Savva v The Owners - Strata Plan No 79419
[2012] FMCA 753
•13 August 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SAVVA v THE OWNERS – STRATA PLAN NO 79419 | [2012] FMCA 753 |
| BANKRUPTCY – Application to review decision of Registrar and set aside sequestration order. |
| Bankruptcy Act 1966 (Cth), s.52 Federal Magistrates Act 1999 (Cth), s.104 |
| Catterick v Owners Corporation PS302189T and Catterick v Owners Corporation PS302189T & Anor [2011] FMCA 694 Cave v Madgwicks (a firm) & Anor [2010] FMCA 878 |
| Applicant: | GEORGE SAVVA |
| Respondent: | THE OWNERS – STRATA PLAN NO 79419 |
| File Number: | SYG 1736 of 2012 |
| Judgment of: | Barnes FM |
| Hearing date: | 13 August 2012 |
| Delivered at: | Sydney |
| Delivered on: | 13 August 2012 |
REPRESENTATION
| Solicitors for the Applicant: | Sally Nash & Co |
| Solicitors for the Respondent: | Grace Lawyers Pty Limited |
ORDERS, BY CONSENT
Compliance with the requirements of Rule 7.06(3) of the Federal Magistrates Court (Bankruptcy) Rules is dispensed with.
The Sequestration Order made on 27 July 2012 in proceedings SYG1371/2012 be set aside.
The Creditors Petition in proceedings SYG1371/2012 be dismissed.
The Applicant to pay the Respondent’s costs of this Application and proceedings SYG1371/2012.
The Court directs the Official Receiver to remove the making of the Sequestration Order from the NPII.
That a copy of this order be given to the Official Receiver within 48 hours of receipt.
NOTES, BY CONSENT
The Court notes the undertaking of the Applicant to the Court to make payment of all unpaid levies, interest and costs, including the costs of this Application and the costs of proceedings SYG1371/2012, owed to the Respondent up to and including 13 August 2012 in the sum of $48,490.36 and the Trustee’s costs and remuneration in the sum of $6,600.00
The Court notes the Applicant has given an irrevocable authority to his solicitor, Sally Nash of Sally Nash & Co Lawyers, to issue two trust account cheques to the Respondent’s solicitor on or before 5.00 pm on 13 August 2012 in payment of the amounts referred to in the preceding paragraph and that such instructions cannot be withdrawn until the trust account cheques have been banked and have cleared in the Respondent’s solicitors trust account.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1736 of 2012
| GEORGE SAVVA |
Applicant
And
| THE OWNERS – STRATA PLAN NO 79419 |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
This is an application filed on 9 August 2012 seeking that the decision of a Registrar of this court to make a sequestration order in relation to the estate of the respondent, Mr Savva, be reviewed and set aside. In the alternative it is sought that the bankruptcy be annulled.
The applicant and the petitioning creditor and the Trustee of the applicant’s bankrupt estate agree that the orders sought are that the sequestration order should be set aside, the creditor’s petition dismissed, the applicant pay the respondent’s costs of this application and of the creditor’s petition and that the Court note the written undertaking of Mr Savva to make payment of all unpaid levies, interest and costs to the respondent in a specified amount and to pay the Trustee’s costs and remuneration in the sum of $6,600. He has given an irrevocable authority to his solicitor that provides for payment to the respondent’s solicitor on or before 13 August 2012 of the amounts in issue.
The applicant relies on his affidavit of 9 August 2012 in support of his application. He explains that he overlooked and did not attend the hearing of the creditor’s petition on 27 July 2012. This was the first return date for the creditor’s petition. A sequestration order was made in his absence. Mr Savva’s evidence is that he did not understand the significance of the creditor’s petition and that had he attended court he would have sought an adjournment. He had at that time exchanged contracts to sell a property at Frenchs Forest. This is one of eight properties he owns. He claims that he intended to pay the outstanding strata levies owed to the petitioning creditor from the proceeds of that sale.
Settlement of that sale was to have occurred on 10 August 2012 but could not proceed because of Mr Savva’s bankruptcy. The Trustee has put a caveat on this property, although not, as I understand, on any of the other properties owned by the applicant. Settlement has been postponed pending resolution of the review application.
The applicant is a company director. He has provided a statement of his assets and liabilities which shows a significant excess of assets over liabilities. He has disclosed a number of debts secured by mortgages over his properties and unsecured debts which are minor utility and credit card debts. Mr Savva’s evidence is that he has no other outstanding unsecured creditors.
The present application has been brought within the time provided for in the rules. The court has power to review the exercise of the Registrar’s powers under s.104(2) of the Federal Magistrates Act 1999 (Cth). A review of a Registrar’s decision is a hearing de novo. This is not a case in which the creditor disputes the orders sought by the applicant or otherwise seeks to keep the sequestration order on foot.
I am told from the bar table that the Trustee neither consents nor opposes the orders being made. However he did, through his solicitor, bring a number of issues to the attention of the court. Having regard in particular to the clarification that Mr Savva’s debt to Telstra is not $760,000 as disclosed, but $760, and the fact that there is said to be no present outstanding liability to the Deputy Commissioner of Taxation in respect of income tax, the issues raised by the Trustee are not such as to lead me to the view that on the evidence before the court the sequestration order should not be set aside.
The applicant overlooked the importance of the hearing. He would have sought an adjournment. He has put before the court evidence of his assets and liabilities and of the impending sale of a property which, taken on face value, would clearly suggest that he is solvent and able to pay his debts (see s.52(2)(a) of the Bankruptcy Act 1966 (Cth)).
There has been no delay by the applicant in bringing these proceedings. I note the proposed undertakings in relation to payment of the debt due to the creditor and the creditor’s costs and also the Trustee’s costs. The amount that is agreed upon for payment to the Trustee is consistent with what I am told from the bar table which is that to date the Trustee has incurred only minimal expenses in the relatively short time since the making of the sequestration order.
There is no suggestion that the court should, instead of setting aside the sequestration order, annul the bankruptcy. This is not a case in which it would seem appropriate to proceed in that manner (see Cave v Madgwicks (a firm) & Anor [2010] FMCA 878 and Catterick v Owners Corporation PS302189T and Catterick v Owners Corporation PS302189T & Anor [2011] FMCA 694). In all the circumstances, I am satisfied it is appropriate that the bankruptcy of Mr Savva should be brought to an end. Having regard to his evidence as to his ability to pay his debts in accordance with s.52(2)(a) of the Bankruptcy Act, it is appropriate that the sequestration order should be set aside and the creditor’s petition should be dismissed.
I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of Barnes FM
Date: 24 August 2012
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