Granich v Yap [1999] FCA 1039 (30 July 1999)

Last Updated: 2 August 1999

FEDERAL COURT OF AUSTRALIA

Granich v Yap [1999] FCA 1039

BANKRUPTCY - application for review and annulment of sequestration order - powers of court - judgment debt - costs order in unsuccessful proceedings against former solicitors - allegation of fraud in relation to proceedings giving rise to judgment debt - appeal process in relation to judgment debt exhausted - no cause to go behind judgment debt - motion for review and annulment dismissed.

Federal Court Rules O 35 r 7 O 77 r 8

Bankruptcy Act 1966 (Cth) s 153B

Miles v The Shelf Company of Australia (unrep, Fed Court, Sundberg J VG7674 of 1997) cited

GRANICH & ASSOCIATES v YAP CHENG SEE

WAG 7047 of 1998

FRENCH J

30 JULY 1999

PERTH

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAG 7047 OF 1998

IN THE MATTER OF YAP CHENG SEE

	GRANICH & ASSOCIATES Applicant Creditor
	And YAP CHENG SEE Respondent Debtor
JUDGE:	FRENCH J
DATE OF ORDER:	30 JULY 1999
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1. The motion is dismissed.

2. The Respondent is to pay the Applicant's costs of the motion to be taxed and paid

out of the bankrupt estate in accordance with the statute.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAG 7047 OF 1998

IN THE MATTER OF YAP CHENG SEE

GRANICH & ASSOCIATES Applicant Creditor And YAP CHENG SEE Respondent Debtor

JUDGE:	FRENCH J
DATE:	30 JULY 1999
PLACE:	PERTH

REASONS FOR JUDGMENT

History of Proceedings

1 On 1 May 1998 Granich & Associates, a firm of solicitors, filed a creditor's petition in the WA District Registry of the Federal Court seeking a sequestration order against Yap Cheng See. The act of bankruptcy relied upon was non compliance with a bankruptcy notice served on 11 October 1997. The bankruptcy notice made demand for payment of $33,184.11. The amount of the debt comprised $29,790.45 by way of taxed costs which Mrs Yap was ordered to pay upon the dismissal of her claim for damages for professional negligence against Granich & Associates which claim was dismissed on 7 May 1996. The costs in question were taxed on 12 August 1996. In addition to the amount of the costs order a sum of $3,393.66 by way of post judgment interest was also claimed.

2 On 17 October 1997 Mrs Yap filed an application to set aside the bankruptcy notice on the basis that she had a counterclaim based upon the negligence of the creditor, Granich & Associates. On 1 December 1997, after hearing submissions from Mrs Yap and counsel for the creditor, the Registrar dismissed the application to set aside the bankruptcy notice and ordered that Mrs Yap pay the creditor's costs. No review was sought of that decision.

3 Mrs Yap had failed to comply with the bankruptcy notice by 3 November 1997 and her non-compliance formed the basis of the creditors petition. On 13 May 1998 she filed a notice of intention to oppose the petition based on a pending application for special leave to appeal to the High Court in relation to her unsuccessful action against the solicitors. She also alleged:

"Deliberate concealment of facts relating to the debtor's cause of action to conceal the petitioner's breach of duty to the debtor pursuant to the petitioner's retainer/contract to the debtor."

An affidavit was filed with the notice of intention to oppose the petition. Further affidavits in opposition were filed on 15 June and 2 November 1998. The hearing of the petition was adjourned five times. Additional short affidavits were filed by Mrs Yap on 9 November and 25 November 1998. A further affidavit with a substantial volume of exhibits was filed by Mrs Yap on 4 December 1998 and on 9 December 1998 the petition was again adjourned to the following date. On 10 December 1998 the Registrar made an order refusing an application for a further adjournment of the hearing of the petition. He proceeded to make a sequestration order against Mrs Yap's estate and ordered that the costs of Granich & Associates be taxed and paid out of her estate in accordance with the Act.

4 On 16 December 1998 Mrs Yap filed a motion seeking an order that the judgment of the Registrar be set aside and the sequestration order be annulled, that Granich & Associates pay damages and the costs of what she described as "this appeal". A further affidavit was filed on the same day and another one on 14 January 1999.

5 The matter came on for directions before Nicholson J on 4 February 1999 and directions were given with respect to the filing of written submissions. Submissions were filed on 19 February and 4 March 1999 and a further affidavit from Mrs Yap on 11 June 1999. Short affidavits were also filed on behalf of Granich & Associates.

Background to the Bankruptcy Proceedings

6 On 15 March 1989 P. Vivante and Co Pty Limited issued a writ against Mrs Yap out of the District Court of Western Australia in action number 1536 of 1989. By its statement of claim the company alleged that it had:

"(a) Performed concreting work at Curtin University at the request of Akibilt Pty Ltd of which company Mrs Yap was a director and shareholder to a value of $25,000; and

(b) Paid the sum of $42,000 to Mrs Yap or at her direction in consideration for her promise to reimburse the company for the sums so paid."

It was further alleged that by a deed between the company and Mrs Yap stamped on 9 September 1988, she:

"(a) Acknowledged and agreed that the sums of $25,000 and $42,000 referred to were due and payable to the company;

(b) Agreed to pay interest to the company at the rate of 14% per annum calculated from 26 May 1988 on the debt or on the outstanding balance thereof from time to time;

(c) Guaranteed payment to the company of the debt due to it by Akibilt and agreed that she would stand as between herself and the company as principal debtor;

(d) Agreed to pay the costs for execution, stamping and registration of any mortgage, of the deed and for any caveats prepared in connection with the deed."

7 The statement of claim went on to assert that on 9 September 1998 payment in the amount of $33,000 was made to the company by Mrs Yap. The balance of $39,034.17 was said to have been demanded by the company by a notice in writing dated 1 March 1989. This represented the balance of the debt plus interest to 1 March 1989.

8 Mrs Yap did not enter an appearance to the writ which was served on her on 29 March 1989. As a result a default judgment was entered on 10 April 1989. A writ of fi fa was issued on 26 April 1989. Property owned by her was seized pursuant to the writ. Mrs Yap approached Melsom Robson & Co, Chartered Accountants for help. The processes of Part X of the Bankruptcy Act 1966 (Cth) were invoked on her behalf and in a statement of affairs annexed to a supporting affidavit she showed a list of unsecured creditors amounting to $758,248. The fifth of those was P. Vivante for an amount of $34,000. The nature of the debt was described as "work done guarantee". The other significant creditor was Esanda Finance Corporation Ltd for an amount of $617,000. The Part X proceedings did not go on. According to Mrs Yap this was because she was concerned that the amounts mentioned in respect of P. Vivante and Co and Esanda Finance were not accurate. Creditors' meetings were held on 23 January 1990 and 18 April 1990 at which it was decided that she should file a debtor's petition in bankruptcy by 25 April 1990. She did not do so. In February 1992 the bailiff called and left his card at Mrs Yap's door informing her that her house would be sold to satisfy the default judgment in the District Court action 1536 of 1989. On 10 April 1992 Mrs Yap, representing herself, made an application to set aside the default judgment obtained against her. Her application to set aside the default judgment was dismissed on 29 May 1992 on the basis of her non-appearance at court. On 29 May 1992 Mrs Yap made a further application to set aside the judgment and swore some four affidavits. The application was heard by Registrar Kingsley on 23 June 1992. He set aside the default judgment which had then been in effect for three years and granted Mrs Yap leave to defend the action. His order however was subject to a condition requiring that she pay $39,000 into court by 7 July 1992. Absent compliance with that condition the company would be able, once again, to enter judgment against her. On the day the default judgment was set aside Mrs Yap engaged Granich & Associates to act on her behalf and dealt with Mr Peter Smallbone of that firm.

9 There were cheques and bank statements from the Akibilt bank account with the ANZ Bank at South Perth which Mrs Yap considered would establish that Akibilt in fact owed no moneys whatever to the company in respect of concreting works it had carried out for the company at Curtin University. Only after she located some missing bank statements at her home was she able to obtain copies of cheques made payable to her company and to P. Vivante which she had been seeking. This information was exhibited to a fifth affidavit that she swore in support of an application for leave to appeal against Registrar Kingsley's order to a judge of the District Court. Two further affidavits were prepared by Granich & Associates and the application for leave to appeal out of time against Registrar Kingsley's order was heard by Judge Viol on 3 August, 10 August and 21 August.

10 Judge Viol observed that the application for leave to appeal was made broadly on two grounds:

1. That Mrs Yap was unrepresented at the time the proceedings originally took place and that had she been represented a different order might have been made.

2. That there was fresh evidence available suggesting an overpayment by her to the company and therefore that the sum originally claimed was not owing and that it would be unfair in the circumstances for the condition imposed by Registrar Kingsley to continue to exist.

11 Judge Viol found little in her affidavit material to justify the delay in the matter generally. Her failure to be represented and to take timely steps were not properly explained and there was no sufficient basis upon which it could be said that her lack of representation had mitigated unfairly against her. His Honour was particularly concerned as to the circumstances in which the missing cheques were said to have been found by Mrs Yap. He found her explanations difficult to accept and the timing of her finding rather suspicious. He took the view that the existence of the cheques confirmed the probable existence of the debt rather than amounting to evidence which might show that there was an overpayment. He also referred to the acknowledgment of debt executed by Mrs Yap on 5 September 1988. In the event his Honour Judge Viol concluded that there was not a sufficient basis for leave to be granted to Mrs Yap to file and serve a notice of appeal out of time against the orders and, in particular, the condition imposed by Registrar Kingsley. Her application was therefore dismissed.

12 In an ex tempore judgment on 10 June 1993 the Full Court of the Supreme Court of Western Australia refused an application for leave to appeal against the decision of Judge Viol.

13 Subsequently Mrs Yap instituted proceedings against Granich & Associates alleging that the firm had been negligent through its employee Mr Smallbone. Her action came on for hearing before Commissioner K. Martin QC in the District Court on 7 May 1996. Commissioner Martin gave an ex tempore judgment in which he dismissed the action against Granich & Associates. As he noted, Mrs Yap represented herself at trial and although a statement of claim had been filed on her behalf her identified grievances against Granich & Associates were as follows:

1. That her arguable defence in relation to overpayment of the company by Akibilt had not been adequately put in the affidavit material submitted to Judge Viol.

2. That the circumstances surrounding her argument that the deed was not to be treated as valid or binding upon her had not been adequately dealt with in the three affidavits prepared on her behalf by Granich & Associates.

3. That Mr Smallbone, on behalf of Granich & Associates, had not used his professional skills to adequately explain her reasons for the time lapse between the obtaining of a default judgment against her on 10 April 1989 and her application precisely three years later to set it aside on 10 April 1992.

4. That the circumstances surrounding Mrs Yap's aborting of the proposed Part X Bankruptcy Act arrangements in early 1990 had not been satisfactorily explained.

5. That the circumstances surrounding the situation under which she had not been able to place the ANZ cheques issued by Akibilt to P. Vivante or to the company having been located but subsequently becoming available at the time of the argument before Judge Viol were not explained in her affidavits.

In the course of the case Mrs Yap abandoned her attack against Granich & Associates based on the arguments 1 and 5. She conceded that the additional cheques obtained from the ANZ Bank had in fact been incorporated by Mr Smallbone into her affidavit of 7 July 1992 on her behalf. Commissioner Martin found there was no other information raising any further defence which she could point to which could have been incorporated in that affidavit.

14 As to the circumstances surrounding the curiously late obtaining of the Akibilt cheques, there could really be no serious argument that her affidavit sworn on 13 August 1992 dealt expressly with those circumstances in par 11. There remained then the allegations 2, 3 and 4 in respect of the alleged breach of duty of care owed by Granich & Associates to Mrs Yap. Commissioner Martin referred to the background circumstances particularly the substantial period of delay in seeking to set aside the default judgment, the fact that she was seeking to resile from the clear terms of a deed acknowledging her indebtedness and that she was seeking to resile from an express acknowledgment in her statement of affairs in the Part X proceedings of the existence of a debt to P. Vivante for $33,000. On the basis of those circumstances, Commissioner Martin concluded that Mrs Yap's defences, accepting that they were arguable, would be regarded by a court with knowledge of the circumstances as "weak and shadowy". She faced "an almost insurmountable task ... in persuading a court that a routine protective condition imposed by way of security by Registrar Kingsley in the exercise of his discretion should be removed". Commissioner Martin concluded, having heard what she now said about those matters and given the fact that no amount of explanation in her affidavits could have persuaded a court that her defences were anything other than shadowy, that it was appropriate to remove the protective condition. In the proceedings before Commissioner Martin, Mrs Yap called Mr Vivante the principal of the company who, as he said, "not surprisingly, gave evidence which did nothing to support Mrs Yap's arguments to the effect that Akibilt had overpaid the company". Indeed Commissioner Martin found the evidence established that Vivante had made loans to Mrs Yap in the amount of $112,000. The evidence from Mr Vivante did not lend any support to her contentions alleging misrepresentation or the overbearing of her will in relation to the execution of the acknowledgment of debt stamped 9 September 1988. Commissioner Martin accepted Mr Vivante's evidence on these issues as reliable and consistent with the documents in evidence before him. He also made reference to correspondence including a letter from Esanda Finance to Mrs Yap as secretary of another of her companies, Cheshire Holdings Pty Ltd. In that letter it was said that Esanda would make a payment to P. Vivante & Co of $34,000 leaving a balance of $33,000 under certain conditions. On the fourth page of that letter, Mrs Yap, on behalf of Cheshire Holdings Pty Ltd and on behalf of herself as a guarantor, accepted the terms of that proposal. A second letter to P. Vivante & Co from her as director of Akibilt involved an acknowledgment by Akibilt that it was indebted to the company, that it was unable to pay the moneys owed by it but that Mrs Yap had commenced to sell her personal assets to ensure that all creditors were paid in full. It included an offer to pay $34,000 within ten days and the balance owing within ninety days. According to Commissioner Martin Mrs Yap attempted at trial to explain these letters as attributable to an officer of Esanda Finance and not in accordance with her instructions. He did not accept her evidence in that regard. Indeed the Commissioner came to the conclusion that while it was not necessary for him strictly to finally determine what would have occurred at a trial on the merits in the company's action against Mrs Yap, it was very clear from all the evidence that the case for the company was overwhelming. Commissioner Martin also did not accept her evidence that she had signed the acknowledgment of debt without careful consideration or an appreciation of its contents and that misrepresentations were made to her by a solicitor acting on behalf of the company.

