Capital Finance Australia Limited v Brookfield
[2012] FMCA 165
•7 March 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CAPITAL FINANCE AUSTRALIA LIMITED v BROOKFIELD | [2012] FMCA 165 |
| BANKRUPTCY – Application to set aside sequestration and other orders made in the absence of the debtor. |
| Federal Magistrates Court Rules 2001 (Cth) |
| Applicant: | CAPITAL FINANCE AUSTRALIA LIMITED |
| Respondent: | IAN WALTER BROOKFIELD |
| File Number: | SYG 1145 of 2011 |
| Judgment of: | Driver FM |
| Hearing date: | 7 March 2012 |
| Delivered at: | Sydney |
| Delivered on: | 7 March 2012 |
REPRESENTATION
| Solicitors for the Applicant: | Mr M Wirth Kemp Strang |
The Respondent appeared in person
INTERLOCUTORY ORDERS
The interim application filed on 28 February 2012 is dismissed with costs.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1145 of 2011
| CAPITAL FINANCE AUSTRALIA LIMITED |
Applicant
And
| IAN WALTER BROOKFIELD |
Respondent
REASONS FOR JUDGMENT
(revised from transcript)
I have before me an interim application filed on 28 February 2012 seeking to set aside orders made by me on 30 January 2012. Those orders were a sequestration order against the estate of Mr Brookfield, a costs order in respect of the creditor’s petition and consequential orders. The orders were made in the absence of Mr Brookfield and, pursuant to rule 16.05 of the Federal Magistrates Court Rules 2001 (Cth), he now seeks to have those orders vacated.
The application is supported by a number of documents annexed to it and by the affidavit of Mr Brookfield made on 21 February 2012, to which are attached a number of other documents. Mr Brookfield has deposed as to his absence in court on 30 January 2012. In essence, he states that he was in Adelaide and hoped to obtain treatment there for a tumour. In the event, he was unable to obtain that treatment and is now arranging treatment in Sydney. I also note that Mr Brookfield is a businessman who travels regularly to Adelaide and elsewhere.
The creditor’s petition had come before me from the registrar’s list, where a number of adjournments had been granted following the filing of the petition on 6 June 2011. The debt identified in the creditor’s petition is a default judgment obtained in the Local Court. The default judgment was for an amount of $45,346.19, inclusive of costs. I note that this was the second default judgment obtained from that Court. An earlier default judgment was set aside at the instigation of Mr Brookfield. He was unsuccessful in seeking to have the second default judgment set aside.
Mr Brookfield obtained finance from the petitioning creditor for the acquisition of a motor vehicle. It appears that at times he was in advance of payments due on the loan, but ultimately fell into arrears. Mr Brookfield puts the view that the creditor acted improperly in repossessing the vehicle at a time when he was seeking to trade it for a more expensive vehicle on terms that would allow him to pay out the remaining amount then due on the first vehicle. In my view, however, it was reasonable for Capital Finance to object to the sale of a motor vehicle over which it held security. Capital Finance exercised its contractual rights to repossess the vehicle and to sell it.
Mr Brookfield disputes that the judgment debt obtained in the Local Court fairly represents the amount that was owed by him following the sale of the motor vehicle after repossession and sale at auction. I do not have before me evidence to explain how the judgment debt was arrived at, but I understand that the judgment debt included interlocutory costs orders. The Local Court proceedings involved the initial proceedings leading to a default judgment, proceedings leading to the first default judgment being set aside, and then the further proceedings leading to the second default judgment.
Mr Brookfield is now seeking to agitate proceedings in the Supreme Court of New South Wales on appeal from the judgment of the Local Court. The present state of those proceedings is that the matter has been adjourned to 3 April 2012. I took into account the existence of those proceedings when I made the orders now sought to be set aside. My view then was that, over the course of the history of this matter, Mr Brookfield had had a sufficient opportunity to agitate his concerns over both the conduct of Capital Finance and the amount of the debt established by the Local Court judgment, and to take appeal proceedings in the Supreme Court.
Mr Brookfield has proposed that he could deal with the debt due to Capital Finance by borrowing funds from elsewhere. However, he asserts that he is frustrated from doing so by an adverse credit notice on his credit file. I note from the documents annexed to his affidavit that an adverse credit report appears, disclosing an overdue amount, $46,281. That is the amount of the judgment debt, plus, I assume, an amount of interest on the judgment.
Mr Brookfield has proposed that if that adverse credit report is cleansed, he would be able to obtain funds to pay into court the amount claimed by Capital Finance pending the resolution of appeal proceedings in the Supreme Court. However, Capital Finance is unwilling to accede to that request on the basis that the adverse credit information reflects the facts of the matter.
The fact that Mr Brookfield is only able to deal with the debt by borrowing funds from elsewhere indicates that he is not able to pay the debt from his own money. I accept that he is unable to obtain other loan finance, confronted with the adverse credit report, but in the absence of any compelling reason to look behind the judgment debt, I see no reason to accede to his request that the court should require Capital Finance to delete the adverse credit information.
I have no reason to disbelieve the explanation given by Mr Brookfield as to his absence from court on 30 January 2012. However, notwithstanding the additional information he has provided in support of his present interlocutory application, I am not persuaded that the interests of justice require the orders made on 30 January 2012 to be disturbed.
I had before me on that day the Notice of Grounds of Opposition to the petition, which had been filed in my chambers on the same day. I was aware of the history of the matter in the Local Court and of the existence of the appeal proceedings in the Supreme Court. Notwithstanding those facts, I considered that Capital Finance had met the formal requirements for the making of a sequestration order, and the matters advanced by Mr Brookfield did not, in the circumstances of the case, provide a sufficient reason for the Court to refrain from making a sequestration order. I am not persuaded today that I should alter that view.
I will order that the application filed on 28 February 2012 be dismissed with costs.
I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of Driver FM
Date: 9 March 2012
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