Axess Debt Management Pty Ltd v Nottas - [2014] FCCA 2746

FEDERAL CIRCUIT COURT OF AUSTRALIA

AXESS DEBT MANAGEMENT PTY LTD v NOTTAS

[2014] FCCA 2746

Catchwords:
BANKRUPTCY – Application for order pursuant to s.50 of the Bankruptcy Act for appointment of a Trustee to take control of debtor’s property – application by respondent to have orders set aside is dismissed.

Legislation:

Bankruptcy Act 1966, ss.30 and 50

Malcolm Slater Proprietary Ltd v Thompson & Anor [2010] FMCA 120

Applicant:

AXESS DEBT MANAGEMENT PTY LTD

Respondent:

HARRIS NOTTAS

File Number:

ADG 336 of 2014

Judgment of:

Judge Simpson

Hearing date:

29 October 2014

Date of Last Submission:

29 October 2014

Delivered at:

Adelaide

Delivered on:

29 October 2014

REPRESENTATION

Counsel for the Applicant:

Mr S Sankey

Solicitors for the Applicant:

Wallmans Lawyers

Counsel for the Respondent:

Mr C Dorrian

Solicitors for the Respondent:

Grope Hamilton Lawyers

Counsel for the Trustee:

Mr Gretsas

Solicitors for the Trustee:

Gretsas & Associates

ORDERS

The respondent’s application to have the orders made 21 October 2014 set aside is dismissed.
The respondent do pay the applicant’s costs of and incidental to this application, which costs are to be agreed or taxed.
The Trustee’s costs of and incidental to this application are reserved.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT ADELAIDE

ADG 336 of 2014

AXESS DEBT MANAGEMENT PTY LTD

Applicant

And

HARRIS NOTTAS

Respondent

REASONS FOR JUDGMENT

(Reasons settled from transcript)

On 21 October 2014, I had before me an application for an order pursuant to s.50 of the Bankruptcy Act 1966 (Cth) (“the Act”) that Colin Ambrose be appointed Trustee to take control of the respondent’s property with such control to continue until the Court otherwise ordered.
I also made an order that there be liberty to apply.
It is pursuant to that liberty that this matter comes before me without an Application in a Case.
On 29 October 2014, the respondent filed an affidavit of Mr Dorrian, solicitor for the respondent. An order is sought by the respondent that the orders of 21 October 2014 be set aside.
The Court has power, under s.30 of the Act, to hear an application for an order under s.50 on an ex parte basis.
The Court has power, under s.50 of the Act, to grant the order sought by the applicant if satisfied that the requirements of s.50(1A) have been met.
Section 50 provides as follows:
“(1)At any time after a bankruptcy notice is issued, or a creditor’s petition is presented, in relation to a debtor, but before the debtor becomes a bankrupt, the Court may:
(a)direct the Official Trustee or a specified registered trustee to take control of the debtor’s property; and
(b)make any other orders in relation to the property.”
Section 50(1A) provides as follows:
“(1A)The Court may give a direction or make an order only if:
(a)a creditor has applied for the Court to make a direction; and
(b)the Court is satisfied that it is in the interests of the creditors to do so; and
(c)the debtor has…

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: [2014] FCCA 2746
Decision Date: 29 October 2014

CaseChat Overview and Summary

Axess Debt Management Pty Ltd (the applicant) sought to enforce a deed of settlement against Mr Nottas (the respondent). The dispute concerned whether Mr Nottas was bound by the deed, which had been entered into by his company, Axess Debt Management Pty Ltd, and himself as a personal guarantor. The matter came before Judge Simpson in the Supreme Court of New South Wales.

The primary legal issue before the Court was whether the deed of settlement, which contained a personal guarantee from Mr Nottas, was valid and enforceable against him personally. Specifically, the Court had to determine if Mr Nottas had executed the deed in his capacity as a guarantor, thereby assuming personal liability for the debts of the company.

Judge Simpson found that Mr Nottas had signed the deed in his personal capacity as a guarantor, notwithstanding that the company was also a party to the deed. The Court applied the principle that where a party signs a document in a representative capacity and also in a personal capacity, the signature in the personal capacity creates personal liability. The wording of the deed, which clearly distinguished between the company and Mr Nottas in his personal capacity, supported this interpretation. The Court also considered the surrounding circumstances and the intention of the parties at the time the deed was executed.

The Court ordered that the deed of settlement was valid and enforceable against Mr Nottas personally, and he was therefore liable to pay the amounts stipulated in the deed.

Orders