case_text: manner in which s 153B is to be applied has been summarised as follows by Carr, Finn and Sundberg JJ in Heinrich v Commonwealth Bank of Australia [2003] FCAFC 315: [20] The Court must first consider whether the sequestration order ought not to have been made. If it so finds, then the Court must consider whether, in the exercise of its discretion, the bankruptcy should be annulled: Re Deriu (1970) 16 FLR 420. Later evidence of previously unknown facts may disclose matters which show that the sequestration order ought not to have been made. That is, the Court is entitled to consider not only the case as disclosed at the time when the sequestration order was made, but also those facts now known then to have existed. The Court excludes those facts which have occurred since the order was made. Later evidence of previously unknown facts may disclose matters which show that the sequestration order ought not to have been made: Re Frank; Ex parte Piliszky (1987) 16 FCR 396 ; Stankiewicz v Plata [2000] FCA 1185 at [19] ; Re Williams (1968) 13 FLR 10 at 23; Re Ditfort; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347. These authorities, all of which were cited by the learned primary judge in his judgment, were accepted at first instance as reflecting the relevant law. See also: Voskuilen v Morisset Megamarket Pty Ltd [2004] FCA 1727 at [14] per Jacobson J; Hacker v The Owners - Strata Plan No 17572 [2005] FCA 1936 at [46] per Emmett J; Johnston v Challen t/as Hawthorn Cappaidge and Badgery [2006] FCA 401 at [32] per Collier J; Gargan v Kippin Investments Pty Ltd [2008] FCA 1718 at [11] per Perram J. When considering whether a sequestration order " ought not to have been made ", it has been said that "... a judge 'ought' not to have made an order only if he was 'bound' not to make the order ": Re Frank; Ex parte Poliszky (1987) 16 FCR 396 at 403 per Fisher J. His Honour there further observed: In my opinion "ought" in s 154(1)(a) is of imperative significance and an order should not be annulled unless the judge was in the circumstances bound not to make it and even then there is a residual discretion not to annul. See also: Boles v Official Trustee in Bankruptcy [2001] FCA 639 at [16] , [2001] FCA 639 ; 183 ALR 239 at 243 per Emmett J (Katz and Conti JJ agreeing). More recently, in Bulic v Commonwealth Bank of Australia Ltd [2007] FCA 307 , Tracey J has undertaken a review of the authorities. His Honour there set forth as follows his results of that analysis: [12] These authorities establish a number of relevant propositions. They are: (1) An order can be made under s 153B(1) of the Act notwithstanding that the applicant has been discharged from bankruptcy; Re Oates; ex parte Deputy Commissioner of Taxation (1987) 17 FCR 402. (2) An applicant who seeks an annulment of his or her bankruptcy "carries a heavy burden". It is incumbent on an applicant "to place before the Court all relevant material with respect to his or her financial affairs so that the Court may be properly informed and may make a judgment that is based on the actual circumstances of the applicant": Re Papps; Ex parte Tapp (1997) 78 FCR 524 at 531. (3) In determining whether or not a sequestration order "ought not to have been made" the Court is not confined to a consideration of whether the order should have been made on the facts known to the Court at the time at which it was made. The Court must take account of facts, known at the time at which the sequestration order was made and at which it determines an annulment application, even if those facts were not before the Court at the time at which the sequestration order was made: Boles v Official Trustee in Bankruptcy [2001] FCA 639 ; (2001) 183 ALR 239 at 243; Re Raymond; ex parte Raymond (1992) 36 FCR 424 at 426. (4) A sequestration order "ought not to have been made" if, on the facts known at the time of the annulment application, the Court would have been bound not to make the sequestration order: Re Frank; ex parte Piliszky (1987) 16 FCR 396. (5) The Court will be so satisfied if it is established that the debtor was not, at the time the sequestration order was made, indebted to the petitioning creditor: Re Deriu (1970) 16 FLR 420 at 422. (6) If the Court is so satisfied, it is not precluded from annulling the bankruptcy because the bankrupt had not sought to have the default judgment set aside or failed to oppose the creditor's petition or failed to seek a review of the sequestration order: Re Raymond; ex parte Raymond (1992) 36 FCR 424 at 426. (7) The power conferred on the Court by s 153B(1) is discretionary in nature. Even if persuaded that the sequestration order ought not to have been made, the Court can, in appropriate circumstances, decline to annul the bankruptcy: Boles v Official Trustee in Bankruptcy [2001] FCA 639 ; (2001) 183 ALR 239 at 243. (8) Considerations which may have a bearing on the exercise of discretion include unexplained delay in the making of the application, whether or not the applicant is solvent, whether or not the applicant has made full disclosure of his or her financial affairs and a failure by the bankrupt to oppose the creditor's petition and attend the hearing at which the sequestration order was made: Re Williams (1968) 13 FLR 10 at 24 5; Boles at 247; Re Papps; ex parte Tapp (1997) 78 FCR 524 at 531; Rigg v Baker [2006] FCAFC 179 at [79]; Cottrell v Wilcox [2002] FCA 1115 at [7]. Additional considerations are collected in D. A. Hassall, "Annulment of Bankruptcy and Review of Sequestration Orders" (1993) 67 ALJ 761 at 766.


case_outcome: cited

case_text: manner in which s 153B is to be applied has been summarised as follows by Carr, Finn and Sundberg JJ in Heinrich v Commonwealth Bank of Australia [2003] FCAFC 315: [20] The Court must first consider whether the sequestration order ought not to have been made. If it so finds, then the Court must consider whether, in the exercise of its discretion, the bankruptcy should be annulled: Re Deriu (1970) 16 FLR 420. Later evidence of previously unknown facts may disclose matters which show that the sequestration order ought not to have been made. That is, the Court is entitled to consider not only the case as disclosed at the time when the sequestration order was made, but also those facts now known then to have existed. The Court excludes those facts which have occurred since the order was made. Later evidence of previously unknown facts may disclose matters which show that the sequestration order ought not to have been made: Re Frank; Ex parte Piliszky (1987) 16 FCR 396 ; Stankiewicz v Plata [2000] FCA 1185 at [19] ; Re Williams (1968) 13 FLR 10 at 23; Re Ditfort; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347. These authorities, all of which were cited by the learned primary judge in his judgment, were accepted at first instance as reflecting the relevant law. See also: Voskuilen v Morisset Megamarket Pty Ltd [2004] FCA 1727 at [14] per Jacobson J; Hacker v The Owners - Strata Plan No 17572 [2005] FCA 1936 at [46] per Emmett J; Johnston v Challen t/as Hawthorn Cappaidge and Badgery [2006] FCA 401 at [32] per Collier J; Gargan v Kippin Investments Pty Ltd [2008] FCA 1718 at [11] per Perram J.


case_text: power conferred by O 52 r 38(1)(a) " must not be lightly exercised ": Van Reesema v Giameos [1979] FCA 108 ; (1979) 41 FLR 86 at 90 per Bowen CJ, Fisher and Lockhart JJ; Goldie v The Commonwealth of Australia [2004] FCA 973 at [16] per Carr J. It has further been recognised that the Court's power " to dismiss for want of prosecution is a drastic step which would only be justified by the grossest or most contumelious delay ": Hughes v Australian Competition and Consumer Commission [2004] FCA 1271 at [8] per Jacobson J. It is " exceptional for the court to dismiss a matter for want of prosecution under O 52 r 38(1)(a) ": Abraham v Attorney-General for the Commonwealth [2004] FCA 411 at [5] per Finn J. Each case, however, must necessarily depend upon its own factual matrix. A failure to comply with obligations imposed by the Rules or directions of the Court made to ensure an appeal is ready for hearing may be relied upon to dismiss an appeal (e.g. Goldie v The Commonwealth of Australia [2004] FCA 973) — but such failures will not in all cases necessarily lead to such an order being made (e.g. Jandruwanda v University of South Australia [2003] FCA 1456). In the context of the present appeal, it is considered to be a more appropriate course to resolve the Notice of Appeal on such merits as it may present. Indeed, it may well require an exceptional case for an appeal to be dismissed for want of prosecution in circumstances where all submissions in respect to the appeal have been concluded.


case_text: 52(5), it has been observed, is in some ways comparable to the statutory requirement that a company be wound up within six months of an application being made. And in Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 consideration was given to whether that statutory requirement displaced the " slip rule ". That decision has since been applied in the context of bankruptcy proceedings in Griffiths v Boral Resources (Qld) Pty Ltd [2006] FCAFC 149 , 154 FCR 554. Spender ACJ, Dowsett and Collier JJ there observed as follows: [29] The decision of the Full Court in Re Young; ex parte Smith (1985) 5 FCR 204 establishes that there can be no extension pursuant to s 52 of the Bankruptcy Act once the petition has lapsed. However the Court (of which Lockhart J was a member) considered that there was no question of applying the slip rule in that case (at 209). In Elyard the Court addressed the slip rule, but in the context of winding up rather than bankruptcy. Although s 52 of the Bankruptcy Act serves substantially the same purpose as s 459R of the Corporations Act , there are potentially significant differences between the two sections. [30] With all respect, we are a little uncomfortable with the view, inherent in Elyard , that the slip rule may be used to extend time notwithstanding the statutory requirement that such order be made within a period of time which has elapsed. However Elyard concerns the practice of the Court and has now stood for over ten years without legislative intervention. We are reluctant to reconsider it. Although it does not directly bind us in applying s 52 of the Bankruptcy Act , to take a different approach would cause substantial confusion in insolvency practice. [31] We wish to stress, however, the importance of the policy, evidenced in both the Corporations Act and the Bankruptcy Act , that insolvency proceedings be speedily resolved, presumably for commercial reasons and for reasons of fairness. Courts exercising jurisdiction in insolvency must recognise this policy by giving priority to the hearing and determination of such matters. The parties and their legal advisers, particularly those advising petitioning creditors, must be aware of the potential problem. The decision in Elyard should not be taken as establishing an unlimited power to avoid this statutory policy. As also noted by their Honours, the question as to whether there was any " error " which attracted the power to invoke the " slip rule " is a question of fact: [2006] FCAFC 149 at [68] . With respect, the same reservation is also expressed as to ability to correct an " error " pursuant to O 35 r 7 by extending the duration of a petition in the face of the express statutory terms of s 52(5). Notwithstanding that reservation, it is the case that other authorities have endorsed the existence of a power to extend time after the initial 12 month period has expired and where there has been an accidental slip or omission in failing to make an application within the time prescribed by s 52(5): Matthews v Collett [2000] FCA 224 ; Bankstown Grammar School Ltd v Park [2000] FCA 1205 ; Roskell v Snelgrove [2008] FCA 427 , 246 ALR 175 ; Boumelhem v Commonwealth Bank of Australia [2008] FCA 1568 , 171 FCR 462.


