Guo v Ong

Case [2022] FedCFamC2G 384

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Guo v Ong [2022] FedCFamC2G 384

File number(s): SYG 1546 of 2021
Judgment of: JUDGE GIVEN
Date of judgment: 29 April 2022
Catchwords: BANKRUPTCY – application for review of Registrar’s decision – redundancy of change of venue in a post-pandemic world  
Legislation:

Bankruptcy Act 1966 (Cth) ss 40, 41, 52

Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 184, 254, 256

Federal Circuit Court of Australia Act1999 (Cth) ss 52, 104

Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth)
Cases cited:

Allison v Murphy [2021] FCAFC 232

Bechara v Bates (2021) 388 ALR 414

Mulhern v Pearce [2012] FMCA 1186

Robson as former trustee of the estate of Samsakopoulos v Body Corporate for Sanderling at Kings Beach CTS 2942 (2021) 392 ALR 93

Wren v Mahony (1972) 126 CLR 212
Division: Division 2 General Federal Law
Number of paragraphs: 68
Date of hearing: 29 April 2022
Place: Sydney
Solicitor for the Applicant: Mr A Grifoni of Grifoni Legal
The Respondent: In person
Solicitor for the Trustee: Mr S Sankey of Wallmans Lawyers

ORDERS

SYG 1546 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:

JIAN MIN GUO

Applicant
AND:

SHAO TING ONG

Respondent

ORDER MADE BY:

JUDGE GIVEN

DATE OF ORDER:

29 APRIL 2022

THE COURT ORDERS THAT:

1.Order 2 made on 23 November 2021 for the sequestration of the estate of Shao Ting Ong under the Bankruptcy Act 1966 (Cth) is affirmed.

2.The application for review filed on 15 December 2021, and as amended, is dismissed.

3.Order 3 made by Registrar Gitsham on 23 November 2021 is vacated and instead the respondent debtor pay the applicant creditor’s costs of the proceedings fixed in the sum of $11,147.50, such costs to be paid in the priority accorded by s 109(1)(a) of the Bankruptcy Act 1966 (Cth).

Note: The form of the order is subject to the entry in the Court’s records.

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

EX TEMPORE REASONS FOR JUDGMENT
(revised from transcript)

JUDGE GIVEN:

  1. I have before me an application for review of a decision of a Registrar who, on 23 November 2021, made an order for the sequestration of the estate (sequestration order) of Shao Ting Ong (respondent debtor). At the time that the Registrar made the sequestration order, she had power to make it pursuant to s 254(2)(i) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (Court Act), read together with r 2.02(1) of the Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021

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AGLC
Guo v Ong [2022] FedCFamC2G 384
Case
[2022] FedCFamC2G 384
Decision Date

CaseChat Overview and Summary

This case involves an application by Shao Ting Ong (the respondent debtor) for a review of a decision by Registrar Gitsham, who had made a sequestration order of the respondent debtor's estate. The application was made within the prescribed time under the Bankruptcy Rules. The applicant creditor, Jian Min Guo, had obtained a final judgment against the respondent debtor in the South Australian proceedings. The Bankruptcy Notice was issued by the Australian Financial Security Authority (AFSA) on 19 April 2021, relying on the Judgment entered on 26 February 2020. The respondent debtor failed to comply with the requirements of the Bankruptcy Notice on or before 27 May 2021, which constituted the act of bankruptcy. The Creditor's Petition was presented on 13 August 2021, relying on the respondent debtor's failure to comply with the Bankruptcy Notice. The respondent debtor filed an application with the Court for review of the sequestration order on 12 December 2021. The respondent debtor was required to comply with Rule 7.05 of the Bankruptcy Rules, which imposed additional requirements on her if such a review application was made. Rule 7.06 of the Bankruptcy Rules was triggered by the making of such an application and imposed an obligation on the trustee to furnish the Court with a report, which must be filed at least five days before the date fixed for the hearing of the review application and must be in the form of an Affidavit.

