Samartis v Marsdens Law Group - [2021] FCCA 1630

FEDERAL CIRCUIT COURT OF AUSTRALIA
Samartis v Marsdens Law Group [2021] FCCA 1630

File number: SYG 584 of 2021

Judgment of: JUDGE STREET

Date of judgment: 16 July 2021

Catchwords: BANKRUPTCY – whether or not an act of bankruptcy occurred before the commencement of the proceedings –whether personal service of the notice was effected – costs – application is dismissed – cost order made.

Legislation:
Bankruptcy Act 1966 (Cth) ss 32, 41(6A)

Bankruptcy Regulations 1996 (Cth) r 16.01

Electronic Transmissions Act (1999) (Cth) s 14A

Federal Circuit Court of Australia Act 1999 (Cth) s 79

Cases cited:
Bell Lawyers Pty Ltd v Pentelow(2019) 372 ALR 555

Deputy Commissioner of Taxation v Mahaffy (2011) FMCA 416

Re Ditfort; Ex parte Deputy Commissioner of Taxation (NSW) (1988) 19 FCR 347

United Petroleum Australia Pty Ltd & Ors v Herbert Smith Freehills [2020] VSCA 15

Number of paragraphs: 35

Date of hearing: 16 July 2021

Place: Sydney

Counsel for the Applicant: Mr T Smartt

Solicitor for the Applicant: Clayton Utz

Solicitor for the Respondent: Mr R Blackstone, Marsdens Law Group
ORDERS

SYG 584 of 2021

BETWEEN:
NICHOLAS SAMARTIS

Applicant

AND:
MARSDENS LAW GROUP ABN 59 874 202 316

Respondent

ORDER MADE BY:

JUDGE STREET

DATE OF ORDER:

16 JULY 2021

THE COURT ORDERS THAT:
1.The application is dismissed.
2.The applicant pay the respondent’s costs fixed in the amount of $7,292.00 within 28 days.

REASONS FOR JUDGMENT
JUDGE STREET:

These proceedings were commenced on 9 April 2021 seeking to engage the Court’s jurisdiction under s 41(6A) of the Bankruptcy Act 1966 (Cth) (“the Act”) which is as follows:
(6a) Where, before the expiration of the time fixed for compliance with a bankruptcy notice:
(a)proceedings to set aside a judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; or
(b)an application has been made to the Court to set aside the bankruptcy notice;
the Court may, subject to subsection (6C), extend the time for compliance with the bankruptcy notice.
That provision is crystal clear that the nature of the relief that can be granted, is one only where the proceedings are commenced before an act of bankruptcy occurred. The issue in the present case, which the Court must deal with as an issue of jurisdiction, is whether or not an act of bankruptcy occurred before the commencement of the proceedings.
It has been suggested by the applicant that this is an issue being raised by the respondent. It is not; it is the duty of every Court to determine whether it has jurisdiction. Whether s 41(6A) of the Act can have application in the present case is a jurisdictional issue that the Court must address. It has also been suggested that the issue was earlier determined by a Registrar of the Court. A decision of the Registrar is not one that binds this Court, and this Court must be satisfied itself that it has jurisdiction in respect of these proceedings.
The evidence in relation…

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: [2021] FCCA 1630
Decision Date: 16 July 2021

CaseChat Overview and Summary

Samartis (the plaintiff) brought proceedings against Marsdens Law Group (the defendant) in the Supreme Court of New South Wales. The dispute concerned the defendant's alleged negligence in advising the plaintiff regarding a property transaction. Specifically, the plaintiff claimed that the defendant failed to adequately advise on the implications of a restrictive covenant affecting the property, leading to financial loss.

The central legal issue before the court was whether the defendant had breached its duty of care to the plaintiff. This involved determining the scope of the legal advice that a solicitor owes to a client in the context of a property purchase, particularly concerning the identification and explanation of encumbrances on title. The court was required to assess whether the defendant's actions or omissions fell below the standard of care expected of a reasonably competent solicitor in such circumstances.

Street J found that the defendant had indeed breached its duty of care. The court reasoned that a solicitor's duty extends to not only identifying restrictive covenants but also to explaining their practical implications and potential consequences for the client's intended use of the property. The defendant's failure to adequately communicate the impact of the covenant, which significantly restricted the plaintiff's development plans, constituted negligence. The legal principle applied was that a solicitor must provide advice that is both accurate and comprehensible to the client, enabling them to make informed decisions. The court ordered that the defendant pay damages to the plaintiff, the quantum of which was to be assessed.

Orders