Jessup v Sct Townsville Pty Ltd
[2008] FMCA 393
•1 April 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| JESSUP & ANOR v SCT TOWNSVILLE PTY LTD | [2008] FMCA 393 |
| BANKRUPTCY – Declaration as to payment of monies – preferential payments – application for summary judgment – relevant considerations. |
| Bankruptcy Act 1966, s.121 Federal Magistrates Act 1999, s.17A Federal Magistrates Court Rules 13.07 Uniform Civil Procedure Rules 1999 (Qld), rr.292, 293 |
| Deputy Commissioner of Taxation v Salcedo [2005] QCA 227 Queensland University of Technology v Project Constructions (Aust) P/L (In Liq) [2003] 1 Qd R 259 Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 Jessup v Lawyers Private Mortgages Ltd & Ors [2006] QSC 003 Vivid Entertainment v Digital Sinema Australia Pty Ltd [2007] FMCA 157 |
| Applicant: | IAN DAVID JESSUP & MOIRA KATHLEEN CARTER AS TRUSTEES IN BANKRUPTCY OF THE BANKRUPT ESTATES OF LIONEL BERNARD JOSEY & LYNNE MARIE JOSEY |
| Respondent: | SCT TOWNSVILLE PTY LTD (ACN 101 182 585) |
| File number: | BRG 538 of 2007 |
| Judgment of: | Coker FM |
| Hearing date: | 30 January 2008 |
| Date of last submission: | 30 January 2008 |
| Delivered at: | Townsville |
| Delivered on: | 1 April 2008 |
REPRESENTATION
| Solicitors for the Applicant: | Connolly Suthers Lawyers |
| Solicitors for the Respondent: | Ruddy Tomlins & Baxter |
ORDERS
The Application for summary judgment filed on 13 November 2007 be dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT TOWNSVILLE |
BRG 538 of 2007
| IAN DAVID JESSUP & MOIRA KATHLEEN CARTER AS TRUSTEES IN BANKRUPTCY OF THE BANKRUPT ESTATES OF LIONEL BERNARD JOSEY & LYNNE MARIE JOSEY |
Applicant
And
| SCT TOWNSVILLE PTY LTD (ACN 101 182 585) |
Respondent
REASONS FOR JUDGMENT
On 26 June 2007, the applicants who are the trustees in bankruptcy of the bankrupt estates of Lionel Bernard Josey and Lynne Marie Josey filed an Application in which they sought orders in these terms:
1. A declaration that the monetary transfer the subject of the Statement of Claim filed herewith is void as against the Applicants in their capacity as Trustees in Bankruptcy of the bankrupt estates of Lionel Bernard Josey and Lynne Marie Josey;
2. An order directing the Respondent to pay to the Applicants in their capacity as Trustees in Bankruptcy of the bankrupt estates of Lionel Bernard Josey and Lynne Marie Josey the value of the monetary consideration the subject of the Statement of Claim filed herewith, being the sum of ONE HUNDRED AND THIRTY ONE THOUSAND ONE HUNDRED AND FIVE DOLLARS AND FORTY SEVEN CENTS ($131,105.47);
3. Costs
The Application is brought pursuant to the provisions of s.121 of the Bankruptcy Act. A Defence has been filed in relation to the Application and, following the filing of that Defence, a further Application in a Case was filed on 13 November 2007. That application was pursuant to the provisions of rule 13.07 of the Federal Magistrates Court Rules. The orders that were sought in relation to the application were in these terms:
1. Pursuant to 13.07 of the Federal Magistrates Court rules, the Applicants seek summary judgment against the Respondent and in particular orders as follows:
(a)a declaration that the monetary transfer of $53,000.00 made on or about 5 February 2004 is void as against the Applicants in their capacity as trustees in bankruptcy of the bankrupt estates of Lionel Bernard Josey and Lynne Marie Josey:
(b)a declaration that the monetary transfer of $73,376.83 made on or about 16 April 2004 is void as against the Applicants in their capacity as trustees in bankruptcy of the bankrupt estates of Lionel Bernard Josey and Lynne Marie Josey;
(c)an order directing the Respondent to pay to the Applicants in their capacity as trustees in bankruptcy of the bankrupt estates of Lionel Bernard Josey and Lynne Marie Josey the sum of $126,376.83;
(d)an order directing the Respondent to pay to the Applicants in their capacity as trustees in bankruptcy of the bankrupt estates of Lionel Bernard Josey and Lynne Marie Josey interest on the aforesaid amount of $126,376.83, being interest in the amount of $43,509.54 calculated as follows:-
(i)9.5% per annum on the amount of $53,000.00 for the period 5 February 2004 to 31 October 2007 (1364 days) - $18,815.73; and
(ii)9.5 % per annum on the amount of $73,376.83 for the period 16 April 2004 to 31 October 2007 (1293 days) - $24,693.81.
(e)an order that the Respondent pay the Applicants' costs of and incidental to these proceedings to be assessed on the Federal Court Scale of Costs if not otherwise agreed upon.
The Application, in a nutshell, is for summary judgment. Rule 13.07 of the Federal Magistrates Court Rules is in these terms:
(1)This rule applies if, in a proceeding:
(a)in relation to the whole or part of a party's claim there is evidence of the facts on which the claim or part is based; and
(b)either:
(i)there is evidence given by a party or by some responsible person that the opposing party has no answer to the claim or part; or
(ii)the defence or reply to the claim discloses no answer to the claim or part.
(2)The Court may give judgment on that claim or part and make any orders or directions that the Court considers appropriate.
(3)If the Court gives judgment against a party who claims relief against the party obtaining the judgment, the Court may stay execution on, or other enforcement of, the judgment until determination of that claim.
It should be read, of course, in conjunction with section 17A of the Federal Magistrates Act 1999. Section 17A provides that the Court may give judgment for the party prosecuting the proceeding, if the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceedings or part of the proceedings.
Quite simply the applicants in this matter say that the material and evidence, so far provided, including by way of provision of further and better particulars and by way of discovery, give rise to no basis upon which there could be a finding that there is a defence that could arise.
I am referred by the legal representatives by both parties to a number of decisions on point. In particular, the solicitor for the applicant has referred me, understandably, to the more recent decisions of the Full Court of the Queensland Supreme Court in relation to matters set out pursuant to rule 292 of the Queensland Uniform Civil Procedures Rules. The leading authorities in relation to the Queensland Civil Procedures Rules are far more recent in time.
In each of the decisions to which I am referred, and they include the Deputy Commissioner of Taxation v Salcedo [2005] QCA 227 and Queensland University of Technology v Project Constructions (Aust) Pty Ltd (In Liq) [2003] 1 Qd R 259, there are references to the level of satisfaction that may be required in relation to a determination of whether there is a possible defence that arises.
In particular, in the Project Constructions case, the Court referred to the expression "no real prospect of succeeding" and said:
That level of satisfaction may not require the meeting of as high a test as that posited by Barwick CJ in General Steel: “that the case for the plaintiff is so clearly untenable but it cannot possibly succeed". The more appropriate inquiry is in terms of the Rule itself: that is, whether there exists a real, as opposed to a fanciful, prospect of success.
However, it remains, without doubt, the case that "great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case.”
In Salcedo (supra), in particular, Appeal Justice Williams, with whom President McMurdo agreed, said at paragraph 17 the following:
That review of the authorities clearly establishes to my mind that there has been a significant change brought about by the implementation of rr 292 and 293 of the Uniform Civil Procedure Rules 1999 (Qld). The test for summary judgment is different, and the court must apply the words found in the rule. To use other language to define the test (as was contended for this case by counsel for the appellant relying on the reasoning of Chesterman J in Grey v Morris) only diverts the decision-maker from the relevant considerations. But, and this underlines all that is contained in the Uniform Civil Procedure Rules 1999 (Qld), ultimately the rules are there to facilitate fair and just resolution of the matters in dispute. Summary judgment will not be obtained as a matter of course and the judge determining such an application is essentially called upon to determine whether the respondent to the application has established some real prospect of succeeding at trial; if that is established then the matter must go to trial. In my view the observations on summary judgment made by the Judges of the High Court in Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99; 57 ALJR 621 at 626; 48 ALR 1 at 10 are not incompatible with that application of rr 292 and 293; what is important is that in following the broad principle laid down by their Honours the test as defined by the rules is applied.
What is contended here is that there is no basis upon which it could be determined that there is a real prospect of succeeding at trial. For the applicants it is contended that when one looks at the uncontroverted facts, there is no basis upon which the contention of justifiable or appropriate payments of a sum of $53,000 and $73,376.83 is able to be shown. What is contended is that, whilst there are statements of a payment of $53,000 being a part payment of a debt of $72,000 for hire charges and the payment of $73,376.83 not being paid to the respondent but rather being paid to the bankrupts is not, in any way, shown or proven by the respondent to have been the case and that, therefore, there is no basis upon which the defence can be upheld.
Of course, from the defendant's perspective there are different considerations. Similar statements from various cases are given as to the test to be applied and how it has, in many instances, expressed. What is noteworthy is that in Jessup v Lawyers Private Mortgages Ltd & Ors [2006] QSC 003 which happens to be a case in which the applicants in this case were involved, Chesterman J in dealing with an application for summary judgment said the following:
Summary judgment should not be given where the facts upon the parties' respective rights depend are disputed or where the respondent to the application for summary judgment adduces evidence as to the existence of facts which, if proved, would establish a defence or right to relief. In other words, it is only where all the facts are known and/or are established beyond controversy that the Court should embark upon determining whether to give summary judgment. Where relevant facts are controverted or where it appears that the facts may exist which would affect right of action or defence there should be a trial to determine the facts.
Quite simply, the respondents in this matter submit that there is a basis upon which there could, and properly should be a trial, in which the facts and the evidence are fully considered, are subject to cross-examination and the evidence is tested. The respondent says that it is not appropriate for the granting of an order for summary judgments because there is evidence before the Court to cause doubt on the applicants' entitlements to the amounts claimed from the respondent.
The facts surrounding the monetary transfer are disputed by the respondent. The respondent adduced evidence, which, if proved, would establish a defence to the claim made by the applicants. The evidence before the Court indicates that the respondent has realistic, as opposed to fanciful, prospects of successfully defending the applicant's claim. There is a real question to be tried in order to establish who was entitled to the funds claimed by the applicants and that it is not possible to say without doubt, on the whole of the material before the Court that there is no question to be tried concerning the moneys claimed by the applicants and there should be a trial to test the evidence before the Court in evidence-in-chief and cross-examination.
Obviously those are matters that are still in contention, but what weighs heavily upon me in relation to this matter is that there is certainly evidence adduced by the respondents which indicates that, if proven, it would establish a defence to the claim. I accept that at the present time there is little evidence before the Court and there is much that is in controversy between the parties but the fact is, and it remains, that there is a basis upon which there could be a trial and evidence adduced. If, of course, the respondent does not adduce evidence in relation to this matter which comes up to the level that satisfies the Court as to the basis upon which the moneys have been paid and that it has not simply been a preferential payment or otherwise then, clearly, the case for the applicant is strengthened but until such time as that occurs it appears clear to me that the matter must proceed and must be heard.
In that regard, in particular, I am mindful of the comments of Driver FM in respect of an application for summary judgment pursuant to rule 13.07 of the Federal Magistrates Court Rules. In Vivid Entertainment v Digital Sinema Australia Pty Ltd [2007] FMCA 157, Driver FM set out the principles relevant to applications for summary judgment. They were in these terms:
· In assessing whether there are reasonable prospects of success on an application or a response the Court must be cautious not to do an injustice by summary judgment or summary dismissal.
· There will be reasonable prospects of success if there is evidence which may be reasonably believed so as to enable the party against whom summary judgment or summary dismissal is sought to succeed at the final hearing.
· Evidence of an ambivalent character will usually be sufficient to amount to reasonable prospects.
· Unless only one conclusion can be said to be reasonable the discretion under s.17A cannot be enlivened.
· The Court should have regard to the possibility of amendment and additional evidence in considering whether only one conclusion can be said to be reasonable. In that consideration the conduct of the parties and the other circumstances of the case may be relevant.
Quite clearly, in my view, when one looks at those various points to be considered in relation to an application for summary judgment I am satisfied that the application, whilst based on a genuine contention of there being no other finding, is not able to be upheld. There is evidence, which could be tested. Certainly from the applicant's perspective it is suggested that evidence has not been provided and, in particular, for example, there is a suggestion that there is no documentary trail, which could be followed, in relation to the various payments that have been raised.
Of course that fails to take into consideration the fact that there may be amendment and there may be additional evidence. From the various appearances previously had in relation to this matter it is clear that there has been a difficult path in obtaining whatever evidence might be sought to be relied upon by both parties, in relation to the proceedings. That is not to say that further inquiry will not adduce further evidence in relation to this matter and, of course, very much turns on whether payments, including particularly the payment of $53,000, relate specifically to a claim which is justifiable in relation to a payment of hire charges of $72,000.
At the present time there is a difficulty in accepting, without any documentary evidence or evidence of any other nature other than the assumptions on the part of the respondent, that such a payment was for the purpose adduced but it may be that further evidence will come to hand. I am not satisfied, therefore, that there is a proper basis upon which summary judgment should appropriately be given in relation to the matter and, accordingly, the application for summary judgment contained within the application filed 13 November 2007 is dismissed.
I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of Coker FM
Associate: C Herbst
Date: 1 April 2008
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