Legal and General Life of Australia Ltd v Milne

[1999] FCA 621

FEDERAL COURT OF AUSTRALIA

Legal & General Life of Australia Ltd v Milne [1999] FCA 621

BANKRUPTCY – whether petitioning creditor had assigned debt to company acquiring it.

Bankruptcy Act 1996, s 43

LEGAL & GENERAL LIFE OF AUSTRALIA LIMITED (ACN 000 029 818) v RICHARD MILNE
VG 7179 of 1998

KENNY J

MELBOURNE
3 MAY 1999

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 7179 OF 1998

BETWEEN:	LEGAL & GENERAL LIFE OF AUSTRALIA LIMITED (ACN 000 029 818) Applicant
AND:	RICHARD MILNE Respondent
JUDGE:	KENNY J
DATE OF ORDER:	3 MAY 1999
WHERE MADE:	MELBOURNE

Upon an act of bankruptcy having occurred on 16 November 1997 by the judgment debtor,

THE COURT ORDERS THAT:

1.          The estate of the debtor be sequestered.

THE COURT FURTHER ORDERS THAT:

2.The costs of the petitioning creditor, including reserved costs, be taxed and paid in accordance with the Bankruptcy Act 1966.

3.Mr Joe Cascone, having given his consent to act as trustee on 23 March 1998, be appointed trustee of judgment debtor's estate pursuant to the provisions of the Bankruptcy Act 1966.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 7179 OF 1998

BETWEEN:	LEGAL & GENERAL LIFE OF AUSTRALIA LIMITED (ACN 000 029 818) Applicant
AND:	RICHARD MILNE Respondent

JUDGE:	KENNY J
DATE:	3 MAY 1999
PLACE:	MELBOURNE

EX TEMPORE REASONS FOR JUDGMENT

1. By a creditor's petition, Legal & General Life of Australia Limited seeks a sequestration order under s 43 of the Bankruptcy Act 1996 against the estate of Richard Milne.  The relevant debt arises pursuant to an order obtained in the County Court of Victoria, Melbourne, on 30 August 1995.  The petition is supported by a number of affidavits including an affidavit by Michael Steriovsky sworn 11 March 1998; an affidavit of Steven Davis sworn 19 March 1998 to which is exhibited an affidavit of Fiona Trudgen sworn 27 October 1997; an affidavit sworn by Hamish McKellar affirmed 13 April 1999; an affidavit sworn by Phillip Liberatore sworn 26 April 1999; an affidavit sworn by Jane Foley on 30 April 1999; and finally an affidavit of liability sworn by Andrew Telford on 30 April 1999.  There are requisite affidavits of service also sworn and filed.

2. Mr Milne gave notice of intention to oppose the application or petition on the following grounds or ground:

   Legal & General have been acquired by Colonial and I have been told by the solicitor for Legal & General that the debt has been assigned.  I have received no notice from Colonial pursuant to section 134 of the Property Law Act 1958. 

   In support of that ground, Mr Milne relies on his affidavit sworn 12 April 1999 and an affidavit sworn 29 April 1999.  He relies on those affidavits to establish the assignment of debt relied on by him, and the absence of notice of the assignment.  In his affidavit of 12 April 1999, Mr Milne also sought access to what he termed an information memorandum given to potential purchasers of Legal & General, and the sale agreement between Legal & General and Colonial Mutual Life Assurance Society Limited.

3. In his affidavit of 12 April 1999, Mr Milne deposes that:

   On 01/04/99, I called Mr Liberatore to discuss the matter and the graveness of its consequences to me if it went ahead.  During this conversation, when I tried to clarify the relationship between Colonial, L & G and myself and whether Mr Andrew Telford (a person I had spoken to at Colonial in Sydney) was always Colonial or had come from the old L & G, Mr Liberatore very quickly responded by saying, "There is nothing there, the debt assignment between Colonial and L & G was in order."

   Mr Milne went on to depose that:

   When Mr Liberatore stated the debts had been assigned, I was now not clear on who I was dealing with and who the real creditor was, Colonial or L & G.  I have never received any notice from Colonial of any assignment pursuant to section 134 of the Property Law Act 1958.

4. In his subsequent affidavit of 29 April, Mr Milne substantially repeated the contents of his earlier affidavit, but answered in part certain of the matters raised by Mr Liberatore in his intervening affidavit.  The position with respect to the two companies is described in the affidavit sworn by Hamish McKellar on 13 April 1999.  In that affidavit Mr McKellar deposes:

   On 1 July 1998, the Applicant's parent company Legal & General Australia Limited … was purchased by the Colonial Mutual Life Assurance Society Ltd. As part of a process of harmonisation of the branding of companies within the Colonial group, the Applicant has ceased using the “Legal & General Umbrella” logo and now uses the Colonial logo in its correspondence and other official documents, and refers to its membership of the Colonial group. However, the Applicant continues to be incorporated under the Corporations Law and continues to operate as a life insurance company under the Life Insurance Act 1995.

   Most importantly, Mr McKellar further deposes that:

   The Applicant has not assigned or transferred any interest in, or rights in relation, to the debt (as claimed in paragraph 1 of the Applicant's Creditor's Petition as being owed by Richard Milne) to [The Colonial Mutual Life Assurance Society Limited] or any other company in the Colonial group.

5. In an affidavit sworn on 26 April 1999, Mr Liberatore, the applicant's solicitor, denies that he advised Mr Milne that the relevant debt had been assigned as Mr Milne alleges.  He

   deposes in paragraph 7 of his affidavit that:

   I deny stating that there was an assignment of the debt to Colonial as at no time had I received any instructions from Legal & General that the debt had been assigned and therefore I had no reason to say it to Mr Milne.

6. Mr Liberatore went on in his affidavit to give an account of other conversations with Mr Milne in which he said Mr Milne did not dispute the liability in relation to the debt.  It is clear from the affidavit material filed on behalf of the applicant that Mr Milne has been given various opportunities to compromise the debt in question. 

7. I am satisfied that the matters stated in the petition are proven, as is the service of the petition and the fact the debt is still owing.  I am also satisfied that the debtor's ground of opposing the bankruptcy notice is not made out.  I am therefore not satisfied that there is any sufficient cause shown why a sequestration order should not be made against the estate of Mr Milne.

I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny.

Associate:

Dated:             3 May 1999

Counsel for the Applicant:	Mr J Isles
Solicitor for the Applicant:	Mulcahy Mendelson and Round
Counsel for the Respondent:	Self-represented
Solicitor for the Respondent:	Self-represented
Date of Hearing:	3 May 1999
Date of Judgment:	3 May 1999