Baycorp Collections PDL (Australia) Pty Ltd v Alexander

[2015] FCCA 3229

FEDERAL CIRCUIT COURT OF AUSTRALIA

BAYCORP COLLECTIONS PDL (AUSTRALIA) PTY LTD v ALEXANDER [2015] FCCA 3229

Catchwords:
BANKRUPTCY – Application for review of the Registrar’s decision – proof of matters required on creditor’s petition – sequestration order upheld – application dismissed.

Legislation:

Bankruptcy Act 1966, ss.5, 43,44, 52, 153B

Bankruptcy Regulations 1996 (Cth), reg.16.01
Federal Circuit Court Rules 2001 (Cth), rr.11.09, 11.11, 11.15
Federal Circuit Court Bankruptcy Rules 2006 (Cth), rr.2.03, 4.02, 4.04, 4.06, 20.03

Totev v Sfar [2008] FCAFC 35; (2008) 167 FCR 193

Applicant: BAYCORP COLLECTIONS PDL (AUSTRALIA) PTY LTD

Respondent: SAMANTHA ROSALIE ALEXANDER

File Number: SYG 2693 of 2014

Judgment of: Judge Nicholls

Hearing date: 13 July 2015

Date of Last Submission: 13 July 2015

Delivered at: Sydney

Delivered on: 4 December 2015

REPRESENTATION

Solicitors for the Applicant: Mr R Roser of Moisson Lawyers

Solicitor for the Respondent: Mr R Watson of Robert Watson Solicitor

Counsel for the Official Trustee In Bankruptcy: Mr D C Eardley

THE COURT ORDERS THAT:

1. The application for review made on 23 March 2015 is dismissed.

2. The sequestration order made on 3 March 2015 is affirmed.

3. The respondent in the substantive proceedings, Samantha Rosalie Alexander, pay the trustee in bankruptcy's costs in relation to and incidental to the application for review as agreed or assessed.

THE COURT NOTES THAT:

1. The Court notes that the date of the act of bankruptcy is 6 June 2014.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 2693 of 2014

BAYCORP COLLECTIONS PDL (AUSTRALIA) PTY LTD

Applicant

And

SAMANTHA ROSALIE ALEXANDER

Respondent

REASONS FOR JUDGMENT

1. On 3 March 2015 a Registrar of the Court made a sequestration order in respect of the estate of Ms Samantha Rosalie Alexander (the respondent in the substantive proceedings, hereafter, “the respondent”), on the petition of Baycorp Collections PDL (Australia) Pty Ltd (the applicant in the substantive proceedings, hereafter, “the applicant”).  The respondent filed an application on 23 March 2015 for review of the decision of the Registrar and for the following orders to be set aside (Orders of 3 March 2015):

   “1. A sequestration order is made against the estate of SAMANTHA ROSALIE ALEXANDER.

   2. The Applicant Creditor's costs be fixed in the amount of $6,528.90 and be paid from the estate of the Respondent Debtor in accordance with the Bankruptcy Act 1966.”

Background

1. The applicant filed a creditor’s petition on 29 September 2014 seeking a sequestration order under s.43 of the Bankruptcy Act 1966 (Cth) (“the Act”) against the estate of the respondent. The petition was based on the respondent’s act of bankruptcy by failing to comply with the requirements of the Bankruptcy Notice on or before 6 June 2014. The Bankruptcy Notice was served on the respondent on 16 May 2014.

2. The applicant relies on a debt owed by the respondent for the making of the sequestration order. This debt is stated at [1] of the creditor’s petition:

   “1. The respondent debtor owes the applicant creditor $45,009.08 being the outstanding principal of $43, 318.56 plus interest in the amount of $1,690.52 for the Judgment Debt obtained against the respondent debtor in PARRAMATTA Local Court Proceedings No. 2014/55199, the applicant creditor being the plaintiff and Judgment Creditor in those proceedings.”

3. The respondent was served, pursuant to reg.16.01(1)(c) of the Bankruptcy Regulations 1996 (Cth) (“the Regulations”) , with a letter from the applicant, the Bankruptcy Notice, and a Certified Copy of Judgment on 16 May 2014 (see the affidavit of service of Greg Hughes, Licensed Commercial Agent, of 28 May 2014).

