History of proceeding
6 The background to the application is set out in Ms Murray's affidavit.
7 The history is long and complex. The salient facts are:
(1) on 5 June 2015, Ramsay filed an earlier creditor's petition based on non-compliance with a bankruptcy notice requiring payment of the March 2015 judgment amount;
(2) on 7 July 2015, Mr Compton filed a notice stating grounds of opposition to that creditor's petition, including that the Court should exercise its discretion to go behind the Supreme Court judgment;
(3) in November 2015, Flick J rejected the application to exercise the Court's discretion to go behind the Supreme Court judgment: Ramsay Health Care Australia Pty Ltd v Compton [2015] FCA 1207;
(4) on 17 August 2016, a Full Court allowed Mr Compton's appeal from the decision in (3) above: Compton v Ramsay Health Care Australia Pty Ltd [2016] FCAFC 106;
(5) on 26 August 2016, a differently constituted Full Court made orders having the effect that the earlier creditor's petition was extended to 5 June 2017;
(6) on 13 September 2016, McDougall J dismissed an application to set aside the March 2015 judgment but granted a temporary stay of the judgment: Compton v Ramsay Health Care Australia Pty Ltd [2016] NSWSC 1331;
(7) on 4 May 2017, the High Court of Australia dismissed Ramsay's appeal from the Full Court's decision in (4) above: Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28;
(8) on 10 May 2017, the earlier creditor's petition was listed before Flick J for case management. His Honour rejected an adjournment application by Mr Compton. On 18 May 2017, Mr Compton's then-lawyer informed Ms Murray that he had served on Mr Compton a notice of intention to cease to act;
(9) on 19 May 2017, Ms Murray received a letter from Chris Perry of Pure Legal, indicating that Ms Perry had been contacted to act for Mr Compton's wife, Amy Compton. After a directions hearing on 23 May 2017, on 26 May 2017 Ms Compton was appointed as Mr Compton's litigation representative. Ms Compton then made an application for an adjournment of the creditor's petition which was refused on 30 May 2017: Ramsay Health Care Australia Pty Ltd v Compton [2017] FCA 612;
(10) on 31 May 2017, Ms Perry provided Ms Murray with an authority signed by Mr Compton pursuant to s 188 of the Act, along with a consent to act as controlling trustee signed by Paul Weston;
(11) prior to the hearing on 1 June 2017, an application was made by Mr Weston for a stay of the earlier creditor's petition proceeding on the basis of the s 188 authority. Flick J rejected that application on the basis that Mr Weston was unable to demonstrate that the s 188 authority was effective as Mr Compton had not complied with the requirement that, prior to the consent being given by Mr Weston, Mr Compton provide to Mr Weston a statement of affairs and a proposal for dealing with them under Part X of the Act;
(12) following his Honour's refusal of Mr Weston's application for a stay, Ms Perry appeared on behalf of Ms Compton and sought a further adjournment, which was also refused. Ms Perry then withdrew Ms Compton's consent to act as Mr Compton's legal representative and withdrew from the Court;
(13) argument on the earlier creditor's petition was heard by Flick J on 1 June 2017, including as to the quantum of the amount owing to Ramsay;
(14) on 1 June 2017, Mr Compton swore an affidavit in which he described himself as "temporarily residing" at an address in Altavista, USA, and stating facts concerning his residency;
(15) on 2 June 2017, Flick J made an order that Mr Compton's estate be sequestrated under the Act: Ramsay Health Care Australia Pty Ltd v Compton (No 2) [2017] FCA 629;
(16) on 9 June 2017, Ms Perry filed a notice of appearance on behalf of Mr Compton in the earlier creditor's petition proceeding. She has not withdrawn that appearance;
(17) on 15 June 2017, Flick J made an order for an expedited appeal from his 2 June 2017 decision. The orders included the following notation:
6. The Court notes that the Respondent (Adrian John Compton), who is the Appellant in the 2017 Appeal Proceeding, does not raise in the 2017 Appeal Proceeding, any challenge or issue as to the following:
a. the finding of the Court on 2 June 2017 that:
i. the Appellant is insolvent;
ii. having gone behind the judgment given by the Supreme Court on 6 March 2015, the Appellant is indebted to the Applicant, which is the First Respondent in the 2017 Appeal Proceeding (Ramsay Health Care Australia Pty Ltd), for a sum no less than $5,000,
it being the Appellant's position that:
iii. the authority under section 188 of the Bankruptcy Act 1966 (Cth) was and is legally valid and effective as set out in the Notice of Appeal ground of appeal No 1, with the consequence that the Appellant has committed an act of bankruptcy pursuant to section 40(1)(i) of the Bankruptcy Act 1966 (Cth);
iv. there was in place a statutory stay, pursuant to section 189AAA(1) of the Bankruptcy Act 1966 (Cth), of proceeding NSD 660/2015 and, as such, the matters set out in the Notice of Appeal ground of appeal No 3 existed and the controlling trustee, Mr Paul Gerard Weston, and the Appellant are not bound by any finding in the reasons for judgment delivered on 2 June 2017;
v. the Creditors Petition of the Applicant, which is the First Respondent in the 2017 Appeal Proceeding (Ramsay Health Care Australia Pty Ltd) dated on or about 5 June 2015 lapsed at the end of 5 June 2017 and proceeding NSD 660/2015 is at an end; and
b. the Appellant's competence to conduct the 2017 Appeal Proceeding.