case_title: Hacker v The Owners - Strata Plan No 17572 [2005] FCA 1936


case_outcome: applied

case_text: manner in which s 153B is to be applied has been summarised as follows by Carr, Finn and Sundberg JJ in Heinrich v Commonwealth Bank of Australia [2003] FCAFC 315: [20] The Court must first consider whether the sequestration order ought not to have been made. If it so finds, then the Court must consider whether, in the exercise of its discretion, the bankruptcy should be annulled: Re Deriu (1970) 16 FLR 420. Later evidence of previously unknown facts may disclose matters which show that the sequestration order ought not to have been made. That is, the Court is entitled to consider not only the case as disclosed at the time when the sequestration order was made, but also those facts now known then to have existed. The Court excludes those facts which have occurred since the order was made. Later evidence of previously unknown facts may disclose matters which show that the sequestration order ought not to have been made: Re Frank; Ex parte Piliszky (1987) 16 FCR 396 ; Stankiewicz v Plata [2000] FCA 1185 at [19] ; Re Williams (1968) 13 FLR 10 at 23; Re Ditfort; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347. These authorities, all of which were cited by the learned primary judge in his judgment, were accepted at first instance as reflecting the relevant law. See also: Voskuilen v Morisset Megamarket Pty Ltd [2004] FCA 1727 at [14] per Jacobson J; Hacker v The Owners - Strata Plan No 17572 [2005] FCA 1936 at [46] per Emmett J; Johnston v Challen t/as Hawthorn Cappaidge and Badgery [2006] FCA 401 at [32] per Collier J; Gargan v Kippin Investments Pty Ltd [2008] FCA 1718 at [11] per Perram J. It was further understood to be common ground that when entertaining an appeal against a decision refusing to annul a sequestration order, this Court could potentially consider further evidence not before the Federal Magistrate whose decision is under appeal — provided that such further evidence was confined to evidence as to those facts now known to have existed as at the date of the sequestration order. On appeal, this Court is just as constrained as the Federal Magistrate to exclude from consideration " facts which have occurred since the order was made ": Heinrich v Commonwealth Bank of Australia [2003] FCAFC 315 at [20] . Although it is considered that the reasons of the Federal Magistrate expose appellable error, it is further considered that the appeal should be dismissed either because: the Appellant has failed to establish that the sequestration order as made in September 2008 " ought not to have been made "; or: as a matter of discretion, an order annulling the bankruptcy should not now be made. The District Court proceedings to which the Notice of Appeal refers were commenced by way of a Statement of Claim filed in the District Court of New South Wales on 4 July 2007. It alleged professional negligence against the Appellant's then solicitor retained for the purposes of the Family Court proceedings, being the judgment creditor and now Respondent. The task he was undertaking was the task entrusted to him by s 153B, namely the task of considering whether the sequestration order " ought not to have been made ". Whether or not the Appellant appealed the making of the sequestration order is not of immediate relevance to the separate and discrete task entrusted by s 153B. An appeal from the making of a sequestration order is a separate process from an application under s 153B. One fundamental difference is that when undertaking the task of considering whether a sequestration order " ought not to have been made ", the Court is not confined to a consideration of only that material which was before the person making the order. As Heinrich and Bulic make clear, " the Court is not confined to a consideration of whether the order should have been made on the facts known to the Court at the time at which it was made. The Court must take account of facts, known at the time at which the sequestration order was made and at which it determines an annulment application, even if those facts were not before the Court at the time at which the sequestration order was made ". A further difference is the existence of the discretion conferred by s 153B. It was not disputed that " procedural issues " may fall within s 153B: Rigg v Baker [2006] FCAFC 179 at [64] , [2006] FCAFC 179 ; 155 FCR 531 at 545. It may further be assumed for present purposes that, albeit inadvertently, the Appellant was denied procedural fairness in both April and September 2008. The denial of procedural fairness in September 2008 may provide a basis upon which it could be contended that the sequestration order ought not to have been made. Indeed the present case provides an instance of the ability in an application made pursuant to s 153B to consider all of the " true facts " as at the date of the making of the sequestration order: Heinrich v Commonwealth Bank of Australia [2003] FCAFC 315 at [20] . The Federal Magistrate may not have known why neither the Appellant nor her solicitor was present on 2 September. But the Magistrate who heard the annulment application knew the reason; as does this Court. Even so, reservation may be expressed as to whether or not — even in those circumstances — it should be concluded that he was " bound " not to have made the sequestration order.


case_text: power conferred by O 52 r 38(1)(a) " must not be lightly exercised ": Van Reesema v Giameos [1979] FCA 108 ; (1979) 41 FLR 86 at 90 per Bowen CJ, Fisher and Lockhart JJ; Goldie v The Commonwealth of Australia [2004] FCA 973 at [16] per Carr J. It has further been recognised that the Court's power " to dismiss for want of prosecution is a drastic step which would only be justified by the grossest or most contumelious delay ": Hughes v Australian Competition and Consumer Commission [2004] FCA 1271 at [8] per Jacobson J. It is " exceptional for the court to dismiss a matter for want of prosecution under O 52 r 38(1)(a) ": Abraham v Attorney-General for the Commonwealth [2004] FCA 411 at [5] per Finn J.


case_text: case, however, must necessarily depend upon its own factual matrix. A failure to comply with obligations imposed by the Rules or directions of the Court made to ensure an appeal is ready for hearing may be relied upon to dismiss an appeal (e.g. Goldie v The Commonwealth of Australia [2004] FCA 973) — but such failures will not in all cases necessarily lead to such an order being made (e.g. Jandruwanda v University of South Australia [2003] FCA 1456). In the context of the present appeal, it is considered to be a more appropriate course to resolve the Notice of Appeal on such merits as it may present. Indeed, it may well require an exceptional case for an appeal to be dismissed for want of prosecution in circumstances where all submissions in respect to the appeal have been concluded.


case_title: Johnston v Challen t/as Hawthorn Cappaidge and Badgery [2006] FCA 401


case_title: Khera v Jones [2008] FCA 548

case_text: the power to dismiss an appeal for want of prosecution is a power available to be exercised in an appropriate case. " [S]uccessive and cavalier omissions by the appellant " led the Full Court to dismiss an appeal in NBCI v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 280. So, too, can " persistent breach of the Court's directions ": Khera v Jones [2008] FCA 548 at [16] per Buchanan J. This power can be invoked in respect to all appeals, including bankruptcy appeals: e.g. Singh v Official Trustee in Bankruptcy [2008] FCA 544.


case_title: Killoran v Duncan [1999] FCA 1574

case_text: was no dissent from the proposition that the Court has an implied jurisdiction to set aside a bankruptcy notice as an abuse of process: Re Sterling; Ex parte Esanda Ltd [1980] FCA 61 ; (1980) 44 FLR 125. And an abuse of process may be made out if the purpose in issuing the bankruptcy notice is to put pressure on a debtor to pay the debt rather than to invoke the Court's jurisdiction in relation to insolvency: Brunninghausen v Glavanics [1998] FCA 230. In Killoran v Duncan [1999] FCA 1574 , Gyles J thus observed: [12] Whilst there is no debate about the jurisdiction of the Court to set aside a bankruptcy notice as an abuse of process where it can be concluded that it was simply to put pressure on the debtor rather than to genuinely invoke the Court's jurisdiction, I am not satisfied that that is the position here. There is nothing to indicate that the respondent creditor does not genuinely intend to pursue the matter if there is default in complying with the notice. In my opinion, there is nothing special about abuse of process in this field, and, if a person wishes to resort to the jurisdiction of the Court for appropriate orders, then it will be an unusual case in which that will be prevented. [13] There is no evidence here of any collateral purpose or of any undue pressure being applied. It is correct, I think, that the time to judge abuse of process is the time that the bankruptcy notice is issued and that subsequent events have relatively slight relevance. They may be relevant insofar as they throw light upon circumstances which might have been appreciated and foreseen at the time of the issue of the notice. [14] If, contrary to my view, however, there were a prima facie case of abuse of process, the remedy is discretionary and, in my view, if circumstances following that time had altered significantly so that it would not be appropriate to set aside the notice, I think that the jurisdiction of the Court is wide enough to give effect to that. I have in mind here that whilst the immediate parties to the application are those with the most interest in the matter, the body of creditors generally also have an interest and I cannot be certain one way or the other about the position of solvency. It may be most unfortunate if a bankruptcy notice were set aside in circumstances where the debtor is in fact insolvent. By way of example, in Maxwell-Smith v S & E Hall Pty Ltd [2006] FCA 825 , 233 ALR 81 Jacobson J was prepared to infer that the purpose in issuing a bankruptcy notice was to put pressure on the debtor rather than to genuinely invoke the court's bankruptcy jurisdiction in circumstances where the bankruptcy notice sought payment of a debt for a small amount based on a judgment debt which was over 5 years old; where the judgment creditor was aware of the probability of solvency; and where the judgment debtor owned assets which greatly exceeded the debt. See also: Cavoli v Etl [2007] FCA 1191 at [17] per Heerey J; Slack v Bottoms English Solicitors [2002] FCA 1445 at [15] to [18] per Spender J. It is an abuse of process for a judgment creditor to pursue bankruptcy proceedings " for the purpose of stifling litigation ": Bayne v Baillieu; Bayne v Riggall [1908] HCA 39 ; (1908) 6 CLR 382 at 396 per Griffith CJ.


case_title: Knight v Beyond Properties Pty Ltd [2007] FCAFC 170 , 242 ALR 586

case_text: resolving each of these Grounds as formulated during the course of the hearing on 7 May 2009, there was no dissent from the proposition that an appeal to this Court is in the nature of a rehearing: Knight v Beyond Properties Pty Ltd [2007] FCAFC 170 at [20] , [2007] FCAFC 170 ; 242 ALR 586 at 591 per French, Tamberlin and Rares JJ. Nor could there be.


