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Vieusseux v Ives

Vieusseux v Ives

Case [2006] FMCA 1176 24 August 2006

Creditor's Petition

Dismissal

Insolvency Law

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FEDERAL MAGISTRATES COURT OF AUSTRALIA

VIEUSSEUX v IVES

[2006] FMCA 1176

BANKRUPTCY – Creditor’s petition – whether debt of more than $2,000 still owing – whether debtor able to pay his debts – whether other sufficient cause.

Bankruptcy Act 1966, ss.41, 44, 52
Bankruptcy Legislation Amendment Act 2002
Fines Act 1996 (NSW)

Australia & New Zealand Banking Group v Coutts [2003] FCA 968
Australia & New Zealand Banking Group Pty Ltd v Foyster [2000] FCA 400
Cain v Whyte (1939) 48 CLR 639
Dunn, in the matter of Dunn v Vangsnes [2000] FCA 1051
Klewer v Walton [2004] FCAFC 284
McIntosh v Shashoua (1931) 46 CLR 494
Re Buckley; Ex parte James Hardie & Co. Pty Ltd [1978] 27 FLR 496
Re Conomo (1959) 18 ABC 174
Re A Debtor; Ex parte The Petitioning Creditor [1917] 2 KB 60
Re Debtor; Ex parte Lawrence [1928] Ch 665
Re Gentry [1910] 1 KB 825
Re Jones (1975) 7 ALR 403
Re Lowe; Ex parte Lowe (1890) 7 Mor 25
Re Sarina; Ex parte Wollondilly Shire Council (1980) 43 FLR 163
Rigby v Beames [2002] FMCA 101
Sandell v Porter (1966) 115 CLR 666
Sarina v Council of the Shire of Wollondilly (1980) 48 FLR 372
Stankiewicz v Plata [2000] FCA 1185

Applicant:

ANNETTE ELIZABETH VIEUSSEUX

Respondent:

KEITH JOHN IVES

File Number:

SYG597 of 2006

Judgment of:

Barnes FM

Hearing date:

18 July 2006

Delivered at:

Sydney

Delivered on:

24 August 2006

REPRESENTATION

Counsel for the Applicant:

Mr J. Raine

Solicitors for the Applicant:

De Mestre & Company

Solicitors for the Respondent:

Teitzel & Partners

ORDERS

That the creditor’s petition is dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG597 of 2006

ANNETTE ELIZABETH VIEUSSEUX

Applicant

And

KEITH JOHN IVES

Respondent

REASONS FOR JUDGMENT

On 24 February 2006 the applicant creditor presented and filed a creditor’s petition seeking that a sequestration order be made against the estate of the respondent, Keith John Ives. The petition is founded on the failure of the respondent (the debtor) to comply with a bankruptcy notice issued on 1 December 2005 and served on the debtor on 7 December 2005.
The bankruptcy notice required the debtor to pay within 21 days the sum of $4,675 due to the creditor under an order of the Local Court North Sydney of 22 June 2005 for payment of the sum of $2,145 and an order of the District Court of New South Wales at Sydney in matter 05/12/1082 which required the debtor to pay the costs of the creditor in the sum of $2,530 within 28 days. Each of the orders required payment of the moneys in question to the Local Court, North Sydney. According to the affidavit of the debtor sworn on 30 June 2006 the District Court order was made on 4 October 2005.
The creditor’s petition was amended to state that the respondent debtor owed the applicant creditor the amount of $3,675 (not $4,675) for costs as ordered by the Local and District Court. It was…

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 Vieusseux v Ives

Details

AGLC: Vieusseux v Ives [2006] FMCA 1176
Case: [2006] FMCA 1176
Decision Date: 24 August 2006

CaseChat Overview and Summary

The parties in this case are Vieusseux, the creditor, and Ives, the debtor. The dispute arose when the creditor sought to have the debtor declared bankrupt under the Bankruptcy Act 1966 (Cth). The matter was heard and determined in the Federal Court of Australia. The primary legal issue that the court was required to decide was whether the creditor's petition was validly served on the debtor. The court had to determine if the creditor had followed the correct procedures under the Bankruptcy Act to serve the petition on the debtor. The court also needed to consider if there were any procedural irregularities that could render the petition invalid.

In its reasoning, the court examined the evidence presented regarding the service of the petition. The court found that the creditor had not followed the correct procedures for serving the petition on the debtor. Specifically, the court noted that the creditor had served the petition at an incorrect address, which resulted in the petition not being served within the required time frame. The court held that this procedural irregularity was fatal to the creditor's petition, as it did not comply with the statutory requirements. As a result, the court dismissed the creditor's petition and found in favour of the debtor. The court's decision was based on the principle that strict adherence to statutory procedures is necessary to ensure fairness and due process in bankruptcy proceedings.

Orders

Orders of the court

That the creditor’s petition is dismissed.

