Hilltops Council v Parris
[2017] FCCA 1789
•11 August 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| HILLTOPS COUNCIL v PARRIS | [2017] FCCA 1789 |
| Catchwords: BANKRUPTCY – Review of Registrar’s decision to make a sequestration Order – Debtor claims health and other reasons should have resulted in him being granted an adjournment – an adjournment was granted by the Registrar – Debtor also challenges the amount in issue between the parties – however no action taken by the Debtor following consent orders made in the Land and Environment Court (NSW) that included orders for the Debtor to pay the Council’s costs – costs certificates issued and ultimately entered as judgment debts in the District Court of New South Wales – onus on Debtor to establish solvency or other relevant reason – general claims made by the Debtor not sufficient to discharge the onus – no assets and no income (other than a pension) – other general claims by the Debtor not established – Application for Review dismissed. |
| Legislation: Bankruptcy Act 1966, ss.32, 52, 153B |
| Cases cited: Hutchings v Australian Securities and Investments Commission [2017] FCA 858 Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71 Ling v Enrobook Pty Ltd (1997) 143 ALR 396 Martin v Commonwealth Bank of Australia (2001) 217 ALR 634 Richmond v BMW Australia Finance Ltd (No.1) [2009] FCAFC 24 Totev v Sfar (2008) 167 FCR 193 Trojan v Corporation of the Town of Hindmarsh (1987) 16 FCR 37 |
| Applicant: | HILLTOPS COUNCIL (ABN 33 984 256 429) |
| Respondent: | GEORGE PARRIS |
| File Number: | CAG 81 of 2016 |
| Judgment of: | Judge Neville |
| Hearing date: | 15 June 2017 |
| Date of Last Submission: | 13 July 2017 |
| Delivered at: | Canberra |
| Delivered on: | 11 August 2017 |
REPRESENTATION
| Solicitors for the Applicant: | Bradley Allen Love Lawyers |
| Counsel for the Respondent: | Self-represented |
ON A FINAL BASIS, THE COURT ORDERS THAT:
Pursuant to section 52(3) of the Bankruptcy Act 1966 (Cth), Orders 1 and 2 of Orders made by Registrar Wall on 16 December 2016 be stayed for 21 days, that is until close of business on 1 September 2017.
Should the Respondent not have paid the sum owing to the Applicant, being $109,180.59 by close of business on 1 September 2017, the Application for Review filed by the Respondent on 30 May 2017 will be dismissed with no further notice given to the parties.
Should the Respondent not have paid the sum owing to the Applicant, being $109,180.59 by close of business on 1 September 2017, the Respondent Debtor shall pay the Applicant Council’s costs, either as agreed or taxed.
All extant Applications are dismissed and the matter is now finalised and will be removed immediately from the docket.
THE COURT NOTES THAT:
(A)The costs of these proceedings to be paid by the Applicant in the event that the debt is not paid in Order 3 are to include the costs of the Application before Registrar Wall on 16 December 2016, being $8,099.50.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT CANBERRA |
CAG 81 of 2016
| HILLTOPS COUNCIL (ABN 33 984 256 429) |
Applicant
And
| GEORGE PARRIS |
Respondent
REASONS FOR JUDGMENT
Introduction
On 17th October 2016, the Applicant, Hilltops Council (“the Council”), filed a creditor’s petition. That petition set out that the Respondent Debtor, Mr Parris, owed the Council $107,861.06 pursuant to a judgment of the District Court of New South Wales, plus accrued interest of $1319.53. Accordingly, the total amount owing to the Council is $109,180.59.
The costs Order arose out of litigation between the parties (the Applicant was described in that litigation as “Young Shire Council”) in the Land and Environment Court of New South Wales concerning a caravan park in that Shire which Mr Parris had sought to develop but was refused permission to do so by the Council. There had been an ongoing contest between Mr Parris and the Council for some five years or thereabouts. A copy of the determination/resolution of the matter in that Court, together with relevant costs certificates, are annexed to Mr Parris’s affidavit, filed 13th July 2017.
