Granich v Yap [1999] FCA 1039

FEDERAL COURT OF AUSTRALIA

Granich v Yap [1999] FCA 1039

BANKRUPTCY – application for review and annulment of sequestration order – powers of court – judgment debt – costs order in unsuccessful proceedings against former solicitors – allegation of fraud in relation to proceedings giving rise to judgment debt – appeal process in relation to judgment debt exhausted – no cause to go behind judgment debt – motion for review and annulment dismissed.

Federal Court Rules O 35 r 7 O 77 r 8

Bankruptcy Act 1966 (Cth) s 153B

Miles v The Shelf Company of Australia (unrep, Fed Court, Sundberg J VG7674 of 1997) cited

GRANICH & ASSOCIATES v YAP CHENG SEE

WAG 7047 of 1998

FRENCH J

30 JULY 1999

PERTH

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY WAG 7047 OF 1998

IN THE MATTER OF YAP CHENG SEE

GRANICH & ASSOCIATES

Applicant Creditor

And

YAP CHENG SEE

Respondent Debtor

JUDGE: FRENCH J

DATE OF ORDER: 30 JULY 1999

WHERE MADE: PERTH

THE COURT ORDERS THAT: 1. The motion is dismissed. 2. The Respondent is to pay the Applicant's costs of the motion to be taxed and paid out of the bankrupt estate in accordance with the statute. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY WAG 7047 OF 1998

IN THE MATTER OF YAP CHENG SEE

GRANICH & ASSOCIATES

Applicant Creditor

And

YAP CHENG SEE

Respondent Debtor

JUDGE: FRENCH J

DATE: 30 JULY 1999

PLACE: PERTH

REASONS FOR JUDGMENT

History of Proceedings 1 On 1 May 1998 Granich & Associates, a firm of solicitors, filed a creditor's petition in the WA District Registry of the Federal Court seeking a sequestration order against Yap Cheng See. The act of bankruptcy relied upon was non compliance with a bankruptcy notice served on 11 October 1997. The bankruptcy notice made demand for payment of $33,184.11. The amount of the debt comprised $29,790.45 by way of taxed costs which Mrs Yap was ordered to pay upon the dismissal of her claim for damages for professional negligence against Granich & Associates which claim was dismissed on 7 May 1996. The costs in question were taxed on 12 August 1996. In addition to the amount of the costs order a sum of $3,393.66 by way of post judgment interest was also claimed. 2 On 17 October 1997 Mrs Yap filed an application to set aside the bankruptcy notice on the basis that she had a counterclaim based upon the negligence of the creditor, Granich & Associates. On 1 December 1997, after hearing submissions from Mrs Yap and counsel for the creditor, the Registrar dismissed the application to set aside the bankruptcy notice and ordered that Mrs Yap pay the creditor's costs. No review was sought of that decision. 3 Mrs Yap had failed to comply with the bankruptcy notice by 3 November 1997 and her non-compliance formed the basis of the creditors petition. On 13 May 1998 she filed a notice of intention to oppose the petition based on a pending application for special leave to appeal to the High Court in relation to her unsuccessful action against the solicitors. She also alleged: "Deliberate concealment of facts relating to the debtor's cause of action to conceal the petitioner's breach of duty to the debtor pursuant to the petitioner's retainer/contract to the debtor." An affidavit was filed with the notice of intention to oppose the petition. Further affidavits in opposition were filed on 15 June and 2 November 1998. The hearing of the petition was adjourned five times. Additional short affidavits were filed by Mrs Yap on 9 November and 25 November 1998. A further affidavit with a substantial volume of exhibits was filed by Mrs Yap on 4 December 1998 and on 9 December 1998 the petition was again adjourned to the following date. On 10 December 1998 the Registrar made an order refusing an application for a further adjournment of the hearing of the petition. He proceeded to make a sequestration order against Mrs Yap's estate and ordered that the costs of Granich & Associates be taxed and paid out of her estate in accordance with the Act. 4 On 16 December 1998 Mrs Yap filed a motion seeking an order that the judgment of the Registrar be set aside and the sequestration order be annulled, that Granich & Associates pay damages and the costs of what she described as "this appeal". A further affidavit was filed on the same day and another one on 14 January 1999. 5 The matter came on for directions before Nicholson J on 4 February 1999 and directions were given with respect to the filing of written submissions. Submissions were filed on 19 February and 4 March 1999 and a further affidavit from Mrs Yap on 11 June 1999. Short affidavits were also filed on behalf of Granich & Associates.