Robinson v Custom Fleet Pty Ltd
[2007] FMCA 2077
•27 November 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ROBINSON v CUSTOM FLEET PTY LTD | [2007] FMCA 2077 |
| BANKRUPTCY – Sequestration order – review of decision of Registrar – where applicant alleges solvency – where applicant has not provided evidence of availability of sufficient funds to repay known creditors – where applicant has not filed tax returns for 12 years – exercise of court’s discretion. |
| Applicant: | DAVID ROBINSON (AKA DAVID ALAN ROBINSON) |
| Respondent: | CUSTOM FLEET PTY LTD (ABN 69 005 093 701) FORMERLY KNOWN AS CUSTOM SERVICE LEASING LIMITED (ABN 69 005 093 701) |
| File Number: | SYG 1930 of 2007 |
| Judgment of: | Raphael FM |
| Hearing date: | 27 November 2007 |
| Date of Last Submission: | 27 November 2007 |
| Delivered at: | Sydney |
| Delivered on: | 27 November 2007 |
REPRESENTATION
| For the Applicant: | In person |
| Solicitors for the Respondent: | Dibbs Abbott Stillman |
| For the Trustee: | Mr H Thomas |
ORDERS
Application dismissed.
The debtor pay the cost of the petitioning creditor, including any reserved costs, and the costs of Mr Thomas the trustee.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1930 of 2007
| DAVID ROBINSON (AKA DAVID ALAN ROBINSON) |
Applicant
And
| CUSTOM FLEET PTY LTD (ABN 69 005 093 701) FORMERLY KNOWN AS CUSTOM SERVICE LEASING LIMITED (ABN 69 005 093 701) |
Respondent
REASONS FOR JUDGMENT
There comes before me an application for a review of a decision of Registrar Kavallaris dated 19 September 2007 making a sequestration order against the estate of David Robinson, also known as David Alan Robinson.
The application was filed on 26 September 2007. There was annexed to the application an affidavit by Mr Robinson. The affidavit is short and is reproduced below:
“On 26th September 2007, I David Alan Robinson of 4 Makinson St Gladesville NSW 2111, Financial Consultant, make oath and say as follows:
1.I am the Applicant. A Sequestration Order was made against me in proceedings SYG1930/2007 on 19 September 2007. I was not present in Court.
2.I seek to review that decision and to set aside the Sequestration Order made.
3.I did not seek legal advice following service of the Bankruptcy Notice and Creditor’s Petition. I am aware that substituted service orders were made in respect of the latter on 14th August 2007.
4.I propose to arrange for payment to be made to Custom Fleet Pty Ltd by a family member.
5.I am solvent. My wife, Narelle Marie Robinson, and I jointly own 4 Makinson Street Gladesville. I believe that the house is worth in excess of $1.2m. There is a Westpac mortgage of $702,599.34. I own a Ford Explorer worth about $10,000.00. I have small amounts in Westpac bank accounts in my name and other small amounts in joint bank accounts with my wife.
6.My liabilities, apart from the debt and costs due to Custom Fleet Pty Ltd, consist of a Westpac Visa Card debt of $37,798.40.
Sworn at Sydney
Before me
………………………………………
James Farquhar Merewether Solicitor”The matter came before me first on 13 November 2007 when it was adjourned until today so that Mr Robinson could take legal advice and provide the trustee, Mr Thomas, who had appeared on that day, with a statement of affairs. I requested Mr Thomas to provide the court with a short report which he has kindly done by way of an affidavit dated
26 November 2007.
Mr Robinson did not take legal advice or if he did no legal representative is here today.
When the matter commenced he sought to change his application to seek to impugn the sequestration order on the grounds that the bankruptcy notice had not been served. I informed him that I did not propose to allow him to amend his application in that manner and that if he wished to take that course he should prepare a new application and provide evidence. He then asked to proceed on the basis of the original application.
The basis of the original application is that Mr Thomas is solvent. He says he owns a house worth in excess of $1.2 million and he has a car worth approximately $10,000. In his submissions to me he made reference to the fact that the debt underlying the sequestration order was one that was guaranteed by a company. He stated that he felt that the creditor should have proceeded against the guarantor and that it was only as a result of some antipathy between himself and the representatives of the creditor that he was being pursued rather than the guarantor.
Mr Thomas' report has been prepared on the basis of a minimal amount of information because Mr Robinson has not provided
Mr Thomas with a statement of affairs as requested. He did, however, provide Mr Thomas with an affidavit which gave some information.
Mr Thomas' report sets out in Annexure C a statement of Mr Robinson's financial position. True it is that he has a house worth approximately $1 million and I am prepared to accept for the purposes of these proceedings that it is worth slightly more than that as submitted by Mr Robinson. But there is a mortgage upon it of $700,000 and it is jointly owned by Mr Robinson and his wife.
Mr Thomas has assessed Mr Robinson's debts so far as he knows them at the present time as approximately $96,000. There are additional sums of $7,341.66 and $850.00 for trustee’s remuneration and disbursements.
Mr Robinson's cash position consists of two accounts worth approximately $5,456.00 which would go nowhere towards meeting the current creditors. Mr Robinson's only method of paying out his creditors is to refinance or to sell the matrimonial home and to utilise his half share of the balance after the mortgage to make the payments.
There is also a serious lacuna in Mr Robinson's dealings with the taxation office. He does not appear to have filed a tax return for approximately 12 years. He tells me that for half of that time he was living in the United Kingdom. But that may not relieve him of the liability to file a tax return in Australia. In any event, he agrees that he has not filed a tax return since 2003 when he did come back to this country. The possibility of substantial debts to the Australian Taxation Office should not be discounted.
It is trite law that solvency is based not upon a person's assets but upon his ability to pay his debts as and when they fall due from funds available to him or being capable of being made available but in a reasonable time. Mr Robinson has provided the court with no evidence of a refinancing nor of a forthcoming sale of his property or of his wife's agreement to that course. In the circumstances it is difficult to see how he could be considered solvent at this stage.
Even if Mr Robinson was “solvent” the court would have a discretion not to set aside the sequestration order whilst a creditor such as the Australian Taxation Office remained outstanding with an unknown debt due. And if I am wrong about my view as to Mr Robinson's solvency then I would propose to exercise the discretion of the court not to set aside the order.
In all the circumstances I dismiss the application. I order that the debtor pay the cost of the petitioning creditor, including any reserved costs, and the costs of Mr Thomas the trustee.
I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Raphael FM
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