Owens v CORRIGAN
[2005] FMCA 1253
•22 August 2005
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| OWENS v CORRIGAN | [2005] FMCA 1253 |
| BANKRUPTCY – Annulment application – application for adjournment – bankrupt preparing composition – whether indemnity costs should be ordered. |
| Bankruptcy Act 1966 (Cth) Federal Magistrates Court Rules2001 |
| Applicant: | SUE OWENS |
| Respondent: | MICHAEL CORRIGAN |
| File Number: | MLG 1436 of 2004 |
| Judgment of: | Phipps FM |
| Hearing date: | 22 August 2005 |
| Date of Last Submission: | 22 August 2005 |
| Delivered at: | Melbourne |
| Delivered on: | 22 August 2005 |
REPRESENTATION
| Counsel for the Applicant: | Mr Galvin |
| Solicitors for the Applicant: | Bevan-Rhys James |
| Counsel for the Respondent: | Mr Cafari |
| Solicitors for the Respondent: | Davies Maloney |
ORDERS
The matter is adjourned until 10.00am on 23 August 2005.
That the applicant Sue Owens pay the costs of John White Consultancy Pty Ltd and each supporting creditor occasioned by the adjournment on an indemnity basis.
Pursuant to Rule 21.15 of the Federal Magistrates Court Rules2001, the Court certifies that it was reasonable for each party to employ an advocate.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLM 1436 of 2004
| SUE OWENS |
Applicant
And
| MICHAEL CORRIGAN |
Respondent
REASONS FOR JUDGMENT
An application for adjournment of the proceeding was made this morning on the basis that the applicant, Sue Owens, had lodged with her trustee a proposal in writing under s.73 of the Bankruptcy Act 1966 (Cth) and that the trustee was proceeding to deal with the proposal under s.73 which would lead to calling a meeting of creditors. The proceeding, now in its third day, is an application for annulment of bankruptcy. The application is made under s.153B of the Bankruptcy Act 1966.
The trustee received a proposal but he has refused to call a meeting, exercising his power under sub-s.73(2)(b) because the proposal does not make adequate provision for the payment to the trustee of accrued fees. Mr Lofthouse has given evidence and he says he is not satisfied with the security which is set out in the proposal.
The proposal is to pay all claims admitted to proof, including any interest and the remuneration expenses of the trustee, both of the bankrupt estate and of the scheme of arrangement, and that this be secured by a registered mortgage over a property at 24 Hill Street, Hawthorn.
As is apparent from the evidence in this case, there is an issue of whether the bankrupt, or the bankrupt and the trustee between them, have the ability to give security over that property because it may or may not be owned by a trust, of which the applicant seems not to be a beneficiary. According to Mr Lofthouse's evidence today, it may be that the applicant is now conceding that the property is owned by a trust. In any event, Mr Lofthouse is not satisfied with the security. That means that he is not calling a meeting.
He has put in place a document which could be an amended composition or fresh composition, whichever way that can be described, which will satisfy him about security for his costs and indeed would satisfy him about security for payment of the admitted claims for proof, or satisfy him about security to the extent that he is prepared to put it to a meeting of creditors.
I have decided to adjourn the application until tomorrow at 10.00am. Counsel for the trustee has said that the document, which he would accept as satisfactory for the purpose of calling a meeting, is with the applicant. It is for her to sign it herself and get any other signatures that may be necessary. I have adjourned the matter to give her the opportunity to do that. Notice of this application for adjournment was given late on Friday night and possibly even only this morning. The original document, being a proposal for a composition under s.73, was sent to the trustee on 15 July 2005. There is no reason why the other parties could not have been given notice of the circumstances which might give rise to the application for an adjournment on an earlier occasion.
This is a case where the parties who have been inconvenienced should not suffer any expense. There is no excuse for the applicant not having given notice to them of what was happening at an earlier time. She is seeking an indulgence of her own application. She should pay indemnity costs.
I certify that the preceding seven (7) paragraphs are a true copy of the reasons for judgment of Phipps FM
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