Guss v Johnstone [2000] HCA 26

HIGH COURT OF AUSTRALIA

GLEESON CJ,

GAUDRON, McHUGH, KIRBY AND CALLINAN JJ

JOSEPH GUSS APPELLANT

AND

RAYMOND JOHNSTONE RESPONDENT

Guss v Johnstone [2000] HCA 26

11 May 2000

M55/1999

ORDER

1. Appeal dismissed.

2. Appellant to pay the intervener's costs of the appeal.

On appeal from the Federal Court of Australia

Representation:

F G A Beaumont QC with L M F Watts for the appellant (instructed by Joseph Guss)

No appearance for the respondent

Intervener:

D S Levin QC with S P Gardiner intervening on behalf of Geelong Building Society (In Liquidation) (instructed by Minter Ellison)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Guss v Johnstone

Bankruptcy – Bankruptcy notice served on debtor after creditor obtained order for costs – Debtor claimed counter-claim, set-off or cross demand equal to or exceeding amount of order for costs being a counter-claim, set-off or cross demand that he could not have set up in the proceedings in which the order for costs was obtained – Debtor applying to the Court for order setting aside bankruptcy notice – Whether Court satisfied that debtor had such a counter-claim, set-off or cross demand before expiration of time fixed for compliance with requirements of bankruptcy notice.

Bankruptcy – Sequestration order – Appeal against orders of primary judge that Court not satisfied that debtor has a relevant counter-claim, set-off or cross demand – Issues to be determined by appellate court – Utility of appeal.

Bankruptcy Act 1966 (Cth), ss 40(1)(g), 41(7).

1. GLEESON CJ, GAUDRON, McHUGH, KIRBY AND CALLINAN JJ. The appellant is indebted to the respondent in the sum of $4,989.40, which is the amount payable under a final order for costs made in proceedings in the Supreme Court of Victoria in 1994. 2. In September 1996 the respondent served on the appellant a bankruptcy notice under the provisions of the Bankruptcy Act 1966 (Cth). The appellant attempted to satisfy the Federal Court that he had a counter-claim, set-off or cross demand equal to or exceeding the amount of the debt, being a counter­claim, set-off or cross demand that he could not have set up in the action or proceeding in which the order for costs was obtained. The attempt was unsuccessful. A judge of the Federal Court (Sundberg J) declared that the Court was not so satisfied. An appeal to the Full Court of the Federal Court failed. A further appeal is brought to this Court against the decision of the Full Court. 3. Before examining the background to, and the basis of, the appeal, it is convenient to set out the relevant provisions of the Bankruptcy Act. They are to be found in ss 40 and 41, and are as follows: