Brunninghausen v Glavanics

Case [1998] FCA 230


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NG 8293  of  1997

BETWEEN:

MAX BERNARD JULES BRUNNINGHAUSEN
Debtor

AND:

MICHAEL GLAVANICS
Creditor

AND:

MAX BERNARD JULES BRUNNINGHAUSEN
Applicant

JUDGE:

EMMETT J

DATE:

3 MARCH 1998

PLACE:

SYDNEY

THE COURT ORDERS:

  1. That time for compliance with the bankruptcy notice be extended with effect from 10 February 1998 up to an including today.

  1. That the bankruptcy notice of 20 October 1997 number 2173 of 1997 be set aside.

  1. That the creditor pay the debtor's costs of this application.

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

NG 8293  of  1997

BETWEEN:

MAX BERNARD JULES BRUNNINGHAUSEN
Debtor

AND:

MICHAEL GLAVANICS
Creditor

AND:

MAX BERNARD JULES BRUNNINGHAUSEN
Applicant

JUDGE:

EMMETT J

DATE:

3 MARCH 1998

PLACE:

SYDNEY

REASONS FOR JUDGMENT

HIS HONOUR:   I have before me an application to set aside a bankruptcy notice issued at the request of Michael Glavanics on 20 October 1997.  The notice was served on Max Bernard Jules Brunninghausen on 22 October 1997.  On 11 November 1997 this application was filed and on 1 December 1997, the first return of the application, the time for compliance was extended to 10 February 1998.  On 10 February 1998 directions were given for the filing of affidavits in relation to the application and the application was stood over to today.  However, apparently through oversight, the time for compliance with the bankruptcy notice was not extended to 3 March 1998.

Although when the matter commenced before me it was intimated that there was an issue as to whether or not it was now open to the Court to set the bankruptcy notice aside, the time for compliance having expired, it is now common ground that the Court has jurisdiction to do so and that the time for compliance should be extended at least up to and including today.  Accordingly, I propose to extend the time for compliance with effect from 10 February 1998 up to and including today.  The primary application, however, is for the bankruptcy notice to be set aside.  Alternatively, the debtor seeks an extension of the time for compliance until the final disposition of an appeal to the Court of Appeal of New South Wales from the judgment which gives rise to the bankruptcy notice.

It is common ground that the appeal to the Court of Appeal is arguable and that it is neither frivolous nor vexatious.  I take it from that concession on behalf of the creditor that it is accepted that the appeal has been brought and prosecuted in good faith.  There is certainly no evidence to the contrary and, indeed, five volumes of appeal books have been settled and are in evidence before me.  It is therefore unnecessary to consider the issues which might arise on the appeal. 

The appeal arises out of orders made by Bryson J on 18 December 1996 that the…

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AGLC
Brunninghausen v Glavanics [1998] FCA 230
Case
[1998] FCA 230
Decision Date

CaseChat Overview and Summary

The case of Brunninghausen v Glavanics involved Max Bernard Jules Brunninghausen, the debtor, and Michael Glavanics, the creditor. The dispute revolved around a bankruptcy notice issued by Glavanics on 20 October 1997, which Brunninghausen sought to have set aside in the Federal Court of Australia. The central issue was whether the bankruptcy notice was an abuse of process, considering that the creditor had not responded to the debtor's offer of security to cover the judgment debt. The debtor argued that the notice was issued to pressure him into paying the debt, rather than invoking the court's jurisdiction regarding insolvency.

The court examined the circumstances surrounding the bankruptcy notice and the communications between the parties. It found that there was no valid reason provided by the creditor for not accepting the debtor's offer of security. The creditor had not responded to the debtor's proposal to offer a first mortgage over a property as security. Furthermore, the creditor had previously indicated a willingness to negotiate security arrangements but had not followed up on the debtor's latest offer. The court concluded that the bankruptcy notice was issued to pressure the debtor to pay the debt rather than to invoke the court's jurisdiction. Therefore, the bankruptcy notice was deemed an abuse of process, and the court set it aside. Additionally, the court extended the time for compliance with the bankruptcy notice up to the date of the judgment, and ordered the creditor to pay the debtor's costs of the application.

The final orders of the court were as follows: the time for compliance with the bankruptcy notice was extended from 10 February 1998 to 3 March 1998; the bankruptcy notice of 20 October 1997 was set aside; and the creditor was ordered to pay the debtor's costs of the application.

Orders

Orders of the court

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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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