Jeans v Commonwealth Bank of Australia [2004] FCA 938

FEDERAL COURT OF AUSTRALIA

Jeans v Commonwealth Bank of Australia [2004] FCA 938 JOHN ANTHONY JEANS v COMMONWEALTH BANK OF AUSTRALIA N 7372 OF 2003 STONE J 9 JULY 2004 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 7372 OF 2003

BETWEEN: JOHN ANTHONY JEANS

APPLICANT

AND: COMMONWEALTH BANK OF AUSTRALIA

RESPONDENT

JUDGE: STONE J

DATE OF ORDER: 9 JULY 2004

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The application for leave to appeal be dismissed. 2. The applicant pay the respondent's costs of today's proceedings. 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 7372 OF 2003

BETWEEN: JOHN ANTHONY JEANS

APPLICANT

AND: COMMONWEALTH BANK OF AUSTRALIA

RESPONDENT

JUDGE: STONE J

DATE: 9 JULY 2004

PLACE: SYDNEY

REASONS FOR JUDGMENT 1 By notice of motion filed in Court the applicant seeks a stay of orders made by Conti J on 8 July 2004 and leave to appeal from those orders. Justice Conti ordered that the Commonwealth Bank of Australia, the respondent to the notice of motion, be released from an undertaking given to the Court on 21 January 2004 subject to a fresh undertaking being given to the Court.

Background 2 The background to the notice of motion can be summarised briefly. In 1998 the applicant, Mr Jeans, entered into certain guarantees in favour of the Commonwealth Bank. In May 2003 Mr Jeans' application to set aside the guarantee was dismissed and judgment on the guarantee was entered for the Bank in the sum of $4,749,813.30 (see Deangrove Pty Ltd v Commonwealth Bank of Australia [2003] FCA 470). On 16 December 2003 the Bank served a bankruptcy notice on Mr Jeans who then applied for an extension of time for compliance with the notice. With the consent of the parties, that application was dismissed on 21 January 2004 by Deputy District Registrar Hedge who noted the Bank's undertaking that it would not present a creditor's petition for a sequestration order until Mr Jeans' application to the High Court for special leave to appeal (and any subsequent appeal) had been finalised. 3 Mr Jeans did not comply with the bankruptcy notice and, as a result, he committed an act of bankruptcy on 21 January 2004. In April 2004 however, the High Court registry advised the Bank that the special leave application was listed for hearing in December 2004.It was accepted by both parties that, pursuant to s 44(1)(c) of the Bankruptcy Act 1966 (Cth), this act of bankruptcy can only be relied on to support a creditor's petition that is presented by 21 July 2004. For this reason the Bank sought to be released from its undertaking subject to it giving a new undertaking to the effect that it would consent to an adjournment of the proceedings under petition until the appeal process in the High Court was exhausted.