Franks v Equititrust Ltd - [2012] FMCA 1180

FEDERAL MAGISTRATES COURT OF AUSTRALIA

FRANKS v EQUITITRUST LTD

[2012] FMCA 1180

BANKRUPTCY – Bankruptcy Notice – where notice included amounts for interest from assessment to entry of judgment – where notice included filing fees for costs assessment – where judgment was in name of party to assessment and not “Manager Costs Assessor” – invalidity of notice.

Legal Profession Act 2004 (NSW), ss.368(5), 369, 369(7)
Corporations Act 2001 (Cth), 601AD
Bankruptcy Act 1966 (Cth), s.41(5)
Federal Magistrates Court (Bankruptcy) Rules 2006

Dennis v Miller & Ors [2012] FMCA 25
Rookharp Pty Limited v Webb & Anor [2011] FMCA 801
Scook v Sims Construction Pty Ltd [2004] 3 ABC(NS) 43
Lord v Rankine [2010] FMCA 668
Croker v Commissioner of Taxation [2005] 145 FCR 150
Rankine v Lord (2011) 9 ABC (NS) 142
Kassem & Secatore as joint liquidators of Pan Pacific Age Care Services Pty Ltd (In liq) & Anor v Koutavas [2012] NSWSC 236

Applicant:

PHILLIP MAURICE FRANKS

Respondent:

EQUITITRUST LIMITED (RECEIVERS & MANAGERS APPOINTED)
(IN LIQUIDATION)

File Number:

SYG 2204 of 2012

Judgment of:

Raphael FM

Hearing date:

19 November 2012

Date of Last Submission:

19 November 2012

Delivered at:

Sydney

Delivered on:

19 November 2012

REPRESENTATION

Counsel for the Applicant:

Mr P Folino-Gallo

Counsel for the Respondent:

Mr M Bennett

Solicitors for the Respondent:

Tucker & Cowan

ORDERS

Bankruptcy Notice BN 5742 of 2012 issued 12 September 2012 be set aside.
Respondent to pay the Applicant’s costs to be taxed if not agreed in accordance with the Federal Magistrates Court (Bankruptcy) Rules 2006.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 2204 of 2012

PHILLIP MAURICE FRANKS

Applicant

And

EQUITITRUST LIMITED (RECEIVER & MANAGER APPOINTED) (IN LIQUIDATION)

Respondent

REASONS FOR JUDGMENT

This application raises some interesting points upon the validity of Bankruptcy Notice BN 5742 issued on 12 September 2012. I am indebted to both Mr Folino-Gallo, who appears on behalf of the applicant, and Mr Bennett, who appears on behalf of the respondent, for the responsible and helpful way in which they have presented their arguments. As will be made clear in these reasons the applicant debtor has a number of grounds upon which he believes that the bankruptcy notice should be set aside.
Those grounds, he argues, are supported by authority. Mr Bennett accepts that there is significant authority against him but wishes it to be made clear that he does not accept, for the purposes of the hearing in this court, the correctness of the decisions about which I am shortly to opine. It remains open for him to appeal this decision, although in effect, he will be seeking the views of the Full Bench upon several other decisions including decisions of the Federal Court and the Supreme Court of New South Wales by which this court is bound or, alternatively, obliged to follow unless it can be said with some certainty that the decision (in the Supreme Court of New South Wales) is clearly wrong.
There has been some long running…

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 Franks v Equititrust Ltd

Details

AGLC: Franks v Equititrust Ltd [2012] FMCA 1180
Case: [2012] FMCA 1180
Decision Date

CaseChat Overview and Summary

The Federal Magistrates Court of Australia was asked to decide the validity of a bankruptcy notice issued by Equititrust Ltd to Phillip Maurice Franks. The notice was based on a judgment for costs from a previous proceeding between Franks and Equititrust Ltd, and included interest and filing fees. Franks applied to set aside the bankruptcy notice on several grounds, including the failure to include all parties to the costs assessment, the inclusion of interest, and the inclusion of a filing fee. The court considered the arguments presented by both parties and found that the bankruptcy notice was invalid due to the inclusion of interest and the filing fee, as well as the failure to include all parties to the costs assessment. The court also found that the smaller judgment for the costs of the assessment was invalid because it was entered in the name of Equititrust Ltd rather than the "Manager Costs Assessor." The court ordered that the bankruptcy notice be set aside and that the respondent pay the applicant's costs.

In summary, the Federal Magistrates Court of Australia found that the bankruptcy notice issued by Equititrust Ltd to Phillip Maurice Franks was invalid for several reasons, including the inclusion of interest and a filing fee, as well as the failure to include all parties to the costs assessment. The court also found that the smaller judgment for the costs of the assessment was invalid because it was entered in the wrong name. The court ordered that the bankruptcy notice be set aside and that the respondent pay the applicant's costs.

Orders