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Ivanhoe Grammar School v Raschilla

Ivanhoe Grammar School v Raschilla

Case [2003] FMCA 30 17 February 2003

Annulment of Bankruptcy

Costs

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Insolvency Law

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FEDERAL MAGISTRATES COURT OF AUSTRALIA

IVANHOE GRAMMAR SCHOOL v RASCHILLA

[2003] FMCA 30

BANKRUPTCY – Sequestration order – Application to set aside registrar’s order – power of court – whether annulment more appropriate – trustee permitted to make oral application for annulment.

Bankruptcy Act 1966 ss.14, 37, 43, 52 153B, 154(1)(b) & 162
Bankruptcy Law Amendment Bill 1992 s.37
Federal Magistrates Act 1999 s.104
Federal Court Rules O 35, r 7, O 77, r 7 & r 44

Re Steer [1945] 13 ABC 216
Demostine Nominees Pty Ltd v Raymond Theodore Osborne [2002] FMCA 235 Deputy Commissioner of Taxation v Clyne (1984) FCR 156
Symons v Bateman (1999) FCA 658
Re Gollan; Ex parte Gollan (1992) 40 FCR 38
Re Anasis; Ex parte Total Australia Ltd (1985) 11 FCR 127
Re Deriu (1970) 16 FLR 421
Re Williams (1968) 13 FLR 10

Applicant:

IVANHOE GRAMMAR SCHOOL

Respondent:

KAREN RASCHILLA

Trustee (by leave):

PAUL ANTHONY PATTISON

File No:

MZ975 of 2002

Delivered on:

17 February 2003

Delivered at:

Melbourne

Hearing date:

21 January 2003

Judgment of:

McInnis FM

REPRESENTATION

Solicitor for the Applicant:

No appearance

Solicitors for the Applicant:

Forbes Dowling Lawyers

Counsel for the Respondent:

Mr J. Evans

Solicitors for the Respondent:

De Marco & Co

Solicitor for the Trustee:

Mr E. Fice

Solicitors for the Trustee:

Charles Fice

ORDERS

In addition to the Orders made by the Court on 9 December 2002

IT IS FURTHER ORDERED

That the Trustee be granted leave to make an oral application for annulment of the bankruptcy of Karen Raschilla this day.
That compliance with Order 77, rules 42 and 44 of the Federal Court Rules be dispensed with and that otherwise so much of the Rules of the Court be dispensed with that would prevent the Trustee's application for annulment being heard this day.
That the bankruptcy of Karen Raschilla under the sequestration order made on 7 November 2002 be annulled.
The Respondent shall pay the costs of the Trustee of and incidental to the hearing pursuant to the Federal Court Rules.
Liberty to apply is granted to the parties in relation to any matters arising out of these orders.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MZ975 of 2002

IVANHOE GRAMMAR SCHOOL

Applicant

And

KAREN RASCHILLA

Respondent

And by leave

PAUL ANTHONY PATTISON

Trustee

REASONS FOR JUDGMENT

In this matter the Applicant Creditor Ivanhoe Grammar School (“the Creditor”) had filed a Creditor's petition on 24 September 2002 relying upon what was said to be a failure by Karen Raschilla the respondent Debtor (“the Debtor”) to comply with a bankruptcy notice number VN613/02 based upon a judgment and order made in the Magistrates Court of Victoria at Melbourne on 24 January 2002.
At the same time the petition was filed the Creditor also filed a consent to act as trustee dated 3 July 2002 completed by Paul Anthony Pattison (the Trustee).
The usual affidavits of search and service and proof of debt were filed with the Court and on 7 November 2002 a…

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 Ivanhoe Grammar School v Raschilla

Details

AGLC: Ivanhoe Grammar School v Raschilla [2003] FMCA 30
Case: [2003] FMCA 30
Decision Date: 17 February 2003

CaseChat Overview and Summary

In the Federal Court of Australia, Ivanhoe Grammar School sought relief against Karen Raschilla, who had been declared bankrupt. The dispute centred around the validity of the sequestration order against Raschilla and the subsequent bankruptcy proceedings. The Trustee in Bankruptcy, appointed to manage Raschilla’s assets, was also a party to the proceedings. The core legal issue before the court was whether the bankruptcy of Raschilla should be annulled due to irregularities in the proceedings that led to the sequestration order. The court had to determine whether the irregularities were substantial enough to warrant the annulment of the bankruptcy.

