Kumar v Bathini

Factual background 7 The Federal Circuit Court set out the relevant factual background, which is not contentious in any material sense between the parties, and I take this summary from her Honour's reasons, and from the affidavit material before me. That affidavit material included the decisions of the County Court of Victoria in Bathini v Kumar [2012] VCC 1604 and the Victorian Court of Appeal in Kumar v Bathini [2014] VSCA 77, to which I refer below. Each of those decisions sets out in considerable detail much of the factual background to the underlying disputes between the applicants and the respondents, as well as the course of litigation between them. 8 The parties have a long and somewhat antagonistic history, relevantly since 2008. They began with a commercial relationship in relation to the provision of educational services to international students. The respondents to this application (whom I shall describe as the creditors) were operating an educational institution called Chelsea International College. It was operated through a company, called Chelsea International College Pty Ltd. The applicants claim the relationship began with an oral agreement in approximately June 2008 whereby the creditors would give the applicants "exclusive marketing rights" in relation to the college and the applicants agreed to procure foreign students to attend the college, and would be paid a commission by the creditors (the calculation of that alleged commission need not be set out here) where students were referred and enrolled. 9 This oral agreement, the applicants claimed, was altered in October 2008 by the applicants and the creditors entering into a partnership agreement instead. The applicants alleged they agreed to waive their commissions in return for a pooling of resources between the parties and an agreement going forward to work as partners. It was this partnership agreement which became the subject of the litigation which led to the sequestration order against the applicants. 10 The creditors brought proceedings in the County Court of Victoria, seeking damages and to have the partnership agreement declared unenforceable, on the basis that they had been induced to enter into it by the misleading and deceptive conduct of the applicants. There was alleged to have been a misleading and deceptive representation to the petitioning creditors, namely, that the applicants had bought a college, the Australian Institute of Tourism and Commerce, for $440,000. After a trial lasting some ten days, judgment was given in favour of the creditors. 11 A declaration was made to the effect that the partnership agreement was unenforceable. The applicants were ordered to pay the creditors $220,000 in damages, plus a further $20,000 which related to a loan, plus interest and costs. The County Court judgment was given on 26 October 2012: see Bathini v Kumar [2012] VCC 1604. The applicants appealed to the Court of Appeal, but their appeal was dismissed, although not until 16 April 2014: see Kumar v Bathini [2014] VSCA 77. An application for special leave to appeal to the High Court was made, but special leave was refused on the papers on 15 October 2014. 12 Meanwhile, the creditors had issued a bankruptcy notice against the applicants, which was served in about December 2012. As her Honour found, and I accept, compliance with the bankruptcy notice was extended for a lengthy period to accommodate the reserved decision of the Court of Appeal. After the Court of Appeal's decision, on 29 April 2014, a Registrar refused to further extend the time for compliance with the bankruptcy notice. 13 The applicants sought review of this decision, and sought to extend the time for compliance with the bankruptcy notice until the disposition by the High Court of the special leave application. However, in July 2014 the Federal Circuit Court refused to grant any such extension of time: Kumar v Bathini [2014] FCC 1592. 14 In seeking an extension of time for compliance with the bankruptcy notice before the Federal Circuit Court on the basis of the special leave application to the High Court, in paragraph 9 of his affidavit, the first applicant had deposed: Further, in the unlikely event that the Appeal against the judgment is dismissed, I believe that my brother and I shall have a claim and or set/off against the respondents for misleading and deceptive conduct and for breach of an agreement to pay commission. I believe that this claim is valued in the sum of $1,206,805.27 which far exceeds the value of the judgment debt which forms the basis of the bankruptcy notice issued against us. In the unlikely event that the Appeal is unsuccessful, we propose to file evidence in support of this claim in due course in support of the setting aside of the Bankruptcy Notice. 15 The evidence in support of the oral commission agreement, to which the first applicant deposed in this affidavit, has not been forthcoming. I note also the same arguments were made to the Federal Circuit Court on this occasion as were made to her Honour, and to me: namely, the applicants' contentions concerning the oral commission agreement, the way the County Court trial was conducted and the prospects of success the applicants contended they have in making out the oral commission agreement. 16 A sequestration order was made on 27 November 2014 by Registrar Caporale. Registrar Caporale granted a stay on the sequestration order of 21 days to enable a review application to be made to the Federal Circuit Court. 17 Shortly before that, but after the unsuccessful extension of time review application to the Federal Circuit Court, the applicants filed on 22 October 2014 a writ in the Supreme Court of Victoria against the creditors seeking payment of the commission amounts they alleged they were owed under the oral agreement. 18 As her Honour noted, that writ was not, and never has been, served on the creditors. That proceeding has gone no further. In his affidavit before me, the first applicant gave as a reason for non-service that the applicants wished to await the outcome of the hearing on 27 November 2014 "before incurring further costs in the Supreme Court of Victoria". 19 Since the sequestration order remains in force, the applicants are unable to take any further steps in this proceeding: Bankruptcy Act 1966 (Cth), s 60(2).

