Goldberg v Morrow

Case [2005] FCA 1038

FEDERAL COURT OF AUSTRALIA

Goldberg v Morrow [2005] FCA 1038

BANKRUPTCY – appeal – application to set aside bankruptcy notice refused by Federal Magistrate– whether copy of judgment attached to bankruptcy notice when served – whether any appeal pending– whether any counter-claim or set off exists.

APPEAL – denial of natural justice – sufficiency of evidence – finality of costs order.

Bankruptcy Act 1966 (Cth) ss 40(1)(g), 40(3)(b), 41(3)(b)
Federal Court of Australia Act 1976 (Cth) s 25(1A)
Supreme Court Act 1986 (Vic) s 3(5)
Supreme Court (General Civil Procedure) Rules 1996 (Vic) r 24.01, O 66

Goldberg v Morrow [2004] FCA 1490; (2004) 83 ALD 251 referred to
Re Briggs; Ex parte Briggs v Deputy Commissioner of Taxation (WA) (1986) 12 FCR 310 followed
Abigroup Ltd v Abignano (1992) 39 FCR 74 referred to
Re: Skinner’s and Smith’s Application (1982) 45 ALR 553 followed
Re: Gibbs; Ex parte Triscott (1996) 65 FCR 80 followed
Gibbs v Triscott [1996] FCA 895 referred to

DAVID GOLDBERG v DAVID MORROW

VID 845 of 2004

CRENNAN J
28 JULY 2005
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 845 OF 2004

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT CONSTITUTED BY FEDERAL MAGISTRATE PHIPPS

BETWEEN:

DAVID GOLDBERG
APPLICANT

AND:

DAVID MORROW
RESPONDENT

JUDGE:

CRENNAN J

DATE OF ORDER:

28 JULY 2005

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.   The appeal be dismissed. 

2.   The appellant pay the respondent’s costs of the appeal.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 845 OF 2004

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT CONSTITUTED BY FEDERAL MAGISTRATE PHIPPS

BETWEEN:

DAVID GOLDBERG
APPLICANT

AND:

DAVID MORROW
RESPONDENT

JUDGE:

CRENNAN J

DATE:

28 JULY 2005

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

  1. This is an appeal from the decision of Phipps FM to dismiss the appellant’s application to set aside a bankruptcy notice served upon the appellant on 11 March 2004. The Chief Justice has determined, pursuant to s 25(1A) of the Federal Court of Australia Act 1976 (Cth) that the appeal should be heard by a single judge.

  2. The bankruptcy notice required payment of a judgment debt of $3468.85.  The judgment debt relates to an order for costs made by Gillard J in the Supreme Court of Victoria (‘the Supreme Court’) on 24 July 2003.  The appellant, Mr Goldberg, and the respondent, Mr Morrow, have been involved in a number of legal proceedings in various courts since 2003.  The history of the relevant proceedings has been summarised by Weinberg J in Goldberg v Morrow [2004] FCA 1490 at [13] – [18], [22], [27] and [28]. I gratefully incorporate those paragraphs into these reasons for judgment.

  3. The respondent sought a sequestration order upon a creditor’s petition filed on 30 June 2004.  Weinberg J heard an appeal against the sequestration order which was made by McInnis FM on 6 September 2004.  On 19 November 2004, Weinberg J dismissed…

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Details
AGLC
Goldberg v Morrow [2005] FCA 1038
Case
[2005] FCA 1038
Decision Date

CaseChat Overview and Summary

In the matter of Goldberg v Morrow, the Federal Magistrates Court, presided over by Phipps FM, considered an application to set aside a bankruptcy notice issued against David Goldberg. The respondent, David Morrow, sought enforcement of a costs order made by Gillard J in a previous proceeding. Goldberg contested the notice on three grounds, which were ultimately dismissed by Phipps FM. Goldberg appealed to the Federal Court against the decision of Phipps FM, arguing that the magistrate had erred in denying his application and had acted without natural justice. The Federal Court found Goldberg's appeal to be without merit and dismissed it.

