FEDERAL COURT OF AUSTRALIA Pineview Property Holdings Pty Ltd v Dimitriou [2019] FCA 1342 File number: NSD 1245 of 2018 Judge: WIGNEY J Date of judgment: 12 August 2019 Catchwords: PRACTICE AND PROCEDURE – application for adjournment of hearing of creditor's petition – application for extension of time to file evidence in opposition to creditor's petition – where applicant had applied for and been granted numerous pervious adjournments – where debtor had changed legal representation on multiple occasions – where "guillotine" order previously made in relation to the filing of evidence in relation to opposition of creditor's petition – where debtor submitted that a refusal of the adjournment would be prejudicial to him Cases cited: Culleton v Balwyn Nominees Pty Limited, [2017] FCAFC 8 Re Sarina, Council of the Shire of Wollondilly [1980] FCA 66; 43 FLR 1 Date of hearing: 12 August 2019 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Category: Catchwords Number of paragraphs: 32 Counsel for the Applicant: Mr J Lee Solicitor for the Applicant: Kekatos Lawyers Counsel for the Respondent: Mr H W Somerville Solicitor for the Respondent: TPS&Co Lawyers ORDERS NSD 1245 of 2018 BETWEEN: PINEVIEW PROPERTY HOLDINGS PTY LTD ACN 155 051 157 Applicant AND: GEORGE DIMITRIOU Respondent JUDGE: WIGNEY J DATE OF ORDER: 12 AUGUST 2019 THE COURT ORDERS THAT: 1. The respondent's application for an extension of time to file evidence and for an adjournment of the hearing listed at 10.15am on 21 August 2019 be dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT (Delivered ex tempore, revised from transcript) WIGNEY J: 1 On 12 July 2018, the applicant in this matter, Pineview Property Holdings Pty Limited, filed a creditor's petition against the respondent, Mr George Dimitriou. This is a further application by Mr Dimitriou to adjourn the hearing of the creditor's petition. For the reasons that follow, the application must be dismissed. 2 Counsel who appeared for Mr Dimitriou and sought an adjournment of the hearing on his behalf, Mr Somerville, conceded that the matter had a "checkered past". That assessment of the history of the matter was not entirely accurate insofar as it implied that something positive may have occurred in the past. As the following chronology of events demonstrates, nothing that has occurred in the course of this proceeding could be characterised as positive, at least insofar as Mr Dimitriou's actions are concerned. 3 As already indicated, the creditor's petition was presented to the Court on 12 July 2018. On 15 August 2018, Mr Dimitriou filed a detailed notice setting out his grounds of opposition to the creditor's petition. On the same day, a Registrar of the Court ordered Mr Dimitriou to file and serve his evidence in support of his opposition to the petition by 26 September 2018. 4 The matter was subsequently referred to my docket. On 26 September 2018, Mr Dimitriou sought an extension of time in which to file his evidence. The application was opposed by Pineview. Nonetheless, Mr Dimitriou was given until 11 October 2018 to file his evidence and the petition was listed for hearing on 24 October 2018. The parties were advised that they should not infer that any further extensions would necessarily be granted. 5 Despite that word of warning, Mr Dimitriou did not file any evidence in accordance with the order. 6 On 24 October 2018, Mr Johnson of counsel appeared for Mr Dimitriou at the hearing of the creditor's petition. Prior to this time Mr Dimitriou had not been legally represented. Mr Johnson applied for an adjournment of the hearing and sought leave for Mr Dimitriou to file an amended notice setting out his opposition to the petition. Mr Johnson advised the Court that the grounds of opposition to the petition would be significantly narrowed if the hearing was adjourned and leave to file an amended notice was granted. 7 The adjournment application was granted and leave to file an amended notice of opposition was granted, largely on the basis of the assurances given by Mr Johnson. Mr Dimitriou was ordered to file and serve the evidence upon which he wanted to rely in support of the amended notice by 19 November 2018 and the petition was listed for hearing on 14 December 2018. 8 On 14 December 2018, Mr Dimitriou was represented by a solicitor, Mr Hall. Mr Hall applied for an adjournment of the hearing. The grounds of Mr Dimitriou's adjournment application included that his counsel, Mr Johnson, was unwell and unable to appear for Mr Dimitriou, that there were supposedly related proceedings pending in the Supreme Court of New South Wales and that counsel for Pineview had a conflict of interest. The adjournment application was refused. Mr Hall indicated that it was unnecessary to provide reasons for the refusal of the adjournment. 9 Once the adjournment application was refused, Mr Hall made detailed and lengthy submissions on Mr Dimitriou's behalf in opposition to the creditor's petition. Judgment was reserved. 