Hinchliffe v Meiko Australia Pacific Pty Ltd
[2009] FMCA 920
•11 September 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HINCHLIFFE v MEIKO AUSTRALIA PACIFIC PTY LTD | [2009] FMCA 920 |
| BANKRUPTCY – Application to adjourn hearing of application to set aside bankruptcy notice. |
| Bankruptcy Regulations 1996 (Cth), reg.16.01 |
| Sunderland v G & J Drivas Pty Ltd [2000] FCA 1028 |
| Applicant: | ADAM SAMUEL HINCHLIFFE |
| Respondent: | MEIKO AUSTRALIA PACIFIC PTY LIMITED |
| File Number: | SYG 1972 of 2009 |
| Judgment of: | Barnes FM |
| Hearing date: | 11 September 2009 |
| Delivered at: | Sydney |
| Delivered on: | 11 September 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Timmins |
| Solicitors for the Respondent: | Barringtons Lawyers |
ORDERS
The oral application for an adjournment is dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1972 of 2009
| ADAM SAMUEL HINCHLIFFE |
Applicant
And
| MEIKO AUSTRALIA PACIFIC PTY LIMITED |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
The applicant, Mr Hinchliffe, seeks a further adjournment of the hearing of his application to set aside a bankruptcy notice issued on 24 July 2009 in which the respondent, Meiko Australia Pacific Pty Limited, claims that he owes it a debt of $1,595,305.60. The bankruptcy notice is said to be based on two judgments or final orders of the Supreme Court of New South Wales in proceedings no.50236 of 2008, copies of which are attached to the bankruptcy notice. The first of those is a judgment made on 5 December 2008 and entered on 17 February 2009, expressed as an order for judgment in the amount of $730,000 in favour of the plaintiff (the respondent in these proceedings) as against each of the defendants. The applicant in these proceedings was the first defendant. In addition there is a judgment or order in the same proceedings, involving the same parties and made on 19 May 2009 headed “Consequential Orders” which is as follows:
Pursuant to the liberty granted to the plaintiff in paragraph 6 of the orders made on 7 May 2009 [the earlier orders] the Court, to provide for interest, revokes orders 1 and 2 of the earlier orders and in their place makes the following orders:
1. Judgment to be entered against the first defendant in the sum of $865,305.60.
…
A separate order was made against the second defendant, a company known as Swiss Systems Proprietary Limited, but that order was stayed with liberty to the plaintiff to apply to lift the stay.
Mr Hinchliffe filed an application in this court on 17 August 2009 seeking orders that the bankruptcy notice be set aside on the basis that it was, as he put it, “not suitably” served on him; that granting such a notice “would not achieve any meaningful payment of the judgment debt”; and that an appeal “will be” filed against the judgment and should be heard “before any act of bankruptcy be entered”. At that time he was self-represented. In a supporting affidavit he claimed that service of the bankruptcy notice did not comply with reg.16.01 of the Bankruptcy Regulations 1996 (Cth).
The matter came before this court on 1 September 2009 by way of referral from the Registrar conducting the bankruptcy list. On that day the respondent sought that the application to set aside the bankruptcy notice be heard. The applicant, albeit it was his application, sought an adjournment. While he did not produce evidence, it was not in dispute that his wife was seriously ill and had been hospitalised. The applicant explained (in his affidavit of 1 September 2009) that he wished to file further affidavit evidence in relation to service. It was on the basis of his indication that he required further time to prepare for the hearing that the matter was adjourned until 11 September 2009.
I ordered that the applicant file and serve any further affidavit evidence on or before 7 September 2009. He did not file any further affidavit evidence. Nor is there any evidence that he has sought an extension of time within which to file further affidavit evidence.
It was also ordered that the respondent file and serve any affidavit evidence in reply by midday on Thursday, 10 September 2009. The respondent had filed an affidavit of Hugh Richard Barry, the solicitor for the respondent, of 27 August 2009 relating to service of the bankruptcy notice and a corrected version of that affidavit. A further affidavit of 10 September 2009 was filed on that date and referred to the fact that the applicant had failed to serve any evidence on the respondent and that the respondent’s solicitors had written to him by email at 11.35 am on 10 September 2009 noting that it would proceed today on the basis of the filed affidavits and would object to any further evidence being tendered by the applicant.
When the matter came before me this morning, Mr Timmins sought and was granted leave to appear for the applicant. He explained that he had only been instructed late yesterday, that there was at this stage no solicitor on the record and that there had been no brief. He sought an adjournment of the hearing. Mr Timmins conceded that there was no real merit in the grounds presently relied on by the applicant and that the problems for the applicant had been brought about by his failure to file evidence in accordance with the orders of this court.
It was acknowledged that while there may have been an issue in relation to service, any difficulty in that respect would, in effect, have been corrected, at least for the purposes of these proceedings, by the fact of the judgment debtor becoming aware of the bankruptcy notice.
