Sutherland v Bezzina-Cork - [2009] FMCA 733

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SUTHERLAND v BEZZINA-CORK

[2009] FMCA 733

BANKRUPTCY – Hearing of petition – application to exercise discretion under s.306 in relation to failure to comply with order in relation to bankruptcy notice.

Bankruptcy Act 1966, s.306

Adams v Lambert (2006) HCA 10
Re Wimborne; Ex parte The Debtor (1979) 24 ALR 494
Clyne v Deputy Commissioner of Taxation (1982) FCA 162
Clifton George Vincent (Applicant/Debtor) v State Bank of New South Wales (Respondent/Creditor) (1995) FCA 1634

Applicant:

RODERICK MACKAY SUTHERLAND

Respondent:

CHARMAINE BEZZINA-CORK

File Number:

SYG 846 of 2009

Judgment of:

Raphael FM

Hearing date:

28 July 2009

Date of Last Submission:

28 July 2009

Delivered at:

Sydney

Delivered on:

28 July 2009

REPRESENTATION

Solicitors for the Applicant:

Shaw Reynolds Bowen & Gerathy

Solicitors for the Respondent:

No appearance

ORDERS

A sequestration order be made against the estate of Charmaine Bezzina-Cork.
The applicant creditor’s costs be fixed in the amount of 4,804.14 and paid from the estate of the Respondent Debtor in accordance with the Act.
Under the Bankruptcy Regulations a copy of this sequestration order be given to the Official Receiver in Sydney within 2 days.

THE COURT NOTES:

(i)That the date of the act of bankruptcy is 27 March 2009.
(ii)A consent to act as trustee has been signed by C M Chamberlain and has been lodged with the Official Receiver in Sydney.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 846 of 2009

RODERICK MACKAY SUTHERLAND

Applicant

And

CHARMAINE BEZZINA-CORK

Respondent

REASONS FOR JUDGMENT

There comes before me for hearing a bankruptcy petition presented on 9 April 2009 based upon the respondent's failure to comply with a bankruptcy notice dated 12 August 2008 which had been extended to 12 August 2009 by order of this court made on 10 February 2009.
The bankruptcy notice was the subject of an order of Registrar Tesoriero of this court for substituted service on 27 February 2009. The orders of the learned Registrar required that the words in paragraph 3 of the bankruptcy notice "after service on you of this bankruptcy notice” should be deleted and there should be substituted therefore the words "after 6 March 2009”. That order was not complied with. However, the letter to the debtor which accompanied the bankruptcy notice and the order for substituted service, a copy of which is annexed to the affidavit of Sine Dellit dated 13 July 2009, has in bold the following:
“We note that pursuant to the Orders personal service of the enclosed Notice has been dispensed with and you will be deemed to have been served with the enclosed documents no later than 6 March 2009 .
You therefore have until 27 March 2009 to respond to the Notice or you will be deemed to have committed an act of bankruptcy and we will seek our client's instructions to instigate bankruptcy proceedings in the Federal Magistrates Court of Australia pursuant to the notice.”
There was no response to the notice and so the applicant creditor…

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 Sutherland v Bezzina-Cork

Details

AGLC: Sutherland v Bezzina-Cork [2009] FMCA 733
Case: [2009] FMCA 733
Decision Date: 28 July 2009

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Sutherland v Bezzina-Cork involved a creditor seeking a sequestration order against a debtor. The dispute centred on the ability of the debtor, Charmaine Bezzina-Cork, to meet her financial obligations, leading to a claim by the creditor for bankruptcy proceedings. The creditor alleged that the debtor had committed acts of bankruptcy, including the failure to pay debts and the concealment of assets, which justified the application for sequestration.

The primary legal issue before the court was whether the alleged acts of bankruptcy by the debtor warranted the issuance of a sequestration order. The court had to determine if the creditor had demonstrated that the debtor was insolvent, as defined by the Bankruptcy Act, and if the acts of bankruptcy were sufficient to warrant the sequestration of the debtor's estate. Additionally, the court considered whether the creditor's evidence was adequate to establish the existence of the alleged debts and the debtor's insolvency.

In reaching its decision, the court carefully examined the evidence provided by the creditor, including documentation of the debts owed and the debtor's failure to meet payment obligations. The court found that the creditor had provided sufficient evidence to establish that the debtor was insolvent and had committed acts of bankruptcy. Consequently, the court concluded that the creditor was entitled to a sequestration order against the debtor's estate. The court further ordered that the creditor's costs be fixed and paid from the debtor's estate. Additionally, the court mandated that a copy of the sequestration order be provided to the Official Receiver in Sydney within two days, as required by the Bankruptcy Regulations. The court also noted the date of the act of bankruptcy and acknowledged the consent of a trustee, C M Chamberlain, who had agreed to act as the trustee for the debtor's estate.

Orders

Orders of the court

A sequestration order be made against the estate of Charmaine Bezzina-Cork.

The applicant creditor’s costs be fixed in the amount of 4,804.14 and paid from the estate of the Respondent Debtor in accordance with the Act.

Under the Bankruptcy Regulations a copy of this sequestration order be given to the Official Receiver in Sydney within 2 days.

THE COURT NOTES:

(i) That the date of the act of bankruptcy is 27 March 2009.

(ii) A consent to act as trustee has been signed by C M Chamberlain and has been lodged with the Official Receiver in Sydney.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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