FEDERAL COURT OF AUSTRALIA
Thredgold v Fyfe Pty Ltd [2013] FCA 1363
Citation: Thredgold v Fyfe Pty Ltd [2013] FCA 1363 Appeal from: Thredgold v Fyfe Pty Ltd [2013] FCCA 587 Parties: MARK THREDGOLD v FYFE PTY LTD File number: SAD 168 of 2013 Judge: WHITE J Date of judgment: 16 December 2013 Catchwords: BANKRUPTCY – application for annulment of bankruptcy – default judgment the basis of sequestration order set aside – discretion whether to annul bankruptcy – appeal from discretionary judgment dismissing annulment application – consideration of discretion afresh – whether solvency established Legislation: Bankruptcy Act 1966 (Cth) ss 41, 43, 52, 54, 60, 153B, 154
Federal Court of Australia Act 1976 (Cth) s 24Cases cited: Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172
Bulic v Commonwealth Bank of Australia Ltd [2007] FCA 307
Clyne v Deputy Commissioner of Taxation (1985) 5 FCR 1
Cottrell v Wilcox [2002] FCA 1115
Duckworth v Water Corporation (No 2) [2012] WASC 163
Francis v Eggleston Mitchell Lawyers Pty Ltd [2013] FCA 564
House v The King (1936) 55 CLR 499
Miller v Bondi Securities (Unreported, Federal Court of Australia, Beazley J, 2 September 1994)
Minister for Immigration and Multicultural Affairs v Jia [2001] HCA 17; (2001) 205 CLR 507
Re Clyne; Ex parte Deputy Commissioner of Taxation (Unreported, Federal Court of Australia, Beaumont J, 13 September 1985)
Re Coyle (1993) 42 FCR 72
Re Papps; Ex parte Tapp (1997) 78 FCR 524
Re Sarina; Ex parte Wollondilly Shirt Council (1980) 32 ALR 596
Re Williams (1968) 13 FLR 10
Rigg v Baker [2006] FCAFC 179; (2006) 155 FCR 531
Stankiewicz v Plata [2000] FCA 1185
Warramunda Village Inc v Pryde [2002] FCA 250; (2002) 116 FCR 58Date of hearing: 18 November 2013 Date of last submissions: 18 November 2013 Place: Adelaide Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 73 Counsel for the Appellant: The Appellant appeared in person Counsel for the Respondent: Mr B Roberts Solicitor for the Respondent: Lynch Meyer Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
SAD 168 of 2013
ON APPEAL FROM THE FEDERAL CIRCUIT COURT OF AUSTRALIA
BETWEEN: MARK THREDGOLD
AppellantAND: FYFE PTY LTD
Respondent
JUDGE:
WHITE J
DATE OF ORDER:
16 DECEMBER 2013
WHERE MADE:
ADELAIDE
THE COURT ORDERS THAT:
1.The appeal be dismissed.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
SAD 168 of 2013
ON APPEAL FROM THE FEDERAL CIRCUIT COURT OF AUSTRALIA
BETWEEN: MARK THREDGOLD
AppellantAND: FYFE PTY LTD
Respondent
JUDGE:
WHITE J
DATE:
16 DECEMBER 2013
PLACE:
ADELAIDE
REASONS FOR JUDGMENT
The appellant appeals against the dismissal by the Federal Circuit Court (FCC) of his application for the annulment of his bankruptcy.
The circumstances giving rise to that application were as follows.
On 1 August 2011, judgment by default was entered in the Adelaide Magistrates Court…
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- AGLC
- Thredgold v Fyfe Pty Ltd [2013] FCA 1363
- Case
- [2013] FCA 1363
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CaseChat Overview and Summary
Thredgold v Fyfe Pty Ltd is a case where the appellant, Thredgold, applied for the annulment of his bankruptcy. The dispute arose after a default judgment based on sequestration order was set aside, and the court had to decide whether to annul the bankruptcy. The Federal Circuit Court (FCC) Judge dismissed the application for annulment, and Thredgold appealed that decision. The appeal focuses on whether the FCC Judge correctly exercised their discretion in dismissing the application and whether Thredgold established his solvency.
The key legal issue was whether Thredgold had established his solvency at the time of the annulment hearing. The FCC Judge correctly held that the onus was on Thredgold to prove his solvency. The Judge assessed Thredgold’s solvency by examining his financial position, including debts and assets. The evidence showed that Thredgold had multiple debts, including a significant one to the respondent, but also highlighted uncertainties regarding some of these debts. The Judge considered Thredgold's assets, noting that he had minimal cash and no other assets. The Judge concluded that Thredgold had not provided sufficient evidence to establish his solvency.