The Court considered the evidence before it, which included Affidavits of service of the Bankruptcy Notice and Creditor's Petition, the Affidavit verifying the Creditor's Petition, the Trustee's Report, the Affidavit of the respondent debtor, and other relevant documents. The Court noted that the respondent debtor had not complied with her obligations under Rule 7.05 of the Bankruptcy Rules and had sought to put before the Court a document which was inadmissible and not probative of any relevant matter to the proceeding. The Court found that the applicant creditor had established the matters required by Section 52(1) of the Bankruptcy Act, which required the applicant creditor to prove the matters stated in the Creditor's Petition, its service, and the fact that the debt on which the petitioning creditor relied was still owing. The Court dismissed the application for review and upheld the sequestration order made by Registrar Gitsham on 23 November 2021. The Court also made orders as to costs, which were not challenged by the respondent debtor.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Rule 7.05 of the Bankruptcy Rules imposes additional requirements on the respondent debtor if such review application is then made, and thereafter, r 7.06 of the Bankruptcy Rules is triggered by the making of such an application and imposes an obligation on the trustee to furnish the Court with a report, which must be filed at least five days before the date fixed for the hearing of the review application and must be in the form of an Affidavit. Evidence The evidence before me today is:(a)an Affidavit of Service of Bankruptcy Notice of David Geoffrey Chambers made 11 May 2021 (First Chambers Affidavit); (b)the Affidavit verifying the Creditor's Petition of Ziyu Guo made 12 August 2021;(c)an Affidavit of Service of Creditors Petition of David Geoffrey Chambers made 14 September 2021 (Second Chambers Affidavit); (d)the Affidavit of Andrew Aravanis made 20 April 2022 annexing the Trustee’s Report pursuant to r 7.06 of the Bankruptcy Rules which was filed on the same date and is made in accordance with subrule 7.06(5);(e)the Affidavit of Anthony John Grifoni (Grifoni Affidavit) sworn 28 April 2022 which deposes to the background of the matter;(f)an Affidavit of search sworn by Anthony John Grifoni on 28 April 2022 (Affidavit of Search); (g)an Affidavit of debt made by Ziyu Guo sworn 28 April 2022 which will be referred to as the Affidavit of debt (Affidavit of Debt); and(h)an Affidavit affirmed by the respondent debtor on 27 April 2022. While I note that a number of other Affidavits have been filed by the respondent debtor since the time she filed the review application in December of 2021, each of them seemed to be an updated version of its antecedent. Accordingly, I confirmed with the respondent debtor that her most recent Affidavit, being that made on 27 April 2022, was intended to replace the others that she has filed since 14 December 2021 and she confirmed that this was so. The respondent debtor also sought to put before the Court a document which had been filed as correspondence on 27 April 2022. That correspondence was an email from a solicitor, addressed to the applicant, which described various matters pertaining to a criminal proceeding in which the respondent debtor is involved. The content of the email is not only hearsay, it appeared to simply repeat back to the respondent debtor matters as to which she had herself instructed the solicitor. The respondent debtor, when asked what the document went to, described it as a letter of support from her criminal solicitor in relation to the bankruptcy matter and she told the Court that it emphasised that she required the money which would otherwise be able to meet the amount the subject of the Creditor’s Petition, in order that she pay her criminal lawyer for those proceedings. The document was not only inadmissible, but it was not probative of any relevant matter to the proceeding and accordingly it was rejected. As noted previously, the Court is to hear the Creditor’s Petition anew and the matters which require proof are provided by s 52(1) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) which in summary requires that the applicant creditor establish:(a)the matters stated in the Creditor’s Petition; (b)its service; and(c)the fact that the debt on which the petitioning creditor relies is still owing. On 26 February 2020, Jian Min Guo (applicant creditor) obtained a final judgment, the execution of which has not been stayed. The respondent debtor admits that she took no steps towards staying it. Background

Decision

Reasons for decision

On 26 February 2020, the applicant creditor filed judgment pursuant to an offer to consent to judgment by the respondent debtor in the South Australian proceedings. Judgment was entered in favour of the applicant creditor against the respondent debtor for the sum of $166,997.90 inclusive of interest and costs (Judgment). Bankruptcy Notice BN 252576 was issued by Australian Financial Security Authority (AFSA) on 19 April 2021, relying on Judgment entered on 26 February 2020 in the South Australian proceedings for the sum of $166,997.90. The Bankruptcy Notice was personally served on the respondent debtor on 6 May 2021 by process server David Geoffrey Chambers. The respondent debtor failed to comply with the requirements of the Bankruptcy Notice on or before 27 May 2021. This failure to comply constituted the act of bankruptcy for the purposes of s 40 of the Bankruptcy Act. The Creditor's Petition was presented on 13 August 2021 relying on the respondent debtor's failure to comply with the Bankruptcy Notice. The Affidavit verifying the Creditor's Petition was sworn by the applicant creditor's son Ziyu Guo on 12 August 2021. The Creditor's Petition and all supporting Affidavits and Trustee Consent to Act were personally served on the respondent debtor on 13 September 2021 by process server David Geoffrey Chambers. As noted on 23 November 2021, Registrar Gitsham made the sequestration order. Following the making of the sequestration order, the respondent debtor filed an application with the Court for review of that decision on 12 December 2021, which by reference to r 2.02(3) of the Bankruptcy Rules was made within time. The matter was listed before me for a first Court date on 4 February 2022. While being within time, the application for review sought the following orders (errors in original):1.The orders made by Registrar Gitsham on 23 November 2021 in proceeding SYG1546/2021 be set aside, pursuant to s104(3) of the Federal Circuit Court of Australia Act 1999 (Cth).2.The creditor’s petition filed by the creditor be dismissed. 3.The Court make no order as to costs.4.The Court make no order to Trustee costs. The Affidavit in support of the review application which was affirmed on 14 December 2021 stated as follows:I will resubmit the Affidavit as I am still waiting to get full legal advice and guidance on the review. Also filed on 15 December 2021 was an incomplete Form B13, which is a Notice to Creditors under Part 9 of the Bankruptcy Rules. By the time the matter came before me for its first Court date on 4 February 2022, despite having been on foot for some seven weeks, the respondent debtor had not complied with her obligations under r 7.05 of the Bankruptcy Rules. I explained to the respondent debtor that she was required to so comply with that rule, and I made orders inter alia that she do so by 25 February 2022. On that occasion, the respondent debtor sought that the matter adjourn for a period because she wished to obtain legal representation. The fact that she had not done so in the weeks following making her application for review was of concern, and it was impressed upon her that if she desired legal representation, it was a matter for her to obtain it and the matter would not adjourn endlessly in order to enable that to occur.

