MJB Building Services v Wallin and Anor. - [2001] FMCA 95

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MJB BUILDING SERVICES v WALLIN & ANOR. [2001] FMCA 95

Bankruptcy Act (Cth) 1966, s 52

Federal Magistrates Court Rules, Pt 21 r 21.02 (b)

Applicant:

MJB BUILDING SERVICES

Respondents:

GRAEME WALLIN and PAULA WALLIN

File No:

SZ 454 of 2001

Delivered on:

25 September 2001

Delivered at:

Sydney

Hearing Date:

25 September 2001

Judgment of:

Raphael FM

REPRESENTATION

Solicitors for the Applicant:

Mr P Haylen of McNeil James Solicitors

For the Respondents:

Litigants in person

ORDERS

Sequestration order against the estates of GRAEME C WALLIN and PAULA WALLIN.
SCOTT DARREN PASCOE be appointed Trustee of the Bankrupts’ estates.
The applicant creditor’s costs including any reserve costs be taxed and paid from the estate of the respondent debtors in accordance with the Bankruptcy Act and the Federal Court Rules.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY

SZ 454 of 2001

MJB BUILDING SERVICES

Applicant

And

GRAEME WALLIN and PAULA WALLIN

Respondents

REASONS FOR JUDGMENT (Ex Tempore)

