FEDERAL COURT OF AUSTRALIA
Bullen v Mangano [2024] FCA 1199
File number(s): NSD 612 of 2024 Judgment of: GOODMAN J Date of judgment: 17 October 2024 Catchwords: BANKRUPTCY AND INSOLVENCY – creditor’s petition for a sequestration order – respondent debtor’s evidence inadequate to establish that she is able to pay her debts within the meaning of s 52(2)(a) of the Bankruptcy Act 1966 (Cth) – sequestration order made Legislation: Bankruptcy Act 1966 (Cth), ss 37, 40, 43, 52 Cases cited: Blatch v Archer (1774) 1 Cowp 63
Coates Hire Operations Pty Ltd v D-Link Homes Pty Ltd [2011] NSWSC 1279
Commonwealth Bank of Australia v Begonia (1993) 11 ACLC 1075
Culleton v Balwyn Nominees Pty Ltd [2017] FCAFC 8; (2017) 343 ALR 632
Day, in the matter of Gould v Gould [2000] FCA 1377
Deputy Commissioner of Taxation v Bayconnection Property Developments Pty Ltd [2012] FCA 363; (2012) 127 ALD 64
Deputy Commissioner of Taxation v De Simone Consulting Pty Ltd [2007] FCA 548
Endresz v Australian Securities and Investments Commission [2014] FCA 1139
Francis v Eggleston Mitchell Lawyers Pty Ltd [2014] FCAFC 18
Mehajer v Weston (Trustee), in the matter of Mehajer [2018] FCA 608
Re Sarina v Council of the Shire of Wollondilly [1980] FCA 175; (1980) 48 FLR 372
Ritson v Commissioner of Police (NSW) [2021] FCAFC 208
Shaw v Yarranova Pty Ltd [2017] FCAFC 88; (2017) 252 FCR 167
Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Number of paragraphs: 28 Date of hearing: 15 October 2024 Solicitor for the Applicant: Mr B Balasubramanian of Marsdens Law Group Counsel for Respondent: Mr Hanrahan Solicitor for the Respondent: Mr T Hall of Hall Partners ORDERS
NSD 612 2024 BETWEEN: ROSEMARY BULLEN
Applicant
AND: SILVANA MANGANO
Respondent
ORDER MADE BY:
GOODMAN J
DATE OF ORDER:
17 OCTOBER 2024
THE COURT ORDERS THAT:
1.The estate of Silvana Mangano be sequestrated under the Bankruptcy Act 1966 (Cth).
2.The applicant creditor’s costs of the petition be paid from the estate of the respondent debtor in accordance with the Bankruptcy Act.
3.A copy of this order is to be provided by the applicant creditor to the Official Receiver in Sydney within two (2) days.
THE COURT NOTES THAT:
4.The date of the act of bankruptcy is 11 May 2024.
5.A consent to act as trustee signed by Mr Gavin King has been filed under s 156A of the Bankruptcy Act.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
GOODMAN J
The applicant moves on a creditor’s petition for a sequestration order under s 43 of the Bankruptcy Act 1966 (Cth). The creditor’s petition describes a total debt of $160,993.32 owed by the respondent to the applicant pursuant to three sets of orders of the Local Court of New South Wales. The…
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- AGLC
- Bullen v Mangano [2024] FCA 1199
- Case
- [2024] FCA 1199
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CaseChat Overview and Summary
The court found that Mangano had failed to provide adequate evidence to discharge the onus of proving that she was able to pay her debts. The evidence presented by Mangano was deemed insufficient to meet the required standard. The court noted that Mangano, as the respondent, had the onus of proving her solvency, an onus which must be discharged on the balance of probabilities. The court held that Mangano’s evidence did not meet this standard, and therefore, the court was satisfied that the conditions for making a sequestration order under s 43(1) and s 52(1) of the Act had been met. Consequently, the court made the sequestration order against Mangano’s estate.
