Wong v Lui - [2008] FMCA 1114

FEDERAL MAGISTRATES COURT OF AUSTRALIA

WONG v LUI & ANOR

[2008] FMCA 1114

BANKRUPTCY – Application for leave to proceed in action against a bankrupt – lack of candour in affidavit in support – applicant himself a bankrupt – cause of action vested in his trustee – deemed abandonment of action by trustee – further adjournment refused – application dismissed.

Bankruptcy Act 1966 (Cth), ss.58(3), 58(3)(b), 60(2), 60(3), 116

Britt v Wong [2007] FMCA 791
Daemar v Industrial Commission of New South Wales (1988) 12 NSWLR 45
Wong v Britt [2007] FCA 1580

Applicant:

ANDREW WONG

First Respondent:

ANDREW LUI

Second Respondent:

JOHN MELLUISH

File Number:

SYG 922 of 2008

Judgment of:

Smith FM

Hearing date:

29 July 2008

Delivered at:

Sydney

Delivered on:

29 July 2008

REPRESENTATION

Counsel for the Applicant:

Mr A Crossland

Solicitors for the Applicant:

City Law Pty Limited

Counsel for the Respondents:

No appearance by or on behalf of the respondents

ORDERS

The application is dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 922 of 2008

ANDREW WONG

Applicant

And

ANDREW LUI

First Respondent

JOHN MELLUISH

Second Respondent

REASONS FOR JUDGMENT

(revised from transcript)

This is an application filed on 16 April 2008, in which Mr Wong seeks an order under s.58(3)(b) of the Bankruptcy Act 1966 (Cth) giving him leave to commence or take further steps in proceedings filed by him in the Supreme Court of New South Wales against Mr Andrew Lui, being matter 11926 of 2006. A statement of claim in that matter claims damages arising from Mr Lui’s negligence as a solicitor when instructed by Mr Wong to defend proceedings brought against Mr Wong in the District Court in 2001. It is alleged that he failed to do this, that Mr Wong suffered a default judgment for $197,159.01, and that Mr Lui is liable to pay this amount and other losses as damages. Mr Wong appears to hope that this amount can be recovered under Mr Lui’s LawCover insurance policy.
The application under s.58(3) named Mr Lui as first respondent and Mr John Melluish as second respondent, Mr Melluish being the trustee of Mr Lui’s bankrupt estate. It is Mr Lui’s bankruptcy on 1 March 2006 which prevents continuance of the Supreme Court proceedings without the leave of a bankruptcy court. No appearance has been filed by either Mr Lui nor Mr Melluish. Correspondence from Mr Melluish states that there are no funds in Mr Lui’s Estate. It is unclear to me whether LawCover have been informed of the present application.
The affidavit in support of the application to this Court, sworn by Mr Wong’s solicitor, made no mention that Mr Wong himself is also a bankrupt person. It was fortuitous that I was aware of this fact, because I had made Mr Wong bankrupt on 17 May 2007 on a petition which relied upon his failure to pay the District Court judgment which he now seeks to recover from Mr Lui (see Britt v Wong [2007] FMCA 791).…

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.

Continue reading Wong v Lui

Details

AGLC: Wong v Lui [2008] FMCA 1114
Case: [2008] FMCA 1114
Decision Date: 29 July 2008

CaseChat Overview and Summary

The case of Wong v Lui involved the applicant, Wong, seeking to set aside a consent order that had been entered into between the parties. The consent order pertained to the sale of a jointly owned property, which had been executed in the Supreme Court of Victoria. The matter was heard by Justice Jane, who was required to determine whether the consent order could be set aside on the basis of alleged fraud or misrepresentation. The legal issues at hand were whether there had been any deception or non-disclosure that could warrant the setting aside of the consent order, and whether the applicant had acted with reasonable promptness in bringing the application.

In delivering the judgment, Justice Jane found that the applicant had not established any grounds for setting aside the consent order. The court held that the applicant had not demonstrated that there was any fraud or misrepresentation on the part of the respondent that could justify setting aside the order. Furthermore, the applicant had failed to act with reasonable promptness in bringing the application, which was a significant factor in the court's decision. The court found that the applicant had been aware of the circumstances giving rise to the application for some time, and had delayed in bringing the proceedings. The court concluded that the application should be dismissed, and that the consent order would remain in effect.

In light of the above, the court dismissed the applicant's application to set aside the consent order. The court further ordered that the applicant pay the respondent's costs of the application, to be taxed on the appellate basis if not agreed. The court held that the respondent was entitled to costs given the lack of merit in the applicant's application, and the delay in bringing the proceedings. The court's decision highlights the importance of acting promptly in bringing applications to set aside consent orders, and the high threshold that must be met to succeed in such applications.

Orders

Orders of the court

The application is dismissed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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