Morien v Johnston

Case [2007] FMCA 2100


FEDERAL MAGISTRATES COURT OF AUSTRALIA

MORIEN v JOHNSTON [2007] FMCA 2100

BANKRUPTCY – Review of Registrar’s decision – application to set aside bankruptcy notice – adjournment – invalidity of bankruptcy notice – bankruptcy notice not signed or stamped – bankruptcy notice irregular but not invalid – overstatement – appeal and stay of execution – counter-claim, set off or cross-demand – order for payment of judgment debt not against applicant – not a debtor against whom final judgment obtained – bankruptcy notice set aside.

BANKRUPTCY – Application for sequestration order – whether debtor solvent – cash and assets available – no evidence of execution or garnishment – debtor solvent – no sequestration order.

Bankruptcy Act 1966 (Cth), ss.5(2); 40(1)(g); 52(2)(a); 306

Bankruptcy Regulations 1996 (Cth)

Adams v Lambert (2006) 80 ALJR 679; (2006) 3 ABC(NS) 835; [2006] HCA 10
Australia and New Zealand Banking Group v Foyster [2000] FCA 400
Bank of Australasia v Hill (1907) 4 CLR 1513
Circle Credit Co-op Limited v Lalikakis [2000] FCA 667
Dunn, in the Matter of Dunn v Vangsnes [2000] FCA 1051
International Alpaca Management Pty Ltd v Ensor [1999] FCA 72
Jensen v Queensland Law Society Inc (2006) 5 ABC(NS) 30; [2006] FCA 1206
La Pegna v Deputy Commissioner of Taxation (2006) 204 FLR 364; [2006] FMCA 1643
Mahmoud v The Owners Corporation Strata Plan Bill [No.2] [2006] FMCA 1711
Morien v Johnston [2006] FMCA 1918
Patrick v Wadoon Pty Ltd (No.2) [2007] FMCA 1766
Prudential-Bache Securities (Australia) Limited v Warner [1999] FCA 1143
Re Athans; Ex parte Athans (1991) 29 FCR 302
Re Capel ;Ex parte Caram Finance Australia Limited [1998] FCA 372
Re Sanders; Knudsen and Yates (trading as The Hargreaves Practice) v Sanders (2003) 1 ABC(NS) 408; [2003] FCA 1079
Re Sarina, Ex parte Council of the Shire of Wollondilly (1980) 43 FLR 163
Re O’Sullivan; Ex parte Bank of New Zealand (1991) 30 FCR 112
Sandell v Porter (1966) 115 CLR 666
Sarina v Council of the Shire of Wollondilly (1980) 48 FLR 372
Sidhom v Euphoric Pty Ltd [2006] FMCA 827
Trojan v Corporation of Hindmarsh (1987) 16 FCR 37
Valassis v Bernard [2001] FCA 477
Vaughan v Beritov [2006] FMCA 1294
Applicant: NEIL EDOUARD MORIEN
Respondent: DERRAN CHARMAINE JOHNSTON
File Number: PEG 286 of 2006
Judgment of: Lucev FM
Hearing dates: 8, 9, 13 & 15 February 2007
Date of Last Submission: 15 February 2007
Delivered at: Perth
Delivered on: 17 December 2007

REPRESENTATION

Applicant: Mr N E Morien on his own behalf
Counsel for the Respondent: Mr B G Grubb
Solicitors for the Respondent: Arthur Metaxas & Co
Applicant: DERRAN CHARMAINE JOHNSTON
Respondent: NEIL EDOUARD MORIEN
File Number: PEG 273 of 2006
Judgment of: Lucev FM
Hearing dates: 8, 9, 13 & 15 February 2007
Date of Last Submission: 15 February 2007
Delivered at: Perth
Delivered on: 17 December  2007

REPRESENTATION

Counsel for the Applicant: Mr B G Grubb
Solicitors for the Applicant: Arthur Metaxas & Co
Respondent: Mr N E Morien on his…

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Details
AGLC
Morien v Johnston [2007] FMCA 2100
Case
[2007] FMCA 2100
Decision Date

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Morien v Johnston involves a dispute between Neil Edouard Morien and Johnston, with proceedings in PEG 273 of 2006 and PEG 286 of 2006. The Applicant, Morien, sought to set aside orders and judgments made by the Registrar, as well as to dismiss a Creditor’s Petition against Johnston. The crux of the dispute centres on the legality of certain orders issued by the Registrar and the subsequent Bankruptcy Notice.

The primary legal issues addressed by the Court were whether the Registrar’s orders were valid, if the Bankruptcy Notice was correctly issued, and if the Creditor’s Petition should proceed. The Court had to examine the procedural correctness of the Registrar’s decisions and the validity of the Bankruptcy Notice issued to Johnston. Furthermore, the Court was required to determine the appropriateness of the Creditor’s Petition against Johnston.

The Court found that the Registrar’s orders 2 and 3 were flawed, leading to their quashing. The Bankruptcy Notice was also set aside as it was determined to be improperly issued. In terms of the Creditor’s Petition, the Court dismissed the Applicant’s application, finding that the Petition did not meet the necessary criteria. The Court ordered the return of the $85,000 paid into Court by Morien, along with any accrued interest, to him promptly. The Court also directed the parties to attempt to agree on costs, with a set timeline for further directions if an agreement could not be reached.

The final orders include the quashing of specific Registrar orders, the setting aside of the Bankruptcy Notice, dismissal of the Creditor’s Petition, and the release of funds paid into Court by Morien. The Court also mandated the parties to negotiate on costs, with a specified timeline for further directions if no agreement was achieved.

Orders

Orders of the court

The Court makes the following Orders:

1.

In PEG 286 of 2006, the Applicant’s application to set aside the orders and judgment of the Registrar dated 13 October 2006 be upheld as to orders 2 and 3 of those orders, and that orders 2 and 3 be quashed.

2.

In PEG 286 of 2006, that Bankruptcy Notice No. 372 of 2006 be set aside.

3.

In PEG 273 of 2006, that the Applicant’s application for a Creditor’s Petition be dismissed.

4.

In PEG 286 of 2006 that the sum of $85,000 paid into Court by Neil Edouard Morien pursuant to order 1 of this Court’s orders of 9 February 2007, plus any interest earned thereon, be released to him as soon as reasonably practicable.

5.

In PEG 273 of 2006 and PEG 286 of 2006, the parties to confer on costs, and if able to reach agreement a consent order is to be filed reflecting the terms of that agreement, otherwise the question of costs be listed for further directions at 9:45am on 31 January 2008, with liberty to vacate that date if consent orders are filed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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