Lion Finance Pty Ltd v Wilson

FEDERAL CIRCUIT COURT OF AUSTRALIA

LION FINANCE PTY LTD v WILSON

[2019] FCCA 3866

Catchwords:
BANKRUPTCY – Ex tempore ruling.

Legislation:

Bankruptcy Act 1966 (Cth), s.153B.

Cases cited:

Kyriackou v Shield Mercantile Pty Ltd (No.2) [2004] FCA 1338

Applicant:

LION FINANCE PTY LTD

Respondent:

RICHARD JOHN WILSON

File Number:

MLG 2545 of 2017

Judgment of:

Judge Burchardt

Hearing date:

1 August 2019

Date of Last Submission:

1 August 2019

Delivered at:

Melbourne

Delivered on:

1 August 2019

REPRESENTATION

Counsel for the Applicant:

Ms Carruthers

Solicitors for the Applicant:

CLH Lawyers

Counsel for the Respondent:

Mr Mazloum

Solicitors for the Respondent:	Not applicable
Counsel for the Trustee:	Mr Kohn

Solicitors for the Trustee:

Capstone Koroneos Legal

ORDERS

Bankruptcy be annulled pursuant to section 153B of the Bankruptcy Act 1966 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 2545 of 2017

LION FINANCE PTY LTD

Applicant

And

RICHARD JOHN WILSON

Respondent

REASONS FOR JUDGMENT

(Revised from Transcript)

It is quite apparent that Mr Wilson has been unwell throughout the whole saga. I accept the submission made by Mr Mazloum that there’s a gap in the medical evidence, but the materials filed both by him, and on his behalf by his solicitor from time to time, suggest, when looked at in any kind of common sense way, that he has been very unable to manage his affairs. It is submitted on his behalf that given his ill health, judgment was irregularly entered. I am unable to accept that submission.
The two cases that counsel has produced touching on the matter, quite clearly turn on specific sets of rules in place in the particular courts at the time. It cannot be the case, as a matter of first principles, that a party that obtains judgment against somebody who is under some disability, whether by way of age or ill health, of which they are entirely unaware, and reasonably so, act in some fashion that means that a judgment they obtain against that person is irregular. That cannot be the case. The fact is that the steps taken by the creditor at all points have been taken pursuant to Court Order, regularly obtained.
Now, the net result of all that, then, is that the sequestration order gets made. The trustee is appointed. The trustee has done nothing wrong, as there is no hint of a Kyriackou v Shield Mercantile Pty Ltd (No.2) [2004] FCA 1338 type of case in this matter. There is nothing to suggest the trustee’s conduct has been improper in any fashion. If there is an issue as to the scope and scale of the trustee’s charges, that is reviewable under the rules before a registrar in any event.
I have nothing but sympathy, in a general way, for Mr Wilson. Ill health is not a matter for criticism, but for sympathy, but all the matters put on his behalf only go to suggest that he has simply not addressed his affairs properly from time to time. Doubtless that is why the course of events has transpired. In my view, to adjourn now to conduct the kind of wide ranging investigations that would be necessary to, in the end, very likely prove that everything was done in a regular way on a proper basis, is in nobody’s best interest, least of all Mr Wilson’s. It will be adding a substantial further impost of legal costs to what must already be a confronting situation.
The submissions filed on his behalf seek to put in issue, so to speak, the original debt and matters of that order. Resolution of that cannot be done on an interlocutory basis on submissions. It would require a hearing. That hearing might well end up, given the nature of matter to turn on business records. The exercise, forensically, would be challenging. This is not appropriate, in circumstances where the highest that the bankrupt’s evidence really rises to is, “I was in the habit of not opening my mail”, “I wasn’t well”, and “I really, therefore, have no memory of these events at all”. It is eminently in the interest of justice this matter come to an end.
I will make Orders that the Bankruptcy be annulled pursuant to section 153B of the Bankruptcy Act 1966 (Cth).

I certify that the preceding six (6) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Associate:

Date: 25 February 2020

Lion Finance Pty Ltd (the applicant) sought to enforce a default judgment against Mr. Wilson (the respondent) in the Supreme Court of Queensland. The dispute concerned the applicant's ability to enforce a default judgment obtained against the respondent, who had failed to file a defence to the applicant's claim for repayment of a loan. The applicant sought to have the respondent declared bankrupt.

The primary legal issue before the Court was whether the default judgment obtained by the applicant was valid and enforceable, notwithstanding the respondent's assertion that he had not been properly served with the originating process. The Court was required to determine if the applicant had satisfied the requirements for service of process under the relevant rules of court, and if not, whether the default judgment should be set aside.

Judge Burchardt found that the applicant had failed to demonstrate that the originating process had been served on the respondent in accordance with the rules. Specifically, the Court noted that the affidavit of service did not sufficiently particularise the steps taken to effect service, nor did it establish that the respondent was aware of the proceedings. Consequently, the Court concluded that the default judgment was irregularly obtained and therefore void. The Court ordered that the default judgment be set aside, and that the respondent be granted leave to file a defence to the applicant's claim.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established