Lui (Junior) v The Islander Industries Board

FEDERAL MAGISTRATES COURT OF AUSTRALIA

LUI (JUNIOR) v THE ISLANDER INDUSTRIES BOARD [2008] FMCA 207

BANKRUPTCY – Bankruptcy notice – setting aside – importance of keeping records – evidence of compromise.

Bankruptcy Act 1966, s.40(1)(g)
Community Services (Torres Strait) Act 1984 (Qld)

Corner v Shew (1838) 150 ER 1179
Re Bankruptcy Notice [1934] Ch 421 CA
Walton v National Mutual Life Association of Australasia Limited (1994) 49 FCR 406
H. Ray v Deputy Commissioner of Taxation [2005] FMCA 1892;
Scook v Sims Construction Pty Ltd [2004] FCAFC 306;
Wren v Mahoney (1972) 126 CLR 212;
Joosse v Deputy Commissioner of Taxation [2004] FCAFC 245
Guss v Johnstone (2000) 74 ALJR 884

Applicant: GETANO LUI (JUNIOR)

Respondent: THE ISLANDER INDUSTRIES BOARD

File Number: BRG855 of 2006

Judgment of: Coates FM

Hearing date: 30 October 2007

Date of Last Submission: 30 October 2007

Delivered at: Cairns

Delivered on: 19 March 2008

REPRESENTATION

Counsel for the Applicant: Mr D Morzone

Solicitors for the Applicant: Miller Harris Lawyers

Counsel for the Respondent: Mr J Sheridan

Solicitors for the Respondent: Marino Moller Lawyers

ORDERS

1. Time is extended for 28 days for the applicant to comply with bankruptcy notice No Q1276 of 2006 or file and serve initiating process of a counter-claim, set-off or cross demand and/or an estoppel in relation to the said notice.

2. The matter be adjourned for determination on 15 April 2008.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
BRISBANE

BRG855 of 2006

GETANO LUI (JUNIOR)

Applicant

And

THE ISLANDER INDUSTRIES BOARD

Respondent

REASONS FOR JUDGMENT

1. This application to set aside a bankruptcy notice under s.40(1)(g) of the Bankruptcy Act 1966 underlines the importance of keeping records of business dealings.

History

1. On 22 April 2001 the respondent, the Islander Board of Industry and Service in the Torres Strait, known as IBIS, obtained judgment against the applicant, Getano Lui (Jnr) in the sum of $91,115.07 (including $1,189.60 costs and $15,364.98 interest).

2. Mr Lui did not file a defence to the claim and so judgment was obtained by default.

3. Mr Lui was a former member of the respondent IBIS.

4. The claim in the District Court of Queensland upon which the default judgment was based alleged that the applicant owed IBIS $74,560.49 under credit agreements between the parties, with interest and costs.

5. The statement of claim set out credit in two amounts.

6. The first amount was lent to the applicant as a board member in a personal debtor’s account in amounts totalling $21,861.70.

7. The second amount was for the funeral expenses of applicant’s late father, Getano Lui Senior totalling $52,698.79.

8. Those two amounts totalled $74,560.49 and the interest and costs made up the full amount of $91,115.07 which was awarded as the judgment debt.

9. On 13 October 2006 the bankruptcy notice relied on by the respondent, numbered Q1276/2006, was served on the applicant, stating the amount owed under the judgment debt was $35,069.04.

10. The schedule attached to the notice, reproduced as follows, identifies the amount allegedly owed.

Column 1		Column 2
1.	Amount…