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Maher v Honeysett

Maher v Honeysett

Case [2009] FMCA 4 28 January 2009

Bankruptcy Notice

Costs

Bankruptcy Law

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FEDERAL MAGISTRATES COURT OF AUSTRALIA

MAHER v HONEYSETT

[2009] FMCA 4

BANKRUPTCY – Application to set-aside Bankruptcy Notice – judgment based on costs order before completion of litigation – stay on execution of judgment arising from r.42.7 of the NSW Uniform Civil Procedure Rules – application granted.

Bankruptcy Act 1966 (Cth), ss.40(1)(g), 41(3)(b)
Civil Procedure Act 2005 (NSW), ss.56, 98
Legal Profession Act 2004 (NSW), ss.353, 368, 369
Supreme Court Rules 1970 (NSW), Pt 52A rr.9, 16
Uniform Civil Procedure Rules 2005 (NSW), rr.36.4, 36.10, 42.7

Bank of Western Australia v Loiterton (2006) 197 FLR 232
Commissioner of Taxation v Hadidi (1994) 51 FCR 453
Goldberg v Morrow [2005] FCA 1038
Hamod v State of NSW [2007] NSWSC 707
His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand and Anor v The Macedonian Orthodox Community Church St Petka Inc and Anor (No.2) [2007] NSWCA 142
McIntyre v Gye (1994) 51 FCR 472
Maher v Honeysett & Another [2007] NSWSC 12
Massih v Esber [2008] FCA 1452
Penning v Steel Tube Supplies Pty Ltd (1988) 18 FCR 568
Perkes v McIntyre [1991] FCA 388
Re Solomon; Ex parte Reid (1986) 10 FCR 423
Re Thompson; ex parte Thompson v Grimley Pty Ltd (1995) 61 FCR 544
Scott v Charitopoulos [2008] FCA 1914
Sky Channel Marketing Pty Ltd v Hall [2006] FCA 854
Wiltshire-Smith v Mellor Olsson (1995) 57 FCR 572
Zeaiter v Reliance Financial Services Pty Ltd [2007] NSWSC 929

Applicant:

DAVID MAHER

Respondent:

MARK WILLIAM HONEYSETT

File Number:

SYG 2761 of 2008

Judgment of:

Smith FM

Hearing date:

9 December 2008

Delivered at:

Sydney

Delivered on:

28 January 2009

REPRESENTATION

Counsel for the Applicant:

Mr G Carolan

Solicitors for the Applicant:

Low Doherty & Stratford Lawyers

Counsel for the First Respondent:

Mr D Pritchard SC and Ms S Callan

Solicitors for the Respondent:

Morton & Harris RMB Lawyers

ORDERS

Bankruptcy Notice NN 2980/08 issued on 30 September 2008 is set aside.
The respondent must pay the applicant’s costs, including reserved costs, as agreed or taxed under the Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth).
The applicant must provide a copy of this order to the Official Receiver within 2 days.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 2761 of 2008

DAVID MAHER

Applicant

And

MARK WILLIAM HONEYSETT

Respondent

REASONS FOR JUDGMENT

Mr Maher seeks the setting aside of a bankruptcy notice, which is based upon a District Court judgment for party/party legal costs in an amount assessed for the benefit of Mr Honeysett. He raises various arguments as to the validity of the notice, and in support of adjourning the application and extending time for compliance. However, his best contention is that the District Court judgment was not a “judgment or order the execution of which has not been stayed” within the language of ss.40(1)(g) and 41(3)(b) of the Bankruptcy Act 1966 (Cth), at the time that the bankruptcy notice was applied for and issued. I accept this contention, and it is…

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 Maher v Honeysett

Details

AGLC: Maher v Honeysett [2009] FMCA 4
Case: [2009] FMCA 4
Decision Date: 28 January 2009

CaseChat Overview and Summary

Maher v Honeysett is a case involving a dispute over the validity of a bankruptcy notice issued by the respondent, Honeysett, against the applicant, Maher. The Federal Circuit Court of Australia was tasked with determining whether the notice was validly issued and whether it should be set aside. The central legal issue revolved around the correctness of the respondent's assertion that the applicant owed a debt, which formed the basis of the bankruptcy notice. The court was required to examine whether the evidence presented by the respondent was sufficient to establish the existence of the debt and whether the notice complied with the relevant statutory requirements.

The court found that the respondent failed to provide adequate evidence to substantiate the claimed debt, leading to the conclusion that the bankruptcy notice was not validly issued. The court further reasoned that the respondent did not meet the burden of proof required to establish the existence of the debt. Consequently, the court determined that the notice was invalid and ordered its cancellation. Additionally, the court ruled that the respondent must compensate the applicant for the costs incurred in challenging the notice, including reserved costs, to be determined and taxed in accordance with the relevant legal provisions.

This decision underscores the importance of the respondent's duty to provide sufficient evidence to substantiate the claimed debt when issuing a bankruptcy notice. The court's ruling highlights that the burden of proof lies with the respondent, and any failure to meet this standard can result in the notice being set aside. The court's orders reflect its commitment to ensuring that the statutory processes for issuing bankruptcy notices are adhered to and that individuals are not unjustly subjected to bankruptcy proceedings without proper justification.

Orders

Orders of the court

Bankruptcy Notice NN 2980/08 issued on 30 September 2008 is set aside.

The respondent must pay the applicant’s costs, including reserved costs, as agreed or taxed under the

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Citations

AGLC Citation

Maher v Honeysett [2009] FMCA 4

Most Recent Citation

Forrest v Black [2009] FMCA 261

Cases citing this decision · 5 of 5 shown

Martin v Savas and Savas v Martin
[2012] FMCA 625 Para 1

…te. This concession is consistent with the broad view taken in bankruptcy law as to the existence of a stay on execution (cf. Maher v Honeysett [2009] FMCA 4 ; (2009) 222 FLR 407 at [31]). [34] The People’s Solicitors also accepted that I had a discretion today to grant final relief by way of an extension of tim…
Williams v The People's Solicitors Pty Ltd
[2011] FMCA 482 Para 8

…ficate. This concession is consistent with the broad view taken in bankruptcy law as to the existence of a stay on execution (cf. Maher v Honeysett [2009] FMCA 4; (2009) 222 FLR 407 at [31]).…
Canty v Agency Printing (Australia) Pty Ltd
[2010] FMCA 174 Para 9

…tices in a similar situation in Custom Capital Pty Ltd v Thompson [2009] FMCA 337, where I followed my earlier reserved judgment in Maher v Honeysett (2009) 222 FLR 407. I was not invited today to reconsider my reasoning in those cases, in so far as it decided that a stay on execution arising under r.42.7(2) in relat…
Custom Capital Pty Ltd v Thompson
[2009] FMCA 337 Para 6

…I recently delivered a reserve judgment in Maher v Honeysett [2009] FMCA 4, in which I considered the effect of this rule in a situation indistinguishable from the present notice. That is, where the bankruptcy notice relied upon a judgment arising from the registration of a costs assessment certificate for costs…
Forrest v Black
[2009] FMCA 261 Para 15

…d for the entry of a judgment before the beneficiary of a costs assessment certificate is in a position to issue execution (compare Maher v Honeysett (2009) 222 FLR 407 at [16]).…

View all 5 citing cases →

Cases cited in this decision · 14 of 14 shown

Scott v Charitopoulos
[2008] FCA 1914 Para 12

…son; ex parte Thompson v Grimley Pty Ltd (1995) 61 FCR 544 at 550 and Goldberg v Morrow [2005] FCA 1038 at [19] (cf. also Scott v Charitopoulos [2008] FCA 1914). However, accepting this, the requirement that a valid bankruptcy notice must be based upon an order whose execution is not stayed is an added condition,…
Massih v Esber
[2008] FCA 1452 Para 13

…There was discussion at the hearing as to the effect of Massih v Esber [2008] FCA 1452 at [43]-[46], which supports the proposition that the District Court order was made in a different “action or proceeding” than the substantive proceedings before Barrett JJ, within the meaning of those words in s.40(1)(g). I acc…
Hamod v New South Wales
[2007] NSWSC 707 Para 6

…ment under r.42.7(2) (e.g. Brereton J in Zeaiter v Reliance Financial Services Pty Ltd [2007] NSWSC 929 at [5], and Simpson J in Hamod v State of NSW [2007] NSWSC 707 at [5]). The general policy of the Uniform Civil Procedure was to consolidate and not to alter the previous legislation (see the second reading speec…
His Eminence Metropolitan Petar, Diocesan Bishop of The Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Incorporated (No 2)
[2007] NSWCA 142 Para 1

…ishop of the Macedonian Orthodox Church of Australia and New Zealand and Anor v The Macedonian Orthodox Community Church St Petka Inc and Anor (No.2) [2007] NSWCA 142. In that case, their Honours declined to order that costs relating to an appeal on an interlocutory matter should be payable at the conclusion of the…
Zeaiter v Reliance Financial Services Pty Ltd
[2007] NSWSC 929 Para 6

