Janover v Muto
[2020] FCCA 1351
•29 May 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| JANOVER v MUTO | [2020] FCCA 1351 |
| Catchwords: BANKRUPTCY – Application for review of registrar’s decision –service of bankruptcy notice and creditor’s petition effected – whether debt truly owing – application dismissed – no maters of principle. |
| Legislation: Bankruptcy Act 1966 (Cth), s.43 Bankruptcy Regulations 1966 (Cth), reg.16.01 Federal Circuit Court of Australia Act 1999 (Cth), s.43(2)(b) Local Government Act 1989 (Vic). Victorian Civil and Administrative Tribunal Act1998 (Vic), Sch.1, cl.46F |
| Cases cited: Culleton v Balwyn Nominees Pty Ltd [2017] FCAFC 8 Wren v Mahony [1972] HCA 5; (1972) 126 CLR 212 Shaw v Yarranova Pty Ltd [2017] FCA FC 88 Muto v Shepparton City Council [2018] VSCA 73 |
| Applicant: | LEWIS JANOVER |
| Respondent: | MILVAN MUTO |
| File Number: | MLG 1291 of 2019 |
| Judgment of: | Judge Riethmuller |
| Hearing dates: | 28 November 2019 and 10 December 2019 |
| Date of Last Submission: | 13 December 2019 |
| Delivered at: | Melbourne |
| Delivered on: | 29 May 2020 |
REPRESENTATION
| Solicitors for the Applicant: | Lewis Allen Janover Solicitor & Consultant |
| The Respondent appeared in person. |
ORDERS
The application for review of the Registrar’s decision dated 17 October 2019 be dismissed.
The Applicant’s costs be costs in the Respondent’s bankruptcy.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 1291 of 2019
| LEWIS JANOVER |
Applicant
And
| MILVAN MUTO |
Respondent
REASONS FOR JUDGMENT
Background
On 26 September 2019 a Registrar made a sequestration order bankrupting Milvan Muto (‘the respondent’). The respondent seeks a review of that decision, including a review of two ancillary orders: (i) leave to amend the Creditors Petition to substitute 15 April 2019 as the date of the commission of the act of bankruptcy; and (ii) dispensing with re-verification and re-service. Applications for review of a decision of a Registrar are heard de novo.
The respondent raises four substantive issues, summarized as follows:
a)The respondent alleges that he was not served with the Bankruptcy Notice, upon which the Petition was founded;
b)The respondent says that he was not served appropriately with the Creditor’s Petition;
c)Whether the applicant should be permitted to amend the date of the act of bankruptcy as appears in the Petition; and
d)The respondent disputes the underlying debt upon which the Bankruptcy Notice is based.
In the event that the respondent is unsuccessful in the above points, he requests that the court exercise its discretion to not make a sequestration order.
There is no dispute with respect to compliance with other technical requirements of the legislation (such as the filing of an affidavit of debt, etc).
Procedural history
The matter commenced in this Court when the applicant filed a Creditor’s Petition on 1 May 2019 seeking a sequestration order, pursuant to section 43 of the Bankruptcy Act 1966 (Cth) (‘the Act’) against the estate of the respondent debtor, Milvan Muto of 111 Maude Street, Shepparton, Victoria. The Petition provided that the respondent owed the applicant creditor an amount of $138,359.10, pursuant to a Supreme Court of Victoria Costs Court Order made on 19 April 2016.
Accompanying the Petition the applicant filed an Affidavit of Service by Stephen Papst (‘Mr Papst’), a Process Server swearing to having served the Bankruptcy Notice on the respondent in person.
On 5 June 2019 the applicant filed an Interim Application seeking personal service of the Creditor’s Petition be dispensed with and substituted service be granted by way of post and email to the respondent. The applicant also filed a second Affidavit by Mr Papst swearing to attempted service of the Creditor’s Petition as well as an Affidavit in support of the Application for Substitute Service by the applicant himself.