10 On 1 March 2019, Mr Dimitriou and various companies associated with him commenced separate proceedings in this Court against Pineview and a number of other respondents. Mr Hall was initially the solicitor on the record for Mr Dimitriou and his companies in those new proceedings. In those proceedings, Mr Dimitriou sought interlocutory relief which included an order that judgment in this proceeding not be handed down until the new proceedings were determined. Pineview opposed that application for interlocutory relief and filed an interlocutory application seeking to strike out the new proceedings on the basis that they were an abuse of process and a collateral attack on this bankruptcy proceeding. The respective interlocutory applications were ultimately heard on 8 May 2019 and judgment was reserved. 11 In early June 2019, Mr Dimitriou retained a new legal team. My chambers were contacted and advised that Mr Dimitriou intended to apply to reopen his case. The matter was listed for a case management hearing on 17 June 2019 so as to ascertain Pineview's response to the application to reopen. At that case management hearing, Mr Dimitriou was represented by counsel, Mr Marshall SC and Mr Lord, instructed by Mr Tierney of Keypoint Law. Pineview indicated that it opposed the application. The application to reopen was listed for hearing on 5 July 2019. 12 At the hearing on 5 July 2019, I ultimately acceded to Mr Dimitriou's application to reopen on the basis of evidence concerning developments that had occurred since the hearing on 14 December 2018. Detailed timetabling orders were made, including orders for the filing of a further amended notice of opposition to the creditor's petition and for the filing of further evidence and submissions. Mr Dimitriou was ordered to file and serve his further evidence on or before 12 July 2019. On Pineview's application, a "guillotine" order was made to the effect that Mr Dimitriou would not be permitted to rely on any evidence which was not filed in accordance with that order without leave of the Court. Mr Dimitriou was also ordered to file written submissions on or before 24 July 2019. The matter was listed for further hearing on 1 August 2019. 13 Mr Dimitriou once again did not comply with the orders to file his evidence and submissions. 14 On 1 August 2019, Mr Dimitriou appeared at the further hearing unrepresented. He applied for yet a further adjournment. Notice of that adjournment application was only given shortly prior the hearing. In support of his adjournment application, Mr Dimitriou relied on an affidavit affirmed by him on 31 July 2019. 15 It is unnecessary to refer in detail to Mr Dimitriou's reasons for that adjournment application. He claimed that he had only been notified the evening before that Mr Tierney was no longer acting for him. He also claimed that Mr Marshall SC had in recent times realised that he had a conflict of interest and could no longer appear. The evidence concerning that supposed conflict of interest was, to say the very least, unpersuasive. Mr Dimitriou was unable to explain why Mr Lord was not appearing for him. Nor did Mr Dimitriou advance any, or any persuasive, reason for why he had failed to comply with the Court's orders concerning the filing and service of his evidence and submissions. 16 The main reason advanced by Mr Dimitriou for the adjournment, however, was that he had recently retained accountants to prepare a report concerning the financial position and solvency of companies associated with him. He claimed that that report would demonstrate his solvency because all of his assets were held by or through those companies. Mr Dimitriou maintained that he would only need a very short adjournment because the report which he had commissioned would be able to be furnished by 8 August 2019. He stated that the evidence would not be voluminous and would essentially include the companies' tax returns and financial statements which the accountants were in the process of auditing. Mr Dimitriou initially proposed that the adjourned hearing could be listed as early as 12 August 2019. Mr Dimitriou also indicated, in support of his adjournment application, that he had contacted new counsel, Mr Somerville, who would appear for him at the adjourned hearing. Importantly, Mr Dimitriou expressed no hesitation or doubt about his ability to furnish his evidence in support of his solvency by 8 August 2019. 17 Ultimately, though reluctantly, I acceded to Mr Dimitriou's adjournment application. My main reason for doing so was that only a relatively short adjournment was necessary because Mr Dimitriou had expressed confidence, if not certainty, that his evidence would be filed by 8 August 2019. Mr Dimitriou also did not oppose an order that he forthwith pay Pineview's costs thrown away by reason of the adjournment. 18 The petition was adjourned for further hearing to 21 August 2019. Mr Dimitriou was ordered to file and serve his evidence by 9 August 2019 and his submissions by 12 August 2019. A further guillotine order was made to the effect that Mr Dimitriou not be permitted to rely on any evidence which was not filed by 9 August 2019. Given the history of Mr Dimitriou's non-compliance with orders, the matter was listed the matter for a further case management hearing on 12 August 2019. It was made abundantly clear to Mr Dimitriou that this was the last indulgence that would be granted to him and that I would be extremely reluctant to grant him any further extension of time to file his evidence and would be even more reluctant to grant any further adjournment of the hearing. 19 Despite the assurances that he gave at the hearing on 1 August 2019, Mr Dimitriou again did not comply with the orders to file his evidence and submissions. 20 At the case management hearing on 12 August 2019, Mr Somerville of counsel appeared for Mr Dimitriou and applied for yet another adjournment of the petition. He also applied for an order that Mr Dimitriou be given another four weeks in which to serve his evidence. No advance notice was given of this adjournment application. 21 Mr Dimitriuou relied, in support of this adjournment application, on an affidavit sworn by his new solicitor, Mr Sperber, on 12 August 2019. That affidavit was unfortunately somewhat uninformative, though that is not intended to be any criticism of either Mr Sperber or Mr Somerville. Mr Sperber deposed to the fact that he had met with Mr Dimitriou on 5 August 2019. It is unclear why Mr Dimitriou did not meet with Mr Sperber before that date, given that he had been before the Court and secured an adjournment on 1 August 2019. Nonetheless, Mr Sperber deposed to the fact that since meeting Mr Dimitriou he had spent some time reviewing the material, had gained an understanding of the issues and had formed the view that additional evidence should be adduced to assist Mr Dimitriou's case. He referred in that context to the fact that Mr Dimitriou had already directly retained an accounting firm to prepare a report about his solvency and that he had been informed that the report had not yet been finalised. Mr Sperber did not, however, explain why that was so or when the report would be finalised. He noted that a further four weeks would be required to prepare the evidence, but did not say what that evidence was or why it would take four weeks to prepare it. 22 In his submissions in support of the adjournment application, Mr Somerville was unable to shed any light on why, despite the assurances given by Mr Dimitriou's during the hearing on 1 August 2019, no evidence had been filed in accordance with the orders that were made on that day. Nor was he able to give any explanation for why a further four weeks was required for Mr Dimitriou to file his evidence, or what that evidence would consist of. No indication was given, of what that evidence would be. 23 The principles that must be applied or considered in respect of adjournment applications are well-settled and do not need to be restated here. The decision is a discretionary one, and the Court must consider and weigh in the balance a number of competing considerations. Those considerations include, but are not limited to, the reasons for the adjournment, the extent of the delay that may be occasioned by the adjournment, the explanations given for any delay in making the application, any prejudice to the opposing party, the parties' choices to date in the litigation and the consequences of those choices and the potential loss of public confidence in the legal system which can arise where the Court is seen to accede too readily to applications made without adequate explanation or justification. 24 In the bankruptcy setting, it is also important to bear, when considering adjournment applications, the somewhat unique nature of the jurisdiction. In Culleton v Balwyn Nominees Pty Limited, [2017] FCAFC 8, Allsop CJ, Dowsett and Besanko JJ said the following in that regard (at [40]): In considering the question of an adjournment of the hearing of a creditor's petition, it is fundamental, to keep firmly in mind, at all times, the nature of the jurisdiction. Bankruptcy is not just a variety of inter-partes litigation; it does not deal only with the private rights and obligations of the debtor and creditor; it is not a form of judgment execution. It is directed to the estate of a person who is insolvent. In that sense it has a public interest, though the general body of creditors and potential creditors of the debtor and prospective bankrupt, and through what is referred to as the change of status of the person who becomes a bankrupt. That status is changed because of the provisions of the Act which inhibit conduct and affect rights and obligations of the bankrupt, including making the bankrupt susceptible to criminal punishment for what would otherwise be innocent conduct. 