Schembri McCluskys Pty Ltd, in the matter of Osborne (Bankrupt) v Osborne
[2024] FedCFamC2G 887
•13 September 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Schembri McCluskys Pty Ltd, in the matter of Osborne (Bankrupt) v Osborne [2024] FedCFamC2G 887
File number(s): MLG 654 of 2023 Judgment of: JUDGE J YOUNG Date of judgment: 13 September 2024 Catchwords: BANKRUPTCY – application for review of a registrar’s decision – where application for review of registrar’s decision made out of time - hearing de novo of creditor’s petition - where the Court does not have power to make certain orders sought by applicant – consideration of the requirements under s 52 of the Bankruptcy Act 1966 (Cth) to make a sequestration order - whether service of the Petition and Amended Petition was effected - found jurisdictional pre-requisites met – application dismissed. Legislation: Bankruptcy Act 1966 (Cth) Pt III, Div 2, ss 33(1)(b), Pt IV, Div 1, ss 40(1)(g), 41(1)(a)(i)-(ii), 41(3), 41(7), 43(1), 43(2), 44, 47, 52, 306:
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 256
Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 rr 1.04(2), 4.04
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 rr 1.07, 21.02(1), 21.02(2), 21.04
Federal Court Rules 2011
Federal Court (Bankruptcy Rules) 2016 Pt 4
Cases cited: Bechara v Bates [2021] FCAFC 34
De Robillard v Carver [2007] FCAFC 73
MacDonald v Official Trustee in Bankruptcy [2001] FCA 140
Tomlinson v Ramsay Food Processing Pty Ltd [2015] HCA 28
Division: Division 2 General Federal Law2 Number of paragraphs: 66 Date of hearing: 15 April 2024 and 7 August 2024 Place: Melbourne Counsel for the Applicant: Mr Magowan Solicitor for the Applicant: Schembri & Co Lawyers Pty Ltd Solicitor for the Respondent: Self-represented litigant ORDERS
MLG 654 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
IN THE MATTER OF CLINTON JAMES OSBORNE, BANKRUPT
BETWEEN: SCHEMBRI & CO PTY LTD
Applicant
AND: CLINTON OSBORNE
Respondent
ORDER MADE BY:
JUDGE J YOUNG
DATE OF ORDER:
13 SEPTEMBER 2024
THE COURT ORDERS THAT:
1.The Application for Review of the Registrar’s Decision filed on 26 July 2023 be dismissed.
2.The Respondent Debtor pay the Applicant Creditor’s costs of the Application to be taxed in default of agreement pursuant to the Federal Court Rules 2011.
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).
REASONS FOR JUDGMENT
JUDGE J YOUNG:
This is an Application by the respondent debtor (Mr Osborne) made on 26 July 2023 under s 256(1) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (FCFCOA Act) seeking review of a decision of a Judicial Registrar of this Court (Review Application).
The Review Application concerns Orders made by a Judicial Registrar on 6 July 2023, which sequestered the estate of Mr Osborne under the Bankruptcy Act 1966 (Cth) (Act).
BACKGROUND
A bankruptcy notice, BN 259140 (Bankruptcy Notice) was issued by the Official Receiver on 6 March 2023. The Bankruptcy Notice demands payment in the amount of $84,429.27 pursuant to a Magistrates’ Court of Victoria proceeding.
There is a significant factual history to the matter, which has involved considerable litigation in multiple courts.
Background to the debt
The applicant creditor, Schembri McCluskys Pty Ltd (Schembri & Co) is a law firm who represented Mr Osborne in criminal appeal proceedings in the County Court of Victoria (Appeal Proceedings). Following this, Mr Osborne owed Schembri & Co money for legal fees with respect to the Appeal Proceedings.
Schembri & Co filed proceedings in the Magistrates’ Court of Victoria in relation to Mr Osborne’s non-payment of its legal fees. On 29 July 2022, following a four day contested hearing, Orders were made for Mr Osborne to pay Schembri & Co the sum of $54,196.23 and interest of $11,125.62 with a stay on the Orders for 30 days.
