Murphy v Revis - [2008] FMCA 1561

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MURPHY v REVIS

[2008] FMCA 1561

BANKRUPTCY – Creditor’s Petition – sequestration order made in absence of debtor.

Bankruptcy Act 1966 (Cth), ss.52(2), 52(5)
Federal Court Rules (Cth), O.7 r.1(3)(c)

Totev v Sfar [2006] FCA 470

Applicant:

ELEANOR MURPHY TRADING AS ELEANOR MURPHY & COMPANY

Respondent:

RINA REVIS

File Number:

SYG 531 of 2007

Judgment of:

Smith FM

Hearing date:

2 September 2008

Delivered at:

Sydney

Delivered on:

2 September 2008

REPRESENTATION

Counsel for the Applicant:

Ms R Winfield

Solicitors for the Applicant:

Eleanor Murphy & Company

Counsel for the Respondent:

No appearance by or on behalf of the Respondent

ORDERS

A sequestration order be made against the estate of RINA REVIS.
The applicant creditor’s costs, including all reserved costs, be taxed and paid from the estate of the respondent debtor in accordance with the Bankruptcy Act 1966 (Cth).
Note that the date of the act of bankruptcy is 15 February 2007.
The applicant must within 2 days give a copy of this order to the Official Receiver in Sydney.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 531 of 2007

ELEANOR MURPHY TRADING AS ELEANOR MURPHY & COMPANY

Applicant

And

RINA REVIS

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

This is a bankruptcy petition filed on 16 February 2007. It relies on a debt totalling $115,186.97, based on two costs orders of the Family Court which have been assessed and registered in the District Court. There is evidence that the debt is still owing. There is evidence that the applicant failed to comply on or before 15 February 2007 with a bankruptcy notice based upon those judgments, which was served under the regulations on 24 January 2007.
At earlier stages in the proceedings, the debtor raised disputes about service of both the bankruptcy notice and the petition. However, in the course of proceedings before Raphael FM on 14 August 2007, his Honour determined that service of the petition had been effected in accordance with O.7 r.1(3)(c) of the Federal Court Rules (Cth) on 1 August 2007. That rule deems personal service to have been effected when the person appears in the proceeding “in response to the process”. It appears to me that his Honour was satisfied that this occurred in the present case, due to the bringing by the debtor through a solicitor of an interim application. The application made a misconceived attempt to have the petition dismissed on an interlocutory basis by reference to s.52(2) of the Bankruptcy Act 1966 (Cth). His Honour’s order of 14 August 2007 also noted that the debtor did not dispute the facts contained in the affidavit of service of the bankruptcy notice.
On a later occasion, on 12 September 2007, Raphael FM dealt with the matter again in circumstances where both parties were legally represented before him. He then dismissed the debtor’s interim application “without prejudice of the debtor’s right to raise the matters in the interim application in a Notice of Objection to the Petition”

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 Revis

Details

AGLC: Murphy v Revis [2008] FMCA 1561
Case: [2008] FMCA 1561
Decision Date: 2 September 2008

CaseChat Overview and Summary

The case of Murphy v Revis involved a creditor seeking to have a sequestration order made against the estate of the respondent, Rina Revis. The creditor, Murphy, sought the order on the basis that Revis had committed an act of bankruptcy by failing to pay a judgment debt owed to Murphy. The dispute was heard in the Federal Circuit Court of Australia.

The primary legal issue before the court was whether Revis had indeed committed an act of bankruptcy by failing to comply with the judgment debt, and whether the creditor was entitled to have a sequestration order made against her estate. The court needed to determine the validity of the debt, whether the act of bankruptcy had occurred, and whether there were any grounds to oppose the application.

In its decision, the court found that Revis had indeed failed to pay the judgment debt, thereby committing an act of bankruptcy. The court considered the evidence provided by Murphy and determined that the debt was valid and enforceable. Revis did not oppose the application, and thus no counterarguments were presented to contest the act of bankruptcy. The court concluded that the creditor was entitled to have a sequestration order made against Revis's estate. In addition, the court ordered that the creditor's costs, including all reserved costs, be paid from Revis's estate in accordance with the Bankruptcy Act 1966 (Cth). The date of the act of bankruptcy was set as 15 February 2007, and Murphy was required to provide a copy of the order to the Official Receiver in Sydney within two days.

Orders

Orders of the court

A sequestration order be made against the estate of RINA REVIS.

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

Note that the date of the act of bankruptcy is 15 February 2007.

The applicant must within 2 days give a copy of this order to the Official Receiver in Sydney.

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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