Williams v JMD Electrics Pty Ltd

[2003] FCA 1132

FEDERAL COURT OF AUSTRALIA

Williams v JMD Electrics Pty Ltd [2003] FCA 1132

Federal Court of Australia Act 1976 (Cth) s 25(1A)
Trade Practices Act 1974 (Cth) ss 51AA and 52
Bankruptcy Act 1966 (Cth) s 43
Bankruptcy Regulations 1966 (Cth)

Harris v Caladine (1991) 172 CLR 84, applied

WILLIAM ROBERT WILLIAMS v JMD ELECTRICS PTY LTD

V 115 OF 2003

MARSHALL J
16 OCTOBER 2003
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V115 OF 2003

BETWEEN:	WILLIAM ROBERT WILLIAMS APPELLANT
AND:	JMD ELECTRICS PTY LTD RESPONDENT
JUDGE:	MARSHALL J
DATE OF ORDER:	16 OCTOBER 2003
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.The appeal be dismissed.

2.The appellant pay the respondent’s costs of the appeal.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V115 OF 2003

BETWEEN:	WILLIAM ROBERT WILLIAMS APPELLANT
AND:	JMD ELECTRICS PTY LTD RESPONDENT

JUDGE:	MARSHALL J
DATE:	16 OCTOBER 2003
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. This matter is an appeal from a judgment of a Federal Magistrate in which her Honour dismissed a review application by the appellant concerning a sequestration order made by a Registrar. The appeal also concerns her Honour’s dismissal of an application, made orally to her at the review hearing, to annul the sequestration order. It was heard by a single judge as a consequence of a determination made by the Chief Justice under s 25(1A) of the Federal Court of Australia Act 1976 (Cth).

2. The original notice of appeal contains three grounds.  They are as follows:

   “1.Her Honour, Hartnett FM, declared that the Applicant has no cause of action. This is clearly incorrect.

   2.Her Honour gave leave to the Applicant to bring annulment proceedings. This should have been declared more precisely.

   3.Her Honour awarded costs against the estate of the Applicant. This was incorrect.”

3. A fourth ground was added in an amended notice of appeal.  That ground is irrelevant to this proceeding as it concerns the Registrar’s decision not to adjourn the proceeding before him, as discussed further below.

4. In an affidavit containing the appellant’s contentions of fact and law filed in the appeal the appellant describes the circumstances in which he became indebted to the respondent.  The appellant required some electrical work to be performed at his farming property.  He claimed that he agreed with the respondent that the work would be performed for $490 plus a slab of beer.  He said that he was later billed substantially for the work and that he refused to pay the bill.  Subsequently the respondent issued a proceeding against him in the Magistrates Court of Victoria for work and labour done.  At paragraph 4 of his contentions the appellant described what occurred at that proceeding as follows:

   “The case went for one day.  The respondent and its witnesses gave evidence and I cross-examined them, as best I could.  They denied that the agreement was that the work would be done for $490 plus a slab.  I and my witnesses gave evidence that the agreement was that the work be done for $490 plus a slab.  At the end, the Magistrate, a woman, ruled against me.”

5. In his written contentions the appellant stated that he wished to pursue the respondent in this Court under the Trade Practices Act 1974 (Cth) (“the TPA”) inter alia, for “telling untruths to the Magistrates’ Court”, in reliance upon ss51AA and 52 of the TPA and the common law. Alternatively he indicated that he may wish to pursue an appeal to the Supreme Court of Victoria. The appellant stated that he wanted the sequestration order annulled so that he could commence such action. Orally on the appeal it was contended that the appellant may have an action against the Registrar under s 51AA of the TPA for refusing to adjourn the proceeding before him.

6. At paragraph 8 of his contentions the appellant said that, “my appeal largely relates to the way in which the sequestration Order was made”.  The appellant then proceeded to protest about the failure of the Registrar to adjourn the application before him, which was subject to review before her Honour.  In the penultimate and final paragraphs of his contentions the appellant referred to proceedings he wishes to commence against other persons for alleged wrongs done to him in 1956 and to the fact that his bankruptcy prevents him from commencing such proceedings.  No mention was made in the contentions about an action against the Registrar.  I consider the submission to be scandalous.  All the Registrar did was to refuse to adjourn a proceeding before him in exercise of his discretion to do so in a bona fide way.  As explained later, what occurred before the Registrar is, in any event, now irrelevant to the instant appeal from the judgment of Hartnett FM in the de novo hearing before her.

7. The judgment in favour of the respondent in respect of the work and labour done for the appellant, including costs, was in the sum of $3,112, according to the relevant order of the Magistrates Court of Victoria made on 16 October 2000.  On 27 April 2002, the respondent served a bankruptcy notice on the appellant. On 29 April 2002, the appellant committed an act of bankruptcy by failing to comply with the bankruptcy notice.  On 11 October 2002, the respondent filed a creditor’s petition.  On 4 February 2003, Registrar Efthim made a sequestration order against the appellant’s estate.  On that day there was no attendance by the appellant at court.  He sought an adjournment by letter, but that application was refused. On 19 February 2003 the appellant applied to the Federal Magistrates Court to review the Registrar’s order.

8. In an ex-tempore judgment delivered on 3 March 2003 the learned Federal Magistrate dealt de novo with the respondent’s application for a sequestration order.  She also dealt with an application by the appellant for an annulment of the bankruptcy, which flowed from the Registrar’s order.  As the proceeding was a de novo one, nothing turned on the Registrar’s failure to adjourn the proceeding before him, a fortiori nothing turns on that issue now (see Harris v Caladine (1991) 172 CLR 84). The appellant was present before the Federal Magistrate and he was represented at the hearing today. The critical issues before this Court are whether the learned Federal Magistrate erred in making a sequestration order and whether she erred in failing to accede to the appellant’s request for annulment of his bankruptcy.

9. The requirements for the making of a sequestration order are found in s 43 of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”). That section provides:

   “1) Subject to this Act, where:

   (a)a debtor has committed an act of bankruptcy; and

   (b)at the time when the act of bankruptcy was committed, the debtor:

   (i)     was personally present or ordinarily resident in Australia;

   (ii) had a dwelling-house or place of business in Australia;
   (iii) was carrying on business in Australia, either personally or by means of an agent or manager; or
   (iv) was a member of a firm or partnership carrying on business in Australia by means of a partner or partners or of an agent or manager;

   the Court may, on a petition presented by a creditor, make a sequestration order against the estate of the debtor.
   (2) Upon the making of a sequestration order against the estate of a debtor, the debtor becomes a bankrupt, and continues to be a bankrupt until:

   (a)he or she is discharged by force of subsection 149(1); or

   (b)his or her bankruptcy is annulled by force of subsection 74(5) or 153A(1) or under section 153B.”

10. On the question of the sequestration of the appellant’s estate her Honour made the following pertinent points:

    · all formal requirements necessary under s 43 of the Bankruptcy Act and the Bankruptcy Regulations 1966 (Cth) for a sequestration order to be made were complied with in an affidavit verifying the creditor’s position;

    ·    the debt of $3,112 was still owing;

    ·    the Federal Magistrate was able to go behind the judgment to see whether there was in reality a debt owing to the respondent by the appellant.

11. At [15] of her reasons the learned Federal Magistrate said:

    “No issue was taken by the applicant as to the matters which are necessary to be proved before the making of a sequestration order such as the accuracy of the bankruptcy notice, service of the petition, filing of affidavits and search of the Insolvency Index – that is, that the creditor has complied with the formalities required by the Act and the Rules.  Nor is there any issue that the judgment was in fact obtained in the Melbourne Magistrates Court some considerable time ago now, namely 16 October 2000.  Such judgment was not a default judgment. It occurred after the hearing of contested proceedings before the presiding magistrate.  The material filed and contained in these proceedings and contained in the affidavit sworn by William Robert Williams and filed 19 February 2003 raise matters which could well have formed the basis of a counter-claim or set-off to the proceedings in the Melbourne Magistrates Court.  The respondent debtor did not seek to appeal from the judgment of the 16.10.2002.”

12. Her Honour was satisfied that there was no reasonable cause of action described in the appellant’s material for the orders sought by him. She was plainly correct in that view. The debt was unambiguously owing. The intended future litigation concerning the conduct of the respondent in the Magistrates Court of Victoria and concerning events dating back to 1956 in respect of an unrelated party gave the Court below no reason to go behind the judgment debt.  Nowhere in the appellant’s written contentions or in his solicitor’s oral argument was any rational cogent reason advanced to demonstrate that the appellant had any arguable cause of action against the respondent or another person with respect to events concerning that person and the appellant in 1956.  Ground 1 of the grounds of appeal is consequently devoid of merit.

13. In effect, the application by the appellant for an annulment of his bankruptcy was otiose.  If the review application was meritorious, the annulment application would have been unnecessary.  If a sequestration order was an appropriate one to make, it would be odd in the extreme to fail to make it and inane to make it, only then to annul it.  The learned Federal Magistrate was plainly correct in not acceding to the application by the appellant for annulment.  Ground 2 of the grounds of appeal in any event do not, in terms, challenge the failure to make an annulment order but complain of the lack of specificity in the reasons of her Honour in granting leave for the issue to be raised. Ground 2 is not made out.

14. Ground 3 of the notice of appeal challenges her Honour’s costs order.  There was no reason why costs should not have followed the event.  Ground 3 also fails.

15. Ground 4 is not a proper ground of appeal in that it fails to comprehend the de novo nature of the proceeding before her Honour (see [8] above).

16. The appeal in the matter is entirely devoid of merit.  In fact it is bad beyond argument.  It is entirely surprising, and all the more disappointing, that this proceeding has reached this Court in circumstances where the appellant is not self-represented but is in fact represented by a legal practitioner.

17. The appeal will be dismissed with costs.

I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.

Associate:

Dated:             16 October 2003

Counsel for the Applicant:	Mr R Johnstone
Solicitor for the Applicant:	Johnstoneda
Counsel for the Respondent:	Mr J Fijalski
Solicitor for the Respondent:	Davies Moloney
Date of Hearing:	16 October 2003
Date of Judgment:	16 October 2003