Axess Debt Management Pty Ltd v Adams

[2021] FCCA 2134

FEDERAL CIRCUIT COURT OF AUSTRALIA

Axess Debt Management Pty Ltd v Adams [2021] FCCA 2134

File number:

ADG 226 of 2021

Judgment of:

JUDGE YOUNG

Date of judgment:

30 July 2021

Catchwords:

BANKRUPTCY – ex parte application for an order pursuant to section 50 of the Bankruptcy Act1966 (Cth) to appoint a trustee to take control of the debtor’s property – where a creditor’s petition has been presented against the debtor – where the debtor owns two pieces of real property – where there is evidence one of the pieces of real property will be sold imminently – Court satisfied it is appropriate to appoint a trustee to take control of the debtor’s property.

Legislation:

Bankruptcy Act1966 (Cth) s 50

Limitation of Actions Act 1958 (Vic)

Number of paragraphs:

7

Date of hearing:

30 July 2021

Place:

Darwin

Solicitor for the Applicant:

Mr Sankey of Wallmans Lawyers

ORDERS

ADG 226 of 2021

BETWEEN:

AXESS DEBT MANAGEMENT PTY LTD ACN 061 791 786

Applicant

AND:

ANTONI MARK ADAMS

Respondent

ORDER MADE BY:	JUDGE YOUNG
DATE OF ORDER:	30 JULY 2021

THE COURT ORDERS THAT:

1.The Applicant has leave to proceed today ex parte. 

2.Pursuant to section 50 of the Bankruptcy Act 1966 (Cth) Colin Louis Ambrose (the section 50 trustee) be appointed to take control of the property of the Respondent with such control to continue until further order of this Honourable Court.

3.The section 50 trustee is hereby indemnified as to his reasonable costs and expenses for and against the Respondent’s property and / or any proceeds of sale, all of which are hereby charged with payment of those amounts.

4.The question of costs of this application be reserved.

5.The Applicant is to effect service of this Order along with a copy of each of the filed documents to date upon the Respondent within seven (7) days of this Order.

6.A copy of this order be provided by the Applicant Creditor to the Official Receiver within 2 days.

7.There be liberty to apply to the parties at short notice.

8.The matter is otherwise adjourned to 18 August 2021 at 9:30am.

REASONS FOR JUDGMENT
Ex Tempore

JUDGE YOUNG:

1. This is an ex parte application for an order pursuant to section 50 of the Bankruptcy Act1966 (Cth) to appoint a trustee to control the property of the respondent debtor, Mr Adams. The debt accrued in 2010 and was apparently factored to the applicant at some point after that.

2. It remains within the statutory limitation period of 15 years in Victoria for enforcement pursuant to the Limitation of Actions Act 1958 (Vic). The last attempt at enforcement occurred in June when the applicant brought proceedings in the Magistrates Court in Melbourne for a warrant of execution to seize property of the debtor. That warrant was returned unsatisfied on 20 July 2021. An unsatisfied warrant constitutes an act of bankruptcy and that act was committed within six months of the creditor’s petition being presented. There is a basis for the creditor’s petition seeking a sequestration order.

3. The applicant has identified that the respondent owns, in his sole name, two pieces of real property which are both subject to mortgages for indeterminate amounts. The applicant says, in effect, these properties provide the only avenue available for achieving payment in whole or in part of the debt which I note is approximately $150,000.

4. The affidavit of the applicant’s solicitor, Mr Sankey, annexes material from a real estate website which shows that the properties have been offered for sale. There is also some information that says that one of the properties is “under offer”.  Mr Sankey did not really know what that meant but I take that to mean that a purchaser has made an offer and, perhaps, the signing of a contract is imminent or a contract has already been signed. This would suggest that there is a real prospect of sale and settlement in the not too distant future.  If there is a settlement it may be, assuming there is any equity in the property, that the creditors will be disappointed. 

5. There may be other options for enforcement of the debt, however, until I hear from the respondent I am not sure whether any of those are practicable. For example, seeking an irrevocable authority from him in relation to the proceeds of sale may be an option.  That would perhaps obviate the necessity for a sequestration order which will be heard by the Registrar, in September 2021. 

6. In the circumstances I am satisfied that an ex parte order of the kind sought by the applicant is appropriate at this stage.  It may be that when the matter comes back before me on 18 August 2021, I will form a different view after I hear from the respondent.  However, at this stage, I am satisfied that the order is properly sought. 

7. There will be orders in terms of the minute provided to the Court. In addition, there will be an order for the adjournment that I have referred to. 

I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Young.

Associate:

Dated:       7 September 2021