Ratio Decidendi

Legal Principle Established

I have before me an application for review of a decision of a Registrar who, on 23 November 2021, made an order for the sequestration of the estate (sequestration order) of Shao Ting Ong (respondent debtor). At the time that the Registrar made the sequestration order, she had power to make it pursuant to s 254(2)(i) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (Court Act), read together with r 2.02(1) of the Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth) (Bankruptcy Rules) and Item 9 of Schedule 1 of Part 1 to the Bankruptcy Rules. Pursuant to s 256(1) of the Court Act that section has the effect that a party to proceedings in which a Registrar has exercised delegated powers under s 254 may apply to the Court for review of that exercise of power within a prescribed time. The time prescribed for a review of this kind is within 21 days after the day on which the power is exercised pursuant to r 2.02(3) of the Bankruptcy Rules. Rule 7.05 of the Bankruptcy Rules imposes additional requirements on the respondent debtor if such review application is then made, and thereafter, r 7.06 of the Bankruptcy Rules is triggered by the making of such an application and imposes an obligation on the trustee to furnish the Court with a report, which must be filed at least five days before the date fixed for the hearing of the review application and must be in the form of an Affidavit. Evidence The evidence before me today is:(a)an Affidavit of Service of Bankruptcy Notice of David Geoffrey Chambers made 11 May 2021 (First Chambers Affidavit); (b)the Affidavit verifying the Creditor's Petition of Ziyu Guo made 12 August 2021;(c)an Affidavit of Service of Creditors Petition of David Geoffrey Chambers made 14 September 2021 (Second Chambers Affidavit); (d)the Affidavit of Andrew Aravanis made 20 April 2022 annexing the Trustee’s Report pursuant to r 7.06 of the Bankruptcy Rules which was filed on the same date and is made in accordance with subrule 7.06(5);(e)the Affidavit of Anthony John Grifoni (Grifoni Affidavit) sworn 28 April 2022 which deposes to the background of the matter;(f)an Affidavit of search sworn by Anthony John Grifoni on 28 April 2022 (Affidavit of Search); (g)an Affidavit of debt made by Ziyu Guo sworn 28 April 2022 which will be referred to as the Affidavit of debt (Affidavit of Debt); and(h)an Affidavit affirmed by the respondent debtor on 27 April 2022. While I note that a number of other Affidavits have been filed by the respondent debtor since the time she filed the review application in December of 2021, each of them seemed to be an updated version of its antecedent. Accordingly, I confirmed with the respondent debtor that her most recent Affidavit, being that made on 27 April 2022, was intended to replace the others that she has filed since 14 December 2021 and she confirmed that this was so. The respondent debtor also sought to put before the Court a document which had been filed as correspondence on 27 April 2022. That correspondence was an email from a solicitor, addressed to the applicant, which described various matters pertaining to a criminal proceeding in which the respondent debtor is involved. The content of the email is not only hearsay, it appeared to simply repeat back to the respondent debtor matters as to which she had herself instructed the solicitor. The respondent debtor, when asked what the document went to, described it as a letter of support from her criminal solicitor in relation to the bankruptcy matter and she told the Court that it emphasised that she required the money which would otherwise be able to meet the amount the subject of the Creditor’s Petition, in order that she pay her criminal lawyer for those proceedings.