The court made the following orders: the estate of Silvana Mangano be sequestrated under the Bankruptcy Act; the applicant creditor’s costs of the petition be paid from the estate of the respondent debtor; and a copy of this order be provided by the applicant creditor to the Official Receiver in Sydney within two days. The court noted that the date of the act of bankruptcy was 11 May 2024 and that a consent to act as trustee signed by Mr Gavin King had been filed under s 156A of the Bankruptcy Act.
Orders
Orders of the court
1. The estate of Silvana Mangano be sequestrated under the Bankruptcy Act 1966 (Cth).
2. The applicant creditor’s costs of the petition be paid from the estate of the respondent debtor in accordance with the Bankruptcy Act.
3. A copy of this order is to be provided by the applicant creditor to the Official Receiver in Sydney within two (2) days.
THE COURT NOTES THAT:
4. The date of the act of bankruptcy is 11 May 2024.
5. A consent to act as trustee signed by Mr Gavin King has been filed under s 156A of the Bankruptcy Act.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Section 43 of the Act provides, in so far as is presently relevant:43 Jurisdiction to make sequestration orders(1) Subject to this Act, where:(a) a debtor has committed an act of bankruptcy; and(b)at the time when the act of bankruptcy was committed, the debtor:(i)was personally present or ordinarily resident in Australia;(ii)had a dwelling‑house or place of business in Australia;(iii)was carrying on business in Australia, either personally or by means of an agent or manager; or(iv)was a member of a firm or partnership carrying on business in Australia by means of a partner or partners or of an agent or manager;the Court may, on a petition presented by a creditor, make a sequestration order against the estate of the debtor. I am satisfied that the respondent has committed an act of bankruptcy within the meaning of s 40(1)(g) of the Act, in that: (1) she was served on 19 April 2024 with a bankruptcy notice issued on 8 March 2024 and which required payment of $160,993.32 by 10 May 2024; and (2) the respondent failed to comply with the bankruptcy notice. I am also satisfied that when that act of bankruptcy was committed the respondent was personally present and ordinarily resident in Australia. It follows that each of s 43(1)(a) and (b) of the Act is satisfied. Section 52(1) of the Act provides:Proceedings and order on creditor’s petition(1) At the hearing of a creditor’s petition, the Court shall require proof of:(a)the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient);(b)service of the petition; and(c)the fact that the debt or debts on which the petitioning creditor relies is or are still owing;and, if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor. I am satisfied that each of the matters specified in s 52(1)(a) to (c) have been proven. I am also satisfied that each of the remaining formal requirements necessary to enliven the Court’s discretion to make a sequestration order have been proven. I was also informed by the respondent’s representatives that no point of a formal nature was taken and that the sole ground of opposition (and principal matter for determination) was the asserted solvency of the respondent. Thus, the Court’s discretion to make a sequestration order against the respondent’s estate has been enlivened. The respondent resists the making of such an order in reliance upon s 52(2) of the Act, which provides, in so far as is presently relevant:(2)If the Court … is satisfied by the debtor:(a)that he or she is able to pay his or her debts; ...it may dismiss the petition. The respondent bears the onus of proving that she is able to pay her debts: Culleton v Balwyn Nominees Pty Ltd [2017] FCAFC 8; (2017) 343 ALR 632 at 644 to 645 [44] (Allsop CJ, Dowsett and Besanko JJ). This onus on the debtor to establish their solvency is an onus on the balance of probabilities: Coates Hire Operations Pty Ltd v D-Link Homes Pty Ltd [2011] NSWSC 1279 at [66] (White J, as his Honour then was); Deputy Commissioner of Taxation v Bayconnection Property Developments Pty Ltd [2012] FCA 363; (2012) 127 ALD 64 at [60] to [61] (Robertson J). The nature of the evidence necessary to discharge the onus will vary from case to case. One would ordinarily expect a debtor resisting a creditor’s petition on the basis that they are solvent to adduce the most cogent evidence available to them. Of course, and relatedly, all evidence falls to be assessed by reference to the relative capacity of each party to adduce evidence on the particular subject matter: Blatch v Archer (1774) 1 Cowp 63.