LV Property Investments Pty Ltd v Liang

[2014] FCCA 1715

FEDERAL CIRCUIT COURT OF AUSTRALIA

LV PROPERTY INVESTMENTS PTY LTD v LIANG [2014] FCCA 1715

Catchwords:
BANKRUPTCY – Application for review of Registrar’s decision to make a Sequestration Order – applicant asserting extensive fraud by creditor, creditor’s solicitor and others – whether assertions of fraud made out – applicant clearly unable to pay debts as and when due – fraud not established – whether Sequestration Order should be made – application for review dismissed.

Legislation:  
Bankruptcy Act 1966, ss.52(1), 52(2)

Federal Court (Bankruptcy) Rules 2005, rr.4.04, 4.06
Evidence Act 1995, s.69

Sandell v Porter (1966) 115 CLR 666
Cain v Whyte (1933) 48 CLR 639
Ling v Enrobook Pty Ltd (1997) 74 FCR 19

Applicant: LV PROPERTY INVESTMENTS PTY LTD

Respondent:

Supporting Creditor:

YAN LIANG

DEPUTY COMMISSIONER OF TAXATION

File Number: LNG 40 of 2013

Judgment of: Judge Burchardt

Hearing date: 11 June 2014

Date of Last Submission: 11 June 2014

Delivered at: Melbourne

Delivered on: 13 August 2014

REPRESENTATION

The Applicant: In person

Counsel for the Respondent: Mr Munting

Solicitors for the Respondent: Wallace Wilkinson +Webster

Counsel for the Supporting Creditor: Mr Cummings

Solicitors for the Supporting Creditor: Angus McCulloch

ORDERS

1. The orders made by Registrar Scott on 9 January 2014 are affirmed.

2. The application for review is dismissed.

3. The costs of the application, including any reserved costs, are to be paid out of the estate of the Bankrupt in accordance with the Bankruptcy Act 1966.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT MELBOURNE

LNG 40 of 2013

LV PROPERTY INVESTMENTS PTY LTD

Applicant

And

YAN LIANG

Respondent

And

DEPUTY COMMISSIONER OF TAXATION
Supporting Creditor

REASONS FOR JUDGMENT

Introductory

1. The matter presently before the court is an application for review of a Sequestration Order made by Registrar Scott in Hobart on 9 January 2014.  Self-evidently the proceeding commenced with a Petition, filed by LV Property Investments Pty Ltd (“LV Property”) on 22 November 2013, but in the circumstances it is convenient to describe Ms Liang as the applicant and LV Property as the respondent.

2. In substance, Ms Liang appears to assert that she has a cross-claim very substantially in excess both of the moneys owing to LV Property and to the supporting creditor and she appears, from time to time, to assert that she is able to pay her debts within the meaning of the Bankruptcy Act 1966 (“the Act”).

3. For the reasons that follow, I do not accept either of these assertions and it follows that the application will be dismissed.

The procedural history of the matter

1. Ms Liang was self-represented at all times and, although fluent in English, she was not always easy to follow.  This difficulty obtains with her written materials as filed from time to time also.  In order to put this matter in its proper context, I propose to review the materials filed in rather more detail than would ordinarily be necessary or appropriate.

2. On 22 November 2013, LV Property filed a Creditor’s Petition.  The Petition relied upon a debt of $6,116.25 pursuant to an order of the Supreme Court of Tasmania in proceeding 431 of 2012, dated

   
   

   29 October 2012, and the certificate of taxation issued in that proceeding on 5 February 2013.  The act of bankruptcy alleged was a failure to comply with the Bankruptcy Notice within time, the notice having been served on 9 May 2013.

3. Part 2 of the Petition was the affidavit verifying Creditor’s Petition.

4. Contemporaneously with the Petition, an affidavit of service of the Bankruptcy Notice and an affidavit for the purposes of r.4.04 of this Court’s Bankruptcy Rules were filed. On 12 December 2013, an affidavit of service of the Creditor’s Petition was filed.

