Ezekiel v Segal

Case [2012] FMCA 1231


FEDERAL MAGISTRATES COURT OF AUSTRALIA

EZEKIEL & ANOR v SEGAL [2012] FMCA 1231

BANKRUPTCY – Bankruptcy Notice – Where there exists an asset protection order – Whether this is a bar to execution so that the notice should be set aside pursuant to s.41(3)(b) of the Bankruptcy Act 1966 (Cth) – Alternatively whether the Bankruptcy Notice was issued for an improper purpose – Whether Bankruptcy Notice issued as a tool for debt recovery – Application dismissed.

BANKRUPTCY – Bankruptcy Notice – Whether an order to extend the time of compliance should be made – Extension granted.

Bankruptcy Act 1966 (Cth), ss.40, 41
Criminal Assets Recovery Act 1990 (NSW), s.10
Family Provisions Act 1982 (NSW), s.7
Proceeds of Crime Act 2001 (Cth), s.24
Boscolo v Botany Council [1996] FCA 897
Deputy Commissioner of Taxation v Stuart-Jones (2000) 102 FCR 296
Ling v EnrobookPty Ltd (1997) 74 FCR 19
National Australia Bank Ltd v Pollak (2001) 186 ALR 44
Ollis v Rayner (2007) 165 FCR 477
Rankine v Lord (2011) 121 ALD 258
Re Ling; Ex parte Enrobook Pty Ltd (1996) 142 ALR 87
Re Ousley; Ex parte Commissioner of Taxation (1994) 48 FCR 131
Sood v Crown Diagnostic Imaging Pty Ltd (2006) 156 FCR 240
Tobin v Ezekiel – Ezekiel Estate [2008] NSWSC 1108
Tobin v Ezekiel; Estate of Lily Ezekiel [2009] NSWSC 1313
Tobin v Ezekiel; Estate of Lily Ezekiel [2011] NSWSC 571
Tobin v Ezekiel [2012] NSWCA 285
Wiltshire-Smith v Mellor Olsson (1995) 57 FCR 572
First Applicant: MORRIS EZEKIEL
Second Applicant: ALBERT EZEKIEL
Respondent: ALAN LEWIS SEGAL
File Number: SYG 1788 of 2012
Judgment of: Lloyd-Jones FM
Hearing dates: 6 and 13 September 2012
Delivered at: Sydney
Delivered on: 19 December 2012

REPRESENTATION

Counsel for the Applicant: Mr T. S. Hale SC and Mr P. Macarounas
Solicitors for the Applicant: Diamond Conway Lawyers
Counsel for the Respondent: Mr P. O'Loughlin
Solicitors for the Respondent: Segal & Associates

ORDERS

  1. The amended application filed in Court on 6 September 2012, seeking that Bankruptcy Notice BN 4516 against Morris Ezekiel and Albert Ezekiel issued on 23 July 2012 be set aside, is dismissed.

  2. The time for compliance with Bankruptcy Notice BN 4516 issued 23 July 2012 is extended for a period of 21 days from the date of this judgment.

  3. The parties have leave to file brief written submissions in respect to costs in these proceedings on or before 10 February 2013.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 1788 of 2012

MORRIS EZEKIEL

First Applicant

ALBERT EZEKIEL

Second Applicant

And

ALAN LEWIS SEGAL

Respondent

REASONS FOR JUDGMENT

The Proceedings

  1. The applicants, Messrs Morris Ezekiel and Albert Ezekiel (collectively, the “Brothers”), seek an order to set aside a Bankruptcy Notice (BN 4516 of 2012) (the “Bankruptcy Notice”) issued against them by Alan Lewis Segal on 23 July 2012 on the following grounds:

    a)The debt is stayed within the meaning of Wiltshire-Smith v Mellor Olsson (1995) 57 FCR 572, such that the Brothers’ property cannot be realised due to…

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AGLC
Ezekiel v Segal [2012] FMCA 1231
Case
[2012] FMCA 1231
Decision Date

CaseChat Overview and Summary

This case concerns the validity of a Bankruptcy Notice issued against the applicants, Morris Ezekiel and Albert Ezekiel. The applicants sought to set aside the Bankruptcy Notice, arguing that it was invalid due to the orders of Brereton J made on 23 May 2011, which effectively prevented them from paying the debt. Alternatively, they argued that the Bankruptcy Notice was issued for an improper purpose and constituted an abuse of process. The court dismissed the application to set aside the Bankruptcy Notice but granted an extension of time for compliance.

The court examined the applicants' argument that the Bankruptcy Notice was invalid due to the orders of Brereton J, which restrained them from encumbering their only substantial asset, the Bondi Property, without giving 28 days' notice to their sisters. The court found that the orders did not have the effect of staying the execution of the judgment, and therefore, the Bankruptcy Notice was not invalid. The court also rejected the applicants' argument that the Bankruptcy Notice was issued for an improper purpose and constituted an abuse of process. The court found that it was in the public interest for the applicants to be made bankrupt, as there was no evidence of their solvency or ability to pay their debts.

The court granted an extension of time for compliance with the Bankruptcy Notice for a further 21 days from the date of the judgment and allowed the parties to file brief written submissions on costs on or before 10 February 2013.

Orders

Orders of the court

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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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