Miller v Udunuwara

Case [2024] FCA 1403


FEDERAL COURT OF AUSTRALIA

Miller v Udunuwara [2024] FCA 1403  

File number(s): VID 133 of 2024
Judgment of: DOWLING J
Date of judgment: 9 December 2024
Catchwords: BANKRUPTCY AND INSOLVENCY – creditor’s petition for a sequestration order – whether requirements for sequestration order have been established – application to adjourn the hearing – application to adjourn dismissed – sequestration orders made
Legislation:

Bankruptcy Act 1966 (Cth) ss 27, 33, 40, 41, 43, 44, 52

Federal Court of Australia Act 1976 (Cth) ss 35A, 37M

Bankruptcy Regulations 2021 (Cth) regs 9, 10, 102

Federal Court (Bankruptcy) Rules 2016 (Cth) rr 4.04, 4.06

Federal Court Rules 2011 (Cth) rr 1.34, 8.21, 8.23, 8.25

Cases cited:

Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175

Aquamore Credit Equity Pty Ltd v Maroon (No 2) [2024] FCA 14

Bullen v Mangano [2024] FCA 1199

Coates Hire Operations Pty Ltd v D-Link Homes Pty Ltd [2011] NSWSC 1279

Commonwealth Bank of Australia v Begonia (1993) 11 ACLC 1075

Culleton v Balwyn Nominees Pty Ltd [2017] FCAFC 8; 343 ALR 632

Curtis v Singtel Optus Pty Ltd [2014] FCAFC 144; 225 FCR 458

Deputy Commissioner of Taxation v Bayconnection Property Developments Pty Ltd [2012] FCA 363; 127 ALD 64

Deputy Commissioner of Taxation v De Simone Consulting Pty Ltd [2007] FCA 548

Frugtniet v Secretary, Department of Social Services [2021] FCAFC 127; 285 FCR 159

Jensen v Queensland Law Society Incorporated [2006] FCA 1206; 154 FCR 525

Sali v SPC Ltd (1993) 67 ALJR 841; HCA 47

Toyota Finance Australia Ltd v Youssef Berro [2022] FCA 497

Xu v Megaward Pty Ltd [2018] NSWCA 232; 130 ACSR 412

Division: General Division
Registry: Victoria
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Number of paragraphs: 50
Date of hearing: 3 December 2024
Counsel for the Applicant  Mr B Parker
Solicitor for the Applicant Sutton Laurence King Lawyers
Counsel for the Respondent The respondent appeared in person

ORDERS

VID 133 of 2024
BETWEEN:

RODNEY MARC MILLER

Applicant

AND:

CHRIS JOSEPH UDUNUWARA

Respondent

ORDER MADE BY:

DOWLING J

DATE OF ORDER:

9 DECEMBER 2024

THE COURT ORDERS THAT:

1.Pursuant to r 8.21 of the Federal Court Rules 2011 (Cth) (Rules) and s 33(1)(b) of the Bankruptcy Act 1966 (Cth), paragraph 4 of the Creditor’s Petition be amended so that the date of the act of bankruptcy read ‘15 February 2024’ in place of ‘19 February 2024’.

2.Pursuant to r 1.34 of the Rules, the requirements of rr 8.23 and 8.25 of the Rules (requiring the filing and service of an amended document) in relation to the amended Creditor’s Petition are dispensed with.

3.The estate of CHRIS JOSEPH UDUNUWARA be sequestrated under the Bankruptcy Act 1966 (Cth).

4.The applicant creditor’s costs, including any reserved costs, of the proceeding be taxed and paid from the respondent’s estate in accordance with the Bankruptcy Act1966 (Cth).

THE COURT NOTES THAT:

A.The Court notes…

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AGLC
Miller v Udunuwara [2024] FCA 1403
Case
[2024] FCA 1403
Decision Date

CaseChat Overview and Summary

In the Federal Court of Australia, Miller, as the petitioner, brought a creditor's petition against Udunuwara seeking a sequestration order. The petitioner claimed that Udunuwara had failed to pay a debt exceeding $5,000, constituting an act of bankruptcy under the Bankruptcy Act 1966 (Cth). Udunuwara did not file any affidavits, submissions, or notice of grounds for opposition to the petition, except for an email dated 10 September 2024. The primary legal issues before the court were whether the requirements for a sequestration order had been established and whether the hearing should be adjourned.

The court found that the requirements for a sequestration order had indeed been met. The Bankruptcy Notice was correctly issued and served, and the debt was more than $5,000. The petition was filed and served within the requisite timeframes, and Udunuwara had not demonstrated any ability to pay the debt. The court dismissed Udunuwara's application to adjourn the hearing, as he had failed to provide any substantive opposition to the petition. Consequently, the court found that Udunuwara had committed an act of bankruptcy and that the petitioner had proven all necessary matters to warrant a sequestration order.

