FIFTY-FIRST RH Nominees v Rice
[2003] FMCA 213
•24 February 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| FIFTY-FIRST RH NOMINEES v RICE | [2003] FMCA 213 |
| BANKRUPTCY – Application for termination of debt agreement – no payments being made – creditors voted against termination – debtor’s Wife principal creditor – debt argument termination. |
Bankruptcy Act 1966, s.185Q
| Applicant: | FIFTY-FIRST RH NOMINEES PTY LTD |
| Respondent: | GARRY FRANCIS RICE |
| File No: | MZ 114 of 2003 |
| Delivered on: | 24 February 2003 |
| Delivered at: | Melbourne |
| Hearing Date: | 24 February 2003 |
| Judgment of: | Phipps FM |
REPRESENTATION
| Counsel for the Applicant: | Ms D. Joseph |
| Solicitors for the Applicant: | Robertson Hyetts |
| Solicitors for the Respondent: | No Appearance |
ORDERS
That pursuant to Section 185Q of the Bankruptcy Act 1966 the Part IX Debt Agreement No VIC 2/01/8 (c117) entered into on 8 February 2001 with Mr Garry Francis Rice be terminated.
That any further requirement of service on the official receiver be dispensed with.
That the Respondent pay the Applicant’s costs fixed at $2,500.00.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MZ 114 of 2003
| FIFTY-FIRST RH NOMINEES PTY LTD |
Applicant
And
| GARRY FRANCIS RICE |
Respondent
REASONS FOR JUDGMENT
This is an application to terminate a debt agreement. The agreement numbered VIC 2/01/8 (c117) was entered into on 8 February 2001 with Mr Garry Francis Rice.
I am satisfied that the application has been served. I am also satisfied that it has been served on the Official Receiver, although it may be a day late. Rule 37.015 requires the application to be served on the Official Receiver at least five days before the date fixed for hearing but I will dispense with any further requirement of service on the Official Receiver.
The material shows that no payments are being made under the debt agreement. The debt agreement was for repayment of an amount of $28,023.00 in 12 consecutive months by instalment.
The Applicant is a solicitor who obtained an order in the Magistrates Court at Bendigo for $1524.10 interest and costs.
The agreement shows some 11 creditors, one of whom is the debtor's Wife.
Following default the person administering the debt agreement, Mr Ronald Dunlop of Ron Dunlop and Associates wrote to the creditors as required, giving them the opportunity to vote to terminate the agreement. Subsequent correspondence from him shows that they voted against termination, the reason being that the debtor’s Wife, who in effect has a controlling interest, voted against it.
A subsequent letter from the administrator on 11 October 2002 shows that he has closed his file and the inference to be drawn from all the material that nothing has been paid under the debt agreement.
Under subsection 185Q(4)(a) of the Bankruptcy Act the court may make an order terminating a debt agreement if it is satisfied that the debtor or the debtor's personal representative, if the debtor has died, has failed to carry out a term of the agreement and that it is in the creditors' interests to terminate the agreement.
One effect of a debt agreement is that an application cannot be made for a sequestration order against the estate of the debtor. He is making no payments in reduction of his debt and not only can no application for sequestration be made, no other steps can be taken to recover the debt.
The debt agreement is not being complied with. The whole position is frozen unless an order is made and it is plainly in the interests of the creditors that they be able to take some steps to deal with the debt, including presenting a creditors petition seeking to sequester the debtor’s estate.
I will make an order in accordance with the application which is that pursuant to section 185Q of the Bankruptcy Act 1966 Part IX debt agreement number VIC 2/01/8 (c117) entered into on 8 February 2001 with Mr Garry Francis Rice be terminated.
I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Phipps FM
Associate:
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