The Owners - Strata Plan No.6766 v Nomchong (No.2)
[2018] FCCA 3450
•28 November 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| THE OWNERS - STRATA PLAN NO.6766 v NOMCHONG (No.2) | [2018] FCCA 3450 |
| Catchwords: BANKRUPTCY – Application for sequestration order – whether preconditions for making sequestration order satisfied – whether respondent able to pay his debts – whether there is any sufficient cause why sequestration order ought not be made – sequestration order made. |
| Legislation: Bankruptcy Act 1966 (Cth), ss.5(2), 43, 47, 52, 95 |
| Cases cited: Ace Contractors & Staff Pty Ltd v Westgarth Development Pty Ltd [1999] FCA 728 |
| Applicant: | THE OWNERS - STRATA PLAN NO.6766 |
| Respondent: | GREGORY NOMCHONG |
| File Number: | SYG 2481 of 2018 |
| Judgment of: | Judge Manousaridis |
| Hearing date: | 30 October 2018 |
| Date of Last Submission: | 23 November 2018 |
| Delivered at: | Sydney |
| Delivered on: | 28 November 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr M Rose |
| Solicitors for the Applicant: | Bannermans Lawyers |
| Respondent, in person |
ORDERS
The estate of Gregory Nomchong is sequestrated under the Bankruptcy Act 1966 (Cth).
The applicant creditor’s costs (including reserved costs) be taxed and paid from the estate of the respondent debtor in accordance with the Bankruptcy Act 1966 (Cth).
THE COURT NOTES THAT
The date of the act of bankruptcy is 24 July 2018.
The consent to act as trustee signed by Joshua Philip Taylor has been filed under s.156A of the Bankruptcy Act 1966 (Cth).
A copy of this order is to be provided to the official receiver in Sydney within two business days.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 2481 of 2018
| THE OWNERS - STRATA PLAN NO.6766 |
Applicant
And
| GREGORY NOMCHONG |
Respondent
REASONS FOR JUDGMENT
Introduction
Before me is an application for a sequestration order against the estate of the respondent, Mr Nomchong. The act of bankruptcy on which the applicant, The Owners – Strata Plan No.6766 (SP6766), relies is Mr Nomchong’s failure to comply with the requirements of a bankruptcy notice issued on 6 March 2018.
I heard the creditor’s petition on 30 October 2018 at the same time as the application brought by Mr Nomchong (bankruptcy notice proceeding) which is the subject of my reasons for judgment in Nomchong v The Owners – Strata Plan No.6766.[1] By that application Mr Nomchong sought a review of orders made by a Registrar of this Court dismissing an application Mr Nomchong made to set aside the bankruptcy notice. These reasons for judgment should be read with my reasons for judgment in Nomchong v The Owners – Strata Plan No.6766.
[1] [2018] FCCA 3385
Procedural history
SP6766 filed the creditor’s petition on 4 September 2018 and was made returnable before a Registrar at 2.00 pm on 11 October 2018. On 5 September 2018, when the bankruptcy notice proceeding was before me, I was informed that SP6766 had filed the creditor’s petition. On 28 September 2018, again when the bankruptcy notice proceeding was before me, I formed the view that the bankruptcy notice proceeding and the creditor’s petition should be heard together. Accordingly, on that day, I made orders that:
a)the creditor’s petition be referred to my docket;
b)the hearing of the creditor’s petition that had been listed before the Registrar on 11 October 2018 be vacated;
c)by 19 October 2018 Mr Nomchong file and serve notice of grounds of opposition and all the affidavits on which he intended to rely;
d)the creditor’s petition be set down for hearing on 30 October 2018; and
e)the hearing of the application to set aside the bankruptcy notice be adjourned to be heard together with the creditor’s petition on 30 October 2018.[2]
[2] As I have noted in Nomchong v The Owners – Strata Plan No.6766 [2018] FCCA 3385, the orders I made are strictly incorrect. Before me in the bankruptcy notice proceeding was in form an application for review of a Registrar’s decision, not an application to set aside a bankruptcy notice.
