlce Zelllng

in relatlon to security f o r costs was heard by the

full court of South Australia and lsmlssed.

On 21 December 1979 the petition was flrst

listed for hearing In the Court of Insolvency.

The hearing was adjourned to 29 January 1980. On

that day the present appellants were represented by

counsel who scught an adjournment on the basls that

what was descrlbed both as "an appeal" and "an

applicatlon" was about o be lnstltuted In the Hlgh

Court from the orders made by M r Justlce Sangster.

. A further ground advanced to support the adJournment

was that the appellants could, within s1x weeks, dispose of assets which would enable them to pay the

debt. The matter was adjourned to 19 March 1980.

On 18 March 1980 a Notlce of Motlon seeklng

special leave to appeal to the Hlgh Court agalnst various orders lncludlng those made by Mr Justlce

Sangster, was filed In the Hlqh Court. On 19 March

1980 when the petltlon came on for hearlng In the

Court of Insolvency, counsel for the appellants

withdrew from the hearlng ar.d the male appellant

applied, on behalf of hlmself and the female

appellant, for a further adJournment of the

hearing of thepetltlon on the basls of the pendlng

applicatlon to the Hlgh Court. The hearlng of the

appllcatlon f o r an adjournrcent occupled most of the

day. Hls Honour reserved ins declslon overnlght.

On 20 March 1980 h i s Honour refused the adjournment and proceeded wlth the hearlng of evldence. The

hearlng of evidence extended over 20 and 21 March

1980, and 2 and 3 April 1980. On 3 Aprll 1980 hls

Honour rese:.ved hls declslon In relatlon to the

male appellant and adjourned the hnarlng of the

petitlon lnsofar as the female appellant was

concerned to 24 Aprll 1980.

On 24 Aprll 1980 the Court of Insolvency was

informed by counsel for the present respondent that

the High Court had granted a stay of all proceedlngs

based on the judgment of Mr Justice Sangster. Hls

Honour adlourned the petltion to a date to be flxed.

As has been mentioned, the High Court refused the

applicatlon for speclal leave to appeal from the orders

of Mr Justlce Sangster on 6 June 1980. The matter was

next listed before the Court of Insolvency on 3 July

1980, when there was n3 appearance for elther

appellant. It was adJourned untll Frlday, 18 July

1980, when counsel appeared fcr the female appellant

and informed hls Honour that the appellants were

seeking speclal leave from the Prlvy Councll to appeal

from the declslon of Mr Justlce Sangster. On the

basis of that pendlng appllcatlon for speclal leave,

and the female appellants state of health, counsel

for the female appellant sought a further adjournment

of the petition. The further hearing was adjourned

until 23 July 1980.

On 23 July 1980 counsel for the female appellant

pressed hls appllcatlon f o r the adjournment. HIS

Honour apparently treated the appllcatlon as belng made on behalf of both appellants. Hls Honour refused the appllcatlon for an adjournment and reserved his

decision on the substantive Issues Involved In the

matter. HIS Honour gave hls declslon on 13 August 1980.

As has been mentloned, he made sequestratlon orders

in respect of the estate of each of the appellants.

In thelr attack before thls court on the

sequestratlon orders, the appellants rely on three

distinct grounds. Flrst, it 1 s sald, the learned judge

at first Instance should have adJourned the matter

because of the proposed applicatlon for speclal

leave to appeal to the Prlvy Councll. Second, It

is argued, the bankruptcy notice upon whlch the

petition was based was a nulllty for the reason

that the t m e for compliance wlth Its terms had

been purportedly flxed by the Reglstrar of the Court

of Insolvency, and that the purported flxlng of

that time constltuted an lrnpermlssable exerclse of

the judiclal power of the commonwealth. Flnally,

it was argued that the learned Judge at flrst

instance erred In falllng to hold that each appellant

was able to pay hls or her debts wlthln the meanlng

of sectlon 5 2 ( 2 ) (a) of the Bankruptcy Act 1966.

We shall deal wlth these grounds of attack upon

the sequestratlon orders	In the order In whlch we
have mentioned them.

