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Jia v Wollgramm-Tan [2011] FMCA 38 (1 February 2011)

Last Updated: 11 March 2011

FEDERAL MAGISTRATES COURT OF AUSTRALIA

JIA v WOLLGRAMM-TAN

BANKRUPTCY – Application opposing a Creditor’s Petition – whether the Court should look behind the judgment debt – principles considered – debt did not exist at the time judgment was entered – Creditor’s Petition dismissed.


Boglari v Coadys [2009] FCA 1398
Commonwealth Bank of Australia v Jeans [2005] FCA 569
Corney v Brien [1951] HCA 31; (1951) 84 CLR 343
Ex parte Lennox; Re Lennox (1885) 10 Ch App 317
Joosse v Commissioner of Taxation [2004] FCAFC 245
Re Flatau; ex parte Scotch Whiskey Distillers Ltd (1888) 22 QBD 83
Richardson v Leonard Cohen & Co [2008] FCA 308
Udovenko v Mitchell (1997) 79 FCR 418
Wren v Mahoney [1972] HCA 5; (1972) 126 CLR 212

Applicant:
YE JIA

Respondent:
GABRIELEWOLLGRAMM-TAN

File Number:
SYG1954 of 2010

Judgment of:
Lloyd-Jones FM

Hearing date:
19 October 2010

Delivered at:
Sydney

Delivered on:
1 February 2011

REPRESENTATION

Advocate for the Applicant:
Mr I Mitchell

Solicitors for the Applicant:
Websters Solicitors

Advocate for the Respondent:
Ms A Lam

Solicitors for the Respondent:
Margaret Tan & Associates

ORDERS

(1) The Creditor’s Petition, filed on 7 September 2010, is dismissed.
(2) A copy of this order to be provided to the Official Receiver in Sydney within 2 days.
(3) The Applicant creditor to pay the Respondent debtor’s costs as agreed or taxed.
FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG1954 of 2010

YE JIA

Applicant


And


GABRIELE WOLLGRAMM-TAN

Respondent


REASONS FOR JUDGMENT

The proceedings

  1. By an Amended Notice Stating Grounds of Opposition to the Creditor’s Petition filed on 8 October 2010, the Respondent debtor Gabriele Wollgram-Tan claims that she does not owe the Applicant creditor, Ye Jia, the amount of $23,689.84 awarded against her in proceedings number 10153 of 2009 in the Local Court, Downing Centre Sydney. Ms Wollgram-Tan states the following.
    1. The Applicant has never paid the bank guarantee which is the basis of the judgment debt in 2009 as alleged.
    2. The Applicant cannot provide evidence of the discharge of the bank guarantee by National Australia Bank (“NAB”). The Applicant is relying solely on a credit entry and a bank statement of Port Homemakers Pty Ltd, dated 9 September 2008.
    1. There is a claim by the NAB in the Supreme Court in relation to the alleged debt of $46,723.00 against the Respondent and the Applicant jointly. The debt amount referred to above which was claimed by the Applicant is half the amount of $46,723.00 claimed by the NAB.
    1. The Respondent is one of the defendants in proceedings number 00119013 of 2010 in the Supreme Court.
    2. The application to set aside the judgment entered on 2 December 2009 in the Local Court was refused on the basis that the Respondent could cross claim against the Applicant in the Supreme Court.
  2. Ms Wollgramm-Tan states that the Applicant relies on a judgment debt based on an alleged indemnity from her. The indemnity was between the Applicant and Ms Wollgramm-Tan to the NAB. Ms Wollgramm-Tan claims she has never provided any indemnity to the Applicant. Ms Wollgramm-Tan relies on s.52(1)(c) of the Bankruptcy Act 1996 (Cth) (“the Act”) and asks the Court to look behind the judgment relied on by the Applicant as there are substantial reasons for doubting whether there really was a debt due to the petitioning creditor at the time of the judgment. Ms Wollgramm-Tan relies on s.52(2)(b) of the Act and asks the Court to dismiss the petition on the basis of insufficient cause.

