Bennell v American Express Australia Ltd - [2005] FCA 1169

FEDERAL COURT OF AUSTRALIA
Bennell v American Express Australia Ltd [2005] FCA 1169
BANKRUPTCY – applications by debtors to review order for substituted service of bankruptcy notices made by a Registrar of the Federal Magistrates Court – where application for the order and the order incorrectly named a related company of the creditor as applicant – further application by creditor to be added as applicant in place of related company on the application for substituted service – where validity of the original bankruptcy notices and order of the Federal Magistrate not in dispute – whether Court should set aside the order on review.
Bankruptcy Act 1966 (Cth), s 5, s 27, s 41, s 306, s 309
Federal Court of Australia Act 1976 (Cth)
Federal Magistrates Act 1999 (Cth), s 39
Federal Magistrates Court Rules, r 29.04
Federal Court Rules, O 82, r 3, O 13, O 77, r 8
Bridge Shipping v Grand Shipping SA (1991) 173 CLR 231 – referred to
Bride v Official Trustee in Bankruptcy (1999) 95 FCR 75 – referred to
Esanda Finance Corp Ltd v Velissaris [1999] FCA 1359 – referred to
Ginnane v Diners Club Limited (1993) 42 FCR 90 – referred to
Re Brindle; Ex parte FB & FA McMahon Pty Limited (1992) 35 FCR 506 – referred to
Re Kwiatek; Ex parte Big J Ltd v Pattison (1989) 21 FCR 374 – referred to
Re Vincent; Ex parte State Bank of New South Wales Ltd (1996) 71 FCR 58 – referred to
SmithKline Beecham (Australia) Pty Ltd v Minister for Family Services (1993) 45 FCR 587 - discussed
BENNELL & ANOR v AMERICAN EXPRESS AUSTRALIA LTD & ANOR
N 1942 OF 2004
N 1943 OF 2004
N 866 OF 2005
N 867 OF 2005
N 1032 OF 2005
EMMETT J
13 SEPTEMBER 2005
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 1942 OF 2004
NSD 1943 OF 2004
NSD 866 OF 2005
NSD 867 OF 2005
NSD 1032 OF 2005

BETWEEN:

IAN ROBERT BENNELL & SUSAN JANE BENNELL
APPLICANTS

AND:

AMERICAN EXPRESS AUSTRALIA LTD
FIRST RESPONDENT

AMERICAN EXPRESS INTERNATIONAL INC
SECOND RESPONDENT

JUDGE:

EMMETT J

DATE OF ORDER:

13 SEPTEMBER 2005

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

The applicants file and serve short minutes of order reflecting the orders proposed in the reasons for judgment on or before 4 pm on Monday, 19 September 2005.

Any submissions by the respondents disagreeing with the form of the orders be filed and served on or before 4 pm on 26 September 2005.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 1942 OF 2004
NSD 1943 OF 2004
NSD 866 OF 2005
NSD 867 OF 2005
NSD 1032 OF 2005

BETWEEN:

IAN ROBERT BENNELL & SUSAN JANE BENNELL
APPLICANTS

AND:

AMERICAN EXPRESS AUSTRALIA LTD
FIRST RESPONDENT

AMERICAN EXPRESS INTERNATIONAL INC
SECOND RESPONDENT

JUDGE:

EMMETT J

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: [2005] FCA 1169
Decision Date: 13 SEPTEMBER 2005

CaseChat Overview and Summary

In Bennell v American Express Australia Ltd, the applicants challenged the validity of bankruptcy notices served on them by American Express Australia Limited, contending that the subsequent issuance of new notices by American Express International Inc was an abuse of process. The matter was before the Federal Court, which needed to determine the validity of the bankruptcy notices and the propriety of issuing new notices.

The court examined whether the bankruptcy notices, as originally issued and subsequently varied by an order of the Federal Magistrates Court, could have reasonably misled the applicants regarding the compliance date. The court found that the applicants could not have been misled, as the original notices and the order were clear and distinct in their requirements. The court also considered whether the issuance of new bankruptcy notices by American Express International Inc constituted an abuse of process, given that the original notices were valid. The court concluded that the new notices were unnecessary and should be set aside.

In its reasoning, the court held that the new bankruptcy notices were an abuse of process and should be set aside with costs. The original proceedings in the Federal Court, which had become redundant following the issuance of the new notices, were dismissed without costs. The applicants were required to file and serve minutes of order reflecting the conclusions in the reasons for judgment. The respondents were invited to make submissions on the form of the orders, with a final order to be made based on any submissions received or in accordance with the proposed minutes of order.

The final orders required the applicants to file and serve minutes of order reflecting the court's proposed orders by a specified date. The respondents were then given an opportunity to file any submissions disagreeing with the form of the orders, with final orders to be made based on any submissions received or in accordance with the proposed minutes of order.

Orders

Orders of the court

1. The applicants file and serve short minutes of order reflecting the orders proposed in the reasons for judgment on or before 4 pm on Monday, 19 September 2005.

2. Any submissions by the respondents disagreeing with the form of the orders be filed and served on or before 4 pm on 26 September 2005.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

EMMETT J

As indicated above, this is not a case where a person in the position of the applicant debtors could reasonably have been mislead as to what was required by the bankruptcy notices. The submission to the contrary was that, as the bankruptcy notices as originally issued stated one date for compliance (21 days from service) and the 12 November 2004 order varying the bankruptcy notices provided for a different time for compliance (21 days from a stipulated date, being the date of deemed service), the applicant debtors may have been mislead as to which date was the relevant date for compliance, as the bankruptcy notices and the order named different applicants. Accepting, as the applicant debtors do that the order of the Federal Magistrate was a valid order of the Federal Magistrates Court unless set aside, it is hard to see just how any person could be misled. CONCLUSION There remain the applications that the new bankruptcy notices issued were an abuse of process. One can understand the reason why American Express International Inc sought the issue of new bankruptcy notices where the question was outstanding whether the existing notices were valid. They are. It follows that the later notices should not have been issued and should be set aside with costs. There still remain extant, although no longer the subject of any argument, the original proceedings in this Court, which were part heard before the proceedings in the Federal Magistrates Court were instituted. Those proceedings, now redundant, should be dismissed but there should be no order as to the costs of them. FORM OF ORDERS The applicant debtors should file and serve short minutes of order reflecting the conclusions set out in these reasons. American Express International Inc and American Express Australia Limited should make submissions about any disagreements with the form of orders. The applicant debtors may then respond if they wish. If no submissions are made, orders will be made in accordance with the short minutes filed. Otherwise, orders will be made after taking into account any submissions filed.

Ratio Decidendi

Legal Principle Established

Established by: EMMETT J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1942 OF 2004 NSD 1943 OF 2004 NSD 866 OF 2005 NSD 867 OF 2005 NSD 1032 OF 2005

BETWEEN:	IAN ROBERT BENNELL & SUSAN JANE BENNELL APPLICANTS
AND:	AMERICAN EXPRESS AUSTRALIA LTD FIRST RESPONDENT AMERICAN EXPRESS INTERNATIONAL INC SECOND RESPONDENT
JUDGE:	EMMETT J
DATE OF ORDER:	13 SEPTEMBER 2005
WHERE MADE:	SYDNEY