Cottrell v Wilcox

Although I accept them, I do not find these generalised statements particularly helpful. Mr Cottrell was able, on 16 April 2003, to produce and file a typewritten draft notice of appeal. The question arises why he was not able to produce and file a notice of appeal in the same form during the preceding period of nearly seven months. This question requires attention to the more specific statements in Mr Cottrell's affidavits and the statements by medical practitioners annexed to them. 7 The first particular statement by Mr Cottrell is that he was very ill during August and September 2002 and was examined by Dr M Alsabti on 21 October 2002, as a result of which he was admitted to Urana Hospital, where he was treated with medication and nursed back to health. I accept this evidence. Further evidence shows that Mr Cottrell was an in-patient at Urana Hospital from 21 October 2002 to 25 October 2002, a period of five days. According to Mr Cottrell's affidavit, he was told when released on 25 October 2002 to rest in bed for at least ten days "on the medicine prescribed for pneumonia". This evidence accounts for some 15 days of the total period of nearly seven months. 8 Dr Alsabti has provided a report dated 23 May 2003 confirming that Mr Cottrell was admitted to Urana Hospital on 21 October 2002 "with diagnosis of pneumonia". In addition, Dr Alsabti states that Mr Cottrell has been his patient since October 2002 and that he looks after the management of his Parkinsonism from which he has been suffering since 1995. 9 Further evidence relating to any date, dates or periods falling within the period of nearly seven months mentioned is to be found in a letter dated 20 May 2003 from the Urana & District Health Services. This letter refers to Mr Cottrell's having been admitted to the Urana Hospital from "10/04/2003 - 11/04/2002 [sic]". I will assume in favour of Mr Cottrell that the reference is intended to be to a hospitalisation from 10 April 2003 to 11 April 2003. The letter does not indicate the reason for this hospitalisation. 10 The only other evidence relevant to the period with which I am concerned is to be found in a letter dated 21 May 2003 from the Community Mental Health Service at Albury. The letter is signed by Ross Everard, Mental Health Counsellor, and states, relevantly, as follows: "During the past year David's depression has fluctuated a lot but it has never been resolved to any satisfactory level. During the past year I have seen David in Urana Hospital whilst he was being treated for pneumonia. I have seen David approximately twelve times since first admission to our service. We have had some significant gains in the area of anxiety and panic attack but have not had much prolonged improvement in his depression and suicidality. David's Parkinson's disease is progressive and he is gradually becoming more and more disabled." 11 The recency of this letter makes it persuasive for what it says. There can be no doubt that Mr Cottrell suffers from serious ill health and has done so for many years. The difficulty which I have with his present application, however, is that the evidence adduced does not establish why he was not able to do what he managed to do on 16 April 2003, when no doubt, he was suffering from Parkinsonism and depression, at any earlier time during the period of some seven months to which I have referred. 12 Moreover, the affidavit of Austin James McRae, the solicitor for Mr Wilcox, shows that Mr Cottrell was able to file a notice of motion in late September 2002 in proceeding number 459/92 between himself and Mr Wilcox in the Local Court at Wagga Wagga Mr Cottrell apparently signed the notice of motion on 25 September 2002. It is dated 26 September 2002 and was returnable on 27 September 2002. Mr McRae states that on 27 September 2002 Mr Weir, barrister, appeared for Mr Cottrell in the Local Court and that Mr McRae cannot recall Mr Cottrell was present in court. The motion was adjourned to 29 October 2002 for hearing. 13 According to Mr McRae's affidavit, on 29 October 2002 he appeared before her Worship Ms Hannam, and Mr Cottrell appeared in person accompanied by his son. According to Mr McRae's affidavit, Mr Cottrell informed her Worship that he had lodged a notice of appeal against the judgment of Branson J. On the hearing before me, Mr Cottrell told me that he did not say this, but told her Worship that he intended to file such a notice of appeal. The motion was adjourned to 1 April 2003 to allow the appeal against the judgment of Branson J to be heard and determined. 