Nunn v Citigroup Pty Ltd
[2012] FMCA 12
•8 December 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| NUNN v CITIGROUP PTY LTD | [2012] FMCA 12 |
| BANKRUPTCY – Application for Review of Registrar’s decision to make a sequestration order – application dismissed. |
| Bankruptcy Act 1966, ss.43, 44(1)(a)(c) and 47(1) Federal Magistrates Court (Bankruptcy) Rules 2006, rr.4.02(2), 4.04(1)(a), 4.05 and 16.01(01)(c) |
| Moran v Lydiard Financial Service Propriety Limited [2007] FCA 872 Cottrell v Nicholls as trustee in the Estate of Cottrell [2004] FCA 102 |
| Applicant: | ROGER BRADFORD NUNN |
| Respondent: | CITIGROUP PTY LTD |
| File Number: | ADG 110 of 2011 |
| Judgment of: | Simpson FM |
| Hearing date: | 8 December 2011 |
| Date of Last Submission: | 8 December 2011 |
| Delivered at: | Adelaide |
| Delivered on: | 8 December 2011 |
| Settled on: | 10 January 2012 |
REPRESENTATION
| Applicant: | Mr Nunn in person |
| Counsel for the Respondent: | Mr S Thomas |
| Solicitors for the Respondent: | William Roberts Lawyers |
ORDERS
The Application for Review filed on 3 November 2011 is dismissed.
The Sequestration Order of Registrar Christie of 20 October 2011 is affirmed.
The Applicant creditor’s costs of the Review are to be taxed pursuant to Order 62 of the Federal Court Rules and be paid from the bankrupt estate of the Respondent debtor in accordance with the Bankruptcy Act 1966.
The applicant debtor’s application for a stay is refused.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADG 110 of 2011
| ROGER BRADFORD NUNN |
Applicant
And
| CITIGROUP PTY LTD |
Respondent
REASONS FOR JUDGMENT
Ex Tempore
I have before me an Application for Review brought by Roger Bradford Nunn (“Mr Nunn”) on 3 November 2011[1]. The review is of a decision of Registrar Christie made on 20 October 2011, at which time the learned Registrar made a sequestration order against the estate of Mr Nunn and ordered that he pay the applicant creditor’s costs. I heard the application yesterday and adjourned the matter to today to give these ex-tempore reasons so that the matter would be dealt with before the Christmas break.
[1] Throughout these reasons for the purpose of consistency, I will refer to the creditor, Citigroup Pty Ltd, as the applicant and the bankrupt, Roger Bradford Nunn (“Mr Nunn”) as the respondent notwithstanding that the application for review has been brought by Mr Nunn.
The applicant creditor, Citigroup Proprietary Limited. seeks a sequestration order under s.43 of the Bankruptcy Act 1966 (“the Act”) against the estate of Mr Nunn.
The petition relies on an act of bankruptcy, namely, Mr Nunn’s failure to comply on or before 6 April 2011 with the requirements of a bankruptcy notice served on him on 16 March 2011, or to satisfy the court that he had a counter-claim set off or cross-demand equal to or more than the sum claimed in the bankruptcy notice, being a counter-claim set off or cross-demand that he could not have set up in the action in which the judgment referred to in the bankruptcy notice was obtained.
I note the following matters:
a)Firstly, the debt is for $24,231.50 and is, therefore, greater than the amount specified in s.44(1)(a) of the Act;
b)Secondly, the date of the act of bankruptcy is 6 April 2011. The petition was presented on 16 May 2011 and, therefore, was within 6 months of the act of bankruptcy, as is required by s.44(1)(c) of the Act;
c)Thirdly, the creditor’s petition has been verified by an affidavit of Timothy Armstrong, a Senior Enforcement Operations Officer with the applicant, sworn 9 May 2011 and contained within the creditor’s petition. Mr Armstrong’s affidavit proves the matters referred to in s.47(1) of the Act and r.4.02(2) of the Federal Magistrates Court (Bankruptcy) Rules 2006 (“the Rules”);
d)Fourthly, an affidavit of Nicole Lachlan, a solicitor, sworn 11 May 2011, was tendered, which proves that, on 11 May 2011, a search was carried out of the computer records of the Federal Court of Australia and establishes that no application has been made in relation to the bankruptcy notice relied upon by the applicants. This affidavit proves the matters required by s.47(1) of the Act and r.4.04(1)(a) of the Rules;
e)Next, I find that an act of bankruptcy occurred as a result of the respondent’s non-compliance with the bankruptcy notice referred to in the petition and that the bankruptcy notice, which relied upon a judgment debt, had been properly served on the respondent; and
I interpose here to say that I will say something more a little later in these reasons about why I consider that it is proper for me to find that the bankruptcy was properly served on the respondent.
f)And finally, I am satisfied, on the basis of the affidavit of Narelle Griffin, a solicitor, sworn and filed on 21 July 2011, that, on 14 July 2011, the respondent was properly served with the petition, supporting affidavits and a copy of the trustee’s consent to act, as is required by r.4.05 of the Rules. On 11 July 2011, Registrar Christie had made orders for substituted service of the petition and other documents in the following terms:
(1)Personal service on the respondent of the Creditor’s Petition, No ADG 110 of 2011, copies of the affidavits verifying the petition, and a copy of any consent to act as trustee be dispensed with.
