Owners - Strata Plan No 6884 v Carmichael, in the matter of Carmichael
[2024] FedCFamC2G 1409
•21 November 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Owners – Strata Plan No 6884 v Carmichael, in the matter of Carmichael [2024] FedCFamC2G 1409
File number(s): SYG 2069 of 2023 Judgment of: JUDGE CAMERON Date of judgment: 21 November 2024 Catchwords: BANKRUPTCY – Creditor’s petition – No matter of principle Legislation: Bankruptcy Act 1966 (Cth), s 52 Division: General Number of paragraphs: 13 Date of hearing: 21 November 2024 Place: Sydney Solicitor for the Applicant: Mr F. Shafiq (J.S. Mueller & Co) Solicitor for the Respondent: No appearance by or on behalf of the respondent ORDERS
SYG 2069 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
IN THE MATTER OF JANEY LYNNE CARMICHAEL (ALSO KNOWN AS JANET LYNE CARMICHAEL)
BETWEEN: THE OWNERS - STRATA PLAN NO. 6884
Applicant
AND: JANET LYNNE CARMICHAEL
Respondent
ORDER MADE BY:
JUDGE CAMERON
DATE OF ORDER:
21 NOVEMBER 2024
THE COURT ORDERS THAT:
1.The estate of JANET LYNNE CARMICHAEL be sequestrated under the Bankruptcy Act 1966 (Cth).
2.The applicant creditor’s costs as agreed or taxed be paid from the estate of the respondent debtor in accordance with the Bankruptcy Act 1966 (Cth).
THE COURT NOTES THAT:
A.The date of the act of bankruptcy is 27 June 2023.
B.A consent to act as trustee signed by Andrew John Scott has been filed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE CAMERON
INTRODUCTION
On 20 December 2023, the applicant creditor filed a creditor’s petition following the failure of the respondent debtor, Janet Carmichael, to comply with a bankruptcy notice issued on 26 April 2023 (Notice). The underlying debt arises out of unpaid strata fees, some of which grounded the judgment of the Local Court at Sutherland on which the Notice is based. Ms Carmichael owes a total of $24,030.18 to the applicant creditor. On 6 March 2024, Ms Carmichael filed a notice stating grounds of opposition to the creditors petition alleging that there was sufficient cause for a sequestration order not to be made, alleging that she did not owe the debt and asking the Court to go behind the Local Court judgment on which the Notice was founded.
When the matter was called on today, there was no appearance by or for Ms Carmichael. In that regard, I should observe that when the matter was last before the Court on 25 October 2024 and listed for hearing today, Ms Carmichael was present by telephone. I should also note that the registry wrote to the parties earlier this morning seeking confirmation that Ms Carmichael would be in attendance today and, as far as I am aware, no response has been received from her in that connection. The matter was called outside the Court and there was no appearance.
The applicant seeks a sequestration order notwithstanding the fact that Ms Carmichael is not present in Court today. In the circumstances, it does not appear to me that it is inappropriate to proceed to determine the creditors petition notwithstanding Ms Carmichael’s absence.
Proceeding in this Court
Ms Carmichael has filed a number of affidavits in this proceeding in which she referred to health conditions, most specifically post-traumatic stress disorder which, I gather, is the basis of what I understand to be the provision to her of a disability support pension.
At the first return date on 12 March 2023, the registrar adjourned the hearing of the petition to 16 April 2024. On 16 April 2024, the hearing was adjourned again by the registrar to 14 May to provide time for a Court-referred pro bono legal practitioner to offer advice on whether the appointment of a litigation guardian for Ms Carmichael might be appropriate. On 14 May 2024, the registrar adjourned the hearing to 2 July 2024 to allow time for further evidence and written submissions to be filed. Ms Carmichael did not appear at the hearing on 2 July 2024, and her pro bono counsel was given leave to withdraw.
