CATCHWORDS
BANKRUPTCY - bankruptcy notice - whether appellant had a cross-demand for wrongful prosecution - whether bankruptcy notice should be set aside - whether bankruptcy notice in correct form - whether costs order of Court of Appeal is a "final order" enforceable by execution - bankruptcy notice founded on costs certificate
Bankruptcy Act 1966 ss 40(1)(g), 52
Re McGregor; McGregor v Clancy and Triado Pty (1991) 100 ALR 431 Dist
Stubberfield v Paradise Grove Pty Ltd (unreported 22 May 1996) Refd
Alan Harry Gibbs v Paul Anthony Triscott
QG188 of 1995
Ryan, Whitlam Kiefel JJ
Brisbane 16 October 1996
IN THE FEDERAL COURT OF AUSTRALIA)
)
QUEENSLAND DISTRICT REGISTRY ) No. QG 188 of 1995
)
GENERAL DIVISION )
ON APPEAL FROM A DECISION OF A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN: ALAN HARRY GIBBS
(Appellant)
AND: PAUL ANTHONY TRISCOTT
(Respondent)
CORAM: Ryan, Whitlam and Kiefel JJ
DATE: 16 October 1996
PLACE: Brisbane
MINUTES OF ORDER
THE COURT ORDERS:
1. That the appeal be dismissed.
2. That the appellant pay the respondent's costs of the appeal such costs to be taxed in default of agreement.
3. That the time for compliance with the bankruptcy notice issued on 26 October 1993 be extended until the expiration of 14 days from the date of this order.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA)
)
QUEENSLAND DISTRICT REGISTRY ) No. QG 188 of 1995
)
GENERAL DIVISION )
ON APPEAL FROM A DECISION OF A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN: ALAN HARRY GIBBS
(Appellant)
AND: PAUL ANTHONY TRISCOTT
(Respondent)
CORAM: Ryan, Whitlam and Kiefel JJ
DATE: 16 October 1996
PLACE: Brisbane
REASONS FOR JUDGMENT
THE COURT: This is an appeal from an order of Drummond
J refusing to set aside a bankruptcy notice founded on a costs certificate for
$3,166.86 issued out of the Supreme Court of Queensland as a result of an
unsuccessful appeal by the present appellant, Mr Gibbs, to the Court of
Appeal. Mr Gibbs contended before the
learned primary Judge that he had a counterclaim, set-off or cross-demand
against the respondent, Mr Triscott, for unliquidated damages for wrongful
prosecution. Mr Triscott is a solicitor
who had acted on Mr Gibbs' instructions in relation to a company, H.B. Homes
Pty Ltd, of which Mr Gibbs was a director.
Mr Gibbs has steadfastly maintained throughout a myriad of proceedings
that the liability on Mr Triscott's original bill of costs was
solely that of the company and had never attached to himself personally.
Should the Court have been satisfied that the appellant has a cross-demand?
The learned primary Judge accepted that the cross-demand which Mr Gibbs sought to invoke could not have been raised in the proceedings in the Court of Appeal in which the foundational order for costs was made. Accordingly, he identified in this way the question for resolution on the application to set aside the bankruptcy notice:
The question for me is whether Mr. Gibbs in his affidavit filed 3 December, 1993, together with the material in his affidavits filed on 15 December, 1993 and 15 February, 1993 that can properly be regarded as supplementing the claims made in his first affidavit, has satisfied me that he has a cross-demand against Mr. Triscott of the kind referred to in s. 40(1)(g) of the Bankruptcy Act. If so, the bankruptcy notice must be set aside. If not, Mr. Gibbs' application must fail, in so far as this particular challenge to the notice is concerned.
By way of criticism of his Honour's reasoning on this point, the appellant asserted, in effect, that his cross-demand was not based solely on wrongful prosecution. Moreover, according to Mr Gibbs, it had never been dismissed on the merits but had only been struck out because it had been incorrectly filed in the form of an affidavit instead of a statement of claim. An examination of part of the transcript of a hearing before his Honour Judge Skoien in the District Court at Toowoomba reveals that the learned Judge made this observation in the course of an exchange with Mr Gibbs:
I'm not saying Mr Triscott's right or wrong. For all I know he might have perjured you
from all over Toowoomba, all over Australia, but there is not claim in your
plaint which properly sets that out. Now
I appreciate that that's probably because you don't understand all of the
legal principles. But that doesn't
require me to change the law, just to help you out.
