Woolley, John Russell v The Offical Receiver for Bankruptcy

IN THE FEDERAL COURT OF AUSTRALIA

) )

VICTORIAN DISTEICT REGISTRY

)	No. VG 17 of 1980

)

GENERAL DIVISION

)

BETWEEN :

JOHN RUSSELL VIOOLLEY

A p p e l l a n t

AND :

TIIE OFFICIAL

RECEIVER

FOR BANKRUPTY

R e s p o n d e n t

ORDER

JUDGES

M A K I N G

ORDER:

Deme, McGrcgor a n d

L o c l c h a r t

DATE OF ORDER.	T h u r s d a y	31 J u l y ,	1980
\BIIERE MADE :	M e l b o u r n e
TIIE COURT ORDERS THAT:

.	T h e appeal be dismissed w i t h ,costs.

IN THE	FEDERAL	COURT	O F AUSTRALIA	)
1

VICTORIAN DISTRICT REGISTRY	)	No. VG 17 of 1980
)
GENERAL DIVISION	1

BETWEEN.

JOHN RUSSELL WOOLLEY

Appellant

AND :

THE OFFICIAL RECEIVER

FOR BANKRUPTY

Responden t

ORDER

JUDGES MAKING ORDER:

Deane ,

McGregor

a n d

L o c k h a r t

JJ.

DATE OF ORDER:

T h u r s d a y

J u l y ,

1980

WHERE

MADE

Melbourne

THE

COURT

ORDERS

THAT:

T h e appeal be disrnlssed

with costs.

IN THE FEDEPAL COURT OF AUSTRALIA	)
1

VICTORIAN

DISTRICT

REGISTRY

NO. VG

17 of l980

GENERAL DIVISION

BETWEEN: JOHN RUSSELL WOOLLEY

Appellant

-	AND :	THE OFFICIAL
RECEIVER FOR
BAMKRUPTCY

Respondent

CORAM:

Deane, McGregor and Lockhart JJ.

Thursday 31 July, 1980

REASONS FOR JUDGMENT

DEANE J:

“his 1s an appeal from a judgment of a slngle

judge

thls court

(Mr.

Justlce Emlthers) dlsmlsslng an

appllcatlon

the appellant, John Russell Woolley,

for

annulment of hls bankruptcy, pursuant to the provlslons

S .l54 of the BPnPruptcy Act, 1966.

The sequcstrntloc crc?er

ln respect of the appellant’s estate had been made on 9 December, 1976, pursuant to a petition presented by Adrlano

Umberto Frlgo. The act

bankruptcy alleged agalnst the

-2-

appe l l an t and

found

t o have

been

committed by h i m was

f a l l u r e

comply

wi th the requl rements o f

bankruptcy not lce based

upon

d e f a u l t

judgment

a g a i n s t t h e a p p e l l a n t i n

M r .

F r lgo ' S

favour .

The

b a s l s of

the

app l i ca t lon fo r

annu lmen t

-be fo re

Mr.

Jus t lce

Smi thers

was

t h a t

t h e

d e b t

i n

r e s p e c t

whlch

t h e r e l e v a n t

judgment

had

been

obtalned

was

i n t r u t h owlng

t o

Mr. Esigo not

the a p p e l l a n t b u t by

company,

F l she r

aria

F lsher

Propr le ta ry

L lml ted

( " the

Company"),

with

whlch

the

appe l l an t

was

a s s o c l a t e d .

Mr.

J u s t l c e

Smmlthers

consldered

the evldence placed before

him

and

d e c l d e d t h a t t h e a p p e l l a n t

had

f a l l e d t o s a t l s f y

him

t h a t

t h e r e l e v a n t d e b t

was

deb t

owlng by A c c o r d l n g l y ,

t h e

company

and

no t

t h e

a p p e l l a n t

p e r s o n a l l y .

h l s

H o n o u r

d i s m i s s e d

t h e

a p p l i c a t l o n

f o r

annulment and

o rde red

t ha t

t he

appe l l an t

pay

t he

Of f l c l a l

Receiver ' S

c o s t s .

