Bassal v CMC Lawyers

This matter concerned applications by Mr Bassal Jnr and Mr Bassal Snr (the applicants) in bankruptcy proceedings before Driver J of the Supreme Court of New South Wales. The applicants sought to establish a counterclaim, set-off, or cross-demand against CMC Lawyers and their former legal advisor, Mr Antoniou, of equal or greater value than a judgment debt previously entered against them. This judgment debt arose from separate proceedings in the Supreme Court of New South Wales, where Adams J had entered judgment for the defendant with costs on 24 July 2019.

The primary legal issue before Driver J was whether the applicants had established the necessary elements of a claim for professional negligence against CMC Lawyers and Mr Antoniou, for the purposes of section 40(1)(g) of the *Bankruptcy Act 1966* (Cth). This required the court to consider the applicants' assertions of negligence, including allegations of invalid commencement of proceedings and failure to obtain relevant evidence, as well as claims relating to the assignment of causes of action and the incurring of unnecessary legal fees. The court also had to address preliminary issues such as the potential impact of Mr Antoniou's death on the claim and the applicability of limitation periods to the professional negligence action, given the statement of claim was only filed shortly before the hearing and had not yet been served.

Driver J reasoned that the applicants had had ample opportunity to substantiate their claims but had failed to do so to the court's satisfaction. The court noted the protracted procedural history of the matter and the significant delays that would ensue if further proceedings in the Supreme Court were required. Ultimately, Driver J concluded that the applicants had not satisfied the requirements of section 40(1)(g) of the *Bankruptcy Act*.

Consequently, Driver J ordered that the applicants' applications be dismissed.