Liprini v Kerem
[2010] FMCA 130
•17 February 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| LIPRINI v KEREM & ANOR | [2010] FMCA 130 |
| BANKRUPTCY – Bankruptcy notice – adjournment of application to set aside – directions defining issues and allowing further evidence in relation to some issues only. |
| Bankruptcy Act 1966, s.40(1)(g) |
| Liprini v Liprini [2008] NSWSC 423 Liprini v Liprini [2009] NSWSC, Unreported 10 July 2009 |
| Applicant: | ALLAN STEPHEN LIPRINI |
| First Respondent: | FIKRI KEREM T/AS LAW PARTNERS SOLICITORS & BARRISTERS |
| Second Respondent: | ANDREW DANIEL T/AS LAW PARTNERS SOLICITORS & BARRISTERS |
| File Number: | SYG 2674 of 2009 |
| Judgment of: | Smith FM |
| Hearing date: | 17 February 2010 |
| Delivered at: | Sydney |
| Delivered on: | 17 February 2010 |
REPRESENTATION
| Counsel for the Applicant: | In Person |
| Counsel for the Respondents: | Mr S Maybury |
| Solicitors for the Respondents: | Law Partners Solicitors & Barristers |
ORDERS
The hearing of the application is adjourned to 29 March 2010 at 10.15 am.
The following issues shall be the issues which shall be addressed at the hearing:
(i)Whether the bankruptcy notice is invalid and should be set aside by reason of the absence of page 7 of the prescribed form.
(ii)Whether the bankruptcy notice is invalid and should be set aside by reason of the absence of a date of issue on page 8.
(iii)Whether the bankruptcy was invalidly issued and should be set aside by reason of the underlying indebtedness being incurred by the applicant solely in a representative capacity as executor of his father’s estate, and noting the provisions of Part XI of the Bankruptcy Act.
(iv)Whether the bankruptcy notice was invalidly issued and should be set aside by reason of the applicant being given no notice of the Local Court proceedings.
(v)Whether the applicant has established a counter-claim etc within s.40(1)(g) of the Bankruptcy Act arising from the circumstances of his instructing the respondents, being a counter-claim which he could not have set up in the Local Court proceedings.
The parties must file and serve all additional evidence in chief they wish to rely upon concerning issues i) to iv) on or before 3 March 2010.
No additional evidence in chief which was not filed on or before today will be admitted concerning issue (v) except with the leave of the Court. Any such evidence must be filed and served on or before 3 March 1010.
Any affidavits in reply must be filed and served on or before 17 March 2010.
Costs in relation to today’s listing and the adjournment are reserved.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2674 of 2009
| ALLAN STEPHEN LIPRINI |
Applicant
And
| FIKRI KEREM T/AS LAW PARTNERS SOLICITORS & BARRISTERS |
First Respondent
| ANDREW DANIEL T/AS LAW PARTNERS SOLICITORS & BARRISTERS |
Second Respondent
REASONS FOR JUDGMENT
(revised from transcript)
This judgment explains my interlocutory orders made today, which adjourn the hearing of Dr Liprini’s application, isolate the issues which will be addressed, and attempt to confine the filing of additional evidence by both parties.
Dr Liprini has applied to set aside a bankruptcy notice, which he states was served on him on 10 October 2009. He attaches a copy to his affidavit, with the implicit assertion that this was the notice that was served. The attachment omits a page 7 which, as the prescribed form indicates, should contain important parts of a bankruptcy notice including the identification of a person authorised to apply for the issue of the notice. The notice attached to the affidavit also has absent, on page 8, a date of issue by the Official Receiver. The respondents have not filed any evidence to prove service of a document in a different form, although I am told today that such evidence might be available. It appears to me that, on the face of the notice tendered by Dr Liprini, the two prima facie omissions from the bankruptcy notice should be identified as issues going to the formal validity of the notice. The respondents should be given opportunity to file further evidence on these issues, since they had not been clearly raised by Dr Liprini.
Dr Liprini’s affidavits refer to the background of the judgment relied upon, being the employment of the respondents as solicitors acting for Dr Liprini in Supreme Court proceedings involving a claim against Dr Liprini as executor of his father’s estate under the Family Provision Act 1982 (NSW) by his brother. Those proceedings appeared to be resolved after terms of settlement were signed at the end of a mediation session conducted by an officer of the Supreme Court, and the respondents’ employment terminated shortly after that date. There was then further litigation between Dr Liprini and his brother concerning enforcement of the consent orders. That litigation has given rise to the judgments of Brereton J in Liprini v Liprini [2008] NSWSC 423, and of Nicholas J in Liprini v Liprini [2009] NSWSC, unreported 10 July 2009. Dr Liprini puts in evidence before me a notice of appeal from the latter judgment, in which he is attempting to canvass the propriety of the settlement which gave rise to Nicholas Js judgment, based upon a challenge to his giving of instructions to the respondents at the mediation and his execution of the consent orders.
I note that there are other pending bankruptcy proceedings in this Court, concerning a bankruptcy notice and petition served on Dr Liprini by his brother relying upon the orders of Nicholas J, which are contended to have imposed a personal liability on Dr Liprini to pay a large sum of money. An application to set aside the bankruptcy notice is listed for hearing in two days’ time before me, and I previously declined an application by the brother to list that application concurrently with today’s matter. I did so because I was endeavouring to spare the present respondents the costs of participating in a hearing involving different issues, albeit with an overlapping background. I may be forced to reconsider that ruling in the future, but today I maintain the view that the two matters should be case-managed separately. As I understand it, the respondents invite the Court to continue that approach, and Dr Liprini appears also to support the separation of the matters.
Dr Liprini’s affidavits focus upon the full course of the Supreme Court proceedings, and his dissatisfaction with three sets of legal representatives whom he has consecutively instructed. As I have noted, the present respondents were instructed after the litigation had commenced, and in the course of the mediation giving rise to consent orders. Dr Liprini’s contentions that they did not properly act upon his instructions when negotiating and persuading him to sign consent orders, appears to provide the basis for his claim to have a counter-claim against them which he can raise in answer to the judgment upon which the bankruptcy notice is based.
Incidentally to his claims, Dr Liprini appears to contend that the respondents were instructed to act for him in his capacity as executor only, and the current evidence on the file appears to point to his being involved in those proceedings only in that capacity. There appears to be no evidence that any orders were sought against him personally, at least during the period in which the present respondents accepted instructions. An added issue therefore appears to me to arise, possibly going to the validity of the bankruptcy notice. This is whether the notice relies upon a judgment or an underlying indebtedness which was owed to the respondent solicitors, if at all, by Dr Liprini in a representative capacity only as executor of his father’s estate. If so, there may be doubt as to the validity of a bankruptcy notice to enforce such indebtedness, in view of Part XI of the Bankruptcy Act which makes separate provisions for enforcing debts owed by deceased estates. Its provisions do not include the service of a bankruptcy notice on an executor.
A further issue, also possibly going to validity of the bankruptcy notice relied upon, also emerged from Dr Liprini’s submissions to me today. This is that he appears to challenge that he had any opportunity to defend the Local Court proceedings, in which the respondents obtained their default judgment for their legal fees. That proceeding was not the registration of a costs assessment under the Legal Profession Act 2004 (NSW), and appears to have been a claim based upon an unparticularised invoice. There is at present no evidence before me as to the circumstances in which the default judgment was obtained, and I note that the respondents seek further time to file evidence going to this issue.
Having identified the above issues in the course of exchanges with the parties in today’s hearing, it is clear to me that some of them were not clearly focused in the material filed by Dr Liprini, and I accept that the respondents should be given an opportunity to present further evidence going to those issues. I propose on that ground to adjourn the proceedings today, with directions allowing both parties to present further evidence and submissions going to the first four issues which I have listed in my directions above.
The fifth issue encompasses Dr Liprini’s claims that he has a counter-claim arising out of the respondents’ alleged failure to follow instructions in relation to the mediated consent orders in the Supreme Court. His contentions in this respect have been clearly raised by Dr Liprini since the commencement of the present application, and both parties have filed evidence concerning the relevant events.
Dr Liprini’s contention that he has a counter-claim coming within s.40(1)(g) of the Bankruptcy Act faces obvious difficulties if he was, indeed, served with notice of Local Court proceedings in which he could have raised his contentions by way of defence and counter-claim. However, the issue has been presented by Dr Liprini with general contentions, some medical evidence, and an affidavit giving some details of what he alleges happened in relation to his instructing of his legal representatives at the mediation. The respondents have filed affidavits giving their account of the receiving of instructions, and it is not clear to me that they have any need to present any additional evidence in reply to the material currently filed by Dr Liprini. Both parties have foreshadowed a desire to cross-examine the witnesses for the other party, and they are entitled to that opportunity.
In the course of today’s discussions about the future course of the proceedings, Dr Liprini foreshadowed that he had further evidence that he might want to present about what happened during the mediation in-chief, including a sound recording which he says he made himself. This material has not been filed and served in accordance with the Court’s previous directions to Dr Liprini to file all his evidence before today. In my opinion, he has been given an ample opportunity to present his evidence in support of his contention that he has a counter-claim, etcetera, within s.40(1)(g) of the Bankruptcy Act. I do not consider that he has shown good reason for being given further opportunities to file more evidence on that matter, even taking into account his impediments both of a medical nature and arising from his lacking legal qualifications, and also taking into account all the other litigation in which he is involved in relation to the same circumstances.
Nor am I today persuaded that the respondents should be given an opportunity to file further affidavits going to the events at the mediation in the Supreme Court proceedings. My present view is that both parties have had a reasonable opportunity to present their evidence concerning the fifth issue in the affidavits they have already filed, and further evidence in chief should not be permitted to be relied upon without the leave of the Court.
I propose to reserve to myself the possibility of rejecting any further affidavit evidence going to this issue, on the basis that sufficient opportunity to lead it was previously given in the directions made in this Court leading to today’s hearing. I have, however, indicated in my directions that the parties will have an opportunity to seek leave to present further evidence, if they can show reason why I should depart from the opinion I have just expressed in relation to that evidence. Such leave should be sought at the hearing, and any affidavits for which leave will be sought should be filed and served in accordance with the time-table I have directed above.
I therefore propose to confine my directions allowing the unconfined presentation of additional evidence to the first four issues going to validity which I have identified above. I shall grant liberty to either party to apply for further directions, including in the light of events in the other proceedings between Dr Liprini and his brother in this Court and in the Court of Appeal.
I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Smith FM
Associate: Michael Abood
Date: 4 March 2010