Re McMallan, George Ex Parte Stevens, William James

[1997] FCA 394

IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE STATE OF QUEENSLAND

No QN 1194 of 1996

RE:  GEORGE McMALLAN

Judgment Debtor

EX PARTE:             WILLIAM JAMES STEVENS

Judgment Creditor

JUDGE MAKING ORDER:          Cooper J
WHERE MADE:  Brisbane
DATE OF ORDER:  24 February 1997

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The application by the judgment debtor under s 41(7) of the Bankruptcy Act 1966 (Cth) be dismissed.

1. The applicant to this application pay the costs of the respondent, of today’s proceedings only.

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

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE STATE OF QUEENSLAND

No QN 1194 of 1996

RE:  GEORGE McMALLAN

Judgment Debtor

EX PARTE:             WILLIAM JAMES STEVENS

Judgment Creditor

CORAM:  Cooper J
PLACE:  Brisbane
DATE:  24 February 1997

REASONS FOR JUDGMENT

This is an application by the judgment debtor (“the applicant”) pursuant to s 41(7) of the Bankruptcy Act 1966 (Cth) (“the Act”) to set aside a bankruptcy notice filed in this court on 1 July 1996, on the basis that he has a counter-claim, set-off or cross-demand of the type referred to in s 40(1)(g) of the Act, namely a counter-claim, set-off or cross-demand which he was unable to raise in the proceedings in the Supreme Court of Queensland which led to judgment being given against him on 12 March 1996, in the sum of $242,150 together with interest and costs. The applicant, in support of the application, filed an affidavit dated 11 December 1996 in which he stated at paragraph 9 that it was his intention to institute proceedings to set aside the judgment obtained in the Supreme Court of Queensland in order to allow him to run the defence which he had originally intended.

The judgment debt arises out of a loan agreement dated 2 December 1994 which was secured against real estate in Mudgeeraba in the State of Queensland.  That loan was originally for the sum of approximately $210,000 plus interest.  A specially endorsed writ of summons was issued out of the Supreme Court of Queensland and served upon the applicant.  Judgment in default of appearance was entered against the applicant on 12 March 1996.  It appears that a contract for the sale of the property, the subject of the security, was entered into prior to the entry of judgment against the applicant.  Settlement of that contract was effected after judgment was entered, and the proceeds of sale were put towards repayment of the monies owed under the judgment debt.  A balance of $67,500.92 remains outstanding.

The applicant contends in his affidavit that the property was sold at an undervalue.  The judgment creditor, the respondent to these proceedings, disputes this and has filed material detailing the steps taken to obtain current valuations and the marketing steps taken to put the property to auction.

Objection has been taken as to the evidence relied upon by the applicant in support of his contention that the property was worth somewhere in the vicinity of $330,000 on the basis that two of the valuations are what are called drive-by valuations, and the third one is some particular period of time prior to the sale.  Be that as it may, it seems to me that the fatal flaw in the application is that it is not shown that the claim, the subject of the application by the applicant, could not be litigated in the Supreme Court of Queensland in the same proceedings which gave rise to the judgment against him, that judgment being a judgment debt arising out of the loan agreement.

The applicant appeared before this court on 10 February 1997 in order to argue his application.  However, it was necessary for the matter to be adjourned on that day due to the respondent's late filing and serving of documentation.  On 20 February at 6.12 pm The applicant sent a fax to the listing officer of this Court advising that he had sought to have this application adjourned to 3 March 1997 but that the respondent had not agreed to this adjournment.  He further advised that he was leaving for Melbourne on Friday 21 February 1997 to be with his father who was ill.  He left a contact number of 019 449198.  Apparently on 10 February 1997 the applicant advised the solicitors for the respondent that Messrs Philip Roberts and Co, solicitors of Mudgeeraba, would be acting for him in relation to this matter.  The respondent tendered a letter, dated 17 February 1997, from its solicitors to Philip Roberts and Co seeking confirmation that they were acting for the applicant and asking whether or not it was intended any further material be filed.  I am advised that that correspondence has not been replied to. 

When this matter was called today and there was no appearance by the applicant.  I instructed that a court officer telephone the contact number provided by the applicant to the court.  It was not possible to contact him at that number.  Further inquiries to another contact number on the court file produced the information that he was in transit, probably returning to Sydney some time today.  I have given consideration as to whether in all the circumstances I ought to adjourn the matter to 3 May 1997, but having regard to the material, the failure of the applicant to institute the proceeding which he foreshadowed in the Supreme Court and my view that the application lacks substance, and on the material presently available would fail, I am of the view that in the circumstances an adjournment should not be granted.

Accordingly, I order that the application be dismissed.

I further order that the applicant pay the respondent’s costs of today, but not the costs of previous hearing on 10 February 1997.

I certify that this and the preceding three (3) pages are a true copy of the reasons for judgment herein of his Honour Justice Cooper.

Date:  24 February 1997

Associate

No appearance for the Judgment Debtor

Counsel for Judgment Creditor:  P P McQuade

Solicitor for Judgment Creditor:  McLaughlins

Date of Hearing:  24 February 1997

Place of Hearing:  Brisbane

Date of Judgment:  24 February 1997