Nath v Clipway Pty Ltd

[1999] FCA 625

FEDERAL COURT OF AUSTRALIA

Nath v Clipway Pty Ltd [1999] FCA 625

NATH V CLIPWAY PTY LTD

G 38 OF 1999

SPENDER, KIEFEL and HELY JJ
18 MAY 1999

BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q 38 OF 1999

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AYSTRALIA

BETWEEN:	VIJAY NATH Applicant
AND:	CLIPWAY PTY LTD Respondent
JUDGES:	SPENDER, KIEFEL and HELY JJ
DATE OF ORDER:	18 MAY 1999
WHERE MADE:	BRISBANE

THE COURT ORDERS THAT:

The appeal be dismissed, with costs, to be taxed if not agreed.

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

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q 38 OF 1999

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AYSTRALIA

BETWEEN:	VIJAY NATH Applicant
AND:	CLIPWAY PTY LTD Respondent

JUDGES:	SPENDER, KIEFEL and HELY JJ
DATE:	18 MAY 1999
PLACE:	BRISBANE

REASONS FOR JUDGMENT

SPENDER J:

1. In these proceedings the appellant seeks to challenge a decision by Drummond J, who dismissed an application by Mr Nath to set aside a bankruptcy notice.  The basis of Mr Nath's claim before his Honour and before us was that he was not able to prosecute the cross-demand which he claims he has against Clipway Pty Ltd, the creditor, essentially for two reasons: the first is that his financial circumstances did not permit him to engage the professional advisers and experts that he needed to successfully prosecute his claim, and the second was that his personal circumstances, and, in particular, the hours that he was working in respect of the business, precluded him from giving sufficient time to consulting the expert professionals that he would need in prosecuting his cross-claim.

2. Drummond J said:

   “There is a long line of authority which establishes, in the context of s 40(1)(g) the Bankruptcy Act 1966 (Cth), that considerations personal to a debtor which prevent him, as a matter of practical reality, from pursuing a cross-claim in proceedings in which judgment is given on which a bankruptcy notice is founded, do not constitute circumstances which entitle the debtor to characterise such a cross-claim as one which he could not have set up in the action or proceeding in which the judgment was obtained.

3. His Honour then referred to a number of authorities which undoubtedly establish that conclusion. It was for that reason that his Honour concluded that Mr Nath's claim against the creditor was not a claim that satisfied the statutory requirements of s 40(1)(g) of the Bankruptcy Act. 

4. His Honour further noted, at the penultimate paragraph of his reasons: 

   “The applicant does not rely, in support of an argument that the cross-claim could not have been set up in the District Court, on the fact that his cause of action, the subject of the cross-claim, is for an amount in excess of the monetary jurisdiction of the District Court.  The reason for the applicant's decision not to rely…