Mulhern v Official Receiver

The case of Mulhern v Official Receiver involves the married applicants, both undischarged bankrupts, challenging the decisions of the Official Receiver to issue bankruptcy notices to them. The applicants sought declarations, including that the Official Receiver be restrained from applying for summary dismissal, and summary judgment in their favour. The Official Receiver, in turn, applied for summary judgment against the applicants under section 31A of the Federal Court of Australia Act 1976 (Cth). The primary issue before the court was whether the applicants had any reasonable prospect of successfully prosecuting their claims. The applicants' claims were based on issues that had already been finally resolved against them in previous proceedings, particularly in relation to Mr Mulhern's bankruptcy stemming from a judgment debt and Mrs Mulhern's transfer of funds prior to the appointment of receivers to the Mulhern Group.

The court considered the principles set out in Mulhern v Bank of Queensland [2015] FCA 44, which provide that a proceeding or part of a proceeding need not be hopeless or bound to fail for it to have no reasonable prospect of success. The applicants' submissions were described as emotive, unhelpful, and often irrelevant, and the court found that they did not disclose any reasonable prospect of successfully prosecuting the proceeding. The applicants did not address the issue of their standing to bring the proceedings as bankrupts, and the court proceeded on the assumption that they had standing.

The court dismissed the applicants' interlocutory application, which sought to restrain the Official Receiver from applying for summary judgment. The court held that while the Official Receiver had failed to comply with an order to file the application for summary judgment by a specified time, the delay was short and there was no prejudice to the applicants. The court granted an extension of time for the Official Receiver to file the application for summary judgment and dismissed the applicants' originating application. The court also ordered that the Official Receiver pay any costs wasted by reason of the non-compliance with the court's order, and that the applicants pay the Official Receiver's costs of the proceeding.

In summary, the court dismissed the applicants' claims and granted summary judgment in favour of the Official Receiver, finding that the applicants had no reasonable prospect of successfully prosecuting their claims based on issues that had already been finally resolved against them. The court also dismissed the applicants' interlocutory application and granted an extension of time for the Official Receiver to file the application for summary judgment.