Re Eather, Rosemary; Ex Parte Eather, Rosemary v Mayco Industries Pty Ltd - [1997] FCA 445

IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
  No QN 1944 of 1995
BANKRUPTCY DISTRICT OF THE
STATE OF QUEENSLAND

Re:             ROSEMARY EATHER
Ex parte:             ROSEMARY EATHER
Applicant
and:             MAYCO INDUSTRIES PTY LTD
Respondent

CORAM:       Spender J
PLACE:         Brisbane
DATE:  1 May 1997

MINUTES OF ORDER

THE COURT DECLARES that it is not satisfied in relation to paragraph 2 of the application to set aside the bankruptcy notice that Mrs Eather had a counter-claim, set-off or cross demand that she could not have set up in proceedings before the Queensland Building Tribunal.

THE COURT ORDERS THAT:

The application to set aside the bankruptcy notice filed 21 February 1996 is dismissed.

The respondent to that application be awarded its costs of the application, including reserved costs, to be taxed if not agreed.

The petition filed by the creditor in No 365 of 1996 be dismissed.

The petitioning creditor pay the costs of the debtor, including reserved costs, to be taxed if not agreed.

Note:Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.

IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
  No. QN 1944 of 1995
BANKRUPTCY DISTRICT OF THE
STATE OF QUEENSLAND

Re:             ROSEMARY EATHER
Ex parte:             ROSEMARY EATHER
Applicant
and:             MAYCO INDUSTRIES PTY LTD
Respondent

CORAM:       Spender J
PLACE:         Brisbane
DATE:  1 May 1997

REASONS FOR JUDGMENT

I am dealing today with an application to set aside bankruptcy notice No 1944 of 1995. The application was filed on 21 February 1996 by Mrs Rosemary Eather and sought orders that:
“ 1. The bankruptcy notice herein be set aside.
2.A declaration that the applicant has a counter-claim set-off or cross demand of a kind referred to in paragraph 40(1)(g) of the Act, details of which are annexed.
3.I request the court to ‘go behind the judgment’ Queensland Building Tribunal and breaches of QBSA Act 1991 and incorrect payment figure, judgment order Sept 20 1995 (QRT) lodged as bankruptcy notice No 1944 1995 by Mayco Industries Pty Ltd.”

This application is part of a much larger saga to which some brief reference has to be made. It is important to note that the application and supporting affidavit was filed on 21 February 1996 and the petition presented by Mayco Industries Pty Ltd (‘Mayco’) on 12 June 1996 asserts in paragraph 4 that:
“ Mrs Eather, within six months before the presentation of this petition, committed the following act of bankruptcy namely, that [she] failed to comply on or before the 22nd day of February 1996 with the requirements of a bankruptcy notice served on her on 24 January 1996, or to satisfy the Court that [she] had a counter-claim, set-off or cross-demand equal to or exceeding the sum specified in paragraph (a) of the bankruptcy notice.”

Section 40(1) of the Bankruptcy Act 1966 (‘the Act’) relevantly provided:
“ A debtor commits an act of bankruptcy in each of the following cases:
...
(g)if a creditor who has obtained against the debtor a final judgment or…

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.

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Details

AGLC: Re Eather, Rosemary; Ex Parte Eather, Rosemary v Mayco Industries Pty Ltd [1997] FCA 445
Case: [1997] FCA 445
Decision Date: 1 May 1997

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Re Eather; Ex parte Eather v Mayco Industries Pty Ltd was heard by Spender J, who was tasked with deciding on an application to set aside a bankruptcy notice. The applicant, Rosemary Eather, sought to set aside a bankruptcy notice issued by Mayco Industries Pty Ltd, asserting that she had a counter-claim, set-off, or cross-demand that she could not have set up in proceedings before the Queensland Building Tribunal (QBT). The central issue for the court was whether Eather's claims against Mayco constituted a valid counter-claim, set-off, or cross-demand under section 40(1)(g) of the Bankruptcy Act 1966. Additionally, the court examined whether it could consider the merits of the QBT judgment, which formed the basis of the bankruptcy notice.

Spender J meticulously reviewed the proceedings and orders made by the QBT, noting that Eather had previously agreed to a compromise on the amount owed, effectively waiving any claims regarding the kitchen work. The court found that Eather's complaints about the kitchen work were not valid counter-claims as they were either compromised or not pertinent to the current application. Furthermore, the court held that Eather's claims about procedural unfairness and contract breaches were not valid counter-claims that could not have been raised in the QBT proceedings. As such, the court was not satisfied that Eather had a legitimate counter-claim, set-off, or cross-demand exceeding the creditor's claim. Consequently, the application to set aside the bankruptcy notice was dismissed, and Mayco Industries Pty Ltd was awarded its costs of the application. Additionally, the petition filed by the creditor was dismissed, with the creditor ordered to pay Eather's costs.

Orders