The court found that the irregularities in the bankruptcy proceedings were significant and sufficient to warrant the annulment of Raschilla’s bankruptcy. The irregularities included errors in the service of the bankruptcy application, which did not comply with the requisite legal standards. The court held that these procedural flaws materially affected the fairness of the bankruptcy proceedings, thereby justifying the annulment of the sequestration order. Consequently, the court ordered the annulment of Raschilla’s bankruptcy and granted the Trustee leave to apply for this relief.

Following the court’s reasoning, it annulled the bankruptcy of Karen Raschilla under the sequestration order made on 7 November 2002. The court also directed that the Trustee be granted leave to make an oral application for this annulment. Additionally, the court dispensed with certain procedural rules to facilitate the hearing of the Trustee's application on the same day. The Respondent, Raschilla, was ordered to pay the costs of the Trustee in relation to the hearing. Finally, the court granted liberty to apply to both parties for any matters arising from these orders.

Orders

Orders of the court

In addition to the Orders made by the Court on 9 December 2002

IT IS FURTHER ORDERED

That the Trustee be granted leave to make an oral application for annulment of the bankruptcy of Karen Raschilla this day.

That compliance with Order 77, rules 42 and 44 of the Federal Court Rules be dispensed with and that otherwise so much of the Rules of the Court be dispensed with that would prevent the Trustee's application for annulment being heard this day.

That the bankruptcy of Karen Raschilla under the sequestration order made on 7 November 2002 be annulled.

The Respondent shall pay the costs of the Trustee of and incidental to the hearing pursuant to the Federal Court Rules.

Liberty to apply is granted to the parties in relation to any matters arising out of these orders.

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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Citations

AGLC Citation

Ivanhoe Grammar School v Raschilla [2003] FMCA 30

Most Recent Citation

Kyriackou v Shield Mercantile Pty Ltd (No 2) [2004] FCA 1338

Cases citing this decision · 6 of 6 shown

ALLARD v Investrend Debt Solutions Pty Ltd
[2010] FMCA 807 Para 8

…ave a right to be heard in respect of a review application seeking orders that a sequestration order be set aside: Ivanhoe Grammar School v Raschilla [2003] FMCA 30. He contended the court could dispense with the requirement for filing an application that is to be heard orally in stanta; see Rules 2.04, 7.01 to 7…
Vaucluse Hospital Pty Ltd v Phillips
[2006] FMCA 44 Para 1

…pplication issues arose as to the right of the trustee to be heard and the appropriate procedure to be adopted. In Ivanhoe Grammar School v Raschilla [2003] FMCA 30 McInnis FM said: 11. … It was noted again during the course of submissions that a Trustee is a person capable of pursuing an application for annulmen…
Brown v CBA
[2005] FMCA 1470 Para 1

…thout a further order annulling the bankruptcy, the Trustee has no means of recovering his costs and expenses (see Ivanhoe Grammar School v Raschilla [2003] FMCA 30). If, on the other hand, an order is made annulling the bankruptcy under section 153B of the Bankruptcy Act, section 154 of the Bankruptcy Act permit…
Capsalis v Ozdemir
[2005] FMCA 1163 Para 1

