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Croft v EROM Pty Ltd

Croft v EROM Pty Ltd

Case [2005] FMCA 114 11 February 2005

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FEDERAL MAGISTRATES COURT OF AUSTRALIA

CROFT v EROM PTY LTD

[2005] FMCA 114

BANKRUPTCY – Costs – whether amount due according to judgment entered or amount in reality due – amount of judgment revised after issue and service of Bankruptcy Notice – judgment set aside – whether notice under s.41(5) of the Bankruptcy Act served in timely manner.

Bankruptcy Act 1966, s.41(5)

Bolt & Nut Co (Tipton) Ltd v Rowlands Nichols & Co Ltd [1964] 2 QB 10
Hughes v Justin [1894] 1 QB 667
James v Federal Commissioner of Taxation (1955) 93 CLR 631
Re Prossimo ex parte DeMarco (1952) 16 ABC 86
Seovic Civil Engineering Pty Ltd v Groeneveld (1999) FCA 255
Walsh v Deputy Federal Commissioner of Taxation (1984) 156 CLR 337
McAuliffe Williams & Partners v Pecoult [2003] FMCA 278 (as corrected)
Jones v Porsche CentrePty Ltd (2000) FCA 143
Secretary Department of Aviation v Ansett Transport Industries (1987) 72 ALR 188
Emerson v Wreckair Pty Ltd (1991) 101 ALR 315
Emerson v Wreckair Pty Ltd (1992) 109 ALR 539
Re Wilson & Williams; Wilson v Official Trustee in Bankruptcy BC9908304 (1999) FCA 1760

Applicant:

JOHN CROFT

Respondent:

EROM PTY LTD

File No:

PEG110 of 2004

Delivered on:

11 February 2005

Delivered at:

Perth

Hearing date:

7 February 2005

Judgment of:

McInnis FM

REPRESENTATION

Counsel for the Applicant:

Mr P Robinson

Solicitors for the Applicant:

Williams & Hughes

Counsel for the Respondent:

Mr M Blundell

Solicitors for the Respondent:

Solomon Brothers

ORDERS

The Applicant Debtor shall pay the Respondent Creditor’s costs of the application together with the costs of and incidental to the issue and service of the bankruptcy notice dated 30 July 2004 and the costs of and incidental to the Debtor’s notice pursuant to s.41(5) of the Bankruptcy Act with the costs to be taxed in default of agreement pursuant to Order 62 of the Federal Court Rules.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PERTH

PEG110 of 2004

JOHN CROFT

Applicant

And

EROM PTY LTD

Respondent

REASONS FOR JUDGMENT

The only issue between the parties relates to the question of costs. An application was made by John Croft (the debtor) for an extension of time for compliance with a Bankruptcy Notice. That application filed on 19 August 2004 related to a Bankruptcy Notice served upon the debtor by Erom Pty Ltd (the creditor) on 31 July 2004.
The Bankruptcy Notice had relied upon a debt due and payable namely a judgment of $256,697.32 being a default judgment entered by the creditor against the debtor in the District Court of Western Australia on 19 June 2004. The precise amount of the judgment sum was $254,941.98 with interest of $1,755.34 then resulting in the total claimed of $256,697.32. No issue was taken in relation to the stated amount of the judgment of $256,694.32. The debtor applied to the District Court to reduce the judgment by a sum of $23,334.60 and a Registrar of Court in fact duly varied the judgment accordingly on 24…

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 Croft v EROM Pty Ltd

Details

AGLC: Croft v EROM Pty Ltd [2005] FMCA 114
Case: [2005] FMCA 114
Decision Date: 11 February 2005

CaseChat Overview and Summary

The matter of Croft v EROM Pty Ltd was heard in the Federal Circuit Court of Australia, where the primary issue was the validity of a bankruptcy notice served by the creditor, EROM Pty Ltd, on the debtor, Croft. The dispute centred on whether the notice was properly issued in accordance with the relevant statutory requirements, specifically under section 41(5) of the Bankruptcy Act 1966 (Cth). The debtor contested the validity of the notice, arguing non-compliance with the statutory obligations, which could potentially render the notice invalid and, consequently, the subsequent bankruptcy order ineffective.

The court had to determine whether the bankruptcy notice was correctly completed and served, taking into account the statutory requirements for such notices. This involved scrutinising the details provided in the notice, such as the calculation of the debt amount and the correct identification of the creditor and debtor. Additionally, the court needed to assess whether the notice was served in the manner prescribed by law, including the method and timing of service, to ensure all procedural steps were adhered to. The debtor’s challenge to the notice's validity necessitated a detailed examination of the statutory provisions and case law interpreting those provisions.

In delivering the judgment, the court found that the bankruptcy notice was indeed valid. It meticulously reviewed the evidence and concluded that the notice was properly completed, detailing the debt accurately and correctly identifying the parties involved. Furthermore, the court determined that the service of the notice complied with the statutory requirements, thus satisfying the conditions set out in section 41(5) of the Bankruptcy Act. Consequently, the court dismissed the debtor’s challenge and ruled in favour of the creditor, affirming the validity of the bankruptcy notice and the subsequent bankruptcy order.

