FEDERAL COURT OF AUSTRALIA Bou Francis v Anderson as Trustee of the Bankrupt Estate of Sarkis Bou Francis [2008] FCA 2006 FADIA BOU FRANCIS v GARY JOHN ANDERSON AS TRUSTEE OF THE BANKRUPT ESTATE OF SARKIS BOU FRANCIS WAD 245 of 2008 SIOPIS J 18 DECEMBER 2008 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 245 of 2008 BETWEEN: FADIA BOU FRANCIS Applicant AND: GARY JOHN ANDERSON AS TRUSTEE OF THE BANKRUPT ESTATE OF SARKIS BOU FRANCIS Respondent JUDGE: SIOPIS J DATE OF ORDER: 18 DECEMBER 2008 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The notice of motion is dismissed. 2. The applicant pay the respondent's costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 245 of 2008 BETWEEN: FADIA BOU FRANCIS Applicant AND: GARY JOHN ANDERSON AS TRUSTEE OF THE BANKRUPT ESTATE OF SARKIS BOU FRANCIS Respondent JUDGE: SIOPIS J DATE: 18 DECEMBER 2008 PLACE: PERTH REASONS FOR JUDGMENT 1 This is an application for leave to extend time within which to file and serve a notice of appeal from the judgment of the Federal Magistrates Court given on 22 September 2008. The application for the extension of time was filed on 5 November 2008. 2 The applicant's husband, Mr Sarkis Antonio Bou Francis, is a bankrupt. The respondent is the trustee of the bankrupt estate of Mr Bou Francis. The trustee applied in the Federal Magistrates Court for an order under s 120(1) of the Bankruptcy Act 1966 (Cth) (the Act) setting aside the transfer by Mr Bou Francis of his half‑interest in property at 8 Faye Avenue, Blakehurst, New South Wales, to his wife, Mrs Fadia Bou Francis, the applicant in this motion. The Federal Magistrate made an order that that transfer was void and made ancillary orders requiring Mrs Bou Francis to execute and deliver up to the trustee one‑half of the undivided interest in the property. 3 When the matter came before the Federal Magistrate for trial there was no appearance on behalf of Mrs Bou Francis. There was evidence before the Federal Magistrate that Mrs Bou Francis had been served with the court orders setting out the time and place of the hearing. The Federal Magistrate proceeded to hear the application in the absence of Mrs Bou Francis. 4 The Federal Magistrate dealt with the application by reference to the evidence which was led by the trustee. That evidence showed that Mr Bou Francis was made bankrupt on 21 April 2008. There was also evidence that the transfer of the husband's half‑interest in the property was made on or about 6 November 2007 and that the consideration expressed on the transfer form was one dollar. The evidence was that houses in the vicinity of the Bou Francis' house sold at the relevant time for well in excess of $1 million and that some sold for several million dollars. The Federal Magistrate found that the transfer was one which fell within the ambit of s 120(1) of the Act. 5 In support of this application today there are two affidavits which have been filed. The first is an affidavit of Ms Ruth Allen dated 29 October 2008 but filed on 5 November 2008, who is a solicitor employed by the firm of solicitors acting for Mrs Bou Francis. Ms Allen deposed that she had prepared a notice of appeal. The grounds of appeal which are set out in the notice of appeal are that: 1. The Appellant was denied natural justice. 2. The facts relied on by the Respondent in obtaining the orders are incorrect. 3. The Appellant obtained the property for valuable consideration. See Family Court Orders annexed. 4. The Appellant denies that s 120(4) of the Bankruptcy Act 1966 (Cth) is applicable. 6 I presume that the reference in para 4 of the notice of appeal was intended to be to s 120(1) of the Bankruptcy Act. 7 There is also an affidavit from the applicant, Mrs Bou Francis, which deposes to a number of matters going to the merits of the application before the Federal Magistrate. Mrs Bou Francis said that her husband's half‑interest in the property was transferred to her in accordance with, what she refers to as, Family Court orders made on 5 November 2007 and annexed to the affidavit is the copy of those orders. Mrs Bou Francis went on to say that the transfer was made in order to protect her future and those of her children and that in exchange for transferring his half‑interest in the house her husband received "all of the form working business". The transfer, she said, was not done to defeat any of the creditors. 8 Mrs Bou Francis also said that after the commencement of the proceeding, she had suffered a breakdown brought on by her existing depressive condition; and that due to the breakdown and the depression, she did not open any mail after receiving the originating application. 