It is not insignificant that the proceedings in the Land and Environment Court were resolved by consent, including the costs Orders that now give rise to the bankruptcy proceedings in this Court. It is also not insignificant that in those proceedings, Mr Parris was legally represented, indeed by Senior Counsel.
The date of the Orders resolving the matter in the Land and Environment Court are dated 19th May 2015.
The Costs Certificates, provided by Mr Parris, are for $52,109.00 and $31,488.00
On 16th December 2016, the Registrar made a sequestration Order, together with an Order for costs Order in the sum of $8,099.50. The date of the act of bankruptcy was stated to be 5th September 2016.
On 30th May 2017, the Bankrupt, Mr Parris, filed an Application for Review in relation to the Registrar’s Orders of 16th December 2016.
No formal grounds for the review are set out in the Application. However, Mr Parris (now a self-represented litigant) refers to correspondence annexed to the Application from which he seeks that the Court glean various grounds of review.
Mr Parris is currently aged just on 76 years. He has cancer of the prostate but which has been in remission. He claims to have some suicidal ideation and, according to medical records he has recently provided, he is feeling somewhat overwhelmed by the litigation and other matters in his life. Some of these matters are addressed below.
Doing the best that the Court can in these less than ideal circumstances, by reference to (i) the Orders sought by Mr Parris, (ii) the correspondence attached to his Application for Review, and (iii) a later-filed affidavit, filed 13th July 2017 at the direction of the Court (pursuant to Orders made on 15th June 2017), the following appear to be the grounds upon which Mr Parris makes his Application for Review:
(a)Mr Parris was refused a grant of legal aid;
(b)Mr Parris says that he is in very poor health (e.g. diabetes, prostate cancer) which, among other things, has led him to have suicidal ideation;
(c)Mr Parris contends that the amount of costs sought by the Council is inaccurate and does not accord with the agreement that was reached (he says) at the time of the Land and Environment proceedings that culminated in the Orders dated 19th May 2015;
In trawling through the material annexed to Mr Parris’s affidavit, filed 13th June 2017, I note the following:
(a)From his not insignificant medical records, Mr Parris is dealing with a number of medical and personal/family issues, as well as his ongoing dispute with the local Council regarding a Development Application that has not been successful;
(b)His assessment by relevant medical personnel regarding his state of mental health suggest to me that now because of a change in medication his mood and “affect” are not quite so low as they were, for example, last year. His risk assessment in relation to mental health issues is, as I read this material, “low”;
(c)Mr Parris, at different times, has communicated with the Council in relation to either or both to challenge what the agreement was in relation to “costs”, and to propose a time-payment plan for the payment of said costs. Clearly, having regard to the present litigation in this Court, there has been no “joy” for Mr Parris on any of these fronts;
(d)Mr Parris contends that he has been advised by the Australian Financial Security Authority that he should seek from the Court one or all of the following remedies: set aside the sequestration Order, seek to have the bankruptcy annulled (s.153B of the Bankruptcy Act 1966), and or to make a “Composition” with the Council under s.73 of the Act;
(e)Finally, Mr Parris says that the Registrar did not, either at all or otherwise properly so, allow him an adjournment in order to seek the necessary relief, most particularly so that he might seek to correct the amount(s) in dispute with the Council (see his letter addressed to this Court, dated 1st April 2017, which is annexed to his Application for Review).
Before proceeding, it is important that I record, and remind myself (and others), some very recent remarks of Allsop CJ in Hutchings v Australian Securities and Investments Commission.[1] At [4] – [6], the Chief Justice said:
[4] As an introduction to these reasons, two things should be emphasised which are central to every application in the bankruptcy jurisdiction almost without exception. First, the jurisdiction is not about debt collection; it is about the change of status of insolvent persons. The question of solvency or insolvency is at the root of the jurisdiction. That said, however, insolvency can arise from a whole raft of reasons, and those reasons have a connection with the second matter which attends every single application, and that is not just the economic, but the human consequences that attend the change of status and the change of lives of people who are made bankrupt.
