Ilhan v Seri - [2012] FMCA 148

FEDERAL MAGISTRATES COURT OF AUSTRALIA

ILHAN v SERI

[2012] FMCA 148

BANKRUPTCY – Creditor’s petition – obligation to disclose security – whether security over property owned by debtor as trustee is security over debtor’s property.

Bankruptcy Act 1966, ss.5, 44, 58, 116

Adsettv Berlouis [1992] FCA 368; (1992) 37 FCR 201; 109 ALR 100
Collie v Merlaw Nominees Pty Ltd [2001] VSC 39
Octavo Investments Pty Ltd v Knight [1979] HCA 61; (1979) 144 CLR 360
Re Morris; Ex parte ANZ Banking Group Pty Ltd (1991) 29 FCR 1
Savage v Union Bank of Australia Ltd [1906] HCA 37; (1906) 3 CLR 1170
13Coromandel Place Pty Ltd v C L Custodians Pty Ltd (in liq) [1999] FCA 144; 17 ACLC 500; (1999) 30 ACSR 377

Applicant:

PATRICIA JOSEPHINE ILHAN

Respondent:

BILLY SERI

File Number:

MLG 1047 of 2011

Judgment of:

Riethmuller FM

Hearing date:

1 February 2012

Date of Last Submission:

1 February 2012

Delivered at:

Melbourne

Delivered on:

1 February 2012

REPRESENTATION

Counsel for the Applicant:

Mr Galvin of Counsel

Solicitors for the Applicant:

Madgwicks

Counsel for the Respondent:

There being no appearance by or on behalf of the Respondent

Solicitors for the Respondent:

Russell Kennedy

Counsel for the Supporting Creditors:

Mr Drenen

Counsel for the Supporting Creditors:

bdlegal

ORDERS

The Applicant has leave to file an amended petition in the form marked and filed in Court today.
Re-verification and re-service of the petition as amended is dispensed with.
A sequestration order is made against the Estate of Billy Seri (also known as Bulent Seri).
The Applicant’s costs, and the costs of the supporting creditor including reserved costs, are to be taxed in accordance with the Federal Court Rules and paid in accordance with the Bankruptcy Act 1966.

AND THE COURT NOTES THAT:

A.The date of the relevant bankruptcy is 25 July 2011.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

MLG 1047 of 2011

PATRICIA JOSEPHINE ILHAN

Applicant

And

BILLY SERI

Respondent

REASONS FOR JUDGMENT

(as revised from transcript)

The applicant in this matter, Ms Ilhan, has a judgment against the debtor in the sum of $708,775.20 entered in the Supreme Court of Victoria on 10 May 2011 before the Honourable Mukhtar AJ. The matter was referred for hearing before this Court as a result of an argument raised in relation to the operation of s.44 of the Bankruptcy Act and the form of the petition that is currently before the Court.
In the petition before the Court the creditor set out that the creditor held security over property of the respondent debtor to the value of $100 consisting of 100 fully paid ordinary one-dollar shares in the name of the respondent debtor in the company, Coffee Pls Pty Ltd ACN 119 345 336. It transpires that the applicant also holds a security over the units held by the debtor in a unit trust. Those units have the same nominal value of $1.00 each and there are 100 units involved.…

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: [2012] FMCA 148
Decision Date: 1 February 2012

CaseChat Overview and Summary

The Applicant, Ilhan, filed an application for leave to amend a petition for sequestration against the Estate of Billy Seri, also known as Bulent Seri. The dispute centres on the validity of the original petition and whether it meets the necessary legal standards for a sequestration order to be granted. The Federal Court was tasked with determining whether the Applicant should be allowed to amend the petition and subsequently, whether a sequestration order should be issued against Seri's estate.

The court had to consider whether the Applicant's proposed amendments to the petition would bring it up to the required legal standards. This involved assessing whether the amended petition adequately complied with the provisions of the Bankruptcy Act 1966. Additionally, the court had to determine whether the supporting creditor's evidence was sufficient to substantiate the claim for bankruptcy. The court's decision hinged on whether the amendments to the petition would significantly improve its legal standing and whether the creditor's evidence was robust enough to support a sequestration order.

The court granted leave for the Applicant to file an amended petition, finding that the amendments would indeed improve the petition's compliance with the statutory requirements. The court noted that the supporting creditor's evidence was sufficient to warrant a sequestration order. Consequently, the court issued a sequestration order against the Estate of Billy Seri, effective from 25 July 2011. Furthermore, the court ordered that the Applicant's and the supporting creditor's costs be taxed in accordance with the Federal Court Rules and paid in line with the Bankruptcy Act 1966.

Orders

Orders of the court

The Applicant has leave to file an amended petition in the form marked and filed in Court today.

Re-verification and re-service of the petition as amended is dispensed with.

A sequestration order is made against the Estate of Billy Seri (also known as Bulent Seri).

The Applicant’s costs, and the costs of the supporting creditor including reserved costs, are to be taxed in accordance with the Federal Court Rules and paid in accordance with the Bankruptcy Act 1966.

AND THE COURT NOTES THAT:

A. The date of the relevant bankruptcy is 25 July 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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