Copacabana MacMasters Beach Realty Pty Ltd v Crawley
[2008] FMCA 1332
•2 September 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| COPACABANA MACMASTERS BEACH REALTY PTY LTD v CRAWLEY | [2008] FMCA 1332 |
| BANKRUPTCY – Application for costs after creditor’s petition dismissed upon payment – where debtor alleges costs outstanding and debtor alleges payment made in full and final settlement – where court required to be satisfied of creditor’s claim. |
| Applicant: | COPACABANA MACMASTERS BEACH REALTY PTY LTD ACN 110 616 254 |
| Respondent: | DEBORAH JUNE CRAWLEY |
| File Number: | SYG 404 of 2008 |
| Judgment of: | Raphael FM |
| Hearing date: | 2 September 2008 |
| Date of Last Submission: | 2 September 2008 |
| Delivered at: | Sydney |
| Delivered on: | 2 September 2008 |
REPRESENTATION
| Solicitors for the Applicant: | T H Drake & Associates |
| Counsel for the Respondent: | Mr J Baird |
| Solicitors for the Respondent: | Kemp Strang |
ORDERS
Application dismissed.
Applicant to pay the respondent’s costs assessed in the sum of $1,400.00.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 404 of 2008
| COPACABANA MACMASTERS BEACH REALTY PTY LTD ACN 110 616 254 |
Applicant
And
| DEBORAH JUNE CRAWLEY |
Respondent
REASONS FOR JUDGMENT
There comes before me today an application for costs upon a Bankruptcy Petition that was dismissed pursuant to orders of
Registrar Hedge made on 1 July 2008. The relevant history of the matter is that some considerable time ago the debtor sold a business to the creditor and out of that sale arose litigation. The amount claimed by the creditor represented the balance of a Judgment given in the Gosford District Court for an original amount of $96,864.33 plus interest. The creditor had issued a number of bankruptcy notices to enforce the debt, the one upon which the petition was based was the fourth such notice. The other three were withdrawn because of alleged invalidities. Although the fourth notice was the subject of complaints about invalidity it would appear that no application to set it aside was instituted, but the invalidities form the basis of a Notice of Grounds of Opposition to a petition filed in this court on 25 June 2008.
The debtor made several attempts to settle her obligations to the creditor. On at least two occasions this was done by way of telephone conversation. There was a telephone conversation on or around 19 May 2008 at which an offer of $30,000.00 was made. The debtor has deposed in an affidavit sworn on 2 September to making the offer on the basis of an email from her solicitor which is exhibit A to that affidavit which gives her a script to talk to the creditor with. Paragraph C of that script says “Tell her that the offer is $30,000.00 inclusive of all costs and interest and in full and final settlement of any dispute she and her husband and Copacabana might have with you now or in the future, including that they must agree to dismiss the Creditor’s Petition.”
The offer was not accepted and the petition remained on foot. On 26 June 2008 the debtor proposed to increase her offer and she received another email from her solicitor. The offer that was proposed to be put was the amount claimed in the bankruptcy notice less the sum of $5,816.00 which had been received by the creditor between the time the bankruptcy notice was issued and 26 June. That amount was $73,299.10. The email says “The balance between these amounts is $73,299.10. That is the amount you should see if Copacabana will take in full and final settlement of all amounts outstanding to Copacabana.” The words “full and final settlement” have been underlined.
The debtor says that her offer was accepted in the telephone conversation between herself and Ms Kronje of the creditor. The creditor says that she did not agree that the money was in full and final settlement and the costs remained outstanding. There was correspondence through her solicitors to this effect. Eventually it was agreed that the petition would be dismissed but the question of costs would remain to be decided by myself.
I heard evidence from both Ms Kronje and the debtor Ms Crawley. There is clearly little love lost between them. I have no doubt that Ms Kronje would not be agreeable to settling the principal debt at anything less than the full amount. But that does not necessarily mean that I accept the full amount included the full amount of her costs. Ms Kronje says that Ms Crawley offered her the full amount of the bankruptcy notice less the amount received from the receiver. She said that Ms Crawley did not mention the actual figure. She agreed and Ms Crawley told her that she had to borrow the money in order to make the payment. She said that Ms Crawley did not offer the money in full satisfaction and if she did mention costs that she did not agree to the offer. Under cross-examination however, she accepted that there had been three disputed bankruptcy notices previously and that she was aware of the fact that this fourth bankruptcy notice was also in dispute. She said that Ms Crawley did the talking and she said to Ms Crawley that she would talk to her solicitor and she mentioned that there was $7,000.00 in costs owing.
I also heard evidence from Ms Crawley. Although she had the scripts in front of her, her evidence was that she made no mention of costs, she merely made the offer in full and final settlement which she believed meant that as between the parties they would call it “quits”. She says there was simply no mention of costs by Ms Kronje.
Needless to say, counsel for Ms Kronje urged me to accept her progression of events and with equal stridency counsel for Ms Crawley, urged me to accept hers. I think it is true that Ms Kronje was more combatative in the witness box than Ms Crawley but that does not necessarily mean that her evidence should not be accepted. The decision is a difficult one. I am aware that recollections differ even on matters as important as this. I am required to be satisfied on the balance of probabilities that the claim being made by the applicant namely that the costs are outstanding, is correct.
Having heard evidence from both parties, the best I can do is to say that I have not reached that stage of satisfaction. That does not mean that I do not believe Ms Kronje or that I believe Ms Crawley. It means that Ms Kronje has just not satisfied the required burden. I think it is very likely that Ms Crawley did offer the money in full and final settlement and it is possible that Ms Kronje misunderstood what that meant and accepted it.
In the circumstances I would dismiss the application for costs and order that the applicant pay the costs of the respondent which I am prepared to assess if the parties request me to do so.
I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Raphael FM
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