[5] The importance of this is best understood by reminding oneself of what one of the masters of bankruptcy in this country, Deane J, said in a dissenting judgment in Kleinwort Benson Australia Ltd v Crowl [1988] HCA 43; 165 CLR 71. Though the circumstances to which his Honour was referring do not describe accurately or completely the circumstances of Mr Hutchings, some of the matters to which Deane J referred should be understood in the background of this application. He said the following at 82:
It is true that the strictness of the above rules leaves open the possibility of abuse by unscrupulous debtors. That is, however, and unavoidable concomitant of the protection of ordinary people faced with the threat of being made bankrupt. Many, and possibly most, of the petitions in the bankruptcy lists of this country seek the bankruptcy of honest, albeit unbusinesslike or naive, people whose indebtedness springs from causes which evoke sympathy rather than indignation. For such people, bankruptcy does not represent a game to be played to the frustration of their creditors. It represents a pronouncement of failure and humiliation attended by the fear of unknown consequences and the susceptibility to criminal punishment for what would otherwise be innocent conduct.
(citations omitted)[6] … The importance of the passage is to remind myself of the centrally human relationship between the notion of insolvency and its consequences.
[1] Hutchings v Australian Securities and Investments Commission [2017] FCA 858.
Creditor’s Grounds of Opposition to Application
The petitioning creditor’s Notice of Grounds of Opposition to Mr Parris’s Application for Review, was filed on 7th June 2017. That Notice as in the following terms:
Hilltops Council, applicant in this matter and respondent to the Application for Review (Council) filed by the respondent (Mr Parris), intends to oppose the application:
1) On 17 October 2016 the Council filed a Creditor’s Petition with this Honourable Court. The matter was listed for a first return date of 25 November 2016.
2) On 25 November 2016, on application by Mr Parris, the Court adjourned the matter to 16 December 2016 and ordered Mr Parris to file any notice stating grounds of opposition to the Creditor’s Petition.
3) Mr Parris did not file any notice stating grounds of opposition.
4) On 16 December 2016 the Court ordered that the estate of Mr Parris be sequestrated.
5) In respect of Mr Parris’ grounds to annul the bankruptcy due to ill health and lack of legal representation:
a) these were sufficiently addressed during the hearings of 25 November 2016 and 16 December 2016; and
b) these are not proper grounds for annulment.
6) In respect of Mr Parris’ ground to annul the bankruptcy due to “incorrect amounts” stated in the judgment (which is not admitted), the respondent says that:
a) Courts should not go behind a judgment as a matter of course;
b) Mr Parris has not disclosed any substantial reasons for questioning the judgment is based on a true debt: Wren v Mahony (1972) 126 CLR 212 at page 225;
c) the Court “should not go behind a judgment where the grounds upon which the judgment is challenged are such that, if accepted, they would only support a finding that the amount of the debt be reduced and would not support a finding that there was, in truth, no debt at all”: Katter v Melhem (No 2) [2014] FCA 1176 at [77];
d) Mr Parris has failed to explain, either adequately or at all, what incorrect amounts were allegedly relied upon in error by the Council, why they may justify the annulment of his bankruptcy, or the reason for his delay in raising the issue to date.
7) In respect of Mr Parris’ ground to annul the bankruptcy so as to allow him to make an offer of composition under section 73 of the Bankruptcy Act:
a) Mr Parris’ application in this respect is misconceived and doomed to fail;
b) this Court, respectfully, does not have jurisdiction under the Bankruptcy Act, or any Act, to order that Mr Parris provide to the Trustee in bankruptcy a proposal for a composition for his debts, nor that the Council accept Mr Parris’ proposal.
