Lahood v Bank of Western Australia Ltd

The judgment below 22 In his reasons for judgment the federal magistrate (again Altobelli FM) noted that the matter had been adjourned on at least seven previous occasions. In fact, as I have already observed, it was nine. His Honour said that it was unusual for a creditor's petition to be before the court for so long and to be adjourned so many times. His Honour also noted that Mr Lahood was apparently unable to comply with directions. He gave examples which suggest a pattern of non-compliance. He acknowledged that more than half of the adjournments had been by consent but noted that at least three had been opposed. I interpolate that there was a dispute about this at the hearing of the appeal but the Federal Magistrates Court file verifies his Honour's statement. 23 By the time the matter was heard, the federal magistrate observed that Mr Lahood had still not filed a notice stating the grounds of opposition to the petition, despite the order made on 22 August 2012 that he do so. I note parenthetically that the Federal Court (Bankruptcy) Rules 2005 (Cth) ("Bankruptcy Rules") (which applied to the proceeding by virtue of r 1.03) require that a notice of grounds of opposition to the petition be filed at least three days before the hearing or, with the leave of the court, at the hearing (r 2.06). 24 His Honour then referred to the requirements of the Bankruptcy Act and Rules and said he was satisfied that they had been complied with. He found (at [9]) that: • the debt the subject of the creditor's petition was still owing; • it exceeded $5,000; • it was a liquidated sum payable immediately; • Mr Lahood committed an act of bankruptcy on 3 January 2012; • at the time the act of bankruptcy was committed he was personally present and ordinarily resident in Australia; and • he failed to comply with the bankruptcy notice, duly served on him, within the statutory time frame. 25 His Honour observed that there had been no application in relation to the bankruptcy notice, which had been personally served on Mr Lahood. I take him to mean by that observation that there had been no application to stay, extend the time for compliance with, or set aside the notice. He noted that there had been a search of the insolvency index and that the results were before the court. He also noted that there was an affidavit of final debt sworn on 12 February by a person with knowledge of the facts in it. 26 At [12] his Honour referred to the medical issues with which Mr Lahood has struggled over the last few years. He noted that Mr Lahood questioned the amount of the debt and "complains, indeed expresses significant frustration, about what he perceives to be the lack of cooperation that [the bank] has extended to him in providing documents to satisfy him about the debt". He observed at [13] that the issue appeared to be about the quantum of the debt and that Mr Lahood wanted the opportunity to convince the bank and the court (with the aid of further evidence) that it was significantly lower than the bank alleged. 27 His Honour noted the submission that there was an existing debt on a property owned by a company apparently controlled by Mr Lahood which "when refinanced and then with a further borrowing to pay [the bank], would still leave some equity in the property". But his Honour noted that the judgment debt was several years old and that no attempt had been made to stay it or set it aside or to attack the bankruptcy notice. He said (at [16]) that it was hard to understand why the issues raised in opposition to the creditor's petition could not have been agitated earlier. While he accepted what Mr Lahood said about his periodic health problems, he noted that "it was never put that he was not able to act in his own interests for the entirety of the last two years or so". For that reason, his Honour said he was "somewhat sceptical" about Mr Lahood's claim and was not prepared to grant a further adjournment. 28 In any case, his Honour noted (at [17]) "the very important point" that even if he was to exercise his discretion in Mr Lahood's favour, Mr Lahood could not demonstrate that he was solvent. 29 His Honour's conclusion on the adjournment application is largely contained in [19]. There he said: I fully accept that Mr Lahood has had a tough time, if I may speak plainly, and I fully accept the importance of the matter before the Court, from his perspective. There is only so much that the Court can do to assist people. And in this case, having regard to the procedural history of this matter, the Court felt that, at the end of the day, when everything was put in the balance, it was appropriate to decline the application for an adjournment on the basis that even taking his case at its highest it would not address the fundamental issue of Mr Lahood's solvency in the context of these proceedings. 30 Moreover, his Honour noted (at [21]) that if Mr Lahood's case were that he was solvent, then, on the authorities, he carried the onus of proving that he was able to pay his debts as they fell due (referring, in particular, to Sandell v Porter (1966) 115 CLR 666). His Honour considered whether this was a case of a recalcitrant but solvent debtor, although no such submission had been put to him. He noted in substance (at [24]) that there was no evidence to suggest that, if he were to grant an adjournment, decline to make a sequestration order or make the order and then stay it, the debt would be paid. He observed that there was no evidence to establish why a sequestration order should not be made and thus no sufficient cause to dismiss the petition. Nor, he said (at [25]) was there any evidence to suggest that it was in the public interest that the rights of the creditor should be "subsumed to" the rights of the debtor. His Honour felt that he had no alternative but to make the order sought.

