FEDERAL COURT OF AUSTRALIA Laginha, in the matter of Laginha v Williams [2000] FCA 1320 IN THE MATTER OF EDUARDO LAGINHA EDUARDO LAGINHA V TREVOR WILLIAMS N 249 OF 2000 JUDGES: BEAUMONT, LEHANE & CONTI JJ DATE OF ORDER: 29 AUGUST 2000 WHERE MADE: SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 249 OF 2000 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA IN THE MATTER OF EDUARDO LAGINHA BETWEEN: EDUARDO LAGINHA APPELLANT AND: TREVOR WILLIAMS RESPONDENT JUDGES: BEAUMONT, LEHANE & CONTI JJ DATE OF ORDER: 29 AUGUST 2000 WHERE MADE: SYDNEY THE COURT ORDERS THAT: The appeal be dismissed with costs, including the costs of the present notice of motion. 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 249 OF 2000 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA IN THE MATTER OF EDUARDO LAGINHA BETWEEN: EDUARDO LAGINHA APPELLANT AND: TREVOR WILLIAMS RESPONDENT JUDGE: BEAUMONT, LEHANE & CONTI JJ DATE: 29 AUGUST 2000 PLACE: SYDNEY REASONS FOR JUDGMENT BEAUMONT J: 1 Before the Court is a notice of motion for dismissal of an appeal for want of prosecution. In order to understand the context in which the motion is brought some reference needs to be made to the history of the matter. 2 The respondent to the appeal, Mr Williams, obtained judgment in the sum of $7,155 in the Local Court of New South Wales against the appellant, Mr Laginha, on 18 May 1999. A bankruptcy notice was served on 30 June 1999. On 22 July 1999 Mr Laginha wrote to the solicitors for the respondent creditor acknowledging service of the bankruptcy notice and acknowledging that he was indebted in the sum mentioned, but stating that he had, in the three weeks that had elapsed after service of the bankruptcy notice, endeavoured to borrow the full amount from family and friends without success, and had applied for loans from various financial institutions, also without success. He referred to other debts he owed which he said he was paying off by instalments and asked the solicitors for Mr Williams to accept instalments of $100 per week. He went on to say in the letter: "Should you elect to proceed with the bankruptcy, I advise that I will not contest it. The result would be that I will lose my position and not be in a position to even make periodic payments." 3 It should be noted at this stage that Mr Laginha is an employed solicitor. He specialises in criminal matters and has taken the position that since he is not a specialist in the bankruptcy jurisdiction, it is appropriate that he seek legal advice. 4 By letter dated 20 August 1999, Mr Williams' solicitors wrote to Mr Laginha informing him that on 21 September 1999 the Court would be asked to make a sequestration order. However, the letter went on to say: "As this is the first day this matter will come before the Court, it will not normally be necessary for you to satisfy the Court that you can pay your debts as they fall due before the petition will be dismissed. However, we suggest you contact your own solicitor for legal advice on your position." 5 According to the evidence of Mr Laginha, he sent a facsimile to Mr Williams' solicitors dated 7 September 1999 informing them that he would be interstate in the period 10 September until about 12 October and could therefore not attend Court on 21 September; and requested they seek an adjournment of the hearing of the sequestration application beyond the second half of October. Mr Williams' solicitors have disputed receipt of this facsimile. 6 On 21 September 1999 a sequestration order was made by a Registrar of the Court in the absence of Mr Laginha. On 7 October 1999, Mr Laginha wrote to Mr Williams' solicitors asking for the date of the next Court appearance. Having been informed that in fact a sequestration order had been made against his estate, Mr Laginha applied to the Court on 15 November 1999 for annulment of the sequestration order. That matter was before the Court on several occasions for directions. Ultimately it came before Justice Lindgren for hearing on 2 March 2000. Mr Laginha appeared in person before his Honour and made an application for pro bono assistance which his Honour refused. Mr Laginha then made an application for adjournment of the proceedings which his Honour also refused. 7 His Honour then turned to the substantive application and, for the reasons his Honour then gave, dismissed that application. Mr Laginha, by notice of appeal filed on 23 March 2000, appealed against his Honour's order. 8 The following is the subsequent history of these appellate proceedings. 9 On 20 April 2000, at a hearing before Registrar Kavallaris on the appointment to settle the appeal index, Registrar Kavallaris gave, amongst others, the following directions: that Mr Laginha take out Justice Lindgren's order; that Mr Laginha prepare an amended index to the appeal books by 11 May 2000; and that appeal books be filed by 30 June 2000. 10 On 7 June 2000 the appeal was called over before me as call-over Judge. There was no appearance by or on behalf of Mr Laginha at the call-over. I stood the matter over before the presiding Judge on the appeal for directions on 1 August 2000. As it happened, I am the presiding Judge in the appeal. Mr Laginha did not serve any amended index nor any appeal book. No appeal books have ever been prepared. The directions hearing was adjourned until 4 August 2000. On that occasion, Mr Williams' solicitor appeared and Mr Laginha attended by telephone conference. On that occasion I directed that the only matter to be dealt with by the Full Court today was Mr Williams' application for dismissal of the appeal for want of prosecution. 11 In support of the notice of motion, Mr Williams relies upon the history of the matter described in the affidavit of Mr D G Francis, solicitor, sworn 8 August 2000. That history is not controversial and is as I have previously described. Mr Laginha again has appeared unrepresented but has read his affidavit sworn on 29 August 2000. In that affidavit, he expresses regret for his inability to prosecute the appeal. He says that this is due to misadventure and illness over the period April to July 2000, which he says has significantly affected his capacity to conduct the matter. He says that in April 2000 a significant ethical issue arose with his then employer and he says that this has given rise to symptoms of excessive stress. In support of this claim he has tendered several medical certificates which speak of his severe anxiety disorder in the period April to 21 July 2000. 