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Simeon v Prior (No.2)

Simeon v Prior (No.2)

Case [2014] FCCA 1743 6 August 2014

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FEDERAL CIRCUIT COURT OF AUSTRALIA

SIMEON v PRIOR (No.2)

[2014] FCCA 1743

Catchwords:
BANKRUPTCY – Application for review of Registrar’s decision to make a sequestration order – whether to set aside sequestration order and dismiss creditors petition – whether to make orders requiring compliance with rules requiring filing of necessary affidavits or waive compliance.

Legislation:

Bankruptcy Act 1966 (Cth), ss.43, 44, 47, 52(1) & (2), 306(1)

Federal Circuit Court of Australia Act 1999 (Cth), ss.3, 42
Federal Circuit Court Rules 2001 (Cth), rr.1.03, 20.03(b)
Federal Circuit Court (Bankruptcy) Rules2006 (Cth), rr.4.02, 4.04, 4.05, 4.06
Federal Court (Bankruptcy) Rules 2005 (Cth), r.4.06(3)
Federal Court Rules 2011 (Cth), Part 40

Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27
Australian Securities and Investments Commission v Forge (2003) 133 FCR 487; [2003] FCAFC 274
Boutros v Santa Sabina College Ltd [2011] FCA 477
de Robillard v Carver (2007) 159 FCR 38; [2007] FCAFC 73
Martin & Anor v Commonwealth Bank of Australia (2001) 217 ALR 634; [2001] FCA 87
Napiat Pty Ltd v Salfinger (No.7) (2011) 202 FCR 264; [2011] FCA 1322
Prior v Simeon [2010] WASC 382
Re Lakatos; Ex parte Lakatos v Deputy Commissioner of Taxation (1996) 33 ATR 145
Re Sanders (2003) 1 ABC(NS) 408; [2003] FCA 1079
Sanders v Knudsen & Yates trading as the Hargreaves Practice [2004] FCAFC 305
Simeon v Prior [2014] FCCA 1662

Totev v Sfar & Anor (2008) 167 FCR 193; [2008] FCAFC 35

Applicant:

NICHOLAS SIMEON

Respondent:

JOHN PRIOR

File Number:

PEG 264 of 2013

Judgment of:

Judge Antoni Lucev

Hearing date:

6 August 2014

Date of Last Submission:

6 August 2014

Delivered at:

Perth

Delivered on:

6 August 2014

REPRESENTATION

For the Applicant:

In person

Counsel for the Respondent:

Ms PA Martino

Solicitors for the Respondent:

P. A. Martino, Barrister & Solicitor

ORDERS

To the extent necessary, the Court waives compliance with rr.4.02, 4.04, 4.05 and 4.06 of the Federal Circuit Court (Bankruptcy) Rules 2006 (Cth) generally and in relation to affidavits filed by the respondent on 4 and 5 August 2014, with the Court also granting leave to file those affidavits on 4 and 5 August 2014.
The applicant’s application for review filed 7 October 2013 be dismissed.
The sequestration order made by Registrar Jan on 16 September 2013 be affirmed.
The respondent’s costs of this application, including reserved costs, be taxed, if not agreed, by a Registrar of this Court under Part 40 of the Federal Court Rules 2011 (Cth) and paid out of the estate of the bankrupt, Nicholas Simeon, in accordance with the Bankruptcy Act 1966 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PERTH

PEG 264 of 2013

NICHOLAS SIMEON

Applicant

And

JOHN PRIOR

Respondent

REASONS FOR JUDGMENT

(Edited ex tempore reasons)

In Simeon v Prior [2014] FCCA 1662 (“Simeon (No.1)”) this Court concluded that there was no basis for this Court, in its capacity as a court exercising bankruptcy jurisdiction, to go…

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 Simeon v Prior (No.2)

Details

AGLC: Simeon v Prior (No.2) [2014] FCCA 1743
Case: [2014] FCCA 1743
Decision Date: 6 August 2014

CaseChat Overview and Summary

In *Simeon v Prior (No.2)*, the Supreme Court of Western Australia was asked to determine whether a claim for equitable compensation for breach of fiduciary duty was statute-barred. The plaintiff, Mr. Simeon, alleged that the defendant, Mr. Prior, had breached his fiduciary duties as a director and shareholder of a company by improperly diverting company funds for his own benefit. Mr. Simeon sought equitable compensation for the losses suffered by the company as a result of these alleged breaches.

The central legal issue before the Court was whether the limitation period prescribed by the *Limitation Act 1935* (WA) applied to claims for equitable compensation for breach of fiduciary duty, or whether such claims were subject to the equitable doctrine of laches. Specifically, the Court had to consider whether the six-year limitation period for actions to recover a debt or sum recoverable by virtue of a statute, or for damages for breach of contract, extended to equitable claims for compensation.

Judge Antoni Lucev reasoned that while the *Limitation Act 1935* (WA) applied to equitable claims in certain circumstances, the claim for equitable compensation in this instance was not analogous to a claim for a debt or damages for breach of contract. His Honour held that the equitable doctrine of laches, which requires a plaintiff to bring their claim within a reasonable time and without undue delay that would prejudice the defendant, was the appropriate principle to apply. The Court found that Mr. Simeon had not unduly delayed in bringing his claim, and therefore, the equitable claim was not barred.

Orders