Sopikiotis v Owners Corporation RP017740
[2013] FMCA 122
•22 February 2013
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SOPIKIOTIS v OWNERS CORPORATION RP017740 & ANOR | [2013] FMCA 122 |
| BANKRUPTCY – Application for extension of time to review decision of Registrar to make a Sequestration Order – substantial delay – delay not explained – lack of substantive merits – application dismissed. |
| Bankruptcy Regulations 1996, regs.16.01(c), 4.02A Acts Interpretation Act 1901, ss.2G, 36 Federal Magistrates Court (Bankruptcy) Rules 2006 Bankruptcy Act 1966, s.52(2) |
| Pearce and Geddes “Statutory Interpretation in Australia” 6th Edition Maxwell v Murphy (1957) 96 CLR 261 Labraga v Exception Holdings Pty ltd (In Liq) [2009] FMCA 397 Glenlogan Park Pty Ltd v Schofield [2007] FMCA 2059 Olivieri v Stafford (1989) 24 FCR 413 Re Longo (1995) 57 FCR 523 |
| Applicant: | MARIA SOPIKIOTIS |
| First Respondent: | OWNERS CORPORATION RP017740 |
| Second Respondent: | PETER ROBERT VINCE AS TRUSTEE OF THE BANKRUPT ESTATE OF MARIA SOPIKIOTIS |
| File Number: | MLG 499 of 2011 |
| Judgment of: | Burchardt FM |
| Hearing date: | 7 February 2013 |
| Date of Last Submission: | 19 February 2013 |
| Delivered at: | Melbourne |
| Delivered on: | 22 February 2013 |
REPRESENTATION
| The Applicant: | In person |
| Counsel for the First Respondent: | Mr Harris |
| Solicitors for the First Respondent: | LMS Lawyers |
| Counsel for the Second Respondent: | Ms Gobbo |
| Solicitors for the Second Respondent: | Maddocks Lawyers |
ORDERS
The Applicant’s application for an extension of time filed
26 September 2012 be and is dismissed.
The costs of the First and Second Respondents be paid out of the Bankrupt’s estate in accordance with the Act.
The Applicant’s application for a stay is refused.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 499 of 2011
| MARIA SOPIKIOTIS |
Applicant
And
| OWNERS CORPORATION RP017740 |
First Respondent
| PETER ROBERT VINCE AS TRUSTEE OF THE BANKRUPT ESTATE OF MARIA SOPIKIOTIS |
Second Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
On 5 July 2011, Registrar Caporale made a Sequestration Order against the applicant, Ms Sopikiotis. From the materials provided, it seems reasonably clear that the applicant presented argument to Registrar Caporale. That hearing itself followed adjournments on the Creditor’s Petition on 2 June 2011 and 27 June 2011. Ms Sopikiotis was present on 2 June 2011, together with a legal representative, and also on
27 June 2011. An application has now been filed, on 26 September 2012, to review the decision of Registrar Caporale. Large amounts of material have been filed and I will endeavour to concentrate on the essential issues which in my opinion for these purposes are first, should time be extended to enable the applicant to bring her application? Second, if so, what should happen on what would otherwise be a
re-hearing de novo. Consideration of the first point, in other words the extension of time, involves consideration of first, any explanation for the delay and secondly, the applicant’s prospects of success.
I note that this matter was before Riethmuller FM on 8 November 2012 and, having read the transcript, in my view his Honour made it quite clear that the matter of the extension of time was the first matter to be addressed. There is, however, a considerable history to this matter.
Relevantly, on 16 December 2009 the petitioning creditor issued proceedings in VCAT. What was sought was payment of body corporate debts, some of which clearly predated 16 December 2003. However, it is clear on the materials filed that over $8,000 worth of debt had arisen during the period from 2003 to 2009. It is clear there has been a long-running dispute between the applicant and the creditor going back at least to 1995, as is apparent from the applicant’s affidavit filed on 29 November 2012 and the materials exhibited to it.
