bIl IN THE FEDERAL COURT OF AUSTRALIA BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES AND THE AUSTRALIAN CAPITAL TERRITORY No. B5240 of 1985 BETWEEN : BRIAN GLENN CHETWYND AND GLYNIS ROSE Debtors EX PARTE: MERIDIEN INTERNATIONAL CREDIT CORPORATICN PRY. LIMITED Creditor MINUTES OF ORDER JUDGE MAKING ORDER: JACKSON J. DATE OF ORDER: 19 December 1985 WHERE MADE: Sydney. THE COURT ORDERS THAT: 1. The application for laave to appeal be refused. tJ , The applicant to pay to the respondent the costs of the application to be taxed including reserved costs if any. Note: Settlement and entry of orders 1s dealt with in Order 124 of the Bankruptcy Rules. -~ 1le- + IN THE FEDERAL COURT OF AUSTPALTA ) GENERAL DIVISION ) BANKRUPTCY DISTRICT OF THE STATE OF ) No. 25240 of 1985 NEW SOUTH WALES AND ) THE AUSTRALIAN CAPTTAL TERRITORY ) BETWEEN : BRIAN GLENN CHETWYND AND GLYNIS ROSE Debtors EX PARTE: MERIDIEN INTERNATIONAL CREDIT COPPORATION PTY. LIMITED Creditor CORAM: JACKSON J. DATE: 19th December 19385 PLACE: SYDNEY REASONS FOR JUDGMENT This matter first came before me on 17 Decamber 1985 in the Bankruptcy List as an application by Brian Glenn Chetwynd for an extension of the time for compliance with Bankruptcy Notice No. 852490 of 1985. -2- I then refused the application, giving short reasons for my decision. Those reasons, in summary, were that: (a) although I was not affirmatively satisfied of the matters 'referred to in s.41(6C)(b), I considered that I yet had a discretion whether to extend the time for compliance under the power conferred by s.41(6A); (b) I refused to exercise the discretion under s.41(5A) in favour of the applicant, mentioning specifically one matter which I regarded as significant, namely that the applicant had a large and uncontested, though not exactly quantified, liability to the respondent. Later that day an application was made for leave to apreai against the decisicn which I had earlier given, the need for leave to appeal being said to arise from s.24(1A) of the Federal Court of Australia Act 1976 which provides that: "f(JA) An apoeal shall not be brought from a judgment referced to in sub-section (1) that is an interlocutory judgment unless the Court or a Judge gives leave to appeal." Ord.52, v.19 provides the procedure for obtaining such leave. Two questions thus arise. First, is the judgment refusing the application for an extension of time for compliance an "anteclocutory judgment" in teems of s.24(1A)? Second, if 1 1s, should leave to appeal be granted? Turning to the first question, the term "Judgment" used in s.24(18) 1s defined by s.¢ of the Act to mean a "judgment, -3- decree cr order, whether final or interlocutory, or a sentence," en and it is thus clear that the order which I made is a "Judgment for the purposes of s.24(1A). The test to be applied in determining whether an order 1s tinal or interlocutory has been discussed in a number of cases and the ultimate question appears to be whether the judgment or order, as made, finally disposes of the rights of the parties. See, for example, Carr v. Finance Corporation of Australia Ltd (No. 1) (1931) 147 C.L.R. 246; and Sanofi v. Parke Davis Pty Limited (No. 1) (1982) 149 C.L.R. 147 at 152-153; and Computer Edge Pty Limited v Apple Computer Inc. (1984) 54 A.L.R. 767. A c1ircumstance in which an order will not be final is 1f, asa matter of law as distinct from a matter of practicality, the 1ssue is capable of being litigated again on a further application. It is possible. of course, for an application for an extension of time for compliance to be made after the time when the period for compliance with the bankruptcy notice has expired \Streimer v. Tamas (1981) 37 A.L.R. 211). It is by no means clear to me that a further application might not be made for an extension of time, notwithstanding that an original application for an extension of time has not besn acceded to. It is & matter of frequent occurrence that applications for further extensions of time pursuant to s.4i(€A) are made. and continue to be made, notwithstanding the fact that the further applications are made -4- at a time when the first application for an extensicn of time has been "finally" dealt with. I appreciate, of course, that a decision on an application may be final if disposed of in one way, and in --locutory 1f disposed of in another way. See the remarks of Windeyer J. in Hall v The Nominal Defendant (1966) 117 C.L.R. 423 at 443. Nonetheless there seems to me to be no compelling reason to regard a decision not to extend the time for compliance witn a bankruptcy notice as precluding the applicant for such an extension from applying afresh for such an extension. Situations may readily be contemplated in which 1t would be appropriate for the making of a second application cf an extension of time, notwithstanding that an earlier application had been refused. To take one example, 1t might well be the case that on an application for an extension of time for compliance with a bankruptcy notice, the grant of an extension was refused because a judgment was then believed to be imminent on the question whether the judgment or order in respect of which the bankruptcy notice was issued should be set aside, a belier which proved incorrect. I do not mean to convey by what I have said that "second applications" for extensions of time are necessarily to be treated entirely without reference to tne fact that an earlier application of a similar nature has been refused. As I have - 5 - said, however, the question whether the order 1s a "final judgment" in terms of s. 24(1A) turns not on the likelihood that it will be set aside or varied, but on the possibility, as a mattec of law, that it may be. In these circumstances my view is that the order which I made on 17 December refusing the application was an "anterleocutory judgment" in terms of s.24(1A). It 1s thus necessary to consider whether the present case 1s one in which leave to appeal should be granted and in determining that question it is necessary to turn first to the legislative purpose appearing from s.24(1A). That purpose is to state as a general proposition that the decision of a Judge of the Court on an interlocutory