Moran v Lydiard Financial Services Pty Ltd - [2007] FCA 872

FEDERAL COURT OF AUSTRALIA
Moran v Lydiard Financial Services Pty Ltd (ACN 005 932 276) [2007] FCA 872
BANKRUPTCY - Appeal against decision of Federal Magistrate to set aside a sequestration order - nature of hearing before Federal Magistrate - timing of act of bankruptcy - misstatement of time of act of bankruptcy in Creditor’s Petition - relevance of pending application for special leave to appeal to the High Court.
Acts Amendment and Repeal (Courts and Legal Practice) Act 2003 (WA) Pt 8
Bankruptcy Act1966 (Cth) ss 33, 40, 41, 43, 44, 47, 52, 104, 306
Copyright Act1968 (Cth) s 43
Federal Court of Australia Act1976 (Cth) s 25
Federal Magistrates Act 1999 (Cth) ss 10, 102, 103, 104
Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth) r 2.02
Federal Court Rules 1979 (Cth) O 62 r 12
Federal Magistrates Court Rules2001 (Cth) r 7.01
Bryant v Commonwealth Bank of Australia [1995] FCA 971 cited
Cottrell v Nicholls (as trustee in the estate of Cottrell) [2004] FCA 102 cited
Guss v Johnstone [2000] FCA 1455 ref to
Guss v Johnstone (2000) 74 ALJR 884 ref to
MacDonald v Official Trustee in Bankruptcy (2001) 107 FCR 72 cited
Martin v Commonwealth Bank of Australia (2001) 217 ALR 634 cited
Meehan v Alfaro (1999) 93 FCR 201 cited
Moran v Lydiard Financial Services Pty Ltd [2005] FMCA 1821 ref to
Moran v Lydiard Financial Services Pty Ltd (previously Cuthberts Nominees Pty Ltd) [2006] FMCA 1341 affirmed
Moran v Lydiard Financial Services Pty Ltd [2006] FCA 631 ref to
Thai v Deputy Commissioner of Taxation (1994) 53 FCR 252 cited
JOHN GERARD MORAN v LYDIARD FINANCIAL SERVICES PTY LTD (ACN 005 932 276) (PREVIOUSLY CUTHBERTS NOMINEES PTY LTD (ACN 005 932 276))
VID 1244 OF 2006
GORDON J
8 JUNE 2007
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 1244 OF 2006

BETWEEN:

JOHN GERARD MORAN
Appellant

AND:

LYDIARD FINANCIAL SERVICES PTY LTD (ACN 005 932 276) (PREVIOUSLY CUTHBERTS NOMINEES PTY LTD (ACN 005 932 276))
Respondent

JUDGE:

GORDON J

DATE OF ORDER:

8 JUNE 2007

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1.The appeal be dismissed.
2.The costs of the respondent creditor to this appeal be paid by the appellant debtor to be taxed according to the scale of costs referred to in O 62 r 12 of the Federal Court Rules 1979 (Cth) and be paid out of the estate of the appellant debtor in accordance with the provisions of the Bankruptcy Act1966 (Cth).

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 1244 OF 2006

BETWEEN:

JOHN GERARD MORAN
Appellant

AND:

LYDIARD FINANCIAL SERVICES PTY LTD (ACN 005 932 276) (PREVIOUSLY CUTHBERTS NOMINEES PTY LTD (ACN 005 932 276))
Respondent

JUDGE:

GORDON J

DATE:

8 JUNE 2007

PLACE:

MELBOURNE

REASONS FOR JUDGMENT
INTRODUCTION

This is an appeal against the decision of Riley FM made on…

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: [2007] FCA 872
Decision Date: 8 June 2007

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Moran v Lydiard Financial Services Pty Ltd revolves around an appeal by the appellant against the decision of Phipps FM, who had dismissed an application to set aside a bankruptcy notice. The bankruptcy notice had been issued pursuant to a costs order, and the appellant was seeking to overturn this notice. The appeal was subsequently heard by Sundberg J, who dismissed the appeal on 26 May 2006. The present case concerns the appellant's further appeal against Sundberg J's decision.

The primary legal issues in this case were whether the bankruptcy notice was validly served and whether the Federal Magistrates Court had the jurisdiction to hear the appeal. The court also considered whether the alleged copyright claim could constitute a counter-claim, set-off or cross demand.

The court dismissed the appeal, finding that the bankruptcy notice was validly served. The court held that the Federal Magistrates Court had jurisdiction to hear the appeal and that the alleged copyright claim could not constitute a counter-claim, set-off or cross demand. The court's reasoning was based on the fact that the bankruptcy notice was served in accordance with the relevant legislation, and the Federal Magistrates Court had the jurisdiction to hear the appeal as it was an appeal from a decision of a Federal Magistrate.

