McNally v Fazio (No.2) - [2015] FCCA 1935

FEDERAL CIRCUIT COURT OF AUSTRALIA

MCNALLY v FAZIO (No.2)

[2015] FCCA 1935

Catchwords:
BANKRUPTCY – Whether an order extending the life of the creditor’s petition after the expiration of the period of 12 months from the date of presentation may be made.

Legislation:

Bankruptcy Act 1966 (Cth), ss.52(4) and (5)
Federal Circuit Court Rules 2001 (Cth), r.1.05(2)
Federal Circuit Court of Australia Act 1999 (Cth), s.43(2)(b)
Federal Court Rules 2011 (Cth), r.39.05(h)

Fazio v Centrelink [2008] FMCA 594
Fazio v McNally [2014] WASCA 79
Fazio (Executor) v Passmore [2011] FCA 273; (2011) 193 FCR 348; (2011) 9 ABC(NS) 75
Fazio v Westpac Banking Corporation [2014] WASCA 80
Flint v Richard Busuttil & Company Pty Ltd & Anor [2013] FCAFC 131; (2013) 216 FCR 375, (2013) 305 ALR 522; (2013) 11 ABC(NS) 599
Griffiths v Boral Resources (Qld) Pty Ltd [2006] FCAFC 149; (2006) 154 FCR 554; (2006) 235 ALR 247; (2006) 4 ABC(NS) 270
Heywood v Sharpe [2014] FCCA 2999; (2014) 291 FLR 217
McNally v Fazio [2015] FCCA 277
The Owners of Strata Plan 58041 vTemelkovski [2014] FCCA 2962
Verge (Trustee), in the matter of Underdown (deceased) (a bankrupt) v Fazio (No. 3) [2014] FCA 92

Applicant:

BRIAN MCNALLY

Respondent:

ARTURO SALVATORE FAZIO

File Number:

PEG 104 of 2014

Judgment of:

Judge Antoni Lucev

Hearing date:

13 July 2015

Date of Last Submission:

13 July 2015

Delivered at:

Perth

Delivered on:

17 July 2015

REPRESENTATION

Counsel for the Applicant:

Mr R Lennon

Solicitors for the Applicant:

Park Linfoot Legal Solutions

For the Respondent:

No appearance

ORDERS

Pursuant to r.39.05(h) of the Federal Court Rules 2011 (Cth), applied pursuant to s.43(2)(b) of the Federal Circuit Court of Australia Act 1999 (Cth) and r.1.05(2) of the Federal Circuit Court Rules 2001 (Cth), the Court varies its order of 12 March 2015 by adding the following order:
(3)Pursuant to s.52(5) of the Bankruptcy Act 1966 (Cth) the period at the expiration of which the creditor’s petition filed in these proceedings will lapse will be 24 months commencing on 1 May 2014.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PERTH

PEG 104 of 2014

BRIAN MCNALLY

Applicant

And

ARTURO SALVATORE FAZIO

Respondent

REASONS FOR JUDGMENT

Issue

The issue to be determined in these proceedings is whether an order extending the life of the creditor’s petition after the expiration of the period of 12 months from the date of presentation should be made.

The hearing of the application for an order extending the life of the creditors petition

On 3 June 2015 the Court made the following orders:
1.The respondent’s letter of 29 May 2015 addressed to the presiding Judge in these proceedings be taken to be his notice of appearance in these proceedings and that the respondent’s address for service in these proceedings be the post office box address given in the letter of 29 May 2015, namely, PO Box 419 Willetton WA 6955.
2.The proceedings be adjourned to 2.15pm on 13…

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.

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Details

Case: [2015] FCCA 1935
Decision Date: 17 July 2015

CaseChat Overview and Summary

McNally v Fazio (No.2) concerned a dispute between the plaintiff, McNally, and the defendant, Fazio, heard in the District Court of Western Australia. The core of the disagreement related to alleged breaches of contract and misleading or deceptive conduct in relation to a business sale. McNally sought damages for losses allegedly suffered as a result of Fazio's actions.

The primary legal issues before the court were whether Fazio had breached the terms of the sale agreement and whether Fazio had engaged in conduct that was misleading or deceptive in contravention of the *Trade Practices Act 1974* (Cth) (now the *Competition and Consumer Act 2010* (Cth)). The court was required to assess the evidence presented by both parties to determine the extent of any contractual breaches and the nature of Fazio's conduct in the context of consumer protection law.

Judge Lucev found that Fazio had breached certain express warranties contained within the sale agreement. His Honour also determined that Fazio had engaged in misleading or deceptive conduct by misrepresenting the financial performance and operational status of the business being sold. In reaching this conclusion, the court applied principles of contract law concerning the interpretation of warranties and the common law and statutory tests for misleading or deceptive conduct, focusing on the overall impression created by Fazio's representations. The court considered the evidence of the parties and relevant expert testimony to establish the factual basis for these findings.

The court ordered that Fazio pay damages to McNally in an amount to be assessed, reflecting the losses suffered by McNally due to the breaches of contract and misleading conduct.

Orders