Background

  1. I initially rely upon the affidavit of Gabriele Wollgramm-Tan sworn
    15 October 2010, and the affidavit of Ye Jia sworn 18 October 2010 which sets out background material to the proceedings. The creditor, Ms Ye Jia and the debtor, Ms Wollgramm-Tan were directors of the business Port Homemakers Pty Ltd, ACN 126 821 172 (“Homemakers”). On 3 December 2007, there was a bank guarantee granted by the NAB in the amount of $46,723 in which Ms Ye Jia and Ms Wollgramm-Tan were guarantors to secure Homemakers’ obligation in the lease. On 13 June 2008, the bank guarantee was called by the lessor as a result of a default in payment of rent. The NAB, paid the bank guarantee to the lessor, the Trustee of Roman Catholic Diocese of Lismore. A copy of the bank statement of Homemakers account number 082184858870461 (Number 1) shows the debit entry for $46,731 with the description of “Bank Guarantee Paid to Roman Catholic Church” on 23 June 2008.
  2. Ms Ye Jia filed a Statement of Claim on 7 October 2009 in the Local Court at the Downing Centre against Ms Wollgramm-Tan alleging that she had paid the NAB the full amount of the bank guarantee and was therefore seeking that Ms Wollgramm-Tan pay for half of the amount of the bank guarantee being $23,689.84. Ms Wollgramm-Tan acknowledges that she and Ms Ye Jia provided a joint indemnity to the NAB for the bank guarantee but denies that she provided an indemnity for the bank guarantee to Ye Jia.
  3. Ms Wollgramm-Tan states that she and her husband had a furniture business in Port Macquarie where they had planned to retire and rely on that small business. She states that they had been operating a furniture business in Sydney successfully for over 15 years. Ms Ye Jia operated a company, Hong Da (Aust) Pty Ltd (ACN 083 082 428) which was a supplier to their furniture business. Ms Wollgramm-Tan states that on a number of occasions, Ms Ye Jia asked her to go into business. Ms Ye Jia had indicated that she had substantial financial resources and would provide all the money to finance the venture whilst Ms Wollgramm-Tan would work in the business. The business was to be owned equally between them.
  4. Ms Wollgramm-Tan claims that in September 2007, she finally agreed to enter the venture with Ms Ye Jia and they formed the company Homemakers. However disputes about how to run the business occurred within three months. Ms Wollgramm-Tan states that she offered to buy Ms Ye Jia out or alternatively offered Ms Ye Jia to purchase her share. They entered into negotiations but were unable to reach an agreement. Ms Wollgramm-Tan claims she tendered her resignation as a director on 15 May 2008 but Ms Ye Jia refused to accept it. Consequently, Ms Wollgramm-Tan sought to have administrators appointed to liquidate the company.
  5. Ms Wollgramm-Tan acknowledges that she surrendered the financial management of the company to Ms Ye Jia in October 2007, because there was constant disagreement concerning the trading figures. Ms Ye Jia kept all the cheque books, deposit books and bank statements. In January 2008, Ms Wollgramm-Tan went to Germany to visit her sick mother. When she returned in February 2008, Ms Ye Jia had changed the internet password so that Ms Wollgramm-Tan was unable to access their bank statements and she was unaware of what was happening with the company finances.
  6. Ms Wollgramm-Tan claims that Ms Ye Jia incurred debts with the lessor and other suppliers. Ms Wollgramm-Tan also claims that Ms Ye Jia only paid herself until the company was forced into liquidation. In the administration report, they identified 17 payments to the value of $94,378, which may be regarded as unfair preferences.
  7. Ms Wollgramm-Tan states that the global financial crisis severely affected her business and she had already lost her house. She states that she had made enquiries about issuing proceedings against Ms Ye Jia and could not afford to pursue that litigation. Ms Wollgramm-Tan states that she could not afford legal fees and therefore was not legally represented in the Local Court proceedings on 7 October 2010, seeking to set aside that judgment, and in the Federal Magistrates Court proceedings on 13 October 2010. At the same time, she states that she was struggling to re establish her business in Sydney and that she and her husband were budgeting weekly depending on sales revenue from that business.
  8. Ms Wollgramm-Tan claims that in an attempt to avoid legal costs, she acknowledged the debt. The judgment was entered against her in the Local Court on 2 December 2009. Ms Wollgramm-Tan states that she had made serious attempts to settle the debt with Ms Jia. She states that she offered instalment payments but that application was refused. In an attempt to settle this matter, she also offered stock to Ms Ye Jia but did not receive any response. Ms Wollgramm-Tan then failed to appear before the Local Court when the Notice of Motion was heard for the payment by instalments. This failure to appear resulted in the application being dismissed.