The Federal Circuit Court review decision 20 The question for her Honour, as it had been for Registrar Caporale, was whether the discretions in s 52(2) of the Bankruptcy Act should be exercised. Section 52(2) provides: If the Court is not satisfied with the proof of any of those matters, or is satisfied by the debtor: (a) that he or she is able to pay his or her debts; or (b) that for other sufficient cause a sequestration order ought not to be made; it may dismiss the petition. 21 Her Honour noted, and it remains the case before me, that the parties agreed the applicable principles had been set out in Totev v Sfar [2006] FCA 470; 230 ALR 236 at [40]-[44], by Allsop J (as his Honour then was). 22 I set out here the relevant parts of her Honour's reasons for judgment at [13]-[27]: 13. The debtors argued that, because the County Court found that the partnership agreement was void, they are now able to claim all the commissions that were owed to them under the agreement. They say that they did not file proceedings earlier because they hoped to have the partnership agreement upheld. The debtors actually claimed in their original defence in the County Court filed on 9 December 2009 that they had the commission agreement with the petitioning creditors and said it constituted a setoff against the claim brought against them by the petitioning creditors. However, in an amended defence filed on 1 October 2010, the debtors abandoned the commission claim. 14. The trial in the County Court commenced on 3 October 2012 and ran for 12 days. The debtors in the preparation for the hearing were represented by a particular solicitor who filed on their behalves both the defence and the amended defence. However, they were not represented at the commencement of the trial. Part way through the trial, they gained legal representation. Their counsel sought on two occasions to be permitted to re-amend the defence to include the commission claim. The County Court refused that application on both occasions. 15. The appeal to the Court of Appeal does not appear to have included any ground of appeal in relation to the County Court's refusal to allow the reinstatement of the commission claim. There is a copy of the special leave application to the High Court before this court. It did not raise as an issue that the County Court erred in not permitting the reinstatement of the commission claim. 16. The Court of Appeal noted that the debtors conceded before the Court of Appeal that they were not legally entitled to bring the claim for commission. Counsel for the debtors before the court today said that that concession had been made because the debtors were aware that leave had not been granted to revive the commission argument and so, on that basis, they were not legally entitled to claim commission. As I have mentioned, there was no appeal ground that leave should have been granted for the commission claim to be revived. 17. The debtors rely particularly on a passage from Totev v Sfar at [44], which said that: Alternatively, the circumstances may reveal a claim of a character and nature in which likelihood of success cannot be predicted with accuracy, but in the circumstances the petition should be dismissed or an adjournment of the petition should be granted: see the approach of Sundberg J in Ling v Commonwealth [1996] FCA 1646; (1996) 68 FCR 180 at 195-196, with which Wilcox J and Whitlam J agreed. 18. The debtors submitted that this is such a case because here there is simply oath against oath. The debtors and creditors respectively have said on affidavit that there was and was not an oral agreement regarding the commission. The debtors submitted that, in such circumstances, the court should allow the matter to be determined by the Supreme Court. The debtors submitted that this court should not be making judgments about the credibility of the debtors' claim. 19. The petitioning creditors argued against that. They said that there are many features of this case which reveal the character and nature of the commission claim and which indicate that the commission claim is not likely to succeed. They said that there is an Anshun estoppel argument. They said that there is an overwhelming likelihood that, if this matter were to go to the Supreme Court, it would be immediately rejected on Anshun principles. The debtors said that Anshun does not apply because they tried to run their argument, but were not permitted to do so. They said that takes them outside the normal range of Anshun cases. 