Re Michael Vincent Bourke and Terence Marcellin Bourke Ex Parte: Beneficial Finance Corporation Limited State Bank of New South Wales [1992] FCA 47 (14 February 1992)

FEDERAL COURT OF AUSTRALIA

Re: MICHAEL VINCENT BOURKE and TERENCE MARCELLIN BOURKE
Ex Parte: BENEFICIAL FINANCE CORPORATION LIMITED
STATE BANK OF NEW SOUTH WALES
Nos. N P1584 and N P1585 of 1991
FED No. 866
Number of pages - 8
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA
BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES
Morling J.(1)

CATCHWORDS

Bankruptcy - sequestration petition - notice of opposition - summons to produce documents - whether oppressive - application to strike out notice of opposition - application granted

HEARING

SYDNEY
14:2:1992

The Applicant Michael Vincent Bourke
appeared in person on behalf of himself and Terence Marcellin Bourke

Counsel for first respondent: Mr T S Hale

instructed by Bruce and Stewart Turton

Solicitor for second respondent: Ms A Odfelat

ORDER

Matter No. NP 1584 of 1991
The Court orders that:
1. The Summons to Witness addressed to the Manager, Bruce and Stewart Turton issued at the request of Michael Vincent Bourke, filed on 1 November 1991 and returnable on 11 December 1991 be set aside.

2. The Summons to Witness addressed to the Manager, Bruce and Stewart Turton issued at the request of Michael Vincent Bourke, filed on 22 November 1991 and returnable on 11 December 1991 be set aside.

3. The Summons to Witness addressed to Robert Ritchie Bruce issued at the request of Michael Vincent Bourke, filed on 1 November 1991 and returnable on 11 December 1991 be set aside.

4. The second Summons to Witness addressed to Robert Ritchie Bruce issued at the request of Michael Vincent Bourke, filed on 1 November 1991 and returnable on 11 December 1991 be set aside.

5. The second Summons to Witness addressed to David Ian Stewart issued at the request of Michael Vincent Bourke, filed on 22 November 1991 and returnable on 11 December 1991 be set aside.

6. The Amended Notice of Intention to Oppose Petition filed 26 July, 1991 be struck out.

7. Judgment debtor pay the costs of the application.

Matter No. P1585 of 1991
1. The Amended Notice of Intention to Oppose Petition filed 26 July, 1991 be struck out.

2. Judgment debtor pay the costs of the application.

Note: Settlement and entry of orders is dealt with by Order 124 of the Bankruptcy Rules.

DECISION

MORLING J. Beneficial Finance Corporation Limited ("Beneficial") has petitioned this court seeking orders that the estates of Michael Vincent Bourke and Terence Marcellin Bourke ("the judgment debtors") be sequestrated in bankruptcy. The petitions are based upon judgments obtained against the judgment debtors in the Supreme Court of New South Wales. On 31 May 1988 Beneficial obtained judgment against Michael Vincent Bourke in the sum of $1,254,899.63 and an additional sum for costs. On 3 June 1988 it obtained judgment against Terence Marcellin Bourke in the same amount and costs. It is common ground that the judgments have not been wholly satisfied.

2. On 16 May 1991 Beneficial presented a creditor's petition in proceedings No. P1584 of 1991, the petition being founded upon an act of bankruptcy alleged to have occurred on 24 November 1990 resulting from Mr Michael Bourke's failure to comply with a bankruptcy notice claiming $612,417.61. The notice was served on 2 November 1990. The bankruptcy notice was based upon the judgment above referred to, that judgment not having been set aside or stayed. Also on 16 May 1991 Beneficial presented a creditor's petition in proceedings No. P1585 of 1991 against Terence Bourke. This petition was founded upon an act of bankruptcy alleged to have been committed on 21 November 1990 resulting from Mr Bourke's failure to comply with a bankruptcy notice claiming $610,289.75. This notice was served on him on 31 October 1990. That notice was based upon the same judgment.

3. The history of the litigation in the Supreme Court and of subsequent litigation in the New South Wales Court of Appeal and in this Court is set out in a lengthy chronology which has been prepared by counsel for Beneficial. Mr Michael Vincent Bourke, who appeared for himself and for his brother, Terence Marcellin Bourke, in the proceedings before me did not dispute the accuracy of the chronology. Nevertheless, I have myself attempted to trace the history of the litigation from the material on the Court files and, having done so, I see no reason to doubt the accuracy of the chronology submitted to me.

4. I annex a copy of the chronology to these reasons so that the course of the litigation can be better understood.

5. I shall not attempt in these brief reasons to trace the history of the litigation as disclosed in the chronology. It is sufficient to say that since the judgments were obtained the judgment debtors have made a multiplicity of applications for the purpose either of having the judgments against them set aside or obtaining in this Court relief which would, in effect, rid them of liability under the judgments. All such applications have met with a total lack of success.

6. The judgment debtors have filed notices of intention to oppose the petitions served upon them. When the matter came on for hearing before me on 4 February, the judgment debtors sought to rely upon further amended notices of intention to oppose the petitions. These further notices had not been served upon Beneficial. Nevertheless, I permitted the judgment debtors to rely upon them. They have not formally been filed, but are annexed to voluminous affidavits which were filed shortly before the hearing. These affidavits had not been served upon Beneficial when the current proceedings came on for hearing.

7. The judgment debtors have caused to be issued a number of summonses to witnesses to produce documents to the Court. The judgment debtors wish to refer to these documents in support of their opposition to the petitions.

8. Beneficial now seeks orders that the amended notices of intention to oppose the petitions be struck out and that the summonses be set aside. In substance, Beneficial claims that the matters upon which the judgment debtors wish to rely have already been litigated unsuccess-fully by the judgment debtors. Beneficial also claims that the documents referred to in the summonses can only relate to issues which have already been decided against the judgment debtors. They also claim the summonses are so extensive as to be an abuse of the process of the Court.

9. Two very lengthy affidavits have been filed on behalf of the judgment debtors in opposition to Beneficial's application. I invited Mr Michael Bourke to supplement some brief oral submissions he made to me with further written submissions. He accepted this invitation and has furnished me with very lengthy written submissions in support of his opposition to the present application.

10. I have done my best to master the material which is in the Court files and to understand the arguments which have been presented on behalf of the judgment debtors. Having done so, I am not left in any doubt that the orders sought by Beneficial should be made.

11. In his brief oral submissions, Mr Michael Bourke made it plain that the principal matter upon which he wished to rely was that an officer of Beneficial had given perjured evidence to Hill J. in an earlier round of the litigation. Counsel for Beneficial pointed out that it did not call any evidence in its own case in the proceedings before Hill J. However, it appears that an officer of the respondent was called by the judgment debtors. Mr Bourke did not refer me to any material which lends any support for the submission that this officer's evidence was perjured. No appeal has been lodged against Hill J's decision on the grounds that perjured evidence was given at the trial. Nor has any application been made for an extension of time to appeal.

12. On 4 December 1991, Beaumont J. set aside a number of summonses for the production of documents. Those summonses, like the summonses subsequently issued and the subject of the application before me, required the production of a vast number of documents. Beaumont J. set aside the summonses. I was referred to the record of proceedings before Beaumont J. It does not contain any formal judgment delivered by his Honour, but his reasons for setting aside the summonses were based upon his view that to require compliance with the summonses would be oppressive. Those reasons apply, possibly with even more force, to the summonses with which I am concerned. To comply with the summonses would involve an inordinate expenditure of time and money. In my view they are clearly oppressive.

13. It has been submitted on behalf of the judgment debtors that if the additional material upon which they wish to rely had been before Hill J., he would have reached conclusions different from those referred to in his decisions which are referred to in the chronology. Having considered this argument,I do not think it has substance.