5. The matter came before Registrar Scott, as earlier indicated, on

   
   

   9 January 2014, by which time LV Property had filed the requisite materials to comply with r.4.06 and the Registrar made the Sequestration Order and the usual consequential orders.

6. On 30 January 2014, the applicant filed, inter alia, the application that is now before this Court.  In the final orders sought, in addition to setting aside the Sequestration Order, Ms Liang sought further time to submit affidavits of facts and, at paragraphs 4 and 5, as follows:

   “4. That the order for Creditor’s costs be taxed and paid from the estate of the applicant debtor in accordance with the Bankruptcy Act 1966 to be set aside. allowing the ongoing Supreme Court matters, which the Applicant is suing Christopher Allan Limmer and its new company LV Property Investment Pty Ltd and associates, together were doing fraud and took large financial advantage of the Applicant’s home loan and interest of $785,000, and subsequently lost 6 properties of the Applicant, to continue the hearings in Supreme Court until reach final result.

   5.    That set the order of Trustee or Receiver’s actions aside, in corresponding of Supreme Court of Tasmania and Magistrate Court of South Australia’s ongoing proceedings until these Court matters reaching the final financial judgments.”

7. The applicant filed an affidavit in support of her application on

   
   

   31 January 2014.  She described herself as “Property renovator of 20 years, Hostel owner, Jewellery shop owner of many years”.

8. Ms Liang deposed at paragraph 1 that she was prosecuting an action in the Supreme Court of Tasmania:

   “…which I am claiming $785,000 my home loan equity and interest are inside the land areas that fraudulently bought and transferred into LV Property Investment Pty Ltd by conspiracies and deceptions on the development land’s valuation as a house.”

9. The narrative disclosed by the affidavit is not easy to follow but would appear to assert that, in the Supreme Court proceedings, some order or judgment had been set aside to Ms Liang’s advantage.  It went on to say at paragraphs 5-7:

   “5.    I am not bankrupt, according to the development land’s true valuation, my home loan equity are inside these lands.  Christopher Allan Limmer knew about this himself.  In year 2012, he has offered me as the mortgage lender, the mortgage loan repayment of $520,000 instead of $785,000. Limmer clearly knew the development land area, was not a normal house, and he has collected several million dollars from the Public, which a normal house was unable him to do so.  And Limmer has also said inside his affidavit, he was earning $10,000 every month, as his management fee, from this development land project, which a normal residential house, each week may have $400 to $500 rental income, one year only have total around $25,000 rent income.  Most real estate agents, who are managing the residential houses’ rentals, would only earn 4% to 7% per annual, which was less than $1,750 fees per year.  No house can earn $10,000 management fee per month as Limmer claims he is entitle to.

   6.    Due to my mortgage loan and interest repayment has been defaulted since 6/11/2008, and LV Property Investment Pty Ltd and Christopher Allan Limmer and his associates, were doing fraud together, I have lost 6 properties and 2 shops.  4 properties have been sold in South Australia, 2 apartments sold in Beijing China.  I have these properties’ titles and records, here are attached several records to show Court.  But I am not bankrupt, for if people were doing fraud, have done financial crime on me, I have the right to claim what belongs to me through court actions.

   7.    Due to the large financial damage done on me by LV Property Investment Pty Ltd and Christopher Allan Limmer and his associates, I have become homeless since 13/9/2013, and lived inside my car for several months, there are the photos I sleep inside my car, sometimes it was 40 degrees hot weather in Adelaide.  Also the photo on Christmas Day I went to homeless centre in 258 Hurt Street Adelaide to have a shower.”

10. It should be noted that none of the photographs referred to are annexed to the copy of the affidavit on the court’s file.

11. I have set out this extract of the affidavit to give some feel as to what the tone of the document is like.  The affidavit goes on to assert a capacity to pay the debt owed to the respondents for interlocutory costs but it is plain, from the terms of the affidavit, that this was contemplated being done over a period of time.

12. On 7 March 2014, the Deputy Commissioner of Taxation filed an affidavit of debt which asserted that the applicant owes the Commissioner $233,891.19, wholly due and unsatisfied.  A notice of opposition based upon that debt was filed contemporaneously.