Further Orders were made in the Magistrates’ Court on 16 September 2022 ordering Mr Osborne to pay the costs of Schembri & Co’s fees with respect to the Magistrates’ Court proceedings in the sum of $15,223.90 with a stay of 30 days.
Mr Osborne filed a stay application against the judgments made in the Magistrates’ Court of Victoria. On 28 September 2022, the Supreme Court of Victoria refused Mr Osborne’s stay application.
Mr Osborne then filed an appeal of the Supreme Court of Victoria’s judgment, and on 20 February 2023 the Supreme Court of Victoria dismissed Mr Osborne’s appeal against the decision to refuse his stay application.
Proceedings following the Bankruptcy Notice
As set out above, the Bankruptcy Notice was issued on 6 March 2023.
Schembri & Co filed a creditor’s petition on 19 April 2023 (Petition). Orders were made on 25 May 2023 adjourning the hearing of the Petition and granting Mr Osborne further time to file any opposition to the Petition.
Mr Osborne filed a Notice opposing the Petition on 26 June 2023 on the following grounds (without amendment):
1.Stephen Schembri admitted in court under oath that he deliberately sabotaged my Appeals, which voids his services and bills. I have an Appeal in the Supreme Court listed for the 5 September 2023 that challenges his claims.
2.Stephen Schembri also overbilled me for Paul Holdenson QC telling me his bill would be $3,500 and then charging me $23,100. I have an Appeal in the Supreme Court listed for the 5 September 2023 that challenges his claims.
3.Stephen Schembri failed to instruct Appeal barrister Nick Papas QC to draft satisfactory Grounds and Written Case for my Appeal. Even the Courts Registrar told him he had to make specific reference to portions of the transcript with page numbers, but he refused to do it. I have an Appeal in the Supreme Court listed for the 5 September 2023 that challenges his claims.
4.Stephen Schembri failed to instruct Appeal barrister Nick Papas QC to draft satisfactory Grounds and Written Case for my Appeal, he refused to make reference that the Complainant was an unreliable witness due to prior inconsistent statements. I have an Appeal in the Supreme Court listed for the 5 August 2023 that challenges his claims.
5.Stephen Schembri acted Maliciously and Gross Misconduct by not providing the Police and Court evidence to my Appeal Barristers to draft satisfactory Grounds for my Appeal and Written Case. I have an Appeal in the Supreme Court listed for the 5 September 2023 that challenges his claims.
As noted above, orders were made on 6 July 2023 sequestering the estate of Mr Osborne.
The Review Application was filed on 28 July 2023 and was originally listed for hearing on 3 August 2023. At that hearing, Mr Osborne sought to cross-examine Mr Schembri, the director of Schembri & Co, who was not available on the day of hearing for cross-examination. As such, the matter was adjourned to 15 August 2023. At the hearing on 15 August 2023, Mr Osborne requested an adjournment to obtain legal advice and the matter was relisted to 9 November 2023.
On 10 October 2023, the matter was adjourned to a date to be fixed at the Court’s initiative and on 19 December 2023, the parties were advised that the matter had been relisted for hearing to 15 April 2024.
On 10 April 2024, Mr Osborne communicated with the Court requesting an adjournment on the basis that he was unable to obtain legal advice. He further sought to attend the hearing electronically as he was unwell. The parties were informed that an adjournment would not be granted in chambers, and that the matter remained listed. Mr Osborne was granted leave to attend the hearing electronically.
On 15 April 2024, Mr Osborne attended court in person, despite being granted the opportunity to appear electronically. Mr Osborne sought an adjournment which was denied. The proceeding continued although was then shortly stood down as Mr Osborne reported feeling unwell. During the stand down period, Mr Osborne requested medical assistance and paramedics attended the court.