15 Referring to her sworn verification in the statement of affairs in the Part X proceedings in relation to a debt to P. Vivante, Commissioner Martin was of the view that she could not escape the consequences of her oath "in the cavalier fashion she has attempted to advance in her evidence given before me at trial". Moreover in a finding strongly adverse to Mrs Yap's credibility he said:

"In summary, I do not regard Mrs Yap's evidence as reliable, where it is not corroborated independently."

16 The Commissioner referred to the circumstances "as a set of circumstances which cried out for the imposition of the security condition imposed by Registrar Kingsley against Mrs Yap....". He accepted Mr Smallbone's evidence as a witness of the truth and particularly Mr Smallbone's statement in evidence:

"I always acted on your instructions. That's the way I did things and I believe I did the best I could. It was very difficult to deal with at times. Your instructions were very, very confused..."

Having regard to this background, Commissioner Martin found that the three remaining complaints or grievances of Mrs Yap against Mr Smallbone and Granich & Associates were all "completely without merit". The matters raised were not causative of any loss to Mrs Yap and it was inevitable that the prudent security condition imposed by Registrar Kingsley would remain in place.

17 Mrs Yap filed an appeal in the Full Court but on 21 July 1997 that appeal was dismissed for want of prosecution. The appeal had been filed on 17 May 1996 following the judgment given on 7 May 1996. It was served by letter dated 28 June 1996 on the solicitors for Granich & Associates. No further step was taken in prosecution of the appeal until 5 December 1996 when Mrs Yap filed a chamber summons for leave to substitute a fresh notice of appeal for the original. A motion to strike the appeal out was supported by an affidavit from Mr Granich of Granich & Associates saying that his firm had made a claim against Mrs Yap for unpaid legal fees of about $6,000 outstanding since 1992 in the Local Court. It was unable to progress its claim in the Local Court however until the pending appeal was heard and determined.

18 On 16 April 1997 a Full Court adjourned the application by Granich & Associates to strike out the appeal and directed that Mrs Yap apply to the Master for leave to amend the grounds of appeal and application within fourteen days. On 2 May 1997 however, the application to amend the notice of appeal was dismissed on the basis that the minute of substituted notice of appeal was "wholly defective". The application before the Master was then adjourned until 12 May 1997. Mrs Yap saw a solicitor to whom she paid a $1,000 on account to draft a new notice of appeal. The notice was not drafted and filed in time. On 12 May 1997 no new document was before the court and neither Mrs Yap nor her new solicitor attended. As a consequence her application was dismissed by Master Bredmeyer. The matter came on again on 23 May 1997 before Master Bredmeyer with affidavits explaining her delay and non-appearance. He considered the new notice was still defective. Given that, Master Bredmeyer did not propose giving Mrs Yap leave to bring in another minute and dismissed her application.