14. It is also to be observed that no real attack is made on the judgments obtained in the Supreme Court of New South Wales, notwithstanding the long passage of time since those judgments were obtained. As I have observed, those judgments have been neither set aside nor stayed. Indeed, it is my understanding that no application has ever been made to the Supreme Court, even for an extension of time to appeal, in respect of those judgments.

15. As to the application to set aside the summonses, it is my view that to allow them to stand would be tantamount to sanction an abuse of the Court's process. Quite apart from their prolificity, the documents referred to in them can only be relevant to issues which have already been determined in earlier rounds of the marathon litigation between the parties.

16. In substance, what the judgment debtors are attempting to do is to go behind the judgment upon which the bankruptcy notices are founded. There is no doubt that, in an appropriate case, this Court has jurisdiction to go behind a judgment upon which a bankruptcy notice is founded: see the cases referred to in McDonald Henry and Meek, Australian Bankruptcy Law and Practice, 5th edn., para. 265. The circumstances in which the jurisdiction will be exercised are referred to in Emerson and Anor v Wreckair Pty Ltd (Full Court 31 January 1992) and in the cases referred to in that decision.

17. In my opinion, there are overwhelming reasons why the Court should not go behind the judgments founding the bankruptcy notices served upon the judgment debtors in this case.

18. During the course of his submissions, Mr Bourke referred to the fact that he has applied to the Legal Aid Commission of New South Wales for legal aid. The only material before the Court with regard to this application is contained in the letter of 28 January 1992 written to Mr Bourke by the Legal Aid Commission. That letter was in the following terms:

"RE: APPLICATION FOR LEGAL AID
I refer to your facsimile dated 18 October 1991 and note its
contents.
I further note your telephone advices of 8 August 1991 that I
withhold preparation of your appeals to the Legal Aid Review
Committee until such time as all supporting documentation have
been received.
I advise that it has been some eight months since the applications
for legal aid submitted by yourself and your brother were refused
and that I am anxious to have the appeals dealt with.
Accordingly, I advise that the appeals lodged by yourself and your
brother will be prepared one month following the date of this
letter. You are invited to submit all further supporting
documentation in the interim.
We await your further advices."

19. Mr Bourke's letter of 18 October 1991 is not in evidence.

20. I am prepared to infer in Mr Bourke's favour, that soon after the bankruptcy petition was served upon him he made an application for legal aid, that this application was refused, and that he thereafter appealed under s. 656 of the Legal Aid Commission Act 1979 (NSW) ("the Act") to a Legal Aid Review Committee. It is to be noted from the Legal Aid Commission's letter that as at 28 January 1992 some eight months had passed since the applications for legal aid made by the judgment debtors were refused. No satisfactory explanation has been given for the delay in prosecuting the appeals to the Legal Aid Review Committee, nor is there any evidence before the Court as to the grounds of the appeals or as to their prospects of success.

21. The judgments obtained against the judgment debtors are for very significant sums. The judgments were obtained nearly four years ago and it is nearly fifteen months since the bankruptcy notices founded upon the judgments were served upon the judgment debtors. I have considered whether, having regard to the terms of s.57 of the Act, I should adjourn the proceedings. I do not think I should. I am not satisfied that the appeals to the Legal Aid Commission are not intended to improperly delay the conduct of the proceedings in this Court. Nor does the information before me lead me to the view that there are no special circumstances that prevent this Court from adjourning the proceedings - vide s.57(c) of the Act. On the contrary, I think the history of the litigation and the other matters to which I have already referred constitute special circumstances that would make it wrong for this Court to adjourn the proceedings. In any event, it is a question whether this Court is obliged to give effect to the terms of s.57.

22. For the above reasons, I think the order sought by Beneficial should be made. Accordingly in matter No. P1584 of 1991 I make orders in terms of paragraphs 1-6 inclusive of the application and I order the judgment debtor to pay the costs of that application. In matter No. P1585 of 1991, I make orders in terms of paragraph 1 of the application and I order the judgment debtor to pay the costs of that application also.