ACM Group Ltd v Smedley - [2014] FCCA 494

FEDERAL CIRCUIT COURT OF AUSTRALIA

ACM GROUP LTD v SMEDLEY

[2014] FCCA 494

Catchwords:
BANKRUPTCY – Creditor’s Petition – Sequestration order made by Registrar – Application seeking review of Registrar’s decision – Respondent debtor claims sequestration order ought not to have been made on basis of solvency – Sequestration order set aside – Creditor’s petition remains extant.

Legislation:

Bankruptcy Act 1966 (Cth), ss.52(2)(a), 153B

Federal Circuit Court of Australia Act 1999 (Cth), s.104(3)

Deputy Commissioner of Taxation v Jaskola [2011] FMCA 67
Hashmi v Akter [2013] FCCA 728
Martin v Commonwealth Bank of Australia (2001) 217 ALR 634
Pattison v Hadjimouratis (2006) 155 FCR 226
Re Touma; Saparas v Touma (2000) 171 ALR 275
Sandell v Porter (1966) 115 CLR 666

Applicant:

ACM GROUP LTD ACN 127 181 097

Respondent:

GRAEME GILBERT SMEDLEY

Intervener:

JASON PORTER AND PAUL WESTON AS JOINT AND SEVERAL TRUSTEES OF THE BANKRUPT ESTATE OF GRAEME GILBERT SMEDLEY

File Number:

SYG 1867 of 2013

Judgment of:

Judge Lloyd-Jones

Hearing date:

26 February 2014

Delivered at:

Sydney

Delivered on:

17 March 2014

REPRESENTATION

Solicitor for the Applicant:

Ms K Van Munster of MSB Lawyers

Counsel for the Respondent:

Mr D Allen

Solicitors for the Respondent:

Mr Y Chen of Juris Cor Legal

Solicitor for the Intervener:

Ms I Hoskinson of Jones King Lawyers

ORDERS

Orders 1 and 2 of the orders made by Registrar Hannigan in these proceedings on 29 November 2013 be set aside.
The creditor’s petition filed on 9 August 2013 remain on foot.
The respondent debtor file and serve by 22 April 2014 an affidavit setting out what steps he has taken in respect of paying the debt owed in the creditor’s petition filed 9 August 2013.
The creditor’s petition be listed before this Court at 9.30am on 28 April 2014 at Level 6, John Maddison Tower, 88 Goulburn Street, Sydney.
The applicant creditor notify the Official Receiver in Sydney of these orders within two days of today’s date.
Costs be generally reserved.
There be liberty to the parties to apply to the Court for further directions on three clear days’ notice.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1867 of 2013

ACM GROUP LTD ACN 127 181 097

Applicant

And

GRAEME GILBERT SMEDLEY

Respondent

JASON PORTER AND PAUL WESTON AS JOINT AND SEVERAL TRUSTEES OF THE BANKRUPT ESTATE OF GRAEME GILBERT SMEDLEY

Intervener

REASONS FOR JUDGMENT

Introduction

On 9 August 2013 the applicant creditor, ACM Group Ltd ACN 127 181 097 (“ACM”), filed a creditor’s petition (the “Petition”) against the respondent debtor, Graeme Gilbert Smedley (“Smedley”). The Petition is founded on Bankruptcy Notice BN 8051 of 2012 (the “Bankruptcy Notice”) which was served on Mr Smedley on 10 May 2013 pursuant to orders for substituted service made in proceedings SYG396/2013 (ACM Group Limited ACN 127 181 097 v Graeme Gilbert Smedley). Mr Smedley failed to comply with the requirements of the Bankruptcy Notice on or before 19 April 2013 and committed an act of bankruptcy. The Bankruptcy Notice is founded on a…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading ACM Group Ltd v Smedley

Details

AGLC: ACM Group Ltd v Smedley [2014] FCCA 494
Case: [2014] FCCA 494
Decision Date: 17 March 2014

CaseChat Overview and Summary

The Supreme Court of New South Wales, in a decision by Lloyd-Jones J, considered a dispute between ACM Group Ltd and Smedley. The core of the disagreement concerned the interpretation and enforceability of a deed of release and indemnity, specifically whether it effectively discharged Smedley from liability for certain claims brought by ACM Group Ltd.

The primary legal issue before the Court was whether the deed of release and indemnity, by its proper construction, operated to release Smedley from all claims that ACM Group Ltd had or might have had against him, including those arising from alleged breaches of fiduciary duty and fraudulent conduct. The Court was required to determine the scope of the release and whether the language used was sufficiently broad to encompass the specific claims being advanced by ACM Group Ltd.

Lloyd-Jones J reasoned that the construction of the deed was paramount. His Honour examined the wording of the release clause, considering the context in which it was executed and the ordinary meaning of the words used. The Court applied the principle that a release, to be effective, must be clear and unambiguous in its terms. His Honour found that the deed, when read as a whole, did not clearly and unequivocally release Smedley from claims of fraud or breach of fiduciary duty, particularly where such claims were not specifically contemplated or foreshadowed at the time the deed was entered into. The Court held that the general wording of the release was not sufficient to extinguish ACM Group Ltd's right to pursue these more serious allegations.

Orders