RMG Acquisitions No 8 Pty Ltd v Collard - [2011] FMCA 596

FEDERAL MAGISTRATES COURT OF AUSTRALIA

RMG ACQUISITIONS NO 8 PTY LTD v COLLARD

[2011] FMCA 596

BANKRUPTCY – Whether requirement for the words “in liquidation” to appear in description of creditor in Bankruptcy Notice – whether Bankruptcy Notice is a “public document” for the purposes of s.541 of the Corporations Act 2001 (Cth) – whether Receiver can initiate bankruptcy proceedings on behalf of a creditor whilst creditor is in liquidation – whether Court should issue a sequestration order.

WORDS AND PHRASES – “public document” – “of”.

Bankruptcy Act 1966 (Cth), ss.41(1), 43, 44, 52(1) and (2)
Corporations Act 2001 (Cth), ss.88A(1), 420, 450E(2), 541(1)
Corporations Legislation Amendment Act (No 2) 1991 (Cth), Schedule 3

Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth), rr.4.02, 4.04, 4.06(2), (3) and (4)

Bufalo Corporation Pty Ltd (rec & mgr apptd) (in liq) v Leone (2001) 40 ACSR 327; [2001] VSC 505
Genovese v Homestyle Pty Ltd (2004) 187 FLR 13; [2004] FMCA 673
Gould v Companies Auditors & Liquidators Disciplinary Board (2009) 71 ACSR 648; [2009] FCA 475
McClymont v Wright Designed Pty Ltd (2006) 196 FLR 344; [2006] FMCA 4
Re Leslie Homes (Aust) Pty Ltd (1984) 8 ACLR 1020
Re Sanders (2003) 1 ABC(NS) 408; [2003] FCA 1079
Sanders v Knudsen & Yates trading as the Hargreaves Practice [2004] FCAFC 305
St George Bank Ltd & Ors v JB (Northbridge) Pty Ltd (2009) 262 ALR 538; [2009] NSWSC 1347
Yu v Farrow Mortgage Services Pty Limited (In Liquidation) (1995) 60 FCR 300

Applicant:

RMG ACQUISITIONS NO 8 PTY LTD

Respondent:

DEAN COLLARD

File Number:

PEG 252 of 2010

Judgment of:

Lucev FM

Hearing date:

26 July 2011

Date of Last Submission:

26 July 2011

Delivered at:

Perth

Delivered on:

5 August 2011

REPRESENTATION

Counsel for the Applicant:

Ms S Hanuman

Solicitors for the Applicant:

Mossensons

For the Respondent:

In person

ORDERS

A sequestration order be made against the estate of Dean Collard.
The applicant creditor’s costs, including all reserved costs, which if not agreed, to be taxed by a Registrar pursuant to O.62 of the Federal Court Rules, and be paid out of the estate of the respondent debtor in accordance with the Bankruptcy Act 1966 (Cth).

AND THE COURT NOTES

The date of the act of bankruptcy is 17 September 2010.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT PERTH

PEG 252 of 2010

RMG ACQUISITIONS NO 8 PTY LTD

Applicant

And

DEAN COLLARD

Respondent

REASONS FOR JUDGMENT

Application

The applicant, RMG Acquisitions No 8 Pty Ltd,[1] applies for a sequestration order under s.43 of the Bankruptcy Act 1966 (Cth)[2] against the estate of Dean Collard, the respondent, in relation to an amount of $16,174.62. This amount arises from a judgment of the Magistrates Court of Victoria, dated 12 September 2006, for $15,552.08 plus interest of $3,077.54, less payments made in the sum of $2,455.00.
[1] “RMG Acquisitions”.
[2] “Bankruptcy Act”.

Issues arising before the Registrar

The application has been referred to this Court by a…

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: [2011] FMCA 596
Decision Date: 5 August 2011

CaseChat Overview and Summary

In the matter of RMG Acquisitions No 8 Pty Ltd versus Dean Collard, the Federal Court was tasked with determining whether a sequestration order should be made against Collard's estate. RMG Acquisitions No 8 Pty Ltd, the applicant, sought this order as Collard had failed to meet a judgment debt owed to the company. This case underscores the court's role in enforcing creditors' rights against debtors who default on their financial obligations.

The legal issues before the court centred on whether Collard's failure to satisfy the judgment debt constituted an act of bankruptcy, thereby justifying the sequestration of his estate. Additionally, the court had to consider the appropriate costs to be awarded to RMG Acquisitions No 8 Pty Ltd in accordance with the Federal Court Rules and the Bankruptcy Act 1966 (Cth). The court needed to ascertain whether the act of bankruptcy occurred on the date claimed by RMG Acquisitions No 8 Pty Ltd and whether the applicant was entitled to the costs sought.

In its reasoning, the court determined that Collard's failure to pay the judgment debt indeed constituted an act of bankruptcy. The court confirmed the date of the act of bankruptcy as 17 September 2010. The court found that RMG Acquisitions No 8 Pty Ltd was entitled to the full amount of its costs, including any reserved costs, which were to be taxed by a Registrar if not agreed upon by the parties. The court granted the sequestration order and directed that the costs be paid out of Collard's estate in accordance with the relevant legislation.

Orders

Orders of the court

A sequestration order be made against the estate of Dean Collard.

The applicant creditor’s costs, including all reserved costs, which if not agreed, to be taxed by a Registrar pursuant to O.62 of the Federal Court Rules, and be paid out of the estate of the respondent debtor in accordance with the Bankruptcy Act 1966 (Cth).

AND THE COURT NOTES

The date of the act of bankruptcy is 17 September 2010.

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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