case_text: hearing of the Appeal and the Respondent's Notice of Motion proceeded on 7 May 2009. In addition to the parties to the appeal, the Trustee in Bankruptcy appeared for the purpose of assisting the Court. As submitted by the Trustee, an application for an annulment of bankruptcy, because it goes to a matter of status under the law, is different from ordinary litigation inter partes : Maas v Maas (unreported, FCA, Ryan, Heerey and Tamberlin JJ, NG 283 of 1998, 16 November 1998). It is considered that the Respondent's Notice of Motion and the Appellant's Appeal should both be dismissed. It is prudent that brief reasons should be provided for adjourning the hearing from 17 April to 5 May 2009 and thereafter to 7 May 2009.


case_title: Matthews v Collett [2000] FCA 224


case_title: Maxwell-Smith v S & E Hall Pty Ltd [2006] FCA 825 , 233 ALR 81


case_title: Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17 , 205 CLR 507

case_text: the powers of the Court on appeal can only be exercised if there be appellable error. And, where an appeal is in the nature of a rehearing, the appellate Court can substitute its own decision on the facts and law as they then stand: Allesch v Maunz [2000] HCA 40 at [23] , [2000] HCA 40 ; 203 CLR 172 at 180 to 181. Gaudron, McHugh, Gummow and Hayne JJ there made the following observations in relation to the powers of a Court when entertaining an appeal by way of a rehearing (references omitted): For present purposes, the critical difference between an appeal by way of rehearing and a hearing de novo is that, in the former case, the powers of the appellate court are exercisable only where the appellant can demonstrate that, having regard to all the evidence now before the appellate court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error, whereas, in the latter case, those powers may be exercised regardless of error. At least that is so unless, in the case of an appeal by way of rehearing, there is some statutory provision which indicates that the powers may be exercised whether or not there was error at first instance. And the critical distinction, for present purposes, between an appeal by way of rehearing and an appeal in the strict sense is that, unless the matter is remitted for rehearing, a court hearing an appeal in the strict sense can only give the decision which should have been given at first instance whereas, on an appeal by way of rehearing, an appellate court can substitute its own decision based on the facts and the law as they then stand. Although this was a case concerning the Family Court, s 27 of the Federal Court of Australia Act 1976 (Cth) is not materially different to the equivalent provision of the Family Law Act 1976 (Cth): Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17 at [75] , [2001] HCA 17 ; 205 CLR 507 at 533 per Gleeson CJ and Gummow J. The " proper role of an appellate court under s 25 of the Federal Court Act ... is ordinarily to correct error ": Sobey v Nicol [2007] FCAFC 136 at [72] , [2007] FCAFC 136 ; 245 ALR 389 at 403 to 404 per Branson, Lindgren and Besanko JJ. It is not appropriate to treat an appeal "as though it were a new trial on the evidence and constrained merely by ... unassailable factual findings "; error must be demonstrated: Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833 at [30] , [2001] FCA 1833 ; 117 FCR 424 at 438 per Allsop J (Drummond and Mansfield JJ agreeing).


case_title: Murphy v Revis [2008] FMCA 1561

case_text: 2 September 2008 a sequestration order was made against the Appellant, then using her married name: Murphy v Revis [2008] FMCA 1561. The hearing on that occasion took place in the absence of the Appellant and her then solicitor. Thereafter, on 22 December 2008 the Federal Magistrates Court, differently constituted, dismissed an application seeking an order under s 153B of the Bankruptcy Act 1966 (Cth) that the bankruptcy be annulled: Revis v Murphy [2008] FMCA 1638. These were considerations well known to the Federal Magistrate who made the sequestration order: [2008] FMCA 1561 at [6] . They are considerations expressly referred to in his reasons for decision. And that Magistrate's reasons for decision were expressly incorporated into the reasons for decision of the Federal Magistrate whose decision is now under appeal and who dismissed the application made pursuant to s 153B: [2008] FMCA 1638 at [14] . But such assumptions do not lead to a conclusion that the sequestration order now ought to be annulled. As at September 2008 the Magistrate was unaware that the legal representative was not in attendance due to an error in his diary. Uninformed by that fact, the Magistrate proceeded as he did. He concluded that the debtor had " had sufficient opportunity to appear today to oppose the petition if she wished to do so ": [2008] FMCA 1561 at [5] . As the true facts later unfolded, it is now apparent that the Appellant was not given this opportunity to be heard. But any denial of procedural fairness, it is considered, has not occasioned any prejudice to the Appellant because: she was given an opportunity in December 2008 to canvas the events that took place in April and September 2008 and to then advance whatever submissions she saw fit. Indeed, if there had been a denial of procedural fairness on that occasion, it may well have been suffered by the Respondent. The Respondent complains that in December 2008 the Federal Magistrate took into account an affidavit and further submissions filed by the now Appellant five days after the application had been heard; and the Appellant was again extended the opportunity as at the date of the hearing of the present appeal to advance whatever submissions she thought appropriate in respect to both the making of the order extending the life of the petition and the making of the sequestration order. In the absence of any reason to reach a contrary conclusion, it is thus considered that any denial of procedural fairness in the making of either the April or September 2008 decisions has occasioned the Appellant no prejudice and provides no basis for concluding that the sequestration order now ought to be annulled pursuant to s 153B. The Appellant further contends that the present Respondent in pursuing bankruptcy proceedings has embarked upon an abuse of process.


case_text: the power to dismiss an appeal for want of prosecution is a power available to be exercised in an appropriate case. " [S]uccessive and cavalier omissions by the appellant " led the Full Court to dismiss an appeal in NBCI v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 280. So, too, can " persistent breach of the Court's directions ": Khera v Jones [2008] FCA 548 at [16] per Buchanan J. This power can be invoked in respect to all appeals, including bankruptcy appeals: e.g. Singh v Official Trustee in Bankruptcy [2008] FCA 544. In the present appeal there is a legitimate basis upon which the application is being advanced by the Respondent. Left to one side when considering the merits of the present application to dismiss for want of prosecution have been such factors as the commencement by the present Appellant of a District Court proceeding. That proceeding was commenced subsequent to the service of the petition. Its procedural course was the subject of criticism by the Federal Magistrates Court. Such factors have been left to one side, as the " want of prosecution " to which O 52 r 38(1)(a) is directed is a want of prosecution of the " appeal "; defaults or procedural irregularities in other proceedings may appear to assume little (if any) immediate relevance when that provision is invoked. In the present appeal, the Appellant failed to file an index to the Appeal Book , to prepare an Appeal Book or to file submissions as directed. After the Notice of Appeal was filed in this Court on 19 January 2009, the Appellant took no step — or certainly undertook inadequate steps — prior to 17 April and 5 May 2009 to ensure that her appeal would be ready for hearing. As was the case in Dunstan v Human Rights and Equal Opportunity Commission [2007] FCA 1326 at [17] , the present Appellant has been extended " every opportunity to litigate [her] complaints " and " considerable procedural leeway " has been extended to her. The present case is also in some ways comparable to NBCI v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 280 where Ryan, Merkel and Conti JJ dismissed an appeal pursuant to O 52 r 38(1)(a) for like failures by the there appellant, those failures being characterised by their Honours as " successive and cavalier omissions ".


case_text: section has essentially two elements, namely the establishment of the state of satisfaction that a sequestration order ought not to have been made and, if that state of satisfaction is reached, thereafter an exercise of discretion: Rigg v Baker [2006] FCAFC 179 at [59] , [2006] FCAFC 179 ; 155 FCR 531 at 543 per French J. Those who seek an annulment carry a " heavy burden ": Re Papps; Ex parte Tapp (1997) 78 FCR 524 at 531 per O'Loughlin J; Evans v Hi-Fert Pty Ltd [2003] FCA 802 at [11] ; Samootin v Wagner [2008] FCA 1066 at [32] . More recently, in Bulic v Commonwealth Bank of Australia Ltd [2007] FCA 307 , Tracey J has undertaken a review of the authorities. His Honour there set forth as follows his results of that analysis: [12] These authorities establish a number of relevant propositions. They are: (1) An order can be made under s 153B(1) of the Act notwithstanding that the applicant has been discharged from bankruptcy; Re Oates; ex parte Deputy Commissioner of Taxation (1987) 17 FCR 402. (2) An applicant who seeks an annulment of his or her bankruptcy "carries a heavy burden". It is incumbent on an applicant "to place before the Court all relevant material with respect to his or her financial affairs so that the Court may be properly informed and may make a judgment that is based on the actual circumstances of the applicant": Re Papps; Ex parte Tapp (1997) 78 FCR 524 at 531. (3) In determining whether or not a sequestration order "ought not to have been made" the Court is not confined to a consideration of whether the order should have been made on the facts known to the Court at the time at which it was made. The Court must take account of facts, known at the time at which the sequestration order was made and at which it determines an annulment application, even if those facts were not before the Court at the time at which the sequestration order was made: Boles v Official Trustee in Bankruptcy [2001] FCA 639 ; (2001) 183 ALR 239 at 243; Re Raymond; ex parte Raymond (1992) 36 FCR 424 at 426. (4) A sequestration order "ought not to have been made" if, on the facts known at the time of the annulment application, the Court would have been bound not to make the sequestration order: Re Frank; ex parte Piliszky (1987) 16 FCR 396. (5) The Court will be so satisfied if it is established that the debtor was not, at the time the sequestration order was made, indebted to the petitioning creditor: Re Deriu (1970) 16 FLR 420 at 422. (6) If the Court is so satisfied, it is not precluded from annulling the bankruptcy because the bankrupt had not sought to have the default judgment set aside or failed to oppose the creditor's petition or failed to seek a review of the sequestration order: Re Raymond; ex parte Raymond (1992) 36 FCR 424 at 426. (7) The power conferred on the Court by s 153B(1) is discretionary in nature. Even if persuaded that the sequestration order ought not to have been made, the Court can, in appropriate circumstances, decline to annul the bankruptcy: Boles v Official Trustee in Bankruptcy [2001] FCA 639 ; (2001) 183 ALR 239 at 243. (8) Considerations which may have a bearing on the exercise of discretion include unexplained delay in the making of the application, whether or not the applicant is solvent, whether or not the applicant has made full disclosure of his or her financial affairs and a failure by the bankrupt to oppose the creditor's petition and attend the hearing at which the sequestration order was made: Re Williams (1968) 13 FLR 10 at 24 5; Boles at 247; Re Papps; ex parte Tapp (1997) 78 FCR 524 at 531; Rigg v Baker [2006] FCAFC 179 at [79]; Cottrell v Wilcox [2002] FCA 1115 at [7]. Additional considerations are collected in D. A. Hassall, "Annulment of Bankruptcy and Review of Sequestration Orders" (1993) 67 ALJ 761 at 766.


