Cheung v Maxims Entertainment Pty Ltd

[2002] FMCA 348

FEDERAL MAGISTRATES COURT OF AUSTRALIA

CHEUNG v MAXIMS ENTERTAINMENT PTY LTD [2002] FMCA 348

BANKRUPTCY – Annulment of bankruptcy – whether applicant was served with bankruptcy notice and petition – issue of solvency – whether the applicant made ‘full and true disclosure’.

Bankruptcy Act 1966 (Cth), ss.52(2)(a), 109, 153B

Re Papps; Ex parte Tapp (1997) 78 FCR 524

Applicant: WING CHEUNG

Respondent: MAXIMS ENTERTAINMENT PTY LIMITED

File No: SZ 700 of 2002

Delivered on: 17 December 2002

Delivered at: Sydney

Hearing Date: 17 December 2002

Judgment of: Raphael FM

REPRESENTATION

Counsel for the Applicant: Mr R Winfield

Solicitors for the Applicant: W. Chan & Co Solicitors

Counsel for the Respondent: Mr S White

Solicitors for the Respondent: Aubrey F. Crawley & Co Attorneys, Solicitors and Proctors

ORDERS

1. Application dismissed.

2. Costs of the respondent and the trustee to be paid out of the estate of the bankrupt pursuant to s 109 of the Bankruptcy Act 1966 (Cth) and to be taxed if not agreed under the Federal Court Rules.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SZ 700 of 2002

WING CHEUNG

Applicant

And

MAXIMS ENTERTAINMENT PTY LIMITED

Respondent

REASONS FOR JUDGMENT

1. In this matter the applicant seeks an annulment of his bankruptcy pursuant to s.153B of the Bankruptcy Act 1996 (Cth) (“the Bankruptcy Act”).  A sequestration order was made against him on 16 July 2002. It is worth noting that the basis for the debt which founded the act of bankruptcy was the applicant's non-compliance with an agreement which had been entered into in order to prevent previous bankruptcy proceedings moving to sequestration.

2. The applicant claims there are two grounds under which I should consider annulling the bankruptcy.  The first is that he was not served the creditor's petition or the bankruptcy notice and the second is that he is solvent.

3. At the commencement of these proceedings I made some decisions relating to the admissibility of affidavits including the affidavits of the process server who alleges that he served the applicant with both the bankruptcy notice and the bankruptcy petition.

4. The first matter in dispute is whether or not the bankrupt was served with the bankruptcy notice and the petition.  They were both alleged to have been be served at restaurants in central Sydney.  The bankrupt says he was not so served.  He said he recognised the process server from seeing him once at a soccer field.

5. The bankrupt gave evidence.  He is not a fluent English speaker and must be given some leeway because of the difficulty he has in understanding questions in cross-examination.  However, his answers to questions were evasive and unresponsive.  A letter (exhibit 1) was put to him.  It indicated that his solicitor had ceased to act for him in the bankruptcy proceedings on 8 July 2002.  This statement was in conflict with paragraph 7 of his affidavit of 23 September 2002 in which he deposes that Mr Chan (his solicitor) was acting for him at all times and was not given notice of…