CLGC Pty Ltd v Zhang - [2022] FedCFamC2G 152

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
CLGC Pty Ltd v Zhang [2022] FedCFamC2G 152

File number(s): SYG 2149 of 2021

Judgment of: JUDGE MANOUSARIDIS

Date of judgment: 10 March 2022

Catchwords: BANKRUPTCY – creditor’s petition – whether sufficient proof of service of bankruptcy notice and of creditor’s petition – whether other conditions for the making of a sequestration order satisfied – sequestration order made.

Legislation:
Acts Interpretation Act 1901 (Cth) s 28A(1)

Bankruptcy Act 1966 (Cth) ss 40(1)(g), 43, 52(1), 156A

Bankruptcy Regulations 2021 (Cth) r 102(1)

Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth) rr 4.04(1), 4.05, 4.06(4)

Cases cited:
Cardinal Insurance Company v Maple Underwriters Ltd (1983) 46 BCLR 137

DM Developments v Driscoll & Anor [2011] FMCA 464

Re Pugliese; Ex parte The Chase Manhattan Bank of Australia Ltd [1993] FCA 454

Sarina v O'Shannassy (No 2) [2021] FCCA 338

Sommer v C Pty Ltd (No.2) [2020] FCCA 1898

Sunrise Auto Limited v Deputy Commissioner of Taxation [1995] FCA 1693

Zhang v Ehrenfeld [2015] FCCA 877

Division: General

Number of paragraphs: 29

Date of last submission/s: 9 March 2022

Date of hearing: 7 March 2022

Place: Sydney

Solicitor for the Applicant: Ms N Sanchez of Luminous Legal, by telephone

The Respondent: No appearance by or on behalf of the respondent
ORDERS

SYG 2149 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

IN THE MATTER OF RONGLAI ZHANG

BETWEEN:
CLGC PTY LTD ACN 140 347 191

Applicant

AND:
RONGLAI ZHANG

Respondent

ORDER MADE BY:

JUDGE MANOUSARIDIS

DATE OF ORDER:

10 MARCH 2022

THE COURT ORDERS THAT:
1.The estate of the respondent, Mr Ronglai Zhang, is sequestrated under the Bankruptcy Act 1966 (Cth).
2.The applicant creditor’s costs be paid from the estate of the respondent, Mr Ronglai Zhang, in accordance with the Bankruptcy Act 1966 (Cth).
3.The applicant creditor’s costs are set in the amount of $10,123.12

THE COURT NOTES THAT:
4.The date of the act of bankruptcy is 16 November 2021.
5.A consent to act as trustee signed by Mr Thyge Trafford-Jones has been filed under s 156A of the Bankruptcy Act 1966 (Cth).

Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION

On 7 March 2022 I heard an application for a sequestration order against the estate of Mr Ronglai Zhang. Mr Zhang did not appear.
The applicant, by its legal representative, read the affidavits on which the applicant relies, and I listed the matter for judgment at 9:30 am on 10 March 2022.
SERVICE OF BANKRUPTCY NOTICE
The act of bankruptcy on…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading CLGC Pty Ltd v Zhang

Details

AGLC: CLGC Pty Ltd v Zhang [2022] FedCFamC2G 152
Case: [2022] FedCFamC2G 152
Decision Date

CaseChat Overview and Summary

CLGC Pty Ltd initiated a creditor's petition against Mr Zhang, seeking a sequestration order against his estate. The application was heard in the Federal Circuit and Family Court of Australia, where the primary concern was verifying the debt claimed by CLGC Pty Ltd and confirming that the requisite searches for Mr Zhang's assets had been conducted. The evidence included an affidavit of debt and an affidavit of search, both of which were filed in compliance with the Bankruptcy Rules.

The court was tasked with determining whether the applicant had satisfied the statutory requirements under sections 43 and 52(1) of the Bankruptcy Act 1966, which are prerequisites for a sequestration order. Specifically, the court had to verify that the debt was undisputed or had been established through a judgment, and that the necessary searches had been conducted to locate any assets of the debtor. The affidavits submitted were scrutinised to ensure they met the necessary standards and were in compliance with the statutory requirements.

After reviewing the evidence, the court found that CLGC Pty Ltd had met the required thresholds for the application of a sequestration order. The affidavit of debt was deemed sufficient to establish the existence of the debt, and the affidavit of search confirmed that the necessary steps had been taken to locate Mr Zhang's assets. The court concluded that the applicant had proved the necessary matters and ordered that a sequestration order be made against Mr Zhang's estate. Additionally, the court approved the costs claimed by CLGC Pty Ltd, ordering that the specified amount be paid from Mr Zhang's estate.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

At the hearing of the creditor’s petition the applicant relied on an affidavit of debt,[15] being an affidavit which, under r 4.06(4) of the Bankruptcy Rules, must be made as soon as practicable before the hearing of the creditor’s petition, and also an affidavit of search,[16] as required by r 4.06(3) of the Bankruptcy Rules.[15] Affidavit of Debt made by W Lu 07.03.2022[16] Affidavit of Search made by H T G Chu 07.03.2022CONCLUSION I am satisfied the applicant has proved the matters it is required to prove under s 43 and s 52(1) of the Act before a sequestration order may be made; and that a sequestration order should be made against the estate of Mr Zhang. I propose to so order. The applicant has provided a short form bill of costs in which the applicant assesses its costs at $10,123.14. I am satisfied these costs are reasonable and I will, therefore, also order that the applicant’s costs fixed in the sum of $10,123.12 be paid from the estate of Mr Zhang in accordance with the Act.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

File number(s):	SYG 2149 of 2021
Judgment of:	JUDGE MANOUSARIDIS
Date of judgment:	10 March 2022
Catchwords:	BANKRUPTCY – creditor’s petition – whether sufficient proof of service of bankruptcy notice and of creditor’s petition – whether other conditions for the making of a sequestration order satisfied – sequestration order made.
Legislation:	Acts Interpretation Act 1901 (Cth) s 28A(1) Bankruptcy Act 1966 (Cth) ss 40(1)(g), 43, 52(1), 156A Bankruptcy Regulations 2021 (Cth) r 102(1) Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth) rr 4.04(1), 4.05, 4.06(4)
Cases cited:	Cardinal Insurance Company v Maple Underwriters Ltd (1983) 46 BCLR 137 DM Developments v Driscoll & Anor [2011] FMCA 464 Re Pugliese; Ex parte The Chase Manhattan Bank of Australia Ltd [1993] FCA 454 Sarina v O'Shannassy (No 2) [2021] FCCA 338 Sommer v C Pty Ltd (No.2) [2020] FCCA 1898 Sunrise Auto Limited v Deputy Commissioner of Taxation [1995] FCA 1693 Zhang v Ehrenfeld [2015] FCCA 877
Division:	General
Number of paragraphs:	29
Date of last submission/s:	9 March 2022
Date of hearing:	7 March 2022
Place:	Sydney
Solicitor for the Applicant:	Ms N Sanchez of Luminous Legal, by telephone
The Respondent:	No appearance by or on behalf of the respondent

SYG 2149 of 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2) IN THE MATTER OF RONGLAI ZHANG
BETWEEN:	CLGC PTY LTD ACN 140 347 191 Applicant
AND:	RONGLAI ZHANG Respondent

ORDER MADE BY:	JUDGE MANOUSARIDIS
DATE OF ORDER:	10 MARCH 2022