Re Orpin, G.E.

[1993] FCA 59

IN THE BANKRUPTCY DlSTRICT

OF TltE STATE OF OUEENSLAND

No. 1668 of 1 9 9 2

RE: GEOFFREY ERIC ORPIN

Judament Debtor

MINUTES OF ORDER

JUDGE MAKING ORDER:	Cooper J .
WHERE MADE:	Brisbane
DATE OF ORDER:	3 February, 1 9 9 3
THE COURT ORDERS:

1 .         That the application is dlsmlssed;

2 .         Extend the time for complying wlth bankruptcy notice number 1668 of 1 9 9 2 filed by Messrs. Hopgood and Ganim until 4 pm Thursday, 25 February, 1 9 9 3 .

3.        That the judgment debtor pay the judgment creditor's costs of and incldental to the application to be taxed.

RECEIVED

23FEB 1993
FEDERAL COURT OF

AUSTRALIA PRINCIPAL REQISTRV

Note:	Settlement and entry of orders is dealt wlth in Rule
124 of the Bankruptcy Rulee.  I - 4 ;:I

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IN THE BANKRUPTCY DISTRIC'P OF THE STATE OF QUEENSLAND

No. 1668 of 1992

RE: GEOFFREY ERIC ORPIN

Judament Debtor

CORAM:  Cooper J

PLACE	:	Brisbane
-	DATE :	3 February, 1993

EXTEMPORE REASONS FOR JUDGMENT

The judgment creditor is a flrrn of solicitors. On 19 October, 1992 the judgment creditor obtained judgment in the Magistrates Court at Brisbane in the sum of $5,056.00 against the judgment debtor for professional costs incurred in litigation between Mercantile Credits Limlted and the judgment debtor.

On 3 November, 1992, the judgment creditor caused to

be lssued out of the Registry of this court a bankruptcy

debt. The bankruptcy notice was served on 3 December, 1992.	notice against the judgment debtor in respect of the judgment
The judgment debtor claims a counter-claim, set-off or cross- demand equal to or exceeding the judgment debt which he contends he could not set up ln the proceedings or action in which the judgment was obtained. The cross-clalm is in an amount of $5,078.50.
The judgment debtor has filed dffidavlt n~dterlal in support of his cross-claim and the matter has been referred to the court for determination pursuant to section 41(7) of the Bankruptcv Act. The judgment debtor has also applled that the matter be adjourned to Townsville to be heard in that city at a later date.
To satisfy the court that he has a counter-claim, set-off or cross-demand for the purposes of sections 40(l)(g) and section 41(7) of the Bankru~tcv Act, the judgment debtor must show that he has a prima facie case even if he does not now adduce admissible evidence to make out the prlma facie case as he would be required to do in a court determining the validity of his cross claim (see Ebert v. Union Trustee Co. JAust. l Ltd. (1960) 104 CLR 346 at 350; Re Lavbut: Ex Darte
Robinson (Unreported - 26.6.85, Beaumont J,); McKechnie: Ex parte Weir (1991) 27 FCR 515 at 520; and see generally McDonald Henry and Meek, Fifth Edltion para. 204).
The judgment debtor's claim is that the judgment client, Preeble Investments Pty. Ltd., a company associated creditor engaged him to act as a planning consultant for its
with a Mr. B. Ronlano. The cross-clalm is for fees allegedly earned in the performance of that consultancy. The judgment debtor claims that the judgment creditor was personally liable for those fees.
The origlnal letter of engagement relied upon by the judgment debtor is dated 2 November, 1989 and it reads as
f o l l o w s :

"The	S e c r e t a r y ,	G e o f f	Orpin	Deslgns	P t y
L t d ,	112	Soonlng	S t r e e t ,	N e l l y Bay,	Q ld
4189.
Dear	S i r ,	R e :	K e l l y ' s	Roadhouse	-

Ronlano .

Fur the r	t o o u r	t e l ephone	c o n v e r s a t i o n	o f 2
November	1989,	we	c o n f i r m	t h e f o l l o w i n g : -
( 1 )	W e c o n f l r m t h a t you	were	the	d e s i g n e r

f o r t h e T o w n s v i l l e T r a n s l t Cen t r e and

t h a t you a r e prepared t o a s s l s t and

prepare r e p o r t s and subnl iss lons a s t o

a s s i s t o u r c l i e n t i n pur su lng an

approval	o f	h i s	p r o p e r t y ,	K e l l y ' s
Roadhouse,	Maryborough	a s	a	b u s

t r a n s i t centre.

( 2 ) W e i n s t r u c t you t o a c t on b e h a l f o f

o u r	cl l e n t ,	Preeble	Inves tn len t s	i n
r e l a t l o n	t o	h i s	p r o p e r t y ,	K e l l y ' s

Roadhouse a t Maryborough i n

accordance	w l t h	t h e	proposal	a s
discussed.

( 3 ) That we w i l l arrange f o r a l l

information r e g a r d i n g p l a n s ,

approva l s ,	Counci l a p p l i c a t i o n s t o be
forwarded	t o you f o r appraisal, i n

p a r t i c u l a r drawlngs from Gavin

P a t t e r s o n and commit tee m e e t i n g s o f

t h e Maryborough C i t y Counc i l .

Yours f a i t h f u l l y . . . "

The l e t ter purpor t s t o be on t h e l e t t e r h e a d o f

Hopgood and Ganim, t h e judgment c r e d i t o r , and f o r t h e purpose

o f t h i s a p p l i c a t i o n , I w i l l a ccep t t h a t t h e l e t t er was s e n t b y

t h a t f i r m .

On 20 December, 1 9 8 9 , under c o v e r o f a f a x on t h e

l e t t e r h e a d	o f	" J e f f e r s o n s o f Magnetic	I s l a n d " ,	t o t h e	judgment
c r e d l t o r ,	from	" G O r p l n " ,	t h e judgment	c r e d l t o r was	adv i s ed :

"Attached is our preliminal-y report for your consideration. Our account is enclosed dnd I would appreciate it being forwarded to Bat. Merry Christnlas and a

happy new year. "

Attached to the fax was a report under the letterhead of "Geoff Orpln Deslgn Pty. Ltd." of 114 Sooning Street, Nelly Bay. The report was addressed to Mr. Bat Romano, Preeble Investments Pty. Ltd., care Hopgood and Ganim.

I t commences:

"Re: Kelly's Roadhouse, Maryborough	.
Dear Sir,
In reply to your instruction t	o

investigate and advise. . . . , "

The preliminary report is signed "C. E. Orpln". Attached to the report was an invoice/statement number 22 dated 20 December, 1989 to "Mr. B. Romano, Preeble Investments Pty. Ltd., care Hopgood and Ganim". The involce on its face states that it is from "Geoff Orpin Deslgn Pty. Ltd." and the order

is shown as number " H & G". The involce is in the sum of

payment, consultant fee $2,500.00; expenses, air fare $3,387.00, being "Account Re Maryborough Terminal; Progress	$520.00; accommodation $382.00; out of pocket $35.00."
By fax dated 12 March, 1990, on the company letterhead the judgment debtor wrote to the judgment creditor as follows:

"David,

Breakdown as discussed. Total 79 hrs only charged as quoted (approx 62 at 40 = $2500.00). Would you please try and sort

t h i s o u t a s I	am	o u t o f pocke t	through n o
f a u l t	o f my own.	Regards,	G e o f f " .

On 18 September , t h e judgment d e b t o r b y h l s

s o l i c i t o r s , Messrs. Lee Turnbu l l and Co. , wro t e t o t h e

judgment c r e d l t o r a s f o l l o w s :

"Dear S i r s ,

Re:  G e o f f Orpin Design P t y . L t d .

W e a c t for G e o f f r e y E r i c Orpin . On o u r

c l i e n t ' s i n s t r u c t i o n s your f l r m engdged

him t o prepare a r e p o r t i n r e s p e c t o f a

proposal known a s Kelly's Roadhouse.

Fur the r ,	on	o u r c l i e n t ' s	instructions,	h e
s u b s e q u e n t l y	I nvo i ced	the	p r o p r i e t o r	a t
your	d i r e c t i o n	which	i n v o i c e was	addressed

t o t h e p r o p r i e t o r c a r e o f your f i r m .

On o u r c l i en t ' s i n s t r u c t i o n s o n l y par t o f

t h a t anlount h a s been pa id , t h a t par t b e i n g

h i s a i r f a r e s from T o w n s v l l l e t o Brisbane.

Our d i f f i c u l t y i s t h a t t h e o n l y c o n t r a c t

t h a t we can see i s t h a t be tween o u r c l i e n t

and y o u r s e l f and we a r e concerned t h a t

shou ld i t become n e c e s s a r y t o I s s u e

proceed ings	t o	r e c o v e r	t h o s e	proceedings
would	have	t o i n c l u d e your	f i r m	t o e n s u r e

t h a t o u r c l l e n t was s u c c e s s f u l .

Would you p l e a s e l e t u s have your conunents

on t h e m a t t e r and p a r t i c u l a r l y you may

c a r e t o t a k e u p w i t h your c l i e n t t h e

p rospec t o f pap l en t a s we a r e i n s t r u c t e d

t o r e s o l v e this m a t t e r by i s s u e o f

proceed ings i f n e c e s s a r y .

W e awai t your r e p l y .

Yours f a i t h f u l l y " .

On 27 September , 1990, t h e judgment c r e d l t o r

responded headlng i t s l e t t e r , "Re: G e o f f Orpln Deslgn Pty.

L t d . " and t h e l e t ter went on t o deny personal liability i n

respect of the claim for professional fees.

On 24 December, 1990 the ludgment debtor's solicitors again wrote as follows:

"Dear S l r s ,

H e G e o f f Orpln Deslgn P t y . L t d .

W e re fer t o your facsimile d a t e d 2 7

September,	1990.	P l e a s e	a d v i s e	whether
you	have been	a b l e	t o o b t a i n your	c l i e n t ' s

i n s t r u c t i o n s	a s	we	a r e	i n s t r u c t e d	t o
proceed	t o	r e c o v e r y	i f	n e c e s s a r y .	W e

a w a i t your r e p l y . Yours faithfully".

