FEDERAL COURT OF AUSTRALIA

Hudson v Sigalla [2015] FCAFC 140

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    There be no order as to costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT

The question on the appeal

1    This appeal concerns the proper construction and reach of s 58(3) of the Bankruptcy Act 1966 (Cth) (the Act), and, in particular, when the leave of the Court under s 58(3)(b) is no longer required.

2    Section 58(3) of the Act provides as follows:

Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor:

(a)    to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt; or

(b)    except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding.

3    The question thrown up by this appeal is whether any leave is required under s 58(3)(b) for a creditor to sue a person (who was previously the bankrupt) after creditors have, by special resolution, accepted a proposal for a composition in satisfaction of the debts of the bankrupt: see subs 73(1) and (4), thereby bringing about the annulment of the bankruptcy by force of s 74(5) of the Act. For the reasons that follow, the answer is “no” – leave is not required under s 58(3). This answer is sufficient to lead to the appeal being dismissed.

The factual context

4    The question arises in the resolution of the affairs of the two parties, Mr Andrew Sigalla and Mr Frank Hudson. The two men were in business together. One aspect of that business was an arrangement with a financier that saw the financier obtain the right to debit the bank account of one party for the obligations of the other. The financier debited Mr Sigalla’s account for Mr Hudson’s debts for an amount, it is said, in the order of $1.9 million. Mr Sigalla was made bankrupt by a sequestration order made in the then Federal Magistrate’s Court on 28 June 2010. Mr Hudson is a licensed bookmaker. He claims that, between 2006 and 2008, Mr Sigalla placed bets with him through a commission agent, Mr James, which resulted, he says, in an overall debt to him from Mr Sigalla of more than $1.9 million.

5    On 21 May 2013, a meeting of the creditors of Mr Sigalla accepted by special resolution a proposal by Mr Sigalla, dated 23 April 2013, involving: the payment of a sum of money ($110,000), the payment of a minute dividend to participating creditors, the reversion to Mr Sigalla of the property that had been vested in the trustee by s 58(1) of the Act (including the claim against Mr Hudson), and the extinguishment of the debts of the creditors.

6    Mr Hudson did not attend the meeting of creditors. He claims that he was not notified of it.

The litigation

7    On 16 July 2013, Mr Sigalla commenced proceedings in the Supreme Court of New South Wales to recover the sums he claims are owed to him by Mr Hudson.

8    On 25 November 2013, Mr Hudson filed a cross-claim against Mr Sigalla to recover the latter’s asserted gambling debts, whether by set off or otherwise.

9    On 14 March 2014, Mr Sigalla filed a notice of motion in the Supreme Court seeking summary dismissal of Mr Hudson’s cross-claim on the basis that the debt it related to was barred by the annulment of Mr Sigalla’s bankruptcy.

10    In response, Mr Hudson filed an application in the Federal Circuit Court, on 25 March 2014, seeking first, to set aside or terminate the composition, and alternatively seeking leave to proceed with his cross-claim in the Supreme Court. That proceeding in bankruptcy was determined on 19 December 2014 after two days of hearing in June and July 2014: Hudson v Sigalla [2014] FCCA 1652. The primary judge analysed in some detail the circumstances of the betting by Mr Sigalla and Mr James, the record keeping by Mr Hudson, and the question of the enforceability of the claimed gambling debts under Victorian legislation. The primary judge also considered the circumstances relating to the composition proposal.

11    The refusal of the primary judge to set aside the proposal is not the subject of appeal. It is necessary, and sufficient, to note that after his detailed analysis of the evidence about the betting, the primary judge concluded that Mr Hudson had not proved that he was a net creditor, or, indeed, a creditor at all of Mr Sigalla, who could have defeated the composition: [164] of the primary judge’s reasons. The primary judge, however, did grant leave to Mr Hudson to pursue the cross-claim in the Supreme Court, stating at [215]: “I do not rule out the possibility that he might be able to persuade the Supreme Court [of the claim].”

