Queensland Law Society v Warren

[2016] FCCA 256

FEDERAL CIRCUIT COURT OF AUSTRALIA

QUEENSLAND LAW SOCIETY v WARREN [2016] FCCA 256

Catchwords:
BANKRUPTCY – Bankruptcy notice – creditors petition – sequestration order.

Legislation:

Federal Circuit Court (Bankruptcy) Rules 2006, r.4.06(3)
Bankruptcy Act 1966 (Cth), s.51(1)
Federal Circuit Court Rules 2001, r.13.03C(1)(e)
Legal Profession Act 2007(QLD), ss.699, 679, 681
Queensland Civil and Administrative Tribunal Act 2009(QLD),ss.107, 131

Applicant: QUEENSLAND LAW SOCIETY INCORPORATED

Respondent: ALEXIA MARGARET WARREN

File Number: BRG 1033 of 2015

Judgment of: Judge Vasta

Hearing date: 5 February 2016

Date of Last Submission: 5 February 2016

Delivered at: Brisbane

Delivered on: 5 February 2016

REPRESENTATION

Counsel for the Applicant: Mr R.G. Hancock

Solicitors for the Applicant: Tucker & Cowen Solicitors

The being no appearance by or on behalf of the Respondent.

ORDERS

1. That a Sequestration Order be made against the estate of ALEXIA MARGARET WARREN.

2. That DAVID LEWIS CLOUT of David Clout & Associates, 105 Bowen Street, Spring Hill, in the State of Queensland, be appointed as the trustee of the estate of ALEXIA MARGARET WARREN.

3. That the Applicant creditor’s costs be paid from the estate of the respondent debtor in accordance with the Bankruptcy Act 1966, fixed in the amount of $7,794.40.

IT IS NOTED:

A. That the date of the act of bankruptcy is 9 July 2015.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT BRISBANE

BRG 1033 of 2015

QUEENSLAND LAW SOCIETY INCORPORATED

Applicant

And

ALEXIA MARGARET WARREN

Respondent

REASONS FOR JUDGMENT

(Ex tempore)

1. This is the hearing of a petition filed by the Queensland Law Society, seeking the sequestration order against Alexia Margaret Warren.  The history of the matter in short compass is that Ms Warren launched proceedings against the Queensland Law Society in the Queensland Civil and Administrative Tribunal.  The tribunal dismissed her application and ordered, in effect, that Ms Warren pay costs in the sum that were later fixed by an order of Thomas J to the sum of $59,025.34.  That order was made on 19 December 2014. 

2. The order then was taken out, pursuant to the procedure under the QCAT Act, and registered in the Magistrates Court so that it then became enforceable as an order of the Magistrates Court under s.131 of the QCAT Act.  That was on 12 May 2015.

3. A bankruptcy notice was issued against Ms Warren on 11 June and served on her a week later on 18 June 2015.  Ms Warren applied to this Court for orders setting aside the bankruptcy notice or for extending time for compliance with it.  That application was heard before me in September of 2015.  Ms Warren also applied to the Magistrates Court for orders setting aside the order of 12 May 2015 or staying enforcement of that order.  That was told to me when I heard the matter on 16 September 2015.

4. I reserved the judgment that day simply because of the weight of matters before me but Ms Warren did inform me that she was going to apply to QCAT to try and reopen the proceedings that led to the order of December 2014.  I quizzed her at that time why she simply did not appeal the order to the Queensland Court of Appeal.  She gave no satisfactory answer to that and it gave me the very firm impression that she was doing whatever she could to delay the proceedings by making a number of applications in different courts. 

5. That meant, the day that I was dealing with the matter on 16 September 2015, that there were three different applications in train:  the application before me, an application before the Magistrates Court, and an application before QCAT.

6. After I reserved the matter, two days later, a magistrate heard the application and granted a stay of enforcement of the order pending disposition of an application by Ms Warren to QCAT.  Whether or not that power actually existed is another matter but, in any event, that was done and the application before QCAT was then on foot. 

7. The following week, I dismissed her application in this Court and that meant that there was not to be any adjournment or stay of the bankruptcy notice.

8. It seems that, in October 2015, Ms Warren filed an appeal to the District Court from the Magistrate’s partial rejection of her application.  On 5 November 2015, the creditor’s petition was presented and, on 12 November, it was served upon Ms Warren.  On 24 November, Ms Warren applied to QCAT to reopen the tribunal hearing and for an extension of time to do this.  The creditor’s petition was heard before Registrar Belcher who adjourned it to 21 December 2015.  On 21 December, the hearing was before Judge Jarrett who adjourned the matter to 22 January 2016.

9. On 6 January 2016, Ms Warren applied to QCAT for an extension of time for the filing of material in support of her earlier applications.  On 20 January 2016, the QCAT hearing occurred and Thomas J reserved judgment.  On 22 January 2016, the hearing before Judge Jarrett was adjourned to a date to be fixed to await the outcome of the judgment that Thomas J had reserved two days earlier.  Later that day, Thomas J released a judgment which ordered that Ms Warren file and serve material by 4 pm on 27 January 2016, failing which her three applications to QCAT would be dismissed without further order or notice.

10. When 4 pm on 27 January 2016 came round, no material was filed or served by Ms Warren.  That had the effect of ending the matters before QCAT.  Therefore, the adjournment of the creditor’s petition that had been done before both Registrar Belcher and Judge Jarrett is now on before me today. 

11. I am satisfied that Ms Warren has had sufficient notice that the matter was on before me today.  Her name was called at 10 am.  It was called again at 10.10 am.  It is now 10.30 am and she has not appeared.

12. Given the history of this matter and given the abundance of material, it is my view that I should proceed pursuant to r.13.03C(1)(e) of Federal Circuit Court Rules 2001 and hear the matter on the merits.  There is a debt that is due and owing.  I am satisfied of that fact.  That debt has been registered in the Magistrates Court.  The application for a stay of that, notwithstanding I have some doubts as to the validity, does not mean that the debt is somehow being shown to be not correct, nor does any application to set aside an order of the Magistrates Court give me any cause to believe that the debt does not become due or owing.

13. If Ms Warren had appealed the decision of QCAT, that may be another factor but she has not appealed that decision.  She is trying to go through to a Magistrates Court to try and stay, or somehow set aside, an order where, in my view, the Magistrates Court would have absolutely no power to set aside the order of QCAT.  As I said to Ms Warren when she appeared before me in September, the proper way to go about this was to appeal to the Court of Appeal.  She has not done that.

14. So, in my view, the debt is due and owing. It has not been paid. Ms Warren still tries an argument that, pursuant to s.699 of the Legal Profession Act 2007(QLD), s.699, that somehow there must be proof of a conferral and exercise of authority to bring about the issue of the petition. As I said at that time, a proper reading of s.699 says that the Society may do this. It is not something that is a mandatory requirement for the Society in any way, shape or form.

15. The submission also, as has been pointed out, ignored s.679 and s.681 of the Legal Profession Act 2007 (QLD).

16. The litigation has well and truly been properly brought against Ms Warren.  I can see no other reason to not look at the merits of the application before me. 

17. As I say, each of the matters that are mentioned in s.52(1) of the Bankruptcy Act 1966 (Cth) have been satisfied to my satisfaction. There is proof of service of the petition. There is proof of all those matters in the affidavit that was presented. The sum of $59,025.34 is owing and is still owing. There is no evidence of any solvency of Ms Warren. The affidavit of the search of National Personal insolvency Index P2 with negative results satisfies r.4.06(3) of the Federal Circuit Court (Bankruptcy) Rules 2006 of the rules and none of the outstanding actions that Ms Warren has before the District Court affects this Court in any way, shape or form.

I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Judge Vasta

Date:  11 February 2016.