Jensen v Queensland Law Society Inc

[2004] FMCA 666

FEDERAL MAGISTRATES COURT OF AUSTRALIA

JENSEN v QUEENSLAND LAW SOCIETY INC [2004] FMCA 666

BANKRUPTCY – Practice and procedure.

Bankruptcy Act 1966 (Cth), s.40(1)(g)

Briess v Woolley (1954) AC 333
Wardley Australia Limited v Western Australia (1992) 175CLR 514

Applicant: PETER JENSEN

Respondent: QUEENSLAND LAW SOCIETY INCORPORATED

File No: BZ328 of 2004

Delivered on: 16 August, 2004

Delivered at: Brisbane

Hearing date: 16 August, 2004

Judgment of: Jarrett FM

REPRESENTATION

The Applicant appeared in person.

Counsel for the Respondent: Mr. M. Martin

Solicitors for the Respondents: McCullough Robertson

ORDERS

1. The application is dismissed.

2. The applicant pay the respondent's costs of and incidental to the application, including the reserved costs of 2 August 2004, to be taxed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
BRISBANE

BZ328 of 2004

PETER JENSEN

Applicant

And

QUEENSLAND LAW SOCIETY INCORPORATED

Respondent

REASONS FOR JUDGMENT

(ex tempore)

(Revised from the transcript)

The application

1. This is an application by Peter Jensen ("the debtor") to set aside a bankruptcy notice issued by the Queensland Law Society Incorporated ("the creditor") on 1 June 2004.  The application filed on 25 June 2004 specifies that it is an application "to set aside bankruptcy notice under sections 30, 40 and 41of the Bankruptcy Act 1966" ("the Act").  In particular, the debtor claims that he has a counter-claim, set-off or cross demand against the creditor equal to or exceeding the amount of the judgment debt against him, and being a counter-claim, set-off or cross demand that he could not have set up in the action or proceeding in which the judgment or order was obtained.

2. The creditor has taken a preliminary point and says that the application ought be dismissed because the set-off, counter-claim or cross demand that the debtor wishes to set up is one that could have been prosecuted by him in the Supreme Court of Queensland, in the action in which the creditor obtained judgment against the debtor.

Background

1. The bankruptcy notice is based upon a judgment of the Supreme Court of Queensland given on 20 March 2003 for a sum of $589,772.88.  The judgment was given upon the creditor's application for summary judgment.  It was not opposed by the debtor.  Certainly no counter-claim was made, and there was no attempt to establish any set off against the claim bought by the creditor.

2. It is said by the debtor that the counter-claim, cross demand and set-off that he wishes to pursue was not open to him at the time of the judgment in the Supreme Court.  In his affidavit filed on 25 June 2004 he says this:

   (4) The bankruptcy notice is based on a summary judgment of the Supreme Court of Queensland as appears from a copy of the judgment attached to the bankruptcy notice.  I did not oppose the respondent's application for summary judgment because I did not doubt the truth of the respondent's affidavit evidence that it suspended my right to practice as a solicitor and was appointed receiver of my property on 25 July 2001. 

   (5) I was until 23 July 2001 a solicitor with a busy practice in Gold Coast City.  The respondent did on that day state and has continuously since then on numerous occasions restated that it had by valid resolutions suspended my right of practice and been appointed receiver of my property. 

   (6) I now believe on reasonable grounds that the alleged resolutions are invalid and, consequently, my right of practice was never suspended and no receiver was appointed.  Those grounds are the respondent's statements in some of its official publications, copies of which will be produced at the hearing.

   (7) My claim (to be commenced in the Supreme Court or the Federal Court) is for damages for conversion, deceit, trespass and breach of section 52 of the Trade Practices Act 1974 and its Queensland equivalent. Even without aggravated or exemplary damages, my claim will exceed the judgment debt because just the real estate component of the property allegedly in receivership was/in worth over one million dollars and thereby exceeds the amount claimed in the bankruptcy notice by $410,227.12, at least.

3. In answer to the creditor's submissions on the preliminary point, the debtor contends that his causes of action in deceit and for breach of the Trade Practices Act1974 ("the TPA") accrue only when he becomes aware that - to put it bluntly- he had been lied to.

4. An action in deceit is an action for damages in tort.  It is plain that once a relevant misrepresentation of fact has been made with the requisite intention, and that is relied upon by the representee who thereby suffers damage, the cause of action is complete: Briess v Woolley (1954) AC 333.

5. In this case, Mr Jensen says he did not become aware that he had been lied to until the day before he went to prison in May of 2003.  But that fact, it seems to me on the authority that I have referred to, is irrelevant.  What is relevant is that a misrepresentation of fact was made to him, that he relied on it, and that he thereby suffered loss.  That he relied on what he says was a lie by the creditor cannot be doubted.  He says as much in his affidavit, to which I have already referred.

6. As Counsel for the creditor contends, once the receiver was appointed to the debtor's property, if the receiver was wrongfully appointed the debtor suffers damage.  The cause of action in deceit at least, was complete at the point in time that the judgment was given in the Supreme Court of Queensland.

7. The debtor also relies on a cause of action under s.52 of the Trade Practices Act1974.  Section 82 of that Act gives a party who suffers loss and damage by reason of a contravention of the Act an entitlement to recover that loss and damage.  That cause of action, it seems to me, was also complete at the time the Supreme Court of Queensland was seized of the matter.  That was a cause of action that the debtor could have raised in those proceedings: Wardley Australia Limited v Western Australia (1992) 175CLR 514.

8. In those circumstances, it seems to me that the counter-claim for deceit and breach of s.52 of the Trade Practices Act was open to the debtor at the time the matter was before the Supreme Court of Queensland. 

9. Similarly, to the extent that the debtor would be entitled to damages for the wrongful appointment of receivers, it seems to me that that cause of action was also available at all times after the receivers were appointed.  And it is not to the point that the debtor now says that because of information that has subsequently come to his knowledge, he did not know of the cause of action that was available to him.  He does not suggest that he did not have available to him the means of ascertaining the true state of affairs insofar as his suspension from practice is concerned.  Indeed he says in his affidavit that the grounds relied upon to show that the suspension and the appointment of the receivers was invalid "…are the respondent's statements in some of its official publications, copies of which will be produced at the hearing".

10. In those circumstances it seems to me that the application to set aside the bankruptcy notice must fail.

11. I will order that the applicant pay the respondent's costs of and incidental to the application, including reserved costs of 2 August 2004, to be taxed pursuant to the Federal Court Rules.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Jarrett FM

Associate:  Susan Haysom

Date: 1 October 2004