The

n o t l c e of

appeal

1 s singularly uninformatlve

a s

t o

t h e

ground

whlch

the

appea l

i s brought.

I t slmply

a s s e r t s

"Thar

hls

Honour

Jus t l ce

Sml the r s

has

e r ro red

a t

lair".

It specifies a s the order

sought ,

"Annulment

o f

t h e

Appellants

Bankruptcy

and

o r

consen t

fo r

s p e c l a l

c a s e

t o

t h e High

Court

Australia".

This

Court

does

not

possess

power

t o s t a t e

spec la l

ca se

I n

t h l s

m a t t e r

f o r

t h e

o p l n l o n

of the

Flgh

Court

Austral ia ,

and

1 s unnecessa ry

t o

r e f e r f u r t h e r t o t h a t

sugges t ed

course o f

ac t lon .

-3-

Both

t h e

a p p e l l a n t

and

Mr.

Frlgo

gave

evidence

before

M r .

J u s t l c e

Smlthers.

Examlnatlon

t he l r

evldence

d l s c l o s e s t h a t

fa r

a s t h e q u e s t l o n w h e t h e r t h e r e l e v a n t

deb t was

owing b y

t h e

a p p e l l a n t

the

company

was

concerned,

there

was sharp conf l l c t between them.

The

appel lant gave evldence

t o t h e

e f fec t

t h a t

t h e

s e r v i c e s of

Mr.

F r lgo had

been

employed

the

company,

whlch

w a s

b u i l d l n g

company,

s i n c e

1 9 7 1 t o d o

c e r t a l n

c o n t r a c t

jobs on si tes owned by

t he

company.

Mr. Frlgo

gave

evldence

t h a t

h i s

s e rv l ces

had

always

been

employed by

t h e a p p e l l a n t

p e r s o n a l l y .

The

a p p e l l a n t

s t a t e d

t h a t

h e

o r l g l n a l l y

introduced

hlmself

and

a Mr.

Gargano as dlrectors of t h e

company and explalned that t h e l r role was

t h a t of

superv ls lng

b u l l d l n g

a c t i v l t l e s

b y

the company.

Mr.

Frlgo

gave

evldence

t h a t

t h e

company

was

no t

mentloned

a t

t h a t

tlme.

The

appe l l an t

gave ev ldence t ha t

a l l work

performed

Mr.

Fr lgo

was for the company.

Mr.

Fr lgo

gave

ev idence

t ha t

t he

appe l l an t

had

t o ld

h l m

t h a t

h e

hlmself

was

r e s p o n s l b l e

for

paylng

hlm.

The

a p p e l l a n t

s a i d

t h a t

a l l

payments

were

made

cheque

drawn

the

company.

M r . drawn both

F r l g o s a l d t h a t t h l s

was

not so and that

cheaues

had

been

the

company

and

the

appe l l an t

pe r sona l ly .

The

appel lan t

gave

ev ldence

t h a t t h e

work

r e l e v a n t

t o

t h e

Judgment

debt

had

been

done

behalf of the company.

Mr. Fr lgo

gave

ev ldence

tha t ,

f a r

a s he was concerned,

the

work was done f o r

t h e

a p p e l l a n t .

-4-

According

t o Mr.

Fr lgo when

the appe l l an t

sugges t ed

t ha t

should

look

t o the

company

for payment

s a l d t o t h e

appe l l an t :

"as far a s I know my

c o n t r a c t was w l t h you and

one

e l se" .

th l s

t h e

a p p e l l a n t ,

"m the end", replled:

will f i x you, no worries".

The

above

contrast

between

the evldence of

t h e

a p p e l l a n t

a n d

t h e

e v l d e n c e

Mr.

F r i g o

t e n d s

t o

over -s lmpl l fy

the

i s sue

before

Mr.

J u s t l c e

Smlthers

i n

t h a t

It may were marked

imply

t h a t t h e l r r e s p e c t l v e a c c o u n t s

r e l e v a n t

facts

a degree of

c l a r i t y and

conslstency whlch was,

I n

t r u t h ,

n o t

p r e s e n t

a t

al?..

