Herat v McLean Holdaway Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Herat v McLean Holdaway Pty Ltd [2014] FCA 816

Citation: Herat v McLean Holdaway Pty Ltd [2014] FCA 816
Parties: BRUCE DULEEP HERAT v MCLEAN HOLDAWAY PTY LTD
File number: NSD 625 of 2014
Judge: FLICK J
Date of judgment: 7 August 2014
Catchwords:

BANKRUPTCY – orders made by consent – service of Bankruptcy Notice within 28 days – whether order stayed – no implied limitation on execution of orders made – need for orders to specify a date for compliance

PRACTICE AND PROCEDURE – orders enforceable upon being entered – an order for costs in a specified sum – need for order to specify date for payment of monies  
Legislation:

Bankruptcy Act1966 (Cth) ss 40, 41, 306
Civil Procedure Act 2005 (NSW) ss 98, 133, 135
Federal Court of Australia Act1976 (Cth) s 43
Legal Profession Act2004 (NSW) s 331, 332A
Uniform Civil Procedure Rules2005 (NSW) rr 36.5, 36.11, 42.34, 50.3

Cases cited:

Atanaskovic v Robey [2014] NSWSC 150
Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119
Bitek Pty Ltd v IConnect Pty Ltd [2012] FCA 506, (2012) 290 ALR 288
Godfrey v Werton Finance Pty Limited [2013] FCA 1057
Harrison v Schipp [2002] NSWCA 213, (2002) 54 NSWLR 738
Hudson v Donald, Unreported, 12 August 1997
Kayserian Nominees (No 1) Pty Ltd v J R Garner Pty Ltd [2008] NSWSC 1011
Kleinwort Benson Australia Limited v Crowl (1988) 165 CLR 71
Kyriackou v Shield Mercantile Pty Ltd [2004] FCA 490, (2004) 138 FCR 324

Mizzi Family Holdings Pty Ltd v Morellini (No 2) [2014] FCA 807
Penning v Steel Tube Supplies Pty Ltd (1988) 18 FCR 568
Re a Debtor [1908] 2 KB 692
Re Emerson; Ex parte Wreckair Pty Ltd (1991) 101 ALR 315
Re Greenhill; Ex parte Myer (NSW) Ltd (1984) 5 FCR 84
Re Moss; Ex parte Tour Finance Ltd (1969) 13 FLR 101
Re Pannowitz; Ex parte Wilson (1975) 38 FLR 184
Re Walsh (1982) 65 FLR 87
Reasonable Endeavours Pty Ltd v Dennehy [2001] FCA 188, (2004) 107 FCR 144
Seovic Civil Engineering Pty Ltd v Groeneveld [1999] FCA 255, (1999) 87 FCR 120
Skouloudis v St George Bank Ltd [2008] FCA 1765, (2008) 173 FCR 236
Tolson v Jervis (1845) 8 Beav 364
Walsh v Deputy Federal Commissioner of Taxation (1984) 156 CLR 337

Date of hearing: 22 July 2014
Place: Sydney
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 34
Counsel for the Applicant: The Applicant appeared in person
Counsel for the Respondent: Mr J J Loofs
Solicitor for the Respondent: Burridge & Legg

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 625 of 2014
BETWEEN:

BRUCE DULEEP HERAT
Applicant
AND:

MCLEAN HOLDAWAY PTY LTD
Respondent

JUDGE:

FLICK J

DATE OF ORDER:

7 AUGUST 2014

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The Application filed on 20 June 2014 is dismissed.

2.The Applicant is to pay the…

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Details
Case
[2014] FCA 816
Decision Date

CaseChat Overview and Summary

This case involves the Applicant, Mr Herat, and the Respondent, McLean Holdaway Pty Ltd. Mr Herat filed an application to have orders made by consent in the Supreme Court stayed. The orders required him to pay $333,901 to the Respondent. The Federal Court heard the case and dismissed the application. The court held that the orders did not require a specified time for compliance and were not ambiguous. The orders became enforceable upon being entered, and there was no need for the orders to specify a date for payment of the monies.

