Wagener v Di Iorio

[2015] FCCA 322

FEDERAL CIRCUIT COURT OF AUSTRALIA

WAGENER v DI IORIO [2015] FCCA 322

Catchwords:
BANKRUPTCY – Application to review sequestration order made by Registrar – act of bankruptcy proved – sequestration order properly made – application for review dismissed.

Legislation:  

Bankruptcy Act 1966, s.52
Queensland Civil and Administrative Tribunal Act 2009 (Qld), ss.131, 164(1)

Owen v Menzies [2013] 2 Qd R 327

Applicant: GARY SEAN WAGENER TRADING AS WAGENER BUILDING SERVICES

Respondent: PETER DI IORIO TRADING AS DI IORIO HOMES

File Number: BRG 814 of 2014

Judgment of: Judge Jarrett

Hearing date: 9 February 2015

Date of Last Submission: 9 February 2015

Delivered at: Brisbane

Delivered on: 9 February 2015

REPRESENTATION

The Applicant appearing on his own behalf

Counsel for the Respondent: Mr Garlick

Solicitors for the Respondent: Q.A.S Legal House

ORDERS

1. The application is dismissed.

2. The applicant pay the first respondent’s costs of and incidental to the application to be taxed and paid in accordance with the Federal Circuit Court (Bankruptcy) Rules 2006.

FEDERAL CIRCUIT COURT
OF AUSTRALIA

AT BRISBANE

BRG 814 of 2014

GARY SEAN WAGENER TRADING AS WAGENER BUILDING SERVICES

Applicant

And

PETER DI IORIO TRADING AS DI IORIO HOMES

Respondent

REASONS FOR JUDGMENT

ex tempore

1. On 27 September, 2010 the Magistrates Court of Queensland at Coolangatta gave judgment against the applicant before me in favour of the respondent.  The judgment was for $8240 and was based upon a decision of the Queensland Civil and Administrative Tribunal. 

2. The registration of the QCAT decision in the Coolangatta Magistrates Court was authorised by s.131 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld). That section provides that, upon registration, the judgment can be enforced as if it were a judgment of the court in which it was registered.

3. There was subsequently issued by the respondent against the applicant a bankruptcy notice. The bankruptcy notice is based upon the judgment of the Magistrates Court at Coolangatta. The bankruptcy notice is in the usual form and in these proceedings no complaint is made about the form of the bankruptcy notice or the judgment attached to it.

4. The bankruptcy notice required compliance within 21 days of service of it upon the applicant. The bankruptcy notice was issued on 12 August, 2014 and served upon the applicant on 13 August, 2014. He, therefore, had until 2 September, 2014 to comply with its terms. It does not seem to be in dispute that he did not comply with its terms. So, on 3 September, 2014 the applicant committed an act of bankruptcy.

5. The creditor has issued a creditor’s petition relying upon that act of bankruptcy.  The creditor’s petition was filed on 16 September, 2014.  There is, again, seemingly no dispute that the creditor’s petition was served on the applicant.  He did not appear when the creditor’s petition was returned to the Court.  On 23 October, 2014 Registrar Baldwin, exercising the jurisdiction of this Court, made a sequestration order against the estate of the applicant.

6. Whilst the applicant accepts that he was served with the creditor’s petition, he says that he did not read it and so he did not know that he had to come to court on 23 October, 2014.  He says that had he read the material that he admittedly received, he might have come along to court.  But for reasons best known to him, he did not read the material served on him, and he did not come to court. 

7. He is entitled to apply for a review of the registrar’s decision and has an entitlement to do that as of right if his application for review is made within 21 days of the date of the order against which the review is sought.  Here he filed an application for review on 13 November, 2014.  It was not within the 21 day time limit, but this Court has power to extend the time within which to file that application if it thinks in the circumstances of the case an extension should be granted.

8. The granting of an extension of time to file a document, such as an application for review, is a discretionary exercise and there are a number of matters which might inform the exercise of the discretion.  For example, the length of the delay, the reasons for the delay and whether any purpose is to be served in granting the extension that is sought.  That last ground generally requires some examination of the merits of the application that is sought to be filed out of time.

9. As to the first matter here, the delay is not very great.  There is, however, no explanation for the delay.  There is nothing in the affidavit material that I have read which would explain why the applicant delayed filing the application.  Even if there is no reason for the delay, the Court is unlikely to shut out a legitimate claim - - -

RECORDED     :   NOT TRANSCRIBED

1. As I was saying, the Court will not shut out a good claim that has prospects of success, even though there is no explanation for the delay in bringing the application that a person wishes to prosecute.  The difficulty for the applicant in this case is that his claim has no prospect of success for these reasons:  first, whilst a bankruptcy court has a discretion to go behind a judgment upon which a bankruptcy notice is based, it ordinarily does not exercise that jurisdiction.  There must be a good reason for doing so.

2. In cases involving fraud or fresh evidence, the Court will examine a judgment upon which a bankruptcy notice is based, but not always. It depends upon the strength of the case. Where there is no fraud or collusion or fresh evidence or anything of that nature raised, then a bankruptcy court is generally loathe to go behind a decision of another court which has heard a proper argument from each of the parties entitled to make it and made a decision on the merits of the claim. The Court is more likely to go behind a judgment of a court which is made by default.

3. The judgment here, which registers a decision of QCAT, is a judgment. Moreover, the decision of QCAT is a judgment of a court. The Queensland Civil and Administrative Tribunal is, despite its name, a court: s.164(1) of the QCAT Act. In Owen v Menzies [2013] 2 Qd R 327 the Court of Appeal held that QCAT is a State court capable of exercising federal power for the purposes of Chapter III of The Constitution. So here we have a decision of a state court which was made after proper argument from each of the parties entitled to present it.

4. The applicant before me confirmed, when I asked him, that he made to QCAT all of the arguments that he makes now.  The difficulty for him is that they were determined against him by QCAT.  They must have been determined against him by QCAT, because QCAT made an order against him.  He has had the opportunity and has taken up the opportunity to appeal the orders of QCAT, and those opportunities have not led to the orders of QCAT being set aside.

5. There is, in my view, no reason demonstrated in the material or the argument to go behind the judgment upon which the bankruptcy notice in this case is based.

6. To the extent that the applicant seeks to argue that he had a counter-claim or cross-demand that he might agitate against the respondent in this case – this is after all, at its genesis, a building dispute – the applicant has had the opportunity to agitate his cross-claim or his counter-claim in the QCAT proceedings.  It is only a cross-claim, cross-demand or a set-off which could not be raised in the original proceedings that attracts a bankruptcy court’s attention when it comes to consider whether an act of bankruptcy has been committed through the failure to comply with a bankruptcy notice.

7. In this case, there is an act of bankruptcy.  A cross-claim could have been raised in QCAT and from the sounds of the argument made to me, it was, and it was rejected. 

8. In those circumstances, I am satisfied that on 3 September, 2014 the applicant committed an act of bankruptcy. I am satisfied that the bankruptcy notice is in valid form. I am satisfied that he has been served with a creditor’s petition in this case. I am satisfied of the formal matters of which I need to be satisfied under s.52 of the Bankruptcy Act1966.

9. There is no good reason not to make a sequestration order.  The Registrar was right to do so. 

10. The application for review fails. The application is therefore dismissed.

RECORDED     :   NOT TRANSCRIBED

1. The ordinary rule is costs should follow the event unless there are special circumstances to demonstrate that that rule is not appropriate. There are no special circumstances here. Costs should follow the event.

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of Judge Jarrett

Associate: 

Date:       16 February 2015