13. Further affidavits of debt and search were filed in contemplation of a hearing that took place before the Court by telephone link in chambers on 13 March 2014.  On that occasion, I made orders for the filing of further affidavits and adjourned the matter to the Hobart registry for final hearing on 14 May 2014.

14. On 11 April 2014, the applicant filed a further affidavit. She referred, at paragraph 1, to ongoing proceedings in the Supreme Court of Tasmania.  Indeed, it would appear there were a number of such proceedings before the Court, although they are all interrelated with the course of dealings over land to which the applicant had already referred in previous material.

15. The affidavit continued to assert fraud on the part of Mr Limmer and asserted that he had been assisted by his lawyer, Mr Nathan Munting.  Fraud was alleged in relation to property valuations and resultant substantial financial loss.  It was put at paragraph 5 (subparagraphs 6-9), in a comprehensive way, that Mr Limmer and others had behaved dishonestly and fraudulently in dealing with the Supreme Court of Tasmania.

16. The applicant’s affidavits also referred to two court matters in South Australia in the Magistrates Court and Supreme Court, respectively.  Paragraph 8 of the affidavit set out a detailed account of events in 2012 involving a number of parties whose participation in the events is not easily able to be identified. On any view, the march of events as between Ms Liang and those whom she feels have wronged her has been complex.

17. At paragraph 12, Ms Liang sought a further 14 days to lodge further materials.

18. On 15 April 2014, I effectively extended the time for Ms Liang to file affidavits to 23 April 2014 as she had requested.  On 12 May 2014, the applicant filed a further affidavit.  She deposed that proceedings in the Supreme Court of South Australia were ongoing and provided documents from those proceedings as annexure A.

19. Annexure A is an interlocutory application brought by the second claimant, John Hoskin as Trustee for the Hoskin Family Trust, and to which the other parties are Dean and Carole Stone as Trustees of the Stone Superannuation Fund (described as “Authority”) with LV Property and Mr Limmer as the first claimant and Ms Liang as the third claimant.

20. I note that the second direction sought was:

    “2.    That the Second Claimant John Hoskin as the Trustee for the Hoskin Family Trust be paid the sum of $97,524.47 being the full sum of moneys deposited in this action into the Supreme Court Suitors Fund in part satisfaction of the loan owed by the Third Claimant Yan Liang to the Second Claimant and secured by way of Caveat Numbered 11916803, registered over the property of the Third Claimant being the whole of her estate and interest in the land comprised in Certificate of Title Register Book Volume 5399 Folio 332 known as 20 Northcote Terrace, Gilberton in the State of South Australia.”

21. From affidavit material filed by Ms Liang, which is also part of annexure A, it seems reasonably clear that the property at Gilberton had in fact been sold and the proceeding in South Australia has all the appearance of being an interpleader action.  The respondent filed further affidavits of search and continuing date in anticipation of the hearing on 14 May 2014 and the applicant filed an affidavit on 14 May 2014 itself.

22. I do not propose to traverse the affidavit in any detail, as it is largely a repeat of the matters previously asserted by Ms Liang.  She referred to new evidence that she desired to lodge, but perhaps it is appropriate to set out paragraph 19 of the affidavit where the application asserted:

    “19.  The key questions are:  the true valuation and price of 9 Sawyer Avenue West Moohah and 48 Creek Rd Creek Rd, and 221 Lenah valley Rd Lenah Valley 5 five years efforts achieved the 116 lots subdivision planning permits, the value were increased or decreased?  if increase according to the $1.395 million valid certified valuation, then LV Property Investment Pty Ltd has to repay my home loan and interest of 6 years $785,000 plus damage.  I have these land titles’ past contract and sales prices records as evidence. Supported by valuations”

The hearing and judgment on 14 May 2014

1. Although the matter had been set down for some time, Ms Liang sought to appear by telephone and, in order that she effectively has an opportunity to participate in the proceeding, I permitted this to occur.  What occurred is recorded in my reasons for judgment given ex tempore and subsequently revised from transcript.  I refer to, without repeating, the matters set out in that judgment.  There are some points to be noted from it, however:

   ·Ms Liang asserted, without qualification and quite clearly, that if she was granted a further four week adjournment, there was no question whatsoever that she could put before the Court the evidence and materials that she said that the Court should have to determine her case.

   ·Ms Liang asserted that she had substantial funds available to her, although, at the same time, appeared to suggest at times that she might be destitute.

   ·In view of the fact that Ms Liang had asserted that she was in funds, I endeavoured to explain to her during the hearing that, assuming the matters in s.52(1) of the Act were satisfied, it would be for her to prove that she was able to pay her debts or that there was other sufficient cause as to why a Sequestration Order ought not be made.

   ·There was an assertion made and then denied that Ms Liang had not filed a Statement of Affairs.

2. Taking all these matters together, and noting the matters that tended against it, I adjourned the matter to enable Ms Liang to have the time she sought and set a final hearing date of 11 June 2014 in Melbourne.

Material filed following the hearing

1. On 5 June 2014, the respondent sought to file an affidavit of Christopher Allan Limmer, but this affidavit was not, in the ultimate, read, although some of the annexures to it were tendered as exhibits.

2. On 6 June 2014, the applicant filed a further affidavit.  She repeated at paragraph 5 her complaint about the subdivision of land and the great profits made by LV Property as a result of their dishonest dealings.  She repeated the assertions of fraud made against LV Property and Mr Limmer, and annexed inter alia an email from Ms Liang to the Public Trustee Guardianship Board of South Australia dated 5 June 2014.  Quite how the matters asserted in that letter may have arisen is utterly unclear, but it appears to assert that the applicant was entitled to payments in some fashion from the Board, in the amounts of $1,000 per week.  It was also asserted that: “I am not in business or working at this moment, due to the several Court matters.”  It asserted that, having contacted her mother, the applicant might shortly receive money from China to enable her to print out documents over the weekend in view of forthcoming proceedings in the Supreme Court of South Australia on 10 June 2014 and in this Court on 11 June 2014.

3. It would appear that substantial funds were held by the public trustee on behalf of Mr James Longmuir, who one might infer is either a son or, in some fashion, a dependant of the applicant, but it has to be said that the material is entirely unclear.  There is an inference that page 2 of a letter to the Public Trustee dated 24 May 2014, that James Longmuir has had a child with the applicant.

Two points arising from materials filed

1. I have set out this history of the matter in relatively considerable detail in order to establish two points that seem to me to be incontrovertible.  These are:

   (1)The materials filed by the applicant have been, at one and the same time, both somewhat densely packed and very hard to follow.

   (2)Ms Liang has been given a considerable period of time in which to prepare for the hearing, and received on 14 May 2014 a second formal adjournment of the proceeding, giving her the amount of time she had expressly asked for to put any relevant materials before the Court, this being something she had said she was well able to do.

The course of the proceeding before the Court on 11 June 2014

1. Ms Liang commenced the proceeding by seeking to file further materials.  In view of the time already granted to her at her request, I declined her permission to file further material in Court.

2. Ms Liang also sought to cross-examine deponents for the other side, but given that counsel for LV Property made it clear that he did not propose to read Mr Limmer’s affidavit, I denied that application.

3. Ms Liang then made extensive oral submissions.  I regret to say that they were no easier to follow in many ways than the written materials filed.  What follows is a paraphrase, doing the best I can from my notes.

4. Ms Liang started by launching into a detailed recitation of what I understand to be the alleged fraud arising out of the land dealings in Tasmania.  It would appear that Ms Liang may have lent money to a company called Welcom, owned by the Heylens, who are now bankrupt.  It is asserted that the bankruptcy of the Heylens was a fraud advised by Mr Limmer.  Ms Liang said this was the third time Mr Limmer had bankrupted people.  It should be noted that a number of the assertions made against Mr Limmer were new and not previously articulated in affidavit material.

5. Ms Liang said her properties in China and South Australia were all now gone, and if I understood her correctly, she may have asserted that there were 10 such properties, of which six were lost because of conduct of Mr Limmer.  Ms Liang also dealt with renovation work which, as I understand it, may have taken place in relation to the South Australian property, but the submissions were so scattergun they were hard to follow.

6. She said that her own mother could send her $70,000, and that her husband and she had separated because of a health issue in 2006.  This would appear to be the person referred to in the Public Trustee correspondence.

7. Ms Liang also asserted she had $97,000 from the sale of her home, held in the South Australian Supreme Court, and this, it would seem to me, was a reference to what I have described as the interpleader proceeding.

8. Ms Liang said she tried to appeal in Tasmania, but the Registrar would not allow her to do so, but went on to say that she would pay whatever she was properly required to pay.

9. Ms Liang said that on the previous day in the Supreme Court of South Australia, her counter-claim for $680,000 or more had been “cancelled” by the Supreme Court.  She did not understand what was meant by cancelled.

10. Ms Liang said that she had paid a deposit for the land in Tasmania and that it should therefore be hers, and she asked how the land, now worth $2 million, could be sold for $600,000.  She said she could prove she was the first mortgagee.  She referred to the values of property in Tasmania as possibly being $1.5 million, and if this was so, she would be able to reclaim the money and pay her tax and other liabilities.

The submissions of counsel for LV Property

1. As indicated, counsel did not read Mr Limmer’s affidavit but did refer to annexures which commenced at the pagination 20 annexed to the affidavit.  I received as separate exhibits the following number of documents.  They are all, in my view, clearly admissible under the Evidence Act 1995 (“the Evidence Act”) as business records or other public records admissible under the Evidence Act.

1. Exhibit M1 is a series of title records.  In relation to land at Glenorchy, they show that on 30 April 2008, the land was transferred to Welcom Pty Ltd and on 2 July 2012 to LV Property.  It also shows a number of caveats lodged by Ms Liang in later 2012.  Annexure C shows further land at Glenorchy, which was transferred to Ian David Heylen and Nancy Heylen on 19 December 2007, and further transferred to LV Property on 2 July 2012.  Once again, it shows caveats lodged in later 2012 by Ms Liang

2. Annexure D shows yet further land at Glenorchy transferred to LV Property on 6 July 2012.   There are no caveats on that property. 

3. Exhibit M2 is a document from the Tasmanian Land Titles Office showing a transfer of mortgage from Permanent Mortgages Pty Ltd to LV Property on 29 June 2012. 

4. Exhibit M3 is a contract of sale between Permanent Mortgages Pty Ltd and LV Property Investments for land at 9 Sawyer Avenue, West Moonah in Tasmania for $600,000, dated 4 May 2012. The purchase price is some $600,000. I had some doubts as to whether this was admissible but given that LV Property Investments Pty Ltd might be a name reasonably taken to describe the activities of the business, the contract of purchase of the property seemed to be a business document within the extended definition in s.69 of the Evidence Act.

5. Exhibit M4 is a further document from the Tasmanian Land Titles Office, showing a transfer between the Commonwealth Bank of Australia and LV Property, dated 29 June 2012.  Exhibit M5 is a document entitled Particulars and Conditions of Sale by Auction in relation to 48 Creek Road, Lenah Valley in Tasmania, which inter alia show an auction on 12 May 2012.  This being a document on its face produced by a firm of lawyers for the purposes of sale once again seemed to me to be part of the records belonging to the auctioneer for the purposes of their business.

6. Exhibit M6 is a writ issued by LV Property against Ms Liang and the Recorder of Titles in the Supreme Court of Tasmania and includes a judgment made by the Honourable Holt AsJ on 7 October 2013, which inter alia declared that:

   “…the First Defendant has no legal or equitable interest in:

   (a) 9 Sawyer Avenue, West Moonah in Tasmania…;

   (b) 48 Creek Road, Lenah Valley in Tasmania…; and

   (c) 221A Lenah Valley Road, Lenah Valley in Tasmania…”

7. It should be noted that a consent memorandum also part of that exhibit shows that the judgment of Holt AsJ, which was obtained in default, was set aside and the applicant granted leave to file and serve a defence.

