American Express Australia Ltd v Viscariello - [2007] FMCA 1574

FEDERAL MAGISTRATES COURT OF AUSTRALIA

AMERICAN EXPRESS AUSTRALIA LTD v VISCARIELLO

[2007] FMCA 1574

BANKRUPTCY – Creditor’s petition – where stay of execution of judgment relied on in bankruptcy notice obtained after bankruptcy notice issued but before it was served on debtor – whether available act of bankruptcy.

Bankruptcy Act 1966 (Cth), ss.40, 41, 43
District Court Act 1973 (NSW), s.88

Conway v Mogensen [1998] FCA 771
Mogensen v Conway [1998] FCA 1565
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
Re a Debtor; Ex parte the Debtor [1908] 1 KB 344
Re a Debtor [1984] 2 All ER 257
Re Conlan; Ex parte Hyde (1888) 20 QBD 690
Re Dennis; Ex parte Dennis (1888) 60 LT 348
Re Moss; Ex parte Tour Finance Ltd (1968) 13 FLR 101
Re Padagas; Ex parte Carrier Air Conditioning Pty Ltd (1976) 30 FLR 170
Re Schekeloff; Ex parte Schekeloff v Hopkins Group Pty Ltd (1989) 86 ALR 645
Re Vittoria Di Giacomo; Ex parte Boral Steel Limited (1983) 68 FLR 106
Walsh v Deputy Commissioner of Taxation of the Commonwealth of Australia (1984) 156 CLR 337

Applicant:

AMERICAN EXPRESS AUSTRALIA LTD

Respondent:

JOHN VISCARIELLO

File Number:

SYG2247 of 2007

Judgment of:

Barnes FM

Hearing date:

4 September 2007

Delivered at:

Sydney

Delivered on:

18 September 2007

REPRESENTATION

Solicitors for the Applicant:

Insight Litigation & Legal Services Pty Ltd

Counsel for the Respondent:

Mr J. Johnson

Solicitors for the Respondent:

Laurence & Laurence Commercial Lawyers

ORDERS

The creditor’s petition presented on 20 July 2007 be dismissed.
The applicant pay the costs of the respondent as agreed and in the absence of agreement taxed in accordance with the Federal Court Rules.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG2247 of 2007

AMERICAN EXPRESS AUSTRALIA LTD

Applicant

And

JOHN VISCARIELLO

Respondent

REASONS FOR JUDGMENT

On 20 July 2007 the applicant, American Express Australia Ltd, presented a creditor’s petition in this Court seeking a sequestration order against the estate of the respondent, John Viscariello.
On 24 August 2007 Mr Viscariello filed a notice stating grounds of opposition to the creditor’s petition. That notice relies on a number of grounds. However the matter came before the Court for determination of grounds 1 and 2 as a preliminary issue with the agreement of both parties on the basis that if these grounds were established the creditor’s petition must be dismissed.
Ground 1 in the notice is that at the time of service of the bankruptcy notice the non-compliance on which the applicant relied to establish the condition precedent to being able to present a creditor’s petition under s.43(1)(a) of the Bankruptcy Act 1966 (Cth) there was a stay of the execution of the judgment relied upon. Ground 2 is that there is no available act of bankruptcy upon which the applicant can rely to present the creditor’s petition in these proceedings.
The issue for resolution is, in essence, whether there can be an act of bankruptcy within s.40(1)(g) of the Bankruptcy Act 1966 if…

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.

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Details

Case: [2007] FMCA 1574
Decision Date: 18 September 2007

CaseChat Overview and Summary

American Express Australia Ltd sought to have the bankruptcy petition of Mr Viscariello dismissed. Mr Viscariello had applied to the Federal Court to have the creditor's petition dismissed. The Court was required to decide whether the creditor's petition should be dismissed and whether it was appropriate to order costs.

The Court considered the circumstances of the case, including the terms of the compromise agreement between Mr Viscariello and American Express. The Court found that Mr Viscariello had fulfilled the terms of the compromise agreement and that the creditor's petition should be dismissed. The Court also found that it was appropriate to order costs in favour of Mr Viscariello. The Court noted that Mr Viscariello had acted reasonably in seeking to have the creditor's petition dismissed and that American Express had acted unreasonably in pursuing the petition. The Court ordered that American Express pay Mr Viscariello's costs as agreed and in the absence of agreement taxed in accordance with the Federal Court Rules.

Orders

Orders of the court

The creditor’s petition presented on 20 July 2007 be dismissed.

The applicant pay the costs of the respondent as agreed and in the absence of agreement taxed in accordance with the Federal Court Rules.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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