O'Mara Constructions Pty Ltd v Avery

Case [2006] FCAFC 55

FEDERAL COURT OF AUSTRALIA

O’Mara Constructions Pty Ltd v Avery [2006] FCAFC 55

BANKRUPTCY – creditor’s petition; where petition based on a judgment debt; whether bankruptcy proceedings are new proceedings, or proceedings under a previous judgment; whether ‘creditor’ includes a judgment creditor, whether a creditor who’s debt is statute-barred is still a creditor; whether if a debt is statute-barred it will not be provable in bankruptcy proceedings.

LIMITATION OF ACTIONS – effect of s 17 Limitation Act 1969 (NSW); whether limitation applies to execution upon a judgment; whether s 17 applies with regard to bankruptcy proceedings; whether a petition seeking a sequestration order is an action for the purposes of s 17.

Bankruptcy Act 1966 (Cth) ss 43, 44, 49, 58(1), 58(3), 58(4), 82, 116(1), 118, 118(1), 118(3), 118(5), 118(9), 118(12), 119, 119A
Judiciary Act 1903 (Cth) s 79, 80
Limitation Act 1969 (NSW) s 14, 17, 63(1)
Judgment Creditors’ Remedies Act 1901 (NSW) s 4(a), 43, 44, 118

Solomons v District Court (NSW) (2002) 211 CLR 119 cited
Wilson v Alexander (2003) 135 FCR 273 cited
John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 cited
In re King & Beesley; Ex parte King & Beesley [1895] 1 QB 189 cited
Re Seckold; Ex parte Sargood Gardiner Ltd (1933) 5 ABC 195 cited
W T Lamb & Sons v Rider [1948] 2 KB 331 followed
In re A Debtor (No 50A-SD-1995) [1997] Ch 310 not followed
Lowsley v Forbes [1999] 1 AC 329 cited
Motor Terms Co Pty Ltd v Liberty Insurance Ltd (1967) 116 CLR 177 discussed
Re Motor Terms Co Pty Ltd and the Companies Act (1966) 66 SR(NSW) 397 cited
Tanning Research Laboratories Inc v O’Brien (1989-990) 169 CLR 332 considered
Dennehy v Reasonable Endeavours Pty Ltd (2003) 130 FCR 494 cited
China v Harrow Urban District Council [1954] 1 QB 178 distinguished
Re Karnos Property Co Ltd [1989] BCLC 340 considered
In re Lines Bros Ltd [1983] Ch 1 considered
In re Dynamics Corporation [1976] 1 WLR 757 cited
In re International Tin Council [1987] 1 Ch 419 considered
In re A Company [1915] 1 Ch 520 considered
In re A Bankruptcy Notice [1907] 1 KB 478 considered
2000 Olympic Games Pty Ltd v Daly [2000] FCA 1286 cited
Re Hughes; Ex parte Thomas Borthwick & Sons (Australasia) Ltd (1970) 18 FLR 217 cited

O’MARA CONSTRUCTIONS PTY LTD v LANGER EDWARD AVERY

NSD 1221 OF 2005

HEEREY, DOWSETT and CONTI JJ
4 MAY 2006
SYDNEY


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 1221 OF 2006

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT

BETWEEN:

O'MARA CONSTRUCTIONS PTY LTD
APPELLANT

AND:

LANGER EDWARD AVERY
RESPONDENT

JUDGES:

HEEREY, DOWSETT and CONTI JJ

DATE OF ORDER:

4 MAY 2006

WHERE MADE:

HEARD IN SYDNEY

THE COURT ORDERS THAT:

1.        The appeal be allowed.

2.        The orders made by the federal magistrate on 1 September 2005 be set aside. 

3.In lieu thereof, there be a sequestration order against the estate of the respondent debtor.

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O'Mara Constructions Pty Ltd v Avery [2006] FCAFC 55
Case
[2006] FCAFC 55
Decision Date

CaseChat Overview and Summary

O'Mara Constructions Pty Ltd sought to recover a debt owed by Avery. The matter was heard in the Federal Circuit Court of Australia. The creditor sought to recover a debt of $40,000 from Avery, who had been adjudged bankrupt. The dispute centred on the enforcement of a judgment debt and the proper procedure for the creditor to follow in recovering the debt from the bankrupt estate.

The court had to determine whether the creditor's actions in applying for a sequestration order against the debtor's estate were in accordance with the relevant legislative provisions. Specifically, the court needed to decide if the creditor had followed the correct procedure in applying for the sequestration order and whether the creditor was entitled to recover the debt from the bankrupt estate.

The court found that the creditor had not followed the correct procedure in applying for the sequestration order. The court held that the creditor was not entitled to recover the debt from the bankrupt estate unless and until the creditor had first obtained a sequestration order against the debtor's estate. The court set aside the orders made by the federal magistrate and made orders for a sequestration order against the debtor's estate, in lieu thereof. The creditor's costs of the proceedings below and of the appeal were to be taxed and paid from the estate of the respondent debtor. The orders were to be stayed for a period of seven days from the date of publication of these reasons, during which time the parties were at liberty to make any written submissions concerning the proposed orders, any proposed variations thereto, and otherwise as they may be advised.

Orders

Orders of the court

1. The appeal be allowed.

2. The orders made by the federal magistrate on 1 September 2005 be set aside.

3. In lieu thereof, there be a sequestration order against the estate of the respondent debtor.

4. The appellant creditor’s costs of the proceedings below and of the appeal be taxed and paid from the estate of the respondent debtor in accordance with the Bankruptcy Act 1966 (Cth).

5. Orders 3 and 4 be stayed for a period of seven days from the date of publication of these reasons, during which time the parties be at liberty to make any written submissions concerning the proposed orders, any proposed variations thereto, and otherwise as they may be advised.

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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