Re Lear, R.l. v Ex parte Walker, R.W - [1992] FCA 1058

/OS% ,92

JUDGMENT NO. ..~.-t

CATCHWORDS

BANKRUPTCY - application to have bankruptcy notice set aside -

s 40(l)(g) Bankru~tcv Act - allegation by debtor that he has a
cross demand against the creditor equal to or exceeding

judgment debt founding the bankruptcy notice - what standard

of chance of success of cross demand Court must be satisfied .
with.

.C

Bankru~tcv Act 1966 (Cth) - S 40(l)(g)

Defamation Act 1974 (NSW)

Re Brink: Ex Darte Commercial Bankinq CO of Svdnev Ltd (1980)

30 ALR 433

Re Gould: Ex ~arte Skinner (1983) 72 FLR 393

RE ROBERT LIONEL LEAR: EX PARTE ROBERT WILLIAM WALKER

No. BN 4269 of 1991

FOSTER J
2 JUNE 1992

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA )

NEW SOUTH WALES DISTRICT REGISTRY ) No. BN 4269 of 1991

1

BANKRUPTCY DIVISION 1

RE : ROBERT LIONEL LEAR

Debtor

EX PARTE: ROBERT WILLIAM WALKER

Petitioning Creditor

JUDGE MAKING ORDERS: FOSTER J

DATE : 2 JUNE 1992
PLACE : SYDNEY

MINUTE OF ORDERS

THE COURT ORDERS THAT:

1. the application be dismissed;
2. the applicant debtor pay the respondent petitioning creditor's costs.

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

IN THE FEDERU COURT OF AUSTRALIA )
1

NEW SOUTH WALES DISTRICT REGISTRY ) No. BN 4269 of 1991

1

BANKRUPTCY DIVISION 1

RE : ROBERT LIONEL LEAR

Debtor

EX PARTE: ROBERT WILLIAM WALKER

Petitioning Creditor

CORAEI: FOSTER J
DATE : 2 JUNE 1992
PLACE : SYDNEY

REASONS FOR JUDGMENT

(Extempore)

HIS HONOUR: This is an application on behalf of the debtor to have set aside the bankruptcy notice which has been served on him by the creditor. Both the debtor and creditor have appeared in person in this matter. Consequently, to a fairly

ordinary requirements of procedure which would be unknown to substantial extent it has been necessary to depart from

them. A lot of matters have been put to me from the bar table. In the ultimate I advised each of the gentlemen that the matter must be determined upon the material placed before me, either in the affidavits which each side have filed, or in the documents which have been placed before me during the course of argument.

I have been addressed at some length by each party at various times during these proceedings and have endeavoured to ensure that each side has placed before me everything that it wishes me to take into account. As a significant portion of this case relates to proceedings which the debtor has commenced against the creditor in the District Court at Penrith I have had regard to the file in those proceedings which has been produced to this court and which the debtor has placed before me. I shall make further reference to that file later in these reasons.

The bankruptcy notice which was served on the debtor relates to a judgment recorded in the Local Court at Penrith in the amount of $1950. Including amounts accruing by way of…

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: [1992] FCA 1058
Decision Date: 2 Jun 1992

CaseChat Overview and Summary

This case involved an application by the debtor, Robert Lionel Lear, to have a bankruptcy notice set aside, which was served by the petitioning creditor, Robert William Walker. The matter was heard in the Federal Court of Australia, Bankruptcy Division, New South Wales District Registry. The primary legal issue was whether the debtor had a cross-demand equal to or exceeding the amount of the judgment debt, as required by s 40(1)(g) of the Bankruptcy Act 1966 (Cth). The court had to determine if the debtor's claim in the District Court for defamation constituted such a cross-demand.

The court, presided over by Foster J, considered the debtor's assertion that he had a cross-demand against the creditor, which was not possible to set up in the original proceedings leading to the judgment. The debtor claimed that his defamation proceedings against the creditor, which were still ongoing, could potentially result in damages equal to or exceeding the judgment debt. However, the court held that the debtor had not demonstrated a reasonable chance of success in these proceedings, as the claims were still being defended and several defences were raised. The court emphasised that a debtor must show they have a prima facie case, but this did not require a preliminary trial of the cross-demand. The debtor had to show that there was a reasonable probability of success in the cross-demand proceedings. In this case, the debtor had not met this standard, and the court dismissed the application with costs.

Orders