Burmingham v Moloney - [2011] FMCA 475

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BURMINGHAM v MOLONEY

[2011] FMCA 475

BANKRUPTCY – Application to set aside or annul sequestration order – alleged non-service of bankruptcy notice and petition – alleged failure to provide searches under s.52 – satisfied about service – application dismissed.

Bankruptcy Act 1966, ss.52 and 58

Applicant:

DAVID BURMINGHAM

Respondent:

COLMAN FRANCIS MOLONEY

File Number:

MLG 507 of 2010

Judgment of:

O'Dwyer FM

Hearing date:

19 May 2011

Date of Last Submission:

19 May 2011

Delivered at:

Melbourne

Delivered on:

19 May 2011

REPRESENTATION

The Applicant:

In Person via telephone link

Counsel for the Respondent:

Mr M. Lapirow

Solicitors for the Respondent:

Davies Moloney

The Trustee:

Mr Bettles

ORDERS

The application for review filed on 28 February 2011 be dismissed.
The applicant judgment debtor pay the respondent’s costs, which costs be taxed and paid from the estate of the applicant in accordance with the Bankruptcy Act 1966.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

MLG 507 of 2010

DAVID BURMINGHAM

Applicant

And

COLMAN FRANCIS MOLONEY

Respondent

REASONS FOR JUDGMENT

(Ex tempore)

This matter comes before me today on an application by Mr Burmingham to have a sequestration order made in this Court on 7 February 2011, either set aside or annulled. His application also seeks to set aside the bankruptcy notice and petition.
Mr Burmingham is acting for himself and that explains to some significant degree the lack of precision in the way his case is put and it falls upon the Court to do justice to Mr Burmingham by exploring all the possible bases for the making of the orders that he seeks.

I am going to go through the generally accepted means by which sequestration orders can be set aside or annulled and in doing so I will refer back to the issues raised by Mr Burmingham.
By way of background, this case arises from a default judgment entered against Mr Burmingham on 19 December 2009 in respect of moneys said to be owed by Mr Burmingham to a solicitor who is the judgment creditor, Mr Moloney. There is a long history to this file in the sense that there have been earlier directional hearings before Registrars of the Court in preparation for a final hearing of the application for a sequestration order that was issued by Mr Moloney.
Further significant background, and certainly one that Mr Burmingham relies on heavily, is that he has a medical history such that he would say – and this is my summary of it – that he lacks the mental, and at times physical, capacity to respond to this litigation in a timely and effective way.
He relies on the medical reports submitted by him from Dr Gary Martin. Those reports are detailed. They are lengthy, and at times quite emotional and one has to – and I do – query the professional independence of the Doctor and the language that he uses. I have read many medical reports over some 30 odd years of practice and I have never quite have read medical reports as expressed by Dr Martin.
Now, as I said, Mr Burmingham has relied heavily upon the medical conditions that he suffers as an explanation for his failure to do certain things. They are significant failures I might point out. The most significant failure that is manifest from the Court file and all of the documentation on it is that he has consistently failed to comply with the orders of the Court in relation to the filing of material and certain documents. He persists, of course, to say that he has medical reports that say that, for instance, from 20 September 2010, when detailed directional orders were made by Registrar Pringle, that he was unable to comply with those directions for medical reasons for a period of almost, or a little bit over, four months to the date when this matter came on for a determination before Registrar Pringle as to whether a sequestration order should be made.
I have gone through a number of possible grounds for Mr Burmingham to substantiate the orders that he seeks. The first one was whether he was solvent at the time that the sequestration order was made. In other words he would be relying on the argument under the Act that a sequestration order ought not to have been made because of his solvency at that time. The burden of proving solvency falls squarely upon the applicant, Mr Burmingham, but he has failed to provide any material of any significance that would be persuasive of the fact that at the time that the sequestration order was made he was solvent. So that ground is denied him.
Now, he also had, the last time he was before me, indicated that he had a challenge to the underlying judgment in the Melbourne Magistrates Court that would have been heard a few days after we last were in Court. I am now informed today that that challenge was unsuccessful.
The reason for the challenge being unsuccessful, Mr Burmingham says, is that a technical point was taken by the judgment creditor based upon arguments under s.58 of the Bankruptcy Act that he didn’t have standing to bring the application, having regard to the subsisting sequestration order. He therefore feels as though the strengths and merits of his application to set aside the judgment debt have not been tested. However, I take the view that the application was unsuccessful. I cannot go beyond that. As a ground, that is also denied Mr Burmingham.
But the main thrust of his application, as I understand how he puts his case, is that he was not served with a bankruptcy notice and therefore he cannot have committed the act of bankruptcy upon which the sequestration order is founded.
The basis of this ground, and what he relies on, is a confusion arising from his postal address and his residential address. He tells me that the judgment creditor was always aware that if he was to try to forward correspondence to him, it had to be at a post office box because any correspondence addressed to his residential address would not be delivered because there is no capacity or facility at his residential address to accept correspondence. The judgment creditor (the applicant for the sequestration order) served the bankruptcy notice by ordinary post on Mr Burmingham at his residential address. That was pursuant to an order for substituted service which dealt with the means by which service was to be done.
In any event, I am satisfied that the bankruptcy notice was served, on a presumption that it was properly served in compliance with the substituted service order. But Mr Burmingham rightly points out that is a presumption that can be rebutted. In support of his rebuttal he has given a detailed account of how correspondence is meant to be sent to him and what happens to correspondence if it is sent to the residential address. But I am mindful, and the file is full of it, of lots of arguments by Mr Burmingham in the past about the failure to receive pertinent correspondence, and the confusion that he says arises. But I can have no confidence in what Mr Burmingham tells me about these things.

The presumption that service was properly effected is a presumption that holds sway with me. So that ground is not open to him.
The second last ground was that the petition was not served correctly. But again I am satisfied on what I have heard and seen that the petition was served correctly.
The final ground relied upon is that the Registrar, on 7 February 2011, prior to making the sequestration order was not presented with the proper proofs that need to be provided under s.52 of the Act before any sequestration order is made. I am satisfied that all those proofs were provided and the order on 7 February 2011 was properly made.
For the above reasons, I intend to dismiss the application for review and as of today the sequestration order is no longer stayed.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of O'Dwyer FM

Date: 19 May 2011