We IN _THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY S.A. No. G15 of 1980 GENERAL DIVISION ON APPEAL FROM THE COURT OF INSOLVENCY OF THE STATE OF SCUTH AUSTRALIA EX#RCISING FEDERAL JURISDICTION Lil BANKRUPTCY BETWEEN: ELFRIEDE BRIGITTE GUNNARSSON-WIENER Appellant and { THE ATTORNEY-GENERAL OF SOUTH AUSTRALIA Respondent : ORDER JUDGES: Northrop, Deane, McGregor, JJ. DATE: 16 October 1980 WHERE MADE: Adelaide ORDER : The appeal be dismissed with costs. qV fms IN_THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY S.A. No. G16 of 1980 GENERAL DIVISION ON APPEAL FROM THE COURT OF INSOLVENCY OF THE STATE OF SOUTH AUSTRALIA EXERCISING FEDERAL JURISDICTION IN BANKRUPTCY BETWEEN: WOLF _GUNNARSSON-WIENER Appellant and THE ATTORNEY-GENERAL OF SOUTH AUSTRALIA Respondent : ORDER JUDGES : Northrop, Deane, McGregor, JJ. DATE: 16 October 1980 WHERE MADE: Adelaide ORDER : The appeal be dismissed with ccsts. REGRET R ree ners = ern = ERE RMT nomen mee ea Pm re ner Crown pres rr eqqr mere re rn a re rn ee re nen Saree ee IN THE FEDERAL COURT OF AUSTRALIA ) ) SOUTH AUSTRALIA DISTRICT REGISTRY ) ae No: ote of tego ) GENERAL DIVISION ) ON APPEAL FROM THE COURT OF INSOLVENCY OF THE STATE OF SOUTH AUSTRALIA EXERCISING FEDERAL JURISDICTION IN BANKRUPTCY BETWEEN: WOLF GUNNARSSON-WIENER and ELFRIEDE BRIGITTEE GUNNARSSON-WIENER Appellants and THE ATTORNEY-GENERAL OF SOUTH AUSTRALIA Respondent NORTHROP, DEANE, EX TEMPORE JUDGMENT 16 OCTOBER 1980 MCGREGOR JJ. <n NORTHROP J: PL NOR ee Ne ere AO aE eee or er ee eae ee ene ee - Z2- The court has prepared a joint judgment in this matter which I propose to read. The appellants, Wolf Gunnarsson-Wiener and Elfriede Brigitte Gunnarsson-Wiener, are husband and wife. They appealed against orders made on 13 August 1980 by the Court of Insolvency in the State of South Australia constituted by Judge Rogerson exercising federal jurisdiction in bankruptcy for the sequestration of their respective estates. The sequestration orders were made upon a petition presented to the court on 16 October 1979 on behalf of the respondent, Attorney-General for the State of South Australia. The act of bankruptcy alleged was the failure by the debtors to comply with a bankruptcy notice issued on 16 August 1979 and served on 30 August 1979. The course of the proceedings before the learned judge at first instance was complicated by the fact that it would seem that after he had, on 3 April 1980, reserved judgment in the case of the male appellant, a stay of proceedings, applicable to the proceedings before his Honour, was granted by the High Court. This stay of proceedings apparently remained operative until 6 June 1980 when an application for special leave to appeal to the High Court from a number of orders of the South Australian Supreme Court, Mr Justice Sangster, was refused by that court. The issues raised by the appeal make it necessary that we make reference not only to the proceedings before the judge at first instance but also to the proceedings before Mr Justice Sangster and associated proceedings in the Supreme Court of South Australia, to the application for special leave to appeal to the High Court and to a proposed application for special leave to appeal to the Judicial Committee of the Privy Council. On 23 October 1975 inspectors were appointed to investigate the affairs of a number of co-operative companies. On 23 May 1976 they recommended that the companies be wound up. There followed a hearing of an application for that purpose by Mr Justice Sangster, who ordered that the companies be wound up. That hearing extended over 39 hearing days. His judgment was delivered on 5 May 1978. The appellants appeared in person as contributories to oppose the winding up. Mr Justice Sangster in his judgment, ordered that the appellants pay certain of the respondent's cost of the proceedings. These were taxed at $31,472.70. This 1s the debt upon which the bankruptcy proceedings was based. The aljocatur in respect of the costs was signed on 27 June 1979. On 23 August 1978 pursuant to leave to appeal granted to the appellants, a notice of appeal to the full court of the Supreme Court of South Australia against the decision of Mr Justice Sangster was filed. The present respondent applied for security for costs and, on 20 March 1979, Mr Justice Zelling of the Supreme Court of South Australia made an order that the appellants give security for the costs in the sum of $7500 within 28 days of the order. On 20 April 1979 Mr Justice Walters of the Supreme Court of South Australia varied that order to extend the time for giving the security for costs to 30 April 1979. It was a term of the order made by Mr Justice Walters that if security was not given within the time specified the appeal should stand dismissed. No security for costs was given within the specified