Vanderland & Anor v Tunbridge [2011] FMCA 98 (23 February 2011)

Federal Magistrates Court of Australia

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Vanderland & Anor v Tunbridge [2011] FMCA 98 (23 February 2011)

Last Updated: 24 February 2011

FEDERAL MAGISTRATES COURT OF AUSTRALIA

VANDERLAND & ANOR v TUNBRIDGE

[2011] FMCA 98

BANKRUPTCY – Leave to continue County Court proceedings – respondent a Certified Practising Account and Registered Tax Agent – respondent beneficiary of professional indemnity insurance.

Bankruptcy Act 1966, s.58(3)(b)

Applicant:

SJIRK VANDERLAND & ANOR

Respondent:

KENNETH WALTER TUNBRIDGE

File Number:

MLG 87 of 2011

Judgment of:

Connolly FM

Hearing date:

21 February 2011

Date of Last Submission:

21 February 2011

Delivered at:

Melbourne

Delivered on:

23 February 2011

REPRESENTATION

Counsel for the Applicant:

Mr McCullagh

Solicitors for the Applicant:

SRC Legal Pty Ltd

Counsel for the Respondent:

N/A

Solicitors for the Respondent:

N/A

ORDERS

(1) The Applicants have leave for the continuation of proceeding No. Cl-10-04465 in the County Court of Victoria at Latrobe Valley wherein the Applicants herein are the Plaintiffs and the Respondent herein is the defendant, and to continue the proceeding pursuant to section 58(3)(b) of the Bankruptcy Act 1966 (Cth).
(2) The said leave to the Applicants be granted nunc pro tunc.
(3) There be no order as to costs.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE

MLG 87 of 2011

SJIRK VANDERLAND & ANOR

Applicant

And

KENNETH WALTER TUNBRIDGE

Respondent

REASONS FOR JUDGMENT

The proceedings

1. This is an ex tempore judgment arising from an application pursuant to section 58(3)(b) of the Bankruptcy Act 1966 for leave for the continuation of County Court proceedings whereby the Applicants are the plaintiffs and the Respondent is the defendant. These reasons relate to orders made on 21 February 2011. The application was filed on 21 January 2011 and was supported by an affidavit by Suryan Robert Chandrasegaran, the legal practitioner for the Applicants.

The law

2. Section 58(3)(b) of the Bankruptcy Act 1966 provides as follows:
   • 58 Vesting of property upon bankruptcy—general rule

(3) Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor:

(a) to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt; or

(b) except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding.

(4) After a debtor has become a bankrupt, distress for rent shall not be levied or proceeded with against the property of the bankrupt, whether or not the bankrupt is a tenant of the landlord by whom the distress is sought to be levied.

(5) Nothing in this section affects the right of a secured creditor to realize or otherwise deal with his or her security.

(5A) Nothing in this section shall be taken to prevent a creditor from enforcing any remedy against a bankrupt, or against any property of a bankrupt that is not vested in the trustee of the bankrupt, in respect of any liability of the bankrupt under:

(a) a maintenance agreement; or

(b) a maintenance order;

whether entered into or made, as the case may be, before or after the commencement of this subsection.

(6) In this section, after-acquired property, in relation to a bankrupt, means property that is acquired by, or devolves on, the bankrupt on or after the date of the bankruptcy, being property that is divisible amongst the creditors of the bankrupt.

The history

3. In 2009, the Applicants filed a proceeding in the Magistrates’ Court at Korumburra against Kenneth Walter Tunbridge. On 6 October 2010, the Magistrates’ Court proceeding was transferred to the County Court of Victoria at the Latrobe Valley. In the proceedings, the Applicants claimed damages suffered by them as clients of the Respondent, Mr Kenneth Walter Tunbridge who was at all times a Certified Practising Accountant and a Registered Tax Agent practising under the practise name ‘Kenneth W Tunbridge (ABN 639 218 646 72).’ In the proceedings, the Applicants assert that they have suffered financial loss because the Respondent, inter alia, was negligent in failing to complete and lodge income tax returns and business activity statements on their behalf, and by failing to make claims for input tax credits available to the Applicants for the financial years ending 2003, 2004, 2005, 2006, 2007 and 2008.
4. That proceeding was served on the Respondent and DLA Phillips Fox Lawyers has been acting for the Respondent and has filed a notice of defence wherein the Respondent admits that he was a Certified Practising Accountant and a Registered Tax Agent and operated under the practise name Kenneth W Tunbridge. On 28 July 2010 the Respondent was declared bankrupt by an order of the Federal Magistrates Court as a result of a petition for bankruptcy by Impressions Finance Pty Ltd, a creditor of his. The administration of the Respondent’s bankrupt estate was initially the responsibility of the Official Trustee. However, on 13 October 2010 Moira Kathleen Carter and Anthony J Edward Miskiewics of the firm BRI Ferrier were appointed joint and several trustees of the Respondent’s bankrupt estate (‘the trustees’).
5. As a certified practising account and a registered tax agent, the Respondent was a member of a compulsory professional indemnity insurance scheme whereby its members are required to maintain professional indemnity insurance. By a letter addressed to the Applicants’ solicitors dated 9 December 2010, the trustees advised that they had no objection to leave being granted to the Applicants pursuant to section 58(3)(b) of the Bankruptcy Act 1966, in respect of the proceeding on the basis that Kenneth W Tunbridge had professional indemnity insurance in respect of the alleged loss and damaged claimed in the proceeding. Accordingly, where the Respondent was insured and where an award of damages will be met by his insurer, it is appropriate for the Court to grant leave pursuant to section 58(3)(b) of the Bankruptcy Act 1966 in respect of the continuation of the County Court proceedings. Accordingly, it was appropriate to make the orders pronounced on the 21 February 2011.

I certify that the preceding 5Error! Style not defined.!Syntax Error, !Error! Style not defined.Error! Style not defined.!Syntax Error, !fivefive (5) paragraphs are a true copy of the reasons for judgment of Connolly FM

Date: 23 February