Neale v Mahony (No.2)
[2019] FCCA 3250
•13 November 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| NEALE v MAHONY (No.2) | [2019] FCCA 3250 |
| Catchwords: BANKRUPTCY – APPLICATION TO SET ASIDE BANRUPTCY NOTICE – Whether debtor has cross-claim, set-off, or cross demand against creditor – whether there are substantial reasons for questioning whether behind the judgment on the basis of which the bankruptcy notice has been issued there exists a true debt – whether creditor’s reliance on bankruptcy notice is an abuse of process – application to set aside bankruptcy notice dismissed. |
| Legislation: Bankruptcy Act 1966 (Cth), s.40(1)(g) Federal Circuit Court Rules 2001 (Cth), rr.12.02, 12.03 |
| Cases cited: Cheung v Burness (Trustee) [2016] FCA 1381 |
| Applicant: | JAMES WOODWARD NEALE |
| Respondent: | JOHN FRANCIS MAHONY |
| File Number: | SYG 927 of 2019 |
| Judgment of: | Judge Manousaridis |
| Hearing date: | 25 October 2019 |
| Date of Last Submission: | 31 October 2019 |
| Delivered at: | Sydney |
| Delivered on: | 13 November 2019 |
REPRESENTATION
| Applicant in person |
| Counsel for the Respondent: | Mr A Maroya |
| Solicitors for the Respondent: | Mahony Law |
ORDERS
The application for an adjournment made by the applicant at the hearing on 25 October 2019 is dismissed.
The application is dismissed.
Subject to order 4, the applicant pay the respondent’s costs.
The parties have liberty to apply by 27 November 2019 for an order discharging or varying order 3.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 927 of 2019
| JAMES WOODWARD NEALE |
Applicant
And
| JOHN FRANCIS MAHONY |
Respondent
REASONS FOR JUDGMENT
Introduction
The applicant, Mr Neale, applies for an order that a bankruptcy notice issued against him on the application of the respondent, Mr Mahony, be set aside.
The bankruptcy notice demands payment of $36,096.34, which is the sum of a judgment of $29,693.46 (Judgment) that was entered in the Local Court in favour of Mr Mahony on 15 June 2016, and interest on the Judgment. The Judgment represents the assessed costs of legal services Mr Mahony provided to Mr Neale in proceedings Secured Global Opportunity Ltd, as assignee of Bank of Western Australia (Bankwest), brought against Mr Neale and his company, JW Neale Pty Ltd, in the Supreme Court of New South Wales (Bankwest proceedings).[1]
[1] James Woodward Neale v Bank of Western Australia Ltd; Bank of Western Australia Ltd v James Woodward Neale [2014] NSWSC 315
In his application Mr Neale relies on five grounds for setting aside the bankruptcy notice. First, Mr Neale claims he has a cross-claim, set-off, or cross demand against Mr Mahony “pursuant to” s.40(1)(g) of the Bankruptcy Act 1966 (Cth) (Act). That asserted claim is based on an alleged failure by Mr Mahony to apply to amend a cross-claim Mr Neale filed in the Bankwest proceedings alleging the sale of a particular property at an undervalue. Second, Mr Neale proposes to apply to set aside or appeal the Judgment. Third, Mr Mahony applied for and served on Mr Neale the bankruptcy notice for the purpose of pressuring Mr Neale to pay to Mr Mahony what is only a small fraction of the amount Mr Neale has been adjudged to owe the Commonwealth Bank of Australia (CBA) “and the parties to whom the CBA sold my loan” and, for that reason, Mr Mahony’s relying on the bankruptcy notice is an abuse of process. Fourth, Mr Mahony agreed Mr Neale would only be liable to pay his costs out of a $250,000 loan Mr Neale anticipated he would obtain, but which he did not obtain. Fifth, all proceedings on the bankruptcy notice should be stayed to enable Mr Neale to pursue a claim identified by Davies J in Neale v Mahony.[2]
[2] [2018] NSWSC 1046
Mr Mahony opposes the application on two broad grounds. First, he submits Mr Neale is estopped from seeking to set aside the bankruptcy notice on the grounds on which he relies because Mr Neale has already unsuccessfully attempted in a previous proceeding before this Court (First BN proceeding) to set aside a previous bankruptcy notice (First BN) that had been issued in relation to the Judgment.[3] Second, given the grounds on which Mr Neale relies to set aside the bankruptcy notice are the same as the grounds on which he relied to set aside the First BN, the application to set aside the bankruptcy notice should be dismissed for the same reasons Judge Nicholls dismissed Mr Neale’s application to set aside the First BN.
[3] Neale v Mahony [2018] FCCA 363
Course of proceeding
At the hearing before me Mr Neale, who is not legally represented, applied for an adjournment to obtain legal assistance. He told me he had recent communications with lawyers seeking legal assistance, but he did not have with him a copy of those communications with him. I indicated to Mr Neale and to Mr Maroya, who appeared for Mr Mahony, that I proposed to hear Mr Neale’s application for an adjournment, reserve my judgment on the application for an adjournment, and hear the substantive application to set aside the bankruptcy notice on the assumption that I would not grant the adjournment. I also indicated to Mr Neale and Mr Maroya that, at the conclusion of the hearing, I would make an order permitting Mr Neale to file correspondence with any lawyers in relation to his seeking legal assistance in this matter.
I then heard the application for an adjournment and the substantive matters in relation to Mr Neale’s application to set aside the bankruptcy notice. Mr Neale relied on an affidavit made on12 April 2019 and a document titled “Submissions by James Neale in SYG927/2019 on 29 April 2019” (Submission). He also relied on email he had sent to the Registry. I marked those emails exhibit A. At the end of the hearing I made orders permitting Mr Neale to file correspondence relating to his seeking legal assistance in this matter, as well as any documents which he believes ought to have been included in exhibit A, but which were not included. Mr Neale did file documents, but these largely consist of documents for which I did not give Mr Neale permission to file. I will, however, identify and consider those documents later in these reasons.
Finally, I should record that during the course of the hearing Mr Neale referred to evidence that was filed in the First BN proceeding. Mr Neale and Mr Maroya agreed I could read that evidence when considering Mr Neale’s application. I indicated that, should there arise any matter in that evidence that was potentially adverse to Mr Mahony, I would notify the parties and give them an opportunity to make submissions. Mr Neale included in the material he provided to the Registry affidavits he filed in First BN proceeding.
