Stubberfield, John Richard v Kilner, Ronald Gary & Anor [1998] FCA 1460

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY QG 7237 of 1998

BETWEEN: JOHN RICHARD STUBBERFIELD

Applicant

AND: RONALD GARY KILNER and ANTHONY JOHN BLACK

(A FIRM)

RespondentS

JUDGE: DOWSETT J

DATE OF ORDER: 27 OCTOBER 1998

WHERE MADE: BRISBANE

THE COURT ORDERS THAT: 1. Time for compliance with Bankruptcy Notice No QN 402 of 1998 be extended until 4.00 pm on Tuesday 3 November 1998. 2. The applicant pay the respondents' costs of the application. 3. The motion to restrain Messrs Lippiatt & Co from acting be dismissed, the applicant to pay the respondents' costs of the motion. 4. The application be otherwise dismissed. 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 QG 7237 of 1998

BETWEEN: JOHN RICHARD STUBBERFIELD

Applicant

AND: RONALD GARY KILNER and ANTHONY JOHN BLACK

(A FIRM)

Respondents

JUDGE: DOWSETT J

DATE: 27 OCTOBER 1998

PLACE: BRISBANE

REASONS FOR JUDGMENT This is an application to set aside a bankruptcy notice delivered to the applicant, John Richard Stubberfield, by Messrs Kilner and Black, a firm of solicitors. Alternatively, there is an application to extend time for compliance. The actual basis for the application is not entirely clear, but the applicant makes three primary complaints concerning the bankruptcy notice. Firstly, he asserts that he is not insolvent and that it was therefore inappropriate for a bankruptcy notice to be given to him. Secondly, he challenges the correctness of the judgment upon which the bankruptcy notice is based, and thirdly he claims to have a counter-claim or cross-claim exceeding the amount of the judgment debt. As to the first, I am not aware that it is a sufficient answer to a bankruptcy notice merely to assert that one is solvent, and that the creditor must have known that. In some cases, proof of those circumstances might lead to an inference that the bankruptcy notice was an abuse of process, but the evidence in this case does not go so far. The bankruptcy notice procedure is, after all, designed to provide evidence of insolvency. I turn to the attack upon the judgment upon which the bankruptcy notice is based. Mr Stubberfield and the respondents have been involved together for very many years, going back at least to 1991 when they acted as his solicitors in Magistrates' Court proceedings which, as it happened, were unsuccessful, although on appeal to the District Court, Mr Stubberfield enjoyed some success. It is enough to say that Mr Stubberfield claims to have a cause of action for professional negligence arising out of the respondents' conduct of those proceedings. It is not necessary to canvass those matters The present debt is pursuant to a costs order made by Byrne J in the Supreme Court on 3 November 1995. That was a decision upon an application by Mr Stubberfield for judicial review of a decision in the Magistrates' Court which decision related to attempts by the respondents to recover professional costs from him. The Magistrate upheld the claim in those proceedings, and Mr Stubberfield sought judicial review of that decision. Byrne J declined to review the decision upon the basis that there were alternative means available for obtaining appropriate relief, namely by way of appeal to the District Court. This was a basis for declining judicial review pursuant to the relevant legislation, but Mr Stubberfield asserts that his Honour was wrong in declining his claim for relief on that basis. If that is so, then he should have appealed against the decision. I cannot see why this court should go behind the judgment, given that Mr Stubberfield has declined to appeal. The relevant debt arose as a result of the exercise by Byrne J of a discretion as to the costs of those proceedings, which discretion was conferred upon his Honour as a Judge of the Supreme Court of Queensland. It is reasonable to infer that the order reflected his Honour's assessment of the conduct of the proceedings in question and the outcome thereof. As that outcome remains unchallenged by appeal, there is no basis for questioning the exercise of the discretion as to costs. Thirdly, Mr Stubberfield asserts that he has a counter-claim or cross-claim. He has been asserting such a claim for some time but has done little to establish it. The evidence does not demonstrate a basis for inferring that he has such a claim, let alone that any such claim equals or exceeds the amount of the judgment debt. Further, his failure to take steps to enforce his claim raises serious doubts as to his bona fides. In the circumstances, the application to set aside the bankruptcy notice is refused. Having regard to the nature of the proceedings and Mr Stubberfield's wish to take other advice, I will extend the time for compliance with the bankruptcy notice until 4 pm on Tuesday, 3 November 1998.