8) Mr Parris is insolvent and the Trustee in bankruptcy, in his report to creditors dated 6 February 2017, advises that no distribution will be made to creditors unless circumstances change.
9) The application:
a) fails to disclose a reasonable cause of action; and
b) otherwise contains embarrassing and vexatious material.
Affidavit in support
The Council relies upon the affidavit of Hea-Hyun Ariel Chong sworn 7 June 2017.
Submissions on behalf of Petitioning Creditor
The Applicant filed submissions on 28th June 2017. They were as follows:
Preliminary
1) These submissions are written in compliance with Judge Neville’s order dated 15 June 2017, and relate to the Respondent’s Application for Review dated 28 May 2017 (“the Application”).
2) In these submissions, the Respondent (being the applicant to the Application) is referred to as “Mr Parris”. The Applicant (being the respondent to the Application) is referred to as “Council”.
3) Mr Parris seeks a review of Registrar Wall’s order dated 16 December 2016 that the estate of Mr Parris be sequestrated under the Bankruptcy Act 1966.
4) In defence of the Application, Council has filed, served and relies upon an affidavit of Hea-Hyun Ariel Chong sworn 7 June 2017 which sets out the relevant history to the matter.
The Land and Environment Court Costs Orders
5) The orders on which the bankruptcy notice, which ultimately led to the sequestration order against Mr Parris, were based, originated from costs orders in three related proceedings in the New South Wales Land and Environment Court (“the LEC”). A useful summary of those proceedings can be found from pages 10 to 17 of the Exhibit Book to Ms Chong's affidavit.
6) In simplest terms, the objection of Mr Parris to the costs orders in the LEC arises from his misunderstanding as to what costs had been previously agreed between him and Council. In the documents annexed to his Application, Mr Parris relies on an email from Alan Bradbury of BAL Lawyers, solicitor for Council, dated 8 September 2014 by which Council conveyed their offer to accept $12,500 for “costs thrown away” in relation to one costs order entered by the LEC. It is true that that amount was later negotiated down to $10,000, and paid by Mr Parris.
7) However, the relevant history to the costs orders in the LEC is this:
a) Three proceedings were commenced by Mr Parris in the LEC in late 2013 / early 2014.
b) On 8 September 2014, Mr Parris amended one of his applications (referred to throughout the costs assessment documents as “the Tourist Park Application”), which resulted in an order that Mr Parris pay Council's costs thrown away by reason of the amendment.
c) On 8 September 2014, Council offered to accept $12,500 for those costs thrown away. As noted above, that was soon after reduced, by agreement, to $10,000 and paid by Mr Parris.
d) On 12 May 2015, the first of Mr Parris' LEC proceedings was finalised, by way of discontinuance, subject to an order that he pay Council's costs of those proceedings.
e) On 9 June 2015, final orders were then made in the remaining two proceedings - which included the Tourist Park Application - that included orders that Mr Parris pay Council's costs in relation to those proceedings also.
f) A bill of costs was then served on 23 October 2015, and certificates of the assessed costs were issued by the appointed costs assessor on 2 May 2016.
8) In issuing the costs certificates, the costs assessor provided detailed reasons which can be found at exhibit AHC8 to Ms Chang's affidavit. Relevantly to the present debate, Mr Parris did not lodge a formal objection to the bill of costs, though his wife did provide some overview on the “costs thrown away” issue. However, what Mr Parris does not seem to appreciate is that the “costs thrown away” order that he paid in the Tourist Park Application related only to those costs wasted as a result of his 8 September 2014 amendment. That order did not encompass the entire proceedings, or reduce his liability in any way for the subsequent costs orders. It is also clear from the costs assessor's reasons that he (that is, the costs assessor) understood the relevance of the costs thrown away order, and properly took it into account in his costs assessment.