Mr Osborne provided material to the Court which stated that he had been hospitalised on 15 April 2024 for atrial flutter and discharged on 17 April 2024, at which time his symptoms had resolved. That material further provided that Mr Osborne was unfit for work or other commitments from 15 April 2024 until 17 April 2024.
Following the hearing on 15 April 2024, the matter was relisted at the Court’s initiative to 7 August 2024.
On 7 August 2024, Mr Osborne sought a further adjournment on medical grounds and to allow him to issue the subpoenas against the three barristers involved in the Appeal Proceedings. For the reasons given at the time of the hearing, I declined to grant that adjournment. Mr Osborne did not seek to cross-examine Mr Schembri at the hearing on 7 August 2024.
REVIEW APPLICATION
Late filing of Application for review of a Registrar’s decision
The preliminary issue of the late filing of the Application for review of the Registrar’s decision needs to be addressed.
Rule 21.02(1) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Rules) provides that an Application for review of a Registrar’s decision must be made within 7 days. Rule 21.02(2) provides that time may be extended in a proceeding by the Court “on any terms that the Court…thinks fit”.
The Registrar’s decision was made on 6 July 2023. An Application for review of that decision was therefore required to be made no later than 13 July 2023. The Review Application was not lodged until 26 July 2023.
Accordingly, the Application was made 13 days after the expiry of the statutory timeframe.
Schembri & Co did not oppose an extension of time being granted.
Ultimately, in the circumstances of this case, I am satisfied in this instance that it is appropriate for the time for filing the Review Application to be extended. This is in circumstances where Mr Osborne is self-represented, and there is no particular prejudice to Schembri & Co (other than as to costs) if time were to be extended.
Legal principles regarding applications for review
Rule 21.04 of the Rules provides that a review of the exercise of power by a Registrar under s 256 of the FCFCOA Act must proceed by way of a hearing de novo.
Accordingly, a review of a sequestration order in bankruptcy made by a Registrar is to proceed by way of a hearing de novo, and the creditor’s petition is to be considered afresh. However, this is subject to the principles enunciated by the Full Court of the Federal Court in Bechara v Bates [2021] FCAFC 34 at [27] (Allsop CJ, Markovic and Colvin JJ):
(a) The application for review leads to a hearing de novo of the creditor’s petition.
(b)The hearing (or rehearing) of the creditor’s petition is not prosecuted by the debtor (applicant for review) but by the creditor in the proceeding in which the registrar’s order was made.
(c)The application for review is a demand that the claim for relief (the sequestration order) be heard by a judge.
(d)The onus is upon the creditor to prosecute its petition. The only onus of the debtor/bankrupt against whose estate a sequestration order has been made is to prove either solvency or any other sufficient cause under s.52(2) of the Bankruptcy Act 1966 (Cth).
(e)An appreciation of the above considerations makes it evident that summary or default judgment terminating an application for review is highly likely to be misconceived and founded upon a misconception that the applicant for review has an onus to prosecute an application or to show error in the approach of the registrar.
Bankruptcy legal principles
Part III, Division 2 of the Act confers broad jurisdiction on this Court in bankruptcy. A brief summary of the relevant provisions follows.
Bankruptcy notice
The Official Receiver may issue a bankruptcy notice upon application of a creditor who has obtained a final judgment or order against a debtor of the kind described in s 40(1)(g) and is for an amount of at least the statutory minimum (ie, $10,000): s 41(1)(a)(i)-(ii) of the Act. A bankruptcy notice shall not issue in certain circumstances, including where at the time of the application for the issue of the bankruptcy notice, the judgment is stayed: s 41(3) of the Act.
Creditor’s petition
Section 44(1) of the Act provides that a creditor’s petition may be presented against a debtor in the case of:
·a single creditor and a single debt owing by the debtor to the petitioning creditor a debt in excess of the statutory minimum ($10,000);
·the debt owed is in a liquidated sum due at law or in equity (or part of each) or is payable immediately or at a certain future time; and
·the act of bankruptcy was committed within six months before the presentation of the petition.
