Re Seghabi; ex parte GIO General Ltd

Case [1994] FCA 470


RE: TANNOUS SEGHABI AND SAIDE SEGHABI
EX PARTE: GIO GENERAL LIMITED
No. NP298 of 1994
FED No. 470/94
Number of pages - 9
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA
BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES
GENERAL DIVISION
BEAZLEY J

CATCHWORDS

Bankruptcy - non compliance with bankruptcy notice - creditors' petition - whether fact that petitioning creditor different from judgment creditor affects validity of Bankrutpcy Notice - whether "error" in the Certificate of the judgment on which bankruptcy notice based, when "error" not duplicated in bankruptcy notice, affected validity of bankruptcy notice - whether effect of grant of legal aid on liability of debtors for order casts in favour of judgment creditor - appropriate for court to go behind the judgment based in part on an amount for which debtors are not liable - whether application should be dismissed on the basis that the debtors are solvent - Legal Aid Commission Act 1979 (NSW): s47; Bankruptcy Act 1966 (Cth): s52.


Legal Aid Commission Act (1979) (NSW)
Bankruptcy Act 1966 (Cth)
Government Insurance Office (Privatisation) Act 1991


Wren v Mahony (1972) 126 CLR 212
Emerson and Anor v Wreckair Pty Ltd (1992) 33 FCR 581
Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71
Re Sarina; ex parte Wollondilly Shire Council (1980) 43 FLR 163
Wollondilly Shire Council v Sarina (1980) 48 FLR 372
Trojan v Corporation of Hindmarsh (1987) 16 FCR 37

HEARING

SYDNEY, 24 May 1994
#DATE 24:6:1994


Solicitors for the Debtors: Mr Prichard


Solicitors for the Creditor: Mr Lee

ORDER

THE COURT ORDERS THAT: The petition be dismissed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

BEAZLEY J GIO General Limited (the petitioning creditor) seeks a sequestration order against the estates of Tannous Seghabi and Saide Seghabi (the debtors), alleging that the debtors are indebted to them in an amount of $8,239.15, together with interest. The debt is alleged to arise from a judgment awarded against the debtors on 22 November 1993. The debtors oppose the making of the sequestration order.


Background
2. In 1986, the debtors commenced proceedings No. 25797 of 1986 in the District Court of NSW against the Government Insurance Office of New South Wales (the GIO) for recovery under a contract of fire insurance in respect of fire at a property at 47 Portland Street, Enfield. The proceedings were heard over a period of 3 days in July 1987, judgment being entered for the Government Insurance Office on 31 July 1987. The debtors were ordered to pay the Government Insurance Office's costs to be taxed. Costs were taxed on 31 May 1991 and allowed in the sum of $8,239.15. A Certificate of Taxation in that amount was issued. On 22 November 1993, a Certificate of Judgment, (the certificate of judgment) bearing file number "25797/86", but recording the name of the judgment debtor as "NSW Insurance Ministerial Corporation", was issued.

  1. The debtors had been granted legal aid for the purposes…

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Details
AGLC
Re Seghabi, T. & Anor v. Ex parte GIO General Ltd [1994] FCA 470
Case
[1994] FCA 470
Decision Date

CaseChat Overview and Summary

In the case of Re Seghabi; ex parte GIO General Ltd, the petitioner, GIO General Ltd, sought to have the respondents declared bankrupt following non-compliance with a bankruptcy notice. The respondents, Mr. and Mrs. Seghabi, contested the petition on several grounds, including the validity of the bankruptcy notice and the effect of the grant of legal aid on their liability to the judgment creditor. The matter was heard in the Federal Court of Australia.

The primary legal issues that the court had to address were whether the fact that the petitioning creditor was different from the judgment creditor affected the validity of the bankruptcy notice, whether an "error" in the Certificate of the judgment on which the bankruptcy notice was based, not duplicated in the notice itself, impacted the notice's validity, whether the grant of legal aid influenced the debtors' liability for the order costs in favour of the judgment creditor, and if it was appropriate for the court to consider factors outside the judgment when determining the application. Additionally, the court had to consider whether the application should be dismissed on the basis that the respondents were solvent.

The court held that the petitioning creditor being different from the judgment creditor did not affect the validity of the bankruptcy notice. It also found that the "error" in the Certificate of the judgment, which was not present in the bankruptcy notice, did not impact the notice's validity. Regarding the effect of the grant of legal aid, the court ruled that it did not influence the respondents' liability for the order costs in favour of the judgment creditor. The court further held that it was not appropriate to go behind the judgment based on an amount for which the respondents were not liable. Finally, the court determined that the application should not be dismissed on the basis of the respondents' solvency.

The court ordered that the petition be dismissed. The settlement and entry of orders are governed by Order 36 of the Federal Court Rules.

Orders

Orders of the court

THE COURT ORDERS THAT: The petition be dismissed.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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