Kattirtzis, in the matter of Zaravinos v Zaravinos

[1999] FCA 1846

FEDERAL COURT OF AUSTRALIA

Kattirtzis, in the matter of Zaravinos v Zaravinos [1999] FCA 1846

BANKRUPTCY - creditor’s petition - where service of bankruptcy notice on which petition is based is disputed - whether bankruptcy notice served as alleged in petition - whether act of bankruptcy committed

IN THE MATTER OF GEORGE ZARAVINOS

GEORGE KATTIRTZIS v GEORGE ZARAVINOS

N8122 OF 1999

EMMETT J
20 DECEMBER 1999
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N8122 OF 1999

IN THE MATTER OF GEORGE ZARAVINOS
BETWEEN:	GEORGE KATTIRTZIS APPLICANT
AND:	GEORGE ZARAVINOS RESPONDENT
JUDGE:	EMMETT J
DATE OF ORDER:	20 DECEMBER 1999
WHERE MADE:	SYDNEY

THE COURT DECLARES THAT:

1.An act of bankruptcy was committed by the debtor on 5 October 1999 as alleged in paragraph 4 of the petition.

THE COURT ORDERS THAT:

2.The matter be referred to a Registrar for determination of the question of whether a sequestration order ought to be made.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N8122 OF 1999

IN THE MATTER OF GEORGE ZARAVINOS
BETWEEN:	GEORGE KATTIRTZIS APPLICANT
AND:	GEORGE ZARAVINOS RESPONDENT

JUDGE:	EMMETT J
DATE:	20 DECEMBER 1999
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. On October 11 1999 a creditor's petition was presented to the court on behalf of George Kattirtzis.  The debtor is George Zaravinos.  The act of bankruptcy relied on in the creditor's petition is the alleged failure by the debtor, on or before 5 October 1999, either to comply with the requirements of the bankruptcy notice served on 11 September 1999 or to satisfy the court that the debtor had a counter claim, set off or cross-demand equal to or exceeding the sum specified in the bankruptcy notice.  The bankruptcy notice is founded on a judgment of the District Court entered at Sydney on 7 October 1998.

2. There has been referred to me for determination the question of whether or not the alleged act of bankruptcy was committed.  That question itself turns on whether or not a bankruptcy notice was served on the debtor on 11 September 1999. 

3. The petitioner relied initially on an affidavit of service sworn by Mr Panayiotis Theodossiou, who is sometimes known as Peter Theo.  Mr Theodossiou said that, on 11 September 1999 at approximately 1.30pm, he served the debtor with a copy of the bankruptcy notice.  He said he identified the debtor by reason of the fact that he has known him personally for well over 12 years.  Mr Theodossiou said that he said to the debtor:

   “Here are your court documents.”

   Mr Theodossiou said that the debtor replied:

   “Why don't you leave me alone?”

   Mr Theodossiou said that he himself then said:

   “One day it will be all over.”

4. In the course of oral evidence, Mr Theodossiou said that he had been to premises known as 12 Colson Crescent, Werrington County, New South Wales and that he recalled the date of 11 September 1999.  He said that, on that day, the debtor was wearing a green tracksuit and that he was trimming a bush in the garden. Initially, that was the only evidence relied on in chief.  The matter has been adjourned several times.  When the matter came back before me today counsel for the petitioner sought leave to call the petitioner to corroborate the evidence given by Mr Theodossiou. 

5. The petitioner said that he recalled 11 September 1999 because it was a matter of some importance to him.  He said that he drove to the premises known at 12 Colson Crescent, Werrington County with Mr Theodossiou and that he saw Mr Theodossiou go up the front steps of the house and serve documents on the debtor who was on the front porch or verandah.  There is some inconsistency between the evidence of the petitioner and Mr Theodossiou in that regard, in that there was no suggestion by the petitioner that the debtor was trimming bushes.

