FEDERAL COURT OF AUSTRALIA Liprini v Liprini [2010] FCA 1117 Citation: Liprini v Liprini [2010] FCA 1117 Appeal from: Liprini v Liprini [2010] FMCA 657 Parties: ALLAN STEPHEN LIPRINI v KEVIN LIPRINI File number(s): NSD 1237 of 2010 NSD 1238 of 2010 Judge: JAGOT J Date of judgment: 8 October 2010 Catchwords: BANKRUPTCY AND INSOLVENCY – motion for stay of a sequestration order until the appeal against the sequestration order is heard – balance of convenience Cases cited: Boumelhem v Commonwealth Bank of Australia [2008] FCA 1568 Freeman v National Australia Bank Ltd [2002] FCA 427 Harvey v Phillips (1956) 95 CLR 235 Liprini v Liprini [2010] NSWCA 126 Liprini v Liprini [2010] FMCA 657 Date of hearing: 8 October 2010 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 23 Counsel for the Appellant: The appellant appeared in person Counsel for the Respondent: Mr M Roset Solicitor for the Respondent: Redmond Hale Simpson Solicitors IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1237 of 2010 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: ALLAN STEPHEN LIPRINI Appellant AND: KEVIN LIPRINI Respondent JUDGE: JAGOT J DATE OF ORDER: 8 OCTOBER 2010 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The notices of motion in proceedings NSD 1237 of 2010 and NSD 1238 of 2010 filed by Dr Allan Stephen Liprini on 30 September 2010 be dismissed. 2. The respondent's costs, as agreed or taxed, be paid out of the estate of Dr Allan Stephen Liprini with the same priority as on the making of the sequestration order. 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 Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1238 of 2010 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: ALLAN STEPHEN LIPRINI Appellant AND: KEVIN LIPRINI Respondent JUDGE: JAGOT J DATE OF ORDER: 8 OCTOBER 2010 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The notices of motion in proceedings NSD 1237 of 2010 and NSD 1238 of 2010 filed by Dr Allan Stephen Liprini on 30 September 2010 be dismissed. 2. The respondent's costs, as agreed or taxed, be paid out of the estate of Dr Allan Stephen Liprini with the same priority as on the making of the sequestration order. 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 Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1237 of 2010 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: ALLAN STEPHEN LIPRINI Appellant AND: KEVIN LIPRINI Respondent IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1238 of 2010 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: ALLAN STEPHEN LIPRINI Appellant AND: KEVIN LIPRINI Respondent JUDGE: JAGOT J DATE: 8 OCTOBER 2010 PLACE: SYDNEY REASONS FOR JUDGMENT 1 I have before me two notices of motion. The notices of motion seek a stay of all proceedings under the sequestration order made by Smith FM on 3 September 2010. On 3 September 2010, Smith FM dismissed Dr Allen Stephen Liprini's application to set aside a bankruptcy notice served on him and made a sequestration order against the estate of Dr Liprini. In his reasons for judgement (see Liprini v Liprini [2010] FMCA 687) Smith FM set out the lengthy history of the litigation between the parties to the present appeals, being Dr Liprini and his brother, Kevin Liprini. 2 Smith FM explained that the indebtedness of Dr Liprini to Kevin Liprini relates back to family provision proceedings in the Supreme Court of New South Wales concerning the estates of their deceased parents. The petition filed on 15 January 2010 relied upon a debt of some $851,335.96 claimed to be due to Kevin Liprini by Dr Liprini from his personal estate by reason of orders made by Nicholas J in the Supreme Court of New South Wales, Equity Division, on 10 July 2009, plus accrued interest. 3 Smith FM explained the circumstances surrounding certain consent orders made on 6 December 2007 in respect of those Supreme Court proceedings in paragraphs 13 through to 26 of his reasons for judgment. Smith FM's reasons also explain the nature of Dr Liprini's challenge to the consent orders. Dr Liprini argued, amongst other things, that these constituted reasons for setting aside the bankruptcy notice and dismissing the petition (see [27]-[56] of the Federal Magistrate's reasons). In essence, Smith FM refused to go behind Nicholas J's orders (at [43]). In so refusing, Smith FM referred also to Dr Liprini's efforts to appeal from those orders which had led to adjournments of the proceedings in the Federal Magistrates Court. Dr Liprini's appeal against Nicholas J's orders was dismissed by Allsop P, the President of the New South Wales Court of Appeal, on an application for summary dismissal brought by Kevin Liprini. In an ex tempore judgment delivered on 24 May 2010, Allsop P noted Dr Liprini's claims that Nicholas J had wrongly declined to consider his (that is, Dr Liprini's) challenge to the consent orders and what Dr Liprini claimed had happened at the mediation on 6 December 2007 from which those disputed consent orders emerged (see Liprini v Liprini [2010] NSWCA 126). Allsop P's reasons for decision are then in part quoted by Smith FM at [44]: [9] ... Apart from continuing with extremely serious allegations against his former legal advisers the submissions [of Dr Liprini] do not identify any coherent basis for attack of either the discretion of His Honour [that is, Nicholas J] to refuse the adjournment or the orders that were made. ... [10] What I understand to be the position from everything he has said today and from what I take from the material, is that Dr Liprini's real complaint is that there was a fraud of some character committed upon him at the mediation. To the extent that he seeks to attack the orders of Nicholas J those matters are only relevant to the extent that His Honour might be seen to have erred in failing to give an adjournment. No grounds of appeal and no aspects of the written submissions identify any rational basis to consider that the discretion exercised by Nicholas J to refuse the adjournment in any way legally miscarried. In these circumstances, I see no basis for considering that the appeal has any real prospects of success. 4 Smith FM then said at [45]: For those reasons, his Honour dismissed the appeal. His Honour noted, however, that his dismissal was interlocutory, and suggested that Dr Liprini could make further applications if he were "able at any point to bring forward a coherent basis to impugn the orders made by Nicholas J". (Emphasis in original). 5 As set out in [46] of Smith FM's reasons Beazley, Giles and Handley JJA refused Dr Liprini's application for review of Allsop P's decision. According to the Federal Magistrate: Only some pages of the transcript of proceedings on that occasion are before me, but they show clearly that the three Justices were unable to detect any arguable error in the proceedings of either Nicholas J or Allsop P. They refused the application for review. 6 Smith FM then proceeded to record advice from Dr Liprini that he would like to apply again for reinstatement of his appeals and expected to do this if successful in his proceeding in the Equity Division of the Supreme Court to set aside the consent orders made on 6 December 2007. At [47] Smith FM concluded as follows: However, in my opinion, his prospects of successfully reinstating his appeal are remote. For reasons I have given above, he at present does not have a factual case which, in my opinion, holds prospects of setting aside the 2007 consent orders, even if he does not encounter jurisdictional difficulties in his present notice of motion. I consider that Dr Liprini has now been given more than ample time to demonstrate to the Supreme Court an evidentiary foundation for challenging both the 2007 consent orders and the orders of Nicholas J, and that he has failed to do this. 7 In consequence and taking into account the other matters to which he referred (including that Dr Liprini had not presented to the court any evidence of his financial position, in particular as to his ability to pay the claims which he has been resisting), the Federal Magistrate determined that the application to set aside the bankruptcy notice should be dismissed and the sequestration order made (at [55]). 8 Smith FM then stated that at the hearing he "raised with Dr Liprini and the solicitor for Kevin Liprini the staying of a sequestration order for 21 days pursuant to s 52(3) [Bankruptcy Act 1966 (Cth)], to allow Dr Liprini to consider his position generally" (at [56]). This was not opposed and, accordingly, his Honour made that order, noting while he recommended "that Dr Liprini should consider whether he can avoid additional expenses and inconvenience of an insolvency administration by reaching agreement with his creditors", nevertheless, if Dr Liprini "wishes to pursue his litigation with his brother and former lawyers by appealing my order, he will need to consider applying for a further stay from the Federal Court". On 30 September 2010, Dr Liprini indeed applied for the stays by way of the notices of motion before me. 9 Mr Roset of counsel, appearing on behalf of the respondent to the appeal, helpfully identified a number of cases setting out the relevant principles to be applied in respect of the stay applications. 10 In Boumelhem v Commonwealth Bank of Australia [2008] FCA 1568 Graham J said at [23]: It was common ground between the parties that, for the applicants to secure a stay of proceedings under Order 52 rule 17 of the Federal Court Rules, it would be necessary for the applicants to establish an arguable case in respect of the grounds of appeal identified in their Notices of Appeal and, also, that the balance of convenience favoured the granting of the relevant stays. 