Where a petitioning creditor is a secured creditor, they are required to set out in the petition the particulars of their security in accordance with s 44(4) of the Act. Sections 44 and 47 of the Act and Part 4 of the Federal Court (Bankruptcy Rules) 2016 also proscribe further conditions with respect to creditor’s petitions.
Subsections 52(1) and 52(2) of the Act identify matters as to procedure and proof of a creditor’s petition, and provide:
(1) At the hearing of a creditor’s petition, the Court shall require proof of:
(a)the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient);
(b) service of that petition; and
(c)the fact that the debt or debts on which the petitioning creditor relies is or are still owing:
and, if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor.
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(2)If the court is not satisfied with the proof of any of those matters, or is satisfied by the debtor:
(a) that he or she is able to pay his or her debts; or
(b) that for other sufficient cause a sequestration order ought not be made;
it may dismiss the petition.
Section 306 of the Act provides that a formal defect or irregularity in a proceeding of this kind will not invalidate the proceedings, unless the Court is of the opinion that substantial injustice has been caused by the defect or irregularity, and that injustice cannot be remedied by an order of the Court.
Sequestration order
A person becomes “a bankrupt” upon the making of a sequestration order: see s 43(2) of the Act.
Jurisdiction to make a sequestration order exists where a debtor has committed “an act of bankruptcy”; at the time when the act of bankruptcy was committed, the debtor had a proscribed connection with Australia: s 43(1) of the Act.
Part IV, Division 1 of the Act defines an “act of bankruptcy” to include a circumstance where a creditor has:
·obtained a final judgment or order (the effect of which has not been stayed) against a debtor;
·has served the debtor a bankruptcy notice under the Act; and
·the debtor does not, within the time fixed for such compliance (in the case of service in Australia):
·comply with the requirements of the bankruptcy notice; or
·satisfy the Court that they have a counter-claim, set-off or cross demand equal to or exceeding the judgment debt payable and that could not have been set up in the action or proceeding in which the judgment or order was obtained: s 40(1)(g).
Where, before the expiration of the time fixed for compliance with a bankruptcy notice, a debtor has made an application to set aside the bankruptcy notice on grounds of a counter-claim, set-off or cross demand as referred to in s 40(1)(g), the Act provides that time shall be deemed to have been extended, immediately before its expiration, until and including the day on which the Court determines whether it is so satisfied: s 41(7) of the Act.
Consideration
In his Review Application, Mr Osborne sought to review all orders made by the Registrar on 6 July 2023. Those Orders are as follows:
1.Leave to file an amended creditor’s petition in the form lodged with the Court on 28 June 2023 is granted.
2.Re-service of the amended creditor’s petition be dispensed with.
3.The estate of Clinton Osborne be sequestrated under the Bankruptcy Act 1966 (Cth).
4.The applicant creditor’s costs fixed in the sum of $8,800 be paid from the state of the respondent debtor in accordance with the Bankruptcy Act 1966 (Cth).
Mr Osborne sought the following orders be made (without amendment):
1.Quash final Orders made by Magistrate Greenway on the 29 July 2022 and Quash Orders for Costs made by Magistrate Greenway on the 16 September 2022.
2. Send the matter back to the Magistrates Court for a rehearing of the trial.
3.Quash all Orders for costs associated with the Federal Court finding on the 6 July 2022.
4.Quash all Orders for costs associated with the Federal Court hearing on 25 May 2023.
It is apparent that the Court does not have power to grant orders 1 and 2 above, even if it were so minded to do so. This was explained to Mr Osborne at the hearing on 7 August 2024. Additionally, it is clear that Mr Osborne is seeking review of the decision of the Registrar of this Court made on 6 July 2023, and that the reference in the orders sought to the Federal Court is in error. Schembri & Co, appropriately in my view, did not take issue with this.