4. The applicant provided evidence that the respondent was personally served with a copy of the creditor’s petition, affidavit of service of Bankruptcy Notice, and a Trustee Consent to Act Declaration by Mr Miles Smith, a Commercial and Private Inquiry Agent, on 10 November 2014 (see affidavit of service of creditor’s petition of Miles Smith sworn on 13 November 2014). The creditor’s petition set out the relevant time and date for the upcoming Court event.

5. The matter first came before the Registrar on 28 October 2014 for a first Court date. Mr D Wilkinson appeared for the applicant. There was no appearance by, or on behalf of, the respondent. The matter was adjourned until 4 December 2014. Prior to that Court event, the Court’s Registry received a phone call from the respondent indicating that she was unable to attend the listing due to “medical issues”. The respondent then sent a facsimile to the Court’s Registry at 11.27am on 4 December 2014 requesting an adjournment and stating that she was unable to attend as she was at “Rousehill medical centre”.

6. Mr D Wilkinson appeared for the applicant before the Registrar on 4 December 2014, and there was no appearance by, or for, the respondent.  The hearing of the creditor’s petition was adjourned to 5 February 2015. Again, there was no appearance by, or for, the respondent. By orders made on that day, the petition was adjourned until 3 March 2015 and the following order was made (order 2 of 5 February 2015):

   “2. Solicitor for Applicant to send written notification within 48 hours to the Respondent (or their solicitor on record) of details of the time, date and place of the adjourned hearing and the details of any orders made today and if seeking to proceed to provide an affidavit proving this notification on the adjourned date.”

7. The applicant received an email from Ms Catherine Jobson on 22 January 2015 indicating that the respondent was “an inpatient in the Hainsworth Unit at Cumberland Hospital” and had been an inpatient since 7 January 2015 and “currently has no leave” so would be unable to attend upcoming Court events. The applicant informed the respondent of the new hearing date (3 March 2015) of the adjourned creditor’s petition by letter sent on 5 February 2015 to her address in Kellyville Ridge, NSW. The applicant sent a copy of this letter to the respondent at her email address, and to Ms Catherine Jobson, at her work email address. The applicant received a reply by email from Ms Catherine Jobson on 6 February 2015 stating that the respondent had been discharged from Cumberland Hospital and for the applicant to “return to the usual way of correspondence” (annexure “A” – “D” and [1] – [5] of the affidavit of service of Mr D Wilkinson of 6 February 2015 and annexures “A” – “D” and [2] – [5] of the affidavit of Wojtek Randla, solicitor director for Baycorp Legal Pty Limited, of 9 April 2015).

8. The respondent contacted the applicant on 15 April 2015. The respondent confirmed that her address at “1 Farrier Way Kellyville Ridge NSW” is the same address as “1 Beck Place Kellyville Ridge NSW” ([3] of the affidavit of David Wilkinson, solicitor, affirmed 21 May 2015). This affidavit was sent to the respondent at her

   
   

   “last-known address” by letter and email, and to the trustee of the bankrupt estate by email (affidavit of service of David Wilkinson of 22 May 2015).

9. Mr D Wilkinson appeared for the applicant at the hearing of the creditor’s petition on 3 March 2015. There was again, no appearance, by, or for, the respondent. The Registrar, having been satisfied that the matters set out in s.52(1) of the Act were met, made a sequestration order against the estate of the respondent.

Application for Review

1. The respondent filed an application for review of the Registrar’s decision on 23 March 2015. The respondent stated in her affidavit of 23 March 2015 that she was hospitalised during the period 7 January 2015 to 28 January 2015, remaining under hospital “care” to 28 February 2015 and that she did not receive “the order made on 5/2/2015 from the applicant Solicitor”. On these grounds, the respondent seeks an order that the sequestration order be set aside.  The respondent also states that she will become “homeless” if her estate is sold, and that she offered to repay her debts monthly at a set sum but this offer was not accepted (see respondent’s affidavit of 23 March 2015). 

