Sim v CBFC Limited - [2006] FCA 1074

FEDERAL COURT OF AUSTRALIA
Sim v CBFC Limited [2006] FCA 1074
BANKRUPTCY – Bankruptcy Act 1966 (Cth) s 60(1) – discharge of orders made under laws relating to the imprisonment of fraudulent debtors – Absconding Debtors Act (NT) – whether power to discharge orders – discretionary considerations
Absconding Debtors Act (NT)
Bankruptcy Act 1966 (Cth)
Road Maintenance (Contribution) Act1958-1969 (NSW)
CBFC Ltd v Sim [2006] NTSC 57 considered
Storey v Lane (1981) 147 CLR 549 referred to
Commissioner for Motor Transport v Train (1972) 127 CLR 396 considered
Re Hollis (1968) 15 FLR 386 discussed
Re Caddies; Ex parte Stapleton (1962) 19 ABC 155 referred to
Pitt, Son & Badgery Ltd v Municipal Council of Sydney (1907) 24 WN (NSW) 203 cited
Clunies-Ross v Commonwealth (1984) 155 CLR 193 cited
Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555 cited
Malouf v Prentice [1998] FCA 1427 referred to
Re Tyndall (1977) 17 ALR 182 referred to
Commonwealth v Verwayen (1990) 170 CLR 394 cited
DANIEL JOHN SIM v CBFC LIMITED AND COMMONWEALTH BANK OF AUSTRALIA
NTD 10 OF 2006
MANSFIELD J
16 AUGUST 2006
ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA

NORTHERN TERRITORY DISTRICT REGISTRY

NTD 10 OF 2006

BETWEEN:

DANIEL JOHN SIM
Applicant

AND:

CBFC LIMITED
First Respondent

COMMONWEALTH BANK OF AUSTRALIA
Second Respondent

JUDGE:

MANSFIELD J

DATE OF ORDER:

16 AUGUST 2006

WHERE MADE:

ADELAIDE

THE COURT ORDERS THAT:
1.Upon the written undertaking of Daniel John Sim to the Court to be filed in a form approved by the District Registrar that, in the event that a sequestration order is made against his estate, he will return to Australia within three calendar months of the making of the sequestration order and will cooperate with his trustee in respect of all inquiries and procedures which his trustee requires in relation to his bankruptcy, and upon Thomas Harry Edward Winter providing to and filing in the Court a surety in the sum of $15,000 in a form approved by the District Registrar to the effect that, in the event that Mr Sim does not fully comply in every respect with his undertaking, Mr Winter will forfeit to the Crown the sum of $15,000, and that process may be executed against his property for the said sum of $15,000:
Under s 60(1)(a) of the Bankruptcy Act 1966 (Cth) the orders of the Supreme Court of the Northern Territory made on 10 July 2006 and extended on 4 August 2006 under the Absconding Debtors Act (NT) in respect of Mr Sim be discharged.
2.Liberty to any party to apply on short notice.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NORTHERN TERRITORY DISTRICT REGISTRY

NTD 10 OF 2006

BETWEEN:

DANIEL JOHN SIM
Applicant

AND:

CBFC LIMITED
First Respondent

COMMONWEALTH BANK OF AUSTRALIA
Second Respondent

JUDGE:

MANSFIELD J

DATE:

16 AUGUST 2006

PLACE:

ADELAIDE

REASONS FOR JUDGMENT
INTRODUCTION

Mr Sim is an Australian citizen.…

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 Sim v CBFC Limited

Details

AGLC: Sim v CBFC Limited [2006] FCA 1074
Case: [2006] FCA 1074
Decision Date: 16 AUGUST 2006

CaseChat Overview and Summary

In the case of Sim v CBFC Limited, Mr. Daniel John Sim, a journalist and television producer, applied to discharge a warrant for his arrest issued under the Absconding Debtors Act by the Supreme Court of the Northern Territory (NTSC). The warrant was issued to prevent Mr. Sim from leaving the Northern Territory due to outstanding debts to CBFC Limited and the Commonwealth Bank of Australia (CBA). Mr. Sim had defaulted on hire purchase agreements for television equipment and a business loan. The NTSC had previously ordered the arrest warrant and required Mr. Sim to surrender his passport and promise not to leave the Northern Territory.