case_text: is for an applicant for annulment to bring himself within s 153B and to satisfy the Court that the sequestration order ought not to have been made: Pollock v Deputy Federal Commissioner of Taxation (1994) 94 ATC 4148 ; Rigg v Baker [2006] FCAFC 179 at [63] , [2006] FCAFC 179 ; 155 FCR 531 at 544 per French J (as His Honour then was). The standard of proof is that of the balance of probabilities: Edelsten v Deputy Commissioner of Taxation (Cth) (1986) 86 ALR 257.


case_title: Purvis v Dairy Adjustment Authority (No 2) [2006] FCAFC 38 , 150 FCR 48

case_text: whatever reason, no draft index of the appeal papers has been filed in the Registry as required by O 52 r 27 of the Federal Court Rules. Nor has there been compliance with O 52 r 28A. The importance of these and other obligations imposed upon an Appellant is not to be underestimated and the fact of non-compliance is not to be disregarded. Compliance ensures the orderly resolution of appeals and avoids the prospect of applications for adjournments or for orders seeking the dismissal of an appeal for failure to comply. Although an appellant has the carriage of an appeal, all parties share a responsibility to avoid incurring cost and expense ( Purvis v Dairy Adjustment Authority (No 2) [2006] FCAFC 38 at [5] , [2006] FCAFC 38 ; 150 FCR 48 at 49 per Black CJ (Branson and Finn JJ agreeing)) and a responsibility to ensure that an appeal is ready for hearing. An unrepresented appellant is equally as bound by these requirements as any other appellant. Whatever may be the shared responsibility of all parties to an appeal, non-compliance by an appellant with fundamental requirements of the Federal Court Rules cannot be the occasion for impermissibly seeking to transfer the obligations imposed upon an unrepresented Appellant to a represented Respondent. The obligations imposed by these Rules upon the Appellant have not been discharged. That failure cannot deprive a Respondent of the opportunity to have an appeal heard and resolved or dismissed. On occasions, a represented respondent (as in the present appeal) has assisted the Court by attempting to do that which should have been done by the appellant. The assistance of those representing the Respondent in preparing a compilation of documents relevant to this appeal has been appreciated.


case_outcome: affirmed

case_title: Revis v Murphy [2008] FMCA 1638

case_text: 2 September 2008 a sequestration order was made against the Appellant, then using her married name: Murphy v Revis [2008] FMCA 1561. The hearing on that occasion took place in the absence of the Appellant and her then solicitor. Thereafter, on 22 December 2008 the Federal Magistrates Court, differently constituted, dismissed an application seeking an order under s 153B of the Bankruptcy Act 1966 (Cth) that the bankruptcy be annulled: Revis v Murphy [2008] FMCA 1638. These were considerations well known to the Federal Magistrate who made the sequestration order: [2008] FMCA 1561 at [6] . They are considerations expressly referred to in his reasons for decision. And that Magistrate's reasons for decision were expressly incorporated into the reasons for decision of the Federal Magistrate whose decision is now under appeal and who dismissed the application made pursuant to s 153B: [2008] FMCA 1638 at [14] .


case_text: section has essentially two elements, namely the establishment of the state of satisfaction that a sequestration order ought not to have been made and, if that state of satisfaction is reached, thereafter an exercise of discretion: Rigg v Baker [2006] FCAFC 179 at [59] , [2006] FCAFC 179 ; 155 FCR 531 at 543 per French J. Those who seek an annulment carry a " heavy burden ": Re Papps; Ex parte Tapp (1997) 78 FCR 524 at 531 per O'Loughlin J; Evans v Hi-Fert Pty Ltd [2003] FCA 802 at [11] ; Samootin v Wagner [2008] FCA 1066 at [32] . It is for an applicant for annulment to bring himself within s 153B and to satisfy the Court that the sequestration order ought not to have been made: Pollock v Deputy Federal Commissioner of Taxation (1994) 94 ATC 4148 ; Rigg v Baker [2006] FCAFC 179 at [63] , [2006] FCAFC 179 ; 155 FCR 531 at 544 per French J (as His Honour then was). The standard of proof is that of the balance of probabilities: Edelsten v Deputy Commissioner of Taxation (Cth) (1986) 86 ALR 257. More recently, in Bulic v Commonwealth Bank of Australia Ltd [2007] FCA 307 , Tracey J has undertaken a review of the authorities. His Honour there set forth as follows his results of that analysis: [12] These authorities establish a number of relevant propositions. They are: (1) An order can be made under s 153B(1) of the Act notwithstanding that the applicant has been discharged from bankruptcy; Re Oates; ex parte Deputy Commissioner of Taxation (1987) 17 FCR 402. (2) An applicant who seeks an annulment of his or her bankruptcy "carries a heavy burden". It is incumbent on an applicant "to place before the Court all relevant material with respect to his or her financial affairs so that the Court may be properly informed and may make a judgment that is based on the actual circumstances of the applicant": Re Papps; Ex parte Tapp (1997) 78 FCR 524 at 531. (3) In determining whether or not a sequestration order "ought not to have been made" the Court is not confined to a consideration of whether the order should have been made on the facts known to the Court at the time at which it was made. The Court must take account of facts, known at the time at which the sequestration order was made and at which it determines an annulment application, even if those facts were not before the Court at the time at which the sequestration order was made: Boles v Official Trustee in Bankruptcy [2001] FCA 639 ; (2001) 183 ALR 239 at 243; Re Raymond; ex parte Raymond (1992) 36 FCR 424 at 426. (4) A sequestration order "ought not to have been made" if, on the facts known at the time of the annulment application, the Court would have been bound not to make the sequestration order: Re Frank; ex parte Piliszky (1987) 16 FCR 396. (5) The Court will be so satisfied if it is established that the debtor was not, at the time the sequestration order was made, indebted to the petitioning creditor: Re Deriu (1970) 16 FLR 420 at 422. (6) If the Court is so satisfied, it is not precluded from annulling the bankruptcy because the bankrupt had not sought to have the default judgment set aside or failed to oppose the creditor's petition or failed to seek a review of the sequestration order: Re Raymond; ex parte Raymond (1992) 36 FCR 424 at 426. (7) The power conferred on the Court by s 153B(1) is discretionary in nature. Even if persuaded that the sequestration order ought not to have been made, the Court can, in appropriate circumstances, decline to annul the bankruptcy: Boles v Official Trustee in Bankruptcy [2001] FCA 639 ; (2001) 183 ALR 239 at 243. (8) Considerations which may have a bearing on the exercise of discretion include unexplained delay in the making of the application, whether or not the applicant is solvent, whether or not the applicant has made full disclosure of his or her financial affairs and a failure by the bankrupt to oppose the creditor's petition and attend the hearing at which the sequestration order was made: Re Williams (1968) 13 FLR 10 at 24 5; Boles at 247; Re Papps; ex parte Tapp (1997) 78 FCR 524 at 531; Rigg v Baker [2006] FCAFC 179 at [79]; Cottrell v Wilcox [2002] FCA 1115 at [7]. Additional considerations are collected in D. A. Hassall, "Annulment of Bankruptcy and Review of Sequestration Orders" (1993) 67 ALJ 761 at 766. When entertaining an appeal against a decision concluding that a sequestration order ought to be annulled pursuant to s 153B , French J (as His Honour then was) in Rigg v Baker [2006] FCAFC 179 , 155 FCR 531 observed: [64] Generally speaking the true facts, which if known to the person making the order may have led him or her to refuse the order, relate to the financial circumstances of the debtor. They may, however, extend to procedural issues: Maxwell-Smith v S & E Hill ; In the matter of Maxwell-Smith [2004] FCA 840 at [20] (Moore J). [65] One basis upon which a creditor's petition may be dismissed is that the debtor has a cross claim against the creditor: Ling v Eurobrook (1997) 74 FCR 19 at 25. In St George Bank Ltd v Helfenbaum [1999] FCA 1337 , Sundberg J said (at 9): The existence of a cross-claim may be "a sufficient cause" within s 52(2)(b) for declining to make a sequestration order. It is for the debtor to establish the existence of "sufficient cause". He must establish that he has a real claim against the creditor that is likely to succeed. If the Court is satisfied that there is such a claim, and that its quantum is likely to equal or exceed the creditor's claim, it will not make a sequestration order. If the claim is likely to be less than the creditor's claim, the Court will require the debtor, if he is to avoid a sequestration order, to pay the difference between the judgment debt and the amount he is likely to recover on his claim. A debtor does not establish a real claim that is likely to succeed merely by producing a statement of claim in an action against a creditor ... or by pointing to the existence of current litigation against the creditor. While the Court does not try the cross-claim in advance, the debtor must adduce sufficient evidence to show that it is a real claim which is likely to succeed. [66] A distinction has been drawn between a claim against the petitioner creditor which is likely to succeed and which would warrant refusal of a sequestration order and a "real claim" which has sufficient prospect to warrant the debtor being granted an opportunity to have it litigated. In the latter case an adjournment of the petition may be appropriate: In the matter of Jovanovic [1998] FCA 463 citing Re James, Ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd (No 2) (1994) 51 FCR 14 at 22 (Olney J). The existence of a cross-claim against the petitioning creditor which is likely to succeed may support the proposition that the sequestration order ought not to have been made and should be annulled. On the other hand the existence of a real claim which might have warranted adjournment would not necessarily support that conclusion. That is not to exclude the possibility that in appropriate circumstances the registrar or judge hearing the petition ought to grant an adjournment on the basis of a "real cross-claim". A distinction is thus to be drawn between a claim which is likely to succeed and a " real claim " which may warrant an adjournment but not such as to necessarily warrant a conclusion that the sequestration order ought not to have been made. The Appellant did not contend that the District Court claim was one which could be characterised as a claim " which is likely to succeed and which would warrant refusal of a sequestration order ". She did contend, however, that it remained a " real claim " — the Federal Magistrate having characterised it as an " arguable case ". It is not considered that the claim — however it may be characterised — provided any basis upon which it could be concluded that the Federal Magistrate making the sequestration order was " bound " not to have made it. It was not disputed that " procedural issues " may fall within s 153B: Rigg v Baker [2006] FCAFC 179 at [64] , [2006] FCAFC 179 ; 155 FCR 531 at 545. It may further be assumed for present purposes that, albeit inadvertently, the Appellant was denied procedural fairness in both April and September 2008. The denial of procedural fairness in September 2008 may provide a basis upon which it could be contended that the sequestration order ought not to have been made. Indeed the present case provides an instance of the ability in an application made pursuant to s 153B to consider all of the " true facts " as at the date of the making of the sequestration order: Heinrich v Commonwealth Bank of Australia [2003] FCAFC 315 at [20] . The Federal Magistrate may not have known why neither the Appellant nor her solicitor was present on 2 September. But the Magistrate who heard the annulment application knew the reason; as does this Court. Even so, reservation may be expressed as to whether or not — even in those circumstances — it should be concluded that he was " bound " not to have made the sequestration order.