Registrar Segal made Orders on 21 June 2019 relisting the Creditor’s Petition to 25 July 2019, dispensing with personal service, and granting leave to the applicant to effect service by way of leaving the documents at the respondent’s address, sending them by post, by email and by text message.
On 18 July 2019 the applicant filed three Affidavits of Service as follows:
i)an Affidavit of Danny Clarke (‘Mr Clarke’) swearing to service of the Creditor’s Petition and supporting documents on the respondent personally,
ii)an Affidavit by the applicant swearing to service on the respondent by sending a text message pursuant to the Registrar’s Order, and
iii)an Affidavit by Donna Sneddon (‘Ms Sneddon’) swearing to service of the Creditor’s Petition and supporting documents by posting the documents to the respondent and by emailing the documents pursuant to the Registrar’s Order.
On 24 July 2019 the applicant filed a further Affidavit declaring email correspondence between his office and the respondent.
On 25 July 2019 Registrar Gitsham made orders for the hearing of the petition to be adjourned to 29 August 2019 and for the parties to file and serve their material.
On 30 July 2019 the applicant filed a further Affidavit of Service by Ms Sneddon swearing to sending a copy of the Trustee’s Consent to Act Declaration by post and email to the respondent.
On 27 August 2019 the respondent filed an Affidavit swearing that he was not personally served with the Creditor’s Petition.
On 29 August 2019 Registrar Gitsham made further orders that the hearing be adjourned to 26 September 2019 and for the parties to file further material.
On 18 September 2019 the applicant filed a Supplementary Affidavit of Service of Bankruptcy Notice by Mr Papst. On 20 September 2019 the applicant filed another Affidavit of Service sworn by Ms Sneddon swearing to service on the respondent of Mr Papst’s Supplementary Affidavit by post and email.
On 25 September 2019 the applicant filed an Affidavit of Debt and an Affidavit of Search.
On 26 September Registrar Gitsham made the orders for the applicant to have leave to amend paragraph 4 of the petition to substitute 15 April 2019 as the date of commission of the act of bankruptcy and that re-verification and re-service be dispensed with. The Registrar further ordered that the estate of the respondent be sequestrated and the creditor’s costs be taxed and paid by the estate of the respondent. It was noted that the consent to act as trustee documentation had been filed.
On 17 October 2019 the respondent filed an Application for Review of Registrar’s Decision seeking the Orders of Registrar Gitsham made on 26 September 2019 be reviewed. The respondent sought Orders that leave to amend paragraph 4 of the petition, to substitute 15 April 2019 as the date of commission of the act of bankruptcy be refused, for service to be complied with, for his estate not to be sequestrated and for there to be no Order as to costs. On the same date the respondent also filed a Notice to Creditors of this application. In effect the respondent was seeking to have the Orders of Registrar Gitsham on 26 September 2019 be set aside.
Service of Bankruptcy Notice
The respondent denies having been served with the Bankruptcy Notice issued on 6 March 2019 as relied upon by the applicant. There are various methods of service available under reg.16.01 of the Bankruptcy Regulations 1966 (Cth) which provides:
16.01 Service of documents
(1) Unless the contrary intention appears, where a document is required or permitted by the Act or these Regulations to be given or sent to, or served on, a person (other than a person mentioned in regulation 16.02), the document may be:
(a) sent by post, or by a courier service, to the person at his or her last-known address; or
(b) left, in an envelope or similar packaging marked with the person’s name and any relevant document exchange number, at a document exchange where the person maintains a document exchange facility; or
(c) left, in an envelope or similar packaging marked with the person’s name, at the last-known address of the person; or
(d) personally delivered to the person; or
(e) sent by facsimile transmission or another mode of electronic transmission:
(i) to a facility maintained by the person for receipt of electronically transmitted documents; or
(ii) in such a manner (for example, by electronic mail) that the document
The applicant relied upon the evidence of Mr Papst who swore Affidavits of Service on 28 March 2019 and 6 September 2019. In his March Affidavit Mr Papst set out that he served the respondent the Bankruptcy Notice personally at 10.00am on 24 March 2019 at 111 Maude St, Shepparton. In his Supplementary affidavit, Mr Papst said that he served the respondent in his front yard, describing him as a man in his late fifties or early sixties dressed in tailored pants and a collared shirt. He had been given two copies of photographs of the respondent from newspapers published 5 years earlier. Mr Papst said he recognized the respondent who also acknowledged his identity. Mr Papst annexed a copy of his ‘running sheet’ entries for that day, showing that he had attended two other addresses (one in Wallan at 2.00pm and one in Beveridge at 2.40pm). Mr Papst also said (at paragraph [7]) that he, ‘purchased petrol on [the] way back to Melbourne from central Victoria at 3.21 pm at Kalkallo.’ A receipt from Caltex StarMart, Kalkallo was also annexed.
