Before the Court is a creditor's petition presented against Andrew Laurence Devy ("the debtor"). The petitioning creditor, BBC Hardware Limited, sought leave to withdraw. An order was made that Ms S. Gurnsy be substituted as petitioning creditor.

Ms Gurnsy is a solicitor. Indeed, she had acted for the debtor in respect of matters related to the petition. She says that a solicitor in her employ was instructed by the debtor to act for him on 14 September 1995 to set aside the judgment which had been obtained by BBC Hardware Limited, and to seek an extension of time for compliance with a bankruptcy notice which had been issued by that company, as well as other matters.

She had received a cheque from the debtor for $600 to cover her outlays, but that cheque had been dishonoured. She said that there had been over 27 attendances by her firm on the debtor and that, as at the date the act of bankruptcy alleged against the debtor was committed, work totalling at least $3000 had been carried out by her firm on his behalf.

The debtor does not deny the instructions he gave to Ms Gurnsy's firm or that work was done for him by that firm. He says, however, that at no time has he been provided with a bill of costs in taxable form.

The short issue for decision is whether in these circumstances Ms Gurnsy is entitled to succeed in her petition. Assuming otherwise, in her favour, that all other formalities have been complied with, that question turns upon whether Ms Gurnsy has shown that there is owing by the debtor to her a debt which is a liquidated sum and which was, at all relevant times, payable immediately, or at a certain future time within the meaning of those words in s 44(1) of the Bankruptcy Act 1966 (Cth).

It is well accepted law that a petitioning creditor, including for present purposes a substituted petitioning creditor, must show the existence of a debt in the relevant amount as a liquidated debt which satisfies the requirement that it be payable immediately or at a certain time in the future, as at the time of the commission of the act of bankruptcy. See Re Jon R. Tait; Ex parte Deputy Commissioner of Taxation (unreported, Lockhart J, 26 April 1996) and the cases cited in that judgment at page 8.

For the debtor, reliance is placed upon the provisions of s 22 of the Costs Act 1867 (Qld) and its successor, s 5 of Legal Profession Act 1995 (Qld), which are in relevantly identical terms. Section 22 of the Costs Act provides:
"Bills to be…

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 Re Devy; ex parte BBC Hardware Ltd

Details

AGLC: Re Devy, Andrew Laurence Ex Parte BBC Hardware Ltd (formerly known as Burns Philp Hardware Ltd) [1996] FCA 598
Case: [1996] FCA 598
Decision Date: 18 Jun 1996

CaseChat Overview and Summary

The case of Re Devy; ex parte BBC Hardware Ltd is a decision from the Federal Court of Australia, specifically the General Division Bankruptcy District of the State of Queensland. The matter concerns a creditor's petition presented against Andrew Laurence Devy, the debtor, by BBC Hardware Limited, which later became the substituted petitioning creditor, Ms S. Gurnsy. The primary issue before the court was whether Ms Gurnsy was entitled to succeed in her petition to have the debtor declared bankrupt, assuming all other formalities had been complied with. This hinged on whether Ms Gurnsy had demonstrated that there was owing by the debtor to her a debt which was a liquidated sum and payable immediately or at a certain future time, as required by section 44(1) of the Bankruptcy Act 1966 (Cth).

The court considered the provisions of the Costs Act 1867 (Qld) and its successor, the Legal Profession Act 1995 (Qld), which stipulate that a solicitor cannot commence or maintain an action for the recovery of fees until a month has elapsed after delivering a bill of fees. The debtor argued that as no such bill was delivered, no debt existed. However, the court held that while a solicitor cannot enforce payment until a bill is rendered, this does not mean that no debt exists. Instead, the right to payment exists immediately upon completion of the work. However, the court found that the debt was not payable immediately or at a certain future time because the right to sue had been removed by statute and would only arise once a proper bill was sent and the time for taxation had passed. Consequently, the court dismissed the petition.

In summary, the court ruled that Ms Gurnsy was not entitled to succeed in her petition as she had not demonstrated that she had a liquidated debt which was payable immediately or at a certain future time. The court ordered that Ms Gurnsy pay the costs of BBC Hardware Limited and a reasonable amount for the costs of submissions made, as well as the costs of the debtor on specific dates and for the hearing.

Orders