There

are

some

I n t e r n a l

con t r ad lc t lons

t he

ev idence

o f

M r .

F r lgo ,

and

t h e r e

are

some

p a s s a g e s i n h l s e v l d e n c e

which

could

p rope r ly

seen

suppor t ing

the

appel lan t ' s

con 'centmn

that

the

work

was

done

by Mr. Frlgo

under

c o n t r a c t wlth t h e company.

Mr.

Fr lgo ' S

command

Engl lsh

was

p l a l n l y

somewhat

d e f l c i e n t .

HI S

knowledge

the

s l g n i f l c a n c e and

n a t u r e of

company

was

p la ln ly

meagre .

A t tlmes, as he hlmself

explalned

under

cross-examlnatlon

the

a p p e l l a n t ,

h e

was

"so confused".

The

ques t ion whe the r i n t e rna l l ncons l s t enc le s

h l s e v l z e n c e

were t o be explalned by a degree of confusion was ve ry much

mat te r

t o be

determlned

reference

t o

seelng

and

hearlng

hlm

g l v e h l s

evldence.

-5-

On the other hand ,

t he

appe l l an t '

claim

t h a t

part of the deb t w a s owlng

h l m was

no t

asslsted

b y p a r t s

o f

h l s

ev ldence

or ,

occaslon,

h ls

ques t lon lng

Mr.

Frlgo.

For

example,

I n the course of

h ls

c ross -examlnat lon

of Mr. Fr lgo he asked a serles o f

ques t lons

whrch

w e r e .

apparent ly ,

Intended

t o

s u g g e s t t h a t

$200,

b e l n g p a r t

t h e

judgment

d e b t , was

owed

by t h e

a p p e l l a n t

p e r s o n a l l y

t o

Mr.

F r l g o

f o r

" p u t t l n g

sept lc

tank

and

some

d r a l n s

a t

personal

home".

I n

these

c i rcumstances ,

h is

Honour ' s

f lnd lng

tha t

was

n o t

sa t lsf led

t h a t

t h e

d e b t

I n

respect of whlch

judgment

had been obtalned

was

owed

the

company

and

not by

t h e a p p e l l a n t

was

l a rge ly

based

upon

h l s

a s ses smen t

bo th

t h e

a p p e l l a n t

and

Mr.

F r l g o

a s

w l t n e s s e s

H e

expressed

s u b s t a n t l a l a c c e p t a n c e of t h e e v l d e n c e of M r . F r l g o , regardlng hlm as a "genuine man" and "the sort of w l t n e s s who

carrles

convlc t lon" .

The

appel lant . has

fal led t o persuade me

tha t t h e

concluslon

M r .

J u s t l c e

Smmlthers

tha t h e was

n o t s a t i s f l e d

t h a t

t h e

r e l e v a n t

d e b t

w a s

orvlng

b y

t h e

company

and

not

t h e

a p p e l l a n t

w a s

a f f e c t e d

b y

a n y

l e e n t l f l a b l e

error

p r l n c l p l e or

mlstake

mlsapprehenslon

f a c t .

I n

t h e s e

&.ircumstances, hls

Honour ' s

dec l s lon ,

t o

the

e x t e n t

t o whlch

It was based on h l s opin lon

the

t rus twor th lness

t h e

-6-

witnesses and the lmpression he formed from seelng

and

hear lng

them

glve ev idence , should on ly

l n t e r f e r e d w i t h

appe l l a t e

cou r t

i f

the

a p p e l l a t e

c o u r t

convlnced

tha t

the

dec l s ion

was

wrong.

t h e o t h e r h a n d ,

t o t h e e x t e n t

t o

whlch

ins

Honour' S

decls lon can proper ly

sald t o be

based

on lnferences drawn

from

the

e s t a b l i s h e d

facts ,

t h l s c o u r t

1 s

under	a	d u t y t o	examlne	the	quest lon	for	l t s e l f	whl le	g lv lng
-

respect

and weight

t o the conclus lon of

the

t r l a l j u d g e .