12    It was only faintly put in written submissions to the primary judge in that hearing that s 58(3) was not engaged at all because the bankruptcy had been annulled. The primary judge approached the matter on the basis that he could grant leave under s 58(3) and, after considering the question of set-off and cross-claim and the differential operation of s 58(3) in relation thereto, said at [225]:

In the present case, there is doubt about precisely when Mr Hudson knew about the bankruptcy. In any event, the administration of that bankruptcy has been established to have been wholly unproductive from the standpoint of the interest of creditors. I have found that the composition agreed to by creditors was properly made and should not be disturbed. No useful purpose would be served by Mr Hudson agitating his claim either in the bankruptcy or in the composition. His only hope is to pursue what I have found to be a highly doubtful claim, fraught with difficulties, in his cross-claim in the Supreme Court proceedings. I know nothing of the strength of Mr Sigalla’s claim against Mr Hudson. For all I know, it may be equally dubious. In the circumstances of this matter, the interests of the administration of justice are best served by allowing the parties to finally resolve their differences within the parameters of the Supreme Court proceedings, including the cross-claim.

13    The primary judge made an order as follows:

The Court grants leave pursuant to s 58(3) of the Bankruptcy Act 1966 (Cth) nunc pro tunc for the applicant to commence and take further steps in his cross-claim in Supreme Court proceedings 2013/216320.

14    On 10 February 2015 Mr Sigalla made an application to the primary judge (this time being represented by senior counsel) to reopen the argument and seeking a revocation of the order for leave. This time, Mr Sigalla’s representatives put substantive argument that leave could not be granted because s 58(3) was not engaged. They also sought to re-agitate the reasons why leave should not be granted, if s 58(3) was engaged. The primary judge permitted the re-opening.

15    The issue before the primary judge on this second application was expressed as a matter of jurisdiction. It is unnecessary to deal with that characterisation beyond saying that the question is better expressed as being whether Mr Hudson required leave under s 58(3)(b) to attempt to prosecute his cross-claim against Mr Sigalla for the latter’s asserted gambling debts. The Federal Circuit Court had jurisdiction to consider the matter. If leave was not required (because the section was not engaged in the circumstances) then the Court did not lack jurisdiction, rather the order had no statutory foundation and was simply unnecessary.

16    The primary judge granted the application to re-open, revoked the order granting leave, and ordered that Mr Hudson’s application of 25 March 2014 be dismissed: Hudson v Sigalla (No 2) [2015] FCCA 542.

17    The reasons of the primary judge on this second application discussed the effect of annulment, and the effect of the acceptance of the composition, on provable debts. The argument before us also linked the two considerations. At [20] of his reasons, the primary judge said:

Whilst reliance upon those observations was placed by counsel for Mr Hudson, in my opinion, they say no more than that the Court of bankruptcy generally retains jurisdiction to undo what has been done to terminate a bankruptcy. In the present case there is no doubt that the Court had jurisdiction to set aside the composition. I did not do so. The effect of the composition was to not only terminate but to extinguish the bankruptcy and to release Mr Sigalla from provable debts in that bankruptcy. The consequence, in my opinion, is that s.58(3) was not enlivened when subsequently called in aid by Mr Hudson and has no work to do in circumstances where the composition was confirmed by the Court. It follows that I fell into error in granting leave pursuant to s.58(3) for the cross-claim initiated by Mr Hudson in the Supreme Court to continue. While the composition represents an obstacle to the pursuit of that cross-claim, s.58(3) does not. Neither the statutory bar nor the lifting of that bar in the exercise of the Court’s discretion arises for consideration.

18    It is unclear whether the primary judge’s conclusion about the release of provable debts came from a reading of the composition and the effect of s 75(1) of the Act (which made the composition binding on all the creditors), or whether it was from an argument based on s 75(2) (to which we will come). Nor is it clear that the matter was fully argued before him. Whatever the basis of that conclusion, the primary judge was of the view that s 58(3) was not engaged because the bankruptcy had been annulled.

Consideration

19    Section 58(3) finds its place in Div 4 of Pt IV of the Act concerning the effect of bankruptcy on property and proceedings. Section 58(1) provides for the vesting of the property of the bankrupt (with certain exceptions) in the trustee when the debtor becomes a bankrupt: either upon the making of a sequestration order: s 43(2), or on the first instant of the day on which the petition is accepted by the Official Receiver: s 57A of the Act.

20    The status of being a bankrupt upon the making of a sequestration order continues until discharge under s 149(1) or annulment under s 74(5), s 153A(1), or s 153B: s 43(2). See Quinn v Official Trustee in Bankruptcy [1996] FCA 443; 63 FCR 136 at 138; and Allanson v Midland Credit Ltd [1977] FCA 66; 30 FLR 108 at 112 and 113.

