Eurofinance Capital Limited v Winter

[2014] FCCA 165

FEDERAL CIRCUIT COURT OF AUSTRALIA

EUROFINANCE CAPITAL LIMITED v WINTER [2014] FCCA 165

Catchwords:
BANKRUPTCY – Sequestration order – where Bankruptcy Notice served on respondent in Vietnam without leave of court – where respondent has not sought to set aside bankruptcy notice – whether to make order nunc pro tunc that respondent personally served with Bankruptcy Notice in Vietnam – whether act of bankruptcy committed – whether to make sequestration order.

Legislation:  

Bankruptcy Act 1966 (Cth) ss.52, 306(1)

Envee Energy Pty Ltd (In Liquidation) v Stockford [2007] FMCA 1426

Applicant: EUROFINANCE CAPITAL LIMITED

Respondent: ROBERT REYNOLDS WINTER

File Number: SYG 2247 of 2013

Judgment of: Judge Raphael

Hearing date: 3 February 2014

Date of Last Submission: 3 February 2014

Delivered at: Sydney

Delivered on: 3 February 2014

REPRESENTATION

Solicitors for the Applicant: MSB Lawyers

For the Respondent: No appearance

ORDERS

1. Leave be granted nunc pro tunc to the Applicant to serve the Bankruptcy Notice dated 15 May 2013 on the Respondent in Vietnam.

2. A Sequestration order be made against the estate of Robert Reynolds Winter.

3. The Applicant Creditor’s costs (including any reserved costs) be taxed and paid from the estate of the Respondent Debtor in accordance with the Bankruptcy Act 1966 (Cth).

4. Under the Bankruptcy Regulations a copy of this order be given to the Official Receiver in Sydney within 2 days.

THE COURT NOTES

1. Leave be granted nunc pro tunc to the Applicant to serve the Bankruptcy Notice dated 15 May 2013 on the Respondent in Vietnam.

2. A Sequestration order be made against the estate of Robert Reynolds Winter.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT SYDNEY

SYG 2247 of 2013

EUROFINANCE CAPITAL LIMITED

Applicant

And

ROBERT REYNOLDS WINTER

Respondent

REASONS FOR JUDGMENT

1. In this matter, the applicant is seeking a sequestration order against the estate of Robert Reynolds Williams.  The application that comes before me also includes an application to make an order nunc pro tunc that the applicant was personally served with bankruptcy notice, BN161093 issued on 15 May 2013, in Vietnam, in respect of which there is an affidavit of service of Rob Stubbs, sworn 11 July 2013, deposing to the fact that Mr Winter was served with such a notice on 31 May 2013.  The continuing connection between Mr Winter, who is an Australian citizen, and the State of New South Wales is deposed to in an affidavit of Margaret Pavey dated 31 January 2014, in which she states that the debtor is an architect who is carrying on business in New South Wales through a company of which he is a principal, known as Winter Group Vietnam Architecture.  In particular, she deposes to the fact that this group is the architect for a development at 9 Wonga Wonga Street, Turramurra, which is presently before the Ku-ring-ai Municipal Council, and in respect of which that council is in communication with Mr Winter and the business.

2. In Envee Energy Pty Ltd (In Liquidation) v Stockford [2007] FMCA 1426, Federal Magistrate Wilson heard a similar case to this, in which a bankruptcy notice had been served outside the jurisdiction in Thailand without first obtaining leave of the court. His Honour, after considering the cases and the relevant statutory provisions of the Bankruptcy Act 1966 (Cth)[1] and the Federal Court of Australia Act 1976 (Cth), concluded that the failure to obtain an order for leave to serve a bankruptcy notice out of Australia prior to its actual service was an irregularity within the ambit of s.306(1) of the Act, and that an order should be made nunc pro tunc that leave to effect such service be granted.  His Honour stated at [25]-[26]:

   ’25. There is no injustice to the respondent in such a course being followed.  As I have said, the respondent was personally served with the bankruptcy notice.  Prior to the expiry of the time allowed by the bankruptcy notice for payment of the debt, the debtor confirmed that he had been personally served and was told the date upon which time for compliance with the bankruptcy notice would expire. The respondent debtor has taken no steps to set aside the bankruptcy notice, nor to challenge the service of it.  This is notwithstanding the fact that he was personally served with the creditor’s petition in Australia on 13 July 2007.  That petition relies for an act of bankruptcy on non-compliance with the bankruptcy notice.

   26. Accordingly, in my view it is appropriate to order that leave be granted nunc pro tunc to serve the bankruptcy notice on the respondent out of Australia and in Thailand.’

   [1] The ‘Act’.

3. Whilst there are certain differences in that case to this, namely, that the creditor’s petition was also served in Vietnam and not in Australia, it is the case that the applicant, who is apparently a professional man, has made no attempt to have the bankruptcy notice set aside. It is clear from the affidavits of debt and search that he is substantially indebted to the creditor, and I believe it is in the interests of justice that a sequestration order be made. I am satisfied that the respondent committed the act of bankruptcy alleged in the petition. I am satisfied of the proof of the other matters required by s.52 of the Act. I make a sequestration order against the estate of Robert Reynolds Winter. I order that the applicant’s costs, including reserved costs, if any, be taxed and paid from the estate of the respondent in accordance with the Act. Under the Bankruptcy Regulations, a copy of this sequestration order be given to the Official Receiver in Sydney within two days. The court notes the date of the act of bankruptcy is 21 June 2013. I note that a consent to act as a trustee has been signed by Schon Condon, and has been lodged with the Official Receiver in Sydney.

I certify that the preceding three (3) paragraphs are a true copy of the reasons for judgment of Judge Raphael

Associate: 

Date:  6 February 2014