Westpac Banking Corporation v Carver - [2003] FCA 221

FEDERAL COURT OF AUSTRALIA
Westpac Banking Corporation v Carver, in the matter of Carver [2003] FCA 221
BANKRUPTCY – PRACTICE & PROCEDURE – application to stay sequestration order pending application for special leave to appeal to High Court – factors to be considered – whether applicant must show that arguable that special leave application will be granted.
Bankruptcy Act 1966 (Cth)
Judiciary Act 1903 (Cth)
Adamopoulos v Olympic Airways SA (1990) 95 ALR 525
Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137
Atkinson v Oakleigh Holdings Pty Limited (2000) 105 FCR 15
Bunnings Forest Products Pty Limited v Bullen (1994) 54 FCR 342
Digitech (Australia) Limited v Kalifair Pty Limited (unreported, 18 February 2003)
Gus v Johnston [2000] FCA 1455
SDN Children’s Services Inc v Hughes (unreported, 14 May 2002)
Oxford Companion to the High Court of Australia
IN THE MATTER OF MARIE PHILLIPPE CYRIL GRELY CARVER; WESTPAC BANKING CORPORATION V MARIE PHILLIPPE CYRIL GRELY CARVER
NO. N 7373 OF 2002
IN THE MATTER OF DEAN STARR JOSEPH CARVER; WESTPAC BANKING CORPORATION V DEAN STARR JOSEPH CARVER
NO. N 7271 OF 2002
BEAUMONT J
27 FEBRUARY 2003
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 7373 OF 2002

IN THE MATTER OF:

MARIE PHILLIPPE CYRIL GRELY CARVER

BETWEEN:

WESTPAC BANKING CORPORATION
APPLICANT CREDITOR

AND:

MARIE PHILLIPPE CYRIL GRELY CARVER
RESPONDENT DEBTOR

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 7271 OF 2002

IN THE MATTER OF:

DEAN STARR JOSEPH CARVER

BETWEEN:

WESTPAC BANKING CORPORATION
APPLICANT CREDITOR

AND:

DEAN STARR JOSEPH CARVER
RESPONDENT DEBTOR

JUDGE:

BEAUMONT J

DATE OF JUDGMENT:

27 FEBRUARY 2003

WHERE MADE:

SYDNEY

REASONS FOR JUDGMENT
BEAUMONT J:

In the course of argument on the hearing of a petition for a sequestration order, a preliminary question of law has arisen and this judgment will deal with that preliminary question.
On behalf of the respondent debtors reliance has been placed upon the principle explained by Davies, Lockhart and Neaves JJ in Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137 at 148 as follows:
“It is also well established that in general a court exercising jurisdiction in bankruptcy should not proceed to sequestrate the estate of a debtor where an appeal is pending against the judgment relied on as the foundation of the bankruptcy proceedings provided that the appeal is based on genuine and arguable grounds.” (Emphasis added)
Their Honours went on to refer to the “broad principle” that:
“[B]efore a person can be made bankrupt the court must be satisfied that the debt on which the petitioning creditor relies is due by the debtor and that if any genuine dispute exists as to the liability of the debtor to the petitioning creditor it ought to be investigated before he is made bankrupt. Bankruptcy is not mere inter partes litigation. It involves change of status and has quasi-penal consequences.”
This passage has been cited and applied on many occasions. It is sufficient for…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2003] FCA 221
Decision Date: 27 FEBRUARY 2003

CaseChat Overview and Summary

Westpac Banking Corporation v Carver concerned an application by the creditor to stay a sequestration order pending the determination of an application for special leave to appeal to the High Court. The debtor, Marie Philippe Cyril Grely Carver, sought to stay the sequestration order on the basis that there was a pending application for special leave to appeal against a Court of Appeal decision. The court had to determine whether the principles established in Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137 applied to an application for special leave to appeal, as opposed to an appeal as of right.

The court held that the principles established in Ahern and other cases applied to appeals as of right, not to applications for special leave to appeal. Special leave to appeal involves a discretionary process where the High Court considers whether the appeal involves a question of law of public importance or if there has been a significant irregularity in the proceedings. The debtor must demonstrate not only that the application for special leave is genuine but also that there are arguable grounds for concluding that special leave will be granted. The court must consider the discretionary criteria set out in section 35A of the Judiciary Act 1903 (Cth) and the factors relevant to the grant of special leave as explained by David Jackson in the Oxford Companion to the High Court of Australia.

The court concluded that the debtor had not shown that it was arguable that special leave to appeal would be granted, as required by the principles established in the cited authorities. The application for special leave was not comparable to an appeal as of right, and the considerations relevant to the grant of special leave were distinct from those applicable to an appeal. Therefore, the application to stay the sequestration order was dismissed.

The court did not make any orders staying the sequestration order pending the determination of the application for special leave to appeal. The sequestration order remained in effect.

Orders