Mr Papst was called to give evidence at the hearing and was cross-examined at length by the respondent. He was challenged as to the actual distance between the house and the Court in Shepparton and agreed that it may be less than 2km when it was put to him that it was only 1 kilometre. However, Mr Papst was clear that he attended a house with a high fence and well-kept gardens. Despite the short attendance of Mr Papst, his description matched the photos of the residence as well as one would expect.
Mr Papst was cross-examined at length about his travel that day. He said that after serving the respondent he went to Big-W to purchase a small television and left around 10.30 to 11.00am. He did not serve the next person until 2.00pm at Wallan (another town around 130km away). It is only a relatively short distance between Wallan and Beveridge and Beveridge to Kalkallo. Allowing for time to have lunch, time to locate each location, attend, and make notes. The times set out by Mr Papst do not appear out of the ordinary, nor the sequences of the stops, given the times provided in the notes.
Whilst the printed work-sheet has an issue date of 8 March 2019, the service details section (completed in handwriting) is dated 24 March 2019. It appears entirely consistent that the printed ‘Issue Date’ on the sheet would pre-date the date of service.
Whilst Mr Papst was a little nervous in the witness box, I generally found him to present as an honest and believable witness.
The respondent gave evidence denying being served and disputing many of the details given by Mr Papst, for example saying that he would have been wearing shorts, that he would not have identified himself (instead would have asked what the enquiry was about) and saying that there would have been a car in the driveway. The respondent said he recalled the date (a Sunday), as his birthday is 28 March and his children had come from Melbourne to serve him breakfast in bed as he had a bad back. His presentation was quite intense. None of his family were called to give evidence.
Considering the whole of the evidence, I am persuaded that the respondent was served with the Bankruptcy Notice as stated by Mr Papst. He has not paid the debt and as such has committed an act of bankruptcy.
Service of Creditor’s Petition
On 21 June 2019, the Registrar made orders for substituted service of the Creditor’s Petition dispensing with personal service and providing for service by:
5. …
(a) By handing them to any person apparently over the age of 16 years but, if this is not possible, by leaving them in the letterbox or affixing them to the front door in a sealed envelope addressed to the Respondent at 111 Maude Street Shepparton Vic. 3630; and
(b) By sending them by prepaid ordinary post addressed to the Respondent at 111 Maude Street Shepparton Vic. 3630; and
(c) By scanning them and sending by email to [email protected]
6. A text (sms) message be sent to the Respondent on mobile number 0448322784 stating that the Applicant has filed a Creditor's Petition with the Court, that the documents have been sent to or left at 111 Maude Street Shepparton Vic. 3630 and the Creditor's Petition will be heard in Court on 25 July 2019.
Ms Sneddon swore an Affidavit dated 18 July 2019 attesting to fulfilment of items 5(b) and 5(c) of those orders. She was not required for cross-examination and I accept her evidence. The applicant swore to compliance with Order 6, which I accept.
Mr Clark swore an Affidavit on 10 July 2019 attesting to personal service of the Creditor’s Petition on the respondent on 5 July 2019 at 5.35pm. He was cross-examined at length by the respondent. Mr Clark has lived all of his life in Shepparton and had previous dealings with the respondent in the past. He explained that a woman answered the door and denied that the respondent lived there. Afterwards, he said that the respondent came out. Whilst the respondent denied his identity at first he then admitted it but refused the documents, so Mr Clark left them at his feet. Whilst his recollection of the details of the house may not have been perfect it was no less than one may expect for a brief visit. Importantly, there was no reason for Mr Clark to lie about the details of service when he only needed to leave the documents in the letterbox to meet the terms of the Order.