Pursuant to those orders Mr Nomchong filed a notice stating grounds of opposition in which he stated the following grounds on which he opposed the making of a sequestration order:
1.I do not owe the debt as it has been created based on discrimination by two committee members, in particular Robin Dunn and Pam King acting in the guise of SP6766.
2.I have a genuine and arguable claim against Robin Dunn and Pam King acting in the guise of SP6766 when I file in another Court for damages and compensation far greater than the alleged debt.
3.I have filed a complaint of discrimination with the Anti Discrimination Board in relation to this matter and await the outcome of its investigation (after contact with NCAT)
4.I have sufficient assets that enable me to obtain a loan and or a further mortgage to pay the alleged debt.
It will be apparent that grounds 1, 2, and 3 overlap entirely with the matters on which Mr Nomchong relied in his application to set aside the bankruptcy notice.
Mr Nomchong also filed two affidavits, both made on 19 October 2018. In the course of my hearing objections to the admissibility of those parts of Mr Nomchong’s affidavit that related to solvency, Mr Nomchong applied for an adjournment to give him time to put on evidence of his solvency. I refused Mr Nomchong’s application for an adjournment, and my reasons for doing so are set out in Nomchong v The Owners Stata Plan No. 6766.[3] Nevertheless, at the end of the hearing, I made the following orders:
[3] [2018] FCCA 3402
1.Judgment on the Creditor’s Petition is reserved.
2.Subject to Orders 3, 4, 5 and 6, the matter is listed for judgment at 9:30 am on 23 November 2018.
3.By 4.00 pm on 19 November 2018, Mr Nomchong has liberty to file and serve an affidavit on solvency.
4.Judge Manousaridis has liberty to review in chambers any affidavit filed pursuant to Order 3 with a view to determining whether the affidavit contains admissible evidence which, if accepted, shows that Mr Nomchong is in a position to pay his debts as and when they fall due.
5.If, after reviewing the affidavit, Judge Manousaridis is of the opinion that the affidavit does not contain admissible evidence which, if accepted, shows that Mr Nomchong is in a position to pay his debts as and when they fall due, that opinion will be reflected in the reasons for judgment that will be delivered on 23 November 2018.
6.If, after reviewing the affidavit filed pursuant to order (3), Judge Manousaridis is of the opinion that the affidavit does contain admissible evidence which, if accepted, shows that Mr Nomchong is in a position to pay his debts as and when they fall due, the associate to Judge Manousaridis will inform the parties of that opinion and the matter will be listed at 9.30 am on 23 November 2018, not for judgment, but for directions.
When making these orders, I noted that they were made with the consent of Mr Nomchong and not with the consent of SP6766.
Further to these orders, on 19 November 2918 Mr Nomchong filed a further affidavit (19 November affidavit). In the course of preparing these reasons for judgment, I read in a relatively casual way Mr Nomchong’s affidavit. I formed the view that on its face it suggested that Mr Nomchong expected to receive in the near future some $161,276.90 from the sale of a water licence. I arranged for my associate to notify the parties that the creditor’s petition would not be listed for judgment, but for directions. My chambers notified SP6766 by email sent to its solicitor. Mr Nomchong was notified by post because he has not provided the Court with an email address. I appreciated that Mr Nomchong would not receive the letter before 23 November 2018 but, given the orders I made on 30 October 2018, I expected Mr Nomchong would appear on 23 November 2018.
When the matter was called on 23 November 2018 there was no appearance by Mr Nomchong. SP6766 appeared by its counsel, Mr Rose. Mr Rose made a number of submissions in relation to the 19 November affidavit. I then listed the creditor’s petition for judgment at 9:30 am on 28 November 2018.
