FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Owners - Strata Plan No 7938 v Toseska [2024] FedCFamC2G 985
File number(s): SYG 1934 of 2023 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 4 October 2024 Catchwords: BANKRUPTCY - Application for review of sequestration order made by Registrar – whether preconditions for making sequestration order are satisfied – whether there is any reason why a sequestration order ought not be made – application for review dismissed and sequestration order affirmed. Legislation: Bankruptcy Act 1966 (Cth) ss 47, 52(1)
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 256
Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth) rr 2.02(3), 4.02, 4.04(1)(a), 4.06(3)
Bankruptcy Regulations 2021 (Cth) reg 10(1)(b)
Cases cited: Division: General Number of paragraphs: 30 Date of hearing: 25 September 2024 Place: Sydney Solicitor for the Applicant: Mr F Shafiq of JS Mueller & Co Lawyers The Respondent: Appeared in person ORDERS
SYG 1934 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: THE OWNERS - STRATA PLAN NO 7938
Applicant
AND: LILJANA TOSESKA
Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
4 OCTOBER 2024
THE COURT ORDERS THAT:
1.The application for review of the sequestration order made against the estate of the respondent by the Registrar on 25 June 2024 is dismissed.
2.The sequestration and other orders made by the Registrar on 25 June 2024 are affirmed.
3.The applicant’s costs be paid out of the estate of the respondent and have the same priority as the costs of the creditor’s petition.
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
INTRODUCTION
The respondent, Ms Toseska, applies for the review of a sequestration order a Registrar of this Court made against Ms Toseska’s estate on 25 June 2024. The Registrar made the sequestration order on the presentation by the applicant (Creditor) of a creditor’s petition filed on 4 December 2023.
The act of bankruptcy on which the Creditor relies is Ms Toseska’s failure to comply with the requirements of a bankruptcy notice (Bankruptcy Notice) that was issued on the Creditor’s application on 17 February 2023. The Bankruptcy Notice demanded that Ms Toseska pay to the Creditor $29,282.63, being the sum of two judgments entered in the Local Court of New South Wales in favour of the Creditor against Ms Toseska, one on 11 April 2022, and the other on 9 December 2022, together with interest and costs. The judgments arose…
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- Case
- [2024] FedCFamC2G 985
- Decision Date
CaseChat Overview and Summary
The central legal issues the court had to resolve were whether the creditor had proven the necessary elements under sections 43 and 52(1) of the Bankruptcy Act and the Bankruptcy Rules, and whether there were any reasons why a sequestration order should not be made against Toseska. The court needed to determine if Toseska had the capacity to repay her debts or if sequestration was the appropriate remedy.
The court examined Toseska's financial situation and her willingness to repay her debts. Toseska argued that she was in the process of arranging a loan to pay off her debts, but the court noted that she had not provided any concrete evidence of her ability to secure such a loan. Additionally, Toseska had not challenged the orders made in the NCAT proceedings, which formed the basis of the creditor's claim. The court was satisfied that the creditor had met the required proof under the Bankruptcy Act and Rules, and therefore found that the preconditions for making a sequestration order were satisfied. The court dismissed the application for review and affirmed the sequestration order.
The court's final orders were that the application for review of the sequestration order be dismissed and that the sequestration order against Toseska be affirmed.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
I am satisfied the Creditor has proved the matters it is required to prove under s 43 and s 52(1) of the Bankruptcy Act and the Bankruptcy Rules and, for that reason, the preconditions for the making of a sequestration order are satisfied. SHOULD A SEQUESTRATION ORDER BE MADE? In her oral submissions Ms Toseska referred to a number of matters. One is a matter to which I have already referred, namely, a suggestion that Ms Toseska first received notice of the Bankruptcy Notice when she appeared before the Registrar on 14 April 2024. I have already noted that Ms Toseska accepted that she had received documents in the PB Address and that, in any event, I am satisfied that the Creditor served the Bankruptcy Notice in accordance with the First Substituted Service Order. The second matter to which Ms Toseska referred were general assertions that she had not been given notice of the NCAT Proceedings. Ms Toseska did not support these assertions with any evidence; and, in any event, Ms Toseska has not taken any steps to set aside the orders that were made in the NCAT Proceedings on the basis of which the Creditor registered the costs assessments as judgments, and on the basis of which it applied for the issue of the Bankruptcy Notice. The third matter to which Ms Toseska referred were statements that she was willing to pay all that she owed to the Creditor. In that regard it is necessary to refer to the affidavit Ms Toseska made on 27 August 2024. In that affidavit Ms Toseska deposes she is the registered proprietor of the Unit; the Unit has a value of approximately $700,000; Ms Toseska receives weekly income of $1,020; and she has weekly expenses of $959.91. Ms Toseska says she understands the Creditor claims the following amounts from her:(a)$1,468.62, being contributions for the period from 1 April 2021 to 1 January 2022 inclusive due and payable to the Administration Fund and Capital Works Fund levied by the Creditor;(b)$9,921.24, being contributions during the period from 1 April 2022 to 1 October 2022 inclusive due and payable to the Administration Fund and Capital Works Fund levied by the Creditor;(c)$13,931.11, being the costs ordered by NCAT on 13 December 2021 in proceedings SC 21/29030 as assessed pursuant to Supreme Court of New South Wales Assessment No. 2022/234820 representing the sum of $13,718 registered as a judgment in the Local Court a Sutherland on 9 December 2022, together with interest to 14 February 2023 amounting to $213.11;(d)$11,339 being the costs ordered by NCAT on 30 October 2020 in proceedings SC 20/2468 as assessed by the Supreme Court of New South Wales Assessment No. 2022/23480 representing the sum of $11,273.86 registered as a judgment in the Local Court a Sutherland on 9 December 2022, together with interest to 14 February 2023 amounting to $175.14. Ms Toseska says she disputes the $9,921.24 in paragraph 26(c) above. Ms Toseska further deposes as follows:21.I am in the process of making enquiries with the Trustee with a view to a Deed of Settlement being entered into whereby I obtain finance to pay out the first registered mortgagee, the Applicant and the Trustee for his remuneration and expenses, upon which I will be annulled.22.Given the loan amount is likely to be around $130,000 at a rate of approx. 6.5%, I am of the view that I will be able to service the loan from the rent of the property and any shortfall from my pension. This is because the repayments will be $205 per week and my weekly income is $1,020. The balance of my weekly income will be enough to pay the average weekly expenses of $442 50 (strata levies and other expenses outlined above).23.As for the figure in paragraph 22 above, I reasonably anticipate will be enough to pay the amount in paragraph 20 above plus interest and costs accrued after the relevant dates above and the Trustee’s remuneration and expenses (which a staff member of his has advised me today will be approx. $20,000); the first registered mortgagee and any valuation and costs associated with the refinance.24. Today, I have been shown a title search for the property which indicates that there is a second registered mortgage to a company which is deregistered, Brendan King Pty Ltd (based on an free ASIC search I have caused to be performed) and a caveat lodged by an individual named Paul Michaels. There is also an order of the Court. I am making urgent enquiries with a view to having these encumbrances or dealings removed from title. The encumbrances or dealings relate to a refinance of other properties I owned over 20 years ago. As stated in paragraph 12 above, to the best of my knowledge and belief, I do not have any other creditors except for the Applicant.