Battenberg v Restom [2007] FCAFC 195 (18 December 2007)

Last Updated: 19 December 2007

FEDERAL COURT OF AUSTRALIA

Battenberg v Restom [2007] FCAFC 195

BANKRUPTCY -- appeal from sequestration order -- whether appellant debtor ordinarily resident in Australia at time of act of bankruptcy for the purposes of s 43(1) of the Bankruptcy Act 1966 (Cth) -- whether debtor may be ordinarily resident in more than one place -- meaning of "ordinarily resident"

Held: appeal dismissed -- appellant debtor ordinarily resident in Australian at time of act of bankruptcy







Bankruptcy Act 1966 (Cth), s 43(1)

Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167 applied
Devries v Australian National Railways Commission [1992] HCA 41; (1993) 177 CLR 472 applied
Jones v Hyde [1989] HCA 20; (1989) 85 ALR 23 applied
Logue v Hansen Technologies Limited [2003] FCA 81; (2003) 125 FCR 590 followed
Mathai v Kwee [2005] FCA 932 referred to
Restom v Battenberg [2007] FCA 46 affirmed
Re Taylor; Ex parte Natwest Australia Bank Limited [1992] FCA 296; (1992) 37 FCR 194 followed
Turner v Trevorrow [1994] FCA 1091; (1994) 49 FCR 566 approved







ANDREW CHARLES ROBERT EDWARD ALBERT BATTENBERG v CONWAY ANTHONY RESTOM, PETER JAMES CALDWELL, ANTHONY JAMES CORDATO, BRIAN STUART OLIVER, PHILIP MARK DAY AND ALAN WILKIE NICOL (TRADING AS MICHELLE SILLAR)
NSD 278 OF 2007

MARSHALL, TRACEY AND BUCHANAN JJ
18 DECEMBER 2007
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 278 OF 2007

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	ANDREW CHARLES ROBERT EDWARD ALBERT BATTENBERG Appellant
AND:	CONWAY ANTHONY RESTOM First Respondent PETER JAMES CALDWELL Second Respondent ANTHONY JAMES CORDATO Third Respondent BRIAN STUART OLIVER Fourth Respondent PHILIP MARK DAY Fifth Respondent ALAN WILKIE NICOL (TRADING AS MICHELL SILLAR) Sixth Respondent

JUDGES:	MARSHALL, TRACEY AND BUCHANAN JJ
DATE OF ORDER:	18 DECEMBER 2007
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The appeal is dismissed.

2. The respondent creditors’ costs, including reserved costs, to be taxed and paid in accordance with the Bankruptcy Act 1966 (Cth).

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 278 OF 2007

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	ANDREW CHARLES ROBERT EDWARD ALBERT BATTENBERG Appellant
AND:	CONWAY ANTHONY RESTOM First Respondent PETER JAMES CALDWELL Second Respondent ANTHONY JAMES CORDATO Third Respondent BRIAN STUART OLIVER Fourth Respondent PHILIP MARK DAY Fifth Respondent ALAN WILKIE NICOL (TRADING AS MICHELL SILLAR) Sixth Respondent

JUDGES:	MARSHALL, TRACEY AND BUCHANAN JJ
DATE:	18 DECEMBER 2007
PLACE:	SYDNEY

REASONS FOR JUDGMENT

MARSHALL AND TRACEY JJ

1 The appellant, Mr Battenberg, appeals from a judgment of Stone J, in which her Honour ordered that his estate be sequestrated; see, Restom v Battenberg [2007] FCA 46. The issue to be determined in this appeal is whether as at 6 June 2005, Mr Battenberg was ordinarily resident in Australia.

2 The respondents allege that Mr Battenberg committed an act of bankruptcy on 6 June 2005. That is the day on which he is deemed to have failed to comply with a bankruptcy notice served on him on 30 March 2005.

3 In the proceeding below, Mr Battenberg opposed the making of a sequestration order because he contended that, as at 6 June 2005, he was not ordinarily resident in Australia. In this context, s 43(1) of the Bankruptcy Act 1966 (Cth) provides:

"Subject to this Act, where:

(a) a debtor has committed an act of bankruptcy; and

(b) at the time when the act of bankruptcy was committed, the debtor –

was personally present or ordinarily resident in Australia;

...

the Court may, on a petition presented by a creditor, make a sequestration order against the estate of the debtor."