6. Once again, the petitioner was granted leave to reopen and called Mr Frank Mercuri, the petitioner's solicitor.  Mr Mercuri gave evidence that the bankruptcy notice was issued on 10 September 1999.  He wrongly said it was issued by the Federal Court.  In fact, the bankruptcy notice, as is normal, was signed by the Official Receiver and presumably was issued by the Official Receiver.  Mr Mercuri said that he gave what he called the “sealed bankruptcy notice” to the petitioner on 10 September 1999.  The bankruptcy notice is not, in fact, sealed, although it does contain a file number fixed by the Official Receiver’s office and contains the stamped signature of the Official Receiver.

7. Mr Mercuri told the petitioner on 10 September 1999 that the bankruptcy notice should be served as soon as possible.  He said that on the afternoon of 11 September 1999, he received a telephone call from the petitioner saying that Mr Theodossiou had served the bankruptcy notice on the debtor. 

8. The debtor also gave evidence on the question of service.  He denies that the bankruptcy notice was served on 11 September 1999 or at all.  He acknowledges that the petition was served, but maintains his denial that the bankruptcy notice was served.  He gave evidence that he no longer lives at 12 Colson Crescent, Werrington County although his wife or former wife still resides there.  He also accepted that he visited those premises regularly.  Some question arose as to where the debtor now resides.  He said that he lives at 11/22 Evans Avenue, Eastlakes and produced rent receipts for several weeks showing payments of $280 for each period of several weeks, probably four weeks. 

9. Attention was drawn to the fact that the rent receipts all appear to be in the same pen and are successive, in terms of their numbers.  That is probably equivocal in that each is purportedly signed by the same person.  The debtor's evidence was that he shares a flat with the owner.  There is no reason to think that the owner would have occasion for issuing rent receipts to anyone else.  On the other hand, the fact of rent receipts itself may be, on one view, regarded as curious. 

10. I am prepared to accept that the debtor does, in fact, live at 11/22 Evans Avenue, Eastlakes.  However, for the reasons I have briefly indicated, that is not decisive of the matter because the debtor accepts that, from time to time, he does visit 12 Colson Crescent, Werrington Country.

11. The debtor also sought to corroborate his evidence by the evidence of Mr Jim Triantos, who swore an affidavit saying that on 11 September 1999 from 12.30pm until 3.00pm he was with Mr Zaravinos, the debtor, at South St Marys.  Mr Triantos conducts a real estate agency.  In oral evidence, he said that he had made arrangements for Mr Zaravinos, the debtor, to attend his office to assist with a letterbox drop.  A copy of what was said to be the diary of Mr Triantos for 11 September 1999 was in evidence before me.  It showed an entry for 1.00pm on 11 September 19999 in the following terms:

    “George Zaravinos Letterbox drops South St Marys (pick him up from Balog Street).”

    At the bottom of the page of the diary, under the heading "Calls to make", the following appears:

    “George Zaravinos: 0413 386095
    Call him for letterbox drops.”

    Mr Triantos has been acquainted with Mr Zaravinos for some years and they have done work together on occasion before 11 September 1999.  Mr Triantos, in fact, knew Mr Zaravinos's telephone number by heart without any need to refer to his diary. 

12. I thus have before me a question that turns upon which of two sets of two witnesses I should believe.  On the one hand, it is suggested that the diary is, in effect, a fabrication.  On the other hand, to find that there was no service would be to disbelieve the evidence of the creditor and Mr Theodossiou. Mr Theodossiou is a close friend of the creditor having been best man at the creditor's wedding.  On the other hand, Mr Triantos, as I have said, is apparently a reasonably well known acquaintance of the debtor.

13. There was some small question raised as to the judgment debt.  After the hearing before me began several weeks ago, the debtor applied to the District Court to have the judgment set aside.  His affidavit in support of that application is in the following terms:

    “I did not appear at the hearing of this matter on 6 October 1998 as I had run out of money and could not afford legal representation.  I did not believe that my English was good enough to represent myself.  At the time I also was going through divorce proceedings.  A decree was made a short time before the hearing and my father was suffering from a severe stroke which occurred in September and which has made him since paralysed and bedridden.  I was not informed that the hearing was adjourned to 23 October 1998.  The plaintiffs had no documentary evidence to support their case against me and their allegations against me are untrue.”

