JML Rose Pty Ltd v Jorgensen - [2024] FCA 1421

FEDERAL COURT OF AUSTRALIA
JML Rose Pty Ltd v Jorgensen [2024] FCA 1421

File number: QUD 529 of 2024

Judgment of: LOGAN J

Date of judgment: 29 November 2024

Catchwords:
PRACTICE AND PROCEDURE – where the respondent debtor makes an application in relation to a registrar’s decision to issue sequestration orders – where the application seeks a stay of the sequestration orders – where the underlying judgment debt was made over two years ago – stay application dismissed

BANKRUPTCY AND INSOLVENCY – where the respondent debtor makes an application in relation to a registrar’s decision to issue sequestration orders – where the application seeks a stay of the sequestration orders – where the underlying judgment debt was made over two years ago – stay application dismissed

Division: General Division

Registry: Queensland

National Practice Area: Commercial and Corporations

Sub-area: General and Personal Insolvency

Number of paragraphs: 8

Date of hearing: 29 November 2024

Solicitor for the Applicant: JML Rose

Counsel for the Respondent: The respondent appeared in person

Solicitor for the Supporting Creditor: Grace Lawyers

Solicitor for the Interested Person: Rose Litigation Lawyers

ORDERS

QUD 529 of 2024

BETWEEN:
JML ROSE

Applicant

AND:
LEIGH ALAN JORGENSEN

Respondent

BODY CORPORATE FOR CAIRNS CENTRAL PLAZA APARTMENTS COMMUNITY TITLES SCHEME 40022

Supporting Creditor

LEON LEE, AS TRUSTEE OF THE BANKRUPT ESTATE OF LEIGH ALAN JORGENSEN (THE BANKRUPT)

Interested Person

ORDER MADE BY:

LOGAN J

DATE OF ORDER:

29 NOVEMBER 2024

THE COURT ORDERS THAT:
1.The application for a stay of the registrar’s order of 16 October 2024 be dismissed.
2.The hearing of the application in respect of the registrar’s order of 16 October 2024 be heard in Brisbane, and via video-link to Cairns, on 4 February 2025 at 10:15am.
3.The applicant file and serve any further affidavit to be relied upon on or before 6 December 2024.
4.The petitioning creditor, supporting creditor and trustee file and serve, save in respect of affidavits on debt and search for the petitioning creditor or an updated affidavit of debt for the supporting creditor, any affidavits to be relied upon on 20 December 2024.
5.Any affidavit in reply by the applicant debtor be filed and served on or before 17 January 2025.
6.On or before 28 January 2025:
(a)the petitioning creditor, supporting creditor and trustee file and serve an outline of submissions to be relied upon, of not more than 7 pages;
(b)any party requiring a witness to attend for cross-examination give notice to the party who has filed the affidavit of that witness.

7.Liberty to apply, including liberty to apply in respect of any order sought as a consequence of any setting aside by the Magistrates Court of Queensland of the judgment underlying the bankruptcy notice.
8.Costs reserved.

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

REASONS FOR JUDGMENT
(REVISED FROM TRANSCRIPT)
LOGAN J:

The respondent debtor, Mr Leigh Alan Jorgensen (Mr Jorgensen) has made an application in respect of a sequestration order made by a registrar on…

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: [2024] FCA 1421
Decision Date: 29 November 2024

CaseChat Overview and Summary

JML Rose Pty Ltd filed a petition for bankruptcy against Jorgensen, leading to a registrar’s decision to issue sequestration orders. Jorgensen subsequently applied to the court to stay the orders, arguing that the underlying judgment debt was made over two years ago. The Federal Court was tasked with determining the validity of Jorgensen's application and the appropriateness of a stay.

The court considered the legal principles surrounding the application for a stay of sequestration orders, particularly focusing on the time elapsed since the judgment debt. The court noted that while the application for a stay was not a common practice, it was not precluded by any specific legal rule. The main issue was whether the delay in making the application warranted a stay of the sequestration orders. The court also examined whether the delay was unreasonable or if there were valid reasons for the delay.

In dismissing the application for a stay, the court found that the delay in making the application was not justified. The court held that the two-year delay was unreasonable and did not constitute a valid reason for the stay. The court emphasised that the prompt enforcement of sequestration orders was important for the effective administration of justice and the protection of creditors' rights. The court also noted that the delay did not prejudice Jorgensen in any way that would warrant a stay.

The court made several orders, including dismissing Jorgensen's application for a stay, setting a date and location for the hearing of the application, and establishing a timetable for filing and serving affidavits and outlines of submissions. The court reserved costs and granted liberty to apply for any consequential orders if the underlying judgment was set aside by the Magistrates Court of Queensland.

Orders

Orders of the court

1. The application for a stay of the registrar’s order of 16 October 2024 be dismissed.

2. The hearing of the application in respect of the registrar’s order of 16 October 2024 be heard in Brisbane, and via video-link to Cairns, on 4 February 2025 at 10:15am.

3. The applicant file and serve any further affidavit to be relied upon on or before 6 December 2024.

4. The petitioning creditor, supporting creditor and trustee file and serve, save in respect of affidavits on debt and search for the petitioning creditor or an updated affidavit of debt for the supporting creditor, any affidavits to be relied upon on 20 December 2024.

5. Any affidavit in reply by the applicant debtor be filed and served on or before 17 January 2025.

6. On or before 28 January 2025:

(a) the petitioning creditor, supporting creditor and trustee file and serve an outline of submissions to be relied upon, of not more than 7 pages;

(b) any party requiring a witness to attend for cross-examination give notice to the party who has filed the affidavit of that witness.

7. Liberty to apply, including liberty to apply in respect of any order sought as a consequence of any setting aside by the Magistrates Court of Queensland of the judgment underlying the bankruptcy notice.

8. Costs reserved.

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

Background

Background to the litigation

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Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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File number:	QUD 529 of 2024
Judgment of:	LOGAN J
Date of judgment:	29 November 2024
Catchwords:	PRACTICE AND PROCEDURE – where the respondent debtor makes an application in relation to a registrar’s decision to issue sequestration orders – where the application seeks a stay of the sequestration orders – where the underlying judgment debt was made over two years ago – stay application dismissed BANKRUPTCY AND INSOLVENCY – where the respondent debtor makes an application in relation to a registrar’s decision to issue sequestration orders – where the application seeks a stay of the sequestration orders – where the underlying judgment debt was made over two years ago – stay application dismissed
Division:	General Division
Registry:	Queensland
National Practice Area:	Commercial and Corporations
Sub-area:	General and Personal Insolvency
Number of paragraphs:	8
Date of hearing:	29 November 2024
Solicitor for the Applicant:	JML Rose
Counsel for the Respondent:	The respondent appeared in person
Solicitor for the Supporting Creditor:	Grace Lawyers
Solicitor for the Interested Person:	Rose Litigation Lawyers

QUD 529 of 2024
BETWEEN:	JML ROSE Applicant
AND:	LEIGH ALAN JORGENSEN Respondent
BODY CORPORATE FOR CAIRNS CENTRAL PLAZA APARTMENTS COMMUNITY TITLES SCHEME 40022 Supporting Creditor LEON LEE, AS TRUSTEE OF THE BANKRUPT ESTATE OF LEIGH ALAN JORGENSEN (THE BANKRUPT) Interested Person

ORDER MADE BY:	LOGAN J
DATE OF ORDER:	29 NOVEMBER 2024