The appeal 31 The notice of appeal was filed on 26 February 2013. At the same time Mr Lahood, through his then solicitors, Morgan Ardino & Co, filed an interlocutory application seeking a stay of the sequestration order pending the hearing of his notice of appeal and an order restraining the trustee in bankruptcy from removing motor vehicles and/or assets and equipment forming part of the trading stock, fixtures and fittings of his business. The interlocutory application was heard by the duty judge (Perram J) and was dismissed. Costs were reserved as costs in the cause. The next day, unassisted by his solicitor, Mr Lahood filed another interlocutory application seeking the same orders. That application was also dismissed with the same costs order. 32 On 29 April 2013 the appeal was listed for directions before the Chief Justice. Neither Mr Lahood nor his solicitor appeared. The Chief Justice dismissed the appeal for want of prosecution (with costs) but on 5 June 2013, on Mr Lahood's application, his Honour set aside those orders. At the time he also directed Mr Lahood to file and serve a folder containing "all material upon which he seeks to rely" on or before 8 July 2013 and the bank to file a folder containing any additional material upon which it intended to rely, including its submissions. The order specified that the folder Mr Lahood was to file should include the judgment below, the orders below, any transcript below, "any factual material to demonstrate any error in the court below" and submissions. On 5 July 2013 Mr Lahood filed a folder containing the following documents behind the tabs bearing the numbers referred to below: (1) "Storey and submission" (15 pages). (2) Annexure A (consisting of copies of various (but not all) bank receipts for account 100-068743-6 between 18 July 2005 and 6 May 2008. (3) Annexure B (consisting of copies of various (but not all) bank receipts for account 100-068730-5 between 23 June 2005 and 16 May 2007. (4) "Annexure C and F" consisting of a copy of a letter from Concord Hospital dated 21 June 2006 with the dates Mr Lahood was admitted to Concord Repatriation General Hospital in April 2010 and to Rozelle Hospital in January/February 2007 and May 2007. Annexure D consisting of a copy of an admission registration form for Cumberland Hospital dated 16 June 2008 with the dates Mr Lahood was admitted in May 2008 and a Croydon Health Centre community treatment order treatment plan dated 12 June 2008. Annexure G consisting of a copy of a letter from the bank to Mr Lahood dated 28 March 2012 and a settlement adjustment sheet. (5) "Submission - storey" (4 pages). (6) Annexure E consisting of a copy of a page of the facility agreement. Annexure H consisting of a copy of a page of the statement of claim in the Supreme Court proceedings. Annexure I consisting of a copy of account 100-133247-8 statement number 1 page 1. Annexure J consisting of a copy of account 111-299170-3 statement number 81 page 7. (7) A report from a forensic accountant dated 28 June 2013. 33 None of the documents included in the folder had been tendered in the Federal Magistrates Court although it is understandable in hindsight, given the ambiguity inherent in the Chief Justice's order (at least to a litigant in person) why Mr Lahood filed them in these proceedings. 34 Subsequently the bank filed a folder, too. It contained the creditors petition (including the affidavit verifying the petition); the reasons for judgment of Altobelli FM; the notice of appeal; the bank's submissions; the notice to produce issued by Mr Lahood to the respondent's solicitor, Mr Angus Begg, filed on 17 June 2013 and a letter in response from Mr Begg dated 25 June 2013. With the exception of the affidavit verifying the creditor's petition, neither party's folder contained any of the affidavits that were before the federal magistrate. In order to follow the argument, however, and to fairly and properly consider the issues raised in the appeal, it was necessary for me to consider all the evidence. Consequently, and with the consent of the parties, I have had access to the Federal Magistrate's Court file and have read the affidavits to which the federal magistrate referred in his reasons. I was also provided with a copy of a draft report from the forensic accountant that Mr Lahood had unsuccessfully tendered in the court below. 35 Despite the terms of the Chief Justice's order, no transcript was filed. I was informed by Mr Begg that none was available. Its absence created difficulties in the hearing of the appeal as the parties did not always agree on what happened. It was also important to understand how the arguments had been put to the federal magistrate. I therefore arranged to obtain a copy of the transcript. It transpired that Mr Begg had been misinformed.

The nature of the appeal 36 The right to appeal from a judgment of the Federal Magistrates Court is conferred by s 24(1)(d) of the FCA Act. The appeal is in the nature of a rehearing: SLMB v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 129 at [11]. A rehearing is not a new hearing. That means that this court cannot simply ignore the reasons of the primary judge and proceed as if there has been no previous hearing. The appellant must be able to satisfy the Court that the judgment is the result of some legal, factual or discretionary error: Draper and Another v Official Trustee in Bankruptcy [2006] FCAFC 157 at [15]. It is for this and other reasons that factual findings cannot be disturbed simply by pointing to other evidence which, if accepted, could support different findings: Yousif v Commonwealth Bank of Australia (2010) 193 IR 212 at 221; [2010] FCAFC 8 at [34] per Kenny, Tracey and Jagot JJ. 37 The position was succinctly summarised by Kenny J in Komba t/as Bora Homes Australia v AIM Site Hire Pty Ltd [2013] FCA 23 at [2]: An appeal from the Federal Magistrates Court pursuant to s 24(1)(d) of the Federal Court of Australia Act 1976 (Cth) is conducted as a rehearing in which it is necessary to show appellable error in the judgment under appeal: see Frost v Sheahan [2012] FCAFC 46 at [14] per Finn, Cowdroy and Flick JJ and the authorities there cited. That is, whilst the appellate court must make up its own mind on the facts, the court does not proceed as if it were trying the case at first instance. There is a need for the appellant to show error on the appeal, since the task of the appellate court is to correct error. 38 That is no easy task where (as here) the impugned decision is a discretionary decision on a matter of practice and procedure. It is well accepted that appellate courts exercise particular caution when reviewing decisions of this kind: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177. A decision to refuse or grant an adjournment will not lightly be set aside on appeal: Sali v SPC Ltd (1993) 116 ALR 625 at 632; [1993] HCA 47 at [1]. 39 Appeals from the exercise of any judicial discretion are governed by the principles explained in House v The King (1936) 55 CLR 499 at 505: It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. 40 These principles govern the present appeal. That is the appeal from the federal magistrate's refusal to grant the adjournment application and, if it may be taken to arise from the notice of appeal, from the making of the sequestration order. 41 Mr Lahood addressed none of these matters in his written submissions or his amended submissions filed on the last working day before the hearing of the appeal. Indeed, the submissions did not even address the grounds of appeal. Neither in form nor in substance did they point to error on the part of the federal magistrate, let alone error that would justify the orders sought in the notice of appeal. They did not refer to any of the evidence in the Federal Magistrates Court. They contained in truth Mr Lahood's story. Nothing Mr Lahood said during the hearing took the matter any further. 42 Whilst a certain amount of latitude must be extended to an unrepresented litigant, it is no part of the Court's function to make an appellant's case for him. The Court's jurisdiction is not at large. The only allegations of error susceptible to review are those identified in the notice of appeal. The notice of appeal raises no error of principle. It makes no complaint about extraneous or irrelevant matters influencing the federal magistrate's decision. It does not suggest that any material consideration was overlooked. Nor does it point to any mistake of fact. I have carefully considered the issues raised by the notice of appeal and everything Mr Lahood put in his written and oral submissions. For the reasons I set out below, however, I have concluded that none of the grounds is made out, that the result the federal magistrate reached was neither unreasonable nor plainly unjust, and that there is no basis for inferring that there has been a failure properly to exercise the discretion reposed in the Federal Magistrates Court. In the result, the appeal must fail. 43 Before recording those reasons, however, there is another matter I must deal with.

