LOVE v Peel

[2014] FCCA 366

FEDERAL CIRCUIT COURT OF AUSTRALIA

LOVE & ANOR v PEEL [2014] FCCA 366

Catchwords:
BANKRUPTCY – Creditor’s petition – no appearance by respondent debtor – correction of error in creditor’s petition concerning date of the act of bankruptcy.

Legislation:

Bankruptcy Act 1966, s.52

First Applicant: KEITH LOVE

Second Applicant: DEIRDRE LYNN LOVE

Respondent: CYRIL JOHN PEEL

File Number: SYG 1326 of 2013

Judgment of: Judge Driver

Hearing date: 27 February 2014

Delivered at: Sydney

Delivered on: 27 February 2014

REPRESENTATION

Solicitors for the Applicant:

Mr A Segal

Kreisson Legal

No appearance by or on behalf of the Respondent

ORDERS

1. A sequestration order is made against the estate of Cyril John Peel.

2. The applicant creditors’ costs, including reserved costs, if any, be fixed in the amount of $7,000 and paid in accordance with the Bankruptcy Act 1966 (Cth).

3. The Court determines that the date of the act of bankruptcy is 4 May 2013.

4. The Court notes the obligations on the applicant creditors to notify, enter and serve these orders in accordance with the Federal Circuit Court (Bankruptcy) Rules 2006 (Cth).

5. The Court notes that a Consent to Act as Trustee has been signed by Mr David Solomons and Mr Antony de Vries on 28 November 2013.

6. The Court directs that the petitioning creditors are to arrange to have the orders made today entered and the petitioning creditors are to serve a copy of these orders on the respondent debtor by express post at his last known address for service.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1326 of 2013

KEITH LOVE

First Applicant

DEIRDRE LYNN LOVE

Second Applicant

And

CYRIL JOHN PEEL

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

1. I have before me a creditor’s petition filed on 14 June 2013 seeking a sequestration order and other orders against Cyril John Peel.  The creditor’s petition asserts that Mr Peel owes the petitioning creditors $25,117.95 based upon a judgment debt which I understand was a default judgment.  The act of bankruptcy relied upon is the failure by the debtor to comply with a bankruptcy notice served on 13 April 2013 on or before 8 April 2013[1].  The creditor’s petition is verified by the affidavit in part 2 of it.  Paragraph 4 of the creditor’s petition is further verified by the affidavit of Alan Lewis Segal made on 7 June 2013.

   [1] This is an obvious error.  I calculated the date of the act of bankruptcy to be 4 May 2013.  See [7] below

2. The petition is further supported by the affidavit of personal service of it filed in Court by leave today and the affidavit of personal service of the supporting bankruptcy notice filed on 14 June 2013.  There is a consent to act as trustee from Mr David Solomons and Mr Anthony De Vries, and affidavits of final search and debt filed in Court by leave today.  I also permitted the solicitor for the petitioning creditors to file in Court an affidavit in support of an order for costs.  I am satisfied on the basis of that material that the petitioning creditors have advanced a prima facie case for the relief they seek.

3. The matter has been before the Court on a number of occasions since the petition was presented.  A number of adjournments have been granted so that the parties could explore the possibility of a settlement.  Unfortunately, those discussions have not been fruitful.  Exhibit A1 is an email from Mr Segal to the then solicitors of the respondent debtor detailing the orders last made by the Court on 10 December 2013 and giving notice that unless the matter was satisfactorily resolved the creditors would not entertain any further discussion or delays.  The email notifies the debtor’s solicitors that the creditors would proceed to seek a sequestration order without further notice if the matter was not properly resolved.  I am told by Mr Segal today that the matter has not been resolved and that he presses for a sequestration order. 

4. There was no appearance by or on behalf of Mr Peel when the matter was called outside Court today.  The matter has been called twice.  There is no explanation for the non-attendance by or on behalf of Mr Peel.  In the circumstances, I have acceded to the petitioning creditor’s request for the Court to proceed to deal with the petition in the debtor’s absence.

5. The debtor filed a notice of grounds of opposition on 12 August 2013.  That asserts that the default judgment supporting the bankruptcy notice and the petition was flawed.  In an affidavit filed on the same day, Mr Peel repeats that assertion and further asserts that the statement of claim in the judgment debt proceedings in the Local Court in Sydney was not properly served and that the pleadings in the statement of claim were flawed in paragraph 6 in that no breach of a mortgage by the mortgagee had been pleaded or particularised.

6. The pleading in question is not annexed and the assertion in the notice of grounds of opposition is not otherwise supported.  I am told by Mr Segal that no action has been taken to seek to set aside the default judgment. 

7. I am satisfied that the debtor committed the act of bankruptcy alleged in the petition and I am satisfied with the proof of the other matters with which s.52(1) of the Bankruptcy Act 1966 (Cth) requires proof. I am not satisfied that the debtor has advanced any reason for the Court to refrain from making a sequestration order or to further delay doing so.

8. The creditor’s petition incorrectly asserts a failure to comply with the bankruptcy notice prior to the service of the bankruptcy notice.  That is a patent error, but not fatal to the petition.  I accept from the affidavit of personal service that the bankruptcy notice was served on 13 April 2013 and I accept from the body of the bankruptcy notice that compliance was required within 21 days of that service.  It follows that the act of bankruptcy was committed on 4 May 2013 and I so determine.

9. The Court notes the obligation of the petitioning creditors to enter, serve and notify the orders made by the Court today and the Court further notes that a consent to act as trustee was signed by Mr David Solomons and Mr Anthony De Vries on 28 November 2013.

I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Judge Driver

Associate: 

Date:  3 March 2014