Sanders v Knudsen & Yates trading as The Hargreaves Practice

Federal Court of Australia (Full Court)|2004-11-19|Before: Bennett J, Emmett J, Sackville JJ

the adjournment application 1 When this appeal was called on for hearing, the appellant applied to vacate the hearing date and to have the hearing of the appeal adjourned to the Full Court sittings in February 2005. We refused that application for the following reasons. 2 The judgment that is the subject of this appeal was given on 9 October 2003 ([2003] FCA 1079). On that day Bennett J made a sequestration order against the estate of the appellant on a creditor's petition presented by the respondents. A notice of appeal, seeking to have the sequestration order set aside, was filed by the appellant in person on 30 October 2003. The appellant's prosecution of his appeal has, however, been most unsatisfactory. It is not necessary to set out the whole of that sorry history, some of which is recounted by Emmett J in a judgment delivered on 6 September 2004 ([2004] FCA 1429), to which we refer below. 3 A solicitor acted for the appellant for a period after 11 February 2004, but the solicitor ceased to act at the end of July 2004 after a motion by the respondents to have the appeal dismissed for want of prosecution had been fixed for hearing. The pending motion was heard by Emmett J on 3 and 6 August 2004, and on 6 August 2004 his Honour made the order for dismissal sought by the respondents. However, at the same time his Honour stayed that order up to and including 6 September 2004 and stood the respondents' motion over to that date. 4 On 6 September 2004 Emmett J rescinded his earlier order dismissing the appeal for want of prosecution. His Honour did so 'with considerable reluctance' and on strict terms. These included specific directions as to certain steps that were to be taken by the appellant 'no later than' 20 September and 5 October. Subsequently, on 16 September 2004, the parties were notified of the hearing date for the appeal. 5 In support of his application the appellant adduced evidence of a proposal accepted by his creditors on 17 September 2004 and of mortgages given on 29 October and 3 November 2004 over two properties. The appellant swore that it had 'not been possible for me, as an unrepresented party, to make the time necessary to properly [sic] prepare the material necessary for the further, proper conduct of these proceedings'. He repeated this refrain again over and over in his oral submissions. The appellant accepted that he was in default of the directions given by Emmett J, but protested that he had asked his Honour to adjourn his appeal until February next year. The fact is that his Honour did not accede to the request. Nonetheless, the appellant appears to have taken the view that he did not need to comply with Emmett J's directions. 6 The subsequent developments to which the appellant deposed did not provide any apparent excuse for his failure to comply. Moreover, even if he thought they did, an appellant genuinely concerned to comply with the Court's directions would not sit on his hands. Instead, he would seek to bring his changed circumstances to the attention of the Court as soon as he realized that he was unable to meet the timetable. Given his past record of default and the terms of the orders made by Emmett J on 6 August and 6 September 2004, this appellant should have been particularly astute to do so. 7 Conscious as we were of the appellant's handicap as an unrepresented party, we did not accept the genuineness of this last minute application by the appellant. Nor could we perceive any utility to him in adjourning his appeal. It did not appear likely that he would be better prepared on a later occasion. Fairness to the appellant, let alone the respondents (to whom a costs order would be likely to be of no value), did not require such a course.

the appeal 8 As mentioned above, by order dated 6 September 2004, Emmett J rescinded an order dated 6 August 2004 by which this appeal was struck out for want of prosecution. His Honour's orders of 6 September 2004, amongst other things, granted the appellant leave to file an amended notice of appeal, incorporating certain paragraphs set out in a draft notice of motion that his Honour initialled and dated. The further amended notice of appeal was required to be filed and served no later than 20 September 2004. The appellant did not file a further amended notice of appeal by 20 September 2004 or at all. The grounds of appeal which this Court is required to consider are therefore to be found in the amended notice of appeal dated 25 February 2004. The amended notice of appeal was filed while the appellant still enjoyed legal representation. 9 The amended notice of appeal is not appropriately drafted (see Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Limited [2002] FCAFC 157; 55 IPR 354). It is not necessary to expand here on the deficiencies of the amended notice of appeal as the appellant only placed reliance on ground 2 of the amended notice, namely that the learned primary judge erred in: 'finding that the Appellant was insolvent, based simply on evidence of his temporary lack of liquidity.' 10 The appellant told the Court that he had available to be tendered in evidence a document or documents that would show that, not long after the date of the judgment of the primary judge, he received an offer of a loan in a significant sum. He told the Court that he was unable to accept that offer because a caveat lodged by his trustee on the title of certain land prevented his providing the security required by the proposed lender. Although the documents were not tendered by the appellant, it is appropriate to record that we would have refused to receive into evidence on this appeal the document or documents had it or they been tendered. The reasons for this are as follows. 11 First, the order of Emmett J dated 6 September 2004 directed the appellant: 'to file and serve no later than 20 September 2004 any affidavits on which he wished to rely in support of any application to adduce additional evidence before the Full Court, such affidavits to include not only additional evidence, but all reasons explaining why the evidence was not adduced before Bennett J.'

The appellant did not file any affidavit or affidavits as directed by Emmett J.

12 Secondly, as the appellant conceded, although the appellant sought to prove before the primary judge that he was able to pay his debts (see s 52(2) of the Bankruptcy Act 1966 (Cth) ('the Act')), he did not ask her Honour to take into account his capacity to borrow money on the security of land registered in his name. Indeed, her Honour's reasons for judgment at [28] record: 'In the present case, the assets under consideration are those reasonably available to meet the debts which, as Mr Sanders has made clear, do not include the two properties for the purposes of a payment now or in the immediate future. Mr Sanders has not established that his assets and income are sufficient to meet his debts.'

The interests of justice would not now be served by allowing the appellant to argue on appeal a case not relied upon before her Honour and, indeed, a case inconsistent with the position that he adopted before her Honour. The case that the appellant seeks to argue before this Court may have been able to be met by evidence adduced by the respondent at first instance.

13 Thirdly, if the case of the appellant is that, although the order made by the primary judge was correct on the material before her Honour, evidence now available discloses that the order should not have been made, the appropriate remedy would ordinarily be an application under s 153B of the Act for an order annulling the bankruptcy. However, the appellant's bankruptcy has now been annulled by operation of s 74 of the Act. It is no longer open to the appellant to apply for an order under s 153B of the Act. 14 The appellant did not challenge that the primary judge was entitled to be satisfied with the proof of the matters identified in paragraphs (a)-(c) of subs 52(1) of the Act. Once her Honour was so satisfied, it was for the appellant to satisfy her Honour that he was able to pay his debts or that for some other sufficient cause a sequestration order should not be made. We are satisfied that the primary judge was right to conclude that the appellant had not placed before the Court material upon which her Honour could have been satisfied that the appellant was able to pay his debts. 15 The appeal will be dismissed with costs. I certify that the preceding fifteen twelve (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Whitlam, Branson and Sackville.

Solicitors for the respondents: The Hargreaves Practice

Date of Judgment: 19 November 2004

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