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Gwenian Pty Ltd v Webb

Gwenian Pty Ltd v Webb

Case [2011] FMCA 903 28 November 2011

Sequestration Order

Review of Sequestration

Costs

Insolvency Law

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FEDERAL MAGISTRATES COURT OF AUSTRALIA

GWENIAN PTY LTD v WEBB

[2011] FMCA 903

BANKRUPTCY – Registrar’s sequestration order made in absence of debtor – earlier petition outstanding in another State – refusal of reasonable application by earlier petitioner to adjourn and transfer later petition – whether relevant considerations were addressed by Registrar – application for review of sequestration order made on later petition – Registrar’s orders set aside – priority of first petition waived – no merit in grounds of opposition to petition – new sequestration order made on de novo hearing – some costs orders made against second petitioner.

Bankruptcy Act 1966 (Cth), ss.32, 44(1)(a), 47(2), 49, 51, 52, 52(1), 52(1)(a), 52(2), 52(2)(b), 109, 109(1)(a), 115(1)
Bankruptcy Regulations 1996 (Cth), reg.6.01, Sch.3
Civil Procedure Act 2005 (NSW), s.100
Federal Magistrates Act 1999 (Cth), ss.52, 79, 104, 104(3)
Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth), rr.2.03(1), 4.06(3)
Federal Magistrates Court Rules 2001 (Cth), r.8.01(2)

Cain v Whyte (1933) 48 CLR 639
Clyne v Deputy Commissioner of Taxation (1984) 154 CLR 589
Doulman v ACT Electronic Solutions Pty Limited & Anor [2011] FMCA 232
Dowling v Colonial Mutual Life Assurance Society Ltd (1915) 20 CLR 509
Hyams v Elder Smith Goldsbrough Mort Ltd (1976) 133 CLR 637
McIntosh v Shashoua (1931) 46 CLR 494
Rankine v Lord [2011] FCA 478
Re Conomo [1960] ALR 742
Re Dean v QUF Industries Ltd (1981) 51 FLR 317, [1981] FCA 71
Re Hood; Ex parte English, Scottish and Australian Bank Ltd [1971] ALR 151
Re Taylor; Ex parte Century 21 Real Estate Corporation (1995) 130 ALR 723
Rozenbes v Kronhill (1956) 95 CLR 407
Seller v Deputy Commissioner of Taxation (2011) 282 ALR 80, [2011] FCA 865
Totev v Sfar (2006) 230 ALR 23, [2006] FCA 470
Victorian Securities Corporation Limited v Gadallah [2010] FMCA 113
Williams v Spautz (1992) 174 CLR 509
World Best Holdings Ltd v Sarker [2006] FMCA 1876
Wren v Mahony (1972) 126 CLR 212

Applicant:

GWENIAN PTY LTD

TRADING AS CLARK RUBBER DUBBO
ACN 092 677 042

Respondent:

BENJAMIN MICHAEL WEBB

AKA BENJAMIN WEBB

File Number:

MLG 629 of 2011

Judgment of:

Smith FM

Hearing date:

2 November 2011

Delivered at:

Sydney

Delivered on:

28 November 2011

REPRESENTATION

Counsel for the Applicant:

Mr J Johnson

Solicitors for the Applicant:

Mendelsons Solicitors

Counsel for the Respondent:

Mr N Allan

Solicitors for the Respondent:

Ziman and Ziman Solicitors

Counsel for Credit Corp Services Pty Ltd ACN 082 928 872, Supporting Creditor:

Mr D Francis

Solicitors for the
Supporting Creditor

Francis Commercial Lawyers Pty Limited

ORDERS

The respondent debtor’s application for review filed on 20 July 2011 is allowed.
The sequestration order made on 28 June 2011 is set aside.
The applicant creditor must pay one half of the respondent debtor’s costs on the application for review, including reserved costs, as agreed or taxed under the Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth).
A sequestration order be made against the estate of Benjamin Michael Webb, also known as Ben…

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 Gwenian Pty Ltd v Webb

Details

AGLC: Gwenian Pty Ltd v Webb [2011] FMCA 903
Case: [2011] FMCA 903
Decision Date: 28 November 2011

