BANKRUPTCY - review of rejection of proof of debt - principles governing review where no oral evidence - standard of proof required - whether deed of acknowledgment executed by one partner merged the liability of the other partx~er pursuant to a simple contract debt.
Re: Theo Theodotou & Anor Ex parte: Fosscroft Pty Ltd & Anor
Qld Part X95 of 1988
PINCUS J.
BRISBANE
IS MAY 1990
IN THE FEDERAL COURT OF AUSTRALIA
1
GENERAL DIVISION
)
QLD Park X95 of 1988
BANKRUPTCY DISTRICT OF THE STATE OF QUEENSLAND
RE:
THE0 THEODOTOU and MARIA T H E O D ( E
EX PARTE :
FOSSCROFT PTY LTD
Applic~~nt
AND :
IVOR WORRELL
MINUTES OF ORDER
JUDGE MAKING ORDER:
PINCUS J.
DATE OF ORDER:
15 MAY 1990
WHERE MADE:
BR1 SBANE
THE COURT ORDERS THAT:
1. time be extended so far as necessary to allow the application to be heard;
2. the trustee's decision to reject the applicant's
proof of debt be set aside;
3. the trustee pay the applicant's costs in {.he proceedings, to be taxed.
NOTE :
Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.
IN THE FEDERAL COURT OF AUSTRALIA
1
GENERAL DIVISION
1
BANKRUPTCY DISTRICT
1
OF THE STATE OF QUEENSLAND
1
RE:
THE0 THEODOTOU and MARIA THEODOTOU
EX PARTE:
FOSSCROFT PTY LTD
Appliciint
AND :
IVOR WORRELL
PINCUS J.
15 MAY 1990
REASONS FOR JUDGMENT
This is an application under s.104(2) of the Bankruptcy Act 1966 for a review of a rejection of a proof of clebt. With one exception, the issues raised are purely factual. The sums put in issue by the application and proof of debt may be grouped as follows:
A. Costs incurred in modifying shop
B. New door and guarding C. Interest to 30 May 1987 D. Proportion of Outgoings
E. Costs and outlays in preparing lease
F.
Costs of District Court action Total
L .
1.
A notice of intention to oppose was filed on 22 March, which said, among other things, that an amount for rent was admitted. However, that admission was withdrawn at the hearing so that in addition to the sums set out above, I have to consider a claim for rent amounting to $5,648.50.
It is common ground that the applicant company negotiated with the debtor, Mr Theodotou, and the latter's partner, M Michalas, with a view to the partne~ship taking a lease of a shop owned by the applicant. However, the conversations which preceded that are disputed and it is convenient to refer to the documentary evidence at t.he outset. In November 1986, the applicant's solicitors sent the prospective lesseesr solicitors (Messrs H. Drakos and Co.) a draft lease, and that was the subject of subsequent correspondence. No lease was ever executed. On 14 July 1987, the applicant's solicitors wrote to Theodotou referring to the…
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
AGLC
Winkler v Director of Public Prosecutions [1990] FCA 194
Case
[1990] FCA 194
Decision Date
CaseChat Overview and Summary
In Winkler v Director of Public Prosecutions, the Federal Court of Australia considered a case concerning the review of a rejection of a proof of debt under section 104(2) of the Bankruptcy Act 1966. Fosscroft Pty Ltd, the applicant, sought review of the trustee's decision to reject their proof of debt in relation to claims against Theo Theodotou and Maria Theodotou, who were bankrupts. The claims related to costs incurred in modifying a shop, new door and guarding, interest, proportion of outgoings, costs and outlays in preparing a lease, and costs of a District Court action. The key issue before the court was whether the applicant could satisfy the balance of probabilities standard to demonstrate that the trustee's decision should be reversed.
The court held that the applicant had the onus of proof to satisfy the court that the trustee's decision should be reversed, and that the standard of proof was the balance of probabilities. Pincus J found that there was sufficient material before the court to rationally choose between the applicant's and the trustee's versions of events. The court found in favour of the applicant, accepting their case that the liability had not merged in the deed executed by one partner. The court set aside the trustee's decision to reject the applicant's proof of debt and ordered that the trustee pay the applicant's costs of the proceedings.
The final orders of the court were that time be extended to allow the application to be heard, the trustee's decision to reject the applicant's proof of debt be set aside, and the trustee pay the applicant's costs of the proceedings.