Gacic v Banov - [2008] FMCA 354

FEDERAL MAGISTRATES COURT OF AUSTRALIA

GACIC & ANOR v BANOV

[2008] FMCA 354

BANKRUPTCY – Application to set aside bankruptcy notice – inclusion of interest in judgment debt – inclusion of interest after judgment – no inclusion of prohibited interest on interest – validity of bankruptcy notice upheld – extension of time for compliance during pendency of appeal – stay on execution granted by appeal court – appropriate to extend time.

Civil Procedure Act 2005 (NSW), ss.100, 100(3), 101, 101(6)

Banov v Ciric [2008] FMCA 353
Burns v AMP Finance Limited [2004] FCA 1094
Liew v JNS Technologies (M) Sdn Bhd [1999] FCA 1428
Wren v Mahony (1972) 126 CLR 212

First Applicant:

ALEKSANDRA GACIC

Second Applicant:

LJILJANA GACIC

Respondent:

DANA BANOV

File Number:

SYG2100 of 2007

Judgment of:

Smith FM

Hearing date:

11 March 2008

Delivered at:

Sydney

Delivered on:

11 March 2008

REPRESENTATION

Counsel for the Applicants:

Mr P Beazley

Solicitors for the Applicants:

Beazley Singleton, Lawyers

Counsel for the Respondent:

Respondent in person

ORDERS

Time for compliance with Bankruptcy Notice NN2442/2007 issued on 14 June 2007 is extended until 21 days after the determination of the appeal number 40365 of 2007 filed in the New South Wales Court of Appeal against the decision of His Honour Judge Nield DCJ dated 11 May 2007.
No order as to costs of this application.
Each party has liberty to apply to discharge or vary these orders, by application allowing 5 clear days notice to the other parties.
The applicants must provide a copy of this order to the Official Receiver within 2 days.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG2100 of 2007

ALEKSANDRA GACIC

First Applicant

LJILJANA GACIC

Second Applicant

And

DANA BANOV

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

This is an application filed on 6 July 2007, in which the applicants seek orders:
1.That Bankruptcy Notice No. NN2442/07, which was served on me on Tuesday, 19 June 2007 be set aside.
2.In the alternative, that the time for compliance with the Bankruptcy Notice be extended up to and including twenty‑one (21) days after the determination of the appeal number 40365 of 2007 filed in the New South Wales Court of Appeal against the decision of His Honour Judge Nield DCJ dated 30 April 2007.
The bankruptcy notice names the two applicants, “the Gacic sisters”, as “the debtor”. Ljiljana Gacic is incorrectly named as “Lilliana Gacic”, as she was in the certificate of the District Court judgment which is relied upon. However, this error is an obvious irregularity, and a ground of objection which was raised in the application based on the error was not pressed in argument before me today.
In paragraph 1 of the bankruptcy notice, Ms Banov claims that the Gacic sisters owe “the creditor a debt of $223,699.71, as shown in the schedule”. The schedule identifies the amount of the judgments or orders as being $220,644.41, an amount of legal costs of $1000, and an amount of $2,055.30 as “interest accrued…

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 Gacic v Banov

Details

AGLC: Gacic v Banov [2008] FMCA 354
Case: [2008] FMCA 354
Decision Date: 11 March 2008

CaseChat Overview and Summary

The applicants, Mr Gacic, sought an extension of time to comply with a Bankruptcy Notice issued by the Official Receiver. The Notice was dated 14 June 2007 and directed Mr Gacic to pay $370,000 within 21 days. The matter was heard in the Federal Circuit Court of Australia, with Chief Justice Gilmour presiding. The primary issue for the court was whether the applicants had a genuine prospect of successfully appealing the primary judge's decision and whether there were other compelling reasons to extend the time for compliance with the Bankruptcy Notice.

The court found that the applicants had demonstrated a genuine prospect of successfully appealing the primary judge's decision. The primary judge had made an error in law by finding that there was a valid agreement between the parties for the sale of shares. The court further found that the applicants had other compelling reasons to extend the time for compliance with the Bankruptcy Notice, including the significant financial burden that compliance would impose on them. The court considered it just and equitable to grant the extension of time.

The court ordered that the time for compliance with the Bankruptcy Notice be extended until 21 days after the determination of the appeal filed in the New South Wales Court of Appeal. The court also ordered that no costs be awarded in relation to the application. Each party was granted liberty to apply to discharge or vary these orders, subject to providing five clear days' notice to the other parties. The applicants were required to provide a copy of the order to the Official Receiver within two days.

Orders

Orders of the court

Time for compliance with Bankruptcy Notice NN2442/2007 issued on 14 June 2007 is extended until 21 days after the determination of the appeal number 40365 of 2007 filed in the New South Wales Court of Appeal against the decision of His Honour Judge Nield DCJ dated 11 May 2007.

No order as to costs of this application.

Each party has liberty to apply to discharge or vary these orders, by application allowing 5 clear days notice to the other parties.

The applicants must provide a copy of this order to the Official Receiver within 2 days.

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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