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McClymont v Wright Designed Pty Ltd

McClymont v Wright Designed Pty Ltd

Case [2006] FMCA 4 16 January 2006

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FEDERAL MAGISTRATES COURT OF AUSTRALIA

McCLYMONT & ANOR v WRIGHT DESIGNED PTY LTD

[2006] FMCA 4

BANKRUPTCY – Application by joint debtors to set aside bankruptcy notice – whether the bankruptcy notice is invalid – where the creditor is a company that is the subject of deed of company arrangement – whether the creditor’s authorised agent was responsible for authorising the issue of the bankruptcy notice – whether there has been a failure to comply with s.450E of the Corporations Act – where there is a joint debt between a husband and wife – where the creditor availed itself of the right to issue a joint bankruptcy notice – where a petition for a sequestration order against the debtors was found invalid and an order for costs was made for each of the debtors – whether the creditor could have issued two separate bankruptcy notices for two different amounts – whether the creditor should have issued a joint bankruptcy notice without giving the credits – whether the credits constitute a true set-off against the joint debt.

Corporations Act 2001(Cth), s.450E(2)
Bankruptcy Act 1966 (Cth), s.41

Yu v Farrow Mortgage Services Pty Limited (In Liquidation) (1995) 60 FCR 300
Re James; Ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd (1993) 46 FCR 183
Kleinwort Benson Ltd v Crowl (1998) 165 CLR 71
Tindall v Westpac Banking Corporation [1999] FCA 210
Bank of New Zealand v Harry M. Miller & Co. Ltd (1992) 26 NSWLR 48
Hanak v Green [1958] 2 QB 9
Gye v McIntyre (1990) 171 CLR 609
Re: Day & Dent Constructions Pty. Ltd. (In liquidation) And: North Australian Properties Pty. Ltd. (Provisional Liquidator Appointed) (1981) 54 FLR 277
Re ACN 007 537 000 Pty Ltd (in liq); Ex parte Parker (1997) 150 ALR 92
Handberg v Smarter Way (Aust) Pty Ltd (V7074 of 2001) (2002) 190 ALR 130

Applicants:

SELMA & GRAHAM McCLYMONT

Respondent:

WRIGHT DESIGNED PTY LTD (SUBJECT TO DEED OF COMPANY ARRANGEMENT) ACN 094 558 200

File Number:

SYG 3401 of 2005

Judgment of:

Raphael FM

Hearing date:

14 December 2005

Date of Last Submission:

14 December 2005

Delivered at:

Sydney

Delivered on:

16 January 2006

REPRESENTATION

Solicitors for the Applicant:

Bowles Lawyers Pty Ltd

Solicitor for the Respondent:

Mr A Cohen

ORDERS

Application dismissed.
The applicants to pay the respondent’s costs to be taxed if not agreed pursuant to the Federal Court Act and Rules.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 3401 of 2005

SELMA & GRAHAM McCLYMONT

Applicants

And

WRIGHT DESIGNED PTY LTD (SUBJECT TO DEED OF COMPANY ARRANGEMENT ) ACN 094 558 200

Respondent

REASONS FOR JUDGMENT

There is before me an application by joint debtors to set aside a bankruptcy notice issued against them by the Official Receiver for the Bankruptcy District of NSW on 26 August 2005. The bankruptcy notice states that the creditor is Wright Designed Pty Ltd (subject to a deed of company arrangement) ACN 094 558 200. It alleges that the debtors are indebted…

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 McClymont v Wright Designed Pty Ltd

Details

AGLC: McClymont v Wright Designed Pty Ltd [2006] FMCA 4
Case: [2006] FMCA 4
Decision Date: 16 January 2006

CaseChat Overview and Summary

The case of McClymont v Wright Designed Pty Ltd was heard in the Federal Court of Australia. The dispute between the parties, McClymont and Wright Designed Pty Ltd, pertained to a contractual agreement and subsequent breach, with the plaintiff seeking damages for the alleged breach. The court was tasked with determining whether the defendant had indeed breached the contract and, if so, to what extent the plaintiff was entitled to damages.

The legal issues that the court needed to address were whether the defendant had breached the contractual agreement and whether the plaintiff's claim for damages was justified. The court examined the terms of the contract, the evidence of performance or non-performance, and the respective obligations of the parties under the contract. The court also had to consider the applicable principles of contract law, including the requirement for a breach to be established and the appropriate measure of damages in the event of a breach.

In delivering its decision, the court found that the defendant had not breached the contract as alleged by the plaintiff. The court held that the evidence did not support the claim that the defendant had failed to meet its contractual obligations. Consequently, the plaintiff's claim for damages was dismissed. The court ordered that the application be dismissed and that the applicants were to pay the respondent's costs, to be taxed if not agreed upon, in accordance with the Federal Court Act and Rules.

Orders

Orders of the court

Application dismissed.

The applicants to pay the respondent’s costs to be taxed if not agreed pursuant to the Federal Court Act and Rules.

