Thomas v TAIAROA - [2020] FCCA 3524

FEDERAL CIRCUIT COURT OF AUSTRALIA

THOMAS v TAIAROA & ANOR

[2020] FCCA 3524

Catchwords:
BANKRUPTCY – Application to set aside bankruptcy notice – whether cross-demand, set-off or cross-claim – whether demand in same right.

Legislation:

Corporations Act 2001 (Cth), ss.180, 236, 598(1), 568(4)
Federal Circuit Court Rules 2001 (Cth), r.20.03

Cases cited:

Aklia Holdings Pty Ltd v The Carter Group Pty Ltd (in liq) [2017] QSC 75

Ballard v Multiplex Ltd (2008) 68 ACSR 208

Carey v Freehills (2013) 303 ALR 445

Chawan v Euphoric Pty Ltd (2009) ACSR 252

Dean v Antunes [2016] NSWSC 1845

Ebert v The Union Trustee Co of Australia Ltd (1960) 104 CLR 346

Giles v Rhind [2003] Ch 618

Ivory v Telstra Corporation Limited [2010] FMCA 123

Ivory v Telstra Corporation Limited [2010] FCA 1361

Morris v IMF Bentham Limited [2018] FCA 1009

Prudential Assurance Co. v Newman Industries (No.2) [1982] CH 204
Thomas v D’Arcy [2005] 1 QdR 666

Applicant:

LUKE THOMAS

First Respondent:

KERI TAIAROA

Second Respondent:

LLL NOMINEES PTY LTD

File Number:

BRG 1061 of 2019

Judgment of:

Judge Jarrett

Hearing date:

16 April 2020

Date of Last Submission:

16 April 2020

Delivered at:

Brisbane

Delivered on:

22 December 2020

REPRESENTATION

The Applicant in person via telephone link

Solicitors for the Respondents:

DSA LAW Pty Ltd

ORDERS

The application filed on 24 March, 2020 be dismissed;
The order made on 5 March, 2020 be confirmed;
The applicant pay the respondents costs of and incidental to the application filed on 24 March, 2020 to be assessed, if not otherwise agreed, pursuant to the provisions of the Federal Circuit Court (Bankruptcy) Rules 2016.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 1061 of 2019

LUKE THOMAS

Applicant

And

KERI TAIAROA

First Respondent

LLL NOMINEES PTY LTD

Second Respondent

REASONS FOR JUDGMENT

On 18 November, 2019 the respondents caused the issue of a bankruptcy notice against the applicant. The bankruptcy notice was based upon a costs orders made in the Supreme Court of Queensland and an order for the payment of the costs as assessed. Copies of each of those orders were attached to the bankruptcy notice.
By application made on 11 December, 2019, the applicant applied for an order that the bankruptcy notice be set aside. He also sought orders that:
a)the time for compliance with the bankruptcy notice be extended on the grounds that the applicant had applied to set aside and/or stay the judgment or order in respect of which the bankruptcy notice was issued; and
b)the time for compliance with the bankruptcy notice be extended “on other grounds”.
By an interlocutory application made on 3 March, 2020 the applicant sought further orders, namely an order that his principal application be adjourned until a date after an application made by him to set aside the costs order was heard and determined or alternatively, that the applicant be granted an extension of time to comply with certain orders of a Registrar made on 29 January, 2020.
On 5 March, 2020 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 Thomas v TAIAROA

Details

AGLC: Thomas v Taiaroa [2020] FCCA 3524
Case: [2020] FCCA 3524
Decision Date: 22 December 2020

CaseChat Overview and Summary

In *Thomas v TAIAROA*, the applicant sought to set aside a bankruptcy notice issued by the respondent. The core of the dispute concerned whether the applicant possessed a sufficient cross-demand, set-off, or cross-claim that was of a nature that could be set up against the respondent's judgment debt.

The primary legal issue before the court was whether the applicant's alleged cross-demand was of a kind that could be set up against the respondent's judgment debt, and crucially, whether such a demand was in the same right as the debt owed. This required the court to consider the nature and enforceability of the applicant's purported counterclaims.

Judge Jarrett found that the applicant had failed to demonstrate a sufficient cross-demand that could be set up against the respondent's judgment debt. The court applied the principles governing the setting aside of bankruptcy notices, emphasizing that a cross-demand must be of a nature that it can be set up in the same right as the debt for which the notice was issued. As the applicant's claims were not established to be of this nature, the application to set aside the bankruptcy notice was dismissed.

Orders