ACN 072 996 895 v Anderson
[2012] FMCA 1156
•4 December 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| KERRY INGREDIENTS AUSTRALIA PTY LTD ACN 072 996 895 & ANOR v ANDERSON | [2012] FMCA 1156 |
| BANKRUPTCY – Creditor’s Petition – application for substituted petitioning creditor – not opposed – application granted. PRACTICE & PROCEDURE – Change of hearing venue – respondent debtor’s application to transfer proceedings from Sydney to Melbourne Registry – relevant matters for consideration – application dismissed. |
| Bankruptcy Act 1966 (Cth), s.49 Federal Magistrates Court Rules 2001 (Cth), r. 8.01 |
| Dean v Q.U.F. Industries Ltd (1981) 51 FLR 317 Earthworks and Quarries Ltd v F.T. Eastman and Sons Pty Ltd [1966] VR 24 Holmes v DMS Pacific Exports Pty Ltd [2007] NSWSC 137 Liftronic Pty Ltd v Montgomery Elevator Co (1996) ATPR 41 - 458 Sherwood Overseas Co Pty Ltd v Jaymac International Pty Ltd [2008] FMCA 495 |
| Applicant: | KERRY INGREDIENTS AUSTRALIA PTY LTD ACN 072 996 895 |
| Applicant on motion to substitute as petitioning creditor: | ALLIED MILLS PTY LTD ACN 000 008 739 |
| Respondent: | WAYNE JOHN ANDERSON |
| File Number: | SYG 1562 of 2012 |
| Judgment of: | Lloyd-Jones FM |
| Hearing date: | 29 October 2012 |
| Delivered at: | Sydney |
| Delivered on: | 4 December 2012 |
REPRESENTATION
| Counsel for Substituted Creditor: | Mr A.M. Chee |
| Solicitors for Substituted Creditor: | Mr S. Sawyer of Bennett and Philp Solicitors |
| Counsel for the Respondent: | Mr J. Redmond |
| Solicitors for the Respondent: | Mr P. Bradley of Shamrock Goodland Lawyers |
ORDERS
Pursuant to s.49 of the Bankruptcy Act 1966 (Cth) Allied Mills Pty Ltd ACN 000 008 739 be substituted as the petitioning creditor in proceedings SYG 1562 of 2012, in the place of Kerry Ingredients Australia Pty Ltd ACN 072 996 895.
The substituted petitioning creditor file an amended creditor’s petition on or before 4.00pm on 11 December 2012.
The respondent’s interim application filed on 24 October 2012 be dismissed.
The respondent debtor pay the applicant substituted creditor’s costs of the application made under s.49 of the Bankruptcy Act 1966 (Cth), as agreed or taxed, and the costs of the day be otherwise costs in the proceedings.
The matter be listed for directions on a date to be fixed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1562 of 2012
| KERRY INGREDIENTS AUSTRALIA PTY LTD ACN 072 996 895 |
Applicant
| ALLIED MILLS PTY LTD ACN 000 008 739 |
Applicant on motion to substitute as petitioning creditor
And
| WAYNE JOHN ANDERSON |
Respondent
REASONS FOR JUDGMENT
Substitution of Petitioning Creditor
On 18 July 2012 Kerry Ingredients Australia Pty Ltd ACN 072 996 895 (“Kerry Ingredients”) filed a creditor’s petition against the respondent debtor Wayne John Anderson in this Court. The first return date for the proceedings was listed on Wednesday 22 August 2012 at which the proceedings were adjourned by consent to 12 September 2012. On 12 September 2012, a registrar of the Court made the following orders:
1. Leave granted to KERRY INGREDIENTS AUSTRALIA PTY LTD ACN 072 996 895 to withdraw as original creditor.
2. ALLIED MILLS PTY LTD ACN 000 008 739 to file and serve any interim application in seeking substitution as petitioning creditor and Amended Creditor’s Petition (“Application”) by 26 September 2012.
3. If the Respondent proposes to oppose the Application, the Respondent to file and serve, by 10 October 2012:
a. A notice in accordance with Form 5 stating grounds of opposition, and
b. An affidavit in support of grounds of opposition.
4. Usual notification to the Respondent of the details of time, date and place of the adjourned hearing and any other orders made.
5. The Application and proceedings stood over until 17 October 2012.
6. Costs reserved.
On 28 September 2012, Allied Mills Pty Ltd ACN 000 008 739 (“Allied Mills”), then a supporting creditor in respect of the proceedings, filed an interim application seeking an order pursuant to s.49 of the Bankruptcy Act1966 (Cth) (the “Bankruptcy Act”) that Allied Mills be substituted as the petitioning creditor in these proceedings, together with leave to file an amended creditor’s petition. The proceedings were listed on 29 October 2012 where a registrar transferred the proceedings to be heard in this Court. Mr Redmond, appearing for Mr Anderson, indicated that he had received instructions not to oppose the interim application for substitution of the petitioning creditor.
Mr Chee, appearing for Allied Mills formally moved on the interim application dated 26 September 2012 and filed 28 September 2012. In support of that application he sought to read the affidavit of Dianne Eaton sworn 26 September 2012 (“Eaton Affidavit”). He also tendered, as admissions, the affidavit of Wayne John Anderson, sworn 11 October 2012, noting [11] which is an admission about the receipt of a Bankruptcy Notice on or about 16 June 2012. Similarly, Mr Chee noted that [19] of Mr Anderson’s Affidavit of 11 October 2012 is an admission as to the execution of the guarantee and indemnity. In the Eaton Affidavit a copy of the application in which the guaranteed indemnity is included, appears at Annexure “A”. On the front page of the document, which is an application, the company name appears as Mixed Grayne Pty Ltd (“Mixed Grayne”). On that page the heading appears:
Application for commercial credit account.
Then immediately below that:
This application for credit incorporates the form below, the credit term, guarantee an indemnity…
Two pages later, which is still part of the same application, there is a guarantee. The customer name in that section is not filled out. At the bottom of that page there are two signatures. The first is the signature of a Ms K. Gills. Below that signature appears the heading “Signature of Guarantor”, underneath which Mr Anderson’s signature also appears (to which he has admitted in his affidavit).
Annexure “B” to the Eaton Affidavit is two invoices that refer to amounts that have not been paid by Mixed Grayne or anyone else. In Annexure “B” there is a sub-total in relation to those unpaid invoices, totalling $10,240.32. In relation to the guarantee, the amount of the unpaid invoices takes it over the jurisdictional minimum for a creditor’s petition, putting aside the provision for the contractual payment of interest together with an indemnity for costs as set out in clause 2.5.
Mr Chee submits that it is on that basis there is a debt outstanding owed to Allied Mills by Mr Anderson.
Mr Chee referred the Court to the decision Dean v Q.U.F. Industries Ltd (1981) 51 FLR 317 per Deane, McGregor and Sheppard JJ at 322, where their Honours stated:
In Hyams v Elder Smith Goldsbrough Mort Ltd it was held by the High Court of Australia that an order for substitution did not involve a finding that the respondent was indebted to the substituted petitioner in the requisite amount at the relevant time. Barwick CJ., with whom Gibbs J. and Mason J. agreed said: “Although a creditor seeking an order of substitution must claim the existence of a debt of the required amount as at the date of the act of bankruptcy, it is not necessary, in my opinion, that that creditor should establish, as part of his application, that his debt was in fact in existence at that time. Of course, if it appears on the face of the material he produces in support of his application that his debt was not in existence at the appropriate time the Court should not order the substitution. McNamara v Langford ), properly understood, decides no more than that, Whether or not the substituted petitioning creditor’s debt is sufficient in point of time to support the petition will be decided when the petition is head”)
(3) (1976) 133 C.L.R. 637.
(4) (1931) 45 C.L.R. 267.
(5) (1976) 133 C.L.R., at p. 639.
