|Moses Obeid. Photo Optus Zoo|
And Federal Magistrate Kenneth Raphael didn't mince words.
"I have been informed that the case has been set down for the hearing of an appeal on 26 November 2012 for 4 days.
"If the appeal is heard then, it is unlikely that a decision will be made upon it for some months so that time for compliance will be extended by over a year from the date of issue of the notice.
"This will cause a significant prejudice to the creditor in terms of the date of the act of bankruptcy and the relation back date. The relation back date is particularly important in a case such as this where the applicant appears to have no assets of his own but has available to him very significant assets through the use of trusts."
Obeid, seed of controversial former Labor minister Eddie Obeid, filed his appeal against the Supreme Court judgement in that court on February 16 this year.
He followed this up with a notice of motion on February 23 seeking a stay of the primary judgement and also sought a stay of the bankruptcy notice.
When his application to stay the bankruptcy notice was rejected he turned to the Federal Magistrates Court, seeking either a setting aside or alternatively, an extension of time for compliance with the notice.
While that too has now been dismissed, Magistrate Raphael said Obeid might have grounds for resisting what generally follows.
" .. I do accept that the debtor may well be able to put forward cogent arguments as to why a sequestration order should not be made against his estate whilst the appeal is being run."
In his judgement Magistrate Raphael quoted a colourful literary reference from acting appeals court Justice Peter Young, who deliberated on Obeid's earlier application for a stay of the bankruptcy notice.
“Where a family organises their affairs in a very complicated way, that may be very advantageous fiscally and may be protection against creditors," Justice Young wrote.
"However, where they have to show a court that they are virtually impecunious, the fact that there is a complicated trust structure with discretionary trusts, where it appears that the people whose means are being examined, are in the words of Mr Thackery’s Vanity Fair, exploiting the doctrine “How to Live Well on Nothing a Year”, then they should not be surprised if the court is unable to find that they have made a full and frank disclosure of their assets and are unable to pay the judgement."
SiN sought comment through Obeid's solicitor, Peter Harkin of Colin, Biggers & Paisley, but no response was forthcoming prior to publication.