Arrangement of reasons
The grounds on which Mr Neale relies assume familiarity with the Bankwest proceedings. To be in a position to understand the claims Mr Neale makes, therefore, it will therefore be necessary that I first identify the circumstances out of which the Bankwest proceedings arose, what occurred in the course of those proceedings, and the outcome of those proceedings. Next, it would be convenient to consider the judgment of Davies J in Neale v Mahony.[4] For reasons that will become apparent, that judgment is relevant to Mr Neale’s claims that he has a cross-claim, set-off, or cross demand against Mr Mahony. I will then consider Mr Neale’s application for an adjournment. For reasons I give in that part of my reasons, I am not satisfied it is in the interests of the administration of justice that I grant Mr Neale an adjournment. I then consider each of the grounds stated in the application.
[4] [2018] NSWSC 1046
Background – the Bankwest proceedings
The Bankwest proceedings arose out of money Bankwest advanced under a facility agreement made on 17 March 2008 made between Bank of Western Australia (Bankwest), Mr Neale, and his company, JW Neale Pty Ltd. The purpose of the loan, as originally agreed, was to refinance money Mr Neale owed to Macquarie Bank ($8.75 million), to fund the payment of an amount the Family Court of Australia ordered Mr Neale pay to his former wife ($6.45 million), to provide working capital to fund the proposed costs associated with the development of a ten acre property fronting on Avon Road Pymble ($800,000), and to allow for capitalised interest ($3 million).[5] As security for the loan, Mr Neale granted a mortgage over the Avon Road Property and over a property at 35 Fox Valley Road, Wahroonga.
[5] James Woodward Neale v Bank of Western Australia Ltd; Bank of Western Australia Ltd v James Woodward Neale [2014] NSWSC 315, [64]
It was a term of the facility agreement that it would expire 18 months from the date of drawdown. It was also a term of the facility agreement that Mr Neale would provide a status report setting out the progress of negotiations for the future development of the Avon Road property, an initial report being due six months from the date of initial drawdown, and the second report within 14 days of the first anniversary of the drawdown, with full review to be conducted by Bankwest at that point.
On 21 April 2008 Bankwest agreed to vary the facility agreement to permit Mr Neale to pay the proceeds of the loan in different amounts to those as originally agreed. On 1 May 2008 Mr Neale drew down $16,088,541 which Mr Neale used to repay Macquarie Bank and to pay his former wife.
On about 30 September 2008 Bankwest and Mr Neale agreed that Bankwest would further vary the facility agreement by increasing the amount of the facility to enable Mr Neale to refinance a loan he had taken from Challenger, to provide additional working capital, and to provide additional capitalised interest. Ms Neale agreed he would provide additional security by granting a mortgage over an industrial property at Yatala Road, Mt Ku-ring-gai. The facility expiry date remained 1 November 2009.
On 18 June 2009, after receiving and assessing the first assessment report, Bankwest wrote to Mr Wescott, who was Mr Neale’s mortgage broker, in which it stated there would be no additional Bankwest funding beyond the present limits, and that Bankwest would be seeking the refinancing of the facility before the November 2009 expiry date. On 10 August 2009, after it considered an application that the facility be extended for 18 to 24 months, and for a further advance of $14.446 million for construction, Bankwest informed Mr Neale it was not going to lend any more money, and it wanted to be repaid by 1 November 2009. This was confirmed by letter dated 12 August 2009 in which Bankwest also stated it had issued instructions for an updated valuation of the Avon Road property.
Mr Neale did not repay the facility, and on 9 February 2010 Bankwest agreed to extend the facility to 1 May 2010, subject to a number of conditions, which included interest of $630,000 to be paid in advance by two instalments. Mr Neale paid the first instalment on time, and he paid the second instalment, but not on time. Further events occurred which it is unnecessary to describe here. I need only note that by 23 June 2011 Mr Neale had not obtained development approval for the Avon Road property, and, on that day, Bankwest demanded Mr Neale and his company pay to the Bankwest the sum of $20,741,998.36, and it appointed receivers to the Avon Road and Yatala Road properties.
On 13 December 2011 Bankwest commenced the Bankwest proceedings in which it claimed judgment against Mr Neale in the sum of $22,584,097, together with an order for possession of the Fox Valley Road property. By that time the Commonwealth Bank of Australia (CBA) had acquired Bankwest from the Halifax Bank of Scotland, as a consequence of which CBA acquired all of Bankwest’s rights, and assumed all of Bankwest’s liabilities. The CBA, in turn, assigned the claim Bankwest had against Mr Neale to Secured Global Opportunity Ltd (SGOL). By an amended commercial list statement (ACLS) filed on 16 December 2013, SGOL, as assignee of Bankwest, claimed judgment against Mr Neale and his company, and an order for possession of the Fox Valley Road property. By their defence filed on 10 January 2014 Mr Neale and his company admitted all of the allegations made in the ACLS, although they later applied for leave to withdraw admissions in relation to default interest Bankwest alleged Mr Neale and his company owed it.
As is apparent from the judgment of Hammerschlag J, Mr Neale relied on a number of matters as a defence to the debt claimed by Bankwest. His Honour rejected each of the defences. Mr Neale also filed a cross-claim for damages and other relief. Although Hammerschlag J referred to the cross-claim, and ordered that it be dismissed, his Honour devoted very little space to it. The explanation might lie in Hammerschlag J’s observation that Mr Neale was not aware of what was contained in his cross-claim:[6]
Mr Neale made it clear that his real case is the deliberate destruction strategy case, and on a number of occasions, said that without it, his case was dead. In one of his written submissions, he submitted that “The real defence is a reprisal by CBA and also a source of wrongful profit by CBA”. As an indication of his preoccupation with the deliberate destruction strategy thesis, at some point, he conveyed to me, that he was not aware of what had been pleaded in his cross-claim.
[6] James Woodward Neale v Bank of Western Australia Ltd; Bank of Western Australia Ltd v James Woodward Neale [2014] NSWSC 315, at [44]
Relevant to one of the grounds on which Mr Neale relies in the proceeding before me is Mr Neale’s having indicated to Hammerschlag J that he proposed to amend his cross-claim to claim the sale of a property at an undervalue. Hammerschlag J referred to this in the following passage from his Honour’s reasons for judgment:[7]
Early in the hearing, Mr Neale foreshadowed seeking leave to amend, so as to plead the deliberate destruction strategy, and as part of it the sale of Yatala Rd at an undervalue. He indicated that he was receiving the assistance of a valuer, Mr Lupton, who would give evidence. Mr Lupton had valued Yatala Rd in December 2011. I observe that the sale of Yatala Rd is pleaded in Mr Neale's cross-claim, on the basis that the sale constituted a trespass, not because it was at an undervalue. No further report (draft or final) from Mr Lupton was produced.