In this matter, Mr & Mrs Wallin, against whom a bankruptcy petition No 454 of 2001 has been issued, filed on 30 September 2001 a notice of intention to oppose the petition on the three grounds of opposition. The first was that
“The Costs for which the Creditors Petition is being applied were gained by fraudulent means. We and all Courts have been misled by the Builder MJB Building Services Pty Ltd Mr Michael Bruggestrass. My husband Graham Wallin and I have been denied our right of reply as has our son Bill Wallin.”
The second was that
"My claim against MJB Building Services Michael J Bruggestrass and Mrs Anne Brugestrass and their Company is greater. My Costs and the damage and deterioration of my property caused by MJB Building Services exceeds their claim.”
The third was that
"Settlement as proposed by the Solicitors McNeil James’ Mr Greg Gilmour would leave me with no way to ever provide my son Bill Wallin who is now nearly eleven years old with a home, we have been driven into poverty by the actions of MJB Building Services as it is with very adverse effects on our health. This is not the remedy required.”
In support of their opposition, Mrs Wallin filed an affidavit on 25 September 2001 and Mr Wallin filed one on 14 September 2001. The history of this matter is well documented in a judgment of Federal Magistrate Driver who heard an application to set aside the bankruptcy notice upon which the petition is based on 28 August 2001. It seems to me from having read this judgment that all the matters raised by Mr & Mrs Wallin in their notice of opposition, were matters raised before his Honour, the Federal Magistrate, on 28 August.
For these reasons I will not deal in any great detail with that history, save to say that the debt arises out of an order for costs given in the Land & Environment Court of New South Wales, in respect of a very bitterly fought dispute between Mr and Mrs Wallin, their local council, and the builders and owners of some adjoining land. Mr and Mrs Wallin were unsuccessful in those proceedings and they were also unsuccessful in an appeal to the New South Wales Court of Appeal. I am told that an application for special leave to the High Court was made which was equally unsuccessful. In fairness to Mr and Mrs Wallin, I should point out that they argue that that application was not in respect of the whole of the matter, but only in respect of part of it which had to do with a boundary fence. Mr and Mrs Wallin do appear to be agitating in the High Court some further applications.
The difficulty which I have, and which is made evident by my inability to describe exactly what proceedings are on foot, is that Mr and Mrs Wallin have not, at any stage, provided any evidence of an intelligible nature to support their arguments. The only area in which they appear to have done this is in relation to their solvency. I will deal with that shortly. I have heard nothing from Mr or Mrs Wallin which would cause me to believe that any further appeal process is likely to end in success for them. I note, in saying this, that either no application has been made to stay any of these judgments or if such applications have been made, they have been unsuccessful because it is not argued before me that the judgment has been stayed.
There was tendered by Mr and Mrs Wallin a series of documents which were intended to assist me with understanding the proceedings that Mr and Mrs Wallin were bringing and to confirm that they were on foot. I have no doubt that something is on foot, but what it is, I know not. This opposition application has been before the court previously and has been adjourned. Mr and Mrs Wallin have had an opportunity to present the court with coherent evidence to support their opposition, but they have failed to do so. Save and except in respect of the value of their property I would not be prepared to adjourn or to set aside the petition on the basis of anything I have heard from Mr or Mrs Wallin this morning.
The affidavits of Mr and Mrs Wallin both exhibit valuations of the two properties which they argue they own. Whilst I have no reason to believe they do not own them, the documentation does not prove it. The documentation does not establish whether or not the properties are encumbered and if so, for how much. Mr and Mrs Wallin told me from the bar table they are not encumbered and that they are insured. But once again evidence is in short supply.
During the course of the proceedings I asked Mr and Mrs Wallin whether they would be prepared to utilise their properties to come up with the money that was owed. I said this on the basis that any money so raised would be secured for the benefit of the creditor but not paid over to it at the present time. I made that remark when I was under the impression that there really was an outstanding application for special leave to appeal to the High Court. The first response I received to that question was an absolute refusal from Mr Wallin to utilise his properties for the benefit of the creditors. Later however Mrs Wallin appeared to give more serious consideration to the proposal but by that time I had heard more submissions from both of the parties and came to the view that there was not much utility in asking Mr or Mrs Wallin to charge their properties for the benefit of the creditor in the particular circumstances of this case.
As Mr Haylen rightly pointed out, charging the property is one thing but there must be some trigger upon which enforcement of the charge can operate. When I was under the impression that a straight forward application for special leave was being made I thought that the decision of the High Court upon the application or the decision of the High Court upon any appeal could be that trigger. I no longer have any confidence that there is any arguable matter before the High Court and I am not assisted by any of the documents which Mr and Mrs Wallin have tendered to me.
Once again there is a failure of evidence which to my mind is fatal to the debtor's position. I cannot see what the benefit would be to either the debtor or the creditor if the property was charged in this way pending the outcome of an application for special leave, which application seems to me to be devoid of any prospect of success. It would only effect some delay which may be to the detriment of any creditor and I have not been shown by Mr or Mrs Wallin any benefit it might give to them.
The evidence which is before me does not even indicate that Mr and Mrs Wallin are solvent. We know nothing about any other creditors and we know nothing about the extent to which the properties might be encumbered. What is said from the bar table is not evidence. Mr and Mrs Wallin did have the opportunity to put on an affidavit to properly deal with this aspect of the matter. Mrs Wallin says that she is not working, that she is in receipt of a pension. Mr Wallin has given me no indication of his earning capacity or his actual earnings and if the truth be told neither of them appear really to wish to make any payment to the creditor as they believe it has acted in a manner towards them which is very much less than satisfactory.
For all these reasons I would dismiss the objection and I would proceed to consider the evidence in favour of granting a sequestration order. I am satisfied, having read the affidavits previously filed and the affidavits filed today that the debtors have committed the act of bankruptcy alleged in the petition. I am satisfied with the proof of the other matters required by section 52 of the Bankruptcy Act (Cth) 1966. I make a sequestration order against the estates of GRAEME C. WALLIN and PAULA WALLIN.
I note that a consent to act as a trustee has been signed BY SCOTT DARREN PASCOE and has been lodged with the Official Receiver in Sydney. I appoint Mr Pascoe as Trustee of the bankrupts.
I make an order for costs. Under Part 21 Rule 21.02 (b) of the Federal Magistrates Court Rules I set the method by which the costs are to be calculated as the Federal Court Rules. I order that the applicant creditor’s costs including any reserve costs be taxed and paid from the estate of the respondent debtors in accordance with the Bankruptcy Act and the Federal Court Rules.
The court notes the date of bankruptcy in respect of GRAHAM WALLIN as 14 May 2001 and in respect of PAULA WALLIN as

15 May 2001.

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

Associate:

Date: