-~- €° "No + Tt THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) No. B1188 of 1986 GENERAL DIVISTON BANKRUPTCY DISTRICT OF NEW SOUTH WALES AND THE AUSTRALIAN CAPITAL TERRITORY PE: William Henry McLaughlin Debtor EX PARTE: Tooth & Co. Ltd Judgment Creditor MINUTE OF ORDER JUDGE MAKING ORDER: Evatt J. DATE OF ORDER: 30 May 1986 WHERE MADE: Sydney THE COURT DECLARES THAT: It is not satisfied that the affidavit of the debtor filed herein pursuant to s.41(7) of the Bankruptcy Act 1966 discloses that the debtor has a counter-claim, set-off or cross demand as is referred to in paragraph 40(1)(g) of the Act. THE COURT ORDERS THAT: Ll. The application under s.41(7) be dismissed. ~ 2. Costs reserved. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. s Ang eee ra eos see ft. ny Pr nate . } ew one ee ee ene ee ep er a eee ne pet een eerie > pees ae oa * fae Pars eet, Fe ate . ' G 4 eatin eae ee po Sere et wooo ane ee eee fag a a oe he . sy IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) No. B1188 of 1986 GENERAL DIVISION BANKRUPTCY DISTRICT OF NEW SOUTH WALES AND THE AUSTRALIAN CAPITAL TERRITORY RE: William Henry McLaughlin - Debtor - EX PARTE: Tooth & Co. Ltd Judgment Creditor CORAM Evatt J. 30 May 1986 REASONS FOR JUDGMENT The Bankruptcy Notice herein, dated 18 March 1986 addressed to William Henry McLaughlin, (the debtor), claims that the District Court judgment obtained on 25 October 19385 by Tooth & Co. Limited (the judgment creditor) against the debtor in the amount of 322319.39 together with interest set out remained unsatisfied. The Bankruptcy Notice which 1s stated to be a 14 days notice was served on the Debtor on 27 March 1986. On 10 April 1986 the debtor filed an affidavit pursuant to 3.41(7) of the Bankruptcy Act (1966) (the Act) wherein he states that he believed that he had a count@r-claim, set-off or cross demand within the meaning of s.40(1)(q) of the Act. me ree ee: ret ron Te re en TS Ree tee ea sey - ae a ee Dr tg cen eT Re ee ne ante a, f8 Cr Pon Sl ee af ge rr a The Registrar on 29 April 1986 gave notice to the debtor and the judgment creditor, Tooth and Co. Limited, pursuant to r.10 of the Bankruptcy Rules appointing Monday, 26 May 1986 as the time when the debtor was to appear before the Court for the purpose of satisfying it that he has a counter-claim, set-off or cross demand as is referred to in paragraph 40(1)(g) of the Act. When the matter was called on on 26 May 1986 Mr Farrar, Counsel for the Debtor and Mr K.V. Taylor, Counsel for the Judgment Creditor, appeared. After hearing Counsel the Court determined Chat it was not satisfied the debtor had an appropriate counter-claim. set-off or cross demand within the meaning of paragraph 40(1)(g) of the Act and then indicated that it would publish full reasons for judgment. These are those reasons. The debtor's affidavit claims that the alleged counter-clain, set-off or cross demand is in the form of the application for orders or awards under s.88F of the Industrial Arbitration Act 1940 (New South Wales) aqainst the judgment creditor which application was filed in the Industrial Commission of New South Wales on 15 October 1985. Annexed to his affadavit 1s a copy of the Notice of Motion and affidavit in support thereof as filed in the Commission. That motion seeks orders or awards declaring void the whole or part or varying the whole or part either ab anitio or from some other time oral contracts arrangements, or conditions and/or collateral arrangements entered into on or ae eer ee sain a oe pee —- — ewe YP TTT "a ween "we i stees poea erate see acy mee ber meenad tanaeeeena rh one oo nr ' ores as) an = os about 17 August 1981 or on or about 15 March 1982 respectively between the debtor and the judgment creditor whereby the debtor was required to perform work in any industry. Thereafter is set out the grounds or reasons claimed to support the making of such orders or awards. Those grounds or reasons dono more than reflect the formal terms of s.88F(1). The debtor's affidavit in support of that motion is dated 15. October 1985 and consists of but two paragraphs which read: I am the applicant herein for relief under the provisions of Section 88F of the Industrial Arbitration Act 1940, from