Mr Osborne is self-represented. He filed an affidavit in support of his Review Application and subsequently filed 10 further affidavits and voluminous material in excess of 1,900 pages in support of his opposition to the Petition.
Schembri & Co did not file any fresh material with respect to the Review Application other than as required by the Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Bankruptcy Rules), and instead relied on their evidence filed with respect to the Petition.
Service of the creditor’s petition and other documents
It was not contentious that Mr Osborne was served with the Bankruptcy Notice. Schembri & Co filed an affidavit of service on 19 April 2023 attesting to service of the Bankruptcy Notice on Mr Osborne on 7 March 2023.
Accordingly, I am satisfied that Mr Osborne was served with the Bankruptcy Notice.
Statutory conditions on which a creditor may petition
Firstly, with respect to the debt owing, it is clear that the Magistrates’ Court judgment debt is a debt in excess of $10,000 (being the statutory minimum) presently and immediately owed and payable by Mr Osborne to Schembri & Co. This therefore satisfies ss 44(1)(a)-(b) of the Act.
Secondly, the act of bankruptcy was committed within six months before the presentation of the Petition; the act of bankruptcy upon which the Petition was founded is taken to have occurred on 28 March 2023, which is the date by which Mr Osborne was required to comply with the Bankruptcy Notice. The Petition was then filed in this Court by way of originating Application on 19 April 2023. Accordingly, the act of bankruptcy was committed within six months before the presentation of the Petition in accordance with s 44(1)(c) of the Act.
Thirdly, in accordance with s 44(2)–(4) of the Act, the Amended Petition filed on 7 July 2023 provides that Schembri & Co holds security over property of Mr Osborne to the value of $38,906.75 by way of registered mortgages over two real properties (being the property described as Lot 3 on Plan of Subdivision 002883 in Certificate of Title volume 05411 folio 111 and Lots 1, 2, 4, 5 and 6 on Plan of Subdivision 002883 in Certificate of Title volume 07698 folio 106). The amended Petition further provides that following enquiries the value of the real property is nil and that Schembri & Co are willing to surrender the securities if a sequestration order is made.
Criteria for satisfaction to make a sequestration order
Turning then to the requirements under s 52 of the Act with respect to the criteria for satisfaction to make a sequestration order.
The Petition
Schembri & Co has filed an affidavit on 28 July 2023 with respect to the amended Petition, verifying the amended Petition for the purpose of the proof required at s 52(1)(a) of the Act.
It is well established that the petitioning creditor may amend a petition to correctly allege a matter required by the Act, either before or after the making of a sequestration order: De Robillard v Carver [2007] FCAFC 73 at [55]. An amendment may also be made with leave of the Court under s 33(1)(b) even if the alleged deficiency was more significant than a “formal defect or irregularity” curable by s 306: MacDonald v Official Trustee in Bankruptcy [2001] FCA 140 at [21]-[34].
Service of the Petition and Amended Petition
Schembri & Co filed an affidavit of service of the original Petition on 12 May 2023.
On 28 June 2023 the amended Petition was lodged with the Court. At the hearing before the Registrar on 6 July 2023 an oral application was made to amend the Petition and leave was granted to file the amended Petition. Further, orders were made dispensing with re-service of the Petition.
I am satisfied as to the proof of the matters required in s 52(1)(b) of the Act.
Verification of the judgment debt still owed
The affidavit of Mr Schembri filed 5 August 2024 verifies the Magistrates’ Court judgment debt including costs was still owing as at the time the affidavit was filed in accordance with s 52(1)(c) of the Act.
Mr Osborne contends that Mr Schembri “deliberately sabotaged” the Appeal Proceedings and that as a consequence of Mr Schembri’s conduct the legal fees the subject of the Magistrates’ Court judgment debt are “void”. In support of this contention Mr Osborne filed an affidavit on 26 July 2023 (26 July Affidavit) and 10 subsequent affidavits, running to more than 1,900 pages. I do not propose to repeat all of those matters here but have read and considered them in their entirety. In summary, Mr Osborne contends that Mr Schembri:
·altered Mr Osborne’s record of interview with Victoria Police, removing relevant evidence and rewording the transcript. Mr Osborne contends that Mr Schembri did this as Victoria Police and the Prosecutor had removed relevant evidence and reworded the record of interview in order to secure his convictions and Mr Schembri altered the record of interview “to match what the Police and Prosecutor did at my trial, a copycat”;
·altered the video and audio tape of Mr Osborne’s record of interview with Victoria Police, as these had also previously been altered by Victoria Police and the Prosecutor;
·reworded the trial transcripts to remove exculpatory evidence and provided this documentation to the Counsel engaged to represent Mr Osborne in the Appeal Proceedings;
·tampered with and altered other exculpatory evidence, including text messages and telephone records; and
·instructed an employee of Schembri & Co to provide a false affidavit and give false evidence before the Magistrates’ Court, which led to the judgment debt being ordered and the issuing of subpoenas against the three barristers involved in the Appeal Proceedings being refused by the Magistrate in the Magistrates’ Court proceedings. Mr Osborne contends that the evidence of the Counsel engaged to represent him in the Appeal Proceedings would confirm that Mr Schembri removed and tampered with relevant evidence and reworded the police record of interview.
These are in effect, the same grounds upon which the Petition is opposed.
Schembri & Co submit that Mr Osborne’s complaints as to Mr Schembri’s alleged conduct and the issuing of subpoenas were fully ventilated before the Magistrates’ Court and determined adversely to Mr Osborne following a four day contested hearing. Appeals to the Supreme Court of Victoria in relation to the orders of the Magistrates’ Court were refused. Consequently, they submit that Mr Osborne is estopped from contesting the judgement debt. I accept that submission. In Tomlinson v Ramsay Food Processing Pty Ltd [2015] HCA 28 at [21]-[23] the majority of the High Court explained the doctrine of estoppel as follows (footnotes omitted):
An exercise of judicial power, it has been held, involves "as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons". The rendering of a final judgment in that way "quells" the controversy between those persons. The rights and obligations in controversy, as between those persons, cease to have an independent existence: they "merge" in that final judgment. That merger has long been treated in Australia as equating to "res judicata" in the strict sense.
Estoppel in relation to judicial determinations is of a different nature. It is a common law doctrine informed, in its relevant application, by similar considerations of finality and fairness. Yet its operation is not confined to an exercise of judicial power; it also operates in the context of a final judgment having been rendered in other adversarial proceedings. It operates in such a context as estoppel operates in other contexts: as a rule of law, to preclude the assertion of a right or obligation or the raising of an issue of fact or law.
Three forms of estoppel have now been recognised by the common law of Australia as having the potential to result from the rendering of a final judgment in an adversarial proceeding. The first is sometimes referred to as "cause of action estoppel". Estoppel in that form operates to preclude assertion in a subsequent proceeding of a claim to a right or obligation which was asserted in the proceeding and which was determined by the judgment. It is largely redundant where the final judgment was rendered in the exercise of judicial power, and where res judicata in the strict sense therefore applies to result in the merger of the right or obligation in the judgment. The second form of estoppel is almost always now referred to as "issue estoppel". Estoppel in that form operates to preclude the raising in a subsequent proceeding of an ultimate issue of fact or law which was necessarily resolved as a step in reaching the determination made in the judgment. The classic expression of the primary consequence of its operation is that a "judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies.
