Fitzgerald v Fitzgerald

Federal Court of Australia|2020-11-06|Before: Stewart J, Reeves J

The application filed 14 May 2020 is dismissed.
The applicant is to pay the respondents' costs of this application, including the costs of the interlocutory application filed 17 July 2020, to be taxed failing agreement. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

INTRODUCTION 1 Mr Mark Fitzgerald has applied under s 35A(5) of the Federal Court of Australia Act 1976 (Cth) (the FCA) for a review of the Registrar's decision made in this matter on 23 April 2020. 2 In his decision the Registrar dismissed Mr Fitzgerald's application for an order under s 40(1)(g) of the Bankruptcy Act 1966 (Cth) (the Act) and r 3.02(3) of the Federal Court (Bankruptcy) Rules 2016 (Cth) to set aside a bankruptcy notice served on Mr Fitzgerald on 24 March 2020. His application was made on the ground that he had a set-off or counter-claim against the respondents. Specifically, the claim which he is currently pursuing in the Supreme Court of Queensland (the Supreme Court proceeding) for an amount which, he claims, exceeds the amount of the debt in the bankruptcy notice. 3 The first respondent in this application, Ms Roslyn Fitzgerald, is Mr Fitzgerald's sister. She is also the sole director and shareholder in each of the second and third respondents. All three respondents (who I will jointly refer to hereafter as Ms Fitzgerald) are defendants in the Supreme Court proceeding. 4 The Registrar's decision was delivered orally. However, from the transcript, it appears that he was not satisfied that Mr Fitzgerald had established a prima facie case that the Supreme Court proceeding supported a set-off or counter-claim for an amount greater than the amount of the debt in the bankruptcy notice. In coming to that conclusion, he had regard to the comments of Stewart J in Royal v Nazloomian, in the matter of Royal [2019] FCA 555.

FACTUAL BACKGROUND 5 Mr Fitzgerald commenced the Supreme Court proceeding on 22 January 2017. In it he alleged that, in or about 2014, he and Ms Fitzgerald made an oral agreement to enter into a joint venture by which he would identify suitable properties for development and Ms Fitzgerald would fund the purchase of those properties. Under this agreement, Mr Fitzgerald claimed that he identified three properties and, through the second and third respondents, Ms Fitzgerald subsequently purchased those properties. He claimed that he then managed the development of those properties until he was hospitalised in February 2015. He claimed that two of the developments were completed and, despite having made a demand, he had not received his share of the profits that were made. Mr Fitzgerald also claimed damages for loss of opportunity regarding a third property with respect to which he alleges Ms Fitzgerald acted in breach of the joint venture agreement. 6 In her defence, Ms Fitzgerald claimed that the oral agreement she and her brother entered into was not a joint venture, but rather comprised a consultancy arrangement pursuant to which Mr Fitzgerald would be paid a fee, but would not be entitled to a share of any profits. 7 The Supreme Court proceeding was set down for a three day trial to commence on 3 June 2019. 8 On 27 May 2019, following an application made by Mr Fitzgerald, Flanagan J made orders adjourning the trial and requiring Mr Fitzgerald to pay Ms Fitzgerald's costs thrown away by the adjournment, on an indemnity basis. The precise terms of that order were as follows: The plaintiff is to pay forthwith, and in each case on the indemnity basis, the defendants' costs of this application and thrown away as a consequence of the adjournment, such costs to include the costs of the case conference on 13 May 2019 before the Resolution Registrar, and correspondence and other costs incurred as a result of the plaintiff's non-compliance with the orders of the Court made on 2 April 2019 and on 13 May 2019. 9 For convenience, I will refer to this order hereafter as "the indemnity costs order". Two things are to be noted about it. First, it does not include any limitation under r 682(2) of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) that: "[T]he costs not be assessed until the proceeding ends". To the contrary, it expressly states that the costs are to be paid "forthwith". Secondly, there is no evidence before me that Mr Fitzgerald sought leave, from Flanagan J, to appeal this order under s 64 of the Supreme Court of Queensland Act 1991 (Qld). 10 Acting under r 705 of the UCPR, Ms Katrina Pagey, Ms Fitzgerald's lawyer, served a costs statement on Mr Fitzgerald's lawyers on 3 July 2019 claiming costs in the amount of $137,655.39. Mr Fitzgerald's lawyers responded with a notice of objection under r 706 of the UCPR. 11 Thereafter, with the consent of the parties, Mr Stephen Hartwell was appointed to undertake a costs assessment in accordance with the pertinent provisions of the UCPR. Mr Hartwell provided his draft costs assessment certificate on 19 November 2019. He then sought, received and considered submissions on the costs of that assessment. 12 On 13 February 2020, Mr Hartwell issued a cost certificate under r 737 of the UCPR for the amount of $137,758.52. 13 Based on that certificate, on 28 February 2020, a Registrar of the Supreme Court entered an order under r 740 of the UCPR in the following terms: 1. The Plaintiff pay the Defendants['] costs pursuant to: * the order of the Court dated 27 May 2019; and * the certificate of the costs assessor filed on 14 February 2020, assessed at $137,758.52. To distinguish it from the indemnity costs order, I will refer to this order hereafter as either, simply, "the costs order", or "the judgment debt". There is no evidence that Mr Fitzgerald applied to have the enforcement of this order stayed under r 740(3) of the UCPR. That rule provides: "[T]he order is not enforceable until at least 14 days after it is made and the court may stay enforcement pending review of the assessment on terms the court considers just". 14 On 24 March 2020, relying on the judgment debt, Ms Fitzgerald caused a bankruptcy notice to be served on Mr Fitzgerald. The present application to set aside that notice was filed on 14 April 2020. As already noted, the Registrar dismissed that application on 23 April 2020. 15 Finally, it should be noted that, about six weeks after I reserved my decision on this review application in June 2020, Mr Fitzgerald applied to re-open his case to file further evidence intended to show that he had, in the meantime, taken steps in the Supreme Court proceeding to review Mr Hartwell's costs assessment mentioned earlier. That application was subsequently dismissed (see [2020] FCA 1445). As indicated at [6] of that decision, I will deal with the costs of that application at the conclusion of these reasons.

THE MATERIALS 16 The quantity of affidavit material relied upon by the parties in the two stages of this application was voluminous, to say the least. Mr Fitzgerald made and filed three affidavits and his lawyer, Mr William Cusack, made and filed two. In addition, Mr Fitzgerald filed and relied on an affidavit made by Mr Alexander Winkler, a civil engineer, and one made by Ms Ashleigh Armstrong, a solicitor assisting Mr Cusack. On the respondents' part, Ms Fitzgerald made and filed two affidavits and her lawyer, Ms Pagey, made and filed another two. That led to approximately 1,800 pages of affidavit material being before the Registrar and a further 800 (approximately) pages being filed in respect of this review application. As will appear later in these reasons, most of this material was irrelevant to the two issues that fell to be determined in this application.

THE CONTENTIONS 17 Mr Fitzgerald advanced two grounds in support of his application: (a) that he had a counter-claim, set-off or cross demand in the terms of s 40(1)(g) of the Act which was equal to, or in excess of, the judgment debt; and (b) that the Court should go behind the judgment debt and determine that there was no debt due and owing to Ms Fitzgerald. 18 On the first ground, Mr Fitzgerald relied on the existing Supreme Court proceeding and the claims being pursued by him in that proceeding. While he claimed that it was not possible for him to quantify the amount of those claims, he asserted it was likely to be "many times" the judgment debt. On the second ground, he claimed that Flanagan J had made the indemnity costs order based upon a misunderstanding about the bases upon which he was seeking the adjournment of the trial, namely the unavailability of a crucial witness for medical reasons. He also claimed that Ms Fitzgerald was not genuinely ready to proceed with the trial. As already mentioned above, he also sought to challenge Mr Hartwell's costs assessment upon which both the costs certificate and, ultimately, the costs order were based. 