On the material placed before the Court, I am satisfied that the unpaid invoices that appear in Annexure “B”, all refer to amounts dated prior to the issue of the Bankruptcy Notice, and that these amounts were owing prior to the service of the Bankruptcy Notice and the act of bankruptcy. The affidavit evidence of the respondent Mr Anderson, sworn 11 October 2012, at [11] contains an admission that the Bankruptcy Notice was actually served in 2012. As there is no objection raised by the respondent debtor, I make the order that the substitution is made and that an amended creditor’s petition be filed within seven (7) days.
Respondent’s Application for transfer of proceedings
Mr Redmond informed the Court that he moved on the interim application, dated and filed on 24 October 2012, and sought to read the affidavit of Wayne John Anderson, sworn on 24 October 2012 together with the affidavit of Wayne John Anderson, sworn on 11 October 2012. There was no objection to the affidavits and they were read.
Mr Redmond indicated that the interim application sought to transfer these proceedings to the Melbourne Registry and that he was obliged to bring to the Court’s attention the provisions of Reg. 8.01 of the Federal Magistrates Court Rules and s.52 of the Federal Magistrates Act 1999 (Cth), which state:
FEDERAL MAGISTRATES COURT RULES 2001 - REG 8.01
Change of venue
(1) A party who files an application or response in a proceeding may apply to have the proceeding heard in another registry of the Court.
(2) In considering an application, the Court must have regard to:
(a) the convenience of the parties; and
(b) the limiting of expense and the cost of the proceeding; and
(c) whether the matter has been listed for final hearing; and
(d) any other relevant matter.
FEDERAL MAGISTRATES ACT 1999 - SECT 52
Venue
(1) The Federal Magistrates Court may sit at any place in Australia.
(2) The Federal Magistrates Court or a Federal Magistrate may, at any stage of a proceeding in the Federal Magistrates Court, order that:
(a) the proceeding; or
(b) a part of the proceeding;
be conducted or continued at a place specified in the order, subject to such conditions (if any) as the Federal Magistrates Court or Federal Magistrate imposes.
Mr Redmond referred the Court to the decision in Sherwood Overseas Co Pty Ltd v Jaymac International Pty Ltd [2008] FMCA 495 per Lucev FM at [8] – [20] where the relevant case law is set out.
Mr Redmond submits that in support to have the matter transferred, the following considerations are relevant.
a)The respondent is resident in Victoria;
b)The place where he did business in respect to where the debt arose is in Victoria;
c)His legal representatives are in Victoria;
d)If the matter was not transferred, to Victoria, it is more likely that more solicitors would have to be engaged in Sydney;
e)His instructing solicitors want the carriage of the matter and would not be instructing Counsel if it was going to proceed in Melbourne:;
f)There is a clause where it states that the applicable law will be the law of NSW, but then it also states it will submit to the non-exclusive jurisdiction of NSW; and
g)The witnesses (possibly 3 in number) that the respondent will call are resident in Victoria.
Mr Redmond submitted that in support of the claim to call witnesses resident in Victoria is that part of the reason that Mr Anderson will ultimately dispute the debt is that he signed a deed of settlement with Mr Gills who was his business partner. A copy of the deed of settlement (affidavit of Wayne John Anderson, sworn 11 October 2012, WJA-02) indicates that Mr Wayne John Anderson entered into a deed of settlement with Grant William Gills, in respect of Mixed Grayne. The respondent executed that document on 29 November 2010 and ceased being a director of that company on that date and had no further involvement with it.
In the Deed of Settlement at [5] it states;
Grant [Grant William Gills] and GFT [Grant William Gills and Karen Anne Gills… as trustees for the Grant Gills and Karen Gills family trust (“GFT”)] shall use their best endeavours to obtain a release of Wayne [Wayne John Anderson] or WAFT [Wayne John Anderson as trustee of the Wayne Anderson family trust)(“WAFT”)] from any guarantee he or they may have provided in respect of the obligations or liabilities of the business. Grant and GFT shall advise all suppliers, creditors, landlords and franchisor that Wayne is no longer involved in the conduct of the Business and has no financial interest in the Business nor has any ongoing liability in respect of the debts of the Business
Mr Redmond notes that these bankruptcy proceedings rise out of a debt which was alleged to have occurred in 2011. At that time the respondent was not involved in the Mixed Grayne business, but nonetheless, he has been brought in because he is a signatory to the guarantee. Mr Anderson will be joining Mr Gills and his wife, who executed the deed of settlement and who are both resident in Victoria, to these proceedings, ultimately to dispute and to resolve who should pay the debt.
