Sherman v Lamb

[2023] FCA 168

FEDERAL COURT OF AUSTRALIA

Sherman v Lamb [2023] FCA 168  

File number:

QUD 209 of 2022

Judgment of:

LOGAN J

Date of judgment:

10 February 2023

Catchwords:

BANKRUPTCY – creditor’s petition – debtor failed to comply with bankruptcy notice – act of bankruptcy committed – whether sequestration order against debtor’s estate should be made – unresolved claim against creditor with Australian Human Rights Commission – whether the debtor is solvent under s5(2) and (3) Bankruptcy Act 1966 –nature of solvency test – power of court to go behind the prima facie existence of a debt – no reason to go behind the judgment of the Queensland Court of Appeal concerning judgment debtor – petitioning creditor proved the necessary formal elements for court to make sequestration order under s52(1) Bankruptcy Act 1966 – debtor failed to evidence solvency under the test on the balance of probabilities – court not satisfied that debtor is solvent – sequestration order made against estate of debtor.   

Legislation:

Bankruptcy Act 1966 (Cth) ss 43, 52

Corporations Act 2001 (Cth) s 95A

Cases cited:

Dean v Pepper Finance Corporation Ltd (Trustee) [2016] FCA 648

Katter v Melhem (No 2) (2014) 319 ALR 646

Lamb v Sherman [2021] QCA 290

Sherman v Lamb [2021] QDC 192

Tarwala v Amirbeaggi as trustee for bankruptcy [2022] FCA 1593

Division:

General Division

Registry:

Queensland

National Practice Area:

Commercial and Corporations

Sub-area:

General and Personal Insolvency

Number of paragraphs:

49

Date of hearing:

10 February 2023 

Counsel for the Applicant:

Mr N Ferrett KC

Solicitor for the Applicant:

Romans and Romans Lawyers

Counsel for the Respondent:

The respondent appeared in person

ORDERS

QUD 209 of 2022

BETWEEN:

SHELDON SHERMAN

Applicant

AND:

SIOBHAN LAMB

Respondent

ORDER MADE BY:	LOGAN J
DATE OF ORDER:	10 FEBRUARY 2023

THE COURT ORDERS THAT:

1.A sequestration order be made against the estate of Siobhan Patricia Lamb, the respondent.

2.The costs of the petition to the credit petitioner, of and incidental to this proceeding, be fix by lump sum by the Registrar if not agreed and paid in accordance with the Bankruptcy Act 1966 (Cth).

The Court notes that there is on the court file a consent of Mr Christopher Baskerville, a registered trustee to act as trustee.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
(REVISED FROM TRANSCRIPT)

LOGAN J:

1. Mr Sheldon Sherman has presented a creditor’s petition by which he seeks the making of a sequestration order under s 52 of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) against the estate of the respondent debtor, Ms Siobhan Patricia Lamb. The Court’s power to make a sequestration order on a creditor’s petition is found in s 43(2) of the Bankruptcy Act. Section 52 of that Act is directed to proceedings on a creditor’s petition. Section 52(1) provides:

   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…