Kenway v Armitage
[2009] FMCA 594
•29 April 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| KENWAY v ARMITAGE | [2009] FMCA 594 |
| BANKRUPTCY – Application to set aside bankruptcy notice. |
| Bankruptcy Act1966, ss.30, 41 Federal Magistrates Court (Bankruptcy) Rules 2006, r.3.02 |
| Applicant: | CRAIG DONALD KENWAY |
| Respondent: | ANNA MARIA ARMITAGE |
| File Number: | BRG 263 of 2009 |
| Judgment of: | Wilson FM |
| Hearing date: | 29 April 2009 |
| Date of Last Submission: | 29 April 2009 |
| Delivered at: | Brisbane |
| Delivered on: | 29 April 2009 |
REPRESENTATION
| Counsel for the Applicant: | N/A |
| Solicitors for the Applicant: | Lillas & Loel Lawyers Pty Ltd |
| Counsel for the Respondent: | N/A |
| Solicitors for the Respondent: | Hopgood Ganim Lawyers |
ORDERS
That the application filed 17 April 2009 is dismissed.
That the applicant is to pay the respondent’s costs of and incidental to the application, to be taxed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 263 of 2009
| CRAIG DONALD KENWAY |
Applicant
And
| ANNA MARIA ARMITAGE |
Respondent
REASONS FOR JUDGMENT
On 25 March 2009, two bankruptcy notices were served on the applicant.
The first, QN313 of 2009, seeks the payment of $33,603.70 being the total of three costs orders made in favour of the respondent in proceedings in the Supreme Court of Queensland. Those costs orders were made on 26 October 2007, 11 June 2008, and 28 October 2008. Copies of the orders were attached to the bankruptcy notice.
The second notice, QN314 of 2009, seeks the payment of $3.5 million pursuant to an order made by McKenzie J in the Supreme Court of Queensland on 26 October 2007, in particular Order 1.2 of the orders made by his Honour requires payment of that amount.
On 17 April 2009 an application was filed in this Court to set aside both bankruptcy notices and for ancillary relief. The application was filed outside of the time for compliance with each of the bankruptcy notices. The Court's jurisdiction to extend the time for compliance pursuant to s.41(6A) of the Bankruptcy Act1966 is therefore not enlivened.
There is authority to suggest that the Court retains jurisdiction to extend the time for compliance with the bankruptcy notices pursuant to s.30 of the Act, but that is a matter that I need not pursue further today.
The affidavit filed in support of the application is brief. Apart from exhibiting copies of the bankruptcy notices - at least one of which is incomplete - and deposing to the fact of service the deponent, Mr Lyall, simply informs the Court that there are proceedings in the Supreme Court to set aside or vary the order made by McKenzie J in October 2007 to which I have already referred. Paragraph 5 of Mr Lyall's affidavit says:
I believe that the applicant has good prospects of seeking orders or obtaining relief in the Supreme Court proceedings which will be in his favour and which will be able to be set off against the obligation here subject to by virtue of the order contained in exhibit JBL1.
Exhibit JBL1 is the order of Justice McKenzie of 26 October 2007. Otherwise, Mr Lyall's affidavit deposes to matters as to the consequence of any bankruptcy on the applicant.
A further affidavit was filed by leave today of the applicant's solicitor, Mr Johnson, which goes only to the issue of service of the applicant and supporting affidavit, and as to the progress of the proceedings in the Supreme Court to set aside the earlier order of McKenzie J.
Before me the principal ground agitated in support of the application to set aside the bankruptcy notices was that they were issued as an abuse of process. Rule 3.02(1)(b) of the Federal Magistrates Court (Bankruptcy) Rules 2006 requires that an application to set aside a bankruptcy notice must be accompanied by an affidavit stating the grounds in support of the application.
The only ground that I am able to discern from Mr Lyall's affidavit is that orders may be made in the Supreme Court which give rise to a set-off in favour of the applicant against the existing orders. The affidavit does not, in my view, comply with r.3.02(1)(b)(i) of the Rules. Further, if the basis of the application to set aside the bankruptcy noticed was that the debtor has a counter-claim set-off or cross-demand there is plain non-compliance with r.3.02(2) of those Rules.
There is, moreover, an inherent difficulty in the applicant's argument concerning a counter-claim, set-off or cross-demand. It would only be when orders are made by the Supreme Court of Queensland in the applicant's favour that such a counter-claim set-off or cross-demand could arise. One does not presently exist and therefore cannot be relied upon to set aside the bankruptcy notices.
So far as the argument is based on an alleged abuse of process the applicant points to no more than the coincidence of the service of the bankruptcy notices with the reactivation of the Supreme Court proceedings in which the applicant seeks to be relieved of his obligation to pay the respondent $3.5 million.
That coincidence may be as a result of many things and I am not prepared to draw the inference on the evidence as it presently stands that the bankruptcy notices were issued as an abuse of process. There is no evidence of any collateral purpose being relied upon by the respondent. As I have said, an abuse of process is not referred to in Mr Lyall's affidavit and there is no evidence to support it.
I accept that if the only bankruptcy notice that was the subject of the application was QN314 of 2009 the applicant could cogently argue that because proceedings in the Supreme Court not only are on foot to set aside the order giving rise to the obligation on which the bankruptcy notice is based, but those proceedings have been heard, that the time for compliance with the bankruptcy notice should be extended to determine the outcome of those proceedings. However, in this case there is the second bankruptcy notice, QN313 of 2009. No basis has, in my view, been shown to set it aside and I decline to do so.
I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Wilson FM
Associate: Lynnette Chin
Date: 25 June 2009
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