That passage tends to suggest that Judge Skoien regarded the plaint which Mr Gibbs had filed to initiate his action in the District Court as not disclosing a cause of action. The cover page of the plaint contained this assertion:
Plaintiff's full statement of claim for $200,000 (two hundred thousand dollars) damages for malicious prosicution (sic), defamation caused by perjury are attached to this plaint by pages numbering one to five.
It does not appear that the attached five pages were in evidence before Drummond J. However, the Court of Appeal, to which the appellant appealed against the order of Judge Skoien striking out the plaint, examined the whole document against a background of the complex history of litigious manoeuvres in which the appellant and the respondent had been involved, and observed:
A number of the matters which have been set out above as constituting the basis for the appellant's claims against the respondent emerged only in the course of the appellant's presentation of the arguments to this Court. Also, they are far from appearing clearly, if they appear at all, in the plaint which he had filed. That document obviously prepared without the benefit of significant professional assistance is in confused narrative form and does not in any tolerably clear fashion isolate aspects capable of grounding a claim. It certainly has emerged that the appellant offered vigorous resistance to the demands which had been made against him for payment of the original costs bill and this resistance resulted in a proliferation of proceedings between the parties. The respondent solicitor clearly for his part did not wish to abandon his claim merely because it was encountering opposition.
While the appellant may consider himself harassed by multiple proceedings and has opposed them as best he could without the benefit of legal representation, it neither appears from his plaint that he has outlined a sufficiently clear basis for claiming damages under his chosen headings of defamation, malicious prosecution and perjury, nor in his argument has he managed to project a picture of what could be thought of as a legitimate legal complaint even one poorly expressed or incompletely adumbrated. Making all allowances for the fact that the plaintiff was not legally represented and for the fact that the courts are reluctant to shut out parties from a reasonable opportunity to present their cases, the matter remains in a state where the conclusion is justified that it was an embarrassment for the respondent to require him to make a defence against the plaint in the form in which it currently appears. It is an additional consideration that the appellant's arguments in support of his position all appeared to be totally unpromising.
...
No doubt the relationship between the parties was productive of considerable dissatisfaction on both sides but the ensuing complications which have not advanced the appellant's position in law at all, have resulted not from any fundamental complexity, but from various moves and counter moves of the parties. The plaint being so inadequately justified by the appellant and being in such a totally unsatisfactory form, the judge below was entitled to reach the decision that it should be dismissed.
Against that background, Drummond J was not persuaded that there was any substance in the claim and, especially that there was any prospect that the damages, in the unlikely event that any were recoverable, would equal or overtop the amount of $3,166.86 stipulated in the costs certificate. We consider that the learned primary Judge was compelled to conclude, as he did, that the material advanced by the appellant which, he noted, was essentially the same as that before the Court of Appeal, fell far short of establishing any cause of action sounding in damages which could constitute a counterclaim or cross-demand in the requisite sense. We would only add, out of deference to a submission made in support of the appeal, that the Court of Appeal was inclined to regard the order of Judge Skoien as not being a final order so that the appellant required leave to appeal from it. Correspondingly, the conclusion by a Court of Bankruptcy that it is not satisfied of the existence of a counterclaim or cross-demand does not preclude a debtor from pursuing a cross-demand in any court of competent jurisdiction which the debtor is able to persuade of the existence of an arguable cause of action.
Form of Notice
The recital in the bankruptcy notice which prefaced the notice requiring the debtor to pay the sum of $3,166.86 or secure its payment or compound that sum to the satisfaction of the judgment creditor was in these terms:
WHEREAS
PAUL ANTHONY TRISCOTT of 3374 Pacific Highway, Springwood in the State of Queensland (hereinafter referred to as "the Judgment Creditor") has claimed that the sum of THREE THOUSAND ONE HUNDRED AND SIXTY SIX DOLLARS AND EIGHTY SIX CENTS ($3,166.86) is due by you to the Judgment Creditor pursuant to a final judgment obtained by the Judgment Creditor against you in the Supreme Court of Queensland at Brisbane on the 7th day of April 1992 being a judgment the execution of which has not been stayed pursuant to which judgment a certificate of taxation was issued in the Supreme Court of Queensland held at Brisbane on the 24th day of September 1992.
