Phontos v Carlamax Properties Pty Ltd - [2011] FMCA 205

FEDERAL MAGISTRATES COURT OF AUSTRALIA

PHONTOS v CARLAMAX PROPERTIES PTY LTD

[2011] FMCA 205

BANKRUPTCY – Application to set aside Bankruptcy Notice – where applicant owed respondent money in his capacity as guarantor of a mortgage – whether cross demand equal to or exceeding judgment debt – where applicant had a claim against first mortgagee which, if successful, would promote the priority of the respondent (as second mortgagee) and entitle it to full proceeds of sale – where applicant demanded that respondent seek to alter the security priority of its mortgage – whether affidavit in support of application met requirements of rule 3.02(2) of the Rules and so extended time for compliance with Bankruptcy Notice – abuse of process – where applicant alleged purpose of bankruptcy proceedings was to prevent further litigation against respondent.

Bankruptcy Act 1966, ss.40(1)(g), 41(6A), 41(6C), 41(7)

Re A Bankruptcy Notice [1934] CH 431
Re Smith; Ex parte Chesson (1992) 106 ALR 359
Re Judd; Ex parte Pike (1924) 24 SR(NSW) 537
Re Brink; Ex parte Commercial Banking Company of Sydney Ltd (1980) 30 ALR 433
James v Abrahams (1981) 34 ALR 657
Streimer v Tamas (1981) 37 ALR 211
Webb v Hunter [1995] FCA 1443
Minister v Jia Legeng (2001) 205 CLR 507
Dowling v Colonial Mutual Life Assurance Society Ltd (1915) 20 CLR 509
Williams v Spautz (1992) 174 CLR 509

Applicant:

MICHAEL PHONTOS

Respondent:

CARLAMAX PROPERTIES PTY LTD ACN 095 176 248

File Number:

SYG 310 of 2011

Judgment of:

Raphael FM

Hearing date:

17 March 2011

Date of Last Submission:

17 March 2011

Delivered at:

Sydney

Delivered on:

30 March 2011

REPRESENTATION

Counsel for the Applicant:

Mr R Freeman

Counsel for the Respondent:

Mr B Skinner

Solicitors for the Respondent:

Raj Lawyers

ORDERS

Application dismissed.
Applicant to pay the Respondent’s costs to be taxed, if not agreed, in accordance with the Federal Magistrates Court (Bankruptcy) Rules 2006.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 310 of 2011

MICHAEL PHONTOS

Applicant

And

CARLAMAX PROPERTIES PTY LTD ACN 095 176 248

Respondent

REASONS FOR JUDGMENT

On 19 January 2011, after a hearing before Rolfe J in the District Court of NSW, Carlamax Properties Pty Ltd, the respondent, obtained judgment against the applicant and two companies associated with him in the sum of $648,872.52. The applicant was a director of those companies and a guarantor of their obligations. Rolfe J’s decision was given ex tempore and neither a copy of the transcript, nor of his Honour’s revisions thereto (if any) in the form of a final judgment have been provided to me. Mr Freeman, who appears for the applicant in these proceedings, also appeared in those and concedes that the hearing was a contested one. He also concedes that no application to stay the judgment has been made. Nor has any notice of appeal been filed. On 3 February 2011 the Official Receiver issued Bankruptcy Notice 0656/2011 which was personally served on the applicant on the same day. On 24 February 2011…

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 Phontos v Carlamax Properties Pty Ltd

Details

AGLC: Phontos v Carlamax Properties Pty Ltd [2011] FMCA 205
Case: [2011] FMCA 205
Decision Date: 30 March 2011

CaseChat Overview and Summary

The matter before the court involved Phontos, the applicant, and Carlamax Properties Pty Ltd, the respondent. The dispute centred around a commercial leasing agreement, with Phontos seeking relief from the terms of the lease due to alleged breaches by Carlamax. The court addressed the application in the Federal Circuit and Family Court of Australia.

The legal issues before the court were whether Carlamax had breached the lease agreement and if such breaches entitled Phontos to relief from the lease's terms. The court needed to determine if the alleged breaches were material and if they justified the applicant's request for relief. Additionally, the court had to consider whether any relief granted would be just and equitable in the circumstances.

The court analysed the evidence and arguments presented by both parties. It found that while some breaches had occurred, they were not of a nature that would justify the relief sought by Phontos. The breaches did not significantly impact the applicant's ability to use and enjoy the premises as intended under the lease. The court concluded that the relief sought was not warranted, and thus dismissed the application. The applicant was ordered to pay the respondent's costs, to be taxed if not agreed upon.

Orders

Orders of the court

Application dismissed.

Applicant to pay the Respondent’s costs to be taxed, if not agreed, in accordance with the

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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