2. Attached to her affidavit was a document titled “Mental Health Review” and a document titled “Economiser Home Loan Summary” from the Commonwealth Bank of Australia. Her affidavit also attached a letter from Dr Rehana Yasmin, a resident Medical officer at Cumberland Hospital, of 28 January 2015, stating that the respondent was an “inpatient and received treatment for a diagnosed mental illness in our hospital from 07/03/1974 to 28/01/2015” and a recommendation that her matter be adjourned “until she is stable” .

3. The applicant opposes the respondent’s application to set aside the sequestration order as it believe it has taken “all reasonable actions” to ensure the respondent received the order of 5 February 2015 ((9) of the affidavit of Wojtek Randla of 9 April 2015 and see above at [8] – [9]).

4. By orders made by the Registrar on 27 April 2015, Mr A J Barnden was joined to the proceedings as Trustee of the bankrupt’s estate and was required to file a report for the Court, setting out the assets and liabilities of the estate, and the income of the respondent. Leave was granted to the parties to file any further evidence.

Before the Court

1. The matter first came before this Court on 10 June 2015. Mr R Roser appeared for the applicant and Mr D C Eardley, of counsel, appeared for the trustee. The respondent appeared in person. By orders made on this day, the matter was set down for final hearing on 13 July 2015 and an order was made compelling the respondent to file and serve a statement of affairs on or before 17 June 2015.

2. During the course of the directions listing it was made clear by the respondent that there may be some issues with her mental condition and she may wish to appoint a litigation guardian to appear on her behalf at the final hearing.

3. At the final hearing of this matter Mr R Roser appeared for the applicant, Mr R Watson appeared for the respondent and Mr D C Eardley, of counsel, appeared for the Trustee.

4. Mr R Watson, the respondent’s solicitor, indicated to the Court that he had only been instructed on the morning of the hearing by the respondent, and that the respondent had previously been on “very heavy doses” of drugs and that “mentally” she had “been in a mess”.  He indicated that he was concerned about the respondent’s “state of mind and health at the time” that “this was all going on”. Further, that previously she may not have been able to get herself to Court events as she was not in a “state to deal” with proceedings. The respondent indicated that the medical certificates would not show this information. The respondent indicated to the Court that the “medical material” did not cover the entirety of the matter before the Court (in relation to the creditor’s petition, Bankruptcy Notice).

5. The respondent provided to the Court “medical certificates” that were dated 17 June 2015. She did not seek to have these documents read into evidence. The respondent confirmed in Court that she was “pressing the application”. The parties proceeded to make oral submissions on the review application, with the understanding that the respondent would be given the opportunity to file further evidence as to her medical condition, and as to whether she would need a litigation guardian in these proceedings. It was agreed that if further evidence was filed by the respondent in regard to this issue by 22 July 2015, the matter would be listed for further directions and the parties given the opportunity to make submissions on the subject. If no evidence was filed pursuant to the orders made on 13 July 2015, then I would proceed to judgment.

6. At the hearing, leave was granted to the Trustee to read and rely on the affidavit of Andrew James Barden of 8 July 2015. The Trustee submitted that the respondent had not filed a statement of affairs or received any funds from the respondent (pursuant to orders (1) and (3) of 10 June 2015). The Trustee submitted that the respondent’s failure to file the statement was a “procedural irregularity” that would have a prejudicial effect on the creditors and would “constrain” the Trustee.

7. The applicant sought to rely on the following documents in support of the petition:

   1)The creditor’s petition filed on 29 September 2014 annexing the Bankruptcy Notice (“A”) and the “Judgment/Order” of the Parramatta Local Court.

   2)The affidavit of Darryl Macey, Operations Manager, verifying the creditor’s petition affirmed 24 September 2014.

   3)The affidavit of service of Bankruptcy Notice of Greg Hughes, Licensed Commercial Agent, sworn 28 May 2014.

   4)The affidavit of service of creditor’s petition of Miles Smith, Commercial and Private Inquiry Agent, sworn on 13 November 2014 annexing a copy of the creditor’s petition (“A”), the affidavit verifying the creditor’s petition (“A”) and the affidavit of service of the bankruptcy notice (“B”) and Trustee Consent to Act Declaration (“C”).

   5)The affidavit of final debt affirmed by Darryl Macey, Operations Manager, on 3 December 2014.

