Malouf v Gallagher
[2009] FMCA 1236
•1 December 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MALOUF v GALLAGHER | [2009] FMCA 1236 |
| BANKRUPTCY – Sequestration Order made where court not satisfied money available to debtor would cover his outstanding debts. |
| Bankruptcy Act 1966, s.52 Bankruptcy Regulations Federal Magistrates Court (Bankruptcy) Rules 2006 |
| Applicant: | ANTHONY MARK MALOUF TRADING AS MALOUF SOLICITORS |
| Respondent: | ROBERT JOHN GALLAGHER |
| File Number: | SYG 2660 of 2008 |
| Judgment of: | Raphael FM |
| Hearing date: | 1 December 2009 |
| Date of Last Submission: | 1 December 2009 |
| Delivered at: | Sydney |
| Delivered on: | 1 December 2009 |
REPRESENTATION
| Solicitors for the Applicant: | Malouf Solicitors |
| For the Respondent: | In person |
ORDERS
A sequestration order be made against the estate of Robert John Gallagher.
The applicant creditor’s costs (including any reserved costs) be taxed (in accordance with the Federal Magistrates Court (Bankruptcy) Rules 2006) and paid from the estate of the Respondent Debtor in accordance with the Act.
Under the Bankruptcy Regulations a copy of this sequestration order be given to the Official Receiver in Sydney within 2 days.
THE COURT NOTES:
(i)That the date of the act of bankruptcy is 3 October 2008.
(ii)A consent to act as trustee has been signed by Roderick Mackay Sutherland and has been lodged with the Official Receiver in Sydney.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2660 of 2008
| ANTHONY MARK MALOUF TRADING AS MALOUF SOLICITORS |
Applicant
And
| ROBERT JOHN GALLAGHER |
Respondent
REASONS FOR JUDGMENT
There comes before me today for hearing an application for a sequestration order in respect of a petition which was presented on 15 October 2008. The life of the petition was extended by order on 13 October 2009. The petition itself was served on 15 October 2008. The reason that the petition has been so long delayed is that the debtor was in dispute with his former de facto partner in relation to their joint property and it was hoped, at all times, that when this dispute had been concluded the amount owed to the petitioning creditor would be paid. The dispute took longer to hear and determine than was first expected and a number of adjournments were given.
Eventually, on 25 September 2009, judgment was given by Delaney J of the District Court. The applicant was awarded $60,000.00 in respect of his share of the matrimonial property. The money was due to be paid within 42 days and failing payment the property was to be sold. It is fair to say, from reading the affidavits of Mr Gallagher filed previously, that the $60,000.00 was considerably less than he thought he was entitled to. He tells me that he has commenced the process of appealing against Delaney J’s decision but, so far as I am aware, no notice of appeal has yet been filed.
The $60,000.00 was not paid to Mr Gallagher within 42 days. He has not gone back to the District Court to enforce the payment. He tells the court that the money is in the trust account of his former de facto’s solicitor and it would appear, from what I have been told from the bar table, that they are declining to pay it out to the creditor, even though there is an irrevocable authority to do so, on the grounds that the Child Protection Agency have a claim against the debtor which it is believed has priority over the creditor’s debt. Mr Gallagher told me from the bar table, that there is indeed a claim from the Child Protection Agency in the region of $20,000.00. He also told me that there would appear to be outstanding taxation liabilities. I have not been given any other information about Mr Gallagher’s assets.
The court is enjoined from making sequestration orders where the applicant is solvent, and where it would appear that payment of the debt due under the creditor’s petition can be made within a reasonable time from assets available to the debtor. The cases on this are set out in the practice but, put simply, the court’s duty is to be satisfied that the creditor is solvent and that he can pay his debts as and when they fall due. In this particular case, whilst I have some sympathy for Mr Gallagher in his situation, I am not able to reach that stage of satisfaction. The debt to the petitioning creditor, according to the affidavit of debt, is $47,356.51 to which would have to be added the cost of these proceedings. If the debt claimed by the Child Protection Agency is indeed $20,000.00 then that exceeds the amount available from the pool provided by the former de facto without even considering any other creditors, including the tax office.
Given the number of adjournments that this case has already had, and given the failure of Mr Gallagher, although knowing of this hearing date for over six weeks, to take what I believe to have been the appropriate steps to enforce payment of the money he says he is entitled to, I have come to the conclusion that it would be in the public interest that a sequestration order be made. I am satisfied that the respondent has committed the act of bankruptcy alleged in the petition. I am satisfied with the proof of the other matters required by s.52 of the Bankruptcy Act 1966 (the “Act”). I make a sequestration order against the estate of Robert John Gallagher. I order that the applicant’s costs, including reserved costs, if any, be taxed and paid from the estate of the respondent in accordance with the Act. Under the Bankruptcy Regulations a copy of this sequestration order be given to the Official Receiver in Sydney within two days. The court notes the date of the act of bankruptcy is 3 October 2008.
I certify that the preceding five (5) paragraphs are a true copy of the reasons for judgment of Raphael FM
Associate:
Date: 10 December 2009
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