Further evidence 44 At the hearing of the appeal Mr Lahood tendered the evidence in his folder. 45 The report of the forensic accountant contains the results of an examination of financial records. The records relate to three separate company accounts, which I gather from the names are held by companies in which Mr Lahood has a controlling interest. The report is an attempt to reconcile all deposits, credits, interest and debits in order to determine "the correct balance due and owing to [the bank]". The accountant who prepared it - Ian Paul - concludes that the account credits exceed the amount of the account debits, but states that "in this regard it is important to note that the credits include transfers of debit loan balances" and that "the credit transfer (sic)" "pertained to a rollover" into new banking facilities in July 2008. I note that Mr Lahood maintains that the records produced by the bank are either inaccurate or incomplete. Mr Lahood also tendered copies of a number of deposit slips and credit transfers. 46 The remaining records relate to Mr Lahood's medical condition at discrete periods of time during 2007, 2008 and 2010. 47 The bank objected to the tender of all these documents. 48 I rejected the tender and indicated I would give my reasons later. These are those reasons. 49 The Court may receive further evidence on an appeal. The power to do so is conferred by s 27 of the FCA Act. The Court has a broad discretion. The evidence does not need to be fresh in the sense of not reasonably available at the hearing, although that is undoubtedly a matter which is relevant to the exercise of the discretion. As the Full Court said recently in August v Commissioner of Taxation [2013] FCAFC 85 ("August") (at [116]) "in many cases it would be most material to consider whether the evidence could have been called at trial and, if it could have been, the reasons it was not, and the extent to which the further evidence had the ability to affect the result". The Full Court noted that s 27 and its equivalent sections in other statutes is a remedial power (see [119]). 50 In Sobey v Nicoll and Davies as Joint and Several Receivers and Managers of the Property of Mercorella and the Scheme and as Joint and Several Liquidators of the Scheme (2007) 245 ALR 389; [2007] FCAFC 136 at [71] the Full Court explained that the discretion to admit further evidence "must be exercised judicially, consistently with proper judicial process and in the interests of justice". Still, the Full Court went on, it is "highly unlikely that the legislature intended that s 27 should be construed in such a way as to obliterate the distinction between original and appellate jurisdiction". As I have already noted, the role of this Court on appeal is to correct error. In Sobey the Court emphasised what was said in Coulton v Holcombe (1986) 162 CLR 1 at 7 that "[i]t is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial"; otherwise "the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish". 51 Had the new evidence been before the federal magistrate it would have been relevant to the questions raised by s 52(2) of the Bankruptcy Act, that is, whether Mr Lahood was able to pay his debts or whether for some other sufficient cause the sequestration order should not be made. 52 But the new evidence is not relevant to the appeal. It is not directed to any ground of appeal and Mr Lahood did not apply to amend his notice of appeal. Nor did he comply with the rules relating to the tender of further evidence on an appeal. 53 Rule 33.29 relevantly provides: 33.29 Further evidence on appeal (1) A party may apply for the Court to receive further evidence on appeal. (2) The application must be filed at least 21 days before the hearing of the appeal and be accompanied by an affidavit stating the following: (a) the facts relating to the grounds of the application; (b) any evidence necessary to establish the grounds of the application; (c) the evidence that the applicant wants the Court to receive; (d) why the evidence was not adduced in the court appealed from. (3) The application and the affidavit must be filed as follows: (a) … (b) if the appeal is to a single Judge - 2 copies. (4) Any other party to the appeal who wants to adduce evidence on the appeal must file an affidavit at least 14 days before the hearing of the appeal. 54 No application was filed. 55 Of course, the Court may dispense with compliance with any of the rules (see FCR r 1.34). In deciding whether or not to exercise this power the Court is bound to act in the way that best facilitates the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible (FCA Act, s 37M). 56 The appeal was listed before the Chief Justice on four occasions. At no time did Mr Lahood indicate that he intended or was even considering presenting evidence on appeal that had not been presented at the original hearing. 57 I take it that the bank was served with the material on or about 5 July 2013 when it was filed in the Court. But the bank was entitled to proceed on the assumption that Mr Lahood was conducting an appeal based on his notice of grounds of appeal and, on its face, none of this material related to any of those grounds. 58 No evidence was given to explain why the evidence had not been put before the federal magistrate. While I can infer that the report was not available at the time the matter was ultimately heard in the Federal Magistrates Court, Mr Lahood had plenty of time to obtain it. The notice to produce was not served on the bank until the month before the hearing. That would have made it difficult to obtain an expert report in time but there is no reason why the notice to produce was not served months beforehand. 