FEDERAL COURT OF AUSTRALIA Ray v Perrett [2007] FCA 1624 GREG RAY v PAUL PERRETT NSD 1975 OF 2007 GRAHAM J 11 OCTOBER 2007 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1975 OF 2007 BETWEEN: GREG RAY Applicant AND: PAUL PERRETT Respondent JUDGE: GRAHAM J DATE OF ORDER: 11 OCTOBER 2007 WHERE MADE: SYDNEY THE COURT: 1. Grants leave to the respondent to file and serve such Amended Notice of Motion as he may be advised on or before 19 October 2007. 2. Directs the respondent to file and serve any affidavits on which he wishes to rely on the hearing of the Notice of Motion or an Amended Notice of Motion on or before 19 October 2007. 3. Directs the applicant to file and serve any affidavits on which he wishes to rely on the hearing of the Notice of Motion or an Amended Notice of Motion on or before 23 October 2007. 4. Orders that the respondent's Notice of Motion filed 8 October 2007 and any Amended Notice of Motion be fixed for hearing before Graham J at 10.15 am on 26 October 2007. 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 NSD 1975 OF 2007 BETWEEN: GREG RAY Applicant AND: PAUL PERRETT Respondent JUDGE: GRAHAM J DATE: 11 OCTOBER 2007 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 12 July 2007 the applicant, Greg Ray, filed a Creditor's Petition in proceedings SYG 2163 of 2007 in the Federal Magistrates Court of Australia. By that petition, Greg Ray sought the making of a Sequestration Order against the estate of Paul Perrett, the respondent named in the Creditor's Petition. 2 On 2 October 2007 Raphael FM ordered that the proceedings be transferred to this Court for hearing. 3 On 8 October 2007 a Notice of Motion was filed in this Court, in the proceedings on the Creditor's Petition, which have become identified as NSD 1975 of 2007. The Notice of Motion is before the Court today for directions only. 4 The Notice of Motion appears to have been signed by Paul John Perrett, the respondent named in the Creditor's Petition. The address provided for Mr Perrett in the Notice of Motion is 159 Narrowneck Road, Katoomba 2780. His address for service is identified as 'Agent: 8/369 Glebe Point Road, Glebe 2037'. 5 When the matter was called earlier today, a Mr Peter Alexander Gargan of 8/369 Glebe Point Road, Glebe announced an appearance for the respondent contending that he had a right to appear under s 308(d) of the Bankruptcy Act 1966 (Cth) ('the Act'), which relevantly provides: '308. Subject to this Act, for the purposes of this Act: … (d) any person may act by his … agent duly authorised in that behalf.' 6 My attention has been drawn to Order 9 rule 1 of the Federal Court Rules, which relevantly provides: '(1) A respondent may enter an appearance and may defend a proceeding by a solicitor or in person.' 7 It is unnecessary for present purposes to determine whether Mr Gargan has authority, by virtue of s 308(d) of the Act, to represent the respondent, as an order was made earlier today granting leave to the respondent to appear today by Mr Gargan as his agent. 8 Mr Gargan informs me that on the hearing of the petition, he anticipates that the respondent will be represented by a Mr Robert Christie, Solicitor, and that a Dr Walsh, from Melbourne, will appear as his counsel. Needless to say, no notice of appearance has as yet been filed by Mr Christie. 9 The act of bankruptcy relied upon by the applicant in the Creditor's Petition is non‑compliance with a Bankruptcy Notice on or before 21 June 2007, which was said to have been served on the respondent on 19 May 2007. The amount demanded in the Bankruptcy Notice was apparently of the order of $7,000 to $8,000. 10 The history of the matter would appear to have been that the respondent instituted proceedings in the Supreme Court of New South Wales for damages in respect of alleged defamation of himself by the applicant. As I understand it, those proceedings were discontinued in circumstances where the respondent became exposed to a liability for costs to the applicant. Costs assessments would appear to have been made resulting in the issue of a certificate of determination of costs in the sum of $6,726.60, and another certificate of determination of costs of the costs assessment in the sum of $1,071.15. 11 The applicant apparently caused those certificates of determination to be brought before a Local Court in New South Wales in proceedings numbered 2471 of 2007 and 2472 of 2007, respectively. Judgments were apparently entered on the basis of the costs certificates in the Local Court. The Bankruptcy Notice was based on a failure by the respondent to pay the amount of the judgments entered against him in the Local Court. 12 On 7 June 2007 the respondent apparently filed an Application in the Federal Magistrates Court of Australia, Victoria Registry, pursuant to s 40(1)(g) of the Act, seeking relief under s 41(7). Section 41(7) relevantly provided: '41(7) Where, before the expiration of the time fixed for compliance with the requirements of a bankruptcy notice, the debtor has applied to the Court for an order setting aside the bankruptcy notice on the ground that the debtor has such a counter‑claim, set‑off or cross demand as is referred to in paragraph 40(1)(g), and the Court has not, before the expiration of that time, determined whether it is satisfied that the debtor has such a counter-claim, set‑off or cross demand, that time shall be deemed to have been extended, immediately before its expiration, until and including the day on which the Court determines whether it is so satisfied.' 13 It would appear that, on 21 June 2007, the application to set aside the Bankruptcy Notice filed 7 June 2007 was dismissed by Registrar Mussett in the Victoria Registry of the Federal Magistrates Court of Australia. Accordingly, the applicant contends that the time for compliance with the Bankruptcy Notice expired at the end of the day on 21 June 2007. As the Bankruptcy Notice was not duly complied with, the applicant proceeded to file the Creditor's Petition which is now before this Court. 