Paligorov v COHEN and Co (No.2)
[2006] FMCA 1003
•8 March 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| PALIGOROV v COHEN & CO (No.2) | [2006] FMCA 1003 |
| BANKRUPTCY – Petition – whether opposition to the petition based upon claims relating to the bankruptcy notice can be entertained when the debtor has undertaken not to take any further steps to set aside the notice. |
| Bankruptcy Act 1966, s.52 Supreme Court Rules 1970 |
| Applicant: | BILL PALIGOROV |
| Respondent: | LEONARD COHEN & CO |
| File Number: | SYG571 of 2005 |
| Judgment of: | Raphael FM |
| Hearing date: | 8 March 2006 |
| Date of Last Submission: | 8 March 2006 |
| Delivered at: | Sydney |
| Delivered on: | 8 March 2006 |
REPRESENTATION
| Counsel for the Applicant: | Mr J Johnson |
| Solicitors for the Applicant: | Dennis & Co |
| Solicitors for the Respondent: | Stewart Forbes |
ORDERS
Sequestration Order against the estate of Bill Paligorov be made.
The Applicant Creditor’s costs (including any reserved costs) be taxed in accordance with the Federal Court Act and Rules and paid from the estate of the respondent debtor in accordance with the Act.
NOTE:
A copy of this sequestration order is to be given to the Official Receiver in Sydney within 2 days.
The date of act of bankruptcy is 29 August 2005.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG571 of 2005
| BILL PALIGOROV |
Applicant
And
| LEONARD COHEN & CO |
Respondent
REASONS FOR JUDGMENT
In this hearing of a bankruptcy petition presented on 16 December 2005, the applicant creditor claims that the respondent debtor had failed to comply by 29 August 2005 with the requirements of a bankruptcy notice WA22/2005. The applicant creditor also claims that the debtor owes it an amount of $7,771.55 plus some interest. The debtor filed, on 24 January 2006, a notice of intention to oppose the application. There are six grounds of opposition. The first four grounds of opposition are grounds for setting aside the bankruptcy notice. The fifth and sixth grounds relate to certain orders made by me on 10 August 2005. They suggest that time for compliance has been extended and the extension has not come to an end and that the application referred to in my orders had not been dismissed. In order to understand the nature of these proceedings it is necessary to rehearse certain matters.
On 10 August 2005 there came before me an application to review a decision of Registrar Tesoriero. On that day the debtor was represented by Mr Gracie of counsel. Mr Forbes, who appears today, also appeared on that day for the respondent. I was told that there were certain proceedings in the District Court of Western Australia that were due to be heard within a reasonably short time. Those proceedings were proceedings to strike out a claim by the creditor against the debtor. Following discussions between the parties consent orders were made extending time for compliance with the bankruptcy notice until three working days after the decision of the Registrar of the District Court in the strike out application. The orders, as they were taken out by the parties, are in the following terms:
“Upon hearing Mr Gracie for the applicant and Mr Forbes for the respondent and upon the applicant undertaking that in the event that his joint application to the District Court of Western Australia to strike out proceedings No 2520 of 2003 is unsuccessful he will forthwith pay the amount claimed in bankruptcy Notice No 22 of 2005 and will take no further proceedings seeking to set aside the said notice and by consent:
THE COURT ORDERS THAT:
1. Time for compliance with the Bankruptcy Notice 22 of 2005 extended until 3 working days after the decision of the Registrar District court in the strike out application is handed down or the strike out application is otherwise dismissed whichever is the earlier.
2. In the event the strike out proceedings are decided in favour of the applicant and the proceedings 2520 of 2003 are struck out with costs the bankruptcy notice is set aside upon the making of such orders.
3. Costs of these proceedings will be reserved for decision and the parties are required to file with my associate and serve submissions thereon on or before 1 December 2005.”
The proceedings before the Registrar of the District Court were a chamber summons for summary judgment pursuant to o.16 r.1 or alternatively, to strike out the plaintiff's writ of summons and statement of claim pursuant to o.20 r.19(1)(b) and/or (d) of the Supreme Court Rules 1970. Seven orders were sought. These were:
“(1)The time for bringing this application be extended.
(2)Summary judgment be entered against the plaintiff.
(3)In the alternative to 2 the plaintiff's claim be struck out in its entirety as vexatious and/or an abuse of the process of the court.
(4)The plaintiff's claim be dismissed.
(5)Alternatively this matter be stayed.
(6) Such further alternative relief as the court deems fit.
(7)[An application for costs.]”
The matter was heard by the Deputy Registrar who made the following orders:
“(1)Paragraph 3 of the application be dismissed.
(2)The balance of the application be adjourned sine die.
(3)Costs be reserved.”
The creditor argues that as paragraph 3, being the paragraph requesting a strike out of the plaintiff's claim, was dismissed term 1 of my orders of 10 August 2005 came into effect. This meant that the bankruptcy notice had to be complied with on or before 29 August 2005. The debtor argues that as the balance of the chamber summons was adjourned sine die, the matter has not concluded and therefore time for compliance with the bankruptcy notice still runs. I am of the view that the debtor's arguments are not maintainable. The orders relate directly to the strike out proceeding which is mentioned both in the preamble to the orders and in order 1 itself. There is no mention of any other part of the chamber summons.
To my mind, the agreement reached between the parties related solely to the strike out application and that having been dismissed it meant that the debtor was obliged to make the payment he promised to make and to comply with the bankruptcy notice within three working days after the decision of the District Court Registrar. In the preamble of 10 August, I note the undertaking of the debtor that in the event that the strike out application was unsuccessful, he would take no further proceedings to set aside the notice. The first four grounds of the notice of intention to oppose the petition are accepted by Mr Johnson, who appears on behalf of the debtor, to be the grounds put forward as grounds for setting aside the bankruptcy notice.
In my view, the undertaking which was given extends to preventing the rehearsal of these grounds as grounds of opposition to the petition for these reasons. I am satisfied firstly, that the time for compliance with the bankruptcy notice expired on 29 August 2005 and secondly, that the debtor cannot raise before me today any matter relating to the invalidity of the bankruptcy notice. It follows from what I have said above that provided I was satisfied of all the matters required by s.52 of the Bankruptcy Act 1966 (the “Act”) I should make a sequestration order against the estate of Mr Bill Paligorov. Unfortunately, I am unable to come to that state of satisfaction because I do not have before me the affidavit of final debt or the affidavit of search which are matters required under Part 31 Rule 31.06(3) and Rule 31.06(4).
I have requested Mr Forbes to provide those affidavits by fax to the court by 3 pm Sydney time today and then to file the originals of those faxed documents within two days thereafter. If the affidavits are received by 3 pm I propose to make a sequestration order in the usual form.
At 3.00p.m. I am satisfied that the debtor has committed the act of bankruptcy alleged in the petition. I am satisfied with the proof of the other matters required by s.52 of the Act. I make a sequestration order against the estate of Bill Paligorov. I order that the applicant creditor's costs including any reserved costs be taxed in accordance with the Federal Court Act and Rules and paid from the estate of the respondent debtor in accordance with the Act. Under the Act a copy of this sequestration order is to be given to the Official Receiver in Sydney within two days. The court notes that the date of the act of bankruptcy is 29 August 2005.
I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of Raphael FM
Associate:
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