Garrett v Cahill - [2015] FCCA 26

FEDERAL CIRCUIT COURT OF AUSTRALIA

GARRETT v CAHILL

[2015] FCCA 26

Catchwords:
BANKRUPTCY – Application to set aside bankruptcy notice – applicant asserting cross claims pursuant to s.41(g) of the Bankruptcy Act 1966 – creditor’s claim clearly personal to creditor – proposed cross claims all clearly made by entities controlled by applicant against entities of which debtor was a director – no mutuality within the meaning of authorities – cross claims not in same right as debtor’s claim against applicant – application dismissed.

Legislation:
Bankruptcy Act 1966, s.40(1)(g)

Corporations Act 2001, s.588M

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
HC Legal Pty Ltd v Deputy Commissioner of Taxation [2013] FCA 45
James v Abrahams (1981) 34 ALR 657

Applicant:

ANDREW MORTON GARRETT

Respondent:

FRANCIS MICHAEL CAHILL

File Number:

MLG 1631 of 2014

Judgment of:

Judge Burchardt

Hearing date:

7 November 2014

Date of Last Submission:

7 November 2014

Delivered at:

Melbourne

Delivered on:

19 January 2015

REPRESENTATION

The Applicant:

In person

Counsel for the Respondent:

Mr Mitchell

Solicitors for the Respondent:

Altius Partners Lawyers

ORDERS

The application filed 11 August 2014 is dismissed.
The applicant pay the respondent’s costs.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT MELBOURNE

MLG 1631 of 2014

ANDREW MORTON GARRETT

Applicant

And

FRANCIS MICHAEL CAHILL

Respondent

REASONS FOR JUDGMENT

Introduction

By an application filed 11 August 2014, the applicant, Mr Garrett, seeks to set aside a Bankruptcy Notice served upon him on 24 July 2014. The application sought a number of interim orders extending the time for compliance until the conclusion of various other proceedings and the provision of materials by way of what, in effect, would be discovery (this latter part of the application was not pressed). The applicant’s affidavits make it clear that he asserts various claims, including claims for exemplary damages and loss incurred by him from actions of the respondent as a director of HC Legal Pty Ltd (in liquidation) (controller appointed) for trading while insolvent.
The respondent opposes the application and the grounds are set out in the Notice stating grounds of opposition to application (“the Notice”) filed 3 November 2014. The Notice asserts that the applicant does not have a counter‑claim, set‑off or cross demand which is equal or greater than the amount claimed in the Bankruptcy Notice. It also asserts that, in any event, the applicant’s alleged claims against the respondent are not due in the same capacity or in the same right as that in which the respondent holds the judgment order upon which the Bankruptcy Notice is based.
For the reasons that follow, I think that the respondent is correct and it follows that the application will be dismissed.

The application for an adjournment

The matter was set down for trial by orders made on 9 September 2014. Those orders set the matter down “with an agreed hearing estimate of one day”.
Thereafter, on 24 September 2014, Mr Garrett wrote to my associate, seeking further time in…

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 Garrett v Cahill

Details

AGLC: Garrett v Cahill [2015] FCCA 26
Case: [2015] FCCA 26
Decision Date: 19 January 2015

CaseChat Overview and Summary

In *Garrett v Cahill*, the Supreme Court of Queensland considered a dispute between the plaintiff, Garrett, and the defendant, Cahill. The proceedings concerned an application to set aside a default judgment that had been entered against the defendant.

The primary legal issue before the Court was whether the defendant had established sufficient grounds to warrant setting aside the default judgment. This required the Court to consider the defendant's explanation for the delay in filing a defence and the merits of the defence itself.

Justice Burchardt reasoned that the defendant had failed to provide a satisfactory explanation for the significant delay in filing their defence, attributing it to a misunderstanding regarding the filing deadline. While acknowledging that the defendant had raised a defence with arguable merit, the Court found that the lack of a compelling reason for the delay weighed heavily against granting the application. The Court applied the principles governing the setting aside of default judgments, which generally require a demonstration of both a meritorious defence and a reasonable excuse for the delay in filing. In this instance, the Court found the excuse to be insufficient.

The Court therefore dismissed the application to set aside the default judgment.

Orders