The final orders of the court were that the appeal be dismissed and that the costs of the respondent creditor to this appeal be paid by the appellant debtor to be taxed according to the scale of costs referred to in O 62 r 12 of the Federal Court Rules 1979 (Cth) and be paid out of the estate of the appellant debtor in accordance with the provisions of the Bankruptcy Act 1966 (Cth).

Orders

Orders of the court

1. The appeal be dismissed.

2. The costs of the respondent creditor to this appeal be paid by the appellant debtor to be taxed according to the scale of costs referred to in O 62 r 12 of the Federal Court Rules 1979 (Cth) and be paid out of the estate of the appellant debtor in accordance with the provisions of the Bankruptcy Act 1966 (Cth).

Background

Background to the litigation

For the reasons that follow, the appeal should be dismissed. These reasons are structured as follows:(1) Factual Background to the Appeal: para [4] to [15];(2) Relevant Legislation and Rules: para [16] to [21];(3)Grounds of Appeal: para [22] to [86].FACTUAL BACKGROUND TO THE APPEAL The facts giving rise to this appeal have a long history. It is not necessary to trace it all in detail. Set out below is a summary of the factual background. On 28 February 2003, the Court of Appeal of the Supreme Court of Victoria ordered that the appellant “do pay on an indemnity basis the costs of [the respondent]” (“the Costs Order”). On 23 September 2005, a bankruptcy notice addressed to the appellant was issued on the application of the respondent in respect of a debt of $14,228.75 pursuant to the Costs Order (“the Bankruptcy Notice”). The Bankruptcy Notice was served on the respondent by Karen Elliot on 29 September 2005. On 3 October 2005, Ms Elliot swore an affidavit in which she deposed to her conversation with the person she served on 29 September 2005. Ms Elliot deposed that at the time she asked the person served, “What is your full name?” and the person replied “I am the authorised representative of the person named on this document” In addition, Ms Elliot asked the same person, “Are you the person referred to as the debtor in these proceedings?”. The person replied “I am the authorised representative of the person named on this document”. The identity of the person served on 29 September 2005 is a matter to which I will need to return later in these reasons. On 17 October 2005, the appellant applied to set aside the Bankruptcy Notice. On 31 October 2005, Phipps FM heard the application and dismissed it. His Honour’s reasons for decision are to be found in Moran v Lydiard Financial Services Pty Ltd [2005] FMCA 1821. On 10 November 2005, a creditor’s petition was presented against the appellant (“the Petition”). On 26 November 2005, the appellant was served with the Petition and associated documents. On 28 November 2005, Ms Elliot swore another affidavit deposing to service of the Petition and associated documents on the appellant. In this affidavit, Ms Elliot deposed that at the time of service, she asked the person served the same questions that she had asked on 29 September 2005 when she served the Bankruptcy Notice and received the same answers. The Petition was returnable on 24 January 2006. The hearing of the Petition was adjourned by consent to a date to be fixed after determination of the appeal against the decision of Phipps FM was heard by Sundberg J, on the giving of five days notice in writing by either party. On 21 November 2005, the appellant served a notice of appeal in respect of the decision of Phipps FM. The appeal against the decision of Phipps FM was heard by Sundberg J on 28 April 2006. On 26 May 2006, Sundberg J dismissed the appeal. His Honour’s reasons for decision are to be found in Moran v Lydiard Financial Services Pty Ltd [2006] FCA 631.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

GORDON J

The alleged copyright claim cannot constitute a counter-claim, set-off or cross demand. This ground of appeal should also be dismissed.CONCLUSION In the circumstances, the appeal is dismissed. The orders I propose to make are as follows:1. The appeal be dismissed.2.The costs of the respondent creditor to this appeal be paid by the appellant debtor to be taxed according to the scale of costs referred to in O 62 r 12 of the Federal Court Rules 1979 (Cth) and be paid out of the estate of the appellant debtor in accordance with the provisions of the Bankruptcy Act1966 (Cth).

Ratio Decidendi

Legal Principle Established

Established by: GORDON J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 1244 OF 2006

BETWEEN:	JOHN GERARD MORAN Appellant
AND:	LYDIARD FINANCIAL SERVICES PTY LTD (ACN 005 932 276) (PREVIOUSLY CUTHBERTS NOMINEES PTY LTD (ACN 005 932 276)) Respondent

JUDGE:	GORDON J
DATE OF ORDER:	8 JUNE 2007
WHERE MADE:	MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 1244 OF 2006

JUDGE:	GORDON J
DATE:	8 JUNE 2007
PLACE:	MELBOURNE