CCC Financial Solutions No.3 Pty Ltd v Masters

[2016] FCCA 1004

FEDERAL CIRCUIT COURT OF AUSTRALIA

CCC FINANCIAL SOLUTIONS No.3 PTY LTD v MASTERS [2016] FCCA 1004

Catchwords:
BANKRUPTCY – Creditor’s Petition – sequestration order.

Legislation:

Bankruptcy Act 1966 (Cth), s.52(1)

Applicant: CCC FINANCIAL SOLUTIONS NO.3 PTY LTD ACN 161 191 206

Respondent: STEPHEN JAMES MASTERS

File Number: ADG 24 of 2016

Judgment of: Judge Heffernan

Hearing date: 11 April 2016

Date of Last Submission: 11 April 2016

Delivered at: Adelaide

Delivered on: 20 April 2016

REPRESENTATION

Counsel for the Applicant: Ms Trebilcock

Solicitors for the Applicant: EMT Legal

The Respondent: In person via phone

THE COURT NOTES THAT:

(a)Mr David Charles Quin has consented to act as Trustee; and

(b)The respondent will provide a short form Bill of Costs to be considered in chambers.

THE COURT ORDERS THAT:

1. A sequestration order be made against the estate of STEPHEN JAMES MASTERS.

2. The applicant creditor’s costs be taxed and paid from the estate of the respondent debtor in accordance with the Bankruptcy Act 1966 (Cth).

   The Court notes that the date of the act of bankruptcy is 27 July 2015.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT ADELAIDE

ADG 24 of 2016

CCC FINANCIAL SOLUTIONS NO.3 PTY LTD ACN 161 191 206

Applicant

And

STEPHEN JAMES MASTERS

Respondent

REASONS FOR JUDGMENT

Settled ex tempore reasons from transcript

1. This is an application by CCC Financial Solutions No. 3 Pty Ltd for sequestration orders against the Estate of Stephen James Masters.  I will briefly outline the procedural history in this Court before considering the application before me.  On 22 January 2016, CCC Financial Solutions filed a Creditor’s Petition and supporting affidavit of debt and as to service on the respondent, Mr Masters.  On 22 February, Registrar Colbran adjourned the hearing of the Creditor’s Petition to 21 March 2016.

2. The Creditor’s Petition was re-endorsed with a new date and time for hearing and costs on that occasion were reserved.  On 17 March 2016, the respondent to the Creditor’s Petition, Mr Masters, filed an interim application for the transfer of these proceedings to the Melbourne Registry and seeking a “Court referral for legal assistance”.  On the same day he filed a Notice Stating Grounds of Opposition to the petition on the basis that:

   a)There was no foundation to the petition;

   b)The petition was an abuse of process; and

   c)Unconscionable conduct.

3. On 18 March 2016, the respondent filed an Application for Review of the orders of Registrar Colbran dated 22 February 2016.  The terms of the orders made by the Registrar on that day have already been summarised by me in these reasons.  That application sought further orders that the matter be transferred to the Melbourne Registry of this Court.  Secondly, that there be a referral to a legal practice with experience in this type of matter.  Thirdly, that there be a referral to mediation or dispute resolution scheme to settle the matter. 

4. On 11 April, this matter came before me on the Application for Review of Registrar Colbran’s decision of 22 February.  I dismissed that Application for Review, together with the interim application dated 17 March.  I turn now to consider the Creditor’s Petition itself and the Notice of Opposition filed by the respondent.  The applicant has filed and relies on the following affidavits for the purpose of proving this application.  Firstly, the affidavit of Mark Robert Draper dated 11 April 2016 as to search of the National Personal Insolvency Index, and there being no reference to this petition or the respondent and no indication of a debt agreement on that Registry, and an affidavit of 11 April 2016 from Mr Draper deposing to the proof of debt still outstanding on the books of the applicant.

