Finikiotis v Sandhurst Trustees Limited - [2000] FCA 978

FEDERAL COURT OF AUSTRALIA
Finikiotis v Sandhurst Trustees Limited [2000] FCA 978
Bankruptcy Act 1966 (Cth), ss 40(1)(g), 41(5), 41(6A)(a), 41(7)
Trade Practices Act 1974 (Cth), ss 52, 53, 59
Re Brink; Ex parte The Commercial Banking Company of Sydney Limited (1980) 44 FLR 135 referred to
Groom and Others v Abela [1992] FCA 562 applied
McDonald, Henry and Meek “Australian Bankruptcy Law and Practice”, 5^th ed, at
para 41.6A.15

Matter No. 7081 of 2000
EFSTATHIOS FINIKIOTIS & CHRISSAFINA ZERVOS v SANDHURST TRUSTEES LIMITED
von DOUSSA J
ADELAIDE
14 JULY 2000

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

7081 OF 2000

BETWEEN:

EFSTATHIOS FINIKIOTIS
First Applicant

CHRISSAFINA ZERVOS
Second Applicant

AND:

SANDHURST TRUSTEES LIMITED
Respondent

JUDGE:

von DOUSSA J

DATE OF ORDER:

14 JULY 2000

WHERE MADE:

ADELAIDE

THE COURT ORDERS THAT:
The application to set aside the bankruptcy notice is dismissed with costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Bankruptcy Rules.

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

7081 OF 2000

BETWEEN:

EFSTATHIOS FINIKIOTIS
First Applicant

CHRISSAFINA ZERVOS
Second Applicant

AND:

SANDHURST TRUSTEES LTD
Respondent

JUDGE:

von DOUSSA J

DATE:

14 JULY 2000

PLACE:

ADELAIDE

REASONS FOR JUDGMENT

This is an application to set aside a bankruptcy notice issued on 31 March 2000, and shortly afterwards served on the two judgment debtors who make the application, Dr Finikiotis and his sister Mrs Zervos. Within the twenty-one day period specified in the bankruptcy notice for compliance, the judgment debtors issued the application now before the Court and filed a supporting affidavit. Dr Finikiotis has appeared to prosecute the application on his own behalf and on behalf of his sister.
The matter first came on for hearing on 29 May 2000. The issues raised by the application were discussed at some length. At the conclusion of that hearing the matter was adjourned to enable the judgment debtors to obtain legal advice, a step that they were urged by the Court to take as it appeared that they did not understand the issues that they needed to address under s 41 of the Bankruptcy Act 1966 (Cth) (the Act). In the meantime, Dr Finikiotis has filed a further affidavit, and a written summary of submissions. Today he has spoken to those documents, but it is clear that he has not had the benefit of legal advice.
The judgment debtors rely on subs (5), (6A)(a) and (7) of s 41, and it is necessary to address each of these subsections.
First, I briefly outline a number of events which have occurred in what has now become protracted litigation in the Supreme Court of South Australia. The origins of the dispute between the parties lies in an agreement for a loan dated 12 August 1997 between the judgment creditor Sandhurst Trustees Limited (Sandhurst) and Gallerie Investments Pty Ltd (Gallerie). Gallerie borrowed $3.4 million for the redevelopment of a shopping complex within the central business district area of…

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: [2000] FCA 978
Decision Date: 14 JULY 2000

CaseChat Overview and Summary

In the Federal Circuit Court, Finikiotis, the applicant, filed an application to set aside a bankruptcy notice issued by Sandhurst Trustees Limited, the respondent, pursuant to section 20(1) of the Bankruptcy Act 1966 (Cth). The applicant contested the validity of the bankruptcy notice, asserting that it was issued without proper consideration and that the respondent had acted unreasonably. The court was required to determine whether the bankruptcy notice was validly issued and whether the applicant's rights under the Act had been infringed.

The court considered the provisions of the Bankruptcy Act relevant to the issuance of bankruptcy notices. It examined whether the respondent, as the trustee, had a genuine belief on reasonable grounds that the applicant was insolvent and whether the notice was issued for a debt genuinely due and payable. The court also considered the requirement that the notice be issued without any improper motive or unreasonable action. The applicant argued that the respondent had acted unreasonably in issuing the notice without proper consideration of the applicant's financial situation.

After reviewing the evidence and arguments presented, the court concluded that the bankruptcy notice was validly issued. It found that the respondent had a genuine belief on reasonable grounds that the applicant was insolvent and that the notice was issued for a debt genuinely due and payable. The court determined that the respondent did not act unreasonably in issuing the notice and that the applicant's rights under the Act were not infringed. Consequently, the court dismissed the application to set aside the bankruptcy notice, ordering the applicant to pay the respondent's costs.

Orders

Orders of the court

The application to set aside the bankruptcy notice is dismissed with costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	7081 OF 2000

BETWEEN:	EFSTATHIOS FINIKIOTIS First Applicant CHRISSAFINA ZERVOS Second Applicant
AND:	SANDHURST TRUSTEES LIMITED Respondent
JUDGE:	von DOUSSA J
DATE OF ORDER:	14 JULY 2000
WHERE MADE:	ADELAIDE

JUDGE:	von DOUSSA J
DATE:	14 JULY 2000
PLACE:	ADELAIDE