8. Exhibit M7 is a report from BRI Ferrier, dated 12 March 2014, which is a report to the applicant’s creditors.

9. Although this report gives an account of events which brings a certain measure of clarity into the applicant’s financial history, I note that the report was not expressly conceded to be accurate by the applicant and the author was not cross-examined.  What I do note, however, is that the applicant has not filed her Statement of Affairs, an assertion which, as I have indicated, was made earlier in this proceeding and never convincingly denied by the applicant. 

10. Counsel referred to exhibit M7 and noted the applicant’s debts described therein.  As I have already indicated, I approached the report with some hesitation, but on any view of the matter the applicant has very substantial debts to the Taxation Commissioner and has not paid the debts and further costs that have arisen to LV Property. 

11. Without doing disservice to the able and comprehensive submissions made by counsel, the summary of what he put was that the materials showed that the applicant had not discharged the obligation on her of showing that she was able to pay her debts within the meaning of s.52(2) of the Bankruptcy Act and nor had she shown other sufficient cause why a Sequestration Order should not be made. Counsel submitted, correctly enough, that fraud is a matter requiring cogent proof and submitted that no proof of such fraud could be made out.

12. Counsel took the Court through the course of dealings in Tasmania in some detail and although I found his account persuasive, it is not necessarily to deal with it in further detail because, in my view, the matter falls to be considered, as it were, under first principles. 

The applicant in reply

1. In reply (although, being unrepresented, Ms Liang was not restrained to matters arising from counsel’s submissions), Ms Liang repeated her criticisms of the course of dealings with the properties in Tasmania.  She intimated from time to time that she was offering to provide to the Court numerous documents that were plainly on the bar table before her, but I did not accept them.  No formal application to tender any documentation was made.  Her submissions were, I regret to say, somewhat chaotic in their character but appeared to arise from Ms Liang’s perception that she had a valid prior mortgage to the Tasmanian properties, which had been defeated by the conduct of Mr Limmer.

2. I should say that counsel’s account of the events in Tasmania, taken together with the exhibits filed at the hearing, suggests, as counsel submitted, that whatever complaints the applicant may have really should more properly be pursued against entities other than LV Property or Mr Limmer.

3. The applicant, right at the end of her submissions, sought to tender exhibit L1, which is an affidavit, not yet sworn, in the proceeding in the Supreme Court of South Australia.  From this, inter alia, it is apparent that Mr James Longmuir is Ms Liang’s husband and is in poor health and that Alistair Longmuir is, indeed, their child.  The affidavit confirms that the applicant renovated properties in Adelaide and rented a shop in the Adelaide Centre Market for many years.  The affidavit would show that in the middle of 2007, Mr Heylen asked for funds to purchase lands in Tasmania and would establish that the three properties (I assume the ones of which I have been tendered the titles) were designed to be developed as a property development. 

4. According to the draft affidavit (which is not by any means easy to understand), it would appear that Ms Liang leant the Heylens money through their company, Welcom, but the mortgage was not registered.

5. The affidavit asserts subsequent conspiracy by Mr Heylen and Mr Limmer to purchase the Tasmanian properties as an undervalue and/or ongoing fraud on the part of Mr Limmer and the Heylens.

The matters required to be proved pursuant to s.52(1) of the Bankruptcy Act

1. Against this confusing and difficult evidentiary background, I turn to deal with the matters in the Bankruptcy Act itself.

2. This being a rehearing de novo, the Court first has to consider whether the matters referred to in s.52(1) of the Act are made out.

3. The affidavit verifying the Petition is clearly sufficient.  There has never been any question as to service of the Petition and there is no doubt that the debts on which the Petition relied have not been paid.

4. I dispensed with further compliance with r.4.06 of this Court’s Bankruptcy Rules on 14 May 2014 because it was apparent that it was inappropriate to put the creditor to further expense in this regard.

5. In truth, there has never been any argument about any of the matters referred to in s.52(1) of the Act and I am satisfied that these matters have been proved. This, of course, gives the Court the discretion to make a Sequestration Order.