The judgment creditor commenced proceedings in the Magistrates Court at Brlsbane for a small debt on 20 July, 1992 to recover $5000.00 for professional costs and $56.00 flling fee. On 24 August, 1992, the judgment credltor filed a defence and counter claim agalnst the judgment creditor claiming, inter alia, $7000.00 for professional services in respect of the Maryborough Roadhouse.

Rule 89A of the Maaistrates Court Rules prevents the bringing of cross-claims in respect of small claims brought in the Magistrates Court, but does not prevent separate proceedings being brought to make a dlrect clalm. The hearing of the claim in the Magistrates Court was on the materlal set down for 13 October, 1992. Mr. Burns in his affidavit deposes that the judgment debtor did not attend and judgment was entered against hlm in respect of the judgment creditor's claim for professional costs.

The subject matter of the cross-claim was not dealt with on that occasion. In an affidavit filed on 24 December, 1992 the judgment debtor deposed as to proceedings instituted by him in the ~ownsville Magistrates Court against the judgment creditor for recovery of the professional fees. The copy plaint is Exhibit "GOHG1" to the affidavit and bears the endorsement "Filed 21/12/92 Townsville". The judgment creditor is shown as the plaintiff and the subject matter of the claim relates to the professional fees allegedly due in relation to the Maryborough Roadhouse project.

By an affidavit filed by leave today, the judgment debtor deposes that he filed proceedings in the Magistrates Court in Townsville on 12 January, 1993 against the judgment creditor for the professional fees in dispute. A copy of the plaint numbered 39 of 1993 is annexed to the affidavit. The plaintiff in the plaint is described as "Geoffrey Eric Orpin trading as Geoff Orpin Design P / L . " By the statement of claim, it is alleged that the judgment creditor engaged "the plalntlff to carry out consulting work for their client Preebl e Inves tmen ts/Ba t Ramano . " The plaint in paragraph 4

pleads requests for progress payments dated 20/12/89, 2/2/90, 2/4/90 and 2/6/90. Other than the invoice of 20 December, 1989 there was no evidence before me as to whom any request for payment was directed on the other occasions.

The whole of the material placed before me, prima facie, supports the conclusion that: -

(a)	the engagement to provide professional services was with the company, Geoff Orpin Design Pty. Ltd. irrespective as to whether that contract was made by the judgment creditor as principal or as agent on behalf of a disclosed principal, namely, its client Preeble Investments Pty. Ltd. or Mr. Ro~nano.
(b)	the engagement was performed by the company utilising the services of the judgment debtor as either an officer/d~rector of the company, or as an employee.
(C)	the demand for payment was made by the company in terms of the original invoice of 20 December, 1989 and the solicitor's correspondence, generally although not clearly, seeks to assert a claim on behalf of the company.
(d)	the present proceedings in the Magistrates Court in
basis that the company was the principal party but Townsville are in truth being prosecuted on the
was at all times the alter ego of the judgment debtor.

There is no material which would satisfy me that the judgment debtor personally has a cause of action for professional fees arising out of any engagement of him personally as opposed to the company, with the judgment creditor. It follows that the judgment debtor is not excused from complying wlth the terms of the bankruptcy notice, on the basis of a counterclaim, set-off or cross-demand in the terms in which he contends. The application is therefore dismissed.

There is no occasion to conslder a change of venue

to Townsville, having regard to my decision on the appl~cation
and the material generally.

The materlal rases other matters as to the conduct of the judgment credltor in leaving the judgment debtor to defend proceedings against Mercantile Credlts Limited in the Supreme Court, and to prosecute his counterclaim agalnst that company without legal assistance. Those matters were not specitically argued before me. Nonetheless, the possibility of an award of damages against a third party is not, as I am presently advised, a sufficient basis to excuse compliance with the bankruptcy notice or to stay the operation of the bankruptcy notice pending determuation of those proceedings.

The judgment debtor deposes that he has access to funds to pay the judgment debt and it appears tolerably clear from the material that he has been resisting payment because of the application brought by him, which I have considered today, and, because of his identlfylng hls deallngs and those of the company as belng indistinguishable.

I wlll therefore hear the judgment debtor as to

extending the time for compliance wlth the bankruptcy notice

for a short perlod in order to allow hlm to discharge the

debt.

THE COURT ORDERS:

1. That the application is dismissed;

2. Extend the time for complying with bankruptcy noLice number 1668 of 1992 filed by Messrs. Hopgood and Ganim until 4 pm Thursday, 2 5 February, 1 9 9 3 .

3 .         That the judgment debtor pay the judgment creditor's costs of and incidental to the application to be taxed

I certify that this and the nine (9)

preceding pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Cooper.

Date: 22 February. 1993

/ , , L I L . L . L

Associate

Solicitors for the Applicant:	Mark Peacock of Hopgood & Ganim
Respondent in Person:	Mr. G.E. Orpm
Hearing Date:	3 February, 1993