Robert Balzola and Associates v Hoskin

[2018] FCCA 2686

FEDERAL CIRCUIT COURT OF AUSTRALIA

ROBERT BALZOLA & ASSOCIATES v HOSKIN [2018] FCCA 2686

Catchwords:
BANKRUPTCY – Creditor’s petition – application for a sequestration order – Court satisfied on the evidence before the Court that an act of bankruptcy occurred – no substance in the contention that the creditor’s petition was filed before the act of bankruptcy – petitioning creditor established the matters required under s.43 of the Bankruptcy Act –sequestration order made.

Legislation:

Bankruptcy Act 1966 (Cth), ss.27, 43, 52

Evidence Act 1995 (Cth), s.160

Applicant: ROBERT BALZOLA & ASSOCIATES

Respondent: JULIE HOSKIN

File Number: SYG 1440 of 2018

Judgment of: Judge Street

Hearing date: 13 September 2018

Date of Last Submission: 20 September 2018

Delivered at: Sydney

Delivered on: 20 September 2018

REPRESENTATION

Counsel for the Applicant: Mr A Hopkins

Solicitors for the Applicant: Robert Balzola & Associates

Counsel for the Respondent: Mr A Bailey
By direct access  

ORDERS

1. A sequestration order is made against the estate of Julie Hoskin.

2. The Petitioning Creditor’s costs be paid out of the bankrupt’s estate in accordance with the priority to which it is entitled.

THE COURT NOTES THAT:

1. A consent to act as trustee has been filed by David Kerr.

2. The act of bankruptcy occurred on 21 May 2018.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1440 of 2018

ROBERT BALZOLA & ASSOCIATES

Applicant

And

JULIE HOSKIN

Respondent

REASONS FOR JUDGMENT

1. This is an application for a sequestration order within the Court’s jurisdiction under s 27 of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”). The proceedings were fixed for a final hearing and heard on 13 September 2018. On that occasion, affidavit evidence was read establishing proof of service of the bankruptcy notice, proof of service of the creditor’s petition, verification of the creditor’s petition, verification of the debt remaining outstanding and a current search in respect of the status of the applicant in accordance with the Federal Circuit Court (Bankruptcy) Rules 2016 (“the Bankruptcy Rules”).

2. The respondent filed a notice stating grounds of opposition to the making of the sequestration order.  There was an assertion that the respondent was solvent. Evidence was put on, identifying the respondent as the registered proprietor of property. The certificate of tile details disclosed the encumbrances on the property. No affidavit evidence was put on quantifying the assets and liabilities of the respondent. On the evidence before the Court, the Court is satisfied that an act of bankruptcy occurred on 21 May 2018.

3. The Court is satisfied that the respondent is insolvent and unable to pay her debts as and when they fall due. There is no substance in ground 1 of the notice of opposition. 

4. In relation to ground 2 of the notice of opposition, the respondent sought to dispute the judgment debt. The judgment in the present case arose out of the provision of legal services by the petitioning creditor to the respondent and the obtaining of a judgment in the Local Court of New South Wales on 19 April 2018 in the sum of $92,136.03. That judgment is not one that has been stayed or is otherwise the subject of challenge and is a final order.

5. At the hearing of the proceedings on 13 September 2018, affidavit evidence was read by the respondent, purporting to dispute the existence of the underlying liability. As the respondent was unrepresented, the Court permitted the respondent to cross-examine the petitioning creditor in relation to the underlying debt, to see whether or not there was any proper basis upon which the Court should go behind the judgment. The respondent asserted that there had been payments made that had not been brought to account. No such payments were proved by the respondent. 

6. I accept the evidence given by Mr Balzola that the amounts received in relation to the matter the subject of the judgment were brought to account.  The challenge to the contrary by the respondent was without substance.  The respondent plainly misunderstood the nature of the bill of costs, which had been submitted for assessment and which gave rise to the judgment in the present case. Nothing adduced from the evidence of Mr Balzola identified any proper basis upon which this Court should go behind the judgment of the Local Court of New South Wales. There is no substance in relation to ground 2 of the notice of opposition.

7. In relation to ground 3, there is no cross-claim on foot and no basis to find that there is other than a final order enlivening this Court’s jurisdiction in the circumstances of the present case to make a sequestration order. The allegations of breach of criminal provisions of an Act were scandalous and vexatious and should not have been made.  There was no proper basis for those allegations advanced by the respondent. There is no substance in ground 3 of the notice of opposition.

8. Equally in relation to ground 4, there is no cross-claim and again, the allegations of criminal conduct are scandalous and vexatious and have no substance.

9. In relation to ground 5, this again is an attempt to go behind the judgment. It is scandalous and vexatious and has no substance. I am satisfied that the respondent was within the jurisdiction at the time the act of bankruptcy was committed. I am satisfied the petitioning creditor established the matters required under s 43 of the Bankruptcy Act and that the Court’s powers to make a sequestration order have been enlivened.

10. The Court finds the act of bankruptcy occurred on 21 May 2018, taking into account s 160 of the Evidence Act1995 (Cth). So far as the creditor’s petition identifies an earlier date, the Court grants leave to amend the same and dispenses with the need for the filing of any amended creditor’s petition. In respect of the requirements under s 52 of the Bankruptcy Act, the Court is satisfied that the petitioning creditor has complied with requirements under the Bankruptcy Rules and that an act of bankruptcy has occurred.

11. The Court is not satisfied that there is other sufficient cause made out why a sequestration order should not be made.  The Court is satisfied the respondent is insolvent. The Court is satisfied this is an appropriate matter in which to make a sequestration order. 

12. The Court notes that proceedings that were heard on 13 September 2018 were the subject of submissions by the respondent, suggesting that she was solvent and could pay out the judgment debt in full and costs if the Court gave her a short adjournment. The Court did so, but on the basis that the Court identified it would reserve its decision. The Court clearly indicated that it would not entertain any further application other than to be informed whether or not payment had been made.

13. A further application was sought to be made on behalf of Ms Hoskin through counsel, seeking to agitate whether or not there was a proper basis to make a sequestration order. These were proceedings in which the Court had reserved its decision. There was no proper basis identified upon which the Court should entertain any further application by reason of the belated attendance of representation on behalf of Ms Hoskin.

14. The Court is satisfied that it has jurisdiction and that the bankruptcy notice was validly served and within the relevant time that the creditor’s petition was brought and there is no substance in the contention that the creditor’s petition was filed before the act of bankruptcy.

15. Accordingly, a sequestration order is made against the estate of Julie Hoskin. The Court notes that a consent to act as trustee has been filed by Mr David Kerr and the Court notes the act of bankruptcy occurred on 21 May 2018.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of Judge Street

Date: 19 October 2018