Jain v Clindo Pty Ltd

[2004] FMCA 442

FEDERAL MAGISTRATES COURT OF AUSTRALIA

JAIN v CLINDO PTY LTD [2004] FMCA 442

BANKRUPTCY – Application to set aside bankruptcy notice – where applicant debtor and respondent creditor parties to a joint venture – where applicant defaulted under the Joint venture agreement which resulted in proceedings in the Supreme Court – where applicant ordered to pay costs of the proceedings – where respondent used joint venture funds to pay said costs – where judgment debt provides foundation for the bankruptcy notice – whether funds raised by the respondent creditor were part of the joint venture funds – whether respondent entitled to use joint venture funds and simply account to the joint venture the sum borrowed – whether respondent had improperly used joint venture funds to pay debt and was in breach of fiduciary duty to applicant – whether the application of joint venture monies extinguished the obligation of the applicant – where Registrar extended time for compliance with bankruptcy notice – whether in doing so the Registrar miscarried in the exercise of his discretion.

Bankruptcy Act 1966 (Cth), ss.30, 41(6A), (7)

The Laws of Australia (2004)WD Duncan (Ed), Joint Ventures Law in Australia (1994)
Goodwin v Duggan & Ors (1996) 41 NSWLR 158
United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1

Applicant: NARENDRA JAIN

Respondent:

CLINDO PTY LIMITED

ACN 006 175 433

File No: SZ 1149 of 2004

Delivered on: 19 July 2004

Delivered at: Sydney

Hearing dates: 1 & 15 June 2004

Judgment of: Raphael FM

REPRESENTATION

Counsel for the Applicant: Mr D Smallbone

Solicitors for the Applicant: Moloney Lawyers

Counsel for the Respondent: Mr J Johnson

Solicitors for the Respondent: Sally Nash & Co

ORDERS

1. The bankruptcy notice No. NN693/04 issued on 16 March 2004 is set aside.

2. The respondent pay the applicant’s costs to be taxed if not agreed according to the Federal Court Act and Rules.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SZ 1149 of 2004

NARENDRA JAIN

Applicant

And

CLINDO PTY LIMITED
ACN 006 175 433

Respondent

REASONS FOR JUDGMENT

1. These are proceedings to set aside a bankruptcy notice No NN693/04 issued by the Official Receiver for the Bankruptcy District of New South Wales on 16 March 2004 at the request of the respondent against the applicant.  The bankruptcy notice seeks payment of a debt of $25,152.61 together with interest of $207.07.  The debt is based upon a judgment of the Supreme Court of New South Wales entered on 9 February 2004 for assessed costs of proceedings between the parties ordered by Barrett J on 18 April 2002 to be paid by the applicant and two other parties to a joint venture agreement to which the respondent was the fourth party.

2. The matter first came to the court by way of an application dated 19 April 2004 and said to be an application under ss.30 and 41(6A) of the Bankruptcy Act 1966 (Cth) (the “Act”). The application stated that it was made on the basis that:

   The judgment obtained by…