Greenhalgh v Hu

[2016] FCCA 1135

FEDERAL CIRCUIT COURT OF AUSTRALIA

GREENHALGH v HU [2016] FCCA 1135

Catchwords:
BANKRUPTCY – whether the respondent is able to pay her debts as and when they fall due – whether there is sufficient cause not to make a sequestration order – respondent made false representations regarding payment of debt – sequestration order made.

Legislation:

Bankruptcy Act 1966 (Cth), ss.27, 50

Applicant: GREGORY ROBERT GREENHALGH

Respondent: HUI QUN HU

File Number: SYG 241 of 2016

Judgment of: Judge Street

Hearing date: 12 May 2016

Date of Last Submission: 12 May 2016

Delivered at: Sydney

Delivered on: 12 May 2016

REPRESENTATION

Solicitors for the Applicant: Mr A Grifoni
Grifoni Legal

Mr H Xiong appeared on behalf of the respondent

ORDERS

1. A sequestration order be made against the estate of Hui Qun Hu.

2. The applicant creditor’s costs fixed in the amount of $8025.72 be paid from the estate of the respondent debtor.

THE COURT NOTES THAT:

The act of bankruptcy occurred on 30 October 2015.

A Trustee Consent to Act Declaration has been provided by registered trustees Andrew Aravanis and Alexander David Clark of Aravanis Insolvency.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 241 of 2016

GREGORY ROBERT GREENHALGH

Applicant

And

HUI QUN HU

Respondent

REASONS FOR JUDGMENT

1. This is an application within the Court’s jurisdiction under s.27 of the Bankruptcy Act 1966 (Cth) for a sequestration order against the respondent. The respondent was the subject of consent orders for an entry of judgment of the sum of $167,493.88 and interest in the sum of $27,493.88 on 21 November 2013. I am satisfied on the material that has been provided by the petitioning creditor that the act of bankruptcy occurred on 30 October 2015. The petitioning creditor has read an affidavit of search and an affidavit of service of the bankruptcy notice and an affidavit of service of creditors petition and the affidavit verifying the creditors petition.

2. I am satisfied that the respondent committed an act of bankruptcy on said date.  I am not satisfied on the material before the Court that the respondent is able to pay her debts as and when they fall due.  I am not satisfied that other sufficient cause not to make a sequestration order has been made out and I am satisfied that the applicant was well aware of the matter being brought back before the Court today. The applicant’s partner appeared before the Court and identified that they were still hoping to obtain money to pay her creditor and that the respondent was in China. 

3. The matter has a history in relation to which representations were made to the petitioning creditor by the respondent that payments would be made. It was on the basis of those representations that the matter had earlier been adjourned. Those representations proved to be false and, on that basis, the petitioning creditor moved for an order under s.50 that came before this Court. That application came before the Court shortly before the return date of a creditors petition. The s.50 order is an interlocutory order of a kind that has no continued operation if a sequestration order is made or if the Court otherwise dissolves the order.

4. Given the proximity of the return date for the creditors petition, the Court made orders giving liberty to the applicant to move this Court or the duty judge for orders in relation to the petition and/or the application on the next return date before the Registrar. When the matter came before the Registrar on 17 March 2013 the respondent made further representations to the applicant that a payment was imminent and about to be made. It was on the basis of those representations that the creditor agreed to the adjournment of the application and agreed a further date in relation to the s.50 application. Those representations also turned out to be false.

5. The respondent’s partner identified that they wanted more time and wanted the creditors petition adjourned and that they were making efforts to try and obtain payment.  No affidavit evidence was filed by the respondent to identify any basis upon which the Court could be satisfied that the respondent was solvent.  Nothing said by the applicant’s husband from the bar table identified sufficient cause why a sequestration order should not be made. 

6. The Court is satisfied that the respondent has committed the act of bankruptcy. The Court is satisfied that the petitioning creditor has proved the matter stated in the petition, service of the petition and the fact that the debts are still owing.  The Court is satisfied that this is an appropriate matter in which to make a sequestration order as against Hui Qun Hu. 

I certify that the preceding six (6) paragraphs are a true copy of the reasons for judgment of Judge Street

Date: 17 May 2016