Nicholls v Mandri (No 1) [2016] FCA 1208

FEDERAL COURT OF AUSTRALIA

Nicholls v Mandri (No 1) [2016] FCA 1208 File number: NSD 1319 of 2016

Judge: GRIFFITHS J

Date of judgment: 11 October 2016

Catchwords: PRACTICE AND PROCEDURE - application to adjourn hearing - application dismissed.

Legislation: Bankruptcy Act 1966 (Cth), ss 30, 58(1)

Date of hearing: 10 October 2016

Registry: New South Wales

Division: General Division

National Practice Area: Commercial and Corporations

Sub-area: General and Personal Insolvency

Category: Catchwords

Number of paragraphs: 18

Counsel for the Applicant: Mr A Spencer

Solicitor for the Applicant: McLean & Associates Solicitors

Counsel for the Respondents: The respondents did not appear

ORDERS NSD 1319 of 2016

BETWEEN: ALAN RICHARD NICHOLLS Applicant

AND: GOVIND MANDRI First Respondent

SUBHAG MANDRI Second Respondent

JUDGE: GRIFFITHS J DATE OF ORDER: 11 October 2016

THE COURT ORDERS THAT:

1. The application for an adjournment be dismissed. 2. The costs of the application be reserved. 3. The matter remains listed for hearing on 13 October 2016 at 10.15 am. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

GRIFFITHS J: 1 On 11 August 2016, the applicant commenced these proceedings, seeking relief under s 30 of the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act). The background to the matter may be summarised as follows. The applicant is a trustee in bankruptcy. On 15 January 2015, a debtor's petition was presented by the first respondent, Mr Govind Mandri, which was accepted by the official receiver later that month. On the acceptance of the debtor's petition, Mr Mandri was made bankrupt. A trustee of his estate was appointed. At the date of his bankruptcy, Mr Mandri was recorded as the sole registered proprietor of real estate situated at 56B Regent Parade, Cheltenham, Victoria (the Property). 2 On the commencement of his bankruptcy, Mr Mandri's interest in the Property vested in the trustee under s 58(1) of the Bankruptcy Act. The trustee has corresponded with both the first and second respondents regarding the trustee's interest in the Property. Mrs Subhag Mandri (the second respondent) asserted that she held an interest in the Property, a matter which the trustee has considered several times. On 16 June 2015, Mrs Mandri registered a caveat on the title to the Property. The interest stated in that caveat is that Mrs Mandri is said to have an interest as chargee, arising from an agreement dated 10 January 2014, between her and Mr Mandri. 3 The agreement has not to date been disclosed to the trustee. The trustee, having considered Mrs Mandri's claim to have an interest in the Property, rejected that claim on the basis that there was no evidence to support it. No appeal was taken from the trustee's initial decision on this matter by either of the respondents. In July 2015, Mrs Mandri obtained legal advice in respect of her claimed interest in the Property. The trustee reconsidered the matter, but again rejected the claim that Mrs Mandri had the interest in the Property which she alleged. No appeal has been brought by Mrs Mandri against that second decision of the trustee. 4 On 9 February 2016, a sequestration order was made against Mrs Mandri. The trustee has subsequently taken various steps to obtain possession of the Property, including issuing notices to vacate, which were served on 9 April 2016. On 19 April 2016, the trustee was registered on the title of the Property and is now the sole registered proprietor of the Property. The second respondent's trustee is on notice of the proceedings, which have been brought by the applicant trustee in this Court. An agreement has apparently been reached between the two trustees in relation to the Property and any interest which the second respondent has in the Property. 5 The matter came before Registrar Wall on 7 September 2016. According to the Court file, the respondents (certainly the first respondent)were represented by a lawyer. The District Registrar made various orders for the matter to proceed to an early hearing. Directions were made on that occasion for the first respondent to file and serve any response to the application and any affidavits in support by 21 September 2016. The applicant was directed to notify the second respondent of the time, date and place of the next Court date, and any other orders that were made. 6 The matter then came before me for a case management hearing on 27 September 2016. There was no appearance by either of the respondents on that occasion. At that time, I listed the matter for hearing on Thursday, 13 October 2016 at 10.15 am. I directed that the first and second respondents file any affidavits on which they intend to rely by 5 pm on Thursday, 6 October 2016. Directions were also made for the parties to file and serve outlines of written submissions and the applicant was directed to send copies of the orders made on 27 September 2016 to both the first and second respondents. 7 By email dated 6 October 2016, sent at 10.40 pm, the first respondent contacted the Court Registry, apparently not copying in the applicant, and asked the Court to adjourn the hearing scheduled for 13 October 2016 to enable the respondents to obtain appropriate legal advice and assistance. 8 The terms of the email are as follows (without alteration): Please be advised that i contacted the Law Institute of Victoria and Justice Connect to engage some solicitors to represent me in preparing and filing the said AFFIDAVITS on our behalf, however after contacting a total of (5) solicitors firms unfortunately none of them were able to assist us as per the (attached responses) received from them as they did not want to commit because of the urgent need and short time available to study the Applicants brief and to prepare the AFFIDAVITS and file appropriate responses on our behalf. In the meantime i am in the process of contacting more solicitors who specialise in this type of cases and therefore we request the Honourable Court to adjourn the forthcoming hearing date and grant us at least another 30 days time in order for us to get appropriate legal advice and assistance in this instance. Hoping to receive a favourable outcome in due course. 9 It is evident from the text of the second paragraph of that email that it appears to have been written on behalf of both the first and second respondents. Annexed to that email were three responses from various law firms, declining to provide legal assistance to the first respondent. One of those letters was dated 27 September 2016 and, in the case of the two other letters, 4 October 2016. The Registry contacted the first respondent on the morning of 7 October 2016, drawing to his attention the need for him to copy in the applicant with any relevant correspondence. 10 Mr Mandri was also advised at that time that the request for an adjournment would be heard by me this morning, 10 October 2016, at 9.30 am and that his participation was required. 11 Later the same day, i.e., Friday, 7 October 2016, the Registry contacted the first respondent and the applicant, confirming that the request for an adjournment would be listed before me this morning at 9.30 am. 12 The applicant has also tendered some further correspondence between the parties. It includes various emails which the applicant has sent to the first respondent, seeking further and better particulars regarding the nature of the respondents' proposed defence and an indication of the nature of the evidence or material which the respondents intend to rely upon. 13 Emails to that effect were sent by the applicant on Friday last week, as well as yesterday, Sunday, 9 October 2016, at 11.39 am. The first respondent was asked to identify who his legal team was and whether or not any legal representative would appear at the adjournment hearing this morning. The first respondent on Friday, 7 October 2016, at 3.19pm, emailed to the Registry (without copying in the applicant) that he was awaiting a response from the person who had represented him initially and that he would advise the Court when a response was received. 14 The email which was sent by the applicant at 11.39 am was in response to an email which the applicant had received from the first respondent on Saturday, 8 October 2016, at 1.32 am, in which the first respondent said (without alteration): Please note there are a few rebuts and claims pertaining to our defence and I can only advise the same subject to advice received from our legal team and appropriate affidavits will be served upon the parties concerned once we have engaged duly solicitors to act on our behalf and that is why it is imminent that we seek this adjournment to enable us ample time to get proper legal representation in due course. 15 When the matter was called this morning, Mr Spencer appeared for the applicant. There was no appearance by either the first or second respondents. During a short adjournment Mr Spencer tried unsuccessfully to contact the lawyer who had appeared for the respondents on 7 September 2016. 16 I am not persuaded, on the basis of the material which is presently before the Court, that a case has been made out for the hearing to be adjourned from the scheduled time of 10.15 am this Thursday, 13 October 2016. The request for an adjournment is refused and costs will be reserved. If the first and second respondents wish to renew their application for an adjournment, that can be done at the commencement of the hearing this Thursday at 10.15 am. It will be necessary, however, that they file and serve appropriate material to support any such adjournment, which has not been the case to date. Absent any application for an adjournment, the matter will proceed as scheduled, this Thursday, 13 October 2016, at 10.15 am. 17 For completeness, it might be noted that following the hearing of the application for an adjournment it came to my attention for the first time that, at 2.16 am on the day of the interlocutory hearing, the first respondent forwarded to the Registry an email exchange with Mr Andrew Byrne of counsel. Mr Byrne had informed Mr Mandri by email at 6.09 pm on 7 October 2016 that he was not available during the week beginning the 10 October 2016. This information was provided to Mr Mandri in direct response to a request as to whether Mr Byrne could represent Mr Mandri at the adjournment hearing or later in the week. It appears that the applicant was not copied in with this email exchange. 18 The Court orders are: (1) The application for an adjournment be dismissed. (2) The costs of the application be reserved. (3) The matter remains listed for hearing on Thursday, 13 October 2016 at 10.15 am. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Griffiths.