Schmidt v Holliday-Smith
[2007] FMCA 1551
•10 September 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SCHMIDT & ORS v HOLLIDAY-SMITH | [2007] FMCA 1551 |
| BANKRUPTCY – Hearing of Creditor’s Petition – where debtor seeks transfer to Family Court. |
| Bankruptcy Act 1966, s.52 |
| Applicant: | RICHARD ARTHUR SCHMIDT, CHRISTOPHER GEORGE THOMAS QUILTER, DANIEL JOHN MARUCCI AND MARK CHARLES WHOWELL TRADING AS BULL, SON & SCHMIDT, LAWYERS |
| Respondent: | GARRY ALEXANDER HOLLIDAY-SMITH |
| File number: | SYG3116 of 2006 |
| Judgment of: | Raphael FM |
| Hearing date: | 10 September 2007 |
| Date of last submission: | 10 September 2007 |
| Delivered at: | Sydney |
| Delivered on: | 10 September 2007 |
REPRESENTATION
| Solicitors for the Applicant: | Bull, Son & Schmidt |
| For the Respondent: | In person |
ORDERS
Sequestration Order made against the estate of Garry Alexander Holliday-Smith.
The applicant creditor’s costs including any reserved costs be taxed in accordance with the Federal Court Rules and paid from the estate of the respondent debtor in accordance with the Act.
Under the Bankruptcy Regulations a copy of this sequestration order shall be given to the Official Receiver in Sydney within two days. The court notes the date of act of bankruptcy is 26 September 2006.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG3116 of 2006
| RICHARD ARTHUR SCHMIDT, CHRISTOPHER GEORGE THOMAS QUILTER, DANIEL JOHN MARUCCI AND MARK CHARLES WHOWELL TRADING AS BULL, SON & SCHMIDT, LAWYERS |
Applicant
And
| GARRY ALEXANDER HOLLIDAY-SMITH |
Respondent
REASONS FOR JUDGMENT
There comes before me today an application for a sequestration order against the debtor, Mr Holliday-Smith. A creditor’s petition was issued on 25 October 2006. The act of bankruptcy that is alleged to have occurred was his failure on 26 September 2006 to comply with the requirements of a bankruptcy notice.
The matter has been adjourned in this court several times although not before me. It came first before me on 14 August 2007. On that date Mr Holliday-Smith told me that there was a substantial amount of money in funds frozen by orders of the Family Court pending the hearing of a property settlement between himself and his former wife. He indicated that if he was successful in the property settlement case he would have sufficient funds to repay his creditors but with the proviso that two creditors, one whom he describes as “Schon Condon” and the ATO had their judgments set aside.
The debtor filed an affidavit on 14 August 2007 explaining why he had not done very much about these two judgments and why he wished for an adjournment generally of the petition. There is no doubt that he is undergoing a very stressful disintegration of his family life. He appears to have responsibility for his three children. There appears to be more than just financial disputes between himself and his former wife and between his former wife and the children. There is concern that notwithstanding a number of tentative dates being set the property hearing has not yet taken place. I have a copy of a letter from a consultant psychiatrist dated 6 September 2007 indicating that the debtor is suffering from depression and is coping minimally with the extra demands of his life. Such demands would undoubtedly include the overhanging petition. The debtor seeks that I transfer the matter to the Family Court, which was a suggestion that I made at the last hearing.
At the last hearing I also told the debtor that I required an affidavit from him concerning efforts that were being made to set aside the two judgments which stand in the way of him being solvent. Nothing has happened. The debtor tells me that this is because all the papers relating to the matter are in the custody of the Family Court having arrived there as a result of a subpoena I am not too sure from whom but I assume from his former wife. The debtor does, however, have in his possession what he considers to be the most important documents in his defence, namely copies of an agreement which he alleges is forged. It seems to me that having these documents and obviously having a detailed knowledge of the case would be sufficient for him to have taken steps to apply to the Supreme Court of New South Wales to set aside the Schon Condon judgment but he has not done this.
Having given the matter some further thought I cannot see any advantage in transferring a bankruptcy petition to the Family Court. True it is that the Family Court has jurisdiction in bankruptcy and could deal with the matter but it is equally true that if the sequestration order is granted today any trustee appointed can apply to the Family Court in the current proceedings for property orders and it is my view that this is the more satisfactory course to allow to be taken. By the time the property matter eventually comes to a hearing the trustee will have some better understanding of the affairs of the debtor and may even be prepared to expend some money on the debtor’s behalf in examining the claim he has to set aside the judgments.
In case this emphasis on the Schon Condon and ATO judgments is misunderstood I should make it clear that neither of those parties is the petitioning creditor or the supporting creditor who appear before me today.
In the circumstances I am not prepared to make the transfer that the debtor requests and I allow the applicant creditor now to proceed to make his application for a sequestration order. I am satisfied that the debtor has committed the act of bankruptcy alleged in the petition. I am satisfied with the proof of the other matters required by s.52 of the Bankruptcy Act 1966 (the “Act”). I make a sequestration order against the estate of Garry Alexander Holliday-Smith. I order that the applicant creditor’s costs including any reserved costs be taxed in accordance with the Federal Court Rules and paid from the estate of the respondent debtor in accordance with the Act. Under the Bankruptcy Regulations a copy of this sequestration order is be given to the Official Receiver in Sydney within two days. The court notes the date of act of bankruptcy is 26 September 2006.
I certify that the preceding six (6) paragraphs are a true copy of the reasons for judgment of Raphael FM
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