59 There are other important considerations. It is ordinarily necessary to demonstrate that the evidence to be relied upon is cogent. In other words, it is ordinarily necessary to satisfy the Court that, had the evidence been called below, it would be likely to have produced a different result: see Guss v Johnstone at [30]. The main purpose of a power of this kind is to give to the appellate court a discretion to admit further evidence "where that evidence, if accepted, would demonstrate that the order under appeal is erroneous": CDJ v VAJ (1998) 197 CLR 172 ("CDJ") at 201. In CDJ the majority said of the comparable provision in the Family Law Act 1975 (Cth): The power exists to facilitate the avoidance of errors which cannot be otherwise remedied by the application of the conventional appellate procedures. A further, but in practice subsidiary, purpose it to give the Full Court a discretion to admit further evidence to buttress the findings already made".. 60 These principles were affirmed by the Full Court in Freeman v National Australia Bank Limited [2003] FCAFC 200. 61 There are numerous difficulties with Mr Lahood's further evidence. 62 First, Mr Paul's report lists, but does not include or annexe, the source material. That, in itself, is not unusual. But the material was not put before the federal magistrate and Mr Lahood did not tender it in this Court. In the absence of the source material, it is impossible to evaluate the reliability of the opinion. Moreover, I am not satisfied merely from the list that Mr Paul was provided with all the bank's records that bear upon the extent of his debt. Mr Lahood did not submit that the other financial documents he wanted to tender were considered by Mr Paul. 63 Secondly, Mr Paul said that he made certain assumptions, but it is not clear from the report precisely what those assumptions were. If the assumptions are not proved, then no weight can be attached to Mr Paul's opinion. On a strict view the report would be inadmissible (see, for example, Trade Practices Commission v Arnotts Ltd (No 5) (1990) 21 FCR 324 at 330 per Beaumont J). As Heydon JA explained in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 ("Makita v Sprowles") at [64]: The basal principle is that what an expert gives is an opinion based on facts. Because of that, the expert must either prove by admissible means the facts on which the opinion is based, or state explicitly the assumptions as to fact on which the opinion is based. If other admissible evidence establishes that the matters assumed are "sufficiently like" the matters established "to render the opinion of the expert of any value", even though they may not correspond "with complete precision", the opinion will be admissible and material: see generally Paric v John Holland Constructions Pty Ltd [1984] 2 NSWLR 505 at 509-510; ... One of the reasons why the facts proved must correlate to some degree with those assumed is that the expert's conclusion must have some rational relationship with the facts proved. 64 Thirdly, the report could hardly be described as cogent evidence. Mr Begg accurately referred to it as inconclusive and the opinions contained in it as qualified. It raised more questions than it answered. 65 At one point Mr Paul stated: The Bank of Western Australia total debit and credit transactions are summarized from the bank statements provided … It is observed that account credits exceed the amount of the account debits. In this regard it is important to note that the credits include transfers of debit loan balances. (Emphasis added.) 66 Later Mr Paul noted that the banking facilities were varied in July 2008 and acknowledged that it was "possible that the aforementioned credit transfer [of $432,758.94, also referred to in the draft report] pertained to a rollover into these new facilities". 67 The report deals in part with information extracted from records relating to a number of bank accounts. The accounts all appear to be held in the name of a company - Dave Lahood Pty Ltd or David Lahood Holdings Pty Ltd. Mr Paul appears to have assumed that Mr Lahood has an exclusive right to deal with the funds in all these accounts as if the accounts were in his own name. In the case of the second-mentioned company, however, there was no evidence to support such an assumption. 68 Further, the method Mr Paul used to carry out the reconciliation is not at all clear from the report. 69 Mr Lahood made no attempt to explain the report to the Court and professed not to understand it himself. 70 Fourthly, the proceeding before the federal magistrate was concerned with the residue of the judgment debt at the time of the hearing. The report does not mention the judgment debt or the information contained in the bankruptcy notice. It is not apparent to me how Mr Paul's opinion relates to either matter. 71 Fifthly, Mr Paul does not touch on the question of solvency. There is still no evidence to show that Mr Lahood was solvent at the time of the hearing. 72 Finally, even if the report were to be admitted, it would have to be on terms, including that the bank have an opportunity to respond to it and Mr Paul make himself available for cross-examination. In effect, this would transform the appeal into a new hearing. 73 As for the other financial records, there is no evidence to suggest that they were not available to be tendered in the Federal Magistrates Court. In any event, their relevance is elusive. 74 As for the medical records, they are selective and incomplete. Once again there was no evidence to indicate that, assuming it to be relevant, the material or material of this kind could not have been presented to the federal magistrate. What is more, they do not detract from anything the federal magistrate said. 75 On 17 September 2012 Mr Lahood's adjournment application was supported by an affidavit of Mr Ardino stating that the reasons the adjournment was sought included his belief that Mr Lahood should be medically assessed as to his fitness to give instructions because a tutor might need to be appointed. The registrar directed Mr Lahood to file and serve any evidence on the question of fitness to give instructions by 17 October 2012. No such evidence was filed and the matter was never raised again. 76 In all the circumstances, I did not consider that I should dispense with compliance with the rules or admit the evidence. I was not satisfied that, had the further evidence been called below, it is likely to have produced a different result (Cf. August at [116]).

