Credit Corp Services Pty Limited v Dindayal
[2012] FMCA 469
•25 May 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CREDIT CORP SERVICES PTY LIMITED v DINDAYAL | [2012] FMCA 469 |
| BANKRUPTCY – Application for extension of time to review Registrar’s sequestration order – absence from hearing – lack of apparent merits – medical evidence insufficient to justify adjournment – application dismissed. |
| Bankruptcy Act 1966 (Cth), ss.52(5), 109(1)(a) Federal Magistrates Act 1999 (Cth), s.104(2)(b) Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth), rr.2.03(1), 7.06 Federal Magistrates Court Rules 2001 (Cth), r.13.03C(1)(c) |
| Adams v Lambert (2006) 228 CLR 409 |
| Applicant: | CREDIT CORP SERVICES PTY LIMITED ACN 082 928 872 |
| Respondent: | VIJAY KUMAR DINDAYAL |
| File Number: | SYG 2080 of 2010 |
| Judgment of: | Smith FM |
| Hearing date: | 25 May 2012 |
| Delivered at: | Sydney |
| Delivered on: | 25 May 2012 |
REPRESENTATION
| Counsel for the Applicant Creditor / Respondent Creditor on Review: | Mr D Francis |
| Solicitors for the Applicant Creditor / Respondent Creditor on Review: | Francis Commercial Lawyers |
| Counsel for the Respondent Debtor / Applicant Debtor on Review: | No appearance by or on behalf the Respondent Debtor / Applicant Debtor on Review |
ORDERS
The application filed on 7 February 2012 for an extension of time to apply for review of the sequestration order made on 20 December 2011 is dismissed under Federal Magistrates Rules r.13.03C(1)(c) by reason of Mr Dindayal’s absence from the appointed hearing.
The creditor’s costs, including all reserved costs, be taxed and paid from the estate of the bankrupt in the priority given to a petitioning creditor under s.109(1)(a) of the Bankruptcy Act 1966 (Cth).
The creditor must give a copy of these orders to the Official Receiver within 2 working days.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2080 of 2010
| CREDIT CORP SERVICES PTY LIMITED ACN 082 928 872 |
Applicant
And
| VIJAY KUMAR DINDAYAL |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
This judgment explains why I have decided to dismiss the present application brought by Mr Dindayal, due to his absence from today’s hearing.
Mr Dindayal filed the application on 7 February 2012. In effect, it seeks an extension of time under Federal Magistrates Act 1999 (Cth) s.104(2)(b) and Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth) r.2.03(1) to file an application for review of a sequestration order made by a Registrar on 20 December 2011. Under that rule, and absent any extension of time, an application for review was required to be filed no later than 10 January 2012.
There is correspondence before me indicating that Mr Dindayal was well aware of a need to bring his application urgently. He clearly was aware of orders made by the Registrar on the day it was made, since he attended her hearing by telephone. The reasons for his subsequent delay in seeking review are not shown clearly in any affidavits he has filed, and in my opinion he has not yet shown a sufficient explanation to justify extending time.
Under r.7.06 of the same Rules, an applicant for review is required to serve a notice on all his creditors at least seven days before the hearing and on his trustee in bankruptcy. There is no evidence filed by Mr Dindayal that he took these steps, his application having been listed for hearing today, at a directions hearing on 12 March 2012. I am therefore left in doubt whether there might be creditors who wish to be heard in support of the Registrar’s orders. As I shall note below, his trustee has become aware of the hearing and has reported to the Court.
At the 12 March 2012 listing, the application for review was referred to me by the Registrar, having previously been listed before a Registrar on 27 February 2012. On both of those listings, orders were made for Mr Dindayal to file and serve his affidavits in support according to timetables which he has not met. My directions required Mr Dindayal to file a notice of his grounds of opposition to the petition and all his evidence in support, no later than 9 April 2012. However, he filed nothing until last week.