On 21 April 2010, Mr Davies, Member of VCAT, made orders in favour of the creditor for $16,691.22 together with interest and costs. The applicant did not attend. A Bankruptcy Notice based upon that order was issued on 18 August 2010 and served on 18 February 2011. It is clear from the affidavit material filed that the creditor had had great difficulty serving Ms Sopikiotis. Indeed, the applicant denies ever having been served with the Bankruptcy Notice but it should be noted that after the Petition was filed on 13 April 2011, the applicant must have become aware of the Bankruptcy Notice as she attended the hearings before Registrar Caporale. As I have already stated, the Sequestration Order was made by the Registrar on 5 July 2011.
The applicant did not file a statement of affairs and as a result on 21 February 2012 her Trustee in Bankruptcy filed a proceeding in the Federal Court. That sought, relevantly, that the applicant be ordered to provide a statement of affairs and vacant possession of the property where she lives. Bromberg J had ordered the applicant to file a statement of affairs. It is, however, clear that the applicant has still, even now, not adequately complied with that obligation.
On 21 May 2012, the applicant applied to VCAT to review the decision of Member Davies given on 21 April 2010. That application was dismissed by VCAT on 21 June 2012, as is apparent from exhibit RB-9 to the affidavit of Richelle Berman, solicitor, sworn on 10 December 2012.
I note that at paragraph 26 of her affidavit, Ms Berman deposes that she was present at the hearing at VCAT and that the presiding Member was not satisfied with the applicant’s excuses for not having been at the original hearing, and the member also expressed a view that the application had insufficient merit to succeed. On 18 July 2012, the applicant applied to the Supreme Court to review the decision of VCAT and on 10 August 2012, Lansdowne AJ refused the application. The decision is at RB-11 to Ms Berman’s affidavit. It should be noted that from that decision it is clear that the applicant knew of the VCAT decision of Member Davies from at least May 2011 when she received the Petition. I further note, as this is a matter also referred to in some detail in the materials, that Lansdowne AJ accepted that VCAT had sent documents to the wrong address for the applicant.
On 21 November 2012, Bromberg J ordered vacant possession of the property but that order has been appealed. This application for review, of course, had already been filed on 26 September 2012.
Against this historical background, I now come to the explanation for the delay in bringing the application. In oral submissions made before the Court, the applicant said first, that she thought that the creditor had followed correct legal process but now understood that not to be the case; second, she had spent considerable periods of time obtaining the transcript of the proceeding before VCAT, which I note was not available before Lansdowne AJ; third, she asserted that the Trustee had withheld information including not forwarding to her affidavits other than those of the creditors.
Before Riethmuller FM at transcript p3, the applicant put the matter in much the same terms. In response to a question from his Honour, “Were you aware that you faced this application this morning?”,
Ms Sopikiotis replied:
“Yes, and I have filed an affidavit, your Honour, in relation to obtaining transcripts. The reason why I’m seeking in my application to waive the time limit is that information became available to me in May 2012 for a Federal Court hearing, and I believe that if all the facts would have been known at the time back in July of 2011, the sequestration order would have never been made. There’s information that only came to light at the middle of this year and it has taken time to obtain that information, to get transcripts from VCAT, to check the files, to search the files, obtain documents, to get copies of affidavits that were never given to me at the sequestration hearing on 5 July, but were filed on that date in court, and, therefore, I’m seeking for you to waiver that time. So that if all the facts had have been known at the date of that hearing, that sequestration order would have never been made.”
The applicant’s affidavit filed on 29 September 2012 refers to the proposition that the debt on which the Petition was founded was under the statutory minimum of $5,000 and, furthermore was, statute barred, and the affidavit also refers to the difficulty obtaining transcripts from VCAT. None of the applicant’s subsequent affidavits refers to the explanation of delay.
I would make the following points. The applicant has had much to say by way of complaints against the Trustee and all the relevant lawyers who have been involved in the matter but it is clear that the applicant knew of the Sequestration Order in July 2011. She also knew of the VCAT debt and the Bankruptcy Notice by May 2011. She further knew that the Trustee was actively pursuing the matter by February 2012 when the proceeding in the Federal Court started.