Statutory framework and some principles
Before the Court can make a sequestration order it must be satisfied that the matters specified in s.43 and s.52(1) of the Bankruptcy Act 1966 (Cth) (Act) are proved. These include the matters stated in the creditor’s petition, and that the debt or debts on which the petitioning creditor relies is or are still owing. The Court must also be satisfied that the relevant provisions of the Federal Circuit Court (Bankruptcy) Rules 2016 (Bankruptcy Rules) have also been complied with, subject to the Court’s discretion to dispense with compliance of those rules. [4] If the Court is satisfied with the proof of the matters specified in s.43 and s.52(1) of the Act, and that the requirements of the Bankruptcy Rules have been met (or their compliance otherwise dispensed with), the Court may make a sequestration order. If the Court is not so satisfied it must dismiss the petition, or if, under s.52(2) of the Act, the Court “is satisfied by the debtor (a) that he or she is able to pay his or her debts; (b) that for some other sufficient cause a sequestration order ought not be made”, the Court may dismiss the petition.[5]
[4] See Burrell v Reavill Farm Pty Ltd & Ors [2014] FCCA 1449 at [48]
[5] Act, s.52(2)
Subsection 52(2)(a) of the Act does not use the word “solvent”;[6] nor does it use the words “as and when they become due and payable”.[7] It simply says “he or she is able to pay his or her debts”. In other words, s.52(2)(a) does not in terms require the debtor to be “solvent”. Notwithstanding the omission of these words from s.52(2)(a) of the Act, the cases have construed that paragraph as requiring the Court to be satisfied the debtor is “solvent” in the sense of not being “insolvent” as that term was explained in Sandell v Porter:[8]
Insolvency is expressed in s. 95 [of the Bankruptcy Act 1924] as an inability to pay debts as they fall due out of the debtor’s own money. But the debtor’s own moneys are not limited to his cash resources immediately available. They extend to moneys which he can procure by realization by sale or by mortgage or pledge of his assets within a relatively short time – relative to the nature and amount of the debts and to the circumstances, including the nature of the business, of the debtor. The conclusion of insolvency ought to be clear from a consideration of the debtor’s financial position in its entirety and generally speaking ought not to be drawn simply from evidence of a temporary lack of liquidity. It is the debtor’s inability, utilizing such cash resources as he has or can command through the use of his assets, to meet his debts as they fall due which indicates insolvency. Whether that state of his affairs has arrived is a question for the Court and not one as to which expert evidence may be given in terms though no doubt experts may speak as to the likelihood of any of the debtor’s assets or capacities yielding ready cash in sufficient time to meet the debts as they fall due.
[6] Being a term which is defined in s.5(2) of the Act.
[7] Which is part of the definition of “solvent” in s.5(2) of the Act.
[8] (1966) 115 CLR 666 at 670-671. The cases which so construed s.52(2)(a) of the Act were identified by Cowdroy J in Rigg v Baker [2006] FCAFC 179 at [104].
Some of the relevant principles for determining whether, on this approach, a debtor is able to pay his or her debts were usefully stated by Driver FM (as his Honour then was) in Deputy Commissioner Of Taxation v Caporale as follows:[9]
The inquiry emphasises that it involves a consideration of the ability to command cash resources through his or her own assets. The Court must also look at the level of the debtor’s recurrent expenses and earnings in addition to whether there are cash resources from assets.
A respondent debtor bears the onus of proving to the Court that their assets are sufficient to pay their liabilities as and when they become due and payable. It is not sufficient to simply show an excess of assets over liabilities. The respondent debtor must also establish that their assets are available to be realised and that they are capable of ready realisation.
