ABA Australian Bar Association v Minus

[2018] FCCA 3836

FEDERAL CIRCUIT COURT OF AUSTRALIA

ABA AUSTRALIAN BAR ASSOCIATION & ORS v MINUS [2018] FCCA 3836

Catchwords:
BANKRUPTCY – Creditor’s petition – whether the petitioning creditors’ established the matters identified in s.52(1) of the Bankruptcy Act 1966 – sequestration order made.

Legislation:

Bankruptcy Act 1966 (Cth), ss.27, 43, 52

Federal Circuit Court Rules 2001 (Cth), r.13.03C(1)(e)

First Applicant: ABA AUSTRALIAN BAR ASSOCIATION (ACN 605 949 148)

Second Applicant: PHILIP SELTH IN A REPRESENTATIVE CAPACITY FOR MEMBERS OF THE AUSTRALIAN BAR ASSOCIATION
(ABN 12 205 148 843) (UNINCORPORATED)

Third Applicant: THE NEW SOUTH WALES BAR ASSOCIATION (ACN 000 033 652)

Respondent: DEREK MICHAEL MINUS

File Number: SYG 2914 of 2018

Judgment of: Judge Street

Hearing date: 20 December 2018

Date of Last Submission: 20 December 2018

Delivered at: Sydney

Delivered on: 20 December 2018

REPRESENTATION

Counsel for the Applicant: Mr R Davies

Solicitors for the Applicant: Webb Henderson

No appearance by or on behalf of the Respondent

ORDERS

1. The hearing of the creditor’s petition proceed pursuant to r.13.03C(1)(e) of the Federal Circuit Court Rules 2001 (Cth).

2. A sequestration order is made against the estate of Derek Michael Minus.

3. The petitioning creditors’ costs be paid out of the bankrupt estate to the priority to which it is entitled in the amount of $7,893.20 for the costs incurred up to 19 November 2018 and the further costs as agreed or assessed from 19 November 2018 to date.

THE COURT NOTES THAT:

1. The act of bankruptcy occurred on 16 September 2018.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 2914 of 2018

ABA AUSTRALIAN BAR ASSOCIATION
(ACN 605 949 148)

First Applicant

PHILIP SELTH IN A REPRESENTATIVE CAPACITY FOR MEMBERS OF THE AUSTRALIAN BAR ASSOCIATION
(ABN 12 205 148 843) (UNINCORPORATED)

Second Applicant

THE NEW SOUTH WALES BAR ASSOCIATION
(ACN 000 033 652)

Third Applicant

And

DEREK MICHAEL MINUS

Respondent

REASONS FOR JUDGMENT

1. These are proceedings for a sequestration order within the Court’s jurisdiction under s 27 of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”). The first and third applicants rely upon Certificates of Taxation obtained as a result of orders made by the learned Greenwood J on 28 July 2014 in respect of proceedings under NSD 972 of 2014 and NSD 1019 of 2013. 

2. The first applicant’s bankruptcy notice arose from the Certificate of Taxation in the sum of $314,200.00. The third applicant’s Certificate of Taxation, the subject of a bankruptcy notice, was certified in the amount of $154,100.00. The evidence adduced by the applicants which satisfied the Court that the bankruptcy notices were served upon the applicant on 25 August 2018 and the Court finds that the respondent was ordinarily resident in Australia, had a dwelling house and place of business in Australia; and was carrying on business in Australia personally as a barrister at the time of the act of bankruptcy.   

3. The Court finds the first respondent committed an act of bankruptcy on 16 September 2018. The Court is accordingly satisfied that the applicants have established the matters identified in s 43(1) of the Bankruptcy Act.

4. Affidavits have also been read in respect of the requirements of the Federal Circuit Court (Bankruptcy) Rules 2016 (Cth) being an affidavit of debt and affidavit of search as well as the evidence as to the notification of the respondent of the hearing today. The matter was fixed by the Court on 18 December 2018.  The Court is satisfied that the respondent was aware of the hearing date and the respondent has failed to appear.

5. Before commencing the proceedings, the Court disclosed that the Court had been a member of the Bar Council until approximately May 2014 and until appointment at the beginning of 2015, had been a Class A member of the Bar Association. Under the constitution of the Bar Association, the Court automatically became a Class B member upon appointment. A Class B member, under the constitution of the Bar Association, has no right to vote or participate in the governance of the Bar Association.

6. The Court did not participate in any decision making in respect of instituting or the pursuit of proceedings the subject of the orders giving rise to the application for the sequestration order before the Court. The Court identified that a reasonably informed lay observer would be aware of the nature of the constitution of the Bar Association and that the objects of the Bar Association were primarily the advancement of the administration of justice and of the distinction between a Class B member and a Class A member. 

7. The Court identified at the outset of the hearing that it was satisfied that a reasonably informed lay observer would not regard there being any logical or rational reason why the Court would determine the matter otherwise than in accordance with the merits and why the Court would not approach the matter otherwise than with an open mind reasonably capable of persuasion as to the merits. The reasonably informed lay observer would also be aware that this Court was appointed in 2015 and took at that time an oath of allegiance and oath of office. In these circumstances, the Court is satisfied that there is no proper basis upon which a reasonably informed lay observer might reasonably apprehend that this Court might not bring an independent and impartial mind to the determination of the matter on its merits. 

8. Having made that disclosure, there was no objection raised by the applicants in respect of the Court determining the matter. The respondent did not appear. The Court is satisfied that it was appropriate to proceed with the hearing under r 13.03C(1)(e) of the Federal Circuit Court Rules 2001 (Cth) in the circumstances of the evidence before the Court as to service of the orders made on 18 December 2018 upon the respondent.

9. There is a notice of grounds of objection on the Court file. That notice of objection made an assertion that the proceedings were commenced within the 21 day period following the act of bankruptcy. It is apparent that that proposition in grounds 1 and 2 is not correct, and that the commencement of the proceedings for the sequestration order was filed after the expiry of the time for compliance with the bankruptcy notice and after the respondent committed an act of bankruptcy.

10. The grounds of opposition seek to take issue with the judgments in respect of costs that were obtained. There is no evidentiary basis identified to support the alleged dispute. There is no material before the Court that would justify the Court going behind the orders made the subject of a Certification of Taxation. There is no appeal on foot in respect of the Certificates of Taxation. There is no appeal on foot in respect of the proceedings the subject of the adverse orders by the learned Greenwood J. Within this jurisdiction, those Court orders are final orders.

11. The respondents’ assertion of not owing the money simply takes issue with the existence of the judgment debts the subject of the bankruptcy notice. There is nothing in the grounds of opposition or before the Court to establish any basis why the Court would be satisfied that the respondent is able to pay his debts or to make out other sufficient cause why a sequestration order ought not be made.

12. Further, there is no material before the Court to justify why an adjournment of the proceedings should be granted. In matters of bankruptcy, the Court is required to deal with the matters expeditiously. The petitioning creditors have established each of the matters identified in s 52(1) of the Bankruptcy Act. No sufficient cause why a sequestration order ought not to be made has been made out. 

13. The Court is satisfied that the respondent is unable to pay his debts. The Court is satisfied this is an appropriate matter in which to make a sequestration order.  

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Judge Street

Associate: 

Date:  15 January 2019