Ground 1 - failure to give due weight to the non-production of financial records

Ground 2 - refusing to adjourn the proceeding although the bank had failed to produce all its financial records 77 It is convenient to deal with these two grounds together as they essentially raise the same point. 78 The bank submitted that both grounds must be dismissed because the federal magistrate made no finding that the bank failed to comply with the notice to produce. That is true, but it seems to me to be beside the point. 79 In an affidavit sworn on 28 November 2012, which (notwithstanding what appears on the Federal Magistrates Court file) Mr Begg assured me had been filed in court the following day in support of the ninth adjournment application, Mr Lahood stated that he had made "innumerable" phone calls to the recovery officer at the bank, Nino DiGregorio, but had been unable to obtain copies of his complete bank statements and records. He said he needed all his bank statements so that he could carry out a reconciliation of all the loan repayments as it was his firm belief that he did not owe the amount of the judgment debt which was the basis for the petition. He explained that his own copies of the bank statements and financial records had been destroyed by flooding. He said that without first obtaining the missing records he was unable to prepare his objections to the petition and to confirm his belief that he owes nothing to the bank. 80 In the same affidavit Mr Lahood also stated that he later made numerous phone calls to Mr Begg as a result of which he received (through his solicitor) two batches of records, but that these batches did not include the bank statements, associated agreements and records relating to the principal loan of $2 million. He said that he had never received the bank statements relating to "my loan account number 111-299170-3". He claimed that the sole purpose of the adjournment was to have all his financial records and bank statements reconciled by his forensic accountant, Mr Paul, "so that, in the event that I lawfully still owe money to Bank West, I shall be able to arrange a loan secured against my said property at Homebush to pay out the same". Annexed to the affidavit was a letter from Mr Paul. In that letter, which was also dated 28 November 2012, Mr Paul stated that he had been told that "documents pertaining to account number 111 299170 3 and a loan in sum of $2,000,000 have been requested by Mr Lahood and that same have not yet been provided to him". Mr Paul continued that, subject to receiving "all of the relevant documents", he expected to be able to prepare the reconciliation within a period of six to eight weeks, "having regards to the apparent complexity of the matter at hand combined with the forthcoming holiday period". 81 It is clear from the reasons for judgment that the federal magistrate had regard to this affidavit (he mentioned it specifically at [6] and referred to a number of matters canvassed in the affidavit at [12]). The transcript shows that Mr Lahood's affidavit was relied upon, though not formally read. 82 On 14 February 2013 Mr Ardino filed in court an affidavit he swore the same day in support of the adjournment application. The transcript shows that he relied on the affidavit, though once again it was not formally read. In that affidavit Mr Ardino said that on 10 January 2013 he served a notice to produce on the bank. The notice to produce called for the production of "the complete files and financial records" of Mr Lahood and the two companies against whom the judgment had been entered (David Lahood Holdings Pty Ltd "in its own capacity and as trustee of the David Lahood Trust" and David Lahood Pty Ltd" (elsewhere referred to as "Dave Lahood Pty Ltd)). It further requested "such files and records to be with respect to all loan monies, and loan accounts, lent by [Bankwest] to any one or more of the abovementioned borrowers … for the whole of the period of each such loan facility". The notice went on to specify certain classes of documents. Despite what Mr Lahood said in his affidavit, however, it did not expressly seek the production of the records relating to account 111-299170-3. 83 The notice to produce was returnable on 22 January 2013. Mr Ardino told the federal magistrate on 14 February that the bank produced documents on the return date and that a complete copy of those records had been sent to Mr Paul. He said that he had received the draft report from Mr Paul the night before the hearing. In his affidavit he said that Mr Paul stated in the draft report (which was not annexed) that he had not been able to complete a full reconciliation because no records were produced in relation to an amount of $432,758.94 which had been transferred on 30 July 2008 from one account into another, the latter account being the account mentioned by Mr Lahood in his affidavit of 28 November 2013 (111-299170-3). Mr Ardino said that for this reason he could not advise Mr Lahood about whether he is in fact indebted in the sum claimed in the petition. He said that once a final reconciliation was conducted he was instructed that Mr Lahood intended to raise a loan against his own real estate property in Homebush to pay out the debt and discharge the loans or, alternatively, that he would be willing to refinance the debt against that property with the bank on terms. 84 There was therefore evidence before the federal magistrate to support the contention that the bank had not produced all its records. Although the bank denied it, Mr Ardino was not cross-examined on his affidavit so that in a formal sense the evidence was undisputed. 85 The stated purpose of the request for a further adjournment was to enable Mr Paul to finalise his report and then to negotiate a settlement "which would include a discharge of [the bank's] debt". 86 In his reasons for judgment the federal magistrate noted Mr Lahood's concerns about the amount of the debt and his complaints and "significant frustration about what he perceives to be the lack of cooperation that [the bank] has extended to him in providing documents to satisfy him about the debt". His Honour did not make a finding that the bank was uncooperative or that the bank had not produced any documents. But no complaint is made in the notice of appeal about that. 87 Mr Lahood insisted that not all documents that answered the notice to produce filed in the Federal Magistrate's Court in January were in fact produced. He said that one of the documents (the extract of the bank statement for account 111-299170-3 (Annexure J to Mr Lahood's "submissions")) was not produced until he had issued a second notice to produce in June this year. But it is not entirely clear that the statement appearing as Annexure J would have fallen within the description of documents in the January notice to produce. Contrary to Mr Lahood's assertion, it does not appear to have been an account in his name but an internal bank account used for the drawing down and disbursal of loan funds. Mr Begg explained that the statement essentially shows internal accounting entries. 88 Assuming, however, that the bank did not comply with the notice to produce, I do not accept that the weight the federal magistrate attached to the bank's omission to produce some documents gives rise to appealable error. 89 First, no formal step was taken before the hearing to enforce compliance. 90 Secondly, on the case as it was presented to the federal magistrate the evidence concerning the absence of records went nowhere. The federal magistrate said that, "on a best case scenario" for Mr Lahood, even if he were given the opportunity to present the evidence from Mr Paul he would only be able to establish that the debt was $430,000. This appears to me to be a misunderstanding of what Mr Lahood was saying in his affidavit. There he expressed doubt about whether he was indebted to the bank at all. But no challenge is made in the notice of appeal to the federal magistrate's statement. Moreover, the transcript confirms that the case was run below precisely in the way the federal magistrate characterised it: HIS HONOUR: All right. The best case scenario, Mr Ardino. So the best case scenario is I grant the adjournment, the final report is prepared, that report establishes that the debt is not in fact 800-odd thousand. It should only be about 400-odd thousand. Is that about right? MR ARDINO: That's correct. 91 The exchange continued: HIS HONOUR: So far so good. And at that point your client, you tell me, would have to refinance the existing debt on his property and then raise the money so that he could pay the bank 400,000-odd dollars. MR ARDINO: That's correct, your Honour.

Ground 3 - Mr Lahood's desire to discharge the judgment debt 92 This is simply an assertion of fact. It alleges no error.

Ground 4 - failing to exercise judicial fairness in refusing the adjournment 93 The contention here is that the federal magistrate denied Mr Lahood the opportunity to call for "the missing records" and "thereby enable the Forensic Accountant to complete his report". 94 The contention is difficult to understand. It is not supported by evidence. Mr Lahood had ample opportunity to call for bank records.