4 The learned primary judge found that Mr Battenberg left Australia for Scotland in April 2004 but that he returned to Australia on several occasions to visit his mother. In early 2005, Mr Battenberg’s former chauffeur commenced a proceeding against him in the Employment Tribunal in Scotland. For the purpose of that proceeding, Mr Battenberg’s solicitor in Australia, Mr Russo, arranged for a letter to be sent to his Scottish solicitors for use in the Employment Tribunal. The letter dated 3 March 2005, stated that Mr Battenberg (referred to in the letter as "Lord Andrew") lived at Sutton Forest, south of Sydney, "and has lived there continuously for a period of at last [sic] five (5) years." The letter continued, "Lord Andrew frequently travels to England, Scotland and South East Asia during the course of the year but his domicile has always been Australia."

5 Mr Battenberg filed a notice of appeal in the Employment Appeal Tribunal in Scotland, presumably in response to an adverse decision from the Employment Tribunal. Mr Battenberg signed the notice of appeal personally. He did not retain a solicitor for the appeal. It was dated 3 May 2005 and filed in that Tribunal on 4 May 2005 and on 7 June 2005.

6 The notice of appeal asserted that Mr Battenberg lived in Sutton Forest NSW and was not domiciled in Scotland. It alleged that:

"the Tribunal erred in determining that it had jurisdiction to hear the matter, the Appellant having Australian domicile at the time. (The letter of 3 March 2005 from Messrs Russo, the Appellant’s Australian solicitor, to Russel and Aithers refers)."

Later, in the notice of appeal, Mr Battenberg complained that the Tribunal had failed to advise him that it was about to reconvene "despite the fact that his London and Australian contact details had been supplied to the Tribunal and had been quoted in correspondence from the Tribunal".

7 Mr Russo’s letter of 3 March 2005 and Mr Battenberg’s notice of appeal were each alleged by them to contain errors made by those who physically typed them. The first error was attributed by Mr Russo to his secretary. The second error was attributed to "an unnamed assistant" by Mr Battenberg: Restom [2007] FCA 46 at [25].

8 Justice Stone found Mr Battenberg to be an unreliable witness who was "prepared to say whatever he thinks best suits his interests": Restom [2007] FCA 46 at [39]. Her Honour was not prepared to accept his evidence without independent corroboration. Her Honour considered Mr Russo to lack candour. She found that his letter of 3 March 2005 was written in accordance with instructions given to him by Mr Battenberg and that it said what Mr Russo intended it to say. Her Honour also found that the notice of appeal showed that Mr Battenberg considered himself to be ordinarily resident in Australia as at 4 May and 7 June 2005.

9 The findings referred to above are very strong and clear. They contain adverse credibility assessments of Mr Battenberg and Mr Russo. Her Honour observed each man give his evidence. The advantage in her so doing should be given the great weight it deserves: see, Devries v Australian National Railways Commission [1992] HCA 41; (1993) 177 CLR 472; Jones v Hyde [1989] HCA 20; (1989) 85 ALR 23; and Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167. Her Honour’s findings were not entirely based on the demeanor of the witnesses but also on the documents filed in the proceedings in Scotland.

10 Justice Stone was entitled to rely on documentary evidence produced by Mr Battenberg and Mr Russo, on Mr Battenberg’s instructions, which made it clear that Mr Battenberg considered himself to be ordinarily resident in Australia proximate to and as at 6 June 2005. That is sufficient to support the sequestration order which her Honour made. Like Buchanan J we are conscious of the possibility that Mr Russo’s letter of 3 March 2005 and the notice of appeal signed by Mr Battenberg may have contained false and self-serving statements designed to strengthen his position in the litigation in which he was engaged in the United Kingdom. No such acknowledgement was, however, made by either Mr Russo or Mr Battenberg when giving evidence before the trial Judge. The evidence which they did give was not accepted by her Honour. The documents therefore provided evidence, on which her Honour was entitled to rely, of Mr Battenberg’s subjective view as to his place of ordinary residence on 6 June 2005: see, Logue v Hansen Technologies Limited [2003] FCA 81; (2003) 125 FCR 590 at 599.

11 It is not to the point that, at that time, Mr Battenberg may also have been ordinarily resident in London. Authorities show that a person can be ordinarily resident in more than one place at a time; see, Re Taylor; Ex parte Natwest Australia Bank Limited [1992] FCA 296; (1992) 37 FCR 194 at 198 and Mathai v Kwee [2005] FCA 932 at [124].