21    The precise effect or significance of an annulment depends upon the question at issue: see generally Battenberg v Union Club [2005] NSWSC 242; 189 FLR 206 (and on appeal: [2006] NSWCA 72; 66 NSWLR 1); Re Oates; Ex Parte Deputy Commissioner of Taxation (1987) 17 FCR 402; Oates v Commissioner of Taxation [1990] FCA 726; 27 FCR 289; Re Hudson; Ex parte ANZ Bank [1994] FCA 569; 50 FCR 281; Coyle v Cassimatis (unreported, Supreme Court of Queensland, Court of Appeal (1 November 1993)).

22    The concept of annulment was the subject of careful analysis (both as to its history and contemporary meaning) by Giles JA in Battenberg in the Court of Appeal: 66 NSWLR at 9-19 [35]-[81]. At [81] Giles JA said:

Accidents of history may have been at work, but it is important that there be uniformity in this area, and I consider that I should follow the recent cases and, so doing, hold that annulment of the respondent's bankruptcy reversed the fact that he had become bankrupt. The judge was correct in the emphasised portions of his [70].

The paragraph of Campbell J’s judgment to which Giles JA referred was as follows:

70    The task of the Court in the present case is to decide whether, today, the condition for the plaintiff's ceasing to be a member of the defendant, namely that he is someone who on 19 May 1997 became bankrupt, has occurred. The Bankruptcy Act 1966 (Cth) has provisions in sections 73 and 74, which have the effect that, today, the bankruptcy which once applied to the plaintiff is one which has been ‘annulled’. Subject to exceptions which the Bankruptcy Act 1966 (Cth) creates, and exceptions which arise as a matter of the general law, in the eyes of the law it is treated as not having occurred. None of the exceptions in the statute itself operate to give it any residual operation which is relevant to this case. Recognising today that in law the plaintiff was never bankrupt does not involve any upsetting of vested property rights or other vested rights. There is no action which was taken in reliance upon the bankruptcy being on foot and valid, which is relevant to the present case.

(emphasis added by Giles JA)

23    Santow JA agreed with the reasons of Giles JA: at 23 [98]. Bryson JA dissented.

24    It is unnecessary to enter into the controversial debate as to the full extent of the meaning of annulment and whether it means that, in law, the debtor was never a bankrupt. The question whether leave is required to proceed against someone who was made bankrupt, but whose bankruptcy was then annulled by s 74(5), is to be answered by reference to, and based on an understanding of, the temporal reach and limits of s 58(3).

25    The purposes of s 58(3) are the same as those of cognate provisions in the legislation governing corporate insolvency, such as ss 471B and 500(2) of the Corporations Act 2000 (Cth). The purposes are to assist in the orderly administration of the insolvent estate by protecting a bankrupt, and the property of the erstwhile debtor (as now vested in the trustee), against the enforcement of remedies. This is done by enabling the court to supervise the handling of claims through the procedure of proof of debt (administered by the trustee or liquidator), by ensuring that the assets of the estate are not expended on costs in a multiplicity of litigation, and by ensuring that no one creditor gets an advantage over the others: Re Sydney Formworks [1965] NSWR 646; Re AJ Benjamin Ltd (In liq) [1969] 2 NSWR 374; Re Rose; Ex parte Devaban Pty Ltd [1994] FCA 1082; Re McMaster; Ex parte McMaster [1991] FCA 773; 33 FCR 70 at 72-73; 7 Steel Building Solutions Pty Ltd v Wright [2011] FCA 328 at [10].

26    No part of that statutory purpose extends to requiring leave to proceed against someone who had been a bankrupt but, by force of ss 43(2) and 74(5), no longer was, and in circumstances where the trustee no longer administered an insolvent estate, but the property, which was previously vested in him by s 58(1), was now vested in someone else by reason of s 74(6).

27    Section 58(3) is clearly directed to the period of time from making the debtor a bankrupt to the point at which the bankrupt ceases to be such and the estate ceases to be vested, in substance, in the trustee. Paragraph (a) refers to the “person or property of the bankrupt”. After the annulment the erstwhile bankrupt ceases to be such: s 43(2). Any debt owed by the bankrupt to a creditor, if a “provable debt”, will be dealt with by the composition. That term is defined in s 5(1) as follows:

5 Interpretation

(1)    In this Act, unless the contrary intention appears:

…

Provable debt means a debt or liability that is, under this Act, provable in bankruptcy.

