Re Karsakis, E. v Ex Parte Omod Nominees Pty Ltd

[1990] FCA 805

JUDGMENT No. ..8.!?5/ 90 ......

IN THE FEDERAL COURT	)	NOT FOR DISTRIBUTION
OF AUSTRALIA	)
GENERAL DIVISION	)
BANKRUPTCY DISTRICT	1
OF THE STATE OF	1
WESTERN AUSTRALIA	1	NO. WP343 OF 1989 RE: EVANGELOS KARSAKIS

Debtor

EX PARTE: OMOD NOMINEES PTY.

LTD.

Petitioning Creditor

CORAM: LEE J.

DATE : 5 FEBRUARY 1990

EX TEMPORE REASONS FOR JUDGMENT

This is an application for an order for sequestration against the debtor, Mr Karsakis. The petitioning creditor is now a substituted creditor relying upon a judgment entered in the Local Court at Perth on 5 May 1986 as evidence of a debt it says is owing to it by the debtor in a sum of $3,162.02. The petition as presented by the substituted creditor does not contain details of that debt nor is the matter of how that sum was calculated and became a judgment in the Local Court addressed.

Tav

The judgment relates to monies owing under a hire- purchase agreement, but there 1s no detail provided as to what rebate of charges, if any, was made nor whether it involved a voluntary return of goods or a repossession of goods by the

11 MAR 1991

FEDERAL COURT OF

AUSTRALIA PRINCIPAL

owner. It can, however, be seen that the Local Court proceedings were commenced about one year after the four year term of the hire-purchase agreement had began and it may be expected that a substantial rebate of hire purchase charges was involved.

The debtor did not contest the judgment. It was entered in the absence of any intention to defend being filed. The debtor did appear on a judgment summons issued after the judgment had been entered. No order was made on that judgment

summons because of the apparent absence of means on the part of the debtor. The judgment has remained undisturbed and undischarged .

The substituted petitioning creditor claims that the judgment refers to a debt and is proof of a debt which became owing under a hire-purchase agreement, but no details of the calculation of the debt have been provided. The debtor now alleges that the judgment is not able to provide evidence of that debt and claims that such debt as did exist, or may have

&& 1959 ("the Act").	existed, was modified by the terms of s.3 of the Hire-Purchase
The debtor says that in relation to the hire- purchase agreement, s.3 of the Act obliges the hirer or owner to provide an agreement in writing which sets out certain details one of which is the amount of any deposit paid
stipulating whether the deposit was paid in cash or in kind.
The debtor asserts that the hire-purchase agreement contained a fictional insertion in respect of a deposit, and that pursuant to sub-s.3(4) of the Act, the debtor's liability under the agreement was reduced, by force of the section, by the terms charges payable under the agreement being "set off" against the rent otherwise due under the hire-purchase agreement.
The terms of sub-s.3(4) indicate a certain confusion of legal concepts, namely the extinction or abatement of the debt with the unenforceability of a right to recover the debt, or the creation of a right of set-off vested in the hirer against the owner. It is unnecessary for me to decide that issue. It is enough to point out that the section is
expressed in contradictory terms in that regard.
The problem for me to decide is whether the debtor has displayed any grounds to persuade the Court to exercise
the discretion it has to go behind a judgment duly entered
against the debtor to assess the reality of the debt. The
debtor has not condescended to particulars which explain why it is said that the judgment was invalidly entered as the debtor now claims nor has he particularized how the amount of the debt is allegedly to be reduced.

a . C 3.

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4 .

The debtor has sat on the matter for three and a half years. He attended pursuant to the judgment summons served upon him without raising any question of his indebted- ness or liability under the judgment. In the absence of any cogent material as to why this Court should go behind that judgment, I will, on this occasion, decline to so act.

I am prepared to accept that in this case the existence of the judgment is evidence of a debt owed by the debtor to the substituted creditor in a sum in excess of $1,500. I further determine that there is no doubt that the debtor is unable to pay that debt. I have read the affidavits of search and of continuation of the debt and it is my conclusion that the Court has no option but to make the sequestration order that is sought by the substituted creditor, and I will so order.

Therefore, there will be an order that the estate of the debtor be sequestrated and the usual order in respect of costs in the petition to be costs out of the estate.

I certify that this and the preceding

four (4) pages are a true copy of the

Reasons for Judgment of his Honour Mr Justice Lee.

Associate: yr Date: S- F€ 6Qu4127 114@

Counsel for the Petitioning Creditor: M r M.W. Sutherland Solicitors for the Petitioning Creditor: Corser & Corser

The Debtor appeared in person.

Date of Hearing : 5 February 1990 Date of Judgment: 5 February 1990