Re Djakovic, Nikola v Ex Parte Ostojic, Bosko - [1996] FCA 819

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
BANKRUPTCY DIVISION OF
SOUTH AUSTRALIA

No SB 877 of 1995

Re:
NIKOLA DJAKOVIC Applicant

Ex parte:
BOSKO OSTOJIC Petitioning Creditor

JUDGE: North J
PLACE: Melbourne (heard in Adelaide)
DATE: 16 September 1996

REASONS FOR JUDGMENT

On 5 June 1996, Nikola Djakovic, the applicant, applied under s.153B of the Bankruptcy Act 1966 (“the Act”) for an order that his bankruptcy be annulled. The section gives the Court power to annul a bankruptcy if it is satisfied that the sequestration order ought not to have been made. The Official Trustee appeared and neither supported nor opposed the application. Mr Margitich appeared to oppose the application on the ground that he is a creditor of Nikola Djakovic. He is a solicitor who previously acted for Nikola Djakovic and his fees remain unpaid.

The sequestration order was made on 19 June 1995 on the petition of Bosko Ostojic, the creditor, presented on 11 May 1995. The petition asserted that Nikola Djakovic was indebted to Bosko Ostojic in the sum of $2,600 due under a final judgment obtained in the Magistrates’ Court at Coober Pedy on 31 March 1994, together with $321 for costs and fees, a total of $2,921. The act of bankruptcy relied upon was the return unsatisfied of a warrant of recovery issued out of the Magistrates’ Court at Coober Pedy on 6 December 1994. Such act of bankruptcy is provided for by s.40(1)(d)(ii) of the Act.

The primary contention of Nikola Djakovic was that the sequestration order should not have been made because the judgment on which it relied should not have been made. To understand this argument it is necessary to refer to earlier proceedings in the Warden’s Court of South Australia, and to examine the relationship between those proceedings and the proceedings in the Magistrates’ Court at Coober Pedy.

PROCEEDINGS IN THE WARDEN'S COURT

Nikola Djakovic was in partnership with his brother and Bosko Ostojic in mining for opal at Coober Pedy. Nikola Djakovic and his brother each had a 30% interest in the partnership, and Bosko Ostojic had the remaining 40% share. The mining was conducted on a precious stones claim held in the name of Verica Djakovic, the wife of Nikola Djakovic. The claim was pegged in about April 1988. In about July 1988, Nikola and Verica Djakovic left Australia to visit their birthplace, Yugoslavia. They returned in December 1988. Bosko Ostojic expected that the mining enterprise would resume when Nikola Djakovic returned from Yugoslavia. Instead, Bosko Ostojic alleged, Nikola Djakovic excluded him from the mining enterprise after their return. Bosko Ostojic therefore commenced proceedings for an injunction in the Warden’s Court. It is most significant that proceedings were brought against Verica Djakovic only.

On the plaint note, Bosko Ostojic alleged:

“1.That they have not worked the claim for the period of seven months.

2.That I have done all the work and now they wont [sic] to kick me out, I have paid…

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 Djakovic, Nikola v Ex Parte Ostojic, Bosko

Details

AGLC: Re Djakovic, Nikola v Ex Parte Ostojic, Bosko [1996] FCA 819
Case: [1996] FCA 819
Decision Date: 16 SEPTEMBER 1996

CaseChat Overview and Summary

In the Federal Court of Australia, Nikola Djakovic, the applicant, sought to have his bankruptcy annulled under section 153B of the Bankruptcy Act 1966. Bosko Ostojic, a creditor, petitioned for the bankruptcy, claiming that Djakovic owed him $2,921. The act of bankruptcy was the return unsatisfied of a warrant of recovery from a Magistrates' Court judgment. Djakovic argued that the judgment should not have been made, as it relied on proceedings in the Warden’s Court, where he was not a party, and where his wife Verica Djakovic was wrongly held liable. The central legal issues were whether the sequestration order should have been made, whether Djakovic had alternative liability with his wife, and if the doctrine of res judicata or Anshun estoppel applied.

The court found that the Warden’s Court proceedings were between Bosko Ostojic and Verica Djakovic, with Djakovic not being a party. However, the judgment held him liable for misappropriating partnership opals, even though he was not a party. The court noted that Djakovic's argument that the Warden’s Court judgment precluded the Magistrates’ Court action was flawed, as the Warden’s Court judgment did not establish alternative liability. The court also dismissed the argument that the Anshun estoppel applied, as the principle is concerned with preventing multiplicity of actions between the same parties, not different respondents. Lastly, the court found that the order for Djakovic to pay the judgment debt by instalments did not constitute a stay of the bankruptcy notice, as the act of bankruptcy was the return unsatisfied of a warrant of sale, not the failure to respond to the notice.

Justice North concluded that the sequestration order should not be annulled, as the judgment on which it was based was valid. The court dismissed the application for annulment of Djakovic's bankruptcy. The determination of costs was adjourned.

Orders