9 The Court has power to extend time to file and serve a notice of appeal if the applicant can demonstrate some special reason. In determining whether to grant an extension of time the Court usually takes into account two main considerations: first, the period of the delay and the explanation for the delay and, secondly, the prospect of success on appeal. 10 First, I deal with the delay and the explanation for the delay in filing the notice of appeal within time. 11 The Federal Magistrate's decision was given on 22 September 2008 and the applicant had 21 days within which to file and serve the notice of appeal. This application for the extension of time was made on 5 November 2008. There is no evidence before me explaining the delay. I notice that the notice of appeal annexed to Ms Allen's affidavit has a date of 15 October 2008 but I cannot place any weight on that because I do not know the circumstances giving rise to the insertion of the date or whether there was an unsuccessful attempt to file the notice of appeal on that date. In any event, the delay is not excessive. 12 Secondly, I turn to the question of the merits of the appeal. 13 The first potential ground of appeal is that the applicant was denied natural justice before the Federal Magistrate. There are no particulars given in support of this potential ground of appeal. However, I presume that this is an argument founded on the fact that the Federal Magistrate proceeded to hear and determine the application in the absence of Mrs Bou Francis. 14 There was evidence before me from Mrs Bou Francis that she became depressed and did not open the mail after the initial service of the application on her. I note, incidentally, that there is no medical evidence of Mrs Bou Francis' condition. Significantly, however, there was no evidence that the Federal Magistrate was ever advised of Mrs Bou Francis' medical condition. In my view, the Federal Magistrate was entitled to proceed as he did when there was evidence before him that the applicant, Mrs Bou Francis, had been served with the application and advised of the date of the hearing, and there was no evidence explaining her absence. There is no prospect of success on this proposed ground of appeal. 15 However, the fact that the Federal Magistrate did proceed in the absence of Mrs Bou Francis means that r 16.05 of the Federal Magistrates Court Rules 2001 (Cth) may apply. This rule permits a party to apply to vary or set aside the judgment made in their absence. This may be the appropriate course for Mrs Bou Francis to follow. 16 The second proposed ground of appeal is that the facts relied upon by the respondent in obtaining the orders are incorrect. This proposed ground does not expressly assert error on the part of the Federal Magistrate and is, therefore, not a proper ground of appeal. However, to the extent that this proposed ground can be construed as asserting such error, it is an attack on the factual findings of the Federal Magistrate. The factual findings which the Federal Magistrate made were the only findings that were available to be made. There was no contradictory evidence from Mrs Bou Francis. Accordingly, there is no prospect of success in respect of this proposed ground of appeal. 17 The third proposed ground of appeal is that the applicant obtained the property for valuable consideration. This, again, is an attempt to agitate the merits in respect of matters not before the Federal Magistrate, without asserting error on the part of the Federal Magistrate. This does not constitute a proper ground of appeal. There is no prospect of success in respect of this proposed ground of appeal. 18 The fourth proposed ground of appeal, namely, the denial that s 120(1) of the Act applies, also does not expressly assert error by the Federal Magistrate. It can be construed as an assertion that the Federal Magistrate misapplied the law. In my view, however, the Federal Magistrate properly applied the law in coming to the decision he made. There is no prospect of success in respect of this proposed ground of appeal. 19 I find, therefore, that there is not a sufficient prospect of success on the appeal to warrant the grant of leave to extend time to file and serve the notice of appeal. I, accordingly, dismiss the notice of motion. 20 As previously mentioned, it may be that Mrs Bou Francis should give consideration as to whether to make an application under r 16.05 of the Federal Magistrates Court Rules in order to raise the matters going to the merits to which she has referred in her submissions and in her affidavit. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. Associate: Dated: 21 January 2009 Counsel for the Applicant: The Applicant did not appear. Solicitor for the Applicant: Sid Hawach & Co Counsel for the Respondent: Mr C Ko Solicitor for the Respondent: Brickhills Date of Hearing: 18 December 2008 Date of Judgment: 18 December 2008