Commonwealth Bank v A Boumelhem

FEDERAL MAGISTRATES COURT OF AUSTRALIA

COMMONWEALTH BANK v A BOUMELHEM [2007] FMCA 730

BANKRUPTCY – Creditor’s petition – where debtor seeks dismissal of the petition – whether debtor has shown ‘other sufficient cause’ pursuant to s.52 Bankruptcy Act – where debtor asserts breach of fiduciary duty by Bank – whether Bank’s duty of care extends to circumstances where an offer is ignored and property subsequently sold for a lesser sum to the offeror – consideration of relief available to debtor – adjournment.

Bankruptcy Act 1966, s.52

Totev v Sfar [2006] FCA 470
Re James; Ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd (No 2) (1994) 51 FCR 14
International Alpaca Management v Evsar [1999] FCA 72
St George Bank v Helfenbaum [1999] FCA 1337
Re Player (1962) 19 ABC 277
Re Schmidt; Ex parte Anglewood Pty Ltd (1968) 13 FLR 111
Ling v Enrobrook Pty Ltd (1997) 74 FCR 19
Commonwealth Bank of Australia v McDonald [1999] FCA 984
Gomez v State Bank of New South Wales Limited [2002] FCA 442

Applicant: COMMONWEALTH BANK OF AUSTRALIA

Respondent: AMIN BOUMELHEM

File Number: SYG 3647 of 2006

Judgment of: Raphael FM

Hearing date: 26 April 2007

Date of Last Submission: 26 April 2007

Delivered at: Sydney

Delivered on: 22 May 2007

REPRESENTATION

Counsel for the Applicant: Mr S Aspinall

Solicitors for the Applicant: Henry Davis York

Solicitors for the Respondent: V F Stanizzo Lawyers

ORDERS

1. Petition adjourned to 20 June 2007.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 3647 of 2006

COMMONWEALTH BANK OF AUSTRALIA

Applicant

And

AMIN BOUMELHEM

Respondent

REASONS FOR JUDGMENT

Narrative

1. This proceeding is the hearing of a bankruptcy petition against Amin Boumelhem.  There is also an application for a sequestration order against Jamal Boumelhem which was heard concurrently, the evidence in the one case being agreed to be evidence in the other.  The grounds of opposition to the making of sequestration orders were the same for both respondents. 

2. In 1998 the respondent obtained a loan from the applicant secured by a mortgage over a property: Lot 192 in DP 30577 known as 69 Robert Street Dapto, NSW, 2530.  The respondent was unable to maintain payments on the loan in a manner satisfactory to the applicant which, on 9 December 2004, obtained judgment for possession of the land together with a money judgment in the sum of $373,420.48 plus costs.  Between the time of obtaining the judgment and October 2005, when possession was obtained, certain moneys were paid by the respondent to the applicant in reduction of the debt and the respondent made a number of attempts to refinance the property or find a purchaser for it to pay out the loan.  The efforts made by the respondent, including the payments made to the bank, resulted in two stays of execution upon the warrant for possession.

3. At all relevant times Mr Boumelhem employed as his solicitor Lionel Kramer of Horowitz & Bilinsky.  On 17 October 2005, the day before the sheriff was due to take possession…