The petition upon which the sequestration order was made was filed by a different creditor, Rebfin Pty Ltd on 23 September 2010, and there had been repeated appearances before Registrars after that date and throughout all of last year. On 23 August 2011 the present petitioning creditor, Credit Corp Services Pty Limited was substituted as applicant, and it filed the current amended petition on 30 August 2011. On 20 September 2011, a Registrar extended the life of the petition for the maximum period allowed by s.52(5) of the Bankruptcy Act.
Mr Dindayal appeared in person at many of these listings, and there were contested adjournments, in which he held out to Registrars the prospect of his creditors being paid from the sale of two parcels of real estate. It appears to me that a great deal of indulgence was shown to him in the course of these appearances before the Registrars.
Ultimately, as the Registrar’s notes of what happened on 20 December 2011 show, Mr Dindayal had exhausted his arguments for further adjournments. Mr Dindayal was allowed to attend by telephone rather than in person. The evidence before me indicates that the hearing before the Registrar proceeded for some time, before she gave judgment refusing further adjournments and then proceeding with the petition. Mr Dindayal was clearly allowed a full opportunity to show why the Registrar should not take this course. I shall attach to this judgment her notes which are on file explaining her decision to proceed with the petition.
At no time during the proceedings before the Registrars, had Mr Dindayal filed a notice of grounds of opposition to the petition or amended petition, nor, it seems to me, any sworn evidence raising any arguable ground of opposition. There is one affidavit sworn by him which was filed on 15 November 2011. It attached a statement of financial affairs, which differs from another statement of affairs found in a bundle of documents that appear to have been sent electronically by Mr Dindayal and were before the Registrar at the hearing on 20 December 2011. These documents sought to suggest a surplus of assets over liabilities by reason of Mr Dindayal’s equity in the two properties, which he claimed to intend to sell for the benefit of his secured and unsecured creditors.
After the matter reached me, Mr Dindayal filed a notice of grounds of opposition to the making of the sequestration order, for the first time on 18 May 2012, that is, one week ago. It is supported by an affidavit, which it appears to make the same assertions as to solvency as had been made before the Registrar, without giving them any greater cogency. As I shall note below, these assertions are now contradicted by the report of the trustee.
Mr Dindayal’s grounds of opposition also raise a challenge to the interest calculations in the bankruptcy notice, but at present I am not persuaded that they raise a contention which would not have been properly addressed by the Registrar by reference to Adams v Lambert (2006) 228 CLR 409.
His other contentions, in so far as I can understand them, do not appear to me to be of obvious prospects of success, in so far as I can assess them unaided by the presence of Mr Dindayal or any legal representative before me today.
I am therefore not currently satisfied that Mr Dindayal has raised sufficient merits to justify an extension of time for his application for review, even apart from the absence of an acceptable explanation for his delay.
I am satisfied that Mr Dindayal has been on notice that the matter is listed today for hearing. I so directed on 12 March 2012, when he was in attendance and received a copy of my orders. Although I do not have a transcript of what I have said, I am confident that I drew to his attention the likelihood that I would proceed with the matter on that day. I consider that I gave him an ample opportunity to engage the services of a legal representative who would be available on that day, if he wished to be represented. I consider that Mr Dindayal has had more than enough notice of the hearing and opportunity to prepare his case.
In recent days, Mr Dindayal informed the solicitor for the creditor, and informally the Court Registry, of an intention not to appear today. He has not appeared today. An email to the solicitor for the creditor on Wednesday, 23 May 2012 advised:
In relation to the hearing on Friday May 25, 2012 i advise that i will seek adjournment for 3 weeks for the following reasons:
•obtain a medical report- it is not available at this stage and i am expecting it to be available by the end of this month
•I will be engaging the service of counsel Mr. Peter Newton at st James chambers and unfortunately he is not available until the end of the month
•i am undergoing medical treatment- very painful and it is very difficult to do anything
•i may also obtain psychological report.
I humbly request your consent for 3 weeks within which time i expect recovery and to proceed with the hearing. It is very unfortunate and i very much appreciate your indulgence.
Yesterday, Mr Dindayal sent to the Registry by facsimile an affidavit sworn in front of a solicitor yesterday, presumably in that solicitor’s office at Parramatta. The affidavit refers to the listing today and states:
6.I am not in position to attend the hearing for tomorrow as I am medically unfit and undergoing treatment. I attached the medical certificate.