19 In response, Ms Fitzgerald submitted that it was not clear what claims Mr Fitzgerald was pursuing in the Supreme Court proceeding because the most recent statement of claim in that proceeding was only in draft form and, while the Registrar had ordered that an amended statement of claim and defence be exchanged, the managing judge had not yet given leave for those amendments to be made. Ms Fitzgerald also claimed that Mr Fitzgerald had failed to diligently prosecute the Supreme Court proceeding, particularly since the trial was vacated in May 2019, thus indicating that the claims being pursued were not genuine claims. Finally, she contended there was no basis upon which this Court could go behind the judgment debt

THE RELEVANT PRINCIPLES 20 A review of this kind proceeds as a rehearing de novo (see, mostly recently, Deputy Commissioner of Taxation v NRA Engineering Pty Ltd (in liq) (No 2) [2019] FCA 1755 at [18] per Anderson J). It is directed to the exercise of power by the Registrar, rather than the individual findings of fact made by him (see Deputy Commissioner of Taxation v Commercial & General Law (SA) Pty Ltd (2011) 198 FCR 417; [2011] FCA 1269 at [98]-[99] per Lander J). 21 The principles pertinent to the first leg of Mr Fitzgerald's application, namely his reliance on s 40(1)(g) of the Act, were outlined by Lindgren J in Glew v Harrowell, in the matter of Glew (2003) 198 ALR 331; [2003] FCA 373 (Glew) as follows: [11] Plainly, in order to "satisfy" the court for the purposes of s 40(1)(g), the debtor is not required to prove, as on a final hearing, the asserted entitlement to recover from the creditor. Accordingly, evidence tendered on an application to set aside is to be tested for admissibility, not as if the proceeding were one in which the debtor's claim was being finally determined, but by reference to the question whether the court should be satisfied that the debtor has a claim deserving to be finally determined. [12] Perhaps little more can usefully be said than that a debtor must satisfy the court that there is sufficient substance to the counter-claim, set-off or cross-demand asserted to make it one which the debtor should, in justice, be permitted to have heard and determined in the usual way, rather than be forced to comply with the bankruptcy notice by payment or to commit an act of bankruptcy. (Emphasis added) 22 The principles bearing on the Court's discretion to go behind a judgment debt in a bankruptcy matter, that being the second leg of Mr Fitzgerald's application, were expressed by Barwick CJ in Wren v Mahony (1972) 126 CLR 212 as follows (at 224-225): … The judgment is never conclusive in bankruptcy. It does not always represent itself as the relevant debt of the petitioning creditor, even though under the general law, the prior existing debt has merged in a judgment. But the Bankruptcy Court may accept the judgment as satisfactory proof of the petitioning creditor's debt. In that sense that court has a discretion. It may or may not so accept the judgment. But it has been made quite clear by the decisions of the past that where reason is shown for questioning whether behind the judgment or as it is said, as the consideration for it, there was in truth and reality a debt due to the petitioning creditor, the Court of Bankruptcy can no longer accept the judgment as such satisfactory proof. It must then exercise its power, or if you will, its discretion to look at what is behind the judgment: to what is its consideration … the emphasis is upon the paramount need to have satisfactory proof of the petitioning creditor's debt. The Court's discretion in my opinion is a discretion to accept the judgment as satisfactory proof of that debt. That discretion is not well exercised where substantial reasons are given for questioning whether behind that judgment there was in truth and reality a debt due to the petitioner.

