El-Hanania v Vella (No.4)

In the Federal Circuit Court of Australia, Mr El-Hanania sought to set aside a bankruptcy notice issued against him. The notice was based on a purported judgment of the District Court of New South Wales, which in turn was founded on the registration of a costs certificate issued under the *Legal Profession Act 2004* (NSW). This certificate recorded an overpayment by Mr El-Hanania's former client, representing the difference between the amount the lawyer retained for his costs and the amount ultimately determined by the certificate.

The primary legal issue before the Court was whether the purported District Court judgment qualified as a "judgment" for the purposes of s 40(1)(g) of the *Bankruptcy Act 1966* (Cth), which governs the setting aside of bankruptcy notices. A secondary issue was whether the Court had jurisdiction to entertain a claim by the former client against Mr El-Hanania for the recovery of the overpayment as a debt under s 368(4) of the *Legal Profession Act 2004* (NSW) within these proceedings.

Judge Manousaridis determined that the purported District Court judgment was not a judgment to which s 40(1)(g) of the *Bankruptcy Act 1966* applied, and consequently, the bankruptcy notice was liable to be set aside. The Court reasoned that the registration of the costs certificate did not create a judgment in the traditional sense for the purposes of bankruptcy proceedings. Furthermore, the Court found that it did possess jurisdiction to hear the client's claim for the overpayment under s 368(4) of the *Legal Profession Act 2004* (NSW), as the preconditions for such a claim were satisfied.

Accordingly, the Court ordered that the bankruptcy notice be set aside and entered judgment for the client against Mr El-Hanania in the amount of the overpayment, plus interest.