I accept the evidence of Mr Clark. As a result, not only was the substituted service order complied with, but personal service was effected.
In any event the respondent was well aware of the Petition and appeared before the Registrar to oppose the orders and filed material. In these circumstances he is taken to have been served: see Culleton v Balwyn Nominees Pty Ltd [2017] FCAFC 8 at [102] – [103] (noting s 43(2)(b) of the Federal Circuit Court of Australia Act 1999).
I therefore find that the respondent fails on this argument.
Amendment of the Creditor’s Petition
The respondent says that the applicant should not be granted leave to amend the Creditor’s Petition to allege the correct date of the act of bankruptcy. The act of bankruptcy is the failure to pay within 21 days after service of the Bankruptcy Notice. The Creditor’s Petition set out an incorrect date. There is no prejudice to the respondent if the date is corrected. The respondent alleged that the change of this date in the Creditor’s Petition in some way ‘means [he] was not given 21 days to respond to it’: see paragraph [7] of the Affidavit filed on 17 October 2019. The date had long past before the Creditor’s Petition was filed. The respondent had not taken any steps between the correct date of the act of bankruptcy and the date in the Petition.
It is appropriate that the applicant be permitted to amend the Petition to set out the correct date. As the date is set out in the order and no other relevant event occurred between the two dates it is appropriate to dispense with re-service and re-verification of the amended Petition.
Whether the debt is truly owing
It is appropriate for a bankruptcy court to consider whether there are ‘substantial reasons … for questioning whether … there was in truth and reality a debt due’: see Wren v Mahony [1972] HCA 5; (1972) 126 CLR 212 at 224-225; and Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28.
In this case the debt arises out of a costs order in favour of the applicant following litigation between the respondent and the applicant with respect to fees due to the applicant when acting as the respondent’s solicitor.
As the Full Court explained in Shaw v Yarranova Pty Ltd [2017] FCAFC 88:
[62] … costs orders, in and of themselves, created the obligation to pay. The case was not one in which an antecedent transaction giving rise to a pre-existing debt had merged in a default or consent judgment or in a judgment following a contested trial as to the existence of a liability to pay.
[…]
[65] … it was not sufficient for [the debtor] to show merely that … costs orders were wrongly made. Rather, it was necessary in all of the circumstances to show evidence of fraud, collusion or a miscarriage of justice...
The respondent contends he has a proceeding before the Full Court of the Supreme Court of Victoria that will result in the Shepparton City Council being ordered to indemnify him for his costs in VCAT proceedings, some of which form the basis of the applicant’s claims for payment. The essence of indemnity is that there is an obligation to pay in the first instance and in order for the respondent to cogently argue he is entitled to an indemnity, he must recognise that in the first instance he has an obligation to pay that which can be indemnified.
Other Court Proceedings
The respondent has been party to complex proceedings in Victorian Civil and Administrative Tribunal (‘VCAT’), the County Court of Victoria (‘County Court’) and the Supreme Court of Victoria (‘Supreme Court’). The history of the matter is set out in Muto v Shepparton City Council [2018] VSCA 73, Muto v The City of Greater Shepparton & Ors [2018] VSCA 75, Muto v Shepparton City Council [2018] VSCA 274; Dobson v Muto (Review and Regulation) (No. 3) [2019] VCAT 167 and Dobson v Muto (Review and Regulation) (No. 4) [2019] VCAT 439. In substance, the respondent was unsuccessful in having his costs paid in proceeding concerning his conduct as a member of a local Council. Despite one success (on a technical point) in Muto v Shepparton City Council [2018] VSCA 73, the respondent has been entirely unsuccessful in VCAT and the state courts.
