Daniel Luke Pty Ltd v Mladenis

Case

[2006] FMCA 1426

5 October 2006


FEDERAL MAGISTRATES COURT OF AUSTRALIA

DANIEL LUKE PTY LTD v MLADENIS [2006] FMCA 1426
BANKRUPTCY – Review of Registrar’s costs order – whether debtor “sat on his rights” after service of bankruptcy notice – whether creditor acted with undue haste in issue of creditors petition.
Hogg v J Isherwood-Hicks Pty Ltd (1992) 108 FLR 262
Microsoft (International) Pty Ltd v Total Peripherals Pty Ltd [1998] VSC 50
Applicant: DANIEL LUKE PTY LTD
Respondent: CHRIS MLADENIS
File number: MLG 981 of 2005
Judgment of: Hughes FM
Hearing date: 15 May 2006
Delivered at: Melbourne
Delivered on: 5 October 2006

REPRESENTATION

Counsel for the Applicant: Mr Connell
Solicitors for the Applicant: Law 554
Counsel for the Respondent: Mr Murphy
Solicitors for the Respondent: Tanya Cirkovic & Associates

ORDERS

  1. The application for review filed 21 April 2006 is dismissed.

  2. The applicant pay the respondent’s costs, to be taxed pursuant to order 62 of the Federal Court Rules in default of agreement.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 981 of 2005

DANIEL LUKE PTY LTD

Applicant

And

CHRIS MLADENIS

Respondent

REASONS FOR JUDGMENT

  1. These proceedings involve an application for review of two costs orders of Registrar Mussett in the Federal Magistrates Court at Melbourne on 5 April 2006. 

  2. The two matters are connected and there is significant overlap in the evidence in relation to each.  They were heard together before the Registrar and before me.  Accordingly, I will deal with both matters together.

  3. The application for Review in each matter was filed on 21 April 2004 and heard on 15 May 2006.

  4. In matter MLG 476 of 2005, the orders of Registrar Mussett were as follows:

    1.   The Applicant pay the Respondent’s costs, to be taxed pursuant to Order 62 of the Federal Court Rules in default of agreement.

    2.   No order for costs of the supporting creditor.

  5. In matter MLG 981 of 2005 the order was as follows:

    1. The Respondent pay the Applicant’s costs, to be taxed pursuant to Order 62 of the Federal Court Rules in default of agreement.

  6. The applicant in matter MLG 476 of 2005 is Gerard Conlan, a solicitor in practice with the firm Law 554.  The respondent is Mr Chris Mladenis, against whom Law 554 obtained a judgement debt in the Victorian Magistrates Court on 10 September 2004.

  7. The applicant in matter MLG 981 of 2005 is Daniel Luke Pty Ltd trading as Costanzo Suzuki. The respondent is Chris Mladenis, against whom Daniel Luke Pty Ltd obtained a judgement debt in the Victorian Magistrates Court on 10 June 2005.  Daniel Luke Pty Ltd was also named as a supporting creditor in matter MLG 476 of 2005.

  8. Bankruptcy proceedings were commenced by each of the judgement creditors.  Ultimately, both sets of proceedings were discontinued.


    It was in relation to the bankruptcy proceedings that the costs orders were made.

Background

  1. The history of the proceedings is well set out in the reasons for decision of Registrar Mussett on 5 April 2006. 

  2. From 12 July 2002 until 20 June 2004, Mr Chris Mladenis and his son Paul Mladenis were joint registered proprietors of a business known as PMC Motors (“the business”).  It is asserted by Chris Mladenis that he had little to do with the running of the business which was primarily conducted by his son Paul. 

  3. Law 554 provided legal services to the business in a relation to a number of matters including a dispute with Daniel Luke Pty Ltd. 

  4. On 14 July 2004 Gerard Conlan, the principal solicitor for Law 554, filed a complaint in the Magistrates Court of Victoria following the dishonouring of a cheque signed by Paul Mladenis and dated 14 June 2004. Paul Mladenis and Chris Mladenis trading as PMC Motors were both named as the defendants.  It is common ground that the complaint was never served on Paul Mladenis.  Whether or not the complaint was served on Chris Mladenis was a matter in dispute.

  5. On 10 September 2004 a default judgment in the amount of $4,548.63 was entered against Chris Mladenis in the Magistrates Court of Victoria.  The sworn evidence of Chris Mladenis is that he was alerted to the fact of the default judgment when he received a letter on


    16 March 2005 from another firm of solicitors, Anthony Peterson and Co, who were completely unconnected with the matter and who approached Mr Mladenis unsolicited. 