[9] [2013] FMCA 5 at [23] and [24]
It may also be relevant to note that the words “able to pay his or her debts” that appear in s.52(2) of the Act do not mean “willing and able” to do so.[10] A debtor, therefore, who is able to pay his or her debts, but who is unwilling to pay the debt owed to the debtor’s petitioning creditor, remains a person who can pay his or her debts, and the Court may, in its discretion, dismiss a creditor’s petition against such a debtor. This reflects the absence of “any policy underlying the Act that a debtor should be made bankrupt if he is able to pay his debts but is unwilling to do so”.[11] If a debtor is “able to pay his debts but is recalcitrant, his creditors may resort to the remedies otherwise afforded by the law such as execution against his property and garnishee proceedings”.[12]
[10] Re Sarina; Ex parte Wollondilly Shire Council (1980) 32 ALR 596 at 599 (Bowen CJ, C A Sweeney and Lockhart JJ)
[11] Re Sarina; Ex parte Wollondilly Shire Council (1980) 32 ALR 596 at 599
[12] Re Sarina; Ex parte Wollondilly Shire Council (1980) 32 ALR 596 at 599
Finally, it is relevant to refer to what is required to prove solvency. Speaking in the context of corporate insolvency, Weinberg J in Ace Contractors & Staff Pty Ltd v Westgarth Development Pty Ltd said that to discharge the onus proving solvency “the Court should ordinarily be presented with the “fullest and best” evidence of the financial position of the respondent”; and that “unaudited accounts and unverified claims of ownership or valuation are not ordinarily probative of solvency. Nor are bald assertions of solvency arising from a general review of the accounts, even if made by qualified accountants who have detailed knowledge of how those accounts were prepared”.[13]
[13] [1999] FCA 728, at [44]
Questions arising
Given the orders I have made, and my discussion of the statutory framework and legal principles that apply in that framework, the following questions arise:
a)Has SP6766 proved that which s.43 and s.52(1) of the Act requires to be proved, and otherwise complied with the relevant provisions of the Bankruptcy Rules?
b)If (a) is answered in the affirmative:
i)Is there admissible evidence which, if accepted, shows that Mr Nomchong is in a position to pay his debts?
ii)Is there some other sufficient cause a sequestration order ought not be made?
Proof of matters specified in s.43 and s.52(1) of Act
As I have already noted, the act of bankruptcy on which SP6766 relies is Mr Nomchong’s failure to comply with the requirements of a bankruptcy notice. The relevant bankruptcy notice was issued on 6 March 2018 and demands payment of $28,082.38, being the sum of three amounts, namely, a judgment for $20,978.69 entered 2 March 2018, a judgment for $6,853.47 entered on 16 January 2018, and interest of $250.22. The bankruptcy notice was personally served on Mr Nomchong on 15 March 2018.[14]
[14] Affidavit of service of B McCombe 13.06.2018
The time for Mr Nomchong’s complying with the requirements of the bankruptcy notice had been extended by orders of the Court. The last order extending time was made on 26 June 2018 where the time for compliance with the requirements of the bankruptcy notice was extended up to and including 24 July 2018. Mr Nomchong did not by that day comply with the requirements of the bankruptcy notice.[15] That means Mr Nomchong committed an act of bankruptcy, and this occurred on 24 July 2018.[16]
[15] Affidavit verifying creditor’s petition of T Pouli 04.09.2018, [3].
[16] Paragraph 5 of the creditor’s petition states Mr Nomchong failed to comply with the requirements of the bankruptcy notice by 3 September 2018. Given Mr Pouli in the affidavit verifying the creditor’s petition deposes that Mr Nomchong failed to comply with the requirements of the bankruptcy notice by 24 July 2018, I will take that date as being the relevant act of bankruptcy.
SP6766 filed a creditor’s petition on 5 September 2018. The application has been filed in accordance with the prescribed form[17], and, as required by s.47 of the Act and r.4.02(2) of the Bankruptcy Rules, an affidavit verifying the creditor’s petition has been made.[18] SP6766 also filed at the time it filed the creditor’s petition an affidavit required by r.4.04(1)(a) of the Bankruptcy Rules,[19] and, as required by r.4.04(1)(b), an affidavit of service of the bankruptcy notice.[20] In addition, SP6766 filed a “Trustee Consent to Act Declaration”.
[17] Bankruptcy Rules, r.4.02(1); Form B2
[18] Affidavit verifying creditor’s petition of T Pouli 04.09.2018. In paragraph 1 of that affidavit Mr Pouli says he is the managing agent responsible for the day to day management of SP6766.
[19] Affidavit of Search, K Taylor, 04.09.2018
[20] Affidavit of service of B McCombe 13.06.2018
As required by r.4.05 of the Bankruptcy Rules, the creditor’s petition was served on Mr Nomchong on 5 September 2018, being more than five days before the date fixed for the hearing of the creditor’s petition, together with the affidavit required by r.4.04(a) of the Rules, and the affidavit of service of the bankruptcy notice.[21]
[21] Affidavit of D Napoli 11 October 2018
Finally, at the hearing on 30 October 2018, counsel for SP6766 filed in Court an affidavit of debt,[22] being an affidavit that under r.4.06(4) of the Bankruptcy Rules must be made as soon as practicable before the hearing date for the creditor’s petition. By the time of the hearing, SP6766 had not filed an affidavit of search as required by r.4.06(3) of the Bankruptcy Rules. At the hearing counsel for SP6766 informed me that no such affidavit had been prepared. I indicated I would be prepared to give SP6766 an opportunity to provide such affidavit. An affidavit was prepared and filed electronically before the hearing was concluded,[23] but it was not formally read. In those circumstances, I am of the opinion that it is in the interests of justice that pursuant to r.1.06(1) of the Federal Circuit Court Rules 2001 (Cth) I dispense with full compliance with r.4.06(3) of the Bankruptcy Rules.
[22] Affidavit T Pouli 30.10.2018
[23] Affidavit of search K Taylor 30.10.2018
In these circumstances, I am satisfied SP6766 has proved the matters it is required to prove under s.43 and s.52(1) of the Act and that, subject to the matters on which Mr Nomchong relies, a sequestration order should be made against the estate of Mr Nomchong.
Ability to pay debts
At the hearing before me on 30 October 2018 Mr Nomchong sought to rely on a number of paragraphs of the longer of the two affidavits he made on 19 October 2018 to prove he is able to pay his debts. Counsel for SP6766 objected to the admissibility of the paragraphs of that affidavit on which Mr Nomchong relied. I reserved judgment on those objections.
Affidavit of 19 October 2018
The paragraphs on which Mr Nomchong relied, and to which objection was taken, are as follows (emphasis in original):
18. Income
19.I am in receipt of an Aged Pension and have been for the past 3 years. I have also been an ‘extra’ in film and tv, and receive a small income from those jobs.
20.Real Estate
21.The property at 3/1290 Pacific Highway, Turramurra where I have a mortgage with the NAB for approximately $270K, and a conservative value from a local Real Estate Agent from a bank, shows the property valued at $850,000 thus giving me an equity of approximately $600,000.00, however, a search of Real estate internet shows that similar properties are listed for sale, from $800,000.00 to $1,300,000 and in conversations with local agents, it is considered that the property would list for between $950,000.00 and $1,000,000.00 (See attached annexure ‘C’ valuation, and listings of similar properties for sale)
22.Thus I would consider that I would have equity of between $600,000.00 to $700,000.00 depending on the actual sale price of the property, and it is my intention to sell the property.
23.In the last year, I have been spending time, staying for a number of nonths and doing day trips to Canberra to care for my 95 year old mother, who was hospitalised and in failing health in the latter part of 2017, she has now recovered and my family and I have been able to stabilize her health and well being, and she has returned to live in her own home and has daily care. However in taking that time and cost, it was my intention to put my apartment on the market in February, 2018 and have it sold, however, the costs of time and money in caring for my aged mother has set my plans back months and depleted my cash reserves, and together with this matter of legal situations has also created delays in achieving my sale and moving on to the next stage of my life.(See annexure ‘C’ of calculation from Ray White RE, and list of similar properties listed for sale as a guide to its value)
The “valuation” referred to in these paragraphs is a document that appears to have been downloaded from a server maintained by or for “Ray White”. The document includes the following information in relation to the lot Mr Nomchong owns (Property) in the strata scheme of which SP6766 is the owners’ corporation. The document includes the following information:
ESTIMATED PROPERTY VALUE
Here we provide an estimate of the property’s value based on statistical data.
