Jain v Prushka Fast Debt Recovery Pty Ltd

[2013] FCA 1410

FEDERAL COURT OF AUSTRALIA

Jain v Prushka Fast Debt Recovery Pty Ltd [2013] FCA 1410

Citation:	Jain v Prushka Fast Debt Recovery Pty Ltd [2013] FCA 1410
Parties:	NEERA JAIN and SACHIN JAIN v PRUSHKA FAST DEBT RECOVERY PTY LTD AS ASSIGNEE FROM ADIWA PTY LTD (ACN 066 441 898)
File number:	VID 1055 of 2013
Judge:	MARSHALL J
Date of judgment:	17 December 2013
Catchwords:	BANKRUPTCY – application to set aside a bankruptcy notice – hearing de novo – where bankruptcy notice allegedly referred to the incorrect business name of the applicants – no abuse of process – application dismissed.
Legislation:	Bankruptcy Act 1966 (Cth) s 40(1)(g) Federal Court of Australia Act 1976 (Cth) s 35A(5)
Cases cited:	Harris v Caladine (1991) 172 CLR 84
Date of hearing:	17 December 2013.
Place:	Melbourne
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	9
Counsel for the Applicants:	The Applicants appeared in person.
Counsel for the Respondent:	Mr J Dunne
Solicitor for the Respondent:	Mendelsons Lawyers

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 1055 of 2013

BETWEEN:

NEERA JAIN
First Applicant

SACHIN JAIN
Second Applicant

AND:

PRUSHKA FAST DEBT RECOVERY PTY LTD AS ASSIGNEE FROM ADIWA PTY LTD (ACN 066 441 898)
Respondent

JUDGE:	MARSHALL J
DATE OF ORDER:	17 DECEMBER 2013
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.The application is dismissed.

2.In the event of a sequestration order being made on the application of the respondent, the costs of this application be costs in the applicants’ bankruptcy.

3.In the event of no sequestration order being made on the application of the respondent, the costs of this application be paid by the applicants.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 1055 of 2013

BETWEEN:

NEERA JAIN
First Applicant

SACHIN JAIN
Second Applicant

AND:

PRUSHKA FAST DEBT RECOVERY PTY LTD AS ASSIGNEE FROM ADIWA PTY LTD (ACN 066 441 898)
Respondent

JUDGE:	MARSHALL J
DATE:	17 DECEMBER 2013
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. On 12 November 2013, Registrar Caporale refused the application of Mr and Mrs Jain to set aside a bankruptcy notice. Mr and Mrs Jain have applied pursuant to s 35A(5) of the Federal Court of Australia Act 1976 (Cth) to review that exercise of power by the Registrar. The consequence of that application having been made is that the Court is now required to consider de novo Mr and Mrs Jain’s application to set aside a bankruptcy notice; see Harris v Caladine (1991) 172 CLR 84 at 96 per Mason CJ and Deane J.

2. The original application to set aside the bankruptcy notice was supported by an affidavit of Mrs Jain. The affidavit refers to an order made by the Victorian Civil and Administrative Tribunal (“VCAT”) made on 6 May 2013, which “formed the basis of Bankruptcy Notice BN 165263 issued on 16 September 2013”.

3. On 6 May 2013, VCAT ordered that the respondents “Sachin Jain t/as Images of India” and “Neera Jain t/as Images of India” pay Adiwa Pty Ltd (“Adiwa”) the sum of $9,950.00.

4. The application which led to the VCAT proceeding referred to Mr and Mrs Jain as operating under the business name “Images of India”. The Jains say that their current business name is “Images Paras Importers”.

5. As the order underpinning the debt refers to the incorrect business name, Mr and Mrs Jain submit that the issuing of the bankruptcy notice against them is an abuse of process because they do not operate under the business name “Images of India”.

6. Mrs Jain also filed an affidavit in support of the current proceeding. In it, she states that she is an owner/partner of the business name, “Images by Paras Importers”. That affidavit exhibited an affidavit of Mr Block of the solicitors which acted for Adiwa, which was relied on in the VCAT proceeding. Adiwa has assigned its debt to the current respondent. The affidavit was filed in VCAT concerning a matter between Adiwa and the Jains which was to be heard on 29 November 2013. The affidavit states, so far as it currently material:

   ·VCAT ordered on 6 May 2013 that the Jains pay Adiwa $9,950.00.

   ·On 31 May 2013, the VCAT order was registered as a Judgment in the Magistrates’ Court at Dandenong.

   ·On 22 July 2013, Adiwa assigned its interests in the judgment to the current respondent, Prushka Fast Debt Recovery Pty Ltd (“Prushka”).

   ·On 16 September 2013, the official receiver issued a bankruptcy notice (BN 165263) citing Prushka as the creditor and the Jains as the debtors. The notice was served personally on the Jains on 24 September 2013.

   On 29 November 2013, VCAT dismissed an application by the Jains to set aside the previous order of 6 May 2013.

7. The Jains do not contest that that there is a judgment registered in the Magistrates’ Court which purports to make them liable to pay money to Adiwa. They contend that they are not the persons referred to in the order because the wrong business name is printed next to their names. They say that having the incorrect business name on the bankruptcy notice infects that notice and means it is an abuse of process for Prushka to seek to bankrupt them. The incorrect reference to the business name under which a person trades makes no difference to that person’s liability to pay a debt. It is trite law that registration and use of a business name does not confer any corporate or special status on individuals.

8. The order registered at the Magistrates’ Court at Dandenong remains binding unless it is set aside. No basis has been established for the allegation that Prushka has engaged in an abuse of process. The Court will not go behind a judgment debt unless there is an arguable case concerning fraud, collusion or miscarriage of justice. There is no evidence of any of those matters in the material before the Court. Further, there has been no appeal from the judgment of the Magistrates’ Court in which the order of VCAT was registered. No appeal has been sought to be made from the later order of VCAT of 29 November 2013.

9. The application is, in effect, one under s 40(1)(g) of the Bankruptcy Act 1966 (Cth). The onus is on a person seeking to set aside a bankruptcy notice to make out his or her case. No such case has been made out in the current circumstances, on the current facts. The application to set aside the bankruptcy notice is dismissed.

I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.

Associate:

Dated:       17 December 2013