Black v Mills (No.4) - [2019] FCCA 129

FEDERAL CIRCUIT COURT OF AUSTRALIA

BLACK v MILLS (No.4)

[2019] FCCA 129

Catchwords:
BANKRUPTCY – Creditor’s petition – opposed on the basis of solvency and because the debt disputed – evidence of solvency – small debt – payment of part of the debt which was indisputable – petition dismissed.

Legislation:

Bankruptcy Act 1966 (Cth), s.52

Cases cited:

Black v Mills (No.2) [2015] FCCA 1973

Black v Mills (No.3) [2017] FCCA 380

Applicant:

RICHARD BLACK

Respondent:

BERNADETTE MILLS

File Number:

SYG 556 of 2018

Judgment of:

Judge Driver

Hearing date:

23 November 2018

Date of Last Submission:

11 January 2019

Delivered at:

Sydney

Delivered on:

28 February 2019

REPRESENTATION

Counsel for the Applicant:

Mr C K Stewart

The Respondent appeared by videolink from Perth

ORDERS

The petition presented on 2 March 2018 as amended on 27 April 2018 is dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 556 of 2018

RICHARD BLACK

Applicant

And

BERNADETTE MILLS

Respondent

REASONS FOR JUDGMENT

Introduction and background

By a creditor’s petition presented on 2 March 2018[1] the petitioning creditor (Mr Black) seeks a sequestration order against the estate of Bernadette Mills (Ms Mills). The matter initially came before District Registrar Wall, who referred the petition to my docket on 7 May 2018.
[1] Filed on 5 March 2018. The petition was amended on 27 April 2018.
The petition asserts two debts totalling $12,921.36. The first debt is founded on a judgment of the NSW Local Court for $10,569.29 (and interest of $102.07), following a costs assessment for professional services said to have been rendered by Mr Black to Ms Mills. The second is an amount of $2,250 founded upon a certificate of taxation, following a costs order made by this Court on 22 July 2015 for costs thrown away in earlier bankruptcy proceedings brought by Mr Black against Ms Mills.[2]
[2] Black v Mills (No 2) [2015] FCCA 1973.
The petition is opposed by Ms Mills who ultimately relied upon an amended Notice of Grounds of Opposition annexed to an affidavit made by Ms Mills on 22 May 2018 and filed on 29 May 2018.
I heard the petition on 23 November 2018, at which time I was satisfied by Mr Black on the basis of his affidavit evidence that the formal requirements for a sequestration order had been met. The focus of attention then turned to the grounds of opposition advanced by Ms Mills. There are notionally three grounds of opposition in the amended Notice of Grounds of Opposition but in substance there are two. First, Ms Mills asserts that she is solvent. Secondly, Ms Mills asserts that there is no debt and invites the Court to go behind the judgment debt. Ms Mills denies that Mr Black was entitled to invoice her for the provision of legal services, which is how the debt arose.
For the purposes of the grounds of opposition, Ms Mills relies upon her affidavits made on 4 April 2018, 22 May 2018, and 17 July 2018.
Mr…

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.4)

Details

AGLC: Black v Mills (No.4) [2019] FCCA 129
Case: [2019] FCCA 129
Decision Date: 28 February 2019

CaseChat Overview and Summary

In *Black v Mills (No.4)*, heard in the Federal Court of Australia, the applicant, Mr Black, sought to have the respondent, Ms Mills, declared bankrupt based on a creditor's petition. Ms Mills opposed the petition, arguing that she was solvent and that the debt underpinning the petition was disputed.

The primary legal issue before the Court was whether to grant the creditor's petition given Ms Mills' contentions of solvency and dispute over the debt. The Court was required to assess the evidence presented by both parties regarding Ms Mills' financial position and the validity of the debt claimed by Mr Black.

Judge Driver dismissed the creditor's petition. The Court found that Ms Mills had provided sufficient evidence of her solvency. Furthermore, the Court noted that Ms Mills had paid a portion of the debt that was indisputable, and that the remaining disputed amount was relatively small. In light of these findings, the Court concluded that it was not appropriate to make a sequestration order against Ms Mills.

Orders