Atkinson v Oakleigh Holdings Pty Ltd

REASONS FOR JUDGMENT 1 The applicant applies to set aside a bankruptcy notice which was issued by an Official Receiver on 31 July 2000 and served pursuant to an order for substituted service with effect on 10 August 2000. After I reserved judgment an order was made by consent extending time for compliance with the notice (if valid) until 30 November 2000. The application also seeks, under the heading "Claim for Interlocutory Relief", an order that the time for compliance be extended "until the hearing and determination of the appeal [sic] against the judgment relied on as the foundation of the Bankruptcy Notice". 2 After a four day trial before his Honour Judge Mitchelmore in the District Court of New South Wales judgment was given for the respondent against the applicant on 13 November 1998 for $132,954.65 and costs. The learned judge delivered a substantial judgment of thirty-five pages. 3 On 28 June 2000 the New South Wales Court of Appeal (Mason P, Meagher and Haydon JJA) dismissed an appeal by the applicant. Their Honours were of the unanimous opinion that the appeal did not raise any question of general principle and delivered a judgment in short form pursuant to s 45(4) of the Supreme Court Act 1970 (NSW) which amongst other things said that the Court "agrees substantially with the reasons of the trial judge". 4 On 25 August 2000 the applicant filed in the Sydney office of the Registry of the High Court an application for special leave to appeal. The application has not yet been heard and no hearing date has been fixed. The proposed grounds of appeal are as follows: "(a) Counsel appearing at the trial before the learned trial judge made an egregious error and was flagrantly incompetent in failing to adduce evidence from Raymond John Bennell. (b) That egregious error and flagrant incompetence of counsel led to a miscarriage of justice in the hearing before the learned trial judge and before the Court of Appeal as the court was led wrongly to the conclusion that it was entitled to accept the evidence of Mr Stone insofar as it related to his reliance on the letter of 8 March 1995." 5 On the hearing of a bankruptcy petition the general rule is that the court should not proceed to sequestrate the estate of the debtor where an appeal is pending against the judgment relied on as the foundation of the bankruptcy proceeding, provided that the appeal is based on genuine and arguable grounds: Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137 at 148, Adamopoulos v Olympic Airways (1990) 95 ALR 525 at 531. 6 In Guss v Johnstone [2000] FCA 1455 at pars 13-17 the Full Court appeared to be of the view that the same approach should be adopted where the debtor is pursuing an application for special leave to appeal to the High Court. However by the time the case came before the Full Court special leave had been granted and the appeal heard and dismissed so the refusal of the adjournment did not occasion the debtor any injustice: at par 17. 7 But in Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264 Lehane J held that different considerations apply when what the debtor seeks is not an adjournment of the hearing of the petition but an extension of time for compliance with the bankruptcy notice. In so holding his Honour followed a line of unreported decisions: Re Geard (Sheppard J, 11 February 1994), Re Smith (Whitlam J, 9 May 1994) and Agrillo v Codispoto (Sackville J, 10 December 1994). 8 In Byron, as in the present case, the debtor was seeking to extend the time for compliance with a bankruptcy notice pending an application to the High Court for special leave to appeal. In refusing the application Lehane J noted · no stay had been granted, or sought, of the judgment founding the notice (at 270) · an appeal had already been dismissed and the proceeding was for special leave to make a further appeal (at 271). 9 Both those factors exist in the present case. Moreover although the court may be reluctant to enter into the merits of an appeal, they may be relevant where the court is able to regard the prospects of success as slight: Byron at 270. On that score it is to be noted · The point as to the alleged negligence of counsel was not taken in the Court of Appeal. · It is no doubt quite conceivable that the High Court, in the light of the recent House of Lords decision in Arthur JS Hall & Co v Simons [2000] 2 WLR 543, may wish before long to reconsider the issue of a barrister's immunity from suit confirmed in Australia by Giannarelli v Wraith (1988) 165 CLR 543. But it seems unlikely that this reconsideration would occur in a case where the point was not taken in the intermediate appellate court and where, even if the applicant's barrister could be sued for negligence, that would not provide a ground for upsetting the respondent's judgment. (Contrast Vozza v Tooth & Co Ltd [1963] NSWR 1675 at 1684 and 1689 where misconduct of opposing counsel in a jury trial was held to provide a ground of appeal.)