  6. The evidence of Mr Chris Mladenis was that, because he has difficulty with the English language, he gave the letter to his daughter, Helen Dimitrijevski.  Ms Dimitrijevski contacted Peterson and Co and then Law 554.  In an affidavit affirmed on 4 May 2005 Ms Dimitrijevski says that she spoke to a Mr Andrew Ferguson, an associate of


    Mr Conlan, the plaintiff.  Mr Conlan was apparently away on holidays at the time.  Ms Dimitrijevski says as follows at paragraph 4 of her affidavit sworn 10 May 2005:

    “..I then asked Mr Ferguson what the judgment was regarding, and he advised that it was to do with fees concerning Paul Mladenis (my brother).  I then questioned why a judgment had been issued against Mr Chris Mladenis, when he has never asked for services to be provided to him, and why a judgment was not issued against Mr Paul Mladenis.  Mr Ferguson replied that “you cannot get anything out of your brother and it will hurt him more to attack his father”.  I then requested that all documents relating the judgment as well as the fees and itemised bills be forwarded to myself or my father.  I have never received such documents.”

  7. Mr Ferguson filed an affidavit in which he denied making the comment “it will hurt him more to attack his father”.

  8. A bankruptcy notice was issued on 6 April 2005.  It was served on Chris Mladenis on 9 April 2005.  Upon receiving that notice Chris Mladenis contacted his daughter again who, on behalf of her father, instructed GSM Lawyers to write to the plaintiff requesting all documents relating the notice and judgment.  She received those documents on 14 April 2005. 

  9. She says in her affidavit at paragraph 6:

    “…This was the first time I had sighted a copy of the complaint in this proceeding”. 

  10. She says at paragraph 7:

    “I have always assisted my father with any legal proceedings in which he has been involved, by providing instructions to his lawyers and providing an interpreting service between the parties.  I have never provided the plaintiff with instructions to act on my father’s behalf in relation to the matters to which the Plaintiff’s claims for fees relate”.

  11. On 13 April 2005 GSM Lawyers, acting for Chris Mladenis, wrote to the Mr Conlan, advising that their client knew nothing about the debt. They requested a copy of the Magistrates Court summons and the affidavit of service of the summons.  The last paragraph of that letter reads as follows:

    “In the circumstance, we suggest that you refrain from taking any further steps to enforce the judgment obtained, as it may be that our client will provide us with instructions to set aside the judgment that has been obtained against him.  If you continue with bankruptcy proceedings despite our request, and an application is then made to set aside the judgment and set aside the bankruptcy proceedings, we will produce this letter on the question of costs.  We trust this will not be necessary.”

  12. On 14 April 2005 a letter from Law 554 was sent to GSM Lawyers acknowledging the facsimile of 13 April 2005, enclosing a copy of the complaint and the affidavit of service.  The last sentence of that letter is as follows:

    “We do not propose to refrain from taking any further steps to enforce the judgment as it was properly obtained.”

  13. Chris Mladenis committed an act of bankruptcy on 2 May 2005 by failing to comply with the bankruptcy notice.  A creditor’s petition was filed on 3 May 2005. 

  14. On 8 June 2005 a notice of opposition to the petition was filed on the basis that Mr Mladenis was seeking to have the judgment of the Magistrates Court of Victoria set aside.

  15. On 10 June 2005 Mr Conlan filed a notice of appearance on behalf of the supporting creditor, Daniel Luke Pty Ltd. 

  16. On 14 June 2005 an affidavit of solvency of Mr Chris Mladenis was filed.

  17. On 27 June 2005 the Magistrates Court of Victoria granted Chris Mladenis leave to defend the complaint.  The default judgment was ultimately set aside. 

  18. On 25 October 2005 the creditor’s petition was dismissed in the Federal Magistrates Court.  Each party sought costs against the other.

Daniel Luke Pty Ltd and Chris Mladenis

  1. On 24 August 2004 Daniel Luke Pty Ltd filed a complaint against both Paul Mladenis and Chris Mladenis in the Magistrates Court of Victoria in relation to an alleged debt. 

  2. On 10 May 2005 default judgment was entered against Chris Mladenis in the amount of $27,817.33.  Daniel Luke Pty Ltd was represented by Law 554 at the relevant time. 

