Yang v Mead

Case [2009] FCA 1202

FEDERAL COURT OF AUSTRALIA

Yang v Mead [2009] FCA 1202

BANKRUPTCY — counter-claim, set-off or cross demand — circumstances in which a bankruptcy notice may be set aside for abuse of process

Held: Appeals dismissed

Bankruptcy Act 1966 (Cth) ss 40(1)(g), (3)(b)
Judiciary Act 1903 (Cth) s 78B
Federal Court Rules O 9 r 2

Bayne v Baillieu; Bayne v Riggall (1908) 6 CLR 382, cited
Brunninghausen v Glavanics [1998] FCA 230, cited
Cavoli v Etl [2007] FCA 1191, 5 ABC(NS) 363, cited
Danielsen v Onesteel Manufacturing Pty Ltd [2009] SASC 56, 224 FLR 319, cited
Davidova v Murphy [2009] FCA 60, cited
Deputy Commissioner of Taxation v Warrick (No 2) [2004] FCA 918, 56 ATR 371, cited
Re Glew; Glew v Harrowell of Hunt & Hunt Lawyers [2003] FCA 373, 198 ALR 331, cited
Goldberg v Morrow [2005] FCA 1038, applied
Re Hansen; Ex parte Hansen (1985) 4 FCR 590, cited
Killoran v Duncan [1999] FCA 1574, cited
Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71, cited
Kyriackou v Shield Mercantile Pty Ltd [2004] FCA 490, 138 FCR 324, applied
Maxwell-Smith v S & E Hall Pty Ltd [2006] FCA 825, 233 ALR 81, cited

Re McSwiney; Ex parte Davies (unreported, FCA, Beaumont J, P 1611 of 1986, 24 November 1986), cited

McWilliam v Jackson [2000] FCA 175, 96 FCR 561, cited
Mead v Mead [2009] FMCA 637, affirmed
CAM v LGM [2009] FamCA 251, referred to
Pham v Secretary, Department of Employment and Workplace Relations [2007] FCAFC 179, cited
Slack v Bottoms English Solicitors [2002] FCA 1445, cited
Re Sterling; Ex parte Esanda Ltd (1980) 44 FLR 125, cited
Re Wimborne; Ex parte The Debtor (1979) 24 ALR 494, cited
Yang v Mead [2009] FMCA 636, affirmed

LEE CHIN LIEN YANG v COLIN ANTHONY MEAD

NSD 774 of 2009

LUCY GUITAR MEAD v COLIN ANTHONY MEAD
NSD 775 of 2009

FLICK J
26 October 2009
SYDNEY


IN THE FEDERAL COURT OF AUSTRALIA

NSW DISTRICT REGISTRY

GENERAL DIVISION

NSD 774 of 2009
ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA
BETWEEN:

LEE CHIN LIEN YANG
Appellant
AND:

COLIN ANTHONY MEAD
Respondent

JUDGE:

FLICK J

DATE OF ORDER:

26 October 2009

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The Notice of Appeal as filed on 29 July 2009 is dismissed.

2.The Interim Application as filed on 24 August 2009 is dismissed.

3.The Notice of Motion as filed on 4 September 2009 is dismissed.

4.The Appellant is to pay the costs of the Respondent.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


The text of orders can be located using eSearch on the Court’s website.


IN THE FEDERAL COURT OF AUSTRALIA

NSW DISTRICT REGISTRY

GENERAL DIVISION

NSD 775 of 2009

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:

LUCY GUITAR…

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Details
AGLC
Yang v Mead [2009] FCA 1202
Case
[2009] FCA 1202
Decision Date

CaseChat Overview and Summary

In the matter of Yang v Mead, the Court of Appeal was called upon to consider the validity of bankruptcy notices issued under the Bankruptcy Act 1966 (Cth). The appellants, Ms Yang and Ms Mead, contested the notices on various grounds including the failure to allow them to make counter-claims, set-offs or cross demands, as well as claims of misleading information and abuse of process. The case was heard on 12 October 2009, and despite an initial attempt by Ms Mead to file a Notice of a Constitutional Matter, the appeal proceeded on its merits. The court found that there were no grounds for dismissing the bankruptcy notices or for staying the proceedings, and dismissed the appeals and associated applications.

The central legal issues before the court involved the interpretation and application of section 40(1)(g) of the Bankruptcy Act, which pertains to the ability of debtors to make counter-claims or set-offs. Additionally, the court needed to assess whether the bankruptcy notices contained misleading information or if the process of issuing them constituted an abuse. The appellants argued that they were not given the opportunity to raise counter-claims, set-offs or cross demands, and that the notices were misleading and issued abusively. The court considered these arguments in light of the evidence and submissions presented, including the claims made in the Family Court.