case_title: Roskell v Snelgrove [2008] FCA 427

case_text: to the first limb, it is to be noted that s 52(4) and (5) of the Bankruptcy Act 1966 (Cth) provide as follows: (4) A creditor's petition lapses at the expiration of: (a) subject to paragraph (b), the period of 12 months commencing on the date of presentation of the petition; or (b) if the Court makes an order under subsection (5) in relation to the petition — the period fixed by the order; unless, before the expiration of whichever of those periods is applicable, a sequestration order is made on the petition or the petition is dismissed or withdrawn. (5) The Court may, at any time before the expiration of the period of 12 months commencing on the date of presentation of a creditor's petition, if it considers it just and equitable to do so, upon such terms and conditions as it thinks fit, order that the period at the expiration of which the petition will lapse be such period, being a period exceeding 12 months and not exceeding 24 months, commencing on the date of presentation of the petition as is specified in the order. Order 35 r 7(3) of the Federal Court Rules provides as follows: A clerical mistake in a judgment or order, or an error arising in a judgment order from an accidental slip or omission, may at any time be corrected by the Court. Rule 1.05 of the Federal Magistrates Court Rules 2001 (Cth), it may be noted, provides that the Federal Magistrates Court may apply the Federal Court Rules where, in a particular case, the 2001 Rules are " insufficient or inappropriate ". By reason of the terms of Rule 1.05 of the Federal Magistrates Court Rules , no question arises as to a Federal Magistrate not being clothed with authority to invoke O 35 r 7: Roskell v Snelgrove [2008] FCA 427 at [37] to [41] [2008] FCA 427 ; , 246 ALR 175 at 181 to 182 per Lindgren J. Section 52(5), it has been observed, is in some ways comparable to the statutory requirement that a company be wound up within six months of an application being made. And in Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 consideration was given to whether that statutory requirement displaced the " slip rule ". That decision has since been applied in the context of bankruptcy proceedings in Griffiths v Boral Resources (Qld) Pty Ltd [2006] FCAFC 149 , 154 FCR 554. Spender ACJ, Dowsett and Collier JJ there observed as follows: [29] The decision of the Full Court in Re Young; ex parte Smith (1985) 5 FCR 204 establishes that there can be no extension pursuant to s 52 of the Bankruptcy Act once the petition has lapsed. However the Court (of which Lockhart J was a member) considered that there was no question of applying the slip rule in that case (at 209). In Elyard the Court addressed the slip rule, but in the context of winding up rather than bankruptcy. Although s 52 of the Bankruptcy Act serves substantially the same purpose as s 459R of the Corporations Act , there are potentially significant differences between the two sections. [30] With all respect, we are a little uncomfortable with the view, inherent in Elyard , that the slip rule may be used to extend time notwithstanding the statutory requirement that such order be made within a period of time which has elapsed. However Elyard concerns the practice of the Court and has now stood for over ten years without legislative intervention. We are reluctant to reconsider it. Although it does not directly bind us in applying s 52 of the Bankruptcy Act , to take a different approach would cause substantial confusion in insolvency practice. [31] We wish to stress, however, the importance of the policy, evidenced in both the Corporations Act and the Bankruptcy Act , that insolvency proceedings be speedily resolved, presumably for commercial reasons and for reasons of fairness. Courts exercising jurisdiction in insolvency must recognise this policy by giving priority to the hearing and determination of such matters. The parties and their legal advisers, particularly those advising petitioning creditors, must be aware of the potential problem. The decision in Elyard should not be taken as establishing an unlimited power to avoid this statutory policy. As also noted by their Honours, the question as to whether there was any " error " which attracted the power to invoke the " slip rule " is a question of fact: [2006] FCAFC 149 at [68] . With respect, the same reservation is also expressed as to ability to correct an " error " pursuant to O 35 r 7 by extending the duration of a petition in the face of the express statutory terms of s 52(5). Notwithstanding that reservation, it is the case that other authorities have endorsed the existence of a power to extend time after the initial 12 month period has expired and where there has been an accidental slip or omission in failing to make an application within the time prescribed by s 52(5): Matthews v Collett [2000] FCA 224 ; Bankstown Grammar School Ltd v Park [2000] FCA 1205 ; Roskell v Snelgrove [2008] FCA 427 , 246 ALR 175 ; Boumelhem v Commonwealth Bank of Australia [2008] FCA 1568 , 171 FCR 462.


case_title: Samootin v Wagner [2008] FCA 1066

case_text: section has essentially two elements, namely the establishment of the state of satisfaction that a sequestration order ought not to have been made and, if that state of satisfaction is reached, thereafter an exercise of discretion: Rigg v Baker [2006] FCAFC 179 at [59] , [2006] FCAFC 179 ; 155 FCR 531 at 543 per French J. Those who seek an annulment carry a " heavy burden ": Re Papps; Ex parte Tapp (1997) 78 FCR 524 at 531 per O'Loughlin J; Evans v Hi-Fert Pty Ltd [2003] FCA 802 at [11] ; Samootin v Wagner [2008] FCA 1066 at [32] .


case_title: Singh v Official Trustee in Bankruptcy [2008] FCA 544


case_title: Sobey v Nicol [2007] FCAFC 136 , 245 ALR 389


case_title: Re Sterling; Ex parte Esanda Ltd [1980] FCA 61 ; (1980) 44 FLR 125


case_text: reasons for decision of the Federal Magistrate who made the sequestration order in September 2008 referred to the Statement of Claim and relevantly concluded: [6] ... It is pleaded with some detail, but its merits and prospects of success are not immediately apparent, and there is no sufficient evidence before me that there would be "other sufficient cause" for the Court to decline in its discretion to make a sequestration order, pursuant to principles such as were discussed by Allsop J in Totev v Sfar [2006] FCA 470. I am not satisfied that the debtor has shown that she has a claim against the applicant exceeding the amount of the debt relied on in the petition, which is "likely to succeed" and is being pursued with sufficient expedition. The decision of the Federal Magistrate whose decision is now under appeal referred to the earlier September 2008 decision and concluded: [15] There has been no appeal to the Federal Court from his Honour's judgment. In my view, it is an inappropriate course for a bankrupt to seek, by annulment application, to achieve what she is unwilling or unable to achieve through an appeal, namely the reconsideration of the reasons of this Court for the making of the sequestration order. In any event, I accept from the evidence of Mr Steel that those District Court proceedings appear to be a defensive action in order to avoid dealing with the bills of costs rendered by Ms Murphy for the family law proceedings. The trustee has been unable to form a view as to the prospects of success of the claim in the District Court as he has not been funded to pursue or inquire into them. Those proceedings are presently stayed by the bankruptcy. The Magistrate then went on to give an account of the proceeding in the Family Court and concluded as follows: [17] ... Her case against Ms Murphy centres on the proposition that the conduct of Ms Murphy prevented her from accepting that offer. That is one possible characterisation. Another is that there was an offer on the table for higher than what Ms Murphy had advised Ms Revis she could expect to get on a judgment, but Ms Revis had unrealistic expectations and Ms Murphy pursued the matter as best she could in accordance with her instructions. I accept, based upon the available material, that Ms Revis has an arguable case of professional negligence in the District Court, but that does not alter my conclusions about the motivation for those proceedings and the manner in which they have been conducted. ... [20] Further, Ms Revis has failed to satisfy me that she is solvent. ... [21] I do not accept that the sequestration order made by this Court should not have been made. It is unnecessary to consider the factors relevant to an exercise of the Court's discretion but, in general terms, the interests of creditors would be best served by the orderly administration of Ms Revis' affairs in the bankruptcy and the realisation of her interest in the house property before that equity is further dissipated. Clearly, the Federal Magistrate was not satisfied that the sequestration order ought not to have been made and, had the occasion arisen for the exercise of the discretion conferred by s 153B, he would have exercised that discretion adversely to the now Appellant. He reasoned that: it was not appropriate to employ the mechanism provided for by s 153B to contest the orders made in September 2008; and " [i]n any event ", the " motivation " for the District Court proceeding was " to avoid dealing with the bills of costs rendered by Ms Murphy for the family law proceedings ". Notwithstanding the submission of the Respondent that it was the failure to satisfy the Federal Magistrate as to solvency which formed the basis of the Federal Magistrate's decision, it is considered that paragraph [15] was either the principal basis upon which the Magistrate proceeded or a very significant reason for his decision to dismiss the application being advanced. In so proceeding, it is respectfully considered that the Federal Magistrate erred. Centrally relevant to whether a sequestration order may be made are the financial circumstances of the debtor. Section 52(2) of the Bankruptcy Act 1966 (Cth) thus provides as follows: If the Court is not satisfied with the proof of any of those matters, or is satisfied by the debtor: (a) that he or she is able to pay his or her debts; or (b) that for other sufficient cause a sequestration order ought not to be made; it may dismiss the petition. " Other sufficient cause " may include a claim sounding in money by the debtor against a petitioning creditor: Totev v Sfar [2006] FCA 470 , 230 ALR 236.


case_text: power conferred by O 52 r 38(1)(a) " must not be lightly exercised ": Van Reesema v Giameos [1979] FCA 108 ; (1979) 41 FLR 86 at 90 per Bowen CJ, Fisher and Lockhart JJ; Goldie v The Commonwealth of Australia [2004] FCA 973 at [16] per Carr J. It has further been recognised that the Court's power " to dismiss for want of prosecution is a drastic step which would only be justified by the grossest or most contumelious delay ": Hughes v Australian Competition and Consumer Commission [2004] FCA 1271 at [8] per Jacobson J. It is " exceptional for the court to dismiss a matter for want of prosecution under O 52 r 38(1)(a) ": Abraham v Attorney-General for the Commonwealth [2004] FCA 411 at [5] per Finn J.