the terms of each of two oral agreements made between myself and the respondent on or about 17 August 1981 and 15 March 1982 respectively whereby I took possession respectively of the licensed premises known as the "Rose and Crown" Hotel situated at Glenmore Road, Paddington in the said State and the licensed premises known as the "Union" Hotel situated at 576 King Street, Newtown in the said State. The grounds and reasons set forth in the Notice of Motion filed in this matter are to the best of my knowledge and belief true in substance and fact. . The judgment creditor commenced it. action against the debtor in the District Court by Plaint. No. 17945 of 1983. The Court was anformed that this plaint was issued in approximately the middle. of that year. The cause of action was for the recovery of monies paid by the judgment creditor in respect of the license fees due _ in respect of the two licensed premises claimed to be payable by the debtor to the judgment creditor pursuant to the same contracts or arrangements made respectively in 1981 and 1983 as is referred to in the debtor's motion before the NSW Industrial Commission. In addition. the judgment creditor claimed monies a we me ere RE nt rr nnn meme ery mayne ERE A Te Are a aTet on vey wT SL ee . al POL 7 \ ee men ee ee a ~ + ey rare yee re re ee et oe 7 7 SU 4. due to it from the debtor in respect of rent of the said premises—- and for the supply of certain goods. The District Court action came on for hearing before Judge Nash in October 1985, His Honour giving judgment therein on 25 October 1985. The overall effect of that judgment was that the judgment creditor had satisfied the Judge that 1t had made out its claim in respect of certain aspects of its total claim and a judgment was entered against the debtor in the sum of $22319.39 together with costs. A copy of His Honour's reasons for judgment were handed up to the Court. Those reasons disclose that His Honour on 25 October 1986 had been made aware of the s.88F application which had been filed by the debtor in the New South Wales Industrial Commission only some ten days earlier. At the conciusion of Judge Nash's reasons, the following appears: There will therefore bea verdict for the plaintiff of $22319.39 and judgment accordingly. The exhibits may be returned. There will also be a verdict for the plaintiff on the cross "2mand. ' (Counsel for the defendant sought a stay of proceedings pending action in another Court). I note there is a Notice of Motion pending in the Industrial Commission of New South Wales returnable on 29 October 1985 seeking orders that the contracts, the subject of these tenancies, be declared void in whole or in part or that they be varied in whole or in part either ab initio or some other time. I do not consider that the application in itself is sufficient grounds for granting a stay of execution. If the defendant and the plaintiff do not agree on the question of a stay, of course, it is open for the defendant to make application formally to this Court in relation thereto if he is unable to pay the amount of the judgment. ae EON This Court has been informed that no such formal application to_-- the District Court in relation to the said judgment has been made by the debtor. This Court was further informed that the application before the Industrial Commission was stood over generally when it was listed on its return date, 29 October 1985 and that no application has been made to restore it for hearing. It is clear that the jurisdiction under s.88F of the New South. Wales Industrial Arbitration Act is exclusive to the New South Wales Industrial Commission so that such any claim by the debtor against the judgment creditor under that section could not have been ra1rsed by the debtor in the said District Court action. The s.41(7) affidavit of the debtor filed herein consists of six paragraphs, four of which are formal or merely identify the annexed documents filed in the NSW Industrial Commission. The remaining paragraphs, V1lZ paragraphs 3 and 5 are set out: 3. I am informed and verily believe 'that in terms of Section 40(1)(g) of the Bankruptcy Act, 1966, I have a counter-claim, set-off or cross demand that I could not have set up in the action in which the Judgment was obtained against me. 5. The said Application Cie the Motion under s.88F before the Commission] arises out of the same subject matter, namely oral contracts entered into on or about 17th August, 1981 and on or about 15th March, 1982 between myself and the Judgment Creditor which gave rise to the action in the District Court of New South Wales in which : the said Judament was obtained against me. f | "| | f ' ' ! ; | ' for] geben, Mr Farrar submitted that in accordance with sub-s.