FEDERAL CIRCUIT COURT OF AUSTRALIA
| MOSKIOS v BISHAY | [2013] FCCA 3 |
| Catchwords: BANKRUPTCY – Review of Registrar’s decision – whether applicant solvent – contentions about validity of bankruptcy notice. |
| Legislation: Federal Magistrates Court (Bankruptcy) Rules 2006, rr.7.06, 20.03 |
| Cases cited: United Medical Protection Ltd (2003) 47 ACST 705 |
| Applicant: | TERRY MOSKIOS |
| Respondent: | REDA BISHAY |
| File Number: | SYG 3013 of 2012 |
| Judgment of: | Judge Altobelli |
| Hearing date: | 31 March 2013 |
| Date of Last Submission: | 31 March 2013 |
| Delivered at: | Sydney |
| Delivered on: | 18 April 2013 |
REPRESENTATION
| The Applicant in person |
| Counsel for the Respondent: | Mr Rose |
Solicitors for the Respondent: | Saarvas Chiappara Lawyers |
ORDERS
That the sequestration order made against the estate of REDA BISHAY on 26 February 2013 be set aside.
That the Creditors Petition filed 18 December 2012 be dismissed.
Any application for costs arising out of these orders be dealt with by written submissions not exceeding 500 words with the applicant for such costs to file and serve same within 14 days and the respondent against costs to file and serve within a further 14 days.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 3013 of 2012
| TERRY MOSKIOS |
Applicant
And
| REDA BISHAY |
Respondent
REASONS FOR JUDGMENT
Introduction and background
On 26 February 2013 District Registrar Wall made a sequestration order against the estate of the respondent in the substantive proceedings, Reda Bishay. The learned Registrar noted that the date of the act of bankruptcy was 27 November 2012.
On 4 March 2013 Mr Bishay filed an Application for Review of the learned Registrar’s order in which he sought the following orders:
1. Sequestration Order SYG 2013/2012 be Stayed until this Application for review be finalized.
2. The time to review Bankruptcy Notice BN 5283 of SYG 2411/2012 with orders dated 27 November be extended.
3. Bankruptcy Notice BN 5283 of SYG2411/2012 be set aside.
4. Sequestration Order SYG 3013/2012 dated 26 February 2013, made against the estate of Reda Bishay be set aside.
5. Costs as the Court Directs.
In these reasons Reda Bishay will be described as the applicant. The respondent in these proceedings, the judgment creditor before the learned Registrar, asks that the Application for Review be dismissed.
There is no dispute between the parties that the judgment debt in question is $54,490.
There is no dispute between the parties that the applicant holds as…
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- AGLC
- MOSKIOS v BISHAY [2013] FCCA 3
- Case
- [2013] FCCA 3
- Decision Date
CaseChat Overview and Summary
The primary legal issues before the court were whether Mr Bishay was solvent at the relevant time, meaning he was able to pay his debts as they fell due, pursuant to section 52(2)(a) of the *Bankruptcy Act 1966* (Cth). Additionally, the court had to determine if there was "other sufficient cause" for setting aside the bankruptcy notice and the subsequent sequestration order, as contemplated by section 52(2)(b) of the Act, due to alleged deficiencies in the bankruptcy notice.
Judge Altobelli reasoned that the evidence presented, including affidavits from Mr Bishay and his accountant, demonstrated that Mr Bishay was indeed solvent. The court noted that the net amount of the disputed judgments between the parties was $18,000, and that Mr Bishay had other assets and income streams that indicated his ability to meet his financial obligations. Furthermore, the court found that while there were some technical deficiencies in the bankruptcy notice, they did not amount to "other sufficient cause" to set aside the sequestration order, particularly in light of the applicant's solvency.
Consequently, the court ordered that the sequestration order made against the estate of Reda Bishay on 26 February 2013 be set aside, and that the Creditors Petition filed on 18 December 2012 be dismissed. The court also directed that any applications for costs arising from these orders be dealt with by written submissions.
Orders
Orders of the court
1.
That the sequestration order made against the estate of REDA BISHAY on 26 February 2013 be set aside.
2.
That the Creditors Petition filed 18 December 2012 be dismissed.
3.
Any application for costs arising out of these orders be dealt with by written submissions not exceeding 500 words with the applicant for such costs to file and serve same within 14 days and the respondent against costs to file and serve within a further 14 days.
FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY
SYG 3013 of 2012
TERRY MOSKIOS
Applicant
And
REDA BISHAY
Respondent
REASONS FOR JUDGMENT
Introduction and background
1.
On 26 February 2013 District Registrar Wall made a sequestration order against the estate of the respondent in the substantive proceedings, Reda Bishay. The learned Registrar noted that the date of the act of bankruptcy was 27 November 2012.
2.
On 4 March 2013 Mr Bishay filed an Application for Review of the learned Registrar’s order in which he sought the following orders:
1. Sequestration Order SYG 2013/2012 be Stayed until this Application for review be finalized.
2. The time to review Bankruptcy Notice BN 5283 of SYG 2411/2012 with orders dated 27 November be extended.
3. Bankruptcy Notice BN 5283 of SYG2411/2012 be set aside.
4. Sequestration Order SYG 3013/2012 dated 26 February 2013, made against the estate of Reda Bishay be set aside.
5. Costs as the Court Directs.
3.
In these reasons Reda Bishay will be described as the applicant. The respondent in these proceedings, the judgment creditor before the learned Registrar, asks that the Application for Review be dismissed.
4.
There is no dispute between the parties that the judgment debt in question is $54,490.
5.
There is no dispute between the parties that the applicant holds as against the respondent various judgments totalling $36,489.
6.
The net amount between the three judgments is therefore $18,000. It is common ground that the creditors petition issued by the Official Receiver was based on the applicant’s failure to respond to or comply with the requirements of a bankruptcy notice issued 27 August 2012, served 2 October 2012, and based on a judgment debt of the District Court of NSW entered on 2 August 2012.
7.
On 23 October the applicant sought to set aside the bankruptcy notice. By orders made in those proceedings the time for compliance with the notice was extended to 27 November 2012, but the application was dismissed on that date. The act of bankruptcy was therefore committed on that date.
Contentions
8.
The applicant, who represented himself in these proceedings, contended in effect that:
a) He was at the relevant time, and continues to be, solvent ie. “he was able to pay his debts” for the purposes of s.52(2)(a) Bankruptcy Act (“the Act”); and
b) By reason of deficiencies in the bankruptcy notice there is “other sufficient cause” for the purposes of s.52(2)(b) of the Act.
9.
The respondent, who was represented by Mr Rose of counsel, opposed those contentions and sought that the application be dismissed.
Evidence
10.
The applicant relied on his affidavits sworn 4 March 2013 and 16 March 2013, and an affidavit of his accountant Magd Genday sworn 20 March 2013.
11.
Both parties relied on all documents that were before the learned Registrar at the time of making the sequestration order.
12.
No one sought to cross-examine any of the deponents of affidavits. The court was greatly assisted by the written submissions produced by Mr Rose on behalf of the respondent.
Applicable law
13.
The power of this court to review a decision of a Registrar is set out in s.104 of the
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
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