IN THE FRDERAL COURT QF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. W 616 of 1977 a) GENERAL DIVISION ) RE: JOAN HEUFEL Debtor EX PARTE: PETER PAGE Creditor REASONS FOR JUDGMENT JUDGE MAKING ORDER: LOCKHART J. WHERE MADE: SYDNEY DATE OF ORDER: 7 MAY 1979 THE COURT ORDERS THAT: 1, The application be dismissed. 2. The bankrupt pay the costs of the petitioning creditor of this applicaticn except the costs of the hearing before Riley J. on 14 June 1978, IN THE FEDERAL COURT OF AUSTRALIA | NEW SOUTH WALES DISTRICT REGISTRY No. W 616 of 1977 GENERAL DIVISION RE: JOAN IIEUFEL Debtor EX PARTE: PETER PAGE Creditor 7 May _1979 LOCKHART J. REASONS FOR JUDGMENT This is an application by Joan Heufel (''the bankrupt") for the annulment of her bankruptcy. The ground of the application is that the sequestration order ought not to have been made for the reasons that the bankrupt was solvent at the time it was made and that the debt, which the petitioning creditor claimed to be due to him by the bankrupt and which was the subject of a judgment signed by the petitioning creditor against the bankrupt in the District Court of New South Wales, was never due by the bankrupt to the petitioning creditor. The application for annulment was filed on I6 May 1978 and heard by the late Mr. Justice Riley on I4 June 1978 when his Honour reserved his decision. His Honour died before giving judgment. The application cane 12/2 * = om) on for hearing before me on 20 April 1979. It was agreed by all parties - namely the bankrupt, the petitioning creditor, and the Official Receiver - that the hearing before me should be a re-hearing de novo of the application as the result of it would turn on the credibility of the bankrupt and of the petitioning creditor. The Official Receiver played no active role in the proceedings before me in view of the ground of the application. The sequestration order was made against the bankrupt on 28 September 1977. She lives and then lived at II7 McKellar Crescent, Cook in the Australian Capital Territory. The only asset disclosed by the bankrupt in her statement of affairs was a motor vehicle which she described as follows: - "Datsun Sedan $4,700.00 Less amount owing under hire purchase agreement to Industrial Acceptance Corp. Limited 320.00 $3,780.00 The only money brought to the credit of the estate account was the deposit paid on the petition of $20.00. The only unsecured creditor disclosed by the bankrupt in her statement of affairs was the petitioning creditor for a debt of $300.00. The applicant also referred to Industrial Acceptance Corporation Limited, the hire purchase creditor. Its debt was subsequently repaid by the bankrupt. ..-/3 = - = - - - - nee ae ee ~~ i] The only creditor who lodged a claim in the estate is the petitioning creditor for $914.00. That claim has not been admitted to proof by the Official Receiver. Am amount of $214.85 is owing to the official receiver in respect of fees incurred in the course of administration of the estate of the bankrupt. The bankrupt is a single lady. She is and was at the date of her bankruptcy employed as a supervisor at the "Quamby" Remand Shelter, Red Hill in the Australian Capital Territory. The bankrupt and the petitioning creditor entered into an arrangement in I975 whereby the bankrupt would sell rings made by the petitioning creditor for which she would be allowed a commission on sales. This arrangement ceased some time in 1976. The petitioning creditor subsequently sued the bankrupt by ordinary statement of claim in the District Court of New South Wales at Sydney claiming $1,282.00 and costs. The petitioning creditor pleaded his cause of action in the statement of claim as follows:- "I. That the Defendant obtained from the Plaintiff his goods namely: - 6 yellow gold rings with white solids (9ct) $395.60 9 dark opal rings $283.00 I imitation aquamarine ring 4.00 $682.00 And the Plaintiff claims the return of the sale goods or their value. «/4 mtr nne ermeemee nee serene = ee a fae et ee —— en SS ni 2. That the Plaintiff further claims the sum of Six hundred dollars ($600.00) for money payable by the Defendant to the Plaintiff for money had and received by the Defendant for the use of the Plaintiff. AND the Plaintiff claims the sum of $1282.00." The bankrupt did not defend the proceedings. Judgment was obtained by the petitioning creditor against the bankrupt on 6 April 1977 in these terms:- @ "IT IS THIS DAY ADJUDGED THAT: I. The plaintiff£ recover against the defendant $1, O18. 00 being $418.00 as vaiue of goods detained and $600. 00 for debt, plus costs of $160.00. 2. The defendant pay $1,178.00 to the Registrar forthwith. z 3. On delivery to the plaintiff and acceptance by him of the following goods: 6 yellow goid rings, valued at $595.00 and three dark opal rings, valued at $23.00 on or before the 4th May, 1977, the @ judgment debt shall deemed to be satisfied to the extent of $418.00." The petitioning creditor applied for the issue of a bankruptcy notice on 20 May I977. The bankrupt notice was issued on 27 May I977 and served on the bankrupt on 2 June 1977. The bankrupt failed to comply with the requirements of the bankruptcy notice or to take any steps to satisfy the court that she had a counter-claim, set-off or cross demand equal to or exceeding-the sum specified in the bankruptcy notice. 