FEDERAL COURT OF AUSTRALIA Baulkham Hills Shire Council v Grant [2001] FCA 438 BANKRUPTCY – failure to comply with bankruptcy notice – application to set aside sequestration order – whether sequestration order ought not be made – whether there was "other sufficient cause" – discretion under s 52(2) of Bankruptcy Act. Bankruptcy Act 1966 (Cth) s 52(2) BAULKHAM HILLS SHIRE COUNCIL v GRANT NO. N 7042 of 2001 JUDGE: BEAUMONT J DATE: 10 APRIL 2001 PLACE: SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 7042 OF 2001 BETWEEN: BAULKHAM HILLS SHIRE COUNCIL APPLICANT AND: NEREZ GRANT (also known as NEREZ GWYNNETH GRANT) RESPONDENT JUDGE: BEAUMONT J DATE OF ORDER: 10 APRIL 2001 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application be 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 7042 OF 2001 BETWEEN: BAULKHAM HILLS SHIRE COUNCIL APPLICANT AND: NEREZ GRANT (also known as NEREZ GWYNNETH GRANT) RESPONDENT JUDGE: BEAUMONT J DATE: 10 APRIL 2001 PLACE: SYDNEY REASONS FOR JUDGMENT BEAUMONT J: 1 Before the Court is a notice of motion to review the Registrar's decision of 5 March 2001 in which a sequestration order was made against the estate of the present applicant. The matter has a complicated background but, for present purposes, it is sufficient to refer to the reasons for judgment of Windeyer J given in the Equity Division of the Supreme Court of New South Wales on 11 February 2000. In that judgment his Honour ordered that the present applicant's summons in the proceedings be dismissed but that on the cross-claim of the petitioning creditor, the Baulkham Hills Shire Council ("the Council"), judgment and order for possession of the property the subject of these proceedings be entered in favour of the Council. His Honour further ordered that the Council had leave to issue a writ for possession on or after 11 April 2000 and, significantly, that the present applicant "pay the Council's costs of these proceedings". 2 On 8 March 2000, the present applicant filed a notice of appeal in the Supreme Court of New South Wales and sought a stay of proceedings on the orders made by Windeyer J. The matter was subsequently dealt with in the Court of Appeal, and on 10 April 2000, a stay of execution of the order for possession was granted on terms that, within twenty-one days, the present applicant institute proceedings claiming against the Council possession and title to the property and thereafter prosecute the proceedings ("the possession proceedings") expeditiously. 3 On 1 May 2000, the applicant filed a statement of claim in those proceedings. Subsequently, the Council's bill of costs (ordered by Windeyer J) was taxed, and no objection was received from the applicant in that connection. There were, subsequently, interlocutory applications brought in the Court of Appeal by the Council seeking security for costs of the appeal. On several occasions during August 2000, the matter was before the Court of Appeal, but there was no appearance by the present applicant. 4 As a consequence of the making of the sequestration order in this matter, the course of events in the Court of Appeal has changed dramatically. The trustee in Bankruptcy has filed a notice of discontinuance of the appeal. (Shortly before this, on 13 February 2001, Master McLaughlin, upon the Council's notice of motion to dismiss the possession proceedings, made orders that those proceedings be dismissed.) 5 In support of the present application, the applicant has sworn an affidavit today stating that she could not attend the proceedings before the Registrar on 5 March 2001 (when the sequestration order was made) as she was seriously ill with gastroenteritis. In this connection, she has annexed to her affidavit a medical certificate of Dr Huber stating that she is a long-standing patient of the practice, that she had had several bouts of debilitating gastric problems which are in the process of being investigated, and that she had been seen in the practice and treated on 8 March and 22 March this year. 6 I am prepared to accept, for present purposes, that the applicant was, indeed, unable to attend before the Registrar on 5 March 2001. It follows that I have approached the matter upon the footing that I can put aside, for the moment, the fact that the Registrar did make a sequestration order on 5 March 2001. I come, then, to the merits of the present application. 7 It is clear from the evidence that the petition, founded, as it is, upon failure to comply with a bankruptcy notice (which itself is based upon the order made by Windeyer J for costs), should succeed, unless within the meaning of s 52(2)(b) of the Bankruptcy Act 1966 (Cth) ("the Act") there is "other sufficient cause". 8 The "other sufficient cause" for present purposes is said by the applicant to consist of her prospects of succeeding in the appeal which, as I have mentioned, has been purportedly discontinued by the trustee in Bankruptcy. For this purpose, I have been invited by the applicant to look not only at Windeyer J's judgment but also at the appeal books which she had prepared with a view to prosecution of the appeal. The trial in the Supreme Court took five days and it was clearly a complex matter. There was not only the history of the site to be considered but there was a considerable volume of expert evidence before His Honour which had to be considered and made the subject of findings. The blue appeal book consists of almost 300 pages; the black appeal book is about 150 pages; and the red appeal book is 30 pages. In addition, I have received into evidence a survey and some photographs which are not in those appeal books. It does not appear to be suggested by the applicant (and I take into account the fact that she appeared in person and has no legal qualifications) that his Honour committed any fundamental error of law. Rather, as I followed her submissions, the suggestion is that his Honour did not properly appreciate the facts, the expert evidence and some of the details of the survey. 9 On behalf of the Council this is strongly disputed. The difficulty I have is that there is no feasible way in which I can resolve that issue between the parties. It is certainly true that the discretion under s 52(2) of the Act is a wide one but I cannot think that the parliamentary draughtsman ever envisaged that a Court of Bankruptcy would embark upon an informal hearing, collaterally to the appeal in the present circumstances. For those reasons, I decline to embark upon that exercise. It seems to me, as a matter of policy, experience and plain commonsense, that it would be a most inappropriate exercise. I could not, on any view, form an understanding of the detail of the matter given the volume of material, except by devoting some days to that undertaking. I have already mentioned that the trial before Windeyer J took five days. Without an understanding of the detail, I do not see how this Court, as a court of collateral jurisdiction, could conceivably form any view, even the most preliminary view, of the prospects of success of the appeal. In those circumstances I decline to embark upon that exercise. 10 It must follow, therefore, that the applicant has not satisfied me that I should exercise the statutory discretion invested in the Court under s 52(2) of the Act. For those reasons I refuse the application made in the notice of motion. ORDERS 11 I refuse the application, 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 Beaumont. Associate: Dated: 10 April 2001 Solicitor for the Applicant: The applicant appeared in person Counsel for the Respondent: Mr Simpson Solicitor for the Respondent: Abbott Tout Date of Hearing: 10 April 2001 Date of Judgment: 10 April 2001