Pucar v Grubb - [2004] FMCA 42

FEDERAL MAGISTRATES COURT OF AUSTRALIA

PUCAR & ORS v GRUBB

[2004] FMCA 42

BANKRUPTCY – Leave to issue proceedings pursuant to s.58(3) of the Bankruptcy Act – provable debt – whether leave necessary.

Bankruptcy Act 1966, ss.58(3), 82, 82(2), 117

Aliferis v Kyriacou (2000) 1 VR 447
Chittick v Maxwell (1993) 118 ALR 728
Re Sharp Ex parte Tietyens Investments Pty Ltd (in liq) (1998) FCA 1367
Reid v Interarch Australia Pty Ltd (2000) FCA 1328
ACCC v Kritharas (2000) 105 FCR 440 at 449-451
Charter Pacific Corp Ltd v Belrida Enterprises Pty Ltd (2003) QCA 375 Badgery v Nash (2002) FMCA 149).
Allanson v Midland Credit Ltd & Anor (1977) 16 ALR 43
Barewa Oil and Mining NK (in liq) v Isim Mineral Development Pty Ltd (1981) 59 FLR 451, 455, 456
Loftus v Clark [2002] FMCA 66
Midland Credit Ltd v Official Trustee in Bankruptcy (1982) 68 FLR 53

Applicants:

MARINKO PUCAR, LENA PUCAR and RICHMARK ASSET PTY LTD
(ACN 102 785 731)

Respondent:

BRUCE GRAEME GRUBB

File No:

WZ 166 of 2003

Delivered on:

4 February 2004

Delivered at:

Perth

Hearing Date:

19 January 2004

Judgment of:

McInnis FM

REPRESENTATION

Counsel for the Applicants:

Mr Price

Solicitors for the Applicants:

Eley Palmer

Counsel for the Respondent:

Mr S.F. Popperwell

Solicitors for the Respondent:

Pynt & Partners

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PERTH

WZ 166 of 2003

MARINKO PUCAR, LENA PUCAR and RICHMARK ASSET PTY LTD (ACN 102 785 731)

Applicants

and

BRUCE GRAEME GRUBB

Respondent

REASONS FOR JUDGMENT

In this matter Marinko Pucar, Lena Pucar and Richmark Asset Pty Ltd (the applicants) have made an application pursuant to s.58(3) of the Bankruptcy Act 1966 (the Bankruptcy Act) seeking an order that the applicants have leave to issue proceedings against Bruce Graeme Grubb (the respondent). The amended application for leave to commence proceedings, which was filed in court on the day of the hearing, also seeks leave to issue proceedings against the respondent for breach of “fiduciary type duties" in the Supreme Court of Western Australia.
It is perhaps convenient to note that in submissions made in writing for and on behalf of the applicants specific leave is sought by the applicants to commence and maintain proceedings in the Supreme Court of Western Australia “in respect of the subject matter of the applicants' proposed writ of summons and to seek relief claimed therein.”
In the written submissions the applicants refer to the leave encompassing both a claim against the bankrupt, that is, the respondent, in negligence, and a claim for a breach of “fiduciary type duties”, whether the latter were part of or separate from the usual duty of care.
The application for leave to commence the proceedings arises, as indicated, from s.58(3) of the Bankruptcy Act which provides as follows:
“58(3)Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor:
(a)to enforce any remedy against the person or the property of the…

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 Pucar v Grubb

Details

AGLC: Pucar v Grubb [2004] FMCA 42
Case: [2004] FMCA 42
Decision Date: 4 February 2004

CaseChat Overview and Summary

The case of Pucar v Grubb was heard by the Federal Magistrates Court of Australia, wherein the applicants, Marinko Pucar, Lena Pucar, and Richmark Asset Pty Ltd sought leave to issue proceedings against the respondent, Bruce Graeme Grubb, pursuant to s.58(3) of the Bankruptcy Act. The applicants sought to issue proceedings against the respondent for breach of fiduciary duties and negligence in the Supreme Court of Western Australia. The legal issues the court was required to decide were whether the proposed Supreme Court proceedings were in respect of a provable debt and if so, whether leave to commence and maintain the proceedings should be given to the applicants.

The court considered conflicting authorities on the issue of whether a claim against a solicitor in negligence was a provable claim. While the Victorian Court of Appeal in Aliferis v Kyriacou held that such claims were not provable, other courts had held that claims in negligence were provable debts. The court chose to follow the approach taken in Allanson v Midland Credit Ltd & Anor, where the Full Court of the Federal Court of Australia held that where the need for leave involved difficult and complicated questions of law or fact, it was permissible to proceed on the basis that leave was necessary.

The court decided to exercise its discretion to grant leave pursuant to s.58(3) of the Bankruptcy Act. The court found that there was at least sufficient evidence that insurance existed, and it was reasonable to assume that the insurance policy may respond to the claim in the Supreme Court. The court also considered the significant disadvantage to the applicants if leave was not granted, as well as the potential costs of litigation and the complexity of the issues involved. It was in the interests of all parties for the issues to be argued discretely before the Supreme Court of Western Australia.

Orders