7.I seek adjournment of 3 weeks on the following basis
•Medical treatment- medical unfit. It is very painful. Friday May 25, 2012 I will be in the theatre undergoing medical checks- including blood test, scan, pressure test, and all other related test
•I will be engaging the service of Counsel Mr. Peter Newton and at St James Chambers and he is not available until the end of the month
•In my hearing I will be tendering medical report from February 2010 and that forms an important part of the submission
8.I did advise the applicant creditor that I will seek adjournment and send them an email dated May 23, 2012 whether or not they will consent to the adjournment and they are not consenting.
The affidavit attaches a certificate of the solicitor before whom the affidavit is sworn, signed by the solicitor which states:
I, [solicitor’s name], Solicitor certify that the following matters concerning the making of this affidavit by the person who made it:
1.I saw the face of the person.
2.I have not known the person for at least 12 months but I have confirmed the person’s identity using an identification document, I relied on was his NSW Driver’s license.
The affidavit attaches a document headed “MEDICAL CERTIFICATE” which is signed by a person who identifies himself by a stamp as Dr Dharmesh Shah. It states:
THIS IS TO CERTIFY THAT
Mr Vijay Dindayal
IS RECEIVING MEDICAL TREATMENT FOR THE PERIOD
24/5/2012 TO 25/5/2012 INCLUSIVE
He WILL BE UNFIT TO CONTINUE his USUAL OCCUPATION
This certificate was completed on 24/5/2012
Dr. D. Shah [signature]
I also note that today emails from the Registry were sent to my associate which record a series of communications to the Registry, purportedly from Mr Dindayal, also asserting a medical unfitness to attend today’s hearing, without submitting any further evidence to prove this.
I am not persuaded that the evidence before me establishes such an unfitness, nor that any medical appointments made by Mr Dindayal for today could not have been made on other days. Indeed, the evidence raises the suspicion that he has deliberately made medical appointments for today, so as to render himself unavailable for attendance at Court. This is speculative, and it is enough for me to conclude that I am not satisfied that the medical certificate of the doctor establishes a diagnosed medical condition which rendered Mr Dindayal incapable of attending a hearing today for a short time, whether in person in front of me or by telephone. The evidence does not satisfy me that Mr Dindayal suffers from any underlying condition which could result in such urgency of medical treatment being appointed for today, as to provide a proper reason for the Court vacating the hearing on Mr Dindayal’s application.
When forming that judgment, I have taken into account the long history of Mr Dindayal’s appearances as noted in the file notes of the Registrars, and his various communications over the length of this matter. It appears to me that, whether consciously or unconsciously, Mr Dindayal is a chronic procrastinator in relation to his bankruptcy proceedings, and that today I am faced with yet another application for an adjournment which, in Mr Dindayal’s mind, will stall the evil day when he has to come to grips with a state of insolvency. However, this state of mind does not justify a further adjournment, nor any further delays in allowing the trustee to give full effect to the sequestration order made by the Registrar.
I arrive at that conclusion since, in my opinion, not only did the evidence before the Registrar point to Mr Dindayal’s insolvency, but this is now supported by the trustee’s report. In his affidavit, the trustee notes that Mr Dindayal, despite reminders, has failed to file a statement of affairs, and has not complied with obligations to deliver his passport to the trustee. The trustee has been unable to identify any assets from which creditors could be paid, but has identified a prospect of creditors who may lodge proofs of debt for amounts exceeding of “at least $510,635.10”. Notably, the trustee’s affidavit attaches correspondence from the secured creditors in relation to the two properties previously held out by Mr Dindayal, indicating that they have been sold at prices resulting in deficits to the secured creditors.
All the evidence before me at present points towards Mr Dindayal’s estate being properly placed in bankruptcy by the Registrar’s order, and to there being a public interest in the present proceedings being brought to finality within such time as justice would allow.
