Thompson v Baycorp Collections PDL (Australia) Pty Limited

[2015] FCCA 37

FEDERAL CIRCUIT COURT OF AUSTRALIA

THOMPSON v BAYCORP COLLECTIONS PDL (AUSTRALIA) PTY LIMITED [2015] FCCA 37

Catchwords:
BANKRUPTCY – Application for review of decision by registrar to make sequestration order.

Legislation:

Bankruptcy Act 1966, ss.40(1); 40(1)(g); 43; 44

Federal Circuit Court Act 1999, s.104

Federal Circuit Court Rules, r.20.03.

Applicant: DAVID ALEXANDER THOMPSON

Respondent: BAYCORP COLLECTIONS PDL (AUSTRALIA) PTY LIMITED

File Number: ADG 321 of 2014

Judgment of: Judge Brown

Hearing date: 9 January 2015

Date of Last Submission: 9 January 2015

Delivered at: Adelaide

Delivered on: 9 January 2015

REPRESENTATION

Counsel for the Applicant: Mr Thompson

Solicitors for the Applicant: In Person

Counsel for the Respondent: Ms McGuire

Solicitors for the Respondent: Clarke Kann, Lawyers

ORDERS

1. The application for review of the Registrar’s decision of 10 November 2014 be dismissed and the sequestration order be confirmed.

2. Costs of the application be paid in accordance with section 109 of the Bankruptcy Act 1966.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT ADELAIDE

ADG 321 of 2014

DAVID ALEXANDER THOMPSON

Applicant

And

BAYCORP COLLECTIONS PDL (AUSTRALIA) PTY LIMITED

Respondent

REASONS FOR JUDGMENT

Introduction

1. This is an application for a review of a decision, made by Registrar Bochner, on 10 November 2014 to make a sequestration order against the Estate of David Thompson.

2. The original petitioner for the sequestration order was Baycorp Collections PDL Pty Ltd “Baycorp”.  The sequestration order was made pursuant to powers conferred upon the court by the Bankruptcy Act (1966) “the Act”.

3. Mr Thompson seeks that the sequestration order be set aside.  He asserts that he is not insolvent.  Baycorp opposes this application and asserts that Mr Thompson has not paid monies due to it pursuant to a judgement debt entered in its favour.

4. The specific power to make a sequestration order is one which has been delegated to registrars of the court.

5. The application for review was filed, by Mr Thompson, on 28 November 2014 and is made pursuant to the provisions of section 104 of the Federal Circuit Court Act 1999.  

6. In general terms, the section authorises this court to review any relevant decision of a registrar in respect of a delegate power. 

7. Pursuant to rule 20.03 of the Federal Circuit Court Rules, such a review is to proceed by way of a hearing de novo.  As such, this is not an appeal from the Registrar’s decision.  Rather I must consider afresh the relevant material. 

The relevant material

1. On 3 August 2012, Baycorp obtained judgement, in the sum of $38,388.89, against Mr Thompson, in the Magistrates’ Court of South Australia.  This sum comprised a claimed amount of $38,388.89 together with costs in an amount of $1,642.00.

2. Mr Thompson does not assert anything other than this judgement debt has not as yet been satisfied.  On 13 May 2014, Baycorp issued a Bankruptcy Notice against Mr Thompson seek payment of the monies due to it pursuant to the judgement entered in its favour together with additional costs in the sum of $3,410.76.

3. The notice stipulated that the sum of $41,799.65 was to be paid by Mr Thompson, to Baycorp, within 21 days of service of the notice or otherwise that Mr Thompson was required to enter into an arrangement to pay the sum in question, which was satisfactory to Baycorp.

4. The situations, in which a person is taken to have committed an act of bankruptcy, are set out in section 40(1) of the Act.  In particular, pursuant to section 40(1)(g), a person commits an act of bankruptcy if a creditor obtains a final judgement, which remains unpaid following service of a demand for payment and it cannot be demonstrated, by the debtor in question that the payment of the judgement has been stayed or there is some form of cross claim or set off in respect of it. 

5. Baycorp asserts that Mr Thompson failed to comply with the notice served upon him and therefore had committed an act of bankruptcy, which entitled it to petition the court to make a sequestration order against the estate of Mr Thompson. 

6. The court’s jurisdiction to make a sequestration order is contained in section 43 of the Act.   The petitioning creditor needs to establish that the respondent, to any such petition, has committed an act of bankruptcy.

7. The conditions precedent, for a creditor’s petition, are set out in section 44 of the Act.  They are as follows:

   ·The debt owed is more than $5,000.00;

   ·The debt is a liquidated sum, due at law;

   ·Is payable immediately or at a certain future time;

   ·The act of bankruptcy, on which the petition is founded, occurred within six months of the presentation of the petition.

8. The petition was filed on 26 August 2014.  The act of bankruptcy relied upon was the failure to satisfy the demand for payment of the judgement debt. 

9. The petition is supported by an affidavit filed by Darryl Macey, which was deposed on 25 August 2014.  Mr Macey is a manager employed by Baycorp.   He filed a further affidavit on 10 November 2014 in which he deposed that the monies owed to Baycorp remained outstanding.

10. An affidavit of service was filed on 26 August 2014, which indicates that the bankruptcy notice was served on Mr Thompson on 27 May 2014.  I find the relevant act of bankruptcy therefore occurred on 17 June 2014.

11. There is a further affidavit of Pallav Lodha filed 10 November 2014 which indicates Mr Thompson was informed of the hearing of 10 November 2014, as Registrar Bochner ordered.

The current application

1. Mr Thompson’s application was made returnable before me on 16 December 2014.  He appeared in person to argue the review application.  He deposed an affidavit in support of his application for review.

2. He deposed that he had requested Baycorp to extend the time for him to repay the debt but this request had been declined.  He further deposed that he had not attended court on 10 November because he had made a complaint to the Financial Services Ombudsman concerning Baycorp’s conduct and had thought that this complaint acted as a stay of the bankruptcy proceedings.

3. However the main thrust of his application was that he was not insolvent as one of his clients in Thailand was due to pay him a significant sum of money, in a few days’ time, and therefore he could not be regarded as being insolvent.  He did not assert that the monies were not due to Baycorp or that the debt was not then outstanding.  His submission was that the debt would be discharged very shortly.

4. On 16 December 2014, I indicated to Mr Thompson, on the basis of the evidence available to me, I could not see how the sequestration order should not have been made.  A demand for the repayment of the judgement debt had been made, which had not been complied with.  The judgement in question had been outstanding for over two years.

5. However, for pragmatic reasons – chiefly so that the debt could, if possible be paid as soon as possible and in full, I adjourned the proceedings and the delivery of these reasons for judgment until 9 January 2015 to see if the monies had arrived from Thailand and arrangements could be made with Baycorp, by Mr Thompson, to settle the debt.

6. Today, Mr Thompson advises me that the monies have not arrived as he had indicated they would.  He indicated further that his client and its officers were very apologetic about this, both to this court and to Baycorp.  On this basis, he seeks a further short adjournment of the proceedings.

7. Ms McGuire, counsel for Baycorp, is not prepared to agree to a further adjournment.  Given the lengthy period, the debt has been outstanding, including the fact that the original hearing of the petition was deferred, I am not prepared to grant a further adjournment.  In all these circumstances, I have come to the conclusion that the application for review should be dismissed.

8. For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.

I certify that the preceding twenty six (26) paragraphs are a true copy of the reasons for judgment of Judge Brown

Associate:     

Date:                  13 January 2015