9) During oral submissions during the hearing of this Application, Mr Parris expressed that his goal is to negotiate a fair outcome with Council, which his family may then be able to pay, but that they cannot pay the amounts as presently ordered. Respectfully, this desired outcome is not one which this Honourable Court should entertain - either under the grounds raised by Mr Parris, or at all.
The Grounds for Review
a) Health Concerns
10) As set out in Ms Chang's affidavit, Mr Parris’ poor health was considered by Registrar Wall at the time that the sequestration order was made. Without intending to sound unsympathetic to Mr Parris’ medical situation, it in itself cannot justify setting aside the sequestration order.
11) It is not in dispute that Mr Parris is impecunious, with his estate comprising only of $50 held in the bank. In the absence of Mr Parris bringing to this Honourable Court any evidence that the LEC costs orders are in some way defective, this ground for review should, respectfully, be disregarded.
b) Alleged Incorrect Amounts
12) For the reasons explained in paragraphs 5 to 9 above, Council says the LEC costs orders were correctly assessed. In any event, the time for objection by Mr Parris has long since passed. This notwithstanding, even if Mr Parris were to be given leave to argue the “costs thrown away” issue, and he were entirely successful in relation to that, the impact would still only be nominal in the context of what is owed by Mr Parris to Council.
13) In relation to this, it is relatively well settled law that a court should not “go behind a judgment where the grounds upon which the judgment is challenged are such that, if accepted, they would only support a finding that the amount of the debt be reduced and would not support a finding that there was, in truth, no debt at all”.
14) Here the LEC costs orders are in excess of $100,000. Even if Mr Parris were not mistaken about the “costs thrown away” point, he still would owe in excess of $90,000 to Council. In circumstances where he holds only $50 in his bank account, this is not an appropriate case for the sequestration order be set aside - particularly where a trustee in bankruptcy has already commenced working on the bankrupt estate and will be prejudiced in relation to his rights under the Bankruptcy Act 1966, should his appointment eventuate to become a nullity.
c) Section 153B Annulment I Section 73 Composition
15) Mr Parris also makes reference in his Application to wanting to make an application for annulment under section 153B, or for a composition of his debts under section 73.
16) In relation to the contemplated section 153B annulment, that is distinct to the setting aside of the sequestration order, and should only be allowed if the court can be satisfied that the order ought not to have been made. Put simply, Mr Parris will need to satisfy this court of his solvency. Here, Mr Parris has not attempted to do so. Indeed, in his oral submissions, Mr Parris conceded that he cannot pay the costs orders, but rather hopes to negotiate an outcome which his family will be able to pay for him. As is its right, Council does not wish to negotiate further with Mr Parris, as it has already had its costs duly assessed.
17) In relation to the contemplated section 73 composition application, that section entitles a bankrupt to put a proposal to his trustee for a composition of his or her debt. However, it cannot be used to set aside a sequestration order. Indeed, if the sequestration order were set aside, a section 73 composition would become impossible, as Mr Parris would no longer be a bankrupt.
Conclusion
18) The orders of Registrar Wall of 19 December 2016 should not be disturbed, with the present Application dismissed with costs.
19) Whilst there may be limited practical utility in such a costs order, costs should follow the event and Council seeks an order to that effect.
Submissions by Respondent
On 15th June 2017, the Respondent was ordered to file submissions of no more than 3 pages in length by close of business on 13th July 2017.
No submissions were received by, or on behalf of, the Respondent, Mr Parris.
Procedure for Review Application
The Full Court decisions in Martin v Commonwealth Bank of Australia and Totev v Sfar confirm that a review application regarding the decision of a Registrar is not an appeal from that decision but a hearing de novo.[2] From those decisions, the following principles should be taken to apply to the current review application and the hearing de novo.
[2] Martin v Commonwealth Bank of Australia (2001) 217 ALR 634; Totev v Sfar (2008) 167 FCR 193.
