Baycorp Collections PDL (Australia) Pty Limited v Hsia

[2018] FCCA 249

FEDERAL CIRCUIT COURT OF AUSTRALIA

BAYCORP COLLECTIONS PDL (AUSTRALIA) PTY LIMITED v HSIA [2018] FCCA 249

Catchwords:
BANKRUPTCY – Application for review of sequestration order – where criteria for sequestration order are established – no other sufficient cause why a sequestration should not be made – sequestration order affirmed.

PRACTICE & PROCEDURE – Application for adjournment – whether an adjournment is in the interests of the administration of justice – where proceedings had been adjourned twice previously – adjournment application refused.

Legislation:

Bankruptcy Act 1966 (Cth), s.52.

Applicant: BAYCORP COLLECTIONS PDL (AUSTRALIA) PTY LIMITED

Respondent: ALAN HSIA

File Number: SYG 1065 of 2017

Judgment of: Judge Street

Hearing date: 25 January 2018

Date of Last Submission: 25 January 2018

Delivered at: Sydney

Delivered on: 25 January 2018

REPRESENTATION

Solicitors for the applicant: Ms K Fernandez
SLF Lawyers

The respondent appeared in person.

ORDERS

1. Grant leave to the respondent to file in Court the affidavits of Alan Hsia dated 25 January 2018 and Jessica Huang dated 25 January 2018.

2. The Court affirms the decision of the Registrar made on 12 October 2017.

3. Costs of the petitioning creditor be paid out of the bankrupt’s estate.

THE COURT NOTES THAT:

1. The date of bankruptcy is 9 January 2017.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1065 of 2017

BAYCORP COLLECTIONS PDL (AUSTRALIA) PTY LIMITED

Applicant

And

ALAN HSIA

Respondent

REASONS FOR JUDGMENT

1. This is an application by the respondent for the Court to review an order made by the Registrar on 12 October 2017, in which the Registrar made an order sequestrating the estate of the respondent under s 52 of the Bankruptcy Act 1966 (Cth) (“the Act”). The hearing before this Court is a hearing de novo. The applicant has had read evidence verifying the contents of the creditor’s petition, service of the creditor’s petition, verifying service of the bankruptcy notice, verifying the continued existence of the debt, and has complied with the requirements of Federal Circuit Court (Bankruptcy) Rules 2016 in respect of the service of the affidavit of search and the affidavit of debt.

2. The evidence on its face establishes that the bankruptcy notice was effectively taken to be served, as a result of which, on 9 January 2017, an act of bankruptcy occurred. The respondent has identified significant personal hardships and family circumstances on which the first respondent seeks to take issue with the judgment debt that was acquired in support of the bankruptcy notice. That judgment was entered on 12 August 2016.

3. The respondent has identified suffering significant depression around the time that the judgment was obtained. The respondent, very sensibly, took steps to engage with the Black Dog Institute. That is an entity in respect of which it is sensible for anyone suffering depression to engage with if normal elasticity is lost or depression takes hold. Nonetheless, the circumstances explained by the respondent do not give rise to any reason why the Court could go behind the judgment entered on 12 August 2016.

4. The respondent submitted that there is no evidence of the assignment to the principal creditor in respect of the proceedings brought against him in respect of the judgment obtained in the amount of $18,320.37. That was an issue potentially capable of being agitated in the proceedings before the Local Court of New South Wales. No steps were taken by the applicant to seek to reopen or re-agitate or set aside the judgment obtained by the petitioning creditor. I do not regard the assertion from the bar table as to the absence of receipt of notice of assignment as giving rise to grounds by reason of which this Court would go behind the judgment obtained in the Local Court.

5. On the face of the material the Court is satisfied that the respondent has committed an act of bankruptcy, that at the time when the act of bankruptcy was committed the respondent was ordinarily resident in Australia, that the creditor has established proof of the matters required in s 52(1) of the Act, and the Court is satisfied that on the evidence before the Court the respondent is insolvent.

6. In relation to s 52(2) as to whether there is other sufficient cause why a sequestration order should not be made, the respondent has identified the hardships that he has faced in relation to the loss of his mother, and it is clear that his circumstances are one in which he has been struggling to deal with personal issues. They are not reasons why other sufficient cause has been shown that a sequestration order should not be made. They are reasons why the respondent should continue to seek and obtain professional help as and when he needs it.

7. At the commencement of the hearing, the respondent sought an adjournment, and handed up to the Court two affidavits in support of his submissions concerning his hardship that he has been facing. Neither affidavit identifies any proper basis upon which it could be said that there is other sufficient cause not to make a sequestration order.

8. The respondent had also earlier forwarded to the Court, on 22 January 2018, an email requesting an adjournment, in which the respondent identified that his sister had made a payment to another creditor, in the sum of $10,130. On the face of it, that payment to the creditor at the time the sequestration order remains in force is clearly a preference recoverable by the trustee. The fact that the respondent has permitted family members to make payments that are preferences is a matter which the Court took into account in considering whether an adjournment should be granted. These are proceedings which the Court has earlier adjourned twice, in part because of the hardship identified by the respondent in respect of the family tragedy.

9. Nonetheless, no proper basis was made for the granting of an adjournment of the hearing today, and the fact that creditors are being benefited unequally, contrary to the provisions of the Act, is a further reason why no further adjournment is granted. The Court is not satisfied an adjournment was warranted in the interests of the administration of justice.

10. The Court is not satisfied that there is other sufficient cause why a sequestration order should not be made. Accordingly, the Court affirms the sequestration order made by the Registrar on 12 October 2017. The Court notes, the act of bankruptcy occurred on 9 January 2017.

I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of Judge Street

Date: 1 March 2018