20/5 OTTERS ere a te ene ners Se en prenereternren tea mami mnnmuinenmmate atenimaminane anne WE liana' ree In the result she committed an act of bankruptcy. She made no application to the court to set aside the bankruptcy notice. The petitioning credita@ presented a petition to the court on I9 July 1977 which came on for hearing on 28 September 1977 when a sequestration order was made against the estate of the bankrupt. The bankrupt did not appear on the hearing of the petition or file a notice of opposition to the petition or otherwise oppose it. The power to annul a bankruptcy is conferred by s. 154 (I) of the Act. That section provides that where the court is satisfied, inter alia, that a sequestration order ought not to have been made, the court may make an order annuling the bankruptcy. There are two matters for the court to consider under the section: first, whether a sequestration order ought not to have been made and secondly, if the court is satisfied as to that, whether in the exercise of the court's discretion the order of annulment ought to bemade. See Delph Sing v. Wood (1918) 25 C.L.R. 497 at p. 498; Re Williams (1968) I3 F.L.R. I0 at p. 23; Re Deriu (1970) I6 F.L.R. 420. The bankrupt concedes that it is for her, as the applicant for annulment, to satisfy the court that the sequestration order ought not to have been made: See Re Scott (1975) 6 A.L.R. 558; Re Calderon (an unreported decision of Riley J., judgment delivered 3I May I977). In determining whether the sequestration order ought not to have been made the court may consider not only the SERS re ee epee qererene meres sane _ T ehdetadehenatanaemnoerdded dealt ethpeeaitndehtetaddibeataeaiontientnendeenmne Addiieitahienicaemnenandteatamameaem d evidence as disclosed at the time the order was made, but as it would have been disclosed had all the true facts been before the court on the making of the sequestration order: See Re Cook (1946) I3 A.B.C. 245 at p. 259. This court has jurisdiction to go behind the judgment of the court where the judgment was signed and to inquire whether it was founded on a real debt: See Corney v. Brien (1951) 84 C.L.R. 343 and Wren v. Mahony (1971-1972) 126 C.L.R. 212; Boaler v. Power (1910) 2 K.B. 229. If the court is satisfied that the sequestration order ought not to have been made it is not bound to annul the order; but must consider in the light of all the circumstances of the case whether the bankruptcy ought to be annulled: See Delph Sing v. Wood (supra) at pp. 498-499; Re Lawson (1939) II A.B.C. 137 at p. 139; Re Williams (supra) at p. 23. I turn to the first question, whether, on the evidence, the bankrupt has satisfied the court that the sequestration order ought not to have been made. I find the facts as follows:- The petitioning creditor is an invalid pensioner who at all material times has made jewellery including opal rings in his spare time. He first met the bankrupt in 1973 or 1974 through her mother who lived at Punchbowl, New South Wales. The two met at the mother's home on a few occasions. They entered into a verbal arrangement whereby the banrkupt would take jewellery from the petitioning creditor for sale and, from the proceeds of sale, she would be paid a sum of money as commission. It was envisaged that she would sell the jewellery among people in Canberra hospital where she was then working. Lr a tar ne ed ee Sanne scermetidendanamaainesaaanennenemenanats ananemmnanaamanndan taeanenenesanteecenemesaee aehnieninaiainiiiadiaeds: a" saic The bankrupt gave the petitioning creditor six orders for jewellery on the following dates:- First order: Second order: Third order: Fourth order: Fifth order: Sixth order: in the first four orders. about 7 July 1974. 2I October 1974 30 June 1975 5 July 1975 3 November 1975 I7 November 1975. The bankrupt paid for the jewellery compriscd The petitioning creditor has not received payment for any of the jewellery comprised in the fifth and sixth orders. On 3 November 1975 the petitioning creditor and the bankrupt met at the Punchbowl home of the bankrupt's mother, and the petitioning creditor asked the bankrupt if she would like to take the money then from earlier sales by way of commission to which she replied "No, don't give the money. Put it towards that sapphire ring which I will take", There @ was a ring at the flat being a sapphire ring which she indicated she wished to buy, and the petitioning creditor then held it on her behalf. fifth order) to jewellery:- I white I white I white 3 white On 3 November I975 the bankrupt gave an order (the the petitioning creditor for the following yellow yellow yellow yellow gold gold gold gold I dark opal ring ee reer ee ~~ opal $ 85.00 opal 85.00 opal 75.00 opals at $50.00 ea. I50.00 20.00 A IT PE PAP AT AA A AO ATH at ee CAL A I dark opal ring $25.00 2 dark opal rings at $19.00 ea. 38.00 5 dark opal rings at $40.00 ea. 200.00 I imitation aqua marine ring 4.00 $682.00 The bankrupt said to the petitioning