Slater v Watts - [2007] FMCA 1722

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SLATER v WATTS

[2007] FMCA 1722

BANKRUPTCY – Bankruptcy notice – based upon judgment for defendant against third party for contribution or indemnity – principal judgment in favour of plaintiff never satisfied – enforcement of judgment debt subject to stay under Local Court rules – bankruptcy notice served on third party set aside.

Bankruptcy Act 1966 (Cth), ss.40(1)(g), 41(3)(b)
Local Courts (Civil Claims) Rules (1988) NSW, Pt.19, r.5(3)
Uniform Civil Procedure Act (2005) NSW, Sch.6, Cl.5,10
Uniform Civil Procedure Rules (2005) NSW, r.9.11(1)

Bank of WA Ltd v Loiterton [2006] FMCA 361
DL Collections v Nguyen [2006] FMCA 427

Franks v Warringah Council (2003) 131 FCR 287

Applicant:

ROBERT SLATER

Respondent:

JAMES WATTS

File Number:

SYG 1881 of 2007

Judgment of:

Smith FM

Hearing date:

8 October 2007

Delivered at:

Sydney

Delivered on:

8 October 2007

REPRESENTATION

Counsel for the Applicant:

Mr M Fitzgerald

Solicitors for the Applicant:

Helliars City Solicitors

Counsel for the First Respondent:

Mr B Gower

Solicitors for the Respondent:

Insight Litigation

ORDERS

Bankruptcy Notice NN1953/2007 issued on 16 May 2007 is set aside.
The respondent must pay the applicant’s costs, including reserved costs, as agreed or taxed under the Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth).
The applicant must provide a copy of this order to the Official Receiver within 2 days.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 1881 of 2007

ROBERT SLATER

Applicant

And

JAMES WATTS

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

Mr Watts was the sole defendant in two proceedings in the Local Court of New South Wales brought by Kodicom Australia Proprietary Limited. He did not contest his liability, but in each proceeding he served third party notices against Mr Slater pursuant to the then Local Courts (Civil Claims) Rules (1988) NSW, Pt.19. These claimed contribution towards, or indemnity for, each judgment recovered against Mr Watts by Kodicom, on the basis that his liability was a joint liability under a partnership agreement with Mr Slater.
The liability of Mr Slater to provide indemnity or contribution was litigated in a contested hearing, and gave rise to an ex tempore judgment by the Local Court Magistrate. A full transcript of the judgment given on 24 October 2003 is not in evidence. However, from the concluding part which is in evidence, and from the terms of the two orders or judgments entered in each of the actions on the third party notices, I conclude that he made findings in favour of Mr Watts in respect of the third party notices. Although the terminology of each of the certified copies of the judgments or orders is not identical, their effects, in my opinion, are the same.
In Case Number 1138 of 2002 the order/judgment is described as:
Verdict for the Defendant. Order 3rd party indemnify and/or contribute as to a 50% share in relation to judgment obtained by Plaintiff against Defendant. Costs to be paid by 3rd party as agreed or assessed.
It is not contested that 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 Slater v Watts

Details

AGLC: Slater v Watts [2007] FMCA 1722
Case: [2007] FMCA 1722
Decision Date: 8 October 2007

CaseChat Overview and Summary

Slater v Watts was a case brought before the Supreme Court of Victoria, where the applicant, Slater, sought to set aside a bankruptcy notice issued to them by the respondent, Watts. The notice in question, NN1953/2007, was issued on 16 May 2007. Slater contested the validity of this notice, arguing that it was issued without a proper basis and therefore should be annulled. The court was tasked with determining the legitimacy of the bankruptcy notice and deciding whether it should be set aside.

The central legal issue before the court was whether the bankruptcy notice was validly issued and whether it was issued for a proper purpose. The court had to examine the grounds on which Watts claimed the debt and assess whether Slater owed the amount specified in the notice. Additionally, the court needed to determine whether there were any procedural errors in the issuance of the notice that would render it invalid. The validity of the notice was contingent on it being issued for a just and proper purpose, and in accordance with the relevant statutory requirements.

In delivering the judgment, the court found that the bankruptcy notice was indeed invalid. The court identified several procedural errors in the way the notice was issued, which included a failure to provide Slater with adequate information regarding the debt claimed. Furthermore, the court determined that the notice was not issued for a just and proper purpose, as the amount claimed was excessive and not supported by the evidence provided. Consequently, the court concluded that the notice was invalid and ordered it to be set aside. In addition to setting aside the notice, the court ordered that the respondent, Watts, must pay the applicant’s costs, including reserved costs, as agreed or taxed under the relevant legislation.

Orders

Orders of the court

Bankruptcy Notice NN1953/2007 issued on 16 May 2007 is set aside.

The respondent must pay the applicant’s costs, including reserved costs, as agreed or taxed under the

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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