Murphy v Sharples - [2008] FMCA 1118

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MURPHY v SHARPLES

[2008] FMCA 1118

BANKRUPTCY – Review of sequestration order made by a registrar – order procedurally unfair and set aside – de novo hearing of the petition – whether bankruptcy notice invalid by reason of service in the precincts of a court considered – no invalidity in the circumstances of service – fresh sequestration order made.

Bankruptcy Act 1966 (Cth), s.52

Mitzev v Foxman (No 2) [2008] FMCA 405
Re O’Sullivan; Ex parte O’Sullivan v Commonwealth Bank of Australia (1995) 57 FCR 145

Applicant:

DAMIEN MURPHY

Respondent:

TERRY PATRICK SHARPLES

File Number:

SYG 1090 of 2008

Judgment of:

Driver FM

Hearing date:

5 August 2008

Delivered at:

Sydney

Delivered on:

5 August 2008

REPRESENTATION

Counsel for the Applicant:

Mr S Golledge

Solicitors for the Applicant:

Freehills

The Respondent appeared in person

CORRECTED ORDERS

Orders 1 and 2 made by Registrar Hannigan on 3 July 2008 are set aside.
A sequestration order be made against the estate of Terry Patrick Sharples.
The applicant creditor’s costs, including reserved costs if any, be taxed and paid in accordance with the Bankruptcy Act 1966 (Cth), subject to the stipulation that those costs are not to include the costs of the hearing before the Registrar on 3 July 2008.
The Court notes that the date of the act of bankruptcy is 21 November 2007.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 1090 of 2008

DAMIEN MURPHY

Applicant

And

TERRY PATRICK SHARPLES

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

I have before me an application filed on 24 July 2008 seeking review of a sequestration and a costs order made by a Registrar at this Court on 3 July 2008. The review application is supported by an affidavit by the applicant debtor, Mr Sharples, filed on 4 August 2008. There is also a notice stating grounds of opposition filed on 29 July 2008.
The creditor relies upon the petition filed on 30 April 2008 and the affidavits verifying that petition. In addition, the creditor relies upon an affidavit of Naomi Ruth Sayer made on 27 November 2007, affidavits of Paul William Sheehy made on 11 December 2007, 23 May 2008 and 3 June 2008, an affidavit of Alexander Bruce Bensemann made on 24 May 2008, an affidavit of William Robert Potter made on 30 June 2008, an affidavit of debt made on 4 August 2008 and an affidavit of search made on 5 August 2008.
I also have before me as exhibits an application filed on 26 November 2007 and supporting affidavit seeking to set aside a bankruptcy notice purportedly served on Mr Sharples and a file note by a Freehills solicitor, Mr Sheehy, dated 2 November 2007.
There are a number of issues raised on the review application. One of those is whether the proceeding before the Registrar was fair in the light of a substituted service order earlier made by the Court and the time available for Mr Sharples to deal with the creditor's 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 Sharples

Details

AGLC: Murphy v Sharples [2008] FMCA 1118
Case: [2008] FMCA 1118
Decision Date: 5 August 2008

CaseChat Overview and Summary

The Federal Magistrates Court of Australia dealt with an application by Damien Murphy to review a sequestration order made by a registrar against Terry Patrick Sharples. The primary issue was whether the proceedings before the Registrar were fair, considering the limited time Mr Sharples had to respond to the creditor's petition and his mental health issues. The Court determined that the substituted service order was properly made, and despite Mr Sharples' limited time and mental health issues, he had sufficient time to prepare for the de novo hearing. The petition was not defective as it correctly identified Mr Sharples' former address, and the service of the petition was proper as it came to his attention through the substituted service order.

Further, the Court examined whether the bankruptcy notice was invalid due to its service within the precincts of a court, potentially constituting contempt. The Court found that service within the court precincts did not necessarily constitute contempt, particularly where the service did not interfere with the court's proceedings. The Court relied on the decision in Mitzev v Foxman (No 2) and concluded that there was no interference with the administration of justice, thus service within the court precincts did not invalidate the bankruptcy notice.

Ultimately, the Court set aside the earlier sequestration and cost orders on the grounds of procedural unfairness but found that the creditor was entitled to a sequestration order based on the creditor's petition. The Court ordered that a sequestration order be made against Mr Sharples' estate, and the creditor's costs, excluding those from the hearing before the Registrar, were to be taxed and paid according to the Bankruptcy Act. The Court also noted that the act of bankruptcy occurred on 21 November 2007.

Orders