creditor: - "T am going back to Canberra tomorrow morning, can you bring them down and have them there in the morning?". @ The petitioning creditor said:- "Yes I will do that". The following day the petitioning creditor took the jewellery down to Canberra together with a book, being a form of order book, and asked her to sign it to acknowledge receipt of the sixtcen rings comprised in the order. She did this. The jewellery was then handed to her. The folio of the order book signed by the bankrupt is at folio 14. On I7 November 1975 the petitioning creditor sent to the @ bankrupt, by means of Comet Overnight Transport ("Comet") the jewellery comprised in a sixth order being: - 6 opal rings at $45.00 ea. $270.00 7 opal pendants at $6.50 ea. 45.50 I opal ring at $80.00 white 80.00 5 opal rings at $25.00 ea. 125.00 2 sapphire rings at $130.00 ea. 260.00 $780.50 The order appears on folio I5 of the order book. Comet picked up the jewellery from the petitioning creditor in Sydney --/9 ee ee NIN EE A I ET Poa ak cama te Socheaime aetna Aue ae bidet oT | about 3.00 p.m. [It was all wrapped and bound. Comet signed a docket acknowledging receipt of the goods but the petitioning creditor cannot find it although he has searched for it and made inquiries from Comet itself. Comet could not find a record of the delivery as it was in the process of shifting premises and adopting computer programmes at the time of the inquiry. No payment was received by the petitioning creditor from the bankrupt for ~® the jewellery comprised in the fifth and sixth orders, nor was the jewellery comrpised therein returned to him; so he instructed his solicitors to write a letter to the bankrupt, which they did on 29 March 1976. That letter requested the return of the jewellery, being the jewellery comrpised in the fifth order and having an invoice value of $682.00. The letter asked the bankrupt to return those rings within ten days from the date of the letter otherwise legal proceedings would be instituted. The bankrupt did not return any jewellery to the @ petitioning creditor nor did she make any payments of money to him or get in touch with him or his solicitors. The solicitors for the petitioning creditor issued an ordinary statement of claim out of the District Court of New South Wales at Sydney on I7 September 1976 claiming $1282.00 from the bankrupt. I have already set out the material terms of that document. The statement of claim was served upon the bankrupt by a process server. The bankrupt says that the process server said to her:-~- "Have you still got the rings?". To which she said: -»./ £0 re nt EY = AE RIT RE WE RY NARA ue NR NO EI ue ARAM OGRE R AL NAY BY LORRY TREATY SRNR TR SESE Nig EO -10- "Yes, but I objected to the claim for the extra $600.00. I don't know what that's for". To which he replied: "Why don't you just send back the rings". The bankrupt denies that she had any knowledge at any time of a claim for $600.00. The petitioning creditor says that the letter from his solicitor of 29 March 1976 contained an error in that it described 3 rings as having a value of 50¢ each, whereas in fact it should have been $50.00 cach, thus making a correct total of $682.00. The petitioning creditor says that the claim for $600.00 is the value of the jewellery comprising the sixth order less $180.00 being the final commission which he says is due to the bankrupt for all the jewellery comprised in the fifth and sixth orders. He denies that he is indebted to the bankrupt for any commission whatever. There was a hearing by the District Court at Sydney on 6 April 1977 as to the damages claimed by the petitioning creditor. The bankrupt decided to return certain rings to the petitioning creditor. She returned, by certified mail from Canberra to Sydney, seven rings comprised in the fifth order and having an invoice value of $264.00. These were directed to the petitioning creditor at an address which was not his but close to it. Someone, perhaps a neighbour, brought the parcel to the petitioning creditor's home one evening some few days after they had been sent by the /TI -II- bankrupt from Canberra by post. At the hearing before the learned District Court judge, credit was given to the bankrupt in the sum of $264.00 against the claim for $682.00 in the first count, with the result that the judgment was signed against the bankrupt for $418.00 on the first count and $600.00 "for debt"t plus costs of $160.00, a total of $1178.00. No jewellery has been returned by the bankrupt to the petitioning creditor subsequently. By letter dated 24 February 1978 from the Official Receiver to the bankrupt he said to her that he had issued instructions to "Central Auctions to take possession of your motor vehicle. You are to co-operate with a duly authorised representative of the company when he calls to take possession of the vehicle". It was the sending of that letter and the threat to repossess her motor car that in my opinion caused the bankrupt to apply to the court on I6 May 1978 for an order annulling her bankruptcy. @ I have found the facts essentially in accordance with the evidence of the petitioning creditor. Doubtless it would be sufficient for me to say that it is for the bankrupt to prove to the court's satis- faction that the sequestration order ought not to have been made, and that she has not discharged that onus, which in my opinion she has not. However, I have reached a firm view as to the reliability of the petitioning creditor and the bankrupt, being the two witnesses who have evidence in the case, and I prefer to deal with the case on that basis. .-/12 Renee eerie ee eee teeny nee a en APE I - Te YR ER EO ETE Tren gers me OF -I2- There is a conflict of evidence between the petitioning creditor and the bankrupt on important questions of fact in the case. Neither witness had a very clear recollection of some of the relevant events, and there are inconsistencies in the evidence of each of them. However, I have reached the conclusion that the evidence of the petitioning creditor is to be preferred to that of the bankrupt. I accept the petitioning creditor as a witness of accuracy and truth and I prefer his evidence to that of the bankrupt where they conflict. The bankrupt was emphatic in her evidence that the jewellery delivered to her in Canberra by Comet was the jewellery comprised in the fifth, not the sixth order; that she knows nothing whatever about the sixth order or the jewellery comprised in it; and that when she returned jewellery to the petitioning creditor, by certified mail on 28 March 1977, she returned all the rings obtained from the @ petitioning creditor in her possession and that they were returned by her in two ring boxes both placed in a post office jiffy bag. These are some of the principal areas of conflict between the evidence of the two witnesses. Although I have reached my conclusion as to the reliability of the witnesses to some extent on their demeanor and manner of giving evidence in the witness box, I have relied also on the contemporaneous and objective circumstances and documents. It is to these that I now turn. First, notwithstanding that the bankrupt received the letter of demand from the petitioning creditor's solicitor ..-/13 Seg ee me woe ee ee a ne a ren EUR RR ET TS Ee OT PO eal a iis -13- dated 29 March 1976 requiring the return of jewellery and threatening legal proceedings unless they were returned, she did nothing about it. A District Court statement of claim was served on her later. Again she did nothing about it until she received some notification probably a notification from the registrar of the District Court to her that the acticn was set down for the assessment of damages. What she then did was to return certain of the rings in her possession in March 1977. She did not defend the proceedings nor did she subsequently make an application to set aside the judgment. The bankruptcy notice was served upon her on 2 June 1977, yet she did nothing about it. The petition was served on her on 28 July 1977. Again, nothing was done by her by way of appearing, filing a notice of opposition to the petition or otherwise. It was not until the Official Receiver threatened to take possession of her vehicle, her most substantial asset, that she disputed the claim of the petitioning creditor by filing the application for annulment. Evidence was led that she was not a woman who had received formal education to an advanced level, and that from February 1974 until March 1976 she was preoccupied and distressed by matrimonial problems and proceedings which were then pending in the Family Court of Canberra. She left her husband in February 1974 in harrowing circumstances and towards the middle of 1974 began to suffer a severe form of oo /14 ee ew. nr ann - NN Pt NEE EE ES SE ME vere come ~I4- migraine headaches and was receiving medical treatment from a Canberra neurologist. She was admitted to hospital for treatment in October and November 1975. She was granted a divroce in the Family Court of Canberra on II March 1976. She says that with the problems of her marriage and health the question of the rings slipped her mind. She says that during the months of September, October and November 1976 she had a recurrence of the headaches and again received treatment from the Canberra neurologist. This is not a case where the bankrupt says that because of her matrimonial problems and sickness during the relevant period, she simply paid no regard whatever to the petitioning creditor. Rather she says that she thought "once the wheels of motion had started, I had returned the rings and I thought once the wheels of motion had started they had to complete their cycle before it could be taken out again...once you had started a proceeding like Mr. Page had to have me declared bankrupt, I thought that it had to be completed before it could be discharged.'"' So she was at least aware that proceedings had been taken by the petitioning creditor against her and thought about them. Notwithstanding these matters, and the fact that some people, when served with legal process, feel at a loss and do not know how to cope with it, I do not accept that the silence from the bankrupt, which remained until the possession of her car was threatened in February 1978, is explained by the matters to