14 In the Local Court proceeding, on Mr Wilcox's motion, the learned Magistrate ordered on 21 May 2003 that Mr Cottrell was "incompetent to defend or prosecute any application" in the proceeding because of the provisions of subss 60(4) and 82(1) of the Bankruptcy Act 1966 (Cth) ("the Act"). Apparently that order was made in response to a motion by Mr Cottrell for an order dismissing the proceeding. With respect, the relevance of the particular statutory provisions mentioned to the order made is not obvious to me. 15 The affidavit testimony of Mr McRae shows that Mr Cottrell was able to prepare and file the notice of motion in the Local Court at Wagga Wagga on (or about) 26 September 2002 and that he was able to appear in that Court on 29 October 2002. These two circumstances also make it difficult to accept that throughout the period of seven months mentioned, Mr Cottrell was not reasonably able to file a notice of appeal against Branson J's orders. In particular, the fact that he was able to prepare and file the notice of motion on or about 26 September 2002 made it difficult to accept that he was unable to prepare and file a notice of appeal in this Court by 24 September 2002. 16 For the reason that Mr Cottrell has not established "special reasons" in terms of the disabling ill health on which he relies, his present application for an extension of time in which to file a notice of appeal should be dismissed with costs. 17 Although this conclusion makes it unnecessary to consider whether the grounds of appeal propounded by Mr Cottrell raise any arguable appeal point (Mr Wilcox submits that they do not), I will address this question also. 18 On 21 September 2001, Conti J made a sequestration order against the estate of Mr Cottrell (Wilcox v Cottrell [2001] FCA 1357). An appeal against the order of Conti J was dismissed on 14 March 2002 (Cottrell v Wilcox [2002] FCAFC 53). 19 The proceeding which was heard and determined by Branson J was an application by Mr Cottrell under s 153B of the Act for an order annulling his bankruptcy. The ground on which Mr Cottrell relied was that the judgment debt upon which Mr Wilcox's creditor's petition was founded was set aside by the Wagga Wagga Local Court on 31 January 2002. Her Honour accepted that the judgment debt was set aside on that date. I note that on 31 January 2002 the learned Magistrate also ordered Mr Cottrell to pay Mr Wilcox's costs of $500 within 28 days and to file a verified defence within 21 days. 20 In passing, I note that there is no evidence of the grounds on which, or circumstances in which, the judgment was set aside. Counsel who appeared before me for Mr Wilcox did not know. Mr Cottrell asserted that the ground was that the alleged debt arose out of an illegal joint enterprise of Mr Cottrell and Mr Wilcox. Apparently there are no published reasons of the Local Court for the order setting aside the judgment. Being a bankrupt, Mr Cottrell was apparently not competent to apply for the setting aside order made on 31 January 2002: see s 58(1)(a) of the Act and Cummings v Claremont Petroleum NL (1996) 185 CLR 124, or, in the alternative, subs 60(2) of the Act, depending on whether Mr Cottrell filed the notice of motion to set aside after or before the making of the sequestration order on 21 September 2001. I do not know if this difficulty was raised in the Local Court or, if it was, how the learned Magistrate dealt with it. 21 Alan Richard Nicholls, the trustee in bankruptcy of Mr Cottrell's estate ("the Trustee"), prepared, filed and served, a report containing the information required by O 77 r 44, of the Federal Court Rules. As required by O 77 subr 44(4) the report was in the form of an affidavit by the Trustee. Several of Mr Cottrell's complaints about the reasons for judgment of Branson J turn on the fact that her Honour took into account matters referred to in the Trustee's report. With respect, she was clearly entitled to do so, as O 77 r 44 contemplates. 22 Section 153B of the Act empowers the Court to annul a bankruptcy if satisfied that the relevant sequestration order "ought not to have been made". Her Honour referred to the Full Court decision in Stankiewicz v Plata [2000] FCA 1185 as authority for the proposition that it is the true facts which existed at the time of the sequestration that are relevant, not facts which occurred subsequently. Her Honour held, plainly correctly, that the setting aside on 31 January 2002 of the judgment of Mr Wilcox, the petitioning creditor, was therefore in itself irrelevant to the question whether the sequestration ought not to have been made on 21 September 2001, and therefore to Mr Cottrell's application for the annulment. Notwithstanding Mr Cottrell's submission to the contrary, her Honour was, with respect, plainly correct in this respect. She was also correct in holding that, nonetheless, facts which existed at the time of the making of the sequestration order which led to the setting aside of the Local Court judgment could be relevant on the application for annulment. 23 Her Honour chose to dismiss Mr Cottrell's application in the exercise of the discretion given her by s 153B based on Mr Cottrell's failure to attempt to prove that he was solvent, notwithstanding her Honour's invitation to him to do so. 24 Her Honour listed details of the creditors from whom the Trustee had received proofs of debt as follows: Goddard Elliott, solicitors $21,434.00 Mason Sier Turnbull, solicitors 15,128.00 Jacob Toyota 7,351.00 James G. Sloan, solicitor 1,227.00 ------------- TOTAL $45,140.00 ========

