Tzovaras v Jeandin

This case concerned an application by Mr. Tzovaras to set aside a bankruptcy notice issued by Mr. Jeandin. The dispute arose from a judgment debt of $1,946,130.13 entered against Tzovaras Legal in favour of Mr. Jeandin. Subsequently, a deed of assignment was executed between Mr. Jeandin and LawCover, which involved a settlement of proceedings and the assignment of Mr. Jeandin's rights to enforce a judgment against George and Ted Tzovaras to LawCover. The application was heard in the Supreme Court of New South Wales.

The primary legal issues before the court were whether Mr. Jeandin was a "creditor" within the meaning of s.40(1)(g) of the *Bankruptcy Act 1966* (Cth) at the time the bankruptcy notice was issued. This question involved two sub-issues: first, whether a judgment creditor requires leave to issue a writ of execution if they have assigned the judgment debt, and second, whether the rule against double recovery applied, preventing Mr. Jeandin from being considered a creditor if he had already recovered the same loss from another party. The court also considered whether the assignment of the judgment debt constituted a change in the persons entitled to execution under the Uniform Civil Procedure Rules 2005 (NSW), requiring leave to issue a writ.

The court reasoned that the relevance of payments made under the deed of assignment was crucial to determining whether Mr. Jeandin remained a creditor for the purposes of the bankruptcy notice. The court assumed, for the purposes of its judgment, that LawCover had paid Mr. Jeandin the settlement sum of $1,992,500. This payment was significant because it related to the third ground on which Mr. Tzovaras sought to set aside the bankruptcy notice, which concerned whether Mr. Jeandin had been fully recouped for the loss for which he had obtained judgment against the applicant. The court's analysis would therefore depend on the effect of this payment and the assignment on Mr. Jeandin's status as a creditor.