Nguyen v CHEHIMI

[2006] FMCA 290

FEDERAL MAGISTRATES COURT OF AUSTRALIA

NGUYEN v CHEHIMI [2006] FMCA 290

BANKRUPTCY — Section 50(1) order – undertaking as to damages given – Court satisfied as to matters set out in section 50(1A) application granted.

Bankruptcy Act 1966 (Cth)

Penning v Steel Tube Supplies Pty Ltd (1988) 18 FCR 568

Applicant: HUY YEN NGUYEN

Respondent: MICHAEL CHEHIMI

File Number: MLG 1319 of 2005

Judgment of: Hartnett FM

Hearing date: 27 February 2006

Delivered at: Melbourne

Delivered on: 27 February 2006

REPRESENTATION

Counsel for the Applicant: Mr F. Plata

Solicitors for the Applicant: Frank Plata

ORDERS

Upon the giving of an undertaking as to damages by the applicant the court orders ex parte that:

1. Pursuant to s.50(1) of the Bankruptcy Act1966 (Cth) the Official Trustee is directed to take control of the debtor’s property and is permitted to lodge a Caveat over the real property known as and situate at 13 Cantalla Court Endeavour Hills in the State of Victoria and more particularly described in Volume 9755 Folio 938. Such order is to cease on the 14 April 2006 or other subsequent date as determined by the Court.

2. The Court notes that section 50(1A) of the Bankruptcy Act1966 (Cth) has been satisfied as to sub-paragraphs (a), (b), and (c).

3. The costs of the applicant are reserved.

4. The solicitors for the applicant serve a sealed copy on the respondent as soon as is practicable.  Such service to be by registered post to the respondent.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 1319 of 2005

HUY YEN NGUYEN

Applicant

And

MICHAEL CHEHIMI

Respondent

REASONS FOR JUDGMENT

1. This matter comes before the court this day on application made ex parte and filed by the applicant on 22 February 2006.  The applicant relies in support of that application on an affidavit sworn by Mr Frank Plata, legal practitioner, who has the care and control of the proceedings on behalf of the applicant creditor.

2. The respondent debtor owes the applicant creditor an amount of $7247.89 for vehicle property damage and being the amount due and payable by the respondent debtor to the applicant creditor pursuant to a judgment obtained in the Magistrates' Court on 11 March 2004.  In addition there are sums outstanding for legal costs and interest. 

3. An order was made on 19 August 2005 by Registrar Bardsley dispensing with service of the bankruptcy notice (the bankruptcy notice is dated 19 August 2005).  A further order was then made dispensing with service of a creditor's petition on 23 December 2005 but there was non‑compliance with those terms by the applicant and accordingly a further order dispensing with service of the creditor's petition was obtained by the applicant on 16 February 2006, being an order of Registrar Mussett.

4. The hearing date for the petition has been set down for 28 March 2006. The applicant seeks an order this day pursuant to s.50 of the Bankruptcy Act 1966 (Cth) (the Act). The relevant parts of that section are as follows:-

   50(1) At any time after a bankruptcy notice is issued, or a creditor's petition is presented, in relation to a debtor, but before the debtor becomes a bankrupt, the court may: (a) direct the official trustee or a specified registered trustee to take control of the debtor's property; and (b) make any other orders in relation to the property.

   (1A) The court may give a direction or make an order only if: (a) a creditor has applied for the court to make a direction; and (b) the court is satisfied that it is in the interests of the creditors to do so; and (c) the debtor has not complied with the bankruptcy notice.

   (1B) If the court directs a trustee to take control of the debtor's property, the court must specify when the control is to end.

5. This application is brought by the applicant both after the bankruptcy notice has issued and after the creditor's petition has been filed.  Evidence has been put before the court that there is a danger that the judgment debtor will dissipate his assets if the order is not made and thus the making of the order is in the interests of the applicant creditor.  The court has sought from the applicant an undertaking as to damages in the event that the order which the court makes this day is ultimately shown to be unjustified.  The applicant has given such undertaking to the court. 

6. The making of an order under s.50 of the Act does not give the trustee any better title to the property of the debtor than the debtor has this day at the time of the making of the order. What interest whether legal and/or equitable, the respondent debtor has in the property at

   
   

   13 Cantala Court, Endeavour Hills in the State of Victoria is still to be determined.  That property has been placed on the market for sale.  On 6 June 2005 and being after the obtaining of the judgment debt by the applicant, the debtor transferred his interest in the real property to his wife.  Thereafter a register search statement disclosed that an encumbrance was registered to the National Australia Bank following the transfer of proprietorship from the husband and his wife to the sole proprietorship of his wife. 

7. The court is satisfied that the application before it has been taken to preserve and protect the property of the debtor so that in the event of a sequestration order being made that property will be available for distribution equitably amongst the creditors; Penning v Steel Tube Supplies Pty Ltd (1988) 18 FCR 568. The court will specify the date of 14 April 2006 as being the date at which the control of the official trustee is to end.

I certify that the preceding seven (7) paragraphs are a true copy of the reasons for judgment of Hartnett FM

Associate:  Tracey Jones

Date:  27 February 2006