Nati v Bunt

REASONS FOR JUDGMENT 1 This is an application in appeal proceedings for an interlocutory injunction to restrain the respondents to the appeal, who are judgment creditors of the appellants, from bringing any proceedings under the Bankruptcy Act 1966 (Cth) and initiating any civil proceedings against the appellants until such time as the Full Court of this Court determines the appeal. The appeal is listed for hearing on 29 April 2013. 2 On 2 January 2013, the judgment creditors issued a bankruptcy notice to the appellants and no extension of time for compliance with that bankruptcy notice was obtained. It follows that the appellants have committed an act of bankruptcy. 3 The judgment creditors have filed bankruptcy proceedings but have not yet proceeded to serve them. The judgment debts in question were a result of orders made by Emmett J on 21 September 2012, and including sums of principal and interest, were both in the sum of $573,809.02. Those orders were consequent upon reasons which his Honour delivered on 6 September 2012. It is with the correctness of those reasons that the appeal listed for 29 April 2013 is concerned. 4 The appellants submit that they ought be granted a stay because of the shortness of time between now and the time at which the appeal is being listed; because of the undoubted prejudice which would flow to them if a sequestration order were made and the appeal subsequently allowed; and, because - implicitly - the balance of convenience favoured the granting of the stay. 5 Rule 36.08 of the Federal Court Rules 2011 (Cth) provides the Court, in its appellate jurisdiction, with the ability to stay the judgment in question, here the orders of Emmett J of 12 September 2012. I do not doubt the Court also has the ability directly to restrain the commencement or pursuit of bankruptcy proceedings. 6 For the purposes of this application, I am content to assume that the appellants have a sufficiently arguable case on appeal to justify the granting of such an order. However, I do not think that the balance of convenience favours the making of such an order. The reasons for this are essentially practical. First, it is unlikely that the proceedings on the petition will come on for hearing and be determined prior to the time at which the Full Court determines the appeal. Secondly, even if that is not so, the existence of a reserved Full Court judgment which is directly concerned with whether the judgment debt ought to be set aside is a powerful consideration against the making of a sequestration order. To me, it is very unlikely that in the improbable event that the petition proceedings are actually brought on for hearing before the Full Court has delivered its judgment that any court would proceed to make a sequestration order whilst that appeal was outstanding. 7 It seems to me, therefore, that the risk with which the appellants are concerned, and which has provoked the present application, is more illusory than real. Thus, whilst excepting that they have sufficient basis for arguing that the appeal will succeed, I do not think that the balance of convenience justifies the granting of the injunction sought. 8 For that reason, I dismiss the application. Costs will be respondent's costs in the appeal. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.