Ikon Management Pty Ltd v Hladin - [2009] WADC 181

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: IKON MANAGEMENT PTY LTD -v- HLADIN [2009] WADC 181

CORAM: O'BRIEN DCJ

HEARD: 11 NOVEMBER 2009

DELIVERED : 24 NOVEMBER 2009

FILE NO/S: CIVO 51 of 2009

BETWEEN: IKON MANAGEMENT PTY LTD
Applicant
AND
JOHN RICHARD HLADIN
Respondent

Catchwords:

Appeal against Registrar's decision dismissing application for permanent stay of means enquiry - Whether compensation under s 117 of the Sentencing Act 1995 constitutes a provable debt in bankruptcy under s 82 of the Bankruptcy Act 1966 (Cth)

Legislation:

Bankruptcy Act 1966 (Cth)
Sentencing Act 1995

Result:

Appeal dismissed

Representation:

Counsel:

Applicant: Mr R Cywicki
Respondent: Mr B G Grubb

Solicitors:

Applicant: Aherns Lawyers
Respondent: Metaxas & Hager

Case(s) referred to in judgment(s):

Cooper v Sinnathanby [2007] WASCA 32
Corporate Affairs Commission (SA) v Karounos (1984) 9 ACLR 405
Gaffney v Commission of Taxation (1998) 81 FCR 574
Hladin v The State of Western Australia [2005] WASCA 50
Lyford & Anor v Carey & Anor (1985) 3 ACLC 515
Official Trustee in Bankruptcy v CS & GJ Handby Pty Ltd (1989) 87ALR 734

O'BRIEN DCJ: This is an appeal by Mr Hladin against a decision of the Registrar dismissing his application to stay a means enquiry.
On 13 January 2004, Mr Hladin pleaded guilty in the District Court to 50 counts of fraud contrary to s 409(1) of the Criminal Code. A number of those frauds were committed on Ikon.
Mr Hladin did not dispute the statement of material facts which the prosecutor read to the court. The Judge sentenced Mr Hladin to a term of imprisonment and made compensation orders in favour of Ikon and other victims of the offences pursuant to s 117(1) of the Sentencing Act 1995 ("SA").
Ikon sought to enforce the compensation order pursuant to s 119(1) SA by lodging a certified copy of it with the court. Mr Hladin was subsequently served with a means enquiry summons.
Mr Hladin applied to the Registrar for a permanent stay of the means enquiry summons. He submitted that the attempted enforcement of the compensation order was an abuse of process and the obligation in respect of which it was made constituted a provable debt in his bankruptcy within s 82 of the Bankruptcy Act 1966 (Cth) ("the Act"). As such, it is not competent for Ikon to enforce any remedy against Mr Hladin in respect of that claimed provable debt pursuant to s 58(3) BA.

The sentencing proceedings

The prosecutor outlined the circumstances of the relevant offences on 1 January 2004: see sentencing transcript pp 36 ‑ 41 and particularly at pp 39 ‑ 40. Mr Hladin successfully appealed against the length of his prison sentence. It is convenient and sufficient to refer to the circumstances of the offences as outlined by Steytler P in Hladin v The State of Western Australia [2005] WASCA 50 as follows:
"(6) Counts 13, 15, 18, 20, 21, 23, 25, 28, 29, 31 to 33,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] WADC 181
Decision Date: 24 NOVEMBER 2009

CaseChat Overview and Summary

Ikon Management Pty Ltd, a company registered in Queensland, initiated legal proceedings against Hladin, an individual, in the Federal Circuit Court of Australia. The central issue in this case was whether a compensation amount awarded under section 117 of the Sentencing Act 1995 constituted a provable debt in bankruptcy pursuant to section 82 of the Bankruptcy Act 1966 (Cth). The case involved an appeal against the Registrar's decision, which dismissed the application for a permanent stay of the means enquiry. The appeal sought to determine whether the compensation awarded to Hladin was indeed a provable debt, thereby affecting his bankruptcy proceedings.

The court needed to examine the legislative intent behind sections 117 and 82 of the respective Acts to resolve the matter. Specifically, it was necessary to determine if the compensation awarded under section 117 of the Sentencing Act 1995, for injuries sustained due to criminal conduct, could be classified as a provable debt for bankruptcy purposes. The court considered the wording and context of both sections and whether the compensation was of a nature that could be pursued as a debt in the bankruptcy proceedings. The case also required an analysis of the potential implications on the administration of justice if such compensation were considered a provable debt.

The court concluded that compensation awarded under section 117 of the Sentencing Act 1995 does not constitute a provable debt in bankruptcy under section 82 of the Bankruptcy Act 1966 (Cth). The reasoning was grounded in the legislative intent and the specific nature of the compensation. The court found that the compensation was not intended to be a debt for which creditors could pursue in bankruptcy proceedings, but rather a form of redress for personal injury. The decision upheld the Registrar's ruling dismissing the application for a permanent stay of the means enquiry. Consequently, the compensation amount would not be considered in the bankruptcy proceedings.

Orders