The applicant ceased acting as a solicitor for the respondent during the VCAT proceedings and ultimately sued for his fees. It appears that the applicant first sued for his fees in the County Court and the respondent joined the Council as a third party seeking indemnity from them pursuant to the Local Government Act 1989 (Vic) (‘the Local Government Act’). In the County Court, the costs claim by the applicant was to follow the claim by the respondent against the Council. Two things have happened: first, the respondent has been unsuccessful in VCAT in his claim for indemnity against the Council (Dobson v Muto (Review and Regulation) (No. 4) [2019] VCAT 439); and secondly, the applicant discontinued in the County Court and brought proceedings in the Supreme Court for costs. No appeal has been lodged against the costs order, nor against the subsequent judgment setting out the taxed amount of those costs. The respondent says he has an appeal against the most recent VCAT decision pending in the Supreme Court.
The respondent submits that if he is successful in the Supreme Court proceedings, Shepparton City Council will be liable to indemnify him for his costs in the earlier proceeding (in which he failed) pursuant the Local Government Act and cl.46F of Schedule 1 of the Victorian Civil and Administrative Tribunal Act1998 (Vic): see paragraph [3] of the Affidavit filed 17 October 2019.
The respondent details (at paragraph [10]) that he has ‘not appealed [the Registrars] Orders because the applicant and the Council have inundated me with legal matters since those Orders were made’.
The respondent seeks to join a third party to the proceedings, being the Shepparton City Council because he submits the debt to the applicant is theirs, rather than his personally. He notes he does dispute the debt existing at all: see paragraph [8].
It is clearly inappropriate to join a third party to the bankruptcy proceedings in these circumstances. There was no legal relationship between the creditor and the Council. The debtor has been unsuccessful in his pursuit of a costs indemnity order against the Council in VCAT.
Costs agreement
Pursuant to Orders made on 10 December 2019 following the hearing, the applicant filed further submissions in relation to the issue of the applicant’s fee agreement with the respondent.
The applicant submits they forwarded a fee agreement to the respondent on 12 September 2012 with a cover letter requesting payment of an initial amount of $10,000, which was subsequently paid on 13 September 2019. The applicant provided as an Annexure those documents.
In his affidavit filed on 27 August 2019 the respondent claims that in relation to the other court proceedings described above, the applicant has received ‘well above $88,000 in fees for his work in my matters but ultimately ceased to act for me 2 or 3 weeks before the substantive hearing in VCAT was to commence’: see paragraph [5]. He further details:
6. The Applicant basically left me unrepresented at the commencement of the VCAT cases and VCAT refused to give me an adjournment, so I left the proceeding and the cases were both heard in my absence and without any defence being put.
7. The applicant at all times said that we would get our money back in the end under s76 of the local government Act 1989 and clause 46F of schedule 1 of the VCAT Act 1998.
8. Those matters are still on foot in the Supreme Court but they will not be heard until 2020 according to the supreme courts orders made on the 10-july-2019.
9. I have no legal document from Lewis Janover as far as a cost agreement is concerned and was never given an exact price for his services by him.
10. I was taken to Mr. Janover by a friend, who also I am told paid Mr. Janover money to look after me.
11. I dispute Mr Janover's costs that he is putting to the Court and the matters that he purports to have handled.
12. Mr. Janover took his claim to the Supreme Court contrary to the Orders of Judge Anderson in the County Court. His claim was dismissed in the County Court with no order as to costs.
13. My car broke down on the way to Melbourne and the Supreme Court, on the day of the Hearing and even though I was able to contact the Supreme Court and advise them of my predicament, the Supreme Court through Registrar Gourlay ( I think ) decided to not give me an adjournment and actually decided once again in my absence to let the Janover application run as an uncontested matter, in the end agreeing with whatever the applicant put on that day.
[…]
16. I do not wish to be made a bankrupt by the Court on the say of Mr. Janover because his claims are not sustainable and unethical, he has no cost agreement to rely on and the amount of times he had me drive down to Melbourne for meetings during 2012 to 2013 is in retrospect fraudulent on many occasions he would meet me down stairs at the cafe ask a few questions and then leave, I would then had to drive back to Shepparton confused.