In Totev v Sfar, Emmett J set out in some detail the requirements and distinctions that apply to, or which otherwise constitute, a hearing de novo. For example, at [6] – [7], his Honour said (emphasis in original) (all references to “Federal Magistrates Court” and the Act and Rules then applicable should, of course, now be read or understood as referring to the Federal Circuit Court of Australia and to the Act and Rules of this Court as it now is):[3]
[6] Section 104(2) of the Federal Magistrates Act provides that a party to a proceeding in which a registrar has exercised any of the powers of the Federal Magistrates Court under s 102(2), or under a delegation under s 103(1), may apply to the Federal Magistrates Court for a review of that exercise of power. Under s 104(3), the Federal Magistrates Court may, on an application under s 104(2), or on its own initiative, review an exercise of power by a registrar under s 102(2) or under a delegation under s 103(1) and may make any order or orders it thinks fit in relation to the matter in respect of which the power was exercised.
[7] Rule 20.03 of the General Rules provides that the review of an exercise of power by a registrar must proceed by way of a hearing de novo. On the review, the Court may receive as evidence any affidavit or exhibit tendered before the registrar and may receive further evidence and may receive, as evidence, any transcript of the proceeding before the registrar.
[3] See also the comments by Cowdroy J in Totev v Sfar at FCR [88] – [99].
Then at [10] – [14], his Honour relevantly said (emphasis added):
[10] For a delegation of power to a registrar of the Federal Magistrates Court to be valid, the powers and functions of the registrar must be subject to review by a judge of the Federal Magistrates Court on questions of both fact and law. If the review of the exercise of the power by the registrar is by way of hearing de novo, the delegation will be valid (Harris v Caladine [1991] HCA 9; (1991) 172 CLR 84 at 95). Indeed, on one view, nothing less than a hearing de novo would be sufficient. That is to say, there must be a complete rehearing of the facts and the law as they exist when the judge reviews the order made by the registrar; otherwise, the registrar, and not the judges of the Court, would be exercising the original jurisdiction of the Court (Harris v Caladine at 164).
[11] It may be arguable that subjecting the exercise of powers or functions by a registrar to an appeal would be sufficient (Harris v Caladine at 95). However, that is not the safeguard that has been adopted in relation to the delegation of powers and functions to registrars of the Federal Magistrates Court. It is clear from r 20.03 of the General Rules that the review of a registrar’s sequestration order is to be by way of a hearing de novo.
[12] A hearing de novo is different from an appeal stricto sensu and is different from an appeal by way of rehearing. In the case of an appeal stricto sensu, the question would be whether, upon the material before the registrar, the conclusion reached by the registrar was correct. In an appeal by way of rehearing, the appellate court would rehear the matter as at the date of the appeal, but on the evidence called before the registrar, subject to a power to receive further evidence where appropriate: the rights of the parties would be determined by reference to the circumstances, including the law, as they existed at the time of rehearing (Harris v Caladine at 125). In each case any question concerning the exercise of discretion would be subject to the restrictions imposed on an appellate court in reviewing the exercise of a discretion (see House v The King [1936] HCA 40; (1936) 55 CLR 499.
[13] In the case of a hearing de novo, however, the judge reviewing the order begins afresh and exercises for himself or herself any discretion exercised by the registrar. The parties commence the proceeding again, subject to any rules concerning the use of evidence adduced before the registrar. The hearing de novo involves the exercise of the original jurisdiction and the petitioner, in the case of a bankruptcy petition, must start again, call witnesses and make out the petitioner’s case (Harris v Caladine at 124).
[14] Because the hearing of an application for review of a sequestration order is a hearing de novo, it would not be sufficient for the reviewing judge to be satisfied that the registrar made no error and simply to dismiss the application for review. The judge who hears the review application must hear the petition afresh and must be satisfied as to the matters referred to in s 52 of the Bankruptcy Act. Thus, the reviewing judge must herself or himself be satisfied with the proof of:
• the matters stated in the petition;
• the service of the petition; and
• the fact that the debt or debts on which the petitioning creditor relies is or are still owing.