11 An observation to the same effect was made by Spender J in Freeman v National Australia Bank Ltd [2002] FCA 427 at [4]. 12 The respondent says that the notice of appeal filed on 22 September 2010 does not identify any arguable ground for an appeal and that the balance of convenience is against the granting of a stay. The respondent also points to the fact that both before the Federal Magistrates Court and this Court Dr Liprini has not presented evidence of his financial position, specifically his ability to pay the claims which he has been resisting. The respondent says in these circumstances there are strong public policy grounds not to permit a bankrupt to continue to incur further expenses during the stay. 13 For his part, Dr Liprini has relied upon two sworn affidavits and an unsworn affidavit which I have accepted as a submission on his part. Those affidavits disclose that the position of Dr Liprini in these appeals is much the same as his position in respect of the proceedings before the Federal Magistrates Court. In essence, it is Dr Liprini's case that his situation has arisen because of his refusal to pay to his brother the amount under the consent orders which Dr Liprini characterises as having been fraudulently made. It is Dr Liprini's position that there was impropriety in relation to the creation of a note said to record the authorisation of the making of the consent orders. 14 Dr Liprini's notice of appeal and his submissions before me today emphasise his view that there are strongly arguable grounds for the appeal in that Smith FM, consistent with everyone else in the proceedings, has consistently and intentionally ignored his material and evidence which, Dr Liprini says, establish the invalidity of the events which occurred on 6 December 2007. 15 On review of the Federal Magistrate's decision, the notice of appeal and Dr Liprini's evidence, it seems to me to be clear that there has not been put forward by Dr Liprini any arguable ground of appeal. 16 The first ground of appeal in the notice of appeal is that Smith FM never acknowledged Dr Liprini's version of the events that happened on 6 December 2007 which Dr Liprini says "declares the 'proceedings' that day were invalid". Otherwise, Dr Liprini submits that he only had one day between receiving the reasons of Smith FM and the preparation of the notice of appeal. 17 Contrary to paragraph 1 of the notice of appeal, the Federal Magistrate appears to have given detailed consideration to Dr Liprini's version of events, however, has ultimately found against Dr Liprini based on the fact that Allsop P dismissed the appeal of Dr Liprini and Beazley, Giles and Handley JJA dismissed the further application for review of Allsop P's decision. 18 Paragraph 2 of the notice of appeal makes an allegation of bias against Smith FM. It appears, even from Dr Liprini's own submissions, that the references in that paragraph are to another set of proceedings (despite the fact that Dr Liprini appears to believe that they are linked with the present proceedings). The inescapable position is that the present appeals relate only to the decision of Smith FM in Liprini v Liprini [2010] FMCA 687. 19 Paragraph 3 of the notice of appeal appears to relate to paragraph 2 and, in any event, the reference in that paragraph does not give rise to any arguable ground capable of being ascertained. 20 Paragraph 4, which refers to the decision in Harvey v Phillips (1956) 95 CLR 235 suggests some form of indifference of Smith FM to that decision or the overlooking of what Dr Liprini identifies as critical aspects of that decision. However, as the Federal Magistrates reasons for judgment disclose, the Federal Magistrate considered the decision in Harvey v Phillips and, indeed, said that he was applying the principles established by that decision (see in particular [24] and [25]). 21 In reviewing the notice of appeal, I have taken into account and given weight to the fact that Dr Liprini does not have legal representation and, as he put it, only had one day in which to prepare his notices of appeal. Be that as it may, it is not the drafting of the notice of appeal which fails to disclose any arguable ground; it is the substance of the notice which fails to do so. 22 I am also firmly of the view that in circumstances where Smith FM expressly found that Dr Liprini had not presented the court with any evidence of his financial position (see [55]), the balance of convenience does not weigh in favour of the granting of a stay. 23 For these reasons, the notices of motions in the proceedings must be dismissed. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. Associate: Dated: 13 October 2010