[…]
19. I have been denied Natural Justice and Procedural fairness from the outset of the allegations against me and then I have been hung out to dry by unscrupulous solicitors that are only interested in money.
20. Mr. Janover is up to something untoward in this proceeding because otherwise it would just be dumb to proceed, I have no money, no property, no superannuation, no assets, no job, no inheritance, I am separated and I pay board and lodgings of $200 per week out of my centerlink money and because of the cost of petrol and parking I am way behind on that as well. What apart from vindictiveness could he possibly achieve, His application is futile and a waste of the courts time, especially in view of the fact that I am still a very good chance of winning my appeal in the Supreme Court on the Clause 46F argument.
In the submissions filed on 13 December 2019, the applicant explains that:
The fee agreements were then governed by the Legal Profession Act 2004 and the Costs Agreements, which were not Conditional Costs Agreements, were given pursuant to s. 3.4.26 of that Act and the Costs Agreements themselves -in the preamble to each costs agreement and s. 3.4.26 (3) -specifically permits acceptance by conduct such as continuing to give instructions as is set out in the Agreements and ins. 3.4.26 (4).
The same provisions are found in the Legal Profession Uniform Law Schedule 1, s. 180 (3) which are the current provisions but which do not apply to the taxation of costs undertaken in respect of these parties as all of the bills were rendered by the Applicant to Mr Muto for services provided prior to the commencement of the operation of the Legal Profession Uniform Law.
The applicant details what occurred in the state court proceedings in the Costs Court division of the Supreme Court of Victoria where final orders were made and remain unchallenged, setting out that:
In the conduct of the County Court proceedings Mr Muto as the defendant asserted that there had been inadequate disclosure by the Applicant in breach of the requirements of the Legal Profession Act 2004 or at least reserved his position in relation to that.
[Section] 3.4.17(1) of that Act requires that if there has been nondisclosure then there is no obligation on the client (Mr Muto) to pay the costs unless they have been reviewed under Division 7 and s.3.4.17(3) requires that a proceeding for the recovery of legal costs may not be maintained unless the costs have been reviewed under Division 7 of the Act.
Hence the application by the Applicant to withdraw from the County Court proceedings once the possible issue of nondisclosure had been raised by Mr Muto.
A review of the Applicant's costs pursuant to Division 7 was initiated on 24 July 2015 by the Applicant by a Summons for Taxation of Costs in the Supreme Court Costs Court in proceeding SCI 2015/03819 pursuant to s.3.4.40 of the Act.
Section 3.4.44 of the Act sets out the criteria for such review in considerable detail and requires the production of, inter-alia, the fee agreement, any disclosure statements, and obviously the relevant bill/bills and all of that documentation was before Judicial Registrar Gourlay in the Costs Court and all were served on Mr Muto.
The Applicant's summons and his affidavit in support in the Supreme Court proceeding together with the Applicant's bills of account were served on Mr Muto on 30 July 2015.
The bills of account all dated 8 October 2013 had first been served on Mr Muto on 8 October 2013 and then again were served on 16 December 2013.
All of the fee agreements and all of the disclosure statements were first served on Mr Muto when Mr Muto retained the Applicant on 12 September 2012 and then again in the course of the Costs Court proceeding on 3 December 2015.
Adjournments in the Costs Court proceeding were sought by Mr Muto by email the 1st of which was from an initial hearing date of 18 August 2015 to the 24 November 2015 when Mr Muto again for a 2nd time asked for an adjournment by email and the matter was listed for 9 February 2016 with directions made.
On Friday, 5 February 2016 at 4:35 PM Mr Muto sent an email to the Costs Court and copied the parties asking what time he needed to be in court for the call over/hearing on Thursday9 February 2016.
Mr Muto did not attend the call over/hearing on 9 February 2016 and the hearing of the taxation was then set down for hearing on 19 April 2016. Mr Muto was advised o the hearing date by the Court Registry.
