Tosswill v Aperfield Pty Ltd

[2001] FMCA 16

FEDERAL MAGISTRATES COURT OF AUSTRALIA

Name: TOSSWILL V APERFIELD PTY LTD

File No:BZ52/01

Citation Number:  [2001] FMCA16

BANKRUPTCY – Application to set aside Bankruptcy Notice – whether cross-claim established – whether application to set aside order bona fide and prosecuted diligently – Bankruptcy Act 1966 s40(1)(g) and s41(6C); Federal Court Rules 077R13

ApplicantANTHONY CHARLES TOSSWILL

Respondent:  APERFIELD PTY LTD

File No:BZ52/00

Delivered on:  15 MARCH 2001

Delivered at:  Brisbane

Hearing Date:  13 MARCH 2001

Judgment of:  Baumann FM

REPRESENTATION:

Applicant: appeared in person       

Counsel for the Respondent:       Mr P P McQuade

Solicitors for the Respondent:        Deacons

IN THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BRISBANE REGISTRY

No BZ52 of 2001 

ANTHONY CHARLES TOSSWILL

Applicant

And

APERFIELD PTY LTD

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. I have before me an application by ANTHONY CHARLES TOSSWILL (“the Debtor”) filed 5 February 2001 seeking an order that the Bankruptcy Notice QN 51/01 dated 16 January 2001 (“the Notice”) be set aside.  The respondent to this application is APERFIELD PTY LTD (“the creditor”).

1. The application also sought the “Bankruptcy Petition” be set aside and that “all proceedings in the action be set aside”.  No creditor’s petition has been presented and this is the only action in this Court, which I will deal with today.

ISSUE

1. The Debtor seeks to set aside the Notice in reliance upon a “counter-claim, set-off or cross demand” within s40(1)(g) of the Bankruptcy Act 1966.

BACKGROUND

1. The background is well known to the parties.  In brief, the Debtor claims to have an interest in a company ROCKDILI PTY LTD.   That company was a party, as was the creditor and others, to a Joint Venture agreement entered into on 7 January 1998.  The agreement is not in evidence before me, however it seems that the Joint Venture related to the development of land at Coomera.  The Debtor claims to have outlaid substantial moneys to benefit the Joint Venture.

1. It is unclear on the material as to the present position relating to the Joint Venture, other than it appears that the Joint Venture was in default under mortgages registered over the Coomera land and a major dispute between the parties, and those claiming to be a party interested in the Joint Venture, has erupted.

1. The Debtor has commenced proceedings in the Queensland Supreme Court No 1251 of 2000  against a number of parties including the Creditor.  (“the cross claim action”).

1. The Debtor had also at one time, lodged a caveat over the Coomera land registered in the name of the Creditor (as Trustee).  Proceedings instituted by the Creditor in the Queensland Supreme Court No s2271 of 2000 resulted in an order of Williams J on 22 March 2000 removing the Debtor’s Caveat and he further ordered that:

“The Debtor pay the Creditor’s costs.”

Those costs were assessed by Senior Deputy Registrar Houghton at $8000.00, as verified by his order made 18 December 2000.  The order of Williams J founds the Notice.

1. The Debtor has filed an application to the Court of Appeal seeking leave to appeal the order of Williams J (“the Appeal”).

1. The cross claim was the subject of an application heard by White J on 14 February 2001.  On that day, White J:

(a)dismissed the Debtor’s application;

(b)ordered a stay of the cross claim, until further order;

(c)ordered the Debtor to pay the Creditor’s costs of his application.

1. Subsequently the Debtor says he has commenced further proceedings against Rockdilli Pty Ltd and its Director/Shareholder Mr Davis, claiming rellief including rectification of the share register of Rockdili, as contemplated by White J.

THE CROSS CLAIM

1. The reasons of White J, which were tendered as Exhibit 1, establishes that the Debtor personally is not the proper plaintiff on the cross claim action.  Whilst the Debtor claims he is entitled to the control of Rockdili, those proceedings are in their infancy.

1. The Debtor claims to be personally owed over $546,000.00 by the Debtor.  The amended statement of claim for the cross-claim action, annexed to his affidavit of 31 January 2001, does not seek recovery of this alleged debt.  It essentially seeks orders relating to the specific performance of the Joint Venture Agreement or, in the alternative, that the Debtor holds the Coomera land partly on trust for the Debtor.