12 Further, as her Honour said in her reasons for judgment at [11]:

"In Turner v Trevorrow [1994] FCA 1091; (1994) 49 FCR 566 at 575, the Full Federal Court acknowledged the possibility that notwithstanding a long physical absence, a continuing link to Australia could establish that a debtor was ordinarily resident in Australia."

13 Her Honour also had before her evidence that Mr Battenberg was actively involved in the interlocutory stages of litigation against the Union Club in the Supreme Court of New South Wales on 5 August 2005.

14 Having regard to the foregoing, we consider that Stone J was entitled to make the factual finding that Mr Battenberg was ordinarily resident in Australia as at 6 June 2005. We would dismiss the appeal and order that the respondent creditors’ costs, including reserved costs, be taxed and paid in accordance with the Bankruptcy Act 1966 (Cth).

I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Marshall and Tracey.

Associate:

Dated: 18 December 2007

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 278 OF 2007

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	ANDREW CHARLES ROBERT EDWARD ALBERT BATTENBERG Appellant
AND:	CONWAY ANTHONY RESTOM First Respondent PETER JAMES CALDWELL Second Respondent ANTHONY JAMES CORDATO Third Respondent BRIAN STUART OLIVER Fourth Respondent PHILIP MARK DAY Fifth Respondent ALAN WILKIE NICOL (TRADING AS MICHELL SILLAR) Sixth Respondent

JUDGES:	MARSHALL, TRACEY AND BUCHANAN JJ
DATE:	18 DECEMBER 2007
PLACE:	SYDNEY

REASONS FOR JUDGMENT

BUCHANAN J:

15 I agree that this appeal should be dismissed.

16 There is no suggestion made on the appeal that her Honour did not correctly appreciate the legal principles which were to be applied to the facts in this case or that she made any erroneous findings of fact apart from the conclusion to which ultimately she came that the appellant was still ordinarily resident in Australia on 6 June 2005.

17 There is no doubt, and it was not contested, that until April 2004 the appellant, an Australian citizen, was ordinarily resident in this country. It was as a resident of Australia that he commenced proceedings against the Union Club in Sydney seeking an order that his membership of that club be renewed and damages for defamation. In May 2004 the appellant had his possessions shipped to Great Britain. He said in his oral evidence that the events which lay at the heart of his litigation with the Union Club caused him to renounce Australia altogether. He moved to Great Britain and took up residence, initially, in Scotland. Subsequently he lived in London. On a number of occasions he made short visits to his mother in Australia who was seriously ill.

18 The date of the act of bankruptcy relied upon in the creditor’s petition with which the proceedings before the primary judge were concerned was 6 June 2005. On 4 February 2005 the appellant made a short visit to Australia for one week. He stated on his entry card that he was a temporary entrant, that his country of residence was Britain and that his nationality was British although, on this occasion, he appeared to have entered using his Australian passport. On 9 May 2005 the appellant made another visit for a week, entering Australia on this occasion using his British passport, describing himself as a temporary entrant whose country of residence was Britain, his nationality as British and giving as the reason for his visit ‘Visiting friends or relatives’.

19 These facts and circumstances are consistent with the appellant’s contention that he had both decided, and acted, before 6 June 2005, to cease being an ordinary resident of Australia. However, the fact that he was, prior to May 2004 at least, indisputably ordinarily resident in Australia clearly raises a question whether a severance of his Australian connections was as clean and as quick as he contends. At 6 June 2005 the appellant was still making regular visits to Australia. He was doing so to see his mother, who was ill, and with whom he had lived for some time at Sutton Forest in New South Wales. He was still in the process of conducting litigation in New South Wales.

20 The primary judge made allowance for the fact that the appellant may have been in a process of transition from an ordinary resident of Australia to an ordinary resident of Great Britain and, if so, the process may have been completed by the time of the proceedings before her, although she made no finding to that effect. However the primary judge was satisfied that, even if in such a transition, the appellant had not ceased to be an ordinary resident of Australia by 6 June 2005.

21 There were a number of considerations which supported this conclusion but there were two documents, in particular, which were crucial to it. As the primary judge observed, the other matters supporting the conclusion would not have been sufficient in their own right.

22 The appellant had become subject to litigation himself in Scotland at the instance of a man he had earlier engaged to be his chauffeur. For purposes connected with that litigation the appellant’s Australian solicitor, Mr Russo, sent a letter to the appellant’s Scottish solicitors on 3 March 2005. The letter read as follows:

‘Re: Lord Andrew Battenberg

We are the Australian Solicitors acting on behalf of Lord Andrew, and we have acted for him for some 3 years.

We note Lord Andrew has asked us to provide some confirmation of his domicility in Australia.

Lord Andrew lives at Sutton Forest an area south of Sydney and has lived there continuously for a period of at last [sic] five (5) years.

Lord Andrew frequently travels to England, Scotland, and South East Asia during the course of the year but his domicile has always been Australia.

Should we be able to assist you further, then please advise what further information you require.’

It is important to observe, as counsel for the appellant, Mr Aldridge SC pointed out, that the statement in the third paragraph is, on any objective view of the facts, incorrect.

23 In a letter dated 6 April 2005 Mr Russo wrote to the solicitors for the respondents to the present appeal in quite inconsistent terms. That letter reads:

‘We act on behalf of Lord Battenberg in respect of the Bankruptcy Notice issued by your firm on behalf of Michell Sillar.

As you would be aware, Lord Battenberg is now domiciled and resident in Scotland and has been so for over twelve months. He no longer holds an Australian Passport, does not own any interest in a dwelling, house or place of business in Australia and does not carry on any business in Australia either personally or by an agent or manager. He also is not a member of a firm or partnership carrying on business in Australia by means of a partner or partners or by an agent or manager.

In those circumstances, no sequestration order noting the provisions of Section 43 of the Bankruptcy Act or petition can be filed against our client and on any application we require you to provide a copy of this letter to the Court.

We would welcome a call to further discuss the matter.’

24 The proceedings commenced against the appellant by his chauffeur were determined against the appellant on 11 March 2005 in his absence. The judgment of the Employment Tribunal recorded that he failed to appear at the hearing having earlier ‘made at least two unsuccessful attempts to have it adjourned’. The Tribunal recorded a number of other instances of the appellant failing to appear before the Tribunal or attempting to justify vague and unspecific allegations made in earlier pleadings.

25 By a notice dated 3 May 2005, recorded as received in the Employment Appeal Tribunal on 4 May 2005, the appellant entered an appeal. The appellant was identified as:

‘Lord Andrew Battenberg

Ethersey House

Illawara Highway

Sutton Forest NSW 2576

Australia’

26 The address given is that of the appellant’s mother where he certainly resided for periods prior to mid 2004. It is the address to which Mr Russo obviously refers in his letter of 3 March 2005. The grounds of appeal include the following:

‘That the Tribunal erred in determining that it had jurisdiction to hear the matter, the Appellant having Australian domicile at the time. (The letter of 3 March 2005 from Messrs Russo, the Appellant’s Australian solicitors, to Russel & Aitken refers).

27 A singularly telling feature of the Notice of Appeal (apart from its reference to Mr Russo’s letter) is the fact that the appellant attributed to himself and identified himself by reference to, an Australian address in the Notice of Appeal itself.

28 Both Mr Russo and the appellant gave evidence before the primary judge. Mr Russo stated that he dictated his letter of 3 March 2005 by telephone to his secretary, who had authority to sign it and send it on his behalf but that the letter sent was not in the terms dictated. The primary judge rejected this evidence.

29 The appellant said that he had referred to Mr Russo’s letter in his Notice of Appeal without reading it but then, when he read it and realised it was incorrect and inaccurate, did not ‘submit it’ to the Tribunal. The primary judge rejected the appellant’s evidence in this respect and in other respects describing him as ‘a completely unreliable witness’.

30 The primary judge found that the letter was in accordance with instructions given by the appellant to Mr Russo and that it said what Mr Russo intended it to say. In a passage which seems to me to be of major importance to her reasoning the primary judge said:

‘There is nothing before me to suggest that either the [appellant] in his instructions or Mr Russo in authoring the letter intended to say anything other than the truth as they saw it at the time. Accordingly I accept the letter as evidence of the [appellant’s] own belief about his place of residence.’

31 The question which I have found difficult to resolve in my own mind in the present appeal is what evidentiary significance, if any, is to be assigned to Mr Russo’s letter of 3 March 2005 and the appellant’s Notice of Appeal of 3 May 2005. These were the two documents which, on the reasoning of the primary judge, effectively discharged the respondents’ onus of establishing that the appellant was ordinarily resident in Australia on 6 June 2005. There are grounds for doubting the veracity of the representations they contain and for suspicion about the appellant’s motives in making them. However, in the end I have come to the view that the appellant cannot have the benefit of any doubt or confusion.

