Hill v James (No.3)
[2006] FMCA 622
•21 April 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HILL & ANOR v JAMES (No.3) | [2006] FMCA 622 |
| BANKRUPTCY − Where proceedings dismissed by consent − where supporting creditor appeared and requested adjournment at concluding stages of matter − whether in best interests of parties to adjourn proceedings to enable creditor to be substituted. |
| Hill & Anor v James (No.1) [2006] FMCA 483 |
| First Applicant: | TERRY DONALD HILL |
| Second Applicant: | PETER DAVID RODGERS |
| Respondent: | DAVID ANTHONY JAMES |
| File number: | SYG1872 of 2005 |
| Judgment of: | Raphael FM |
| Hearing date: | 21 April 2006 |
| Date of last submission: | 21 April 2006 |
| Delivered at: | Sydney |
| Delivered on: | 21 April 2006 |
REPRESENTATION
| Solicitors for the Second Applicant: | T. Breene Breene & Breene Solicitors |
| Counsel for the Respondent: | D. Allen |
| Solicitors for the Respondent: | Catalyst Legal |
| Solicitors for the Supporting Creditor: | P. Hegarty Cowley Hearne Lawyers Pty Limited |
ORDERS
Orders are made in accordance with consent orders initialled by me and placed with the papers.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1872 of 2005
| TERRY DONALD HILL |
First Applicant
DAVID RODGERS
Second Applicant
And
| DAVID ANTHONY JAMES |
Respondent
REASONS FOR JUDGMENT
This matter, which was the hearing of a petition against the respondent debtor brought originally by the first applicant but taken over by the second applicant, the first applicant's bankruptcy trustee, had been adjourned until today on 30 March 2006 after certain orders were made by consent on that date. The application for the sequestration order had been due to be heard on 29 and 30 March but I was also asked to deal with an application by the respondent, who argued that neither the first nor the second applicant had any standing to bring the petition because the first applicant had assigned his right to the second applicant and the second applicant's debt had not arisen as at the date of the petition.
I gave two judgments on 30 March, one dealing with the matter that I have just referred to and the other dealing with the filing of certain affidavits. It was common knowledge at the time that both those judgments were to be appealed. The parties then entered into certain discussions and negotiations which resulted in the consent orders of that day. I understand that appeals have been commenced against the two judgments.
In the meantime the parties seem to have resolved their difficulties and I have been presented today with consent orders. Those consent orders are between the second applicant and the respondent. The first applicant has not appeared here and has been informed of the agreement reached. In my judgment Hill & Anor v James (No.1) [2006] FMCA 483, I came to the conclusion that the second applicant should be substituted for the first applicant and that there was nothing in the argument that his debt had not arisen. For this reason, I was prepared to dismiss the proceedings in accordance with the consent orders notwithstanding that they had not been signed by the first applicant. In my view the first applicant has no standing in this matter.
This morning when the matter came before me I was presented with a notice of appearance on behalf of a company known as Wine Source (NSW) Pty Limited. This company claims to be a supporting creditor. I have no details of the debt, although I am told by Mr Hegarty from the bar table that the figure is about $60,000. I am also advised, again from the bar table by Mr Allen, that the debt is disputed and I am further informed that there is no judgment.
I understand that the debt in question is not a new debt. It is at least a year old, but up until today there has been no appearance on behalf of this creditor. I am asked by Mr Hegarty not to make the consent orders, but to adjourn the matter for approximately 14 days so that he can take instructions as to whether his client wishes to be substituted. Mr Allen argues that a hard fought proceeding has now been settled and that it is in the best interests of all parties that the matter be concluded in accordance with the consent orders. If that was not done and if the matter continued, the appeals against my original judgments could continue and all parties would be preparing for those appeals at extra expense whilst Wine Source made up its mind whether or not it wished to be substituted. There would then be an argument as to the validity of the substitution on the grounds that the debt was disputed.
I have taken all these matters into consideration in deciding not to grant Mr Hegarty the adjournment he asks and to dismiss the proceedings in accordance with the consent orders. I feel that it is in the best interests of the parties to these proceedings and any other potential creditors of Mr James that these particular proceedings now be ended and that if anyone else wishes to take action against Mr James, they do so in the normal way, allowing him the opportunity to defend and an equal opportunity to make payment if he believes the debt was properly incurred.
This exercise of my discretion is not indicative of any general view as to the rights of persons wishing to be substituted as creditors, but I do feel that in this particular case when the situation with the parties has probably been known in the wine industry for some considerable time, that if the proposed additional creditor had really wished to take action, it might have done so considerably earlier than at the death knock of the current proceedings.
Therefore I make orders in accordance with the consent orders initialled by me and placed with the papers. I congratulate the parties on bringing this matter to a conclusion.
I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of Raphael FM.
Associate:
Date: