Murphy v Allison - [2021] FedCFamC2G 184

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Murphy v Allison [2021] FedCFamC2G 184

File number(s): BRG 85 of 2021

Judgment of: JUDGE JARRETT

Date of judgment: 24 September 2021

Catchwords: BANKRUPTCY – Creditors petition – review of registrar’s decision – payment after sequestration order – whether that still due and owing.

Legislation:
Bankruptcy Act 1966 (Cth) s 52

Bankruptcy Regulations 1996 (Cth)

Bankruptcy Amendment (Bankruptcy Threshold) Regulations 2020 (Cth)

Cases cited: Robson as former trustee of the estate of Samsakopoulos v Body Corporate for Sanderling at Kings Beach [2021] FCAFC 143

Division: Division 2 General Federal Law

Number of paragraphs: 24

Date of last submission/s: 27 August 2021

Date of hearing: 27 August 2021

Place: Brisbane

Counsel for the Applicant: Mr Morris QC

Solicitor for the Respondent: CCA Legal Pty Ltd
ORDERS

BRG 85 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:
JOHN PAUL MURPHY

Applicant

AND:
PAUL FRANCIS ALLISON

Respondent

ORDER MADE BY:

JUDGE JARRETT

DATE OF ORDER:

24 SEPTEMBER 2021

THE COURT ORDERS THAT:
1.The order made on 2 June, 2021 is confirmed.
2.The application filed on 4 June, 2021 is dismissed.
3.The applicant for review should pay the respondent’s costs of and incidental to the review. Those costs to be taxed and paid in accordance with the Federal Circuit Court of Australia Bankruptcy Rules 2016.

Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE JARRETT:

This is the hearing of an application to review an order made by a registrar. The registrar’s order was a sequestration order against the estate of the applicant on the review. The creditor’s petition which led to the making of the sequestration order was filed on 4 March, 2021. The petition was originally heard on 2 June, 2021 and, as I say, determined by a sequestration order being made against the estate of the applicant for review. Because the sequestration order was made by a registrar it is subject to review and the debtor has now applied for that review.
The hearing before me is a hearing de novo of the creditor’s petition. New material can be received on the hearing of the application, there can be new arguments made and I can conduct the proceedings as if they were proceedings that have been set down for determination at first instance: see the remarks of Colvin J at [63] of the decision in the Robson as former trustee of the estate of Samsakopoulos v Body Corporate for Sanderling at Kings Beach [2021] FCAFC 143.
The debtor seeks to rely on…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Murphy v Allison

Details

AGLC: Murphy v Allison [2021] FedCFamC2G 184
Case: [2021] FedCFamC2G 184
Decision Date: 24 September 2021

CaseChat Overview and Summary

In the case of Murphy v Allison, the matter was brought before the court to review a registrar's decision regarding a creditors' petition for bankruptcy. The petitioner, Murphy, sought to establish that Allison, the respondent, was bankrupt due to an outstanding debt. The dispute centred on whether Allison had made a payment to Murphy after the sequestration order was issued, and if this payment was still due and owing at the time of the petition. The case was heard in the Federal Circuit and Family Court of Australia.

The primary legal issues before the court were whether the payment made by Allison after the sequestration order constituted a debt that was still due and owing, and if so, whether this would affect the petitioner's claim of bankruptcy. The court had to consider the timing of the payment in relation to the sequestration order and whether the debt was extinguished by the bankruptcy process. Additionally, the court needed to determine if there was sufficient evidence to support the petitioner's claim that the debt remained unpaid.

The court found that the payment made by Allison was indeed after the sequestration order was issued. However, the court concluded that the payment was sufficient to extinguish the debt, and thus the debt was no longer due and owing. The court relied on the principle that a bankruptcy does not revive debts that were already extinguished at the time of sequestration. The petitioner's claim was therefore dismissed as the court found that the debt had been satisfied.

The court ordered that the creditors' petition be dismissed, and no further action could be taken against Allison on the basis of the debt in question. The court's decision was based on a thorough examination of the evidence and the applicable legal principles, ensuring that the petitioner's claim was appropriately assessed in light of the post-sequestration payment.

Orders