25 The Full Court then considered the centrality of the question of solvency to the bankruptcy jurisdiction and to what was said in that regard in Re Sarina, Council of the Shire of Wollondilly [1980] FCA 66; 43 FLR 163. The Full Court then continued (at [44]-[45]): Whilst it is legitimate for a creditor to proceed in bankruptcy for the purpose of recovering a debt, that does not mean that bankruptcy should be viewed in its essential character as part of the process of execution of judgment debts. It is the changing of the status of an insolvent person: O'Mara Constructions Pty Ltd v Avery [2006] FCAFC 55; 151 FCR 196 at [53] (and the cases there discussed) and see also O'Farrell v Palicave Pty Ltd [2009] FCAFC 64; 176 FCR 134 at [24]. A sequestration order, as demonstrated by Re Sarina, will not be made against the estate of someone who refuses to pay a debt if that person can prove (the onus being on him or her) that he or she is solvent. The centrality of the question of solvency or insolvency might, in a given case, be why an adjournment is not granted when solvency is asserted. If material before the Court gives rise to the inference that further time to prove solvency is unlikely to be of utility, there may be a risk of further prejudice to creditors generally if there is delay in making the order. On the other hand, if the evidence reveals the real possibility that there is further material that may prove the debtor is solvent, attention should generally be given to the question whether some time or opportunity should be afforded to the debtor. Whether it is afforded will depend upon all the circumstances. 26 It should be emphasised in this context that Mr Dimitriou first raised his solvency as a potential ground of opposition to the creditor's petition in his initial notice of opposition, which was filed almost a year ago to the day. As the earlier recitation of the chronology of this proceeding indicated, he failed to comply with the orders made in relation to the service of his evidence. He then sought and was granted leave to amend his notice of opposition. While Mr Dimitriou's amended notice of opposition again included, as a ground of opposition to the petition, that Mr Dimitriou was able to pay his debts, he effectively failed to file any evidence in support of that ground. At the hearing of the creditor's petition on 14 December 2018, the solicitor who appeared for Mr Dimitriou did not seek to argue that Mr Dimitriou was able to pay his debts. Rather, he sought to argue that Mr Dimitriou was suffering short term liquidity and that he expected in the near future to receive the fruits of various cases that were pending in the Supreme Court of New South Wales. 27 In his further amended notice of opposition, filed after he was granted leave to re-open this proceeding, Mr Dimitriou again sought to raise his solvency in opposition to the creditor's petition. He has, however, repeatedly failed to comply with orders which had been made concerning the service of evidence concerning his solvency or his opposition to the creditor's petition generally. He has also been unable to provide any, or any adequate or reasonable, explanation for why no such evidence has been filed. 28 Mr Dimitriou has now had almost a year in which to file evidence concerning his solvency or opposition to the creditor's petition. He has repeatedly been granted indulgences by the Court. He has also repeatedly ignored, if not flouted, orders requiring him to file his evidence. When it suits him, he appears to change his legal advisers and then relies on that fact to secure an adjournment of the hearing. He has generally failed to provide any reasonable or adequate explanation for his changes of legal representation. 29 Mr Dimitriou was granted the most recent adjournment largely on the basis of his assurances that the preparation of his accounting evidence was well underway and he would be able to serve the report on the applicant and provide a copy to the Court by 8 August 2019. He has provided no explanation whatsoever for his failure to file and serve his evidence by that date. 30 The delays that have been occasioned by Mr Dimitriou's conduct in this proceeding have already been extreme. The prejudice already suffered by Pineview has undoubtedly been considerable. The risk of further prejudice to Pineview, and indeed to Mr Dimitriou's creditors generally, if there is any further delay in the hearing and determination of the petition cannot be countenanced. 31 Mr Dimitriou has failed to advance any sound reason why the proceeding should be delayed further. In all the circumstances, I am not persuaded that a further adjournment of the proceedings is warranted. Nor am I persuaded that Mr Dimitriou should be granted any further time to file his evidence, let alone the four weeks sought by him. I should note, in that regard, that any further delay to the filing of the evidence would almost certainly prejudice Pineview's preparation for the hearing on 21 August 2019. 32 Mr Dimitriou's application for an adjournment and an extension of time in which to file his evidence in opposition to the creditor's petition is accordingly dismissed. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wigney. Associate: Dated: 20 August 2019