Some days into the hearing, Mr Neale moved his application for leave to amend. He brought in a proposed Amended Commercial List Cross-Claim Statement. I refused leave to amend. The proposed pleading was inadequate and objectionable, not least of all because some of the issues it sought to raise were non-justiciable. It is not necessary to deal in detail with its inadequacies, because, even with an adequate pleading, I would have refused leave. No factual underpinning of any kind, let alone any sufficient to conclude that the deliberate destruction strategy had any prospect of being established, was produced.
[7] James Woodward Neale v Bank of Western Australia Ltd; Bank of Western Australia Ltd v James Woodward Neale [2014] NSWSC 315, at [37], [38]
What occurred at the hearing before Hammerschlag J in relation to Mr Neale’s intention to file an amended cross-claim was described in a little more detail by Leeming JA in the judgment his Honour gave on the appeal Mr Neale brought against the orders of Hammerschlag J.[8] His Honour’s reasons show that on the fourth day of the hearing Mr Neale applied for leave to file an amended cross-claim, the thrust of which Hammerschlag J described to be a claim that the Yatala Road property was sold at an undervalue.[9] After asking Mr Neale some questions about the proposed amendment, his Honour said: “I have no option but to refuse your application to amend”.[10] Hammerschlag J, however, gave Mr Neale the option to renew his application at a later day because his Honour did not think Mr Neale could have done it then “in a manner which gives you the best prospect of it succeeding.” His Honour also said:[11]
Now, at the moment you leave me no option [but] to decline your application to amend. If you insist on moving it now, I will reject it. But I would urge you to have another look at it, to speak to Mr Lupton, and you can deal with this application on Monday.
[8] Neale v Commonwealth Bank of Australia Ltd trading as Bank of Western Australia [2015] NSWCA 272
[9] Neale v Commonwealth Bank of Australia Ltd trading as Bank of Western Australia [2015] NSWCA 272, at [74]
[10] Neale v Commonwealth Bank of Australia Ltd trading as Bank of Western Australia [2015] NSWCA 272, at [74]
[11] Neale v Commonwealth Bank of Australia Ltd trading as Bank of Western Australia [2015] NSWCA 272, at [75]
Mr Lupton appears to be a valuer whom Mr Neale informed Hammerschlag J was assisting Mr Neale, who had valued the Yatala Road property in December 2011, and who would give evidence.[12]
[12] James Woodward Neale v Bank of Western Australia Ltd; Bank of Western Australia Ltd v James Woodward Neale [2014] NSWSC 315, at [37]
In the second week of the trial Hammerschlag J asked Mr Neale whether he was waiting for Mr Lupton to get to Mr Neale. Mr Neale said that was correct, and that Mr Lupton “wanted to take the documents away and read them thoroughly and he says he normally gets days to do it”. Mr Neale said nothing further about Mr Lupton during the second week of the hearing.[13]
[13] Neale v Commonwealth Bank of Australia Ltd trading as Bank of Western Australia [2015] NSWCA 272, at [76], [77]
On the ninth day of the hearing before Hammerschlag J, Mr Neale was permitted to file in court a notice of motion seeking leave to file the cross-claim, and to withdraw any admissions. The proposed amendment to the cross-claim was not confined to a claim based on undervalue. Hammerschlag J informed Mr Neale of the following:[14]
See, what could happen is the two things are entirely disparate. Allowing you to withdraw the admission is entirely different to allowing you to amend to sue to claim the matters which are claimed in paragraphs 12 to 17 of your proposed amendment. Now, I certainly could see a basis for allowing you to amend to claim the sale undervalue of Yatala Road and so it is possible that I would give you leave to withdraw the admission to the extent, other than approximately 22 million, allow you to bring Yatala Road, say at an undervalue but refuse the remainder.
[14] Neale v Commonwealth Bank of Australia Ltd trading as Bank of Western Australia [2015] NSWCA 272, at [78]
Mr Neale did not apply for leave to amend his cross-claim confined to an allegation that Yatala Road had been sold at an undervalue; and on the afternoon of 17 February 2014, Hammerschlag J informed Mr Neale that his Honour would not permit the amendment, and that he would give full reasons in his Honour’s final judgment.[15]
[15] Neale v Commonwealth Bank of Australia Ltd trading as Bank of Western Australia [2015] NSWCA 272, at [79]
There is one final matter to note about the Bankwest proceedings, at least up to the hearing before Hammerschlag J, and that is his Honour’s observations that at “various times during the life of the proceedings Mr Neale has been legally represented”, having consulted no less than 15 firms of solicitors, one of which was Mr Mahony’s firm.[16]
[16] James Woodward Neale v Bank of Western Australia Ltd; Bank of Western Australia Ltd v James Woodward Neale [2014] NSWSC 315, at [21]
I have already noted Mr Neale appealed against the orders of Hammerschlag J. The Court of Appeal dismissed Mr Neale’s appeal. The only matter to which I need refer to is Mr Neale’s claims before the Court of Appeal that Hammerschlag J failed to find that that the loss sustained by the sale of Yatala Road had been pleaded, or his Honour otherwise erred in the exercise of discretion by refusing to allow Mr Neale to plead that Yatala Road had been sold at an undervalue. The Court of Appeal rejected these claims:[17]
[17] Neale v Commonwealth Bank of Australia Ltd trading as Bank of Western Australia [2015] NSWCA 272, at [94]-[97]
True it is that when the appeal was heard, Mr Altan was given the opportunity to take instructions on this issue, and advised that:
“My instructions are that Mr Lupton was ready and willing and able to attend throughout the hearing but then ultimately the decision was made not to allow this issue to be raised and it was for that reason that he wasn’t called” (transcript 27 August 2015, p 17).
