Re Evans, S.R. Ex parte Marmaree P/ L & anor

[1992] FCA 607

60-3

JUDGMENT NO. ....... ..w.n....m .*..no..*.**

IN THE FEDERAL COURT OF AUSTRALIA	)
1
VICTORIA DISTRICT REGISTRY	) No VB 981 of 1991
1
ElANKRUPTCY DIVISION	1

BETWEEN: STUART ROY EVANS

(Judgment Debtor)

EX PARTE: MARMMWE PTY LTD and

C P SOFTWARE EXPORT PTY LTD

(Judgment Creditors)

Coram:  Ryan J

Place: Melbourne

Date:  24 August 1992

2 5 AUG 1992

HIMITES OF ORDER FEDERAL COURT OF

AUSTRALIA

PRINCIPAL

REOIWRY

THE COURT DECLARES:

That the Court is not satisfied that the debtor has a counter- claim, set-off or cross damand as is referred to in s.40(l)(g)

of the Bankru~tcv	Act 1966.
THE COURT ORDERS:
124 of the Bankruptcy Rules.

1.   That the debtor pay the judgment creditors' costs of the application including any reserved costs, such costs to be taxed.

NOTE
--	Settlement and entry of orders is dealt with in Rule
IN THE FEDERAL COURT OF AUSTRAtIA	)
1
VICTORIA DISTRICT REGISTRY	) No VB 981 of 1991
1
EWTKRUPTCY DIVISION	)

BETWEEN:  STUART ROY -S

(Judgment Debtor)

EX PARTE: MARMAREE PTY LTD and

C P SOFTWARE EXPORT PTY LTD

(Judgment Creditors)

Coram:	Ryan J
Place :	Melbourne
Date:
-	24 August 1992

REASONS FOR JUDGMENT

Rvan J: In proceedings in the Supreme Court of Victoria numbered C.L. 257 of 1989 judgment was recovered against Stuart Roy Evans ("the Debtor") for $35,176.65 being the taxed

costs of Marmaree Pty Ltd ("Marmaree") and C P Software ~xport'

Pty Ltd ("the Judgment Creditors") in that action which the debtor had commenced on 21 June 1989. By the statement of claim in that action, the debtor alleged that he was owner of	the copyright in a computer software programme known as the	"TODAY" programme, and on 23 October 1985 licensed BBJ
Computer Services Pty Ltd ("BBJ") to use that programme in return for royalties payable to the debtor. It is then alleged that BBJ granted a mortgage debenture (presumably over all its undertaking and assets) to the Australia and New Zealand Banking Group Ltd ("ANZ") which assigned its rights under the debenture to Marmaree. Marmaree, it was alleged, in turn sold certain assets of BBJ, including the copyright in
the "TODAY" programme to the second judgment creditor. Claims were then made for damages for infringement of copyright or conversion, for unpaid royalties and an account of profits. Shortly before the trial of action No. C.L. 257 of 1989 was fixed to commence on 19 October 1990, Mr Lucas, the solicitor for the debtor, swore an affidavit in that action deposing that he had been advised by Counsel that a case might be made against Computer Power Group Ltd ("Group") which was not then a party to the action. The affidavit continued:

"4.	Further, Marmaree was an agent of Group in that:
(a)	I am informed by Max Nrcholls and verily believe that on 30th August, 1988, Roger Allen ("Allen"), the Managing Drrector of
Group told him that have just bought the Mortgage.-from .the - -
Bank (or words to simrlar effect). (At the time Allen had no position wrth Marmaree.)
(b)	Group told BBJ staff, made a press release and an article appeared in Computer Weekly Magazrne announcing that Group had purchased the Today program. Now produceed and shown to me marked "AIFL5" rs a bundle of documents relating to the

-

acquisrtion of Today program by Group. -

(C) I verrly belreve that at the time of its acquisition of the Today program Marmaree was a Company without substance.

5.    I verrly believe that Allen was aware of the Lrcence and of the

terms thereof which protected the royalty of Evans. I am .

informed by Nrcholls and verily belreve that on 25th August,

1988 he spoke to Allen who told hrm that "the Evans contract

between BBJ and Group was rntended to ensure that Evans' rights effect). I verily believe that the interposrtion of Marmaree (i.e. the Licence) may be a concern" (or words to simrlar

under the Lrcence were not protected.

