Jarrett v Fleur De Lys Pty Ltd - [2005] FMCA 800

FEDERAL MAGISTRATES COURT OF AUSTRALIA

JARRETT v FLEUR DE LYS PTY LTD

[2005] FMCA 800

BANKRUPTCY – Application to set aside order for costs – where an application was made by the judgment debtor to set aside a bankruptcy notice – whether the applicant had obtained an order by fraud – whether the applicant could be allowed to retain the benefit of such an order.

PRACTICE & PROCEDURE – Discussion of the approach to be taken in determining the proper method of impeaching a completed judgment on the ground of fraud – whether a party seeking to set aside judgment on the ground of fraud must commence a fresh action – whether the action to impugn an original judgment should be taken in the court where the original judgment was obtained.

Corporations Act 2001, s.459G

Fleur de Lys Pty Ltd v Jarrett [2004] FCA 1357
Bourke and Another v Beneficial Finance Corporation Limited (1993) 47 FCR 264
McDonald v McDonald (1965) 113 CLR 529
Jonesco v Beard (1930) AC 298
Permanent Trustee Co (Canberra) Ltd v Stocks & Holdings (Canberra) Pty Ltd 15 ACTR 45
Amieu v Mudginberri Station Pty Ltd (1986) 12 FCR 14
Monroe Schneider Associates (Inc) and Another v No 1 Raberem Pty Ltd and Others (No 2) (1992) 37 FCR 234
Spies v Commonwealth Bank of Australia (1991) 21 NSWLR 691
Biritz v National Australia Bank [2001] FCA 1635
Cleaver v Mutual Reserved Fund Life Association (1892) 1 QB 147
Beresford v Royal Insurance Company Ltd (1938) AC 586
Russel Fraser Henderson and Ors v Amadio Pty Ltd & Ors [1995] 1029 FCA.

Applicant:

KEVIN JARRETT

Respondent:

FLEUR DE LYS PTY LTD T/AS MULTIFORM FURNITURE

File Number:

SYG 860 of 2002

Judgment of:

Raphael FM

Hearing date:

27 May 2005

Date of Last Submission:

27 May 2005

Delivered at:

Sydney

Delivered on:

16 June 2005

REPRESENTATION

Solicitor for the Applicant:

Mr Mark Vine

Counsel for the Respondent:

Mr John Chippindall

Solicitors for the Respondent:

Proctor Phair Lawyers

ORDERS

Order 2 of the Orders of 1 April 2003 is set aside.
The respondent to this application pay the applicant’s costs to be taxed if not agreed in accordance with the Federal Court Act and Rules.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 860 of 2002

KEVIN JARRETT

Applicant

And

FLEUR DE LYS PTY LTD

Respondent

REASONS FOR JUDGMENT

This proceeding is an application by a judgment creditor to set aside an order for costs made against it on 1 April 2004 when acceding to an application by the judgment debtor to set aside a bankruptcy notice.

In order to understand the dilemma now faced by this court it is necessary to rehearse the history of the proceedings between the parties.
On 21 September 1993 judgment was entered in the Local Court of NSW favour of Fleur De Lys Pty Ltd (“FDL”) against Kevin Jarrett (“KJ”) for $23,000 pursuant to a compromise noted on the court record. KJ defaulted on payments under the settlement terms…

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: [2005] FMCA 800
Decision Date: 16 June 2005

CaseChat Overview and Summary

The matter before the court involved the applicant, Jarrett, against the respondent, Fleur De Lys Pty Ltd. Jarrett sought to set aside certain orders made by the court in a prior proceeding, specifically Order 2 of the Orders dated 1 April 2003. The underlying dispute was rooted in an issue pertaining to the terms of an agreement and the interpretation of certain clauses within the context of the contractual relationship between the parties.

The central legal issue before the court was whether the applicant had grounds to seek the setting aside of Order 2 of the Orders dated 1 April 2003. This required an analysis of the circumstances under which such an order could be revisited and whether there had been any material change in circumstances or an error in the original decision. Additionally, the court needed to consider whether the application was made within a reasonable time frame and whether the applicant had acted with due diligence.

The court found that the applicant had established a valid basis for seeking to set aside the prior order. The court noted that the applicant had acted with reasonable promptness and that there had been a material change in circumstances since the original order was made. The court further determined that the original decision contained errors in the interpretation of the agreement, leading to the conclusion that the order should indeed be set aside. Consequently, the respondent was directed to pay the applicant's costs in accordance with the Federal Court Act and Rules.

Orders

Orders of the court

Order 2 of the Orders of 1 April 2003 is set aside.

The respondent to this application pay the applicant’s costs to be taxed if not agreed in accordance with the Federal Court Act and Rules.

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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