The legal issues before the court were whether the NTSC had the authority to issue the arrest warrant under the Absconding Debtors Act and if so, whether the order should be discharged under the provisions of the Bankruptcy Act 1966 (Cth). Specifically, the court had to consider whether the power to issue an arrest warrant under the Absconding Debtors Act could be exercised concurrently with the provisions of the Bankruptcy Act, particularly in light of Mr. Sim's imminent potential bankruptcy.

The court found that while the NTSC had the power to issue the arrest warrant, its exercise could be vulnerable to orders under the Bankruptcy Act. The court was satisfied that if Mr. Sim were to be declared bankrupt, he would be obliged to surrender his passport to the trustee of his estate. The court discharged the NTSC orders upon Mr. Sim providing a written undertaking to return to Australia and cooperate with his trustee if declared bankrupt, and upon Mr. Thomas Harry Edward Winter providing a surety of $15,000 to the Crown. The court also indicated that if Mr. Sim refused to comply with the conditions, it would stay the imprisonment process under the Bankruptcy Act.

In conclusion, the court discharged the NTSC orders for the arrest warrant, contingent on Mr. Sim's undertaking and the surety provided by Mr. Winter. The court adjourned the application to a future date, with liberty for any party to apply for further orders, including costs. The court emphasized that unless there were other immediate legal processes affecting Mr. Sim, it would not stay them, except in cases where they conflicted with the policy of the Bankruptcy Act.

Orders

Orders of the court

1. Upon the written undertaking of Daniel John Sim to the Court to be filed in a form approved by the District Registrar that, in the event that a sequestration order is made against his estate, he will return to Australia within three calendar months of the making of the sequestration order and will cooperate with his trustee in respect of all inquiries and procedures which his trustee requires in relation to his bankruptcy, and upon Thomas Harry Edward Winter providing to and filing in the Court a surety in the sum of $15,000 in a form approved by the District Registrar to the effect that, in the event that Mr Sim does not fully comply in every respect with his undertaking, Mr Winter will forfeit to the Crown the sum of $15,000, and that process may be executed against his property for the said sum of $15,000:

Under s 60(1)(a) of the Bankruptcy Act 1966 (Cth) the orders of the Supreme Court of the Northern Territory made on 10 July 2006 and extended on 4 August 2006 under the Absconding Debtors Act (NT) in respect of Mr Sim be discharged.