Mr Chee indicated that in respect to the affidavit of Dianne Eaton, sworn 26 October 2012, he tendered Annexures “A” and “B” which are the credit application and the statement of unpaid invoices, respectively. He also relied upon the affidavit of Ross Burns, sworn 22 October 2012, and tendered Annexure “A” of that affidavit, which is a bundle of delivery notes. Mr Chee also sought leave to file an affidavit of Ross Burns, sworn 26 October 2012, but did not read [4], [6] and [7]. At [8] of Mr Burns’ affidavit of 26 October 2012, filed in court on 29 October 2012, it states that Allied Mills’ head office is in Rhodes, in NSW. Similarly, in the affidavit of Dianne Eaton, Annexure “B”, contains statements which indicate that the Allied Mills’ head office is located in NSW. Mr Chee indicated that, although Mr Redmond did not expressly concede it, he would be submitting that the debt owed to the applicant is a debt that accrued in NSW. Mr Chee provided written submissions on this point, which are as follows:
Debt arose in NSW
3. A petitioning creditor requires the existence of a debt. A debt is a form of chose of action. The authorities make clear that unless a contract specifies a contrary place for payment, a debt chose of action arises at the location of the creditor.
4. In Holmes v DMS Pacific Exports Pty Ltd [2007] NSWSC 137, Hammerschlag J said at [57]:
“[57] As to where to pay, it has long been settled that where a contract is silent as to place of payment (which is the case here), it is for the debtor or obligor to seek out his creditor and the debt is payable where the creditor is found: Earthworks and Quarries Ltd v F.T. Eastment & Sons Pty Ltd [[1966] VR 24].”
5. The Earthworks and Quarries case is directly on point only that the service provider was on Victoria and the debtor company in NSW, The service provider commenced proceedings in it home state and served the defendant in NSW. The defendant moved to set aside the writ. At p 26 Dean J said, “it has long been settled, at least since Sheppard’s Touchstone, that prima facie where a contract or bond is silent as to place of payment, it is for the debtor or obligor to seek out his creditor or oblige and the debt is payable where the creditor or oblige is found.”
6. Since the plaintiff is a NSW company, absent a contractual provision to the contrary, the money should have been paid in NSW.
7. In Liftronic Pty Limited v Montgomery Elevator Company [(1996) ATPR 41 – 458], Sackville J was dealing with a case in which it was alleged there was a requirement to provide information within Australia. The argument was that since there was a failure to provide this information in Australia, that is where the breach occurred. The Court said [10]:
“The general principle is stated in Kygh, Conflict of Laws in Australia (6th ed. 1995), at 54:
“Where the breach consists of non-feasance, the place of the breach is the place where the obligation in question is due to be performed.””
8. Since there was a failure to pay in NSW, the debt arose in NSW.
Mr Chee stated that from his examination of the application itself there was no place for payment of the amounts specified, however, it would almost inevitably occur electronically. In a circumstance where payment does not occur the relevant issue is where the actionable debt exists. Mr Chee submits that where there has not been a place of payment specified the obligation is to pay the creditor where the creditor is located and also, where any action in relation to the debt accrues, namely NSW. In the Eaton Affidavit 2012, Annexure “A” is titled – “Application for a commercial credit account”. Mr Anderson signed that document on 10 October 2003, which was subsequently accepted on 27 November 2003. Importantly, attached to the authorised signatory is a note which states:
The customer’s credit application is accepted by the supplier only when the supplier’s authorise representative has completed and signed, where indicated.
Mr Chee indicates that he is briefed that the supplier’s signature was attached in NSW.
