Bank of Western Australia Limited v Salmon

[2009] FMCA 1155

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BANK OF WESTERN AUSTRALIA LIMITED v SALMON [2009] FMCA 1155

BANKRUPTCY – Review of Registrar’s decision to make a sequestration order – rehearing – fresh sequestration order made.

Bankruptcy Act 1966 (Cth), s.52

Applicant: BANK OF WESTERN AUSTRALIA LIMITED

Respondent: OWEN SALMON

File Number: SYG 1281 of 2009

Judgment of: Driver FM

Hearing date: 25 August 2009

Delivered at: Sydney

Delivered on: 25 August 2009

REPRESENTATION

Solicitors for the Applicant: Ms B Spain
Gadens Lawyers

ORDERS

1. Orders 1 and 2 made by Registrar Hannigan on 24 July 2009 are set aside.

2. A sequestration order be made against the estate of Owen Salmon.

3. The applicant creditor’s costs, including any reserved costs, be taxed and paid in accordance with the Bankruptcy Act 1966 (Cth).

4. The Court notes that the date of the act of bankruptcy is 19 May 2009.

5. The Court notes that Scott Darren Pascoe has signed a consent to act as trustee on 26 May 2009.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PERTH

SYG 1281 of 2009

BANK OF WESTERN AUSTRALIA LIMITED

Applicant

And

OWEN SALMON

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

1. I have before me a creditors petition filed on 28 May 2009 seeking a sequestration order against Owen Salmon and other orders.  The petition is supported by the affidavit of John Woodridge filed on 28 May 2009 dealing with service of the bankruptcy notice, the affidavit of Paul Anthony Higgins filed on 28 May 2009, verifying paragraph 4 of the petition, the affidavit of Melanie Skinner filed on 18 June 2009, dealing with searches undertaken in relation to compliance with substituted service orders earlier made by Registrar Morgan on 25 June 2009, an affidavit of attempted service of Kris Sabatino filed on 18 June 2009, an affidavit of service of the creditor’s petition of Melanie Louise Skinner filed on 24 July 2009, a further affidavit of service made by Kris Sabatino filed 24 July 2009 and a further affidavit filed on the same day by Kris Sabatino, also relating to service, the affidavit of Brooke Spain made on 18 June 2009 relating to compliance with the substituted service orders and final affidavits of search and debt filed in court by leave today.  There is also a consent to act as trustee by Scott Darren Pascoe made on 26 May 2009.

2. Registrar Hannigan made a sequestration order against the estate of Owen Salmon on 24 July 2009 and also made a costs order.  Mr Salmon filed an application to review those orders on 11 August 2009.  That review application was supported by his own affidavit filed on 11 August 2009.

3. On the basis of that affidavit, on which Mr Salmon was not required for cross-examination, I concluded that, while the substituted service orders had been complied with, the documentation had not, in fact, come to Mr Salmon’s attention until after the sequestration order had been made and that procedural fairness required him to be given the opportunity to respond to the petition before the Court.  I set aside the orders made by Registrar Hannigan and, after adjourning to enable Mr Salmon to consider the material presented in support of the petition, I heard from the parties on the hearing of the petition.  I was satisfied, on the basis of the material relied on by the petitioning creditor, that the formal requirements for the making of a sequestration order had been met.

4. Although no notice of any grounds of any opposition had been filed by Mr Salmon, I heard him on the reasons why he opposed the making of the orders sought in the petition.  Mr Salmon submits that the Court should look behind the judgment of the Supreme Court supporting the bankruptcy notice on the basis of fraud in connection with a loan leading to that judgment and perjury in the giving of evidence in the Supreme Court.  He also asserts that he has a counter claim against Bankwest, which exceeds in value the debt claimed by the bank.

5. I do not consider that there is any reason to look behind the judgment debt.  There was an opportunity before the Supreme Court to agitate both issues in relation to the loan and guarantee leading to those proceedings and to challenge in those proceedings the credibility of witnesses.  No appeal has been lodged, although Mr Salmon indicated his intention to do so.  He said that he had been delayed in doing so by the bankruptcy proceedings.  No legal process in relation to alleged counter claim has been lodged, although Mr Salmon again indicated his intention to do so.  While that may have been an issue having a significant bearing on the bankruptcy notice.  I am not satisfied that it would be a sufficient reason for the Court to refrain from making a sequestration order.  There is no evidence of solvency and that counter claim, if advanced, would be available to the trustee in bankruptcy to pursue of behalf of all creditors.

6. I conclude that Mr Salmon has not advanced any reason for the Court to refrain from making a sequestration order. I am satisfied that he committed the act of bankruptcy alleged in the petition and I am satisfied with the proof of the other matters of which s.52(1) of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”) require proof.

7. I will order that a sequestration order be made against the estate of Owen Salmon.  The applicant creditor’s costs, including any reserved costs, are to be taxed and paid in accordance with the Bankruptcy Act 1966 (Cth).

8. The Court notes that the date of the act of bankruptcy is 19 May 2009.  The Court further notes that Scott Darren Pascoe signed the consent to act as trustee on 26 May 2009.

I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of Driver FM

Associate: 

Date:  23 November 2009