  3. Again there was a dispute about service but the respondent acknowledged that he had notice of the judgement from 14 June 2005. On that date the solicitor for Daniel Luke Pty Ltd was advised by the solicitor for the Mr Mladenis that the Mr Mladenis intended to make an application to set aside the default judgement.

  4. On 15 July 2005 a bankruptcy notice was issued against Chris Mladenis.  It was served on him on 21 July 2005. 

  5. On 10 August 2005 Chris Mladenis filed an application to set aside the bankruptcy notice.  That application was granted on 14 September 2005.

  6. Both Mr Mladenis and Daniel Luke Pty Ltd sought costs in relation to the bankruptcy proceedings.  Daniel Luke Pty Ltd also sought costs as a supporting creditor in the matter of Conlan v Mladenis. Mr Mladenis sought costs on the basis of his successful application to have the bankruptcy notice set aside.

  7. Registrar Mussett in her reasons for decision of 5 April 2006 set out the law in relation to costs noting that, ordinarily, costs follow the event.  She noted the argument to the contrary as follows at paragraph 23:

    “In these matters Mr Conlan and Daniel Luke Pty Ltd argued the usual course of awarding costs of the successful party ought not to be followed because Mr Mladenis, in failing to act at appropriate times (most especially by not responding to complaints filed against him in the Magistrates Court of Victoria or to a Bankruptcy notice served on him in matter MLG 476 of 2005) has caused the litigation to proceed as far as it has; that he could have prevented Mr Conlan and Daniel Luke Pty Ltd from expending costs if he had just defended claims against him when they were first presented.”

  8. She went on to say:

    “For the argument that Mr Mladenis “sat on his rights” to succeed, I would have to be convinced that Mr Mladenis was in fact aware of the actions being pursued against him.”

  9. After reviewing the evidence, Registrar Mussett concluded:

    “Given that both default judgments were eventually set aside, it would appear that the issue of service of the complaints was raised and not satisfactorily answered in both those matters in the Magistrates Court of Victoria.  I am satisfied that on the material before me that Mr Mladenis was not served with either complaint and he did not “sit on his rights” in relation to those complaints.

    As to the argument that he became aware in March 2005 of the judgment obtained against him by Mr Conlan and did nothing for over six weeks, this is answered by Mr Mladenis’ and his daughters evidence as to the steps they took when the letter from Anthony Peterson and Co was received – he gave the letter to his daughter who rang first Anthony Peterson and Co and then Law 554, who did not respond to her request for documents relevant to the judgment.

    When Mr Mladenis received the Bankruptcy notice, he gave that document to his daughter also, who referred it to the firm of solicitors who represents Mr Mladenis in these proceedings.  That firm also requested a copy of documents relevant to the judgment upon which the Bankruptcy notice was based and, significantly, also suggested that Mr Conlan refrain from taking any further steps to enforce the judgment obtained as it may be that our client might ask for instructions to set aside the judgment.

    Mr Conlan would have been well advised to follow this suggestion.  His firm was clearly on notice by this stage (by way of phone calls from Mr Mladenis’ daughter and lawyer) that Mr Mladenis claimed he was unaware of the judgment or the complaint which had given reason to it.  A prudent lawyer might have suggested to his client that they not proceed with the Creditor’s Petition until the issue of the debtor’s knowledge of the complaint and the judgment had been investigated.  Unfortunately the exact opposite happened – a Creditor’s Petition was filed a day after Mr Mladenis failed to comply with the Bankruptcy notice.

    In my view the creditor could have easily have avoided incurring the costs of issuing a Creditor’s Petition had he been reasonably patient in following the matters raised by Mr Mladenis' daughter and lawyer concerning Mr Mladenis’ lack of knowledge of the complaint and judgment in the Magistrates Court of Victoria.  I do not accept that the costs of issuing the Creditor’s Petition arose solely or even substantially because Mr Mladenis failed to protect his rights.”

  10. Accordingly, Registrar Mussett ordered that the applicant creditor pay the costs of the respondent debtor.  She made no order in relation to the supporting creditor’s costs.

  11. In relation to the matter MLG 981 of 2005 involving Daniel Luke Pty Ltd, Registrar Mussett, having found that Mr Mladenis was unaware of the complaint that had been filed in the Magistrates Court of Victoria, concluded that:

    “He can hardly be accused of sitting on his rights prior to receiving the Bankruptcy notice.  Having received it he immediately filed an application in this Court to have it set aside, an application which was ultimately successful.”

  12. The Registrar rejected the argument that Mr Mladenis had not protected his rights and ordered that the respondent pay the applicant’s costs of the application to set aside the bankruptcy notice. 