which she referred. Secondly, the relevant contemporaneous records support the case of the petitioning- creditor. He kept his order book .../TS -IS- which'recorded, amongst other things, orders lodged by the bankrupt with him. It is a somewhat informal book, not the sort of book that would be kept by someone in business; but the petitioning creditor was a man who made rings and other jewellery as a form of occupational therapy in his spare time after he became an invalid pensioner. It records on folio I4, the lodgmont of the order on 3 November 1975 by the bankrupt. It also records the acknowledgment by her of her receipt of those rings. It records the order lodged on I7 November 1975 for jewellery having an invoice value of $780.00. The relevant docket on folio I5 records that there was a rush order by Comet, picked up at 3.00 p.m. Although some attack was made on the authenticity of these order forms, I am satisfied that they are reliable contemporaneous documents recording the relevant orders. For the bankrupt's case to succeed I would have to be satisfied that the order recorded as being lodged on I7 November 1975 (the sixth order) was a fabrication by the petitioning creditor. In my opinion, the evidence does not warrant such a conclusion. It is true that the bankrupt did not sign the order form acknowledging receipt of the sixth order; but I accept the petitioning creditor when he says that this was sent as a rush order to Canberra by means of Comet. Although it is perhaps a little curious that there were no documents from Comet tendered in evidence, recording the delivery to the bankrupt in Canberra, the evidence as to Comet leaving with the petitioning creditor the docket book recording the receipt of the goods by Comet was given by the petitioning creditor and ../16 -j6- I accept it as truthful including the evidence of the petitioning creditor as to his inability to find the Comet docket book. It is true that, on the evidence of the petitioning creditor, he wanted to obtain from the bankrupt her signature acknowledging receipt of the fifth order for more than one reason; yet he obtained no such signed receipt from her when the sixth order was delivered about a fortnight later. In my opinion this is explained by the petitioning creditor's evidence as to the order being a rush order. Thirdly, the bankrupt was emphatic that she returned all the rings in her possession by certified mail on 28 March 1977, that they were in two boxes, that the rings were placed into the slots in the boxes and there was a floating ring in each box because there were not enough slots for each of the rings. Yet the bankrupt could not identify any particular ring or swear to the fact that the rings comprised in the fifth order were not the ones comprised in the sixth order. Herexplanation is that she is certain that she never at any time received jewellery consisting of an opal pendant or sapphire rings, these being included in the sixth order. The petitioning creditor, when asked by the post master of the Bankstown post office about the parcel which was sent to him by the bankrupt, wrote a letter saying that what he received on about 30 March 1977, were seven rings to the value of $264.00. This evidence is consistent with the note made by the petitioning creditor on the yellow copy of folio I3 acknowledging receipt on 30 March 1977 of seven rings. Also, when the assessment of damages came before the learned District Court judge on 6 April 1977, the petitioning creditor gave nn ee ooo -. —~— —— Mt ne NR TR ee CLARO em eterno fn ee ew ee ry Tete were eee ee ane oqeen os Sh re eon areas -I7- evidence to the effect that he had received those rings from the bankrupt, thus reducing his claim on the first count from $682.00 to $418.00, a difference of $264.00. Fourthly, the bankrupt acknowledged at the commencement of the proceedings before me that she was indebted to some extent in respect of the fifth order, but not to an extent sufficient to found a sequestration order ($500.00). This acknowledgment is inconsistent with her version of the facts, because she says that she returned to the petitioning creditor on 28 March 1977 all the rings in her possession which she had not sold and that she owed him nothing thereafter. Notwithstanding her acknowledgment of some indebtedness to the petitioning creditor in respect of the fifth order, she has made no offer to pay it, although in her affidavit sworn on 2 May I978 she deposed to the fact that her solicitors presently hold the sum of $1500.00 in their trust account. These are the principal objective matters which I rely upon to found my conclusion that it is the evidence of the petitioning creditor that I prefer to that of the bankrupt. I should add that the petitioning creditor was cross examined as to why the letter of demand from his solicitor of 29 March 1976 and the District Court statement of claim make no reference to the rings comprising the sixth order, yet the statement of claim claims $600.00 as being "money payable by the defendant to the plaintiff for money had and received by the defendant for the use of the plaintiff". It was suggested