Bank of Western Australia Ltd v Comninos (No.2)
[2011] FMCA 1014
•22 November 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BANK OF WESTERN AUSTRALIA LTD v COMNINOS (NO.2) | [2011] FMCA 1014 |
| BANKRUPTCY – Creditor’s petition – notice of objection – where debtor claims solvency and sale of property at undervalue – where no evidence of solvency or sale at undervalue – whether creditor must prove bona fides – where clear evidence of substantial debt – whether debtor’s poor health constitutes reason not to make sequestration order. |
| Bankruptcy Act 1966, (Cth) s.52 Federal Magistrates Court (Bankruptcy) Rules 2006 |
| Applicant: | BANK OF WESTERN AUSTRALIA LTD ABN 22 050 494 4545 |
| Respondent: | PASCALL GEORGE COMNINOS |
| File Number: | SYG 2065 of 2011 |
| Judgment of: | Raphael FM |
| Hearing date: | 22 November 2011 |
| Date of Last Submission: | 22 November 2011 |
| Delivered at: | Sydney |
| Delivered on: | 22 November 2011 |
REPRESENTATION
| Solicitors for the Applicant: | Mr A Begg |
| Solicitors for the Respondent: | Hancocks Solicitors |
ORDERS
A sequestration order against the estate of Pascall George Comninos.
The Applicant Creditor’s costs (including any reserved costs) be taxed (in accordance with the Federal Magistrates Court (Bankruptcy) Rules 2006) and paid from the estate of the Respondent Debtor in accordance with the Act.
Under the Bankruptcy Regulations a copy of this sequestration order be given to the Official Receiver in Sydney within 2 days.
THE COURT NOTES:
(i)That the date of the act of bankruptcy is 29 August 2011.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2065 of 2011
| BANK OF WESTERN AUSTRALIA LTD \ ABN 22 050 494 4545 |
Applicant
And
| PASCALL GEORGE COMNINOS |
Respondent
REASONS FOR JUDGMENT
Having determined that I was not prepared to grant an adjournment of this matter I proceeded to hear the petition, and after being provided with the required evidence, I asked Mr Kelvin, on behalf of the respondent, to speak to the notice of grounds of objection. As noted earlier, the notice of grounds of objection claim (1) solvency and then (2) by way of a series of paragraphs, that the property had been sold at an undervalue. The debtor has provided the Court with no evidence whatsoever as to his solvency, and in regard to the sale of the undervalue, Mr Kelvin tells me that the original mortgage was in a sum of $385,000.00 which meant that the bank must have been satisfied, on a valuation, that the property was worth in excess of that figure. I do not have a copy of the mortgage before me and I am not aware as to whether it was the only property secured for the advance. Mr Kelvin says that he needs the valuation that he requested in the notice to produce because his client finds it hard to believe that the value of the property has dropped so much. The mortgage itself was apparently obtained in 2005 according to the affidavit of Mr Comninos filed on 21 November.
Whilst it can be accepted that if the property was the sole security for the sum of $385,000 then it is more likely than not that the bank obtained a valuation in excess of that figure. But from 2005 until 2011 there have been a number of years of financial turmoil, and in the absence of any evidence at all, it is difficult for the court to come to a conclusion that a property in a country area such as this one maintained its value through those difficult times.
Mr Kelvin, in his submissions, appeared to me to be indicating that he believed it was for the bank to establish its bona fides in relation to the sale, but, with respect to him, I do not think that is the case. As I said earlier it is for a debtor who believes that the bank has acted unlawfully to establish that fact. It is not for the bank to establish the opposite. Again, as indicated earlier, I am not satisfied that Mr Comninos has made any effort to substantiate his claims, and has had a considerable period of time in which he could have done so. I have no evidence before me that would suffice to permit me either to adjourn or to set aside the petition.
Mr Kelvin refers in his submissions to his client’s state of health. His client is present in court and it is clear that he is not a person in the best of health. But I have no medical evidence and, in any event, it is being put to me that Mr Comninos is in a precarious financial position and is going to need expensive medical care which might be endangered by him going into bankruptcy. But for a person in a precarious financial position the requirement to make payment by himself for his medical care would be difficult.
Whilst the burden of bankruptcy is never a pleasant one to have to bear for a person in good health, still less in poor health, this is not in itself a reason not to make a sequestration order where there is clear evidence of a substantial debt, as there is here. In all the circumstances I am satisfied that the respondent has committed the act of bankruptcy alleged in the petition. I am satisfied of the proof of the other matters required by s.52 of the Bankruptcy Act 1966 (Cth)[1], and I will dismiss the notice of grounds of objection for the reasons given. I order that the Applicant Creditor’s costs (including any reserved costs) be taxed (in accordance with the Federal Magistrates Court (Bankruptcy) Rules 2006) and paid from the estate of the Respondent Debtor in accordance with the Act. The court notes that the date of the act of bankruptcy is 29 August 2011.
[1] The “Act”
I certify that the preceding five (5) paragraphs are a true copy of the reasons for judgment of Raphael FM
Date: 16 December 2011
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