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Maples v Siteberg Pty Ltd

Maples v Siteberg Pty Ltd

Case [2013] FMCA 1253 5 March 2013

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FEDERAL MAGISTRATES COURT OF AUSTRALIA

MAPLES v SITEBERG PTY LTD

[2013] FMCA 123

BANKRUPTCY – Application to set aside bankruptcy notice – whether an abuse of process – earlier bankruptcy notice discussed – pending proceedings in Supreme Court of NSW.

Bankruptcy Act 1966, s.30

Maxwell-Smith v S & E Hall Ltd, in the matter of Maxwell-Smith [2006] FCA 825
Russell v Polites Investments Pty Ltd [2012] FCA 11
Williams v Spautz (1992) 174 CLR 509

Applicant:

BRUCE JOHN MAPLES

Respondent:

SITEBERG PTY LTD

File Number:

SYG 2017 of 2012

Judgment of:

Altobelli FM

Hearing date:

5 February 2013

Date of Last Submission:

5 February 2013

Delivered at:

Sydney

Delivered on:

5 March 2013

REPRESENTATION

Counsel for the Applicant:

Mr Skinner

Solicitors for the Applicant:

Frontier Law Group

Counsel for the Respondent:

Mr Johnson

Solicitors for the Respondent:

Crisp Legal

ORDERS

The application filed 18 September 2012 is dismissed.
The applicant pay the respondent’s costs as agreed or as assessed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 2017 of 2012

BRUCE JOHN MAPLES

Applicant

And

SITEBERG PTY LTD

Respondent

REASONS FOR JUDGMENT

Introduction and background

One gets the impression that the present dispute between the parties is merely a relatively inconsequential skirmish in the litigation war that they are engaged in. The applicant asks the court to set aside a bankruptcy notice issued by the respondent on 29 June 2012 on the grounds that it is an abuse of process. The respondent opposes this, denies there is an abuse of process, but quite frankly acknowledges that even if the court dismisses the application, the creditor’s petition that it will cause to issue will probably be the subject of further litigation.
The prospect of further litigation does not seem to concern either party. The war between them arises out of a failed business venture the vehicle of which was the Southern Highlands Trust, a unit trust of which the applicant is settlor and equal unit holder with the respondent who is the Trustee. The main litigation is currently before the New South Wales Supreme Court, but there has been at times ancillary litigation in the Local Court at Camden and in the District Court of NSW. The detail of this litigation is not relevant to the present proceedings.
By way of a bankruptcy notice issued 29 June 2012 the respondent seeks to recover a debt in the sum of $100,049.10 based on two judgments for costs – one for $30,049.10 on 29 June 2012, and one for $70,000 dated 28 April 2010. An earlier bankruptcy notice dated 11 March 2011 claimed $123,205.51 for various judgments which included the judgments referred to in the bankruptcy notice sought to be set aside. In June 2011 the parties agreed unconditionally and by consent to withdraw and dismiss the first bankruptcy notice with each party to pay their own costs.

Contentions

The applicant contends that the bankruptcy notice of 29 June 2012 is an abuse of process because, firstly, it is identical to the…

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 Maples v Siteberg Pty Ltd

Details

AGLC: Maples v Siteberg Pty Ltd [2013] FMCA 123
Case: [2013] FMCA 1253
Decision Date: 5 March 2013

CaseChat Overview and Summary

Maples v Siteberg Pty Ltd involved a dispute where Maples, the applicant, sought to set aside a bankruptcy notice issued by Siteberg Pty Ltd, the respondent. The application was made in the Federal Circuit Court of Australia, where Maples argued that the issuance of the bankruptcy notice was an abuse of process. The matter was complicated by the fact that Maples had already received a bankruptcy notice from Siteberg Pty Ltd, and there were pending proceedings in the Supreme Court of New South Wales that related to the same debt.

The primary legal issue before the court was whether the issuance of the second bankruptcy notice constituted an abuse of process, particularly given the circumstances of the earlier notice and the ongoing Supreme Court proceedings. The court had to consider the principles surrounding the abuse of process doctrine and whether the respondent's actions in issuing the second notice fell outside the bounds of procedural fairness and justice. Another aspect of the court's consideration was whether the pending Supreme Court proceedings should preclude the issuance of the second notice.

In its judgment, the court determined that the issuance of the second bankruptcy notice did not constitute an abuse of process. The court held that there were no grounds to suggest that the respondent acted improperly or in bad faith. The court also noted that the pending Supreme Court proceedings did not automatically preclude the respondent from issuing a new notice. The court emphasised the respondent's right to seek the recovery of debts and the procedural safeguards that are in place to protect creditors and debtors alike. Consequently, the application to set aside the bankruptcy notice was dismissed.

The court ordered that the application filed on 18 September 2012 be dismissed and that the applicant pay the respondent’s costs as agreed or as assessed. This decision underscored the importance of respecting procedural rights and the limitations on the abuse of process doctrine in the context of bankruptcy proceedings.

Orders

Orders of the court

The application filed 18 September 2012 is dismissed.

The applicant pay the respondent’s costs as agreed or as assessed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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Citations

Maples v Siteberg Pty Ltd [2013] FMCA 123

Cases Citing This Decision

No citing cases yet.

