New Zealand Breweries Ltd v Singh
[2010] FMCA 260
•13 April 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| NEW ZEALAND BREWERIES LTD v SINGH | [2010] FMCA 260 |
| BANKRUPTCY – Sequestration order – where debtor applicant sought adjournment to obtain documents – where debtor did not defend original proceedings or object to registration of New Zealand judgment. |
| Bankruptcy Act1966 (Cth), s.52 Foreign Judgments Act1991 (Cth) |
| Wren v Mahony [1972] HCA 5; (1972) 126 CLR 212 Cain v Whyte [1933] HCA 6; (1933) 48 CLR 639 |
| Applicant: | NEW ZEALAND BREWERIES LIMITED |
| Respondent: | JUGESHINDER SINGH |
| File Number: | SYG 3141 of 2009 |
| Judgment of: | Raphael FM |
| Hearing date: | 13 April 2010 |
| Date of Last Submission: | 13 April 2010 |
| Delivered at: | Sydney |
| Delivered on: | 13 April 2010 |
REPRESENTATION
| Counsel for the Applicant: | Ms K Dawson |
| Solicitors for the Applicant: | Mallesons Stephens Jaques |
| For the Respondent: | In person |
ORDERS
A sequestration order be made against the estate of Jugeshinder Singh.
The Applicant Creditor’s costs (including any reserved costs) be taxed (in accordance with the Federal Magistrates Court (Bankruptcy) Rules 2006) and paid from the estate of the Respondent Debtor in accordance with the Act.
All proceedings under this order are stayed for a period of 21 days.
Under the Bankruptcy Regulations a copy of this sequestration order be given to the Official Receiver in Sydney within 2 days.
THE COURT NOTES:
(i)That the date of the act of bankruptcy is 6 October 2009.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 3141 of 2009
| NEW ZEALAND BREWERIES LIMITED |
Applicant
And
| JUGESHINDER SINGH |
Respondent
REASONS FOR JUDGMENT
There comes before me today an application for a sequestration order based upon a petition filed in this Court on 24 December 2009 in which it is claimed that the respondent debtor owes the applicant $908,769.33 based upon a judgment of the High Court of New Zealand, dated 27 February 2009, registered in New South Wales pursuant to Part 2 of the Foreign Judgments Act (1991) (Cth).
The debt appears to be based upon personal guarantees given by the respondent to the applicant in connection with a complex business arrangement whereby the respondent and companies associated with him purchased licensed premises in New Zealand and entered into agreements with the applicant company for the supply of beers, wines and other spirituous liquors to the premises. I understand from Mr Singh that those agreements included a guarantee of the obligations of the companies to New Zealand Breweries Limited.
Mr Singh has filed a notice of opposition. He states that the judgment which was obtained against him was an uncontested default judgment, and that he was unable to defend the matter because of constraints imposed upon him by the failure of the creditors or others to provide him with information and documents that he needed. He also stated that those documents would establish that the agreements in which the guarantees were contained had lapsed, and therefore there was no claim which could be brought in the High Court of New Zealand.
The difficulty which I have with the respondent’s position, including his application today for an adjournment so that he can access some documents that have recently been supplied to him, and some other documents which he claims will be supplied via the Commonwealth Bank in some proceedings before Hammerschlag J in the Supreme Court of New South Wales, is this: it is not the function of a court of bankruptcy to try cases that have not been given a full trial because of the failure of a defendant to exercise the rights given to him by the Court of original jurisdiction.
Of course, there are circumstances in which a court of bankruptcy can “go behind the judgment” but these circumstances are rare; Wren v Mahony [1972] HCA 5; (1972) 126 CLR 212 at 233. It would involve an allegation of fraud in relation to the obtaining of the judgment or some very serious evidence of why the debtor was unable to exercise the rights that he had been given; Wren supra at [223]. From what I have heard from Mr Singh today, his complaint amounts to the fact that for some considerable time after the deal with the creditor began to sour, he asked for documents and was not given them.
I pointed out to Mr Singh that he would have been entitled to a discovery of those documents in the proceedings in Auckland. He told me that he was financially pressed and was unable to attend at New Zealand for that purpose. But I note that he claims to be a consultant financier, and a company director, and has provided me with no other evidence about his financial position at the relevant time.
Even if Mr Singh did not understand the seriousness of his situation when the judgment in New Zealand was entered against him, he would surely have realised it by the time the creditor sought to register the judgment in New South Wales when he was once again given an opportunity to object. He did not take it. The judgment was registered and shortly after registration the bankruptcy notice was issues.
Mr Singh did seek to set aside the bankruptcy notice. I am told that this application failed because he brought it out of time, after the act of bankruptcy had been committed. He says that he made reference in the application to a cross-claim and this is confirmed by Ms Dawson, who appears for the creditor. But the applicant did not provide me with any evidence that the cross-claim was equal to or exceeded the amount of the claim.
The rules relating to the setting aside of bankruptcy notices are strict; for an applicant to be able to set aside the bankruptcy notice on the grounds that he has a cross-claim, cross-demand, or set-off equal to or exceeding the amount of the judgment debt, he must also be able to establish that that cross-claim, cross-demand, or set-off was something that he could not have raised in the original proceedings.
Nothing that I have heard from Mr Singh today, or that appears in his affidavit filed in Court today, suggests any reason why those matters could not have been raised in the proceedings in which judgment was given in February 2009. They were all matters that had already taken place by the time the proceedings were commenced. It seems to me that what Mr Singh asked of this Court was for it to allow him a substantial adjournment so that he could prepare documentation which he would put before the Court so that the Court could try the very issues that should have been tried in New Zealand but, to my mind entirely through the fault of Mr Singh, were not. In those circumstances, the Court declined to grant an adjournment and has considered and will dismiss the notice of objection.
There exists a judgment apparently regularly obtained and properly registered in NSW which is capable of supporting a bankruptcy notice. The debtor did not comply with notice and did not obtain an extension of time for compliance. An act of bankruptcy was committed. The creditor is entitled to proceed to sequestration; Cain v Whyte [1933] HCA 6; (1933) 48 CLR 639, and has done so. The applicant has not satisfied me that the notice of objection in its current form would provide me with sufficient cause not to make the order.
I have been provided by the applicant with the appropriate affidavits of debt and search and I am satisfied that the respondent debtor committed the act of bankruptcy alleged in the petition, which was the non-compliance with the bankruptcy notice served on 15 September 2009.
I am satisfied with the proof of the other matters required by s.52 of the Bankruptcy Act1966 (Cth) (the “Act”) and I make a sequestration order against the estate of Jugeshinder Singh. I order that the applicant’s costs, including reserved costs, if any, be taxed and paid from the estate of the respondent, in accordance with the Act. Under the Bankruptcy Regulations, a copy of this sequestration order shall be given to the Official Receiver in Sydney within two days. The Court notes that the date of the act of bankruptcy is 6 October 2009. All proceedings under this order will be stayed for a period of 21 days.
I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Raphael FM
Associate:
Date: 15 April 2010
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