Monsour Pty Ltd v Amos

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MONSOUR PTY LTD v AMOS [2007] FMCA 740

BANKRUPTCY – Bankruptcy notice – sequestration order – set aside – costs.

Bankruptcy Act 1966 (Cth)

Re Vanechteld (1960) 18 ABC 258
Re Sarina; Ex Parte Wollondilly Shire Council (1980) 32 ALR 596
Re Murray – v- Phillip Vilkelis- Curas Ex Parte; Deputy Commissioner of Taxation. Unreported. Federal Court No P360 of 1985 per Jenkinson J.

Hones –v- Gorczynski [2002] FMCA 253

Applicant: MONSOUR PTY LTD (FORMERLY MONSOUR LEGAL COSTS PTY LTD) ACN 010 644 989

Respondent: EDWARD AMOS

File number: BRG 244 of 2006

Judgment of: Burnett FM

Hearing date: 2 May 2007

Date of last submission: 2 May 2007

Delivered at: Brisbane

Delivered on: 18 May 2007

REPRESENTATION

Solicitors for the Applicant: McInnes Wilson

Counsel for the Respondent: Mr Ambrose

Solicitors for the Respondent: Keller Nall & Brown

ORDERS

1. That the Respondent pay the Applicant’s costs of and incidental to the application including reserved costs to be assessed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
BRISBANE

BRG 244 of 2006

MONSOUR PTY LTD (FORMERLY MONSOUR LEGAL COSTS PTY LTD) ACN 010 644 989

Applicant

And

EDWARD AMOS

Respondent

REASONS FOR JUDGMENT

Introduction

1. In this proceeding the Applicant Monsour Pty Ltd (formerly Monsour Legal Costs Pty Ltd) (the Applicant) sought a sequestration order against the Respondent Edward Amos (the Respondent).   On 11 April 2007 the Application was dismissed by consent.

2. The Applicant says that it was only a short time before that date that it was apparent to it from material filed by the Respondent in the application that the Respondent was in all the circumstances able to pay his debts.  The Respondent says that his solvency would have been apparent to the Applicant from the outset.

3. The Respondent asks for costs, they to follow the event of dismissal.  The Applicant too seeks costs.

4. From argument at the hearing two issues arose.

   a)Did the Applicant have knowledge, actual or constructive, of the Respondent’s true financial situation prior to bringing its application such as to render its bringing and prosecution of the application unreasonable; and

   b)Whether or not it was in any event appropriate to bring bankruptcy proceedings when another cheaper means of verifying the Respondent’s financial position was available.

Background Facts

1. The Applicant was a company conducting the business of legal cost assessments.  The Respondent had been an unsuccessful party to proceedings in the Queensland Supreme Court.  In resolution of those proceedings he entered into an agreement with the other party to those proceedings to pay the other party’s costs of those proceedings, which such costs were to be assessed by the Applicant.  The costs were duly assessed and the Respondent paid to that party its costs.

2. The Respondent however considered that the Applicant, in performing its costs assessment, had conducted that assessment negligently and/or in breach of implied terms of its contract with the Respondent.  Accordingly it commenced proceedings in the Magistrates Court to recover damages against the Applicant in respect of those alleged…