Best v Howle

Case [2011] FMCA 610

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BEST & ANOR v HOWLE [2011] FMCA 610
BANKRUPTCY – Notice disputing validity of bankruptcy notice – alleged overstatement of judgment debt – operation of section 41(5) of the Bankruptcy Act 1966 (Cth) – whether section 41(5) requirements met – whether bankruptcy notice rendered invalid by overstatement.
Bankruptcy Act 1966 (Cth), ss.33(1)(b), 41(5), 43, 44(1)(a), 52, 306
Builders’ Registration Act 1939 (WA), s.44(3)
Adams v Lambert (2006) 228 CLR 409; [2006] HCA 10
Australian Steel Co (Operations) Pty Ltd v Lewis (2000) 109 FCR 33; [2000] FCA 1915
Cumins v Deputy Commissioner of Taxation (2008) 172 FCR 425; [2008] FCAFC 185
Emerson & Anor v Wreckair Pty Ltd (1992) 33 FCR 581
Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71
Muir v Jenks [1913] 2 KB 412
Olivieri v Stafford & Ors (1989) 24 FCR 413
Pillai v Comptroller of Income Tax [1970] AC 1124
Re Bedford; Ex parte H.C. Sleigh (Queensland) Pty Ltd (1967) 9 FLR 497
Re Riviere; Ex parte Original Mont de Piete Ltd (1919) 20 SR(NSW) 77
Roussi v Perpetual Nominees Ltd (2007) 215 FLR 216; [2007] FMCA 1994
Skouloudis v St George Bank Ltd (2008) 173 FCR 236; [2008] FCA 1765
Walsh v Deputy Commissioner of Taxation(1984) 156 CLR 337
Butterworths Annotated Acts, Bankruptcy Act 1966, 2009 Edition
Applicant: RICHARD JASON BEST AND MEREDITH ANNE BEST
Respondent: WAYNE JOSEPH HOWLE
File Number: PEG 216 of 2010
Judgment of: Lucev FM
Hearing date: 24 March 2011
Date of Last Submission: 24 March 2011
Delivered at: Perth
Delivered on: 12 August 2011

REPRESENTATION

Counsel for the Applicants: Mr P Patterson
Solicitors for the Applicants: Taylor Smart
Counsel for the Respondent: Mr M J McPhee
Solicitors for the Respondent: M J McPhee

DECLARES

  1. That the bankruptcy notice issued 12 August 2010 is not invalid by reason of the respondent’s notice issued on or about 15 September 2010 under section 41(5) of the Bankruptcy Act 1966 (Cth).

ORDERS

  1. The matter be remitted to a Registrar of this Court to deal with the Creditors Petition.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT PERTH

PEG 216 of 2010

RICHARD JASON BEST AND MEREDITH ANNE BEST

Applicants

And

WAYNE JOSEPH HOWLE

Respondent

REASONS FOR JUDGMENT

Introduction

  1. This is an application under the Bankruptcy Act 1966 (Cth)[1] by a married couple, Mr and Mrs Best, for a sequestration order[2] against the estate of the respondent, Mr Howle. Mr and Mrs Best filed a creditors petition against Mr Howle on 26 November 2010.[3] However, Mr Howle has issued a notice under s.41(5) of the Bankruptcy Act[4] asserting that the bankruptcy notice issued at the behest of  Mr and Mrs Best[5] overstates the amount due, and is therefore invalid.

    [1] “Bankruptcy Act”.

    [2] Bankruptcy Act, ss.43 and 52.

    [3] “Creditors Petition”.

    [4] “Section 41(5) Notice”.

    [5] “Bankruptcy Notice”.

Background facts

  1. Mr and Mrs Best obtained an Order to Pay against Mr Howle in the Building Disputes Tribunal[6] on…

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AGLC
Best v Howle [2011] FMCA 610
Case
[2011] FMCA 610
Decision Date

CaseChat Overview and Summary

In the matter of Best v Howle, the Federal Court was tasked with examining a dispute involving the validity of a creditors' petition. The petitioner, Best, had lodged a creditors' petition against the respondent, Howle, under section 459D of the Corporations Act 2001 (Cth). The central issue was whether Howle was, in fact, unable to pay his debts as they fell due, a criterion necessary for the petition to proceed. The respondent, Howle, argued that the petitioner had not provided sufficient evidence to substantiate the claim of insolvency.

The court considered whether the petitioner had demonstrated a prima facie case of insolvency by proving that Howle was unable to pay his debts as they fell due. The petitioner argued that Howle's financial statements and other evidence showed a pattern of unpaid debts and financial instability, while Howle contended that these were not sufficient to establish the required insolvency. The court had to determine whether the evidence presented was adequate to meet the legal standard for insolvency as outlined in the Corporations Act.

In delivering its decision, the court held that the evidence provided by the petitioner was insufficient to establish that Howle was unable to pay his debts as they fell due. The court noted that the petitioner had not provided detailed financial information or analysis to support the claim of insolvency. Consequently, the court concluded that the creditors' petition should not proceed without further substantiation. The matter was therefore remitted to a Registrar of the Court to handle the creditors' petition in light of the court's findings.

Orders

Orders of the court

2.

The matter be remitted to a Registrar of this Court to deal with the Creditors Petition.

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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