Re Kevin McNamara and Son Pty Ltd - [2014] VSC 337

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

No. S CI 1084 of 2014

IN THE MATTER OF

KEVIN McNAMARA & SON PTY LTD

(ACN 072 144 579)

BETWEEN:

KEVIN McNAMARA & SON PY LTD

(ACN 072 144 579)	Plaintiff
v
JOANNE VLAHOS	Defendant

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JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	16 April 2014
DATE OF JUDGMENT	18 July 2014
CASE MAY BE CITED AS:	Re Kevin McNamara & Son Pty Ltd
MEDIUM NEUTRAL CITATION:	[2014] VSC 337

- - -

CORPORATIONS – Winding up - Statutory notice – Application to set aside – Debt jointly due to husband and wife – Husband subsequently became an undischarged bankrupt – Notice for full amount of debt and signed by the wife alone – Whether statutory notice invalid – Whether wife able to give notice in respect of full amount – Effect of bankruptcy on joint debt – Whether s 62 of Bankruptcy Act 1966 (Cth) applies to a statutory notice – Notice valid – Application dismissed – Bankruptcy Act 1966 (Cth), s 62.

- - -

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	P J Marzella	Ferraro & Company Pty Ltd
For the Defendant	C Ballantyne (as solicitor)	Madgwicks

Cases referred to

115 Constitution Road Pty Ltd v Downey as trustee for NBD Systems (2008) 68 ACSR 118

Altarama Ltd v Camp (1980) 5 ACLR 513

Anvic Holdings Pty Ltd v Constable [2002] NSWSC 424

Clarke & Walker Pty Ltd v Thew (1967) 116 CLR 465

Createc Pty Ltd v Design Signs Pty Ltd (2009) 71 ASCR 602

Ellis v Fisher [2011] VSC 621

Euphoric Pty Limited v Magar (aka Kamir Azir Magar) [2011] NSWSC 469

Federal Commissioner of Taxation v Everett (1980) 143 CLR 440

In the matter of theEstate of Nickolaos Zikos (Unreported, Supreme Court of Victoria, Nathan J, 31 March 1987)

McIntyre v Gye (1994) 51 FCR 472

Macks (trustee of the estate of Weber), Re Weber (bankrupt) (2006) 233 ALR 50, [24]

Manzo v 555/255 Pitt St Pty Ltd (1990) 21 NSWLR 1

Mibor Investments Pty Ltd v Commonwealth Bank of Australia [1994] 2 VR 290

Miller v Shea [1999] NSWSC 40

Norman v Federal Commissioner of Taxation (1963) 109 CLR 9

Official Trustee in Bankruptcy, in the matter of Shaw [1999] FCA 968

Page v McKensey [2008] NSWSC 147

Peldan (as trustee of the bankrupt estate of R K Pinna) v Anderson (as executor of the estate of the late D R Pinna) (2006) 227 CLR 471

Randall Pty Ltd v Chepan Pty Ltd [2009] NSWSC 783

Re A & K Holdings Pty Ltd [1964] VR 257

Re Australia Seiwa Pty Ltd [2012] NSWSC 1334

Re Francis; Ex parte Official Trustee in Bankruptcy (1988) 19 FCR 149

Re Oswald and Oswald; Ex parte The Official Trustee in Bankruptcy (1985) 11 FCR 276,

Roberts v Wayne Roberts Concrete Constructions Pty Ltd [2004] NSWSC 734

Rookharp Pty Ltd v Webb (2011) 254 FLR 410

Schweitzer v Kronen…

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: [2014] VSC 337
Decision Date: 18 July 2014

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Re Kevin McNamara and Son Pty Ltd involved a winding-up application by the respondent, the trustee of the petitioner company, seeking to set aside a statutory notice issued by the applicant, Mrs McNamara, in respect of a debt owed by the petitioner company. The petitioner company, Kevin McNamara and Son Pty Ltd, contested the validity of the statutory notice, arguing it was issued improperly by Mrs McNamara alone, despite the debt being jointly owed by her and her husband. The issue for the court was to determine if the statutory notice was valid when issued by only one of the joint creditors and if Mrs McNamara could validly issue the notice for the full amount of the debt after her husband became an undischarged bankrupt.

The court considered the statutory framework, particularly the provisions of the Corporations Act 2001 (Cth) and the Bankruptcy Act 1966 (Cth). It found that the statutory notice was valid as it was issued by one of the joint creditors, Mrs McNamara, for the full amount of the debt. The court held that the wife had the right to give notice for the full amount of the debt despite her husband's bankruptcy, as the debt was not solely attributable to him under section 62 of the Bankruptcy Act. The court also found that the bankruptcy of the husband did not affect the validity of the statutory notice issued by the wife. The application to set aside the statutory notice was dismissed.

The final orders of the court dismissed the petitioner's application to set aside the statutory notice, confirming that Mrs McNamara's statutory notice was validly issued and the winding-up application could proceed. The court's decision clarified the position of creditors in joint debt scenarios and the effect of bankruptcy on the ability of one creditor to issue a statutory notice.

Orders