Osborne v Schepis

[2014] FCCA 531

FEDERAL CIRCUIT COURT OF AUSTRALIA

OSBORNE & ORS v SCHEPIS [2014] FCCA 531

Catchwords:

BANKRUPTCY – Sequestration order – review of registrar’s decision – sequestration order upheld – application dismissed – costs awarded.

First Applicant: KEITH ROBERTSON OSBORNE

Second Applicant: NICHOLAS JOHN SATOURIS

Third Applicant: ANDREW MICHAEL CHRISTOPOULOS

Respondent: ASHLEY MARIE SCHEPIS

File Number: SYG 2261 of 2013

Judgment of: Judge Burnett

Hearing date: 19 February 2014

Date of Last Submission: 19 February 2014

Delivered at: Brisbane

Delivered on: 19 February 2014

REPRESENTATION

Solicitors for the Applicant: Colin Biggers & Paisley

The Respondent appeared on her own behalf.

ORDERS

1. That the application filed 13 February 2014 be dismissed.

2. That the Applicant pay the Respondents’ costs of and incidental to the application to be assessed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA

AT BRISBANE

SYG 2261 of 2013

KEITH ROBERTSON OSBORNE

First Applicant

NICHOLAS JOHN SATOURIS

Second Applicant

ANDREW MICHAEL CHRISTOPOULOS

Third Applicant

And

ASHLEY MARIE SCHEPIS

Respondent

REASONS FOR JUDGMENT

(Ex Tempore)

1. The applicant seeks review of a sequestration order made by Registrar Lynch on 23 January 2014. It appears that the application was heard on that occasion without the respondent debtor having been afforded an opportunity to be heard. That appears to have occurred because of confusion in the registry and an exchange between the debtor and Registrar Ng. Notwithstanding the fact that the order itself perhaps ought not to have been made on the day, the application for review must fail for this reason:  the debtor’s complaint is that she is not truly indebted, but that contention is simply incorrect.

2. An order was made against her in District Court of New South Wales proceedings before Judge McLoughlin. It appears that there was some negligence on the part of those representing her in those proceedings. Accordingly when the matter again came before his Honour on 24 November, when his Honour sought to deal with the representative’s omission, an exchange occurred between his Honour and Mr Ling, who was then representing the debtor.  The upshot of the exchange was that Mr Ling consented to an order that he indemnify the debtor in respect of a costs order that was made against her on 16 August 2011. 

3. His Honour did not discharge the costs order against the debtor, but simply ordered that Mr Ling indemnify the debtor in respect of those costs.  It is those costs that bring this application to court today.  They were assessed in due course and a judgment was entered.  A bankruptcy notice was served but went unanswered. A creditor’s petition was also served.  The debtor then contacted one of the registrars of the court to inform them of her complaint that she was not indebted.

4. The simple fact remains that she is indebted. While she may have a claim against Mr Ling, she has not sought to enforce it. On the day that the matter came before the registrar she was not present. That was because of a misunderstanding on her part, but the determination to proceed to hear the application in her absence was not occasioned by any error on the registrar’s behalf. Accordingly, even though it might seem that, prima facie, she was not afforded a right to be heard, the registrar proceeded correctly on the basis that the debtor had been served with the proceedings and had notice of the application. 

5. That matter aside, having heard what the debtor has to say I do not believe that the court would have come to any different conclusion to that reached on 23 January 2014, that is, that she had committed an act of bankruptcy. She was prima facie insolvent.  The evidence produced to the court on that occasion demonstrated the continuing insolvency and that the order sought was appropriate. 

6. I make two observations in relation to service. I note that in her application for review the applicant also complains about service.  Her complaint in this regard is somewhat confused, as she complains that she was never served with the bankruptcy notice as she was working at her job at Bi-Lo, and then refers to the rules relevant to the service of creditor’s petition.

7. The bankruptcy notice does not have to be served personally, but in any event there is affidavit evidence to indicate that service was effected personally. Likewise, there is evidence that the creditor’s petition was served personally. 

8. I have enquired of the debtor as to whether or not she may have some other reason or cause as to why a sequestration order ought not be made, including by asking whether she has any assets against which a judgment might be executed.  In short, she has none.  There is, in my view, no reason why the registrar’s order ought be set aside.  It was an appropriate order, and I would have made an order in the same terms had I heard the application on 23 January 2014.  It follows that the application is dismissed.

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

Date:  18 March 2014