Peek v Hennessy

Case [2021] FCA 1187

FEDERAL COURT OF AUSTRALIA

Peek v Hennessy [2021] FCA 1187   

File number: QUD 202 of 2021
QUD 203 of 2021
Judgment of: RANGIAH J
Date of judgment: 6 October 2021
Catchwords: BANKRUPTCY AND INSOLVENCY – Bankruptcy Act 1966 (Cth) – applications to set aside bankruptcy notices – applications for extension of time to comply with bankruptcy notices – extensions sought until the High Court determines the constitutional validity of certain judgments– no basis for extensions established – whether court should go behind final judgments– no basis for going behind the judgments – applications dismissed – applicants to pay indemnity costs
Legislation:

Constitution cl 5 and s 118

Bankruptcy Act 1966 (Cth) ss 30 and 41

Judiciary Act 1903 (Cth) ss 78B, 79 and 80

High Court Rules 2004 (Cth) r 6.07

Queensland Building Services Authority Act 1991 (Qld) s 42

Queensland Building Services Authority Regulation 2003 (Qld)

Cases cited:

Chapel of Angels Pty Ltd Trading As Chapel of Angels v Hennessy Building Pty Ltd Trading As Hennessy Building ACN 117 587 998 In Its Own Capacity And As Trustee For The Hennessy Family Trust & Anor [2021] HCASL 40 (4 March 2021)

Chapel of Angels Pty Ltd v Hennessy [2021] FCA 875

Chapel of Angels Pty Ltd v Hennessy Builder Pty Ltd& Anor [2018] QDC 218

Chapel of Angels PtyLtd v Hennessy Builder Pty Ltd& Anor [2018] QDC 248

Chapel of Angels Pty Ltdv Hennessy Building Pty Ltd& Anor [2017] QDC 280

Chapel of Angels Pty Ltdv Hennessy Building Pty Ltd& Anor [2020] QCA 219

Chapel of Angels Pty Ltd vHennessy Building Pty Ltd & another [2021] QDC 81

Clyne v Deputy Commissioner of Taxation (1983) 57 ALJR 673

Dunkerley v Comcare [2019] FCA 1002

Ramsay Health Care Australia Pty Ltd v Compton (2017) 261 CLR 132

Re Athans; Ex parte Athans (1991) 29 FCR 302

Re Briggs; Ex parte Briggs v Deputy Commissioner of Taxation (WA) (1986) 12 FCR 310

Sayer-Jones v Juju Bean Investments Pty Ltd [2020] FCA 177

Singh v Fobupu Pty Ltd, in the matter of Singh [2020] FCA 886

Walton v Gardiner (1993) 177 CLR 378

Division: General Division
Registry: Queensland
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Number of paragraphs: 52
Date of hearing: 14 September 2021
Solicitor for the Applicants: Mr M Ohlson of Michael J Ohlson Solicitor
Counsel for the Respondent: Mr P Travis
Solicitor for the Respondent: AXIA Litigation Lawyers

ORDERS

QUD 202 of 2021
BETWEEN:

SASKIA PEEK

First Applicant

PETER JAMES MCQUITTY

Second Applicant
AND:

JOHN PAUL HENNESSY

Respondent
QUD 203 of 2021
BETWEEN:

SASKIA PEEK

First Applicant

PETER JAMES MCQUITTY

Second Applicant
AND:

HENNESSY BUILDERS PTY LTD

Respondent

ORDER MADE BY:

RANGIAH J

DATE OF ORDER:

6 OCTOBER 2021

THE COURT ORDERS THAT:

1.In proceeding QUD 202 of 2021:

(a)the originating application is dismissed;

(b)the applicants pay the respondent’s costs of the proceeding on an indemnity basis.

2.In proceeding QUD 203 of 2021:

(a)the originating application is…

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Details
AGLC
Peek v Hennessy [2021] FCA 1187
Case
[2021] FCA 1187
Decision Date

CaseChat Overview and Summary

In the Federal Court of Australia, Saskia Peek and McQuitty sought extensions of time to comply with bankruptcy notices issued against them. They argued that they should not have to comply with the notices until the High Court determines the constitutional validity of certain judgments. The respondents, Hennessy Builders Pty Ltd and John Paul Hennessy, opposed the applications, stating that the applicants had not satisfied the requirements under sections 41(6A) and 30 of the Bankruptcy Act 1966 (Cth) for an extension of time for compliance with the bankruptcy notices and for setting aside the bankruptcy notices.

The court had to determine whether the applicants had established a basis for extensions of time to comply with the bankruptcy notices and whether it should go behind final judgments. The court found that the applicants had not satisfied the requirements under sections 41(6A) and 30 of the Bankruptcy Act for an extension of time for compliance with the bankruptcy notices and for setting aside the bankruptcy notices. The applicants had not pointed to any proceedings instituted by either of them personally, and the attempts of Chapel of Angels Pty Ltd to file an application in the High Court did not initiate a relevant proceeding. Additionally, there was no proceeding seeking to set aside the orders of the District Court made on 11 December 2018 that the applicants pay the amounts of costs assessed.

The court dismissed the originating applications and ordered that the applicants pay the respondents' costs of the proceeding on an indemnity basis. The court found that the applicants' applications were an abuse of process, were without merit, and were nonsense. The court did not consider it appropriate to go behind the final judgments of the District Court and the High Court.

Orders

Orders of the court

1. In proceeding QUD 202 of 2021:

(a) the originating application is dismissed;

(b) the applicants pay the respondent’s costs of the proceeding on an indemnity basis.

