Credit Watch Pty Ltd v Petek

[2016] FCCA 2407

FEDERAL CIRCUIT COURT OF AUSTRALIA

CREDIT WATCH PTY LTD & ANOR v PETEK [2016] FCCA 2407

Catchwords:
BANKRUPTCY – Application to set aside a sequestration order – whether the sequestration order should have been made – whether there are any sufficient grounds established which would prevent a sequestration order being made – application dismissed.

Legislation:

Bankruptcy Act 1966, ss.27, 43, 52

First Applicant:

CREDIT WATCH PTY LTD

ACN 144 644 244

Second Applicant :	LOYALTY AUSTRALASIA PTY LTD ACN 100 300 301 TRADING AS DYNAMIC BUSINESS
Respondent:	KENNETH PETEK

File Number: SYG 1752 of 2016

Judgment of: Judge Street

Hearing date: 15 September 2016

Date of Last Submission: 15 September 2016

Delivered at: Sydney

Delivered on: 15 September 2016

REPRESENTATION

Solicitors for the Applicants: Mr Wilkie
Neville & Hourn Legal

The Respondent appeared in person.

ORDERS

1. Dispense with the requirement under the Federal Circuit Court (Bankruptcy) Rules 2016 per rr.4.04 and 4.06 for the filing of an updated affidavit of debt and an updated affidavit of search.

2. The sequestration order made by the Registrar on 16 August 2016 against the estate of Kenneth Petek is affirmed.

3. The creditor’s costs be paid out of the estate on trustee basis.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1752 of 2016

CREDIT WATCH PTY LTD

ACN 144 644 244

First Applicant

LOYALTY AUSTRALASIA PTY LTD
ACN 100 300 301
TRADING AS DYNAMIC BUSINESS
Second Applicant

And

KENNETH PETEK

Respondent

REASONS FOR JUDGMENT

1. This is an application within the Court’s jurisdiction under s.27 of the Bankruptcy Act 1966 (Cth) (“the Act”) in which the respondent is seeking to have set aside the sequestration order made by the Registrar on 16 August 2016.

2. Accordingly, this Court is considering afresh whether or not a sequestration order could be made and, whether the order made on 16 August 2016 should be affirmed.

3. The respondent relies upon an affidavit that identifies the origin of the judgment debt and the dispute between the applicant and the respondent and his company.  The affidavit evidence of the respondent supports a taxation process in relation to the costs orders that reflect the final orders the subject of the bankruptcy notice the subject of the creditor’s petition. There is no proper basis to go behind that final order on the evidence adduced by the respondent.

4. The applicant has had read the affidavit verifying the petition, the affidavit of service of the bankruptcy notice, an affidavit of service of the creditor’s petition. I note, that although the affidavit of service of the creditor’s petition is the subject of dispute by the respondent, it is apparent on the evidence that it was served upon the respondent. 

5. There has also been filed affidavits of search and affidavit of debt as at 15 August 2016. An application is made for the dispensing of the requirement under the Rules for a further updated affidavit of search and an updated affidavit of debt. I am satisfied that it is appropriate in the present case to dispense with the requirement of an updated affidavit of search and an updated affidavit of debt.

6. The respondent expressed his concern in relation to the conduct of the proceedings that gave rise to the relevant judgment debt and also his disagreement in relation to the taxation process. Those are not matters that give rise to any genuine offset in claim, demand or setoff.

Conclusion

1. On the evidence before the Court, the Court is satisfied that there was an act of bankruptcy on 1 June 2016. Under s.43 of the Act, the Court is satisfied that the respondent has committed an act of bankruptcy.

2. On the evidence before the Court, the requirements of s.43(1)(b) of the Act are satisfied, enlivening the Court’s power to make a sequestration order. There is no evidence before the Court to establish that the respondent is able to pay his debts.

3. The disagreement by the respondent with the making of the costs order and the circumstances in which it is made do not establish other sufficient cause not to make a sequestration order. 

4. There are no other grounds identified by the respondent that would amount to a sufficient cause not to make a sequestration order under s.52(2) of the Act.

5. I am satisfied that the applicant has established proof of the matters required under s.52(1)(a), (b) and (c) of the Act.

6. I am satisfied that this is an appropriate matter in which to make a sequestration order.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of Judge Street

Date: 29 November 2016