to the petitioning creditor that this was inconsistent with ../18 -T8- with his claim that there was a sixth order and that the rings comprised therein had been delivered to the bankrupt and not returned by her to him. The evidence of the petitioning creditor in explanation of this was not entirely satisfactory. At one point in his cross examination he said that he understood from conversations with the bankrupt that the rings "had been sent and lost in the truck" and "she told me they got lost". Yet he said towards the end of his cross examination that the bankrupt told him that she had a cheque for $600.00 which she told him had got lost in the truck. The petitioning creditor said that he left the question of what should be demanded from the bankrupt and recovered from her in court to his solicitor. No doubt there is more than one explanation as to why the letter of demand and the statement of claim in the District Court were drafted the way they were; and probably it is consistent with the petitioning creditor's cvidence as to the lost cheque that they were so drafted. Also there is in the evidence a notice of demand for detention of goods issued out of the Bankstown Court of Petty Sessions on behalf of the bankrupt on I6 August 1976 claiming delivery up of "the undermentioned goods, to wic:- 6 yellow gold rings with white solids (9ct). 9 dark opal rings I imitation aquamarine ring $600.00 in cash " Although this aspect of the case troubled me to some extent, I am satisfied that the petitioning creditor has at all material times demanded from the bankrupt, not only the return of the rings comprised in the fifth ..-/19 -19- order, but $600.00 in cash; and that this is consistent with the banrkupt having told him, and she has not denied it, that she had sold the rings the subject of the sixth order and that a cheque for $600.00 had been lost. The petitioning creditor explained the sum of $600.00, in relation to the sum of $780.00 the subject of the sixth order, on the basis that it represented the sum of $780.00 less the commission to which she was entitled on the footing that she sold the rings. Hence he allowed in her favour a credit of a difference of $180.00 notwithstanding that there is no reference to the sum of $180.00 commission in his invoice book. It follows from what I have said that I am satisfied that the sequestration order was properly made. If I had reached the conclusion that the sequestration order ought not to have been made, and were then to consider the second question, whether in the exercise of the court's discretion the bankruptcy should be annuled, it would have been necessary to consider all the circumstances of the case, the interests of the creditors and of the public. It is not suggested that the bankrupt has been guilty of any misconduct since the making of the sequestration order although she did fill in her statement of affairs inaccurately in certain respects. I am satisfied that her explanation as to why that occurred is truthful. I am satisfied that the bankrupt was solvent when ..-/20 -20- the sequestration order was made and that she is solvent now. <Aithough the application for annulment filed by the bankrupt states the solvency of the bankrupt as one of the reasons why the sequestration order ought not to have been made, the argument before me proceeded on the basis that solvency was relevant to the exercise of any discretion to annul the bankruptcy rather than to the question whether the sequestration order ought not to have been made. If I were to have reached a conclusion that the sequestration order ought not to have been made, I would have annulled the bankruptcy, although that would have been subject to an order protecting the Official Receiver for the fees owing to him in respect of action taken under the sequestration order and subject to an appropriate order for costs in favour of the petitioning creditor of the petition and of this application. For these reasons, 1n my opinion the application should be dismissed. I order that the application be dismissed and that the bankrupt pay the costs of the petitioning creditor of this application except the costs of the hearing before Riley J. on I4 June 1978. Otherwise I make no order as to costs. l certUy that tus and the NW nesen f/f) Preceairg pagic aro a true copy cf the Reasons for Judgment herein of his Honour Kir. Justice Leckhart Dated 7 Mf CATCHWORDS Trade Practices - Prosecution for an offence - Whether power to state a case. Trade Practices Act 1974, ss.53 and 79. JOHN CRANSTON THOMPSON v. RILEY McKAY PTY. LIMITED G. Nos. 74 and 78 of 1977 Coram: Franki, Deane and Fisher JJ. Sydney 22 June 1979 Se a Ne ER eR A weve IN THE FEDERAL COURT OF AUSTRALTA} NEW SOUTH WALES DISTRICT REGISTRY G. Nos. 74 and 78 of 1977 GENERAL DIVISION IN THE MATTER of the Trade Practices Act 1974 as amended (Sections 79,53(a) and 53(c)) BETWEEN: JOHN CRANSTON THOMPSON Informant AND: RILEY McKAY PTY, LIMITED Defendant Coram: Franki, Deane and Fisher JJ. 22 June 1979 Sydney ORDER JUDGES MAKING ORDER: Franki, Deane and Fisher Ju. DATE OF ORDER: 22 June 1979. WHERE MADE: Sydney. THE COURT ORDERS THAT: 