CONSIDERATION 23 As noted in the contentions above, there are two grounds to Mr Fitzgerald's application. For the reasons that follow, both are rejected. On the first ground, having regard to the observations of Lindgren J in Glew, the issue is whether Mr Fitzgerald has satisfied me that "there is sufficient substance" to his claims that they "deserv[e] to be finally determined" before he is forced to comply with the bankruptcy notice (see the emphasis in Glew at [21] above). Answering this question requires an examination of the claims that have been advanced, and the evidence that has been adduced in respect of them, to determine whether they have the requisite substance, that is, whether they are of a "substantial or solid character or quality" (Macquarie Dictionary (8th ed, Macquarie Dictionary Publishers, 2020)). That does not usually require an examination of the strength or cogency of those claims. Nor does it involve conducting what is, in effect, a mini trial. 24 The most appropriate starting point for that examination is the claims set out in the pleadings in the Supreme Court proceeding. In one of his affidavits, Mr Fitzgerald's lawyer, Mr Cusack, described the state of those pleadings in the following terms: 23. Annexure "WPC3-1" is [a] true copy of [Ms Fitzgerald's] further amended defence and further counterclaim filed 7 November 2018. 24. Annexure "WPC3-2" is a true copy of [Ms Fitzgerald's] proposed second further amended defence and amended counterclaim served on 15 May 2019 shortly before the scheduled trial date. Leave to file this pleading was to be sought at the trial but this never happened because the trial was adjourned. 25. For the reasons mentioned below the pleading in "WPC3-2" represents a major turnaround from the case pleaded by [Ms Fitzgerald] in "WPC3-1". 26. Annexure "WPC4-1" is a true copy [of] Mr Fitzgerald's further amended Statement of claim filed 8 February 2019 [sic - 2018]. 27. Annexure "WPC4-2" is Counsel's draft Second Further Amended Statement of claim served shortly before the trial -13 [sic] May 2019. Leave to file this pleading was to be sought at the trial, which was adjourned, and leave was not granted. 28. A true copy of Mr Fitzgerald's proposed second further amended statement of claim which is annexure "WPC4-3" has been compiled by me. The draft needs further work (to integrate the two previous pleadings and confirm particulars) but I do verily believe contains a summary of the chronology of the events and the issues in dispute. Since becoming directly involved in the matter (and as mentioned later in relation to [Ms Fitzgerald's] solicitors['] request in relation to Mr Fitzgerald's disclosure) I have had cause to review the large number of documents upon which Mr Fitzgerald relies from his own and third party sources and I have interviewed him to clarify his claim on a number of occasions. 29. As a result, it is my conclusion which I say is reasonable, that Mr Fitzgerald has more than reasonable prospects of successfully concluding his claim with a reasonable prospect of an award of damages and[/]or compensation up to a total of $ [sic] $2,866,886.00. [sic] on the grounds and for the reasons as alleged in "WPC4-3" (subject to proper disclosure and accounting by the Judgment Creditors). (Emphasis in original) 25 It is apparent from this description that the pleadings in the Supreme Court proceeding are in a state of flux. Leave has not yet been given to file and rely on the two amended versions of the statement of claim represented by the documents at Annexures "WPC4-2" and "WPC4-3" above. Nor has Ms Fitzgerald obtained leave to rely on the amended defence represented by the document at Annexure "WPC3-2" above. In those circumstances, I do not consider it would be an "efficient use of judicial … resources", nor lead to the timely disposal of this application at a cost that is "proportionate to the importance and complexity of the matters in dispute" (see s 37M(2) of the FCA) to make an assessment of Mr Fitzgerald's two further proposed amended statements of claim. Instead, the aforementioned considerations dictate that my examination should be limited to the claims Mr Fitzgerald has pleaded in the extant statement of claim, Annexure "WPC4-1" above. 26 For similar reasons, it would not be efficient, timely or proportionate to embark upon the many inquiries proposed by the parties in filing the vast quantity of affidavit material described above. That includes whether Mr Fitzgerald has been dilatory in prosecuting his claims in the Supreme Court proceeding and which party is at fault in the disputed discovery process in that proceeding. That is so because these inquiries are of marginal relevance, at best, to the critical focus of the present inquiry, namely the substance of Mr Fitzgerald's claims. 