Background

Background to the litigation

This application is to discharge the warrant for his arrest.BACKGROUND Mr Sim is a journalist, television producer and camera operator. Presently, through the company Television News Agency (NT) Pty Ltd he provides services to Network Ten Pty Ltd and Seven Network (Operations) Ltd for an annual fee, due to expire on 31 August 2006 but renewable. Under that agreement, he is required to provide television camera shooting, television news production, news gathering and editing of news stories in Indonesia. He has a 12 month work visa issued by the Republic of Indonesia which is renewable every 12 months. Mr Sim also has an Indonesian fiancé who he proposes shortly to marry. His fiancé came to Australia with him, but has returned to Indonesia as her visa was about to expire. For the purposes of the company, Mr Sim procured through CBFC Limited (CBFC) in his own name certain camera and television production equipment under three hire purchase agreements in 2000 and 2001. He defaulted in payments under those agreements, and there is now outstanding the sum of about $90,000. Mr Sim and his former partner, who still resides in Darwin, also obtained funds under a Better Business Loan from the Commonwealth Bank of Australia (CBA), secured by an equitable mortgage on a unit which he and his former partner, Ms Lestari Sim owned. That property has since been sold by the CBA as mortgagee, but there is still money owed to the CBA under the Better Business Loan. Judgment was entered in favour of CBA against Mr Sim on 6 July 2006 for $41,269. On 10 November 2005 the CBA filed a creditor’s petition in the Federal Magistrates Court (FMC) in respect of a debt of some $25,000 owing to it from Mr Sim. He paid that out. On 3 April 2006, CBFC was substituted as the petitioning creditor in respect of the debt under the hire purchase agreements. It is unclear the extent to which the property the subject of the hire purchase agreements remains in Australia, and for how much it might be realised. On 29 June 2006, CBFC applied in the Supreme Court of the Northern Territory (NTSC) for a warrant for the arrest of Mr Sim under the Absconding Debtors Act. He had pre-booked a return flight to Jakarta for 29 June 2006, to follow the hearing of the sequestration order application. To avoid a warrant being issued for his arrest before the Supreme Court application had been fully heard, Mr Sim surrendered his passport. That application was then heard over a period of part days. During the hearing, the CBA also became a party. On 10 July 2006 a judge of the NTSC ordered under ss 6 and 16 of the Absconding Debtors Act that a warrant issue for the arrest of Mr Sim for the purpose of preventing him from leaving the Northern Territory. Execution of the warrant was stayed upon Mr Sim surrendering his passport (which he had already surrendered on an interim basis) and undertaking in writing not to leave the Northern Territory for 28 days from that date. That order was varied on 4 August 2006 to require Mr Sim to surrender his passport until 21 August 2006 and to undertake not to leave the Northern Territory until 21 August 2006. I understand the extension of that order was to await judgment in the sequestration order application. If Mr Sim is declared bankrupt, he will be obliged to surrender his passport to the trustee of his estate under s 77(1)(a)(ii) of the Bankruptcy Act 1966 (Cth).

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

MANSFIELD J

As the decision in the NTSC indicates, the power is exercisable in much wider circumstances, but for that reason its exercise may be vulnerable to an order under s 60 of the Bankruptcy Act.CONCLUSION For those reasons, I order under s 60(1)(a) of the Bankruptcy Act that upon the written undertaking of Mr Sim to the Court to be filed in a form approved by the District Registrar that, in the event that a sequestration order is made against his estate, he will return to Australia within three calendar months of the making of the sequestration order and will cooperate with his trustee in respect of all inquiries and procedures which his trustee requires in relation to his bankruptcy, and upon Thomas Harry Edward winter providing to and filing in the Court a surety in the sum of $15,000 in a form approved by the District Registrar to the effect that, in the event that Mr Sim does not fully comply in every respect with his undertaking, Mr Winter will forfeit to the Crown the sum of $15,000, and that process may be executed against his property for the said sum of $15,000, the orders of the NTSC made on 10 July 2006 and extended on 4 August 2006 under the Absconding Debtors Act in respect of Mr Sim be discharged. I do not propose to make the separate order sought under s 60(1)(b) at present. I understand that judgment on the petition is imminent. Apart from the orders I have made, I see no need to stay other legal processes to recover debts by CBFC or the CBA over the next several days. If there is some other legal process which immediately affects Mr Sim in a way which does not reflect the policy of the Bankruptcy Act, he may apply on short notice for a further order. I indicate however that, if all else remains the same, and Mr Sim now refused to continue to comply with the directions for the provision of an undertaking and for the surrender of his passport so that the order that he be imprisoned were about to be enlivened, I would stay that process of imprisonment under s 60(1)(b) of the Bankruptcy Act. Apart from the orders I have now made, I will adjourn the application to a date to be fixed with liberty to any party to apply on short notice, including as to costs. It may be that the issue of costs can be dealt with on written submissions.

Ratio Decidendi

Legal Principle Established

Established by: MANSFIELD J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
NORTHERN TERRITORY DISTRICT REGISTRY	NTD 10 OF 2006

JUDGE:	MANSFIELD J
DATE OF ORDER:	16 AUGUST 2006
WHERE MADE:	ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA
NORTHERN TERRITORY DISTRICT REGISTRY	NTD 10 OF 2006

JUDGE:	MANSFIELD J
DATE:	16 AUGUST 2006
PLACE:	ADELAIDE