Vasiliou v Tasiopoulos Lambros and Co

[2004] FMCA 572

FEDERAL MAGISTRATES COURT OF AUSTRALIA

VASILIOU v TASIOPOULOS LAMBROS & CO [2004] FMCA 572

BANKRUPTCY – Bankruptcy notice – no ground for setting aside.

Bankruptcy Act1966
Magistrates Court Act 1986
Penalty Interest Rates Act1983

Applicant: ANDREW VASILIOU

Respondent: TASIOPOULOS LAMBROS AND CO

File No: MLG 756 of 2004

Delivered on: 30 August 2004

Delivered at: Melbourne

Hearing Date: 30 August 2004

Judgment of: Phipps FM

REPRESENTATION

Mr A. Vasiliou appeared on his own behalf

Counsel for the Respondent: Mr Howas

Solicitors for the Respondent: Tasiopoulos Lambros & Co.

ORDERS

1. That the application filed 4 August 2004 to review the registrar's order of 2 August 2004 is dismissed.

2. That the applicant pay the respondent's costs of the application.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 756 of 2004

ANDREW VASILIOU

Applicant

And

TASIOPOULOS LAMBROS AND CO

Respondent

REASONS FOR JUDGMENT

1. This is an application to review a decision of Registrar Mussett made on 2 August 2004.  By the registrar's order, she dismissed an application by the applicant to set aside a bankruptcy notice.  The application was filed on 15 June 2004 and it concerned a bankruptcy notice which had been filed by the respondents with the Official Receiver on 6 June 2003.  The total amount that was sought for payment under that bankruptcy notice is $32,450.17 consisting of a judgment or order of $23,220.82 which was made in the Magistrates Court at Melbourne on 25 January 2000.  The balance of the amount, $9,229.35, is interest pursuant to the Magistrates Court Act 1986 and the Penalty Interest Rates Act1983.  The application to review the decision of the registrar is by way of rehearing.

2. There is a dispute about the time of service and indeed there is actually a dispute about service.  So far as it might be relevant to this application, the bankruptcy notice required payment of the debt within 21 days.  Under s.41(6)(a) and possibly (7) there is a need for a person served with a bankruptcy notice to apply within the time fixed for payment, in this case 21 days, to set aside the bankruptcy notice, otherwise they will have committed an act of bankruptcy.  There is an affidavit of service filed and if the date of service deposed to in that affidavit of service is correct, it appears that the application is out of time.  But there is a dispute about service and it is not a dispute which is necessary to resolve for the purposes of this application.

3. The issue which does decide this application is whether there is a valid judgment with any significant prospect of it being set aside or any prospect at all of it being set aside.  The evidence before the court is a combination of what is contained in affidavits of the applicant and what I have been told as agreed matters from the bar table.  The applicant appears for himself and Mr. Howas appears for the respondent.

4. The relevant matters are these.  Judgment was obtained on 25 January 2000 in the Magistrates Court at Melbourne.  That was a default judgment.  The applicant, the debtor, applied to set aside that default judgment, and when that came on for hearing in the Melbourne Magistrates Court on 8 March 2000, the applicant debtor was not present and so the application was refused.  What he sets out in his affidavits is that he was unwell at that stage and there was a period when he was hospitalised.  Subsequent to the service of the bankruptcy notice on him, he made the application to this court to set aside the bankruptcy notice filed on 15 June 2004.  He then made a further application to the Magistrates Court at Melbourne to set aside the judgment debt.  That came on for hearing, originally on 1 July 2004 and it was then adjourned to 26 July 2004.  On 26 July 2004, that application was refused.  The applicant has now made an application to the Supreme Court which he describes as an appeal to the Supreme Court but which might be more correctly be described as an application for leave to appeal.

5. The bankruptcy notice itself is otherwise a valid bankruptcy notice.  No submissions have been put by the applicant disputing the validity of the bankruptcy notice other than about the existence of the debt.  The bankruptcy notice does appear to be otherwise valid.  The basis for the issue of the bankruptcy notice as set out in sub-s.41(g) of the Bankruptcy Act1966 is that a creditor has obtained against a debtor a final judgment or order which has not been stayed.  The additional provision contained in that subsection is that the debtor may satisfy the court that he or she has a counterclaim, set‑off or cross‑demand equal to the judgment debt which could not have been set up in the proceedings in which the judgment or order was obtained.

6. The existence of the debt itself is not an issue for this court.  The issue for this court is whether there is a judgment debt.  Other than a dispute about the debt there is, as far as I can see, no claim that there is a counterclaim or set‑off which could not have been set up in the proceedings.  From what the applicant has told me from the bar table, the debt is legal fees.  He disputes whether the amount of work was done for which the money is claimed and whether it was done competently.  Whatever defences might arise out of those two things, they could all have been raised in the proceedings in which the judgment or order was obtained.

7. There is then an order of the State Magistrates Court which, on the face of it, was properly entered as a default judgment on 25 January 2000.  There have been two applications to set it aside.  On the second one, the applicant debtor appeared and the application was dismissed.  He has now applied for leave to appeal to the Supreme Court, or he has appealed to the Supreme Court.  He has not put before this court anything which might suggest that that appeal is likely to succeed.

8. I also note that there are decisions by the Federal Court that on an application to set aside a bankruptcy notice, what the court is dealing with is the validity of the bankruptcy notice and whether the requirement of the existence of a judgment or order for a debt has been satisfied.  The circumstances in this case is that there is a valid order in existence of the Melbourne Magistrates Court of Victoria for an amount of $23,220.82.  Interest pursuant to statute brings that total amount to $32,450.17.  A recent application has been made to set aside that order and it has not succeeded.  There is therefore no basis for challenging the bankruptcy notice.  The decision of the registrar is correct.  The application to review the registrar's decision is dismissed.

9. Application has been made on behalf of the respondent for costs.  There is no reason in this case why the ordinary rule as to costs should not apply.

I certify that the preceding Nine (9) paragraphs are a true copy of the reasons for judgment of Phipps FM

Associate:  Sherryn Kwong

Date:  7 September 2004