RAVESI v HEGYI - [2015] FCCA 1962

FEDERAL CIRCUIT COURT OF AUSTRALIA

RAVESI v HEGYI

[2015] FCCA 1962

Catchwords:
BANKRUPTCY – Application for review of a Registrar’s order for sequestration order – sequestration order made before default judgment set aside – sequestration order set aside.

COSTS – Applicant’s delay in filing defence – costs incurred by trustee – applicant to pay petitioning creditor’s and former trustee’s costs.

Legislation:

Bankruptcy Act 1966, ss.27, 52

Totev v Sfar [2008] FCAFC 35
Ahern v Deputy Commissioner of Taxation (Queensland) (1987) ALR 137
Adamopoulos v Olympic Airways SA (1990) 95 ALR 525
Cottrell v Nicholls (Trustee) in the matter of Cottrell (Bankrupt) [2004] FCA 102

Applicant:

PAUL RAVESI

Respondent:

STEVEN HEGYI

File Number:

SYG 2654 of 2014

Judgment of:

Judge Street

Hearing date:

16 July 2015

Date of Last Submission:

16 July 2015

Delivered at:

Sydney

Delivered on:

16 July 2015

REPRESENTATION

Applicant appeared in person via telephone link

Solicitors for the Respondent:

Mr Horowitz
Sweeney Tiggemann Solicitors

ORDERS

The sequestration order made on 29 May 2015 by the registrar is set aside.
Set aside order 2 made by the registrar on 29 May 2015.
The period of time before which the petition expires is extended under s.52(5) of the Bankruptcy Act 1966 up to 23 September 2016.
The petition is adjourned for directions at 9:30 am on 4 December 2015.
The applicant pay the costs and expenses of the former trustee Joyce Fu on a trustee basis incurred from 29 May 2015 up to an including 16 July 2015.
Liberty to the former trustee to apply to have the costs and expenses fixed by the Court.
The costs in relation to the application for review are reserved.
Reserve the issue of the costs incurred to date in respect of the petitioning creditor.
Direct the respondent to notify both AFSA and Joyce Fu of this order on or before 5pm 17 July 2015.
Liberty to apply on two days’ notice.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 2654 of 2014

PAUL RAVESI

Applicant

And

STEVEN HEGYI

Respondent

REASONS FOR JUDGMENT

This is an application of the Court’s jurisdiction under s.27 of the Bankruptcy Act 1966 (Cth). The Registrar made a sequestration order on 29 May 2015 and an application for review of the Registrar’s order was filed on 17 June 2015. The matter came before this Court on 2 July 2015 and orders were made as follows:
1. The matter be stood over to 16 July 2015 at 2:15 pm.
2. Pursuant to s.33 of the Bankruptcy Act 1966 time is extended under s.60(3) for the purpose of election by the Trustee up to and including 30 July 2015 or further order of the Court.
3. Direct the applicant notify the liquidator Peter Macks of the making of these orders, by forwarding a copy of the same to Peter Macks on or before 5 pm on 3 July 2015.
4. Direct the applicant forward a copy of this order to Joyce Fu of AFSA of this order on or…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading RAVESI v HEGYI

Details

AGLC: Ravesi v Hegyi [2015] FCCA 1962
Case: [2015] FCCA 1962
Decision Date: 16 July 2015

CaseChat Overview and Summary

The applicant, Ravesi, sought a review of a Registrar's sequestration order made against him. The petitioning creditor was Hegyi. The dispute arose from an application to set aside a default judgment that had been obtained by Hegyi against Ravesi. Crucially, the sequestration order was made by the Registrar *before* the default judgment was set aside. The matter came before Judge Street in the Supreme Court of Victoria.

The primary legal issue before the Court was whether the sequestration order, which was predicated on a default judgment that was subsequently set aside, should stand. A related issue concerned the appropriate orders for costs, given the applicant's delay in filing a defence and the costs incurred by the trustee.

Judge Street reasoned that a sequestration order based on a default judgment that is later set aside must itself be set aside. The Court applied the principle that the foundation for the sequestration order had been removed, rendering the order invalid. The Court also considered the costs. While the sequestration order was set aside, the Court found that Ravesi's delay in filing his defence had caused costs to be incurred by the petitioning creditor and the former trustee.

Consequently, Judge Street ordered that the sequestration order be set aside. However, Ravesi was ordered to pay the petitioning creditor's and the former trustee's costs.

Orders