Wilson v Interhealth Investments Pty Ltd
[2011] FMCA 455
•17 June 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WILSON v INTERHEALTH INVESTMENTS PTY LTD | [2011] FMCA 455 |
| BANKRUPTCY – Application to set aside bankruptcy notice – counter-claim, set-off or cross demand. |
| Bankruptcy Act 1966, s.40(1)(g) Property Law Act 1974, ss.280, 286 |
| Hillpalm Pty Limited v Wilson [2009] NSWSC 362 |
| Applicant: | PATRICK SHAUN WILSON |
| Respondent: | INTERHEALTH INVESTMENTS PTY LTD |
| File Number: | BRG 1228 of 2010 |
| Judgment of: | Jarrett FM |
| Hearing date: | 24 February 2011 |
| Date of Last Submission: | 24 February 2011 |
| Delivered at: | Brisbane |
| Delivered on: | 17 June 2011 |
REPRESENTATION
| Counsel for the applicant: | Ms Chueng |
| Solicitors for the applicant: | Lillas & Loel Lawyers Pty Ltd |
| Counsel for the Respondent: | Mr Coulson |
| Solicitors for the Respondent: | Hickey Lawyers |
ORDERS
The application filed on 9 December, 2010 be dismissed.
The applicant pay the respondent’s costs of and incidental to the application to be agreed and failing agreement to be assessed in accordance with Schedule 1 of the Federal Magistrates Courts Rules 2001.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 1228 of 2010
| PATRICK SHAUN WILSON |
Applicant
And
| INTERHEALTH INVESTMENTS PTY LTD |
Respondent
REASONS FOR JUDGMENT
On 19 November, 2010 the respondent caused a bankruptcy notice to be issued to the applicant. It was served upon him on the same day. By this application, the applicant seeks to have the bankruptcy notice set aside.
The bankruptcy notice relies upon an order of the Supreme Court of New South Wales made on 29 April, 2009 and entered on 18 June 2009 that the applicant pay to the respondent $131,641.76 and costs. The bankruptcy notice claims that the applicant owes to the respondent $104,935.75 based upon the judgment. The bankruptcy notice specifies how that sum is calculated after taking into account the judgment sum, post-judgment interest and a payment made by, or credit allowed to, the applicant.
The basis for the application is said to be that the applicant has against the respondent a counter-claim, set-off or demand that he could not have set up in the proceedings in which the order upon which the bankruptcy notice is based was obtained and that is equal to or exceeds the amount claimed in the notice.
The applicant’s claim is said to arise from the following facts:
a)The applicant and Ms Joanne Hambrook were in a de facto relationship between 1990 and 2004. The applicant deposes that he and Ms Hambrook, in the course of their de facto relationship, engaged in a number of commercial enterprises for their joint financial benefit.
b)On 18 March 2005, the applicant commenced proceedings against Interhealth and twenty-six other respondents in the Supreme Court of Queensland. The proceedings remain unresolved to some degree.
c)In the Qld proceedings the applicant seeks five primary orders. They are set out in the amended claim as follows:
(1) Pursuant to sections 280 and/or 286 of the Property Law Act:
a. A declaration that the interests held by the First Defendant in each of the Second to Twenty-Fifth Defendants, as at 31 January 2004, are held on trust for the Plaintiff and the First Defendant respectively, in the shares of 50% each;
b. A declaration that the interest held by the First Defendant in the Outrigger Share Trust, as at 31 January 2004, is held on trust for the Plaintiff and the First Defendant respectively, in the shares of 50% each;
c. An order that the common personal property of the Plaintiff and the First Defendant including, but not limited to, paintings and other artworks, antiques, furniture and electrical goods located at the premises described herein as "the penthouse" be sold and the proceeds of sale be shared equally between the Plaintiff and the First Defendant;
d. Such other orders as the Court considers just and equitable, or appropriate having regard to section 341 to Part 19, Division 4, subdivisions 3 and 4 of the Property Law Act 1974, including all such necessary and consequential orders to enforce the property adjustment;
e. Such order as to costs that the Court considers appropriate considering section 341 of Part 19 of the Property Law Act 1974.
2. Alternatively to 1., declarations that:
a. The interests held by the First Defendant in each of the Second to Twenty-Fifth Defendants, as at 31 January 2004, are held on trust for the Plaintiff and the First Defendant respectively, in the shares of 50% each;
b. The interest held by the First Defendant in the Outrigger Share Trust, as at 31 January 2004, is held on trust for the Plaintiff and the First Defendant respectively, in the shares of 50% each; and
c. The interest held by each of the Second to Twenty-Fifth Defendants, as at 31 January 2004, in all real property or other assets, are held on trust for the Plaintiff and the First Defendant respectively, in the shares of 50% each.
3. An accounting of all profits derived from any and all dispositions of real and personal property by each of the Second to Twenty-Fifth Defendants between 31 January 2004 to the date of judgment.
4. Such further or other orders, declarations or relief as the court thinks fit.
5. Costs.
d)The gravamen of the Qld proceedings is that the applicant and
Ms Joanne Hambrook were in a de facto relationship between 1990 and 2004. By reason of the contributions he alleges he made to the property that the parties accumulated by the end of their relationship, he is entitled to the relief sought. He claims that he and Ms Hambrook engaged in a large number of commercial enterprises, using a number of corporate entities to achieve their joint commercial aspirations. The present respondent is one of those companies.e)Commencing in 2004 the applicant sought to record caveats over the titles to certain parcels of real property in New South Wales. That resulted in litigation, one of the outcomes of which was the order that now founds the bankruptcy notice. That order was made by Ward J (see Hillpalm Pty Limited v Wilson [2009] NSWSC 362). In her Honour’s reasons for judgment, she set out a short history of the litigation between the applicant,
Ms Hambleton and their interests. It is instructive:2. On 3 June 2008, orders were made by White J, as duty judge, restraining the defendants from recording caveats on certain of the properties. On 17 June 2008, his Honour continued those orders on the giving of the usual undertakings as to damages until further order. Since then the defendants have unsuccessfully sought orders transferring this matter to the Supreme Court of Queensland under the cross-vesting jurisdiction of this court (an application which was ruled upon by Austin J on 7 August 2008) and orders staying the New South Wales proceedings pending determination of the Queensland proceedings (an application which was ruled upon by Hammerschlag J on 16 September 2008).
3. The background to the various interlocutory applications brought by the defendants is that there are on foot in the Supreme Court of Queensland proceedings in which claims have been brought against Ms Joanne Hambrook (the sole director of the plaintiff companies) and various other corporate entities. The claims, as I understand it, are made pursuant to the Property Law Act 1974 (Queensland) and were described by Austin J in his ex tempore judgment in August last year as relating essentially to a de facto relationship dispute.
4. Before me, however, the application is a discrete one. It is not disputed that over a period of time varying from December 2004 to March 2008 (in respect of the properties owned by the first plaintiff) and over a period of time from 20 December 2004 to 15 June 2007 (in respect of the properties owned by the second plaintiff), a series of caveats was lodged. Those caveats were lodged variously by each of the first and the second defendants over the properties owned by the first plaintiff (C/T Folio Identifier 154/801121, 156/801121, 151/630766, 152/630766, 530/1003396 and 2/1084992) and by the first defendant over the two properties owned by the second plaintiff (C/T Folio Identifier 1/628862 and 101/771752).
5. The interests claimed under the caveats were variously described but in most cases were the same or substantially similar. One of the caveats which was lodged by the first defendant over the six properties owned by the first plaintiff claimed a caveatable interest by way of equitable mortgage for work carried out (Caveat AD 3904637), but the balance of the caveats seem to relate to claims for equitable interests or as beneficial owner pursuant to a trust or constructive trust. The constructive trust seems, variously, to be one which is said to arise between the first defendant and the majority shareholder or director of the first or second plaintiff or one said to arise under or in relation to a claim based upon a shareholder's agreement entered into between the second defendant and the two other current shareholders of the first plaintiff.
6. In at least two of the caveats it would seem that the statutory declaration supporting the caveat has been signed by Mr Wilson describing himself as a solicitor (Caveat AC 575543W).
7. Other than in relation to the caveat which was the subject of the application before White J on 3 June last year (Caveat AD 961507Y) to restrain the Register General from recording the caveats, the various caveats lodged by the respective defendants have successively lapsed following lapsing notices issued on behalf of the first and second defendants (although in one case (Caveat AD 512480A) it appears there was a departmental dealing recorded to remove the caveat).
8. On the lapse of the various caveats - and this is not disputed - further caveats were then lodged claiming the same or substantially similar interests. Those further caveats were lodged without the leave of the court as was clearly required under section 74O of the Real Property Act 1900.
9. A declaration is sought that the caveats in question were lodged without reasonable cause within the meaning of section 74P of the Real Property Act. The plaintiffs seek to recover damages to compensate them for the pecuniary loss attributable to the lodgement of the caveats.
f)Her Honour went on to find that the caveats were lodged without reasonable cause and to assess damages to compensate the plaintiffs for the pecuniary loss attributable to the lodgements of the caveats.
The applicant submits that upon the successful completion of the litigation in the Queensland Supreme Court “the applicant will more than equal or exceed the sum of the judgement order which is the subject of the Bankruptcy Notice”. It is argued that “the applicant’s interest in the outcome of the Supreme Court of Queensland proceedings constitutes the set-off or cross-claim that is referred to in s.40(1) of the Act”.
It is further submitted by the applicant that the identified counter-claim, set-off or cross demand could not have been set up in the action or proceedings in which the judgment or order was obtained. That is so, it is argued, because the applicant was not at liberty to have his set-off or cross-claim heard as part of the New South Wales proceedings when they were already part of the proceedings commenced in the Supreme Court of Queensland.
On 16 March 2011, however, the claims in the Queensland proceedings against Interhealth were dismissed.
Accordingly, to the extent that the applicants counter-claim, set-off or demand was represented by the claims he was making in the Queensland proceedings, those claims have been determined against him.
I am prepared to assume for the purposes of these reasons that the applicant was precluded as a matter of law from setting up his purported counterclaims against the respondent in the New South Wales proceedings because those claims were already the subject of proceedings in Queensland.
However, on a close examination of the Queensland proceedings, no claim is in fact made against Interhealth that would result in a judgment for a money sum that would equal or exceed the amount claimed in the bankruptcy notice. The primary claim in the Queensland proceedings is for declaratory relief against Ms Hambrook. The declaration is about how she holds her “interests” in Interhealth, but the relief is not something about which Interhealth is concerned.
There is a claim against the respondent in that a declaration is sought that as at 31 January, 2004 it held certain real property on trust for the applicant and Hambrook in equal shares, and a claim for an accounting that, on one view, may result in a money order in favour of the applicant. But given the applicant’s primary contention that Hambrook was the true owner of Interhealth (by a series of inter-related shareholdings) these claims seem to be of subsidiary importance only.
Moreover, the applicant’s case against Interhealth, if there be one, is that he made contributions to real property purchased by Interhealth during the course of his relationship with Hambrook. In particular he says that he owned certain property of a certain value at the commencement of their relationship and that he developed the properties owned by Interhealth “to:
i)Expand the jockey training activities; and
ii)Train thoroughbred horses;”
(see paragraph 28(h) of the amended statement of claim at page 35, PSW 1 to the affidavit of the applicant filed on 9 December, 2010).
However, he does not swear to any particulars of those allegations.
He swears to the general allegations in his affidavit, but there are no particulars. There is no attempt to give evidence that might support the allegations. The relief claimed against Interhealth in the amended statement of claim is tenuous at best.
The fact that the Queensland proceedings have now been dismissed as against Interhealth demonstrates that the proceedings against it are without foundation.
I am not satisfied that the applicant has demonstrated that he has a counter-claim, set-off or demand against Interhealth, let alone one that he could not have set up in the New South Wales proceedings in which the order upon which the bankruptcy notice is based was obtained.
The application must be dismissed with costs.
I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of Jarrett FM
Associate:
Date: 17 June 2011
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