The learned trial Judge acknowledged that the source of the liability to make the payment was the judgment or order of the Court of Appeal. He further noted that, as an obligation to discharge that liability by payment did not arise until the costs had been quantified by taxation, the bankruptcy notice was required to refer to both the judgment or order and the taxing officer's certificate. His Honour then continued:
This notice complies with the requirements of s. 41. It correctly identifies the judgment of 7 April, 1992 as the source of the debtor's liability to pay the amount demanded in respect of costs and it refers to the certificate of taxation that issued pursuant to the judgment on 24 September, 1992. I do not think the notice can fairly be said to have misled the debtor in any relevant respect, even though it did not, in express terms, refer to the amount demanded by the notice as the amount for which the certificate of taxation referred to in the notice had issued.
Unlike the circumstances which arose in Re McGregor; McGregor v Clancy & Triado Pty (1991) 100 ALR 431 where the certificate of the taxing officer of the Family Court was deemed, under the rules of that Court, to be "a judgment for debt immediately due and payable", there was here both an order of the Court of Appeal disposing of an issue between the appellant and the respondent and a certificate of a taxing officer which quantified the amount payable by the respondent pursuant to that order. Both the order and the certificate of taxation are sufficiently identified in the bankruptcy notice. We therefore agree that it was not defective in form.
Was the order of the Court of Appeal in conjunction with the costs certificate a "final order" enforceable by execution?
The learned primary Judge devoted a large part of his reasons to an examination of the Rules of the Supreme Court of Queensland in so far as they had a bearing on whether the costs order of the Court of Appeal, as quantified by the certificate of the taxing officer, gave rise to an entitlement in the judgment creditor to levy execution for the amount specified in the certificate. We regard his Honour's analysis of those Rules and their application to the present case as unacceptionable and have already indicated our reasons for regarding Re McGregor (supra) as distinguishable from the present case. In particular, we agree that an order for costs followed by a taxing officer's certificate is a "final order" for the purpose of s. 40(1)(g) of the Bankruptcy Act provided that it has not been stayed before service of the bankruptcy notice. We refer to what this Full Court said in its joint judgment in Stubberfield v Paradise Grove Pty Ltd (unreported 22 May 1996) where it was observed, at p. 7:
Even if the extension of time for review had predated the issue
of the bankruptcy notice, on the authority of Re a Debtor [1981] L.S. Gaz. R 631 cited by the learned primary
Judge, the requirements of s. 40(1)(g) would still have been satisfied unless
the Supreme Court had been persuaded before 31 January 1994 or, at the latest,
before service of
the bankruptcy notice to stay execution on the judgment and certificate for
costs.
Accordingly, we reject the appellant's contention that it is a "standard rule" that a "taxed bill is not accepted as a final order".
Conclusion
For the reasons explained above, the appellant has not demonstrated an error in any aspect of the learned primary Judge's reasons for declining to set aside the bankruptcy notice. The appellant's contention that the bankruptcy notice lays a foundation for property worth up to $300,000 to be sold to satisfy a judgment debt for slightly over $3,000 is met by reference to the discretion which the Court has under s. 52 of the Bankruptcy Act if a creditor's petition issues for non-compliance with the bankruptcy notice. The appeal will be dismissed but, to allow the appellant a further opportunity to comply now that the validity of the bankruptcy notice has been conclusively determined, we shall extend the time for compliance for a further fourteen days from the date of the order of this Court. The appellant must pay the respondent's costs of the appeal.
I certify that this and the preceding six (6) pages are a true copy of the Reasons for Judgment of their Honours Justices Ryan, Whitlam and Kiefel JJ.
Associate:
Date: 16 October 1996
Counsel for the appellant : Appellant in person
Solicitors for the appellant: -
Counsel for the respondent : Mr M.D. Martin
Solicitors for the respondent : Baker Johnson
Date of Hearing : 22 April 1996
Place of Hearing : Brisbane
Date of Judgment : 16 October 1996
Place of Judgment : Brisbane