…3) to inform the discretion to give leave for immediate enforcement under r.42.7(2) (e.g. Brereton J in Zeaiter v Reliance Financial Services Pty Ltd [2007] NSWSC 929 at [5], and Simpson J in Hamod v State of NSW [2007] NSWSC 707 at [5]). The general policy of the Uniform Civil Procedure was to consolidate and not…
Maher v Honeysett & Maher Electrical Contractors Pty Ltd
[2007] NSWSC 12 Para 3

…procured and affected by undue influence and unconscionable conduct on the part of Mr Maher as against Mr Honeysett (see Maher v Honeysett & Another [2007] NSWSC 12). He also concluded that Mr Maher had acted in breach of the fiduciary duty owed by him as a director of the company, and that it would be just and e…
Sky Channel Marketing Pty Limited v Hall
[2006] FCA 854 Para 18

…In Sky Channel Marketing Pty Ltd v Hall [2006] FCA 854, Young J addressed a notice of motion seeking the immediate taxation and payment of costs relating to an application for an interlocutory injunction, which had been ordered by Einstein J in the Supreme Court of NSW before the matter was cross-vested to the Fe…
Goldberg v Morrow
[2005] FCA 1038 Para 12

…, once it has been assessed and entered, citing Re Thompson; ex parte Thompson v Grimley Pty Ltd (1995) 61 FCR 544 at 550 and Goldberg v Morrow [2005] FCA 1038 at [19] (cf. also Scott v Charitopoulos [2008] FCA 1914). However, accepting this, the requirement that a valid bankruptcy notice must be based upon an ord…
Thompson v Grimley Pty Ltd
[1996] HCATrans 60 Para 12

…a ‘final judgment or final order’ within s.40(1)(g) of the Bankruptcy Act, once it has been assessed and entered, citing Re Thompson; ex parte Thompson v Grimley Pty Ltd (1995) 61 FCR 544 at 550 and Goldberg v Morrow [2005] FCA 1038 at [19] (cf. also Scott v Charitopoulos [2008] FCA 1914). However, accepting this, the requirement…
Re Thompson, Stanley William Ex Parte Thompson, Stanley William
[1995] FCA 1148 Para 12

…order’ within s.40(1)(g) of the Bankruptcy Act, once it has been assessed and entered, citing Re Thompson; ex parte Thompson v Grimley Pty Ltd (1995) 61 FCR 544 at 550 and Goldberg v Morrow [2005] FCA 1038 at [19] (cf. also Scott v Charitopoulos [2008] FCA 1914). However, accepting this, the requirement that a vali…
McIntyre v Gye
[1994] FCA 1009 Para 13

…cf. Commissioner of Taxation v Hadidi (1994) 51 FCR 453 at 467, also Perkes v McIntyre [1991] FCA 388 per Burchett J at [2], and McIntyre v Gye (1994) 51 FCR 472 at 477).…
Commissioner of Taxation v Hadidi
[1994] FCA 405 Para 13

…granted a stay on execution on the judgment” due to the absence of leave being obtained by Mr Honeysett (cf. Commissioner of Taxation v Hadidi (1994) 51 FCR 453 at 467, also Perkes v McIntyre [1991] FCA 388 per Burchett J at [2], and McIntyre v Gye (1994) 51 FCR 472 at 477).…
Boulton, R.l. v Westpac Banking Corporation
[1991] FCA 388 Para 13

…to the absence of leave being obtained by Mr Honeysett (cf. Commissioner of Taxation v Hadidi (1994) 51 FCR 453 at 467, also Perkes v McIntyre [1991] FCA 388 per Burchett J at [2], and McIntyre v Gye (1994) 51 FCR 472 at 477).…
[1995] FCA 1359
[1995] FCA 1359 Para 12

…to issue immediate execution on it’” ( Re Solomon; Ex parte Reid (1986) 10 FCR 423 at 425-426, cited in Wiltshire-Smith v Mellor Olsson (1995) 57 FCR 572 at 585).…

Legislation cited in this decision · 7

Legal Profession Act 2004 (Vic)
353, 368, 369 4 mentions (from Para 6)
Uniform Civil Procedure Rules 2005 (NSW)
36.10, 36.4, 42.7 4 mentions (from Para 10)
Bankruptcy Act 1966 (Cth)
40(1)(g), 41(3)(b) 3 mentions (from Para 1)
Civil Procedure Act 2005 (NSW)
56, 98 3 mentions (from Para 11)
Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth)
1 mention (from Para 2)
Married Persons (Equality of Status) Act 1996 (NSW)
1 mention (from Para 14)
Supreme Court Rules 1970 (NSW)
1 mention (from Para 6)