20. The position is that this court cannot determine definitively whether Anshun estoppel would apply in this case or not. That would be a matter for the Supreme Court. However, there are a number of features already mentioned which suggest that there is a solid basis to the Anshun arguments. The commission claim was raised in the County Court. It was abandoned in the County Court. The debtors had the same lawyers acting for them when both of those steps were taken. It is true that the debtors attempted to reinstate their commission claim in the County Court without success. Although they appealed against the County Court judgment, they did not appeal the refusal to allow the commission claim to be run. The other telling point is that, although the Supreme Court writ regarding the commission claim was issued on 22 October 2014, it has not been served. 21. Counsel for the debtors disputed a claim by counsel for the creditors that the matter would not be heard in the Supreme Court until next year. Counsel for the debtors said that the Anshun point could be heard and determined in weeks in the Supreme Court. That may be true, but it cannot be determined until the writ is served. It seems to me that it is extremely telling that the debtors chose not to serve the writ. 22. There was some debate about why it had taken so long for the writ regarding the commission claim to be filed at all in the Supreme Court. Counsel for the debtors explained that they did not wish to set aside the partnership agreement because it would have given them a one-third share in the college and they perceived that as being more valuable than their $1.2 million commission claim. That might explain the delay between the judgment of the County Court on 22 October 2012 and the refusal of special leave on 15 October 2014. However, it does not explain the delay in serving the writ. 23. It seems to me that in the context of this case there is a reasonable prospect that the Anshun argument will be resolved in favour of the creditors. However, it also seems to me that there are surrounding circumstances in this case which support a decision that the sequestration order should not be set aside. The decision of Allsop J, as his Honour then was, in Totev v Sfar said that the discretion in s.52(2) of the Act should be informed by a number of factors, including public interest considerations. There has been a very long history to this matter. The bankruptcy notices were issued in 2012. There has already been protracted litigation in the County Court, Court of Appeal and the High Court. 24. Another factor is the stage of the litigation. As I have said, the writ was issued on 22 October 2014, but it has not been served. The litigation [is] at an extremely early stage. 25. The next factor is the length of time for the vindication of any claim. The parties were in considerable dispute about how long it might take for the Supreme Court proceeding to come to a conclusion. I am not in a position to determine that matter, other than to say, again, that the litigation is at an extremely early stage. 26. Allsop J said in in Totev v Sfar that what the debtors needed to show was that there was a real claim, which is likely to succeed. There is other authority to the effect that the claim does not need to be more likely than not to succeed, rather, that there be a prima facie case. However, even on the lower test, it seems to me that there is no real reason to consider that this is a real claim which has reasonable prospects of success. The claim is based on an oral agreement. There is no evidence, other than the debtors' assertions, of the existence of that agreement. The creditors point out that the alleged agreement seems odd in that, if it concerned marketing rights for Chelsea International College, it would be expected that Chelsea International College would have been party to the agreement. Moreover, there is the Anshun argument. 27. Taking into account all the matters referred to by Counsel, I do not consider that there is "other sufficient cause", such that the sequestration order made by the registrar ought to be set aside. There will be orders accordingly.

The parties' submissions on the application 23 By the time of the hearing of the application the applicants and the creditors were represented by counsel, and had filed written submissions in support of their respective positions, which I have read and considered, including a reply handed up by the applicants' counsel in court. The parties made detailed oral submissions, which I have also taken into account.

Consideration of the extension of time application 24 At the start of the hearing, counsel for the applicants made a submission that the extension of time application should be referred to a Full Court, to be heard together with an appeal if an extension of time was granted, on the basis there is a conflict of authority about s 52(2) of the Bankruptcy Act. I pointed to the parties' agreed position before the Federal Circuit Court that Totev was the applicable authority and counsel confirmed this. Counsel's attempted reliance on paragraph [26] of her Honour's reasons (extracted above) does not alter the relevance of that concession, which was properly made. In [26] her Honour was doing nothing more than making a cautious supplementary observation. There was no contest between the parties before her Honour on the applicable principles, nor was there any before me. I informed the parties that in any event there had been a direction from the Chief Justice that the extension of time application be dealt with by a single judge and that was what would occur. If an extension of time were granted, whether the appeal then went before a Court constituted by one or three judges would be a matter for the Chief Justice. 25 Somewhat inconsistently, counsel for the applicants then moved to a submission that it would be sufficient for an appeal to be heard by a single judge. This recognised, properly, that there was no relevant conflict of authorities raised by this appeal. 26 In considering whether to extend the time in which a notice of appeal may be filed, the Court takes into account three principal matters: any explanation for the delay, any prejudice to the respondent or other parties which might be occasioned if the extension of time were granted and the prospects of success of the appeal if an extension of time were to be granted. These considerations were set out in Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 186; 3 FCR 344 at 348-349 and have been applied consistently in this Court, by single judges and Full Courts. The way the explanation for the delay is to be balanced against the prospects of success of the proposed appeal will vary from case to case. I respectfully agree with observations of Besanko J in Vaysman v Deckers Outdoor Corporation Inc [2014] FCAFC 60; 222 FCR 387 and his Honour's reliance on Jopar v The Queen [2013] VSCA 83; 228 A Crim R 519, where his Honour said (at [89], relying on Jopar): In this case, the correct decision on the application for an extension of time is finely balanced. The delay is very substantial and, as I have said, the explanation for it, far from satisfactory. Nevertheless, I agree with the approach taken by the Court of Appeal of the Supreme Court of Victoria in Jopar v The Queen (2013) 228 A Crim R 519 at [60]: Scrutiny is thus invited of the reasons for the delay and the merits of the proposed appeal. These two considerations are not necessarily in equipoise. Where the merits of the proposed appeal are very poor, even a satisfactory explanation for the delay might not justify an extension. On the other hand, where the merits of the putative appeal are very good, but the explanation for the delay is poor, the court may incline towards granting an extension. The discretion reposed in the court must be exercised according to the individual facts of each case. 27 The applicants explain the delay by referring to the subsequent provision of settled reasons by her Honour. I regard this as unsatisfactory. The applicants have been through enough court processes to know the effects on their appeal rights of the pronouncement of orders. They were represented by solicitors and counsel in the review before her Honour, although it appears from the transcript that their solicitors were not in court. Their counsel was present when judgment was delivered and orders were pronounced. 28 As to the absence of any action before the provision of settled reasons from the Court, the first applicant deposes: We had instructed our lawyers that we wished to appeal the judgement of her Honour Judge Riley and were informed that Counsel would review the settled written reasons for judgment upon receipt and would then draw the necessary papers to pursue our appeal if Counsel was of the view that the appeal had merit. We are informed by Counsel that our proposed appeal has merit and we attach herewith a draft of the proposed Notice of Appeal marked with the letters "AK4" which was received by us today. 29 There is no evidence before me that the reasons as pronounced by the Court ex tempore differed in any material respect from the settled reasons, and this would in any event be highly unusual. Her Honour was applying agreed principles to the evidence before her. An assessment was capable of being made after the giving of an ex tempore judgment of the prospects of any appeal. It is apparent from the transcript of the hearing before her Honour that the applicants' counsel was very familiar with the issues in the case, as he had also appeared in the County Court trial for the applicants. 30 The content of the proposed notice of appeal in evidence before me confirms my view that the reason given is unsatisfactory. I set out the proposed grounds at [40] below. 31 Each of these grounds reflects contentions put to the Federal Circuit Court judge in April 2015 and to the previous Federal Circuit Court judge in mid-2014. The contentions have not materially changed. I see no basis whatsoever that a notice of appeal could not have been drawn and filed within time. 32 Contrary to the applicants' submissions what was said by the Court in WAAD v Minister for Immigration & Multicultural Affairs [2002] FCAFC 399 does not compel a different conclusion. For the reasons I set out below, there is injustice, by way of prejudice, to the creditors. The delay is short, but not excusable in the circumstances. While legally represented, the applicants had a right of appeal, which despite what they now vigorously contend to be the importance and overwhelming compellability of the oral commission agreement claim, they did not exercise. 