Pollnow v Queensboro Pty Ltd - [1988] FCA 625

CATCHWORDS

Bankruptcy notice - Cross demand under s.4O(l)(g) - Effect of . , I

s.41(7) and sufficiency of relevant affidavit - Value of cross

demand not quantified in affidavit - “Benevolent construction“ !

applied - Sufficiency of evidence to establish cross demand - t
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Cross demand being subject of dismissed proceedings now under i.
appeal, issue was not whether prima facie case shown but whether
real possibility debtor’s appeal will succeed.

Bankruptcy Act 1966, ss.4O(l)(g), 41(7)
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POLLNOW (Debtor) -V- QUEENSBORO PTY LIMITED & ANOR (Petitioning
Creditors)

B.2391 Of 1988 B. 378 Of 1988
Burchett J.
19 October 1988
Sydney

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IN THE FEDERAL COURT OF AUSTRALIA )

GENERAL DIVISION 1 , .
BANKRUPTCY DISTRICT OF THE STATE )
' ,

OF NEW SOUTH WALES AND THE 1

AUSTRALIAN CAPITAL TERRITORY 1

B.2391 of 1988 BETWEEN:
ERROL HUGH POLLNOW
Debtor
AND :
-
QUEENSBORO PTY LIMITED
Petitioning Creditor

BETWEEN:
ERROL HUGH POLLNOW
Debtor

AND :

GARDEN NEWS-ST. LEONARDS
PTY LIMITED
Petitioning Creditor

MINUTE OF ORDERS OF THE COURT (MADE IN EACH CASE)

Judge Making Order: Burchett J.

Date of Order: 19 October 1988
Where wade: Sydney

THE COURT DECLARES THAT:

It is satisfied that the debtor has cross demand of

the type referred to in s.4O(l)(g).

THE COURT ORDERS THAT:

i	debtor's	creditor	the	The	c s .	pay
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l	-	NOTE :	Settlement and entry of orders is dealt with in rule	124
I	of the Bankruptcy Rules.
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IN THE FEDERAL COURT OF AUSTRALIA )
GENERAL DIVISION 1 BANKRUPTCY DISTRICT OF THE STATE ) OF NEW SOUTH WALES AND THE )

AUSTRALIAN CAPITAL TERRITORY 1

B.2391 of 1988 BETWEEN:

ERROL HUGH POLLNOW
Debtor

- AND :
QUEENSBORO PTY LIMITED
Petitioning Creditor

B.378 Of 1988 BETWEEN:
ERROL HUGH POLLNOW
Debtor

- AND :
GARDEN MEWS-ST. LEONARDS
PTY LIMITED
Petitioning Creditor

EX-TEMPORE REASONS FOR JUDGMENT i

BURCHETT J.

These are applications, whi.ch were heard together by

consent, in respect of two bankruptcy notices.

By s.4O(l)(g) of the Bankruptcy Act 1966 provision is

made for the service of a bankruptcy notice requiring a debtor,
within a fixed time, to "comply with the requirements of the

notice or satisfy the Court that he has a counter-claim, set-off

or cross demand equal to or exceeding the amount of the judgment

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debt or sum payable under the final order, as the case may be,
being a counter-claim, set-off or cross demand that he could not

have set up in the action or proceeding in which the judgment or
order was obtained." Section 41(7) provides:

"Where, before the expiration of the time
fixed for compliance with the requirements of
a bankruptcy notice, the debtor has filed
with the Registrar an affidavit to the effect
that he has such a counter-claim, set-off or
cross demand as is referred to in paragraph
40(l)(g), and the Court has not,…

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 Pollnow v Queensboro Pty Ltd

Details

AGLC: Pollnow v Queensboro Pty Ltd [1988] FCA 625
Case: [1988] FCA 625
Decision Date: 19 Oct 1988

CaseChat Overview and Summary

In the Federal Court of Australia, Justice Burchett considered two bankruptcy notices served on Errol Hugh Pollnow by Queensboro Pty Ltd and Garden Mews-St. Leonards Pty Ltd. The notices required Pollnow to either comply with the requirements of the notices or satisfy the Court that he had a cross-demand equal to or exceeding the amount of the debt. The primary legal issue before the Court was whether Pollnow had a cross-demand as required by s.40(1)(g) of the Bankruptcy Act 1966. The Court had to determine if the affidavit filed by Pollnow in response to the notices was sufficient under s.41(7) of the Act to extend the time for compliance with the bankruptcy notices.

Justice Burchett held that the affidavit filed by Pollnow was sufficient under s.41(7) as it was given a benevolent construction. Although the value of the cross-demand was not quantified in the affidavit, the Court found that the claims made in the affidavit were sufficient to constitute a cross-demand. The Court also considered the real possibility of Pollnow succeeding in his cross-demand, given the stage of the litigation and the dissenting judgment of Priestley J. in the earlier proceedings. The Court concluded that there was a real possibility that Pollnow's appeal would succeed, and thus, he had a cross-demand as required by s.40(1)(g).

The Court declared that it was satisfied that Pollnow had a cross-demand of the type referred to in s.40(1)(g) and ordered that the creditors pay certain costs.

Orders