FEDERAL COURT OF AUSTRALIA
ICM Agriculture Pty Ltd v Young [2009] FCA 109
BANKRUPTCY – bankruptcy notice – appeal from Federal Magistrates Court’s order setting aside bankruptcy notice – nature of evidence of debtor’s counter-claim before Federal Magistrate – affidavit verifying statement of claim in proceeding brought by debtor against judgment creditor in District Court – statement of claim and affidavit verifying tendered in evidence before Federal Magistrate, but affidavit not read – distinction between tendering affidavit and reading it – conclusory nature of allegations made in statement of claim – affidavit verifying would not have been admissible if attempted to be read – assignment of bare cause of action for no consideration by company to debtor – whether debtor had a genuine commercial interest sufficient to support assignment – whether assignment was a breach of fiduciary duty owed by debtor as a director of assignor company, to that company.
PERSONAL PROPERTY – choses in action – assignment of bare right of action – need for assignee to have a genuine commercial interest to support assignment.
Bankruptcy Act 1966 (Cth) s 40(1)(g)
Bhagat v Global Custodians Ltd [2002] FCAFC 51 followed
Castle Constructions Pty Ltd v Fekala Pty Ltd (2006) 65 NSWLR 648
Commonwealth v Ling (1993) 44 FCR 397 cited
Ebert v The Union Trustee Co of Australia Ltd (1960) 104 CLR 346 followed
Glew v Harrowell of Hunt and Hunt Lawyers [2003] FCA 373 followed
Hadley v Baxendale (1854) 9 Exch 341(156 ER 145) applied
Monkv The Australian & New Zealand Banking Group Limited (1994) 34 NSWLR 148 followed
National Mutual Property Services (Australia) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514 cited
Re Daley; ex parte National Australia Bank Ltd (1992) 37 FCR 390 distinguished
Re Timothy’s Pty Ltd and the Companies Act [1981] 2 NSWLR 706 citedSalfinger v Niugini Mining (Australia) Pty Ltd (No 3) [2007] FCA 1532 cited
Trendtex Trading Corporation v Credit Suisse [1982] AC 679 citedTolhurst G, The Assignment of Contractual Rights (Hart Publishing, 2006)
ICM AGRICULTURE PTY LTD (ACN 006 077 765)
v DARYL WILLIAM YOUNGNSD 1267 of 2008
LINDGREN J
19 FEBRUARY 2009
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 1267 of 2008
ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA
BETWEEN: ICM AGRICULTURE PTY LTD (ACN 006 077 765)
AppellantAND: DARYL WILLIAM YOUNG
Respondent
JUDGE:
LINDGREN J
DATE OF ORDER:
19 FEBRUARY 2009
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The appeal be allowed.
2.The orders made by the Federal Magistrates Court of Australia on 25 July 2008 in proceeding SYG 3929 of 2007 be set aside, and in lieu thereof it be ordered that:
(a) the application to that Court be dismissed; and
(b) the respondent as applicant in the proceeding in that Court pay the costs of the appellant as respondent to the proceeding in that Court.
3.The respondent pay the appellant’s costs of the appeal.
Note:Settlement and entry of orders is dealt with…
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- Case
- [2009] FCA 109
- Decision Date
CaseChat Overview and Summary
The court reasoned that the affidavit provided by Mr Young, which was intended to verify his statement of claim, did not constitute sufficient evidence of the quantum of the counter-claim. The affidavit merely stated Mr Young's belief in the truth of the allegations in his statement of claim and did not present factual evidence that could be accepted under the rules of evidence. The court noted that a belief or confidence in a claim is not equivalent to evidence of the facts necessary to support it. The court also observed that the statement of claim itself contained conclusory statements rather than factual assertions, which further undermined the admissibility of the material as evidence.
Consequently, the appeal was allowed, and the orders made by the Federal Magistrates Court were set aside. The court ordered that Mr Young's application to set aside the Bankruptcy Notice be dismissed, and Mr Young was directed to pay the costs of the appeal as well as the costs incurred during the trial. The decision underscored the necessity for claimants to present factual evidence to substantiate their claims, particularly in matters involving substantial monetary amounts.
Orders
Orders of the court
1. The appeal be allowed.
2. The orders made by the Federal Magistrates Court of Australia on 25 July 2008 in proceeding SYG 3929 of 2007 be set aside, and in lieu thereof it be ordered that:
(a) the application to that Court be dismissed; and
(b) the respondent as applicant in the proceeding in that Court pay the costs of the appellant as respondent to the proceeding in that Court.
3. The respondent pay the appellant’s costs of the appeal.
Note:
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
Established by: LINDGREN J
As events turned out, however, the appeal was not able to be concluded on the day fixed in any event, and had to be adjourned part-heard. CONSIDERATIONGround 1 – No evidence as to the value of the counter-claim contended for by Mr Young The amount of the judgment debt the subject of the Bankruptcy Notice was $198,278.06. The counter-claim was for unliquidated damages in the terms set out in Mr Young’s statement of claim filed in District Court proceeding 5792 of 2007 (see [57] above). The only evidence supporting the quantum of the claim was Mr Young’s “affidavit verifying” the statement of claim made on 21 December 2007. In that affidavit, Mr Young stated simply:“I believe that the allegations of fact in the statement of claim are true.”The supposed “allegations of fact” as to quantum are to be found under the heading “Relief claimed” in the statement of claim set out at [57] above. The affidavit was not read before the Federal Magistrate. Although Mr Young’s District Court statement of claim and his accompanying verifying affidavit were tendered and admitted (as a single exhibit) before the Federal Magistrate, the affidavit was not read into evidence. Accordingly, for this reason alone there was no evidence of quantum before the Federal Magistrate. If an attempt had been made to read the affidavit as evidence of any facts under the heading “Claim for relief”, there would have been an objection and the affidavit would have been rejected. First, the affidavit was nothing more than a statement of Mr Young’s “belief”; his state of belief was not evidence of any of the primary facts, and was not able to satisfy the test discussed in Glew (set out at [67] above and [79] below). Second, and more importantly, if Mr Young had sworn that the allegations of fact in the statement of claim were true, his affidavit would still have been inadmissible because of the nature of the material in the statement of claim. It was an amalgam of conclusions, rather than a statement of facts. Indeed, before the Federal Magistrate Mr Young did attempt to read an affidavit sworn by him on 21 December 2007 which contained in paragraphs 18 and 19 the very material that appeared under the heading “Relief claimed” in the statement of claim. When objection was taken to the two paragraphs, they were not read. Counsel then appearing for Mr Young (not the Counsel who appeared for him on the present appeal) said that the non-reading of them was of little consequence at that stage because he proposed to tender the statement of claim which would show the monetary value of the counter-claim. Counsel appears to have thought that it sufficed to show how the counter-claim was calculated. But it was not enough for Mr Young to formulate a claim in sweeping conclusory terms and to say on oath that he believed in his claim or was confident that he would be able to sustain it on a hearing: see, for example, Ebert v The Union Trustee Co of Australia Ltd (1960) 104 CLR 346 at 350-351; Bhagat v Global Custodians Ltd [2002] FCAFC 51 at [53].