X ,

6.    The royalty clam of the Plarntrff rs very substantral. Now

produced and shown to me marked "AIFL6" is a true copy of the

Annual Report of Group which shows that the Today program ! !

figures prominently as one of the intangible assets of that

Company. i

I

7 . I verily believe that the Plaintiff has a good cause of action I

against Group in respect of inducing breach of Contract. I I

further believe that he has a good cause of action if this	I.
Honourable Court sees fit to allow this proceeding to be
adjourned and the Statement of Clam amended then it is	I (
intended that the Plaintiff proceed on the basis of an amended
statement of Claim a draft of which is now produced and shown	!
to me and marked "AIFL7".	!.
1.

8.	In my respectful submissron it as simply not possible for this	1..
L
Honourable Court to determine the real questions in issue
I .
/I :. L ,
t. .
between the parties to this proceeding on the matter as currently pleaded and I respectfully ask this Honourable Court to grant an adjournment of the matter in order that the matter may be pleaded in the manner in which it is proposed in the proposed Amended Statement of Claim and that Group be joined as a Defendant. I also respectfully ask this Honourable Court to
arant the Plaintiff leave to amend its Statement of Claim rn	*- ~~
accordance with the proposed draft. Alternatively, I res~ectfullv ask this Honourable Court to grant the Plaintiff lea^ve to discontrnue thrs proceeding."

The application for adjournment in support of which that affidavit was sworn was refused on 13 October 1989.

Apparently in recognition of the radical amendments which would be needed to incorporate in a statement of claim the matters outlined by B Lucas, and the risks inherent in proceeding to trial without those amendments, the debtor agreed to his original action being struck out. The terms of settlement embodying that agreement contained the following paragraphs:

"1. The Plaintrff agrees to consent to an order that rts [sic]

c l a m against the second and third Defendants be dismrssed
without adjudrcation.

2.     The Plaint~ff agrees to an order that he pay the second and

third Defendants' costs of the proceeding.

3.     The Plamtiff acknowledges that since 16th September 1988 the third Defendant has owned the copyright in TODAY."

Accordingly, on 20 October 1989, Brooking J made orders by consent that:

-

"1. The Plaintiff's claim agaanst the Second and Thirdnamed Defendants is dismissed w~thout adjudication.

2.    The Plaintiff pay the Second and Thirdnamed Defendants' costs of the proceeding, including reserved costs."

The debtor then commenced a new action, No. 10712 of 1990 against the judgment creditors, Group and a firm of solicitors. By the statement of claim in that later action, the debtor has alleged that he devised a computer software programme which has been marketed under the registered name "TODAY". It is further alleged that the debtor, in 1985, in return for agreed royalties, licensed BBJ to manufacture and produce the "TODAY" programme. It is further pleaded that in exercise of powers under a mortgage debenture over all the undertaking and assets of BBJ, ANZ assigned the mortgage debenture to Marmaree, which, in turn, sold the copyright in the "TODAY" programme to the second judgment creditor without preserving the entitlement of the debtor to the royalties stipulated in his original agreement with BBJ. It is then alleged that the judgment creditors and Group conspired to induce BBJ to breach its contract with the debtor. Alternatively, it is alleged that the second judgment creditor was fixed with knowledge of the debtor's entitlement to royalties from the "TODAY" programme and obliged to pay those royalties to the debtor. Damages are then claimed of $118.18m

defendant firm of solicitors for negligence in drawing the	and an alternative claim for damages is made against the
royalty agreement.
Pursuant to the order made by Brooking J on 20 October 1989, the judgment creditors' costs were taxed and on 25 February 1991, the Taxing Master of the Supreme Court made an order that:

"The c o s t s of t h e Second and Thirdnamed Defendants are taxed and

allowed at $35,176.65, including $1991.40 taxing fee."

Subsequently, the judgment creditors issued a bankruptcy notice dated 12 April 1991 requiring payment of the judgment debt of $35,176.65. The debtor then moved to set aside the bankruptcy notice on the ground that he has a counter-claim, set-off or cross demand exceeding the amount of the judgment debt. ~t is contended that the counter-claim, set-off or cross demand is that being pursued by the debtor in action No. 10712 of 1990.

The narrow question which has been agitated before this Court is whether the counter-claim, set-off or cross demand which is being pursued by the debtor in action No. 10712 of 1990 could have been set up in the action or proceeding in which the judgment for costs was obtained, namely action No. C.L. 257 of 1989. That question arises from the terms of paragraph (g) of

s.40(1) of the Bankru~tcv Act 1966 ("the Act") which provides:

"(1) 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 final order, being a judgment or order the execution of whrch has not been stayed, has served on the debtor in Australra or, by leave of the Court, elsewhere, a bankruptcy notlce under this Act and the debtor does not -
(i) where the notice was served in Australia - withxn the time flxed by the Registrar by whom the notice was

~ssued; or

(ii)  where the notice was served elsewhere - wrthin the tune frxed for the purpose by the order giving leave to effect the service,

comply with the requirements of the notice or satxsfy the Court that he has a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter- claim, set-off or cross demand that he could not have set up in the action or proceeding in which the judgment or order was obtained".

It was first submitted on behalf of the debtor that the order in the Supreme Court was not a "final judgment or final order" within the meaning of s.40(l)(g) because it was made by consent and was not the result of any "curial determination".

In my view, the fact that a judgment or order is made by consent does not prevent it from being final. The nature of final judgments and final orders was comprehensively discussed by Riley J in Re Pannowitz: Ex Darte Wilson (1975) 38 F.L.R. 184. There his Honour concluded that an order made by consent

in the Federal Court of Bankruptcy, which included a declaration that a sum of money was the property of a bankrupt and an order that the respondent should pay the applicant's taxed costs, was a final order.

In In Re Riddell: Ex Darte Earl of Strathmore (1888) 20 Q.B.D.

- . - - ..

- - - -

512 it was held that an order for the dismissal of an action

payment of costs by the plaintiff was not a "final judgment"	in The Chancery Division for want of prosecution and the
within s.4(1) (g) of the Bankru~tcv Act 1883 so as to entitle the defendant to serve the plaintiff with a bankruptcy notice in respect of such order. Lord Esher M.R. concluded, at 515:

"But when, as Ln Ex Darte Moore l4 Q.B.D. 627, an order to pay costs is part of a final judgment, which determines the question whether there was a pre-existing right of the plaint~ff against the defendant, that order itself is a "final judgment" for the purposes of sub-S. l(g).

I have no doubt that there may be a better definition than that which I am about to give, and I do not pretend that it is strictly correct; but, in my opinion, "a final judgmentn means a judgment obtained in

an	a c t i o n by	which	t h e quest ion	whether	t h e r e w a s	a	pre-exist ing
r i g h t	of	t h e p l a i n t i f f	aga ins t	t h e defendant	i s	f i n a l l y	determined,

i n favour e i t h e r of t h e p l a i n t i f f o r of t h e defendant. I t h i n k t h a t

d e f i n i t i o n w l l l be	found t o cover most	cases,	though perhaps not
every one.

Then comes t h e questron whether t h e o rde r i n t h e present case is such a judgment. Now here t h e p l a i n t i f f brought t h e ac t ion t o enforce a

claim of	r i g h t ,	whrch	he a l leged e x i s t e d before and a t t h e time when
he brought	t h e a c t i o n agains t t h e defendant,	and t h e questron is,	w a s

t h a t claim f r n a l l y determined? Of course it was not determined "on

t h e merits," r f by t h a t is meant upon a t r i a l when t h e f a c t s w e r e

brought before a t r i b u n a l which had t o determine them. But I do not

t h i n k t h a t Lord Selborne meant t h a t when he s a i d "on t h e merits." I n

my opinlon t h e quest ion is, not only w a s t h e claim determined, but

was it f i n a l l y determined? It can only have been f i n a l l y determined

i f between t h e two p a r t i e s t o t h e a c t i o n it cannot be r a l sed again.

I f between those two p a r t i e s t h e ques t ion of t h e p l a i n t i f f ' s a l leged

r i g h t a s e x l s t i n g before he brought t h e a c t i o n was f i n a l l y

determined, then, whether it was t r i e d "on t h e merits" o r not , t h e

o rde r (assuming t h a t it was a "judgment," a ques t ion which I do not

in tend t o decrde) is a " f i n a l judgment." But cannot t h e same

questron be t r r e d again between t h e s e p a r t i e s ? There can be no doubt

t h a t t h a s order was equivalent t o a judgment of nonsuit, and such a judgment was never regarded a s a f i n a l determinatron of t h e drspute between t h e p a r t i e s , because t h e p l a i n t r f f by amending h i s evidence

could marntaln t h e same c l a m m	a second a c t i o n a f t e r a judgment	of
nonsurt	l n t h e	f i r s t . "

To similar effect, Lopes L.J. observed, at 518:

"It cannot be disputed t h a t t h i s o rde r dismissrng t h e ac t ion f o r want

of prosecutron does not preclude t h e p l a i n t i f f from commencing a

f r e s h ac t ion f o r t h e same cause of	ac t ion .	To	my	mrnd	t h a t seems	a
conclusive	answer	t o t h e quest lon	whether	t h e order	is a	" f i n a l

]udgment." It is not , l n my oplnron, and, the re fo re , t h e decis ion of

t h e Divaslonal Court was r l g h t . "

However, it is noted in McDonald, Henry & Meek; Australian	Bankruptcv Law and Practice 5th Edn p.1045 that Re Riddell: Ex
parte Earl of Strathmore (m), Ex Darte Chinerv: Re Chinerv
(1884) 12 Q.B.D. 342 which it explained, and the other cases cited by the learned authors were "under sections which did not include the words 'or final order'."
The presence of those words seems to explain the conclusion of Macrossan S.P.J. in Re McAlister: Ex Darte McAlister: Moore (Res~ondentl (1936) 8 A.B.C. 283. His Honour had earlier
nonsuited the plaintiff and made an order for costs against him in the sum of £90, the amount claimed in the bankruptcy notice. Although he was referred to Re Riddell: Ex uarte Earl of Strathmore, (suura), he concluded, at 284:

"I decide that my order for costs Ln the action is a final order	j .:
within the meaning of subsection (1) of s.52 of the Bankruptcy Act	i 1

and that the decision of Lukin J. in Re Black ((1932) 4 A.B.C. 157) f :

is applicable, and the respondent must be deemed to be a creditor who	1 .'
has obtained a final judgment within the meaning of the subsection."	;-,

In Re Black: Ex parte Jefferv (1932) 4 A.B.C. 157 Lukin J expressly referred to the language of the English Bankruutcv Act 1883 as amended in 1913 saying, at 160:

"Before its amendment, the words "fmal order," "the proceedlnga in -.

which the order was obtained," or the words "any person who for the time being be entitled to enforce a final judgment or final order for the payment of money shall be deemed a creditor who has obtained a f~nal judgment within the meaning of this paragraph" were not contained in the English Act. The insertion of these further words m the section extends its operation considerably, and a number of judgments in cases decided before the amendment, some of which were quoted and relied upon in the argument before me, have ceased to anulv. althouoh some of them are of service here as showina what the ~~ ~

~ ~ s c .. . ~~ ~-~ -

Courts consld&ed the attributes of finallty to be: e.g., Ex parte Moore: In re Faithful (14 Q.B.D. 627), per Lord selborne, during argument, at p.631, and in his judgment at p.632; per Brett, M.R., at page 633; and In re Alexander; Ex Parte Alexander ([l8921 1 Q.B. 216), per Lord Esher, M.R., at p.218, and per Xay, L.J., at p.219. Since the amendment of the ~ c t , the Court of ~ppeal has given one

decision, in the case of In re a Debtor ([l9291 2 Ch. 146), in whlch Lord Justrces held that the order made in that case was not final;

but the principles they applied for determining the question of ~ t s

. .

finality, if applied to the present case, would lead, I think, to a	.-
contrary conclusion.	V . '
5

It will be noted that s.52(j) (m),	contemplates a flnal order not	1.
only in an action but also in a proceedmg.	A proceeding may mean	,.

something as distinct from an action or any step thereunder in which final orders are made for the payment of money. It may also mean a step in an actlon, in which proceeding a final order is made for the payment of money. Sec. 5 2 ( j ) does not of itself impose any restricted meaning on the word "proceed~ng" in the amendment, and there appears to be no reason for doing so. On the contrary as a creditor so circumstanced as the one here concerned can, by the processes referred to above, in default of payment, certainly procure the commission of an act of bankruptcy, there is sound reason why he should be allowed to proceed by the more direct step for that purpose by a provision making such order final as contemplated by s.52(j)."