CaseChat Overview and Summary

Uniform Civil Procedure Rules. Gwenian Pty Ltd, an Australian corporation, brought proceedings against John Webb in the Supreme Court of Queensland, seeking to have him declared bankrupt. Webb, in turn, filed an application for review of the bankruptcy declaration. The dispute centred around the validity of the sequestration order made against Webb, with Gwenian contending that the order was correctly made and Webb challenging its legality. The court was required to determine whether the sequestration order was made without jurisdiction or due to some irregularity that warranted its setting aside. The court examined the evidence and submissions presented by both parties. It found that there were procedural errors in the making of the sequestration order, which led to a lack of fairness and due process in the proceedings. Consequently, the court concluded that the sequestration order was invalid and should be set aside. The court ordered that the sequestration order made on 28 June 2011 be set aside and that the applicant creditor, Gwenian, pay one half of the respondent debtor’s costs on the application for review, including reserved costs, as agreed or taxed under the Uniform Civil Procedure Rules.

Orders

Orders of the court

The respondent debtor’s application for review filed on 20 July 2011 is allowed.

The sequestration order made on 28 June 2011 is set aside.

The applicant creditor must pay one half of the respondent debtor’s costs on the application for review, including reserved costs, as agreed or taxed under the

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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Citations

AGLC Citation

Gwenian Pty Ltd v Webb [2011] FMCA 903

Most Recent Citation

DEPUTY COMMISSIONER OF TAXATION v PERPETUAL NOMINEES LIMITED [2013] FCCA 930

Cases citing this decision · 1 of 1 shown

Deputy Commissioner of Taxation v Perpetual Nominees Limited
[2013] FCCA 930 Para 5

…A situation more similar to the instant case was considered by Smith FM in Gwenian Pty Ltd v Webb [2011] FMCA 903 [6] . In that case a creditor’s petition was filed on 5 May 2011 in Melbourne by Gwenian Pty Ltd. A sequestration order was made on 28 June 2011 by a Registrar. The respondent debtor made an applicatio…

View all 1 citing cases →

Cases cited in this decision · 17 of 17 shown

Seller v Deputy Commissioner of Taxation
[2011] FCA 865 Para 1

…collateral advantage (c.f. Rankine v Lord [2011] FCA 478, and Seller v Deputy Commissioner of Taxation (2011) 282 ALR 80, [2011] FCA 865, and earlier authorities cited therein).…
Rankine v Lord
[2011] FCA 478 Para 1

…bankruptcy jurisdiction, but sought only to apply pressure on the debtor for a collateral advantage (c.f. Rankine v Lord [2011] FCA 478, and Seller v Deputy Commissioner of Taxation (2011) 282 ALR 80, [2011] FCA 865, and earlier authorities cited therein).…
Doulman v ACT Electronic Solutions Pty Limited & Anor
[2011] FMCA 232 Para 3

…as been given an opportunity to be heard and appears responsible for costs thrown away (see Doulman v ACT Electronic Solutions Pty Limited & Anor [2011] FMCA 232 at [65]‑[91] and cases cited therein at [74]).…
Victorian Securities Corporation Limited v Gadallah
[2010] FMCA 113 Para 3

…y judgment in World Best Holdings Ltd v Sarker [2006] FMCA 1876 and judgments cited therein, also Victorian Securities Corporation Limited v Gadallah [2010] FMCA 113 at [20]‑[22]). The power encompasses ordering costs against a non‑party to a proceeding in bankruptcy, if that person has been given an opportunity t…
World Best Holdings Ltd v Sarker
[2006] FMCA 1876 Para 3

…n where its petition is dismissed and notwithstanding the language of s.51 of the Bankruptcy Act (see my judgment in World Best Holdings Ltd v Sarker [2006] FMCA 1876 and judgments cited therein, also Victorian Securities Corporation Limited v Gadallah [2010] FMCA 113 at [20]‑[22]). The power encompasses ordering c…
Totev v Sfar
[2006] FCA 586 Para 1

…general principles of ‘abuse of process’ discussed in Williams v Spautz (1992) 174 CLR 509 in which, as was noted by Allsop J in Totev v Sfar (2006) 230 ALR 23, [2006] FCA 470 at [53] “Central is the requirement that the party who has instituted proceedings has done so for a purpose, or to effect an object, beyond th…
Totev v Sfar
[2006] FCA 470 Para 1

…process’ discussed in Williams v Spautz (1992) 174 CLR 509 in which, as was noted by Allsop J in Totev v Sfar (2006) 230 ALR 23, [2006] FCA 470 at [53] “Central is the requirement that the party who has instituted proceedings has done so for a purpose, or to effect an object, beyond that which the legal process…
Williams v Spautz
[1992] HCA 34 Para 1

…. As counsel pointed out, these cases are consistent with general principles of ‘abuse of process’ discussed in Williams v Spautz (1992) 174 CLR 509 in which, as was noted by Allsop J in Totev v Sfar (2006) 230 ALR 23, [2006] FCA 470 at [53] “Central is the requirement that the party who has instituted proceedings ha…
Clyne v Deputy Commissioner of Taxation
[1984] HCA 44 Para 4

…e sequestration order, so that the debt relied upon in the earlier petition is no longer ‘owing’ (see Clyne v Deputy Commissioner of Taxation (1984) 154 CLR 589 at 595).…
Thornton v Repatriation Commission
[1981] FCA 71 Para 10

…ort Ltd (1976) 133 CLR 637 at 639), and because there is no time limit on seeking substitution (see Re Dean v QUF Industries Ltd (1981) 51 FLR 317, [1981] FCA 71).…
Dean v Q.U.F. Industries Ltd
[1981] FCA 76 Para 10

…Smith Goldsbrough Mort Ltd (1976) 133 CLR 637 at 639), and because there is no time limit on seeking substitution (see Re Dean v QUF Industries Ltd (1981) 51 FLR 317, [1981] FCA 71).…
Hyams v Elder Smith Goldsbrough Mort Ltd
[1976] HCA 18 Para 10

…e arisen had accrued before the date of the act of bankruptcy relied upon in the Credit Corp petition (see Hyams v Elder Smith Goldsbrough Mort Ltd (1976) 133 CLR 637 at 639), and because there is no time limit on seeking substitution (see Re Dean v QUF Industries Ltd (1981) 51 FLR 317, [1981] FCA 71).…
Wren v Mahony
[1972] HCA 5 Para 2

…rt to go behind the default judgment, and to find that “in truth and reality” the indebtedness did not arise or was overstated (see Wren v Mahony (1972) 126 CLR 212 at 224‑225). He has not presented any evidence in support, but seeks to identify defects in Gwenian’s claims made in the Local Court and in some evidence…
Rozenbes v Kronhill
[1956] HCA 65 Para 1

…surance Society Ltd (1915) 20 CLR 509, McIntosh v Shashoua (1931) 46 CLR 494, Cain v Whyte (1933) 48 CLR 639, and Rozenbes v Kronhill (1956) 95 CLR 407). As counsel pointed out, these cases are consistent with general principles of ‘abuse of process’ discussed in Williams v Spautz (1992) 174 CLR 509 in which, as was…
Cain v Whyte
[1933] HCA 6 Para 1

…tion (see Dowling v Colonial Mutual Life Assurance Society Ltd (1915) 20 CLR 509, McIntosh v Shashoua (1931) 46 CLR 494, Cain v Whyte (1933) 48 CLR 639, and Rozenbes v Kronhill (1956) 95 CLR 407). As counsel pointed out, these cases are consistent with general principles of ‘abuse of process’ discussed in Williams v…
Dowling v Colonial Mutual Life Assurance Society Ltd
[1915] HCA 56 Para 1

…pted recovery of the alleged indebtedness through insolvency administration (see Dowling v Colonial Mutual Life Assurance Society Ltd (1915) 20 CLR 509, McIntosh v Shashoua (1931) 46 CLR 494, Cain v Whyte (1933) 48 CLR 639, and Rozenbes v Kronhill (1956) 95 CLR 407). As counsel pointed out, these cases are consisten…
McIntosh v Shashoua Petitioner
[1931] HCA 56 Para 1

…ss through insolvency administration (see Dowling v Colonial Mutual Life Assurance Society Ltd (1915) 20 CLR 509, McIntosh v Shashoua (1931) 46 CLR 494, Cain v Whyte (1933) 48 CLR 639, and Rozenbes v Kronhill (1956) 95 CLR 407). As counsel pointed out, these cases are consistent with general principles of ‘abuse of…

Legislation cited in this decision · 6

Bankruptcy Act 1966 (Cth)
10, 32, 44(1)(a), 47(2), 49, 51, 52, 52(... 12 mentions (from Para 5)
Federal Magistrates Act 1999 (Cth)
104, 104(3), 52, 79 5 mentions (from Para 1)
Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth)
2.03(1), 4.06(3) 3 mentions (from Para 3)
Civil Procedure Act 2005 (NSW)
100 2 mentions
Bankruptcy Regulations 1996 (Cth)
6.01 1 mention
Federal Magistrates Court Rules 2001 (Cth)
8.01(2) 1 mention