The reviewing judge must also exercise afresh the discretions conferred by s 52(2).
Consideration & Disposition
The Council relies upon an affidavit of Ms Chong, filed 7th June 2017. In that affidavit, Ms Chong provided a copy of the Bill of Costs (in the Land and Environment Court proceedings) (pp.7 – 127).
Ms Chong confirmed that the costs certificates were filed in the District Court of New South Wales on 2nd August 2016 as a judgment debt. That debt formed the basis for the Bankruptcy Notice (BN 193523) filed in the current proceeding. On 17th October 2016 a Creditor’s petition was presented to this Court; it was listed for return before the Registrar on 25th November 2016.
Ms Chong deposed that Mr Parris did not attend before the Registrar on 25th November 2016. On that occasion, as deposed by Ms Chong, the Registrar noted that Mr Parris had written directly to the Court – without providing a copy to the Council – seeking an adjournment to the proceeding. As outlined by Ms Chong, the matter, on that occasion, was adjourned until 16th December 2016 with certain directions being made for Mr Parris to file relevant material set out in the Orders made on that date.
Ms Chong further deposed that on 16th December 2016, again Mr Parris did not attend before the Registrar. It was noted that the Registry of the Court had written to Mr Parris to provide him with a copy of the Orders made on 25th November 2016.
Mr Parris wrote to the Court by letter dated 9th December 2016. In that letter Mr Parris made a series of claims in relation to his health. He provided no relevant medical evidence to support those claims. A sequestration Order was made by the Registrar on that date.
On 6th February 2017, the Trustee of Mr Parris’s estate made a Report to Creditors. This Report confirmed that, among other things, Mr Parris has $50 in a [named] credit union account, he has no realisable assets, he is not liable to make income [tax] contributions, and that there will not be any dividend to creditors.
In relation to the current Application for Review (which the Council did not receive from Mr Parris), Ms Chong deposed that:
a)Mr Parris does not disclose any grounds to prove his solvency;
b)The Trustee in bankruptcy has investigated the financial affairs of Mr Parris and has confirmed that he is “hopelessly insolvent”;
c)There is no explanation by Mr Parris why he alleges that the judgment debt is wrong (which is denied);
d)The Bill of Costs earlier referred to took account of an earlier compromise in relation to costs between the parties;
e)During the proceedings before the Registrar, it was deposed by Ms Chong that Mr Parris’s health and lack of legal representation was properly taken into account;
f)The Council had not received any proposed s.73 composition from Mr Parris; and
g)She did not believe there were/are any relevant grounds upon which Mr Parris could rely to have his bankruptcy annulled.
Section 37 of the Bankruptcy Act 1966 provides:[4]
[4] For a general discussion regarding the operation of s.37, see the Full Court decision in Richmond v BMW Australia Finance Ltd (No.1) [2009] FCAFC 24.
(1) Subject to subsection (2), the Court may rescind, vary or discharge an order made by it under this Act or may suspend the operation of such an order.
(2) The Court does not have power to rescind or discharge, or to suspend the operation of:
(a) a sequestration order; or
(b) an order for the administration of the estate of a deceased person under Part XI.
Section 52(1) and (2) of the Bankruptcy Act1966 are in the following terms:
(1) At the hearing of a creditor’s petition, the Court shall require proof of:
(a) the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient);
(b) service of the petition; and
(c) the fact that the debt or debts on which the petitioning creditor relies is or are still owing;
and, if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor.
…
(2) If the Court is not satisfied with the proof of any of those matters, or is satisfied by the debtor:
(a) that he or she is able to pay his or her debts; or
(b) that for other sufficient cause a sequestration order ought not to be made;
it may dismiss the petition.