On the day of the taxation hearing in the Costs Court of 19 April 2016; Mr Muto advised the Registry of the Costs Court that he could not attend and Registrar Gourlay proceeded with the hearing and the taxation of the Applicant's bills of account in Mr Muto's absence.
The Registrar refers to that decision to proceed in Mr Muto's absence and sets out the reasons by way of Other Matters in the Judgment of 19 April 2016.
Subsequently to the Judgment of 19 April 2016 on 27 April 2016 the Applicant conveyed a copy of the Judgment of 19 April 2016 to Mr Muto. Mr Muto then sent an email to the Costs Court (and others) on 27 April 2016 objecting to the orders made in his absence and the Costs Court responded to Mr Muto on 28 April 2016 by email advising Mr Muto of his appeal rights.
No appeal by Mr Muto was lodged.
The General Form of Order in the Supreme Court of Victoria Costs Court of 19 April 2016 ordered the Respondent to pay the Applicant the judgment debt therein described of $107,771.65 which provided inter alia by Order 7 that:
…
7. After deducting monies paid, the costs of the Applicant are taxed and allowed in the sum of $107,771.65 to be paid by the Respondent.
The Costs Court is the expert tribunal division of the Supreme Court of Victoria created by the state legislation to control, monitor and assess the reasonableness of costs sought and compliance with the relevant legislation both previously the Legal Profession Act 2004 and now the Legal Profession Uniform Law. It is the only place that a review of the Applicant's costs pursuant to division 7 of the Act can take place.
That court has satisfied itself that appropriate costs agreements were in place, the relevant provisions of the Act had been complied with by the Applicant and that the level of charges were proper. Final Orders made and remain unchallenged
Despite many claims by the respondent against the applicant with respect to the costs that are the subject of the judgment, no clear particulars are provided. On the material before the court in these proceedings it is difficult to see that there is any arguable case or substantial reason for concluding that the judgment amount is not due to the applicant. The respondent did not appear in court to oppose either the primary order or the taxation of the costs, nor has he appealed the orders. The substance of his argument is that he wants time to litigate in the Supreme Court to challenge the last decision of VCAT. He has not shown an arguable case with respect to the appeal against VCAT. The claim that is the subject of appeal is only for indemnity against the Council and does not relate to the applicant directly.
I am not persuaded that the respondent has shown that there are circumstances that would make it appropriate to decline or delay making a sequestration order.
Medical conditions
The respondent submits that he is ‘very sick, mentally and also broke [his] back’: see paragraph [11] of the Affidavit filed on 17 October 2019. The respondent says he has been prescribed Valium and Prozac for about 5 years and has a doctor’s certificate to explain why he cannot work and is not capable of representing himself in court proceedings.
In his affidavit filed on 27 August 2019, the respondent further details that he is not mentally capable of representing himself in the Supreme Court ‘due to [his] anxiety, stress levels and diagnos[is] of an adjustment disorder’: see paragraph [3].
The applicant presented as capable and coherent, cross-examining the witnesses in detail. The applicant has not sought to have a litigation guardian appointed. On the material I am not satisfied that he requires a litigation guardian.
Conclusion
In this matter I am satisfied that the respondent has committed an act of bankruptcy in failing to pay the sum set out in the Bankruptcy Notice that was served upon him. I am satisfied that he was served with the Creditor’s Petition and that there are affidavits of debt and consent. I am persuaded that it is appropriate that there be orders for the amendment of the creditor’s petition as ordered by the Registrar (including dispensation from verifying and serving it again). I am not persuaded that there are substantial reasons nor an arguable case that the debt is not truly owning, nor that there are facts or circumstances that make it appropriate to decline to make a sequestration order or adjourn the creditor’s petition. There is no material from which one could form the view that the debtor is solvent. As a result I find that the creditor is entitled to orders in the form made by the Registrar.
As I would make the same orders as the Registrar did, it is appropriate that the Application for review of the Registrar’s decision be dismissed with the usual order for costs.
I certify that the preceding fifty-six (56) paragraphs are a true copy of the reasons for judgment of Judge Riethmuller
Associate:
Date: 29 May 2020
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