Savage v Soloman - [2022] NSWDC 244

District Court

New South Wales

Medium Neutral Citation: Savage v Soloman [2022] NSWDC 244
Hearing dates: 29 June 2022
Date of orders: 5 July 2022
Decision date: 05 July 2022
Jurisdiction: Civil
Before: Russell SC DCJ
Decision:
(1)   Determine the separate question as follows: the defendant has no right to seek to set aside the judgment entered against him, as that right has vested in the Official Trustee.
(2)   Dismiss the defendant’s Notice of Motion filed on 19 January 2022.
(3)   Order the defendant to pay the plaintiff’s costs.

Catchwords:
BANKRUPTCY – defendant is an undischarged bankrupt - vesting of property on bankruptcy – whether the right to seek to set aside a default judgment is part of the property of the bankrupt and therefore vested in the Official Trustee – whether that right is outside the Bankruptcy Act and remains with the defendant himself
PROCEDURE – whether defendant has standing to bring a notice of motion to set aside default judgment

Legislation Cited:
Uniform Civil Procedure Rules (NSW) 2005, rr 28.2, 28.4, 36.16
Bankruptcy Act 1966 (Cth), ss 5, 58, 60, 116,

Cases Cited:
Cummings v Claremont Petroleum NL [1996] HCA 19; (1996) 185 CLR 124
Heath v Tang [1993] 1 WLR 1421; [1993] 4 All ER 694
Hedwan v Hannouf (1997) 140 FLR 229
Soloman v Savage [2018] NSWCA 249
Soloman v Savage [2019] NSWCA 294
Baulkham Hills Shire Council v Stankovic (No. 6) [2010] NSWLEC 33

Category: Procedural rulings
Parties: Robin Savage (Plaintiff)
Phillip Soloman (Defendant)
Representation:
Counsel:
P Thompson (solicitor) (Plaintiff)
V Mishra (solicitor) (Defendant)
Solicitors:
Kennedy & Cooke (Plaintiff)
Redline Legal (Defendant)

File Number(s): 2016/137741

Judgment

Introduction

This judgment concerns the determination of a separate question: whether the defendant has a right to seek to set aside a judgment entered against him, or whether that right has vested in the Official Trustee, since the defendant is an undischarged bankrupt.
In 2017 the plaintiff obtained a money judgment against the defendant in the District Court at Bega. The defendant did not appear at the hearing which led to the entry of judgment against him.
The defendant appealed against the judgment. The Court of Appeal dismissed his appeal with costs: Soloman v Savage [2018] NSWCA 249.
The defendant then brought an application by motion in the District Court seeking to set aside the judgment entered against him. That motion was dismissed with costs.
The defendant sought leave to appeal that decision to the Court of Appeal. The application for leave to appeal was dismissed with costs: Soloman v Savage [2019] NSWCA 294.
The plaintiff served a Bankruptcy Notice upon the defendant. A sequestration order was made under the Bankruptcy Act 1966 (Cth) (the Act). The defendant is still an undischarged bankrupt.
The defendant filed a Notice of Motion on 19 January 2022 seeking the following orders:

An order pursuant to r 36.16(2) of the Uniform Civil Procedure Rules (NSW) 2005 (UCPR) setting aside or varying the judgment entered on 27 November 2017.

The…

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.

Continue reading Savage v Soloman

Details

AGLC: Savage v Soloman [2022] NSWDC 244
Case: [2022] NSWDC 244
Decision Date: 05 July 2022

CaseChat Overview and Summary

In the matter of Savage v Solomon, the plaintiff, Savage, sought to enforce a judgment against the defendant, Solomon, who was an undischarged bankrupt. Solomon, who was represented by counsel, contested the enforcement of the judgment on the grounds that as a bankrupt, the right to seek to set aside a default judgment was part of the property of the bankrupt and therefore vested in the Official Trustee. The court was tasked with determining whether the right to seek to set aside a default judgment was part of the property of the bankrupt and therefore vested in the Official Trustee or whether that right was outside the Bankruptcy Act and remained with the defendant himself. Additionally, the court had to decide whether Solomon had standing to bring a notice of motion to set aside the default judgment.

The court held that the right to seek to set aside a default judgment was part of the property of the bankrupt and therefore vested in the Official Trustee. The court found that the right to seek to set aside a default judgment was a chose in action, which is a type of property that can be assigned or transferred. The court held that upon bankruptcy, all of the bankrupt's property vests in the Official Trustee, including the right to seek to set aside a default judgment. The court further held that the Bankruptcy Act did not provide an exception to this rule, and therefore, the right to seek to set aside a default judgment remained with the Official Trustee. The court also found that Solomon did not have standing to bring a notice of motion to set aside the default judgment, as the right to do so had vested in the Official Trustee.

In conclusion, the court held that the defendant, Solomon, had no right to seek to set aside the judgment entered against him, as that right had vested in the Official Trustee. The court dismissed Solomon's Notice of Motion filed on 19 January 2022 and ordered Solomon to pay the plaintiff's costs. The court's decision clarified the position of the right to seek to set aside a default judgment in the context of bankruptcy and the vesting of property in the Official Trustee.

Orders

Orders of the court

(1) Determine the separate question as follows: the defendant has no right to seek to set aside the judgment entered against him, as that right has vested in the Official Trustee.

(2) Dismiss the defendant’s Notice of Motion filed on 19 January 2022.

(3) Order the defendant to pay the plaintiff’s costs.

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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Medium Neutral Citation:	Savage v Soloman [2022] NSWDC 244
Hearing dates:	29 June 2022
Date of orders:	5 July 2022
Decision date:	05 July 2022
Jurisdiction:	Civil
Before:	Russell SC DCJ
Decision:	(1) Determine the separate question as follows: the defendant has no right to seek to set aside the judgment entered against him, as that right has vested in the Official Trustee. (2) Dismiss the defendant’s Notice of Motion filed on 19 January 2022. (3) Order the defendant to pay the plaintiff’s costs.
Catchwords:	BANKRUPTCY – defendant is an undischarged bankrupt - vesting of property on bankruptcy – whether the right to seek to set aside a default judgment is part of the property of the bankrupt and therefore vested in the Official Trustee – whether that right is outside the Bankruptcy Act and remains with the defendant himself PROCEDURE – whether defendant has standing to bring a notice of motion to set aside default judgment
Legislation Cited:	Uniform Civil Procedure Rules (NSW) 2005, rr 28.2, 28.4, 36.16 Bankruptcy Act 1966 (Cth), ss 5, 58, 60, 116,
Cases Cited:	Cummings v Claremont Petroleum NL [1996] HCA 19; (1996) 185 CLR 124 Heath v Tang [1993] 1 WLR 1421; [1993] 4 All ER 694 Hedwan v Hannouf (1997) 140 FLR 229 Soloman v Savage [2018] NSWCA 249 Soloman v Savage [2019] NSWCA 294 Baulkham Hills Shire Council v Stankovic (No. 6) [2010] NSWLEC 33
Category:	Procedural rulings
Parties:	Robin Savage (Plaintiff) Phillip Soloman (Defendant)
Representation:	Counsel: P Thompson (solicitor) (Plaintiff) V Mishra (solicitor) (Defendant) Solicitors: Kennedy & Cooke (Plaintiff) Redline Legal (Defendant)
File Number(s):	2016/137741