2. In proceeding QUD 203 of 2021:

(a) the originating application is dismissed;

(b) the applicants pay the respondent’s costs of the proceeding on an indemnity basis.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

It is necessary to describe the history of the litigation at some length in order to give context to the parties’ submissions.Background The applicants are directors and shareholders of Chapel of Angels Pty Ltd. On 23 October 2014, Chapel of Angels Pty Ltd commenced proceeding BD 4124 of 2014 against “Hennessy Builder Pty Ltd” in the District Court of Queensland. Later, “John Paul Hennessey” was added as the second defendant. In subsequent proceedings, Hennessy Builder Pty Ltd was referred to by various other names and with various spellings. In Chapel of Angels Pty Ltd v Hennessy [2021] FCA 875, Derrington J at [44]-[48] addressed the discrepancies, noting that:44 …The company “Hennessy Builders Pty Ltd” apparently does exist, but is unrelated to Hennessy Building and the various proceedings…this error appears to have ultimately originated from the plaintiff’s incorrect description of Hennessy Building in the title of the District Court Proceedings (which it commenced). This lead to Hennessy Building being described in several different ways in the proceedings in the Queensland courts: “Hennessy Building Pty Ltd”, “Hennessy Builder Pty Ltd” and “Hennessy Builders Pty Ltd”, or with “Hennessy” spelt as “Hennessey”.45 It is apparent on the material before the Court that there has been a misidentification of Hennessy Building in a number of the documents in the proceedings in the Queensland Courts and in documents which are the subject of the present application...46…In the course of submissions on behalf of the plaintiff, Mr Ohlson said in relation to the misnaming of Hennessy Building:Everyone knows that Hennessy Builders – Hennessy Building is the name of the – the proper name of the respondent for everything. Really, you know, the contract is signed in Hennessy Building, and there is different names on all of the court proceedings. The defendants applied for security for costs in the District Court of Queensland, and, on 21 November 2017, Judge Reid determined that security should be provided: Chapel of Angels Pty Ltdv Hennessy Building Pty Ltd& Anor [2017] QDC 280. However, in lieu of ordering the provision of security for costs, his Honour accepted undertakings from the present applicants, Ms Saskia Peek (then known as Saskia Pryce) and Mr McQuitty, that, if any order for costs were made against Chapel of Angels Pty Ltd, they would be jointly and severally responsible for the payment of those costs, as taxed, assessed or agreed between the parties. On 12 November 2018, Judge Porter QC of the District Court delivered reasons for judgment, upholding Chapel of Angels Pty Ltd’s case in part, but finding for the defendants upon their counter-claim, and directing the parties to make submissions as to the appropriate form of orders: Chapel of Angels Pty Ltd v Hennessy Builder Pty Ltd& Anor [2018] QDC 218. On 11 December 2018, Judge Porter QC ordered that Chapel of Angels Pty Ltd pay Hennessy Builder Pty Ltd the sum of $85,989.86 and pay the defendants’ costs: Chapel of Angels PtyLtd v Hennessy Builder Pty Ltd& Anor [2018] QDC 248.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The thrust of the respondents’ submissions is that the applicants have not addressed the requirements under ss 41(6A) and 30 of the Bankruptcy Act for an extension of time for compliance with the Bankruptcy Notices and for setting aside the Bankruptcy Notices. The respondents submit that the applicants simply invite the Court to entertain yet another attempt to litigate the proceeding that was dealt with following a contested trial before the District Court. The respondents contend that the applications are an abuse of process, are without merit, and are nonsense.Consideration of the applications for extension of time The originating applications seek extensions of time for compliance with the Bankruptcy Notices until:(a)a determination is made by the High Court as to the constitutional validity of the decisions of the District Court of Queensland, the Queensland Court of Appeal and the High Court itself; and(b)a determination is made by this Court as to whether to set aside the Bankruptcy Notices. The relief is presumably sought under s 41(6A) of the Bankruptcy Act, which provides:(6A)Where, before the expiration of the time fixed for compliance with a bankruptcy notice:(a)proceedings to set aside a judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; or(b)an application has been made to the Court to set aside the bankruptcy notice;the Court may, subject to subsection (6C), extend the time for compliance with the bankruptcy notice. It may be noted that s 41(6C) provides:(6C) Where:(a)a debtor applies to the Court for an extension of the time for complying with a bankruptcy notice on the ground that proceedings to set aside a judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; and(b)the Court is of the opinion that the proceedings to set aside the judgment or order:(i) have not been instituted bona fide; or(ii) are not being prosecuted with due diligence;the Court shall not extend the time for compliance with the bankruptcy notice. Section 41(6A)(a) of the Bankruptcy Act requires that proceedings to set aside a judgment or order in respect of which a bankruptcy notice was issued must “have been instituted by the debtor”. The “debtor” under s 41 of the Bankruptcy Act is the person against whom the creditor has obtained a final order and to whom the bankruptcy notice is issued (s 41(1)) and who may apply to the Court for an extension of time (s 41(6A)). Accordingly, the applicants are the debtors. However, the originating applications state that Chapel of Angels Pty Ltd has sought to initiate proceedings before the High Court, not the individual applicants. The applicants have not pointed to any proceedings instituted by either of them personally. Accordingly, to the extent that the originating applications rely upon the attempts of Chapel of Angels Pty Ltd to initiate proceedings in the High Court, s 41(6A)(a) is not satisfied. In any event, the attempts of Chapel of Angels Pty Ltd to file an application in the High Court did not initiate “a proceeding”. Under the Order of 26 May 2021 made by Gageler J, Chapel of Angels Pty Ltd cannot file any relevant application in the High Court Registry without leave, and its application for leave was dismissed by Gleeson J on 12 July 2021. Accordingly, no relevant “proceedings” have been instituted by the debtors in the High Court. Further, there is no proceeding seeking to set aside the orders of the District Court made on 11 December 2018 that the applicants pay the amounts of costs assessed.