Estimated Value $850,000High Confidence
Estimated Value Range $722,500 - $977,500
This estimate is provided by CoreLogic, and is a computer generated, statistically derived estimate of the value of the subject property and must not be relied upon as a professional valuation or an accurate representation of the market value of the subject property as determined by a valuer
Mr Nomchong’s affidavit continues as follows (emphasis in original):
25.I have a Water licence, Class A of 39 ml valued between $180K to $200K depending upon market pricing at the time of sale.
26. Motor vehicles and estimate values
27.I have 6 motor vehicles including one with historic registration with a conservative value of $80,000.00
28.I have 10 motor cycles including historic and project vehicles with a conservative value of $55,000.00
29.I have a 26ft yacht with a conservative value of $15,000.00
30.I have some farming equipment including a bulldozer, tractor, quads and other plant equipment with a conservative value of $25,000.00
31.I have a number of car [sic], boat and box trailers with a conservative value of $5,000.00
32.(See annexure ‘D’ of similar vehicles listed for sale from the internet as a guide to their value)
33. BANKING:
34.In the alternative, I have been in touch with my bank of over 50 years and I am unable to obtain a loan, and or a 2nd mortgage to an amount of more than the alleged debt to be able to pay it.
The assertions about the value of the Property is not admissible as evidence of value. Although the assertions rely on a software application, there is nothing before me that indicates the nature of the software application and, in particular, whether it is based or purports to be based on matters that expert valuers rely when assessing the value of real estate. Even if admissible, I would give the assertions little weight because the basis on which the assertions have been made are not disclosed.
This, however, is not the greatest obstacle to Mr Nomchong’s relying on his affidavit to prove he is in a position to pay his debts. First, it does not purport to list all of his debts. In particular, although the affidavit identifies a debt of $279,000 Mr Nomchong owes the bank, the affidavit does not identify the amounts Mr Nomchong is required to pay to service that debt; nor does the affidavit refer to the $11,986.51 of unpaid strata levies that Mr Pouli has deposed Mr Nomchong owes SP6766. As for the balance of the matters set out in the affidavit that I have quoted, it consists of no more than assertions of ownership of various assets and their value without any documents to support the assertions. The assertions are not matters that satisfy me of the existence of that which they purport to assert. For these reasons, I cannot be satisfied on the basis of the matters to which Mr Nomchong deposes in his affidavit of 19 October 2018 that he is in a position to pay his debts.
Affidavit of 18 November 2018
That, then, leads me to the 19 November affidavit. I have not formally read that affidavit but, as I have already noted, at the directions hearing on 23 November 2018 Mr Rose, counsel for SP6766, made a number of submissions about it. Before I refer to those submissions, I will describe the contents of the 19 November affidavit.
Mr Nomchong says that on 5 November 2018 he contacted a water brokerage company in South Australia (Waterfind), and made arrangements with the broker to sell Mr Nomchong’s water licence. On 8 November 2018 Mr Nomchong was informed the sale was successful, and that he would be sent the documents Mr Nomchong would be required to sign. Mr Nomchong received the documents on 14 November 2018. The documents Mr Nomchong says he received are annexure “A” to the 19 November affidavit. These consist of a letter from Waterfind dated 12 November 2018 enclosing three documents.
a)One is a transfer apparently in the form required by s.71M of the Water Management Act 2000 (NSW). The licence described in the form of transfer is “Water Access Licence Number 16552”, and Mr Nomchong is described as the licensor. The form does not specify the name of a transferee or any amount for the consideration for the transfer.