(18) on 21 December 2017, the Full Court allowed the appeal from Flick J's decision ([2017] FCA 629): Compton v Ramsay Health Care Australia Pty Ltd [2017] FCAFC 221. At [76] of the Full Court's reasons for judgment, the parties were invited to make submissions as to the form of orders arising from the decision, including in relation to costs; and
(19) following the parties' provision of these submissions, on 19 February 2018, the Full Court made orders disposing of the appeal: Compton v Ramsay Health Care Australia Pty Ltd (No 2) [2018] FCAFC 21;
(20) The orders included that:
1. Pursuant to s 188(6) of the Bankruptcy Act 1966 (Cth), the second respondent (Mr Weston) became the controlling trustee of the property of the appellant (Mr Compton) by about 5.00 pm on 1 June 2017 (Australian Eastern Standard Time).
…
5. Pursuant to ss 30(1) and 33(1)(c) of the Bankruptcy Act and s 23 of the Federal Court of Australia Act 1976 (Cth), the time be extended nunc pro tunc for doing any act or thing under Pt X of the Bankruptcy Act, the Bankruptcy Regulations 1996 (Cth) or the Insolvency Practice Rules (Bankruptcy) 2016 (Cth) in relation to the authority signed at 9.15 pm on 31 May 2017 in Altavista, Virginia, United States of America, by Mr Compton under s 188(1) of the Bankruptcy Act naming and authorising Mr Weston to call a meeting of Mr Compton's creditors and to take control of Mr Compton's property, which Mr Weston consented to in writing on 1 June 2017 (Australian Eastern Standard Time), as if that authority had become effective on the seventh day after the date of this order.
8 There is evidence that, on about 22 March 2018, Paul Weston issued a controlling trustee's report pursuant to s 189A of the Act; and that, by that report, Mr Weston called a meeting of Mr Compton's creditors in pursuance of an authority signed by Mr Compton under s 188. The report states that Mr Compton's current residential address is an address in Altavista, Virginia, United States of America. The report also records statements by Mr Compton that he is currently in the USA with his family to care for his ill father-in-law and to seek medical treatment for his own illness, and that it is his intention to return to Australia in the near future.
9 On 9 April 2018, I made the following orders in Federal Court proceeding no. NSD 660 of 2015:
1. Pursuant to s 30(1) of the Bankruptcy Act 1966 (Cth) ("Act"), the Court declares nunc pro tunc that the authority signed by the first respondent and consented to in writing by the second respondent on 1 June 2017 is and was effective for the purposes of s 189AD of the Act on and from 26 February 2018.
2. Pursuant to s 30(1) of the Act, the meeting of the creditors of the first respondent called for 9 April 2018 is a meeting validly convened under Part X of the Act.
10 There is also evidence that, on 9 April 2018, Mr Weston convened the s 188 meeting. The following resolutions were put to creditors and were not carried:
(1) that Mr Compton execute a personal insolvency agreement;
(2) that control of Mr Compton's assets ends; and
(3) that Mr Compton file a debtor's petition.
11 The available evidence is that the meeting was concluded with no special resolution having been passed.
12 On 26 April 2018, Ramsay filed a creditor's petition dated 16 April 2018 with the Court, by which Ramsay will apply for a sequestration order against Mr Compton under s 43 of the Act.