Richter v Kalas
[2013] QCATA 56
•25 February 2013
| CITATION: | Richter v Kalas [2013] QCATA 56 |
| PARTIES: | Dennis Richter (Applicant/Appellant) |
| v | |
| Dimitrios Kalas Georgia Kalas (Respondents) |
| APPLICATION NUMBER: | APL350-12 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | 25 February 2013 |
| HEARD AT: | Brisbane |
| DECISION OF: | Dr J R Forbes, Member |
| DELIVERED ON: | 25 February 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Leave to appeal granted. 2. Appeal allowed. 3. The decision made in these proceedings on 17 September 2012 is set aside. 4. The application filed by Dimitrios Kalas and Georgina Kalas being MCD805/12 is dismissed. |
| CATCHWORDS: | MINOR CIVIL DISPUTE - Residential Tenancies and Rooming Accommodation Act 2008 – General tenancy agreement – decision in favour of applicants at first instance – judgment in default of appearance – appeal by judgment debtor - whether leave to appeal should be granted – whether original application and subsequent steps competent – whether contrary to Bankruptcy Act 1966 (Cth) Queensland Civil and Administrative Tribunal Act 2009, ss 32, 93, 142 Bankruptcy Act 1966 (Cth), ss 5, 58, 60, 82, 158 Cummings v Clairemont Petroleum NL (1996) 185 CLR 124 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
On 31 July 2012 the Respondents (“Kalas”) initiated a Minor Civil Dispute against the Appellant (“Richter”), claiming arrears of rent and water charges due and owing under a tenancy agreement governed by the Residential Tenancies and Rooming Accommodation Act 2008 and dated 7 March 2011. That agreement succeeded several similar agreements between the parties, in relation to the same premises, dating from 2006.
The matter came on for hearing at Southport on 17 September 2012. Richter did not appear, and the Adjudicator then entered a default judgment[1] against him in the amount of $17,991.06, payable forthwith.
[1] QCAT Act s 93.
Richter seeks leave[2] to appeal against that decision. His sole ground of appeal, so far as is material, reads as follows:
I became bankrupt on 8 August 2011. ... I hereby ask the Tribunal, on behalf of my bankruptcy [sic] to excuse me from this case.[3]
[2] Ibid s 142(3)(a)(i).
[3] Application for leave filed 12 October 2012 Parts C and D.
I interpret that submission as raising an issue under subsection 58(3) of the Bankruptcy Act 1966 (Cth) (“BA”), which provides –
Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor: (a) to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt; or (b) except with the leave of the Court[4] and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding.
Richter’s allegation of bankruptcy is evidenced by a photocopy Certificate of Appointment of Trustee under hand of the Official Receiver[5], dated 25 October 2011, and a Report to Creditors[6] dated 11 October 2011. Each document records that Richter’s estate was sequestrated on 4 August 2011. I infer that the sequestration order was effective on 31 July and 17 September 2012; there is no evidence to the contrary.
[5] See Evidence Act 1995 (Cth) s 157.
[6] As to a presumption of regularity see BA s 258.
“Court”, in subsection 58(3) of the BA means the Federal Court or the Federal Magistrates Court.[7] There is no suggestion that the leave required by that subsection was obtained from either of those authorities before these proceedings were commenced, or before the default judgment was entered.
[7] BS s 5(1): “the court”; Foots v Southern Cross Mine Management Pty Ltd (2007) 234
CLR 52 at 55.
It is apparent that the Adjudicator’s attention was not drawn to the existence of the subject sequestration order before she gave judgment on 17 September 2012.
