Hijazi v CGU Workers Compensation
[2012] FMCA 956
•9 October 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HIJAZI v CGU WORKERS COMPENSATION & ANOR | [2012] FMCA 956 |
| BANKRUPTCY – Annulment – no satisfaction the sequestration order should not have been made – discretion where debtor was not co-operative with his trustee and is still indebted in substantial sum. |
| Bankruptcy Act 1966 (Cth), s.153B Workers Compensation Act 1987, ss.169, 170 Federal Magistrates Court (Bankruptcy) Rules 2006 |
Glambed v GIO Workers Compensation (NSW) Ltd
[1999] FCA 648
(23 October 1997), NSW Court of Appeal, unreported
(1987) 16 FCR 396
[1999] FCA 189
Employers Mutual Indemnity (Workers Compensation) Limited v A. Donald Pty Limited
Frank Re; Ex parte Piliszky
Hudson v Whalan
| Applicant: | GHASSAN HIJAZI |
| First Respondent: | CGU WORKERS COMPENSATION |
| Second Respondent: | NICOLS & BRIEN |
| File Number: | SYG 1619 of 2012 |
| Judgment of: | Raphael FM |
| Hearing date: | 9 October 2012 |
| Date of Last Submission: | 9 October 2012 |
| Delivered at: | Sydney |
| Delivered on: | 9 October 2012 |
REPRESENTATION
| For the Applicant: | Mr Hijazi in person |
| Solicitors for the Respondent: | Mr K Metlej |
| Solicitors for the Second Respondent: | Gadens |
ORDERS
Application to annul dismissed.
Applicant to pay the Trustee’s costs to be taxed, if not agreed in accordance with the Federal Magistrates Court (Bankruptcy) Rules 2006.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1619 of 2012
| GHASSAN HIJAZI |
Applicant
And
| CGU WORKERS COMPENSATION |
First Respondent
| NICOLS & BRIEN |
Second Respondent
REASONS FOR JUDGMENT
This application to annul, pursuant to s.153B of the Bankruptcy Act 1966 (Cth)[1], a sequestration order made against Mr Hijazi on 8 October 2008 was filed on 25 July 2012. The basis of the sequestration order was a debt alleged to be owed by Mr Hijazi to CGU Workers Compensation in respect of workers compensation premiums for a business that he was running between about 2004 and 2006. Judgment was dated 13 December 2006. The essence of Mr Hijazi’s submissions to this court is that this judgment should never have been entered because he did not owe CGU any money for the relevant period, having not paid wages sufficient to require him to pay any workers compensation premiums at all. He says that when he found out about the judgment he made inquiries and was told that he had to file a wage declaration, that he did on 6 November 2007, but by that time the judgment had already been entered.
[1] “Act”
Mr Hijazi did not seek to have the judgment set aside nor to appeal it and because of the nature of the debt this causes him some problems. In Glambed v GIO Workers Compensation (NSW) Ltd [1999] FCA 648 Emmett J followed a decision of the New South Wales Court of Appeal in Employers Mutual Indemnity (Workers Compensation) Limited v A. Donald Pty Limited (23 October 1997), NSW Court of Appeal, unreported, per Priestley, Stein and Cole JA, that made it clear that the calculation of premiums in respect of workers compensation matters was the subject of a code contained in ss.169 and 170 of the Workers Compensation Act 1987, that required any challenge to the amount of the premium to be made administratively.
Emmett J said at [16]:
“[16]Those observations suggest to me that any ground of appeal from the determination of the Magistrate, asserting a misinterpretation of the Workers Compensation Act in preventing any challenge to the calculations, is doomed to failure.
[17]On the material presently before me, I do not consider that there is any basis for concluding that there is any prospect of success for the stated case. That, of course, is not to pre-empt the outcome. I am not sitting on the hearing of the stated case. That is a matter for the court before which it comes. All I can determine is whether or not there is any basis for concluding that the court might ultimately go behind the judgment of the Local Court. As I have said, there is nothing in the material before me at present which suggests that this Court should have any doubt as to the existence of the debt for which the certificate has been given.”
The difficulties that Mr Hijazi might face in impugning this judgment are only one part of the concern that I have in granting his application. Under s.153B of the Act the court should only annul the bankruptcy if it is satisfied that the sequestration order ought not to have been made and also that it is appropriate, in its discretion, to grant such an order. Given the difficulties to which I have just referred and the fact that at no stage did Mr Hijazi attempt to overturn the judgment or seek an administrative review of the premiums charged I would not be able to satisfy myself in accordance with the test set out by Fisher J in Frank Re; Ex parte Piliszky (1987) 16 FCR 396 at [403] approved by the Full Court of the Federal Court in Hudson v Whalan [1999] FCA 189 at [10] that the sequestration order ought not to have been made.
But even if I am wrong about this I would not be prepared to grant any annulment in the exercise of my discretion. Mr Nicols, who is Mr Hijazi’s trustee, has put on a detailed affidavit and exhibits which indicate that Mr Hijazi has substantial creditors to an amount that might well exceed $400,000.00 that have not yet been paid. In addition Mr Hijazi has failed to file income tax returns since about 2005 and has, in all probability, a considerable debt to the Taxation Commissioner although this has not yet been properly calculated.
In the affidavit Mr Nicols also points out that Mr Hijazi has been less than forthcoming in relation to his affairs and has not assisted Mr Nicols in the administration of his estate. The affidavit goes on to point out that there are serious discrepancies between the assets and income that Mr Hijazi provided in his statement of affairs and, in an affidavit filed in the Family Court of Australia on 30 September 2010, relating to some proceedings between himself and his wife.
I was also advised this morning that shortly after the current sequestration order was made this court in its Melbourne Registry, made another sequestration order against Mr Hijazi in respect of a debt to IG Markets Limited in the sum of $31,788.95. There is no evidence before me that this debt has been paid and whilst this second sequestration order may well be invalid, its existence provides me with another ground for declining to exercise my discretion to annul.
Mr Hijazi tells me that he has certain assets. He certainly is the owner of a property in Lakemba which may have some value. It has taken until 2012 and an order of this court for Mr Hijazi to hand over to his trustee the title deeds of that property. This conduct again goes against the grant of the annulment. He also has, allegedly, some money in escrow in ASIC which appears to be owing to a company that he promoted but of which he is no longer able to be a director.
As I explained to Mr Hijazi such funds, if they belong to him, will have been assigned to his trustee pursuant to the provisions of the Act. The state of Mr Hijazi’s financial affairs is confusing but it is clear that there are some assets and it is very possible that he speaks the truth when he tells me that some of his creditors, who appear to be family or friends, may not press for full payment of the original debt. These are all circumstances which led me to suggest to Mr Hijazi that the current application was misguided and that he would be better off trying to bring about a compromise of his creditors through his trustee under the provisions of the Act. This, to my mind, is the most appropriate course of action.
I dismiss the application to annul. I order that the Applicant pay the Trustee’s costs to be taxed, if not agreed, in accordance with the Federal Magistrates Court (Bankruptcy) Rules 2006.
I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of Raphael FM
Date: 18 October 2012
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