5. The applicant further relies on the affidavits of Ms Emma Megan Trebilcock dated 21 January 2016 and 6 April 2016, and the affidavit of Kerry George Hopkins dated 24 February 2016 as to service of the petition, the affidavits and the consent of the trustee to act in this matter.  I have considered all of those affidavits and I have treated them as being read in full for the purpose of this application. 

6. The respondent, Mr Masters, relies on the following affidavits affirmed by him.  An affidavit dated 15 March 2016, which was intended to relate to the interim application which I have had consideration to for the purposes of this application, as well a further affidavit dated 15 March 2016, which is specifically with respect to this creditor’s petition, and an affidavit dated 7 April 2016, which attests to various medical conditions suffered by the respondent, Mr Masters, and some medications taken by him.  As I have said, I have treated all of those affidavits as being relied on by the applicant for the purpose of these proceedings.

7. The respondent, Mr Masters, resides in Victoria and is a pensioner.  Mr Masters complains that this Court has no jurisdiction to deal with the matter in the Adelaide Registry.  The judgment debt, which it is alleged the respondent has failed to satisfy, was in fact, obtained by the applicant in the South Australian Magistrates Court.  This Court has jurisdiction to make orders on Creditor’s Petitions under the Bankruptcy Act 1966 (Cth).  The respondent claims that having to defend these proceedings from Victoria is a denial of procedural fairness.

8. I note, however, that the respondent has represented himself in this matter and was given permission to attend here by way of telephone.  He was given an opportunity to address the Court and made submissions.  He has filed two applications and a notice of objection, as well as supporting affidavits.  It is not apparent to me that there has been occasioned any procedural unfairness by the proceedings being conducted in Adelaide.  He has had, in my view, sufficient notice of the proceedings and has not attended in person. 

9. There are reasons for this, in that he says that he cannot afford to but he has been able to attend by telephone and in my view, has been able to meaningfully participate in the proceedings.  The respondent says that he cannot afford legal representation.  This is regrettably not a matter that the Court can play any direct role in.  I reject the submission of the respondent that it would be more likely he could obtain legal representation in Melbourne and for that reason these proceedings should be transferred to the Melbourne Registry.

10. The affidavit regarding the Creditor’s Petition, which the respondent has filed, in large part sets out background material which seeks to have this Court look behind the judgment debt obtained at the Magistrates Court of South Australia on which this Creditor’s Petition is based.  He also claims that there is an abuse of process in the proceedings taking place in Adelaide and procedural unfairness in relation to some proceedings that have previously occurred in the Adelaide Magistrates Court which gave rise to the judgment debt.

11. Any procedural unfairness that took place in the Adelaide Magistrates Court is not a matter to which this Court can have regard.  The affidavit also claims that the conduct of the applicant has been unconscionable and degrading towards the respondent.  In that section of the affidavit the respondent is critical of the relationship between ME Bank, with whom he had an account or accounts, and the applicant, to whom he is alleged to owe the judgment debt.  I reject the submission that there is anything unconscionable, or by way of an abuse of process, in the applicant having taken these proceedings.

12. What the affidavits of the respondent do not do, is demonstrate, or it appears attempt to demonstrate, is that he is solvent in the sense that he has assets presently available, or able to be realised to meet his debts.  It is, of course, for the creditor to establish that the requirements of the Bankruptcy Act have been met and that the orders should ultimately be made.  Having considered all the materials in this matter, I am satisfied that this application is not an abuse of process, as I have just said.  I am satisfied that the respondent has committed an act of bankruptcy as alleged in the Creditor’s Petition.

13. I am satisfied that the applicant has proven those matters of which proof is required under s.52(1) of the Bankruptcy Act, namely the matters stated in the Petition, the service of the Petition, and the fact that the debt or debts on which the applicant relies are still owing.  I note that Mr David Charles Quin has consented to act as trustee in bankruptcy in this matter.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Judge Heffernan

Associate: 

Date:  28 April 2016