The Federal Court considered the appeal and assessed the FCC Judge’s discretion afresh. The Court noted that the FCC Judge had correctly identified the need for Thredgold to establish solvency and had thoroughly examined the evidence presented. The Court found that the FCC Judge’s conclusion on solvency was consistent with the evidence, which did not sufficiently demonstrate Thredgold's ability to meet his debts. As a result, the appeal was dismissed.
In summary, the appeal was dismissed, and no orders were made in favour of the appellant. This conclusion was based on the FCC Judge's correct application of the law and assessment of the evidence regarding Thredgold’s solvency.
The key legal issue was whether Thredgold had established his solvency at the time of the annulment hearing. The FCC Judge correctly held that the onus was on Thredgold to prove his solvency. The Judge assessed Thredgold’s solvency by examining his financial position, including debts and assets. The evidence showed that Thredgold had multiple debts, including a significant one to the respondent, but also highlighted uncertainties regarding some of these debts. The Judge considered Thredgold's assets, noting that he had minimal cash and no other assets. The Judge concluded that Thredgold had not provided sufficient evidence to establish his solvency.
The Federal Court considered the appeal and assessed the FCC Judge’s discretion afresh. The Court noted that the FCC Judge had correctly identified the need for Thredgold to establish solvency and had thoroughly examined the evidence presented. The Court found that the FCC Judge’s conclusion on solvency was consistent with the evidence, which did not sufficiently demonstrate Thredgold's ability to meet his debts. As a result, the appeal was dismissed.
In summary, the appeal was dismissed, and no orders were made in favour of the appellant. This conclusion was based on the FCC Judge's correct application of the law and assessment of the evidence regarding Thredgold’s solvency.
Orders
Orders of the court
1. The appeal be dismissed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
It is convenient to address the appellant’s submissions on appeal by reference to the discretionary considerations upon which the FCC Judge relied. Such an approach is favourable to the appellant as it involves reading his two grounds of appeal in a generous manner.The conclusion as to solvency The FCC Judge considered, correctly, that it was for the appellant to establish that he was solvent (at [20]). The Judge considered the appellant’s solvency by reference to the evidence about his financial position as at the time of the annulment hearing. The evidence indicated that the appellant had the following actual or potential indebtedness:Debt to the respondent $30,313.89Debt to Martin Robinson Solicitors $10,184.93Debt to Marciano Lawyers $10,714.65Debt claimed by Mirona Constructions Pty Ltd (in liq) $25,000.00Costs of the petitioning creditor $7,040.46 The FCC Judge considered it appropriate to ignore, for the purposes of assessing the appellant’s solvency, the disputed debt claimed by the respondent. The appellant’s potential liability for the trustees’ costs may also be put to one side for present purposes. There did not seem to be any dispute about the debt to Martin Robinson Solicitors. It was supported by documentation from that firm and the appellant had at one stage made some payments by way of reduction of his liability. The only evidence of the debt to Marciano Lawyers was the statement by the trustees in bankruptcy that they had received a proof of debt for that amount. The Judge noted that the trustees in bankruptcy had not adjudicated on this debt but accepted that it was a debt of a kind provable in the appellant’s bankruptcy. The appellant did not provide any evidence concerning the debt claimed by Marciano Lawyers and submitted only that, if it was not proved, it should be excluded from consideration in relation to his solvency. The Judge noted some uncertainties concerning the debt claimed by Mirona Constructions Pty Ltd (in liq). This included the fact that Mirona Constructions had discontinued that part of a proceeding in the Adelaide Magistrates Court which concerned a claim against the appellant and had, instead, pursued its claim against a co-defendant. The only evidence of the possible existence of the debt was that the liquidator of Mirona Constructions had lodged a proof of debt with the appellant’s trustees in bankruptcy. The Judge accepted that the nature of the debt claimed meant that it was provable in the bankruptcy but seemed to accept that there was controversy about the existence of this debt. The Registrar’s order of 3 September 2012 had fixed the creditor’s costs at $7,040.46 and had directed that they be paid from the estate of the appellant in accordance with the Bankruptcy Act. Although there were some uncertainties in the appellant’s debt position, the Judge considered that the position with respect to his assets and income was much more straightforward. The appellant’s Statement of Affairs filed with Insolvency and Trustee Service Australia on 12 September 2012 in accordance with s 54 of the Bankruptcy Act disclosed that the appellant had $9 in cash on hand but no other assets at all. In the Statement of Affairs, the appellant acknowledged his indebtedness to Martin Robinson Solicitors. The trustees in bankruptcy reported that the appellant attributed his bankruptcy to an inability to collect debts due to disputes. The appellant did not disclose to the trustees income exceeding the threshold amount from which income contributions could be expected. In a report dated 20 September 2012, the trustees in bankruptcy indicated that their investigations had not identified any assets by which a dividend may be payable to creditors.
Ratio Decidendi
Legal Principle Established
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