   6)The affidavit of final search affirmed by David Wilkinson, solicitor, on 3 December 2014.

   7)The affidavit of service and debt affirmed by Justin Watson, Operations Manager, on 3 March 2015.

   8)The affidavit of Wojtek Randla, Solicitor Director of Baycorp Legal Pty Ltd, sworn 9 April 2015.

   9)The affidavit of David Wilkinson, Solicitor, affirmed on 21 May 2015.

   10)The affidavit of service affirmed by David Wilkinson on 22 May 2015.

   11)The applicant’s affidavit of final search and final debt affirmed by David Wilkinson on 13 July 2015.

8. The respondent sought to rely on the following documents:

   1)The application for review filed on 23 March 2015.

   2)The applicant’s affidavit affirmed on 23 March 2015.

9. As stated above, the parties were also provided with the opportunity to file any further evidence in relation to the matter of the respondent’s mental condition. Nothing further has been subsequently filed.

The Issues

1. The issues in the proceedings are as follows. First, in reviewing the sequestration order made by the Registrar, on the evidence presented, are the matters that are required to be satisfied, or met, such that the applicant is entitled to the sequestration order, so satisfied.

2. Second, do the respondent’s submissions, through her solicitor, regarding her claimed mental health condition, affect the consideration of the issue above.

3. In relation to the first issue, relevant to the consideration of deciding whether to set aside the Registrar’s decision to enter a sequestration order, the Court must have regard to whether the petitioning creditor has sufficiently proven the matters specified in s.52(1) of the Act (Totev  v Sfar [2008] FCAFC 35; (2008) 167 FCR 193 (“Totev”) at [14]). If sufficiently satisfied of the s.52(1) requirements, the Court may enter a sequestration order against the relevant party. If the Court is unable to be satisfied with the proof of any of those matters, or is satisfied by the debtor that they are able to pay their debts, or there is any other “sufficient cause” as to why a sequestration order should not be made, the Court may dismiss the petition (s.52(2)(a) and (b) of the Act).

4. Although a sequestration order has been made, and the respondent is a bankrupt, the Court is required to consider any application brought pursuant to r.2.03 of the Federal Circuit Court (Bankruptcy) Rules 2006 (Cth) (“the Bankruptcy Rules”) by “way of a hearing de novo” (see r.20.03 of the Federal Circuit Court Rules 2001 (Cth) (“the FCC Rules”)).

5. In Totev it was relevantly held that (at [13]):

   “In the case of a hearing de novo, however, the judge reviewing the order begins afresh and exercises for himself or herself any discretion exercised by the registrar. The parties commence the proceeding again, subject to any rules concerning the use of evidence adduced before the registrar. The hearing de novo involves the exercise of the original jurisdiction and the petitioner, in the case of a bankruptcy petition, must start again, call witnesses and make out the petitioner’s case (Harris v Caladine at 124).”

6. A review application is a hearing that must begin “afresh” and the Court must be “satisfied” with the proof of matters under s.52 of the Act, including satisfaction of (Totev at [14]):

   “• the matters stated in the petition;

   •   the service of the petition; and

   • the fact that the debt or debts on which the petitioning creditor relies is or are still owing.”

7. The Court may read into evidence any evidence that was before the Registrar and grant leave for any new evidence to be read (r.20.03 of the FCC Rules).

8. In relation to the second question (at [25] above), given the material that has been filed by the respondent in these proceedings, and her oral submissions during various Court events, it was raised with the parties whether it was appropriate to appoint a litigation guardian for the respondent pursuant to r.11.11 of the FCC Rules, and how this may affect her application.

9. Of potential relevance to these matters is whether the respondent was a person who needed a litigation guardian at an earlier stage, including during service of the creditor’s petition. I note here rr.11.09 and 11.15 of the FCC Rules, in relation to documents to be served to people who need a litigation guardian.

10. It is convenient to address the second issue of the respondent’s mental health and its effect on her to engage with the process. As set out above, at the hearing of this matter, the respondent was represented by a solicitor. He made clear that he had received instructions in this matter at a late stage. This was one of the reasons that the parties were given the opportunity, if they chose to, to file further evidence in this matter.