matter should not be the subject of appeal but to provide for relaxation of that principle in circumstances where 1t is appropriate that the decision at first instance should be reconsidered by a Full Court. There are no doubt cases where the issues of law, cr fact, ace such, or the impact of a decision upon procedural matters is such, that leave to appeal should be given. Equally there are cases where 1t is apparent that the circumstances present no feature which should result in a relaxation of the general rule that the interlocutory judgment of a Judge at first instance should be final. Whilst recognizing that cases exist in which the likely result of an application for leave to appeal 15 clear, -5- the question depends very much on the particular case in question at any time, and 1t would be quite inappropriate to attempt to state exhaustively the circumstances in which leave to apyoeal against an interlocutory judgment should be granted. With these considerations in mind, I turn to the particular case. The applicant was sued in the District Court on a guarantee by him of the obligations of a company, Intaplex Industries Pty Limited, of which he was a diractor. The guarantee also contained a clause (cl.6) under which the applicant agreed to be treated as a principal debtor. The applicant allowed a judgment to go against him by default in the District Court for a principal sum of $47,320.56 and interest and costs thereon amounting in total to $54,260.59. By the time of issue of che bankruptcy notice interest had made the sum increase to $63,184.59. The judgment of the District Court was given on 21 September 1984. No action was taken to seek to set 1t aside until nearly 15 months later, namely on 13 December 1985, a course of action prompted no doubc by the service upon the applicant on 3 December 1985 of the bankruptcy notice in question. I have declined, in my earlier judgment, to arrive at an opinion of the nature specified in s.41(6C)(b) but I regard the length of time which elapsed between the judgment and the making of the application to set 1t aside, a period the length of which was not sought to be explained in the evidence before me, as being a relevant matter -7- for the purposes of the present application. Mere importantly, however, there 1s no denial in the proceedings of an obligation to the creditor under the guarantee, an obligation which presently sounds in money and is, and for a considerable time has been, unsatisfied. Rather the contentions are that the judgment in the District Court should be set aside because the procedure adopted was by a Statement of Liquidated Claim, a course which should not be adopted if there 1s no agreement as to the rate of interest aoplicable. The correctness ot the assertion that there was no such agreement 1s, of course, in issue. Further 1t is contended that the claim in the District Court relating to principal was again a claim containing an element of interest, the joinder of which was inappropriate in proceedings by way of Statement of Liquidated Claim. I should also say that the applicant contends that since Intaplex Industries Pty Limited was placed in receivership on 10 November 1983 he has had considerable difficulties in obtaining access to the books of account of that company. He also said that neither that company nor himself had been provided by the creditor with a sufficiently detailed statement to enable him to establish the principal owed, the reriod for which interest had been claimed, and the rate of interest applied. He said too that during the period following service upon him of the Statement of Liquidated Clazm he had been under considerable strain both financial and emotional following the placing cf Intaplex -8- Industries Pty Limited into receivership. The suggested difficulties concerning identification of the exact amount due would have been cesolved, no doubt, if the proceedings in the District Court had been defended but no such course was taken. The "financial and emotional strain" to which the applicant refers 1s a matter which I took into account at the time of my original order. In these circumstances the situation which appears to me to obtain is that the applicant is admittedly liabie to the creditec in an amount which is not exactly identified but is likely to he substantial. It may be that the application to the Distcict Court to set aside the judgment will be successful and if that is so the effect will be that a different procedure will have to be adopted to recover the money, or the correct amount of money, from the aoplicant. Hut s.41(6A) 1tself recegnizes that notwithstanding that an application may be made, and perhaps made successfully, to set aside a judgment, the Court yet has a discretion to refuse to extend the pericd for compliance with a bankruptcy notice. Further 5.24(1A) of the Federal Court of Australia Act as does any other provision of a similar nature, contemplates the possibility that there wili be judgments which, if there had been an appeal as of right, vould have been reversed on appeal but which will not be the subject of appeal because they present no feature which distinguishes them from the ordinary run of cases. - 9 - There are two cther matters which seem to me to be relevant to the exercise of discretion whether to grant leave to appeal. The first is that the applicant makes no offer to pay or provide any security for the payment of the amounts which it 1s liable to pay the creditor. It is, of course, not essential that an applicant for leave to appeal should do so, but failure to do so 15 in my view a relevant matter. Secondly, I would be more inclined to grant leave to avpeal if I were of the view that an irremediable change had occurred by ceason of my original order. It goes without saying that the result of the order is that an act of bankruptcy has occurred, or is likely shortly to occur. It does not follow, hewever, from the making of my order tnat the matters set out in the bankruptcy notice are thereafter unexaminable. See s.52(2) of the Bankruptcy Act. In summary then, the case appears to me to present no feature which merits the grant of leave to appeal and I refuse to Grant such leave.