FEDERAL COURT OF AUSTRALIA
Rankine v Lord [2011] FCA 478
Citation: Rankine v Lord [2011] FCA 478 Appeal from: Lord & Anor v Rankine & Ors [2010] FMCA 668 Parties: GEOFFREY JAMES RANKINE, KARIN ELKE RANKINE and SOUTHERN CROSS AUTOGLASS PTY LIMITED (ACN 129 010 019) v JOHN FREDERICK LORD AND ATLE CROWE-MAXWELL IN THEIR CAPACITIES AS SPECIAL PURPOSE LIQUIDATORS OF NIELSEN AND MOLLER AUTOGLASS PTY LIMITED (IN LIQUIDATION) (ACN 107 721 595 ) File number: NSD 1308 of 2010 Judge: MARSHALL J Date of judgment: 12 May 2011 Corrigendum: 17 June 2011 Catchwords: BANKRUPTCY – appeal from Federal Magistrates Court – application to set aside a bankruptcy notice issued to recover costs from a judgment debtor – bankruptcy notice incorrectly issued to a party who is not a creditor –overstatement of debt due to include local court filing fee – claim that issue of bankruptcy notice was an abuse of process Legislation: Bankruptcy Act 1966 (Cth) s 30, s 33, s 40, s 41, s 306
Corporations Act 2001 (Cth) s 536
Legal Profession Act 1987 (NSW) s 208J
Civil Procedure Act 2005 (NSW) s 98Cases cited: Lo v Nielsen and Moller (Autoglass) (NSW) Pty Ltd [2008] NSWSC 407
Re Nielsen and Moller Autoglass (NSW) Pty Limited (in liq); Geoffrey James Rankine v John Frederick Lord [2008] NSWSC 1197
Reid v Hubbard [2003] FCA 1424
Re Athans; ex parte Athans (1991) 29 FCR 302
Re Gibbs; ex parte Triscott (1995) 65 FCR 80
Adam v Lambert (2006) 228 CLR 409
Croker v Commissioner of Taxation (2005) FCA 127
Walsh v Deputy Federal Commissioner of Taxation (1984) 156 CLR 337Date of hearing: 9 May 2011 Date of last submissions: 9 May 2011 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 42 Counsel for the Appellants: Mr A Fernon Solicitor for the Appellants: Yates Beaggi Lawyers Counsel for the Respondents: Mr J Svehla Solicitor for the Respondents: Rowan Solicitors FEDERAL COURT OF AUSTRALIA
Rankine v Lord [2011] FCA 478
CORRIGENDUM
1.In paragraph 4 of the Reasons for Judgment, in the third dot point, the word “Bennett” should read “Barrett”.
2.In paragraph 6 of the Reasons for Judgment, in the last sentence, the word “respondents” should read “appellants”.
I certify that the preceding two (2) numbered paragraphs are a true copy of the Corrigendum to the Reasons for Judgment herein of the Honourable Justice Marshall. Associate:
Dated: 17 June 2011
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1308 of 2010
ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA
BETWEEN: GEOFFREY JAMES RANKINE
First AppellantKARIN ELKE RANKINE
Second AppellantSOUTHERN CROSS AUTOGLASS PTY LIMITED
(ACN 129 010 019)
Third AppellantAND: JOHN FREDERICK LORD AND ATLE CROWE-MAXWELL IN THEIR CAPACITIES AS SPECIAL PURPOSE LIQUIDATORS OF NIELSEN AND MOLLER AUTOGLASS PTY LIMITED (IN LIQUIDATION)
(ACN 107 721 595)
Respondents
JUDGE:
MARSHALL J
DATE OF ORDER:
12 MAY 2011
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The appeal is dismissed.
2.The appellants…
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- Rankine v Lord [2011] FCA 478
- Case
- [2011] FCA 478
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CaseChat Overview and Summary
The matter of Rankine v Lord came before the court in the context of an appeal against a decision of the Federal Magistrates Court, concerning an application to set aside a bankruptcy notice issued to recover costs from a judgment debtor. The respondents, who were appointed as special purpose liquidators of Nielsen and Moller Autoglass (NSW) Pty Limited, had issued the bankruptcy notice to the appellants, who were associated with Nielsen and its directorship and asset transfers. The primary contentions by the appellants were that the bankruptcy notice was incorrectly issued to parties who were not creditors, the debt was overstated by including a local court filing fee, and that the issuance of the bankruptcy notice constituted an abuse of process.
