KANG v Goldsmith

[2017] FCCA 845

FEDERAL CIRCUIT COURT OF AUSTRALIA

KANG v GOLDSMITH [2017] FCCA 845

Catchwords:
BANKRUPTCY – Application to set aside bankruptcy notice – the Court was not satisfied that the applicant has a counter-claim set-off or cross-demand or any proper ground to set aside the bankruptcy notice – application is dismissed.

Legislation:

Bankruptcy Act 1966, ss. 27, 41(6A)

Applicant: EDWARD KANG

Respondent: BARRIE GOLDSMITH

File Number: SYG 2860 of 2016

Judgment of: Judge Street

Hearing date: 27 April 2017

Date of Last Submission: 27 April 2017

Delivered at: Sydney

Delivered on: 27 April 2017

REPRESENTATION

Counsel for the Applicant: Mr N Allan

Solicitors for the Applicant: Ziman Lawyers

The Respondent appeared in person.

ORDERS

1. Grant leave to the Applicant’s representative to file a notice of address for service in Court and dispenses with the need for the electronic filing of the same.

2. The orders made by the Registrar on 10 March 2016 are set aside.

3. The application to set aside the bankruptcy notice is dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 2860 of 2016

EDWARD KANG

Applicant

And

BARRIE GOLDSMITH

Respondent

REASONS FOR JUDGMENT

1. This is an application within the Court’s jurisdiction under s.27 of the Bankruptcy Act 1966 (Cth) (“the Act”) in respect of a bankruptcy notice served on the applicant on 28 September 2016 on what would otherwise have been the date of bankruptcy. The Registrar set aside the bankruptcy notice on 10 March 2016 and the current proceedings are a hearing de novo based on the application for review by the respondent.

2. An application was brought in this Court on 19 October 2016 seeking an order under s.41(6A) of the Act for an extension of time for compliance and an order seeking to have the bankruptcy notice set aside on the basis of a genuine counter-claim set-off or cross-demand. I find the application was brought within time under s.41(6A) of the Act.

3. The bankruptcy notice was based on a Local Court judgment made in respect of an order given on 12 September 2016 and entered on 20 September 2016. Counsel on behalf of the applicant sought to argue that the Local Court judgment was in fact, the subject of an alleged set-off arising from the debts, the subject of a deed of assignment, dated 11 January 2016.

4. I do not accept that the applicant had any genuine counter-claim set-off or cross-demand arising from the deed or the debts assigned under the deed that reduced the amount of the judgment which the respondent obtained in the Local Court reflecting interest and costs in circumstances of proceedings that had been on foot since 2015. There is no basis to find that there is an arguable case of any breach of the deed by failing to take reasonable steps to recover the subject matter of the assignment. Nor is the enforcement of the Local Court judgment by the bankruptcy notice a breach of the said deed.

5. It is apparent from the evidence before the Court that the cost, the subject of the assignment under the deed were taken into account by the respondent in the bringing of a second set of proceedings in the Local Court on 29 July 2016 for $18,376.92. Accordingly, the applicant had obtained the benefit of the application of those assigned debts at the time of judgment in September 2016. There was no outstanding set off at the time of the judgment that the respondent obtained. I accept the evidence of Mr Goldsmith that he has received no payment for the said Local Court judgment and that the judgment given on 12 September 2016 remains outstanding by the applicant. I am not satisfied that the applicant has a counter-claim set-off or cross-demand, or that there is any proper ground on which the Court should set aside the bankruptcy notice.

6. The suggestion that the service of another bankruptcy notice based on a different judgment gives rise to an abuse of process is without substance.

7. The application to set aside the bankruptcy notice is dismissed.

I certify that the preceding seven (7) paragraphs are a true copy of the reasons for judgment of Judge Street

Date: 11 May 2017