Turco v Mortgage Ezy Australia Pty Ltd - [2018] FCCA 1519

FEDERAL CIRCUIT COURT OF AUSTRALIA

TURCO v MORTGAGE EZY AUSTRALIA PTY LTD

[2018] FCCA 1519

Catchwords:
BANKRUPTCY – Application to set aside a bankruptcy notice – whether bankruptcy notice an abuse of process – purpose of a bankruptcy notice.

WORDS AND PHRASES – “abuse of process”.

Legislation:

Bankruptcy Act 1966 (Cth), ss.30, 41, 52

Bankruptcy Regulations 1996 (Cth), reg.16.01
Federal Circuit Court Rules 2001 (Cth), r.3.05

Cases cited:

Atkinson v Oakleigh Holdings Pty Ltd [2000] FCA 1547; (2000) 105 FCR 15
Australian Securities and Investments Commission v Forge [2003] FCAFC 274; (2003) 133 FCR 487; (2003) 1 ABC(NS) 429

Bank of Australasia v Hall (1997) 4 CLR 1514; (1997) 14 ALR 51

Brunninghausen v Glavanics [1998] FCA 230

Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264
Cavoli v Etl [2007] FCA 1191; (2007) 5 ABC(NS) 363
Clyne Deputy Commissioner of Taxation (NSW) (No 3) (1982) 13 ATR 466; (1982) 82 ATC 4484
Clyne v Deputy Commissioner of Taxation (NSW) (No 3) (1982) 13 ATR 686; (1982) 69 FLR 1; (1982) 45 ALR 323; (1982) 82 ATC 4690
Elliott v Water Wheel Holdings Ltd [2004] FMCA 37; (2004) 178 FLR 459
Guss v Johnstone [2000] HCA 26; (2000) 74 ALJR 884; (2000) 171 ALR 598
Killoran v Duncan [1999] FCA 1574
Kimber v The Owners Strata Plan No 48216(No 2) [2018] FCA 406
Lavan Legal v Kenyon [2017] FCCA 2529; (2017) 326 FLR 20
La Pegna & Anor v Commissioner of Taxation [2006] FMCA 1643; (2006) 204 FLR 364
Lord v Rankine [2010] FMCA 668
McPhee v Glentham Pty Ltd [2006] FMCA 1508

Rankine v Lord [2011] FCA 478; (2011) 9 ABC(NS) 142; (2011) 121 ALD 258

Re Athans; Ex parte Athans (1991) 29 FCR 302
Re Briggs; Ex parte Briggs v Deputy Commissioner of Taxation (WA) (1986) 12 FCR 310; (1986) 18 ATR 663; (1986) 86 ATC 4779; (1986) 75 ALR 554
Re Sterling; Ex parte Esanda Ltd (1980) 44 FLR 125; (1980) 30 ALR 77
Sandell v Porter & Anor (1966) 115 CLR 666; (1966) 40 ALJR 71
Seller v Deputy Commissioner of Taxation [2011] FCA 865; (2011) 84 ATR 501; (2011) 282 ALR 80; (2011) 9 ABC(NS) 195
Sims v Suda Ltd [2015] FCCA 2934
Slack v Bottoms English Solicitors [2002] FCA 1445

Turco & Turco & Ors [2017] FCWA 150

Warner v Frost [1999] FCA 830
Watts v Adelaide Bank Limited [2009] FCA 420
Young v Cooke [2017] FCA 26

Applicant:

MARIO TURCO

Respondent:

MORTGAGE EZY AUSTRALIA PTY LTD (ACN 050 494 454)

File Number:

PEG 5 of 2018

Judgment of:

Judge Antoni Lucev

Hearing date:

2 May 2018

Date of Last Submission:

2 May 2018

Delivered at:

Perth

Delivered on:

14 June 2018

REPRESENTATION

Counsel for the Applicant:

Mr T Galic

Solicitors for the Applicant:

MGM O’Connor Lawyers

Counsel for the Respondent:

Mr NW Kalmund

Solicitors for the Respondent:

Hotchkin Hanley Lawyers

ORDERS

Time for…

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.

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Details

Case: [2018] FCCA 1519
Decision Date: 14 June 2018

CaseChat Overview and Summary

In *Turco v Mortgage Ezy Australia Pty Ltd*, the applicant sought to set aside a bankruptcy notice issued by the respondent. The core of the dispute concerned whether the bankruptcy notice constituted an abuse of process. The matter was heard in the Federal Court of Australia before Judge Antoni Lucev.

The primary legal issue before the Court was whether the bankruptcy notice was an abuse of process. This required the Court to consider the purpose of a bankruptcy notice and whether the respondent's actions in issuing the notice were consistent with that purpose.

Judge Lucev reasoned that a bankruptcy notice is a statutory demand for payment of a debt, intended to facilitate the recovery of that debt through bankruptcy proceedings. The Court found that the respondent had issued the bankruptcy notice not for the genuine purpose of recovering the debt, but rather to exert pressure on the applicant to pay a debt that was the subject of ongoing litigation and dispute. This ulterior motive, the Court held, amounted to an abuse of process. The Court therefore ordered that the bankruptcy notice be set aside.

Orders