In its reasoning, the court found no error in the Federal Magistrate's decision. It held that neither Ms Yang nor Ms Mead had established a valid counter-claim, set-off or cross demand, and no misleading information or abuse of process was evident. The court recognised the appellants' repeated opportunities to assert their claims but found no basis for concluding that the notices were defective or that the process was abused. The court dismissed the appeals and associated applications, noting the appellants' detailed oral submissions but ultimately finding no merit in their contentions.

The court made clear its final orders, dismissing both the appeals and the interim applications, and directing that the appellants pay the costs of the respondent. This outcome was consistent with the court's determination that there was no valid basis for the appellants' claims and that the bankruptcy notices were correctly issued and valid.

Orders

Orders of the court

1. The Notice of Appeal as filed on 29 July 2009 is dismissed.

2. The Interim Application as filed on 24 August 2009 is dismissed.

3. The Notice of Motion as filed on 4 September 2009 is dismissed.

4. The Appellant is to pay the costs of the Respondent.

Note:

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

FLICK J
At the outset of the hearing of the appeals on 12 October 2009, Ms Mead sought to file in her appeal a Notice of a Constitutional Matter pursuant to s 78B of the Judiciary Act1903 (Cth). Notwithstanding the terms in which that Notice was expressed, Ms Mead explained that it was not intended to raise any matter arising under the Constitution in this Court. Rather than this Court being under a possible “duty … not to proceed”, Ms Mead was anxious for this Court to hear and resolve her claims immediately. Such a position, it may be noted, was inconsistent with the application to have the appeals in effect adjourned. The Notice was, in any event, understood as being more directed to the alleged failure on the part of the Federal Magistrate to give proper weight to Ms Mead’s inability to comply with the 21 day period prescribed in the bankruptcy notice due to her being in custody. In the absence of any matter arising under the Constitution being raised in this Court, the appeal proceeded to be heard on 12 October 2009. Had it been necessary to resolve an alternative contention, namely that the Notice imposed upon this Court a “duty … not to proceed”, that contention would have been rejected: cf Deputy Commissioner of Taxation v Warrick (No 2) [2004] FCA 918 at [103], 56 ATR 371 at 396 per French J; Danielsen v Onesteel Manufacturing Pty Ltd [2009] SASC 56 at [30], 224 FLR 319 at 327 to 328 per Gray J; Pham v Secretary, Department of Employment and Workplace Relations [2007] FCAFC 179. CONCLUSIONS No error can be discerned in the reasons for decision of the Federal Magistrate. There is no error in the conclusions that neither Ms Mead nor Ms Yang has been able to establish any “counter-claim, set-off or cross demand” within the meaning of and for the purposes of s 40(1)(g) of the Bankruptcy Act. Nor can any such “counter-claim, set-off or cross demand” be distilled from such additional materials as were before this Court. This conclusion is only further reinforced if reference is made to those claims advanced and resolved by the Family Court. More generally expressed, there is no basis for reaching any conclusion other than that Ms Mead and Ms Yang have each been given repeated opportunities to have their claimed entitlement to monies heard and resolved. No defect is exposed in either of the bankruptcy notices such as would be “capable of misleading” either Ms Mead or Ms Yang and no abuse of process in the issuing of the bankruptcy notice has been established. In contrast to the inadmissible form of the Affidavits as filed stands the care and attention to detail displayed by Ms Mead in her oral submissions in support of both appeals. This attention to detail displayed a mastery of such facts as were in evidence and, in addition, the citation of numerous authorities in support of her submissions. The two Notices of Appeal, the Interim Applications and the Notices of Motion are to be dismissed.ORDERS The Orders of the Court are:In proceeding NSD 774 of 2009:1.The Notice of Appeal as filed on 29 July 2009 is dismissed. 2.The Interim Application as filed on 24 August 2009 is dismissed.3.The Notice of Motion as filed on 4 September 2009 is dismissed.4.The Appellant is to pay the costs of the Respondent. In proceeding NSD 775 of 2009:1.The Notice of Appeal as filed on 29 July 2009 is dismissed. 2.The Interim Application as filed on 24 August 2009 is dismissed. 3.The Notice of Motion as filed on 4 September 2009 is dismissed.4.The Appellant is to pay the costs of the Respondent.

Ratio Decidendi

Legal Principle Established

Established by: FLICK J

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