28    The above is not a description merely of the characteristics of the obligation; it also refers to a debt that has a relationship with the estate of the bankrupt. Section 82(1) of the Act defines what is “provable in bankruptcy”:

82 Debts provable in bankruptcy

(1)    Subject to this Division, all debts and liabilities, present or future, certain or contingent, to which a bankrupt was subject at the date of the bankruptcy, or to which he or she may become subject before his or her discharge by reason of an obligation incurred before the date of the bankruptcy, are provable in his or her bankruptcy.

29    The expression “provable in his or her bankruptcy” at the end of s 82(1) means provable in the insolvent or bankrupt estate of the bankrupt.

30    Once the bankruptcy is at an end, once it is annulled, if a debt remains extant against the debtor (notwithstanding the effect of the composition) then it is no longer a provable debt, at least in the sense that there is no bankruptcy, and no insolvent or bankrupt estate in which to prove. It is a debt. Thus, after an annulment, there is no legal proceedings to which s 58(3)(b) is directed, because the proceeding is not in respect of a debt provable in a bankruptcy, but rather (if the debt exists) it is a debt, not of the bankrupt, but of the person who was (and on this hypothesis, remains) the debtor.

31    To reach this conclusion does not require any conclusion that the annulment under s 74(5) discharges or extinguishes any debts of creditors.

32    It was submitted that the terms of s 75 of the Act extinguish all provable debts. Subsections 75(1), (2) and (3) are as follows:

75 Effect of composition or scheme of arrangement

(1)    Subject to this section, a composition or scheme of arrangement accepted in accordance with this Division is binding on all the creditors of the bankrupt so far as relates to provable debts due to them from the bankrupt.

(2)    The acceptance of a composition or scheme of arrangement does not:

(a)    except with the consent of the creditor to whom the debt is due, release the bankrupt from a provable debt that would not be released by his or her discharge from bankruptcy; or

(b)    release any other person from any liability from which he or she would not be released by the discharge of the bankrupt.

(3)    The provisions of a composition or scheme of arrangement that has been accepted in accordance with this Division may be enforced by the Court on application by a person interested, and disobedience of an order of the Court made on the application is a contempt of the Court and is punishable accordingly.

33    Section 75(1) brings about a statutory enforcement of the composition. The amendments to the Act in 1992 removed the previous requirement (found in the earlier s 74(1)) for Court approval of the composition. It makes the composition binding on all creditors in so far as it relates to provable debts from the bankrupt. It is the composition to which one looks to find the fate of the provable debt.

34    Section 75(2) provides some exceptions from the effects of acceptance of a composition; some debts will not be released. These are exceptions from the release of debts by the acceptance of the composition and s 75(1); s 75(2) does not in terms act as a provision that impliedly releases all other debts. Given the view we have taken as to s 58(3), it is unnecessary (and inappropriate given the sparseness of argument) to express a finally concluded view on the operative effect of s 75(2).

35    Thus, to reach the conclusion that the primary judge was correct to conclude that leave under s 58(3) was unnecessary does not require any conclusion that Mr Hudson’s claim against Mr Sigalla has been released or extinguished. The issue before us is whether leave was necessary. We agree with the primary judge that it was not. Whether or not Mr Hudson’s claim subsists or whether or not it has been extinguished can be decided if he seeks to propound it in the action presently before the Supreme Court.

Whether the primary judge erred in re-opening

36    The question of re-opening was a broad discretion for the judge. He had the power to do so. It is not clear that there was utility in doing so. Nevertheless, we do not see any error of principle in doing so.

The notice of contention

37    It is strictly unnecessary to examine the notice of contention. The Court was, however, pressed to deal with it even if we agreed with the primary judge on s 58(3). We therefore propose to do so.

38    At [21] of his second judgment the primary judge rejected the other grounds Mr Sigalla put as reasons for refusing to grant leave. The primary judge said:

For completeness, I reject the other bases upon which Mr Sigalla sought to reopen the proceedings. Those go to the exercise of the Court’s discretion to grant leave pursuant to s.58(3) if the provision were enlivened. In circumstances where Mr Sigalla gave no evidence and the evidence of Mr Hudson provided no proper basis for the Court to reach a concluded view as to whether he was a creditor of Mr Sigalla in any particular amount, I took the view that that issue was better left to the Supreme Court of NSW. It is true that I found that Mr Hudson’s claim was fraught with difficulties, including the obstacle created by the Gambling Regulation Act. However, I did not consider myself to be in a position to draw a definitive conclusion that the cross-claim was statute barred, either under that Act or the Bankruptcy Act. If s.58(3) had been enlivened, this is precisely the sort of case involving difficult and complicated questions of law and fact that would, on the authority of Allanson, have warranted the granting of leave.

