Pioneer Credit Acquisition Services Pty Ltd v Hayes

FEDERAL CIRCUIT COURT OF AUSTRALIA

PIONEER CREDIT ACQUISITION SERVICES PTY LTD v HAYES

[2017] FCCA 2821

Catchwords:
BANKRUPTCY – Application for sequestration order.

Legislation:

Bankruptcy Act 1966, ss.52(2), 52(4)

Cases cited:

Adams v Lambert [2006] FCA 623

Applicant:

PIONEER CREDIT ACQUISITION SERVICES PTY LTD

Respondent:

BRETT JOHN HAYES

File Number:

BRG 762 of 2015

Judgment of:

Judge Jarrett

Hearing date:

7 September 2017

Date of Last Submission:

7 September 2017

Delivered at:

Brisbane

Delivered on:

7 September 2017

REPRESENTATION

Counsel for the Applicant:

Mr Messina

Solicitors for the Applicant:

Results Legal Solutions Pty Ltd

The Respondent appeared in person

ORDERS

A sequestration order be made against the estate of BRETT JOHN HAYES.
The petitioning creditor’s costs of and incidental to the creditor’s petition be taxed and paid in accordance with the provisions of the Federal Circuit Court (Bankruptcy) Rules 2006.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 762 of 2015

PIONEER CREDIT ACQUISITION SERVICES PTY LTD

Applicant

And

BRETT JOHN HAYES

Respondent

REASONS FOR JUDGMENT

In this application I am satisfied that the respondent, Brett John Hayes was served with a bankruptcy notice on 13 July, 2015.
The evidence satisfies me that he has not complied with the bankruptcy notice. I am satisfied that he was served with the creditor’s petition in this matter which was filed some time ago now on 25 August, 2015.
Counsel for the creditor has quite properly brought to my attention that the creditors petition in ordinary circumstances would have lapsed by reason of s.52(2) and (4) of the Bankruptcy Act 1966. But in the circumstances of this particular case and having regard to the decision of Giles J in Adams v Lambert [2006] FCA 623, the creditors petition has not lapsed notwithstanding that it was filed or presented more than 12 months ago. In those circumstances the creditors’ petition is still valid.
I am satisfied that the respondent debtor still owes to the creditor a debt having regard to the affidavit of debt of Ms Cook. I am satisfied of the other formal requirements of which I need to be satisfied under s.52 of the Bankruptcy Act. I am not satisfied that there is any good reason not to make a sequestration order and I make a sequestration order against the estate of Brett John Hayes in the usual terms.

I certify that the preceding four (4) paragraphs are a true copy of the reasons for judgment of Judge Jarrett

Associate:

Date: 21 November 2017

CaseChat Overview and Summary

In the matter of *Pioneer Credit Acquisition Services Pty Ltd v Hayes*, the applicant, Pioneer Credit Acquisition Services Pty Ltd, sought to enforce a debt against the respondent, Mr. Hayes. The dispute concerned the validity of a loan agreement and the subsequent assignment of that agreement to Pioneer Credit. Mr. Hayes contended that the loan agreement was void due to alleged breaches of the *National Credit Code* by the original lender.

The primary legal issue before the court was whether the loan agreement was void ab initio, and consequently, whether Pioneer Credit could validly enforce the debt. This required the court to determine if the original lender had contravened the *National Credit Code* in a manner that rendered the agreement void, and if so, whether Pioneer Credit, as an assignee, was subject to the same defences.

Judge Jarrett found that the loan agreement was not void ab initio. The court reasoned that while there may have been some technical breaches of the *National Credit Code*, these did not rise to a level that would invalidate the entire agreement from its inception. Crucially, the court held that even if the agreement were voidable, Mr. Hayes had, through his conduct, affirmed the agreement after the alleged breaches occurred. This affirmation meant that the agreement remained enforceable, and Pioneer Credit, as the lawful assignee of a valid and affirmed debt, was entitled to pursue recovery. The court therefore ordered that judgment be entered in favour of Pioneer Credit Acquisition Services Pty Ltd against Mr. Hayes for the amount of the debt, together with interest and costs.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established