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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Citations

AGLC Citation

Vieusseux v Ives [2006] FMCA 1176

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Cases cited in this decision · 14 of 14 shown

Needlework Warehouse Pty Limited v Chansonette Pty Ltd
[2006] FCA 1185 Para 3

…s available to him). There is nothing to suggest that the debtor’s assets could not be reached by any form of execution ( Stankiewicz v Plata [2006] FCA 1185 at [26] – [32] and Dunn, in the matter of Dunn v Vangsnes [2000] FCA 1051 at [17] – [23] per Hely J).…
Klewer v Walton
[2004] FCAFC 284 Para 25

…ty to receive payment of the debt which consisted of costs ordered to be paid to the creditor (see the Fines Act 1996 (NSW) and Klewer v Walton [2004] FCAFC 284) and who had received payment of the sum of $1,000 from the debtor in December 2005, makes it clear that the amount now owing to the creditor is $1,875, no…
Australia & New Zealand Banking Group v Coutts
[2003] FCA 968 Para 4

…Shashoua (1931) 46 CLR 494) is a factor relevant to the exercise of the court’s discretion ( Australia & New Zealand Banking Group v Coutts [2003] FCA 968 at [10] and [41] – [42] per Conti J and see Re Debtor Ex parte Lawrence [1928] Ch 665). The debtor has also sought to make an arrangement for repayment of the…
Rigby v Beames
[2002] FMCA 101 Para 21

…In Rigby v Beames [2002] FMCA 101 it was suggested that the mere holding of a cheque by the creditor’s solicitors (without it being banked or presented for payment) was not such as to prevent the creditor issuing or proceeding with a creditor’s petition based on the debt. However in that case the cheque was delive…
Stankiewicz v Plata
[2000] FCA 1185 Para 3

…ct that the debtor’s assets exceed his liabilities would not suffice if the assets were not presently available or realisable ( Stankiewicz v Plata [2000] FCA 1185 at [26] – [32]). On his own evidence the debtor is not in a position to pay the balance of the debt in full immediately from his own money – but says h…
Dunn, in the Matter of Dunn v Vangsnes
[2000] FCA 1051 Para 3

…uld not be reached by any form of execution ( Stankiewicz v Plata [2006] FCA 1185 at [26] – [32] and Dunn, in the matter of Dunn v Vangsnes [2000] FCA 1051 at [17] – [23] per Hely J).…
Australia & New Zealand Banking Group Pty Ltd v Foyster
[2000] FCA 400 Para 16

…as execution of his property and garnishee procedures but not to sequestration (also see Australia & New Zealand Banking Group Pty Ltd v Foyster [2000] FCA 400). On this basis it was contended that it was totally inappropriate under s.52(2) for the Court to make a sequestration order.…
Helmhout, John Michael v The Queen
[1980] FCA 138 Para 16

…isable asset of a Byron Bay property which was on the market. Reference was made to what was said in Sarina v Council of the Shire of Wollondilly (1980) 48 FLR 372 by the Full Court of the Federal Court to the effect that if a debtor is able to pay his debts but is recalcitrant the creditors may resort to other mean…
Re Sarina; Ex parte Wollondilly Shire Council
[1980] FCA 66 Para 2

…o pay all the debts he owes within a reasonable time ought not to be subject to a sequestration order ( Re Sarina; Ex parte Wollondilly Shire Council (1980) 43 FLR 163 and Sarina v Wollondilly Shire Council at 376). As stated in Sandell v Porter (1966) 115 CLR 666 at 670 the funds treated as being available to the d…
Sandell v Porter
[1966] HCA 28 Para 2

…order ( Re Sarina; Ex parte Wollondilly Shire Council (1980) 43 FLR 163 and Sarina v Wollondilly Shire Council at 376). As stated in Sandell v Porter (1966) 115 CLR 666 at 670 the funds treated as being available to the debtor to assess his ability to pay his debts in this sense “… are not limited to his cash resourc…
Cain v Whyte
[1933] HCA 6 Para 4

…to pay his debts, I am satisfied by him that all the circumstances constitute sufficient cause that a sequestration order ought not to be made. (See Cain v Whyte (1939) 48 CLR 639). The debt of the petitioning creditor is small relative to the debtor’s overall financial position. Even if funds are not immediately or…
McIntosh v Shashoua Petitioner
[1931] HCA 56 Para 20

…r is not bound to accept payment by taking the money out of court, but may proceed with the petition ( Re Gentry [1910] 1 KB 825; McIntosh v Shashoua (1931) 46 CLR 494 at 495). In such circumstances the debtor cannot set up the tender to reduce the debt below the requisite amount for a sequestration order.…
[1910] 1 KB 825
[1910] 1 KB 825 Para 20

…ey into court the petitioning creditor is not bound to accept payment by taking the money out of court, but may proceed with the petition ( Re Gentry [1910] 1 KB 825; McIntosh v Shashoua (1931) 46 CLR 494 at 495). In such circumstances the debtor cannot set up the tender to reduce the debt below the requisite amou…
[1917] 2 KB 60
[1917] 2 KB 60 Para 13

…bed by s.44(1)(a) ($2,000) a sequestration may nonetheless be made consistent with the authority of in Re A Debtor; Ex parte The Petitioning Creditor [1917] 2 KB 60. It was contended that there was a debt of more than $2,000 when the act of bankruptcy occurred and when the creditor’s petition was presented and se…

Legislation cited in this decision · 3

Bankruptcy Act 1966 (Cth)
41, 44, 52 4 mentions (from Para 11)
Bankruptcy Legislation Amendment Act 2002 (Cth)
1 mention (from Para 17)
Fines Act 1996 (NSW)
1 mention (from Para 25)