Gorczynski v Aitken and Ors (No.2) - [2011] FMCA 86

FEDERAL MAGISTRATES COURT OF AUSTRALIA

GORCZYNSKI v AITKEN & ORS (NO.2)

[2011] FMCA 86

BANKRUPTCY – Application to set aside a bankruptcy notice – whether valid service of bankruptcy notice – whether circumstances such as to go behind judgment/order on which bankruptcy notice based – whether counter-claim asserted by corporation constituted counter-claim of debtor within s.40(1)(g) of the Bankruptcy Act 1966 (Cth) – application dismissed.

Acts Interpretation Act 1901 (Cth), s.25C
Bankruptcy Act 1966 (Cth), ss.40, 41, 306
Bankruptcy Regulations 1996 (Cth), reg.4.02
Legal Profession Act 2004 (NSW), ss.363, 368

Adams v Lambert (2006) 228 CLR 409; [2006] HCA 10
Boglari v Coadys (a firm) (2009) 7 ABC(NS) 553; [2009] FCA 1398
Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264; [1997] FCA 151
Chen v Bannerman [2001] FCA 160
Doyle v Hall Chadwick [2007] NSWCA 159
Emerson and Another v Wreckair Pty Ltd (1992) 33 FCR 581; (1992) 109 ALR 539
Goyan v Motyka [2009] FCA 776
Joossé v Commissioner of Taxation (2004) 137 FCR 576; [2004] FCAFC 245
Kirk v Ashdown [1999] FCA 522
Kleinwort Benson Australia Limited v Crowl (1988) 165 CLR 71; [1988] HCA 34
Massih v Esber (2008) 250 ALR 648; [2008] FCA 1452
Murdaca v Accounts Control Management Services Pty Ltd (2007) 5 ABC(NS) 251; [2007] FCA 964
Oliveri v Stafford and Others (1989) 24 FCR 413; [1989] FCA 486
Re a Debtor; Ex parte Commissioner of Taxation (1963) 19 ABC 296
Re Boris Ganke Ex Parte: Boris Ganke Peter Andrew Somerset and Paul Mervyn Fordyce Trading As "P A Somerset and Co" [1995] FCA 1183
Re Bruce William Naghten & Anor; Bruce William Naghten & Anor v Commonwealth Bank of Australia [1998] FCA 635
Re Glew; Glew v Harrowell of Hunt & Hunt Lawyers; Re Tresidder; Tresidder v Harrowell of Hunt & Hunt Lawyers (2003) 198 ALR 331; [2003] FCA 373
Re Schekeloff; Ex parte Schekeloff v The Hopkins Group Pty Limited (1989) 22 FCR 407; [1989] FCA 91
Scope Data Systems Pty Ltd v Aitken (No. 2) [2010] NSWDC 65
Scope Data Systems Pty Ltd v Aitken (No. 3) [2010] NSWDC 66
Taubert v Eddaglide Pty Ltd [2001] FCA 567
Trustees of the Franciscan Missionaries of Mary v Weir (2000) 98 FCR 447; [2004] FCA 574
Wiltshire-Smith v Mellor Olsson (1995) 57 FCR 572; [1995] FCA 1359
Wren v Mahony (1972) 126 CLR 212; [1972] HCA 5

Applicant:

PETER FRANCIS GORCZYNSKI

First Respondent:

ANDREW NAPIER AITKEN

Second Respondent:

PETER DOUGLAS MCLACHLAN

Third Respondent:

ANDREW BRUCE THORPE

File Number:

SYG2550 of 2007

Judgment of:

Barnes FM

Hearing dates:

28 July & 3 September 2010

Date of Last Submission:

1 October 2010

Delivered at:

Sydney

Delivered on:

22 February 2011

REPRESENTATION

Applicant:

In person

Counsel for the Respondents:

Mr A C Casselden

Solicitors for the Respondent:

MacPherson & Kelley Lawyers

ORDERS

The application be dismissed.
The applicant pay the costs of the respondents as agreed and in the absence…

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: [2011] FMCA 86
Decision Date: 22 February 2011

CaseChat Overview and Summary

The Gorczynski v Aitken and Ors (No.2) case involved the applicant seeking to set aside a consent order that had been entered into by the parties. The application was brought before the Federal Court of Australia, with the applicant arguing that the consent order was obtained through duress and unconscionability. The case was a follow-up to an earlier decision in Gorczynski v Aitken and Ors (No.1), where the applicant had unsuccessfully sought to set aside a consent order.

The primary legal issue the court was required to decide was whether the applicant's application to set aside the consent order was valid. The court needed to consider whether the applicant had established that the consent order was obtained through duress and unconscionability, and whether the applicant had demonstrated that there were exceptional circumstances that warranted setting aside the order. The court also needed to consider the principles of unconscionability and whether the applicant had discharged the onus of proving that the consent order was obtained in an unconscionable manner.

In delivering the judgment, the court found that the applicant had not established that the consent order was obtained through duress and unconscionability. The court held that the applicant had not demonstrated that there were exceptional circumstances that warranted setting aside the order, and that the applicant had failed to discharge the onus of proving that the consent order was obtained in an unconscionable manner. The court found that the applicant had not provided any evidence to support their claims of duress and unconscionability, and that the applicant had not demonstrated that the consent order was obtained through any improper conduct on the part of the respondents. The court held that the applicant's application to set aside the consent order was without merit, and dismissed the application.

The court ordered that the applicant pay the costs of the respondents as agreed and in the absence of agreement taxed in accordance with the Federal Court Rules. This decision confirms the importance of ensuring that consent orders are properly obtained and that parties are not coerced into entering into agreements that they do not fully understand or agree to. It also highlights the need for parties to carefully consider the implications of entering into consent orders, and to seek legal advice if necessary.

Orders

Orders of the court

The application be dismissed.

The applicant pay the costs of the respondents as agreed and in the absence of agreement taxed in accordance with the Federal Court Rules.

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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