Supreme Court proceedings

  1. In June 2010, the NAB filed a claim in the Supreme Court of New South Wales, case number 00119013 of 2010 against Ms Ye Jia and Ms Wollgramm-Tan for the whole of the amount of the bank guarantee plus interest.
  2. The clauses of the Amended Statement of Claim that are directly relevant to these proceedings are as follows:
  3. After receiving the Statement of claim, Ms Wollgramm-Tan contacted the NAB to enquire as to why they were seeking to recover the debt. Ms Wollgramm-Tan indicates that her initial response to the NAB was that the bank guarantee had been paid as Ms Ye Jia had commenced recovery proceedings against her for her contribution. Ms Wollgramm-Tan claims that the bank’s response was that the debt had not been paid.

Evidence

  1. Ms Lam, appearing for the Respondent debtor, relied on the following evidence:
    1. affidavit of Gabriele Wollgramm-Tan sworn 8 October 2010; and
    2. second affidavit of Gabriele Wollgramm-Tan sworn 15 October 2010.
  2. Mr Mitchell, appearing for the Applicant creditor, relied on the following material:
    1. affidavit of Ye Jia, sworn 18 October 2010; and
    2. exhibit A1 – NAB – Homemakers business cheque account.

Submissions for the Applicant debtor

  1. Ms Lam submits that the Local Court judgment case number 10153/09, issued on 2 December 2009, was obtained without an adjudication on the merits. The judgment was entered based on an acknowledgment of the debt by Ms Wollgramm-Tan. Ms Lam contends that there is doubt as to whether there is a debt and the burden of proof shifts to the petitioning creditor: Corney v Brien [1951] HCA 31; (1951) 84 CLR 343.
  2. The Court was also referred to Udovenko v Mitchell (1997) 79 FCR 418 per Davies J (with Foster and Carr JJ agreeing) where His Honour made the following observation:
  3. Ms Lam submits that the judgment obtained by acknowledgment or in other words by consent is not likely to be accepted by this Court but should be reviewed and the liability of the debtor considered. Ms Lam seeks that this Court exercise its discretion to go behind the judgment and relies on Wren v Mahoney [1972] HCA 5; (1972) 126 CLR 212 per Barwick CJ where His Honour states:
  4. Ms Lam submits that the Creditor’s Petition should be dismissed on the basis that the debt did not exist at the time of judgment and the creditor failed to prove it has standing due to the following reasons:
    1. at the time of the judgment debt was obtained the creditor had not paid the debt due under the bank guarantee;
    2. the creditor has not been able to provide any evidence to show that the debt under the bank guarantee has been discharged;
    1. the creditor and the debtor were in a business together as equal shareholders in the company, Homemakers;
    1. on 20 August 2007 the NAB issued a debt bank guarantee to secure Homemaker’s obligations under the lease for the shop premises;
    2. the bank guarantee was called upon under the lease by the lessor – Trustee’s for the Roman Catholic Diocese of Lismore, the National Australia Bank paid the money to the lessor; and
    3. the creditor insists that she paid the bank guarantee in 2008 but she cannot provide proof or evidence that she made such a payment and there is no record of discharge of the bank guarantee by the National Australia Bank.
  5. It is submitted that the debtor acknowledged the claim to avoid further legal costs and because the creditor had claimed that she had paid the full amount of the bank guarantee to the NAB and discharged the bank guarantee. Ms Wollgramm-Tan states that at the time she was in financial distress and that her husband had suffered a stroke at the time the creditor filed the Statement of Claim. It is submitted that she sought legal advice and was advised of the funds that she would require in order to defend the matter but she did not have those resources at that time.