The legal issue before the court was whether the orders made by consent in the Supreme Court were ambiguous and required a specified time for compliance. The court found that Rule 36.5 of the Uniform Civil Procedure Rules did not require the orders to specify a time for compliance. The court also found that there was no ambiguity in the orders made on 6 May 2014. The court held that the orders were enforceable upon being entered, and there was no need for the orders to specify a date for payment of the monies. The court rejected the argument that the orders were subject to an implied stay for 28 days.

The court dismissed the application and ordered that the Applicant pay the costs of the Respondent. The court found that there was no evidence of the Applicant's subjective intention when consenting to the orders made on 6 May 2014. The court also found that any ambiguity in the orders was irrelevant because the orders were unambiguous. The court held that the orders became enforceable upon being entered, and there was no need for the orders to specify a date for payment of the monies. The court rejected the argument that the orders were subject to an implied stay for 28 days.

Orders

Orders of the court

1. The Application filed on 20 June 2014 is dismissed.

2. The Applicant is to pay the costs of the Respondent.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Central to this submission was r 36.5 of the Uniform Civil Procedure Rules which provides as follows:Time for compliance with judgments and orders (1)If a judgment or order requires a person to do an act within a specified time, the court may, by order, require the person to do the act within another specified time. (2)If a judgment or order requires a person: (a)to do an act forthwith or forthwith on a specified event, or (b)to do an act but does not specify a time within which he or she is required to do the actthe court may, by order, require the person to do the act within a specified time.The submission advanced by Mr Herat founded upon r 36.5 involved three steps, namely:·any order of the Supreme Court, to be enforceable, requires the specification of a time for compliance; ·if no time for compliance is specified, the order is necessarily ambiguous; and ·even if the existing orders for the payment of $273,901 and $60,000 were to be construed as requiring compliance “forthwith”, such an order is ambiguous.Rule 36.5, it was submitted, necessarily required an order to “specify a time” within which an act – such as the payment of monies – was to take place. Common to the argument that the orders were subject to an “implied stay” for 28 days is the present contention that the orders made on 6 May 2014 cannot found a bankruptcy notice until a time for payment is specified – and that period may well exceed 28 days. The argument is rejected. It fails at the outset. An order that monies be paid, including orders of the kind made on 6 May 2014, may not be enforced until entered (Civil Procedure Act s 133(1)) but thereafter can be enforced. In the past, a party had “a right to avail himself of any error or of the most technical objection” to the manner in which an order had been “entered”: Tolson v Jervis (1845) 8 Beav 364 at 366 per Lord Langdale MR. As at present, the requirements as to the manner in which an order of the Supreme Court is to be entered are set forth in r 36.11 of the Uniform Civil Procedure Rules. But no question is raised in the present proceeding disputing the fact that the orders made on 6 May 2014 were properly entered. Once entered, it is not considered that r 36.5 is to be construed as requiring the orders as made to specify a time within which the amount of $333,901 was to be paid. Authorities relied upon by Mr Herat as to an order requiring an act to be done “forthwith” (e.g., Kayserian Nominees (No 1) Pty Ltd v J R Garner Pty Ltd [2008] NSWSC 1011) are, with respect, of no immediate relevance. In the event that this argument was rejected, Mr Herat receded to a fall-back position. The fall-back position was that any ambiguity in the manner in which the orders made on 6 May 2014 was to be construed by reference to the subjective intention of the parties when consenting to the orders made on that date. His subjective intention, so it was submitted from the bar table, was that he never contemplated that the orders were enforceable immediately upon their being entered. But that fall-back position is without substance either because: ·there is no evidence as to what was the subjective intention of Mr Herat; or because, had that been his intention:·it could readily have been accommodated by an order that the time for compliance with the orders for payment be not before a date specified. But no such order was sought by Mr Herat and no such order was made on 6 May 2014.Left to one side is any underlying consideration as to why evidence of any such intention would, in any event, have been relevant or admissible to any question as to the construction of what were otherwise unambiguous orders of a superior court of record.The costs order – an amount exceeding the amount due?

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.