14. While some intimation was given from the bar table, I have no evidence before me as to the nature of the proceedings in the District Court.  The reference to an adjournment to 23 October 1998 appears to be misconceived.  There is some evidence before me in the form of a file record from the District Court that indicates that some matter was adjourned on 7 October 1998 to 23 October 1998.

15. The certificate of the District Court which is attached to the bankruptcy notice, after referring to entry of judgment and orders to pay against the defendant, George Zaravinos, in favour of Nick Houvardas and George Kattirtzis, also records the following order:

    “Leave granted to the plaintiffs to approach the list Judge regarding Notice of Motion by the Plaintiffs against George Zaravinos and Ourania Zaravinos originally returnable 25 September to have this matter listed for hearing and the respondents to the Notice of Motion are to be notified of the hearing date.”

    It may be that 23 October 1998 was the date for further hearing of the notice of motion.  Whatever the explanation of the file note from the District Court, the certificate is clear in saying that the judgment was entered on 7 October 1998.

16. It is apparent from the affidavit filed by the debtor in support of his application to set the judgment aside that he did not attend on the hearing of the District Court proceedings, which appears to have lasted for two days.  There is nothing in the affidavit itself to indicate that there is any prospect of success in having the judgment set aside, although it may be, of course, that there is other evidence intended to be relied on.

17. I find the question before me a difficult one to decide in the absence of any credible contemporaneous evidence.  The diary note, or extract from the diary, if it were accepted as a contemporaneous note, coupled with the evidence of Mr Triantos would corroborate the fact asserted by Mr Zaravinos that he was not at 12 Colson Crescent on 11 September 1999 at 1.30pm.

18. However, the document is simply a copy of a page.  The original was not produced to enable comparisons between handwriting and inks.  That, of course, is probably equivocal.  The original affidavit of Mr Triantos referred to a time from 12.30pm until 3.00pm at South St Marys.  It is curious therefore that the time shown in the diary is 1.00pm and that there is an appointment shown for 2.00pm.  There are arrows pointing from the entry for 12.00pm to a name opposite the time at 1.00pm where the debtor’s name appears.  I have already referred to the fact that it would be curious that Mr Triantos would need to make a note on 11 September 1999 of Mr Zaravinos' name in order to remind him to call him for letter box drops.

19. It is difficult to form any decisive view of credibility of witnesses from their appearance in the witness box.  I was unable to form a firm view, one way or the other, as to whether any of the witnesses (other than Mr Mercuri) was speaking truthfully.

20. Each of them is a non-native English speaker which, of course, makes it more difficult when giving evidence, particularly in the formal circumstances of sworn evidence in a witness box.  What I do find to be significant is the evidence of Mr Mercuri.  I have already indicated that there are some aspects of Mr Mercuri's evidence that suggest reconstruction.  However, I am not prepared to accept that Mr Mercuri gave false evidence about the conversations he had, both in person and on the telephone, on 10 and 11 September 1999.  Indeed, he was not challenged about those discussions.

21. Having regard to the curiosities concerning the diary page said to come from Mr Triantos' diary and the circumstances of Mr Mercuri's evidence, I consider on balance that it is more likely than not that the bankruptcy notice was served as alleged in the petition. 

22. It follows that I will make a declaration that an act of bankruptcy was committed by the debtor on 5 October 1999 as alleged in paragraph 4 of the petition.  The matter will be referred to a Registrar for the purposes of determining the question of whether or not a sequestration order should be made.

I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate:

Dated:            23 December 1999

Counsel for the Applicant:	R.D.S.M. McCrudden
Solicitor for the Applicant:	Mercuri & Co
The debtor appeared in person
Date of Hearing:	7-8 December, 20 December 1999
Date of Judgment:	20 December 1999