39    In his notice of contention Mr Sigalla claimed that the primary judge should have reversed the grant of leave on the basis of any one or more of the four other grounds which had been put, namely:

(a)     Leave could not be granted under s 58(3) because the debt claim the subject of the application for leave had been released by a composition and therefore could not be the subject of a grant of leave;

(b)     Leave could not be granted under s 58(3) because under that section Mr Sigalla must have “become a bankrupt” and the effect of the composition was that he had never “become a bankrupt”;

(c)     Leave could not be granted under s 58(3) because that section refers to a “provable debt” and by operation of the Gambling Regulation Act 2003 (Vic) the applicant’s debt was not a provable debt because it was unenforceable;

(d)     Leave could not be granted under s 58(3) because the applicant’s debt was not a provable debt for the additional reason that the unreliable nature of the applicant’s betting records meant that contrary to s 82(6) of the Bankruptcy Act the debt could not be fairly estimated.

40    Grounds (a), (b) and (d) relate to the operation of the Act and ground (c) relates to the Gambling Regulation Act 2003 (Vic), the primary judge having said in [21] that he did not consider he was “in a position to draw a definitive conclusion that the cross-claim was statute barred, either under that Act or the Bankruptcy Act”.

41    It is convenient to deal with the ground relating to the Gambling Regulation Act first.

Ground (c) - Gambling Regulation Act 2003

42    The primary judge dealt at length with the arguments put for Mr Sigalla about the Gambling Regulation Act in his first judgment. Despite the conclusions he expressed in those reasons to the effect that Mr Hudson’s cross-claim appeared to be fraught with difficulty because of numerous instances of non-compliance with the Gambling Regulation Act, the primary judge did not accept that these provided a proper foundation to refuse to grant leave in either his first or second judgments. Instead, as his Honour’s reasons in the second judgment at [21] disclose, if s 58(3) applied, he considered that the issues under the Gambling Regulation Act should be resolved in the context of the proceedings between Mr Sigalla and Mr Hudson presently in the Supreme Court and not in the application for leave. In support of this conclusion the primary judge cited Allanson 30 FLR at 115 where Bowen CJ, Riley and Deane JJ said:

Where a court is given power to grant leave to perform a particular act or pursue a particular course of action and the question whether the need for such leave has arisen involves difficult and complicated questions of law or fact, it is permissible, in an appropriate case, to proceed on the basis that such leave is necessary rather than involve the parties in the futile exercise of determining, possibly after a series of appeals, whether the need for such leave has arisen.

43    Mr Sigalla contends that the primary judge erred in not determining that Mr Hudson’s debt was not a provable debt because, by reason of the Gambling Regulation Act, the debt was unenforceable.

44    The contention overlooks some fundamental matters. The primary judge’s refusal of the application for leave to re-open on this ground was a discretionary decision. Moreover, it was a discretionary decision based on a conclusion that even if leave to re-open were to be granted, the Gambling Regulation Act issues would not constitute a proper basis to refuse leave under s 58(3) consistent with the reasoning in Allanson. As the reasoning in Allanson discloses, the approach of granting leave in a case where “the question whether the need for such leave has arisen involves difficult and complicated questions of law or fact” is itself discretionary.

45    It follows that in order to succeed on this ground Mr Sigalla must establish that the discretion to refuse leave to re-open on this ground miscarried in the sense described in House v The King [1936] HCA 40; 55 CLR 499 at 504-505. The only attempt to confront that difficulty by Mr Sigalla was an assertion that the primary judge had regard to irrelevant considerations. At [21] of the second judgment the primary judge identified as reasons not to re-open the circumstances that “Mr Sigalla gave no evidence and the evidence of Mr Hudson provided no proper basis for the Court to reach a concluded view as to whether he was a creditor of Mr Sigalla in any particular amount”. As the submissions for Mr Sigalla put it, these reasons were irrelevant because they could not “logically displace the conclusion that followed ineluctably from the primary judge’s first two conclusions that the bets were unenforceable and therefore statute barred”.

