Body Corporate for Araucaria GTP 1790 v Massey

[2009] FMCA 598

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BODY CORPORATE FOR ARAUCARIA GTP 1790 v MASSEY [2009] FMCA 598

BANKRUPTCY – Creditor’s petition – whether sequestration orders should be made after creditors’ meeting called pursuant to Part X of the Act adjourned, and where controlling trustee recommended rejection of personal insolvency agreement proposed.

Bankruptcy Act 1966, ss.52, 188, 189AAA

Applicant: BODY CORPORATE FOR ARAUCARIA GTP 1790

Respondent: JOHN JOSEPH MASSEY

File Number: BRG 741 of 2008

Judgment of: Wilson FM

Hearing date: 29 May 2009

Date of Last Submission: 29 May 2009

Delivered at: Brisbane

Delivered on: 29 May 2009

REPRESENTATION

Counsel for the Applicant: N/A

Solicitors for the Applicant: Redchip Lawyers

Counsel for the Respondent: N/A

Solicitors for the Respondent: In person

ORDERS

1. That a sequestration order be made against the estate of JOHN JOSEPH MASSEY.

2. That the Applicant Creditor’s costs, including reserved costs, if any be taxed in accordance with the Federal Court Rules and paid from the estate of the Respondent Debtor in accordance with the Bankruptcy Act 1966 (Cth).

The court notes that the date of the act of bankruptcy is 23 October 2008.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
BRISBANE

BRG 741 of 2008

BODY CORPORATE FOR ARAUCARIA GTP 1790

Applicant

And

JOHN JOSEPH MASSEY

Respondent

REASONS FOR JUDGMENT

1. The applicant seeks a sequestration order against the estate of the respondent. 

2. The matter has come before the Court on a number of occasions and has been adjourned for one reason or another.  On one occasion the respondent had proposed satisfaction of the petitioning creditors' debt but cheques tendered in respect of that matter were dishonoured on presentation.  Most recently on 17 April 2009 the matter was adjourned until today to permit the respondent to proceed with a creditors' meeting called pursuant to Part X of the Bankruptcy Act.

3. The respondent has signed an authority under s.188 of the Act and a creditors’ meeting was convened on 22 May 2009. The minutes of that meeting are exhibited to the affidavit of Christopher Richard Cook filed by leave today. The meeting has been adjourned. The minutes record what occurred at that meeting and that a number of issues have arisen in respect of asserted proofs of debt and proxies received by the controlling trustee.

4. Prior to the holding of the creditors’ meeting the controlling trustees prepared a report which is exhibited to the affidavit of Mr Khatri filed by leave today.  That report is quite detailed.  It raises a number of issues concerning the bona fides of the proposal advanced by the respondent.  It raises at least one transaction concerning the sale of real property that a trustee-in-bankruptcy may wish to investigate.  The controlling trustees at page 11 of their report recommend such further investigation.

5. The controlling trustees at page 14 of their report summarise the proposal made by the respondent which is to make 15 monthly payments of $4,000, such moneys to be provided by John Wayne Massey, who is himself an undischarged bankrupt.  At page 14 of their report the controlling trustees recommend that the respondent's personal insolvency agreement proposal be rejected. 

6. At page 15 of their report the controlling trustees conclude that the respondent is insolvent and that it would be appropriate for the respondent to present a debtors' petition if his Part X proposal was not accepted.  In light of the matters raised, as I have said, the meeting was adjourned. 

7. Pursuant to s.189AAA Bankruptcy Act the creditors' petition is stayed where an authority is signed by a debtor under s.188 of the Act until either the conclusion of the creditor's meeting or the adjournment of the meeting, whichever is the earlier. The meeting was adjourned last Friday, 22 May, and therefore the stay is no longer operative. It is open to the creditor to pursue its application for a sequestration order.

8. The material filed by leave today demonstrates that the debt upon which the petition has been presented remains owing.  The respondent filed a notice of opposition to the application for a sequestration order on 4 March.  The only substantive ground raised in that notice was that he was not served with the bankruptcy notice.

9. An affidavit of James Robert Hodge filed 11 November 2008 deposes to a copy of the bankruptcy notice being delivered to an address, 4667 The Parkway, Sanctuary Cove which was stated to be the last known address of the respondent.  The document was left there in a sealed enveloped in compliance with Bankruptcy Regulation 16.01(1)(c). 

10. The respondent says that he was not personally served.  There is no requirement for personal service of a bankruptcy notice.  He says that he was no longer at that address.  However, in his notice of appearance filed 4 March 2009 the respondent gives his address as 4667 The Parkway, Sanctuary Cove, being the same address as that where the bankruptcy notice was left.  I am satisfied that service of the bankruptcy notice was properly effected. 

11. There is, having regard to the content of the trustee's report, no other sufficient cause pursuant to s.52(2) Bankruptcy Act not to make a sequestration order.  I make a sequestration order against the estate of the respondent. 

I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Wilson FM

Associate:  Lynnette Chin

Date:  25 June 2009