Although I do not doubt that those were Mr Altan’s instructions from Mr Neale in August 2015, the record precludes my acceptance that that had been the position 18 months earlier. It will be recalled that:
(1)Mr Neale’s pleading at the beginning of 2012 had advanced a claim for an undervalued sale, as had the draft claim which was not pressed on 11 November 2013;
(2)Mr Jacobs had referred to the need for further valuation evidence on 11 November 2013, in the presence of Mr Neale;
(3)On the first day of the hearing, when the paragraphs of Mr Neale’s affidavit dealing with Yatala Road were objected to and struck out, the primary judge explained, “But you’re not calling the valuer”, and made it clear that it would be necessary for Mr Lupton to give evidence if that aspect of the claim was to be advanced. The primary judge said, “You’d have to bring a valuer to give evidence”, to which Mr Neale replied, “I’m happy to do that. Vic Lupton is quite happy to come here and give evidence”. His Honour advised Mr Neale emphatically: “if you’ve got Mr Lupton who says he’ll come and give evidence, bring him”.
(4)The repeated statements of the need to provide Mr Lupton, and the absence of any need to make an amendment, could have left no doubt in Mr Neale’s mind at the end of the first day of the hearing as to what was required in order for his claims about Yatala Road to be determined.
(5)As much was demonstrated by the document handed to the court at the beginning of the second day, which was said to reflect a brief conversation Mr Neale had had with Mr Lupton and what Mr Neale hoped he would say. Whether or not MFI1 and MFI2 were the documents handed to the court on that occasion, it is plain from what Mr Neale said at the time that he understood what the primary judge had said about Mr Lupton and was taking steps to obtain a report from him.
(6)At the conclusion of the second day, when Mr Neale had been under cross-examination, the primary judge expressly advised that he was free to talk with Mr Lupton.
(7)Mr Neale failed to provide any expert evidence of value. His amendment was refused on the fourth day of the hearing, but with the “indulgence” given by the primary judge to “have another look at it, to speak to Mr Lupton, and [to] deal with this application on Monday”.
(8)Even so, no expert evidence was produced at any time in the hearing. Nor was any produced by way of fresh evidence on appeal as to what would have been tendered had the amendment been allowed.
(9)When an amendment was pressed on the ninth day of the hearing, which included but went substantially beyond the claim that Yatala Road had been sold at an undervalue in breach of duty, it was rejected, precisely as the primary judge had indicated on the fourth day of the hearing.
In short, Mr Neale was told clearly and unambiguously that he needed to procure Mr Lupton’s attendance for cross-examination. How else was the stark disparity between Mr Lupton’s valuation and the price obtained by Bankwest’s receivers to be resolved by the court? The only conclusion available from the record is that Mr Neale well understood what was required of him, and was unable to provide Mr Lupton. Mr Neale obviously has a different view of the position now, 18 months later, but that cannot displace what he said and did at the time.
It follows that the primary judge’s decision to refuse the amendment was unquestionably correct.
Background – proceedings against Mr Mahony
Also relevant to the question I must determine is a proceeding Mr Neale brought against Mr Mahony in the Supreme Court of New South Wales in which he claimed damages for negligence. Mr Neale alleged eight particular acts of negligence, one of which was that Mr Mahony failed to plead in the Bankwest proceeding the sale of the Yatala Road property at an undervalue. Mr Mahony applied to dismiss the proceeding on the ground that the statement of claim did not plead any material facts to support the allegation of negligence.
On 13 July 2018 Davies J ordered that all but one of the causes of action Mr Neale pleaded in his statement of claim be dismissed, and that the whole of the statement of claim be struck out. His Honour granted the applicant leave to replead a claim identified in paragraph 8(d) of the statement of claim. That paragraph claimed Mr Mahony failed to lodge caveats when strongly advised to do so by counsel.[18] Mr Neale applied for leave to amend his statement of claim, but on 10 August 2018 Davies J refused Mr Neale leave because the proposed amendment disclosed no reasonable cause of action.[19]
[18] Neale v Mahony [2018] NSWSC 1046
[19] Neale v Mahony (No.2) [2018] NSWSC 1253
Application for adjournment
As I have already noted, Mr Neale applied for an adjournment to obtain legal representation, and at the end of the hearing I granted Mr Neale leave to provide by email to the Registry any correspondence in relation to his seeking legal assistance. Mr Neale provided a large volume of documents which I have arranged to mark as “MFI1”. I have been unable to find in MFI1 any communication between Mr Neale and any legal practitioner that relates to Mr Neale seeking legal assistance in relation to the proceeding before me. There are, however, communications in exhibit A between Mr Neale and “Leverage Solicitors”. But in an email sent on 5 August 2019 Mr Kis of “Leverage Solicitors” informed Mr Neale that as “noted in our previous correspondence to you Leverage Solicitors is unable to represent you at this time”.
On the material before me, therefore, there is nothing to suggest that Mr Neale would have any prospect of obtaining legal representation if I were to adjourn the hearing. For that reason, I am not satisfied it would be in the interests of justice to grant Mr Neale an adjournment to seek legal representation because there would be no utility in doing so.
Mr Neale also submitted that it would be unjust for him to represent himself. He applied for an order that I appoint a lawyer to adduce evidence from him. There are four matters to note about that submission. First, the Court does not have power to appoint a lawyer to lead evidence from a party before it. Second, although the Court has power under r.12.02 of the Federal Circuit Court Rules 2001 (Cth) to refer a party to a lawyer, r.12.03 provides that a party is not entitled to apply to the Court for a referral under r.12.02. In any event, I am not satisfied this is a matter appropriate for referral. Third, Mr Neale has the right to file evidence, and Mr Neale has exercised his right. Finally, for reasons that will become apparent later, the matters about which Mr Neale says he wants evidence led from him are irrelevant to the issues I am required to consider. Thus, Mr Neale’s desire that the Court appoint a lawyer to lead evidence from him is not a matter on which I propose to grant Mr Neale an adjournment.
Finally, in his affidavit of 12 April 2019 Mr Neale deposed that he suffers from disabilities that make it impossible for him to represent himself properly. The disabilities to which Mr Neale refers are his having severe peripheral neuropathy which affects Mr Neale’s typing, cooking and cleaning; anxiety and depression induced by “the increasing proof of what CBA did”; Mr Neale has had no support from two firms of lawyers; the CBA “has directly and through their agents bribed, induced or threatened any entity who would support” Mr Neale until they stopped supporting him; and that Mr Neale’s wife has left him. There is no evidence to support the allegations of wrongdoing by CBA or by any of its officers. As for the other matters on which Mr Neale relies, although they may have raised and continue to raise difficulties for Mr Neale, I am not satisfied the matters prevent or have prevented Mr Neale from putting before the Court everything he wishes to say in support of his application, particularly given the substantial time that has passed after the date on which Mr Neale filed his application. Further, there is nothing to suggest that if I were to grant Mr Neale an adjournment for any of these reasons there would be any utility in doing so. There is no evidence that the disadvantages from which he says he suffers will be alleviated with the passing of time.
