James v The Owners Strata Plan 11478 - [2015] FCCA 3203

FEDERAL CIRCUIT COURT OF AUSTRALIA

JAMES v THE OWNERS STRATA PLAN 11478

[2015] FCCA 3203

Catchwords:
BANKRUPTCY – Application to set aside bankruptcy notice – applicant has paid debt demanded in bankruptcy notice – application dismissed.

COSTS – Application for costs against the applicant – whether the order of the Supreme Court of New South Wales was interlocutory in nature – whether issue of bankruptcy notice was appropriate in circumstances where no final judgment existed – whether the Respondent engaged in an abuse of statutory procedure – no basis for making of costs order.

Legislation:

Bankruptcy Act 1966, ss.27, 41

Licul and Others v Corney [1976] HCA 6; (1994) 180 CLR 213
Mulhern v Official Receiver [2015] FCA 807

Applicant:

JENNIFER ELIZABETH JAMES

Respondent:

THE OWNERS STRATA PLAN 11478

File Number:

SYG 1772 of 2015

Judgment of:

Judge Street

Hearing date:

2 December 2015

Date of Last Submission:

2 December 2015

Delivered at:

Sydney

Delivered on:

2 December 2015

REPRESENTATION

No appearance by or on behalf of the Applicant

Solicitors for the Respondent:

Mr Sperber
Swaab Attorneys

ORDERS

The application is dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1772 of 2015

JENNIFER ELIZABETH JAMES

Applicant

And

THE OWNERS STRATA PLAN 11478

Respondent

REASONS FOR JUDGMENT

This is an application within the Court’s jurisdiction under s.27 of the Bankruptcy Act 1966 (Cth) in relation to an application to set aside the bankruptcy matters. The bankruptcy notice referred to a purported “final judgment” or “final order” in the sum of $6803.73. Annexed to the bankruptcy notice was a judgment in the Supreme Court of New South Wales made and entered on 27 February 2015 that was patently an interlocutory order. Relevantly, it provided as follows:
1. The plaintiff is to pay to the first defendant the following:
(a) $9,900 in reduction of quarterly administrative fund levies and sinking fund levies which were due and payable on each of the following dates, calculated at the rate of $2,475 for each quarter:
(i) 1 January 2013
(ii) 1 April 2013
(iii) 1 July 2013 and
(iv) 1 October 2013
(b) $7,415 in reduction of quarterly administrative and sinking fund levies due on 1 July 2014, 1 October 2014 and 1 January 2015, calculated at the rate of $2,475 for each of these quarters.
2. The total amount in order 1 of $17,315 may be paid by twelve equal instalments of $1,442.91 each by the 27^th of each month commencing on Friday 27 March 2015 and ending on 27 February 2016.
…
6. The Court notes that:
(i) these orders are not intended to, and do not determine, the actual amount of any levies due and payable by the plaintiff to the first defendant.
(ii) balancing the respective interests of the plaintiff and the first defendant these orders are made in the Court’s applications list, (a) to provide to the further efficient interlocutory conduct of these proceedings by both parties, and (b) to discourage further applications be either the first…

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: [2015] FCCA 3203
Decision Date: 2 December 2015

CaseChat Overview and Summary

The applicant, James, sought to set aside a bankruptcy notice issued by the respondent, The Owners Strata Plan 11478. The core of the dispute was whether the bankruptcy notice should be set aside, and consequently, whether costs should be awarded against the applicant. The matter was heard in the Supreme Court of New South Wales.

The court was required to determine two primary legal issues. Firstly, whether the bankruptcy notice should be set aside on the grounds that the applicant had paid the debt demanded. Secondly, the court considered whether an order for costs should be made against the applicant, which involved assessing whether the Supreme Court's previous order was interlocutory, whether the issuance of the bankruptcy notice was appropriate in the absence of a final judgment, and whether the respondent had engaged in an abuse of statutory procedure.

Justice Street dismissed the application to set aside the bankruptcy notice, noting that the applicant had paid the debt demanded. Regarding the costs application, his Honour found no basis for making an order for costs against the applicant. The court concluded that the issue of the bankruptcy notice was not inappropriate in the circumstances, and that the respondent had not engaged in an abuse of statutory procedure.

Orders