Pascoe v Erten - [2011] NSWSC 769

Supreme Court

New South Wales

Medium Neutral Citation: Pascoe v Erten [2011] NSWSC 769
Hearing dates: 13 July 2011
Decision date: 22 July 2011
Jurisdiction: Common Law
Before: Schmidt J
Decision:
The motion is dismissed with an order for costs in favour of the plaintiff.

Catchwords: PROCEDURE - stay of proceedings sought pending Federal Magistrates Court decision - defendants are bankrupts - question of arguable point and balance of convenience - stay refused - costs
Legislation Cited: Bankruptcy Act 1966 (Cth)
Bankruptcy Regulations 1996 (Cth)
Federal Court of Australia Act 1976
Cases Cited: De Robilliard v Carver [2007] FCAFC 73; (2007) 159 FCR 38
Ferella v Official Trustee in Bankruptcy (as trustee of the bankrupt estate of Ferella) (No 2) [2011] FCA 619
Nilant v Macchia [2000] FCA 1528; (2000) 104 FCR 238
Simon v Vincent J O'Gorman Pty Ltd (1979) 41 FLR 95
Re Coyle (1993) 42 FCR 72
Re Schierholter; Ex parte Geis (1978) 32 FLR 22
Wren v Mahony (1972) 126 CLR 212
Category: Procedural and other rulings
Parties: Scott Darren Pascoe as trustee of the Bankrupt Estate of Ozkan Erten and the Bankrupt Estate of Nurdan Erten (Plaintiff)
Ozkan Erten (First Defendant)
Nurdan Erten (Second Defendant)
Representation: Counsel:
Mr DE Baran (Defendants)
Solicitors:
Grace Lawyers (Plaintiff)
Maatouks Law Group Pty Ltd (Defendants)

File Number(s): 2011/188559

Judgment

By notice of motion filed in July 2011, the defendants seek orders staying these proceedings, pending the Federal Magistrates Court's disposition of applications for relief which they have brought under the Bankruptcy Act 1966 (Cth) ('the Act'). Both defendants are bankrupts. Mr Ozkan Erten has made an application for relief under s 179 of the Act and Ms Nurdan Erten under s 153B.

The application is opposed, notwithstanding that the matters are listed before the Federal Magistrates Court in August, when they may be heard or dealt with only for directions. The defendants have undertaken to take whatever steps are reasonably available to them, to have their applications expedited.

The proceedings were commenced in June 2011. By amended statement of claim the plaintiff, the defendants' trustee in bankruptcy, seeks judgment for possession of a property located at Dulwich Hill, where the defendants reside.

The motion was supported by an affidavit sworn by Mr Maatouk, the defendants' solicitor, which disclosed that Mr Erten was made bankrupt in July 2007 and that he had instructed in February 2011, that he understood that his three year bankruptcy period had expired in July 2010 and that he had been discharged from bankruptcy. Mr Maatouk had discovered, however, that Mr Erten had never filed a Statement of Affairs and that consequently, the trustee was refusing to consent to his discharge.

Mr Erten seeks to have the bankruptcy set aside, claiming that the former trustee, the Insolvency and Trustee Service Australia ('ITSA') never informed him of the need to file a Statement of Affairs and took no action to bring such a requirement to his attention. By letter of 5 July 2011, Mr Maatouk…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Pascoe v Erten

Details

AGLC: Pascoe v Erten [2011] NSWSC 769
Case: [2011] NSWSC 769
Decision Date: 22 July 2011

CaseChat Overview and Summary

Pascoe v Erten was a case before the Federal Court of Australia where the plaintiff, Pascoe, sought a stay of proceedings against the defendants, Erten and another, pending a decision in the Federal Magistrates Court. The defendants were bankrupts and argued that a stay was necessary due to the potential for inconsistent outcomes in the two proceedings and the burden of defending the action. The plaintiff opposed the stay on the basis that the defendants had not demonstrated an arguable point in the Federal Magistrates Court decision, nor had they shown that the balance of convenience favoured a stay. The court was required to determine whether the defendants had established the necessary criteria to warrant a stay of proceedings.

The Federal Court considered the principles governing the stay of proceedings in light of the defendants' bankruptcy and the need to avoid inconsistent outcomes. The court examined the arguments presented regarding the arguable point and balance of convenience. The plaintiff contended that the defendants had not shown that the Federal Magistrates Court decision would be favourable to them, and therefore, there was no arguable point. The court found that the defendants had not provided sufficient evidence to demonstrate that the balance of convenience favoured a stay of proceedings in the Federal Court. The court also noted that the defendants' financial status did not necessarily entitle them to a stay.

Ultimately, the Federal Court rejected the defendants' application for a stay of proceedings. The court held that the defendants had not demonstrated an arguable point or shown that the balance of convenience favoured a stay. The court also noted that the defendants' bankruptcy did not automatically entitle them to a stay. Consequently, the plaintiff's action in the Federal Court proceeded without interruption. The court ordered the defendants to pay the plaintiff's costs associated with the application for a stay.

Orders