On 11 July 2024, the registrar referred the matter to a judge of the Court. At the directions hearing on 2 August 2024, it appeared to me that Ms Carmichael was capable of understanding the nature of the litigation, although she found it difficult to conduct the proceeding, and I ordered that the matter be referred to the registry for appointment of a pro bono solicitor to represent her. On 30 August 2024, the matter was adjourned to 27 September 2024 for directions.
On 18 September 2024, the registry wrote to my chambers advising that a firm of solicitors had agreed to take on the pro bono referral. The matter was then listed before me on two further occasions, 27 September 2024 and 25 October 2024, but the offer of pro bono assistance appears not to have crystallised into the giving and accepting of instructions. On both 27 September 2024 and 25 October 2024, the Court noted that the matter would proceed to hearing on the next occasion and, as I said earlier, on the later of those two occasions, 25 October 2024, Ms Carmichael was present by telephone.
The affidavits which Ms Carmichael has filed indicate that she was more than capable of making an application for an adjournment if that was considered by her to be appropriate. Certainly, it was something that was canvassed on the last occasion. It appears that Ms Carmichael has not sought to take that step.
It appears from conversations with Ms Carmichael that she has been unwilling or incapable of accepting the advice the pro bono solicitor provided to her, which is referred to in an email of 24 September 2024 from the firm to Ms Carmichael that was attached to an email Ms Carmichael sent to the Court on 26 September 2024. It was previously made clear to Ms Carmichael that it was a matter for her whether she would accept the advice of these solicitors and proceed with their assistance or do something else. It appears that she has chosen something else.
RULES AND LEGISLATION
The Bankruptcy Act 1966 (Cth) (Act) relevantly provides:
52 Proceedings and order on creditor’s petition
(1) At the hearing of a creditor’s petition, the Court shall require proof of:
(a) the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient);
(b) service of the petition; and
(c) the fact that the debt or debts on which the petitioning creditor relies is or are still owing;
and, if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor.
(1A) If the Court makes a sequestration order, the creditor who obtained the order must give a copy of it to the Official Receiver before the end of the period of 2 days beginning on the day the order was made.
Penalty: 5 penalty units.
(1B) Subsection (1A) is an offence of strict liability.
(2) If the Court is not satisfied with the proof of any of those matters, or is satisfied by the debtor:
(a) that he or she is able to pay his or her debts; or
(b) that for other sufficient cause a sequestration order ought not to be made;
it may dismiss the petition.
(3) The Court may, if it thinks fit, upon such terms and conditions as it thinks proper, stay all proceedings under a sequestration order for a period not exceeding 21 days.
(4) A creditor’s petition lapses at the expiration of:
(a) subject to paragraph (b), the period of 12 months commencing on the date of presentation of the petition; or
(b) if the Court makes an order under subsection (5) in relation to the petition—the period fixed by the order;
unless, before the expiration of whichever of those periods is applicable, a sequestration order is made on the petition or the petition is dismissed or withdrawn.
(5) The Court may, at any time before the expiration of the period of 12 months commencing on the date of presentation of a creditor’s petition, if it considers it just and equitable to do so, upon such terms and conditions as it thinks fit, order that the period at the expiration of which the petition will lapse be such period, being a period exceeding 12 months and not exceeding 24 months, commencing on the date of presentation of the petition as is specified in the order.
CONCLUSION
Mr Shafiq, who appears for the applicant creditor today, has taken the Court through the Notice and its service, the Local Court judgment, the creditors petition, the affidavit supporting the creditors petition, the service of the creditors petition, the affidavit of service of various documents, the affidavit of final search, the affidavit of final debt and a trustee's consent to act.
I am satisfied that Ms Carmichael committed the act of bankruptcy alleged in the petition. I am also satisfied with the proof of the other matters of which s.52 of the Act requires proof. I note that Andrew John Scott, a registered trustee, has consented to be the trustee of the estate in the event that a sequestration order is made.
I make a sequestration order against the estate of Janet Carmichael and order that the applicant creditor’s costs as agreed or taxed be paid from the estate of the respondent debtor in accordance with the Act.
I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Cameron. Associate:
Dated: 17 December 2024
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