ASX Perpetual Registrars Ltd v GOLUBOVIC

[2004] FMCA 1052

FEDERAL MAGISTRATES COURT OF AUSTRALIA

ASX PERPETUAL REGISTRARS LTD v GOLUBOVIC [2004] FMCA 1052

BANKRUPTCY – Application to set aside petition or adjourn – where debtor has recently applied without success to have judgment set aside – where Supreme Court of New South Wales has criticised debtor’s conduct of proceedings – where there is no real evidence that debtor can refinance – where there is evidence of other creditors – whether public policy considerations apply – whether matter should be referred to Registrar to hear petition.

Wolff v Donovan (1991) FCR 480
Wren v Mahony (1972) 126 CLR 212

Applicant: ASX PERPETUAL REGISTRARS LIMITED

Respondent: JOHNY GOLUBOVIC (also known as FRANK JOHN GOLUBOVIC)

File No: SYG2047 of 2004

Delivered on: 21 December 2004

Delivered at: Sydney

Hearing date: 21 December 2004

Judgment of: Raphael FM

REPRESENTATION

Solicitors for the Applicant: Henry Davis York

Solicitor for the Respondent: Murphy B J Angelovski & Associates

Counsel for the Respondent: Anthony Cheshire

ORDERS

1. Matter referred back to the Registrar for the hearing of the bankruptcy petition.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG2047 of 2004

ASX PERPETUAL REGISTRARS LIMITED

Applicant

And

JOHNY GOLUBOVIC (also known as FRANK JOHN GOLUBOVIC)

Respondent

REASONS FOR JUDGMENT

1. In this matter the respondent debtor seeks that I should dismiss the petition on the grounds that if I went behind the judgment upon which the bankruptcy notice was founded I would be satisfied that there is not a genuine debt, or alternatively that I should adjourn the petition so that the debtor has the opportunity to refinance his home and thus establish either solvency or the ability to repay this particular creditor and have this particular creditor withdraw from the proceedings.

2. The judgment upon which the petition is based was obtained by default.  It was not, however, automatic default.  The matter came before Barrett J in the Supreme Court of New South Wales on 11 December 2003.  His Honour gave a short judgment which is found as Annexure D to an affidavit of Abigail Badman sworn in proceedings before the Supreme Court of New South Wales and dated 10 December 2004.

3. His Honour says at  [3]:

   “The defendant seeks a further extension of time for filing any defence.  This is in circumstances where a stay application was made to Hamilton J sitting as a Duty Judge on 2 December and the stay was refused.

   The whole of the circumstances raise a strong inference that the defendant it playing for time.  The appropriate course to bring matters to a head is that judgment by default be entered, but that judgment be stayed for a short time to give the defendant one last chance to come forward with anything he considers himself capable of coming forward with.  It would then be for the defendant to make an application that the judgment be set aside and in that respect positive action to retrieve the position would be required of him, thus crystallising matters one way or the other.

   I make orders in the short minutes which I initial and date.  I order that execution of the judgment be stayed until 5.00 pm on 17 December 2003.

4. That judgment was entered on 11 December 2003 in the sum of $142,698. 

5. The applicant debtor through an affidavit of Lupico Angelovski, his former solicitor, filed in these proceedings and dated 30 November 2004, denies any involvement in the matters that gave rise to the judgment and seeks to explain why the debtor did not take any further steps following the decision of Barrett J until a very short time ago when he made an effort to set aside that judgment by application to Windeyer J in the Supreme Court of New South Wales.

6. I am told by counsel representing the creditor, and I believe it is accepted by counsel representing the debtor, that Windeyer J dismissed that application.  Neither of them were able to provide me with a copy of his Honour's judgment but it would appear one of the major factors influencing the decision was the delay in bringing the application at all.   However, it seems to me that if this debtor had a very good ground for showing that the judgment had been entered against him wrongfully then Windeyer J would have been more inclined to have acceded to his request that the judgment be set aside. 

7. The position in relation to the going behind judgments is seminally considered by the Full Bench of the Federal Court in Wolff v Donovan (1991) FCR 480 where their Honours apply Wren v Mahony (1972) 126 CLR 212. As it is noted in the head note of Wolff:

   “The court will more readily look behind the judgment if it was obtained by default but it is relevant, in this regard, whether any attempt has been made by the judgment debtor to have the judgment set aside.”

8. The debtor has shown me a copy of the defence which he had proposed to file in the Supreme Court and which was not accepted by Windeyer J.  The defence is short.  It admits various paragraphs of the statement of claim and then claims that the defendant does not know and cannot admit several of the others.  Certain paragraphs are denied.  There is not a single factual statement in the whole document.  Counsel for the debtor says there should not be.  He says that the allegations made against his client are simply not true.  The only thing to do in that case is to deny them.

9. I have some sympathy with that argument but I do not think it is a full answer to the fact that Windeyer J dismissed the application to set aside and to allow the defence in. This court must have some comity with the decisions of the Supreme Court of New South Wales and I would be most reluctant to go behind a judgment which has been the subject of consideration so recently by such an authority as his Honour.  It seems to me, in my own view of the matter that the debtor has singularly failed to present appropriate evidence that could persuade me or another Judge in bankruptcy that there was no debt.

10. In regard to the debtor's application for an adjournment so that he can refinance his property the difficulty I have with that is that there is no evidence in front of me that would indicate that this might be possible in the near future.  What I do have is evidence of caveats having been placed upon that property and also evidence which goes to my discretion generally that there is at least one other creditor circling this particular debtor.  Bankruptcy is a matter of public policy as well as a method by which resolution of a private debt can be obtained.  This is not to say that it is a form of an execution upon a judgment.  When considering the question of adjournments and the question of whether or not to allow a petition to proceed public policy must also be taken into account.

11. In all the circumstances I am not prepared to grant this adjournment.  Counsel for the debtor informed me that his client was on his way and could give evidence but that is not the manner in which these things should be done.  I should have had before me full evidence on which the debtor intended to rely to indicate to me that there was a real possibility that within a short space of time the refinancing could be obtained and that he would be able satisfy all his creditors, not just the one who was currently petitioning.

12. In the circumstances and because of the very full lists before me I have decided that the matter should be referred back to the Registrar for the hearing of the bankruptcy petition insofar as the formal requirements are concerned.  I have accepted into filing various affidavits which will go before the Registrar in that regard.  The Registrar will also make the usual order for costs which presumably will include the costs of the hearing before me.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of Raphael FM

Associate: 

Date: