National Australia Bank Limited and Van Eps (No.2)

[2015] FCCA 1395

FEDERAL CIRCUIT COURT OF AUSTRALIA

NATIONAL AUSTRALIA BANK LIMITED & VAN EPS (No.2) [2015] FCCA 1395

Catchwords:
BANKRUPTCY – Creditor’s petition – sequestration order made – stay under 252(3) ordered for 21 days.

Legislation:  
Bankruptcy Act 1966 (Cth), ss.52(1), 52(3)

National Australia Bank Limited v Van Eps [2014] FCCA 1899
Stankiewicz v Plata [2000] FCA 1185

Applicant: NATIONAL AUSTRALIA BANK LIMITED

First Respondents: PETER DOUGLAS VAN EPS AND JULIE ANNE-MARIE VAN EPS

File Number: BRG 467 of 2014

Judgment of: Judge Baumann

Hearing date: 18 May 2015

Date of Last Submission: 18 May 2015

Delivered at: Brisbane

Delivered on: 19 May 2015

REPRESENTATION

Solicitors for the Applicant: Gadens Lawyers

Solicitors for the Respondent: Self Represented

ORDERS

1. A sequestration order be made against the estate of PETER DOUGLAS VAN EPS.

2. A sequestration order be made against the estate of JULIE ANNE-MARIE VAN EPS.

3. All proceedings under the said sequestration orders are stayed under s.52(3) of the Bankruptcy Act 1966 for twenty-one (21) days.

4. The applicant creditor’s cost including all reserved costs in the amount of $10,207.86 be paid from the estate of the respondent debtors, in equal shares, in accordance with the Bankruptcy Act 1966.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT BRISBANE

BRG 467 of 2014

NATIONAL AUSTRALIA BANK LIMITED

Applicant

And

PETER DOUGLAS VAN EPS AND JULIE ANNE-MARIE VAN EPS

Respondents

REASONS FOR JUDGMENT

(settled from extempore reasons)

1. On 21 May 2014, the petitioning creditor, the National Australia Bank, filed a creditor’s petition against the respondents, Peter and Julie Van Eps.  The debt found in the petition is for the sum of $169,894.85 and is uncontested.  No doubt that debt has now been swelled by interest and costs.  On 28 August 2014, for reasons then delivered (see National Australia Bank Limited v Van Eps [2014] FCCA 1899), the Court adjourned a further hearing of the petition until 9 February 2015.  It is clear that two adjournments had been ordered in the exercise of the court’s discretion to allow a trial listed before the Supreme Court of Queensland in 2014, in which Ms Van Eps had an interest, to proceed.

2. On 6 February 2015, an affidavit was filed by Ms Van Eps, which deposed to:-

   a)when it became clear that the defendants did not hold sufficient professional indemnity insurance to satisfy a judgment or costs order the trial, set to commence on 17 November 2014, was vacated;

   b)on 7 November 2014 the deed administrator terminated the deed of company administration through which purported authority, Ms Van Eps, had undertaken the litigation;

   c)Ms Van Eps, who was also personally a party in the litigation as the first applicant, subsequently, on 5 December 2014, made an application for costs.

3. It is not possible or, in my view, necessary to make any assessment of the prospects of success of that application and the evidence before the court is insufficient, in any event, to do so.  The costs application was heard by Boddice J in the Supreme Court of Queensland on 30 March 2015 and a decision is reserved.  The application, being annexure “JVE1”, seeks (according to paragraph 18 of Ms Van Eps’ affidavit) sums totalling $351,302.15.  Confronted with this evidence on 12 February 2015, the Court further adjourned the hearing to 20 March (by consent) and further, on 17 March by consent, the application was adjourned to 9 April 2013. 

4. On that date, a further adjournment to 18 May 2015 (which was opposed by the petitioning creditor) was granted.  Ms Van Eps, in her affidavit, filed 7 April 2015, confirmed that her submissions in respect to the costs application closed on 10 April 2015 and the Court was informed on 9 April 2015 the decision on the costs application would be available – it anticipated – by 18 May 2015.  Ms Van Eps, from the bar table in a demonstration of understandable frustration and desperation, indicated at that time that if there was not a result by 18 May 2015 then it was unlikely they could do anything more to stave off the inevitable sequestration.

5. The matter came before me yesterday. The petitioning creditor seeks a sequestration order and relied upon the affidavit set out in the written submissions, two of which were filed with my leave to demonstrate the matters set out in section 52(1) of the Bankruptcy Act 1966 had been satisfied.  I find that to be the case and, as a result, the applicant has a prima facie right to a sequestration order in respect of Mr and Mrs Van Eps.  The respondents, in their written submissions, seek to extend the life of the petition (which would otherwise expire on 21 May 2015) and to adjourn the extended petition so as to allow the Supreme Court costs application to be determined.

6. I did not ignore the evidence from Ms Van Eps that she has also engaged negotiations to resolve the costs application it must be noted that, at least since the vacation of the trial in November 2014, the respondents ought to have been aware (I note that Mr Van Eps is a practicing barrister) that time was running out.  I have considered the matters raised in the respondent’s submissions at paragraph 31.  I am not satisfied that the respondents will be in a position to pay the debt (with costs and interest) in a relatively short timeframe (see Stankiewicz v Plata [2000] FCA 1185 at 2930). 

7. I am not persuaded that the petition should be further adjourned or extended. In my view, the applicant is entitled to the benefit of a sequestration order and I will so order today in the usual terms. At paragraph 32 of their submissions the respondents, as an alternate and final claim, seeks that if the Court orders sequestration that all proceedings under the sequestration order be staid under section 52(3) of the Bankruptcy Act for 21 days. I am prepared to do so, noting that the applicant did not seek to make a submission on that application.

8. That period cannot be extended by the Court but will allow a window of opportunity for Mr and Mrs Van Eps in discussions with either potential business partners and/or maybe family members or others to consider whether it is possible to come to arrangements whereby their sequestration can be annulled without too much delay or expense.  For these reasons, I propose to make a sequestration order in the usual terms. 

I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of Judge Baumann

Date: 19 May 2015