case_text: manner in which s 153B is to be applied has been summarised as follows by Carr, Finn and Sundberg JJ in Heinrich v Commonwealth Bank of Australia [2003] FCAFC 315: [20] The Court must first consider whether the sequestration order ought not to have been made. If it so finds, then the Court must consider whether, in the exercise of its discretion, the bankruptcy should be annulled: Re Deriu (1970) 16 FLR 420. Later evidence of previously unknown facts may disclose matters which show that the sequestration order ought not to have been made. That is, the Court is entitled to consider not only the case as disclosed at the time when the sequestration order was made, but also those facts now known then to have existed. The Court excludes those facts which have occurred since the order was made. Later evidence of previously unknown facts may disclose matters which show that the sequestration order ought not to have been made: Re Frank; Ex parte Piliszky (1987) 16 FCR 396 ; Stankiewicz v Plata [2000] FCA 1185 at [19] ; Re Williams (1968) 13 FLR 10 at 23; Re Ditfort; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347. These authorities, all of which were cited by the learned primary judge in his judgment, were accepted at first instance as reflecting the relevant law. See also: Voskuilen v Morisset Megamarket Pty Ltd [2004] FCA 1727 at [14] per Jacobson J; Hacker v The Owners - Strata Plan No 17572 [2005] FCA 1936 at [46] per Emmett J; Johnston v Challen t/as Hawthorn Cappaidge and Badgery [2006] FCA 401 at [32] per Collier J; Gargan v Kippin Investments Pty Ltd [2008] FCA 1718 at [11] per Perram J.


case_text: than mere assertion is required before an abuse of process can be established: Watts v Adelaide Bank Ltd [2009] FCA 420. The argument is rejected. Had an occasion for the exercise of any discretion arisen, that discretion would have been exercised against the Appellant by reason of: her delay in commencing the District Court proceedings, the Family Court proceedings being heard in November 2005 and the District Court proceedings being commenced in July 2007; the fact that the Appellant has not demonstrated or adduced any evidence that she is presently solvent. The only evidence as to the current financial circumstances of the Appellant was contained in the Trustee's affidavit prepared for the purposes of the December 2008 proceedings in the Federal Magistrates Court. He there stated: [44] ... it is my opinion that the Bankrupt was insolvent at the date of Bankruptcy and at the time of swearing this Affidavit. There was no more current evidence. the absence of any full and frank disclosure by the Appellant of her financial affairs as at the date of the hearing of her appeal; and the voluntary non-appearance and want of opposition to the creditor's petition at the outset of the bankruptcy process. An additional factor may also be relied upon, namely: the failure of the Appellant to promptly prosecute the present appeal, albeit not being a delay warranting dismissal of the appeal.


case_outcome: referred to

case_text: those orders be continued against other respondents who are members of the NUW? The answer to this question depends on whether, as members, they are bound to perform and observe the Rules by engaging or not engaging in the conduct which is the subject of his Honour's orders. As officers, they were subject to the rules because they owed fiduciary obligations to the union: cf Allen v Townsend [1977] FCA 10 ; (1977) 31 FLR 431 at 483. Members, as such, do not have equivalent fiduciary obligations. Mr Borenstein nonetheless argued that members of an organisation are under an obligation not to act against the interests of the organisation of which they are members. He submitted that the Rules constituted a compact which defined the relationship between the member and the union. There was, he submitted, an implied restraint against a member acting against the interests of the union by procuring resignations by other members. He referred to Rule 3 of the NUW rules, which provides that, where a member acts in a way that conflicts with the objects of the union, that member may be subject to a charge under Rule 67 for failing to observe the rules of the union. The only object to which he referred was that found in rule 2(44) which was 'To enrol into membership of the union all employees eligible to become members of the union'.


case_title: Cook v Crawford (1982) 43 ALR 83

case_text: is arguable that Rule 2(44) may give rise to a negative implication that employees who have been induced to enrol as members should not, thereafter, be encouraged by other members to resign their membership. There may be some support to be found for the existence of such an implication in dicta in the judgment of Smithers J in Cook v Crawford (1982) 43 ALR 83 at 116. His Honour there said: "Whatever reasons the appellants may have had for thinking that their resistance was justifiable, there could, of course, be no justification of any kind for members and officers of the organisation actually to attempt to induce other members to resign from it. To try to reduce the membership of the organization whilst remaining members and officers thereof was conduct which could only be described as most reprehensible. Whether or not there was some expressed or implied rule of the organisation which forbade members to engage in such conduct, it conflicted with every implied obligation of official duty" (emphasis added). See also at 114 per Smithers J, and 159-160 per Sheppard J. It is not necessary, in dealing with interim Orders, to come to a concluded view as to whether or not there is an obligation, which may be enforced against a member of an organisation under s 164, not to prejudice the interests of the organisation by encouraging fellow members to resign. It is sufficient that I conclude, as I do, that this is a serious question which will require attention at a final hearing. Accordingly, I reject the application that Orders 1(a) and 1(b) of Gray J's Orders be vacated insofar as they apply to respondents who are presently members of the NUW. Order 1(c) is in a different category. It was made at a time when it was normal practice for a single application to be made, or concurrent applications to be made, by aspiring members who wished to join the NUW and the NUWQ. This was convenient because the Queensland branch of the NUW and the NUWQ had the same office bearers, operated out of the same offices, and acted as if they were a single entity. It was not, however, appropriate that respondents who were officers of the NUW should be recruiting workers to be members of the NUWQ to the exclusion of the NUW.


case_outcome: considered

case_title: Collingridge v Santor Pty Ltd (1997) 141 FLR 440

case_text: Reliance was also placed by the plaintiff upon the authority of Young J in Collingridge v Sontor Pty Ltd (1997) 141 FLR 440, particularly the passage at 445. I do not consider this case assists the plaintiff. Again, that case was dealing with a situation of an arrangement being entered into without a special resolution and it was held to be null and void. Reliance was placed, however, I think by way of analogy and by way of principle, upon a passage where Young J said: However, it is clear that the deed could not be consummated without the memorandum or articles of association being altered so as to include material which would exempt the scheme from being a reduction of capital because of s 195(13) of the Corporations Law . 17 In my view this is not the situation confronting me. The Acquisition Deed could well be consummated without any change of name (for example), although the consequences of a failure to do so, that is failing to change the name, may impact adversely upon the Company. I do observe that there is the opportunity for the Royal Automobile Club of Victoria Ltd ('RACV') to terminate the arrangements in circumstances where the change of name does not occur, at least as the arrangements are currently drafted. But, in any event, even if I am wrong as to this analysis, in my view the decision of Young J does not deal with the point I need to decide, namely whether there is a requirement for a special resolution in this case. 18 The position remains that there is no requirement in the articles of association, or the Act, that necessitates the use of a special resolution procedure in this case, nor has any other reason been shown for such a procedure to be adopted. 19 I mention some other matters raised by the plaintiff for completeness. The plaintiff referred to the proposed arrangements conferring unequal benefits upon members, and reference was made to arts 4 and 20 of the articles of association. The benefits proposed to be conferred by the arrangements are benefits to be conferred by membership of the new association operated by the RACV; they are not benefits conferred under the articles of association of the existing entity, namely the Company. In my view, arts 4 and 20 have no application to the circumstances of this case. 20 Secondly, I observe that the objective of the proposal is to preserve and improve golfing facilities for members of the Company. To the extent that this is a matter which is relevant for determination, I do not accept that the proposal is inconsistent with the objects of the Company set out in para 2 of the memorandum of association. There is the promotion of the game of golf, and the provision of links and grounds at Torquay, which do not necessarily need to involve the ownership of the land. 21 It was also suggested that the implementation of the proposal will involve a contravention of para 8 of the memorandum of association and art 67 of the articles of association. However, it is to be observed that each of those provisions is predicated upon there being a "winding up or dissolution" of the Company. The proposal is not one for the winding up of the Company or its dissolution, although this is contemplated to occur in due course. Paragraph 8 of the memorandum and art 67 of the articles will operate according to the terms upon a winding up or dissolution when that occurs. 22 Finally, considerations of policy were adverted to by the plaintiff, which may impact upon other questions that could arise out of these circumstances, but not upon the sole issue which I have been asked to decide. 23 In these circumstances I propose to order that the application 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 Middleton. Associate: Dated: 14 June 2007 Counsel for the Applicant: P Bravender-Coyle Solicitor for the Applicant: Wightons Lawyers Counsel for the Respondent: J G Santamaria QC with C R Northrop Solicitor for the Respondent: Harwood Andrews Lawyers Date of Hearing: 22 and 23 May 2007 Date of Judgment: 23 May 2007 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/911.html


case_text: In support of the plaintiff's contention that a special resolution is required now, reliance was placed upon the case of James v Beuna Ventura Nitrate Grounds Syndicate Limited [1896] Ch D 456 at 463, where Lord Herschell said: A good deal of argument was addressed to us on the question whether this resolution of April, 1893, sanctioned a different allotment of the shares from that provided for by art. 27; and, if so, whether it was competent by a special resolution to sanction a departure from the provisions of art. 27 without having first by a special resolution duly altered that article. I am not satisfied that it would be competent for the company thus to act. It is unnecessary, however, to decide the point... 15 There is not here any sanctioning of a departure from the articles of association or the Act, as was hypothesised in the case of James [1896] Ch D 456. There is nothing in the proposal that has been put before the Court that suggests that the requirement in respect of a name change will not occur, namely, that procedures in relation to a special resolution will not be followed.


case_text: The plaintiff also relied upon the cases of Taylor v Pilsen Joel & General Electric Light Co [1884] 27 Ch D 268 and McCawley v The King [1918] HCA 55 ; (1918) 26 CLR 9. I do not consider these cases take the matter any further in the context of this case, as they do not deal with, or touch upon, the issue I need to determine, namely the one postulated by the plaintiff in identifying the issue. This is not a case where it is suggested the Company cannot enter into the arrangements at all. Nor is this a case where the entering into of the arrangement, or proposal, will necessarily be a breach of the memorandum or articles of association.