In my opinion, the requirements of justice have been satisfied, by allowing Mr Dindayal to prepare and present today his case for an extension of time for review of the Registrar’s order and for reviewing the Registrar’s order. As I have explained, I am not persuaded that he has established a good ground for an adjournment of the hearing which has been long appointed for that purpose.
In my opinion, the appropriate order is to dismiss the application for extension of time, and necessarily the application for review, on the grounds of absence from today’s hearing.
I note that Mr Dindayal may have rights to make further applications to the Court to set aside or annul his bankruptcy. These will involve discretionary judgments which will address both his explanations for his conduct subsequent to the making of the sequestration order and the merits of the matter. Public interest considerations will also be relevant, and the speed at which Mr Dindayal makes application to the Court, as well as the merits of his further applications, may be very important. Meanwhile, he is obliged to comply with the requirements of the Bankruptcy Act.
I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of Smith FM
Date: 13 June 2012
SCHEDULE
NOTES ONLY on EX TEMP decision on adjournment in SYG 2080/2010
Dindayal
This is an application for further adjournment of a creditors petition.
The petition was presented on 23 Sept 2010 and has been extended by consent into the second 12 months.
There have been approx 1 year’s worth of regular adjournments most by consent of the petitioning creditor, while the respondent debtor sought to sell property and raise funds to pay debt. On many occasions, the adjournment was sought by the petitioning creditor and the respondent regularly either appeared by phone or sent in faxes explaining why he could not be in court. Throughout the first 12 months on the petition, supporting creditors regularly appeared.
In August 2011, a supporting creditor, Credit Corp Services Pty Ltd, applied to be substituted, with the original petitioning creditor not opposing such substitution. It is now not clear if there was a problem with the petitioning creditor’s debt or if it was satisfied. There was an application and order that the CP be extended to 24 months.
Between September and December there were a number of further adjournments granted pending selling of property or raising of funds. These adj applications were contested by substit and supporting creditors.
On 20 December the Respondent appeared by phone and again asked for an adjournment. He had been directed to support any such application with an affidavit (as had been the direction on a number of previous occasion, although on many the creditor had consented to an adjournment or even provided the affidavit supporting the adj, usually due to pending settlement of property sale - which, if it eventuated, did not net sufficient to pay debts.)
The respondent (who used to be a solicitor?) explained that:
•he is working 3 jobs and is trying really hard to payoff debt
•has paid 8200 in 3 months and continuing to payoff,
•his property/ies are on the market but he cannot find a buyer.
•He has a new Real estate agent as per the letter dated 7 December faxed through
•Possibly has a W Comp claim and reinstatement as solicitor claim that he is paying a barrister to run in January?
•His faxed letter (not an affidavit) dated 19 December which was treated as a submission and attached letters as tendered going in part to attempted negotiations with substit creditor and their solicitor, corro confirming that property on market etc.
Applicant/substit creditor opposed adj with submissions including that:
•Had been trying to pay off debts for more than 12 months\
•Appears to be at least 3 debts of 48th, 33th, 20th approx; equity in property possible 70th (if can be sold at asking price with no sale over many months and no real equity if other property actually sold).
•Bank statements do not appear to verify alleged income
•Realisation of any assets to cover debt has not progressed over the 15 months
•Although caveats against property, they were not secured creditors
•Some payments made but involuntary payments
A notice of opposition to this petition has not been filed; the fax sent to court yesterday has not been served on creditor (matter was stood down to allow them to examine).
As stated Petition presented 23 Sept 2010 and respondent has a long history of trying to sell properties and raise funds. He has more than one creditor and no definitive action to set aside judgments in evidence. It appears that recently he has paid off some of the debt but is also paying a barrister to try to regain his practicing certificate.
There is also long history of adjournments in this matter, various supporting creditors have attended throughout, there is no updated affidavit available to support any grounds for today’s adjournment and although it appears that creditors have been patient, that court has granted many, many adjournments on basis that debtor has been trying to sell properties and more recently pay off from income, cannot now be satisfied on material provided and on history of the matter that further adjournment is justified or any more likely to result in funds eventuating in the foreseeable future.
Further adjournment is refused and will look at the evidence in support of the sequestration order.
J. Hedge
20 December 2011
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