Red Energy Pty Limited v Saxton - [2019] FCCA 86

FEDERAL CIRCUIT COURT OF AUSTRALIA

RED ENERGY PTY LIMITED v SAXTON

[2019] FCCA 86

Catchwords:
BANKRUPTCY – Review of a registrar’s sequestration order – bankrupt failed to take steps to set aside judgment debt – bankrupt conceded liability for part of the debt – consideration of s 118 of the Australian Constitution – consideration of s 78B of the Judiciary Act – bankrupt putting in issue whether Corporations Act was validly enacted – whether petitioning creditor a corporation with standing to commence proceeding – review of the history of aspects of bankruptcy law – application for review dismissed.

Legislation:

Bankruptcy Act 1883 (UK) (46 & 47 Vict., C.52)

Bankruptcy Act 1966 (Cth), s.52

Commonwealth of Australia Constitution Act 1900 (UK) (63 & 64 Vict., Ch. 12), s.118
Judiciary Act 1903 (Cth), s.78B

Federal Circuit Court Rules 2001, rr.13.03C(1)(c), 16.05(2)(a)

Cases cited:

Breavington v Godleman (1988) 169 CLR 41
Commonwealth Bank of Australia Limited v Jordanou [2018] FCCA 297
John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503
Kirk v Australian Industrial Relations Commission (2010) 239 CLR 531
Lange v Australian Broadcasting Corporation (1997) 189 CLR 520
Lipohar v R (1999) 200 CLR 485
Mulhern v Pearce (No.2) [2014] FCA 805
Official Trustee in Bankruptcy v Mateo (2003) 94 CLR 512
Official Trustee in Bankruptcy v Turner (1994) 94 FCR 512

Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221

Ramsay Healthcare Australia Pty Ltd v Compton (2017) 261 CLR 132
Re Baxter; ex parte Official Receiver v Baxter (1988) 10 FCR 398
Re Wakim; ex parte McNally (1999) 198 CLR 51
Twyne’s Case, Mich. 44 Eliz (3 Coke Report 81)

Other materials:

Baldwin, Edward, The Law of Bankruptcy and Bills of Sale (Stevens & Haynes, 1895)
Commonwealth, Report of the Committee Appointed by the Attorney-General of the Commonwealth to Review the Bankruptcy Law of the Commonwealth, Parl Paper No 1964/65 (1965)
Davies, Martin, Andrew Bell SC and Paul Le Gay Brereton AM, Nigh’s Conflict of Laws in Australia (LexisNexis Butterworths, 9^th ed, 2014)
Moens, Gabriël and John Trone, Lumb, Moens & Trone, The Constitution of the Commonwealth of Australia Annotated (LexisNexis Butterworths, 9^th ed, 2016)
Potter, Adams and Dickson, The Elementary Principles of the Law of Bankruptcy and Deeds of Arrangement (Butterworth & Co, 1932)
Quick, John and Robert Randolph Garran, The Annotated Constitution of the Australian Commonwealth (LexisNexis Butterworths, 2015)
Sir William Holdsworth KC, A History of English Law (Methuen & Co Ltd, 1925)

Applicant:

RED ENERGY PTY LIMITED (ACN 107 479 372)

Respondent:

IVAN SAXTON

File Number:

MLG 1320 of 2018

Judgment of:

His Honour Judge Wilson

Hearing date:

22 November 2018

Date of Last Submission:

22 November 2018

Delivered at:

Melbourne

Delivered on:

29 January 2019

REPRESENTATION

Counsel for the Applicant:

Ms S Cipriano

Solicitors for the Applicant:

CLI Lawyers Pty Ltd

Respondent:

In person

Solicitors for the Respondent:

None

ORDERS

The application for review of a registrar’s decision filed 30 August 2018 is dismissed.
The respondent pay the…

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.

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Details

Case: [2019] FCCA 86
Decision Date: 29 January 2019

CaseChat Overview and Summary

Red Energy Pty Limited, the petitioning creditor, sought to have Mr Saxton declared bankrupt. Mr Saxton applied to review and set aside the sequestration order made by the Registrar. The dispute concerned Mr Saxton's liability for a debt owed to Red Energy and his subsequent failure to take steps to set aside the judgment debt, which ultimately led to the sequestration order. The application for review was heard by His Honour Judge Wilson in the Federal Court of Australia.

The primary legal issues before the Court were whether the sequestration order should be set aside, and in determining this, whether the *Corporations Act 2001* (Cth) was validly enacted. Mr Saxton also put in issue whether Red Energy Pty Limited was a valid corporation with the standing to commence bankruptcy proceedings. The Court was required to consider the historical development of bankruptcy law and the implications of Mr Saxton's arguments regarding the validity of Commonwealth legislation.

His Honour Judge Wilson dismissed Mr Saxton's application for review. The Court found that Mr Saxton had conceded liability for a significant portion of the debt and had failed to take timely steps to challenge the judgment or the sequestration order. The arguments concerning the validity of the *Corporations Act 2001* (Cth) and Red Energy's corporate status were found to be without merit, particularly in light of established legal principles and the history of bankruptcy legislation. The Court applied principles relating to the finality of judgments and the requirements for setting aside sequestration orders, finding no grounds to interfere with the Registrar's decision.

Orders