27 Turning then to Annexure "WPC4-1", according to that document, Mr Fitzgerald's claims revolve around an agreement he alleges he made with Ms Fitzgerald in "early 2014". The critical facts with respect to that alleged agreement are pleaded at [5]-[6] of Annexure "WPC4-1" as follows: 5. Mark [Fitzgerald] and Roslyn [Fitzgerald] entered an express agreement (the "Agreement") to the effect that: (a) from that time onwards, they would carry on the business of property development in common with a view to profit, (b) they would share the profits of this business equally, that is, fifty/fifty, (c) Mark [Fitzgerald] would contribute his experience in property development, most significantly by identifying properties for purchase that could be re-sold at a profit, (d) Roslyn [Fitzgerald] would contribute her financial resources, most significantly her ability to obtain borrowed funds to use as working capital to hold property before it could be re-sold at a profit, and (e) investment decisions would be made by mutual consent. Particulars The agreement was oral. It was reached in a single conversation between Mark [Fitzgerald] and Roslyn [Fitzgerald] in early 2014 that occurred while Mark [Fitzgerald] and Robyn [sic - Roslyn] [Fitzgerald] were travelling in Robyn[…] [sic - Roslyn] [Fitzgerald's] Toyota Rav 4 SUV near Carnival Street, Loganholme. 6. The Agreement did not make any express provision for the relationship between the parties breaking down, or provide for the contingency of a party refusing or becoming unable to perform his or her obligations, or for its own termination. 28 At [7] of Annexure "WPC4-1", Mr Fitzgerald alleges that this agreement constitutes: … (a) a contract between Mark [Fitzgerald] and Roslyn [Fitzgerald], and further (b) a partnership between Mark [Fitzgerald] and Roslyn [Fitzgerald] under the Partnership Act 1891 (Qld), or (c) alternatively, a fiduciary relationship arising from conduct embarked on with a view to forming a partnership, and (d) further or alternatively, a representation by Roslyn [Fitzgerald] giving rise to a promissory estoppel (on the additional premises pleaded in paragraphs 36 and 37 of this statement of claim), and (e) further or alternatively, an arrangement upon which equity imposes a common endeavour constructive trust (on the additional premises pleaded in paragraphs 36 and 37 of this statement of claim). 29 Pursuant to this alleged agreement, Mr Fitzgerald claims that he and his sister undertook three property developments as follows: (a) the Tristania Street Project (pleaded to at [8]-[20] of Annexure "WPC4-1"); (b) the Yatala Project (pleaded to at [21]-[30] of Annexure "WPC4-1"); and (c) the Tanah Merah Project (pleaded to at [31]-[35] of Annexure "WPC4-1"). 30 At [40]-[41] of Annexure "WPC4-1", Mr Fitzgerald claims "unliquidated damages for economic loss in excess of $1,086,250" as follows: 40. On the premises of paragraphs 5 [the Agreement], 18 [the Tristania Street Project], 30 [the Yatala Project], 33 … and 35 [the Tanah Merah Project], unliquidated damages for economic loss in excess of $1,086,250 are due to Mark [Fitzgerald] for Roslyn[…] [Fitzgerald's] contractual breaches of the Agreement and further or alternatively breaches of her fiduciary duties as pleaded in paragraph 7. 41. As a partner of Mark [Fitzgerald] and on the premises of paragraphs 5 and 7, Roslyn [Fitzgerald] owes Mark [Fitzgerald] a duty to account for the business of the partnership under Chapter 14, part 1 of the Uniform Civil Procedure Rules 2009 (Qld) and section 14 of the Partnership Act 1891 (Qld). 31 At the conclusion of Annexure "WPC4-1", Mr Fitzgerald then seeks the following remedies: … 1. A declaration that [Mark Fitzgerald] and [Roslyn Fitzgerald] are in partnership, 2. An order that an account be taken of partnership profits, 3. Damages for breaches of contract or alternatively breaches of fiduciary duties in excess of $1,086,250, 4. Interest up to judgment under section 58(3) of the Civil Proceedings Act 2011, 5. A declaration that a half share in the proceeds of the subdivision and sale of the land formerly described as Lot 94 on RP127145 and Lot 93 on RP127145 [the Tristania Street Project] is subject to a constructive trust or otherwise charged in equity in favour of [Mark Fitzgerald], 6. A declaration that a half share in the land described as lot 7 on RP 91086, title reference 13286213 [the Yatala Project] is subject to a constructive trust or otherwise charged in equity in favour of [Mark Fitzgerald], 7. An order for the appointment of statutory trustees for the sale of land described as lot 7 on RP 91086 [the Tanah Merah Project] pursuant to section 38 of the Property Law Act 1974, and 8. Costs. 