Gould v Day

REASONS FOR JUDGMENT 1 I have before me a motion which I think can be characterised as an application for a stay of proceedings under a sequestration order. It is necessary to say something about the background to the filing of the relevant motion. On 7 September 2000 Conti J made a sequestration order in respect of the applicant, Mr Stephen Gould. On 12 September 2000 I heard an application for stay of proceedings under the sequestration order both under s 52(3) of the Bankruptcy Act 1966 (Cth) ("the Bankrutcy Act") and under Order 52 rule 17 of the Federal Court Rules. 2 On that day I ordered that the proceedings under the sequestration order, other than the obligation arising under s 54 of the Bankruptcy Act, be stayed up to and including 5 October 2000. I also directed Mr Gould to file and serve detailed written submissions outlining his proposed grounds of appeal from the orders of Conti J. On 5 October 2000 I ordered that the stay of proceedings be extended up to and including 19 October 2000. I also ordered that if, on or before 19 October 2000, security for the respondent's costs of the appeal be provided by Mr Gould, the stay be extended up to the determination of the appeal. 3 The security was not provided. Nevertheless the appeal proceeded and, as I understand the position, was dismissed by the Full Court of this Court. Mr Gould then sought special leave to appeal to the High Court from the order dismissing his appeal. Special leave was refused. On 8 November 2001 Mr Gould filed an application in the Federal Magistrates Court seeking an order that the sequestration order be annulled and an order that the administration by the Insolvency Trustee Service of Australia ("ITSA") be stayed. A further application was filed in the Magistrates Court on 15 November 2001 seeking a stay in the administration of the sequestration order pending the application for annulment and pending the hearing of an action for damages brought in the Supreme Court of New South Wales by Mr Gould against the petitioning creditors. 4 On 11 December 2001 Mr Gould's application for an annulment and stay was dismissed pursuant to Rule 13.03(2) of the Federal Magistrates Court Rules 2001. On 12 December 2001 Mr Gould filed a further application in the Federal Magistrates Court seeking a stay in the administration or an annulment and an order under Rule 16 of the Magistrates Court setting aside a judgment or order made in the absence of the party. That suggests, although nobody in Court today is able to tell me, that the order made on 11 December 2001 was made for want of appearance by Mr Gould at some stage. 5 On 20 December 2001 Driver FM ordered that the application by Mr Gould be dismissed. That appears to have disposed of, on a final basis, the proceeding in the Federal Magistrates Court. Mr Gould then filed a notice of appeal in this Court being N1652 of 2001. By the notice of appeal Mr Gould appeals from the whole of the judgment of Driver FM given on 20 December 2001. An appointment for settlement of the papers in the appeal has been made for 21 February 2002 before the Registrar. 6 However, notwithstanding the currency of proceeding N1652 of 2001 in this Court, on 18 January 2002 Mr Gould filed a further application to this Court seeking an order that the sequestration made by Conti J. be annulled. The application filed on 18 January 2002 also seeks by way of interlocutory relief, ...an immediate stay in the administration of the sequestration order by the Insolvency Trustee Service of Australia to avoid a miscarriage of justice and irreparable damage to the applicant. 7 An affidavit in support of that application was also filed on 18 January 2002. That affidavit purports to specify the grounds upon which annulment is sought. The relevant paragraph is as follows: Since 1995 Julian Day, Director of the Australian Information Technology Society Pty Limited, Life Cycle Technologies, ISEG Pty Limited and Conseenus Pty Limited and Alan Manly, Director of the Australian Information Technology Society Pty Limited and Director, Groot College Australia, have been in breach of the Trade Practices Act 1974 in that they have colluded to: (a) prevent me from earning a living; (b) damage my reputation; (c) deter people from working with me on projects; (d) disrupt government funding for OIC projects. To support this application for an annulment complaints have been lodged with the Australian Competition and Consumer Commission by Stephen Gould and the Open Interchange Consortium. Annexed to the affidavit in support of the application for an annulment were forms of complaint addressed to Australian Competition and Consumer Commission. 8 There is nothing in the affidavit to indicate the nature of any facts which had come to the attention of Mr Gould after the making of the sequestration order or after the disposal of the proceedings in the Magistrates Court. 9 On 30 January 2002 Mr Gould filed a further motion in the proceeding commenced on 18 January 2002, that is proceeding N7019 of 2002. That motion claimed an order in the following terms: In the light of: (1) the applicant's inability to obtain a hearing for a stay in vacation from 17 December 2001 - 4 February 2002; (2) the first date for a hearing of application 7019 of 2002 for the annulment of the sequestration order being 15 February 2002; (3) new evidence discovered WE0501 2002 of breach of the Trade Practices Act 1974 by the creditors Day and Manly, a hearing for interim orders for a stay in proceedings of the administration of the sequestration order by the Insolvency Trustee Service of Australia be expedited forthwith. 10 That motion was supported by an affidavit sworn by Mr Gould on 29 January 2002. The affidavit refers to a number of communications from ITSA representing Mr Gould's Trustee in Bankruptcy. Mr Gould seeks a stay of proceedings under the sequestration order insofar as he would otherwise be required to respond to the communications from ITSA. In his affidavit he expresses concern that if he responds to the communications information would be made available to the petitioning creditors who he fears would use that information to his detriment. 11 In my reasons of 12 September 2001 I referred to my concerns as to the Court's power to order a stay under O 52 r 17 of the Federal Court Rules in the light of s 37 of the Bankruptcy Act. Section 37 expressly says that the Court does not have power to rescind or discharge or to suspend the operation of a sequestration order. I referred on that occasion to the views of Carr J in Coleman v Lazy Day Investments Pty Limited (1994) 55 FCR 297 concerning the inter-relationship of those provisions. However, O 52 r 17 has no application in the present case since there is no appeal pending. Accordingly, at present I have reservations as to whether, if I were disposed to do so, I would have power to grant the stay sought. 12 I am not persuaded at the moment that the application for an annulment has any worthwhile prospects of success. There is nothing to suggest that Mr Gould has become aware of facts of which he was not aware prior to the sequestration order. He has said from the bar table that on 5 January he became aware of some provisions of the Trade Practices Act 1974 (Cth) as a result of which he now believes that there have been contraventions of that Act by the petitioning creditors, Messrs Day and Manly. However, he has not been able to point to any evidence in his affidavits to indicate that there were facts not known to him before 7 September 2000 which have now come to his attention. 13 At present I am not persuaded, as I have said, that there is any real prospect of success in the application for annulment. I am not persuaded that there is any risk that compliance with the requests from ITSA would result in any prejudice to Mr Gould. Accordingly I consider that the motion for a stay should be dismissed. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.