Re Harrison P.L. v Ex parte Morgans Solicitors - [1995] FCA 144

Bankruptcy - Rule 10 reference - whether the Court is satisfied that the debtor has a counter-claim, set-off or cross demand equal to or exceeding the amount payable under a final order - subject matter of the alleged counter-claim and set-off already litigated and decided between the parties in other courts - not appropriate to go behind the judgment

Matter No. SN 682 of 1994

PETER LINDEN HARRISON Ex Parte MORGANS - SOLICITORS

VON DOUSSA J
ADELAIDE
8 MARCH 1995

IN THE FEDERAL COURT OF AUSTRALIA )
  )
SOUTH AUSTRALIA DISTRICT REGISTRY )
  )
GENERAL DIVISION                 ) No. SN 682 of 1994
  )
BANKRUPTCY DISTRICT OF THE STATE )
  )
OF SOUTH AUSTRALIA               )

Re: PETER LINDEN HARRISON

Debtor

Ex Parte:

MORGANS - SOLICITORS

Creditor

MINUTES OF ORDER

JUDGE MAKING ORDER : VON DOUSSA J

WHERE MADE : ADELAIDE

DATE OF ORDER : 8 MARCH 1995

THE COURT DECLARES THAT:

It is not satisfied that the debtor has a counter-claim, set-off or cross demand of the kind referred to in s.40(1)(g) of the Bankruptcy Act 1966 (Cth).

AND THE COURT ORDERS THAT:

The time for compliance with the bankruptcy notice be extended to Wednesday 22 March 1995.

Note:Settlement and entry of order is dealt with in Bankruptcy Rule 124.

IN THE FEDERAL COURT OF AUSTRALIA )
  )
SOUTH AUSTRALIA DISTRICT REGISTRY )
  )
GENERAL DIVISION                 ) No. SN 682 of 1994
  )
BANKRUPTCY DISTRICT OF THE STATE )
  )
OF SOUTH AUSTRALIA               )

Re: PETER LINDEN HARRISON

Debtor

Ex Parte: MORGANS - SOLICITORS

Creditor

REASONS FOR JUDGMENT

Coram:    von Doussa J:
Place:    Adelaide
Date :    8 March 1995

This is a reference to the Court pursuant to r.10 of the Bankruptcy Rules for the Court to determine whether the debtor has a counter-claim, set-off or cross demand which fulfils the requirements of s.40(1)(g) of the Bankruptcy Act 1966 (Cth). The bankruptcy notice was issued on 12 October 1994 and was served on 17 October 1994. It sought payment of the sum of $4,416.47 as money due under an allocatur for costs which had been taxed and allowed under an order made in the Supreme Court of South Australia against the debtor on 6 September 1994. The debtor filed an affidavit as required by s.41(7) on 27 October 1994 alleging that he had such a counter-claim, set-off or cross demand.

The provisions of s.40(1)(g) require a debtor upon the service of a bankruptcy notice to comply with it by payment of the debt claimed or by satisfying the Court that the debtor 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 could not have been set up in the action or proceeding in which the judgment or order was obtained.

In the present case the relevant order was the allocatur sealed on 6 September 1994. The order for costs against the debtor had…

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

Case: [1995] FCA 144
Decision Date: 8 MARCH 1995

CaseChat Overview and Summary

The case of Re Harrison P.L. v Ex parte Morgans Solicitors involved Peter Linden Harrison, the debtor, and Morgans Solicitors, the creditor. The dispute centered on a reference to the Federal Court of Australia under rule 10 of the Bankruptcy Rules to determine if the debtor had a counter-claim, set-off, or cross demand that met the requirements of section 40(1)(g) of the Bankruptcy Act 1966 (Cth). The debtor had filed an affidavit alleging such claims against the creditor, who had issued a bankruptcy notice seeking payment of $4,416.47 as money due under an allocatur for costs.

The legal issues that the court needed to decide were whether the debtor's alleged counter-claim, set-off, or cross demand was valid under section 40(1)(g) of the Bankruptcy Act and if it was equal to or exceeded the amount claimed in the bankruptcy notice. The court examined the background of the case, including the debtor's counter-claim for damages for negligence and a claim for a refund of costs paid to the creditor. These claims had already been litigated and decided in other courts, specifically the Magistrates Court and the Supreme Court of South Australia.

The court found that it was not appropriate to go behind the judgments of the lower courts, as the matters had already been fully argued between the parties and had been decided by judicial decision. The court emphasized the importance of finality in litigation and gave full force and effect to the decisions of the Magistrates Court and the Supreme Court of South Australia. The court also found that the debtor had not established a set-off which equaled or exceeded the amount claimed in the bankruptcy notice.

The court declared that it was not satisfied that the debtor had a counter-claim, set-off, or cross demand that met the requirements of section 40(1)(g) of the Bankruptcy Act. The court ordered that the time for compliance with the bankruptcy notice be extended to Wednesday, 22 March 1995.

Orders