Re Smith; Ex parte Chesson

Case [1992] FCA 59

Re: IRIS ENSLEY SMITH
Ex parte: MURRAY ADAIT CHESSON
No. B1985 of 1991
FED No. 59
Bankruptcy
(1992) 106 ALR 359

COURT

IN THE FEDERAL COURT OF AUSTRALIA


BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES
GENERAL DIVISION
Hill J.(1)
CATCHWORDS

Bankruptcy - Debtor's application for leave to proceed out of time in action under s.20 De Facto Relationships Act 1984 (NSW) dismissed with costs - whether pre-existing common money count a "set-off, cross-claim or cross-demand that he could not have set up" - whether certificate of taxation a final order - effect of s.40(3)(b) discussed.

Bankruptcy Act 1966 (Cth): ss.40(1)(g), 40(3)(b)

Re McGregor; McGregor v Clancy and Triado Pty Ltd (1991) 100 ALR 431

Re Ravasio; Ex parte Leonard Norman Pty Ltd (1965) 5 FLR 373

Re Brink (1980) 30 ALR 433

Re A Bankruptcy Notice (1934) Ch 431

Re Black (1932) 4 ABC 157

Re Stokvis (1934) 7 ABC 53

Re Gould; Ex parte Skinner (1983) 72 FLR 393

HEARING

SYDNEY

#DATE 26:2:1992

Counsel and Solicitors
for Applicant: Mr L. Ellison instructed by

Patterson Byfield and Bryen

Counsel and Solicitors
for Respondent: Mr J. Dupree instructed by

H.D. Kelly
ORDER

The Debtor has a cross-demand of the type referred to in s.40(1)(g).

The Judgement Creditor to pay the Debtor's costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

Miss Iris Ensley Smith ("the Debtor") was served with a Bankruptcy Notice in or about August of 1991. That notice claimed that Mr Murray Chesson ("the Judgment Creditor") had obtained a judgment, in the sum of $5,674.55 (together with interest totalling in all $6,131.47,) in the Supreme Court of New South Wales on 6 July 1990.

  1. Before the time fixed for compliance with the Bankruptcy Notice, there was filed by the Debtor an affidavit to the effect that she had a counter-claim, set off or cross-demand of the kind referred to in s.40(1)(g) of the Bankruptcy Act 1966 (Cth) ("the Act"). The consequence of filing that affidavit was that time for compliance was deemed to have been extended, pursuant to s.41(7), pending the determination before me of the issue which now arises, namely, whether I am satisfied that the Debtor has a counter-claim, set off or cross-demand equal to or exceeding the amount of the judgment debt or sum payable under the final order as the case may be, being a counter-claim, set off or cross-demand that she could not have set up in the action or proceeding in which the judgment or order was obtained.

  2. Evidence was adduced from the Debtor and despite some cross-examination, which seemed to be directed at credit, there was at the end of the day little relevant dispute.

  3. It would seem that the Debtor and the Judgment Creditor lived together for some time in a de facto relationship. There is dispute between them as to when that relationship ceased. That is not a matter, however, which affects the outcome of the present case.…

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Details
AGLC
Re Smith, I.E. Ex parte Chesson, M.A. [1992] FCA 59 ((1992) 106 ALR 359)
Case
[1992] FCA 59
Decision Date

CaseChat Overview and Summary

In the matter of Re Smith; Ex parte Chesson, the Federal Court addressed a dispute concerning a debtor's application for leave to proceed out of time in an action under the De Facto Relationships Act 1984 (NSW). The debtor, Chesson, sought leave to challenge a certificate of taxation issued in a bankruptcy proceeding. The certificate had been issued in favour of the judgement creditor, Smith, who was a former de facto partner of Chesson. Chesson argued that the certificate of taxation was not a final order as it did not resolve a cross-demand he had regarding a pre-existing common money count.

The court was required to determine whether the pre-existing common money count constituted a set-off, cross-claim, or cross-demand that Chesson could not have set up. Additionally, the court had to assess the effect of section 40(3)(b) of the relevant legislation and whether it applied in such a way as to allow Chesson's application to proceed. The core issue was whether the pre-existing common money count constituted a cross-demand of the type referred to in section 40(1)(g).

The court held that the pre-existing common money count did indeed constitute a cross-demand of the type referred to in section 40(1)(g). Consequently, the debtor had a legitimate cross-demand that could have been raised earlier. The court further found that section 40(3)(b) did not provide a basis for allowing the application to proceed out of time. The certificate of taxation was considered a final order as it settled the substantive rights of the parties regarding the de facto relationship, and the debtor's cross-demand did not alter this conclusion. As a result, the debtor's application for leave to proceed out of time was dismissed with costs awarded to the judgement creditor.

The final orders of the court were that the judgement creditor, Smith, was to pay the debtor's costs. The settlement and entry of orders were to be dealt with in accordance with Order 36 of the Federal Court Rules.

Orders

Orders of the court

The Debtor has a cross-demand of the type referred to in s.40(1)(g).

The Judgement Creditor to pay the Debtor's costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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