11. As set out above, the respondent’s affidavit of 23 March 2015 (with annexures) stated that she was hospitalised on 7 January 2015 as she was suffering from a “mental illness”.  She further stated that she was released from hospital on 28 January 2015 and remained under the care of the hospital until 28 February 2015.

12. The following timeline is relevant to the disposition of this matter, drawn from the evidence of the respondent in her affidavit, and the various affidavits and documents of the applicant set out at [21] above:

    1)16 May 2014 – the respondent was served with the Bankruptcy Notice and a certified copy of the judgment of final debt.

    2)6 June 2014 – act of bankruptcy.

    3)29 September 2014 – the applicant filed the creditor's petition.

    4)28 October 2014 – first Court Date before the Registrar.

    5)10 November 2014 - respondent personally served with a copy of the creditor’s petition, affidavit of service of Bankruptcy Notice and a Trustee Consent to Act Declaration form.

    6)4 December 2014 – second Court event before the Registrar. The respondent contacted the registry and indicated that she could not attend.

    7)7 January 2015 to 28 January 2015 – the respondent is in Cumberland Hospital.

    8)22 January 2015 ‑ applicant receives correspondence from Cumberland Hospital indicating that that the respondent is in hospital.

    9)28 January 2015 to 28 February 2015 – respondent discharged from hospital, remaining under hospital “care”.

    10)5 February 2015 - hearing of the creditor's petition before the Registrar. No appearance by the respondent, matter is adjourned.

    11)3 March 2015 – hearing of the creditor’s petition before the Registrar. Sequestration order made by the Registrar. No appearance by the respondent.

    12)23 March 2015 - respondent filed an application for review of the Registrar’s decision.

    13)15 April 2015 – applicant confirmed the respondent’s address.

    14)27 April 2015 - Trustee joined to proceedings.

    15)10 June 2015 – first Court date before Judge Nicholls for application for review of the Registrar’s decision.

    16)17 June 2015 – respondent’s Statement of Affairs due to be filed and served.

    17)13 July 2015 - Final hearing before Judge Nicholls on application for review. Both parties were represented before the Court.

    18)22 July 2015 – additional evidence due to be filed by the Respondent. Nothing further filed. Matter became reserved for judgment.

1. There are two strands to the implications possibly arising from this. First, was the “process” outlined above affected by any incapacity on the part of the respondent such as to have required different conduct from the applicant in relation to service. Further, could the question of mental capacity affect the validity of the Bankruptcy Notice and the Creditor’s Petition and, thus, be relevant to the question of the making of sequestration order.

2. Some care must be taken with the understanding of the respondent’s case here. Following the statement of her hospitalisation, the remainder of her affidavit can be properly understood as focussing on the immediate process before the Registrar and the consequences for her, and her family, of the making of the sequestration order.

3. There is nothing in the affidavit seeking to impugn the Creditor’s Petition or Bankruptcy Notice, or to assert any mental health issue, such as to affect their efficacy (and see further below). The respondent’s complaint appears to be that she did not receive the order made by the Registrar on 5 February 2015 which, as set out above, adjourned the relevant hearing to a subsequent date, where the sequestration order was made.

4. Attached to the respondent’s affidavit is a letter dated 28 January 2015, which is signed by a resident medical officer at the Cumberland Hospital (Dr R Yasmin). The doctor’s letter states that the respondent was an inpatient in the hospital from “07/03/1974 to 28/01/2015”.

5. The first date is clearly given in error. This can be seen, if for no other reason, from the date of birth of the respondent, as it appears at the top of the letter, “DOB 25/03/1974”.

6. At most, therefore, what can be said is that the letter supports the respondent’s claim to have been hospitalised. The period of that hospitalisation is as the respondent has set out in her affidavit.

7. As stated above, during the hearing, the respondent’s solicitor also sought to tender two other letters from medical practitioners. One is from Dr M Akhtar dated 17 June 2015 addressed to a psychiatrist at the Cumberland Hospital. The letter states that the representative was in care at the hospital in January 2015 and has “manic bi-polar disorder.” The letter asks for a review of her medication.

8. The second letter is signed by the same doctor and dated 17 June 2015. The letter seeks to “certify” that the respondent, based on “discharge notes” available to the doctor, had “manic bipolar disorder”.

9. The respondent’s submissions before the Court, made through her solicitor, were relevantly focussed on the occasions when the respondent did not appear before the Registrar and that her explanation for that was her hospitalisation with mental health issues. This is summarised in the submissions made orally to the Court that “…had she been in a better state of mind she would have…appeared and dealt with these matters rather than ignored the correspondence”.

10. At its highest, therefore, despite opportunity to file further evidence and make further arguments, the state of the evidence filed, and the submissions made, seek to explain her absence before the Registrar at the time of the making of the sequestration order.

11. There was no argument, let alone evidence, to say that the medical condition related to the time leading up to the making of the Bankruptcy Notice or the Creditor’s Petition. The question of any medical, or other, incapacity, therefore, does not arise at these relevant times. The matters of service according to the FCC Rules (as set out above) do not arise. Nor is there any basis to consider that any medical condition affected the efficacy of the Bankruptcy Notice or Creditor’s Petition.

12. The question remains, therefore, whether the process before the Registrar, at the time of the making of the sequestration order, was unfair, due to the respondent’s claimed mental health condition.

13. While the respondent’s affidavit, and the letters in support, asserts the hospitalisation of the respondent from 7 January 2015 to 28 January 2015, there was nothing in the respondent’s evidence or submissions to the Court to say that the hospitalisation, and the mental health situation, was such that she lacked relevant capacity at that time and required a litigation guardian. The submissions, at their highest, and consistent with the affidavit, were that she could not “properly” attend to the “correspondence” about the hearing before the Registrar because of her hospitalisation. That is, because she was in hospital.

14. It is also of note, that at the time of the hearing of the sequestration order (3 March 2015), the respondent was not in hospital and a copy of the relevant correspondence, and orders, was served on the respondent (see the affidavit of Wojtek Randla of 9 April 2015 at [4] – [6]).

15. In any event, the question of what occurred before the Registrar, and the respondent’s inability to attend before the Registrar, now needs to be seen in light of the application for review of the Registrar’s decision to make a sequestration order.

16. As stated above, the matter before the Court proceeded “de novo”. The respondent had access to legal representation. She was given the opportunity to provide further material in pressing the application for review. The question in these circumstances, therefore, is whether, on what is before the Court now, the matters relevant to the making of the sequestration order have been addressed, and met. For the reasons set out below, I am satisfied that they have.

17. I should also note, again, that in relation to the application for review proceedings, the Court specifically raised the question of the need for any litigation guardian for the respondent. This was not pursued by the respondent’s solicitor, including as to whether it may have related to the review proceedings.

Proof of Matters on a Creditor’s Petition

1. The relevant issue for consideration here is whether the applicant, Baycorp Collections Pty Ltd, has proven the matters specified in s.52(1) of the Act. The applicant contends that there is sufficient evidence before the Court such that the sequestration order should be made. However, the respondent submits, pursuant to s.52(2) of the Act, that she is able to pay her debts and if the Court is satisfied of this matter, that an order should be made under s.153B of the Act annulling the respondent’s bankruptcy.

2. I turn to whether the applicant has been able to prove the matters specified in s.52(1) of the Act. I am satisfied of the following matters:

   1)Ms Samantha Rosalie Alexander was served with the Bankruptcy Notice on 16 May 2014 at 9.20am (the affidavit of service of Bankruptcy Notice of Greg Hughes sworn 28 May 2014).

   2)The creditor’s petition filed by Baycorp Collections PDL (Australia) on 29 September 2014 is in accordance with Form 6 of the Bankruptcy Rules (see in particular, r.4.02(1) of the Bankruptcy Rules and the Creditor’s Petition of 29 September 2014).

   3)The matters stated in paragraphs 1, 2, 3, 4 and 5 of the applicant’s creditor’s petition are verified in accordance with Part 2 of Form 6 and those matters, therefore, are proved (r.4.02 of the Bankruptcy Rules). Those matters are that the respondent owes Baycorp Collections PDL (Australia) Pty Limited $45,009.08 pursuant to a judgment entered in the Parramatta Local Court; that, at the time when the act of bankruptcy was committed, the respondent was, among other things, personally present in Australia and was ordinarily resident in Australia; and that Ms Samantha Rosalie Alexander failed to comply on, or before, 6 June 2014 with a bankruptcy notice served on her on 16 May 2014 2014 (the affidavit of Darryl Macey, Operations Manager, verifying the creditor’s petition affirmed 24 September 2014).