  13. All parties filed affidavit material and written submissions for the purpose of the cost argument before the Registrar.  The proceedings before me were conducted as a hearing de novo. The parties relied upon the same affidavit material and written submissions and, through Counsel, made further oral submissions. Neither of the applicants sought to cross examine Mr Mladenis. 

  14. There were a number of matters canvassed in the affidavit material and in written and oral submissions which I will consider briefly.

Mr Mladenis’ English language skills

  1. In his affidavit filed 21 February 2006, Mr Conlan disputed


    Mr Mladenis’ claim to poor English language skills.  At paragraph 13 of that affidavit, referring to his firm’s previous relationship with


    Mr Mladenis, he says:

    “13.I was aware at that time that the Debtor was a proprietor of PMC and that he was able to communicate in the English language.  The firm was able to take instructions from the Debtor without the aid of an interpreter.”

  2. Without the benefit of cross-examination, I am simply left with competing evidence and can make no finding of fact in relation to it.


    I note, however, that the actions taken by Mr Mladenis in contacting his daughter and dealing with the matters with her assistance are consistent with a lack of confidence with the English language on his part.

  3. At the end of the day, the quality of Mr Mladenis’ English language skills is not relevant to the matters I have to determine.  At best it might be relevant to credit.  The issue in these proceedings is the tardiness or otherwise of steps taken by Mr Mladenis to deal with the judgement debts and the bankruptcy issues once he became aware of them.  Whether those steps were taken directly by Mr Mladenis or by his daughter because of his language difficulties (or for any other reason), is irrelevant.

The extent of the respondent’s involvement in the business of PMC

  1. It is the evidence of Mr Chris Mladenis that he was involved in the business only to a limited extent.  It is common ground that in August 2003, Chris Mladenis and Paul Mladenis negotiated arrangements to have Chris Mladenis’ name removed from the business register as a person carrying on business under that name. His name was removed from the Register on 20 June 2004.  During the latter part of the negotiations Paul Mladenis was represented by Law 554.

  2. It was argued for Mr Chris Mladenis that it was more appropriate for the creditor to have pursued Paul Mladenis for the debt or, given that Mr Conlan knew that Chris Mladenis had ceased to be a partner in the business in August 2004, enquiries ought at least to have been made about whether or not Paul Mladenis indemnified his father against the debts of the business from that time.

  3. Mr Conlan disputes Mr Mladenis’ claim to a minor role in the business. He says that, at the time his firm was providing services to PMC, Chris Mladenis was active in the business.  He says that, in any event, he made a deliberate decision not to pursue Paul Mladenis for the debt as he believed it would be fruitless.  He was aware from his professional relationship with the business and from searches conducted by his firm that Chris Mladenis was employed full time by Carlton United Breweries and owned his own home.

  4. Again, this is not relevant to the matter which I have to determine except in so far as it reflects on the decision by Mr Conlan to initiate bankruptcy proceedings in relation to a debt of less than $5,000.00 when he was his aware of Mr Mladenis’ financial circumstances and other, less drastic, options for recovery of the debt were available to him.

Whether the original debt was valid

  1. The respondent claimed that the original debt was in relation to a bill for work never actually performed by Mr Conlan’s firm, that invoices were never sent to the respondent and that no letter of demand was ever sent to him.  These are all matters which go to the issue of the original complaint and not to the issue of costs in the bankruptcy proceedings. 

Service of the original complaints

  1. Service of the original complaint was in issue in both matters. 


    In matter MLG 476 of 2005, the affidavit of service filed in the Victorian Magistrates Court proceedings was inadequate as the person served was not properly identified.  The defendant’s son, Paul Mladenis, filed an affidavit in which he deposed that he was given documents by a process server at his father’s house but that he put them in the bin, hoping to deal with the matter without involving his father.

  2. In matter MLG 981 of 2005, the defendant’s wife was served but, apparently, mislaid the documents and failed to bring the proceedings to the attention of the defendant.

  3. Evidence of service was not tested in the proceedings before me.  


    I assume, given the attention to the matter in the material, that the issue would have been thoroughly ventilated in the proceedings brought by the respondent to set aside the default judgments in the Victorian Magistrates Court.  Registrar Mussett concluded from the fact that the judgements were eventually set aside that the issue of service was raised and not properly answered in both matters.  Although that is a reasonable assumption, there was no evidence before me about why the judgements were set aside, simply that they were. It is common ground that both judgements were set aside and that the debtor was ordered to pay the creditor’s costs thrown away in each matter. It is not for this Court to look behind those orders.