I do not find the applicant’s explanation for delay either convincing or satisfactory. I note, in particular, that the applicant maintains, and has always maintained, that she has been solvent. Clearly, she should have applied to set aside the Sequestration Order if that was so at some antecedent point.
I now turn to the issue of consideration of the merits of the application. The issues that in my view fall for consideration are first, was the Bankruptcy Notice stale when it was served? Second, was it statute barred? Third, was the sum involved under $5,000? Fourth, were any fees ever, indeed, owing to the creditor? All these matters are interrelated in the sense that they involve matters to do with the process at VCAT and the address at which the applicant lived to a greater or lesser extent. The fifth issue is that the applicant asserts that she is, in any event, solvent.
The applicant has raised a number of matters which in my view are not relevant. They include first, the applicant’s complaints against the Trustee. In my view, in this regard the Trustee’s application to the Federal Court to obtain a compulsion on the applicant to comply with the statement of affairs would seem prima facie quite proper. Second, the applicant’s complaints against the various lawyers, which is a matter for the Legal Services Commission and not for me. Third, the applicant complains that there was no proper attempt to mediate by the other side but in my view, that was clearly irrelevant because there was no obligation on them in the circumstances to do so. Fourth, the applicant complains about a deed of settlement which appears never to have been executed.
It is possible I may have overlooked some other matters but if I have, I should make it plain that I considered all the materials and, to the extent that they are not dealt with, they are not of any moment.
I turn now to the question of whether the Bankruptcy Notice was stale. I note in passing that the Registrar who is, of course, very experienced in these matters was well-aware of the six month point. This is apparent from the checklist that the Registrar completed that is before the Court. All parties agree that if the Bankruptcy Notice was stale there was, therefore, no bankruptcy and the Sequestration Order should never have been made.
It is agreed that the Bankruptcy Notice was issued on 18 August 2010. I accept that it was served on 18 February 2011. That evidence was accepted by the Registrar and I accept it too. Clearly, it was left at the applicant’s last known address within the operation of Bankruptcy Regulation 16.01(c). This brings us to regulation 4.02A which I will read out.
“A bankruptcy notice must be served within:
(a) the period of 6 months commencing on the date of issue of the bankruptcy notice.”
There is then an alternative which is not relevant. Section 36 of the Acts Interpretation Act 1901 until 27 December 2011 read as follows:
“Where in an Act any period of time, dating from a given day, act, or event, is proscribed or allowed for any purpose, the time shall, unless the contrary intention, appears be reckoned exclusive of such day or the day of such act or event.”
This, in my view, disposes of the issue. The six months in this case commences on a given day, in other words, the day of issue. If one excludes 18 August 2010, it is quite clear that the Bankruptcy Notice was served within six months. The definition of “months” in the Acts Interpretation Act is quite clear. If one looks at s.2G of that Act, it is plain that the operation of it is such that the six month period would have expired after, but not on, the date of service itself. I also note that the use of the phrase “within” suggests exclusion of the first day. In this regard, I refer to Pearce and Geddes “Statutory Interpretation in Australia” 6th Edition at 229 to 230. There is, I would say, no justification for calculating the running of time by individual days as the applicant’s submissions assert.
I should note also that the amendment to the Acts Interpretation Act in December 2011 is not a procedural one. It might affect substantive rights. Dixon CJ said in Maxwell v Murphy (1957) 96 CLR 261 at [267]:
“The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events.”
In my view, to construe the amendment to the Acts Interpretation Act effected in December 2011 other than affecting substantial rights in these circumstances would be not possible. However, if I am wrong and, in the alternative, the amended Act applies, the point about “within” still applies and the first day would still be ignored. I note in passing two cases in this Court, namely Labraga v Exception Holdings Pty Ltd (In Liq) [2009] FMCA 397 at [23], a similar situation passed without comment from Driver FM and, likewise, in Glenlogan Park Pty Ltd v Schofield [2007] FMCA 2059 at [2] and [6] from Wilson FM.
