Re Lewy, D. v Ex parte Lewy, D. - [1994] FCA 753

JUDGMENT No. ........ ..mu. I---------- 753 1/ 9Y
Re: -
Debtor

E x parte: DENNIS L m
Applicant

And r

~ P O n c k m t Creditor

N o . NN 2085 of 1994

R e :

Debtor

E x parte: RONNIE LEOPOLD

Applicant

And:

- - .
wspondent Creditor

No. NN 2086 of 1994

R e : GARY LKWg
Debtor

Bankruptcy notices were issued in these three matters on or about 20 June 1994, and the debtors make application for a declaration

And: GARY L-

Applicant

And : MOSS NOMINEES PTY LIMITED

ACN 000 853 494 - - - -

Respondent Creditor

EINFELD J SYDNEY 19 JULY 1994

that they have complied with the requirements of the bankruptcy notices or alternatively that the bankruptcy notices be set aside. They agree that there is little to choose between those forms of relief in this particular case. There is no express power in the Bankruptcy Act to make the declaration sought but the debtors argue that such relief is inherent within the context of section 30(l) (b) of the Bankruptcy Act in the light of the provisions of sections 40(l)(g) and 41(2)(a)(ii).

The bankruptcy notices are based upon judgments against the three debtors in the Supreme Court of New South Wales which are said to have taken effect on 16 May 1994. These judgments have now been appealed to the Court of Appeal. The notice of appeal is dated 10 June and appeal papers are to be settled shortly. Nonetheless the evidence brought on behalf of the debtors on these applications is that the Court of Appeal will be unable to hear or dispose of the appeals in much, if any, less than two years. There is evidence that the debtors intend to seek an expedited hearing.

On 4 ~ u l y stays of execution were granted in favour of the

debtors by the Court of Appeal on condition that the basic amount of the judgment be paid into an interest-bearing deposit in the names of the solicitors for the parties on trust. The evidence is that the agreed or ordered amount was lodged in a term deposit with the ANZ Bank in the appropriate names on 18 July for 90 days maturing on 16 October 1994 and bearing interest in that period at 5.25 percent. No doubt it is intended that that deposit will

be rolled over at the end of 90 days in the event that the Court of Appeal has not yet determined the matter and continually solled over until the appeal has been disposed of. Transactions on the account are to be made and only made on the signatures of partners of the respective firms of solicitors. It has been agreed between the parties, and between the parties and the bank, that the disposition of the funds in the account are to abide the decision of the Court of Appeal.

The bankruptcy notices state, and it is not disputed, that interest is accruing on…

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: [1994] FCA 753
Decision Date: 19 Jul 1994

CaseChat Overview and Summary

In the case of Re Lewy, D. v Ex parte Lewy, D., three debtors sought relief from bankruptcy notices issued against them by a creditor. The bankruptcy notices were based on judgments in the Supreme Court of New South Wales, which had been appealed to the Court of Appeal. The debtors sought a declaration that they had complied with the requirements of the bankruptcy notices or, in the alternative, that the notices be set aside. They argued that the deposit of the judgment amount into an interest-bearing account with conditions attached constituted compliance with the notices. The creditor opposed the application on unclear grounds.

The court examined the legal issues, including whether the court had the jurisdiction to make the declaration sought and whether setting aside the bankruptcy notices would be appropriate. The court noted that while there was no explicit power to make such a declaration, it could potentially be inherent within the provisions of the Bankruptcy Act. The court also considered the creditor's vindictive attitude and the potential prejudice to the debtors if the notices remained in place while the appeals were pending. The court concluded that setting aside the bankruptcy notices would be the appropriate relief, as it would prevent unnecessary harassment and potential harm to the debtors without prejudicing the creditor's interests.

The court ordered that the bankruptcy notices be set aside and directed that the parties bear their own costs of the applications, noting that the initial applications were premature and the subsequent applications for a declaration were refused. This decision ensures that the debtors are not unduly prejudiced while the appeals are pending, and it prevents the creditor from maintaining the notices without justification.

Orders