Cases Cited

Maxwell-Smith v S & E Hall Pty Ltd [2014] NSWCA 146
Citation 1 (Para 2)

…ircumstances where the debtor is in fact insolvent: [[1999] FCA 1574]. See also: Maxwell-Smith v S & E Hall Pty Ltd [2006] FCA 825, 233 ALR 81 at [41] to [49] per Jacobson J; Cavoli v Etl [2007] FCA 1191 at [17] per Heerey J; Slack v Bottoms English Solicitors [2002] FCA 1445 at [15] to [18] per Spender J; Ya…
Maples v Siteberg Pty Ltd [2013] FMCA 123
Citation 2

…[2013] FMCA 123…
Russell v Polites Investments Pty Ltd [2012] FCA 11
Citation 3 (Para 2)

…A useful statement of the relevant law is found in Russell v Polites Investments Pty Ltd [2012] FCA 11 at paragraphs 45-46 inclusive where his Honour Justice Flick said: 45. It may be accepted that it is an abuse of process to pursue bankruptcy proceedings “for the purpose of stifling litigation”: Bayne v Bailli…
Seller v Deputy Commissioner of Taxation [2011] FCA 865
Citation 4 (Para 2)

…citors [2002] FCA 1445 at [15] to [18] per Spender J; Yang v Mead [2009] FCA 1202 at [11]; Seller v Deputy Commissioner of Taxation [2011] FCA 865 at [15] to [16]. An allegation of abuse of process, it is to be recalled, is a “serious” allegation and one not to be made without a sufficient factual foundation: cf.…
Yang v Mead [2009] FCA 1202
Citation 5 (Para 2)

…[2007] FCA 1191 at [17] per Heerey J; Slack v Bottoms English Solicitors [2002] FCA 1445 at [15] to [18] per Spender J; Yang v Mead [2009] FCA 1202 at [11]; Seller v Deputy Commissioner of Taxation [2011] FCA 865 at [15] to [16]. An allegation of abuse of process, it is to be recalled, is a “serious” allegation an…
Cavoli v Etl [2007] FCA 1191
Citation 6 (Para 2)

…99] FCA 1574]. See also: Maxwell-Smith v S & E Hall Pty Ltd [2006] FCA 825, 233 ALR 81 at [41] to [49] per Jacobson J; Cavoli v Etl [2007] FCA 1191 at [17] per Heerey J; Slack v Bottoms English Solicitors [2002] FCA 1445 at [15] to [18] per Spender J; Yang v Mead [2009] FCA 1202 at [11]; Seller v Deputy Commission…
Conley v Commonwealth Bank of Australia [2006] FCA 1255
Citation 7 (Para 2)

…serious” allegation and one not to be made without a sufficient factual foundation: cf. Conley v Commonwealth Bank of Australia [2006] FCA 1255 at [9] to [18] per Bennett J.…
Maxwell-Smith v S & E Hall Pty Ltd [2006] FCA 825
Citation 8 (Para 1)

…o set aside a bankruptcy notice as an abuse of process under s.30 Bankruptcy Act 1966; Maxwell-Smith v S & E Hall Ltd, in the matter of Maxwell-Smith [2006] FCA 825 (3 July 2006). Neither party contended to the contrary.…
Slack v Bottoms English Solicitors [2002] FCA 1445
Citation 9 (Para 2)

…5, 233 ALR 81 at [41] to [49] per Jacobson J; Cavoli v Etl [2007] FCA 1191 at [17] per Heerey J; Slack v Bottoms English Solicitors [2002] FCA 1445 at [15] to [18] per Spender J; Yang v Mead [2009] FCA 1202 at [11]; Seller v Deputy Commissioner of Taxation [2011] FCA 865 at [15] to [16]. An allegation of abuse of…
Killoran v Duncan, in the matter of Killoran [1999] FCA 1574
Citation 10 (Para 2)

…advantage over other creditors”. 46. In the context of an application to set aside a bankruptcy notice, Gyles J in Killoran v Duncan [1999] FCA 1574 relevantly observed: [12] Whilst there is no debate about the jurisdiction of the Court to set aside a bankruptcy notice as an abuse of process where it can be concl…
Williams v Spautz [1992] HCA 34
Citation 11 (Para 3)

…xtent to which this manifests an abuse of process. This was discussed in the judgment of Mason CJ, Dawson, Toohey and McHugh J in Williams v Spautz (1992) 174 CLR 509 at paragraphs 34, 36 and 42: 34. The observations of the Privy Council in King v. Henderson (40) (1898) AC, at p 731 and those of Isaacs J. in Dowling…
Rozenbes v Kronhill [1956] HCA 65
Citation 12 (Para 2)

…may also be readily accepted. The “ultimate principle involved is that a court will not allow its process to be abused”: Rozenbes v Kronhill [1956] HCA 65; (1956) 95 CLR 407 at 417. Dixon CJ, Webb and Fullagar JJ there said that a court would “look strictly at the conduct of a creditor using or threatening bank…
Bayne v Baillieu [1908] HCA 39
Citation 13 (Para 2)

…epted that it is an abuse of process to pursue bankruptcy proceedings “for the purpose of stifling litigation”: Bayne v Baillieu; Bayne v Riggall [1908] HCA 39; (1908) 6 CLR 382 at 396 per Griffith CJ. The power of the Court to prevent such an abuse of process may also be readily accepted. The “ultimate principl…
King v Henderson (New South Wales) [1898] UKPC 34
Citation 14 (Para 3)

…Much was said in submissions about the respondent’s purpose in causing the bankruptcy notice to issue, and the extent to which this manifests an abuse of process. This was discussed in the judgment of Mason CJ, Dawson, Toohey and McHugh J in Williams v Spautz (1992) 174 CLR 509 at paragraphs 34, 36 …

Legislation Cited

Bankruptcy Act 1966 (Cth) 30
2 mentions (from Para 1)