After giving these details, her Honour recounted what Mr Cottrell said about them. She then referred to three "potential claimants" mentioned by the Trustee in his report, said she had not found it necessary to consider those potential claims, but noted that they tended to suggest that Mr Cottrell's financial affairs required investigation. 25 Finally, her Honour referred to the estimated outstanding fees and disbursements of the Trustee of $14,323.06 and to the Trustee's estimate of $7,000 in further legal and other costs to be incurred. 26 Against the above background, I turn to the grounds of appeal on which Mr Cottrell wishes to rely.

That the Judge failed in her duty to consider the facts put before her Honour in a fair and unbiased manner 27 There is no evidence adduced in support of this ground and there is no substance in it.

That the Judge allowed material to go before the Court that was not permissible and was in breach of the Bankruptcy Act 28 Mr Cottrell explained that this ground was intended to refer to the fact that her Honour relied on the Trustee's report. In my opinion, however, it is clear beyond argument that her Honour was entitled to rely upon that report, in the form of an affidavit, which was required by O 77 r 44 to be provided to the Court in connection with an application of the very kind that was before her Honour.

That the Judge allowed evidence to be tendered with the prefix TBA clearly in breach of the Bankruptcy Act 29 Again, Mr Cottrell explained that this ground was intended to refer to her Honour's reliance on the report of the Trustee. There is no substance in this ground.

That the Judge was wrong to make a judgement on facts not the subject of the s 153B Application before the court at that time 30 Mr Cottrell explained that again his complaint was that her Honour relied on the Trustee's report. He submitted that because Mr Wilcox's judgment had been set aside, her Honour should not have referred to the Trustee's report. But Mr Cottrell was still a bankrupt. Clearly, her Honour did not err in relying on the Trustee's report.

That the Judge was wrong to give any weight to the already dealt with, and dismissed petition of Goddard Elliott. 31 I understand that Goddard Elliott is a firm of solicitors. That firm presented a creditor's petition against Mr Cottrell. On 13 February 2001, the petition was dismissed in the Federal Magistrates Court at Melbourne (proceeding MZ94 of 2000). Counsel appearing for Mr Wilcox before me asserted that Goddard Elliott's petition had been dismissed because, at the time, Mr Cottrell was already bankrupt by reason of the sequestration order made in his estate on 29 November 2000 in proceeding N7880 of 2000 in this Court on the petition of Mr Wilcox. Whether or not this is the reason why Goddard Elliott's petition was dismissed, its dismissal does not signify that Mr Cottrell was not indebted to that firm. The Trustee reported that the firm had lodged a proof of debt. 32 On the hearing, Mr Cottrell submitted that Goddard Elliott could not have recovered the fees from him because the firm had not supplied an itemised bill of costs as required by the Legal Profession Act 1987 (NSW). This is not referred to in the draft notice of appeal. There is no evidence that the matter was raised before Branson J. Nor is there is evidence before me on the point. For lack of evidence, I put the matter to one side.

That the Judge was wrong to give weight to the possibility of the existence of potential claimants, not admitted to by the applicant 33 There is no substance in this ground. Debts can exist although not admitted and not the subject of a bankruptcy petition, and, indeed, not the subject of a judgment of any court. In any event, her Honour said only that the further potential claims referred to by the Trustee deserved investigation. 34 For the above reasons, I would also have dismissed Mr Cottrell's submission for extension of time because an appeal on the grounds propounded by him would be doomed to fail.

CONCLUSION 35 The application for extension of time will be dismissed with costs. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

Associate: Dated: 18 June 2003 The applicant appeared by telephone link. Counsel for Respondent: Mr P Parker Solicitors for Respondent: Sally Nash & Co Date of Hearing: 6 June 2003 Date of Judgment: 18 June 2003