FEDERAL COURT OF AUSTRALIA Baulkham Hills Shire Council, in the Matter of Diamond v Diamond [2000] FCA 1315 BAULKHAM HILLS SHIRE COUNCIL v NEVILLE DIAMOND N 7561 OF 2000 EMMETT J 5 SEPTEMBER 2000 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 7561 OF 2000 IN THE MATTER OF NEVILLE DIAMOND (also knownas Neville Francis Diamond) BETWEEN: BAULKHAM HILLS SHIRE COUNCIL APPLICANT AND: NEVILLE DIAMOND (also known as NEVILLE FRANCIS DIAMOND) RESPONDENT JUDGE: EMMETT J DATE OF ORDER: 5 SEPTEMBER 2000 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. A sequestration order be made against the estate of Neville Diamond, also known as Neville Francis Diamond. 2. The petitioning creditor's costs, including any reserved costs of this proceeding (if any), be taxed and paid in accordance with the Bankruptcy Act 1966 (Cth). THE COURT NOTES THAT: 3. Consent to act as a trustee has been signed by Thomas William Frederick Dickson and has been lodged with the Official Receiver in Sydney. 4. An act of bankruptcy was committed on 9 May 2000. 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 7561 OF 2000 IN THE MATTER OF NEVILLE DIAMOND (also known as Neville Francis Diamond) BETWEEN: BAULKHAM HILLS SHIRE COUNCIL APPLICANT AND: NEVILLE DIAMOND (also known as NEVILLE FRANCIS DIAMOND) RESPONDENT JUDGE: EMMETT J DATE: 5 SEPTEMBER 2000 PLACE: SYDNEY REASONS FOR JUDGMENT 1 I have before me a petition for the sequestration of the estate of Neville Diamond, also known as Neville Francis Diamond. The applicant is Baulkham Hills Shire Council ("the Creditor"). The petition is based on an alleged act of bankruptcy committed when the debtor failed on or before 9 May 2000 to comply with the requirements of a bankruptcy notice. 2 There was no appearance for the debtor today. However, on 30 August 2000 a notice of motion was filed, returnable today, being the return day of the petition after it had been adjourned on 9 August 2000. The notice of motion sought the following orders: "1. That the proceedings be adjourned for three weeks so that the Law Society may make a decision to grant me legal assistance in this matter. 2. The proceedings be adjourned with a cal lover date in three weeks time to review the position. 3. The court grant access to the material as requested in the subpoena dated 30 August 2000 and that this material be provided within seven days with reasonable photocopying costs" 3 On 1 September 2000 the solicitor for the Creditor received a facsimile communication from the debtor, saying as follows: "Jim I am sorry I will not be able to attend court on 5 September and I suggest that it be sent to the Registrar for call over on 4 October 2000 when the subpoena to produce falls due. The reason for my non-appearance is medical and not associated with this action. A doctor's certificate is attached. I expect to be available as of 8 September. Relevant to the subpoena to produce I am willing to make arrangements with you to view the files as long as photocopying is available at an economic rate. Sorry for any inconvenience. Thanks for your assistance." 4 Attached to the letter from the debtor is a document purporting to be from a doctor's premises at 1 Kissing Point Road, Turramurra and says: "To whom it may concern. Neville Diamond is unfit to attend university and to attend court from 1/9/00-to 8/9/00 inl." There is an illegible signature. I do not regard that document as evidence of the Debtor's inability to attend court. 5 When the matter was first called before the Registrar, the Registrar referred the matter to me. When the matter was first called before me and there was no appearance for the debtor, I granted a short adjournment to enable a further attempt to be made to speak to the debtor. There was already evidence that the Creditor's solicitor had tried unsuccessfully to communicate with the debtor by telephone. The Creditor's solicitors had left a recorded message indicating that the Creditor would oppose any adjournment of the bankruptcy proceedings. That message was left on the morning of 4 September 2000. 6 Following the adjournment this morning, a further affidavit was filed in which Mr Thomas James Rue, the solicitor for the Creditor, deposed to having telephoned the telephone number of the debtor, where he spoke to a woman who identified herself as the debtor's mother. She told Mr Rue that, "He has gone into the Courts". Mr Rue was told that the debtors had left about two hours previously, the conversation taking place at about 10.30 am this morning. Mr Rue then telephoned the debtor's mobile telephone number and had a conversation as follows. Neville Diamond: "Neville Diamond" Rue: "Hello, Neville, its [sic] Jim Rue. Where are you?" Diamond: "Hello Jim. I can't come to Court today. I have put a medical certificate into the Court an [sic] I faxed you a copy." Rue: "Neville, the bankruptcy proceedings