Coadys v Ribaric - [2004] FMCA 594

FEDERAL MAGISTRATES COURT OF AUSTRALIA

COADYS v RIBARIC

[2004] FMCA 594

BANKRUPTCY – Creditors petition – no basis upon which the Court should go behind judgment.

Bankruptcy Act 1966, s.52

Legal Practice Act 1996

Corney v Brien (1951) 85 CLR 343
Wren v Mahony (1972) 126 CLR 212

Applicant:

COADYS (A FIRM)

Respondent:

ANTHONY RIBARIC

File No:

MZ 829 of 2004

Delivered on:

23 August 2004

Delivered at:

Melbourne

Hearing Date:

23 August 2004

Judgment of:

McInnis FM

REPRESENTATION

Counsel for the Applicant:

Mr Barker

Solicitors for the Applicant:

Coadys

Respondent:

In person

ORDERS

A sequestration order be made against the estate of Anthony Ribaric.
That the applicant creditor's costs, including reserved costs, if any, be taxed in accordance with the Federal Court Rules and be paid from the estate of the respondent debtor in accordance with the Bankruptcy Act 1966.
The court notes that the date of the act of bankruptcy is 12 April 2004.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MZ 829 of 2004

COADYS (A FIRM)

Applicant

and

ANTHONY RIBARIC

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

This is a creditor's petition filed on 24 June 2004 by Coadys, a firm, (the applicant creditor) against Anthony Ribaric, (the respondent debtor). The creditor's petition has been supported by the usual affidavits in relation to service and affidavits otherwise complying with the requirements of the Bankruptcy Act, and in particular, those requirements set out in s.52 of the Bankruptcy Act 1966 (the Act).
The petition is based upon a bankruptcy notice which, I am satisfied, was served upon the respondent. That bankruptcy notice in turn would appear to be based upon a judgment entered in the Magistrates Court of Victoria in favour of the applicant creditor who was then the plaintiff and against the respondent who was then the second defendant. The certified extract of the order made in the Magistrates Court at Melbourne refers to a judgment being entered on the claim of $29,003 with costs of $4937.17. The notation on the order reads that the defendants having no defence to the action and having indicated an acceptance of liability the defence is struck out and judgment made for the plaintiffs.
In addition to the usual affidavits, the applicant creditor has relied upon an affidavit in this matter of David Michael Brett, sworn 18 August 2004. It is useful to perhaps understand the background to this application and to then in turn deal with the respondent's material and submissions made by him this day. Due allowance is given for the fact, that he is unrepresented.
The affidavit of Mr Brett refers to the chronology of events which, in brief terms, would appear to involve proceedings by a company of which the respondent is a director, ATR Industries Pty Ltd (ATR) which in June 2000 had instructed a firm of solicitors to issue proceedings in the commercial list of the Supreme Court against another company, Auskay International Pty Ltd (Auskay). It would appear that there are allegations against the firm of solicitors that they failed to properly execute a client services agreement and otherwise failed to properly comply with provisions of the Legal Practice Act 1996.
Ultimately, ATR and the respondent had retained the applicant creditor and this occurred on 13 October 2000 with a client services agreement duly executed by ATR with the respondent as guarantor. It is that client service agreement which no doubt formed the basis upon which proceedings were then taken in the Melbourne Magistrates Court against both the respondent and ATR.
It appears that the proceedings against Auskay were subject to mediation and apparent settlement. This occurred on 11 March 2001. On 27 September 2001 a complaint was lodged on behalf of the respondent with the Legal Practitioners Liability Committee (LPLC) in relation to the conduct of the firm previously acting for the respondent, and the charges rendered by them in relation to their actions on behalf of ATR. After negotiations it would appear that LPLC were prepared to make an offer and indeed forwarded a cheque which at that time the applicants had been instructed to accept in the sum of $50,000. Those instructions changed prior to the banking of the cheque and the cheque was returned. That occurred on 8 July 2002.
According to the affidavit of Mr Brett, the respondent creditor was unable to then provide sufficient funds to enable proceedings to be issued against the former solicitors and the retainer then with Coadys was withdrawn. A further complaint has been lodged with the Legal Practice Tribunal in relation to the claim against the former solicitors.
It is against that background the proceedings then were issued in the Magistrates Court of Victoria at Melbourne by the current applicant creditor on 4 November 2000 and this led to the judgment being entered on 28 August 2003.
The respondent has relied upon affidavit material filed by him on 11 August 2004. The affidavit sworn the same day attaches a number of items of correspondence. Essentially, the applicant has opposed the making of a sequestration order and has otherwise sought orders by this court to annul all orders, which I take to include the order made in the state Magistrates Court. I have looked at the affidavit carefully and it is clear that the affidavit and the attached documents essentially raise issues perceived by the respondent to be either misconduct or inappropriate handling of his claim and that of his company against the former solicitors. He raises concerns otherwise about the consequences of a sequestration order. None of those concerns, however, as a matter of law are matters which I ought to take into account in this application.
In terms of the criticism of the conduct of the applicant creditor in the handling of the legal affairs of the respondent, it is clear to me that the respondent, whilst expressing in general terms some grievance, is essentially seeking to agitate matters which could and should have been further agitated in the contested hearing before the Melbourne Magistrates Court.
In an application of this kind it would only be appropriate for this court to go behind the judgment of the state Magistrates Court if I were satisfied that there had been some conduct of a kind which would encourage the court to undertake that exercise.
Before going behind a judgment which on the face of it has been regularly entered the Court needs to have sufficient reason not to exercise its discretion to treat a judgment as satisfactory proof of the debt where reasons are raised doubting whether the debt is due to the creditor (see Corney v Brien (1951) 85 CLR 343 per Fullagar J at 352–358; see also Wren v Mahony (1972) 126 CLR 212 per Barwick CJ at 224-225).
In the circumstances before this court I can see no valid reason why the court should go behind the judgment of the Melbourne Magistrates Court, particularly having regard to the notation on the order and the fact that that hearing occurred after a contested hearing, albeit that the respondent regrettably did not have, as I understand it, the assistance then, or indeed now, of proper legal advice. I note that in recent times he has sought some legal advice in relation to these proceedings and again it is a matter of regret that he has not been able to pursue that legal advice either here or indeed in terms of reactivating the claim he may have had against former solicitors, which at least at one point generated what can only be described as an offer of some significance.
On the material before me, however, I am satisfied it is not appropriate to go behind the judgment. I am satisfied that there is a bankruptcy notice which has been properly served. I am otherwise satisfied as to the requirements of the Bankruptcy Act and I rely upon the affidavit material, including the most recent material filed and relied upon by the applicant creditor in this matter. In the circumstances I am satisfied that the applicant creditor has complied with the requirements of the Bankruptcy Act. There is no other evidence before me which would persuade me not to make an order and no other evidence before me which would satisfy me that in particular s.52 of the Act has not been complied with. I am further satisfied that there is no evidence before me as to solvency of the respondent which may assist in the further deliberations in this matter.
Taking all those matters into account, it is clear that the order that

I should make is a sequestration order and I will make a sequestration order that the estate of the respondent be sequestrated. I will make the usual order in relation to costs. I note that the date of the act of the bankruptcy is 12 April 2004. The costs of the respondent will include reserved costs, if any.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of McInnis FM

Associate:

Date: 23 August 2004