The court was tasked with determining whether the bankruptcy notice against Goldberg was properly issued and whether any of the grounds put forward by Goldberg warranted setting it aside. The grounds included the absence of a copy of the costs order attached to the notice, the pendency of an appeal against the costs order, and the existence of a set-off or counterclaim in the related Supreme Court proceeding. Phipps FM rejected these arguments, confirming that the notice was properly issued and served. The Federal Court upheld this decision, finding no error in the magistrate's reasoning or process.

The reasoning of the Federal Magistrates Court was based on the evidence presented regarding the service of the bankruptcy notice, the lack of a pending appeal against the costs order, and the absence of a valid set-off or counterclaim. Phipps FM held that the first ground was not substantiated as the evidence showed that a copy of the order was attached and served. The second ground was dismissed because there was no active appeal against the costs order and no stay of execution had been granted. The third ground was rejected as the Supreme Court proceeding had no bearing on the validity of the bankruptcy notice. The Federal Court concurred with this analysis, confirming that Goldberg had not demonstrated any grounds for setting aside the notice.

The final orders of the Federal Court were to dismiss Goldberg's appeal and to require him to pay Morrow's costs of the appeal. This decision affirmed the enforcement of the costs order and upheld the validity of the bankruptcy notice issued against Goldberg.

Orders

Orders of the court

1. The appeal be dismissed.

2. The appellant pay the respondent’s costs of the appeal.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

CRENNAN J
There is no appeal on foot against the decision of Gillard J made on 24 July 2003 in which his Honour ordered David Goldberg to pay David Morrow’s costs, which were subsequently taxed by Master Bruce on 14 November 2003 in the sum of $3,468.85. No stay of execution has been granted in respect of Gillard J’s order.DECISION OF PHIPPS FM In the application to set aside the bankruptcy notice the appellant essentially relied on three grounds. The first ground was a claim that a copy of the order that Gillard J made on 24 July 2003 was not attached to the bankruptcy notice. Phipps FM rejected the appellant’s evidence to that effect, preferring and accepting the evidence of the respondent’s solicitor and the process server that a copy of the order of Gillard J had been attached to the bankruptcy notice and served on the appellant. As the appellant did not allege that there were any other defects in the bankruptcy notice, his Honour held that the first ground of the application before him was not made out. The second ground of the application before Phipps FM was that the appellant had an appeal pending before the Court of Appeal and an application for special leave to appeal to the High Court. Phipps FM considered applications to other courts which were identified by the appellant. However, as there was no appeal process on foot against the costs order of Gillard J and no stay of execution in respect of the costs order, Phipps FM held that there was no ground for setting aside the bankruptcy notice based on the possibility of some further proceeding arising out of the judgment itself. The third ground of the application before Phipps FM was that the appellant had a set-off or counter-claim against the creditor in respect of matters which were the subject matter of the proceeding in the Supreme Court. The statement of claim in that proceeding was struck out by Nettle J and Phipps FM held that there was no set-off or counter-claim against the judgment debt which could not have been made in the Supreme Court proceeding. Accordingly, Phipps FM held that none of the grounds of the application had been made out and dismissed the application. Phipps FM also ordered that the applicant pay the respondent’s costs of the application.THE APPEAL TO THIS COURT On 5 July 2004 the appellant filed a notice of appeal to the Federal Court against the whole of the judgment of Phipps FM. The grounds of appeal were that: ‘(A) The Appellant was denied Natural Justice by the order made where there was no evidence before the Court which could lead to such findings against the Appellant under the Rule of Law.(B)His Honour Magistrate PHIPPS has failed in his duty to act fairly and in the sense of according procedural fairness in making his order against the Appellant. The Appellant’s rights were destroyed, defeated and prejudiced by this order.(C)How any reasonable Magistrate could come to the conclusion that the Appellant was not entitled for an order to set aside a bankruptcy notice under the evidence before him and the fact that the legal action before the Supreme Court of Victoria (No. 5230 of 2003) has not been concluded and there is also currently an application to the High Court of Australia (No. M97 of 2004).(D)How any reasonable Magistrate can impose impermissible disability and discrimination by exercise of the Judicial Act on the Appellant by making his order, when the evidence before him is clear that there is no final order for the costs for the Supreme Court’s proceedings before him.’

Ratio Decidendi

Legal Principle Established

Established by: CRENNAN J

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