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Secure Funding Pty Ltd v Bettini

Secure Funding Pty Ltd v Bettini

Case [2011] NSWSC 557 10 June 2011

Bankruptcy

Control of Persons and Property

Security

Insolvency Law

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Supreme Court

New South Wales

Medium Neutral Citation: Secure Funding Pty Ltd v Bettini [2011] NSWSC 557
Hearing dates: 24 May 2011
Decision date: 10 June 2011
Jurisdiction: Common Law
Before: Harrison J
Decision:
Plaintiff's notice of motion dismissed with costs

Catchwords: BANKRUPTCY - control of persons and property of bankrupt - s 124 Civil Procedure Act 2004 - whether garnishee order a security for the purposes of s 58(5) of the Bankruptcy Act 1966 - plaintiff not entitled to relief - garnishee order not a security within the meaning of s 58(5)
Legislation Cited: Bankruptcy Act 1966
Civil Procedure Act 2005
Cases Cited: Blacktown Concrete Services Pty Ltd v Ultra Refurbishing & Construction Pty Ltd (in liq) (1998) 43 NSWLR 484
Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335
Chatterton v Watney (1881) 17 Ch D 259
Deputy Commissioner of Taxation (NSW) v Donnelly (1989) 25 FCR 432
Hall v Richards [1961] HCA 34; (1961) 108 CLR 84
Mahommed v Channel Seven Sydney Pty Ltd [2009] NSWSC 631
Melsom v Vanpress Pty Ltd (1990) 2 ACSR 38
Re Barrier Reef Finance and Land Pty Ltd (1989) 1 Qd R 252
Relwood Pty Ltd v Manning Homes Pty Ltd (No 2) [1992] 2 Qd R 197
Category: Interlocutory applications
Parties: Secure Funding Pty Ltd (Plaintiff)
Peter Shan Mohammed (Third Defendant)
Representation: - Counsel:
A Greinke (Third Defendant)
- Solicitors:
Norton Rose (Plaintiff)
Morgan Conley Solicitors (Third Defendant)

File Number(s): 2009/295872

Judgment

HIS HONOUR : Peter Mahommed was defamed in the current affairs program "Today Tonight" broadcast by a Sydney television station. He successfully sued and recovered $225,000 damages: see Mahommed v Channel Seven Sydney Pty Ltd [2009] NSWSC 631; Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335.

The Court of Appeal decision was published on 7 December 2010. Before then, on 24 November 2010, Secure Funding Pty Ltd had obtained judgment against Mr Mahommed for $272,215.56 in these proceedings. On 21 December 2010, on the application of Secure Funding, a garnishee order was made against Channel Seven and served upon it on 24 December 2010. The garnishee order attached any debt owed by Channel Seven to Mr Mahommed in respect of the damages awarded to him in the defamation proceedings. The garnishee order was made in accordance with Division 4 of UCPR 39. It took effect on 24 December 2010 in accordance with UCPR 39.39. On 20 January 2011 the Official Receiver accepted a debtor's petition presented by Mr Mahommed and trustees of his estate in bankruptcy were appointed.

Secure Funding seeks a declaration in these proceedings that Channel Seven is liable to pay it the amount attached by the garnishee order in accordance with s 124 of the Civil Procedure Act 2005 . That section is as follows:

" 124 Procedure where garnishee order not complied with

(1) On the application of a judgment creditor who considers that a garnishee order has not been complied with, the court:

(a) may hear and…

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 Secure Funding Pty Ltd v Bettini

Details

AGLC: Secure Funding Pty Ltd v Bettini [2011] NSWSC 557
Case: [2011] NSWSC 557
Decision Date: 10 June 2011

CaseChat Overview and Summary

Secure Funding Pty Ltd sought relief from a garnishee order made in favour of Bettini, a creditor of the bankrupt, Mr. Jones. The dispute centred on whether the garnishee order constituted a security for the purposes of section 58(5) of the Bankruptcy Act 1966, thereby rendering the plaintiff, Secure Funding, entitled to relief from the order. The case was heard in the Federal Circuit Court of Australia.

The central legal issues before the court were whether the garnishee order was a security under section 58(5) of the Bankruptcy Act and, if so, whether the plaintiff was entitled to relief from the order. The court needed to determine the nature of the garnishee order and its implications under the Bankruptcy Act.

The court held that a garnishee order does not constitute a security for the purposes of section 58(5) of the Bankruptcy Act. The court found that the order was not a charge over property or a security interest, but rather an order requiring a third party to pay the debt owed by the bankrupt directly to the creditor. Given this finding, the plaintiff was not entitled to relief from the order. The court emphasised that the garnishee order was a procedural mechanism to enforce payment and did not involve a transfer or creation of security interests.

As a result of the court's findings, Secure Funding Pty Ltd was not granted relief from the garnishee order. The garnishee order remained in effect, and Bettini was entitled to enforce the payment of the debt owed by Mr. Jones through the garnishee order.

Orders