Oldfield v WBG Developments Pty Ltd, in the matter of Oldfield [2003] FCA 1012

FEDERAL COURT OF AUSTRALIA

Oldfield v WBG Developments Pty Ltd, in the matter of Oldfield [2003] FCA 1012 IN THE MATTER OF WAYNE JOHN OLDFIELD WAYNE JOHN OLDFIELD v WBG DEVELOPMENTS PTY LTD (in liq) N 7087 of 2003 ALLSOP J 22 SEPTEMBER 2003 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 7087 of 2003

BETWEEN: WAYNE JOHN OLDFIELD

APPLICANT

AND: WBG DEVELOPMENTS PTY LIMITED (in liq)

RESPONDENT JUDGE: ALLSOP J

DATE OF ORDER: 22 SEPTEMBER 2003

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. the applicant pay 25 per cent of the costs of the respondent. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 7087 of 2003

BETWEEN: WAYNE JOHN OLDFIELD

APPLICANT

AND: WBG DEVELOPMENTS PTY LTD (in liq)

RESPONDENT

JUDGE: ALLSOP J

DATE: 22 SEPTEMBER 2003

PLACE: SYDNEY

REASONS FOR JUDGMENT 1 In this matter, on 24 March 2003, the applicant filed an application to set aside a bankruptcy notice moving under subs 41(7) of the Bankruptcy Act 1966 (Cth). The underlying judgment was a joint judgment for costs in the names of the respondent and Ronald John Dean-Willcocks. The bankruptcy notice was issued in the name only of the company in liquidation. The matter has been proceeding for some time on the basis of it being an application only under subs 41(7) of the Bankruptcy Act. The parties have expended costs on that basis. 2 Mr Obgorne, who appears for the applicant, filed submissions last week pointing out, as is now agreed, that the bankruptcy notice is bad because it is in the name of, and brought by, one only of the joint creditors. In these circumstances the bankruptcy notice is bad: Australian Workers' Union v Bowen (1946) 72 CLR 575 and cases there cited. In these circumstances the bankruptcy notice is a nullity: see Kleinwort Benson Australia Limited v Crowl (1988) 165 CLR 71 at 79 to 80 in the judgment of the majority. That authority has been followed by a Full Court of this Court in Gardiner v Gardiner (1992) 39 FCR 259 at 266 to 267. 3 In those circumstances, and without opposition, I granted leave to the applicant to amend the application to set aside the bankruptcy notice today in a form which reflected an attack on the bankruptcy notice on this basis. This was necessary, it seemed to me, to ensure that orders could be made rectifying the state of the file to avoid any confusion in the general public. I made orders setting aside the bankruptcy notice for the reason that I have adverted to above. 4 The application under subs 41(7) therefore did not need to be decided although it was plain from Mr Obgorne's submissions of 18 September 2003 that the applicant was unable to prove the existence of an ability to pursue a counter claim today. That counter claim is one to be made, if possible, by his client as mortgagor, against the respondent which was the assignee of the mortgagee. The claim is sought on a Cuckmere Brick basis, that is, the dereliction of the mortgagee's duty to the mortgagor: see Cuckmere Brick Co Ltd v Mutual Finance Co Ltd [1971] 2 All ER 633. 5 It is common ground that there is money in the order of $250,000 or more owing under the constructive trust said to have been created in favour of the respondent in circumstances into which I need not go. In any event, given the nature of the claim as one essentially seeking an accounting between the parties, it would not have in any way surprised the applicant's legal advisers when Windeyer J required, as a condition of the leave to proceed against the respondent, that the applicant bring into court the amount of the money said to be owed. 6 There is a dispute as to the precise amount of that money, but it is agreed that it is at least $200,000. That money has not been brought in and so the condition of leave to proceed has not been fulfilled. There is no evidence before me as to whether any of this, including the inability of the applicant to meet this condition, has come as any surprise to him and I do not have any evidence of his ability to fund that amount of money now, in the past or in the future. 7 In these circumstances I must decide who should pay the costs of this application. In the ordinary course an application which succeeds will have costs following the event. I do not think this is an appropriate case for that to occur. Although the respondent, in a sense, is responsible for the issue of the bankruptcy notice in the form issued, the case has been fought up to 18 September on the basis of subs 41(7) of the Bankruptcy Act and costs have been expended on that basis. 8 Taking into account all of the circumstances, including the ultimate responsibility of the respondent for the current position, but also the assertion by the applicant of its claim under subs 41(7), I think it is appropriate that the applicant pay some part of the respondent's costs of this application. Any assessment of how much that should be is perhaps arbitrary, but I think in all the circumstances the applicant should pay 25 per cent of the respondent's costs of this application. 9 That assessment brings to bear, in particular, the ultimate responsibility for the notice at the feet of the respondent, however gives some balm to the respondent for the hares it has been forced to chase in relation to subs 41(7) of the Bankruptcy Act. 10 For those reasons I order that the applicant to the application pay 25 per cent of the costs of the respondent to the application. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop.