Lovering Holding No.1 Pty Ltd v Jonsson (No 2) - [2008] FMCA 1345

FEDERAL MAGISTRATES COURT OF AUSTRALIA

LOVERING HOLDING No.1 PTY LTD v JONSSON (No.2)

[2008] FMCA 1345

BANKRUPTCY – Creditor’s petition – no appearance by debtor– sequestration order.

Bankruptcy Act 1966 (Cth), ss.43,52

Civil Procedure Act 2005 (NSW), s.101

Lovering Holding No.1 Pty Ltd v Jonsson [2008] FMCA 1344
Re Sarina; Ex p Wollondilly Shire Council (1980) 43 FLR 163

Applicant:

LOVERING HOLDING NO.1 PTY LTD ACN 106 316 867

Respondent:

HANS THOMAS JONSSON

File Number:

SYG 1836 of 2008

Judgment of:

Barnes FM

Hearing date:

16 September 2008

Delivered at:

Sydney

Delivered on:

16 September 2008

REPRESENTATION

Solicitors for the Applicant:

Meehans Solicitors

Solicitors for the Respondent:

LAS Lawyers

Solicitors for the Supporting Creditor:

Hunt and Hunt Lawyers

ORDERS

That a sequestration order be made against the estate of Hans Thomas Jonsson.
That the applicant creditor’s costs (including the costs of the adjournment application and any reserved costs) be taxed (in accordance with the Federal Court Rules) and paid from the estate of the respondent debtor in accordance with the Bankruptcy Act 1996.
That under the Bankruptcy Regulations a copy of this sequestration order be given to the Official Receiver in two (2) days.

THE COURT NOTES:

The date of the act of bankruptcy is 4 July 2008.
A consent to act as trustee has been signed by Ivan Daniel Cvitanovic and has been lodged with the Official Receiver in Sydney.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 1386 of 2008

LOVERING HOLDING NO.1 PTY LTD ACN 106 316 867

Applicant

And

HANS THOMAS JONSSON

Respondent

REASONS FOR JUDGMENT

(Revised from Transcript)

On 16 July 2008 the applicant creditor presented and filed a creditor’s petition seeking that a sequestration order be made against the estate of Hans Thomas Jonsson. The petition is said to be founded on the failure by the debtor to comply on or before 4 July 2008 with the requirements of a bankruptcy notice served on him on 13 June 2008.
The bankruptcy notice required the debtor to pay to the creditor within 21 days of service the sum of $40,256.44. That amount was said to be due to the creditor pursuant to a default judgment of the Local Court of New South Wales of 10 April 2008 in the amount of $39,907.52, together with interest pursuant to s.101 of the Civil Procedure Act 2005 (NSW) to 12 May 2008.
The debtor filed a notice of intention to oppose the creditor’s petition and a supporting affidavit, claiming that the debts owed arose from his position as an officer and guarantor of the obligation of a company, that he had the capacity to “derive income in the near future” to pay all debts and that the making of a sequestration order would prevent this and that a proposal for future payment of the debts had been put to the creditor.
When the matter came before me this morning for hearing of the creditor’s petition, the respondent debtor sought an adjournment to enable him to pursue the possibility of entering into a personal insolvency agreement under Pt X of the Bankruptcy Act 1966 (Cth).
The debtor appeared and was represented at that time. He relied on an affidavit filed on 16 September 2006. He was given leave to give further oral evidence in support of the adjournment application. He was cross-examined in relation to a number of issues, including his financial circumstances (see Lovering Holding No.1 Pty Ltd v Jonsson [2008] FMCA 1344).
The adjournment application was refused and the matter adjourned for hearing of the creditor’s petition at 2.15pm. However at 2.15 pm there was no appearance either by the debtor or by his solicitor. After a short adjournment to enable the solicitors for the creditor to attempt to locate the solicitor for the debtor, I was informed from the bar table that Mr Manca, the solicitor for the debtor, was in his office and that he did not “oppose” the orders sought. Somewhat to my concern, the solicitor for the debtor did not appear before the Court this afternoon to inform the Court of his client’s position.
I take from this that the debtor does not intend to pursue the grounds in the notice of opposition, but I note in any event that the matters raised are not such as to satisfy me either that the creditor had not met the requirements of s.52(1) of the Bankruptcy Act 1966 or that a sequestration order should not be made. The debtor has disclosed three creditors. While a proposal was put to each of the creditors for the payment of the debts, as he indicated in his affidavit and oral evidence, that proposal has not been accepted by the petitioning creditor, Lovering Holding Pty Ltd and the supporting creditor, ATO. I am told there is a debt of some $67,000 owing to the ATO. There is one other disclosed debtor (Kennard’s Hire Pty Ltd) for an amount of $12,901.25.
In relation to the matters to be established by the petitioning creditor, on the material before the Court I am satisfied that there has been an act of bankruptcy consisting of a failure to comply with the bankruptcy notice. No issue was taken with the form of the bankruptcy notice. The date of the act of bankruptcy is 4 July 2008. According to the creditor’s petition, the creditor does not hold any security over the property of the respondent debtor. There is no dispute on the material before me about the debtor being personally present or ordinarily resident in Australia. The requirements of s.43 of the Bankruptcy Act are met.
In relation to the matters required under s.52(1), the creditor has filed a creditor’s petition and the requisite affidavits under the Bankruptcy Rules in relation to matters such as service of the creditor’s petition and bankruptcy notice, verification of the creditors petition, final search and final debt. In addition, among the documents filed in Court today, was a consent to act as trustee and evidence of service of that document.
The creditor’s petition has been presented in correct form for a debt of more than $2,000, within six months of the date of the act of bankruptcy signed by the solicitor for the creditor. No issue was taken with the content of the creditor’s petition or the affidavits before the Court. I am satisfied with proof of the matters required under s.52(1) of the Bankruptcy Act.
The evidence before me from the debtor this morning was that his assets were limited to some $2,500. His debts are over $120,000. He is a self-employed construction project manager. Insofar as he hoped to be able to meet the debts, that would depend on him earning from existing contracts a net profit which at this stage can only be seen to be an optimistic estimate and also profits from future contracts which he hoped would come to fruition, but which have not yet been executed. Even if that was to occur the amounts which he estimated he would “clear” from those contracts over the next few months would not suffice to meet his outstanding debts. He also told the Court that he had arranged to obtain employment and tendered a letter from RBS Joinery in relation to six months proposed employment at $95 per hour. However that letter made it clear that the proposed employment was conditional on the proposed employer signing contracts for projects he anticipated would commence in the next six weeks. The evidence before the Court is not such as to demonstrate that the debtor is able to pay his debts within a reasonable time (see Re Sarina; Ex p Wollondilly Shire Council (1980) 43 FLR 163).
Notwithstanding that the solicitor for the debtor has, through the intermediary of another solicitor, indicated that he does not oppose the orders sought, I have had regard to whether on the evidence before me I am satisfied that the debtor is able to pay his debts within s.52(2). The evidence before me is, however, not such as to satisfy me in that respect.
Nor am I satisfied that for any other sufficient cause a sequestration order ought not to be made. The fact that a proposal was put to the creditors for payment of the debts by way for instalments over an anticipated future period is not such as to satisfy me that it is appropriate to dismiss the petition. The offer to the petitioning creditor and the ATO was not accepted. Indeed there is no obligation on the creditor to accept payment of the debt. In any event it was not an offer to pay the full debt immediately but, rather, an intention to make payment by instalments dependent on matters outside the control of the debtor.
In all of the circumstances, given that I am satisfied that the respondent debtor committed the act of bankruptcy alleged in the petition and with proof of the other matters required by s.52 of the Bankruptcy Act I will make a sequestration order against the estate of Hans Thomas Jonsson.

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Barnes FM

Associate:

Date: 29 September 2008