I am therefore not satisfied it is in the interest of the administration of justice that I grant Mr Neale the adjournment he seeks; and I propose to make an order dismissing Mr Neale’s application for an adjournment.
Ground 1 of application
Ground 1 of Mr Neale’s application is as follows:
I have a cross-claim, set-off or cross demand pursuant to s 40(1)(g) of the Bankruptcy Act 1966 (Cth). Mr Mahony well understood that the strongest part of my claim against BankWest [sic] and CBA in which he represented me was the deliberate sale of my properties at an undervalue. The court found that Mr Mahony had not pleaded the undervalue sales at all and found against me thereby causing damages in the tens of millions of dollars.
The matters of which a court must be satisfied before it can be satisfied that a debtor has a counter-claim, set-off, or cross demand against the creditor have been stated in different ways, and in ways that sometimes overlap. The various statements were summarised by Lindgren J in Glew v Harrowell.[20] In general terms, a debtor must satisfy the Court that the counter-claim, set-off, or cross demand is made in good faith, and that there is sufficient substance to the counter-claim, set-off, or cross demand asserted to make it one which the debtor should, in justice, be permitted to have heard and determined in the usual way, rather than be forced to comply with the bankruptcy notice by payment or to commit an act of bankruptcy.
[20] [2003] FCA 373 at [9]
Mr Neale set out in his affidavit of 12 April 2019 the matters on which he relies for claiming he has a cross-claim, set-off, or cross demand against Mr Mahony. Mr Neale there deposed that the “Supreme Court pleadings were being prepared by Mr Mahony to start with”, but he then employed a solicitor named Cate Carney to work on Mr Neale’s matter. After Ms Carney informed Mr Neale that she was being advised by her husband in relation to Mr Neale’s matter, Mr Neale insisted that Mr Mahony finalise the pleading himself, and Mr Mahony did so. Mr Neale deposed he did not know that Mr Mahony had never filed the correct pleadings until Hammerschlag J told Mr Neale halfway through the trial.
In an affidavit he made on 22 March 2017 for the purpose of the First BN proceeding, Mr Neale also deposed to matters relating to the drafting and amendment of the cross-claim.[21] Mr Neale deposed that Mr Mahony employed Ms Carney, but Mr Neale insisted that Mr Mahony draft the pleading because Ms Carney had given advice that was different from other lawyers representing victims of Bankwest’s behaviour. Mr Neale also deposed that Mr Mahony said he had filed the wrong document, and Mr Mahony had informed Mr Neale that senior counsel had advised that Mr Neale’s pleadings required serious amendment. In the Submissions Mr Neale makes assertions of fact which substantially repeat what he has deposed in his affidavits.
[21] This is in MFI1
There are other documents Mr Neale provided after the hearing which claim or are relevant to the claim Mr Mahony did not plead a cause of action based on undervalue. I do not propose to summarise their contents, first, because Mr Neale did not have my permission to file such documents and, second, because they only repeat the substance, although with varying and sometimes inconsistent detail, of what Mr Neale has deposed in his affidavits.
The fatal difficulty in the way of Mr Neale’s contention that he has a cross-claim, set-off, or cross demand against Mr Mahony based on Mr Neale’s not having pleaded in the Bankwest proceeding a cause of action based on the sale of the Yatala Road Property at an undervalue is that even if, as Mr Neale claims, he first became aware during the hearing before Hammerschlag J that the cross-claim did not plead any such cause of action, it was not the absence of a pleaded cause of action that prevented Mr Neale from proceeding with such cause of action. As is apparent from the passage of the judgment of Leeming JA I have set out above, Mr Neale was made aware at the hearing before Hammerschlag J that the cross-claim did not plead any such claim; and his Honour informed Mr Neale that his ability to amend his cross-claim to make such a claim, and therefore be in a position to pursue such claim, depended on his providing evidence from the valuer, Mr Lupton. Mr Neale, however, was unable to procure Mr Lupton to appear and give valuation evidence. Mr Neale does not allege that his inability to procure the presence of Mr Lupton to give valuation evidence was due to Mr Mahony’s not having pleaded a cause of action.
In these circumstances, there is no substance to Mr Neale’s asserted cross-claim, set-off, or cross demand against Mr Mahony based on Mr Mahony’s not having pleaded in the Bankwest proceeding a cause of action based on the sale of the Yatala Road Property at an undervalue. Even if, however, it could be said Mr Neale’s asserted cross-claim, set-off, or cross demand against Mr Mahony was of sufficient substance so as to permit Mr Neale, in justice, to have it heard and determined in the normal way, rather than by being forced to comply with the requirements of the bankruptcy notice, Mr Neale filed a statement of claim asserting the very claim that is the cross-claim, set-off, or cross demand Mr Neale claims he has against Mr Mahony; and, as I have already noted, Davies J dismissed that cause of action. Further, although there was not before the Court of Appeal a claim based on Mr Mahony having negligently omitted to plead a cause of action based on the sale of the Yatala Road Property at an undervalue, the Court of Appeal made a finding which, although not binding as between Mr Neale and Mr Mahony, nevertheless constitutes consideration by a judicial tribunal of what would be an essential aspect of any claim in negligence Mr Neale may have against Mr Mahony. That aspect is the question of what accounted for Mr Neale’s inability to maintain an action based on the sale of the Yatala Road Property at an undervalue. The Court of Appeal found that the “only conclusion available from the record is that Mr Neale well understood what was required of him, and was unable to provide Mr Lupton”.
At the hearing before me Mr Neale submitted that the Court of Appeal was wrong, and that Mr Hammerschlag J correctly recorded the fact that Mr Mahony failed to plead a cause of action. I do not accept that submission. It is apparent from the passage from the judgment of Leeming JA that his Honour considered not only what Hammerschlag J said in his Honour’s reasons for judgment but also what his Honour said as revealed by the transcript.
Ground 1, therefore, fails.