The central legal issues before the court were whether the Federal Magistrates Court was correct in setting aside the bankruptcy notice on any of the grounds argued by the appellants. Additionally, the respondents raised a contention regarding the availability of a counterclaim. The court had to examine whether the bankruptcy notice was correctly issued, the accuracy of the debt amount, and whether the process of issuing the notice was abused.
The court, after reviewing the arguments and evidence, found that the Federal Magistrates Court did not err in setting aside the bankruptcy notice. The court determined that the notice was incorrectly issued to parties who were not creditors, the debt was overstated, and the issuance of the notice constituted an abuse of process. Therefore, the appeal was dismissed, and the appellants were ordered to pay the respondents' costs of the appeal, to be taxed if not agreed upon.
In conclusion, the appeal was dismissed, and the appellants were required to pay the respondents’ costs of the appeal. This decision reinforces the importance of correctly identifying creditors and accurately stating debts when issuing bankruptcy notices, and underscores that the process must not be abused.
The central legal issues before the court were whether the Federal Magistrates Court was correct in setting aside the bankruptcy notice on any of the grounds argued by the appellants. Additionally, the respondents raised a contention regarding the availability of a counterclaim. The court had to examine whether the bankruptcy notice was correctly issued, the accuracy of the debt amount, and whether the process of issuing the notice was abused.
The court, after reviewing the arguments and evidence, found that the Federal Magistrates Court did not err in setting aside the bankruptcy notice. The court determined that the notice was incorrectly issued to parties who were not creditors, the debt was overstated, and the issuance of the notice constituted an abuse of process. Therefore, the appeal was dismissed, and the appellants were ordered to pay the respondents' costs of the appeal, to be taxed if not agreed upon.
In conclusion, the appeal was dismissed, and the appellants were required to pay the respondents’ costs of the appeal. This decision reinforces the importance of correctly identifying creditors and accurately stating debts when issuing bankruptcy notices, and underscores that the process must not be abused.
Orders
Orders of the court
1. The appeal is dismissed.
2. The appellants pay the respondents’ costs of the appeal, to be taxed in default of agreement.
Note:
Background
Background to the litigation
The appellants contend that the Court below erred in all three respects. The issue for determination in this appeal is whether his Honour was correct to set aside the notice on any one of the grounds set out in the preceding paragraph. There is also a notice of contention raised by the respondents pertaining to the issue of the availability of a counterclaim. Background facts The respondents were appointed as special purpose liquidators of Nielsen and Moller Autoglass (NSW) Pty Limited (“Nielsen”) by order of Barrett J in the Supreme Court of New South Wales; see Lo v Nielsen and Moller (Autoglass) (NSW) Pty Limited [2008] NSWSC 407. In Lo, Barrett J referred to the following facts that remain relevant on this appeal:·the first appellant, Mr Rankine, was the sole director of Nielsen at the time the voluntary administration of Nielsen began;·the request for the appointment of special purpose liquidators arose from the submission by a creditor of Nielsen:that all assets of value and some favoured creditors were…shifted out of [Nielsen] and into Southern Cross, leaving non-favoured creditors with Nielsen which was then subjected to voluntary administration where no return for those remaining creditors could be expected. See Lo at [6];·without making a finding on the matters raised in the immediately preceding dot point, Bennett J said at [8] that:…they point to a need for investigation by the liquidator of [Nielsen] and indicate a possibility that various recovery proceedings might be pursued or, at least, considered by the liquidator in the interests of the creditors;and·“there are aspects of the affairs of Nielsen which required examination and investigation”; see Lo at [19]. The specific powers and functions conferred on the respondents included powers to:·investigate the creation and registration of a fixed and floating charge by Nielsen to the first and second appellants as trustees of their family superannuation fund;·investigate the circumstances in which the third appellant (“Southern Cross”) was registered at or about the time (21 December 2007) when a creditor of Nielsen lodged a winding-up petition in the Supreme Court of New South Wales;·investigate the circumstances in which the first appellant became, at that time, the sole director and shareholder of Southern Cross; ·investigate the circumstances concerning the transfer of the entire assets and undertakings of Nielsen to Southern Cross;·investigate the conduct, involvement and knowledge of Southern Cross concerning its acquisition of the assets and undertakings of Nielsen; and·take steps, including legal proceedings, to ensure preservation and protection of the assets of Nielsen, whether or not in the possession of Nielsen, and including against the respondents. In their capacity as special purpose liquidators the respondents commenced an examination proceeding in the Supreme Court. Summons were issued for the first and second appellants to be examined about some of the examinable affairs of Nielsen. Production of certain documents was required. The first and second respondents then moved by interlocutory process to set aside the orders for production.
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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