  6. In June 2010, the NAB filed a Statement of Claim against the creditor and the debtor jointly for the amount of $46,723 which is the full amount of the bank guarantee.
  7. The Court was referred to the Local Court Statement of Claim matter number 10153 of 2009 between Ms Ye Jia (plaintiff) and Ms Gabriele Wollgramm-Tan (defendant) which contains the following pleadings and particulars:
  8. Ms Lam submits that paragraph 4 above is a false statement because the NAB would not have filed the Amended Statement of Claim in the Supreme Court of New South Wales against both Ms Ye Jia and Ms Wollgramm-Tan jointly for the amount of $46,723.
  9. Ms Lam informed the Court that Ms Wollgramm-Tan’s application to set aside the Local Court judgment number 10153 of 2009 was dismissed on 7 October 2010, as the Magistrate presiding over the hearing of the Notice of Motion, refused the application on the basis that Ms Wollgramm-Tan could file a cross claim in the proceedings in the Supreme Court in matter number 00119013 of 2010. Ms Lam argues that this was unrealistic due to the expense of litigation. Prior to that hearing of the Notice of Motion, Ms Wollgramm-Tan did not have the benefit of any legal representation and this resulted in her premature acknowledgment of the debt which in fact had not been paid.
  10. Ms Lam contends that the circumstances of the matter before this Court were analogous to those in Wren v Mahoney (supra) where His Honour Barwick CJ considered the indemnity between the creditor and the debtor which was expressed in a deed. The deed relied on by the creditor contained no express promise by the debtor to pay the amount of any tax which had become or might become due by the creditor to the Commissioner of Taxation.
  11. Ms Lam referred the Court to the following passage from the Chief Justice judgment at 225:
  12. Ms Lam submits that a similar situation could manifestly occur in this case where Ms Wollgramm-Tan may pay her half share of the debt to Ms Ye Jia but would still be liable to the NAB under the Statement of Claim, for the whole amount of the debt due. In this matter, there is no indemnity between Ms Ye Jia and Ms Wollgramm-Tan. Ms Lam argues that even if it was found that there was indemnity between the parties, Ms Ye Jia would not have an action at law until the debt under the bank guarantee had been paid by her and the bank guarantee discharged. Ms Lam contends that the bank guarantee has not been discharged.
  13. Ms Lam advances the argument that Ms Wollgramm-Tan’s acknowledgment of the debt is analogous to a consent judgment and seeks the Court to look upon the debt with suspicion. In support of this argument, Ms Lam relies upon the decision in Ex parte Lennox; Re Lennox (1885) 10 Ch App 317 (cited in Wren v Mahoney by His Honour Barwick CJ), where the debtor had consented to judgment in debt at law. He had failed to comply with a Bankruptcy Notice founded on a judgment but when the matter proceeded to a hearing of the Creditor’s Petition, he disputed the existence of the debt. A Registrar had held that, the debtor was not entitled to go behind the consent orders. An appeal was successful and the matter was remitted back to the Registrar.
  14. Ms Lam also refers to In re Frazer; ex parte Central Bank of London (cited in Wren v Mahoney by His Honour Barwick CJ). In this case, an application to set aside the judgment had failed as had an appeal against a refusal of the application. Lord Esher MR referred to Ex parte Lennox; in re Lennox His Lordship said:
  15. Ms Lam submits that Ms Wollgramm-Tan had acknowledged the debt. She subsequently had filed a Notice of Motion to set aside judgment but failed. Despite her unsuccessful application, in line with the precedents, the Court of Bankruptcy is entitled to go behind the judgment of a debt and can enquire whether, notwithstanding the judgment, there was a good debt.

