Udovenko, Michael & Ors v Mitchell, Alan Bernard [1997] FCA 1312

Udovenko, Michael & Ors v Mitchell, Alan Bernard [1997] FCA 1312

Where a creditor's claim for costs is subject to statutory requirements (such as delivery of an itemised bill under s 198 of the Legal Profession Act 1987 (NSW)), and those requirements have not been met, no debt is presently due and payable within the meaning of s 44(1)(b) of the Bankruptcy Act. Consequently, such a claim cannot support a bankruptcy notice or sequestration order, and any judgment based on such a non-compliant claim does not suffice to constitute a provable debt for bankruptcy purposes. No relevant waiver of the requirements occurred on the facts.

Jurisdiction
Australia
Judgment Date
28 November 1997
Procedural Posture
Bankruptcy Appeal / Appeal From First Instance Decision on Creditor's Petition and Sequestration Orders
Outcome
Appeal allowed; sequestration orders set aside
Legal Topics
['sequestration Orders' 'non Compliance With Statutory Billing Requirements' 'waiver of Statutory Protection' 'going Behind Judgment in Bankruptcy' 'solicitor Client Debt for Costs']
['bankruptcy' 'legal Profession'] ['sequestration Orders' 'non Compliance With Statutory Billing Requirements' 'waiver of Statutory Protection' 'going Behind Judgment in Bankruptcy' 'solicitor Client Debt for Costs']

Case Brief

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Procedural Posture

Bankruptcy Appeal / Appeal From First Instance Decision on Creditor's Petition and Sequestration Orders

Legal Issues

  1. 1 ["Whether a debt for solicitor's costs not supported by a compliant bill under s 198 (now s 192) of the Legal Profession Act 1987 (NSW) is sufficient for a bankruptcy petition" 'Whether the appellants waived the statutory requirements of s 198 of the Legal Profession Act' 'Whether the bankruptcy court should go behind the Local Court judgment on the basis of statutory non-compliance or other reasons']

Ratio Decidendi

Where a creditor's claim for costs is subject to statutory requirements (such as delivery of an itemised bill under s 198 of the Legal Profession Act 1987 (NSW)), and those requirements have not been met, no debt is presently due and payable within the meaning of s 44(1)(b) of the Bankruptcy Act. Consequently, such a claim cannot support a bankruptcy notice or sequestration order, and any judgment based on such a non-compliant claim does not suffice to constitute a provable debt for bankruptcy purposes. No relevant waiver of the requirements occurred on the facts.

Court Disposition

Appeal allowed; sequestration orders set aside

Orders

  • ['The appeal be allowed.' 'Orders 2, 3, 4, 5 and 6 made on 19 February 1997 be set aside and in lieu thereof it be ordered that the petition be dismissed with costs.' "The respondent pay the appellants' costs."]