Conflict of interest

  1. The respondent raised issues of conflict of interest, particularly in relation to the firm Law 554 acting for Daniel Luke Pty Ltd against its former clients. Daniel Luke Pty Ltd ultimately obtained separate legal representation, although in these proceedings both Daniel Luke Pty Ltd and Mr Conlan briefed the same counsel. While the issue is important, it has no bearing on the matters before me.

Delay by the respondent after notice of bankruptcy proceedings

  1. This is the real issue in the proceedings.

  1. Counsel for the applicant creditors submitted that it was perfectly reasonable for the creditor to proceed with bankruptcy proceedings in each case.  Counsel for the respondent submitted that the creditor was too hasty in pursuing bankruptcy and incurred costs unnecessarily.

  2. In matter MLG 476 of 2005 it was submitted on behalf of Mr Conlan and Daniel Luke Pty Ltd as supporting creditor that bankruptcy proceedings were a legitimate step. It was submitted that there were two periods of unreasonable delay on the part of the respondent; firstly, the period between 16 March 2005 when the respondent became aware of the judgment debt and 6 April 2005, which was the date of the issue of bankruptcy notice, and, secondly, between service of the bankruptcy notice on 9 April 2005 and the application by the respondent on


    25 May 2005 to set aside the default judgement. In the meantime the creditor’s petition had been issued and was served on the respondent on 3 May 2005. It was submitted that the issuing of the petition involved no prejudice to Chris Mladenis as fair warning had been given in the letter of 14 April 2005 that further steps to enforce the judgement were imminent.

  3. The petition was dismissed by consent on 25 October 2005. This was reasonable in light of the Victorian Magistrates Court granting leave to the respondent on 27 June 2005 to defend the claim.

  4. The applicant sought costs on the basis that the petition was a legitimate step to take in relation to a judgement properly obtained, notwithstanding that the petition was ultimately dismissed.

  5. Registrar Mussett  summarised the issue at paragraph 15 of her reasons for decision as follows:

    “The question I have to decide is should Mr Mladenis, as a successful respondent, get his costs of opposing the petition; or should Mr Conlan get his costs despite having his petition dismissed because Mr Mladenis “sat on his hands”, as the saying goes, and did nothing to either defend the original complaint or try and have it set aside until the creditor had expended time and money pursuing him the in the Magistrates Court of Victoria and in this Court.”

  6. In Hogg v J Isherwood-Hicks Pty Ltd (1992) 108 FLR 262, the defendant applied to set aside a default judgement obtained by the plaintiff in circumstances in which a defence had been filed and served in the period between the filing of the request for judgement and the judgement being entered by the Master. Kearney J ruled that the entering of the judgement “amounted to a “slip”, and was of no effect, as a defence had by that time already been served.” 

  7. In his judgement, Kearney J made the following comment at page 264:

    “I should add that I consider where, as here, a solicitor has entered an appearance, the practice of “snapping on” a default judgement, without notice, immediately upon the expiration of a period prescribed by the rules, should be strongly deprecated. It serves no useful purpose. It increases the costs of litigation unnecessarily. It should form no part of the practice of the law in Darwin.”

  8. In Microsoft (International) Pty Ltd v Total Peripherals Pty Ltd [1998] VSC 50 the plaintiff had entered interlocutory judgement against the defendant on the same day that the defendant had filed and served its defence but which was, on the plaintiff’s submission, outside the time limit provided in orders previously made in relation to filing of documents. Beach J found that the orders made as to filing were ambiguous, but that, in any event, he would have set aside the judgement. He said at paragraph 12:

    “It is clear that at all times Total Peripherals intended to defend the proceeding. That much follows from the filing and service of its original defence and the fact that it was Total Peripherals that gave the notice of intention to proceed on 23 September 1996 rather than Microscience.”

  9. Beach J quoted with approval the statement by Kearney J in Hogg v J Isherwood-Hicks Pty Ltd, and said at paragraph 15 “I simply add – nor should it be the practice in the State of Victoria.”

  10. In both of these cases a defence had actually been filed by the defendants prior to the default judgement being entered.  In the matter before me, MLG 476 of 2005, no documents had been filed by the respondent prior to the creditor’s petition being served.  In my view, however, the same principles apply. On the evidence before me, the firm representing the applicant creditor was contacted by Mr Mladenis’ daughter, Ms Dimitrijevski, on the same day that Mr Mladenis was made aware of the judgement against him, namely, 16 March 2005.


