Linell, M.R. v Australia & New Zealand Banking Group Ltd Summary

872 9~

JUDGMENT No. ...., J .....-.

IN THE FEDERAL COURT OF AUSTRALIA )

1

1 No. NN 1352 of 1994

1

OF NEW SOUTH WALES 1

RE : MICHAEL RICHARD LINELb and
BRONWYN ANN LINELL
Judgment Debtors

EX PARTE: WSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED
Judgment Creditor

1 NOVEMBER 1994

REASONS FOR JUDGMENT

SrOCKHART J. .< .

This is an application to set aside a bankruptcy notice or, alternatively, to further extend time for compliance with its requirements. Today is the last day for compliance with the requirements of the notice, time having been extended on previous occasions by Registrars of the Court. The genesis of the application by the debtors lies in District Court proceedings, whereby the creditor sued the debtors by a liquidated statement of claim in the District Court of New South Wales.

The creditor, subsequently, sought to amend that document and, in due course, proceedings were taken by the debtors before the District Court, the essence of which was that they alleged they had not been served with the relevant documents

District Court heard over a period of some days, though, I

including the amended notice of liquidated claim. The

gather, somewhat intermittently, the debtors' application and heard evidence from the relevant witnesses, including the debtors, and the process server and resolved the issue of fact in favour of the creditor. The result of the judgment which had been earlier obtained by the creditor against the debtors was not set aside and an application to stay the relevant proceedings was refused by the District Court.

I am informed by the solicitor for the debtors that he has instructions to lodge an appeal against the District Court's judgment and that that appeal will be instituted soon, though it has not been instituted yet. In the meantime in this Court, the creditor had served a bankruptcy notice upon the debtors based upon the District Court judgment, to which I have referred, and it has been periodically adjourned by Registrars of the Court, in effect, to abide the result of the contested proceeding before the District Court, which has now terminated, save for any rights that may reside in the debtors
by reason of their prospective appeal. There is no relevant evidence before the Court dealing with the matter, but
statements of fact have been made from the bar table by the
representatives of the parties and I shall act upon them.

In my opinion, it has not been established that this is an appropriate case in which to set aside the bankruptcy notice or to further extend time for compliance with its requirements. The debtors have had ample chance to pursue their remedies in the District Court. They have done so. They have so far failed. They may or may not succeed in the future in relation to the appeal. If they do succeed, an act of bankruptcy will have been committed in the meantime, but the ultimate fate of the matter can be resolved by this Court on hearing a petition for sequestration of the debtors' estates and it may, in the meantime, have the benefit of the result of the appeal in the District Court.

So it does not follow that the debtors will necessarily be made bankrupt by reason of today's unsuccessful application on their part, but, as I say, I am not persuaded that it is an appropriate case to grant the relief sought. Accordingly, the application of the debtors is refused.

I order the debtors to pay the costs of the creditor of the application, including reserved costs.

preceding two (2) pages are a I certify that this and the

true copy of the reasons for judgment herein of the Honourable Mr. Justice Lockhart.

ssociate 4& P&
Dated: 1 November 1994

Counsel for the Judgment Debtors : Mr G Limburg
Solicitors for the Judgment Debtors: Maxwell Berghouse &
Ives

Counsel for the Judgment Creditor : Mr J Mitchell
Solicitors for the Judgment Creditor: Norton Smith & CO
Date of Hearing 1 November 1994
Date of Judgment 1 November 1994

In the Federal Court of Australia, Michael Richard Linell and Bronwyn Ann Linell, the judgment debtors, applied to set aside a bankruptcy notice or, alternatively, to further extend time for compliance with its requirements. The creditor, Australia and New Zealand Banking Group Limited, sought the bankruptcy notice based on a District Court judgment against the debtors. The debtors argued that they had not been served with relevant documents, and they had contested the District Court judgment, which was ultimately resolved in favour of the creditor. The debtors planned to appeal the District Court's judgment but had not yet done so. The court had to decide whether to set aside the bankruptcy notice or grant an extension for compliance with its requirements.

The court examined whether the debtors had had sufficient opportunity to pursue their remedies in the District Court. The debtors had contested the District Court judgment and failed to have it set aside. Although they planned to appeal the District Court's judgment, they had not yet done so. The court found that it was not an appropriate case to grant the debtors' relief because they had ample chance to pursue their remedies in the District Court. The court also considered that the ultimate fate of the matter could be resolved by the Federal Court on hearing a petition for sequestration of the debtors' estates, and the court could have the benefit of the result of the appeal in the District Court.

The court refused the debtors' application to set aside the bankruptcy notice or to further extend time for compliance with its requirements. The court found that the debtors had had ample opportunity to pursue their remedies in the District Court. The court was not persuaded that it was an appropriate case to grant the relief sought. The debtors were ordered to pay the creditor's costs of the application, including reserved costs.

Linell, M.R. v Australia & New Zealand Banking Group Ltd

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

SrOCKHART J.	.< .
This is an application to set aside a bankruptcy notice or, alternatively, to further extend time for compliance with its requirements. Today is the last day for compliance with the requirements of the notice, time having been extended on previous occasions by Registrars of the Court. The genesis of the application by the debtors lies in District Court proceedings, whereby the creditor sued the debtors by a liquidated statement of claim in the District Court of New South Wales.
The creditor, subsequently, sought to amend that document and, in due course, proceedings were taken by the debtors before the District Court, the essence of which was that they alleged they had not been served with the relevant documents	District Court heard over a period of some days, though, I	including the amended notice of liquidated claim. The
gather, somewhat intermittently, the debtors' application and heard evidence from the relevant witnesses, including the debtors, and the process server and resolved the issue of fact in favour of the creditor. The result of the judgment which had been earlier obtained by the creditor against the debtors was not set aside and an application to stay the relevant proceedings was refused by the District Court.
I am informed by the solicitor for the debtors that he has instructions to lodge an appeal against the District Court's judgment and that that appeal will be instituted soon, though it has not been instituted yet. In the meantime in this Court, the creditor had served a bankruptcy notice upon the debtors based upon the District Court judgment, to which I have referred, and it has been periodically adjourned by Registrars of the Court, in effect, to abide the result of the contested proceeding before the District Court, which has now terminated, save for any rights that may reside in the debtors
by reason of their prospective appeal. There is no relevant	evidence before the Court dealing with the matter, but
statements of fact have been made from the bar table by the representatives of the parties and I shall act upon them.
In my opinion, it has not been established that this is an appropriate case in which to set aside the bankruptcy notice or to further extend time for compliance with its requirements. The debtors have had ample chance to pursue their remedies in the District Court. They have done so. They have so far failed. They may or may not succeed in the future in relation to the appeal. If they do succeed, an act of bankruptcy will have been committed in the meantime, but the ultimate fate of the matter can be resolved by this Court on hearing a petition for sequestration of the debtors' estates and it may, in the meantime, have the benefit of the result of the appeal in the District Court.
So it does not follow that the debtors will necessarily be made bankrupt by reason of today's unsuccessful application on their part, but, as I say, I am not persuaded that it is an appropriate case to grant the relief sought. Accordingly, the application of the debtors is refused.
I order the debtors to pay the costs of the creditor of the application, including reserved costs.

Counsel for the Judgment Debtors	:	Mr G Limburg
Solicitors for the Judgment Debtors:	Maxwell Berghouse & Ives

Counsel for the Judgment Creditor :	Mr J Mitchell
Solicitors for the Judgment Creditor:	Norton Smith & CO
Date of Hearing	1 November 1994
Date of Judgment	1 November 1994