Grundy v Wattyl Australia - [2002] FCA 615

FEDERAL COURT OF AUSTRALIA
Grundy v Wattyl Australia [2002] FCA 615
BANKRUPTCY – application for interlocutory relief pending the hearing of an appeal from a decision of the Federal Magistrate – where the Federal Magistrate dismissed an application for review of a sequestration order – where the bankrupt seeks to stay the effect of the sequestration order – where the bankrupt’s estate has been in administration for eight months – whether the bankrupt has an arguable case.
Bankruptcy Act 1966 (Cth) ss 52, 153B, 154
Federal Court of Australia Act 1976 (Cth) ss 23 and 29
Federal Magistrates Act 1999 (Cth) ss 102, 104(3)
Federal Court Rules O 52 r 17
Freeman v National Australia Bank Ltd [2002] FCA 427 cited
Stirling Harbour Services Pty Ltd v Bunbury Port Authority (No 2) [2000] FCA 87 cited
Coleman v Lazy Days Investments Pty Ltd (1995) 55 FCR 297 cited
Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 cited
Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65 cited
Minogue v Human Rights and Equal Opportunity Commission (1999) 84 FCR 438 cited
Neil v Nott (1994) 121 ALR 148 cited
Stankiewicz v Plata [2000] FCA 1185 discussed
Trustees of the Franciscan Missionaries of Mary v Weir (2000) 98 FCR 447 cited
Re Almassy (1999) 92 FCR 597 cited
Symonds v Bateman [1999] FCA 658 cited
Re Gollan; Ex parte Gollan (1992) 40 FCR 38 cited
Mackay v Mobil Oil Australia Ltd [1999] FCA 1124 cited
Re Maas [1998] FCA 1447
Re Sarina; Ex parte Wollondilly Shire Council (1980) 43 FLR 163 cited
Re Stubberfield; Ex parte Paradise Grove Pty Ltd (1995) 134 ALR 169 cited
PHILLIP GRUNDY v WATTYL AUSTRALIA PTY LTD AND SCOTT DARREN PASCOE AS THE TRUSTEE OF THE PROPERTY OF PHILLIP GRUNDY
N 249 of 2002
MOORE J
14 MAY 2002
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 249 OF 2002

IN AN APPEAL FROM THE FEDERAL MAGISTRATE

BETWEEN:

PHILLIP GRUNDY
APPLICANT

AND:

WATTYL AUSTRALIA PTY LTD
FIRST RESPONDENT

SCOTT DARREN PASCOE AS THE TRUSTEE OF THE PROPERTY OF PHILLIP GRUNDY
SECOND RESPONDENT

JUDGE:

MOORE J

DATE OF ORDER:

14 MAY 2002

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.Until further order the proceedings under the sequestration order made on 13 September 2001 in relation to the estate of Mr Phillip Grundy be stayed insofar as it permitted or required the sale of 2a Mount Vincent Road, Mount Vincent.

2. Until further order the Trustee be restrained from selling the property.
3.Until further order and upon Mr Phillip Grundy giving an undertaking to vacate the property within 7 days of any judgment dismissing his appeal from the judgment of the Federal Magistrate of 13 March 2002, the Trustee permit Mr Phillip Grundy to enter and occupy the property until judgment in the appeal.

4. Cost of the stay application be costs in the appeal.
Note: Settlement and entry of orders is dealt with in Order 36 of the…

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: [2002] FCA 615
Decision Date: 14 MAY 2002

CaseChat Overview and Summary

Phillip Grundy applied to the court for an order staying the sale of his property and allowing him to re-enter the property pending the hearing and determination of an appeal from a judgment of a Federal Magistrate. The property in question was Mr Grundy’s home which he shared with his elderly father. The Trustee in Bankruptcy and the petitioning creditor, Wattyl Australia, opposed the stay order. The court was required to decide whether the application should be granted, and if so, on what terms. The court considered the evidence presented by both parties and the legal principles relevant to the case. The court found that the application should be granted on the terms set out in the orders. The court noted that the Trustee in Bankruptcy and Wattyl Australia had opposed the stay order, but that the court had the discretion to grant the order if it considered it just and convenient to do so. The court also considered the impact of the stay order on the administration of Mr Grundy’s estate and the rights of the creditors. The court found that the stay order was necessary to ensure that Mr Grundy could maintain a roof over his head while his appeal was being heard, and that the impact on the creditors was minimal. The court also noted that the stay order would not prejudice the rights of the creditors in any way. The orders made by the court were that until further order, the proceedings under the sequestration order made on 13 September 2001 in relation to the estate of Mr Phillip Grundy be stayed insofar as it permitted or required the sale of 2a Mount Vincent Road, Mount Vincent. Until further order, the Trustee be restrained from selling the property. Until further order and upon Mr Phillip Grundy giving an undertaking to vacate the property within 7 days of any judgment dismissing his appeal from the judgment of the Federal Magistrate of 13 March 2002, the Trustee permit Mr Phillip Grundy to enter and occupy the property until judgment in the appeal. The cost of the stay application be costs in the appeal.

Orders

Orders of the court

1. Until further order the proceedings under the sequestration order made on 13 September 2001 in relation to the estate of Mr Phillip Grundy be stayed insofar as it permitted or required the sale of 2a Mount Vincent Road, Mount Vincent.

2. Until further order the Trustee be restrained from selling the property.

3. Until further order and upon Mr Phillip Grundy giving an undertaking to vacate the property within 7 days of any judgment dismissing his appeal from the judgment of the Federal Magistrate of 13 March 2002, the Trustee permit Mr Phillip Grundy to enter and occupy the property until judgment in the appeal.

4. Cost of the stay application be costs in the appeal.

Background

Background to the litigation

This judgment concerns an application by Mr Phillip Grundy for an order staying the sale of a property he owned and allowing him to re-enter the property. These orders are sought pending the hearing and determination by this Court of an appeal from a judgment of a Federal Magistrate given on 13 March 2002. Mr Grundy is a bankrupt as a result of a sequestration order made by a Registrar of the Federal Magistrates Court on 13 September 2001. Both the Trustee in Bankruptcy and the petitioning creditor, Wattyl Australia Pty Ltd (“Wattyl”) appeared and opposed the stay order being made. The property to which the proposed orders relate was Mr Grundy’s home which he shared with his elderly father. He was required to leave it by the Trustee in January 2002 to facilitate its sale as part of the administration of his estate.Background In order to understand the issue raised in the notice of motion it is necessary to describe, in a summary way, some of the history of the matter. Some of it is uncontentious as it is a matter of public record. Some other aspects of the history are contentious and are set out in affidavits filed in this application or the proceedings before the Federal Magistrate to which reference was made in these proceedings. However the evidence in the affidavits was not tested in this application. The parties approached the matter on the footing that issues of fact were raised by the affidavits but no findings of fact had to be made. On 3 July 2001 a creditor’s petition was filed by Wattyl. The petition was based on the failure of Mr Grundy to comply with a bankruptcy notice which issued on 23 April 2001 and was served on Mr Grundy on 1 May 2001. The bankruptcy notice was, in turn, based on a default judgment of $8,495.05 obtained by Wattyl in the North Sydney Local Court on 11 April 2001. The judgment apparently related to the unpaid purchase price of spray painting equipment. Mr Grundy did not attend the local court proceedings and claims to have had no knowledge of them. The creditor’s petition was returnable on 9 August 2001 and, on that occasion, Mr Grundy appeared unrepresented and Wattyl was represented by Mr Lamich from Lamich & Co. Accompanying Mr Lamich was a solicitor of that firm, Ms Helen Cook. Both in an affidavit filed in the Federal Magistrates Court on 25 February 2002 and in a further affidavit filed in this Court on 29 April 2002, Mr Grundy asserts that he had a conversation with Mr Lamich. In the affidavit filed on 25 February 2002 he said:“5.I attended the hearing at this Court in August, 2001 at which time the presiding registrar adjourned proceeding until 13th September, 2001. She ordered Wattyl’s legal representative Mr. Lamich of Lamich and Co. to discuss a suitable arrangement in the hallway. Which we proceeded to do. I also informed the registrar during this appearance that I did not wish to be made Bankrupt and that I felt an alternative was within reason.6.At the discussion with Mr. Lamich I told him that I was prepared to pay the full amount owing plus his costs by one of two arrangements either by instalments over the next 6 months or by getting a personal loan, once I new the true amount owing. Mr. Lamich indicated to me at this meeting that it would take him some time to organise the repayment as he would have to seek advise from Wattyl and in any event would probably take longer than the 3 weeks to the 13th September, 2001. As I had informed Mr Lamich that I was due to start full-time employment at the Mirriwinni Gardens Aboriginal Academy, Bellbrook N.S.W. some 480kms from the Sydney Court. He told me that it would not be necessary for me to appear at the hearing at the Magistrates Court set down for September 13th and as he put it “I will tell them that we have reached an agreement and that I have told you not to appear, then I will let you know how and when to make the payment, I am surprised it got this far, but now we will fix it up and I’ll keep in touch. I gave Mr Lamich the name and address of my new employer and my Mount Vincent telephone number instructing him that he could leave a message with my father on that number and it would be returned within a day or two as I was constantly in touch with him.7.We received no other advise from Mr. Lamich prior to 11th September, 2001 at which time I attempted to contact Mr Lamich’s office and the Federal Court prior to the 13th without success due to congested telephone services, probably due to the events in New York on the 11th September, 2001.8.A couple of weeks later I received a letter from the Trustee Sims Lockwood informing me that I had been made bankrupt on the 13th September, 2001. This letter also informed me that I would receive a statement of assets and liabilities forthwith and to complete this and return it to them with 14 days.”In the affidavit filed in these proceedings on 29 April 2002 Mr Grundy repeats the gist of this assertion about what he was told by Mr Lamich. That is, he was told it was unnecessary for him to attend on 13 September 2001.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

MOORE J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: MOORE J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 249 OF 2002

BETWEEN:	PHILLIP GRUNDY APPLICANT
AND:	WATTYL AUSTRALIA PTY LTD FIRST RESPONDENT SCOTT DARREN PASCOE AS THE TRUSTEE OF THE PROPERTY OF PHILLIP GRUNDY SECOND RESPONDENT
JUDGE:	MOORE J
DATE OF ORDER:	14 MAY 2002
WHERE MADE:	SYDNEY