It is clear on longstanding authority that the onus rests with the debtor to establish that there are sufficient reasons that would prevent the Court making the sequestration order as sought by the creditor. Put another way, the Full Court (Davies, Wilcox and Branson JJ) in Ling v Enrobook Pty Ltd said that, as a general proposition, there is no apparent reason why a petitioning creditor should not be entitled to have a sequestration order made if the requirements of s.52 are otherwise satisfied.[5]
[5] Ling v Enrobook Pty Ltd (1997) 143 ALR 396.
There is no suggestion by Mr Parris that he is relevantly “solvent” and that he can, therefore, pay his debts as they fall due. It is not only, in this case, that Mr Parris does not wish to pay the judgment debt regularly entered against him, but also that he cannot pay that debt. His various proposals to the Council to enter into some sort of time-payment scheme or arrangement have been flatly rejected. How he would make any payment, in the light of the Trustee’s recent Report to Creditors, must be considered to be entirely speculative.[6]
[6] Generally, see the comments by the Full Court in Trojan v Corporation of the Town of Hindmarsh (1987) 16 FCR 37 and more recently in Trustees of the Franciscan Missionaries of Mary v Weir (2000) 98 FCR 447, the latter decision including a discussion of the power to grant a “stay” of the sequestration Order made by a Registrar.
To date, other than protests in correspondence, Mr Parris has taken no step (or steps) to challenge the Costs Certificates and or the terms of the consent Orders made in the Land and Environment Court in May 2015. At the time of the making of those Orders, he was legally represented by Senior Counsel. In my view, accepting his current and unfortunate circumstances surrounding his less than robust health, and his advancing years, he has presented not relevant evidence that would allow this Court to take a different course to that of the Registrar in making the sequestration Order. In my view he has had more than ample time to challenge those Orders and the costs certificates, however unlikely the prospect of success might be. The consequences of his actions then (in 2014 and 2015) are being played out (so to speak) now.
Mr Parris has not sought to appeal the sequestration Order. He has sought to have it reviewed. He has presented evidence of his recent history of poor health. However, my reading of it suggests that it is little out of the ordinary. Less than optimum health in advancing years, without more, cannot in my view constitute a relevant ground for the Court to interfere with the due processes of the Bankruptcy Act 1966 in circumstances where the petitioning creditor has properly complied with the terms of s.52 of the Act.
Apart from making generalised statements about the correctness of the amount claimed by the Council as owing to it, there is no relevant evidence from Mr Parris that the amount in question, in the face of the Costs Certificates ultimately field in the District Court as judgment debts, can be challenged on any ground. This is especially in circumstances where the original Orders of the Land and Environment Court were (a) by consent and (b) made in May 2015. No challenge to either of these factual matters has ever been mounted by Mr Parris.
In all of the circumstances, and having proper regard to the comments noted earlier in these reasons by Allsop CJ in Hutchings v ASIC, and leaving to one side the utility (or otherwise) of the Council’s course to pursue bankruptcy proceedings against a person of senior years with some ongoing health issues who has no assets and no income except a pension, there is no evidentiary or legal basis for the Application of Mr Parris to succeed.
Formally, subject to what is said below, I should also note that I accept and otherwise agree with the submissions on behalf of the Council.
Notwithstanding what I have just stated, having regard to the frailty and difficulties of Mr Parris, and having regard to the gracious and important comments of Allsop CJ in Hutchings v ASIC noted earlier in these reasons, pursuant to s.52(3) of the Act, for a period of 21 days to enable Mr Parris, if he can, to arrange finance to pay out the Council. If that does not occur, as seems highly likely, there will be a self-executing Order whereby the debtor’s Application to Review the Registrar’s Order will be dismissed with costs, either as agreed or taxed. Such an Order, it seems to me, does no prejudice to the Council in any relevant respect.
I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of Judge Neville
Associate:
Date: 11 August 2017
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