(2)In lieu of personal service, a copy of the creditor’s petition, copies of the affidavits verifying the petition, a copy of any consent to act as trustee and a sealed copy of this order be served on the respondent as follows:
a) by prepaid ordinary post addressed to the respondent at 1/155, Waterfall Gully Road, Waterfall Gully SA 5066; and
b) by emailing a scanned copy to the respondent at [email protected].
(3)The documents posted be contained in a sealed envelope addressed to the respondent at the address stated, and be accompanied by a letter stating the date of posting.
(4)Service in accordance with this order shall be deemed good and sufficient service of the said documents upon the respondent.
(5)If service is effected in accordance with this order, the said documents shall be deemed to be served on the respondent on the fifth day after the date on which all the methods of service referred to in paragraph 2 hereof have been effected.
The affidavit of Ms Griffin proves that service was effected by complying with the order for substituted service of 11 July 2011.
I am satisfied, on the basis of the affidavit of Narelle Sandra Griffin, a solicitor, sworn 5 December 2011, that there were no references to the respondent in the National Personal Insolvency Index as at 5 December 2011. Ms Griffin’s affidavit also proves that there is no record of any bankruptcy proceeding in this District pending against the respondent debtor except for these current proceedings and that there were no details of a debt agreement in relation to the debt on which the applicant relies in the index on the day when the petition was presented and on the day when the search was carried out. The affidavit of Timothy Armstrong, a Senior Investment Operations Officer with the applicant creditor, of 5 December 2011, establishes that the debt of $24,231.50 remains unpaid. I am satisfied that the applicants have properly complied with the Act and Regulations both in relation to the bankruptcy notice and the petition.
At the hearing of the review, the only argument put by Mr Nunn was that no sequestration order should have been made by Registrar Christie as, at the time that she made the order, no accurate affidavit of service of the bankruptcy notice had been filed. At that particular point in time, the only affidavit of service on the court file was Mr Cranik’s affidavit, sworn 23 March 2011 and filed on 16 May 2011. That affidavit stated (wrongly as it turned out) that service had been effected by leaving the bankruptcy notice and other documents contained in an envelope marked with the respondent’s name and last known address of Unit 1, 155, Waterfall Gully Road, Waterfall in the letterbox at that address.
Mr Cranik admitted, in a further affidavit and in oral evidence that he gave during the hearing, that the affidavit was not correct. In truth, he had put the bankruptcy notice into an envelope, sealed the envelope and put the respondent creditor’s name on the outside of the envelope and slipped that envelope under the door to Unit 1, 155, Waterfall Gully Road, Waterfall Gully. Mr Cranik explained that he made the mistake because a pro forma (or standard) letter had been used to prepare the affidavit of service and insufficient care was taken to ensure that all appropriate changes to the pro forma affidavit were carried out. Mr Cranik’s later affidavits of 25 July and 5 September 2011 clarified that the bankruptcy notice was served by complying with r.16.01(1)(c) of the Bankruptcy Rules.
There was little gained, it seemed to me, in Mr Nunn taking the point about the error in the affidavit, although I should say that it is most unfortunate that a process server should make such a mistake in an affidavit of service. As Mr Nunn admitted in his affidavit, sworn and filed on 20 June 2011, in which he admitted that “bankruptcy notice number BN676 and dated 4 February 2011 was left under my door at Waterfall Gully Road, Waterfall Gully in the state of South Australia 5066. It was not served personally.”
During the hearing, I was informed that it was an agreed fact that Mr Nunn did not open the sealed envelope placed under the door to the Waterfall Gully property, that envelope containing the bankruptcy notice.
Mr Nunn believed that personal service of the bankruptcy notice was necessary and said that, in any event, if he did not open the envelope that contained the bankruptcy notice, there would not be proper service. Both of these beliefs were incorrectly held. In my opinion, as previously stated, Mr Nunn had been properly served.
There has been some debate on occasions, about the orders that I should make where a bankrupt brings an application for review of a sequestration order. I am satisfied, in this case, that the review should be dismissed, and I am also satisfied that it is appropriate that there be a sequestration order, and in those circumstances, the appropriate order is that I dismiss the application and affirm the learned Registrar’s decision. There is no need for this court to make a fresh sequestration order.[2]
[2] Moran v Lydiard Financial Service Proprietary Limited [2007] FCA 872, Cottrell v Nichols as trustee in the Estate of Cottrell [2004] FCA 102
I make the orders to be found at the beginning of these reasons.
I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Simpson FM
Date: 10 January 2012
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