case_title: Taylor v Pilsen Joel & General Electric Light Co [1884] 27 Ch D 268


case_text: notice to produce. The provision in the Federal Court Rules in relation to notices to produce is O 33 r 12. That rule provides: (1) Where a party to any proceedings serves on another party notice, in accordance with Form 45, requiring the party served to produce at any trial or hearing in the proceedings, or before any Judge, officer, examiner or other person having authority to take evidence in the proceedings any document or thing for the purpose of evidence and the document or thing is in the possession, custody or power of the party served, the party served shall, unless the Court otherwise orders, produce the document or thing in accordance with the notice, without the need for any subpoena for production. (2) Where the document or thing required to be produced in accordance with subrule (1) is not produced, the party serving the notice may lead secondary evidence of the contents or nature of the document or thing. (3) Subrule (2) does not affect the power of the Court to order costs against a party who fails to comply with a notice under subrule (1). Some principles have emerged in relation to notices to produce under O 33 r 12 from prior authorities. It is accepted that a notice to produce, properly issued in terms of O 33 r 12, has the same coercive effect as a subpoena. There is also authority that a notice to produce may be used even in respect of an interlocutory hearing. Though examples are to be found of such use it may perhaps require reconsideration at some stage in light of the remarks made in the Full Court in Lloyd Werft Bremerhaven GmbH v Owners of Ship "Zoya Kosmodemyanskaya" and Anor (1997) 79 FCR 71 at 93D (Bremerhaven), where the Full Court makes reference to adjectival rules to be applied at the hearing, being those appropriate to a final hearing. I proceed, though, on the basis that the desired use of a notice to produce by Mr Joyce to secure the production of particular documents for use in relation to the application to be heard on 14 December 2009 is, at least in theory, permissible under the Rules even though the application to be heard that day is not a final hearing. I note that in Tyco Australia Pty Ltd v Leighton Contractors Pty Ltd [2005] FCAFC 115 ; (2005) 142 FCR 428 , Hely J at 442, having voiced his general agreement with observations made by Hill J in relation to notices to produce, stated: Contestable issues of fact may arise in proceedings under O 15A for preliminary discovery.


case_text: sentiments expressed by Hely J were quoted with apparent approval by Graham J in Telstra Corporation v Minister for Communications, Information Technology and the Arts [2007] FCA 1398 (Telstra). One finds in Graham J's judgment in the Telstra case at para 44 through to, and including, para 54, a helpful recitation of authority in relation to practice and procedure concerning notices to produce. The Sunland parties do not challenge the prima facie ability of Mr Joyce to invoke the notice to produce procedure in support of his application on 14 December 2009.


case_text: is, it must be said, something of an incongruity in respect of a party who, on the one hand, challenges the jurisdiction of this Court to entertain the substantive proceeding and, on the other hand, seeks to invoke its compulsory process to support an application that that party is making. It may well be that, again prima facie, that course is impermissible: see Armacel Pty Ltd v Smurfit Stone Container Corporation [2007] FCA 1928 ; (2007) 164 FCR 123 at [10] . The application to be heard on 14 December 2009 has about it, though, as noted, an alternative predicated upon an absence of success as to the jurisdictional challenge. The Sunland parties, for their part, recognise the practicalities and also the service of the interests of justice by the hearing of the application for the relief Mr Joyce seeks on that day conjunctively rather than in some staggered way. For that reason there is no formal challenge to the ability to invoke the compulsory process reflected in a notice to produce made by the Sunland parties. Rather, they seek to meet whether the notice to produce should be set aside on the assumption that it is otherwise open to Mr Joyce to invoke that process. That seems to me to be a just way to approach the question of whether the notice to produce should be set aside in the particular circumstances of this case. In other words, whilst I have a particular reservation as to the invocation of the process when jurisdiction is under challenge, I shall proceed on the assumption that it is otherwise regular to have sought to invoke the process. Another question which emerges in terms of practice and procedure is the absence of a grant of leave to Mr Joyce for the issuing of any notice to produce, be it in the form quoted or in some other form. I say that because the notice seeks to have the documents it describes produced at a time other than the hearing which was to occur on 14 December.


case_title: Tyco Australia Pty Ltd v Leighton Contractors Pty Ltd [2005] FCAFC 115 ; (2005) 142 FCR 428


case_text: BP Australia Pty Ltd v Nyran Pty Ltd [2003] FCA 834 , Nicholson J had occasion to deal with an application for leave to serve a notice to produce. His Honour made the observation - with respect, an unsurprising observation - that O 33 r 12(1) did not require leave, but that was in the context of where production was to occur at a trial or hearing, or otherwise as provided in r 12. His Honour further observed that leave was necessary in the case before him because the notice sought the production of documents other than at a trial or hearing. Mr Joyce's counsel, upon this particular subject being drawn to his attention, applied orally for a grant of leave. Thus there are strictly two applications before the Court today. One is that brought by the Sunland parties for the setting aside of the notice to produce; the other is for a grant of leave for the production of documents on notice prior to the hearing on 14 December. The Sunland parties describe the notice to produce as "a mere fishing expedition". Their submission is that fails to meet the requisite test of relevance in relation to notices to produce. An alternative submission is made in respect of paras 2, 5 and 6 of the notice; that it is oppressive.


case_outcome: followed

case_text: test, so far as the question of relevance is concerned, is one of adjectival relevance. Further, so far as any question of "fishing" is concerned, observations made in the Full Court in Bailey v Beagle Management Pty Ltd [2001] FCA 60 ; (2001) 105 FCR 136 at 143 are pertinent: [E]ven if the notices to produce are properly to be regarded as fishing, that concept has undergone substantial rethinking in this Court in recent years. In a number of cases it has been pointed out that O 15A r 6 (discovery before action) expressly contemplates what once might have been castigated as fishing and that it would be incongruous if the power to order discovery much less extensive in favour of a party to a proceeding properly brought in the Court than in favour of someone unable for lack of evidence to mount a case.


case_title: McMahon v Gould (1982) 7 ACLR 202

case_text: 14 December 2009, insofar as the application turns on matters other than jurisdiction, it is evident that Mr Joyce will seek to persuade the Court that there is unjust prejudice to him in the continuance of these proceedings of a kind described in McMahon v Gould (1982) 7 ACLR 202 at 208. One factor to which Mr Joyce proposes to point is that it is, to say the least, likely that evidence in these proceedings, insofar as it is lawfully possible under our law for the same to be disclosed, will find its way to the authorities in the Emirate. So much is accepted by the Sunland parties. The Sunland parties go rather further in terms of the particular qualities that are likely to attend them in relation to these proceedings and in respect of proceedings, both civil and criminal, in the Emirate. That this is so is evident in terms of statements made publicly by the Sunland parties, the contents of which are in evidence before me in the form of a series of Australian Stock Exchange and Media Releases issued under the hand of a Mr Harrison, the company secretary of the Sunland Group. Thus, on 20 February, the Sunland parties have disclosed openly that: Information has been provided by Sunland to the investigating authorities [I interpolate "in Dubai"] and the Sunland Group will continue to provide assistance where required.


case_text: Order 11 rule 16 of the Federal Court Rules permits the Court to strike out a pleading (in whole or in part) where no reasonable cause of action is disclosed; where the pleading has a tendency to cause embarrassment or is otherwise an abuse of process such as where an action is time barred: Jobbins v Capel Corporation Limited and Another [1989] FCA 538 ; (1989) 25 FCR 226. It is an abuse of process to bring a proceeding which can clearly be seen to be foredoomed to fail: Walton v Gardiner [1993] HCA 77 ; (1993) 177 CLR 378 at 393.


case_title: Walton v Gardiner [1993] HCA 77 ; (1993) 177 CLR 378


case_text: The respondent submits that the cause of action founded upon a contravention of s 52 of the TPA is doomed to fail in that it is time barred: s 82(2) and Schedule 1, item 21 of the Trade Practices Amendment Act (No 1) 2001 (Cth). Ms Windsor seeks damages under s 82 and s 87. In the case of any cause of action which had not expired as at 26 July 2001, that action must be commenced within six years of the date upon which the cause of action accrued. Ms Windsor's case appears to be that she was induced to enter into a contract on the basis of representations made in contravention of the TPA. That contract (putting aside the question of parties) was made on 8 January 2001: see para 4 of her statement of claim. Proceedings were commenced on 28 February 2007. The cause of action accrued when the loss was ascertained (the date of entry into the contract) or was reasonably ascertainable (on 13 January 2001, when the representations were first shown to be false): see Wardley Australia Limited and Another v The State of Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 as to the date of accrual of the cause of action. As such, the cause of action is time barred. 24 The respondent submits that it is not clear from the pleading whether Ms Windsor contends that the representations were rendered misleading or deceptive by reason of the fact that the contract did not contain terms consistent with the representations. Ms Windsor does not expressly plead that the representations were false, misleading or deceptive. If the case propounded by Ms Windsor is that the contract did contain terms consistent with the representations, Ms Windsor did not suffer loss by reason of the representations, but rather by reason of a breach of contract. Conversely, if Ms Windsor's case is that the contract did not contain those terms, the cause of action plainly accrued when she entered into a bargain devoid of those terms or when the representations were first shown to be false. 25 Ms Windsor submits that the respondent's arguments that her claim is doomed to fail because it is time barred is fatally flawed in that it incorrectly assumes that all causes of action occurred before 28 February 2001.


case_text: The statutory duties owed by the first respondent are in addition to the common law and fiduciary duties which rest upon a company's officers. The first respondent owed corresponding fiduciary duties to those of his statutory duties. He also owed fiduciary duties: (a) not to prefer his own interests to those of the applicant; (b) to act with reasonable care in the discharge of his duties as a company secretary; and (c) not to place himself in a position where his duty to the applicant conflicted with his own self-interest or where there was a possibility of such a conflict arising: Bordman v Phipps [1966] UKHL 2 ; [1967] 2 AC 46 at 123; Chan v Zacharia [1984] HCA 36 ; (1984) 154 CLR 178 at 198.


case_text: However, in case I am wrong, I should address the contention. In BP Refinery (Westernport) Pty Ltd v Shire of Hastings [1977] HCA 40 ; (1977) 180 CLR 266, a majority of their Lordships in the Privy Council said in their view, for a term to be implied, the following conditions (which may overlap) must be satisfied: '(1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it; (3) it must be so obvious that "it goes without saying"; (4) it must be capable of clear expression; (5) it must not contradict any express terms of the contract.' That case was approved by the High Court in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24 ; (1982) 149 CLR 337.


case_text: A proceeding under s 1322(2) is not limited to a legal proceeding: Langton v Forsayth Mineral Exploration NL (1975) 1 ACLR 227. A proceeding extends to 'every type of procedure which might be undertaken by a company or in relation to a company's affairs': Broadway Motors Holdings Pty Ltd (In Liq) and the Companies (New South Wales) Code (1986) 6 NSWLR 45 at 55.


case_title: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24 ; (1982) 149 CLR 337


case_text: An application under s 1322(4)(a) is not confined to a procedural irregularity. The subsection clearly has a wider application: Jordan v Avram (1997) 25 ACSR 153 at 157; Deputy Commissioner of Taxation v Partinex [2000] NSWSC 99 ; (2000) 34 ACSR 391.