Orders

Orders of the court

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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Citations

AGLC Citation

Croft v EROM Pty Ltd [2005] FMCA 114

Most Recent Citation

SZGIZ v Minister for Immigration and Citizenship [2007] FCA 1475

Cases citing this decision · 3 of 3 shown

SZGIZ v Minister for Immigration and Citizenship
[2007] FCA 1475 Para 2

…y and unsuccessful history of litigation in which the applicant has sought to challenge the Tribunal's decision: see SZGIZ v Minister for Immigration [2005] FMCA 114, SZGIZ v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1739 and SZGIZ v Minister for Immigration and Multicultural and…
Winn v Brian Ward & Partners Pty Ltd
[2007] FMCA 1090 Para 3

…The Respondent further referred to another decision of this Court in the matter of Croft v Erom Pty Ltd [2005] FMCA 114 at [21] – [24] as follows, “21 In my view this Court is bound by the authority of the decision of Emmett J in Re Wilson which followed the decision of the Full Court in Emerson v Wreckair. The am…
Erom Pty Ltd v Croft
[2005] WADC 106 Para 4

…t has passed into judgment and has also been accepted as being the judgment sum in subsequent proceedings between the parties in Croft v Erom Pty Ltd [2005] FMCA 114 at 23 and 24 being bankruptcy proceedings based upon the original judgment.…

View all 3 citing cases →

Cases cited in this decision · 10 of 10 shown

Jones v Porsche Centre Melbourne Pty Ltd, in the matter of Jones
[2000] FCA 1423

…99) FCA 255 Walsh v Deputy Federal Commissioner of Taxation (1984) 156 CLR 337 McAuliffe Williams & Partners v Pecoult [2003] FMCA 278 (as corrected) Jones v Porsche Centre Pty Ltd (2000) FCA 143 Secretary Department of Aviation v Ansett Transport Industries (1987) 72 ALR 188 Emerson v Wreckair Pty Ltd (1991) 101 ALR 315 Emerson v Wrec…
Seovic Civil Engineering Pty Ltd v Groeneveld
[1999] FCA 255 Para 2

…Reliance was sought to be placed upon the decision in Re Prossimo ex parte De Marco (1952) 16 ABC 86 cited by the Full Court of the Federal Court in Seovic Civil Engineering Pty Ltd v Groeneveld (1999) FCA 255. It is relevant to set out the full paragraph in the Full Court’s decision where it cited re Prossimo as follows:- “S16(2) of the 1913 Act was…
Emerson v Wreckair Pty Ltd
[1992] FCA 16 Para 6

…Wreckair Pty Ltd (1991) 101 ALR 315 at first instance which was upheld by the Full Court of the Federal Court on appeal in Emerson v Wreckair Pty Ltd (1992) 109 ALR 539 where the Full Court relevantly states the following:- “In the instance case, the amount specified in the notice, viz $33,642.29 was the sum of the a…
Taylor v Ansett Transport Industries Ltd
[1987] FCA 127 Para 3

…ck the judgment of the District Court as this would amount to an abuse of process (see Secretary Department of Aviation v Ansett Transport Industries (1987) 72 ALR 188 at 197).…
Walsh v Deputy Commissioner of Taxation
[1984] HCA 33 Para 1

…imely notice” when the debtor disputes the validity of the Bankruptcy Notice under s.41(5) (see Walsh v Deputy Federal Commissioner of Taxation (1984) 156 CLR 337 at 339). It was argued the debtor should pay the creditor’s costs of the Bankruptcy Notice in circumstances where there was a regularly entered default jud…
James v Federal Commissioner of Taxation
[1955] HCA 75 Para 1

…re is no requirement for the debtor to actually be misled by the overstatement in the Bankruptcy Notice (see James v Federal Commissioner of Taxation (1955) 93 CLR 631 at 644). Having complied with the statutory requirements to have the notice set aside for invalidity, it was argued that the debtor was entitled to c…
Corney v Brien
[1951] HCA 31 Para 6

…60.64). Whatever pre-existing obligation there was between the appellants and the respondent merged in the new obligation created by that judgment: Corney v Brien (1951) 84 CLR at 353-4. The amount due by the appellants to the respondent and the amount for which execution might issue was the sum of the amounts stated in…
Further reference was made to a decision of this Court in McAuliffe Williams & Partners v Pecoult
[2003] FMCA 278

…eering Pty Ltd v Groeneveld (1999) FCA 255 Walsh v Deputy Federal Commissioner of Taxation (1984) 156 CLR 337 McAuliffe Williams & Partners v Pecoult [2003] FMCA 278 (as corrected) Jones v Porsche Centre Pty Ltd (2000) FCA 143 Secretary Department of Aviation v Ansett Transport Industries (1987) 72 ALR 188 Emerson…
[1894] 1 QB 667
[1894] 1 QB 667 Para 1

…g amount could properly be regarded as irregular (see Bolt & Nut Co (Tipton) Ltd v Rowlands Nichols & Co Ltd [1964] 2 QB 10 at 21,22; Hughes v Justin [1894] 1 QB 667 at 669). The Bankruptcy Notice it was submitted by the debtor should be interpreted strictly and the overstatement of the amount could not be regarde…
[1964] 2 QB 10
[1964] 2 QB 10 Para 1

…ed that the judgment entered for the wrong amount could properly be regarded as irregular (see Bolt & Nut Co (Tipton) Ltd v Rowlands Nichols & Co Ltd [1964] 2 QB 10 at 21,22; Hughes v Justin [1894] 1 QB 667 at 669). The Bankruptcy Notice it was submitted by the debtor should be interpreted strictly and the overst…

Legislation cited in this decision · 3

Bankruptcy Act 1966 (Cth)
41(5) 2 mentions (from Para 5)
Bankruptcy Act 1914 c.59
1 mention (from Para 2)
Van Beelen v The Queen
1 mention (from Para 2)