Handberg v Smarter Way (Aust) Pty Ltd [2002] FCA 469

FEDERAL COURT OF AUSTRALIA

Handberg v Smarter Way (Aust) Pty Ltd [2002] FCA 469

BANKRUPTCY - order for costs – joint and several debtors – where judgment debt set off in full as between insolvent co-debtor and creditor by operation of Corporations Act s 553C – applications by remaining debtors to set aside bankruptcy notices issued against them – whether statutory set off operates to extinguish creditor's claims against remaining debtors – whether there was a debt existing to support the issue of bankruptcy notices against remaining debtors – proof of debts – double satisfaction INSOLVENCY – where one joint and several debtor executes deed of company arrangement – Corporations Act s 553C – whether required mutuality – where debt set off in full by operation of law – whether creditor can seek to recover debt against remaining solvent co-debtors – scope and operation of s 553C Bankruptcy Act 1966 (Cth), s 41(2) Corporations Act 2001 (Cth), s 439C, s 444D(1), s 444H, s 444(4)(i), s 444A(5), s 553C, s 553E Bankruptcy Regulations, reg 4.02 Corporations Regulations, Sch 8A, reg 5.3A.06 GM & AM Pearce and Co Pty Ltd v RGM Australia Pty Ltd [1998] 4 VR 888 followed Gye v McIntyre (1991) 171 CLR 609 applied Stein v Blake [1996] 1 AC 243 followed Owen v Wilkinson (1858) 5 CB(NS) 526 referred McDonald v Dennys Lascelles Limited (1933) 48 CLR 457 referred Goodwin v Duggan (1996) 41 NSWLR 158 referred Ex Parte Wyldman (1750) 2 Ves Sen 113; 28 ER 74 cited In Re Houlder [1929] 1 Ch 205 cited Edwards v Hood-Barrs [1905] 1 Ch 20 cited Midland Montagu Australia Ltd v Harkness (1994) 35 NSWLR 150 cited Hill v Anderson Meat Industries Ltd [1971] 1 NSWLR 868 considered Re Kolb, Ex parte England v Federal Commissioner of Taxation (1994) 51 FCR 31 cited Re Last, Ex parte Butterell (1994) 124 ALR 219 cited In Re Garner's Motors, Ltd [1937] Ch 594 considered Deanplan Ltd v Mahmoud [1993] Ch 151 cited Johnson v Davies [1999] Ch 117 considered Trocko v Renlita Products Pty Ltd [1973] 5 SASR 207 cited Caratti v Hillman [1974] WAR 92 cited Re Terri Co Pty Ltd (1987) 12 ACLR 457 cited Re Applications of NRMA Ltd (2000) 156 FLR 349 cited Kempe (as joint liquidator of Mentor Insurance Ltd) v Ambassador Insurance Co (in liq) [1998] 1 WLR 271 cited Day and Dent Constructions Pty Ltd (in liquidation) v North Australian Properties Pty Ltd (1982) 150 CLR 85 referred M S Fashions Ltd v Bank of Credit and Commerce International SA (in liquidation) [1993] Ch 425 considered In Re Bank of Credit and Commerce International SA (No 8) [1998] AC 214 referred Rory Derham, Set-off (Oxford, 2nd ed, 1996) Glanville Williams, Joint Obligations (London, 1949) GEOFFREY NEILS HANDBERG v SMARTER WAY (AUST) PTY LTD (ACN 087 747 359) V 7074 of 2001 ANTHONY D'ALOIA v SMARTER WAY (AUST) PTY LTD (ACN 087 747 359) V 7075 of 2001 KENNY J 15 APRIL 2002 MELBOURNE