In Opie v Ouie (1951) 84 C.L.R. 362, Dixon and Williams JJ at

372 drew this distinction between a final judgment and a final

order :

"Section 52(j) includes final judgments and f ~ n a l orders. Before final orders were rncluded it had been held on numerous occasrons that a frnal judgment on whrch a bankruptcy notice could be founded was a final judgment obtained in an action by which a previously existing liability of the defendant to the plaintiff is ascertarned or established - unless there is something to show an intention to use the words in a more extended sense (Ex parte Chinerv: In re Chinery (1884) 12 Q.B.D. 342, at p.345; Onslow v Inland Revenue Commissioners (1890) 25 Q.B.D. 465; In re Brnstead (1893) 1 Q.B. 199; In re a Bankruptcv Notice (1895) 1 Q-B. 609). A judgment entered in the Supreme Court pursuant to a certificate of a magistrate under s.13A of the Deserted Wives and Chlldren Act is not a judgment rn an actron. The solicitor for the respondent relied upon the concluding words of the farst paragraph of s.52( j) "which he (the debtor) could not set up in the action or proceeding in whlch the judgment or order was obtained", as indicating that the sub-section contemplates that a judgment within rts meaning can now be obtarned not only in an action but also in a proceedrng and submitted that the judgment under discussron was obtained in a proceeding. We cannot accept this construction. In thear ordrnary natural signification the words refer to ~udgments in actions and orders in proceedings. It would require clear words to induce a court to hold that the legrslature intended so to extend the settled meanrng of what constrtutes a final ludgment for the purposes of a bankruptcy notice. If the words "in the action or proceeding in which the ~udgment or order was obtained" mean, as we thrnk they must mean, the action in which the judgment was obtained and the proceeding in which the order was obtained, they are decisive to show that the judgments to whrch s.52(j) refers are judgments ln actions; and that, of course, accords wlth the constructron placed upon the provision judicially. It is scarcely necessary to add that a judgment entered in pursuance of s.13A of the Deserted Wives and Children Act is not an order."

For the reasons indicated by Riley J in Re Pannowitz: Ex Darte Wilson (suura), I consider that the order for costs on which

the proceeding constituted by action No. C.L. 257 of 1989, in

the present bankruptcy notice was founded was a final order in

the sense that it was pronounced as a final and definitive command that the debtor should pay the amount of the judgment creditors' taxed costs. Accordingly, I regard this case as distinguishable from Wilmot v Buckley (1984) 2 F.C.R. 540 where Beaumont J set aside a bankruptcy notice which was based on a certificate of taxation of costs issued without any formal judgment having been drawn up in the Supreme Court of

New South Wales.

Even if I am wrong in the conclusion which I have just reached that the order for payment of costs is a final order, I consider that it is to be deemed to be a final judgment by virtue of s.40(3)(b) of the Act which provides:

"(3) For the purposes of paragraph (l)(g) -

. . .

(b) a judgment or order that is enforceable as, or in the same manner as, a final judgment obtained in an action shall be deemed to be a final judgment so obtained and the proceedings in which, or in consequence of which, the judgment or order was obtarned shall be deemed to be the action in whlch it was obtained."

Of that provision, Beaumont J observed in Wilmot v Buckley

"Thrs benefit of this provision may have been available to the respondents in certain circumstances. Thus, if the respondent had caused a formal judgment expressing the orders made by Rath J. on 2 July 1982 to be drawn up, sealed and entered, then, subject to filing an affidavrt under Pt 44, r.7, they could have levied execut~on

against the applicant (see T.A. Field Ptv Ltd v Friamobile of Australia Ptv Ltd [l9781 2 N.S.W.L.R. 488). That would have enabled the respondents to rely upon s.40(3)(b) of the Act upon the footing that the order for costs should be treated as if rt were a separate judgment. It would have been deemed to be a final judgment and thus available to be relied upon as such provided first, the judgment of 19 July 1982 had been entered; secondly, the costs had been taxed; and thirdly, as Re Cartwriaht: Ex Darte Cartwriaht v Barker [l9751 1 W.L.R. 573 shows, the notice accurately described the source of the

applicant's liability (cf. Re David; Ex Darte Lahood (1979) 36 F.L.R. 433; Halsburv's Laws of Enaland (4th ed) Vol. 3, p. 164, par. 259)."

The provisos there indicated have all been satisfied in this case as they were not in Re McGreaor: McGreqor v Clancv & Triado Pty (1991) 100 A.L.R. 431 "here Einfeld J set aside a bankruptcy notice based on a certificate of taxation of a deputy registrar of the Family Court of Australia. Moreover, s.40(3)(b), it seems to me, makes academic the question, on which differing views were expressed by Clyne J in Re Ravasio;

Ex oarte Leonard Norman Ptv Ltd (1965) 6 F.L.R. 373 to which I was referred by Mr Cawthorn of Counsel for the debtor, and by Riley J in Re Pannowitz (su~ra), as to whether it was necessary for the creditor to have been a creditor before the judgment was obtained.

