Property Bound Pty Ltd v Makhoul

[2019] FCCA 691

FEDERAL CIRCUIT COURT OF AUSTRALIA

PROPERTY BOUND PTY LTD & ANOR v MAKHOUL & ANOR [2019] FCCA 691

Catchwords:
BANKRUPTCY – Application under s.58(3) of the Bankruptcy Act 1966 (Cth) for leave to commence and take fresh steps in a matter in the Common Law Division of the Supreme Court of New South Wales – relief sought by the applicants entirely appropriate – leave granted.

Legislation:

Bankruptcy Act 1966 (Cth), s.58

First Applicant: PROPERTY BOUND PTY LTD

Second Applicant: ROBERT GERMANOS

First Respondent: JOHN JOE MAKHOUL

Second Respondent: NICHOLAS CRAIG MALANOS AS TRUSTEE IN THE BANKRUPTCY OF JOHN JOE MAKHOUL

File Number: SYG 3092 of 2018

Judgment of: Judge Dowdy

Hearing date: 28 February 2019

Delivered at: Sydney

Delivered on: 28 February 2019

REPRESENTATION

Counsel for the Applicant: Mr A. K. Flecknoe-Brown of Counsel

Solicitors for the Applicant: Barry Nilsson Lawyers

The First Respondent appeared in person late at 10:08am after the orders had been pronounced.

THE ORDERS OF THE COURT ARE AS FOLLOWS:

1. Pursuant to s.58(3)(b) of the Bankruptcy Act 1966 (Cth) grant leave to the Applicants, Property Bound Pty Ltd and Robert Germanos, if and insofar as it is necessary, to commence and take fresh steps against the First Respondent, Mr John Joe Makhoul, in Common Law Division proceeding number 7103 of 2015 in the Possession List of the Supreme Court of New South Wales (the Proceeding) for damages and like relief as set out in prayers 1 to 4 of the First Cross-Claim Statement of Cross-Claim filed 30 July 2018 in the Proceeding, a copy of which is annexed to the affidavit of Mr Simon Michael Black affirmed on 26 September 2018, or as further subsequently amended by the Applicants.

2. For the purposes of Order (1), leave to commence the Proceeding against the First Respondent is to be deemed to have been granted on 30 July 2018.

3. NOTE that it is a condition of the leave to proceed hereby given that the Applicants not take any step to enforce any money judgment or any money order against the First Respondent in the proceeding without prior leave of this Court.

4. The parties have liberty to apply on three days’ notice.

5. Order that the Applicants costs of this application for leave are to be dealt with and fall under the Applicants costs in the Proceeding as between the Applicants and the First Respondent.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 3092 of 2018

PROPERTY BOUND PTY LTD

First Applicant

ROBERT GERMANOS

Second Applicant

And

JOHN JOE MAKHOUL

First Respondent

NICHOLAS CRAIG MALANOS AS TRUSTEE IN THE BANKRUPTCY OF JOHN JOE MAKHOUL

Second Respondent

REASONS FOR JUDGMENT

EX TEMPORE

(Revised from Transcript)

1. There is before me an Application under s.58(3) of the Bankruptcy Act 1966 (Cth) (the Act) by the Applicants, namely, Property Bound Pty Ltd and Mr Robert Germanos for leave to commence and take fresh steps in a matter in the Common Law Division of the Supreme Court of New South Wales where Westpac was plaintiff, being proceeding no. 7103 of 2015 in the Possession List. The Application was filed in this Court on 6 November 2018.

2. In my Reasons for Judgment dated 10 March 2017 in a matter bearing the citation [2017] FCCA 460 I gave leave to Westpac to commence and take fresh steps in the Supreme Court proceeding in which leave to proceed is sought in the present Application before me. That judgment should be read with this judgment and sets out the relevant background. In this matter, Mr Flecknoe-Brown of Counsel appears for the Applicants and he has filed very helpful and detailed Written Submissions dated 26 February 2019, which I will place in the file and leave with the papers.

3. Those Written Submissions helpfully summarise the factual background which is set out in the affidavit upon which Mr Flecknoe-Brown relied, namely, the affidavit affirmed on 4 October 2018 of Mr Simon Black. I note that I agree with the exposition of the applicable legal principles also set out in Mr Flecknoe-Brown’s Written Submissions, in particular at [14] – [17] and I act on those principles which are, in substance, also set out in my previous reasons given in favour of Westpac’s application in 2017.

4. Mr Black has explained in his affidavit that the reason the first Cross-Claim, being the document which the Applicants in this proceeding wish to propound in the Supreme Court proceeding, was actually filed in the Supreme Court on 30 July 2018 without first coming to this Court to get leave under s.58(3) of the Act, was because of mere administrative error which, in my view, does not preclude the granting of leave to proceed under s.58(3).

5. The Supreme Court proceeding obviously involves complex and serious issues and matters, including deceit and document forgery. In my view, there is a clear forensic purpose to the granting of leave to proceed to the Applicants, so that all issues that are presently before the Supreme Court or should be before the Supreme Court can be heard and determined in a forum which is far more suitable for the consideration of those issues and matters than the proof of debt procedure. Accordingly, to sum up, I am of the view that the relief sought by the Applicants in their Application to this Court ought to be granted and accordingly, I will proceed to make the appropriate orders.

6. I note that I am informed by Mr Flecknoe-Brown and entirely accept, that notice of today’s Application has been given to the First Respondent who is a party to the Supreme Court proceeding and also that the former bankruptcy trustee of the First Respondent, who has now been released from bankruptcy by effluxion of time, wishes to take no part in relation to the present application and neither opposes nor consents to the Application. In the result I make Orders 1 to 5 substantially in the terms as sought in the Application filed in this Court on 6 November 2018.

I certify that the preceding six (6) paragraphs are a true copy of the reasons for judgment of Judge Dowdy

Associate: 

Date:  19 March 2019