Re Crisafi, S. Ex Parte Cooper, P

[1992] FCA 765

JUDGMENT No. ...2 .&..,f -?"L.

IN THE FEDERAL COURT OF NJSTRALIA )

1

VICTORIA DISTRICT REGISTRY ) No VP 322 of 1992

RE:  SILVIO CRISAFI

(Debtor)

EX PARTE:  PETER COOPER

(Petitioning Creditor)

Coram:	Ryan J
Date:	7 October 1992
Place	: Melbourne

EX TEMPORE REASONS FOR JUDGMENT

Rvan J: I have been requested by Counsel for the petitioning creditor to grant leave to amend the petition by substituting the Transport Accident Commission for Peter Cooper as petitioning creditor. That application has not been opposed and consistently wlth the approach which I took in Re Milutin: ex uarte Jovetic and McLaren (unreported, 29 July 1992), I grant leave to make that amendment.

Act: 

The judgment debtor opposes the making of a sequestration order on three substantive grounds:

"1. The Bankruptcy Not ice was no t s e rved i n accordance w i t h Rule

1 5 ( a ) o f t h e Bankruptcy Rules.

2. Proof of service by way of A f f i d a v i t i s no t I n accordance w i th

Rule 16 of t h e Bankruptcy Rules.

3. The deb to r 1s so lven t and he i s a b l e t o pay h ~ deb t s . " s

Rule 15(a) of the Bankruptcy Rules provides:

"Unless o t h e r w ~ s e ordered by t h e Court under subsec t i on 309(2) o f t h e

(a) servlce of a bankruptcy notice shall be effected on the debtor by delivering to the debtor personally a copy of the bankruptcy notice signed and stamped by the Regrstrar."

Mr De Angelis, the process server who claims to have served the

bankruptcy notice in this matter, has deposed:

"2. On the 30th day of September 1991 at 6.40 o'clock in the forenoon I served SILVIO CRISAFI wrth a copy of the Bankruptcy Notlce herein signed and stamped by the Deputy Regrstrar by dellverlng the said Notice to hrm personally at 19 Cantala Drlve, Doncaster.

3. I identrfied the person served by me as SILVIO CRISAFI by reason of the following statements made at the tlme of service -

I asked the person served "Is your name SILVIO CRISAFI?" to which

the person served replied, "Yes", and I also asked, "Are you the person referred to in the Bankruptcy Notice as the Judgment Debtor?" to which SILVIO CRISAFI replled, "Yea"."

The judgment debtor on the other hand has sworn that he spoke to the process server only through an intercommunications system, one speaker of which was located at the front door of his home at 19 Cantala Drive, Doncaster. He has denied being handed a copy of the bankruptcy notice and says that he found the bankruptcy notice pushed under the front door of hls home when he left some 20 minutes after his conversation with the process server through the intercommunications system. His version has

been corroborated by his wife who gave oral evidence by leave.	She indicated that it was she who first spoke to the process
server through the intercommunications system before referring him to her husband.
On balance I accept the evidence of the debtor and his wife in preference to that of the process server who has now no recollection of the matter independent of what he deposed in an affidavit which had been prepared in advance in a standard form by the judgment creditor's solicitor and which was not sworn

until some four days after the date of the events said to constitute service. However, in my view, the essential element of personal service has been supplied by the debtor's admission that the bankruptcy notice came into his possession shortly after the visit from the process server. That admission brings this case within the principles enunc~ated in, for example, & Ditford: Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347, Graczvk v Graczvk [l9551 ALR (CN) 1077, and Re Hudson: Ex parte G.E. Crane and Sons Ltd (1990) 25 FCR 318.

Indeed, because of the admission to which I have referred, this case is even stronger than those since it is indisputable that the bankruptcy notice came to the notlce of the debtor. Accordingly, the first ground specified in the notice of opposition fails.

The second ground of opposition arises from the fact that the copy of the bankruptcy notice annexed to the affidavit of service was said not to have an impression of the seal of the Registrar

in Bankruptcy surrounding the hand-written figures "14" in the

expression, "Therefore take notice that within 14 days after

service of this notice on you. . . " . However, from my examination,

the copy of the bankruptcy notice annexed to the affidavit of service by Mr De Angelis clearly bears such an impression of the Registrar's seal. Accordingly, the second ground specified in the notice of opposition has not been made out.

