Big River Group Pty Ltd v Visnic - [2010] FMCA 276

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BIG RIVER GROUP PTY LTD v VISNIC

[2010] FMCA 276

BANKRUPTCY – Creditors petition – notice of opposition – where respondent debtor claimed solvency on the basis of monies due to him from proceeds of two companies in liquidation, an unassessed costs order and property in Croatia – whether funds available within a reasonable time – where proceeds of liquidation were the subject of a freezing order issued in Family Court proceedings and distribution from one company dependant on sale of rural land – whether existence of freezing order constituted “other sufficient cause” not to issue a sequestration order – where debtor sought transfer of the matter to the Family Court.

Bankruptcy Act 1966 (Cth), ss.35A, 52(2)(a), 52(2)(b)
Family Law Act 1975 (Cth), s.79

Sandell v Porter (1966) 115 CLR 666
Pascoe v Boensch & Anor (No.9) [2009] FMCA 769
Hall v Poolman [2007] NSWSC 1330
Ling v Enrobook Pty Ltd (1997) 74 FCR 19
Clyne v Deputy Commissioner of Taxation (1985) 5 FCR 1
Cain v Whyte (1933) 48 CLR 639

Applicant:

BIG RIVER GROUP PTY LTD (FORMERLY KNOWN AS BIG RIVER TIMBERS PTY LTD)

Respondent:

MILAN VISNIC

File Number:

SYG 2015 of 2009

Judgment of:

Raphael FM

Hearing date:

19 April 2010

Date of Last Submission:

19 April 2010

Delivered at:

Sydney

Delivered on:

3 May 2010

REPRESENTATION

Counsel for the Applicant:

Mr D Jay

Solicitors for the Applicant:

Toomey Pegg Drevikovsky

Counsel for the Respondent:

Mr A Street SC

Solicitors for the Respondent:

Lander & Rogers

ORDERS

A sequestration order be made against the estate of Milan Visnic.
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 4 August 2009.
(ii)A consent to act as Trustee has been signed by Nicholas Malanos and has been lodged with the Official Receiver in Sydney.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
ATSYDNEY

SYG 2015 of 2009

BIG RIVER GROUP PTY LTD (FORMERLY KNOWN AS BIG RIVER TIMBERS PTY LTD)

Applicant

And

MILAN VISNIC

Respondent

REASONS FOR JUDGMENT

On 20 August 2009 the applicant creditor presented a petition to this Court seeking a sequestration order against Milan Visnic, the respondent, who had committed an act of bankruptcy by failing on or before 4 August 2009 to comply with the bankruptcy notice NN86-09 served upon him pursuant to an order for substituted service made by Registrar Segal on 9 July 2009. There was annexed to the bankruptcy notice a sealed copy of a judgment entered on 3 August 2006 whereby the applicant obtained a judgment against the respondent in the sum of $144,250.00 inclusive of costs. It is not known why the applicant did not proceed to bankrupt the…

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: [2010] FMCA 276
Decision Date: 3 May 2010

CaseChat Overview and Summary

The case of Big River Group Pty Ltd v Visnic involved a dispute where the applicant, Big River Group, sought a sequestration order against the respondent, Milan Visnic. The matter was heard in the Federal Circuit Court of Australia, where the court was required to consider whether Visnic's financial circumstances warranted the appointment of a trustee to manage his estate. The primary legal issue before the court was whether Visnic was insolvent, and if so, whether his insolvency justified the sequestration of his estate. The court also had to assess the evidence provided by both parties regarding Visnic's financial obligations and assets.

The court examined the evidence provided by Big River Group, which included a detailed affidavit outlining the outstanding debt owed by Visnic. The court also considered Visnic's submissions, which contested the insolvency claim. The central focus was on whether Visnic could reasonably be expected to pay his debts as they fell due. The court found that Visnic had not provided a satisfactory explanation for his inability to meet his financial obligations and concluded that Visnic was indeed insolvent. This determination was based on the inability to reconcile the debts with the assets available to Visnic.

In light of these findings, the court ruled in favor of Big River Group, granting the application for a sequestration order against Visnic's estate. The court's decision was grounded in the clear evidence of insolvency presented by Big River Group and the lack of a viable defence from Visnic. The court further directed that the costs associated with the application be taxed in accordance with the relevant legal provisions. This decision was pivotal in ensuring that the applicant's claims for outstanding debts were pursued through the formal insolvency process.

Orders

Orders of the court

A sequestration order be made against the estate of Milan Visnic.

The Applicant Creditor’s costs (including any reserved costs) be taxed (in accordance with the

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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