have been referred to Justice Emmett in Court 20C in the Federal Court Building. The Judge has indicated that he is prepared to proceed today. He has asked us to make one final effort to contact you to find out what you are doing about the matter." Diamond: "I can't come in. I sent a medical certificate into the Court and I thought that was reasonable." Rue: "Neville, I have just spoken to your mother and she has told me that you had already left to come to Court." Diamond: "Well, that's not accurate." Rue: "You really should come into Court because we will be proceeding against you." Diamond: "Well, I can't come. I've given the Court the medical certificate. Its [sic] wrong. If it goes ahead I'll have to look at an appeal." Rue: "Where are you?" Diamond: "Cattai" Rue: "It's a matter for you whether you come in or not. I have told you we will be proceeding and we will be asking the Judge to deal with it today." Diamond: "Its [sic] wrong. I can't come in. I have sent a medical certificate." Rue: "I'll tell the Judge what you have said, but we will be proceeding." Diamond: "If that's the way it has got to be, then so be it." 7 In the light of the reference in the notice of motion to a proposed application to the Law Society, Mr Rue also endeavoured today to speak to the Law Society. He asked to speak to someone who could help him with inquiries concerning the Society's pro bono scheme. He then had a conversation with a female person to the following effect: He said: "I am trying to obtain some information concerning the Society's pro bono scheme and how it operates. I am also trying to establish whether a particular individual has obtained assistance under that scheme, although I suspect there might be confidentiality issues on that last request." She replied: "The basis of the Society's scheme is that it maintains a register of solicitors who are prepared to act for nothing or with substantially reduced fees. The scheme is subject to a means test and its merits based in the sense that the applicant must have a reasonable chance of success." Rue said: "I am acting for a local council who has commenced bankruptcy proceedings against an individual. That individual has informed me that he intends to seek an adjournment on the basis that he is waiting for the Society to grant him assistance and he has asked for a three week adjournment on that basis." She replied: "The information we receive is confidential, but I can let you know whether an application has been received. What is the persons's name?" Rue said: "Neville Diamond." She said: "I can tell you that Mr Diamond has lodged an application for assistance however we have asked him for further information. In fact we have written to him on 3 occasions asking for some more information without any response. We cannot take the matter any further and have closed our file for the moment. If he subsequently give us the information then we will look at it accordingly. You can disclose this to the Registrar if you wish." 8 There is no record in the Court's file of any medical certificate having been received from the debtor. In the light of the conversation that the debtor had with Mr Rue, I am not disposed to grant an adjournment of the bankruptcy petition. The only basis for the adjournment sought in the notice of motion was a desire to seek legal assistance in the light of the communication from the Law Society. It appears that the debtor is not over diligent in pursuing any application for legal assistance. 9 I am satisfied that the debtor committed the act of bankruptcy alleged in the petition. The respondent applied on 20 April 2000 for an order setting aside the bankruptcy notice. On that day the Court made an order extending the time for compliance with the bankruptcy notice to 9 May 2000. On that day the application to set aside the bankruptcy notice was dismissed. No further orders were made by the court to extend the time for compliance with the bankruptcy notice. Accordingly, I am satisfied that the act of Bankruptcy was committed as alleged in the petition on 9 May 2000. 10 I am satisfied with the proof of the other matters of which subsection 52(1) of the Bankruptcy Act 1966 (Cth)requires proof. Accordingly, I make a sequestration order against the estate of Neville Diamond, also known as Neville Francis Diamond. I order the Creditor's costs including any reserved costs of this proceeding (if any) be taxed and paid in accordance with the Bankruptcy Act 1966 (Cth). I note that consent to act as a trustee has been signed by Thomas William Frederick Dickson and has been lodged with the Official Receiver in Sydney. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate: Dated: 14 September 2000 Counsel for the Applicant: Mr J B Conomy Solicitor for the Applicant: Coleman & Greig Date of Hearing: 5 September 2000 Date of Judgment: 5 September 2000