Song v Ying
[2012] FMCA 1015
•5 November 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SONG v YING | [2012] FMCA 1015 |
| BANKRUPTCY – Creditor’s Petition – application by Petitioning Creditor for appointment of controlling trustee until the resolution of New South Wales Court of Appeal Proceedings – respondent Debtor consents to appointment – Controlling Trustee appointed. |
| Bankruptcy Act 1966, ss.50(1), 52 |
| Applicant: | LIDA SONG |
| Respondent: | MING YING |
| File Number: | SYG 1680 of 2012 |
| Judgment of: | Lloyd-Jones FM |
| Hearing date: | 30 October 2012 |
| Date of Last Submission: | 30 October 2012 |
| Delivered at: | Sydney |
| Delivered on: | 5 November 2012 |
REPRESENTATION
| Solicitors for the Applicant: | Ms A. Mathias as agent for Mr M. Wells of ETD Law |
| The Respondent: | The Respondent appeared in person with the assistance of an interpreter in the Mandarin language |
ORDERS
Pursuant to section 50 of the Bankruptcy Act 1966 (Cth) and the Bankruptcy Regulations 1996 (Cth) a Controlling Trustee be appointed to take control over the Respondent Debtor’s property.
The control over the Respondent Debtor’s property by the Controlling Trustee end upon the making of a sequestration order against Ming Ying, or the dismissal of the Creditor’s Petition in these proceedings.
The Respondent Debtor pay the Applicant’s costs of the Interlocutory Application filed 24 October 2012.
Liberty to apply is granted on 2 days’ clear notice.
Notice be given to the Official Receiver in Sydney, and the Respondent Debtor within 24 hours of this order being sealed and received.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1680 of 2012
| LIDA SONG |
Applicant
And
| MING YING |
Respondent
REASONS FOR JUDGMENT
Introduction
On 1 August 2012 the applicant creditor, Lida Song, filed a creditor’s petition in this Court against the estate of the respondent debtor, Ming Ying, pursuant to a judgment of the Supreme Court of NSW in favour of the applicant creditor in the amount of $349,981.66 in proceedings 2012/00093232. The proceedings in this Court were first listed before a registrar of the Court on 4 September 2012 and have been further adjourned on a number of occasions.
On 24 October 2012, the applicant filed an interim application seeking a controlling trustee to be appointed to take control of the respondent debtor’s property until the resolution of the proceedings, pursuant to s.50 of the Bankruptcy Act 1966 (Cth) (the “Act”) and supported by the affidavit of Matthew Wells sworn on the same day. This application was referred to this Court on 30 October 2012 where orders to that effect (noted above) were made by consent. These reasons give effect to those orders.
Hearing 30 October 2012
At the hearing on 30 October 2012, Ms A. Mathias appeared on behalf of the applicant creditor. The respondent debtor, Ming Ying, appeared in person assisted by an interpreter in the Mandarin language. Ms Mathias informed the Court that the orders sought by the applicant were consented to by the respondent, which was confirmed by the respondent. Ms Mathias read the affidavit of Matthew David Wells sworn 24 October 2012 (“Wells Affidavit”) in support of the application. No objections to its contents were raised.
Consideration
I rely on the contents of the Wells Affidavit in respect to the following issues:
…
2. Judgment entered against the Respondent Debtor in Supreme Court proceedings 2012/00098232 on 28 March 2012 in the amount of $349,981.66.
3. A Bankruptcy notice filed with ITSA on 1 August 2012.
4. The Bankruptcy Notice was served on the respondent on 2 July 2012. I crave leave to refer to the affidavit of service of Anastacey John Gavrily sworn 15 July 2012 which was filed in these proceedings on 1 August 2012.
5. The Respondent committed an act of bankruptcy on 23 July 2012 in that he did not respond to the Bankruptcy Notice.
6. On 1 August 2012, a Creditors Petition was filed in the Federal Magistrates Court in Sydney.
7. Each time the matter had been listed the Respondent has sought an adjournment on the basis that he is waiting on a decision from the NSW Court of Appeal.
…
9. The Respondent’s appeal was heard before the NSW Court of Appeal on 4 September 2012.
10. The Respondent has not sought an order in the appeal proceedings that the judgment be stayed.
11. The only issue preventing this Court making a sequestration order against the Respondent is the appeal which is currently before the NSW Court of Appeal.
12. The time in which the Appeal will take is not within the control of any party or this Court. It is a process which may take many months and is undeterminable.
13. If the Court is minded to withhold the making of a sequestration order until the Respondent’s appeal is determined (which is an undeterminable period of time) there is a risk that the Respondent could use the time to dispose of assets.
14. It is in the interest of the Creditor that its interest in the Respondent’s estate be protected pending the Respondent’s Appeal and the determination of this Court.
15. The making of the order sought in the Interim Application would preserve the rights of each party while the Appeal is being determined.
An order pursuant to s.50 of the Act is made in aid of the creditors of a debtor who has already committed an act of bankruptcy and has a creditor’s petition pending against him. It is a necessary and ancillary provision designed to enable appropriate steps to be taken to preserve and protect the property of a debtor, so that in the event of a sequestration order being made that property will be available for distribution equitably amongst the creditors in accordance with the statutory provisions contained elsewhere within the Act. From the information contained in the Wells Affidavit it is readily apparent that the provisions of s.50 have been met.
Although orders under s.50(1) are often made ex parte, this circumstance did not arise in this matter as the debtor was present in court, indicating that he had participated in discussions with the petitioning creditor assisted by an interpreter in his own language. He informed the Court that he understood the purpose and consequences of the order and consented to it being made.
On the material before the Court and in the presence of the debtor who states that he understands the nature of the order and its consequences explained to him in his own language by an accredited interpreter, I am satisfied that the requirements of s.50(1) of the Act have been complied with and that the order sought by the applicant should be made.
I certify that the preceding seven (7) paragraphs are a true copy of the reasons for judgment of Lloyd-Jones FM
Date: 5 November 2012
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