Moran v Lydiard Financial Services Pty Ltd

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MORAN v LYDIARD FINANCIAL SERVICES PTY LTD [2005] FMCA 1821

BANKRUPTCY – Bankruptcy notice – application to set aside – whether promissory note is payment of debt – whether debtor has set off or cross-claim – whether bankruptcy notice abuse of process when three previous notices were invalid.

Bankruptcy Act1966 (Cth)

Bhagat v Global Custodians Ltd (2002) FCA 223
Ebert v Union Trustee Co of Australia Ltd (1960) 104 CLR 346 at 350

Applicant: JOHN GERARD MORAN

Respondent: LYDIARD FINANCIAL SERVICES PTY LTD

File Number: MLG 1291 of 2005

Judgment of: Phipps FM

Hearing date: 31 October 2005

Date of Last Submission: N/A

Delivered at: Melbourne

Delivered on: 31 October 2005

REPRESENTATION

The Applicant in person

Counsel for the Respondent: Mr Peter Fary

Solicitors for the Respondent: Wisewoulds

ORDERS

1. That the application filed by the application debtor on 17 October 2005 is dismissed.

2. That the applicant debtor pay the respondent creditor's costs to be taxed in accordance with the procedures contained in O.62 of the Federal Court Rules using the scale contained in schedule 1 of the Federal Magistrates’ Court Rules 2001.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 1291 of 2005

JOHN GERARD MORAN

Applicant

And

LYDIARD FINANCIAL SERVICES PTY LTD

Respondent

REASONS FOR JUDGMENT

1. The respondent to this application, Lydiard Financial Services Pty Ltd, has obtained a bankruptcy notice against the applicant, John Gerard Moran. The bankruptcy notice was issued on 23 September 2005.  It is based on an order of the Court of Appeal of the Supreme Court of Victoria where on 28 February 2003, the Court dismissed an application and ordered that John Gerard Moran pay on an indemnity basis the costs of Lydiard Financial Services Pty Ltd, formerly called Cuthberts Nominees Pty Ltd, and then on an order of the taxing master of the Supreme Court, Master Bruce, on 30 June 2003, where the master ordered that those costs be taxed and allowed in the sum of $11,310.40. 

2. The bankruptcy notice was served on 29 September 2005.  Mr Moran now applies to set it aside.  He puts forward three bases for his application to set aside.  First, that the costs have been paid.  He says that they were part of a payment of $82,521.27 paid to the creditor's solicitors in January 2005.  Next he claims that he has a cross-claim in an amount which exceeds by many multiples the costs which are claimed in this bankruptcy notice, and finally, the third claim he alleges that the issuing of this bankruptcy notice, being the fourth that the creditor has obtained against him, is an abuse of process of the Court.

3. I deal first with the claim that payment was made.  The order for costs in the Court of Appeal on 28 February 2003 is not the only order for costs which has been made against Mr Moran, thus the explanation for the figure of $82,521.27.  On 31 January 2005, Mr Moran sent to Messrs Wisewoulds, who are…