Pioneer Credit Acquisition Services v Hayes - [2016] FCCA 1261

FEDERAL CIRCUIT COURT OF AUSTRALIA

PIONEER CREDIT ACQUISITION SERVICES v HAYES

[2016] FCCA 1261

Catchwords:
BANKRUPTCY – Sequestration order – proof of agreement to compromise debt – whether valid agreement.

Legislation:

Bankruptcy Act 1966 (Cth)

Applicant:

PIONEER CREDIT ACQUISITION SERVICES PTY LTD

Respondent:

BRETT JOHN HAYES

File Number:

BRG 762 of 2015

Judgment of:

Judge Vasta

Hearing date:

16 May 2016

Date of Last Submission:

16 May 2016

Delivered at:

Brisbane

Delivered on:

16 May 2016

REPRESENTATION

Solicitors for the Applicant:

Results Legal Solutions

The Respondent appearing on his own behalf

ORDERS

That the Application filed 25 August 2015 be dismissed.

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

(Ex tempore)

In this matter the Applicant, Pioneer Credit Acquisition Services, came to this court in September 2015 with a judgment debt of some $63,000.00. Brett John Hayes appeared at that time and said that he was to appeal that judgment given that that judgment was a judgment in default of appearance. He maintained that he had not been given any notice that the matter was going before the original Court.
I allowed an adjournment of these proceedings to allow him to appeal. Given the history which shows that Brett John Hayes appears every time there is a matter involving him before the Court and also answers every correspondence whether that be in his best interests or not, there were, as I saw it, arguable points as to whether the judgement in default ought to have been entered.
However, notwithstanding that I had allowed that adjournment, the matter was still to come back to me if it were that the appeals were unsuccessful. It turns out that they were unsuccessful. It was then a matter for the Applicant creditor to bring the matter back before this Court.
Upon the matter being dismissed in, it would seem, the Magistrates Court, the Respondent debtor wrote to the Applicant creditor, in effect, saying that whilst he did not agree with what had occurred in Court, he accepted that he was in debt and that he would start repaying the debt at $100.00 a month at a minimum and would pay whatever it is that he could pay from then on.
The Applicant creditor banked that $100.00 money order which was sent with that particular payment. This occurred before the Applicant creditor took steps to bring the matter back to this Court. It would seem that the Applicant came back to this Court, reinstituted the proceedings, as it were, without knowledge of what had occurred by the banking of these matters.
The Respondent debtor submits that he entered into an agreement to pay the debt on the terms he outlined and, by banking his cheque, the Applicant creditor has accepted the contract.
I note that since then, the Respondent debtor has sent a sum of $162.00, another in $147.00 and a fourth in the sum of $433.00 that he says is in furtherance of the agreement that he made that was accepted by the Applicant creditor. Those three payments have not been banked.
The matter came before me on 29 February 2016. On that date, I had expressed some doubt as to whether there had been an agreement to compromise the debt entered into that would, in effect, mean that all the requirements for a sequestration order had not been met. I allowed an adjournment for the Applicant to look at the matter as, it seemed to me, not comprehended the significance of the payment accepted by them.
On 4 April 2016, I started to hear the arguments but the Applicant requested another adjournment to see if they could come to an agreement with the Respondent debtor. I adjourned the matter until today to allow that to happen. I have now seen correspondence sent by the Respondent to the Applicant during the adjournment period which has not been answered. Nothing was achieved by the adjournment because the Applicant didn’t sincerely try. So I will decide the matter today.
The Applicant creditor submitted that the company receives a huge amount of mail and gets cheques sent to them all the time and simply banked the cheque without looking at what the letter had said and had not understood what it was doing in banking the $100.00.
Whilst that may be an excuse as to why they banked the cheque, it really doesn’t stand up as a reason to doubt that there had been an acceptance of the offer that the Respondent debtor had made. When one thinks that the Applicant creditor is a large and successful company, it beggars belief that they would ignore the contents of a letter and just simply bank the cheque. One would think that they would look at what they were doing before they act.
In any event, that scenario was simply a submission from the Bar table. There was no affidavit from the person who opened the letter to say why they ignored it or from anyone as to why they banked the cheque. In the absence of any proof to the contrary, I must accept that the Applicant creditor received the offer from the Respondent debtor and acted upon it. In banking the cheque, the Applicant creditor accepted the offer of the Respondent debtor.
So in my view there was an agreement. The argument the Applicant creditor makes is that such an agreement really is void because of the lack of consideration.
The Applicant creditor points to a long line of authority talking about a payment of a lesser sum not being sufficient to satisfy a debt for the whole of the sum. Whilst there is nothing in this matter that derogates from that line of authority, the authorities do look at what are the terms of the agreement. The agreement is not that I will “pay this and that will be the end of it,”; the agreement is, “I will keep paying this money until the debt is extinguished.”
What has been said by the Applicant creditor, that even if there weren’t interest that accrued, it would take something in the order of 60 years for such a payment to be made and, even at the interest rate of 8%, the interest payable would be $2,515.36 per annum which the $100.00 a month would not even cover.
Therefore, the Applicant says that such could not amount to consideration capable of supporting an agreement because, on the terms of the agreement, the payments would never reduce the principal debt as being owed.
There is much merit in what the Applicant says there. However, it does seem to me that that was something that should have been well and truly in the mind of the Applicant when it took the $100.00 and banked it. In this case, where there has been plenty of litigation made by Brett John Hayes, one would have thought that the Applicant would look very carefully at any correspondence sent by the Respondent debtor. The fact that the Applicant now claims (without any proof of such claims) that it did not look at the terms before it accepted the amount by Brett John Hayes is really a matter that they only have themselves to blame.
Brett John Hayes has been upfront from the start of this matter and has continued to make the payments and, having noted that there is an interest component, increased his $100.00 a month to $433.00 last month. In my view that indicates that there is an agreement to compromise the debt even though that agreement is well and truly weighted in the favour of Brett John Hayes. But I find that it is a valid agreement and so, therefore, I refuse to make the sequestration order.

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of Judge Vasta

Date: 30 May 2016