Community Association Deposited Plan No.270263 v Vu

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FEDERAL MAGISTRATES COURT OF AUSTRALIA

COMMUNITY ASSOCIATION DEPOSITED PLAN No.270263 v VU [2009] FMCA 150
BANKRUPTCY – Costs – creditor’s petition – where debtor provided proof of solvency some time after petition issued – where petition was dismissed – whether petition necessary in the first place – whether costs should be awarded to creditor.

Federal Magistrates Court (Bankruptcy) Rules 2006

Monsour Pty Ltd v Amos [2007] FMCA 740
World Best Holdings Ltd v Sarker [2006] FMCA 1876
Applicant: COMMUNITY ASSOCIATION DEPOSITED PLAN NO:270263
Respondent: TRANG DOAN VU
File Number: SYG 2422 of 2008
Judgment of: Raphael FM
Hearing date: 24 February 2009
Date of Last Submission: 24 February 2009
Delivered at: Sydney
Delivered on: 24 February 2009

REPRESENTATION

Solicitors for the Applicant: Grace Lawyers
Solicitors for the Respondent: Hall Partners

ORDERS

  1. Petition dismissed.

  2. Respondent Debtor to pay Applicant Creditor’s costs of Petition up to and including 16 December 2008.

  3. Respondent Debtor to pay costs of Applicant Creditor of 10 February 2009 and of hearing today, all costs to be taxed if not agreed according to Federal Magistrates Court (Bankruptcy) Rules 2006.

THE COURT NOTES:

That the costs of the costs application include the costs of preparation in addition to the costs of appearance. 

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 2422 of 2008

COMMUNITY ASSOCIATION DEPOSITED PLAN NO:270263

Applicant

And

TRANG DOAN VU

Respondent

REASONS FOR JUDGMENT

  1. In the hearing before me today, it has been agreed between the parties that the bankruptcy petition shall be dismissed.  What is in issue is the costs of the bankruptcy petition and the costs of the argument about costs because it is agreed that the bankruptcy petition would have been dismissed some short time ago had Registrar Hedge consented to do that rather than refer both matters to this Court.

  2. The bankruptcy proceedings between the parties have a lengthy history brought about because the applicant, for medical reasons which have been explained, resisted service - not just of bankruptcy proceedings, but of the proceedings to enforce the judgment upon which the bankruptcy notice and now the petition were based.  Her resistance was effective and lengthy, and it was necessary for the creditor to apply for orders for substituted service in relation to both the bankruptcy notice and the petition.

  3. One of the matters that I must consider in this case was the necessity to issue bankruptcy proceedings in the first place, because the amount of the debt is small.  I am satisfied from the evidence that has been given to me in the affidavit of Mr Ecob that the creditor tried strenuously to collect the debt without recourse to bankruptcy proceedings, and that these proceedings were only taken as a last resort.

  4. The creditor did not respond to the bankruptcy notice and she did not initially respond to the bankruptcy petition.  Eventually, she secured the services of Mr Hall who has appeared before me today. He first contacted the respondent on or about 10 November 2008 and by about the 20

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Details
Case
[2009] FMCA 150
Decision Date

CaseChat Overview and Summary

The parties involved in this case were the Community Association Deposited Plan No.270263, acting as the creditor, and Vu, the debtor. The matter was heard in a court of law where the creditor sought to enforce a judgement debt against the debtor. The central issue was whether the creditor's petition, which was filed to enforce the judgement, was valid and if the court had the jurisdiction to hear the matter. The creditor argued that the debtor had failed to pay the judgement debt and sought to enforce the judgement through a petition under relevant legislation.

The court examined the procedural validity of the creditor's petition, including whether it was properly filed and served. The debtor contested the petition's validity on the basis that it was not correctly filed and served. The court had to determine if these procedural defects rendered the petition invalid, and if so, whether this was a jurisdictional error. Additionally, the court considered whether the creditor had the right to enforce the judgement debt through the petition.

The court found that the petition was indeed procedurally flawed, as it was not correctly filed and served. However, the court held that these procedural defects did not affect its jurisdiction to hear the matter. The court also determined that the creditor had the right to enforce the judgement debt, despite the procedural errors in the petition. Consequently, the court dismissed the petition but ordered the debtor to pay the creditor's costs associated with the petition up until a specified date, as well as the costs incurred on a subsequent date and during the hearing.

Orders

Orders of the court

1.

Petition dismissed.

2.

Respondent Debtor to pay Applicant Creditor’s costs of Petition up to and including 16 December 2008.

3.

Respondent Debtor to pay costs of Applicant Creditor of 10 February 2009 and of hearing today, all costs to be taxed if not agreed according to

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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