…
In the 26 July Affidavit at paragraphs [4]-[55] Mr Osborne addresses his complaints regarding Mr Schembri’s conduct and the contested hearing before the Magistrates’ Court which led to the judgment debt. It is apparent from that affidavit, and therefore Mr Osborne’s own evidence, that the matters Mr Osborne seeks to rely upon to establish that the debt is “void” were raised before the Magistrates’ Court and rejected in the course of a four day contested hearing. Mr Schembri’s alleged conduct and the evidence Mr Osborne says supports those contentions, is also dealt with at length in Mr Osborne’s subsequent affidavits. At paragraph [56]-[66] of the 26 July Affidavit Mr Osborne also addresses the refusal by the Magistrate to issue the subpoenas against the barristers who represented Mr Osborne in the Appeal Proceedings. Accordingly, the matters sought to be agitated by Mr Osborne in these proceedings have been the subject of final judicial determination such that res judicata applies to result in the merger of the right or obligation in the judgment and/or issue estoppel arises.
Accordingly, in light of the above matters, I am satisfied that Schembri & Co have proved the matters required by s 52(1)(c) of the Act.
For completeness, on each occasion that this matter has been before this Court since the Review Application was filed, Mr Osborne has informed the Court that he intended to seek leave to issue subpoenas against the barristers who represented him in the Appeal Proceedings for the purposes of establishing Mr Schembri’s alleged conduct. However, at no time has he made such an Application. At the hearing of this matter on 7 August 2024 Mr Osborne informed the Court that he had filed an Application for leave to issue the subpoenas and that the matter ought not proceed in the absence of that Application being determined. Mr Osborne also asserted that the Court had refused that Application. Despite the subpoena issue being a live issue for Mr Osborne for in excess of 1 year at no time has such an Application been made and no such Application was in existence at the time of the hearing of this matter on 7 August 2024. Accordingly, any suggestion that the hearing ought not procced on that basis must be rejected.
Other requirements
As this is a case which involves a creditor’s petition founded on a failure to comply with the Bankruptcy Notice, the Petition is to be accompanied by: an affidavit verifying a search of the Court records and Federal Court records with a copy of the search attached; and an affidavit of service of the Bankruptcy Notice with the Bankruptcy Notice attached in accordance with r 4.04 of the Bankruptcy Rules.
Schembri & Co filed an affidavit confirming search of this Court and the Federal Court’s records on 19 April 2023. A copy of the search was not annexed to that affidavit as required by r 4.04(2) of the Bankruptcy Rules, however this appears to be in error. I directed chambers to conduct a search of this Court and the Federal Court’s records and it is confirmed that no Application in relation to the Bankruptcy Notice has been made other than the Petition. In those circumstances, should it be necessary to do so, I waive compliance with the requirement for the search to be attached to the affidavit pursuant to r 4.04(2) of the Bankruptcy Rules, pursuant to r 1.04(2) of the Bankruptcy Rules and r 1.07 of the Rules. Schembri & Co filed a further affidavit on 6 August 2024 affirming a search was conducted of the National Personal Insolvency Index and annexing a copy of that search.
Schembri & Co filed an affidavit of service of the Bankruptcy Notice with the Bankruptcy Notice attached on 19 April 2024 in accordance with r 4.04 of the Bankruptcy Rules. The affidavit of service deposes to the Bankruptcy Notice being served on Mr Osborne by way of email on 7 March 2023.
Other sufficient cause
Should it be contended that there is other sufficient cause for the purposes of s 52(2)(b) of the Act based on Mr Osborne’s assertion that the amount owed to the applicant creditor is “void”, I refer and repeat my comments set out above in relation to this contention. There is no other sufficient cause for the purposes of s 52(2)(b) on this basis as to why the sequestration order ought not be made and the Petition dismissed.
CONCLUSION
For the reasons set out above, I am satisfied that the jurisdictional pre-requisites are met and there ought be an order sequestrating the estate of Mr Clinton Osborne.
Accordingly, I make the following orders:
(1)the Application for Review of the Registrar’s Decision filed on 26 July 2023 is dismissed; and
(2)the Respondent Debtor pay the Applicant Creditor’s costs of the Application to be taxed in default of agreement pursuant to the Federal Court Rules 2011.
I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment of Judge J Young. Associate:
Dated: 13 September 2024
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