Maxwell-Smith v S and E Hall Pty Ltd - [2003] FMCA 162

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MAXWELL-SMITH v S & E HALL PTY LTD

[2003] FMCA 162

BANKRUPTCY – Application to set aside bankruptcy notice – notice based on Local Court judgment following determination of legal costs awarded in Supreme Court proceedings – Supreme Court review of proceedings in the Building Disputes Tribunal – leave to appeal against Supreme Court decision refused by NSW Court of Appeal and the High Court – attempt by the applicant to re-agitate the issues dealt with by the Building Disputes Tribunal – whether the bankruptcy court should go behind the decision of the Supreme Court – application dismissed.

Consumer Claims Tribunal Act 1987 (NSW)

Federal Court Rules

Applicant:

EUGENE MAXWELL-SMITH

Respondent:

S & E HALL PTY LTD

File No:

SZ294 of 2003

Delivered on:

22 April 2003

Delivered at:

Sydney

Hearing date:

22 April 2003

Judgment of:

Driver FM

REPRESENTATION

The applicant appeared in person

Counsel for the Respondent:

Mr E Petersen

Solicitors for the Respondent:

Sautelle White Lawyers

ORDERS

The application is dismissed.
The applicant is to pay the respondent’s costs and disbursements of and incidental to the application, including any reserved costs.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SZ294 of 2003

EUGENE MAXWELL-SMITH

Applicant

And

S & E HALL PTY LTD

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

I have before me an application by Eugene Maxwell-Smith seeking to set aside bankruptcy notice NN284402, served on him and his wife. There was a question in the hearing before me today whether Mrs Maxwell-Smith is also a party to the application. I ruled that she was not a necessary party and the matter proceeded on the basis of the application of Mr Maxwell-Smith alone.
The applicant is self-represented and he raises a number of issues in opposition to the bankruptcy notice. He raised an issue of estoppel but that was not pursued in the proceedings before me. He also raised an issue about the absence of the assessor’s report relating to legal costs not being annexed to the bankruptcy notice served on him. The position is that the bankruptcy notice is based upon a certificate of judgment from the Local Court at Bega, consequent upon an assessment of costs in proceedings in the Supreme Court of New South Wales. I place no significance on the absence of the assessment from the bankruptcy notice. The assessment clearly exists and I accepted it when tendered in the proceedings before me.
Mr Maxwell-Smith doubted whether the petitioning creditor actually incurred any legal costs in the Supreme Court proceedings given an apparent close relationship between the solicitors and the creditor. However, his belief is no more than a suspicion and, in the circumstances, there is nothing before me on which to base a finding that no costs were in fact incurred by the petitioning creditor.
The import of the matters raised by the applicant is that I should go behind the Court decision supporting the bankruptcy notice. That decision is on a narrow analysis, simply the costs determination following proceedings in the Supreme Court of New South Wales, which were themselves a review of a decision of the Building Disputes Tribunal of New South Wales (“the Tribunal”) under the Consumer Claims Tribunal Act 1987 (NSW) relating to a building dispute. The Tribunal proceedings were a rehearing following an earlier quashing of a previous Tribunal decision by consent. In substance, Mr Maxwell-Smith believes that the decision of the Tribunal on that building dispute was unjust and that a proper opportunity did not exist in the review proceedings in the Supreme Court, which were heard before his Honour James J, to look at all of the available evidence.
Mr Maxwell-Smith has explained to me that the building dispute arose during the construction of a home for him and his wife by the creditor. There was a dispute both as to moneys claimed by the builder and rectification work sought by Mr and Mrs Maxwell-Smith. The dispute went before the Tribunal which made a ruling substantially in favour of the builder, although a small allowance of some $596 was made for the rectification work sought. The Tribunal decision required Mr and Mrs Maxwell-Smith to pay $6,745.55 after allowing for a credit of $596.50 for unfinished work.
In hindsight, Mr and Mrs Maxwell-Smith may have been better advised to pay the amount sought. However, they sought a review of the Tribunal determination in the Supreme Court of New South Wales. The decision of James J was that no legal basis had been made out for interfering with the decision of the Tribunal.
Mr Maxwell-Smith presented material to me and invited me to watch a video tape which he told me would establish that the rectification work required was far more substantial than had been recognised by the Tribunal. I decided that I should receive as evidence the material presented by Mr Maxwell-Smith and I also watched the video. That showed me that there were a number of apparent defects in the construction of the house, some of which on the surface appeared superficial, but on analysis appeared to include some fairly significant deterioration of metal work, in particular on the roof of an atrium forming part of the house structure.
It seems that some three years passed between the dispute arising as to the construction work and the eventual rectification of that work. Mr Maxwell-Smith told me that something in excess of $9,000 was finally spent on the rectification work. It is open to question how much of that cost was due to deterioration over that three year period and how much of that deterioration resulted from original defects in the construction work.
It is possible that the Tribunal was mistaken in its assessment of the cost of the rectification work. However, the fact that the Tribunal may have been in error in assessing that cost is not a reason to go behind the judgment of the Supreme Court, let alone the subsequent costs determination enforced in the Local Court. The Supreme Court found that there was no legal error in the proceedings before the Tribunal justifying that Court in interfering with the decision of the Tribunal. Nothing that has been advanced before me today by Mr Maxwell-Smith supports a conclusion that I should go behind the decision of the Supreme Court, or the Local Court. Mr Maxwell-Smith cannot in these proceedings re-open the issue dealt with in the Tribunal.
On that basis, while I find that I can go behind the decision of the Supreme Court, and the Local Court order supporting the bankruptcy notice, in this matter I find that there is no proper basis to go behind either the judgment debt supporting the bankruptcy notice or the Supreme Court decision leading to the relevant costs order. Mr and Mrs Maxwell-Smith sought to have reviewed the decision of the Tribunal. They were unsuccessful. They were unsuccessful in further appeals to the New South Wales Court of Appeal and the High Court. That should have been the end of the matter.
Mr and Mrs Maxwell-Smith have incurred substantial legal costs in the pursuit of justice as they see it. Perhaps they would have been better advised to meet the builder's claim in the first instance. In any event, those legal costs have been incurred and have not been paid. I am satisfied that those costs were properly assessed following the decision of the New South Wales Supreme Court. Following the assessment of the costs and entering of judgment in the Local Court the costs became due and payable. In the circumstances, I am not satisfied that a basis has been advanced to set aside the bankruptcy notice and I will dismiss the application.
Mr Maxwell-Smith has been unsuccessful in the application and in accordance with the general principle that costs follow the event I am satisfied that there should be an order for costs. In bankruptcy proceedings in this Court in the absence of a specific order, the Federal Court Rules apply. I will order that the applicant pay the respondent's costs of and incidental to the application, including any reserved costs.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of Driver FM

Associate:

Date: 5 May 2003