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Etl v Lennon Settle

Etl v Lennon Settle

Case [2004] FMCA 718 5 November 2004

Civil Litigation & Procedure

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FEDERAL MAGISTRATES COURT OF AUSTRALIA

ETL v LENNON SETTLE

[2004] FMCA 718

BANKRUPTCY – Application to set aside Bankruptcy Notice or extending time pending an Appeal.

Bankruptcy Act 1966, s.40(1)(g), 44(2), 44(3)

Liew v JNS Technologies (M) Sdn Bhd (1999) FCA 1428 (18 October 1999)
Elliott v Water Wheel Holdings Ltd and Water Wheel Mills Ltd [2004] FMCA 37

Applicant:

KARL ETL

Respondent:

LENNON SETTLE

File No:

MLG 1091 of 2004

Delivered on:

5 November 2004

Delivered at:

Melbourne

Hearing Date:

5 October 2004

Judgment of:

McInnis FM

REPRESENTATION

Counsel for the Applicant:

Mr Selimi

Solicitors for the Applicant:

Goldsmiths

Counsel for the Respondent:

Mr P Fary

Solicitors for the Respondent:

Lennon Settle Mazzeo

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 1091 of 2004

KARL ETL

Applicant

and

LENNON SETTLE

Respondent

REASONS FOR JUDGMENT

By an application filed 20 August 2004 Karl Etl (the applicant) seeks to set aside bankruptcy notice number VN1122/04 dated and issued 22 July 2004 (the bankruptcy notice) and in the alternative seeks an order that the time for compliance with the requirements of the bankruptcy notice against the applicant be extended up to and including the hearing and determination of an appeal in the Court of Appeal in the Supreme Court of Victoria or to the date that the application to set aside the bankruptcy notice is heard and determined. In fact after hearing the application the decision was reserved and the time for compliance with the requirements of the bankruptcy notice extended until a determination of this application. An alternative application seeking to restrain the respondent from issuing any further bankruptcy notice against the applicant for matters arising out of a County Court proceeding was not pursued.
The bankruptcy notice was issued upon the request of Lennon Settle (the creditor) and relied upon a debt of $101,616.04 which was the amount of a judgment of the County Court by order made on 14 July 2004.
A notice of appeal in the Court of Appeal in the Supreme Court of Victoria was filed by the applicant on 27 July 2004. The applicant appeals from the whole of the judgment and orders made by the County Court on 14 July 2004.
When the matter was listed before this court on 6 September 2004 an order was made that it be adjourned to 5 October 2004 on the basis that the applicant by affidavit evidence from the applicant's solicitor stated that instructions had been received to make application to the Court of Appeal of the Supreme Court of Victoria for a stay of the County Court orders. The application was made to the Court of Appeal and rejected by that court on 1 October 2004. At the time of the further hearing of the application an authenticated copy of the orders of the Court of Appeal and reasons for its decision were not available to this court. At the same time the Court of Appeal dismissed the applicant's application for a stay it also dismissed…

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 Etl v Lennon Settle

Details

AGLC: Etl v Lennon Settle [2004] FMCA 718
Case: [2004] FMCA 718
Decision Date: 5 November 2004

CaseChat Overview and Summary

The matter before the Federal Magistrates Court was an application by Karl Etl (the applicant) to set aside a bankruptcy notice issued by Lennon Settle (the creditor). The bankruptcy notice was based on a County Court judgment for $101,616.04. The applicant sought either to set aside the bankruptcy notice or to extend the time for compliance pending an appeal to the Court of Appeal of the Supreme Court of Victoria. The court reserved its decision and extended the time for compliance until the determination of the application. The key legal issue was whether the court should exercise its discretion to extend the time for compliance with the bankruptcy notice pending the outcome of an appeal, given that the Court of Appeal had refused a stay of execution. The court considered the principles established in Liew v JNS Technologies and Elliott v Water Wheel Holdings Ltd and Water Wheel Mills Ltd, which emphasize the importance of fixing the relation back day at the earliest proper point of time and the desirability of a creditor enjoying the fruits of a final judgment. The court also noted that the refusal of a stay by the Court of Appeal was a significant factor, though not determinative. The applicant argued that he had a deed of charge over certain properties that provided security for the debt and that he would suffer prejudice if forced to sell these properties. The creditor contended that the appeal's prospects were weak, and the applicant's predicament was largely self-inflicted. The court found that there was a deed of charge providing some security but also noted uncertainties regarding the enforceability of the charge and the adequacy of the security. Despite the applicant's claims of significant equity in the properties, the court was not persuaded that this was a sufficient factor to grant the application. The court concluded that the delay in the appeal proceedings and the desirability of fixing the relation back day at the earliest proper point of time outweighed the applicant's claims of prejudice. Therefore, the application to extend the time for compliance with the bankruptcy notice was dismissed with costs.

Orders