IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) BANKRUPTCY DISTRICT OF ) THE STATE OF QUEENSLAND ) No. QN 305 of 1994 RE:MEA HEWITT and JANE STEEN-OLSEN EX PARTE:MEA HEWITT and JANE STEEN-OLSEN AUSTRALIAN SUNSHINE FOODS PTY. LTD. Respondent CORAM: Drummond J PLACE: Brisbane DATE: 15 June, 1994 REASONS FOR JUDGMENT This is an application to adjourn the hearing of the applicants! application filed as long ago as 13 May, 1993 for an order setting aside the bankruptcy notice served on them at the behest of the respondents of these proceedings. The judgment debt, which founds the bankruptcy notice, arose from an order that the applicants pay certain costs of an interlocutory hearing made in the course of a Supreme Court action they themselves had commenced some time ago against the respondent, in effect for damages for breach of the respondent's fiduciary duty as their agent. That order was made in October 1993. As I have said, the applicants' application that is now before me and which the applicants seek to adjourn was filed as long ago as 13 May, 1993. The application was supported by material prepared by the applicants themselves, although they had solicitors acting for them in the Supreme Court proceedings referred to, and have had solicitors acting for them in these proceedings. They are represented today by counsel and by other solicitors now acting for them. The proposition is that they should be given the adjournment of this application, which has been before the Court for a long time, because they have taken the step of engaging legal representation that they apparently now wish to utilise, only very late in the piece, a week or so ago. There is nothing in the material before me which explains this somewhat extraordinary picture of inactivity by the applicants to justify them getting an adjournment of their own application. I refuse the application for an adjournment. (After hearing submissions in relation to the setting aside of the bankruptcy notice, Mr. Justice Drummond continued.) This is an application by the judgment debtors to set aside a bankruptcy notice founded upon their allegations that they have a cross-demand, set-off or counter-claim sufficient for the purposes of s. 40(1)(g) the Bankruptcy Act 1966 (Cth). The only evidence before me to support this proposition comprises a statement of claim filed by the judgment debtors when they initiated Supreme Court proceedings against the judgment creditor in Western Australia in June 1992. It appears from this statement of claim, which is not verified on oath (and neither have the material allegations in the pleading been separately verified), that the applicants were contending that the respondent had breached its duty to the applicants as the applicants' Queensland agent for the distribution of certain food product. Damages, not particularised, and an account, are claimed. Although there is no material before me explaining how it happened, it can be safely inferred that this Supreme Court proceeding was transferred to the Queensland Supreme Court. On 14 October, 1993, it is common ground that de Jersey J in the Queensland Supreme Court dealt with an application by the judgment creditor, as defendant in those Supreme Court proceedings, to strike out the applicant, as plaintiff on the ground of want of prosecution. The application failed but it seems clear from the order made by his Honour which visited the costs of the application on the applicants that he must have regarded them as guilty of some considerable delay. In any event, the position before me is that the applicants have chosen only to put before me their statement of claim in the Supreme Court action to show that they have a good cross-demand, set-off or counter-claim. They have also given me only the sketchiest information about what has been happening in relation to the prosecution of their Supreme Court proceedings upon which they are relying to vindicate what they say is this cross- demand. It seems to me that, on the very limited material before me, it is quite hopeless for the applicants to contend that they meet the test applicable to satisfy the Court of the existence of such a counter-claim, cross-demand or set-off. I refer to the decision of Re Ryan; Ex parte Ryan v Jupiter's Management Limited (1992) 38 F.C.R. 127 at 131 from which it appears that the debtor must satisfy the Court that they have a genuine demand and that that demand has a reasonable probability of success. I, on the very limited material before me, having regard to the wholly unexplained delay on the part of the applicants in prosecuting the Supreme Court proceedings, am satisfied neither that they have a genuine demand nor that such demand as they may have has any probability of success. I, therefore, dismiss the application. I certify that this and the preceding three pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Drummond. Associate: Date: 15 June, 1994 IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) BANKRUPTCY DISTRICT OF ) THE STATE OF QUEENSLAND ) No. QN 305 of 1994 RE:MEA HEWITT and JANE STEEN-OLSEN EX PARTE:MEA HEWITT and JANE STEEN-OLSEN AND: AUSTRALIAN SUNSHINE FOODS PTY. LTD. Respondent MINUTES OF ORDER JUDGE MAKING ORDER: Drummond J DATE OF ORDER: 15 June, 1994 WHERE MADE: Brisbane THE COURT ORDERS THAT: 1.The application for an adjournment of the hearing of the applicants' application filed on 13 May, 1993 is refused. 2.The application filed on 13 May, 1993 by the applicants is dismissed. 3.The applicants shall pay the respondent's costs of and incidental to the application. NOTE:Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.