Re: RONALD WALLACE GOULD, ELAINE MARGARET GOULD AND JULIE GAY GOULD
Ex parte: IAN ROBERT SKINNER AND DAYLE KERRY SMITH (1983) 72 FLR 393
Nos. 1871 and 1872 of 1982
Bankruptcy
COURT
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND
Fitzgerald J.(1)
CATCHWORDS
Bankruptcy - whether a "counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt" - nature of affidavit required under s.41(1) of the Act - extension of time for compliance with Bankruptcy Notice.
Bankruptcy Act, 1966 (Cwlth), s.40(1)(g), s.40(3)(b) and (d), s.41(7)
Bankruptcy - Whether a "counterclaim, set-off or cross demand equal to or exceeding the amount of the judgment debt" - Nature of affidavit required under s. 41(1) of the Bankruptcy Act 1966 (Cth) - Extension of time for compliance with bankruptcy notice - Bankruptcy Act 1966 (Cth), s. 40(1)(g), ss 40(3)(b) and 40(3)(d), s. 41(7).
HEADNOTE
The respondents caused bankruptcy notices to be served on the applicants. The applicants applied to set the notices aside, and filed affidavits directed to showing that they had one or more counterclaims, set-offs or cross demands such as are referred to in s. 40(1)(g) of the Bankruptcy Act 1966.
The respondents had acted as solicitors for the applicant in various matters, including a court action in which the applicants had a judgment in their favour for $700,000. That decision was, at the time of the application, under appeal by both sides. The respondents had, by way of security for their costs which totalled over $310,000, received an assignment of the benefit and advantage of the judgment. They had also taken as security a bill of encumbrance over certain land owned by the applicant's family trust.
The bankruptcy notices related to orders for costs given against the applicants in favour of the respondents in the course of litigation between them over the respondents' unpaid fees.
The notices related to costs totalling about $5,200. The respondents commenced steps to sell the land over which they held security. The applicants issued proceedings to prevent the sale, which were unsuccessful. The applicants alleged the land was sold at an undervalue and that the bill of encumbrance was obtained by undue influence and fraudulent misrepresentation.
The respondents sued in the Supreme Court for their unpaid fees. These proceedings were stayed pending taxation of the relevant bills of costs. At the same time the applicants commenced proceedings in the Supreme Court in respect of the assignment of the judgment. Two orders for costs were made in those proceedings against the respondents, but the costs had not, at the time of the application, been taxed.
The applicants also made claims in relation to a house property which was transferred to the respondents in June 1979 for $50,000. The respondents sold the property in October 1981 for $180,000. The applicants claimed that the transfer was solely so that it could be used by the respondents as a basis…
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- AGLC
- Re Gould, Ronald Wallace & Ors Ex Parte Skinner, Ian Robert & Anor [1983] FCA 71 ((1983) 72 FLR 393)
- Case
- [1983] FCA 71
- Decision Date
CaseChat Overview and Summary
The court examined the evidence presented by the respondent and found that he had a counter-claim, set-off or cross demand that exceeded the amount of the debts which were the subject of the orders for costs upon which the bankruptcy notices were founded. The court held that the respondent had satisfied the requirements of section 41(1) of the Act and granted the extension of time for compliance with the bankruptcy notice. The court also noted that the costs of and incidental to the proceedings in this matter, including reserved costs, if any, shall follow the event in action No. 1473 of 1982 in the Supreme Court of Queensland if the action proceeds to finality and shall otherwise be paid by the judgment debtors to the judgment creditors.
In conclusion, the court found in favour of the respondent and granted the extension of time for compliance with the bankruptcy notice. The court held that the respondent had provided sufficient evidence to support his claim of a counter-claim, set-off or cross demand that exceeded the amount of the debts which were the subject of the orders for costs upon which the bankruptcy notices were founded. The court also noted that the costs of and incidental to the proceedings in this matter, including reserved costs, if any, shall follow the event in action No. 1473 of 1982 in the Supreme Court of Queensland if the action proceeds to finality and shall otherwise be paid by the judgment debtors to the judgment creditors.
Orders
Orders of the court
1. The Court declares it is satisfied that the judgment debtors have in action No. 1473 of 1982 a counter-claim, set-off or cross demand exceeding the amount of the debts which are the subject of the orders for costs upon which the bankruptcy notices are founded which could not have been set up in the proceedings in which those orders were obtained.
2. The costs of and incidental to the proceedings in this matter, including reserved costs, if any, shall follow the event in action No. 1473 of 1982 in the Supreme Court of Queensland if the action proceeds to finality and shall otherwise be paid by the judgment debtors to the judgment creditors.
Background
Background to the litigation
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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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