14 On the same day as the Creditor's Petition was filed, namely 12 July 2007, an application was apparently filed in the New South Wales registry of the Federal Magistrates Court of Australia in proceedings SYG 2160 of 2007 seeking an order that the time for setting aside the Bankruptcy Notice be extended under rule 3.05 of the Federal Magistrates Court Rules 2001 (Cth) notwithstanding that the time for compliance with the Bankruptcy Notice had expired on 21 June 2007. 15 It is unnecessary for present purposes to address whether or not an application for extension of time nunc pro tunc could be ordered in the circumstances. It would appear that on 17 August 2007 Registrar Lackenby, sitting in the Federal Magistrates Court of Australia, dismissed the application filed 12 July 2007 seeking an order extending the time within which an application to set aside the Bankruptcy Notice may be brought. 16 The order made by Registrar Lackenby on 17 August 2007 refers to rule 13.03A of the Federal Magistrates Court Rules 2001 (Cth). As entered it does not record the order in fact made and this may warrant further consideration under the slip rule. In any event it would appear to be common ground that the application for an extension of time was dismissed as the respondent proceeded to file an 'Interim Application' in the Federal Magistrates Court of Australia, New South Wales Registry, on 5 September 2007 in which a review of the orders made by Registrar Lackenby on 17 August 2007 was sought. 17 Once again, that Interim Application in matter number SYG 2160 of 2007 gave as the respondent's address for service 8/369 Glebe Point Road, Glebe, 2037. The application for review of Registrar Lackenby's decision remains in the Federal Magistrates Court of Australia. It has not been transferred to this Court for determination in accordance with s 39 of the Federal Magistrates Act 1999 (Cth). 18 This leaves two matters for consideration by this Court. Firstly, the Creditor's Petition filed 12 July 2007, and secondly, the respondent's Notice of Motion filed 8 October 2007. 19 The order which is sought in the Notice of Motion is an order that 'the questions of fact stated below, be tried and determined by a jury'. Section 30(3) of the Act provides: '30(3) If in a proceeding before the Federal Court under this Act a question of fact arises that a party desires to have tried before a jury, the Federal Court may, if it thinks fit, direct the trial of that question to be had before a jury, and the trial may be had accordingly in the same manner as if it were the trial of an issue of fact in an action.' 20 The 'questions of fact' so called referred to in the respondent's motion filed 8 October 2007 are 18 in number. Not one of them answers the description of a question of fact within the meaning of s 30(3) of the Act. However, the motion is listed before the Court today for directions only. Whilst it may be that the Court can be persuaded, contrary to the view which I have just expressed, that the 18 questions are indeed questions of fact or that some of them are questions of fact, it is necessary to fix a date for the hearing of the Notice of Motion. 21 Given the observation which I have just made in relation to questions of fact within the meaning of s 30(3) of the Act, I will grant leave to the respondent to file and serve an Amended Notice of Motion so that he may give consideration to whether he wishes to redefine questions of fact which may warrant trial by a jury on the hearing of the Creditor's Petition. It is important to note that the Court has a discretion to order a jury trial in respect of questions of fact. If all that remains is the formulation of a series of questions of law the Court could not be expected to order a jury trial in respect of those questions. 22 My understanding is that the case which the respondent wishes to advance is to the effect that the judgments of the Local Court, founded upon the certificates of determination of costs in respect of the New South Wales Supreme Court proceedings, were nullities or void and of no effect as they were not entered following a jury trial in the Local Court. No doubt it will be necessary in due course to have regard to the terms of the Legal Profession Act 2004 (NSW) in relation to the registration of certificates of cost determinations as judgments in the Local Court. 23 The applicant, as the petitioning creditor, desires to have an early determination of his Creditor's Petition. It seems to me that this is a reasonable request. It is said by Mr Gargan that the hearing of the Creditors Petition will involve constitutional issues requiring the service of s 78B notices under the Judiciary Act 1903 (Cth). At an appropriate time, this matter will have to be given consideration. 24 It seems to me that in the first instance the Court should deal with the Notice of Motion filed 8 October 2007 and then proceed to deal with the Creditor's Petition. 25 Should the respondent wish to withdraw his Notice of Motion filed 8 October 2007, he could no doubt do so by arranging for a consent order to be signed by himself and by the solicitor for the applicant which could be presented to my Associate to allow me to make appropriate orders in chambers. Subject to any decision by the respondent to discontinue his Notice of Motion I will fix it for hearing on 26 October next at 10.15 am. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. Associate: Dated: 26 October 2007 Counsel for the Applicant: A P Spencer Solicitor for the Applicant: Freehills Agent for the Respondent: P A Gargan Date of Hearing: 11 October 2007 Date of Judgment: 11 October 2007