The third ground requires the debtor to establish that he is able to pay his debts as they fall due. He has deposed that he

conducts a practice as an accountant in partnership with his wife who attends to the secretarial work of the practice. Work in progress of the practice has been valued at approximately $3000 and unpaid accounts rendered to clients as at 25 August 1992 amounted to $11,543. The debtor's share of those assets, if fully realisable, would therefore be slightly over $7000. He has no interest in the matrimonial home which had some time earlier been transferred into the sole name of his wife, but is jointly liable under a bank mortgage over that property, on which the principal sum owing is approximately $50,000. He and his wife are required to make payments of principal and interest of about $700 a month under that mortgage. They are also obliged to meet from the partnership income living expenses for themselves and their children. The debtor's net taxable Income for the year ended 30 June 1992 was approximately $23,000. He has no money standing to the credit of any bank account but apparently drew a cheque for $12,000 as a contribution under a policy of insurance by way of superannuation issued by the Prudential Assurance Co. That policy has not been shown on the evidence to

have any immediately or shortly realisable surrender value.

The debtor's ability to pay his debts, including the judgment debt of $6680 specified in the bankruptcy notice, depends on the favourable exercise of discretions byothers, including, it would seem the debtor's wife and her bankers and the Prudential Assurance Co. It also depends on the ability to realise promptly and in full the amounts owing by trade debtors of the accountancy partnership. In this context I regard the present case as distinguishable from that considered by a Full Court of this

Court in Sarina v Council of the Shire of Wollondillv (1980) 48 FLR 372, where the debtor readily discharged the onus of proving solvency.

This case on the evldence can be assimilated to Troian v Cor~oration of Town of Hindmarsh ( 1987) 82 ALR 255, where another Full Court of this Court observed at 268:

"The onus, under s.52(2), is upon the appellant to satisfy the court that he is able to pay hrs debts. In order to discharge that onus, he must rely on the assets of the trust and on the money paid into court. So far as the assets of the trust are concerned, they are available to hrm only rf a drscretlon rs exercised rn his favour. The possrbrlity of a favourable exercise of the trustee's discretron as to the utllisatron of trust assets 16 quite drfferent from the abllrty to "command" cash resources "through the use of hrs assets" to whrch Barwrck CJ referred rn Sandell v Porter (1966) 115 CLR 666 at 670.

. . .

The same considerations emphasrse how drfferent the sltuatlon rn the present case is from that whlch was lnvolved rn the case. If, rn the present case, the respondent had been remrtted to its rrghts of recovery in respect of its ludgments by means other than bankruptcy, it would have faced enormous diffrcultres in enforcrng those rrghts so as to recover from the appellant who, so far as the respondent rs concerned, is rndebted to the full amount of the judgments. In those crrcumstances, as dist~nct from a case where ample assets were available upon whrch to levy execution, the prrnclple lard down ln the Sarina case would not necessarrly be satrsfred by a sterrle demonstratron of an ablllty to achieve a payment whrch was not in reality at all lrkely to be compelled."

For these reasons the third substantive ground of opposition also

fails in my view.

Since none of what I have called the substantive grounds has been made out, I do not regard it as an appropriate exercise of the Court's discretion to dismiss the petition. Accordingly, the order of the court is that a sequestration order be made against the estate of the debtor.

I shall further order that the petitioning creditor's costs, including any reserved costs, be taxed and paid in accordance

with the statute. I note the date of the act of bankruptcy as 14 October 1991. I shall order that there be a stay of proceedings under the sequestration order for 21 days from this day.

I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment of his Honour Mr Justice Ryan

Associate: [m#&J

Date: 7 Q & WL

Counsel for the Judgment Debtor:	Mr R Mitchell
Solicitor for the Judgment Debtor:	Quinn and Quinn
Counsel for the Petitioning Creditor:	Mr S Gardiner
Solicitor for the Petitioning Creditor:	Hall and Wilcox