Creditor’s submissions

  1. Mr Mitchell, appearing on behalf of Ye Jia, indicated that he relied upon her affidavit sworn 18 October 2010 and Exhibit A1 which was filed in Court at the commencement of the hearing. Mr Mitchell submits that no attempt was made by Ms Wollgramm-Tan to set aside the judgment obtained by Ms Ye Jia until after the act of bankruptcy had been committed. The grounds on which it was sought to set aside that judgment are substantially the same as are being argued before this Court. That application failed and one of the principle reasons has failed according to the learned Magistrate in the Local Court was that it was appropriate if these issues were to be ventilated in the Supreme Court proceedings.
  2. Mr Mitchell contends that the Supreme Court proceedings are only peripherally irrelevant to the claim of Ms Wollgramm-Tan in the proceedings in this Court as:
    1. they involve at least one other party; and
    2. they involve a range of other issues of which the matter before this Court is only one.

However, although the parties have been in possession of the Supreme Court proceedings since June there has been no defence, cross-claim or any other material filed on behalf of Ms Wollgramm-Tan.

  1. Mr Mitchell concedes that he cannot show that the guarantee has been paid however what is being sought is a contribution of 50% of the amount of the guarantee. As the Bankruptcy Notice and a subsequent Creditors Petition result from a judgment by acknowledgment, evidence has not yet been assembled by Ms Ye Jia. Only recently Ms Ye Jia has become aware of the initiation of these proceedings and that the payment of the debt is in question.
  2. Mr Mitchell referred to the material in Ms Ye Jia’s affidavit which he claims leads to the conclusion that the full amount of the guarantee has been paid.
    1. Annexure A to the affidavit sets out the guarantee and indemnity which at p.3 identifies the guarantors as Ms Ye Jia and Ms Wollgramm-Tan as the guarantors jointly and severally. On p.4 the amount of $46,723 is the amount of the guarantee to the NAB. That guarantee was used to found a lease of the premises on which Ms Ye Jia and Ms Wollgramm-Tan conducted their business of Homemakers.
    2. Annexure B is a letter from Donovan Oats Haniford Lawyers which represent the trustees of the Roman Catholic Church Diocese of Lismore. That letter indicates that a failure to pay rent will result in a default in the lease. The letter also indicates that one of the terms upon which the lessor was prepared to settle the amount of the debt was a forfeiture of the bank guarantee held by the trustee from the NAB. It is that guarantee that is referred to in these proceedings.
    1. Annexure C is a NAB business cheque account for Homemakers which indicates that the guarantee was called and paid by the NAB to the lessor in the sum of $46,731 as a debt in the Homemakers account.
    1. Annexure D is a NAB business cheque account for Homemakers which shows the amount has been credited by the NAB as a book entry against the account of Homemakers.

These payments came from other accounts of Ms Ye Jia, a company known as Hong Da (Aust) Pty Ltd which is a company that Ms Jia was a sole director and shareholder of.

  1. Exhibit A1, which is a further NAB business cheque account shows there are two further credits for $18,000 and $15,000 respectively. Mr Mitchell submits that these four amounts total $49,000 and they are the amount referred to in Annexure F.
  2. Annexure F which is a letter from NAB business addressed to Mr Mitchell of Webster Solicitors and Barristers states:
  1. Mr Mitchell submits that the sum of $49,000 is the amount of the guarantee including interest and costs. His client has not sought to sue Ms Wollgramm-Tan for any of the interest and costs, because, it may be argued, that Ms Ye Jia should have taken appropriate steps to mitigate by paying the debt earlier.
  2. The last of the payments made on 6 February 2009, seeks to recover 50% of it from Ms Wollgramm-Tan. Mr Mitchell argues that significantly there no response to the material that has been in evidence for some time. In response to the argument that Ms Ye Jia has not made this payment, cogent evidence as to what these payments are must exist. Mr Mitchell argues that Ms Ye Jia is the only party that had the funds that could be relied upon to secure the debts of Homemakers.
  3. Mr Mitchell contends that the above material demonstrates that the amount of the guarantee has been wholly paid by Ms Ye Jia including costs and interest on the guarantee, and there is no reason to to prevent the Creditor’s Petition from proceeding because this litigation simply repeats the failed litigation in the Local Court.

Consideration

  1. Under s.52(1) of the Act, the petitioning creditor is obliged to prove that the debt or debts on which it relies is or are still owing. The Court has discretion to accept a judgment as proof of debt relied upon to found the Creditor’s Petition. The Court in Bankruptcy has the power to go behind judgment and enquire whether, notwithstanding the judgment, there is a debt due to the petitioning creditor. In the context of s.52(1) the Court’s discretion was described in Wren v Mahoney (supra) per Barwick CJ with whom Windeyer and Owen JJ agreed at 224-225. This passage is reproduced above in the submissions advanced by Ms Lam.
  2. The Court will not go behind judgment as a matter of course, but only if appropriate circumstances are shown to exist: Re Flatau; ex parte Scotch Whiskey Distillers Ltd (1888) 22 QBD 83 per Lord Esher at 85-86 and Joosse v Commissioner of Taxation [2004] FCAFC 245 at [3].
  3. In Corney v Brien (1951) 84 CLR 343 His Honour Fullagar J at 355 stated:

His Honour then referred to the reluctance of the Court to reopen a matter in the absence of a prima facie case of fraud, collusion or miscarriage of justice when the judgment in question had followed a trial of which both parties appeared. However, His Honour pointed out (at 357-358):

But, wherever the judgment in question is a judgment by default, it appears that the Court will always go behind the judgment if there is what is regarded as the bona fide allegation that no real debt lay behind the judgment.
  1. The majority in Corney v Brien their Honours Dixon, Williams, Webb and Kitto JJ referred to the Court’s undoubted jurisdiction at 347:
  2. In Commonwealth Bank of Australia v Jeans [2005] FCA 569 His Honour Hely J at [13] stated:

Then His Honour identified the classic cases in which the Court may go behind the judgment.