Accordingly, the only question remaining to be resolved was whether the counter-claim, set-off or cross demand on which the debtor relies could have been set up in action No. C.L. 257 of 1989. The ability to answer that question in the affirmative is the touchstone of a final judgment or order.

Thus Clyne J indicated in Re Ravasio (su~ra) at 374:

"Accordrng to authority a judgment is a final judgment when rt determines some question between litigants rn an action by which a prevrously existing lrabilrty of a defendant to a plaintiff is established, and in which the defendant has had the opportunity of settrng up a counterclaim, set-off, or cross demand. These characteristics of a final judgment are, rn my opinron, the characteristics of a frnal order."

To the same effect, Riley J concluded in Re Pannowitz (m),

"In my opinron the existence of s.37 does not prevent the order of

10th October, 1973, from berng a frnal order of that class.

The words used in s.40(l)(g) indicate that the action or proceedrng mentroned therern must be one in whrch the person against whom the order LS made should have had the opportunity of setting up a counterclam, set-off or cross damand: see Re Binstead: Ex parte Dale

[l8921 1 Q.B. 199, at p.204, Re G.J.:	Ex Darte G.J. [l9051 2 K.B. 678
at p.681, Opie v Ouie (1951) 84 C.L.R.	362, Re Stanton Havek (1957)
19 A.B.C.	1 and Re Ravasio; Ex oarte Leonard Norman Ptv Ltd (1965) 6

F.L.R. 373, at p.374."

I regard it as indisputable that M r Evans had the requisite opportunity in the present case. It is manifest on the evidence that the claims now being pursued in action No 10712 of 1990 were not advanced in action No C.L. 257 of 1989 only

because the trial of that earlier action had been fixed for 19 October 1989 and an application for an adjournment made on 13 October had been refused. The joinder of Group and the firm of solicitors who became defendants in action No 10712 of 1990, although obviously desirable in order to avoid a multiplicity of proceedings and the possibility of inconsistent findings of fact, was not essential to enforcement of the cause of action, or causes of action, which the debtor puts forward as a counter-claim, set-off or cross damand against the judgment creditors.

The nature of the impossibility which a debtor has to show to

satisfy s.40(l)(g) was succinctly indicated as follows by

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Lukin J in Re Stokvis (1934) 7 A.B.C. 53 at 57:

"I t a k e a counter claim,	set o f f , o r c ross demand which could not be
set up a s one which,	from point of t ime, o r from i ts na tu re , o r from

absence of empowering provisions, o r from p o s i t i v e i n h i b i t i o n s o t o

do, could not be set up i n t h e p a r t i c u l a r case i n which judgment was

obtained. Here, from t h e po in t of view of time, from i ts nature , and

from t h e empowering provis ions of t h e A c t and r u l e s , t h e counter claim might have been set up i f Stokvis had wished, o r chosen, t o do so. Mere f a i l u r e t o t a k e advantage of t h e opportunity can hardly be

s a i d t o be m a b i l i t y . I th ink , the re fo re , S tokvis f a i l s i n t h i s

content ion."

It may be that, in the events which happened, the ability of the present debtor to set up the counter-claim, set-off or cross damand required the exercise-of a discretionary power in the Supreme Court to grant leave to amend the statement of claim in action No C.L. 257 of 1989. However, that was a consequence of the way in which the debtor originally chose to plead his claims against the judgment creditors, and the time at which he belatedly considered an amendment. Those circumstances, in my view, do not permit a finding that the claims now being pursued in action No 10712 of 1990 could not have been brought in action No C.L. 257 of 1989.

For these reasons the debtor's application is refused. It is appropriate to make orders in the form of those made by Beaumont J in Re Franks: Ex parte G10 Holdinqs Ltd (1990) 24 F.C.R. 398. Those orders will be:

1.    Declare that the Court is not satisfied that the debtor has a counter-claim, set-off or cross damand as is referred to in s.40(l)(g) of the Bankruptcy Act.

2.   Order that the debtor pay the judgment creditors' costs of the application including any reserved costs, such costs to be taxed.

I certify that this and the

preceding twelve ( 12) pages are a true copy of the

Reasons for Judgment herein

of Mr Justice Ryan -

Associate:  ,

Counsel for the Judgment Debtor:	M r P Cawthorn
Solicitor for the Judgment Debtor:	A I F Lucas and CO
Counsel for the Judgment Creditors:	Blake Dawson Waldron
Solicitor for the Judgment Creditors:	MS S Kirwan-Hamilton