Murphy v Revis
[2008] FMCA 1561
•2 September 2008
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”. His Honour noted an undertaking by the creditor not to seek the listing of the petition for six months from 12 September 2007 or the earlier resolution of District Court proceedings brought by the debtor against the creditor for damages. That six month period has now elapsed, and the creditor is free to proceed with the petition.
The petition was re‑listed before me on 15 April 2008. I then made orders on the application of the applicant, extending the petition under s.52(5) on a nunc pro tunc basis . I appointed today for the hearing of the petition, and directed that my orders should be served on the debtor.
I am satisfied that due service of notice of today’s listing has occurred, through service on the debtor’s solicitor at a time when the solicitor was still on the record of the proceedings. Although the solicitor subsequently indicated a desire to cease to act for the debtor, this has not yet been effected under our rules. On all the evidence, I am satisfied that the debtor has had sufficient opportunity to appear today to oppose the petition if she wished to do so.
The evidence which was before Raphael FM contained the debtor’s statement of claim in the District Court alleging professional negligence by the applicant. It is pleaded with some detail, but its merits and prospects of success are not immediately apparent, and there is no sufficient evidence before me that there would be “other sufficient cause” for the Court to decline in its discretion to make a sequestration order, pursuant to principles such as were discussed by Allsop J in Totev v Sfar [2006] FCA 470. I am not satisfied that the debtor has shown that she has a claim against the applicant exceeding the amount of the debt relied on in the petition, which is “likely to succeed” and is being pursued with sufficient expedition.
In any event, as was submitted by the applicant, the debtor was on notice from the proceedings before Raphael FM and from his orders, that if she wished to raise and pursue an opposition to the petition it was necessary to comply with the Bankruptcy Rules in relation to the filing of a notice of grounds of opposition and evidence. This has not occurred.
I am satisfied as to the proof of the matters stated in the petition, including the debt for which I shall rely upon the affidavit verifying. I am satisfied as to service of the petition, and that the debt is still owing, and as to the other matters required by the Bankruptcy Act and the Bankruptcy Rules before the making of a sequestration order.
I consider it appropriate to make a sequestration order today.
I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Smith FM
Associate: Lilian Khaw
Date: 20 November 2008