Invion Ltd v Jones - [2016] FCCA 702

FEDERAL CIRCUIT COURT OF AUSTRALIA

INVION LTD v JONES

[2016] FCCA 702

Catchwords:

BANKRUPTCY – Creditors petition – whether the Court should go behind judgment – application dismissed – Sequestration order made.

Legislation:

Bankruptcy Act 1966 (Cth)

Katten v Melhem (No2)(2014) 319 ALR 646

Applicant:

INVION LIMITED (FORMERLY CBIO LIMITED) ACN 094 730 417

Supporting Creditor:

CHARTIS AUSTRALIA INSURANCE LIMITED

Respondent:

STEPHEN GEORGE BURCH JONES

File Number:

BRG 831 of 2014

Judgment of:

Judge Baumann

Hearing date:

5 February 2016

Date of Last Submission:

5 February 2016

Delivered at:

Brisbane

Delivered on:

6 April 2016

REPRESENTATION

Counsel for the Applicant:

Mr Hodge

Solicitors for the Applicant:

McCullough Robertson

Solicitors for the Supporting Creditor

Carter Newell

The Respondent appearing in person

ORDERS

That a Sequestration order be made against the estate of STEPHEN GEORGE BURCH JONES.
That the Applicant Creditor’s costs be fixed in the sum of $8,276.66 and paid from the estate of the Respondent debtor in accordance with the Bankruptcy Act 1996 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 381 of 2014

INVION LIMITED (FORMERLY CBIO LIMITED)
ACN 094 730 417

Applicant

CHARTIS AUSTRALIA INSURANCE LIMITED

Supporting Creditor

And

STEPHEN GEORGE BURCH JONES

Respondent

REASONS FOR JUDGMENT

Mr Jones has failed to comply on or before 1 August 2014 with the bankruptcy notice served on 11 July 2014 founded on a final judgment.
After a trial before former Chief Justice De Jersey over seven days in May 2014, an order was made on 20 June 2014 that Mr Jones (and other defendants), pay the plaintiff Invion Limited, $1,290,739.23 and interest.
Mr Jones (and the other Defendants) had appealed that order to the Court of Appeal. That Appeal was dismissed. A Special Leave Application to the High Court of Australia was dismissed.
The Creditors Petition filed on 19 September 2014 was adjourned for hearing on a number of occasions and then extended, so as to allow Mr Jones to exhaust all his appeal remedies. On 7 September 2015, the Creditor’s Petitioner was extended to 19 September 2016.
With the final avenue of Appeal completed, the Creditor presses for the making of a sequestration order. I am satisfied that the Creditor has adduced evidence that meets the formal requirements under the Bankruptcy Act1966 for the Court to make a sequestration order.
By way of an Amended Notice of Opposition to the granting of the Creditors Petition dated 21 December 2015, Mr Jones essentially seeks to “go behind the judgement” of De Jersey CJ and further asserts that an “abuse of process” has occurred. On the basis of these grounds, Mr Jones says that Petitioner should be dismissed because:
“on the grounds that the reasons for judgment are open to review questions and cast doubt on the efficacy and truth of the debt claimed in the Petition”.
The full terms of the Amended Application are:
“1. Those facts deposed in the Affidavit of Stephen George Burch Jones sworn 21st December 2015.
2. That…

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.

Continue reading Invion Ltd v Jones

Details

AGLC: Invion Ltd v Jones [2016] FCCA 702
Case: [2016] FCCA 702
Decision Date: 6 April 2016

CaseChat Overview and Summary

Invion Ltd petitioned for the bankruptcy of Mr. Jones based on a judgment debt. Mr. Jones sought to have the creditor's petition dismissed, arguing the court should "go behind" the judgment and examine the underlying debt.

The primary legal issue before the court was whether it should exercise its discretion to go behind the judgment obtained by Invion Ltd. This involved determining if Mr. Jones had raised a substantial and bona fide dispute regarding the debt that would justify preventing the sequestration of his estate.

Judge Baumann dismissed Mr. Jones's application, finding that he had not demonstrated a substantial and bona fide dispute concerning the debt. The court applied the principle that it will only go behind a judgment in bankruptcy proceedings in exceptional circumstances, and that the onus is on the debtor to establish such a dispute. Having failed to meet this threshold, the court proceeded to make a sequestration order against Mr. Jones's estate.

Orders