32 In Annexure "WPC3-1", Ms Fitzgerald denies the agreement alleged in Annexure "WPC4-1" and she also denies that Mr Fitzgerald is entitled to the relief he has claimed in Annexure "WPC4-1". Instead, she alleges that she and he entered into a consultancy agreement as follows (at [5]): … (a) In late 2013 / early 2014 [Roslyn Fitzgerald] planned to purchase an investment property. (b) Around the same time, [Roslyn Fitzgerald] returned from overseas to help her daughter and young family. (c) On or about 26 January 2014 [Roslyn Fitzgerald] telephoned [Mark Fitzgerald] and told him that she wished to purchase a property at Wynnum and said words to the effect: "would you like to have a look at a property that I want to buy, I would be interested in your opinion". [Mark Fitzgerald] replied, "ok". (d) In or about early 2014 [Roslyn Fitzgerald] attended at a property in Wynnum with [Mark Fitzgerald]. [Mark Fitzgerald] informed [Roslyn Fitzgerald] that he did not think [Roslyn Fitzgerald] should purchase that property. (e) [Mark Fitzgerald] and [Roslyn Fitzgerald] then travelled to another property located at 4 Carnival Street, Loganholme in the State of Queensland. (f) On or about 23 February 2014 [Mark Fitzgerald] travelled with [Roslyn Fitzgerald] to the corner of Tristania and Utrech Streets, Cornubia in the State of Queensland ("Lot 94"). [Roslyn Fitzgerald] and [Mark Fitzgerald] had the following conversation: [Roslyn Fitzgerald]: "we could enter into a partnership everything would be fifty/fifty, That is, you work onsite and manage the development and I'll supply the finance". [Mark Fitzgerald]: "Ok, but I don't do contracts" [Roslyn Fitzgerald]: "Mark, I've been through a messy divorce and I know some of your history. I'm not doing this without contracts. I need it all above board". [Mark Fitzgerald]: "I don't do contracts. I just want to be paid for what I do". [Roslyn Fitzgerald]: "Ok, so then I'll pay you for what you do, your time". [Mark Fitzgerald]: "Yes".

(g) The 23 February 2014 Discussion related only to the potential investment in, and development of Lot 94. It was agreed that: ("the Consultancy Agreement") (i) [Mark Fitzgerald] (or his related entities) would invoice [Roslyn Fitzgerald] for the services performed by him; and (ii) [Roslyn Fitzgerald] would pay such invoices. (h) Pursuant to the Consultancy Agreement: (i) [Mark Fitzgerald] caused for [sic] invoices to be issued from entities controlled by him, to [Roslyn Fitzgerald], including, but not limited to the following: Date From To Amount Notes 30.06.14 Masonre [Roslyn Fitzgerald] $5,345.45 For works performed between 11 April 2014 and 26 June 2014 30.09.14 Masonre [Roslyn Fitzgerald] $13,375.00 For works performed between 3.07.13 to 23.07.14 31.12.14 Masonre [Roslyn Fitzgerald] $7,500.00 For works performed between 03.11.13 to 10.12.14. 31.03.14 Masonre [Roslyn Fitzgerald] $1,500.00 For works performed between 05.01.13 and 05.03.14. 22.06.17 Cressbrook [Roslyn Fitzgerald] $110,000.00 For works performed up to and including 22 June 2017.

(ii) The above invoices have been paid. (Emphasis in original) 33 Having identified the claims Mr Fitzgerald is pursuing in the Supreme Court proceeding, it is necessary, next, to turn to the evidence that he has filed in this application to endeavour to demonstrate that those claims have the "sufficient substance" mentioned earlier. The first of Mr Fitzgerald's three affidavits contains the following statements concerning the alleged agreement pleaded at [5]-[7] of Annexure "WPC4-1" (see at [27] above): (a) At [33]-[34], he described how the alleged agreement was made and what services he provided pursuant to it as follows: 33. The agreement was oral. It was concluded after preliminary/background discussions in a single conversation between me and [Roslyn Fitzgerald] in early 2014 that occurred while we were travelling in [Roslyn Fitzgerald's] vehicle near Carnival Street, Loganlea in the State of Queensland. 34. In partnership with [Roslyn Fitzgerald], I provided my services in respect of 3 separate projects: (a) Tristania Street Project; (b) Yatala Land; and (c) Tanah Merah Development which are defined below. (b) After setting out the details of the Tristania Street Project (at [35]), Mr Fitzgerald then said at [36]-[37]: 36. In identifying such land as a property development opportunity I used and applied my intellectual property and knowhow and concluded from my calculations, investigations and enquiries that such property satisfied the development criteria … and would be eminently suitable as a property to introduce to [Roslyn Fitzgerald] for joint enterprise development pursuant to the Agreement. I have been dealing in land development and construction predominately in Logan City since 1972 as my sole source of revenue. 37. [Roslyn Fitzgerald] and I mutually decided that the partnership would purchase the Tristania Street Land under the agreement. (c) At [46]-[47], Mr Fitzgerald then described the alternative arrangements that he claims were made for his nephews to assist with the Tristania Street Project when he became hospitalised in February 2015 as follows: 46. The new arrangements which had to be made because I was in hospital were that Alexander and Nicholas [Winkler] became the development managers which was the role I had adopted and had carried out before I had my leg amputated . 