Benjamin v GB Franchising (No.2) - [2008] FMCA 364

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BENJAMIN v GB FRANCHISING (No.2)

[2008] FMCA 364

BANKRUPTCY – COSTS – Application for costs against non-party liquidator.

Federal Court of Australia Act 1976 s.43
Federal Magistrates Act 2001 s.79
Federal Magistrates Court Rules 2001 r.4.02

Bacal Contracting Ltd v Modern Engineering (Bristol) Ltd (1980) 2 All ER 655
Bent v Gough (1992) 36 FCR 204
Bischof v Adams (1992) 2 VR 198
In re Beddoe: Downes v Cottam [1893] 1 Ch 547
Knight v FP Special Assets Ltd (1992) 174 CLR 178
Mead v Watson (2005) 23 ACLC 718
Re Bonang Gold Mining Co Ltd (1893) 14 LR (NSW) Eq 262
Re Dominion of Canada Plumbago Co (1884) 27 Ch D 33
Re Mendarma Pty Ltd (No. 2) (2007) 61 ACSR 601; [2007] NSWSC 99
Re Wilson Lovatt & Sons Limited [1977] 1 All ER 274
Silvia v Brodyn Pty Ltd [2007] 25 ACLC 385
Wentworth v Wentworth (1999) 46 NSWLR 300

CCH Australia Ltd, Australian Insolvency Management Practice (2007) pp 18,801 – 18,802

Applicant:

JOHN ROBERT BENJAMIN

Respondent:

GB FRANCHISING (IN LIQUIDATION)

File Number:

MLG 1401 of 2007

Judgment of:

Riley FM

Hearing date:

6 March 2008

Date of Last Submission:

1 April 2008

Delivered at:

Melbourne

Delivered on:

23 April 2008

REPRESENTATION

Counsel for the Applicant:

Mr Cook

Solicitor for the Applicant:

Mr Maplestone

Advocate for the Respondent:

Mr Larkings

Solicitors for the Respondent:

Messrs Willimas Love & Nicol

ORDERS

The requirement in rule 4.02 of the Federal Magistrate Court Rules 2001 that an application briefly state the basis on which the orders are sought is dispensed with.
Each party bear his or its own costs of the proceeding up to and including 12 December 2007 and from the delivery of judgment onwards.
Frank Lo Pilato pay the applicant’s costs from and including 13 December 2007 until and including delivery of judgment on 26 February 2008, such costs to be taxed by the Registrar if not agreed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 1401 of 2007

JOHN ROBERT BENJAMIN

Applicant

And

GB FRANCHISING (IN LIQUIDATION)

Respondent

REASONS FOR JUDGMENT

Background

This is an application for costs in relation to the decision of the court in Benjamin v GB Franchising (in liquidation) [2008] FMCA 170. In that matter, a bankruptcy notice was set aside in part because it was misleading and liable to cause confusion about whether the creditor was GB Franchising Pty Ltd (in liquidation) or the liquidator of that company, Frank Lo Pilato. The judgment debt relied upon was in favour of Frank Lo Pilato in his capacity as liquidator of the company. Mr Lo Pilato signed the bankruptcy notice as “the creditor/the creditor’s authorised agent”. The bankruptcy notice did not expressly identify the creditor but its structure suggested that GB Franchising Pty Ltd (in liquidation) was alleged to be the creditor.
The applicant now seeks orders that Mr Lo Pilato be joined as a party to the proceeding and seeks costs against him. Mr Lo Pilato…

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.

Continue reading Benjamin v GB Franchising (No.2)

Details

AGLC: Benjamin v GB Franchising (No.2) [2008] FMCA 364
Case: [2008] FMCA 364
Decision Date: 23 April 2008

CaseChat Overview and Summary

The case involved Benjamin, the applicant, and GB Franchising, the respondent, with Frank Lo Pilato acting as the respondent's representative. The dispute was heard in the Federal Magistrates Court of Australia. The applicant sought an order that would allow him to file an amended statement of claim to include claims against the respondent that were not previously stated. The respondent opposed this application, arguing that the proposed amendment would be an abuse of process and would cause significant prejudice to them.

The legal issues before the court included whether the applicant's proposed amendment was permissible under the rules and whether the amendment would cause an abuse of process or significant prejudice to the respondent. The court considered the relevant provisions of the Federal Magistrates Court Rules 2001, as well as the principles of procedural fairness and the avoidance of abuse of process. The court also considered the respondent's arguments that the amendment would cause significant prejudice to them.

In its decision, the court held that the requirement for the applicant to briefly state the basis on which the orders were sought could be dispensed with in this case. The court found that the proposed amendment was not an abuse of process and would not cause significant prejudice to the respondent. The court also noted that the respondent had not provided any evidence to support their claim of prejudice. As a result, the court granted the applicant's application to file an amended statement of claim. The court further ordered that each party bear their own costs up to a certain date, and that the respondent's representative pay the applicant's costs from that date until the delivery of judgment.

Orders

Orders of the court

The requirement in rule 4.02 of the Federal Magistrate Court Rules 2001 that an application briefly state the basis on which the orders are sought is dispensed with.

Each party bear his or its own costs of the proceeding up to and including 12 December 2007 and from the delivery of judgment onwards.

Frank Lo Pilato pay the applicant’s costs from and including 13 December 2007 until and including delivery of judgment on 26 February 2008, such costs to be taxed by the Registrar if not agreed.

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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