1. Casesstated struck out. 2. Liberty to either party to apply to the registrar within 14 days if any order as to costs is sought. IN THE FEDERAL COURT OF AUSTRALIA) NEW SOUTH WALES DISTRICT REGISTRY) G. Nos. 74 and 78 of 1977 GENERAL DIVISION IN THE MATTER of the Trade Practices Act 1974 as amended (Sections 79 ,53(a) . and 53(c)) BETWEEN: JOHN CRANSTON THOMPSON Informant AND: RILEY McKAY PTY. LIMITED Defendant Coram: Franki, Deane and Fisher JJ. 22 June 1979 Sydney REASONS FOR JUDGMENT FRANKI J: These two matters, which were heard together, are cases stated to the Full Court of this Court by a judge of this Court in proceedings before him in matters G. No. 74 and G. No. 78 of 1977. The proceedings in G. No. 74 of 1977 were instituted by information wherein it was alleged that Riley McKay Pty. Limited, the defendant, was guilty of an offence in that it had contravened s.53(a) of the Trade Practices Act 1974 ("the Act"). The proceedings in G. No. 78 of 1977 were between the same parties and it was alleged in the information that the defendant had contravened s.53(c) of the Act. Both proceedings are clearly criminal proceedings. It was held by a majority of a Full Court of this Court in judgments delivered on 21 May 1979 in matters of Henaerson v. Pioneer Homes Pty. Limited and Henderson v. Pioneer Agencies Pty. Limited that a judge of this Court in proceedings alleging contraventions of s.53(e) and (g) of the Act had no power to state a case for the consideration of a Full Court of this Court. In my opinion the same considerations apply to the two matters before this Court and for the reasons which I set out in my judgment in the two cases mentioned above and which I will not repeat, I consider that this Court has no jurisdiction to answer the questions now submitted to it because the learned trial judge had no power to state the two cases. For this reason I propose that this Court should decline to answer the questions submitted to it in the two cases. I aiso propose an order that if either party wishes the Court to consider whether it is appropriate to make any order as to costs that party must notify the Registrar within fourteen days of the delivery of this judgment and the Court will then consider any such application. a i a ence a I certify that this and the preceding pageX are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Fraw.; P LysU > A) Coral Associate Dated stain (4 IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) G Nos. 74 and 78 of 1977 ) ) GENERAL DIVISION IN THE MATTER of the Trade Practices Act 1974 as amended (Sections 79 and 53(a) and (c)) BETWEEN: JOHN CRANSTON THOMPSON Informant AND: RILEY McKAY PTY. LIMITED Defendant CORAM: Franki, Deane and Fisher JJ. Friday 22 June, 1979. REASONS FOR JUDGMENT DEANE J: These are two cases purportedly stated by a Judge of this Court pursuant to the provisions of s.25(6) of the Federal Court of Australia Act, 1976. The first case was stated in proceedings instituted by information alleging a breach of §.53(a) of the Trade Practices Act 1974. The second case was stated 1n proceedings instituted by the same informant against the same defendant alleging a breach of s.53(c) of that Act. Each case was stated at an early stage of the proceedings before evidence was led. By consent, the matters were heard together in thi's Court. Section 25(6) of the Federal Court of Australia Act, 1976 (''the Act") provides, for present purposes, that the Court constituted by a single Judge "may state any case or reserve any question concerning a matter with respect to which an appeal would lie from a judgment of the Judge to a Full Court of the Court". A preliminary question has arisen as to whether the learned judge had authority to state - and this Court has authority to hear and determine - either case. The resolution of that preliminary question depends, in each case, upon whether the case concerns, for the purposes of s.25(6), "a matter with respect to which an appeal would lie from a judgment of the Judge to a Full Court". Section 24(1)(a) of the Act confers upon this Court jurisdiction to hear and determine "appeals from judgments of the Court constituted by a single Judge". The general appellate jurisdiction so conferred plainly includes a general jurisdiction to hear appeals from judgments of a single Judge in criminal Matters. An appeal lies against sentence at the suit of either the Crown (or other prosecutor) or the accused (s.28(5)). An appeal lies against a conviction (s.28(1)(c)). That general appellate jurisdiction in criminal matters will, however, be subject 10 certain qualifications and exceptions arising from the fact that the provisions conferring the jurisdiction must be construed in the context of both the ordinary appellate process and relevant common law principles. Thus, to take an obvious example, the general conferring of authority to hear and deter- mine appeals from a judgment of a single Judge docs not confer jurisdiction to'thear and determine an appeal purportedly brought by a stranger to the proceedings. In Thompson v. Mastertouch T.V. Service Pty. Limited ((1978) 19 A.L.R. 547), it was held by a Full Court of this Court that an appeal does not lie, pursuant to s.24(1)(a) of the Act, from a judgment of acquittal pronounced by a single Judge in a criminal matier after a hearing on the merits. The basis of that decision was not a denial of the plain fact that s.24(1)(a) conferred upon the Full Court jurisdiction to hear appeals from a single Judge in criminal matters. The basis of the decision was that the existence of an appeal from a judgment of acquittal in a criminal matter after a hearing on the merits not only formed no part of the ordinary appellate process but was contrary to a fundamental common law right of a person who has been acquitted by a court of competent jurisdiction after a hearing on the merits to be spared the renewed Jeopardy involved in an appeal against that acquittal. It was held that, eonstrued in the context of that ordinary appellate process and that fundamental common law right, the general reference to "appeals from judgments of the Court" in s.24(1)(a) did not encompass an appeal from an acquittal in a criminal matter after a hearing on the merits. Unassisted by authority, I should have been of the view that the fact that a judgment of acquittal in a criminal matter after a hearing on the merits was, as a matter of construction, to be excluded from the general grant of appellate jurisdiction contained in s.24(1)(a) of the Act did not have the consequence of precluding a criminal matter before a single Judge to which that general grant of appellate jurisdiction was applicable from:being "a matter with respect to which an appeal would lie from a judgment of the Judge to a Full Court" within the meaning of those words as contained in s.24(6) of the Act. The reasons which would have led me to that view are generally those expressed in the dissenting judgment of Smithers J. in Henderson v. Pioneer Homes Pty. Limited and Henderson v. Pioneer Agencies Pty. Limited (unreported: 21, May, 1979). In Henderson's Case (supra) however, a majority of a Full Court of this Court accepted the contrary view and held that a single Judge of this Court lacked authority to state, and that a Full Court lacked jurisdiction to hear and determine, a case or question in a criminal matter, It is plainly undesirable that there should be conflicting decisions of this Court on such a jurisdictional question. In the circumstances, I consider that I should follow the decision in Henderson's Case (supra) and conclude that the learned judge had no authority to state - and that this Court has no jurisdiction to determine - the case stated in eather of the present matters. I agree with the orders proposed by Franki J. SNL Teertify te 77 8 and- ne Stine preceding, pagte @2@ a kzue copy of the Reasons for Tudtgia- 4 nerein of his Hong Hr. Justice tae — AE Associate NN Dated :Ja+6-19 IN THE FEDEPAL COURT OF AUSTPALIA NEW _SOUWH WALES DISTRICT REGISTRY Neos. 74 and 72 of 1977 nee GENDRAL DIVISION ) IN SRE TTT, Praciices % (Se ctaene BoP w © Ol: JOU. Cerys eon THOME 5a'! RILSY Mov AS ETY. LIMTIEL Pel. saat CO, "'a.a 2, beara aud TtSHoh G.t To each ol chese natters a du dge of this Sout has a C3802 prrsvedk t2 8.0506) of tha Tocerti Guar tow Australia Rel 197GL XN prelirimery queelicu ayris-$ 78 Lo has olen to srate sash aocaso, in Leat the mrocecdings al' ye i owe iu.stance a Men dose on 4 Dawn fie pas bey Lemted and Aa wGoliowlec 2L Mal 1979) held thac ligseders3an o' Pinnger (here 18 Da per be slate * tase fh Gg bittaabt matber. lL agree with Deemer Townes. teastac Lona. aad lin ato untaqe oF reatarg, char ait so undesirable that tmere Saoald he cut lecki gob Lissauns of this Court tr o yerdedretional «vest tem such as this. Te follow, that T alsc consider I should folle. the Geeisions vF tne 2all Court an the hen'ersen Casts, aT ayes Were tue maltoes Free frem aut isiaty To vaela Aace Leen anclined t2 eccepr tne tonclusaon 410 ia the reasseing of Smichers J. in his dissenting Judgment in those cases. in so far as the power in (6) tos 2.CesO § vestricled to "a natter with respeel bk. whien en appeal tvwouia Lie Frew a yuaamert ol the Judyo to a Pull Court", 1 wou.d hav. thougn- chat tre qualification Matters" ralher than jude 28 impesed with ircraticn ty ments. It would follew Ehat 2r in ary . . ta of COure Pulsum € tO s.at sh appropriate uatter the leyisiaturs wed the qudgane 1. of the sangle ,adge "fLaral and conclusive vr uk subject to cppeal" Sete there would (see lotreductery woreus to 3.26(1) ol treo be no pewer Lo state a case mae: ©.25.6). This would be because the case would be stated an "a matrer in yeesee > fl which an apveal would" moe a pidyment of Pall Goure". by the investing Act meLither. mace T1a!t and coreiusive nor net subjcet ta angeal, therc would be pewes Lo state a case. wu dreover such would be the position even choush for sone reasctn a partricula? adgmert of the Jcdage aarqik ist pe appealable vhether L ~ .! z't because of tie neture of the (udumesl or atl the behost particuier rerty. T agree saith the orders propcsed Ly Tran. J. fcernty thattmis andthe / prece: q pecee are a true copy of tne Reasons tor Juagment of Mr Justice Fisher AL, iate Dated: 22 Yunre (777