The question of whether an appllcatlon for an

adjournment of a matter should be granted or refused

is a matter wlthln the dlscretlon of the trlal Judge

to be resolved according to the overall requlrements

- 2 -

of justice in the particular circumstances - Conroy

v Conroy (1917) 1 7 SR (NSW) 680 at page 662. A

court of appeal wlll not as a general rule Interfere

with the declslon of a Judge of flrst Instance on that questlon unless It is satisfled that the

exerclse of hls dlscretion has mlscarrled In the

sense that it has been affected by wrongful appllcatlon

of principle or mlsunderstandlng or erroneous

assessment of the factual material before hlm. Thls

general rule is subject to any power of the appellate

court to receive new evidence on the hearing of an

appeal, see, for example, Federal Court of Rustralla Act 1976, sectlon 27, and the beneflt of hlndslght in

a case where it can be seen that serious InJustlce

has resulted, or will in fact result, from the

exercise of the discretion.

The appellants in the present case have qulte

failed to persuade us that the learned trlal Judge

was in error LJ refuslng a further adjournment o

the appellants on the ground that they proposed to

apply to the Prlvy Councll for special leave to appeal

from the orders made by Mr Justlce Sangster In the

South Australlan Supreme Court. The appellants had

already appealed to the full court of the South

Australlan Supreme Court from that declslon. Their

appeal had been dismissed as a result of thelr

failure to comply wlth an order to provlde security

for costs. They had appealed against an order In

relation to securlty for costs. That appeal had

also been dismissed. They had applled for speclal

leave to appeal to the Hlgh Court of Australla.

That appllcatlon for speclal leave to appeal had

been refused. They had allowed the tlme In whlch

they were entltled to appeal from the declslon of

Mr Justlce Sangster to the Privy Councll to explre.

In these clrcumstances his Honour was fully entltled

to adopt the approach that, after all the adjournments

which had already been granted, the petitioner was

entitled to have hls petltlon heard.

On the hearing of the appeal, the male

appellant who appeared In person, placed before us

a telex dated l1 October 1980 which had apparently

been recelved from the appellants London sollcitors.

This was done wlth the consent of counsel for the

respondent. That telex lndlcates that the appllcatlon

for special leave to appeal to the Prlvy Councll has

stlll not been lodged. It states that council has

said that "papers are voluminous but he has had a

preliminary look through them and he conslders an

appeal to Prlvy Councll 1s feasible". If a

sequestration order had not been made the petltlon

would lapse today. The beneflt of hlndslght conflrms

rather than underm~nes his Honour's refusal to grant

a further adJournment of the pctltlon by reason of

the proposed appllcatlon for speclal leave to appeal

to the Prlvy Councll. The argument thzt the

- b -

.. . sequestration orders should be set aslde by reason

of his Honour's refusal to grant a further

adjournment must be reJected.

No argument was advanced on behalf of the

appellants in respect of the second ground of

attack upon the sequestratlon orders. We have

however glven conslderatlon to the arguments whlch

can be advanced In support of that ground. Those

arguments are set out In the judgment of Mr Justlce

Gibbs, sittlng as a judge of the Federal Court

of

Bankruptcy, In re Moss, ex parte Tour Flnance

Limited, (1968). 13 FLR 101 at pages 104-110,

where they are rejected. We agree with the reasonmg

of Mr Justlce Glbbs in that case, and with hls

decision that a reglstrar in flxlng the tlme for

compliance wlth the terms of a bankruptcy notlce 1 s

not exerclslng part of the Judlclal power of the

commonwealth. The appellants have not made good

this ground of appeal.

Section 5 2 ( 2 ) (a) of the Bankruptcy Act 1966

provldes. for present purposes, thatthe court may

dismiss a petltlon If It 1s satlsfled by the debtor

"that he is able to pay his debts". The onus of

so satisfylng the court rested upon the appellants.

The learned trial judges view as to the crlterla to

be adopted In determlnlng whether the appellants were

able to pay thelr debts was a favourable one from

the appellants point of vlew. Adoptlng the crlterla

he held that nelther appellant had satlsfled hlm

: that he or she was able to pay hls or her debts.

That was a concluslon whlch, on the evldence, hls

Honour was plainly entltled to reach.

In the result, the appellants have falled to make

good any of the grounds upon whlch they have relled

in the appeals.

We would note that at the commencement of the

haring of the appeals counsel appeared for the

Attorney-General for the commonwealth to admlt

service of a notlce pursuant to section 18B of the

Judlclary Act 1903 In relatlon to the questlon

Involving the extent of the Judlclal power of the

commonwealth, and Informed the court that the Attorney-

General dld not deslre to make submlsslons thereon.

The appeals are dlsmlssed, wlth costs.