Ground 2
Ground 2 asserts that Mr Neale proposes to appeal the Judgment on the ground that Mr Neale’s liability to pay Mr Mahony’s costs was conditional on his receiving a loan of $250,000. Mr Neale did file with the Supreme Court of New South Wales a summons commencing an appeal but, by the operation of orders made by Schmidt J on 8 December 2016, the summons was dismissed on 15 December 2016.[22]
[22] Exhibit C
I should record that at the hearing Mr Neale gave an explanation for the dismissal of the summons. Briefly stated, Mr Neale said that at the time his wife left Mr Neale and took with her the email address to which he received correspondence, and Mr Neale failed to notify the Supreme Court of his new email address. The consequence of that was that Mr Neale was not notified of the hearing or hearing dates that had been set down by the Supreme Court. Whether or not that explanation is correct, Mr Neale’s appeal was dismissed on 15 December 2016, and, for that reason, there is no appeal on foot; and, for that reason alone, ground 2 fails.
Ground 3
Ground 3 is as follows:
Pursuant to s 41(6A)(b) this is an abuse of process whose purpose is to pressure me into paying Mr Mahony a small fraction of the debt owing to the CBA and the parties to whom CBA sold my loan. If I do not succeed in correcting the omission of the undervalue sale plea as permitted by Justice Davies in the Supreme Court Mr Mahony’s claim was represent a tiny fraction of the sums claimed by the CBA and those who bought my loan from the CBA.
It is not easy to determine what Mr Neale intends to claim in this ground. At the hearing I understood Mr Neale to suggest that CBA induced Mr Mahony to seek to make Mr Neale bankrupt. If that is what Ground 3 is intended to claim, there is no evidence to support the claim. Otherwise, ground 3 discloses no abuse of process. That the judgment debt in relation to which Mr Mahony applied for the issue of a bankruptcy notice is only a fraction of the debt Mr Neale owes another creditor by itself is incapable of rendering Mr Mahony’s reliance on the bankruptcy notice an abuse of process.
Ground 3, therefore, also fails.
Grounds 4 and 7
Ground 4 is as follows:
Pursuant to s 41(6A)(b) the debt is not owing. My agreement to pay Mr Mahony money was conditional on my receiving a loan of $250,000. I received nothing because the security property was sold by CBA without notice and without ever going to auction.
It is common ground that Mr Mahony recovered the Judgment after a contested hearing in which Mr Neale raised the same or substantially the same ground as stated in ground 4. That Mr Mahony recovered the Judgment implies that the Local Court rejected the ground. Ground 4, therefore, is a claim that this Court should go behind the Judgment.
On the hearing of a creditor’s petition, a bankruptcy court has a discretion to “go behind the judgment” if “substantial reasons are given for questioning whether behind that judgment there was in truth and reality a debt due to the petitioner”.[23] Where the bankruptcy court is satisfied such substantial reasons exist, the petitioning creditor will bear the legal burden of proving the judgment records a true debt.[24] The same principles apply in an application to set aside a bankruptcy notice; the bankruptcy court has a discretion to go behind the judgment on the same grounds on which the court may go behind a judgment when hearing a creditor’s petition.[25]
[23] Wren v Mahony [1972] HCA 5; (1972) 126 CLR 212 at page 225 (Barwick CJ)
[24] Cheung v Burness (Trustee) [2016] FCA 1381 at [79] (Moshinsky J)
[25] Olivieri v Stafford (1989) 91 ALR 91 at pages 107-109 and in particular the discussion by Gummow J in Wilkinson v Osborne & Anor (1915) 21 CLR 89, Re Vernon Arnfield (1925) 25 SR (NSW) 517 and Re Riviere; Ex parte Original Mont de Piete Ltd (1919) 20 SR (NSW) 77.
The question, then, is whether there are any substantial reasons for questioning the debt that has merged in the Judgment. That requires me to identify the material that is relevant to the determination of that question. I begin with Mr Neale’s affidavit of 12 April 2019. He there deposed that at the end of 2015 Mr Neale’s business partner in the Avon Road development, Mr Rocco Falcomata, offered to lend Mr Neale $250,000 to be secured by the Avon Road property, provided Mr Neale granted Mr Falcomata an option to purchase the property. Mr Mahony sent an email stating that if Mr Neale obtained the extra money Mr Neale should pay him 10% of it. Mr Neale refers to an annexure “P”, but there is no annexure “P” to his affidavit. Mr Neale agreed to pay Mr Mahony 10% of any funds he would receive, and he did so because “the contingency provided for in our costs agreement was my liquidity, not success, and I then trusted Mr Mahony”. Mr Neale, however, received no funds. Mr Neale repeated the substance of these claims in his affidavit made on 22 March 2017 which he filed in the First BN proceeding.
Next, I turn to the affidavit Mr Neale made on 9 June 2017 which he filed in the First BN proceeding. At paragraph 35 of that affidavit, Mr Neale deposed (emphasis in original):
Our costs agreement (Annexed as “A”) says at Cl 8 thereof “Persons responsible for the Work John Mahony will be responsible for you matter, but Catherine Carney will do most of the work.” That agreement is conditional upon my having enough money to retire on, even if we lost. I presently have no money, no funds, and am seeking to support myself until I can receive an aged pension.
The annexure referred to in this passage is not annexed to the copy of the affidavit that is in evidence.[26] I have accessed the Court’s electronic file in relation to the First Bankruptcy proceeding and found that the affidavit of 9 June 2017 Mr Neale filed did not have annexed to it the costs agreement or any other document Mr Neale deposed in his affidavit was annexed to his affidavit.
[26] As part of exhibit B
Next, I turn to the assertions made in the Submissions. Mr Neale there asserts that at the time of the proposed sale of the Avon Road property, Mr Mahony was documenting a proposed loan of $250,000 from “Falco” to be secured over part of the Avon Road property. Mr Neale asserts he “agreed, as our costs agreement was based conditional on my liquidity, to pay Mr Mahony $25,000 on receipt by me of that $250,000”. After the Avon Road property was sold, however, it was no longer possible to secure “the Falco loan”, and Mr Neale did not receive the $250,000. Mr Mahony “then became the beneficiary of the $250,000 funds available from Falco which I understand Falco agreed to pay by way of factoring Mr Mahony’s receivables”.
I have reviewed the documents that form exhibit A, but I found no document that was or which appeared relevant to a claim that Mr Neale’s obligation to pay Mr Mahony’s fees was conditional on Mr Neale’s liquidity or on his obtaining a loan of $250,000. I have also gone through the documents that form part of “MFI1”. I there found drafts of the affidavit of 9 June 2017 Mr Neale filed in the First BN proceeding. I also found an affidavit filed or proposed to be filed in a different proceeding which repeats the paragraph from Mr Neale’s 9 June 2017 affidavit that I have already set out.
