Emerson v Wreckair Pty Ltd

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Re: JOSEPH FRANCIS EMERSON and WILMA LUCY EMERSON
And: WRECKAIR PTY. LIMITED
No. G68 of 1991
FED No. 16
Bankruptcy
(1992) 33 FCR 581

COURT

IN THE FEDERAL COURT OF AUSTRALIA


QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Morling(1), Neaves(1) and Spender(1) JJ.
CATCHWORDS

Bankruptcy - Bankruptcy notice - Validity - Notice founded on judgment entered after contested hearing in which debtors legally represented - Appeal from judgment pending - No stay of judgment - Allegation that judgment entered for too large a sum - Amount claimed in the bankruptcy notice in accordance with judgment - No circumstances justifying court in bankruptcy "going behind" judgment - Circumstance that judgment subsequently varied on appeal not of significance.

Bankruptcy - Bankruptcy notice - Application to extend time for compliance - Whether Registrar in Bankruptcy had power to specify different dates for compliance in respect of identifiable components of the amount of the judgment debt on which notice founded.

Bankruptcy - Bankruptcy notice - Appeal pending against judgment on which notice founded - No case made out to extend time for compliance pending determination of appeal.

HEARING

BRISBANE

#DATE 31:1:1992

Counsel for the appellants: Mr P.E. Hack

Solicitors for the appellants: Lees Marshall and Warwick

Counsel for the respondent: Mr K. Varley

Solicitor for the respondent: Barker Gosling

ORDER

The appeal be dismissed.

The appellants pay the respondent's costs of and incidental to the appeal.

The time for compliance with the bankruptcy notice issued on 14 December 1990 be extended until 21 days after the date of this order.

In the event that a sequestration order is made against the appellants founded upon the bankruptcy notice issued on 14 December 1990, any part of the costs of the appeal which then remains unpaid is to be treated as if that part of the costs were petitioning creditor's costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

This is an appeal by Joseph Francis Emerson and Wilma Lucy Emerson ("the appellants") from part of a judgment given by a single judge of the Court (Pincus J.) on 8 May 1991. The subject matter of the judgment is a bankruptcy notice addressed to the appellants that was issued by a Deputy Registrar in Bankruptcy on 14 December 1990 upon an application in that behalf by Wreckair Pty Limited ("the respondent").

  1. The bankruptcy notice was founded upon a final judgment obtained by the respondent against the appellants in the District Court of Queensland (Kimmins D.C.J.) on 27 November 1990 after a contested hearing in which the appellants and the respondent were legally represented. The judgment, which was in the sum of $29,081.65 plus interest of $4,560.64 and costs, arose out of an agreement dated 29 August 1988 whereby, in consideration of the respondent supplying goods and services on credit to a company called Joe Emerson Pty Limited ("the company"), the appellants jointly and severally guaranteed to the respondent the payment by the company of the cost of those…

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Details
Case
[1992] FCA 16
Decision Date

CaseChat Overview and Summary

Emerson v Wreckair Pty Ltd involves a dispute over the validity of a bankruptcy notice issued by Wreckair Pty Ltd against the Emersons. The matter was heard by the Federal Court of Australia. The central issue was whether the bankruptcy notice was valid, given that it was based on a judgment which the Emersons claimed was excessive and had been entered after a contested hearing in which they were legally represented. Additionally, an appeal against the judgment was pending, and the Emersons argued that this should have prevented the issuance of the bankruptcy notice.

The court examined whether the Emersons' contention that the judgment was entered for an excessive amount and the pending appeal should have precluded the issuance of the bankruptcy notice. It held that the notice was valid as the amount claimed in the notice was in accordance with the judgment and there were no circumstances justifying the court in "going behind" the judgment. The fact that the judgment was subsequently varied on appeal did not affect the validity of the notice. The court concluded that the bankruptcy notice was properly issued and the Emersons' appeal was dismissed. The court ordered the Emersons to pay Wreckair Pty Ltd's costs of the appeal, extended the compliance time for the bankruptcy notice, and stipulated that any unpaid costs of the appeal would be treated as petitioning creditor's costs if a sequestration order was made against the Emersons.

Orders

Orders of the court

The appeal be dismissed.

The appellants pay the respondent's costs of and incidental to the appeal.

The time for compliance with the bankruptcy notice issued on 14 December 1990 be extended until 21 days after the date of this order.

In the event that a sequestration order is made against the appellants founded upon the bankruptcy notice issued on 14 December 1990, any part of the costs of the appeal which then remains unpaid is to be treated as if that part of the costs were petitioning creditor's costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

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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