Capital Finance Australia Ltd v Elkordi
[2012] FMCA 293
•2 April 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CAPITAL FINANCE AUSTRALIA LTD v ELKORDI | [2012] FMCA 293 |
| BANKRUPTCY – Creditor’s petition – application for adjournment – notice of objection – where petition founded on default judgment – where adjournment sought to seek setting aside of judgment – where matter previously before this court – whether to grant adjournment – whether to grant sequestration order – whether to grant stay of proceedings. |
| Bankruptcy Act 1966 (Cth), ss.52, 52(3) Bankruptcy Regulations |
| Applicant: | CAPITAL FINANCE AUSTRALIA LTD |
| Respondent: | NASSER ELKORDI |
| File Number: | SYG 2659 of 2011 |
| Judgment of: | Raphael FM |
| Hearing date: | 2 April 2012 |
| Date of Last Submission: | 2 April 2012 |
| Delivered at: | Sydney |
| Delivered on: | 2 April 2012 |
REPRESENTATION
| Solicitors for the Applicant: | Bartier Perry |
| Solicitors for the Respondent: | Johnston Vaughan Solicitors |
ORDERS
Application for an adjournment be dismissed.
Notice of Objection dismissed.
A sequestration order be made against the estate of Nasser Elkordi.
The Applicant’s costs be fixed in the amount of $8,113.40 and paid from the estate of the Respondent in accordance with the Act.
Under the Bankruptcy Regulations a copy of this sequestration order be given to the Official Receiver in Sydney within 2 days.
THE COURT NOTES
(i)That the date of the act of bankruptcy is 18 November 2011.
(ii)A consent to act as a trustee has been signed by Paul Leroy and has been lodged with the Official Receiver in Sydney.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2659 of 2011
| CAPITAL FINANCE AUSTRALIA LTD |
Applicant
And
| NASSER ELKORDI |
Respondent
REASONS FOR JUDGMENT
There comes before today an application for an adjournment of the hearing of a bankruptcy petition against the respondent, Nasser Elkordi. The basis of the application for an adjournment is that Mr Elkordi wishes to make an application to the Supreme Court of New South Wales to set aside the judgement upon which the act of bankruptcy is based. This is a judgement that was entered against him on 9 July 2010 in default and appears to be for a sum in excess of $1.6 million. Ms Peterson, who appears on behalf of the applicant, has provided a helpful affidavit dated 2 April 2012. That affidavit deposes to a series of conversations that Mr Dlakic, who appears for the respondent, is not, as I understand it, in a position to cross-examine her on because of a lack of instructions. However, the affidavit does give an indication of the history of the matter with which Mr Dlakic does not cavil.
It would seem that the judgment debt represents moneys advanced by the applicant to the respondent in connection with a motor vehicle business under a bailment agreement. The applicant and another appear to have guaranteed the obligations of a company known as Modena Prestige Cars Proprietary Limited with which they were associated. It would appear that moneys due under the agreement were not paid. The other guarantor was a Mr Graziani. Proceedings were taken against Mr Elkordi in the Supreme Court of New South Wales and a default judgment was entered.
Following upon that default judgment, Mr Elkordi apparently agreed to the sale of certain properties, which had been mortgaged to the applicant, in reduction of the debt. One property was sold and the debt has been reduced by approximately $98,000. The balance of the debt is still outstanding. Mr Elkordi claims that the whole debt is owed by Mr Graziani but the documents which I have seen and which are annexed to the affidavit of Ms Peterson would seem to indicate that they are joint obligors under the guarantee. Whilst Mr Elkordi may have a right of contribution from Mr Graziani, there is nothing here which indicates that Mr Graziani has, with the consent of the creditor, accepted liability for the entire debt.
This is the second time the matter has been in this court list, which is not an inordinate number of times. However, I do not believe there is anything to be gained by providing Mr Elkordi with the adjournment he seeks. With the greatest respect to him and his advisors, based upon the affidavit of Mr Dlakic filed on 29 March 2012, I really cannot see any likelihood of the New South Wales Supreme Court setting aside a judgment that is now almost two years old and which has been the subject of voluntary enforcement proceedings. If the judgment is not set aside then there is no possible ground upon which the applicant could resist this petition. It is not in the interests of the creditor to have to wait for what might be an inordinate period of time whilst Mr Elkordi gets together whatever he considers necessary to make the application. The creditor has his judgment and it is entitled to the relief claimed in a petition.
In those circumstances, and having heard the applicant, I am satisfied that the respondent has committed the act of bankruptcy alleged in the petition. I am satisfied that the proof of the other matters required by s.52 of the Bankruptcy Act 1966 (Cth)[1]. I make a sequestration order against the estate of Nasser Elkordi. Under the Bankruptcy Regulations, a copy of the sequestration order be given to Official Receiver in Sydney within two days. The court notes that the date of the act of bankruptcy is 18 November 2011. I note that a consent to act as trustee has been signed by Paul Leeroy and has been lodged with the Official Receiver in Sydney. I order the applicant’s costs be fixed in the amount of $8,113.40 and paid from the estate of the respondent in accordance with the Act.
[1] The “Act”.
The respondent asks for the court to give a stay of proceedings under the order pursuant to s.52(3) of the Bankruptcy Act. Under that section the court only has the power to stay proceedings under the order for a period of 21 days. The purpose of the stay would be for the applicant to file his application to set aside the original judgment. But it seems to me that such a stay would have no utility because the prospects of the application being heard and determined within that period are very, very small indeed.
Even if the judgment were set aside, and I think this is most unlikely given the information contained in the affidavit of Ms Peterson and the failure of the applicant previously to make any attempt to set aside the judgment or to appeal it, the right to have a sequestration order against the applicant already exists. It exists because of the act of bankruptcy that he has committed. In those circumstances I do not propose to grant the stay requested.
I certify that the preceding seven (7) paragraphs are a true copy of the reasons for judgment of Raphael FM
Date: 11 April 2012
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