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Black v Mills (No 2)

Black v Mills (No 2)

Case [2015] FCCA 1973 21 July 2015

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FEDERAL CIRCUIT COURT OF AUSTRALIA

BLACK v MILLS (No.2)

[2015] FCCA 1973

Catchwords:
PRACTICE AND PROCEDURE – Application under r.16.05(2)(a) of the Federal Circuit Court Rules 2001 (Cth) to set aside sequestration order made in the absence of the bankrupt – whether the bankrupt has given reasonable explanation for not appearing at hearing – whether bankrupt has reasonably arguable prospects of establishing she is solvent – whether bankrupt has reasonably arguable prospects of establishing there are substantial reasons for questioning whether behind the judgment on which the creditor’s petition is based there was in truth and reality a debt due to the creditor – orders set aside.

Legislation:

Bankruptcy Act 1966 (Cth), ss.5(2), 52(2)(a)

Federal Circuit Court Rules 2001 (Cth), r.16.05(2)(a)

Deputy Commissioner Of Taxation v Caporale [2013] FMCA 5
Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22
International Alpaca Management Pty Ltd v Ensor [1999] FCA 72
Lawman v Queensland Building Services Authority [1999] FCA 1781
McVey, re Ex Parte Carswell & Company (unreported 22 May 1996) FCA
MZYEZ v Minister for Immigration and Citizenship [2010] FCA 530
Re Eather; Ex parte Palada (unreported 30 May 1996) FCA
Sandell v Porter [1966] HCA 28; (1966) 115 CLR 666
St George Bank Ltd v Helfenbaum [1999] FCA 1337
Stankiewicz v Plata [2000] FCA 1185
Wren v Mahony [1972] HCA 5; (1972) 126 CLR 212

Applicant:

RICHARD BLACK

Respondent:

BERNADETTE MILLS

File Number:

SYG 3051 of 2014

Judgment of:

Judge Manousaridis

Hearing date:

14 July 2015

Date of Last Submission:

17 July 2015

Delivered at:

Sydney

Delivered on:

21 July 2015

REPRESENTATION

Counsel for the Applicant:

Mr C K Stewart

Solicitors for the Applicant:

R D Black & Associates

Respondent appeared by telephone.

ORDERS

Pursuant to r.16.05(2)(a) of the Federal Circuit Court Rules 2001 (Cth) orders 1 and 2 of the orders made on 14 April 2015 are set aside.
The respondent, Bernadette Mills, pay the costs of the applicant, Richard Black, incurred at the hearing of 14 April 2015 which have been thrown away by reason of order 1 of these orders.
The costs of the application in the case filed on 19 June 2015 be costs in the cause.
The matter stand over to a date to be fixed for directions.
A copy of these orders be given to the Official Receiver in Sydney within 2 days.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 3051 of 2014

RICHARD BLACK

Applicant

And

BERNADETTE MILLS

Respondent

REASONS FOR JUDGMENT

Introduction

On 14 April 2015 his Honour Judge Nicholls made a sequestration order against the estate of Ms Bernadette Mills. His Honour made the order in the absence of Ms Mills. By an application in a case filed on 19 June 2015, Ms Mills, who is not legally represented, now seeks an order under r.16.05(2)(a) of the Federal Circuit Court Rules 2001 (Cth) (Rules) that the sequestration order be set aside.

Principles

The principles that govern the Court’s exercise of the power under r.16.05(2)(a) of the Rules…

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 Black v Mills (No 2)

Details

AGLC: Black v Mills (No.2) [2015] FCCA 1973
Case: [2015] FCCA 1973
Decision Date: 21 July 2015

CaseChat Overview and Summary

In *Black v Mills (No 2)*, the applicant, Mr. Black, sought to set aside a default judgment entered against him in favour of the respondent, Ms. Mills. The dispute arose from an earlier proceeding where Ms. Mills had obtained judgment against Mr. Black for damages and costs. Mr. Black contended that the default judgment should be set aside on the grounds that he had a meritorious defence to the original claim and that he had not been properly served with the originating process.

The primary legal issue before the court was whether Mr. Black had established sufficient grounds to warrant setting aside the default judgment. This involved determining whether he had demonstrated a real prospect of success in defending the original claim and whether the service of the originating process had been effective. The court was required to consider the principles governing the setting aside of default judgments, including the need for a defence on the merits and the adequacy of service.

Judge Manousaridis found that Mr. Black had failed to demonstrate a meritorious defence to the original claim. While acknowledging that the court has a broad discretion to set aside default judgments, the judge emphasised that this discretion is not unfettered and requires a substantial reason. The evidence presented by Mr. Black did not establish a defence that was more than merely arguable. Furthermore, the court was satisfied that service of the originating process had been effected in accordance with the rules. Consequently, the application to set aside the default judgment was dismissed.

Orders