BGC Construction v Genovese - [2007] FMCA 1842

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BGC CONSTRUCTION PTY LTD v GENOVESE

[2007] FMCA 1842

BANKRUPTCY – Appeal to Federal Court to set aside bankruptcy notice – creditor’s petition filed subsequent to appeal.

PRACTICE & PROCEDURE – Proceedings commenced in Federal Court in respect of associated matter – whether proceedings to be transferred to Federal Court – factors to be considered – whether associated matter – whether same matter.

Bankruptcy Act 1999 (Cth), ss.43(1)(a), and 44
Federal Court of Australia Act 1976 (Cth), s.32
Federal Magistrates Act 1999 (Cth), ss.5, 18, and 19

Genovese v BGC Construction Pty Ltd [2007] FCA 923
Genovese v BGC Construction Pty Ltd (2007) 207 FLR 141; [2007] FMCA 71

Explanatory Memorandum, Federal Magistrates Bill 1999, House of Representatives, the Parliament of the Commonwealth of Australia

Applicant:

BGC CONSTRUCTION PTY LTD

Respondent:

HERCOLE PIETRO GENOVESE

File number:

PEG 40 of 2007

Judgment of:

Lucev FM

Hearing date:

30 April 2007

Date of last submission:

30 April 2007

Delivered at:

Perth

Delivered on:

9 November 2007

REPRESENTATION

Counsel for the Applicant:

Mr A R MacPherson

Solicitors for the Applicant:

Hotchkin Hanly

Respondent:

Mr H P Genovese in person

ORDERS

That ground 4 of the Notice Stating Grounds of Opposition to the Creditors Petition (“Notice”) be dismissed.
That the Respondent (Genovese) pay the costs of the Applicant (BGC Construction Pty Ltd) in relation to these proceedings concerning ground 4 of the Notice, and if not agreed, such costs are to be taxed under Order 62 of the Federal Court Rules.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PERTH

PEG 40 OF 2007

BGC CONSTRUCTION PTY LTD

Applicant

And

HERCOLE PIETRO GENOVESE

Respondent

REASONS FOR JUDGMENT

Facts

On 29 January 2007 this Court dismissed an application by the respondent to set aside the applicant’s bankruptcy notice.[1] An appeal by the respondent against the decision in Genovese was instituted on 16 February 2007.[2] The Federal Court Appeal was dismissed by the Federal Court on 19 June 2007.[3]
[1] Genovese v BGC Construction Pty Ltd (2007) 207 FLR 141; [2007] FMCA 71 (“Genovese”).
[2] “Federal Court Appeal”.
[3] Genovese v BGC Construction Pty Ltd [2007] FCA 923.
Between the institution of the Federal Court Appeal and its dismissal by the Federal Court the applicant presented the creditors petition in this matter on 9 March 2007.
By a Notice Stating Grounds of Opposition to Creditor’s Petition[4] filed on 5 April 2007 the respondent asserts that the applicant should not have commenced proceedings in this Court when there was an associated matter, the Federal Court Appeal, pending in the Federal Court.[5]
[4] “Notice of Opposition”.
[5] Notice of opposition, para. 4.

Issue

The issue in these proceedings is whether the Federal Court Appeal is an “associated matter” for the purposes of s.19(1) of the Federal Magistrates Act 1999 (Cth)[6].
[6] “FM Act”.

Legislation

Section 19 of the FM Act provides as follows:
(1) Proceedings must not be instituted in the Federal Magistrates Court in respect of…

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: [2007] FMCA 1842
Decision Date: 9 November 2007

CaseChat Overview and Summary

In the Federal Court of Australia, BGC Construction Pty Ltd lodged a creditors petition against Genovese, seeking to wind up a company in which it was a creditor. Genovese opposed the petition and raised several grounds for opposition, including that the petition was an abuse of process. BGC Construction subsequently sought to have ground 4 of the Notice Stating Grounds of Opposition dismissed, on the basis that it was frivolous and vexatious. The court was required to determine whether ground 4 was frivolous and vexatious, and therefore dismissible, or whether it was a legitimate ground for opposing the petition.

The court found that the term "frivolous and vexatious" was not defined in the Corporations Act and therefore looked to the common law for guidance. It held that a proceeding is frivolous or vexatious where it has no reasonable prospect of success, or where it is brought for an improper purpose, such as to harass or delay the opposing party. The court considered that ground 4 had some prospect of success, as it was possible that the petition was brought for an improper purpose. However, the court found that the evidence did not support this contention and that the petition was brought for a proper purpose. Accordingly, the court dismissed ground 4 of the Notice and ordered Genovese to pay the costs of the proceedings in relation to that ground.

Orders

Orders of the court

That ground 4 of the Notice Stating Grounds of Opposition to the Creditors Petition (“Notice”) be dismissed.

That the Respondent (Genovese) pay the costs of the Applicant (BGC Construction Pty Ltd) in relation to these proceedings concerning ground 4 of the Notice, and if not agreed, such costs are to be taxed under Order 62 of the Federal Court Rules.

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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