In light of the findings, the court ordered that the estate of Chris Joseph Udunuwara be sequestrated under the Bankruptcy Act 1966 (Cth). The court also amended the date of the act of bankruptcy to 15 February 2024 and dispensed with certain procedural requirements for filing and serving an amended document. The petitioner's costs were to be taxed and paid from Udunuwara's estate in accordance with the Act. The court took note of the corrected date of the act of bankruptcy and the consent of Daniel Peter Juratowitch to act as trustee.

Orders

Orders of the court

1. Pursuant to r 8.21 of the Federal Court Rules 2011 (Cth) (Rules) and s 33(1)(b) of the Bankruptcy Act 1966 (Cth), paragraph 4 of the Creditor’s Petition be amended so that the date of the act of bankruptcy read ‘15 February 2024’ in place of ‘19 February 2024’.

2. Pursuant to r 1.34 of the Rules, the requirements of rr 8.23 and 8.25 of the Rules (requiring the filing and service of an amended document) in relation to the amended Creditor’s Petition are dispensed with.

3. The estate of CHRIS JOSEPH UDUNUWARA be sequestrated under the Bankruptcy Act 1966 (Cth).

4. The applicant creditor’s costs, including any reserved costs, of the proceeding be taxed and paid from the respondent’s estate in accordance with the Bankruptcy Act 1966 (Cth).

THE COURT NOTES THAT:

A. The Court notes that the date of the act of bankruptcy is 15 February 2024.

B. The Court also notes that a consent to act as trustee signed by Daniel Peter Juratowitch has been filed under s 156A of the Bankruptcy Act 1966 (Cth).

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Mr Udunuwara did not file any affidavits, submissions or notice of grounds for opposition (save for his email of 10 September 2024 described above).GROUNDS FOR SEQUESTRATION On the material before the Court, I am satisfied of each the following procedural and compliance matters:(a)The Bankruptcy Notice was in the prescribed form and was obtained in respect of a judgment of the Magistrates’ Court of Victoria that was more than the statutory minimum of $5,000 prescribed by s 41(1) of the Act.(b)The Bankruptcy Notice was issued within 6 years of the order of the Magistrates’ Court of Victoria: s 41(3) of the Act.(c)When served, the Bankruptcy Notice had attached with it a certified extract of the order of the Magistrates’ Court of Victoria: Curtis v Singtel Optus Pty Ltd [2014] FCAFC 144; 225 FCR 458 at [35]. (d)The Bankruptcy Notice was served on Mr Udunuwara on 25 January 2024, within six months of it being issued: reg 10 of the Regulations.(e)The creditor’s petition was issued on 20 February 2024, within six months of the date of the act of bankruptcy and relates to a debt larger than $5,000: s 44(1)(a) and (c) of the Act.(f)The creditor’s petition was accompanied by an affidavit of search pursuant to r 4.04(1)(a) of the Federal Court (Bankruptcy) Rules 2016 (Cth).(g)The creditor’s petition has not lapsed because it has been less than 12 months since the date of presentation of the petition: s 52(4)(a) of the Act.(h)The applicant has filed and served affidavits of final search and affidavits of final debt (on 2 December 2024) consistently the with r 4.06 of the Bankruptcy Rules. On the material before the Court, I am also satisfied of each of the requirements of ss 43 and 52 of the Act, namely:(a)Mr Udunuwara did not, and has not, paid the debt and has therefore committed an act of bankruptcy for the purposes of s 43(1)(a) and s 40(1)(g) of the Act by failing to comply with the notice. (b)When the act of bankruptcy was committed Mr Udunuwara was personally present or ordinarily resident in Australia: s 43(1)(b)(i) and (ii) of the Act.(c)In all of the circumstances above the applicant has proven: the matters in the petition, service of the petition and that the debt is still owing: s 52(1) of the Act. Where the applicant has established all the matters required by s 52(1) of the Act he has a prima facie right to a sequestration order: Toyota Finance Australia Ltd v Youssef Berro [2022] FCA 497 at [33], Aquamore Credit Equity Pty Ltd v Maroon (No 2) [2024] FCA 14 at [31].Solvency At the hearing on 3 December 2024, Mr Udunuwara confirmed that he was not submitting that he is able to pay the debt now, but rather that he will pay it in two weeks: Transcript, page 10, lines 11-41. Clearly, that was not a submission that he was presently able to pay his debts as provided for by s 52(2) of the Act. In any event, and out of an abundance of caution that I have misunderstood Mr Udunuwara, I will treat Mr Udunuwara’s email of 10 September 2024 as a submission that he is able to pay his debts and is solvent.