Fair Trading Administration Corp v Ho - [2004] FMCA 230

FEDERAL MAGISTRATES COURT OF AUSTRALIA

FAIR TRADING ADMINISTRATION CORP v HO

[2004] FMCA 230

BANKRUPTCY – Creditor’s petition – opposition by the debtor – invitation to go behind the judgment debt – whether grounds exist to go behind the judgment – whether claim to post judgment interest properly based – whether any judgment awarding pre-judgment interest.

Bankruptcy Act 1966 (Cth), ss.51, 52

Bankruptcy Regulations

District Court Act 1973 (NSW), ss.83A, 85

Applicant:

FAIR TRADING ADMINISTRATION CORPORATION

Respondent:

WILLIAM WING ON HO

File No:

SZ295 of 2004

Delivered on:

6 April 2004

Delivered at:

Sydney

Hearing date:

6 April 2004

Judgment of:

Driver FM

REPRESENTATION

Solicitors for the Applicant:

Mr C Fesel
Hunt & Hunt

The respondent appeared in person

ORDERS

A sequestration order be made against the estate of William Wing On Ho.
The petitioning creditor’s costs, including reserved costs, if any, be taxed and paid in accordance with the Bankruptcy Act 1966 (Cth).
The Court notes that under the Bankruptcy Regulations a copy of this order is to be given to the Official Receiver in Sydney within two days after the order is entered.
The Court notes that the date of the act of bankruptcy is 29 January 2004.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SZ295 of 2004

FAIR TRADING ADMINISTRATION CORPORATION

Applicant

And

WILLIAM WING ON HO

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

I have before me a creditor’s petition filed on 6 February 2004 seeking a sequestration order against the estate of William Wing On Ho, plus costs. The respondent debtor filed a notice of opposition on 26 February 2004.
It does not appear to me that any of the issues raised by Mr Ho in opposition to the creditor’s petition sustain that opposition. Mr Ho has sought to persuade me that there is in law no debt payable. However, the debt claimed by the creditor is clearly based on a judgment of the District Court, a certificate of which was annexed to the bankruptcy notice served on Mr Ho.
Although the Court has the power to go behind the judgment, the matters advanced by Mr Ho, namely whether the statutory requirements for the pursuit of a claim against him by the creditor had been met and whether the proceedings in the District Court were fair, were raised, or attempted to be raised by him, in the District Court and he was unsuccessful. He elected not to appeal against the decision of the District Court or to seek a stay of the judgment. Nothing Mr Ho has advanced persuades me that there is a proper basis for the Court to look behind the judgment of the judge of the District Court.
The second matter raised by Mr Ho was a claim that the debt had been in some way waived. Annexed to his affidavit filed on 26 February 2004 is a letter from the Department of Fair Trading stating that in response to a request from Mr Ho a review of debt recovery action against him would be undertaken and that enforcement action would be suspended pending that review. Mr Ho deposes that he was subsequently told that “no news was good news” and that he would be contacted if there was any pursuit of the claim against him. Mr Ho deposes that he was left with the impression that the debt might be written off or waived. Write off of course is merely an accounting measure and does not affect the existence of the debt. A waiver of the debt would extinguish the debt. However, nothing in the material presented by Mr Ho indicates, let alone establishes, that the creditor intended to or did waive the debt.
Mr Ho also used the letter from the Department of Fair Trading which was dated 11 April 2001 to assert that the claim for post judgment interest made against him pursuant to s.85 of the District Court Act1973 (NSW) (“the District Court Act”) was illegitimate. Mr Ho submits that it was improper for the creditor to claim post judgment interest in circumstances where recovery action was suspended for several years after the judgment was obtained in the District Court in 2001. I accept, however, Mr Fesel's submissions in opposition to that submission that it was at all times Mr Ho's responsibility to meet his obligations under the judgment debt or to appeal against it. The letter from the Department of Fair Trading made that clear.
It was Mr Ho who instituted the process of review undertaken by the Department of Fair Trading. That process took a long time but Mr Ho should not have been left in any doubt that it was his obligation to meet the debt established by the judgment. The review process undertaken at Mr Ho's request does not in law or equity disentitle the creditor to interest on the judgment obtained pursuant to s.85 of the District Court Act.
Finally, Mr Ho asserted that there was no judgment including pre-judgment interest and he took me to a certification of judgment provided to him by the creditor late in 2003 at a time when the parties were having settlement discussions. That certificate of judgment is annexure 11(2) to his affidavit filed on 26 March 2004. The certificate of judgment makes no reference to pre-judgment interest. However, the certificate of judgment annexed to the bankruptcy notice served on Mr Ho does include an award of pre‑judgment interest pursuant to s.83A of the District Court Act.
The explanation given from the bar table by Mr Fesel was that the first certificate of judgment provided by the Court to the creditor, and later provided by the creditor to Mr Ho, was erroneous and that the creditor's own notes of the judgment included an award of pre‑judgment interest. The creditor raised with the District Court the apparent error in the certificate of judgment and a fresh certificate was issued. That is the certificate relied on by the creditor and the certificate annexed to the bankruptcy notice as was required. I accept the explanation. In the circumstances, the erroneous certificate of judgment initially provided by the District Court is of no assistance to the debtor.
Mr Ho invited me to refrain from making a sequestration order in reliance upon the general discretion provided by s.52(2)(b) of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”). However, no basis has been advanced by Mr Ho to satisfy me that I should exercise that discretion. On the basis of the material presented by the creditor I am satisfied that the formal requirements for a sequestration order have been met. The grounds of opposition to the creditor's petition advanced by Mr Ho I have rejected. I do not rule out the possibility that he might have had other grounds for opposition for the creditor's petition but he has not advanced them and it is not for the Court to advance grounds on his behalf.
I am satisfied that the debtor committed the act of bankruptcy alleged in the petition. I am satisfied with the proof of the other matters of which s.52(1) of the Bankruptcy Act requires proof.
I make a sequestration order against the estate of William On Ho.

I order that the petitioning creditor's costs, including reserved costs, if any, be taxed and paid in accordance with the Bankruptcy Act. I note that under the Bankruptcy Regulations a copy of these orders must be given to the Official Receiver in Sydney within two days of entry of the order. I further note that the act of bankruptcy committed by the debtor was non-compliance with the bankruptcy notice on 29 January 2004.

I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Driver FM

Associate:

Date: 19 April 2004