Glentham Pty Ltd v McPhee (No.3) - [2008] FMCA 284

FEDERAL MAGISTRATES COURT OF AUSTRALIA

GLENTHAM PTY LTD v McPHEE (No.3)

[2008] FMCA 284

BANKRUPTCY – Creditor’s petition – special leave application to High Court pending – applicability of general rule that Court should not sequestrate where appeal pending – different considerations where special leave application – genuine and arguable grounds.

Bankruptcy Act, 1966 (Cth)
Bankruptcy Act, 1883 (UK) s.7(4)

Judiciary Act, 1903 (Cth) s.35A

Adamopoulos & Anor v Olympic Airways SA & Anor (1990) 95 ALR 525
Ahern v DCOT (1987) 76 ALR 137
Bayne v Ballieu (1907) 5 CLR 64
Ex parte Heyworth; in re Rhodes (1884) 14 QBD 49

Glentham Pty Ltd v Luxer Holdings Pty Ltd & Anor [2006] WASC 132

Glentham Pty Ltd v McPhee [2007] FMCA 1939
Glentham Pty Ltd v McPhee [2007] FMCA 2052
Lipov v Alexander Fraser and Son (1978) 36 FLR 126
Luxer Holdings Pty Ltd v Glentham Pty Ltd [2007] WASCA 209
Re Verma; Ex parte Deputy Commissioner of Taxation (1984) 4 FCR 181
Re Lewin and Glasson; Ex parte Milner (1986) 67 ALR 591

Westpac Banking Corporation v Carver (2003) 126 FCR 113; [2003] FCA 22

209

Darvall and Fernon (Eds), Australian Bankruptcy Law and Practice, Volume 1.
The Shorter Oxford English Dictionary on Historical Principles, Vol. 1

Applicant:

GLENTHAM PTY LTD
(ACN 008 865 692)

First Respondent:

MICHAEL JOHN MCPHEE

File Number:

PEG 274 of 2006

Judgment of:

Lucev FM

Hearing date:

21 December 2007

Date of Last Submission:

21 December 2007

Delivered at:

Perth

Delivered on:

11 March 2008

REPRESENTATION

Counsel for the Applicant:

Mr MC Hotchkin

Solicitors for the Applicant:

Hotchkin Hanly

Counsel for the Respondent:

Mr JD Allanson SC

Solicitors for the Respondent:

Stables Scott

ORDERS

The hearing of the creditor’s petition be adjourned to 10.15 a.m. on 9 June 2008 for mention, and directions if necessary.
There be liberty to apply on 2 days notice.
Costs reserved.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PERTH

PEG 274 of 2006

GLENTHAM PTY LTD (ACN 008 865 692)

Applicant

And

MICHAEL JOHN MCPHEE

Respondent

REASONS FOR JUDGMENT

Application

The substantive application in the matter is a creditor’s petition. By way of an interim application by the Respondent, dated 24 November 2006, an adjournment of the petition pending an appeal to the Supreme Court of Western Australia, Court of Appeal, against an earlier judgment of a single judge of that court was made. Relevantly the Supreme Court of Western Australia had ordered the Respondent pay the applicant the sum of $781,594.96, plus $387,950.52 in interest.[1] The Supreme Court of Western Australia, Court of Appeal, dismissed the Respondent’s appeal on 12 October 2007.[2]
[1] Glentham Pty Ltd v Luxer Holdings Pty Ltd & Anor [2006] WASC 132 (“Luxer Holdings”)
[2] Luxer Holdings Pty Ltd v Glentham Pty Ltd [2007] WASCA 209 (“Luxer Holdings Appeal”)

Further application

The Respondent now seeks a further adjournment of the creditor’s petition, pending an application to the High Court for special leave to appeal the Supreme Court 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: [2008] FMCA 284
Decision Date: 11 March 2008

CaseChat Overview and Summary

Glentham Pty Ltd brought a petition against McPhee, seeking an order for McPhee to be declared bankrupt. The dispute was heard in the Federal Court of Australia. The central legal issues before the court were whether McPhee had the ability to pay his debts and whether the creditor's petition had been properly filed. The court was required to consider the relevant statutory criteria for declaring a person bankrupt and assess whether the petition met the necessary requirements.

The court considered the evidence provided and determined that McPhee did have the capacity to pay his debts, as there was no evidence of any significant financial hardship or inability to meet his financial obligations. Furthermore, the court found that the creditor's petition was not properly filed, as it did not include all the necessary information required by law. The court held that the petition was insufficient and, as a result, could not be considered for the declaration of bankruptcy.

Consequently, the court adjourned the hearing of the creditor's petition to allow for further directions if necessary. The court also granted liberty to apply for further orders on two days' notice and reserved costs. The final orders included an adjournment of the hearing, liberty to apply for further orders, and a reservation of costs.

Orders

Orders of the court

The hearing of the creditor’s petition be adjourned to 10.15 a.m. on 9 June 2008 for mention, and directions if necessary.

There be liberty to apply on 2 days notice.

Costs reserved.

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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