33 At one level the short period by which the appeal would be out of time might be said to mean there could be no real prejudice to the creditors. However the creditors correctly submitted that this would ignore the amount of time litigation between these parties had been on foot. The oral commission claim dates from mid-2008 and proceedings between the parties have been ongoing since 2009. The effect of granting an extension of time in which to appeal is to attend the making of the sequestration order with ongoing uncertainty, even in the absence of any ongoing stay. In my opinion this is prejudice which can be considered in the exercise of the discretion to extend time. Where the applicants wish to raise a claim dating from 2008 as a reason there is "sufficient cause" under s 52(2) of the Bankruptcy Act to either adjourn or dismiss a bankruptcy petition, and in circumstances where that claim has been made, abandoned and then unsuccessfully reagitated in other proceedings, it is incumbent on the applicants to take any further steps in a timely fashion because otherwise, the creditors' entitlements in the bankruptcy are subject to a lack of finality: see Newman v Bain [2013] FCA 558; 213 FCR 370 per Gilmour J at [65]. 34 Even if, contrary to the findings I have made above, I were satisfied there was an adequate explanation for the delay, and that there was no disqualifying prejudice to the creditors in granting an extension of time, I do not consider the appeal enjoys any reasonable prospects of success. 35 I commence with the issue of the correct approach to her Honour's reasons. Section 52(2) of the Bankruptcy Act confers a discretion on the Court, conditioned on the Court forming a state of satisfaction that there exists a "sufficient other cause" to dismiss the petition for bankruptcy, or adjourn it. That discretion was available for exercise by the Federal Circuit Court, the review being conducted as a hearing de novo. 36 Counsel for the applicants did not accept that the principles in House v The King (1936) 55 CLR 499 were applicable. The respondent submitted they were. 37 In my view the principles in House v The King are applicable. The terms of s 52(2) - by their requirement that the Court form a state of satisfaction and then by the conferring of a discretionary power - make it as clear as it could be that this is a discretionary judgment for the Court to make, on the evidence before it. 38 I reject the submission of the applicants' counsel that the principles in House v The King are confined to discretionary powers relating to matters of practice and procedure. It is true they are often applied in that context. There is no authority to suggest that is the entire universe of their operation (and the applicants' counsel did not refer the Court to any), and much authority establishing the contrary to be the case: see, for example, Toms v Harbour City Ferries Pty Limited [2015] FCAFC 35 per Buchanan J at [86]-[97], Allsop CJ and Siopis J agreeing, citing Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; 203 CLR 194 at [19]-[21] and Norbis v Norbis [1986] HCA 17; 161 CLR 513 per Mason and Deane JJ at 518-519. I note this approach was taken by Gleeson J in relation to s 52(2) of the Bankruptcy Act in Barton v Malcolm Johns Legal Pty Ltd (No 2) [2015] FCA 166 at [34]-[35], where her Honour referred also to Re Dolman; Ex parte Elder Smith Goldsbrough Mort Ltd (1967) 10 FLR 384 per Gibbs J at 391. I respectfully agree with her Honour. 39 The applicants must demonstrate on this application they have reasonable prospects of success on the appeal in showing that the Federal Circuit Court acted on a wrong principle, took into account extraneous or irrelevant matters, or misunderstood the evidence in a material and dispositive way. 40 I turn then to the grounds set out in the proposed notice of appeal: 1. The learned judge erred in law by failing to succinctly identify, and to correctly apply, the principles of law governing the consideration of whether the Appellants had an arguable cross-claim against the respondents which enjoyed a reasonable prospect of success sufficient to constitute "other sufficient cause" within the meaning of section 52(2)(b) of the Bankruptcy Act 1966 (Cth) ("the Act"). 2. The learned judge erred in law and in fact by failing to find on the evidence that the Appellants had a cross-claim against the respondents which constituted "other sufficient cause" within the meaning of section 52(2)(b) of the Act. 3. The learned judge erred in law by holding that there was "a reasonable prospect" that the Appellants' alleged cross-claim would be "Anshun estopped" in circumstances where the Appellants had unsuccessfully sought to re-agitate their cross-claim against the Respondents in the County Court of Victoria. 4. The learned judge's exercise of discretion in making a sequestration order against the Appellants miscarried by reason of the failure to properly consider whether the Appellants had a cross-claim against the respondents and whether the existence of this alleged cross-claim afforded a proper basis to either dismiss or adjourn the Creditor's petition filed against the Appellants. 41 As to the first ground, counsel for the applicants properly conceded in oral submissions that there was no debate between the parties about the applicable principles. Both parties urged her Honour to apply the approach to s 52(2) set out by Allsop J (as his Honour then was) in Totev. 42 It is important to set out some key early passages from her Honour's reasons. At [17] her Honour noted the particular part of Totev upon which the applicants relied. At [18] her Honour said: The debtors submitted that this is such a case because here there is simply oath against oath. The debtors and creditors respectively have said on affidavit that there was and was not an oral agreement regarding the commission. The debtors submitted that, in such circumstances, the court should allow the matter to be determined by the Supreme Court. The debtors submitted that this court should not be making judgments about the credibility of the debtors' claim. 43 Before me, counsel accepted this paragraph was an accurate summary of how the arguments were put to the Federal Circuit Court. 44 In oral submissions before me, counsel focused on a contention that her Honour misapplied the principles in Totev. Counsel submitted her Honour misapplied, in particular, the following passage from Totev (at [44]): If the claim is one in which credit of witnesses will be involved, and a debtor sets out the nature and detail of the case and all his or her evidence the debtor may only be able to persuade the bankruptcy court that, if relevant criteria are believed, he or she has good prospects of success. 45 I do not accept the submission that her Honour misapplied this passage. This passage from Totev must be read in the context of Allsop J's reasons as a whole. Immediately after that passage his Honour says (at [44]-[45]): What should be proved, or what is sufficient to be proved, in any given case will depend upon the circumstances. The context in which the issue arises is also important. The discretion involved in s 52(2)(b) is a broad one, and, importantly, it is informed by public interest considerations concerned with the dealing with insolvents. It is to be distinguished from the task involved in deciding whether a claim exists that satisfied s 40(1)(g) of the Act. There, the task, prior to the commission of an act of bankruptcy, is the identification of a bona fide or genuine claim … Mr Totev referred to and relied upon some of those authorities dealing with applications concerning s 40(1)(g) to the effect that all he had to do before the Federal Magistrates Court was demonstrate a bona fide or genuine claim. That was to misunderstand the nature of the task at hand. The context was different. There had been an act of bankruptcy and the question was whether "other sufficient cause" had been shown. The cases to which I have referred reveal the principles to be applied in that respect. (Citations omitted.) 46 Read in context, and contrary to the applicants' submissions, there is no suggestion at all Allsop J was setting out an approach approximating a "prima facie case" approach: in fact, his Honour was doing the opposite. 47 Once that is understood, the Federal Circuit Court's reasoning fits comfortably with the approach outlined by Allsop J. It was up to her Honour to look at all the material before her, and to decide whether on the basis of that material the "cause" advanced by the applicants was "sufficient", taking into account public interest considerations. That is what her Honour did. The first proposed ground of appeal has no reasonable prospect of success. 48 The second ground of appeal simply invites this Court to reach a different conclusion on the evidence, and is not a tenable ground of appeal if House v The King is applicable, which I consider it is. Even if House v The King were not applicable, I see no basis to suppose the applicants could persuade an appellate court her Honour erred on the basis of the evidence before her. The evidence was of short compass, and her Honour set it out at [11]-[12] of her reasons: The debtors argued that they have a good claim. The evidence upon which they rely is set out in the affidavit of Aakash Kumar sworn on 28 April 2014. That affidavit sets out the history of the matter and it said at paragraph 7: In or about June, 2008, my brother and I entered into an oral agreement with the respondents whereby the respondents granted us exclusive marketing rights in relation to their company, Chelsea International College Pty Ltd ("CIC") ("the Commission Agreement"). Pursuant to that agreement, we agreed to procure foreign students to be referred to CIC for enrolment at that college in consideration of a promise to pay us commission in accordance with the following formula: (a) 30% commission for each student directly referred to CIC by us; (b) 10% commission for each other student enrolled at CIC as a result of a referral by other agents or as a result of "walk-ins" to CIC. The affidavit included reference to a separate and distinct written partnership agreement dated 1 October 2008 between the debtors and the creditors. It then said, at paragraph 8 that: … since August, 2008, we had agreed to waive commissions which were due to us pursuant to the Commission Agreement on the basis of an agreement with the respondents that we would pool all of our resources together and work as partners. The partnership agreement was formalised by the document executed 24 October, 2008 and backdated to 1 October 2008. 49 Counsel for the applicants confirmed in oral submissions this was all he relied upon, and, he submitted, all he needed to rely upon. However he did also place some reliance on a schedule of commission fees he alleged the applicants had prepared as part of their claim. With some assistance from the creditors, both as to the evidence itself and its location, he did point to a schedule of alleged commission fees, prepared by the applicants at some unknown but later date to support their claim to the $1.2 million. I do not consider this to provide any evidentiary support for the existence of the oral agreement itself, back in 2008. There was no need for her Honour to have referred to this schedule. The second proposed ground of appeal is not tenable; alternatively it has no reasonable prospect of success. 