…thout a further order annulling the bankruptcy, the Trustee has no means of recovering his costs and expenses (see Ivanhoe Grammar School v Raschilla [2003] FMCA 30). If, on the other hand, an order is made annulling the bankruptcy under section 153B of the Bankruptcy Act, section 154 of the Bankruptcy Act permit…
Kyriackou v Shield Mercantile Pty Ltd (No 2)
[2004] FCA 1338 Para 18

…The Official Trustee noted that just such an approach had been adopted by McInnis FM in Ivanhoe Grammar School v Raschilla [2003] FMCA 30. In that case, a Registrar of the Federal Magistrates Court made a sequestration order against a debtor on 7 November 2002, and the trustee was appointed on the same day. The d…
Hadjimouratis v Casanova
[2005] FMCA 1468 Para 1

…thout a further order annulling the bankruptcy, the Trustee has no means of recovering his costs and expenses (see Ivanhoe Grammar School v Raschilla [2003] FMCA 30). If, on the other hand, an order is made annulling the bankruptcy under section 153B of the Bankruptcy Act, section 154 of the Bankruptcy Act permit…

View all 6 citing cases →

Cases cited in this decision · 7 of 7 shown

Demostine Nominees P/L v Osborne
[2002] FMCA 235 Para 4

…urt is entitled to make appropriate orders including setting aside any sequestration order (see Demostine Nominees Pty Ltd v Raymond Theodore Osborne [2002] FMCA 235 at par 27). If Parliament intended to limit the power of a Court on review then it could easily do so by amendment. The Explanatory Memorandum of the…
Symons v Bateman
[1999] FCA 658 Para 6

…Reference was also made to the decision of French J in Symons v Bateman (1999) FCA 658. In that case sequestration orders were made against two Debtors. At the time the orders were made applications were pending in the Full Court of the Supreme Court of Western Australia seeking review of a Master's decision refusing leav…
Re Gollan; ex parte Gollan
[1992] FCA 1044 Para 2

…I was further referred to the decision of the Federal Court in the matter of Re Gollan; Ex parte Gollan (1992) 40 FCR 38. In that case, Spender J considered an application on behalf of a Debtor to review or reconsider a sequestration order against the estate made by a Registrar. An order was sought that the sequest…
Re Anasis; Ex parte Total Australia Ltd
[1985] FCA 615 Para 13

…I note that during the course of submissions I referred to the decision of the Federal Court in Re Anasis; Ex parte Total Australia Ltd (1985) 11 FCR 127. In that case the Court was dealing with the issue of a Debtor not receiving a notice of adjourned hearing thereby being denied an opportunity of presenting his ca…
Deputy Commissioner of Taxation v Clyne
[1984] FCA 383 Para 5

…of setting aside a sequestration order was considered by the Full Court of the Federal Court of Australia in Deputy Commissioner of Taxation v Clyne (1984) 4 FCR 156. The Court dealt with the issue of whether the making of a sequestration order on a Creditor's petition within 12 months of the date of presentation…
Clyne v Deputy Commissioner of Taxation
[1984] HCA 44 Para 15

…ing rid of the order is by annulment under s 154: Re Deriu (supra); Re Bond (1978) 36 FLR 131; Clyne v Deputy Commissioner of Taxation (No 3) (1984) 58 ALJR 398 at 400 and 401-402.…
Re Bond, Julia Natalia Ex Parte The Bankrupt
[1978] FCA 95 Para 15

…cy notice and petition had not been served, the proper way of getting rid of the order is by annulment under s 154: Re Deriu (supra); Re Bond (1978) 36 FLR 131; Clyne v Deputy Commissioner of Taxation (No 3) (1984) 58 ALJR 398 at 400 and 401-402.…

Legislation cited in this decision · 3

Bankruptcy Act 1966 (Cth)
14, 154(1)(b), 37, 43, 52 6 mentions (from Para 7)
Federal Magistrates Act 1999 (Cth)
104 2 mentions (from Para 5)
Bankruptcy Amendment Act 1991 (Cth)
1 mention (from Para 2)