b)The second document is a letter dated 8 November 2018 from Waterfind to Mr Nomchong which refers to an “attached copy of the Permanent Sell Order for WAL 16553, 39ML . . . @$4,300/ML WET. Total proceeds $161,340.90”. The letter also states that “[o]nce the parcel sells, it will take over 4 weeks for the sale to settle”.
c)The third document appears to be the “Permanent Sell Order” referred to in the document I described in (b). It is dated 8 November 2018 and titled “Tax Invoice & Settlement Statement”, apparently issued by Waterfind. It refers to the sale “of 39.00 ML for $4,300.00 per ML Water” for $167,700, a brokerage fee of $5,781, a “WAL search fee” of $20, an “Application for Financial Statement” for $44, and “Payment due to you at settlement” of $161,276.90. At the bottom of the document there is a box requiring the insertion of details of the manner in which and the person to which payment (presumable of the $161,276.90) is to be made. Those details are not included in the box.
I should also note that in Waterfind’s letter to Mr Nomchong dated 12 November 2018 it is stated that (emphasis in original):
It is a requirement of registration with Land Registry Services (LRS) that the original WAL certificate be sent along with the signed 71M form for registration. I would therefore ask that you send to me the original WAL certificate 16552 in the enclosed envelope.
Mr Rose submitted that these documents do not prove any sale has occurred; and they do not even prove Mr Nomchong has any title to sell the water licence identified in the form of transfer. I agree. The documents appear to be nothing more than documents which a broker who has been instructed to sell a water licence requires to be signed and provided to him or her to enable the sale of the water licence. Further, there is omitted from Mr Nomchong’s affidavit any copy of the “WAL certificate” in relation to the water licence identified in the transfer. I infer that the “WAL certificate” is a document that evidences or constitutes title to the water licence. The omission of a copy of such certificate suggests Mr Nomchong has no title to the water licence. That impression is strengthened by their being no indication that Mr Nomchong signed the transfer and the “Permanent Sale Order” and returned those documents to Waterfind.
In the remainder of the 19 November affidavit Mr Nomchong says he is “unable to provide any valuation documentation re my plant equipment [sic]”, and that he was unable to arrange for a real estate valuer because there was insufficient time, and the valuers were too busy. Mr Nomchong annexes a “RP Automated Valuation” of the Property. Mr Nomchong also annexes what appear to be certificates of registration of what Mr Nomchong describes as “my vehicles”. The 19 November affidavit, however, does not disclose the extent of Mr Nomchong’s income or his debts, and in particular the amounts he is required to pay to service the debt he owes the bank and the $11,986.51 of unpaid strata levies that Mr Pouli has deposed Mr Nomchong owes SP6766.
Given these matters, I cannot be satisfied on the basis of what is contained in 19 November affidavit, whether considered alone or with the 19 October 2018 affidavit I have already considered, that Mr Nomchong is able to pay his debts.
Other sufficient cause?
As I have already noted, the other grounds stated in Mr Nomchong’s statement of grounds of opposition overlap entirely with the matters on which Mr Nomchong relied in his application to set aside the bankruptcy notice. In Nomchong v The Owners – Strata Plan No.6766,[24] I concluded Mr Nomchong does not have has any “counter-claim, set-off or cross demand” against SP6766 “equal to or exceeding the amount of the judgment debt”. Thus, the claim Mr Nomchong says he has against the executives of SP6766 or against SP6766 does not constitute a “sufficient cause” for not making a sequestration order.
[24] [2018] FCCA 3385
Conclusion and disposition
SP6766 has satisfied the matters necessary to enliven the power under s.52(1) of the Act to make a sequestration order. I am not satisfied Mr Nomchong is able to pay his debts; and I am not satisfied there is any sufficient cause why a sequestration order ought not be made against Mr Nomchong’s estate. I propose, therefore, to make such order. I also propose to order that SP6766’s costs be taxed and paid from the estate of Mr Nomchong in accordance with the Act.
I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis
Associate:
Date: 28 November 2018
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