Given the findings I make in this regard, it is not necessary to deal with the first respondent’s submissions that the Federal Magistrates Court (Bankruptcy) Rules 2006, which are favourable to the respondents, operate so as to exclude the operation of the Acts Interpretation Act.
I will deal next with the three matters that to an extent relate to the VCAT criticisms namely, whether the matter was statute barred, less than $5,000 and/or that the fees were never owing. Dealing with the matter of the $5,000 first, I am afraid the applicant is clearly wrong. $8,317 was not statute barred. The first respondent’s written submissions filed on 18 December 2012 assert that it is clear that if after investigation the Court finds the valid debt is less than the amount of the judgment that grounds the Petition, the Court will not interfere with the Sequestration Order unless the debt is less than the statutory limit.
It is sufficient to say that the cases the first respondent cites unquestionably support this proposition: see Olivieri v Stafford (1989) 24 FCR 413 at [428]-[432] per Gummow J and Re Longo (1995) 57 FCR 523 at [530]-[531] per Cooper J.
The next issue is whether the matter was statute barred. As I say this is, in a sense, an interrelated point. It is clear, as the applicant submits, that some of the VCAT order related to debts that were over six years, old but what was left was still well over $5,000. In these circumstances, there is no need to deal with the respondents’ arguments that these debts were specialty debts and, therefore, not caught by the Statute of Limitations. I note that it would be open to the applicant to challenge the quantum of such debts with her Trustee in any event.
Next, the question as to whether the fees were ever owing. It should be remembered that this is not a final trial. It is a matter of considering the merits in an interlocutory sense as part of the consideration of the discretion to extend time. Although the applicant is adamant that no money was ever owing, it is clear the creditor has provided extensive accounts and documentation which prima facie would appear believable.
Next, I deal with the assertion that the applicant is solvent. This requires her to be able to pay her debts as and when they fall due, bearing in mind the slightly expanded operation of that proposition arising from the decision of Barwick CJ in Sandell v Porter where moneys may be readily available in any event.
The applicant dealt with this issue in her affidavit filed on
23 November 2012 in exhibit MS-12. Under the heading “Statement of Solvency” she wrote:
“Income $13,000 per annum net, all household expenses are up-to-date, creditors Harrick Lawyers $60 per fortnight, Boroondara Council $100 per fortnight.”
All the other creditors were disputed, although the amounts of their alleged debts were not disclosed. The applicant further set out the various payments she had more recently made and referred to her superannuation. In one of the incomplete statements of affairs at Court Book 122 that the applicant has provided, she asserts that her wages were $41,400. I note that a complete statement of affairs does not appear yet to have been executed. From exhibit CMC-14 to the affidavit of Christine Margaret Cantwell sworn on 29 June 2012 at Court Book 508, there is a list of proofs of debts in the total sum of $157,800. I accept that the applicant denies the validity of such proofs of debts, but their existence is clearly a relevant consideration.
Some of these proofs of debts are from major commercial entities such as the ANZ Bank and Credit Corporation Group. They must have at least some prospects of being correct.
I note that pursuant to s.52(2) of the Bankruptcy Act 1966, it is for the applicant to satisfy the Court that she can pay her debts if we reach that stage. On the materials filed, I am not satisfied that the applicant would be able to do so.
Accordingly, I come to my conclusion. First, the applicant has not in any way satisfactorily explained the delay in her application. Second, the relevant matters she has raised going to the merits of her application are to an extent misconceived and/or of the most dubious merit. It is overwhelmingly clear, in my view, that I should not exercise my discretion to extend time for the applicant to bring her application for review of Registrar Caporale’s decision. Accordingly, the application to extend time filed by the applicant on 26 September 2012 is dismissed.
I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of Burchardt FM
Associate:
Date: 25 February 2013
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