Ground 5 - failing to give any weight to the fact that on numerous occasions the proceeding had been adjourned to allow the bank to make its records available to Mr Lahood but that the bank had failed to release all its records by the time of the hearing 95 There was no evidence that the proceeding had ever been adjourned for the stated purpose. As I have already noted, at no time before the hearing was any complaint made about non-compliance or insufficient compliance with the notice to produce.

Ground 6 - failing to give due weight to the fact that Mr Lahood had been up to date in all his loan repayments until 31 July 2008 96 I fail to see the relevance of this matter. The judgment giving rise to the act of bankruptcy was given on 8 February 2010.

Ground 7 - failing to give due weight to lengthy delays caused by the bank agreeing to release its records but failing to deliver all of them by the time of the hearing 97 This is merely another way of putting ground 5. It suffers from the same problems.

Ground 8 - failing to give due weight to the complexity of the task of reconciling the loan accounts and the need for expert assistance 98 The federal magistrate did not refer (at least expressly) to the complexity of the accountant's task or the need for expert assistance. Still, as this was the basis for the adjournment application it is inconceivable that his Honour did not take them into account. Indeed, Mr Lahood made no such suggestion. The weight to which these matters were entitled depended on the weight to be attached to all other relevant considerations. I am not satisfied that his Honour failed to give these matters due or appropriate weight. His Honour said that it was hard to understand why the matters raised by Mr Lahood could not have been agitated earlier. It is difficult to disagree with him. Had the notice to produce been issued soon after the creditor's petition was served or even after Mr Lahood's early informal attempts to obtain the documents had proved futile, any dispute about production could have been heard and disposed of and any expert report completed well before February 2013.

Ground 9 - failing to give sufficient weight to the finding of the accountant in his "preliminary report" 99 This ground must also fail. The "preliminary report" is a reference to Mr Paul's draft report. The report was not received in evidence and there is no complaint in the grounds of appeal about that decision. That is sufficient to dispose of this ground of appeal. In any case, the draft report did not contain any "finding". Mr Paul said he could not "complete a full reconciliation of the monies claimed to be owed to Mr Lahood" because he did not have "a copy of [the] account" to which the $432,758.94 had been transferred. If what is meant by this ground is that the federal magistrate did not give sufficient weight to this statement, then I reject it.