I also found an exchange of emails between Mr Neale and Mr Mahony. The exchange begins with an email Mr Mahony sent to Mr Neale at 11:40 am on 19 May 2015 in which he says he is happy to help “but we need to work out our costs issue”, and that he will “send a suggestion to you shortly”. Mr Neale responded by email he sent at 12:48 pm on 19 May 2015 (errors in original):
Whatever we agree will be tested by me on two bases:
1is it consistent with our costs agreement in which I made a full and truthful disclosure of my financial position
2I will always assess help on the basis of the result rather than the skill, effort and intent. Not that I ignore the contrast between the direction of your skill, effort and intent with that of the CBA.
I cannot get your receivers to withdraw or modify their written demand that I pay them. I have no intention of, or capacity to, pay them.
Mr Mahony then sent an email to Mr Neale at 1:17 pm on 19 May 2015 as follows (errors in original):
The Receivers [to Mr Mahony’s practice] are gone
I will send You more info.
Any previous costs understanding finished when you negligently allowed Avon Rd to be stolen from you.
We need to document an agreement to recognise and agree to pay/secure the costs incurred to date.
If you are not prepared to agree to that, we will let the Court do it.
Am I wasting my time proposing such an arrangement?
The only other document that contains potentially relevant information is a submission Mr Neale made to the Law Society in relation to fees that were apparently payable by Mr Mahony to Mr Muddle, a barrister, whom Mr Mahony retained to undertake work for Mr Neale. Mr Neale there stated:
Me Neale’s matter was taken on by the legal practice on a “no win no fee” basis, as it is an extremely important matter in the context of the Commonwealth Bank takeover of Bankwest that issue has recently been the subject of a Senate Enquiry. That Senate Enquiry confirmed in its findings that Bankwest customers such as Mr Neale had been treated unconscionably by the Commonwealth Bank on its takeover of Bankwest.
Mr Neale’s case is also pivotal t the upcoming $20 billion class action being put together by 100’s of Bankwest customers against the Commonwealth Bank.
This material does not disclose any consistent account of the agreement Mr Neale says he made with Mr Mahony. It is apparent that the matters on which Mr Neale relies in his affidavits for claiming that he does not owe the debt that merged in the Judgment are assertions that it was a term of the costs agreement with Mr Mahony that Mr Neale would pay Mr Mahony’s fees only if Mr Neale were liquid, and an assertion that he would be liable to pay those fees out of a loan of $250,000 Mr Neale expected to receive if Mr Neale received it. It is also based on what I will take to be evidence of a conversation Mr Neale says he had with Mr Mahony that Mr Neale agreed he would pay to Mr Mahony $25,000 out of the $250,000 loan to be secured on the Avon Road property Mr Neale expected to receive. These matters, however, whether considered alone or together, do not constitute a substantial reason for questioning whether behind the Judgement there was in truth and in reality a debt.
The assertion that the costs agreement rendered Mr Neale liable only if he were liquid is not supported by the term of the costs agreement Mr Neale quotes in his affidavit. Nor is Mr Neale’s assertion that Mr Mahony agreed that Mr Neale would be liable to pay his fees only if Mr Neale received the loan of $250,000 supported by the conversation he says he had with Mr Neale. The conversation Mr Neale says he had with Mr Mahony went no further than Mr Mahony agreeing that on Mr Neale’s receipt of the $250,000 loan Mr Neale would pay to Mr Mahony $25,000 out of the loan proceeds. That, however, is different from an agreement that Mr Neale would pay Mr Mahony’s fees only if he were to obtain the loan of $250,000; and it is different from an agreement that the $25,000 would be paid in full and final satisfaction of fees that might be or might become owing to Mr Mahony.
Next there is the exchange of emails between Mr Neale and Mr Mahony on 19 May 2015. Mr Mahony, in his first email, refers to an arrangement, which is consistent with Mr Neale’s assertion that he agreed with Mr Mahony that he would pay to Mr Mahony $25,000 from the proceeds of the loan of $250,000 Mr Neale expected to receive on the security of the Avon Road property. As I have already noted, however, that is not the same thing as an agreement by Mr Mahony that he would be paid only if Mr Neale were to obtain the loan of $250,000. Further, although in his email to Mr Mahony Mr Neale referred to “our costs agreement”, he did not assert that the costs agreement contained a term to the effect that Mr Mahony would be paid only if Mr Neale were liquid. Mr Neale stated no more than that, consistently with the costs agreement, he made a truthful disclosure of his financial position. If, as Mr Neale has asserted in his affidavits, Mr Mahony had agreed that he would be paid only if Mr Neale were liquid, it is reasonable to expect that Mr Neale would have explicitly stated that he had agreed with Mr Mahony that Mr Mahony’s being paid was conditional on Mr Neale being liquid. Further, although Mr Neale referred to his inability to get Mr Mahony’s receivers to withdraw or modify their written demand that Mr Neale pay them, Mr Neale did not state he was not liable to pay them because Mr Mahony had agreed Mr Neale would not be required to pay him unless Mr Neale were liquid; Mr Neale instead said he had no intention, or capacity, to pay the receivers.
Finally, there is the assertion Mr Neale made in the submission to the Law Society in relation to Mr Muddle’s fees. He there asserted that Mr Mahony’s law practice agreed to carry on the work on a “no win no fee basis”. That is not consistent with what Mr Neale claimed in his affidavits; and it is not a matter he asserted to Mr Mahony in the email exchange to which I have referred. Further, it is inconsistent with what Mr Neale said to me at the hearing from the bar table. Mr Neale said Mr Mahony provided him with a costs agreement that was headed “pro bono”, but Mr Neale told Mr Mahony that he did not engage Mr Mahony pro bono. Mr Neale told me he informed Mr Mahony that, if Mr Neale succeeds, Mr Mahony would be paid double the amount he would be owed, but if Mr Neale lost, he would pay Mr Mahony’s costs depending on Mr Neale’s liquidity.
The question, then, is whether the material to which I have referred satisfies me there are substantial reasons for questioning whether behind the Judgment there was in truth and reality a debt due by Mr Neale to Mr Mahony. I am not satisfied. For reasons I have given, the assertions Mr Neale makes in his affidavit are not reasonably capable of supporting a finding that Mr Mahony agreed to be paid only if Mr Neale were liquid; the email exchanges of 19 May 2015 constitute an occasion where if, as Mr Neale claims, Mr Mahony had agreed to be paid only if Mr Neale were liquid, Mr Neale would have stated to Mr Mahony that that is what Mr Mahony had agreed, but Mr Neale made no such statement; the assertion Mr Neale made to the Law Society that he retained Mr Mahony’s law practice on a “no win no fee basis” is inconsistent with the assertions Mr Neale made in his affidavit and to me at the hearing; and Mr Neale’s assertion to me that Mr Mahony agreed to be paid at twice the rate if Mr Neale were to succeed in his claims but if he did not win he would pay Mr Mahony’s fees only if Mr Neale were liquid, is inconsistent with all other assertions Mr Neale made about the agreement he made with Mr Mahony.
For these reasons, grounds 4 and 7 do not succeed.
Other matters stated in application
In paragraph 9 of his application Mr Neale claims an order preventing any bankruptcy action until his fresh proceedings have been determined. Mr Neale refers to paragraph 14 of the reasons for judgment of Davies J in Neale v Mahony (No.2).[27] In those reasons for judgment Davies J refused Mr Neale leave to file an amended statement of claim against Mr Mahony in relation to an alleged failure to lodge caveats. At paragraph 14, his Honour said:
As I have said, I was concerned at the time of my first judgment that the plaintiff should not be shut out forever for making the claim in relation to the failure to lodge caveats. It is now apparent that the events of which he complains, where a loss has flowed, occurred in 2014 and 2015. If the plaintiff considers that he has, and can plead, a reasonable cause of action against Mr Mahony in relation to the issues set out in the proposed amended statement of claim, he will not be prevented from commencing fresh proceedings in that regard.
[27] [2018] NSWSC 1253
Paragraph 9 assumes Mr Neale has some arguable claim against Mr Mahony. The only claim Mr Neale identifies in his application is the asserted cross-claim, set-off, or cross demand against Mr Mahony that I have already considered. I have already found there is no substance to Mr Neale’s asserted cross-claim, set-off, or cross demand against Mr Mahony based on Mr Mahony’s not having pleaded in the Bankwest proceeding a cause of action based on the sale of the Yatala Road property at an undervalue. Ground 9, therefore, affords no ground for setting aside the bankruptcy notice.
In paragraph 10 of his application Mr Neale claims an order preventing any bankruptcy action against him until “my fresh proceedings against CBA have been determined”. There is no question that Mr Neale is aggrieved by what he believes the CBA did or failed to do; and there is abundant material before me in which Mr Neale has expressed his grievances. Hammerschlag J described Mr Neale’s claims as follows:[28]
Mr Neale fervently holds the conviction, to the point of preoccupation, perhaps even obsession, that once the Commonwealth Bank had taken over Bankwest, it set out on a deliberate course of targeting Bankwest's customers, including himself, with the intention of harming them by fraudulently forcing them into default and selling them up at an undervalue. I will refer to this as the "deliberate destruction strategy".
Mr Neale believes that in his case, the deliberate destruction strategy was implemented by the Commonwealth Bank fraudulently procuring low valuations of the properties mortgaged by him to Bankwest, so as to make him default by putting him in breach of loan to value ratio (LVR) covenants in his facilities, and by withholding advances so as to deny him resources to obtain redress. He believes that valuers knowingly participated in the deliberate destruction strategy.
He says that as part of the deliberate destruction strategy, Yatala Rd was deliberately sold at a significant undervalue, and that the same strategy is being adopted with respect to Avon Rd.
[28] James Woodward Neale v Bank of Western Australia Ltd; Bank of Western Australia Ltd v James Woodward Neale [2014] NSWSC 315, at [24]26]
What was said by Hammerschlag J is reflected in the material that is before me. For example, annexure “G” to Mr Neale’s affidavit of 12 April 2019 makes a number of serious, but unsupported, allegations against the CBA ranging from the bribery of Mr Neale’s solicitors, the fraudulent selling of Mr Neale’s loan to a tax haven, and inducing Mr Mahony “to remove crucial pleadings”.
I do not doubt Mr Neale genuinely believes the matters he alleges against the CBA. But there is nothing in the material before me that is capable of giving rise to any reasonable cause of action against the CBA. In any event, even if Mr Neale were able to formulate some reasonably arguable case against the CBA, he has already filed a cross-claim against the CBA in the Bankwest proceedings which was dismissed. In the absence of an allegation that the orders Hammerschlag J made in those proceedings were procured by fraud, there is little prospect that Mr Neale would be able to commence fresh proceedings against the CBA.
Thus, given I am satisfied there is nothing in the material before me that is capable of reasonably disclosing any cause of action against the CBA, I do not propose to make any order to the effect claimed in paragraph 10 of the application.
Other matters
At the hearing Mr Neale said that the “real issue” in the proceeding is the CBA having bribed everyone to prevent them from disclosing evidence of fraud by the CBA and other banks, that fraud consisting of the CBA and other banks taking possession of security properties, and selling them at an undervalue; and that the CBA in particular, and banks in general, have sought to prevent people from exposing that fraud. Mr Neale’s allegations of fraud are not particularised, and there is no evidence in the material before me that remotely suggest fraud. Mr Neale’s assertions of fraud do not disclose any ground for setting aside the bankruptcy notice.
Matters raised by Mr Mahony
In his written submissions Mr Mahony submits that the grounds on which Mr Neale relies in support of his application to set aside the bankruptcy notice are the same as the grounds on which Mr Neale relied in the First Bankruptcy proceeding and which were determined against him; and, for that reason, it is an abuse for Mr Neale to have commenced an application to set aside the bankruptcy notice. It is not obvious to me that Mr Neale’s relying on the grounds to set aside a bankruptcy notice that are the same or substantially the same as the grounds on which he relied to set aside a different bankruptcy notice, although based on the same judgment, constitutes an abuse. Given the findings I have made, however, it is not necessary for me to decide that question.
Conclusion and disposition
Mr Neale has not succeeded on any of the grounds on which he relies to set aside the bankruptcy notice. I propose, therefore, to order that the application be dismissed. There is no reason why costs should not follow the event. I also propose to order that Mr Neale pay Mr Mahony’s costs, subject to reserving to the parties liberty to apply within fourteen days for an order that the costs order be varied or discharged.
I certify that the preceding seventy-one (71) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis
Associate:
Date: 13 November 2019
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