Burkitt, R.J. v Harts Pty Ltd & Ors [1995] FCA 496

Burkitt, R.J. v Harts Pty Ltd & Ors [1995] FCA 496

Harts failed to establish that the $10,500 it appropriated from Mr Burkitt's trust money was protected from the s 139ZQ notice, because the payments were prima facie preferential, the claimed creditor benefit was not proved or commensurate with the amount taken, the whole amount was appropriated in satisfaction of a debt owed by Mr Burkitt to Harts, and any allowance for services or lien-like entitlement had first to be considered by the Trustee rather than enforced by self-help. The Trustee's cross-application also failed because Harts' payment of the remaining balance to Mr Burkitt before bankruptcy was made in good faith and in the ordinary course of business for the purposes of s 124...

Jurisdiction
Australia
Judgment Date
14 July 1995
Procedural Posture
Bankruptcy Application and Cross Application / Reasons for Judgment and Orders
Outcome
Both Harts Pty Ltd's application and the Trustee's cross-application were dismissed with costs, with liberty reserved to apply.
Legal Topics
['setting Aside Notice Under S 139 ZQ of the Bankruptcy Act' 'void Preferences' 'payments Before Bankruptcy' 'good Faith and Ordinary Course of Business' 'particular Lien Over Funds']
['bankruptcy Law'] ['setting Aside Notice Under S 139 ZQ of the Bankruptcy Act' 'void Preferences' 'payments Before Bankruptcy' 'good Faith and Ordinary Course of Business' 'particular Lien Over Funds']

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Procedural Posture

Bankruptcy Application and Cross Application / Reasons for Judgment and Orders

Legal Issues

  1. 1 ["Whether Harts Pty Ltd's payments of $10,500 from Mr Burkitt's trust account to itself were void as a preference under s 122 of the Bankruptcy Act or protected by a lien or entitlement for services." 'Whether Harts Pty Ltd was discharged under s 124 of the Bankruptcy Act for paying the remaining trust account balance to Mr Burkitt before bankruptcy.' 'Whether the Trustee was entitled to declarations and repayment of $23,169 with interest.']

Ratio Decidendi

Harts failed to establish that the $10,500 it appropriated from Mr Burkitt's trust money was protected from the s 139ZQ notice, because the payments were prima facie preferential, the claimed creditor benefit was not proved or commensurate with the amount taken, the whole amount was appropriated in satisfaction of a debt owed by Mr Burkitt to Harts, and any allowance for services or lien-like entitlement had first to be considered by the Trustee rather than enforced by self-help. The Trustee's cross-application also failed because Harts' payment of the remaining balance to Mr Burkitt before bankruptcy was made in good faith and in the ordinary course of business for the purposes of s 124...

Court Disposition

Both Harts Pty Ltd's application and the Trustee's cross-application were dismissed with costs, with liberty reserved to apply.

Orders

  • ['That the application by Harts Pty Ltd dated 10 March 1995 be dismissed with costs.' 'That the cross-application by the Trustee, Paul Desmond Sweeney, dated 10 April 1995 be dismissed with costs.' "That liberty be reserved to any party to apply on not less than 72 hours' notice in writing to each other party."]