Mr Timmins suggested that there was a possibility that there were properties owned by the applicant that would provide funds to meet his indebtedness. No evidence was put before the court by the applicant in this respect but there is some evidence in Exhibit A, a document headed “Financial Statement”. In addition, an application of 8 July 2009 by Mr Hinchliffe to the Supreme Court to pay the judgment debt by instalments and the order made on 16 July 2009 refusing the instalment application are contained in an annexure to the affidavit of Mr Barry sworn on 27 August 2009. The applicant’s financial statement indicates that, having regard to his assets, including his properties and his liabilities (but not taking into account the claimed debt to the respondent) he had net assets of some $23,500. Nonetheless Mr Timmins submitted that the applicant may be able to meet the judgment debt from properties or from a loan or possibly by continuing to be in employment and that this was of relevance to this adjournment application. I am not satisfied that this is a factor in favour of an adjournment.
More pertinently, Mr Timmins went to suggest that there may be, although he was not able to put it any higher than that, a difficulty with the bankruptcy notice insofar as it was apparent that there were two judgments or orders made by the same court in the same proceedings. The argument was not that a bankruptcy notice could not be based on more than one judgment. Rather, it was suggested that it was in some way inconsistent that there was more than one judgment or set of orders made in the one matter against the one party. This possibility was said to provide an appropriate basis for an adjournment of the applicant’s application to set aside the bankruptcy notice. Mr Timmins confirmed that it was not contended that there was any abuse of process by the respondent.
The solicitor for the respondent opposed any adjournment, referring to the fact that he had sought that the matter proceed on the last occasion. Reference was made to the letter sent to the applicant on 10 September 2009. Significantly, Mr Barry referred to the fact that there is no evidence before the court as to why the applicant did not do anything from 1 September 2009 until the evening of 10 September 2009 to obtain legal representation or provide any explanation for his failure to file any affidavit evidence as ordered by the court on 1 September 2009.
The respondent also pointed out that the issue that Mr Timmins now sought to raise was not something that had previously been raised with the respondent. Mr Barry suggested that had it been raised it could in fact be addressed, but also that if it emerged that there was an issue in relation to whether there was a difficulty with the bankruptcy notice (which I take to mean a difficulty such that the court could not be satisfied that an act of bankruptcy was established by failure to comply with that bankruptcy notice) such a matter could be raised at the hearing of any creditor’s petition, were there to be a creditor’s petition issued in relation to the debtor.
It was also submitted that if it was relevant that Mr Hinchliffe may be in a position to satisfy the debt, any such contention was contrary to the disclosure of his financial position in relation to the unsuccessful application to pay the debt by instalments. On that basis, the application for an adjournment was opposed.
It is necessary for me to have regard to the interests of the parties and the interests of the administration of justice in considering an adjournment application. On balance, I am not persuaded that it has been established by the applicant that it is in the interests of the parties or of the administration of justice that there be a further adjournment of the hearing in this case.
I have regard to the fact that there is no evidence before the court to explain why the applicant did not comply with the orders of the court, having been given one adjournment. He did not file any affidavit evidence and there is no evidence before the court to explain why he did nothing to seek legal advice until the evening before the scheduled hearing.
While an issue was raised in a provisional sense in relation to the bankruptcy notice, it has not been raised in such a way as to cause me to conclude that there is such merit in the argument that it would be contrary to the interests of justice or the parties to proceed with the hearing today. I am not satisfied that such a ground has any real prospects of success. I also bear in mind that issues can be raised in relation to a bankruptcy notice in the context of the hearing of any creditor’s petition (see Sunderland v G & J Drivas Pty Ltd [2000] FCA 1028 at [3] per Hely J).
Moreover I have had regard to the significance of the hearing of an application to set aside a bankruptcy notice in relation to the time of any act of bankruptcy, given that the time for compliance with the requirements of the bankruptcy notice was extended up to and including today, and also to the difference between the consequences of the commission of an act of bankruptcy and the much more significant consequences of a sequestration order being made.
On balance, having regard to all of those matters as well as the absence of any suggestion of any abuse of process and a lack of satisfaction on the evidence before the court that that applicant is in a position to meet any debts, I am not persuaded that it is appropriate that there be an adjournment to allow the applicant to raise belatedly a very generally expressed contention in relation to the fact that there are two judgments or orders of the Supreme Court made in the same proceedings. I note that it was not suggested that there was an issue about the total amount of the order (or whether the debt exceeded $2,000). Rather the fact that there were two orders on different dates in the one matter was said to be “inconsistent”.
As indicated, it would be necessary, were a creditor’s petition to be issued, for a court to be satisfied before making a sequestration order that there had been an act of bankruptcy. This would enable the court at that time to consider any issues that might be raised in relation to the validity of the bankruptcy notice if this bankruptcy notice is not set aside and is relied on in relation to a creditor’s petition.
It is appropriate that the application to set aside the bankruptcy notice should proceed today, having already been adjourned on the one occasion. The oral application for an adjournment is refused.
I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of Barnes FM
Associate:
Date: 8 October 2009
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