1. In respect of this cross-claim, the Debtor has put only a limited amount of material before the Court, including two further affidavits I gave him leave to file and read at the hearing.   He has not, in my view, complied with the requirements of o77R13, which requires the Debtor’s affidavit at least to set out the legal basis of the claim and the facts which support the cross claim (see O’Neil v National Australia Bank (2000) FCA 220.

1. The Debtor also sought to rely, as a cross claim, on what he says is an order for costs in his favour made by Muir J on 19 December 2000.  Only one page of the transcript of a judgment by Muir J was annexed to his affidavit.  The judgment appears to relate to an interlocutory step in the cross-claim action, and the only order made was that:

“the costs of and incidental to the application be the respondent’s costs in the course.”

The heading sheet for the transcript suggests that the Creditor, and not the Debtor, was the respondent and therefore had the benefit of the costs order.  Furthermore, the order is not a final order, being a matter to be considered in the final adjudication.

1. The Debtor has not satisfied me, as a result of the background set out above, that he:

(a)has a personal claim against the Debtor; and

(b)a prima facie claim with a fair change of success against the Debtor.

capable of persuading me that there exists a counter claim for the purposes of s40(1)(g).

THE APPEAL

1. s41(6c) of the Act provides that:

“Where:

(a)a debtor applies to the Court for an extension of the time for complying with a bankruptcy notice on the ground that proceedings to set aside the judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; and

(b)the Court is of the opinion that the proceedings to set aside the judgment or order:

(i)have not been instituted bona fide; or

(ii)are not being prosecuted with due diligence;

the Court shall not extend the time for compliance with the bankruptcy.”

1. In this matter, the only document which suggests a challenge to the order founding the Notice, is a copy of an application dated 6 February 2001 2001 (Annexure C to the Debtor’s affidavit of 8 February 2001).  The application seeks, at paragraph 4, to enlarge the time to bring the appeal.

1. The Order of Williams J was made on 22 March 2000, and the Uniform Civil Procedure Rule 748 (Qld) provides an appeal must be filed, unless otherwise ordered by the Court of Appeal, within 28 days.

1. I noted that the application to the Court of Appeal was apparently filed after the Debtor had been served with the Bankruptcy Notice.  The grounds of the Appeal seem to rely upon an allegation that Williams J wrongly admitted into evidence an unstamped copy of the Joint Venture Agreement.

1. The debtor did not, in any of his affidavits, explain the delay in lodging his application to Appeal.  From the Bar table, he says he didn’t understand the significance of the Joint Venture Agreement being “unstamped” until he obtained further information from the Debtor end “heard submissions” from the legal representatives for the Debtor in the cross claim action.

1. I have no evidence as to the basis upon which the Debtor sought to sustain the Caveat.  It does not seem that it could have been as a result of a claim by the Debtor that he had

“an interest in the property pursuant to a joint venture Agreement”.

as a Caveat lodged on that basis (number 703553785) dated 31.8.99 was apparently withdrawn.  The Williams J order referred to a difference Caveat (number 701754314) lodged 13 January 2000.

1. I am not satisfied that the application for leave to appeal has either been instituted bona fide or has been prosecuted with due diligence.

CONCLUSION

1. For these reasons, it seems that the Debtor’s application to set aside the Bankruptcy Notice must fail.

1. In view of the relative small amount of the judgement debt involved I wish to give the Debtor an opportunity to consider paying the debt and thus avoiding being put in a situation of having committed an Act of Bankruptcy, which inevitably follows from a dismissal of his application (the time for compliance with the Notice having expired).

1. I am aware of a similar issue confronting Drummond J in a matter of Henderson ex parte Henderson v McCafferty and Others (2000) FCA 1511.  In that case he deferred the pronouncement of the orders which he thought must be made for a further period.

1. That approach commends itself to me in this matter.  I propose to defer the pronouncement of any orders which I think must be made, dismissing the application and with the Debtor paying the Creditor’s costs, for a period f 14 days.

______________________________________________________________
I certify that the preceding  (26) paragraphs are a true and correct copy of the Reasons for Judgment of Federal Magistrate Baumann

Associate
Date: