Ray v Harvey

[2017] FCCA 995

FEDERAL CIRCUIT COURT OF AUSTRALIA

RAY v HARVEY [2017] FCCA 995

Catchwords:
BANKRUPTCY – Application for a review of the Registrar’s decision – hearing de novo where the Court is Court is determining afresh whether or not a sequestration order should be made –the requirements of s.52(1)(c) of the Act could not be made out – not appropriate to make a further sequestration order – creditor’s petition dismissed.

Legislation:

Bankruptcy Act 1966, ss. 52(1)(c), 153B.

Federal Circuit Court of Australia Act 1999 (Cth), s.104(3).

Applicant: NICHOLAS ROBERT RAY

Respondent: ADAM ROSS HARVEY

File Number: SYG 88 of 2017

Judgment of: Judge Street

Hearing date: 12 May 2017

Date of Last Submission: 12 May 2017

Delivered at: Sydney

Delivered on: 12 May 2017

REPRESENTATION

Solicitors for the Applicant:

Mr G J Casey

Garden & Montgomerie Solicitors

Counsel for the Respondent:  Mr R Tregenza

Solicitors for the Respondent:

The Trustee appeared via telephone.

Steele & Co

ORDERS

1. Set aside orders 1 and 2 made by the Registrar on 30 March 2017.

2. The Creditor Petition filed by the Applicant Creditor on 15 February 2017 is dismissed.

3. There be no order as to costs as the costs of the Applicant Creditor have already been paid in full by the Respondent Debtor.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 88 of 2017

NICHOLAS ROBERT RAY

Applicant

And

ADAM ROSS HARVEY

Respondent

REASONS FOR JUDGMENT

1. On 20 April 2017, the respondent filed an application for review of a sequestration order made by the Registrar on 30 March 2017.  A review of the order made by a Registrar under the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”) is a review de novo. 

2. In support of the application for review, the respondent filed evidence seeking to identify that he was solvent. That evidence included identifying substantial assets in respect of which it was alleged the respondent had a beneficial interest under the trust.

3. The Court listed the matter for a telephone directions hearing on 4 May 2017 at which the trustee and both parties attended and identified that there may be issues in relation to establishing solvency in respect of undistributed alleged beneficial interests. The Court raised that if there was to be a distribution, there would still need to be determined whether or not the sequestration order should be made under the Act, and that it would be relevant to know what had happened to the funds the subject of that distribution. The Court raised that it would also be relevant to identify for the benefit of the parties what the costs were that had been incurred by the petitioning creditor to date and the costs of the trustee to date.

4. On that occasion, the trustee’s representative identified that the trustee did not object if payment was made to the order of the Registrar being set aside pursuant to s.104(3) of the Federal Circuit Court of Australia Act 1999 (Cth), or pursuant to s.153B of the Bankruptcy Act. In hearing the application to review, the Court has not engaged any process that requires consideration of s.153B of the Bankruptcy Act rather, the Court is determining afresh whether or not a sequestration order should be made.

5. Evidence has now been adduced before the Court, that the debt the subject of the petition has been paid, that the creditor’s costs have been paid and that the trustee’s costs have been paid. In those circumstances, the requirements of s.52(1)(c) of the Bankruptcy Act could not be made out and accordingly, it is not appropriate to make a sequestration order and the order that was made by the Registrar should not be affirmed.

6. Consent orders have been provided to the Court for the setting aside of the Registrar’s orders and for dismissing the petition. I am satisfied that it is appropriate to make those proposed orders. 

I certify that the preceding six (6) paragraphs are a true copy of the reasons for judgment of Judge Street

Date: 22 June 2017