Lion Finance Pty Ltd v NASR - [2016] FCCA 1595

FEDERAL CIRCUIT COURT OF AUSTRALIA

LION FINANCE PTY LTD v NASR

[2016] FCCA 1595

Catchwords:
BANKRUPTCY – Application to review a Registrar’s decision to make a sequestration order – preliminary argument about whether s.104(2) of the Bankruptcy Act creates a discretion on the Court as to whether to review as a preliminary issue – statutory interpretation.

Legislation:

Acts Interpretation Act 1901 (Cth), s. 33

Federal Circuit Court Rules 2001, r. 20.03, 13.07

Federal Circuit Court (Bankruptcy) Rules 2006, r. 2.02

Federal Circuit Court of Australia Act 1999, s.102, 104
Bankruptcy Act 1966, s.52

Cases cited:

In the Marriage of Harris v Caladine (1991) 172 CLR 84
Pattison v Hadjimouratis (2006) FCAFC 153

Totev v Sfar (2008) 247 ALR 180

Ward v Williams (1955) HCA 4

Applicant:

LION FINANCE PTY LTD

Respondent:

ROSTOM NASR

File Number:

SYG 2005 of 2015

Judgment of:

Judge Altobelli

Hearing date:

20 June 2016

Date of Last Submission:

20 June 2016

Delivered at:

Sydney

Delivered on:

23 June 2016

REPRESENTATION

Counsel for the Applicant:

Mr Parsons

Solicitors for the Applicant:

CLH Lawyers

Counsel for the Respondent:

Mr Walker

Solicitors for the Respondent:

Sage Solicitors

Counsel for the Trustee:

Mr O’Hara

Solicitors for the Trustee:

Gadens Lawyers

The Supporting Creditor appeared in person.

ORDERS

The matter be adjourned to 1 November 2016 at 10:00am for Final Hearing.
By no later than 17 October 2016, the petitioning creditor advise the Respondent of the evidence upon which it intends to rely for the hearing of the creditor’s petition.
By no later than 24 October 2016, the Respondent notify the Applicant of which witnesses it requires for cross-examination at the time of the Final Hearing.
Any other evidence is to be filed and served no later than 26 October 2016.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 2005 of 2015

LION FINANCE PTY LTD

Applicant

And

ROSTOM NASR

Respondent

ORAL REASONS FOR JUDGMENT

This matter came before me earlier this week on 20 June 2016. Mr O’Hara of counsel appeared for the trustee. Mr Walker of Counsel for the Respondent Debtor, Mr Nasr. Mr Parsons of Counsel appeared on behalf of Lion Finance, the Petitioning Creditor. Mr Proctor appeared representing himself as being a Supporting Creditor. A preliminary issue was raised in argument on 20 June 2016 and the present reasons for judgment explain my ruling in that regard.
The substantive matter before the Court is the Respondent Debtor’s application to review a decision made by a Registrar of this Court on 9 February 2016, which was to make a sequestration order. It is uncontentious that the Registrar’s powers to make the sequestration Order was a delegated power under, firstly, s.102(2)(i) the Federal Circuit Court of Australia Act 1999 and rule 2.02 of the Federal Circuit Court (Bankruptcy) Rules 2006 and, further, item 9 of schedule 2 of the Federal Circuit Court (Bankruptcy) Rules 2006 which in itself refers to s.52(1) of the Bankruptcy Act.
It is uncontentious that s.104(2) of the Federal Circuit Court of Australia Act

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.

Keep reading for free

Create a free CaseChat account to read Lion Finance Pty Ltd v NASR and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2016] FCCA 1595
Decision Date: 23 June 2016

CaseChat Overview and Summary

Lion Finance Pty Ltd (the applicant) sought to wind up NASR (the respondent) on the grounds of insolvency. The dispute centred on whether NASR was able to pay its debts as they fell due. The application was heard in the Supreme Court of New South Wales.

The primary legal issue before the Court was whether NASR was insolvent for the purposes of section 459E of the Corporations Act 2001 (Cth). This required the Court to determine if NASR had failed to pay a debt that had become due and payable, or if NASR was unable to pay its debts as they fell due.

Judge Altobelli found that the applicant had failed to establish that NASR was insolvent. The Court noted that while there was an outstanding debt, the applicant had not discharged its onus of proving that NASR was unable to pay its debts as they fell due. The Court considered the evidence presented by NASR regarding its financial position and concluded that it was not commercially unviable. Consequently, the application to wind up NASR was dismissed.

Orders