Savage v Soloman (No 2) - [2021] FedCFamC2G 384

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Savage v Soloman (No 2) [2021] FedCFamC2G 384

File number(s): CAG 62 of 2018

Judgment of: JUDGE RILEY

Date of judgment: 13 December 2021

Catchwords: BANKRUPTCY – application to review sequestration order made by a registrar – court having gone behind the judgment and declared that the underlying debt was owing in truth and reality – bankrupt seeking to file further affidavits to challenge the declarations – court being functus officio – court declining to entertain further affidavits – bankrupt being insolvent – application to review dismissed.

Cases cited: Savage v Soloman [2021] FedCFamC2G 278

Division: Division 2 General Federal Law

Number of paragraphs: 10

Date of hearing: 13 December 2021

Place: Melbourne

Advocate for the applicant: Paul Thompson

Solicitor for the applicant: Kennedy & Cooke Lawyers

Advocate for the respondent: Rocco Ardino

Solicitor for the Respondent: Morgan Ardino & Co Solicitors
ORDERS

CAG 62 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

IN THE MATTER OF THE BANKRTUPCT ESTATE OF PHILLIP AZIZ SOLOMAN

BETWEEN:
ROBIN BARRY SAVAGE

Applicant

AND:
PHILLIP AZIZ SOLOMAN

Respondent

ORDER MADE BY:

JUDGE RILEY

DATE OF ORDER:

13 DECEMBER 2021

THE COURT ORDERS THAT:
1.The application for review filed on 31 March 2020 and amended on 12 June 2020 be dismissed.

THE COURT ORDERS BY CONSENT THAT:
2.The respondent pay the applicant’s costs of the application to review fixed in the sum of $7,000.

AND THE COURT NOTES THAT:
A.The court was satisfied today that the respondent is insolvent.

Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
JUDGE RILEY:

These are the reasons for orders made on 13 December 2021. Below is an amalgam of statements I made on that day, albeit not in the form of an ex tempore judgment. These reasons have been prepared because the bankrupt has filed an application for leave to appeal out of time from the orders made on 13 December 2021, and possibly also from the orders made on 18 November 2021.
By way of background, the bankrupt filed an application to review a sequestration order made by a registrar against the bankrupt's estate. The bankrupt argued that the court should go behind the judgment debt on which the bankruptcy notice was based. The court considered that it was appropriate to do so in this case. The court conducted a trial within a trial on the question of whether the debt was owed in truth and reality. That trial was conducted on 5 October 2021.
On 18 November 2021, the court…

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.

Continue reading Savage v Soloman (No 2)

Details

AGLC: Savage v Soloman (No 2) [2021] FedCFamC2G 384
Case: [2021] FedCFamC2G 384
Decision Date

CaseChat Overview and Summary

The case of Savage v Soloman (No 2) involved an application by Phillip Aziz Soloman, the bankrupt, to review a sequestration order made against his estate by a registrar. The court had previously declared that a debt of $60,000 plus interest was owed by Soloman to Robin Barry Savage. Soloman sought to file further affidavits to challenge the declaration that the debt was owing in truth and reality. The court declined to entertain the further affidavits, finding that it was functus officio on the question of whether there was in truth and reality a debt. The court found that Soloman was insolvent and dismissed the application to review.

The primary legal issue before the court was whether it had the power to go behind the judgment debt on which the bankruptcy notice was based. The court considered that it was appropriate to do so in this case, and conducted a trial within a trial on the question of whether the debt was owed in truth and reality. The court found that the debt was owed in truth and reality and declared as much. The bankrupt then sought to file further affidavits to challenge this declaration, which the court declined to entertain, finding that it was functus officio.

Judge Riley found that the court had no discretion to go behind the declarations made in the trial within a trial. The court had declared that the debt was owing in truth and reality, and could not simply unwind those declarations. The bankrupt argued that if the court accepted that the debt was only $7,000, he would be solvent. However, the court had declared that the debt was $60,000 plus interest. The bankrupt also argued that he had a job, and a surplus of income of about $1,000 per week. However, the test of solvency required the debts to be repaid as and when they fell due or within a reasonable time thereafter. Sixty weeks was not a reasonable time. Moreover, the bankrupt had over $100,000 in costs orders against him, which meant that he was hopelessly insolvent. The application to review was dismissed.

Orders