Field v St George Bank Limited

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FEDERAL COURT OF AUSTRALIA

Field v St George Bank Limited [2009] FCA 1042

BANKRUPTCY – creditor’s petition – sequestration order - whether “other sufficient cause” so that a sequestration order ought not to be made within the meaning of s 52(2)(b) of the Bankruptcy Act 1966 (Cth) – whether pending litigation against the creditor “other sufficient cause”

Held: appeal dismissed

Australian Securities and Investments Commission Act 2001 (Cth)
Bankruptcy Act 1966 (Cth)
Trade Practices Act 1974 (Cth)

National Parks and Wildlife Act 1974 (NSW)
Real Property Act 1900 (NSW)

City of Canada Bay Council v F & D Bonaccorso Pty Ltd (2007) 71 NSWLR 424; [2007] NSWCA 351
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28
Qun Xiong (Kenny) Yu v Todaytech Distribution Pty Ltd (ACN 059 027 250) (2006) 4 ABC(N) 133; [2006] FCA 131
St George Bank v Archer Phillip Field [2007] NSWSC 902
St George Bank Limited v Field [2009] FMCA 519
St George Bank Ltd v Helfenbaum [1999] FCA 1337
Totev v Sfar (2006) 230 ALR 236; [2006] FCA 470

ARCHER PHILLIP FIELD v ST GEORGE BANK LIMITED ACN 055 513 070

NSD 575 of 2009

JAGOT J
17 SEPTEMBER 2009
SYDNEY


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 575 of 2009
ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA
BETWEEN:

ARCHER PHILLIP FIELD
Appellant
AND:

ST GEORGE BANK LIMITED ACN 055 513 070
Respondent

JUDGE:

JAGOT J

DATE OF ORDER:

17 SEPTEMBER 2009

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The appeal be dismissed.

2.The appellant pay the respondent’s costs of the appeal including the appellant’s withdrawn applications to rely on further material made on 26 and 27 August 2009, as agreed or taxed.

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


The text of entered orders can be located using Federal Law Search on the Court’s website.


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 575 of 2009
ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA
BETWEEN:

ARCHER PHILLIP FIELD
Appellant
AND:

ST GEORGE BANK LIMITED ACN 055 513 070
Respondent

JUDGE:

JAGOT J

DATE:

17 SEPTEMBER 2009

PLACE:

SYDNEY

REASONS FOR JUDGMENT

BACKGROUND TO THE APPEAL

  1. This is an appeal against orders of the Federal Magistrates Court of 10 June 2009 making a sequestration order against the estate of the appellant, Archer Phillip Field. The issue is whether the Federal Magistrate erred in not being satisfied that that there was “other sufficient cause” so that a sequestration order ought not to be made within the meaning of s 52(2)(b) of the Bankruptcy Act 1966 (Cth).

  2. The opening paragraph of the reasons for decision of the Federal Magistrates Court (St George Bank Limited v Field [2009] FMCA 519) discloses the nature of the hearing before the Federal Magistrate:

    [1] In this petition, the Bank relies upon…

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Details
Case
[2009] FCA 1042
Decision Date

CaseChat Overview and Summary

In the case of Field v St George Bank Limited, the appellant, Mr Field, sought to appeal the decision of the Federal Magistrate who had dismissed his claim for unconscionable conduct against St George Bank Limited. The crux of the dispute centred on whether the Federal Magistrate erred in his handling of evidence, including the admissibility of certain documents, and the weight given to particular evidence presented by the respondents. The court was tasked with determining if the Federal Magistrate's decision was legally sound and whether it was appropriate to admit or exclude certain pieces of evidence.

The court had to consider whether the Federal Magistrate correctly exercised his discretion in rejecting the admissibility of certain material based on the grounds of delay and the late raising of additional issues. Additionally, the court needed to assess if there was any error in the weight given to evidence that was described as "self-serving assertions and conclusions of the receivers and managers of Jenolan Caves Resort Pty Limited," particularly considering that this evidence was actually a report by the administrators, not the receivers and managers. The court's review involved scrutinising the Federal Magistrate's reasoning regarding the relevance and probative value of this evidence, as well as the objectivity and competence of the administrators who authored the report.

The court found that the Federal Magistrate's decision to exclude the late-submitted material was justified by the grounds of delay and the introduction of additional issues at a late stage. Furthermore, the court upheld the Federal Magistrate's assessment of the administrators' report, finding that it was reasonable to give substantial weight to their analysis and conclusions. The court concluded that the Federal Magistrate did not err in his handling of the evidence and that the weight assigned to the administrators' report was appropriate. The administrators' report provided a comprehensive analysis that cast doubt on the viability of Mr Field's claims, particularly regarding the valuation of Jenolan Caves Resort Pty Limited.

In light of the findings, the court dismissed Mr Field's appeal and ordered that he pay the respondent's costs, including the costs associated with the withdrawn applications made by Mr Field to rely on further material. The decision underscored the importance of timely and relevant evidence in legal proceedings and affirmed the Federal Magistrate's careful consideration of the evidence presented.

Orders

Orders of the court

1. The appeal be dismissed.

2. The appellant pay the respondent’s costs of the appeal including the appellant’s withdrawn applications to rely on further material made on 26 and 27 August 2009, as agreed or taxed.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

I can see no error in the Federal Magistrate’s decision to refuse to admit this material into evidence. The material was rejected on a discretionary ground (delay and the late raising of additional issues). Nothing suggests any error of principle in the Federal Magistrate’s rejection of this material. The fact that the material had potential relevance to para 45(f) of the statement of claim does not invalidate the Federal Magistrate’s conclusion that it was difficult to discern how it advanced Mr Field’s position. Paragraph 45(f) alleges as a particular of the claim for unconscionable conduct that St George failed to apply the Code of Banking Practice to various complaints Mr Field had made. The observations of the Federal Magistrate about the difficulties this evidence involved in terms of form and substance and its lateness justified the decision to reject it.WRONGFUL ATTRIBUTION OF WEIGHT TO EVIDENCE Ground 17 alleges an error by the Federal Magistrate in placing weight on evidence described as “self serving assertions and conclusions of the receivers and managers of Jenolan Caves Resort Pty Limited”. The difficulty with this ground is that the evidence in question comprised a report to the creditors of JCR by the administrators, not the receivers and managers. As the Federal Magistrate rightly said at [30]-[31]:[30]…The evidence gives me no reason not to give weight to [the administrators’] opinions, particularly since their objectivity and competence to assess the value to JCR of litigation of the sort now contemplated by Mr Field was not challenged. It is clear that they closely considered the foundations of Mr Field’s claims of very substantial loss arising from the making of the Jenolan Deed. In particular, they examined a valuation report of Messrs Magin and Roberts obtained in 2001 by JCR for financing purposes, upon which Mr Field largely pins his claim that the true value of the lease in 2006 exceeded $11m, rather than the total consideration of $2.350m which reached the receivers. The administrators pointed to substantial reasons for doubting the 2001 valuation, and its continuing weight. The relevant passages in their report are too lengthy for me to extract, but I find their analysis of the various valuations and the history of JCR and its receivership to be strongly persuasive. They summarised some significant conclusions at p 26:SummaryFor there to be a successful claim against St George or the Receivers and Managers under s 420A of the Act, it would have to be proven that the above transaction was either below market value or if there was no market for the asset, it was realised for below the best price possible.We are of the opinion that this would be a difficult action to pursue for the following reasons:• The Receivers and Managers obtained formal advice that the asset was unsaleable in its current form;• The trust was required to consent to the assignment;• A major factor in ensuring the assets were saleable was negotiating a reduction in the rent payable under the lease. While the Receivers and Managers attempted to obtain such a reduction, they were unsuccessful in this regard;• Major rectification works were required to be undertaken or committed to before any assignment could take place;• There was a limited timeframe in which to sell the leasehold;• No co-operative marketing and management structure existed between the cave operator and the resort operator;• No commitment had been provided by the Trust to upgrade the existing infrastructure and/or services provided under the lease; and• The Receivers and Managers had undertaken negotiations with three (3) parties, all of which were unsuccessful.We note that the following additional factors also need to be considered in respect of any potential legal action:• Due to the inherent uncertainty and cost involved in pursuing litigation, a detailed legal opinion would be required as to the merits or otherwise of this claim;• We currently do not have any funds in the Administration to obtain a legal opinion or become involved in a potentially lengthy or costly litigation; and• In discussions with the Receivers and Managers, it has been indicated that in the event that any such claim was brought, it would be vigorously defended.[31] Mr Field’s evidence and submissions have not demonstrated to me any real prospect of his being able to overcome the factual or legal foundations of these opinions. In my opinion, the administrator’s opinions in this summary and elsewhere in their report to creditors, and the evidence to which they point, suggest that there is little prospect that Mr Field will be able to establish that the true value of JCR’s business at the time of the Jenolan Deed exceeded the consideration provided in that Deed, whether it was validly or invalidly entered into, and whether or not it was attended by challengeable behaviour by the Bank.

Decision

Reasons for decision

JAGOT J
The Federal Magistrate was entitled to give weight, including substantial weight, to these matters. No error in so doing is disclosed.CONCLUSIONS I am satisfied that none of Mr Field’s grounds of appeal are sustainable. Mr Field has not demonstrated that the Federal Magistrate’s conclusions and orders were the result of any legal, factual or discretionary error. Having reviewed the available material I am convinced that the Federal Magistrate’s conclusions were not only justifiable but correct. Accordingly, the appeal must be dismissed with costs.

Ratio Decidendi

Legal Principle Established

Established by: JAGOT J

Full text does not contain this section.