Axess Debt Management Pty Ltd v Markovic - [2022] FedCFamC2G 197

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Axess Debt Management Pty Ltd v Markovic [2022] FedCFamC2G 197

File number(s): ADG 3 of 2022

Judgment of: JUDGE BROWN

Date of judgment: 3 March 2022

Catchwords: BANKRUPTCY – creditor’s petition – application under s 50 of the Bankruptcy Act 1966 (Cth) – where a bankruptcy notice has been served and not complied with – where debtor has begun divesting himself of property – order to appoint a trustee to take control of the debtors property – matters to be considered.

Legislation: Bankruptcy Act 1966 (Cth) s 50.
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) Div 6.4, rr 6.14, 6.15.

Cases cited: ACM Group Ltd v Achram [2017] FCCA 2558.
Deputy Commissioner of Taxation v Clyne (1983) 50 ALR 118.
Makinna Pty Ltd (in liq) v Trives [2016] FCA 1247.
Plaster Plus (Australia) Pty Ltd v Zhou & Anor [2013] FCCA 1983.

Division: Division 2 General Federal Law

Number of paragraphs: 19

Date of hearing: 3 March 2022

Place: Adelaide

Counsel for the Applicant: Mr Sankey

Solicitor for the Applicant: Wallmans Lawyers

Counsel for the Respondent: No appearance

Solicitor for the Respondent: No appearance
ORDERS

ADG 3 of 2022

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:
AXESS DEBT MANAGEMENT PTY LTD

Applicant

AND:
DANIEL JOHN MARKOVIC

Respondent

ORDER MADE BY:

JUDGE BROWN

DATE OF ORDER:

3 MARCH 2022

THE COURT ORDERS THAT:
1.Pursuant to section 50 of the Bankruptcy Act 1966 (Cth) (the Act) that Colin Louis Ambrose (hereafter the Section 50 Trustee) be appointed to take control of the Respondent’s property and such control to continue until this Honourable Court otherwise orders.
2.The Section 50 Trustee be indemnified as to his reasonable costs and expenses for and against the Respondent’s property and/or any proceeds of sale, all of which be hereby charged for that purpose.

Substituted Service Orders
3.Pursuant to rule 6.14 (1) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (hereafter the Rules) & section 309 (2) of the Act an order that personal service upon the Respondent of Creditor’s Petition ADG3 of 2022 (and all subsequently filed documents) along with copies of the Affidavits verifying the Petition and a copy of any consent to Act as trustee and a copy of this order, (collectively the documents) be dispensed with.
4.Pursuant to rule 6.14 (2) of the Rules and section 309(2) of the Act an order that in lieu of personal service, the documents in each instance be marked ‘Private and Confidential’ and served upon the Respondent by:-
(a)Pre-paid express post to:
(i)15A Aireys Street, AIREYS INLET VICTORIA 3231; and
(ii)BakerJones Lawyers (Attention: Jade Hopper) C/- Level 8, 160 Queen Street, MELBOURNE VICTORIA 3000

(b)causing the documents to be attached to an email and transmitted electronically to Jade Hopper via email address Jhopper@bakerjones.com.au;

5.Pursuant to rule 6.14 (3) of the Rules and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] FedCFamC2G 197
Decision Date

CaseChat Overview and Summary

In Axess Debt Management Pty Ltd v Markovic, the Federal Circuit and Family Court of Australia (Division 2) was asked to consider an application for a creditor's petition, and an order for substituted service under section 50 of the Bankruptcy Act 1966 (Cth). The application was brought by Axess Debt Management Pty Ltd against Daniel John Markovic. The court was asked to consider the appointment of a Section 50 Trustee to take control of the respondent's property, and for an order of substituted service on the respondent. The court had to determine whether there were sufficient grounds for the appointment of a Section 50 Trustee, and whether substituted service was appropriate in these circumstances.

The court considered the provisions of section 50 of the Bankruptcy Act 1966 (Cth), and found that the application was appropriate in these circumstances. The court found that Mr Markovic had not complied with a bankruptcy notice, and had sold a property that he owned with another person, which may have been a de facto wife or partner. The court found that the applicant had provided evidence of this sale, and that it was likely that this was an attempt to defeat the effect of any sequestration order that may subsequently be made. The court also found that substituted service was appropriate in these circumstances, as the respondent had indicated that he would not accept service, and it was likely that his solicitor, Ms Jade Hopper, had communicated with him and he was aware of the proceedings. The court found that it was appropriate to make the orders sought by the applicant.

The court ordered that Colin Louis Ambrose be appointed as the Section 50 Trustee, and that he take control of the respondent's property. The court also ordered that substituted service be made on the respondent, by sending the relevant documents to his address in Aireys Inlet and to his solicitor, Ms Jade Hopper. The court ordered that the respondent pay the applicant's costs of the application. These orders were made to protect the interests of the creditors and to prevent the respondent from divesting himself of property that may be required to satisfy any debts owed to them.

Orders