period. On 26 November 1979 an appeal by the present appellants against the decision of Mr Justice Zelling in relation to security for costs was heard by the full court of South Australia and dismissed. On 21 December 1979 the petition was first listed for hearing in the Court of Insolvency. The hearing was adjourned to 29 January 1980. On that day the present appellants were represented by counsel who scught an adjournment on the basis that what was described both as "an appeal" and "an application" was about to be instituted in the High Court from the orders made by Mr Justice Sangster. A further ground advanced to support the adjournment was that the appellants could, within six weeks, dispose of assets which would enable them to pay the debt. The matter was adjourned to 19 March 1980. On 18 March 1980 a Notice of Motion seeking special leave to appeal to the High Court against various orders including those made by Mr Justice Sangster, was filed in the High Court. On 19 March 1980 when the petition came on for hearing in the Court of Insolvency, counsel for the appellants withdrew from the hearing and the male appellant applied, on behalf of himself and the female appellant, for a further adjournment of the hearing of the petition on the basis of the pending application to the High Court. The hearing of the application for an adjournment occupied most of the day. His Honour reserved his decision overnight. On 20 March 1980 his Honour refused the adjournment and proceeded with the hearing of evidence. The hearing of evidence extended over 20 and 21 March 1980, and 2 and 3 April 1980. On 3 April 1980 his Honour reserved his decision in relation to the maie appellant and adjourned the hearing of the petition insofar as the female appellant was concerned to 24 April 1980. AEN ET te ee eae ee te nnn mn ene nae erent ee On 24 April 1980 the Court of Insolvency was informed by counsel for the present respondent that the High Court had granted a stay of all proceedings based on the judgment of Mr Justice Sangster. His Honour adjourned the petition to a date to be fixed. As has been mentioned, the High Court refused the application for special leave to appeal from the orders of Mr Justice Sangster on 6 June 1980. The matter was mMext listed before the Court of Insolvency on 3 July 1980, when there was no appearance for either appellant. It was adjourned until Friday, 18 July 1980, when counsel appeared fer the female appellant and informed his Honour that the appellants were seeking special leave from the Privy Council to appeal from the decision of Mr Justice Sangster. On the basis of that pending application for special leave, and the female appellants state of health, counsel for the female appellant sought a further adjournment of the petition. The further hearing was adjourned until 23 July 1980. On 23 July 1980 counsel for the female appellant Pressed his application for the adjournment. His Honour apparently treated the application as being made on behalf of both appellants. His Honour refused the application for an adjournment and reserved his decision on the substantive issues involved in the matter. His Honour gave his decision on 13 August 1980. As has been mentioned, he made sequestration orders in respect of the estate of each of the appellants. In their attack before this court on the sequestration orders, the appellants rely on three @istinct grounds. First, it 1s said, the learned judge at first instance should have adjourned the matter because of the proposed application for special leave to appeal to the Privy Council. Second, it is argued, the bankruptcy notice upon which the petition was based was a nullity for the reason that the time for compliance with its terms had been purportedly fixed by the Registrar of the Court of Insolvency, and that the purported fixing of that time constituted an impermissable exercise of the judicial power of the commonwealth. Finally, it was argued that the learned judge at first instance erred in failing to hold that each appellant was able to pay his or her debts within the meaning of section 52(2) (a) of the Bankruptcy Act 1966, We shall deal with these grounds of attack upon the sequestration orders in the order in which we have mentioned them. The question of whether an application for an adjournment of a matter should be granted or refused is a matter within the discretion of the trial judge to be resolved according to the overall requirements - ue of justice in the particular circumstances - Conroy v Conroy (1917) 17 SR (NSW) 680 at page 662. A court of appeal will not as a general rule interfere with the decision of a judge of first instance on that question unless it is satisfied that the exercise of his discretion has miscarried in the sense that it has been affected by wrongful application of principle or masunderstanding or erroneous assessment of the factual material before him. This general rule is subject to any power of the appellate court to receive new evidence on the hearing of an appeal, see, for example, Federal Court of Australia Act 1976, section 27, and the benefit of hindsight in a case where it can be seen that serious injustice has resulted, or will in fact result, from the exercise of the discretion, The appellants in the present case have quite failed to persuade us that the learned trial judge was in error 1n refusing a further adjournment to the appellants on the ground that they proposed to apply to the Privy Council for special leave to appeal from the orders made by Mr Justice Sangster in the South Australian Supreme Court. The appellants had already appealed to the full court of the South Australian Supreme Court from that decision. Their appeal had been dismissed as a result of their failure to comply with an order to provide security for costs. They had appealed against an order in relation to security for costs. That appeal had also been dismissed. They had applied for special leave to appeal to the High Court of Australia. That application for special leave to appeal had been refused. They had allowed the time 1n which they were entitled to appeal from the decision of Mr Justice Sangster to the Privy Council to expire. In these circumstances his Honour was fully entitied to adopt the approach that, after all the adjournments which had already been granted, the petitioner was entitled to have his petition heard. On the hearing of the appeal, the male appellant who appeared in person, placed before us a telex dated 11 October 1980 which had apparently been received from the appellants London solicitors. This was done with the consent of counsel for the respondent. That telex indicates that the application for special leave to appeal to the Privy Council has still not been lodged. It states that council has said that "papers are voluminous but he has had a preliminary look through them and he considers an appeal to Privy Council is feasible". If a sequestration order had not been made the petition would lapse today. The benefit of hindsight confirms rather than undermines his Honour's refusal to grant a further adjournment of the petition by reason of the proposed application for special leave to appeal to the Pravy Council. The argument that the YEE A A SN RT et dleainmennatemenmemmenna a -o- sequestration orders should be set aside by reason of his Honour's refusal to grant a further adjournment must be rejected. No argument was advanced on behalf of the appellants in respect of the second ground of attack upon the sequestration orders. We have however given consideration to the arguments which can be advanced in support of that ground. Those arguments are set out in the judgment of Mr Justice Gibbs, sitting as a judge of the Federal Court of Bankruptcy, in re Moss, ex parte Tour Finance Limited, (1968), 13 FLR 101 at pages 104-110, where they are rejected. We agree with the reasoning of Mr Justice Gibbs in that case, and with his decision that a registrar in fixing the time for compliance with the terms of a bankruptcy notice 1s not exercising part of the judicial power of the commonwealth. The appellants have not made good this ground of appeal. Section 52(2) (a) of the Bankruptcy Act 1966 provides, for present purposes, thatthe court may dismiss a petition if it 1s satisfied by the debtor "that he is able to pay his debts". The onus of so satisfying the court rested upon the appellants. The learned trial judges view as to the criteria to be adopted in determining whether the appellants were able to pay their debts was a favourable one from the appellants point of view. Adopting the criteria he held that neither appellant had satisfied him that he or she was able to pay his or her debts. That was a conclusion which, on the evidence, his Honour was plainly entitled to reach. In the result, the appellants have failed to make good any of the grounds upon which they have relied in the appeals. We would note that at the commencement of the haring of the appeals counsel appeared for the Attorney-General for the commonwealth to admit service of a notice pursuant to section 78B of the Judiciary Act 1903 in relation to the question involving the extent of the judicial power of the commonwealth, and informed the court that the Attorney-— General did not desire to make submissions thereon. The appeals are dismissed, with costs. 1+ esta'y that Uns and the "ve 22.) eg nig. are a true copy of the "ss for Judgment herem of the Aonourable Mr. Justice Natirop, He Horovrable. jit Astee Beonre cand he Kodouce ble Mer, Systee Me Gregor Associate ~ Dated: WA OCTOBER /9K0 d <r Seen ha ee | ee ee Hee ~ <* _—— eee eee ie ee TO ne oe fl' iia