Wood v Paulis [2009] FMCA 104 (2 February 2009)

Last Updated: 27 February 2009

FEDERAL MAGISTRATES COURT OF AUSTRALIA

WOOD v PAULIS

[2009] FMCA 104

BANKRUPTCY – Application for adjournment by debtor – no challenge to creditor’s materials – foreshadowed cross-claim for unliquidated damages for professional negligence – claim not pursued for over two years – adjournment refused – orders made.

Evidence Act 1995 Bankruptcy Act 1966

Applicant:

ROBERT IAN WOOD

Respondent:

LUAY PAULIS

File Number:

MLG 1322 of 2007

Judgment of:

Burchardt FM

Hearing date:

2 February 2009

Date of Last Submission:

2 February 2009

Delivered at:

Melbourne

Delivered on:

2 February 2009

REPRESENTATION

The Applicant:

In person

Counsel for the Respondent:

Mr Walters

Solicitors for the Respondent:

Eggleston Mitchell

ORDERS

(1) A Sequestration Order be made against the estate of Luay Paulis.
(2) The Applicant Creditor’s costs be taxed in accordance with the Federal Court Rules and paid from the estate of the Respondent Debtor in accordance with the Bankruptcy Act 1966.

AND THE COURT NOTES THAT:

(3) The date of the Act of Bankruptcy is 24 September 2007.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE

MLG 1322 of 2007

ROBERT IAN WOOD

Applicant

And

LUAY PAULIS

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

1. This is a slightly unusual proceeding. It is appropriate to perhaps endeavour to work through it in the way in which it has come to the Court.
2. From Exhibit A1, it is clear that on 2 February 2006 a Full Court of the Federal Court dismissed three appeals by Luay Paulis, who is the debtor in this case. The judgment I have retrieved from the Court's own computer records shows first that the Full Court regarded
   Mr Paulis' three appeals, which were heard concurrently, as being devoid of merit; and second, that Mr Paulis had applied for an adjournment on the basis of a medical condition in circumstances where the Full Court was not prepared to grant the adjournment.
3. Mr Wood has subsequently sued Mr Paulis for fees for legal work done after that appeal decision. Mr Wood did give an account of his interaction with Mr Paulis from the bar table this morning but I should make it clear I am relying for present purposes solely on those documents that are properly in evidence before me. It is not that I doubt Mr Wood's word - he is after all an officer of the Court - but in circumstances such as these, I think the Court should proceed strictly in accordance with the Evidence Act 1995.
4. It is plain from the bankruptcy notice which has been properly put on affidavit and from Exhibit A2 that judgment was entered in favour of Mr Wood by the Melbourne Magistrates Court sitting at Ringwood. It is clear from the certified extract of judgment that the judgment given on 12 February 2007 was regularly entered.
5. From Exhibit A2 it is clear that an application for re-hearing heard before his Honour Mr McNamara at Ringwood on 3 September was refused. Indeed, on that day Mr Paulis was ordered to pay Mr Wood's costs, stayed for 30 days.
6. Although an email message from Mr Paulis to the Court directly dated 26 January 2009 suggests there might be a typographical error in the bankruptcy notice, neither I nor both counsel in Court have been able to find any such error and indeed I note, the if I may say so, proper concession made by Mr Walters of counsel that the formal documents required to be produced going to the affidavit of search and proof of debt and the like are not challenged.
7. When the matter came on, Mr Walters on his instructions sought an adjournment. He said that on his client's instructions it appeared Mr Paulis is overseas. He is presently understood to be in Syria where his family have decamped perhaps understandably from Iraq. It is said that he is trying to get his family to Australia and that explains why he is unable to give instructions.
8. Although the terms of the Family Law case suggest Mr Paulis and his former partner were clearly living in Australia at that time, nonetheless I am prepared to accept in Mr Paulis' favour for these purposes the fact that he is overseas and unable to give instructions.
9. The bulk of Mr Paulis' email consists in effect of assertions of professional misconduct by Mr Wood. Those are matters which it seems to me on their face would be more properly the subject - should they be pressed - of the relevant professional disciplinary authorities. From the email, it is plain that the assertions that Mr Paulis failed to attend Court at the original hearing and was unsuccessful in applications to set it aside are correct.
10. In my view, there is no utility to further adjourning this matter, insofar as the Court has a discretion to adjourn. While I note that obviously Mr Paulis will be the subject of a sequestration order and suffer all the various difficulties associated with being bankrupt, on the other hand this is a debt regularly entered on Mr Paulis' own material; it is not the subject of any appeal. It is clearly a final order. It is for a sum in excess of the amount required, in excess of $2,000.00. The formalities have been dealt with. The debtor has knowledge of these proceedings, as is made plain both by the attendance of Mr Walters and by his email to the Court.
11. There is nothing in the material before me that suggests that Mr Paulis would do other than to seek to articulate some sort of professional negligence cross-claim, but the trouble with that is that the proceeding would involve an unliquidated claim for damages which still has to be issued. It has not been issued in the period from February 2007 until now, which is a period of almost exactly two years. There is nothing to suggest that Mr Paulis has felt moved to pursue any rights he may feel he has at law against Mr Wood in the meantime.
12. For those reasons it seems to me inappropriate to adjourn the proceeding. Accordingly, I will make the usual orders for a sequestration and the usual order for costs; namely, that the petitioning creditor's costs be dealt with pursuant to the Bankruptcy Act 1966.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of Burchardt FM

Associate: Ms B. Evans

Date: 2 February 2009