Simons v Simons (No.2) - [2012] FMCA 1224

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SIMONS v SIMONS (NO.2)

[2012] FMCA 1224

BANKRUPTCY – Creditor’s petition – based on debt owed to former spouse under property settlement – adjournment of petition for concurrent hearing with debtor’s application to set aside or vary property settlement.

Bankruptcy Act 1966 (Cth)
Family Law Act 1975 (Cth), s.79A

Simons v Simons [2012] FMCA 1045

Applicant:

DIANE CIONA SIMONS

Respondent:

ADAM MARK SIMONS

File Number:

SYG 1495 of 2012

Judgment of:

Smith FM

Hearing date:

14 December 2012

Delivered at:

Sydney

Delivered on:

14 December 2012

REPRESENTATION

Counsel for the Applicant:

Mr M Roset

Solicitors for the Applicant:

Manion McCosker

Counsel for the Respondent:

Mr G Mylne

Solicitors for the Respondent:

Mylne Lawyers

ORDERS

The petition is adjourned for hearing before Kemp FM on 8 April 2013 at 10am concurrently with the hearing appointed in Family Law matter (P)SYC5526/2008.
The directions made by Kemp FM on 29 November 2012 in that matter are also to be followed by the parties in relation to this matter.
Costs reserved.
The applicant must give a copy of these orders to the Official Receiver within 2 working days.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 1495 of 2012

DIANE CIONA SIMONS

Applicant

And

ADAM MARK SIMONS

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

This creditor’s petition was listed for hearing before me on 8 November 2012, and I gave a short adjournment for reasons which I explained in Simons v Simons [2012] FMCA 1045. The matter was again listed before me today.
During the adjournment, Mrs Simons has filed an affidavit detailing the instalments made by Mr Simons under the 2009 Family Court orders. It confirms my finding, which I gleaned from the previous evidence, that Mr Simons had been in default from soon after the orders were made. He appears to have endeavoured to meet his obligation to pay instalments until about May 2010, but from thereafter he did not do so in any significant manner.
Mr Simons has filed some additional evidence confirming that his source of income from the income protection policy did come to an end in late 2009. He states that he is currently litigating in the Supreme Court against the insurer in relation to the insurer’s avoidance of the policy based on an alleged breach of a duty of disclosure. He does not explain the delay in that litigation.
Mr Simons has also filed a verified statement of affairs using the form prescribed for the purposes of the Bankruptcy Act 1966 (Cth). This is designed to give a picture as to the debtor’s income, assets and liabilities, but without engaging in a detailed analysis of weekly income and outgoings such as is required by the financial disclosure forms used in Family Law proceedings. It provides, therefore, only a limited picture of Mr Simons’ current domestic circumstances. However, I infer that he is working part‑time as a marketing consultant in his own business which is now incorporated, and that he is substantially supported by his partner. In relation to his assets and liabilities, he does not point to assets available to meet the current indebtedness to Mrs Simons or any other substantial liabilities, but on that side of the account, Mr Simons does not admit that he has any unsecured creditors, even Mrs Simons.
If I accepted the statement of affairs at face value, it does not raise any substantial concerns that Mr Simons’ financial position will deteriorate between now and April next year, nor that there will be any creditor at added risk if he is not made bankrupt before that time, including Mrs Simons. Thus, although I accept criticisms of the adequacy of the statement of affairs made by the solicitor for Mrs Simons today, it does provide me with some assurance which I was looking for on the last occasion.
In terms of the merits of the pending s.79A application, Mr Simons’ case has advanced a little, in so far as I can assess its prospects. However, plainly I am not assisted in the manner that the Family Court will be assisted, since neither party has tendered the full contents of the file from 2009 to allow me to explore the circumstances in which the 2009 settlement was arrived at, and there may be other evidence upon which Mr Simons proposes to rely at the hearing.
However, I have decided that it is not necessary for me today to further explore the merits of the pending s.79A application. In my opinion, it would not be a useful application of the resources of the Court, nor does justice to either of the parties require, that I should embark on a further analysis of Mr Simons’ s.79A application and its prospects of success, in so far as they might bear on a discretion to dismiss the petition today. It is enough that I am not persuaded that a case has been made out for me to either uphold or dismiss the petition today.
In my opinion, the appropriate exercise of my discretions under the Bankruptcy Act would be to adjourn the petition until the hearing of the s.79A application. However, I am ordering this adjournment only on the basis that the Court is now aware of the procedural stage reached in Mr Simons’ s.79A application in this Court in its Family Law jurisdiction, and on the basis that dates have been allocated where both that application and the petition can be addressed at a concurrent hearing in April.
In this respect, I note that the s.79A application was listed for directions before Kemp FM on 29 November 2012. His Honour made orders, in particular in paragraph 3 that “the matter be adjourned to 8‑10 April 2013 at 10am for final hearing (estimate 3 days) with priority in relation to a s.79 [sic: s.79A] application, contravention and bankruptcy matter”. His Honour also gave directions for the payment of setting down and hearing fees, and for the full preparation of the matter in the run‑up to the hearing. The parties were given liberty to apply to vacate the hearing, and to apply generally for further directions.
It appears from these orders, and I am informed by the parties, that his Honour’s attention was drawn to the pendency of the petition, and clearly his Honour has indicated that he would be prepared to address the petition concurrently with the s.79A application.
Obviously, if that matter does proceed at the appointed hearing to finality and judgment, it would not be necessary for the petition to be the subject of additional argument, since on the grounds of opposition its outcome will depend upon the outcome of the s.79A application. In the circumstances of the present case, the concurrent listing therefore appears to me to be a highly efficient manner of dealing with the creditor’s petition.
I therefore propose to make the orders sought by Mr Simons today, that I adjourn this matter for concurrent hearing with the Family Law proceeding.
I make it clear, however, that I am doing so in reliance on Mr Simons’ assurances that he can and will prepare both matters properly and with the objective of being able to proceed at the appointed hearing. I also note that Kemp FM has given both parties liberty to apply in the event that such an expectation proves to be unfounded. It will be open to Mrs Simons to move his Honour for an early hearing of the petition, in the event that it appears that Mr Simons is not able to proceed with the s.79A application at the appointed hearing.
Since the matter will, in any event, be required to leave my docket at the end of this year, I suggest that any further applications for directions in relation to the bankruptcy petition should be addressed to Kemp FM.

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Smith FM

Date: 18 December 2012