Mr Chee submits in relation to the location of the various witnesses, in the case of the applicant, the deponents to the affidavits read are in Queensland. Consequently, there are travel considerations for both parties. As well there is a cost consideration in relation to the applicant needing to brief further Counsel in Melbourne and the associate costs thrown away.
Consideration – Transfer
Consideration of a matter of transfer initially proceed on the basis of the mandatory considerations set out in Rule 8.01(2) of the Federal Magistrate Court Rules 2001 (Cth) which are reproduced at [8] above.
Convenience of the Parties
The applicant:
a)Has its head office in the Sydney suburb of Rhodes, NSW, with various branch offices in other States;
b)Will be calling witnesses predominantly from Queensland and appears to be a medium sized business enterprise; and
c)Has solicitors in Brisbane, however retains the services of Mr Chee of Counsel to appear in any debt recovery proceedings.
The respondent:
a)Has its place of business in Melbourne, Victoria;
b)Will be calling three witnesses located in Victoria; and
c)Is a private citizen with unknown business affiliations; and
d)Has his solicitors in Victoria.
If further proceedings are heard in Sydney, both parties will be similarly inconvenienced as they both will be required to bring witnesses to Sydney. The level of inconvenience to the parties will not be materially different.
Limited expense and cost of proceeding
Wherever the proceedings are heard, either Melbourne or Sydney, one of the parties will have to incur additional expense and cost. Neither party has made any attempt to quantify their respective costs imposition if the matter stays in the Sydney Registry or, alternatively, transferred to Melbourne. On the information before the Court it is difficult to determine, with any precision, to what extent the expenses and costs of the proceedings might be limited by a transfer to the Melbourne Registry.
A substantial amount of the documentary evidence has already been filed and served and there have been no submissions made that further material is being sought to be filed in the proceedings. Mr Chee, in his submissions, indicated that there will be an application seeking a declaration allowing discovery, although leave will have to be sought to pursue this course. In respect to witnesses, Allied Mills has filed affidavits of Ross Burn and Dianne Eaton, while Mr Anderson has filed affidavits and it has been indicated by his Counsel that he will be calling Mr and Mrs Gills. In respect to other witnesses there has been no indication by either party that other witnesses will be required. However, at this stage it would be risky to speculate as to how many additional witnesses may be called and where they may come from. I note that there is a possibility that some of the witnesses might give evidence which is short and relatively uncontroversial, and it may be appropriate to hear their evidence by video-link to avoid the necessity to travel.
The firm of solicitors retained to represent Mr Anderson are located in country Victoria, while the solicitors representing Allied Mills are located in Brisbane. Mr Chee in his oral submissions indicated that he was on a permanent retainer from Allied Mills to represent that organisation in types of matters similar to the proceedings before this Court. This is supported by the affidavit of Ross Burns sworn 26 October 2012 at [5] and [8]. Mr Redmond from the Sydney Bar has been retained to represent Mr Anderson as his firm of solicitors are located in Victoria but indicated if the matter were transferred to the Melbourne Registry, Counsel would not be retained and Mr Anderson would be represented by a solicitor from the firm that he has retained to represent him.
Neither party has made submissions indicating the approximate length of hearing, however, based on the material currently before the Court and the scope of the dispute it is difficult to envisage the matter taking more than a single day of hearing time.
Any other relevant matter
On the material available to the Court, it does not appear that the subject matter has a strong connection to any particular venue and rather focuses on a detailed analysis on the contractual relationship between the parties. The dispute appears to be totally focussed on the documentation exchanged between the parties and not influenced by any question of locality. Similarly, the transactional documents which are attached to the affidavit are noted as originating in the Sydney suburb of Rhodes and subsequently transmitted by email or postal service. No issue has been raised in respect to the service of that documentation.
Conclusion
Having considered many factors under Rule 8.01(2), I have come to the conclusion that it is not in the interest in the administration of justice on the determination of the issues or effective administration of the Court to order a change of venue. Consequently, the interim application, dated and filed 24 October 2012, is dismissed and costs reserved.
I certify that the preceding twenty-five (25) twenty-five paragraphs are a true copy of the reasons for judgment of Lloyd-Jones FM
Date: 4 December 2012
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