(2) of s.88F_.. I. the NSW Industrial Commission could, if the debtor was successful F in having the contracts declared void either in whole or in part, , make an order as to the payment of a sum of money equal to the F | amount referred to in the Bankruptcy Notice. That sub-section "se reads: > 88F(2) The Commission, in making an order or award pursuant to subsection (1), may make such order as to the payment of money in connection with any contract, arrangement, condition or collateral arrangement declared void, in whole or in part, or varied in whole or in part, as may appear to the Commission to be just in the circumstances of the case. cieesee teens tt My Taylor, on the other hand, submitted that in accordance with authority the debtor's counter-claim etc must be a claim which 1s measurable in an amount of money and that what the debtor was really claiming here amounted to rectification which is nota counter-claim referred to under s.40(1)(g) of the Act. Further he submitted, that even though the debtor's counter-claim need I et or te rg ere en er rr not be for a liquidated sum i1t must be capable of being a quantified 1n terms of money, (see Re Jocumsen (1929) 1 ABC 82; i ——— , James vy Abrahams (1981) 34 ALR 654 @ 664) and that a s.41(7) affidavit filed by the debtor should quantify it in some way. { (Ex parte The Debtor v_ National Westminister Bank (1983) 3 All ~ E.R. 545 @ 553). Here, it was submitted, no attempt is made by the debtor to so quantify his alleged counter-claim etc. c woe owe ie ' ys foe In my view the debtor's s.41(7) affidavit does not demonstrate_.- _,7 that even if the motion filed under s.88F 1s a proper claim under that section and if he were to succeed on his motion before the Commission. the Commission of necessity must make an order that the debtor be paid a sum of money by the judgment creditor let alone an amount equal to the figure set out in the Bankruptcy Notice. Even on the most benevolent construction (see Eastick v ANZ Bank#mq Group Ltd (1981) 53 FLR 91 @ 93-4) of the paragraphs. of the debtors s.41(7) affidavit or upon such a construction of the motion and affidavit in support filed in the Industrial Commission, I am not satisfied that the claim before the Commission must be capable of being quantified in terms of money as that expression is used in the authorities. A fortiori, I am not satisfied that the s.41(7) affidavit of the debtor has attempted in any way to quantify it. Further Mr Taylor submitted that the undisputed facts in this matter are such that it is clear that the debtor has been guilty of delay in prosecuting any counter-claim etc he may have had under s.88F of the N.S.W. Act against the judgment creditor. I agree. The District Court action was commenced against the debtor in mid-1983. Yet he did nothing to prosecute his alleged counter-claim etc until the very hearing of the District Court action in October 1985. No explanation is given by the debtor in his affidavit for such delay. Nor indeed was any such explanation offered at the hearing of the present application. ; i 3. In ali circumstances. I am-not satisfied that the debtor's —-_.— affidavit filed pursuant to s.41(7) of the Act discloses that he has a counter-claim etc equal to or exceeding the amount of the sum payable under the judgment debt as is referred to in H paragraph 40(1)(g) of the Act. Further I am of the view that the debtor's delay in prosecuting any s.88F claim he may have is such that the Court should refuse his present application. i iceadtne Soteeineat) a voy a shops I certify that this and the Seyen ' preceding pages are a true copy of the F Reasons for Judgment herein of his ' Honour Mr Justice Evatt Associate Dated: 30-S- 86 7