19 Before the Full Court subsequently, there was an affidavit of 13 June 1997 setting out a form of proposed substituted notice of appeal. After considering the proposed grounds of appeal and after making "every allowance" and giving "every possible indulgence" to Mrs Yap on account of her lack of representation, the Full Court held there were no grounds of appeal which complied with the Rules. Moreover it was impossible to determine from the papers that the appellant had an arguable case by way of appeal. In the reasons for judgment of the Chief Justice, with which Justices Kennedy and Franklyn agreed, it was said:

"In the present case the various attempts which have been made to formulate grounds of appeal in compliance with the Rules have all failed. At the same time there has been inordinate delay which has caused prejudice to the respondent. As a consequence it was inevitable that this appeal should be dismissed and that the appellant be ordered to pay the respondent's costs of the appeal."

20 Mrs Yap brought an application for special leave to appeal to the High Court from the decision of the Full Court. On 22 October 1998 the High Court dismissed the application for special leave. It gave oral reasons for its decision referring to the technical difficulties with her application, namely that she was out of time in bringing the application for special leave and that no affidavit evidence had been filed explaining the reasons for delay. The court also observed that her application was "entirely devoid of merit".

The Motion to Annul the Bankruptcy

21 As was pointed out in submissions on behalf of Granich & Associates Mrs Yap has not identified the source of the Court's power to make the orders she seeks. This is perhaps not surprising given that she was not legally represented. Possible sources of the Court's power to make orders relied upon by Mrs Yap include O 35 r 7 and O 77 r 8 of the Federal Court Rules and s 153B of the Bankruptcy Act 1966.

22 Order 35 r 7 provides:

"7(1) The Court may vary or set aside a judgment or order before it has been entered.

(2) The Court, where it is not exercising its appellate or related jurisdiction under Division 2 of Part III of the Act, may if it thinks fit vary or set aside a judgment or order after the order has been entered where:

(a) the order has been made in the absence of a party, whether or not the absent party is in default of appearance or otherwise in default and whether or not the absent party had notice of the motion for the order;

(b) the order was obtained by fraud;

(c) the order is interlocutory;

(d) the order is an injunction or for the appointment of a receiver;

(e) the order does not reflect the intention of the Court; or

(f) the party in whose favour the order was made consent"

23 The conditions under which that power can be exercised are not satisfied in this case. The sequestration order was made on 10 December 1998 and it was entered on 15 December 1998. Therefore O 35 r 7(1) does not apply. The other conditions under which the power in O 35 may be exercised as set out in O 35 r 7(2) are also not applicable to this case. Thus the order was made in Mrs Yap's presence. Her allegations of fraud related to the judgment debt upon which the bankruptcy notice and creditors petition were based, not the sequestration order itself. The order was not interlocutory, not injunctive and the party in whose favour the order was made does not consent to it being set aside.

24 Order 77 r 8 allows for review by the Court or a Judge of a Registrar's decision. It provides:

"8(1) In this rule:

"decision" means a decision, direction or act of a Registrar.

(2) An application for review of a decision must be made within 21 days of the date of the decision.

(3) A decision may be reviewed by the Court or a Judge.

(4) However, if the decision relates to a matter mentioned in section 31 of the Bankruptcy Act, it must be reviewed by a Judge sitting in Court."

25 Section 31 of the Bankruptcy Act requires that in exercising jurisdiction under the Act the Court shall hear and determine certain enumerated matters in open court. One of those matters is "creditors' petitions". There can therefore be no doubt that O 77 r 8 will apply to authorise judicial review of a Registrar's decision to make a sequestration order.

26 To annul a sequestration order, as is sought in the motion, requires the application of s 153B of the Bankruptcy Act which provides:

"153B. If the Court is satisfied that a sequestration order ought not to have been made or, in the case of a debtor's petition, that the petition ought not to have been presented or ought not to have been accepted by the Official Receiver, the Court may make an order annulling the bankruptcy."

27 A review under O 77 r 8, in the circumstances of this case, gives rise to essentially the same issues as those to which s 153B gives rise. The core question in either case is whether the Court can go behind the judgment debt upon which the bankruptcy notice and the creditor's petition were based.

28 The first affidavit filed by Mrs Yap, sworn on 11 May 1998 in opposition to the creditor's petition, focussed upon the conduct by Granich & Associates on the application to Judge Viol in the District Court for leave to appeal out of time against the order made by Registrar Kingsley. In the affidavit she asserted the negligence of Granich & Associates in various respects:

1. Failing to do a search on her properties which would have revealed the lodgment of caveats in favour of P. Vivante & Co Pty Ltd with no consideration in favour of Mrs Yap and that Mr Vivante and his company were owing Akibilt $60,650.

2. Related to the above is the alleged failure by Granich & Associates at the hearing before Judge Viol to take the point that the deed of acknowledgment of debt was invalid and unenforceable, evidently upon the basis that there was no consideration for it.

3. The omission, of an amount of $52,429 from a schedule "CSY-1" of Mrs Yap's affidavit of 7 July 1992, which entry would have substantiated her assertion that Akibilt had fully paid Vivante for its work and that the deed of acknowledgment of debt was false and fabricated.

The affidavit went into the background of Akibilt's dealings with Vivante and alleged loans made to Vivante or to Mr Vivante. In accordance with her affidavit and submissions, Mrs Yap repeatedly asserted that the action brought against her by P. Vivante & Co Pty Ltd was "void" and she evidently related this to the alleged invalidity and unenforceability of the deed of acknowledgment of debt. Those assertions, which seem fundamental to her argument, are simply unsustainable. The issues of negligence and underlying issues of the dealings with Vivante were canvassed by Commissioner Martin in his reasons for judgment in the unsuccessful action brought by Mrs Yap against Granich & Associates.

29 In essence, Mrs Yap appears, in her affidavit, to have been seeking to agitate again before the Registrar issues which had been decided adversely to her in the proceedings that she brought against Granich & Associates and, underlying that, the question of her liability to P. Vivante & Co Pty Ltd. These issues were further agitated in her affidavit of 2 November 1998 where she endeavoured to assert that the judgment adverse to her in the proceedings against Granich & Associates had been obtained by fraud. In this affidavit, after again canvassing issues between herself and P. Vivante & Co Pty Ltd and particularly loans allegedly made to Mr Vivante or his company, she asserted that counsel for the judgment creditor had deliberately concealed facts involving the judgment creditor's breach of duty and deliberately misrepresented a concession by the judgment creditor that one cheque for $4,170 had been left out of the schedule CSY-1 to her affidavit prepared by Granich & Associates in the earlier proceedings when in fact seven cheques amounting to $62,490 had been left out. She accused counsel for Granich & Associates of having "deliberately and artfully misrepresented the facts". She accused Mr Smallbone of deliberately lying in those proceedings in connection with a decision she had taken to abort the Part X proceedings.

30 At the end of her affidavit she said:

"I have shown that Mr Smallbone lied, Mr Vivante lied and Mr Ainslie QC deliberately misrepresented facts to concealed (sic) the J Creditor's breach of duty to me/my cause of action. Therefore, the Judgment it obtained on 7.5.96 was obtained by fraud."

31 The assertion that the judgment was obtained by fraud is, in truth, an assertion that the judgment was obtained on perjured evidence and misleading statements by counsel. The allegations are, on the face of it, highly implausible. The fact is her own credibility was found wanting by the Commissioner. The remedy for the asserted injustice was by way of appeal and her pursuit and the outcome of the appeal process has already been outlined. It is not now open to Mrs Yap to use these proceedings to endeavour to impugn the judgment upon which the judgment debt is based. It is to be noted also that in this case no question arises about the existence of any antecedent debt to found the judgment. The debt arose directly out of the order of the Commissioner in the District Court that Mrs Yap pay the legal costs of her unsuccessful action against Granich & Associates.

32 Where a judgment has followed a full investigation at trial in which both parties participated, the Court will not reopen the matter unless a prima facie case of fraud or collusion or miscarriage of justice is made out - see Miles v The Shelf Company of Australia (unrep, Fed Court, Sundberg J, VG7674 of 1997). In a case in which the relevant judgment flows from a trial before another court and the appeal process has been exhausted, it is a rare case in which the Court will go behind the judgment. The position is not quite as restrictive in the case of a default judgment.

33 In my opinion this is not a case in which it can be said that the sequestration order ought not to have been made. On the materials before the Registrar and before me it ought to have been made. All the conditions necessary for the making of that order had been satisfied at the time that it was made and whether Mrs Yap's motion is taken to be relying upon O 77 or s 153B or both, the motion will be dismissed.

I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French.

Associate:

Dated: 30 July 1999

	Mrs Yap appeared in person
Counsel for the Respondent:	Mr B.S. Dodd
Solicitor for the Respondent:	Mallesons Stephen Jacques
Date of Hearing:	26 July 1999
Date of Judgment:	30 July 1999