Ivory v Telstra Corporation Limited - [2010] FMCA 123

FEDERAL MAGISTRATES COURT OF AUSTRALIA

IVORY v TELSTRA CORPORATION LIMITED & ORS

[2010] FMCA 123

BANKRUPTCY – Bankruptcy Notice – application to set aside bankruptcy notice – whether notice properly served – whether debtor entitled to indemnity from third party a relevant consideration.

Bankruptcy Act 1966, s.40
Bankruptcy Regulations 1996, r.16.01
Judiciary Act 1903, s.65

Australian and New Zealand Banking Group Limited v Menso [2006] FMCA 1522
Gargan v Commonwealth of Australia [2005] NSWSC 1178

Applicant:

KENNETH CLYDE IVORY

Respondents:

TELSTRA CORPORATION LIMITED ACN 051 775 556 AND EACH OF ITS BOARD OF DIRECTORS AND ITS COMPANY SECRETARY AND ITS CHIEF FINANCIAL OFFICER

File Number:

BRG 836 of 2008

Judgment of:

Wilson FM

Hearing dates:

27 March, 3 April 2009

Date of Last Submission:

3 April 2009

Delivered at:

Brisbane

Delivered on:

26 February 2010

REPRESENTATION

Counsel for the Applicant:

N/A

Solicitors for the Applicant:

In person

Counsel for the Respondent:

Mr Sullivan S.C.

Solicitors for the Respondent:

Mallesons Stephen Jaques

ORDERS

The separate questions ordered to be decided by the Court on 6 February 2009 and 20 March 2009 be answered as follows:
(i)The Bankruptcy Notice should not be set aside on the grounds that:
(a)Service of the notice was not properly effected, because the notice was properly served;
(b)The judgment debtor is entitled to be indemnified by the Commonwealth of Australia against the judgment debt, because that is not a ground upon which to set aside the Bankruptcy Notice, and in any event the applicant is not so entitled;
(c)The judgment sought to be relied upon by the respondent Telstra Corporation Limited is stale and cannot be used to support the Bankruptcy Notice, because the judgment relied upon was made on 3 September 2008;
(d)The Bankruptcy Notice is invalid because it only has attached to it the order of the Deputy Registrar made on 3 September 2008, because such order is sufficient for the purposes of the Bankruptcy Act.
The names of all respondents other than Telstra Corporation Limited be removed from these proceedings.
The applicant pay the costs of the respondent Telstra Corporation Limited of and incidental to the hearing of the separate questions.
The matter otherwise be listed for directions before Federal Magistrate Jarrett on 18 March 2010 at 9.30am.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
BRISBANE

BRG 836 of 2008

KENNETH CLYDE IVORY

Applicant

And

TELSTRA CORPORATION LIMITED
ACN 051 775 556 AND EACH OF ITS BOARD OF DIRECTORS AND ITS COMPANY SECRETARY AND ITS CHIEF FINANCIAL OFFICER

Respondents

REASONS FOR JUDGMENT

The applicant seeks to set aside Bankruptcy Notice QN 1443/2008. The respondent Telstra Corporation Ltd had previously had issued Bankruptcy Notice QN 1263/2008. On 5 December 2008, at Telstra’s request, Logan J set aside Bankruptcy Notice QN 1263/2008. His Honour ordered that the proceedings continue in respect of Bankruptcy Notice QN 1443/2008. The matter was transferred to this Court.
On 6 February 2009 this Court ordered:
(1)That the court will deal with the following as a separate question:
Whether…

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.

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Details

Case: [2010] FMCA 123
Decision Date: 26 February 2010

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Ivory v Telstra Corporation Limited was heard by Justice Gilmour. The dispute concerned a Bankruptcy Notice served by Telstra Corporation Limited against the applicant, Ivory. The key legal issues centred around the validity of the Bankruptcy Notice and whether it should be set aside on various grounds.

The court was tasked with determining whether the Bankruptcy Notice was properly served, whether the applicant could be indemnified by the Commonwealth against the judgment debt, whether the judgment relied upon by Telstra was too old to support the Bankruptcy Notice, and whether the Bankruptcy Notice was invalid due to the attachment of an order rather than the judgment itself. The court also considered whether other respondents should be removed from the proceedings and the question of costs.

The court ruled that the Bankruptcy Notice was validly served and that the other grounds for setting it aside were not substantiated. The court held that service of the notice was proper and that the applicant's entitlement to indemnification by the Commonwealth was not a basis to set aside the notice. The court found that the judgment relied upon was recent enough to support the notice and that the attachment of the Deputy Registrar's order was sufficient. Consequently, the court ordered that the names of all respondents other than Telstra Corporation Limited be removed from the proceedings. Additionally, the court ordered the applicant to pay the costs of Telstra Corporation Limited and directed the matter to be listed for further directions.

Orders

Orders of the court

The separate questions ordered to be decided by the Court on 6 February 2009 and 20 March 2009 be answered as follows:

(i) The Bankruptcy Notice should not be set aside on the grounds that:

(a) Service of the notice was not properly effected, because the notice was properly served;

(b) The judgment debtor is entitled to be indemnified by the Commonwealth of Australia against the judgment debt, because that is not a ground upon which to set aside the Bankruptcy Notice, and in any event the applicant is not so entitled;

(c) The judgment sought to be relied upon by the respondent Telstra Corporation Limited is stale and cannot be used to support the Bankruptcy Notice, because the judgment relied upon was made on 3 September 2008;

(d) The Bankruptcy Notice is invalid because it only has attached to it the order of the Deputy Registrar made on 3 September 2008, because such order is sufficient for the purposes of the Bankruptcy Act.

The names of all respondents other than Telstra Corporation Limited be removed from these proceedings.

The applicant pay the costs of the respondent Telstra Corporation Limited of and incidental to the hearing of the separate questions.

The matter otherwise be listed for directions before Federal Magistrate Jarrett on 18 March 2010 at 9.30am.

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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