Loftus v Clark (No.1) - [2003] FMCA 66

FEDERAL MAGISTRATES COURT OF AUSTRALIA

LOFTUS v CLARK (No.1)

[2003] FMCA 66

BANKRUPTCY – Whether claim in County Court provable debt – whether leave to proceed necessary – interest of the parties.

Bankruptcy Act1966, ss.58 (3), 60(2), 60(3), 82(1)

Fraser v Deputy Commissioner of Taxation [1996] 69 FCR 99
Kattirtzis v Zaravinos [2001] FCA 1158
Re Sharp Ex Parte Tietyans Investments Pty Ltd (in liq) [1998] FCA 1367
Sturdy Components Pty Ltd v Trustee of the Bankrupt Estate of Sturt [2000] FCA 884

Applicant:

ANTHONY LOFTUS

Respondent:

GRAHAM J CLARK (AS TRUSTEE IN BANKRUPTCY OF THE ESTATE OF MICHAEL LOFTUS)

File No:

MZ 1199 of 2002

Delivered on:

5 March 2003

Delivered at:

Melbourne

Hearing Date:

11 December 2002

Judgment of:

McInnis FM

REPRESENTATION

Counsel for the Applicant:

Mr M Black

Solicitors for the Applicant:

Noble Lawyers

Counsel for the Respondent:

Mr P Duggan

Solicitors for the Respondent:

Madisons

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MZ 1199 of 2002

ANTHONY LOFTUS

Applicant

And

GRAHAM J CLARK (AS TRUSTEE IN BANKRUPTCY OF THE ESTATE OF MICHAEL LOFTUS)

Respondent

REASONS FOR JUDGMENT

In this application ANTHONY LOFTUS (the Applicant) seeks orders against GRAHAM J CLARK (the Respondent) in his capacity as Trustee in bankruptcy of the estate of Michael Loftus. Michael Loftus became bankrupt on 26 August 2002 which is the date upon which the Respondent was appointed as Trustee of the bankrupt’s estate.
The Applicant is the brother of the Bankrupt. The brothers inherited a property situated at and known as 7 Tennyson Street Malvern (the property) and became registered as joint proprietors of the property on 20 July 1999. The property had been valued at between $320,000 and $340,000 in late April 1999. It was subsequently sold on 26 August 2000 for the sum of $271,500.
The purchasers of the property commenced Supreme Court proceedings for specific performance of a contract of sale in circumstances where the brothers were unable to agree in relation to the proceeds of sale and it was alleged the Bankrupt was not prepared to complete the contract. In any event after commencement of Supreme Court proceedings an order was made by a Senior Master

of the Supreme Court on 11 December 2000 for specific performance of the contract of sale for the property by 13 December 2000. At settlement a further order was made that the purchasers be entitled to retain a certain sum from the settlement by way of set off for costs of the action with any surplus to be returned to the Applicant and the Bankrupt. The Applicant and the Bankrupt were ordered to pay costs of the proceedings and the balance of proceeds of sale were to be paid to the Senior Master to be held together with interest for the benefit

of the Applicant and the Bankrupt. Settlement of the property occurred on 13 December 2000. After deduction of the sum of $4,500 retained by the purchasers pursuant to the orders of the Court a sum of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Loftus v Clark (No.1)

Details

AGLC: Loftus v Clark (No.1) [2003] FMCA 66
Case: [2003] FMCA 66
Decision Date: 5 March 2003

CaseChat Overview and Summary

In the Federal Magistrates Court, Anthony Loftus (the Applicant) sought leave to continue County Court proceedings against Graham J Clark, as Trustee in bankruptcy of the estate of Michael Loftus (the Bankrupt) (the Respondent). The Applicant and the Bankrupt had jointly inherited a property, which was sold for less than expected. The Applicant commenced County Court proceedings against the Bankrupt seeking a declaration of entitlement to the proceeds of sale held by a Senior Master of the Supreme Court. The Respondent applied for a stay of the County Court proceedings, which led to this application. The Applicant argued that he was not a creditor within the meaning of s.58(3) of the Bankruptcy Act 1966, that the proceedings were not an enforcement of a remedy, that the claim was not for a provable debt, or that leave should be granted in the interests of all parties. The Respondent opposed the application, submitting that leave should not be granted as the County Court proceedings were for a provable debt and there were no circumstances justifying leave under s.58(3). The Court found that s.58(3) applied as the Applicant was a creditor claiming a provable debt. However, the Court was satisfied that it was in the interests of all parties to permit the County Court proceedings to continue to judgment to resolve the issue of ownership of the funds deposited with the Senior Master. The Court granted the Applicant leave to continue the County Court proceedings up to and including judgment.

Orders