50 The third ground relates to the creditors' contentions about Anshun estoppel and the way her Honour dealt with this issue. Reading the reasons as a whole it is apparent her Honour was careful not to form any decided views on this, correctly noting this would be a matter for the Supreme Court. Her Honour did express a preference for the contentions put by the creditors, but no more than that. It is a nice point whether Anshun estoppel could run in relation to a claim made, then abandoned and then sought to be made again in a proceeding where ultimately the Court refused leave for the claim to be made again. Whether that course of events renders it "unreasonable" for the claim not to have been made in that proceeding is, I consider, open to argument. Had the estoppel issue been the only basis for her Honour's conclusions, the applicants may well have been found to have at least some prospects of success in their appeal. However it was far from the only basis, and in my opinion it was nothing more than an additional and tangential basis. The third proposed ground of appeal has no reasonable prospect of success. 51 The fourth proposed ground of appeal alleges a failure by her Honour to "properly consider" whether the applicants had a cross-claim. This ground is unsustainable. Her Honour gave careful and thorough reasons for her decision and considered the arguments put on behalf of the applicants before her, in the context of the evidence they adduced to support them. 52 Her Honour considered a number of other factors in [23]-[26] of her reasons, in accordance with Totev, which led her to conclude the discretion in s 52(2) of the Bankruptcy Act should not be exercised. Her Honour's conclusion at [27] must also, I consider be read in the context of the matters her Honour referred to at [13]-[16] about the abandonment of the claim in the County Court, and what was and was not raised in the Court of Appeal. 53 There was no detail about the alleged oral agreement in the evidence adduced by the applicants before her Honour. There was no corroborating evidence. Aside from the commission schedules (which have no relevance to the existence of the agreement), counsel did not point to anything outside the evidence quoted by her Honour. It was open to her Honour not to be satisfied (recalling the language at s 52(2)) the evidence demonstrated there was "sufficient" cause. The word "sufficient" imports a qualitative assessment by the Court. That is what occurred. It was not, as counsel for the applicants contended, simply a matter of her Honour impermissibly preferring one piece of sworn evidence (the creditors') over the other (the applicants'). The onus was on the applicants to adduce probative evidence to meet the "sufficiency" criterion. In this case, there was a long history to the way in which the oral commission agreement claim eventually came to be made by writ in late 2014, and her Honour considered all of that history, including but not limited to the course of the County Court proceedings, properly taking into account the public interest considerations in finalising bankruptcy proceedings. The fourth proposed ground of appeal has no reasonable prospect of success.

Conclusion 54 I am not satisfied there is any basis to grant to the applicants an extension of time in which to appeal. I do not accept their explanation for the delay, short as it is. In the circumstances it is inexplicable. There is real prejudice to the creditors in granting an extension of time. And there are no reasonable prospects of success on the grounds of appeal set out in the proposed notice of appeal. 55 Even if the correct approach were to consider the applicants' prospects of success on a basis more generous to them than House v The King, I would not be persuaded their claim that her Honour erred in finding there was no sufficient cause for the purposes of s 52(2) enjoyed any reasonable prospects of success. The reasons given by her Honour for refusing to exercise the discretion under s 52(2) are cogent, and I am not persuaded there is any arguable error apparent in them. 56 One further matter should be noted. In the first applicant's affidavit, there is a bare and broad allegation of negligence made against the applicants' original solicitors, in relation to the running of the County Court proceeding. It appears this allegation is intended to diminish the weight which should be placed on the course of events occurring in the County Court proceedings. There is a wholly insufficient basis in the evidence to assess that allegation, even if it could legitimately form part of the Court's consideration about the prospects of success of an appeal. There are no proposed proceedings against the applicants' former legal advisers. Even if such proceedings had been foreshadowed, there should be a level of certainty both about any proposed claims against legal representatives and about the prospects of success for such claims: Westpac Banking Corporation v Tsatsoulis [2003] FCA 406. On their merits, they may in any event suffer from the difficulty that these allegations do not appear to have been put to the Federal Circuit Court. When one reads the County Court's reasons for judgment, to which I have referred, it is apparent the applicants swore to the truth of the defence pleaded on their behalf, after the oral commission claim had been abandoned. 57 For those reasons the application for an extension of time will be refused, with costs. I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mortimer.