47. I asked Alexander [Winkler] to take my place and I promised them that if things worked out well I would pay them a bonus from my share of the profits. As it happened Roslyn [Fitzgerald] pre-empted these arrangements and did a deal directly with Alexander and Nicholas [Winkler] to pay a bonus based on the project costs savings which had been able to be achieved. This was one of the first signs that Roslyn [Fitzgerald] was trying to rewrite our agreement to suit herself. (Errors in original) (d) At [55]-[56], he made the following assertions about the alleged agreement and possible alternative claims he may pursue: 55. Further even if it were found that there was no partnership agreement and or trust obligations the amount of $100,000.00 which Roslyn [Fitzgerald] has suggested is sufficient recompense for my efforts is grossly inadequate on any reasonable view of the value of my contributions assessed in acordance with usual industry standards . 56. Also and for this reason it is proposed if necessary to obtain expert evidence to support alternative claims founded on the doctrines of unjust enrichment /quantum meruit as Mr Cusack has advised me and I do verily believe because each of the development opportunities did or could have lived up to my assessments. Therefore 50% of the profits would be an industry standard fee for introducng such proprerties and assissting the developer to see the developments through to the predicted conclusions. (Emphasis and errors in original) (e) Finally, at [61]-[64], he made the following claims about the circumstances surrounding the Tanah Merah Project: 61. In around November 2015 I identified a further property development opportunity involving the purchase of lot 7 on RP 91086, title reference 13286213, with a view to its eventual resale or subdivision This is the "Tanah Merah Land". I had previously introduced the vendor party to the property in 2001 . 62. I applied my know-how and identified such land as capable of satisfying the development criteria. I was aware of the availability of such land for purchase as the result of my past associations with the vendor and her family with whom I had a friendly relationship. (Emphasis and errors in original) 34 Mr Fitzgerald's second affidavit contains only two relevant pieces of evidence concerning the alleged agreement. First, at [7], he described the claim he was pursuing in the Supreme Court proceeding and the agreement upon which it was based in the following terms: … As set out in [WPC4-1], my claim is that I entered into agreement with Roslyn [Fitzgerald] that we would carry on the business of property development in common with a view to splitting profits of the business equally. 35 The only other mention of the alleged agreement in that affidavit is the following general reference at [45]: As I have mentioned in my earlier affidavit my role was to introduce properties and after development and sale of such properties, I would get half of the profits[.] 36 Mr Fitzgerald was even less forthcoming with evidence about the alleged agreement in his third and final affidavit. Most of that affidavit was devoted to a change that he claimed was made to Ms Fitzgerald's case from March 2019 and to expressing his views with respect to the profits that were made in the course of the three development projects. However, while he did not directly mention the agreement, he did give some evidence concerning the invoice he issued in 30 June 2017 that is described at [5] of Ms Fitzgerald's defence Annexure "WPC3-1" (see at [32] above). He describes the circumstances in which that invoice was issued and paid in the following terms (at [37]-[38]): 37. I entered into a contract to buy a house of my own and asked for accounting details which were not forthcoming. It was then that Roslyn [Fitzgerald] asked [Alexander Winkler] to submit a tax invoice for consultancy fees on my behalf. After more than 3 years of effort and June 30 2017 approaching. I thought the invoice was for tax deduction purposes and would count as credit towards my share of profits but Roslyn [Fitzgerald] clearly has had different ideas and rests her denial of my claim on the basis that there was a belated one off payment for consultancy fees. 38. I respectfully say that even apart from evidence by other witnesses this suggestion is implausible that is that 3 years after the project started, I would suddenly get consultancy fees. I am not a consultant and have not received payment for consultancy fees in my working life. 37 This analysis of the claims made by Mr Fitzgerald in his extant statement of claim Annexure "WPC4-1" and the evidence concerning those claims in his three affidavits filed in this application