I n

t h e

p r e s e n t

case,

appears

t o m e t h a t ,

for

the reasons

whlch

have

ment

ioned,

the

conclusion

Mr.

J u s t l c e

Smmlthers

t h a t he

was

n o t

s a t l s f l e d

tha t

the

r e l e v a n t

debt

w a s

n o t

owlng

the

appe l l an t

pe r sona l ly

was

based

l a r g e l y on hls

assessment

t h e

a p p e l l a n t

and

F r l g o

wltnesses and tha t hxs conclus ion

> h e o v e r a l l

e f fec t

the

evldence

of M r . Frlgo

was,

t o

smal l

ex ten t ,

based

observlng

and

hear lng

M r .

F r lgo

g lve

h l s

ev idence

It X ,

however ,

no t necessary in the p resent case

t o

attempt

t o

draw

the	l i n e between	f lndlngs	of f ac t based upon the trlal
\	I

judge 's

lmpresslon

of wl tnesses and Inferences

drawn

from

such

f lndlngs

prlmary

f ac t .

Even

t h e

a p p r o p r l a t e

approach

were

t o be

accepted

as belng to examlne

the

ques t lon

for

ourse lves

whl le

g lv lng

due

respect

and welght

t o t h e

concluslon

the

trlal

~ u d g e , I

g u l t e unpersuaded

that

any ground has been

shown

for

l n t e r f e r l n g

wlth

the conc lus lon

M r .

Jus t lce Smithers

t h a t

h e

was

n o t

s a t l s f l e d

t h a t

t h e

deb t was

no t

owlng by

the a p p e l l a n t .

. .

-7-

The

a p p e l l a n t

a l s o

s u b m l t t e d

t h a t

t h e r e

were

grounds

for

s a y m g t h a t t h e

amount of

t h e judgment debt may,

I n any

event,

not

correspond

w i t h

t h e

amount

whlch

w a s

I n

truth

owlng.

There

i s n o t h l n q i n

thls

submlsslon

whlch

would

warran t In te r fe rence

thls

c o u r t with

t h e order made

by M r .

J u s t l c e	Smmlthers.	Indeed ,	i n	t he	cou r se	of	t h i s	s u b m i s s l o n ,
-	-

t h e

a p p e l l a n t ,

a t

one

s t age ,

specu la t ed

t ha t

the

amount

properly owing

may exceed the amount of t h e judgment debt .

I n the clrcumstances, it 1 s unnecessary for me

'express or t o form any

vlew

the

q u e s t i o n

w h e t h e r

h l s

Honour

w a s

c o r r e c t i n t h e c i r c u m s t a n c e s

of' t h i s

case

In gorng

behlnd

the

judgment

which had already been

the

s u b j e c t

unsuccess fu l

app l l ca t ion

t o

set It a s l d e and whlch

underlay

t h e

a c t

bankruptcy

found

t o have

been

commltted

the

hea r ing

197G of the bankruptcy

pe t i t ion ,

pursuance

AND :

Respondent

COR.UI:

DEPJJE, NcGREGOR and LOCIUfART JJ

Thursday 31 J u l y l980

McGREG0.S J: I agree

with

what

has

fa l len

f rom

the

learned

res id ing

Judge .

For myself,

I would J u s t w i sh

t o

add

This:

tha t be€ore the l earned judge

from

v~l?lch t h i s

appeal.

i s

brought ,

the subs tan t la l

ques t ion a rgued

was

whe-cher

t h e

d e b t , t h e s u b J e c t

o f

t h e p e t l t i o n ,

was

owed

n o t

t h e

eppe l l an t bu t

a compeny of which he was

a d i r e c t o r ,

namely,

F l s h e r

Fisher

Pty.

Limited.

His

Konour,

af ter hear ing

de ta l l ed ev ldence

from

both

c r e d i t o r

and f rom the appel lcnt

and

cross-exammation

o f

bo th pa r t i e s and

making

h i s own

assessment of them,

concluded

t h a t

was

n o t s a t i s f i e d t h a t

the

c o n t r r x t

o u t o f IrhLch

t h c dc?lt was

s a i d t o a r i s e

vas

between 131~.

