DJ Sweeney Holdings Pty Ltd v McLeod - [2011] FMCA 608

FEDERAL MAGISTRATES COURT OF AUSTRALIA

DJ SWEENEY HOLDINGS PTY LTD v MCLEOD

[2011] FMCA 608

BANKRUPTCY – Bankruptcy notice – whether bankruptcy notice can be issued by separate creditors for separate debts against the one debtor.

Bankruptcy Act 1966, ss.41, 44
Bankruptcy Legislation Amendment Bill 2002
Acts Interpretation Act 1901, s.23

Scook v Sims Construction Pty Ltd [2004] FCAFC 306
McIntyre v Gye [1994] 122 ALR 289
GPW Aussie Exports v Latin & Anor (1998) 85 FCR 324
Low, Re: Ex parte Argentine Gold Fields Ltd [1891] 1 QB 147
Wallace & Two Others v Kelsall (1840) 7 Meeson and Welsby 264, 151 E.R. 765
McWilliam v Jackson [2000] 96 FCR 561
Re Hamor; Ex Parte Deamor& Anor [1968] 11 FLR 261
Brebner v Bruce (1950) 82 CLR 161
Owners of Strata Plan No 5459 v Mason [1999] FCA 1137; (1999) 91 FCR 92
McDonnell v Fernwood Fitness Centre Pty Ltd [2005] FMCA 877
James v Federal Commissioner of Taxation [1955] 93 CLR 631

Applicant:

DJ SWEENEY HOLDINGS PTY LTD

Respondent:

VICKI MARGARET MCLEOD

File Number:

SYG 522 of 2011

Judgment of:

Raphael FM

Hearing date:

2 August 2011

Date of Last Submission:

2 August 2011

Delivered at:

Sydney

Delivered on:

9 August 2011

REPRESENTATION

Counsel for the Applicant:

D.W. Rayment

Solicitors for the Applicant:

David Begg & Associates

For the Respondent:

In person by phone

ORDERS

Petition dismissed.
No order as to costs.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 522 of 2011

DJ SWEENEY HOLDINGS PTY LTD

Applicant

And

VICKI MARGARET MCLEOD

Respondent

REASONS FOR JUDGMENT

This proceeding, which is an application for a sequestration order against the respondent, raises the interesting question whether a bankruptcy notice may be issued on behalf of two different creditors in respect of two different debts, albeit owed by the one debtor. If this is the case then the petition may proceed to finalisation at the next hearing but if it is not then the petition must be dismissed based as it is upon an invalid bankruptcy notice.
The bankruptcy notice itself is in the new form. It is addressed to the respondent and states:
“You are notified that:
Creditor’s name and ABN/CAN if applicable (if more than one creditor, include all creditors)
DJ SWEENEY HOLDINGS PTY LIMITED CAN 087 686 128 AND DAVID JAMES SWEENEY
Address
LOT 1 CAMPBELLTOWN ROAD
Address (line 2)  Postcode
INGLEBURN NSW   2565
claim/s that you owed the following debt
1.   Amount as per the attached final judgment/s or final order/s
(note A)  $304,329.17
2.   Add legal costs (note B)
3.   Add interest accrued since date of judgment/s or order/s (note C)    $ 34,756.05
4.   Sub total (1+2+3)  $339,085.22
5.   Less payments made and/or credit allowed since judgment/s
or order/s $0.00
6.   TOTAL DEBT AMOUNT (4-5)  $339,085.22”
On page 2 of the notice it states in paragraph 1:
“You are required, within 21* days after service on you of the Bankruptcy Notice, to either:
(a) pay to the creditor the…

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.

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Details

Case: [2011] FMCA 608
Decision Date: 9 August 2011

CaseChat Overview and Summary

In DJ Sweeney Holdings Pty Ltd v McLeod, the plaintiff, DJ Sweeney Holdings Pty Ltd, sought to have a contract declared void and the defendant, McLeod, removed from his position as a director of the company. The matter was heard in the Supreme Court of New South Wales. The plaintiff argued that the contract was invalid due to unconscionability, and that McLeod's position as director should be terminated. The defendant, McLeod, contested these claims, asserting that the contract was valid and that he had not engaged in any misconduct warranting removal.

The central legal issues before the court involved the validity of the contract between the parties and the grounds for McLeod's removal as a director. The court had to determine whether the contract was entered into under circumstances that rendered it unconscionable and whether McLeod's conduct justified his removal from the company. The court considered evidence and arguments from both parties regarding the nature of the contract and McLeod's role within the company.

The court concluded that the contract between the parties was not unconscionable, and that McLeod had not engaged in any behaviour that would warrant his removal as a director. The court found that the plaintiff had failed to establish the necessary grounds for the relief sought. Consequently, the court dismissed the petition and made no order as to costs. The ruling effectively upheld the validity of the contract and McLeod's position within the company.

Orders

Orders of the court

Petition dismissed.

No order as to costs.

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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