Calia v Cicio
[2010] FMCA 385
•1 June 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CALIA v CICIO | [2010] FMCA 385 |
| BANKRUPTCY – Review of Registrar’s sequestration order – indebtedness shown not to exist – order set aside by consent. |
| Bankruptcy Act 1966 (Cth), ss.37(2), 153B Federal Magistrates Act 1999 (Cth), s.104(3) Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth), r.7.06 |
| Wren v Mahony (1972) 126 CLR 212 |
| Applicant: | ROSALIA CALIA |
| Respondent: | VITA CICIO T/AS VALENTINA CURTAINS & MANCHESTER |
| File Number: | SYG 2023 of 2009 |
| Judgment of: | Smith FM |
| Hearing date: | 1 June 2010 |
| Delivered at: | Sydney |
| Delivered on: | 1 June 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr W Dixon |
| Solicitors for the Applicant: | Hassett Dixon Solicitors |
| Counsel for the Respondent: | No appearance by or on behalf of the Respondent |
ORDERS
The application for review is allowed.
The sequestration order made on 5 February 2010 is set aside.
The petition is dismissed.
No orders as to costs.
The applicant must within 7 days file an affidavit confirming service on the trustee in accordance with order 3 made on 3 March 2010.
The applicant must provide a copy of this order to the Official Receiver and to the Trustee within 2 days.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2023 of 2009
| ROSALIA CALIA |
Applicant
And
| VITA CICIO T/AS VALENTINA CURTAINS & MANCHESTER |
Respondent
REASONS FOR JUDGMENT
(revised from transcript)
This is an application filed on 2 March 2010, in which Mrs Calia seeks review of a sequestration order made by Registrar Hannigan on 5 February 2010. The order was made in the absence of Mrs Calia, although she had been represented informally at previous listings by members of her family. The sequestration order was based upon a Local Court judgment obtained by Ms Cicio for $11,928.19, and upon an act of bankruptcy resulting from non‑compliance with a bankruptcy notice based on that judgment.
The affidavits by Mrs Calia and her daughter filed in support of the application for review suggest that the proceedings in the Local Court miscarried, by reason of that Court not being properly informed about Mrs Calia’s defence to Ms Cicio’s claim that she owed monies under a contract to make curtains. Mrs Calia’s affidavits show that she had a complete defence to that claim, because the contract was made with Mrs Calia’s daughter and not with herself.
The affidavits suggest that before the Registrars in this Court there was an unfortunate failure by Mrs Calia to present her grounds of opposition to the sequestration order. On the evidence now on the file, which is uncontested, “in truth and reality” the debt upon which the bankruptcy proceedings was based did not exist (cf. Wren v Mahony (1972) 126 CLR 212 at 224‑225). The Court therefore may go behind the judgment debt, and find that a sequestration order should not have been made.
It is unnecessary to detail the evidence, since Ms Cicio does not contest the setting aside of the sequestration order. She has not appeared today, and has signed consent orders providing for the sequestration order to “be vacated”.
Rule 7.06 of the Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth) requires that an application for review should be served on the trustee appointed under the sequestration order, and also on “each person known to the applicant to be a creditor of the bankrupt”.
Service on the trustee was also required under interim orders made by Driver FM on 3 March 2010. I am assured by the solicitor for Mrs Calia that compliance with his Honour’s order was performed personally by himself. I accept his assurance, but shall direct that he file an affidavit of service to complete the record.
The Trustee was therefore on notice of Mrs Calia’s application and of its first court date. He did not appear on that occasion nor on later listings, and appears to have decided to take no part in the proceedings. In the circumstances, it appears to me unnecessary to adjourn so as to ensure that the trustee has been served with notice of today’s listing.
I am satisfied that, if the trustee wished to draw the Court’s attention to any circumstance bearing upon the setting aside of the sequestration order or the alternative power of the Court to annul the bankruptcy, he would have appeared and reported relevant matters to the Court. I am also prepared to assume that the trustee does not wish to be heard in relation to any expenses incurred by himself.
Mrs Calia’s solicitor submits that her evidence does not reveal any unsecured creditors who should be served with her application, and I accept that submission.
Taking into account the speed with which the application was brought, the absence of any opposition by the trustee, and the other background circumstances shown in the affidavits, I consider that it is appropriate for the Court to set aside the bankruptcy notice, rather than exercise a power of annulment under s.153B of the Bankruptcy Act 1966 (Cth).
An order in the agreed terms of “vacating” the sequestration order would not be appropriate, in my opinion, since the powers of the Court in relation to sequestration orders are confined to its powers of review under s.104(3) of the Federal Magistrates Act 1999 (Cth) or of annulment under s.153B. The Court is specifically precluded under s.37(2) of the Bankruptcy Act from otherwise rescinding or discharging or suspending the operation of a sequestration order.
I am, however, satisfied that orders should be made under s.104(3) which allow the application for review, sets aside the sequestration order, and dismisses the petition. I note that no order as to costs is sought by any party.
I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of Smith FM
Associate: Lilian Khaw
Date: 7 June 2010
0