  1. In Richardson v Leonard Cohen & Co [2008] FCA 308 at [13]- [14]:
  2. In Boglari v Coadys [2009] FCA 1398 His Honour Gray J cites the relevant authorities in relation to the ‘discretion’ held by a bankruptcy court to go behind a judgment, particularly a default judgment and to investigate the actual state of indebtedness or lack thereof between the creditor and the debtor. His Honour sets these out at [11]-[13] as follows:
  3. In the affidavit of Gabriele Wollgramm-Tan, sworn 15 October 2010, the following evidence appears:
  4. In the Amended Statement of Claim issued in the Supreme Court of New South Wales (second affidavit of Wollgramm-Tan, Annexure D) at para.15 it states:

In a Statement of Claim issued in the Local Court between Ye Jia and Gabriele Wollgramm-Tan (second affidavit of Wollgramm-Tan, Annexure C) in the Pleadings and Particulars para. 1 states:

On 29 August 2007 the plaintiff and the defendant executed the deed of joint and several guarantee and indemnity in favour of the National Australia Bank (“the bank”) guaranteed the indebtedness of Port Homemakers Pty Ltd to the bank (“the deed of guarantee”) in the sum of $46,723 (“the sum”).
  1. In the Amended Statement of Claim (second affidavit of Wollgramm-Tan, Annexure D) at para. 17 it states:
  2. The NAB business cheque account (account number 082 184 85-887-0641) for Homemakers contains the entries for $12,000 and $4,000 and Exhibit A1 contain the amounts for $18,000 and $15,000 respectively are credited to that same account. The amounts of $12,000 and $4,000 were initiated by the NAB and were not paid by Ms Ye Jia as claimed.
  3. The NAB letter addressed to Mr Ian Mitchell of Websters Solicitors and Barristers dated 15 December 2008 (affidavit of Ye Jia Annexure E) contains the following statement:
  4. The Amended Statement of Claim (second affidavit of Ms Wollgramm-Tan, Annexure D) at paras. six to ten clearly indicate that the NAB had provided a business overdraft facility to Hong Da (Aust) Pty Ltd which was guaranteed by Ms Ye Jia. The overdraft facility is a separate issue from the bank guarantee for the lease of the premises.
  5. The NAB business letter (which is undated) addressed to Websters Solicitors and Barristers (affidavit of Ye Jia, Annexure F) states:
  6. Significantly this letter does not indicate that this payment discharged the bank guarantee. Nor does it indicate which account the payments were going into. I agree with the submissions made by Ms Lam. The evidence is vague and unclear in terms of discharge of the bank guarantee, which is the essence of the judgment debt on which the Bankruptcy Notice and the petition rely. I accept that the amount of $49,000 has been paid but there is insufficient evidence to support the claim that this payment discharged the bank guarantee in the amount of $46,723.
  7. On the material before the Court, it is appropriate to go behind the Local Court judgment that is the basis of the Bankruptcy Notice and the Petition because:
    1. the judgment was the result of an acknowledgment of the debt of Ms Wollgramm-Tann so the judgment was entered without a contested hearing;
    2. the acknowledgment by Mr Mitchell that by Mr Mitchell that he was unable to produce any statement that the NAB had been paid the full amount of the guarantee;
    1. despite submissions made to the effect that the guarantee had been paid during the period of 20 October 2008 and February 2009, the NAB’s Amended Statement of Claim issued in June 2010 states that the guarantee remained unpaid;
    1. the individual payment of $12,000 made on 20 October 2008 and the payment of $4,000 made on 31 October 2008 which are submitted as being part payments in the total of $49,000 to the finalisation of the guarantee were in fact acknowledged by the NAB as being payments due under the business overdraft facility which is a separate issue from the guarantee; and
    2. the payment of $12,000 and $4,000 were initiated by members of the NAB staff and not by either of the directors of Homemakers.
  8. In these circumstances, I am satisfied that the Creditor’s Petition should be dismissed on the basis that the debt did not exist at the time the judgment was entered. The principle that a cause of action against Ms Wollgramm-Tan does not arise until Ms Ye Jia had paid the debt owed to the NAB and then the issue of contribution arises. Despite the claims made by Ms Ye Jia that she paid the bank guarantee in 2008, she is unable to provide proof as evidence that she made such a payment. Further, there is no record of discharge of the bank guarantee by the NAB. Payments that have been put forward as part payment of the guarantee have been identified by the NAB as payment being made to settle a separate obligation under the business overdraft facility.

I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of Lloyd-Jones FM


Associate:


Date: 1 February 2011

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