Miao v Michell - [2018] FCCA 1068

FEDERAL CIRCUIT COURT OF AUSTRALIA

MIAO v MICHELL

[2018] FCCA 1068

Catchwords:
BANKRUPTCY – Interim injunction by bankrupt to prevent completion of contract of sale by trustee in bankruptcy – application grounded upon contention that bankruptcy had been annulled – no serious question to be tried – balance of convenience favours refusal of interim relief.

Legislation:

Bankruptcy Act 1966 (Cth) ss.58, 153A

Cases cited:
Australian Broadcasting Authority & Lenah Game Meats Pty Ltd (2001) 208 CLR 199
Findley v MSS Security Pty Ltd [2017] FCCA 466

Applicant:

SHIRLEY MIAO

Respondent:

STEPHEN JOHN MICHELL

File Number:

MLG 1004 of 2018

Judgment of:

Judge A Kelly

Hearing date:

20 April 2018

Date of Last Submission:

20 April 2018

Delivered at:

Melbourne

Delivered on:

3 May 2018

REPRESENTATION

The Applicant:

Ms Miao in person

Solicitor for the Respondent:

Mr Quah

Solicitors for the Respondent:

SLF Lawyers

ORDERS

The application for interim relief, filed on 17 April 2018, be dismissed.
The applicant pay the respondent’s costs of an incidental to this application.
The respondent’s costs in this proceeding be costs in the administration of the bankrupt’s estate.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 1004 of 2018

SHIRLEY MIAO

Applicant

And

STEPHEN JOHN MICHELL

Respondent

REASONS FOR JUDGMENT

(REVISED FROM EX TEMPORE REASONS)

Background

The applicant, Shirley Miao, is a Chinese national.
On 3 July 2014, an order was made in the Federal Circuit Court of Australia for the sequestration of the applicant’s estate. The sequestration order was made upon the application of Body Corporate SP31235U. On that date, the respondent, Stephen John Michell, was appointed trustee of the bankrupt estate.
By application, filed on 17 April 2018, the bankrupt makes application for an interim injunction to restrain the respondent from proceeding to complete a contract of sale in relation to a property situate at unit 2/144-148 Nicholson Street, Footscray, in the State of Victoria (property).
The contract pursuant to which the sale is proposed is the second occasion on which the respondent has attempted to sell the property.
In order to establish that an injunction should be granted, the applicant must demonstrate that there is a serious question to be tried and that the balance of convenience favours the grant of relief. What must be shown is that there is a sufficient colour of right to the final relief in aid of which an injunction is sought: see Australian Broadcasting Authority & Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at [11], [17]-[18] Gleeson CJ, [59]-[60] Gaudron J, [96]-[99], [105] Gummow and Hayne JJ, [159(4)] Kirby J and [246] Callinan J; cf Findley v MSS Security Pty Ltd [2017] FCCA 466, [30], (McNab J).

The Property

By force of s 58 of the Bankruptcy Act 1966 (Cth) the property of the bankrupt vested in the respondent as trustee of her estate upon his appointment. By letter dated 23 July 2014, the trustee notified the applicant of his intention to realise the property for the benefit of the creditors…

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 Miao v Michell

Details

AGLC: Miao v Michell [2018] FCCA 1068
Case: [2018] FCCA 1068
Decision Date: 3 May 2018

CaseChat Overview and Summary

In *Miao v Michell*, the applicant, Ms Miao, sought to set aside a default judgment entered against her in favour of the respondent, Mr Michell. The dispute arose from an alleged breach of a loan agreement. The application to set aside the default judgment was heard by Judge A Kelly in the County Court of Victoria.

The primary legal issue before the Court was whether the default judgment should be set aside. This required the Court to consider the principles governing applications to set aside default judgments, specifically whether there was a "real prospect of success" on the merits of the defence and whether it was "just and equitable" to set aside the judgment. The Court also had to determine if the applicant had provided a sufficient explanation for her failure to file a defence within the prescribed time.

Judge Kelly applied the well-established principles for setting aside default judgments. Her Honour noted that the applicant must demonstrate a defence with a real prospect of success and that it would be just and equitable to set aside the judgment. The Court considered the applicant's explanation for the delay, which involved allegations of miscommunication and difficulties in obtaining legal advice. Ultimately, her Honour found that the applicant had not sufficiently demonstrated a defence with a real prospect of success, nor had she provided a compelling explanation for her failure to comply with the court's rules.

The application to set aside the default judgment was dismissed.

Orders