6. This, of course, brings the Court to s.52(2). The Court may dismiss the Petition if, relevantly, it is satisfied by the debtor:

   1)that he or she is able to pay his or debts;  or

   2)that for other sufficient cause, a Sequestration Order ought not be made.

Is Ms Liang able to pay her debts?

1. It is quite clear on the materials as they stand that Ms Liang is not able to pay her debts, even within the more extended meaning given to that terminology by the cases that have flown from Sandell v Porter (1966) 115 CLR 666. Her own materials have suggested that from time to time, she has been all but destitute, living in a car, it would appear, over the Christmas period last year. Nothing suggests that any significant influx of funds has flown to her since then, save for the reference to the $1000 per week paid from the South Australian Guardianship Authority. This sum, however, is clearly payable to Ms Liang referable, inter alia, to the care of her son.

2. In any event, a figure of $1,000 per week would not suggest that Ms Liang is able to pay the enormous amount clearly owing to the supporting creditor.

3. Ms Liang has made glancing reference to the possibility of the receipt of $70,000 from her mother in China, but no evidence has been filed to support that hearsay assertion.

4. I further note that Ms Liang might assert some, or even the whole, ownership of the $97,000, the subject of the inter-pleaded proceedings in South Australia but, once again, there is no definite proof that that money is partly or wholly owned by her.

5. Even if I was to assume that all these figures were, as it were, to be assessed favourably to Ms Liang, it would go nowhere near to discharging the capital sums that she owes.

6. It is for the applicant to establish that she is able to pay her debts and, putting the matter at the lowest, I am not satisfied that she has established that that is so.

Is there other sufficient cause why a Sequestration Order should not be made?

1. As Ms Liang herself has said, this is, perhaps, the central part of the issue.  She believes passionately that she has been defrauded from the benefits of a major land development in Tasmania.  Whether this is put at the amount she herself loaned to the Heylens, which is in excess of $600,000, or the resultant profits that might be generated by the land development, which are clearly over a million dollars, if these matters were made out, they would certainly suggest that there might be a sufficient cause why an order ought not be made.

2. The difficulty is, however, that Ms Liang has not persuaded the Court that the fraud she asserts is indeed established.  Indeed, to the extent that the objective documentation shows anything, it would tend strongly in the opposite direction.  The evidence so far as one could approach it with any measure of confidence suggests that LV Property and Mr Limmer have engaged in no fraudulent activity at all.  To the extent that there appears to have been any kind of curial disposition of any of the matters in conflict, LV Property and Mr Limmer appear to have succeeded on each occasion.

3. As already mentioned more than once in this judgment, fraud is a very serious matter requiring cogent proof. Such proof is simply not available. In my view, there is not sufficient cause within the meaning of s.52(2) that a Sequestration Order ought not be made.

Should a Sequestration Order be made?

1. The authorities show that, prima facie, once an act of bankruptcy is committed, a petitioning creditor is entitled to a Sequestration Order (see Cain v Whyte (1933) 48 CLR 639 at 645-646 per Henchman J, whose judgment was unanimously upheld by the High Court).

2. The applicant bears the onus of proving that there is other sufficient cause (see Ling v Enrobook Pty Ltd (1997) 74 FCR 19 at pp. 24-25)

3. It is clear that the mere fact that the applicant has ongoing claims in the South Australian Supreme Court and, it would appear also, in the Supreme Court of Tasmania is not of itself enough to establish the applicant’s case.

4. In all the relevant circumstances, bearing in mind the fact that I am in no way convinced that the applicant is able to pay her debts and that I am satisfied that the matters she has advanced do not constitute other sufficient cause within the meaning of s.52(2), it is clearly appropriate that I should exercise my discretion to make a Sequestration Order.

5. This being a hearing de novo, I will affirm the Sequestration Order made and the orders as to costs. I will order that the application for review of the decision of Registrar Scott be dismissed. 

I certify that the preceding seventy-nine (79) paragraphs are a true copy of the reasons for judgment of Judge Burchardt.

Associate: 

Date:  13 August 2014