Trkulja v Gibsons Solicitors Pty Ltd [2011] FMCA 655

Federal Magistrates Court of Australia|2011-08-26

(1) All extant applications are adjourned to the 14th day of October 2011 at 10:00am.

(2) Pursuant to s.41(6A) of the Bankruptcy Act 1966 the time fixed for compliance with the bankruptcy notice BN822/2011 is extended to the 14th day of October 2011 at 4:00pm.

This matter comes before the Court on an application for review filed by Milorad Trkulja on 18 July 2011. The order sought to be reviewed is one of Registrar Luxton made in Melbourne on 13 July 2011. Registrar Luxton ordered that:
- (1) The application to set aside bankruptcy notice BN822/2011 be dismissed.
- (2) The applicant pay the respondent's costs, including reserve costs, to be taxed in default of agreement.
Before the Court on this hearing de novo is the amended application of the applicant filed 29 March 2011 (his application being originally filed on 23 March 2011) which seeks leave to file and serve the application out of time and further seeks that bankruptcy notice BN822/2011, served on the applicant on 11 February 2011, be set aside.

The respondent was formerly the applicant's solicitor. The applicant determined that the respondent should no longer act for him and prior to the issue of proceedings in the Melbourne Magistrates' Court for recovery of fees owing by the applicant to the respondent, the applicant caused to be sent to the respondent, an email dated 29 August 2010, which relevantly requested the following:

_"_Please provide me your final account in taxable form from the starting to act for me to 27/8/2010

a) Provide me all receipts for all money that I have paid you.

b) Provide me with all invoice that you have paid on my behalf

c) Provide me with all invoices that you paid to barristers Mr Lancaster and Mr Littlemore

d) Any legal fees that you have paid on my behalf with my four cases."

The applicant was further seeking that the respondent provide him with his file and documents in relation to litigation conducted on his behalf. The applicant requested a suitable time for the solicitors to make his file ready, and for a taxi to pick up his files. He indicated that he would pay his outstanding fees, and further, that if the files were not returned to him, he would not keep "my promise".
On 21 September 2010, the respondent filed a complaint in the Magistrates' Court of Victoria at Melbourne. The defendant was the applicant in these proceedings. The nature of the complaint was moneys owed and the amount claimed was in the sum of $69,365.25. The moneys claimed related to the provision of legal services by the plaintiff to the defendant. Service of the complaint was said by the plaintiff to be effected personally, and some time after the filing of the complaint.
Mr Trkulja now claims that he was not served with the complaint. He however filed a defence dated 7 February 2011, which was filed within time, following service of the complaint upon him, as alleged by the respondent in these proceedings.
Following receipt of the defence, the plaintiff made an application for a summary order filed 16 December 2010 in the Melbourne Magistrates' Court. The summary order was sought on the basis that it was alleged the defendant had no defence as to the whole of the plaintiff's claim in accordance with r.10.08(1) of the Magistrates' Court Civil Procedure Rules 2009 (Vic). That application was supported by affidavit sworn by Mr Dorey on 16 December 2010. Mr Trkulja claims he was not served with the application for a summary order.
The application for a summary order was forwarded by registered post to the notice of address for service provided by Mr Trkulja. It was returned to the plaintiff's offices as unclaimed. However, the plaintiff alleges service was also effected by a second means, namely by email in accordance with an order for substituted service, obtained earlier in the proceedings in the Melbourne Magistrates' Court.
On 20 January 2011, the application for summary order proceeded in the absence of the applicant in these proceedings. The order as sought was made which included payment of the sum claimed together with further amounts by way of interest and costs. Mr Trkulja applied in the Melbourne Magistrates' Court for a rehearing of the matter and setting aside of the order made 20 January 2011. Mr Trkulja claims that the first time he became aware of an application for summary order was on his receipt of the order made on 20 January 2011. He was served with a copy of that order and a bankruptcy notice, by personal service on

11 February 2011. He made his application for a rehearing at that time. 7. The rehearing application of Mr Trkulja proceeded in the Melbourne Magistrates' Court on 15 March 2011 before Magistrate Braun.

Mr Trkulja was unsuccessful and he has appealed the refusal of his rehearing application to the Supreme Court of Victoria at Melbourne by notice of appeal filed 29 March 2011. The hearing of that appeal is to occur on 12 September 2011. The issue is whether on 15 March 2011, Mr Trkulja was denied natural justice in not being heard on the question of service of the summary order application - if in fact he was not so heard. 8. Returning to these proceedings, the applicant relies upon a number of affidavits. They are as follows: two affidavits sworn by him and filed on 23 March 2011; an affidavit sworn and filed by him on 4 April 2011; an affidavit sworn by him on 28 March 2011 and filed by him on 29 March 2011; an affidavit sworn and filed by him on 4 July 2011, an affidavit sworn and filed by him on 18 July 2011; and submissions filed 18 August 2011. The respondent relies upon affidavits sworn by Mr Kevin Michael Dorey on 1 April 2011; 8 July 2011 and 18 August 2011. 9. There is no issue between the parties that the applicant was personally served with the bankruptcy notice on 11 February 2011 and that he has not complied with same nor entered into any arrangement to the creditor's satisfaction. 10. That bankruptcy notice set out clearly to Mr Trkulja that any application by him to set it aside or extend the time for compliance, was required to be brought within 21 days of service. Service was effected on 11 February 2011. Twenty-one days thereafter was Friday, 4 March 2011. Mr Trkulja did not make his application to set aside the bankruptcy notice until 23 March 2011. Mr Trkulja was thus out of time in making the application which he did, and requires the Court's leave to bring such application. 11. The reason for being out of time, as described by Mr Trkulja, was simply that he did not know that he was required to make his application within 21 days. I note the bankruptcy notice is very clear on its face and stipulates the 21 day period. The respondent opposes leave being granted and argues that the applicant has no satisfactory reason for not seeking to set aside the bankruptcy notice within the time for compliance. 12. The Court may extend the time for compliance with a bankruptcy notice, pending the outcome of proceedings to set aside the judgment on which the notice is based on or an application to set aside the notice. It is a precondition of the granting of such an extension that the applicant has, before the expiration of the bankruptcy notice, either applied to set aside the judgment, in which case the provisions of s.41(6A) of the Bankruptcy Act 1966 (Cth) ('the Act') are relevant (Rixon v Bryett [2001] FCA 433) or applied to set aside the bankruptcy notice. He did not do the latter. 13. Mr Trkulja made application to set aside the judgment obtained and have the matter reheard, on the basis that he disputed service of the summary order application and that he had a defence - being that the solicitor's firm had overcharged him. Although that application was heard on 15 March 2011, it was on foot from the time of filing in February 2011 and indeed is still progressing onward in the form of an appeal to the Supreme Court of Victoria. 14. Thus should this Court exercise its discretion to allow the applicant to bring his application out of time. The applicant issued proceedings to set aside the underlying judgment prior to the expiration of the bankruptcy notice. They remain, logically speaking, in the form of the current Supreme Court proceedings. Section 41(6A)(a) of the Act is complied with and the Court is satisfied that s.41(6C) does not apply. The time for compliance with the bankruptcy notice may be extended after that time has expired in these circumstances (Streimer v Tamas [1981] FCA 123; (1981) 37 ALR 211). I propose to extend the time for the applicant to comply with the bankruptcy notice and adjourn the proceedings to a date in October 2011, being a date after the hearing of the proceedings between the parties in the Supreme Court of Victoria.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of Hartnett FM

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