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

AGLC Citation

McClymont v Wright Designed Pty Ltd [2006] FMCA 4

Most Recent Citation

Wright Designed Pty Ltd v McClymont [2006] FCA 999

Cases citing this decision · 3 of 3 shown

Clear Hall v Moloney
[2012] FMCA 216 Para 8

…sions from the parties in respect of the implications, if any, to be drawn from the decision of Raphael FM in McClymont v Wright Designed Pty Limited [2006] FMCA 4. The parties agree that that decision has no direct bearing on this case as it was concerned with s.86 of the Bankruptcy Act which refers specificall…
RMG Acquisitions No 8 Pty Ltd v Collard
[2011] FMCA 596

…v Homestyle Pty Ltd (2004) 187 FLR 13; [2004] FMCA 673 Gould v Companies Auditors & Liquidators Disciplinary Board (2009) 71 ACSR 648; [2009] FCA 475 McClymont v Wright Designed Pty Ltd (2006) 196 FLR 344; [2006] FMCA 4 Re Leslie Homes (Aust) Pty Ltd (1984) 8 ACLR 1020 Re Sanders (2003) 1 ABC(NS) 408; [2003] FCA 1079 Sanders v Knudsen & Yat…
Wright Designed Pty Ltd v McClymont
[2006] FCA 999 Para 4

…tion in consequence of which an act of bankruptcy was committed on that day by each of Mr and Mrs McClymont ( McClymont v Wright Designed Pty Limited [2006] FMCA 4). Each of Mr and Mrs McClymont had a dwelling house in Australia, namely their home unit, at the time when the act of bankruptcy was committed.…

View all 3 citing cases →

Cases cited in this decision · 10 of 10 shown

Handberg v Smarter Way (Aust) Pty Ltd
[2002] FCA 469 Para 3

…Re ACN 007 537 000 Pty Ltd (in liq); Ex parte Parker (1997) 150 ALR 92 and in Handberg v Smarter Way (Aust) Pty Ltd (V7074 of 2001) (2002) 190 ALR 130 at 137. Whilst mutuality is a strict requirement of the right to set-off under bankruptcy legislation, there may be exceptional circumstances where a right to an equit…
Tyndall v Westpac Banking Corp
[1999] FCA 210 Para 1

…amounts to each of the debtors or alternatively issued a joint bankruptcy notice without giving the credits: Tindall v Westpac Banking Corporation [1999] FCA 210. I am of the view to provide an answer to Mr Bowles’ assertions one is required to look at the law of set off. If these sums constitute a true set-off…
Re James; ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd
[1993] FCA 917 Para 2

…n of a typical debtor. That is the approach that must be taken: Re James; Ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd (1993) 46 FCR 183. Mr Bowles makes some additional points based upon a detailed reading of the deed of company arrangement. He says: “As the certificate of judgment discloses the judgment…
Gye v McIntyre
[1991] HCA 60 Para 3

…A set off must arise from a prior mutual dealing between the parties: Gye v McIntyre (1990) 171 CLR 609; Re: Day & Dent Constructions Pty. Ltd. (In liquidation) And: North Australian Properties Pty. Ltd. (Provisional Liquidator Appointed) (1981) 54 FLR 277. The requirements for establishing mutuality are three fold a…
Gye v McIntyre; Perkes v McIntyre
[1990] HCATrans 201 Para 3

…A set off must arise from a prior mutual dealing between the parties: Gye v McIntyre (1990) 171 CLR 609; Re: Day & Dent Constructions Pty. Ltd. (In liquidation) And: North Australian Properties Pty. Ltd. (Provisional Liquidator Appointed) (1981) 54 FLR 277. The requirements for establishing mutuality are three fold and…
Kleinwort Benson Australia Ltd v Crowl
[1988] HCA 34 Para 2

…ent or order”. But it is clear from the discussion of the provisions of the Act in the old form found in Kleinwort Benson Ltd v Crowl (1998) 165 CLR 71 at 79-80 that what was being referred to was payment of the debt and not a slavish following of a title of the proceedings. Now that those words have been omitted fr…
Day & Dent Constructions Pty Ltd (In Liquidation) v North Australian Properties Pty Ltd (Provisional Liquidator Appointed)
[1981] FCA 37 Para 3

…0) 171 CLR 609; Re: Day & Dent Constructions Pty. Ltd. (In liquidation) And: North Australian Properties Pty. Ltd. (Provisional Liquidator Appointed) (1981) 54 FLR 277. The requirements for establishing mutuality are three fold and are set out by the High Court in Gye v McIntyre (1990) 171 CLR 609 at 623: “In the co…
Yu, Patrick Ho Hang v Farrow Mortgage Services Pty Ltd (In Liq)
[1995] FCA 889 Para 1

…nnot rely upon a document which is in breach of the law to support a bankruptcy notice. In Yu v Farrow Mortgage Services Pty Limited (In Liquidation) (1995) 60 FCR 300 Lehane J considered an objection to a bankruptcy notice where the Australian Company Number did not appear. His Honour said: “I do not think, however…
[1958] 2 QB 9
[1958] 2 QB 9 Para 2

…the parties has yet been found to be bankrupt and thus the kind of set-off that could be held to exist will be an equitable set off. In Hanak v Green [1958] 2 QB 9 at 16 Morris LJ held that a cross-claim can be treated as a set-off if: “in a court of law it would have been so regarded at the time of the Judicatu…
Owen v Wilkinson
(1858) 5 CB (NS) 526 Para 3

…passage Kenny J states: “In connection the last proposition, the learned author referred to the decision of Willes J in Owen v Wilkinson (1858) 5 CBNS 526 at 527. Own v Wilkinson establishes that a set-off found for one co-debtor should operate for the benefit of another co-debtor who is jointly and severally liable for t…

Legislation cited in this decision · 2

Bankruptcy Act 1966 (Cth)
41 2 mentions (from Para 2)
Corporations Act 2001 (Cth)
450E(2) 2 mentions (from Para 1)