case_text: In Dunlop Pneumatic Tyre Company Limited v New Garage and Motor Company Limited [1915] AC 79 at 86-87, Lord Dunedin said: '3. The question whether a sum stipulated is penalty or liquidated damages is a question of construction to be decided upon the terms and inherent circumstances of each particular contract, judged of as at the time of the making of the contract, not as at the time of the breach ...' 440 Lord Dunedin said in relation to the task of construction (at 87): ' 4. To assist this task of construction various tests have been suggested, which if applicable to the case under consideration may prove helpful, or even conclusive. Such are: (a) It will be held to be penalty if the sum stipulated for is extravagant and unconscionable in amount in comparison with the greatest loss that could conceivably be proved to have followed from the breach. ... (b) It will be held to be a penalty if the breach consists only in not paying a sum of money, and the sum stipulated is a sum greater than the sum which ought to have been paid ... (c) There is a presumption (but no more) that it is penalty when "a single lump sum is made payable by way of compensation, on the occurrence of one or more or all of several events, some of which may occasion serious and others but trifling damage" ...'


case_text: The Heads of Agreement entered into on 13 October provided that the 'Free Carry Shares' were only to be issued so long as the respondents 'continue to be employed by (the applicant)': clause 5(g). The shareholders agreement also contemplated that the respondents had to achieve the performance criteria themselves so as to be entitled to the issue of the shares under that agreement. In my opinion, regard can be had to those two previous transactions to discern the objective intention of the parties in relation to the circular resolution: HIH Casualty & General Insurance Ltd v New Hampshire Insurance Company [2001] 2 Lloyd's Report 161 at [83]. 388 The very purpose of performance shares, in my opinion, is to induce the person to whom the shares are given to perform. That was the purpose for their issue in this case because it was important for the applicant to have those who had the responsibility of managing the applicant achieve the performance criteria. The performance shares were issued with the objective intention that the performance criteria in the performance shares would be met by the holders of the performance shares themselves. That means that the respondents had to cause the applicant to achieve the performance milestones. 389 It was contended by the applicant that the respondents had to raise capital with ANZIS in accordance with ANZIS' offer of 29 November 2004 because that transaction was later embodied in the subscription agreement. Because that particular capital raising did not occur, then that criteria was not achieved. I do not think that the circular resolution necessarily obliged the respondents to raise capital only in accordance with ANZIS' offer of 29 November 2004. I think the criterion that needed to be met was to raise sufficient capital so as to allow the second criterion also to be met. It did not need to be with ANZIS or, if it was with ANZIS, it did not need to be only in the terms of the offer made on 29 November 2004. It was only necessary that the respondents raised sufficient capital to allow the second criterion to be met. In any event, that does not weaken the applicant's case because, whatever the criterion was, it was not met by either or both the respondents. 390 In my opinion, the first respondent is not entitled to claim that the performance shares converted to B Class shares after the applicant satisfied the performance criteria in the circular resolution under its new management. 391 It follows that if I am wrong about my conclusion that the resolution contained in the circular resolution should be rescinded and the issue of the performance shares set aside and the first respondent is entitled to the performance shares, the first respondent will never be entitled to have those shares convert to B Class shares because he and the second respondent did not satisfy the performance criteria.


case_title: Jordan v Avram (1997) 25 ACSR 153


case_title: Langton v Forsayth Mineral Exploration NL (1975) 1 ACLR 227


case_text: The two documents under consideration (the circular resolution and the Executive Service Agreement) must be construed in accordance with the principles laid down by the High Court in Pacific Carriers Ltd v BNP Paribas [2004] HCA 35 ; (2004) 218 CLR 451 and Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 ; (2004) 219 CLR 165. The principles which may be extracted from those decisions are: 1. The subjective beliefs or understanding of the contracting parties are irrelevant. 2. The rights and liabilities of the parties to a contract will be determined by reference to the objective intention of the parties. 3. The common intention of the parties will be discerned by considering what a reasonable person would understand the parties to have intended to have meant by the terms. 4. The documents will be construed having regard to the purpose and object of the commercial transactions. 5. Reference must be made to the text and the context of the terms under consideration. 6. Reference should be had to the surrounding circumstances known to the parties.


case_text: Section 1322 is a remedial provision and should be given a liberal interpretation: Re Insurance Australia Group Ltd [2003] FCA 581 ; (2003) 45 ACSR 702. The power to validate given in s 1322 and s 254E must be exercised by reference to the purposes of the sections in the Corporations Act . 360 The purpose of s 1322 is to empower the Court to relieve a company of the consequences of non-compliance with a proceeding under the Corporations Act . It allows the Court to make orders to validate procedures or transactions where there has been non-compliance with a provision of the Corporations Act . The power is to be exercised in favour of the company unless, in the case of s 1322(2) , the irregularity which is the subject matter of the application has caused or may cause substantial injustice but cannot be remedied by any order of the Court.


case_title: Re Wave Capital (2004) 47 ACSR 418

case_text: Whilst s 254E is silent on the question of substantial injustice, in my opinion, no order would be made under s 254E unless the applicant could show that no injustice would be caused to any other party. In Re Wave Capital (2004) 47 ACSR 418 at [29], French J said: 'Like the discretion to validate invalid share issues under s 254E , the power conferred by s 1322 must be exercised having regard to the requirements of the purposes of the Corporations Act and any other relevant statutes whose application may be in issue. It must also be exercised having regard to the interests of all parties affected and the public interest in ensuring compliance with statute law and company constitutions. Evidence of a blatant disregard of the provisions of the Act or the constitution of the company may lead to refusal of relief: Re Onslow Salt Pty Ltd (2003) 198 ALR 344; 45 ACSR 322 and cases there cited.'


case_text: No order can be made under s 1322(4)(a) unless the party applying can satisfy paragraphs (a) and (c) of s 1322(6). The matters in s 1322(6)(a) are disjunctive: Re Westpac Banking Corporation (ACN 33 007 457 141) and Others (2004) 53 ACSR 288. It was contended by the applicant that such an order would not be made because the first respondent has not discharged his obligation of establishing that a validation order would be unlikely to result in a substantial injustice to any person. 371 It was contended that the applicant had given as its particular in its plea in paragraph 4E.2 and paragraph 4EE that no substantial injustice has been or is likely to be caused to any person; that the applicant had approved the issue of performance shares on terms no more favourable in the shareholders agreement; and that thereafter any person who had acquired shares did so with knowledge of the agreement to issue those shares. For the reasons already given, that particular has not been made out. The performance shares in the circular resolution were to issue on more favourable terms to the respondents than the performance shares contemplated in the shareholders agreement. 372 The applicant pleaded in reply to the first respondent's defence that the failure to comply with s 246B of the Corporations Act has resulted in substantial injustice in that the applicant's shareholders would have or may have refused to approve the issue of the performance shares. No other particular of any substantial injustice is given by the applicant in that pleading.


case_text: Lord Dunedin's speech was recently followed in the High Court in Ring Row Pty Ltd v BP Australia Pty Ltd [2005] HCA 71 ; (2005) 222 ALR 306, subject to the caveat at 309. 442 At the time that the Executive Service Agreement was entered into the first respondent was a chartered accountant in full-time employment which was apparently available to him for the foreseeable future. 443 The applicant was liable under clause 13.1(b) of the Executive Service Agreement to pay the full amount of the first respondent's remuneration package unless the contract of employment was terminated for illness, poor performance, including summary termination, or if the company ceased to trade.


case_title: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 ; (2004) 219 CLR 165


case_text: It is also true, as the appellant submitted, that the Tribunal commits an error of law if it imposes a requirement on an applicant to modify his or her behaviour or if it fails to consider the reason(s) for modified behaviour and, if fear of persecution is a reason, if it fails to consider if the fear of harm is well-founded and whether the threat of harm itself constitutes persecution: Appellant S395/2002 v Minister for Immigration and Multicultural Affairs [2003] HCA 71 ; (2004) 216 CLR 473 (" Appellant S395/2002 "). 31 In my opinion, the Tribunal did not fail to consider whether the appellant had a well-founded fear of persecution based on his conversion from Islam to Christianity. It must be remembered that the focus of the appellant's claim was that Jihadists were pursuing him at the instigation of his uncle. The Tribunal clearly rejected that claim. It rejected the appellant's assertion that there had been five incidents involving the appellant and Jihadists in Kano in 2002 and it rejected the assertion that Jihadists were searching for him. It rejected his explanation for travelling to Kano in June 2004 in light of his evidence that Jihadists were pursuing him as "far fetched and implausible". Any suggestion that the Tribunal was not entitled to make those findings on the evidence must be rejected. 32 Once the appellant's claim that he was being pursued by Jihadists at the instigation of his uncle is rejected and (as was the case) in the absence of any evidence or material to support a conclusion that the appellant would be identified by Jihadists as a convert, it was appropriate that the Tribunal consider, as it did, the general situation in Nigeria and, in particular, the fact that half of the country's population is Christian. In other words, it was appropriate for the Tribunal at that point to consider whether the appellant would or may face persecution by reason of the fact that he was a Christian. 33 I do not think the Tribunal made the error of treating what has happened as decisive in terms of whether there is a well-founded fear of persecution (see the discussion in Appellant S395/2002 at 498 [72]-[77]). It dealt with the principal case advanced by the appellant and rejected it. There was no evidence that the appellant's conversion would be discovered and the mere fact that he was a Christian would not give rise to a well-founded fear of persecution. 34 Furthermore, I do not think the Tribunal erred in its approach to the appellant's modified behaviour. It is not clear to me whether the Tribunal accepted the appellant's evidence that he had modified his behaviour. It appears that the Tribunal may have proceeded on the basis that even if the appellant had modified his behaviour in Lagos and even if that was because he feared persecution, the fear of persecution was not well-founded. I do not think there is any error in that approach. Once the Tribunal member made the findings she did and in particular once she rejected the appellant's principal claim it was open to her to conclude that even if the appellant genuinely feared persecution the fear was not well-founded.


case_text: There can be no doubt, as the appellant submitted, that the Tribunal was required to review the delegate's decision (s 414) and a failure by the Tribunal to deal with a "substantial, clearly articulated argument relying on established facts" made by an applicant will constitute jurisdictional error because it constitutes a constructive failure to exercise jurisdiction: Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26 ; (2003) 77 ALJR 1088 at 1092 [24] - [25] per Gummow and Callinan JJ. A judgment that the Tribunal has failed to consider a claim not expressly advanced is not lightly to be made: NABE at 22 [68].