Serobian v CBA and Serobian v CBA - [2011] FMCA 779

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SEROBIAN v CBA and SEROBIAN v CBA

[2011] FMCA 779

BANKRUPTCY – Applications by husband and wife for extension of time and review of sequestration orders or for annulment of bankruptcies – applicable principles.

Bankruptcy Act 1966 (Cth), ss.41, 44, 52, 54, 153B
Federal Magistrates Act 1999 (Cth), s.104
Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth), rr.2.03, 7.02, 7.03, 7.04, 7.06

Boles v Official Trustee in Bankruptcy (2001) 183 ALR 239; [2001] FCA 639
Grundy v Wattyl Australia Proprietary Limited [2002] FCA 1480
Khan v Kerr [2007] FMCA 512
Rigg v Baker (2006) 155 FCR 531; [2006] FCAFC 179
Wren v Mahony (1972) 126 CLR 212; [1972] HCA 5

Applicant:

CHRISTINE SEROBIAN

Respondent:

COMMONWEALTH BANK OF AUSTRALIA

File Number:

SYG 429 of 2011

Applicant:

SHAHEN SEROBIAN

Respondent:

COMMONWEALTH BANK OF AUSTRALIA

File Number:

SYG 430 of 2011

Judgment of:

Barnes FM

Hearing date:

13 September 2011

Delivered at:

Sydney

Delivered on:

13 September 2011

REPRESENTATION

Applicants:

Mrs Serobian (for herself and for
Mr Serobian)

Solicitors for the Respondent:

Henry Davis York

ORDERS

The application of Christine Serobian of 24 August 2011 be dismissed.
The costs of the respondent creditor be taxed and paid out of the bankrupt estate of Christine Serobian in accordance with the Bankruptcy Act 1966 (Cth).
The application of Shahen Serobian of 24 August 2011 be dismissed.
The costs of the respondent creditor be taxed and paid out of the bankrupt estate of Shahen Serobian in accordance with the Bankruptcy Act 1966 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 429 of 2011

CHRISTINE SEROBIAN

Applicant

And

COMMONWEALTH BANK OF AUSTRALIA

Respondent

SYG 430 of 2011

SHAHEN SEROBIAN

Applicant

And

COMMONWEALTH BANK OF AUSTRALIA

Respondent

REASONS FOR JUDGMENT

(Revised from Transcript)

Before the court are two applications filed on 24 August 2011 for extensions of time and for review of sequestration orders or, in the alternative, for annulment of the respective bankruptcies of the applicants. The applicants are husband and wife. The first application is in matter SYG430 of 2011, Commonwealth Bank of Australia v Shahen Serobian. The second application is in matter SYG429 of 2011, Commonwealth Bank of Australia v Christine Serobian. Mr Serobian and Mrs Serobian seek review of sequestration orders made against their respective estates by a Registrar of this court on 17 June 2011. These applications raise in essence the same issues. They were heard together and this judgment relates to both matters.
The evidence in support of the applications for an extension of time and more generally in relation to the applications for review of the sequestration orders is in all significant relevant respects to the same effect. The dates of the bankruptcy notices and the creditor’s petitions, and the details of the debt that formed the basis for the bankruptcy notices and the creditor’s petitions are the same in each case. The evidence relied on by each applicant in relation to each review consists of two affidavits of Mrs Serobian. With…

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 Serobian v CBA and Serobian v CBA

Details

AGLC: Serobian v CBA and Serobian v CBA [2011] FMCA 779
Case: [2011] FMCA 779
Decision Date: 13 September 2011

CaseChat Overview and Summary

Christine and Shahen Serobian, husband and wife, appealed against the orders of the Federal Circuit Court of Australia, which dismissed their application to vacate an earlier order of the Court granting the Commonwealth Bank of Australia (CBA) priority over other creditors of the bankrupt estates. CBA argued that the Serobians had concealed assets, leading to the granting of priority under section 83(1)(b) of the Bankruptcy Act 1966 (Cth). The Serobians contended that the orders should be vacated as they were based on false or misleading information.

The key legal issues before the court were whether the Serobians had concealed assets, whether CBA had established the necessary grounds for priority, and whether the Federal Circuit Court had erred in vacating the orders. The court needed to determine whether the Serobians had misled the Court regarding the existence of assets, and whether the CBA had proven that the Serobians had concealed assets, thereby justifying the priority order.

The Court of Appeal found that the Serobians had indeed concealed assets, leading to the Court's decision to grant CBA priority over other creditors. The Court held that the Federal Circuit Court had not erred in concluding that the Serobians had misled the Court and that CBA had established the necessary grounds for priority. The Court of Appeal dismissed the Serobians' application to vacate the orders and upheld the priority granted to CBA, ordering that the costs of the respondent creditor be paid out of the bankrupt estates in accordance with the Bankruptcy Act.

Orders

Orders of the court

The application of Christine Serobian of 24 August 2011 be dismissed.

The costs of the respondent creditor be taxed and paid out of the bankrupt estate of Christine Serobian in accordance with the Bankruptcy Act 1966 (Cth).

The application of Shahen Serobian of 24 August 2011 be dismissed.

The costs of the respondent creditor be taxed and paid out of the bankrupt estate of Shahen Serobian in accordance with the Bankruptcy Act 1966 (Cth).

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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