FEDERAL COURT OF AUSTRALIA

Bhattacharya v Milne Berry & Berger [1999] FCA 1302

BANKRUPTCY – application to set aside bankruptcy notice – cross-claim – professional negligence and breach of contract.

Legal Profession Act 1987 (NSW), ss 208A and 208J

PRANAY KUMAR BHATTACHARYA V VICTOR BERGER & HARRY NORMAN FREEDMAN (TRADING AS MILNE BERRY & BERGER)

N 660 OF 1999

JUDGES:       BEAUMONT, MADGWICK & HELY JJ.

DATE:            14 SEPTEMBER 1999

PLACE:          SYDNEY

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

THE COURT ORDERS THAT:

1.                  The appeal is dismissed, with costs.

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

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT

THE COURT:

1                     The appellant, Mr Bhattacharya, applied to a Judge of the Court for an order setting aside a bankruptcy Notice, issued at the request of the respondent, Victor Berger and Harry Norman Freedman (trading as Milne Berry & Berger).  The Judge dismissed the application.  Mr Bhattacharya now appeals from that order.

2                     The bankruptcy Notice, dated 12 February 1998, required the appellant to pay the respondent the sum of $13,940.58, being the amount payable under the judgment or order relied on by the respondent.  Annexed to the bankruptcy Notice was a civil claims cover sheet in the Local Court, describing these parties as “Judgment Debtor” and “Judgment Creditor” respectively.  Registration was stated to be “in accordance with ... [the] Legal Profession Act”.  The balance of the debt was stated to be $13,889.58, costs of registration $51.00, totalling $13,940.58.  Further annexed to the Notice was a Certificate dated 10 October 1996 as to the determination of practitioner/client costs in the sum of $24,889.58, noting that credit was to be given for the sum of $11,000 paid by the appellant to the respondent on account.  The costs assessor was stated to be Mr G G Buckworth.

3                     The Certificate referred to s 208A of the Legal Profession Act 1987 (NSW).  It provides that, when considering an application relating to a bill of costs, the costs assessor must consider:  (a) whether or not it was reasonable to carry out the work to which the costs relate;  and (b) whether or not the work was carried out in a reasonable manner;  and (c) the fairness and reasonableness of the account of the costs in relation to that work.

4                     The Certificate also referred to s 208J of the Legal Profession Act.  The Certificate went on to state:

“This Certificate is, on the filing of the Certificate in the office or registry of a court having jurisdiction to order the payment of that amount of money, taken to be the judgment of that court for the amount of the unpaid costs [Section 208J(3) of the Act].”

5                     In his application to set aside the bankruptcy Notice, the appellant claimed, inter alia, that he had a substantial cross-claim against the respondent arising out of the alleged negligent failure of the respondent to discharge its professional responsibilities under the terms of its engagement by the appellant.  The appellant also submitted to the primary Judge that a court of bankruptcy should go behind the judgment debt and find that there was, in truth and in reality, no debt due by him to the respondent.

6                     As has been noted, his Honour dismissed the application.  He accepted that it was open to the appellant, as a matter of jurisdiction, to seek to establish that, prima facie, the appellant had a cross-claim in an amount exceeding the judgment debt.  But his Honour was not satisfied, on the material before the Court that, on the facts, a prima facie case of professional negligence had been shown to exist.

7                     The primary Judge also accepted (quite correctly) the existence of the Court’s power, or discretion, to go behind a judgment.  But again, his Honour found that, on the facts, this was not a case which warranted the exercise of this extraordinary jurisdiction.

8                     The appellant now challenges both of his Honour’s conclusions, essentially on factual grounds.

9                     We do not see any basis for our interference with the judgment on any question of law.  It seems to us that his Honour addressed the correct legal questions to be determined.  Thus, the issues for us on the appeal, as the appellant’s submissions accepted, were factual ones.  Really, to be more specific, the question for us was whether the appellant has been able to show that the primary Judge erred in concluding, from the material in evidence, that the allegations of professional negligence and breach of contract for professional services went beyond the appellant’s generally expressed assertions.

10                  Having examined the appellant’s affidavit and written submissions at first instance, and having considered the appellant’s written and oral arguments before us, we are not persuaded that his Honour erred in his conclusions, on the facts, first, that no prima facie cross-claim etc. has been demonstrated;  and secondly, that no foundation for going behind the judgment had been laid, having regard also to the history of the litigation in the Local Court. 

11                  Finally, it should be noted that the appellant submitted at first instance, and before us, that his Honour should have disqualified himself for apparent bias.  In this connection, the appellant sought to rely upon parts of the transcript of argument at first instance, which we have now read.  In our opinion, there is no foundation at all for the claim of apparent bias.

ORDERS

12                  The appeal is dismissed, with costs.

Associate:

Dated:              14 September 1999