It is uncertain whether Kalas possessed that knowledge at any material time. According to Richter, he informed Kalas of his (Richter’s) bankruptcy a few days after it occurred.[8] Kalas denies that allegation.[9] But Kalas’ knowledge, or lack of knowledge, is immaterial. Subsection 58(3) simply states that resort to remedies against a bankrupt, outside the bankruptcy regime, are incompetent; there is no necessity to prove that the person seeking such a remedy knows that the party against whom the remedy is sought is a bankrupt. Subsection 58(3) operates automatically unless leave from a proper court is first obtained,[10] although reinforcement, in the nature of an injunction, may be sought if necessary.[11] Evidently it is the policy of the Act to make its intended protection of creditors as effective possible:
The Act follows the pattern of earlier bankruptcy law. Broadly ... the effect of the bankruptcy is to divest a bankrupt of his property, to vest that property in a trustee and to make it available for the payment of provable debts. The right to commence or take a fresh step in legal proceedings to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt are, in general, denied to creditors when sequestration is ordered.[12]
[8] Application for leave filed 12 October 2012 Part C.
[9] Letter Kalas to QCAT 13 November 2012.
[10] Kenneth James Baker & Ors v Anthony Christopher Paul & Ors [2012] NSWSC 392 at
[50].
[11] BA s 60(1)(b).
[12] Cummings v Clairemont Petroleum NL (1996) 185 CLR 124 at 132 per Brennan CJ,
Gaudron and McHugh JJ.
The requirement of leave is limited to “provable debts”. Subject to some immaterial exceptions, the BA defines that expression as including all debts and liabilities, present or future, certain or contingent, to which a bankrupt was subject at the date of the bankruptcy, or to which he may become subject, before discharge, by reason of an obligation incurred before the bankruptcy commenced.[13]
[13] BA s 82(1).
“Liability” includes an obligation or possible obligation to pay for the breach of a covenant, contract, agreement or undertaking, whether or not the breach occurs, is likely to occur, or is capable or occurring before the bankrupt’s discharge.[14]
[14] BA s 82(8).
The subject agreement, and its predecessors, are expressed in short form, described as a “general tenancy agreement”, and prescribed under the Residential Tenancies and Rooming Accommodation Act 2008[15] as well as the Residential Tenancies Act 2005. That form is supplemented by “standard terms” set out in the Residential Tenancies Regulation 2005 and the Residential Tenancies and Rooming Accommodation Regulation 2009, dealing inter alia, with the duty to pay rent and liability for water supply charges.[16]
[15] Residential Tenancies and Rooming Accommodation Act 2008 s 55.
[16] In the 2005 Regulation, and in the 2009 Regulation, the standard terms are prescribed
in s 6 and Schedule 1.
While the particulars contained in Kalas’ original application leave something to be desired, I am satisfied that Kalas’ claim is a provable debt, within the meaning of the Bankruptcy Act.
As noted above, the Adjudicator was not informed of Richter’s bankruptcy. But while there can be no criticism of the Adjudicator’s decision to accept Kalas’ application and to enter judgment in default of appearance, each of those procedures is inevitably a nullity. That is so, because they were taken contrary to overriding[17] provisions of the Bankruptcy Act 1966 (Cth), as cited and considered above, and thus “incompetent”.
[17] Meriton Apartments Pty Ltd v Industrial Court of New South Wales [2008] FCAFC 172
at [80].
It follows that the decision under appeal is affected by an incurable error of law. Leave to appeal must be granted, and, whether it be elegant logic to set aside a nullity, the award purportedly made on 17 September 2012 must be set aside. Unfortunately for Mr and Mrs Kalas, they are left to such remedies as may still be available to them on application to the trustees.[18]
[18] John Gervase Shanahan and Joanne Emily Dunne of the firm KordaMentha Pty Ltd,
Level 14, Creek St, Brisbane. See Notice to creditors of registered trustee 11 October 2011.
ORDERS
1. Leave to appeal granted.
2. Appeal allowed.
3. The decision made in these proceedings on 17 September 2012 is set aside.
4. The application filed by Dimitrios Kalas and Georgina Kalas being MCD 805/12 is dismissed.
[4] As was given, for example, in the special circumstances of National Australia Bank v
Moore [2012] FCA 865 and Leader Computers Pty Ltd v Johnson [2012] FCA 716.
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