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Skalkos v Smiles

Skalkos v Smiles

Case [2006] NSWSC 192 27 March 2006

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CITATION: Skalkos v Smiles and Ors [2006] NSWSC 192

HEARING DATE(S): 16 March 2006

JUDGMENT DATE :
27 March 2006

JUDGMENT OF: Johnson J at 1

DECISION: The First Defendant’s Notice of Motion is dismissed with costs.

CATCHWORDS: PRACTICE AND PROCEDURE - application by First Defendant for summary dismissal of proceedings - First Defendant entered into composition under Part X of the Bankruptcy Act 1966 (Cth) - whether claims by Plaintiff against First Defendant are provable debts under s.82 of the Act - whether claims fall within fraud exception in s.153(2)(b) of the Act - meaning of "fraud" in s.153(2)(b) - held that triable issues exist on these questions - application for summary dismissal refused

LEGISLATION CITED: Bankruptcy Act 1966 (Cth)
Fair Trading Act 1987 (NSW)
Trade Practices Act 1974 (Cth)
Civil Procedure Act 2005
Uniform Civil Procedure Rules

CASES CITED: Dey v Victorian Railway Commissioners (1949) 78 CLR 62
General Steel Industries Inc v Commissioner of Railways (NSW) (1964) 112 CLR 125
Webster v Lampard (1993) 177 CLR 598
Brimson v Rocla Concrete Pipes Limited (1982) 2 NSWLR 937
Agar v Hyde (2000) 201 CLR 552
Wickstead v Browne (1992) 30 NSWLR 1
Esanda Finance Corporation Limited v Peat Marwick Hungerfords (1995-1997) 188 CLR 241
Preston v Star City Pty Limited [1999] NSWSC 1273
Banque Commerciale SA In Liquidation v Ahkil Holdings Limited (1990) 169 CLR 279
Jingellic Minerals NL v Abigroup Limited (1992) 7 WAR 566
Co-Ownership Land Development Pty Limited v Queensland Estates Pty Limited (1973) 47 ALJR 519
Coventry v Charter Pacific Corporation Limited [2005] HCA 67; (2005) 80 ALJR 132
Aliferis v Kyriacou (2000) 1 VR 447
Handberg v Smarter Way (Aust) Pty Limited (2002) 190 ALR 130
Chittick v Maxwell (1993) 118 ALR 728
Maxwell v Chittick (Court of Appeal (NSW), 23 August 1994, unreported, BC9402909)
Re Bosun Pty Limited (In Liquidation) (2000) 34 ACSR 597; [2000] SASC 180
Reid v Interarch Australia Pty Limited [2000] FCA 1328
Australian Competition and Consumer Commission v Kritharas (2000) 105 FCR 444
SGB v The Queen (2005) HCA 80

PARTIES: John Skalkos (Plaintiff)
James John Smiles (First Defendant)
Archibald George Poulos (Second Defendant)
Smiles Poulos Services Pty Limited (Third Defendant)
Taxcare Pty Limited (Fourth Defendant)
Svelte Corporations Pty Limited (Fifth Defendant)
Geoff Kotsakis (Sixth Defendant)

FILE NUMBER(S): SC 21033/95

COUNSEL: Mr S Wells (Plaintiff)
Mr M Aldridge SC (First Defendant)
Second to Sixth Defendants (no appearances)

SOLICITORS: Rosier Partners (Plaintiff)
Abreu Legal (First Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
CIVIL LIST

Johnson J

27 March 2006

21033/95 Skalkos v Smiles and Ors
JUDGMENT

1 JOHNSON J: The Plaintiff, John Skalkos, has brought proceedings for damages against the First Defendant, James John Smiles, and five other Defendants. The proceedings have been on foot for more than a decade. On 4 February 2005, the Plaintiff filed a Fourth Amended Statement of Claim (“FASC”) pursuant to leave granted by Burchett AJ on 17 November 2004.

Issues on the Present Application

2 By…

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 Skalkos v Smiles

Details

AGLC: Skalkos v Smiles [2006] NSWSC 192
Case: [2006] NSWSC 192
Decision Date: 27 March 2006

CaseChat Overview and Summary

In the matter of Skalkos v Smiles, the plaintiff sought to pursue claims against the first defendant, who had entered into a composition under Part X of the Bankruptcy Act 1966 (Cth). The plaintiff's claims against the first defendant were contested on the basis that they were not provable debts under section 82 of the Act and potentially fell within the fraud exception outlined in section 153(2)(b) of the Act. The court was tasked with determining whether these claims were indeed provable debts and, if so, whether they were exempt due to fraud.

The primary legal issues revolved around the interpretation of "provable debts" as defined in section 82 of the Bankruptcy Act and the scope of the fraud exception in section 153(2)(b). The court had to consider whether the claims made by the plaintiff against the first defendant could be categorised as debts that could be pursued in the composition process, and if any of these claims were tainted by fraud, thereby rendering them non-provable.

In reaching its decision, the court examined the evidence presented and concluded that there were triable issues regarding the nature of the claims and whether they constituted provable debts. The court found that the meaning of "fraud" within the context of section 153(2)(b) was not conclusively determinable on the available evidence, and thus, the matter could not be decided on summary dismissal. Consequently, the application for summary dismissal was refused, allowing the case to proceed to a full hearing to resolve these complex issues.

The court ordered that the application for summary dismissal by the first defendant be dismissed, paving the way for the substantive issues to be fully litigated. The case will continue to be heard to determine the final outcomes regarding the provability of the plaintiff's claims and the applicability of the fraud exception.

Orders