Re Lofts, David John Ex Parte Johnson, Andrew William
[1997] FCA 580
•24 Jun 1997
IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
No QG 7197 of 1997
BANKRUPTCY DISTRICT OF THE
STATE OF QUEENSLAND
RE:DAVID JOHN LOFTS
EX PARTE:ANDREW WILLIAM JOHNSON
Applicant
DAVID JOHN LOFTS
Respondent
CORAM: Spender J
PLACE: Brisbane
DATE: 24 June 1997
MINUTES OF ORDER
THE COURT ORDERS THAT:
Lynette Maria Addison be substituted as petitioning creditor in petition No 7197 of 1997.
The hearing of the petition be adjourned to 28 July 1997.
The costs of the application for substitution of petitioning creditor be reserved.
The application by Mr G M Smith to be substituted as petitioning creditor be adjourned to Friday, 11 July 1997.
The costs of today in relation to the application by Mr G M Smith to be substituted as petitioning creditor be reserved.
THE COURT DIRECTS THAT:
Any further material on behalf of Mr G M Smith be filed and served by 4 pm on Wednesday, 2 July 1997.
Any affidavit material by Mr Lofts in reply to the application for Mr Smith to be substituted as petitioning creditor be filed and served by Wednesday, 9 July 1997.
Note:Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.
IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
No. QG 7197 of 1997
BANKRUPTCY DISTRICT OF THE
STATE OF QUEENSLAND
RE:DAVID JOHN LOFTS
EX PARTE:ANDREW WILLIAM JOHNSON
Applicant
DAVID JOHN LOFTS
Respondent
CORAM: Spender J
PLACE: Brisbane
DATE: 24 June 1997
REASONS FOR JUDGMENT
I am presently dealing with an application that Lynette Maria Addison be substituted as petitioning creditor against David John Lofts. A further application that a Mr G.M. Smith be substituted as a petitioning creditor seems to me to have been the subject of material filed very late and which in justice I ought not to consider at this time.
Insofar as the application on behalf of Lynette Maria Addison is concerned, she asserts that she entered into an agreement with Mr Lofts to repay to her the sum of $12,500.00 which she paid to a company, Oz Trade Limited (‘Oz Trade’). She claims that the debt is evidenced by the contents of an agreement in writing dated 27 December 1995. The parties to the agreement are specified in the recitals as Oz Trade, Lynette Maria Addison and Leslie James Addison.
The second paragraph immediately above the execution sections in the agreement is in the following terms:
“ Oz Trade and David Lofts agree to return the investment to the contributor within 30 days after notice in writing requesting same, provided the Contributor has not received any moneys from the project.”
The document is then signed David J. Lofts, under which appears:
“ Signed by Oz Trade through its duly appointed Australian representative, David John Lofts, in the presence of...”
and a witness's name and a date appears. I note the date is different from the typewritten date which appears at the top of page 1 of the agreement. The two signatures of Mr and Mrs Addison also appear, with the same witness, and the same date.
The claim by Mrs Addison is that there was an agreement by David Lofts to pay to her the contribution that she made to Oz Trade, on the conditions specified at the top of page 2 of that agreement. She asserts that notice in writing requesting payment was given, that no payment was made by David Lofts to her within 30 days of that notice in writing, and that consequently she is entitled to be substituted as creditor.
The material is not expressly directed to whether she has received any moneys from the project, but I think it clear from the totality of the material that Mrs Addison claims to be a creditor pursuant to that agreement, and by inference that there have been no payments received by her from the project.
These matters are the subject of dispute by Mr Lofts. He says the contribution was made to Oz Trade and not to him. He claims that, "…there was no obligation on me personally to repay the money”, and he asserts that he did not ever personally agree, either orally or in writing, to repay such moneys. There is also a dispute as to the question of a notice in writing.
On the hearing of the petition, it is necessary of course for the petitioning creditor to establish that there is in truth and reality a debt, and the matters the subject of Mr Lofts' contentions can be pursued at that time if necessary. The fact of the matter, however, is that, by that time it may very well be the case that there is in Mr Smith's circumstances a judgment debt which has been the subject of an unsuccessful application to set aside, and that there could then be no argument as to the existence of a sufficient debt to justify the making of a sequestration order.
It seems to me that, having regard to the authorities as to whether a creditor should be substituted in a petition, the material in the present case is sufficient to permit the Court to make the order substituting Mrs Addison as petitioning creditor.
For present purposes, however, it is unnecessary to speculate as to what might be the factual result of the contentions by the various parties here. It is not necessary that the creditor establish as part of his application for substitution, that the debt was in fact in existence at that time. Barwick CJ in Hyams v Elder Smith Gainsborough Mort Limited (1976) 50 ALJR 593 makes plain that the question of whether or not the substituted petitioning creditor's debt is sufficient in point of time or in point of reality to support the petition will be decided when the petition is heard.
In the circumstances, I order that Lynette Maria Addison be substituted as petitioning creditor in petition No 7197 of 1997. I reserve the question of the costs of the application on behalf of Mrs Addison to be substituted as petitioning creditor on the basis that, if it be the case that Mr Lofts is correct in his contentions, it would not be right for him to be saddled with the costs of the substituted petitioner.
I direct that any further material sought to be relied on by Mrs Addison be filed and served within seven days of today's date and that any further affidavit material by Mr Lofts in response be filed within a further 14 days, that is to say, within 21 days of today.
I adjourn the hearing of the petition to Friday, 28 July 1997.
So far as the application by Mr Smith to be substituted as petitioning creditor is concerned, I will adjourn that until Friday, 11 July 1997. Any further material on behalf of Mr Smith should be filed and served by 4 pm on Wednesday, 2 July 1997, and any affidavit material by Mr Lofts in reply to the application for Mr Smith to be substituted as petitioning creditor to be filed and served by Wednesday, 9 July 1997. I reserve the costs of the application that G.M. Smith be substituted as petitioning creditor.
I certify that this and the preceding four (4) pages are a true copy of the reasons for judgment herein of the Honourable Justice Spender.
Associate
Date: 24 June 1997
Counsel for the applicant : Mr G. Radcliffe
instructed by : Reynolds
Counsel for the respondent : Mr P Morrow
instructed by : Broadbent & Radich
Date of hearing : 24 June 1997
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