Marom v Ensign Laboratories Pty Ltd
[2007] FMCA 1785
•15 October 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MAROM v ENSIGN LABORATORIES PTY LTD | [2007] FMCA 1785 |
| BANKRUPTCY – Application to set aside sequestration order – outstanding Magistrates Court judgment – issue estoppel – application dismissed. |
| Applicant: | LEO MAROM |
| Respondent: | ENSIGN LABORATORIES PTY LTD |
| File number: | MLG 860 of 2007 |
| Judgment of: | Burchardt FM |
| Hearing date: | 15 October 2007 |
| Date of last submission: | 15 October 2007 |
| Delivered at: | Melbourne |
| Delivered on: | 15 October 2007 |
REPRESENTATION
| The Applicant: | In person |
| Counsel for the Respondent: | Mr Baker |
| Solicitor for the Respondent: | Macpherson & Kelley Lawyers |
ORDERS
That the Application is dismissed.
That the Respondent’s costs of the application be costs in the bankrupt’s estate.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 860 of 2007
| LEO MAROM |
Applicant
And
| ENSIGN LABORATIES PTY LTD |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
On 25 June 2007 Mr Marom, who is the Applicant, filed an application to set aside a bankruptcy notice served upon him on the footing that he has a cross-demand – which was described as "being prepared" – which was not able to be raised in the proceedings which resulted in the judgment against him.
An affidavit in support of the application was filed on the same day by Mr Marom and that document asserted, relevantly, that the Magistrate had erred in finding that a contract had existed between Mr Marom and Ensign Laboratories Pty Ltd. It went on to assert that the Magistrate had ignored occupational health and safety laws regarding labelling of the product with which the contract had been concerned; it made a number of other assertions about the Magistrate ignoring the “Therapeutic Goods Administration” (sic); it asserted, in rather general terms, that the labelling of the products had been misleading and deceptive or otherwise inadequate.
From affidavit material filed on behalf of Ensign Laboratories Pty Ltd (“Ensign Laboratories”) it is apparent that there have been proceedings in the Victorian Magistrates' Court. A complaint was issued in which Ensign Laboratories sought $40,721.25 as a debt against Mr Marom. The complaint annexed a statement of claim for goods sold and delivered in that amount.
Thereafter Mr Marom filed a defence. At that time he was represented by Robinson Gill Lawyers. The defence takes issue with the question as to who the proper defendant was and asserted it should have been Mr Marom's company rather than himself. It went on to say in paragraph 6 and following that the goods were defective and not of merchantable quality. The specifics in paragraph 6 of the defence were that the goods were faulty and that they were of poor quality with bad colour, a spelling mistake and cracked printing and that they were marked "organic" without proof thereof and were not tested for UVC rating.
The matter was the subject of further
particulars of the defence on
23 February 2006 in which the question of labeling and the like was further set out. That document was itself again prepared by Robinson Gill Lawyers.
In due course on 25 October 2006 the Victorian Magistrates' Court constituted by his Honour Mr Hassard heard the matter and the judgment of the Court makes it plain that Mr Hassard found, first, that the contracting party was Mr Marom personally, and, second, that he was unable to be satisfied on the balance of probabilities that there was a substance defect such as to give Mr Marom a remedy. His Honour went on to assert that there was no evidence of any loss.
Mr Marom has sought to appeal that decision in the Supreme Court of Victoria by notice of appeal filed on 16 November 2006. The matter came before Master Daly, who on 6 March 2007 dismissed the appeal with costs, and the Court's general form of order notes that, “The notice of appeal does not identify a question of law."
Thereafter, and based upon the outstanding Magistrates' Court judgment, Ensign Laboratories has proceeded to serve a bankruptcy notice, which led in due course to a sequestration order on
20 September 2006.The matter has been adjourned to give Mr Marom time to put on any further affidavit material, but he has not done so and indeed technically his application has been overtaken by events, because what he is really now seeking to do is not to set aside the bankruptcy order but to set aside the sequestration order. I have not concerned myself as to this technical deficiency. Plainly, Mr Marom could take out a relevant application and seek an extension of time, if he needs to do so.
The difficulty is that the judgment of the Magistrates' Court still stands. Furthermore, although Mr Marom has asserted that he is taking steps to challenge that judgment, it is not in any way plain to me that it is open to him to do so, although that is a matter for him. There is certainly no evidence before me to suggest that any application has been made with any curial authority to stay or set aside in some way the original Magistrates' Court judgment and nor has there really been any satisfactory explanation for the lack of affidavit material.
Mr Marom has asserted that as a result of the deficiency in the product provided to him - or, as he would say, his company, he lost three clients, and thereby lost in excess of $100,000.00. He also refers to a desire to achieve a product‑recall, although I note that matter is being pursued with the relevant competent authorities, at least according to what Mr Marom tells me.
It is perfectly clear, contrary to the assertion in the originating application of Mr Marom, that he could have pursued his alleged loss in the Magistrates' Court. Even if it was in excess of the jurisdictional limit of the Court, the matter could have been uplifted and transferred to the County Court; and it is very surprising, to say the least, that his lawyers did not include any such claim or cross‑claim in his Magistrates' Court proceeding.
More importantly, there has been a finding made by the Magistrate, Mr Hassard that he was not satisfied that there was indeed any deficiency in the product. In my view, that is a finding sufficiently clearly on point to give rise to an issue estoppel and one that I should respect in any event. It therefore follows that the application must be dismissed.
I order that costs in the application be costs in the bankrupt’s estate.
I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Burchardt FM
Associate: Brooke Evans
Date: 15 October 2007
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