46    However, as is plain from [21] of the second judgment, the primary judge concluded only that, as the issues relating to the Gambling Regulation Act were complicated, they should not be determined on an application for leave under s 58(3). In so deciding, the primary judge was entitled to take into account all of the circumstances of the hearing before him, including the fact of Mr Sigalla not giving evidence and the limited evidence of Mr Hudson. Even if those two circumstances did not diminish the force of his other findings in the first judgment about the Gambling Regulation Act, they were not irrelevant to the discretion to be exercised. Properly analysed, the submissions for Mr Sigalla involve an assertion that the primary judge should not have found the issues under the Gambling Regulation Act to be complex and thus should have decided them for himself. However, this assertion involves nothing more than a difference of view between Mr Sigalla and the primary judge about the character of the issues as complicated or not. Such a difference of view cannot give rise to any miscarriage of the discretion by the primary judge.

47    Ground (c) of the notice of contention, accordingly, cannot be accepted.

Ground (a)

48    By this ground Mr Sigalla contends that whatever debt claim Mr Hudson might once have had against him, the debt claim has been extinguished by the composition, with the consequence that either s 58(3) does not apply (as to which see above) or if s 58(3) does apply any grant of leave would be futile

49    Mr Sigalla’s argument that any grant of leave would be futile did not depend on the terms of the particular composition in this case. The argument was to the effect that a composition necessarily has the effect of extinguishing Mr Hudson’s debt claim because, by force of s 74(5) of the Act, the bankruptcy was annulled.

50    One difficulty with this contention is that the primary judge’s refusal to grant leave to re-open on this ground was also a discretionary decision. The primary judge recognised that the composition was an obstacle to Mr Hudson’s cross-claim but declined to find the claim barred by the Act, not because of any particular construction of the provisions of the Act, but because he considered it would be best resolved in the proceedings currently before the Supreme Court. Mr Sigalla has not identified any error of principle in respect of that exercise of discretion. This, of itself, is a complete answer to Mr Sigalla’s contention on this ground.

51    Another difficulty with this contention is that the point was not fully argued before either the primary judge or this Court. Irrespective of what was said in argument before the primary judge (that Mr Hudson’s debt claim was “taken away from him by reason of the composition”), on which Mr Sigalla relied, the primary judge did not so find and Mr Hudson did not accept, for the purposes of the appeal, that his cross-claim was barred by reason of the composition. Putting aside the exclusions in s 75(2) of the Act, Mr Sigalla’s case to the contrary assumed not only that every debt which was a provable debt in a bankruptcy is necessarily extinguished by a composition (irrespective of the terms of the composition), but also that there could be no claim against a former bankrupt of any kind in connection with a debt that was provable in the bankruptcy because of the annulment of the bankruptcy under s 74(5) (again, irrespective of the terms of the composition).

52    It is sufficient to say that an application for leave under s 58(3) is not the appropriate context or vehicle in which to determine that a claim is doomed, leave thus being futile, where there are potential complexities which have not been sufficiently exposed during the course of the leave application.

Ground (b)

53    It is unnecessary to reach the conclusion that Mr Sigalla, by reason of the annulment, was not a person “who has become a bankrupt” within the meaning of s 58(3). We have dealt with the reach of s 58(3) above by reference to the ending of his status as a bankrupt. It is not appropriate in this context to explore the limits of the meaning of the term “annulment”.

Ground (d)

54    No submissions were put in support of this ground. In common with the grounds discussed above, the primary judge’s decision not to rely on the parlous state of Mr Hudson’s betting records as a reason to decide that s 58(3) did not apply was essentially discretionary. Again, no error of principle is apparent.

Orders

55    The appeal should be dismissed. Given Mr Sigalla’s refusal to concede that leave was unnecessary, and his failure on each of the grounds of the notice of contention, there should be no order as to costs.

56    One further matter arises. If, in the Supreme Court proceedings, Mr Hudson presses matters that arise under the Act, it may well be that questions of bankruptcy jurisdiction arise as they did in Truthful Endeavour Pty Ltd v Condon (Trustee), in the matter of Rayhill (Bankrupt) [2015] FCAFC 70. That, however, will be for the Supreme Court to decide.

Associate:

Dated:    24 September 2015