Legal Research
Cases
Barodawala v Perinparajah (No 2)

Barodawala v Perinparajah (No 2)

Link copied

Case Copied 23 May 2022 30 min read

Contents

On this page

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION
GENERAL LIST

S CI 2012 01172

ISMAIL BARODAWALA	Plaintiff
v
SUJEETHA PERINPARAJAH	Defendant

---

JUDGE:	GARDE J
WHERE HELD:	Melbourne
DATE OF HEARING:	28 March 2022
DATE OF JUDGMENT:	23 May 2022
CASE MAY BE CITED AS:	Barodawala v Perinparajah (No 2)
MEDIUM NEUTRAL CITATION:	[2022] VSC 247

---

BANKRUPTCY AND INSOLVENCY – Whether debt incurred by means of fraud – Whether judgment debt survived discharge from bankruptcy – Res judicata – Merger by judgment – Whether decision of single judge in another State concerning a provision in a federal statute should be followed unless plainly wrong – Construction of s 153(2)(b) of the Bankruptcy Act 1966 (Cth) – Whether fraud alleged in primary proceeding – Necessity of specifically pleading fraud – Power v Kenny [1977] WAR 87, applied – Bankruptcy Act 1966 (Cth) ss 82(1), 153(2)(b).

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A Terzic	CAV Law Pty Ltd
For the Defendant	Ms A Carruthers	Hutchinson Legal

HIS HONOUR:

Introduction

This is an appeal by the plaintiff from the decision of Irving JR (as he then was) on the defendant’s summons setting aside a warrant of seizure and sale dated 7 July 2020 (‘warrant’) in the amount of $335,928.14 relating to the property of the defendant. The warrant was issued pursuant to the grant of leave by this Court to enforce a judgment of the Supreme Court of New South Wales against the defendant obtained on 16 December 2011.[1]
[1]Re Sterco International Pty Ltd (in liq) [2011] NSWSC 1560 (Ball J) (‘NSW judgment’).

This appeal is brought under r 84.05(3) of the Supreme Court (General Civil Procedure) Rules 2015 (‘Rules’) and is an appeal conducted by way of a hearing de novo.[2] By a second summons filed 14 May 2021, the plaintiff seeks to reduce the amount of the warrant to $127,591.90 and interest accrued from 18 May 2015 to the date of payment, and to extend the period of validity of the warrant. That summons was dismissed by Irving JR on 27 July 2021.
[2]Rules r 84.05(4).

The key issue for decision is whether the defendant was released from the NSW judgment on her discharge from bankruptcy in 2015. For the warrant to be valid, it is necessary for the plaintiff to demonstrate that the NSW judgment is a ‘debt incurred by means of fraud’ within the meaning of s 153(2)(b) of the Bankruptcy Act 1966 (‘Act’).

Background facts

Both parties relied on affidavits filed in the proceeding. The parties agreed that there was no benefit in deciding objections which had been made to certain paragraphs of the affidavits. The background facts are not in dispute and were conveniently summarised by Irving JR in his reasons for decision.[3] I will adopt a similar summary.
[3]Barodawala v Perinparajah (2021) 359 FLR 96, 98–9.

In about June 2008, the plaintiff initiated a proceeding against Sterco International Pty Ltd (ACN 118 837 924)…

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.

Keep reading for free

Create a free CaseChat account to read Barodawala v Perinparajah (No 2) and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2022] VSC 247
Decision Date: 23 May 2022

CaseChat Overview and Summary

In Barodawala v Perinparajah (No 2), the High Court considered the issue of whether a debt incurred by fraud survived a discharge from bankruptcy. The case involved a judgment debt that arose from a previous proceeding between the parties. The central question before the court was whether the judgment debt was extinguished by the bankrupt's discharge and whether the doctrine of res judicata applied to preclude the bankrupt from raising the defence of fraud. Additionally, the court examined the appropriate interpretation of section 153(2)(b) of the Bankruptcy Act 1966 (Cth) and the necessity of specifically pleading fraud in the primary proceeding.

The High Court held that the judgment debt did not survive the discharge from bankruptcy and that the doctrine of res judicata applied. The Court found that the debt was extinguished by the discharge and that the bankrupt was precluded from raising the defence of fraud because it was not specifically pleaded in the primary proceeding. The Court emphasised the importance of following the decision of a single judge in another State concerning a provision in a federal statute unless it was plainly wrong. The Court also held that the relevant provision of the Bankruptcy Act required the bankrupt to specifically plead fraud in the primary proceeding.

The High Court's decision in Barodawala v Perinparajah (No 2) provides important guidance for practitioners in the area of bankruptcy and insolvency law. The Court's interpretation of section 153(2)(b) of the Bankruptcy Act 1966 (Cth) and the requirement to specifically plead fraud in the primary proceeding are particularly noteworthy. The decision also highlights the importance of considering the doctrine of res judicata when dealing with bankruptcy proceedings. Overall, the Court's decision in this case is a useful addition to the body of case law in this area of law.

Orders