does not satisfy me that there is sufficient substance to those claims to justify my staying the operation of the bankruptcy notice until he has an opportunity to pursue them. In reaching this conclusion, I have had regard to a number of matters, including the following. First, the agreement is oral and it is alleged to have been made in a single conversation that occurred approximately three years before the Supreme Court proceeding was commenced. Secondly, the agreement is not pleaded in customary "he said", "she said", form, but is instead expressed in conclusory terms (see at [27] above). Thirdly, and perhaps most importantly, there is no contemporaneous record of the agreement despite it allegedly concerning developments involving the investment of many millions of dollars. Fourthly, to the extent that subsequent conduct might be relied on, Mr Fitzgerald has acknowledged that, in June 2017, he rendered a tax invoice to Ms Fitzgerald for consultancy fees which invoice was paid (see [36] above). This acknowledgement is arguably more consistent with the consultancy agreement pleaded in Ms Fitzgerald's defence (see at [32] above) than the joint venture agreement pleaded in Mr Fitzgerald's statement of claim. Finally, in his affidavits, Mr Fitzgerald himself seems to cast doubt on his claims and proffers, instead, other potential claims (see at [33(d)] above). 38 Two further observations are appropriate before leaving this issue. First, since I have concluded that Mr Fitzgerald's claims do not have sufficient substance to warrant ordering a stay of the bankruptcy notice, it is unnecessary to determine the quantum of any award of damages Mr Fitzgerald may have been able to obtain if he were to establish those claims. Secondly, however, the conclusion above is based on an examination of Mr Fitzgerald's claims as pleaded in his extant statement of claim Annexure "WPC4-1" and the evidence he has adduced in this application. It does not, therefore, necessarily mean that Mr Fitzgerald may not be able to adduce the evidence necessary to prove those claims, or an amended version of them, at the trial of the Supreme Court proceeding, if and when that occurs. 39 For these reasons, I do not consider Mr Fitzgerald has established that he has a set-off or counter-claim in terms of s 40(1)(g) of the Act which would justify staying the bankruptcy notice in this matter. 40 I turn, next, to the second ground of this application: Mr Fitzgerald's contention that I should go behind the costs order of 28 February 2020. The short answer to that contention is that Mr Fitzgerald has not shown any valid reason, much less a substantial one, to question whether, behind that order, there is "in truth and reality a debt due". To begin with, as mentioned above, no attempt was made to seek leave to appeal the original indemnity costs order of 27 May 2019 made by Flanagan J upon which the costs order of 28 February 2020 is based. That being so, the views of Mr Fitzgerald and his lawyer, Mr Cusack, about whether the former order was justified, are completely irrelevant. That order stands as an order of the Supreme Court of Queensland and nothing of merit has been shown which would justify my doubting its validity and force. 41 Similar observations may be made with respect to the costs order of 28 February 2020. As outlined earlier, prior to that order being issued, the costs assessment process in Ch 17A of the UCPR was followed and a cost certificate was duly issued. Further, that order was duly entered by a Registrar of the Supreme Court under r 740 of the UCPR and no order was made under r 740(3) to stay its enforcement. In that set of circumstances, as with the indemnity costs order above, whatever unarticulated concerns Mr Fitzgerald and his lawyer may have about the costs assessment upon which the cost certificate is based are entirely irrelevant. 42 The position with respect to both orders is, therefore, the opposite of that for which Mr Fitzgerald contends. That is to say, there is, in truth and reality, a debt due to Ms Fitzgerald under them. It follows that there is no reason, let alone a substantial reason, to go behind the judgment debt. Accordingly, there is no merit to this second ground of Mr Fitzgerald's application.

CONCLUSION 43 For these reasons, Mr Fitzgerald's application filed 14 May 2020 to review the Registrar's decision of 23 April 2020 must be dismissed. The orders will be:

The application filed 14 May 2020 is dismissed.
The applicant is to pay the respondents' costs of this application, including the costs of the interlocutory application filed 17 July 2020, to be taxed failing agreement. 44 I will hear from the parties as to what orders are required with respect to the bankruptcy notice. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Reeves.

Uniform Civil Procedure Rules 2009(Qld)

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