   4)The creditor’s petition was accompanied by an affidavit stating that on 3 December 2014 the computer records of the Federal Court and of this Court had been searched and no application had been made in relation to the Bankruptcy Notice issued against the respondent (r.4.04(1)(a) of the Bankruptcy Rules and the affidavit of David Wilkinson, solicitor, of final search of 3 December 2014).

   5)On 10 November 2014, being more than five days before the date fixed for the hearing of the creditor’s petition filed by Baycorp Collections PDL (Australia) Pty Limited, Samantha Rosalie Alexander was served with, amongst other things, a sealed copy of the creditor’s petition, an affidavit of service of the Bankruptcy Notice on Samantha Rosalie Alexander sworn by Greg Hughes on 28 May 2014, and an affidavit verifying the creditor’s petition sworn by Darryl Macey on 24 September 2014 (r.4.06(2) of the Bankruptcy Rules and the affidavit of service of the creditor’s petition of Miles Smith of 13 November 2014).

   6)Finally, leave was granted to file in Court on 13 July 2015, an affidavit of debt and an affidavit as required by r.4.06 of the Bankruptcy Rules (see Mr Wilkinson’s affidavit of final search and final debt sworn on 13 July 2015).

3. Before the Court, the trustee raised the matter of the applicant having security over the property of the respondent.

4. I note that the creditor’s petition addresses this matter:

   “2. The applicant creditor holds security over the property of the respondent debtor to the value of $45,009.08 and consisting of a writ recorded against the respondent’s interests in folio 52/DP1015083 and

   (a) is willing to surrender this security for the benefit of creditors generally if a sequestration order is made against the respondent debtor;…”

5. I am satisfied that the applicant has included in the petition a statement that it is willing to surrender the security for the benefit of the general creditors, in the event of a sequestration order made against the respondent. I am satisfied that the requirements of s.44(3) and s.44(4) of the Act are met.

6. I am satisfied that the requirements under s.52(1) of the Act are met. Turning to s.52(2)(a) and (b) of the Act. If the respondent is able to pay her debts (s.52(2)(a) of the Act) and can provide sufficient proof that she is solvent, the Court has the discretion to dismiss the creditor’s petition. A person is considered solvent if they are able to pay all the debts, as, and when, they become due and payable (s.5(2) of the Act). The respondent has asserted to the Court in oral submissions that she has assets that will “well and truly satisfy the debt”. However, this submission remains in a state of mere assertion. Further, the respondent has not complied with orders of the Court to file and serve a statement of affairs setting out her financial affairs. On balance, I find that there is insufficient evidence before the Court of the respondent’s financial position to suggest that she will be able to pay her debts within a reasonable period. With reference to s.52(2)(a) of the Act, there is insufficient evidence to suggest that the discretion to dismiss the creditor’s petition should be relevantly exercised.

7. Turning to the requirements set out in s.52(2)(b) of the Act, as to whether any other “sufficient cause” arises that could provide a reason for dismissing the creditor’s petition. While the respondent asserts in her affidavit that she was not properly served with orders made on 5 February 2015 (see above), there is no other evidence before the Court to support this proposition. There is evidence before the Court that the respondent was properly served with all relevant documents.

8. As to the question of whether the respondent’s assertion of mental incapacity amounts to a “sufficient cause” for the purposes of s.52(2)(b), what is set out above stands in answer. There is nothing before the Court to suggest any other basis on which the Court may ground a finding that there is “sufficient cause” to dismiss the creditor’s petition.

Conclusion

1. I am satisfied that the petitioning creditor has proved the matters it is required to prove under s.52(1) of the Act and that the sequestration order made by the Registrar should stand. The application for review should be dismissed. I will make an order accordingly.

I certify that the preceding sixty-one (61) paragraphs are a true copy of the reasons for judgment of Judge Nicholls

Associate: 

Date: 4 December 2015