Hennessy Building Pty Ltd v Pryce
[2022] FCA 198
•8 March 2022
FEDERAL COURT OF AUSTRALIA
Hennessy Building Pty Ltd v Pryce [2022] FCA 198
File number: QUD 437 of 2021 Judgment of: DERRINGTON J Date of judgment: 8 March 2022 Catchwords: BANKRUPTCY – Creditor’s Petition – adjournment pending resolution of proceedings – order made that respondents pay indemnity costs of petitioning creditor – serious unfounded allegations of fraud made by respondents justifying order
LEGAL PROFESSION – allegations of fraud made by solicitor and barrister against litigants and their legal representatives – allegations utterly unfounded and demonstrably false – no care in the making of serious allegations in circumstances where the absence of dishonest conduct easily identifiable
Division: General Division Registry: Queensland National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Number of paragraphs: 7 Date of hearing: 8 March 2022 Counsel for the Applicant: Mr R Gallo Solicitor for the Applicant: Axia Litigation Lawyers Counsel for the First and Second Respondents: Mr F Redmond Solicitor for the First and Second Respondents: Ohlson Lawyers ORDERS
QUD 437 of 2021 BETWEEN: HENNESSY BUILDING PTY LTD ACN 117 587 998
Applicant
AND: SASKIA PRYCE
First Respondent
PETER JAMES MCQUITTY
Second Respondent
ORDER MADE BY:
DERRINGTON J
DATE OF ORDER:
8 MARCH 2022
THE COURT ORDERS THAT:
1.The Creditor’s Petition be adjourned to a date to be fixed.
2.The parties have leave to apply to the Court on two business days’ notice.
3.The respondents pay the applicant’s costs of and incidental to the Creditor’s Petition on an indemnity basis.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
DERRINGTON J:
The creditor’s petition before the Court seeks sequestration orders against the estates of Saskia Pryce, sometimes referred to as Saskia Peek, and Mr Peter James McQuitty. On 9 February 2022, a Registrar of this Court directed that it be heard before a judge of this Court.
The underlying disputation between the parties has a long history involving other substantial litigation, particularly in the District Court of Queensland. Similarly, the bankruptcy proceedings have been protracted. In general terms, during the course of these proceedings, the respondents have raised a wide variety of grounds in order to stave off their obligations to pay the judgment creditor. Some have been fanciful and farfetched. It is apparent that they were raised for the purposes of delay only.
However, the most serious of such grounds relied upon by the respondents was that raised in the Notice of Grounds of Opposition to the creditor’s petition. By it, Mr McQuitty and Ms Pryce, through their legal advisors, alleged that the judgment creditor, Hennessy Building Pty Ltd (Hennessy Building), its director, Mr John Hennessy, Axia Litigation Lawyers, the solicitors Ms Jennifer Lauren Raphael and Mr Adam Brown, and Counsel Mr Peter Travis, had engaged in the fraudulent concealment of certain documents in the course of the District Court proceedings from which the judgment debt which underpins the bankruptcy notice arose. I have read and examined closely all of the material filed in these proceedings and in particular, the respondents’ affidavits and other documents which were relied upon to make those allegations. From that careful consideration, it can only be concluded that:
(a)The allegations of fraudulent concealment against each of the persons identified were absolutely baseless. They were not supported by any evidence at all.
(b)There was no evidence that the documents in question were concealed from the respondents or any other entity. In fact, the evidence makes it pellucidly clear that the documents in question were provided by Hennessy Building and its solicitors, including Ms Raphael and Mr Brown, to the opposing solicitors in the District Court proceedings.
(c)There was, in fact, no duty on the solicitors or Hennessy Building or anyone else to provide the documents in question to any other party or entity. The alleged foundation for suggesting the existence of a duty to disclose them was fanciful, and it is not possible to believe that any reasonable practitioner could have thought otherwise.
(d)It is a matter of grave concern that the falsity of the allegations of fraudulent concealment could have been discovered by the simplest of investigation. A letter, email or telephone call to Axia Lawyers, Ms Raphael or Mr Brown, or even the opposing solicitors in the District Court proceedings would have disclosed that no concealment had occurred.
In summary, the allegations of fraudulent concealment made by the respondents were baseless and bereft of any substance at all. They ought never to have been made. There is not a skerrick of evidence to support them. In fact, the evidence which is available demonstrates that the legal representatives of Hennessy Building acted with the utmost propriety in relation to the documents in question. In particular, in the District Court proceedings, Ms Raphael acted in the best interests of her client by maintaining that the documents were not relevant, but in order to avoid a costly interlocutory application, provided them to the opposing solicitors. Similarly, there is nothing to suggest that Mr Travis of Counsel acted other than with complete propriety at all times. On the basis of the evidence available on this application, it is difficult to avoid the conclusion that the allegations of fraudulent concealment were made in an attempt to intimidate Hennessy Building, its directors, its legal advisors or to otherwise vex and harass them. It is not possible to understand how any legal professional could have made the allegations of such misconduct in any public document.
As all parties who might be affected by a final conclusion on that latter point are not entitled to make submissions on this hearing as to their culpability or otherwise, there is no need to go further. The appropriateness of the making of the allegations and the drawing of the statement of the claim must be adjudicated upon in another forum.
Today, the applicants have sought to resolve the matter with the respondents, and I am prepared to accede to orders agreed upon by the parties which has the effect of adjourning the matter until another date to see if resolution can be achieved. In the circumstances described the order for indemnity costs is more than justified.
The orders I will make are as follows:
1.The Creditor’s Petition be adjourned to a date to be fixed.
2.The parties have leave to apply to the Court on two business days’ notice.
3.The respondents pay the costs of and incidental to the Creditor’s Petition on an indemnity basis.
I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Derrington. Associate:
Dated: 8 March 2022
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