    Mr Ferguson, to whom Ms Dimitrijevski spoke, does not take issue with her evidence that she requested a copy of the judgement and documents evidencing the claim against her father but that those documents were not provided to her.

  11. The bankruptcy notice was served on the respondent on Saturday


    9 April 2005.  The respondent’s legal representatives wrote to the applicant on Wednesday 13 April 2005, requesting a copy of the relevant documents concerning the default judgement. In that letter they specifically requested that the applicant refrain from taking any further steps to enforce the judgement, foreshadowing an application to set aside the judgement.  They specifically foreshadowed an application for costs in the event that the applicant continued with bankruptcy proceedings and the default judgement and bankruptcy were set aside.

  12. It was not reasonable in those circumstances for the applicant to proceed without further notice to the respondent.  Once on notice of a bona fide intention to defend the action, it was incumbent on the applicant to engage appropriately with the respondent. 

  13. The applicant argued that the defendant was on notice the applicant would strictly enforce the debt. He relied on the statement in the responding letter of 14 April 2005 that the judgement was properly obtained and that the applicant would not refrain from taking further steps. This is insufficient in the context of the respondent contacting the applicant within three business days of service upon him of the proceedings and indicating a likely application to defend the original claim as well as the bankruptcy proceedings.

  14. The applicant, as a result of acting for the defendant previously, was aware of the solvency of the respondent.  He knew that the respondent had a fulltime job and owned his own home.  By being too keen to prosecute the bankruptcy the applicant caused unnecessary cost to himself and to the defendant.  It is appropriate in those circumstances that he bears the costs of those actions.

  15. Daniel Luke Pty Ltd as supporting creditor in matter MLG 476 of 2005 and being represented by the same firm, Law 554 until 13 October 2005, is not entitled to costs for the same reasons.

  16. In matter MLG 981 of 2005, the applicant Daniel Luke Pty Ltd argues that it should be awarded costs because, although the respondent had notice of the judgement debt on 14 June 2005, no application was made by the respondent to set aside that judgement until 10 August 2005.


    In the meantime, the applicant had commenced bankruptcy proceedings. A bankruptcy notice was issued on 15 July 2005 and served on 21 July 2005.

  17. The solicitor for the respondent, Mr Trent Blacket, filed an affidavit in these proceedings on 6 December 2005.  Paragraph 5 of that affidavit reads as follows:

    “5. Prior to issuing the said application on or about 14 June 2005, when the Respondent was a supporting creditor in the bankruptcy proceeding MLG 476/2005, I informed Mr Ferguson, solicitor for Law 554 on behalf of Daniel Luke Pty Ltd, that I would be seeking to set aside the default judgment.  Subsequent to that a letter was received by my office from Law 554 dated 21 June 2005 in which Mr Ferguson wrote, “At the Federal Magistrates Court last week it was indicated by Mr Mladenis’ counsel that he intended to make application for a rehearing of the judgment obtained against him by Costanzo Suzuki.  Costanzo Suzuki relied upon that judgment to appear as a supporting creditor to the Creditor’s Petition”.  Now produced and shown to me and marked TB-1 is a true copy of the said letter.  The solicitors for the Respondent were well aware of the intention of Chris Mladenis to set aside the default judgment, before the bankruptcy notice was issued on behalf of the Respondent.  Further the solicitors for the Respondent did not notify our office before service of the bankruptcy notice.”

  18. I mention again that Costanzo Suzuki is the trading name for the business conducted by Daniel Luke Pty Ltd.

  19. No issue with this evidence was taken by the applicant.  The applicant simply relied on the lapse of time between the service of the judgement on the respondent on 14 June 2005 and the application to have the judgement set aside on 10 August 2005 as evidence of unreasonable delay on the part of the respondent.

  20. The actions of the applicant in commencing bankruptcy proceedings when on notice of the intention to defend were unreasonable, especially as the applicant was represented by the same firm as the applicant in the related proceedings in which a similar notice of intention to set aside had been given and in which an affidavit of solvency had been filed.

  21. In my view the orders made by Registrar Mussett were appropriate.  The application for review of those orders in each matter is dismissed.

  22. I see no reason to depart from the usual course and will order that the applicant pay the costs of the respondent in each matter. 

I certify that the preceding seventy-five (75) paragraphs are a true copy of the reasons for judgment of Hughes FM

Associate:  J Commins

Date:  5 October 2006

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