Chen v Bannerman

[2001] FCA 160

FEDERAL COURT OF AUSTRALIA

Chen v Bannerman [2001] FCA 160

BANKRUPTCY – application to set aside Bankruptcy Notice – claim of a “counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt” – whether applicants claim could have been set up in the action or proceedings in which the judgment was obtained – “proceeding” includes the process of an application for Supreme Court assessment of a solicitor’s costs.

Bankruptcy Act 1966 (Cth), s 40(1)(g)

Bhattacharya v Berger [1999] FCA 883, cited

DONG CHEN v DAVID SUTHERLAND BANNERMAN
N7006 of 2001

MADGWICK J
20 FEBRUARY 2001
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N7006 of 2001

BETWEEN:	DONG CHEN APPLICANT
AND:	DAVID SUTHERLAND BANNERMAN RESPONDENT
JUDGE:	MADGWICK
DATE OF ORDER:	20 FEBRUARY 2001
WHERE MADE:	SYDNEY

THE COURT DECLARES THAT:

1.The applicant has not satisfied the Court that he has a counter-claim, set-off or cross demand, equal to or exceeding the amount of the judgment debt, being one that he could not have set up in the action or proceeding in which the judgment was obtained.

2.The time for compliance with the Bankruptcy Notice expires at midnight on 20 February 2001.

THE COURT ORDERS THAT:

1.The applicant pay the respondent’s costs, including reserved costs.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N7006 of 2001

BETWEEN:	DONG CHEN APPLICANT
AND:	DAVID SUTHERLAND BANNERMAN RESPONDENT

JUDGE:	MADGWICK
DATE:	20 FEBRUARY 2001
PLACE:	SYDNEY

REASONS FOR JUDGMENT
(revised from transcript)

HIS HONOUR:

1. In this matter the applicant seeks to satisfy the Court pursuant to ss 40(1)(g) and 41(7) of the Bankruptcy Act 1966 (Cth) (“the Act”) that he has:

   “...a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt ... being a counter-claim, set-off or cross demand that he ... could not have set up in the action or proceeding in which the judgment ... was obtained.”

   to use the language of s 40(1)(g) of the Act.

2. The creditor is a solicitor who acted for the applicant and his family companies from about January 1997 until, I gather, some date in 1999.  The Bankruptcy Notice is founded on a judgment of $17,506.48 plus a small amount of interest, the judgment debt stemming from a judgment of the Local Court recovered on 1 November 2000.  The judgment was obtained by way of the registration of an assessment by an officer of the Supreme Court of New South Wales of the creditor's costs.

3. The applicant's claim is, in substance, that one of the matters in relation to which he and/or one of the various companies he owned or controlled instructed the creditor was in connection with the sale of a certain taxi plate.  The applicant claims that the respondent creditor has failed to pay or account to him for a total sum in excess of $124,000 from the proceeds of that sale. 

4. No steps were taken to put this claim, or a claim of overcharging…