32 Although there is another possible explanation for the representations contained in the letter and the Notice of Appeal, it was no part of the appellant’s case before the primary judge or on appeal that the representations made in the letter and in the Notice of Appeal were falsely made for the purposes of the appeal in Scotland (although Mr Aldridge did submit that the letter was factually unreliable). Having rejected the explanations given by the appellant and Mr Russo the primary judge was not obliged to search for another explanation.

33 Moreover, as the primary judge found, it was not necessary to proceed on any view that the appellant could have only one ordinary residence at any given moment. In Re Taylor; Ex parte Natwest Australia Bank Ltd [1992] FCA 296; (1992) 37 FCR 194 Lockhart J said (at 198):

‘To say that a person is ordinarily resident in Australia must mean something more than that he is resident in Australia. The word "ordinarily" connotes a comparison, a measure of degree. A person may have more than one residence, but he is not necessarily ordinarily resident in each of them. The question must be determined for the purposes of s 43 of the Act at a particular time. One must ask the question whether at that time the person was ordinarily resident in Australia. The concept of "ordinary residence" for the purposes of the Act, in my opinion, connotes a place where in the ordinary course of a person's life he regularly or customarily lives. There must be some element of permanence, to be contrasted with a place where he stays only casually or intermittently.’

But his Honour explained why a person might be ordinarily resident in more than one country saying:

‘It depends on the facts of each case whether the debtor is ordinarily resident in Australia at the time of the commission of the relevant act of bankruptcy. At first blush it may seem strange to say that a person can be ordinarily resident in more than one country at the same time; but on closer analysis it is not. Plainly you cannot be physically present in more than one place at the same time. But the lifestyles of people vary greatly. Some people in the ordinary pursuit of their lives regularly or customarily live in more than one place, each of which has an element of permanence about it and is not merely a place of casual or intermittent resort.’

34 On this approach a person may establish a place of ordinary residence in another country, as the appellant contends he did, but remain ordinarily resident in Australia as the appellant represented to the Employment Appeal Tribunal in Scotland.

35 In Logue v Hansen Technologies Ltd [2003] FCA 81; (2003) 125 FCR 590 (‘Logue’) Weinberg J said (at [24]):

‘The English authorities suggest that it may also be possible for a person to have two ordinary residences, one within the jurisdiction and one outside.’

and at [26]:

‘... the test for ordinary residence depends to a significant degree upon the state of mind of the person whose residence is in question. The language used in a number of the cases focuses upon whether the person habitually and normally resides in the jurisdiction, and does so for a settled purpose.’

36 Both Mr Russo and the appellant spoke of the appellant’s domicile in their respective documents. The term was clearly used loosely and in its ordinary, rather than legal sense. It does not correspond legally with the idea of ordinary residence. In Logue Weinberg J said at [28]:

‘At common law no person could be without a domicile. Conversely, no person could have more than one domicile at a time. Neither of these propositions is applicable to the expression "ordinarily resident". If anything, the threshold for acquiring a new domicile of choice appears to be higher than the threshold for acquiring a new ordinary residence.’

37 The authorities to which I have referred were referred to also by the primary judge.

38 The respondents were entitled to rely upon the undisputed prior history of ordinary residence and the two critical documents to carry the appellant’s ordinary residence in Australia past 6 June 2005. In a practical sense the evidentiary burden shifted to the appellant. His attempts to discharge it were constrained by his own declarations of residence and those made on his behalf. His attempts to neutralise the effect of those declarations, in the form those attempts took, were rejected. Given that it was no part of the appellant’s case to denounce Mr Russo’s letter or his own Notice of Appeal as containing falsehoods it was, in my respectful opinion, clearly open to the primary judge to accept the contents of these documents as evidence of continuing ordinary residence in Australia. Whether regarded as evidence of an active belief on the part of the appellant or as an admission against his interests for the purpose of the proceedings, the primary judge was not required to discount their evidentiary value with the result that the respondents did not discharge their onus.

39 I agree with the orders proposed by Marshall and Tracey JJ.

I certify that the preceding twenty five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan.

Associate:

Dated: 18 December 2007

Counsel for the Appellant:	Mr M Aldridge SC
Solicitor for the Appellant:	Russo and Partners
Counsel for the Respondents:	Mr P Walsh
Solicitor for the Respondents:	Sally Nash and Co
Date of Hearing:	22 November 2007
Date of Judgment:	18 December 2007