Ground 10 - unfairly favouring the bank 100 This is a conclusion based upon the success of ground 9. As ground 9 is not made out, it follows that neither is ground 10. 101 Most of the grounds of appeal complain about the weight the federal magistrate attached to various matters. Although an appellate court reviewing a discretionary decision will consider whether insufficient weight has been given to a relevant consideration, it will not on that account substitute its own judgment for that of the primary judge unless it comes clearly to the conclusion that for that reason the discretion has been wrongly exercised: Lovell v Lovell (1950) 81 CLR 513 ("Lovell") at 533 per Kitto J, cited with approval by Aickin J in Gronow v Gronow (1979) 144 CLR 513 at 537. Similarly, in Lovell Latham CJ said (at 519) that to set aside an order made in the exercise of a judicial discretion the court must be satisfied that the failure to give adequate weight to the consideration "really amounts to a failure to exercise the discretion actually entrusted to the court". 102 Here, the federal magistrate had regard to the fact that there had been numerous adjournments and to the lengthy period during which the hearing had been pending. He acknowledged that many of the adjournments were by consent. In November 2012 the federal magistrate adjourned the proceedings for a period of 11 weeks. The notice to produce was not issued until six weeks after the November listing and no explanation was given for the delay. As I have already observed, it was of course open to Mr Lahood to issue the notice to produce months before, at any time after he had been served with the creditor's petition. If there was to be a challenge to the petition, it should have been flagged in a notice of opposition well before the hearing. 103 These matters were plainly relevant to the exercise of the discretion and they were entitled to considerable weight. The federal magistrate had an obligation to dispose of the proceeding expeditiously. Section 42 of the Federal Magistrates Act 1999 (Cth) imposed a duty on the court to try to ensure that the proceedings are not protracted. Rule 1.03 of the Federal Magistrates Court Rules 2001 (Cth) imposed a duty on the parties to avoid undue delay. Moreover, there is a public interest in the speedy determination of alleged insolvencies. In Totev v Sfar (2008) 167 FCR 193 Emmett J remarked at [17] on the importance that bankruptcy matters be dealt with in "a highly expeditious" manner. He said that "[c]ourts exercising bankruptcy jurisdiction must be assiduous in avoiding delay in dealing with any question concerning the making of a sequestration order". Similarly, in Offshore and Ocean Engineering Pty Ltd (recs & mgrs apptd) (admin apptd) v Greenwich Contractors Pty Ltd [2012] NSWCA 371 at [16] Campbell JA referred to "the general public importance that the court system can provide remedies concerning unpaid debts with speed and certainty". In Griffiths v Boral Resources (Qld) Pty Ltd (2006) 154 FCR 554 at [31] the Full Court stressed the importance of these matters and stated that courts exercising jurisdiction in insolvency must recognise the policy by giving priority to the hearing and determination of them. 104 The federal magistrate also took into account Mr Lahood's non-compliance with court orders. Mr Lahood did not suggest that this matter was irrelevant and it was also entitled to some weight. In GSA Industries Pty Ltd v NT Gas Ltd (1990) 24 NSWLR 710 Samuels JA observed at 716: Justice, procedural justice that is, in the conduct of litigation depends very largely upon establishing and then fulfilling the reasonable expectations of the litigants. Those expectations in turn depend very largely upon the parties' ability to accept that certain things will happen in the times laid down by the court after the parties have had full opportunity to put their points of view. 105 As the federal magistrate observed (at [15]), there was no evidence that Mr Lahood had taken any steps to have the judgment set aside or to stay its execution. The evidence was that there was a debt of over $855,000. Mr Lahood is dubious about the extent of the debt and wanted the documents from the bank to prove that the outstanding amount was substantially lower than this. But there was no reliable evidence that, whatever the size of the debt, he was in a position to discharge it. His affidavit contained a bare assertion that if he still owed money to the bank, then he could pay the debt by borrowing against a property registered in the name of one of his companies. He said that there is a caveat registered against the property in favour of the bank. He stated that he is the sole director and shareholder of the company. He said that the property was subject to a first mortgage secured against it of "approximately $360,000". He annexed his last summary statement which disclosed a closing balance of just under $335,000. The affidavit also contained Mr Lahood's opinion on the property's approximate minimum current market value (approximately $2,000,000 or more). There is no evidence that Mr Lahood has any expertise as a valuer and the basis of the opinion was undisclosed; it was, therefore, "a bare ipse dixit" (Makita v Sprowles), that is to say, no more than an unproved assertion. So the evidence should not have been admitted. Having been admitted, it was entitled to no weight. Nevertheless, the federal magistrate was prepared to accept that if Mr Lahood refinanced the debt on his property the company would have retained some equity in it. 106 Even so, in the absence of any evidence about the full extent of Mr Lahood's assets and liabilities, what was to be gained by a further adjournment? This point was not lost on the federal magistrate. At [17] his Honour remarked: But there is another point and I think a very important point the significance of which has been missed on the respondent and that is that, even if I accept everything that he says, if I take his case at best, if I allow him the time to do the things he wants to do, if I exercise my discretion in his favour and accept everything that he says, even on his own case he is not solvent. He is not in a position where he could meet the debt to the applicant, whether it is $400,000 or $850,000, in a timely fashion. Given the history of this case, procedural and otherwise, it is difficult to understand why evidence of his solvency and his ability to meet the debt to the applicant, however it might be, has not been the subject of detailed evidence before this Court. 107 The federal magistrate weighed in the balance Mr Lahood's interests and concerns about the bank's conduct against: the age of the judgment debt; the failure to seek a stay of, or set aside the judgment; the failure to challenge the bankruptcy notice; the lengthy delay and the numerous adjournments; the failure to comply with court orders and the absence of evidence of solvency. Ultimately, his Honour considered that the balance did not favour an adjournment because "even taking his case at its highest" the evidence he wanted to call if he was given this adjournment would not address what his Honour referred to as the "the fundamental issue" of his solvency. That was true. In all the circumstances, I am not satisfied that the federal magistrate's discretion to refuse the adjournment miscarried. 108 It is not apparent that the notice of appeal challenged the federal magistrate's findings on the making of the sequestration order. Certainly, nothing in it could be construed as an attack on the findings that the formal requirements had been proved. There was no evidence that Mr Lahood could pay his debts and no sufficient cause made out. Perusal of the transcript shows that Mr Ardino was taken to rely on what he had said in support of the adjournment application. Beyond that he pleaded with the federal magistrate not to make the order because of the impact it would have on his client's life. He also sought "a suspension of the operation of [the] orders" to allow the accountant to complete his task and to give Mr Lahood the opportunity to raise the money to discharge the debt and time to pay. The magistrate plainly felt he had had enough time. I see no reason why any of the matters raised by or on Mr Lahood's behalf is sufficient to demonstrate error in the exercise of the court's discretion to dismiss the petition.

Conclusion 109 I am not persuaded that the federal magistrate's discretion miscarried on any of the bases raised by the notice of appeal. There is, therefore, no appealable error. Consequently, the appeal must be dismissed with costs. Those costs will include the costs of the unsuccessful stay applications. In accordance with the order made below and the practice adopted in a number of bankruptcy appeals the costs (including reserved costs) should be taxed and paid out of the bankrupt estate in accordance with s 109(1)(a) of the Bankruptcy Act. I certify that the preceding one hundred and nine (109) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Katzmann.