Lamaw Pty Ltd v Tahiri - [2018] FCCA 2955

FEDERAL CIRCUIT COURT OF AUSTRALIA

LAMAW PTY LTD v TAHIRI & ANOR

[2018] FCCA 2955

Catchwords:
BANKRUPTCY – Application for sequestration order – substituted creditor – whether substitution was valid – whether debt due – whether judgment debt necessary for action – circumstances of entering into deed – cross and third party claims – discretion to refuse sequestration order – sequestration order granted.

Legislation:

Bankruptcy Act 1966 (Cth), ss.37, 43, 49, 52(1), 52(2)(b)

Federal Circuit Court (Bankruptcy) Rules (Cth), r.2.04

Cases cited:

Buckley v Bienfelt; Ex parte James Hardie & Co Pty Ltd (1976) 13 ALR 291

Cain v Whyte (1933) 48 CLR 639
Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ASCR 785
Ling v Enrobook Pty Ltd [1997] FCA 226
Menzies v Paccar Financial Pty Ltd [2011] FCA 460

Owners of Strata Plan No 53267 v Prestia [2001] FCA 363

Papas v Westpac Banking Corporation [2014] FCA 290
Prestia, in the matter of Australia and New Zealand Banking Group Limited v Prestia [2001] FCA 792
Re Svir; Ex parte Commissioner of Taxation (1998) 83 FCR 314
Vlad v Lopez (No 2) [2017] FCCA 2032

Applicant:

LAMAW PTY LTD (ACN 137 876 478)

First Respondent:

BETJULA TAHIRI

Second Respondent:

VEZIRE TAHIRI

File Number:

MLG 1839 of 2017

Judgment of:

Judge McNab

Hearing date:

24 July 2018

Date of Last Submission:

24 July 2018

Delivered at:

Melbourne

Delivered on:

19 October 2018

REPRESENTATION

Counsel for the Applicant:

Mr P. Bornstein

Solicitors for the Applicant:

John Dunne & Associates

Counsel for the Respondents:

Mr P. Corbett QC

Solicitors for the Respondents:

Madgwicks Lawyers

THE COURT ORDERS THAT:

A sequestration order be made under the Bankruptcy Act 1966 against the estate of the Respondent debtors, Betjula Tahiri and Vezire Tahiri.
The Applicant creditor’s costs, including the costs reserved, be taxed and paid from the estate of the Respondent debtors in accordance with the Bankruptcy Act 1966.

AND THE COURT NOTES THAT:

A.The date of the commission of the act of bankruptcy is 22 August 2017.
B.A private trustee, Daniel Peter Juratowitch, has consented to act as trustee in bankruptcy.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 1839 of 2017

LAMAW PTY LTD (ACN 137 876 478)

Applicant

And

BETJULA TAHIRI

First Respondent

VEZIRE TAHIRI

Second Respondent

REASONS FOR JUDGMENT

Introduction

By an amended creditor’s petition filed 17 April 2018, Lamaw Pty Ltd (ACN 137 876 478) (‘Lamaw’) applied for a sequestration order under s 43 of the Bankruptcy Act 1966 (Cth) against the estate of Betjula Tahiri and Vezire Tahiri. The Applicant claims in this petition that:
1.The Respondent debtors Bejtula Tahiri and Vezire Tahiri jointly and severally owe the substituted Applicant creditor the amount of $1,176,953.56 being the balance owing to the creditor pursuant to the provisions of the deed of settlement 22 January 2016.
2.The Applicant creditor does not hold security over the property of the Respondent debtors Bejtula Tahiri and Vezire Tahiri.
3.At the time when the act of bankruptcy was committed, the…

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: [2018] FCCA 2955
Decision Date: 19 October 2018

CaseChat Overview and Summary

Lamaw Pty Ltd (the applicant) sought a sequestration order against Mr Tahiri (the respondent) in the Federal Court of Australia. The application was based on an alleged debt owed by the respondent to the applicant, which arose from a deed entered into by the parties. The respondent disputed the existence and validity of this debt.

The primary legal issues before the Court were whether the applicant, as a substituted creditor, had a valid claim against the respondent, whether a judgment debt was a prerequisite for such an application, and whether the circumstances surrounding the entry into the deed, along with cross and third-party claims, warranted the exercise of the Court's discretion to refuse the sequestration order.

Judge McNab found that the applicant had established a debt due and owing by the respondent. The Court determined that a judgment debt was not a necessary prerequisite for an application for a sequestration order, and that the applicant, as a substituted creditor, was entitled to pursue the application. The Court also considered the circumstances of the deed's execution and the existence of cross and third-party claims, ultimately concluding that these factors did not provide sufficient grounds to refuse the sequestration order. Accordingly, the Court granted the sequestration order.

Orders