12 In his oral submissions to us, Mr Laginha emphasised his difficulties in conducting the matter, referring again to his lack of experience in the bankruptcy jurisdiction and to the difficulties he had experienced earlier this year in his work situation and, as indicated, the resulting symptoms of stress. 13 On behalf of Mr Williams, however, it is pointed out that the difficulties that Mr Laginha experienced earlier this year had, on the evidence, been resolved by no later than the beginning of this month and that Mr Laginha had failed to take any step in the prosecution of the appeal for the four weeks of August. On behalf of Mr Williams, reliance is also placed upon the circumstance that at earlier stages of the proceedings in bankruptcy, which as noted go back to the middle of 1999, there had been a pattern of procrastination on behalf of Mr Laginha. 14 In my opinion, in an application such as this, it is an important consideration that regard be had to the prospects of success of an appeal. That is to say, even if an appeal appears to have merit then the Court should be reluctant to dismiss it for want of prosecution no matter how long the delay, provided some reasonable explanation for the delay is offered. For this purpose I turn to the matters relied upon by the primary Judge in refusing the application for annulment. 15 In dealing with that substantive application his Honour noted that after service of the bankruptcy notice on 30 June 1999, Mr Laginha acknowledged the debt and put the proposal, previously mentioned, to pay it by instalments. His Honour also noted that in the earlier correspondence, Mr Laginha had indicated that he would not contest the bankruptcy proceedings if they were pursued. His Honour concluded in all the circumstances that it had not been established that the sequestration order ought not to have been made. 16 Nothing has been put to us today to indicate any reasonable prospect in Mr Laginha persuading an appellate Court that his Honour's exercise of judicial discretion in that area miscarried in some way. His Honour, however, went on to deal with the question whether, assuming Mr Laginha had been able to establish that the order ought not to have been made, his Honour should have further exercised his discretion to set aside that order. In this regard, his Honour stated that for the details then given, Mr Laginha was "hopelessly insolvent" so that in the exercise of that discretion, his Honour would not have annulled the sequestration order in any event. 17 Again, nothing has been put to us to indicate that Mr Laginha would have any reasonable prospect of disturbing that exercise of discretion. It is, of course, a central consideration in any proceeding in the bankruptcy jurisdiction that when any judicial discretion is to be exercised, regard must be had not only to the interests of the creditor before the Court but to the interests of the general body of creditors. It is clear from the evidence before us that there are creditors, apart from Mr Williams, who have not been paid. 18 In my opinion, the appeal, if pursued, would have no arguable prospect of success. Moreover, I am not persuaded, given the previous history of procrastination in the matter, that if Mr Laginha were given a further opportunity to prosecute the appeal, he would make good use of that opportunity. On the contrary, it is my view that that previous history will regrettably be repeated to the detriment of all concerned. For those reasons I would dismiss the appeal for want of prosecution, with costs. LEHANE J: 19 I agree. I would add only this. Whatever sympathy one may have for Mr Laginha's predicament, as disclosed by his evidence, and however much one might be disposed to permit a short time within which to prepare the appeal, if one thought that there were some reasonable prospects of success, in my view, this is a case in which the order sought by the respondent must be made. I appreciate that Mr Laginha has not had an opportunity to address substantial argument to us on the merits of his appeal and that the Court should be cautious in taking, on a motion of this kind, a view of the merits of the appeal except in a clear case; but, in my view, this is a clear case. I do not think that the appeal has any significant prospect of success. I see no reason to doubt the correctness of his Honour's conclusion that it was not established that the sequestration order ought not to have been made. 20 Although his Honour did not finally determine the way in which he would have exercised his discretion had he concluded otherwise, in my view the considerations to which his Honour referred, and which the presiding Judge has mentioned, would have led to an exercise of the discretion against the making of an order of annulment and, inevitably in my view, with the further lapse of time that becomes even more clearly the proper exercise of the discretion. Accordingly, I agree that the appeal should be dismissed. CONTI J: 21 I agree. Mr Laginha, can I just add this to you, in the interests of your own self esteem and for the benefit of your future professional life and prospects; you will do yourself much more service by applying your energies to repaying as much as possible the debts that are incurred before bankruptcy. BEAUMONT J: 22 The order of the Court therefore is appeal dismissed with costs, including the costs of the present notice of motion. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court. Associate: Dated: October 2000 Solicitor for the Appellant: The appellant appeared in person Solicitor for the Respondent: D Francis, Watkins Tapsell Date of Hearing: 29 August 2000 Date of Judgment: 29 August 2000