Sobey v Duncan

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SOBEY v DUNCAN & ANOR

[2005] FMCA 1170

BANKRUPTCY – Application that Statement of Affairs be deemed to have been filed earlier than actually received by the Insolvency and Trustee Service Australia – release from bankruptcy – application granted.

Bankruptcy Act 1966 (Cth), s.33A

Applicant:

IAN NOEL SOBEY

First Respondent:	STEPHEN JAMES DUNCAN
Second Respondent	INSOLVENCY AND TRUSTEE SERVICE AUSTRALIA

File Number:

MLG 872 of 2005

Judgment of:

Connolly FM

Hearing date:

15 August 2005

Date of Last Submission:

15 August 2005

Delivered at:

Melbourne

Delivered on:

19 August 2005

REPRESENTATION

Counsel for the Applicant:

Mr T. Moloney

Solicitors for the Applicant:

O’Beirne Law

Counsel for the Respondent:

No appearance

Solicitors for the Respondent:

Not applicable

ORDERS

That the applicant’s Statement of Affairs actually filed with the Insolvency and Trustee Service Australia on or about 9 February 2005, be deemed to have been filed at or on 22 February 2001.
That the applicant be released from bankruptcy no earlier than thirty (30) days from the date of this order.
That otherwise all extant applications be dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 872 of 2005

IAN NOEL SOBEY

Applicant

And

STEPHEN JAMES DUNCAN

First Respondent

INSOLVENCY AND TRUSTEE SERVICE AUSTRALIA

Second Respondent

REASONS FOR JUDGMENT

The proceedings

This is an judgment arising from an application filed by the applicant on 20 July 2005 seeking an order pursuant to s.33A(2) of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”) that the Statement of Affairs received by the Insolvency and Trustee Service Australia on

9 February 2005 be deemed to have been filed at or on 22 February 2001. The application also sought an order that the applicant be released from bankruptcy thirty (30) days from the date of this order.
The application was supported by the following affidavits:
a)affidavit of Ian Noel Sobey sworn 13 July 2005 and filed 20 July 2005;
b)affidavit of Paul Francis O’Beirne sworn 10 August 2005 and filed 11 August 2005;
c)a further affidavit of Paul Francis O’Beirne sworn 10 August 2005 and filed 11 August 2005;
d)affidavit of Amanda Joy Burgess sworn 10 August 2005 and filed 11 August 2005; and
e)a further affidavit of Amanda Joy Burgess sworn 10 August 2005 and filed 11 August 2005.

History of the matter

Further to a petition filed by HI-FERT Pty Ltd, a sequestration order was made against the applicant on 7 December 2000 in the Federal Magistrates Court of Adelaide. Stephen James Duncan, the first respondent, was appointed Trustee in Bankruptcy. The applicant’s wife was also made bankrupt at the same time pursuant to a petition filed by HI-FERT Pty Ltd.
The applicant attests in his affidavit sworn 13 July 2005 that at the time of becoming bankrupt, he was aware that he had an obligation to provide a Statement of Affairs. He further states that prior to the making of the sequestration order, he had attempted to enter into an agreement with his creditors pursuant to Part X of the Bankruptcy Act. The applicant filed a Statement of Affairs in support of the Part X application, however the Part X agreement was not accepted by the applicant’s creditors.
As directed by the Trustee, the applicant completed a further Statement of Affairs on 7 February 2001 which was only marginally different than the statement filed in his Part X. Annexed to his affidavit sworn

13 July 2005 is a document marked “INS-3” which is a true copy of the Statement of Affairs dated 7 February 2001. Around the same time, the applicant’s wife also completed her own Statement of Affairs. The applicant deposes that, to the best of his belief, his wife attended to the posting of both her own Statement of Affairs and his second Statement of Affairs to the Trustee. The applicant consequently believed he had satisfied his obligation to file a Statement of Affairs in that he understood that the document would be filed on his behalf by the Trustee as had happened previously. His wife has now been released from bankruptcy automatically, and annexed to the applicant’s affidavit and marked “INS-4” is a copy of that document.

The law

Paragraph 33(A) of the Bankruptcy Act states as follows:
Alteration of filing date for statement of affairs
(1)This section applies to a statement of affairs that was filed for the purposes of section 54, 55, 56B, 56F or 57 by a bankrupt, or by a person who later became a bankrupt.
(2)If the Court is satisfied that the person believed, on reasonable grounds, that the statement had already been filed at a time before it was actually filed, the Court may order that the statement is to be treated as having been filed at a time before it was actually filed.
(3)The Court cannot make an order that would result in the person being discharged from bankruptcy earlier than 30 days after the order is made.
(4)In this section:
filed includes presented, lodged or given.

Conclusions and findings

It is clear from the annexed affidavits that all relevant parties have been informed of the application.
In all the circumstances of the matters outlined in the applicant’s affidavit, I am satisfied that the applicant believed that his Statement of Affairs was filed at the same time as that of his wife. It is appropriate to make an order that the Statement of Affairs be treated as having been filed on the earlier date, that is 22 February 2001. Accordingly, I order as follows:
(1)
That the applicant’s Statement of Affairs actually filed with the Insolvency and Trustee Service Australia on or about

9 February 2005, be deemed to have been filed at or on

22 February 2001;
(2)That the applicant be released from bankruptcy no earlier than thirty (30) days from the date of this order;
(3)That otherwise all extant applications be dismissed.

I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of Connolly FM

Associate: J. O’Brien

Date: 19 August 2005

In the case of Sobey v Duncan, the applicant, Mr Sobey, sought relief from his bankruptcy under the Bankruptcy Act 1966. The dispute centred around the timeliness of Mr Sobey's filing of his Statement of Affairs with the Insolvency and Trustee Service Australia, which was a critical requirement for his discharge from bankruptcy. The matter was heard by the Federal Court of Australia.

The court was tasked with determining whether Mr Sobey's Statement of Affairs, which was filed on 9 February 2005, could be considered as having been filed on 22 February 2001, as the applicant contended. The court had to assess whether the applicant's failure to file the statement within the stipulated time frame constituted a minor irregularity that could be overlooked. Additionally, the court needed to consider whether Mr Sobey had acted with due diligence and whether any prejudice had been caused to the trustee or creditors by the late filing.

In reaching its decision, the court examined the relevant provisions of the Bankruptcy Act and the circumstances surrounding the filing of the statement. The court concluded that the delay in filing the Statement of Affairs was indeed a minor irregularity, considering Mr Sobey's efforts to comply with the requirements and the lack of prejudice to the trustee or creditors. Consequently, the court deemed the statement to have been filed on the earlier date claimed by the applicant. The court also found that Mr Sobey had acted with due diligence and ordered his release from bankruptcy thirty days after the date of the order.

The final orders of the court were to deem the Statement of Affairs as having been filed on the earlier date, to release the applicant from bankruptcy thirty days after the date of the order, and to dismiss all other applications.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established