FEDERAL COURT OF AUSTRALIA Bowin Designs Pty Ltd v Leslie [2000] FCA 530 BOWIN DESIGNS PTY LTD v FREDERICK JOHN LESLIE N 8024 OF 1999 WHITLAM J 7 MARCH 2000 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 8024 OF 1999 In the matter of FREDERICK JOHN LESLIE (also known as JOHN LESLIE) BETWEEN: BOWIN DESIGNS PTY LTD APPLICANT AND: FREDERICK JOHN LESLIE RESPONDENT JUDGE: WHITLAM J DATE OF ORDER: 7 MARCH 2000 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The motion of Frederick John Leslie, notice of which was filed on 20 December 1999, is refused with costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 8024 OF 1999 In the matter of FREDERICK JOHN LESLIE (also known as JOHN LESLIE) BETWEEN: BOWIN DESIGN PTY LTD APPLICANT AND: FREDERICK JOHN LESLIE RESPONDENT JUDGE: WHITLAM J DATE: 7 MARCH 2000 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 30 November 1999 Deputy District Registrar Quinn made a sequestration order against the estate of Frederick John Leslie ("the debtor") on the petition of Bowin Designs Pty Ltd ("the creditor"). On 20 December 1999 the debtor lodged an appeal and filed a notice of motion seeking a stay of the sequestration order. That motion has been heard today. 2 The grounds of opposition to the petition were stated to be: "(a) The judgement obtained by the applicant creditor was erroneous and as such no debt exists breaching s 52(1)(c) of the Bankruptcy Act 1966. (b) The respondent debtor can show sufficient cause why a sequestration should not be made pursuant it [sic] s52 (2) (b)." 3 As ground (a) suggests, the petition was founded on an act of bankruptcy mentioned in s 40(1)(g) of the Bankruptcy Act 1966 ("the Act"). The creditor relied on a judgment recovered against the debtor in the amount of $26,242.78 at Manly Local Court on 15 September 1997. An application to set aside the bankruptcy notice was dismissed by Burchett J on 22 March 1999: [1999] FCA 333. 4 The procedural history of the creditor's petition is important. On 25 October 1999, the date for hearing stated in the petition, a direction was given that the debtor file any further affidavits upon which he wished to rely by 15 November and the petition was fixed for hearing on 30 November. These orders were made by consent. Subsequently a subpoena for production addressed to the solicitors who had acted for the debtor in the proceedings in Manly Local Court was issued at his request on 23 November. The subpoena was returnable on 8 December. 5 On 30 November the creditor's petition came on for hearing before Deputy District Registrar Quinn. The debtor sought an adjournment which was refused. Ground (b) in the notice of opposition was referred to Gyles J for determination. His Honour was not satisfied under s 52(2)(b) of the Act that there was any sufficient cause why a sequestration order not be made, and he returned the petition to the Deputy District Registrar for further hearing: [1999] FCA 1837. After further hearing Deputy District Registrar Quinn made the sequestration order that is the subject of the present stay application. 6 Notwithstanding that the Deputy District Registrar's making of a sequestration order against the debtor's estate is subject to review, the anterior decision of Gyles J requires, as a matter of comity at least, that the present motion be dealt with as an application for a stay pending an appeal. In that context the solicitor for the creditor accepts the law as stated in Balnaves v Deputy of Commissioner of Taxation (1998) 41 ATR 15. In that case von Doussa J said (at 16): "The approach taken by this court on applications for stays in respect of sequestration orders pending an appeal has been to grant the stay where there is any reason to doubt that the sequestration order was correctly made or, in other terms, a stay will be granted where the appellant can demonstrate that there is a point that is arguable on appeal." 7 In support of his motion the debtor has read two affidavits, one sworn on 7 February and one sworn today. He has also been cross-examined by the solicitor for the creditor. Correspondence from the debtor's former solicitors has been received in evidence, which indicates that he was advised he had no grounds of appeal against the judgment of Manly Local Court. The evidence shows that on 24 September 1999 the debtor commenced an action against the creditor for a liquidated sum of $28,766 in Wallsend Local Court. No proper particulars of this claim are given in the initiating process. However, it appears from cross-examination that it relates to the same money claim that he unsuccessfully asserted before Burchett J, although that claim was for a significantly smaller amount than the judgment obtained by the creditor in Manly Local Court. The debtor was unable to explain the inflated amount. 8 The debtor says that he sought an adjournment on 30 November 1999 in order to gather further evidence. I am entitled to assume that such evidence has now been included in the two affidavits read today in support of his motion. The subpoena to his former solicitors was answered on 2 February 2000. 9 I found it difficult to follow the debtor's submissions as to why a stay should be granted. The grounds of appeal stated in his notice of appeal are as follows: "1) The orders issued by the Registrar require review as they have a tendency to be unjust, harsh and oppressive. 2) The judgement delivered by His Honour Justice Gyles is prejudicial to the appellant and was unjust, harsh and oppressive. 3) The Courts process has being [sic] abused." 10 No part of the evidence read on the present application was explicative of those grounds, nor has the debtor developed them in his oral submissions by reference to any material that is before me. The debtor seems mainly to be concerned about the stay of the action commenced in Wallsend Local Court brought about by s 60(2) of the Act. However, there is no evidence as to any election made by his trustee in relation to that action and, further, I do not understand how such a consideration relates to his grounds of appeal. The debtor also mentioned his work as a debt collector, but again he made no attempt to show how such a fact was relevant either to his grounds of appeal or to the question of making a sequestration order on a review at a hearing de novo. 11 The debtor's motion is quite hopeless. The language of his third ground of appeal compels me to observe that this very motion, as argued, verges on an abuse of process. It will be refused with costs. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Whitlam. Associate: Dated: 7 March 2000 Ms Christine La Cava of Anderson & Sjoquist, solicitors, appeared for the applicant creditor. The respondent debtor appeared in person. Date of hearing: 7 March 2000 Date of judgment: 7 March 2000