Frigo ,and

t h e compmy,

That same i s s u e was

a t tempted to be ra l sed before

His

Honour

Judge

Gormn,

wl?o

hen:-d

an a p p l i c e t i o n ire

a r e t o l d

I n chanbers

t o s e t

a s i d e

t h e

p Q m e n t .

HLS HOIIGXI,

r e f u s e d

t h s t

anTlic ,c t ion,

t h e

prec?.sc ,~rounf i s

o f

h r s r c f u s : d

h r ~ e

n o t beer1 t h e

ci)bj3,.L

argument

'discussion,

though

Lmre

j.s

r e f e r e n c e i n

khr.

transcript

t o t h a t

h e a r i n g .

The

c n d c n c e

which

have

read

f o r

ou r se lves

and

t o

l ihlch extensive rcfcrence has been

made

the appel lan t

i s well

capaille o f bear ing tht .

cons lructlon

t h a t t h e c o n t r a c t ,

o r

c o n t r a c t s

o u t o f

which

t he Judgmsnl; then

arose,

?'!as beCween

the zppel lan t m d

F!r.

Frigo.

Thus,

the

Judgwnt credj.-r;or was

e n t i t l e d

t o

znd

indeed could

only have

sued

the Judgment debtor,

zssuming

that t h e r e was

evldence o f a contract

between

them,

I n rny

view,

reason has been

shown

In l aw

o r i n f a c t t o i n t e r f e r e

wl th

t h e

Judgment appealed upon.

IN THE FEDERAL COURT

OF AUSTRAT,TA

VICTORIAN

DISTRICT

REGISTRY

NO, VG 17 of 1980

DIVISION

GENERAL

BETWEEN:

JOHN RUSSELL WOOLLM

Appellan

AND:

THE OFFICIAL RECEIVER FOR

BANKRUPTCY

Responde:

CORAM:

DEANE, McGREGOR and LOCKHART JJ.

Thursdav 31 July, 1980

REASONS FOR JUDGPENT

LOCIU-LNT J:

I agree with what has been sald by the other

members of the Court and would add only

a few words for myself

The appellant conciucted his own appeal

befo-e this Court. He

analysed the evidence before the learned trial Judge carefully

and fully. He sought to estabhsh, in particular, that there

were many inconsistencies

in the evldence of Mr.

Frigo; but

the same may

be said of the evldence of the appellant himself.

However, some

of the alleged inconsistencies are examples

equivocatlon rather than inconsistency. The learned trlal Judp

considered all the evidence and preferred the evidence of

Mr.

Frigo to that

of the appellant. His Honour concluded that he

was not satisfied that the debt was

owed by the company.

In my opinion, it has not been established that his

Honour erred in reaching this concluslon; accordingly there	1s
no warrant for interferrmg with his Honour's declsion. In

determming the questlon whether

a sequestration order ough-c

. .

. /2

-2-

not to have been made, the Court looks at the facts as they

existed at the date when the sequestratlon order was made:

see Re Scott (1975) 6 A.L.R. 558.

To ascertain those €acts

the Court is not confined to the case disclosed to the Court

when the sequestration order was made, but may consider the

case that would have been disclosed

If all the facts had beer

before the Court when the sequestration order was made. Thi;

was the course taken, and	in my opinion, correctly, by the
learned trial Judge.

Even if the Court

1s satisfied that

a sequestration

order ought not to have been made, it is not bound as

matter of course to annul the bankruptcy; but must consider

all the circumstances of the case and decide whether, in the

exerclse of its discretion, the bankruptcy ought to be annul:

see Delph Slng v Wood (1918) 25 C.L.R. 497 and Re Mlllam.

(1968)

F.L.R. 10.

This questlon does not arise for

consideration in the present case, as

it has ndt been

establlshed that the sequestration order ought not to have

been made. I agree that the appeal should be dismissed

wlth costs.

[1980] FCA 121

31 Jul 1980