Westpac Banking Corporation v Strangio
[2008] FMCA 1102
•28 July 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WESTPAC BANKING CORPORATION v STRANGIO | [2008] FMCA 1102 |
| BANKRUPTCY – Adjournment of creditor’s petition sought and refused – sequestration order made. |
| Bankruptcy Act 1966 (Cth) |
| Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137 |
| Applicant: | WESTPAC BANKING CORPORATION |
| Respondent: | BRUNO STRANGIO |
| File Number: | MLG 1702 of 2007 |
| Judgment of: | Hartnett FM |
| Hearing date: | 28 July 2008 |
| Delivered at: | Melbourne |
| Delivered on: | 28 July 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr C J Nichol |
| Solicitors for the Applicant: | Gadens Lawyers |
| Counsel for the Respondent: | Mr K A Boden |
| Solicitors for the Respondent: | Starnet Legal Pty Ltd |
ORDERS
Upon hearing the Creditor’s Petition filed 14 December 2007 a sequestration order is made against the estate of Mr Bruno Strangio.
Mr Paul Anthony Pattison be appointed as Trustee of the bankrupt estate of Mr Bruno Strangio.
The costs of these proceedings including all reserved costs be taxed and paid in accordance with the Bankruptcy Act 1966 (Cth).
NOTATION
The date of the act of bankruptcy is 26 October 2007.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 1702 of 2007
| WESTPAC BANKING CORPORATION |
Applicant
And
| BRUNO STRANGIO |
Respondent
REASONS FOR JUDGMENT
A creditor’s petition was filed on 14 December 2007. It was first returnable on 26 February 2008. The petition was founded upon the failure to comply with a Bankruptcy Notice number VN1747/07 served upon the respondent on 5 October 2007. That bankruptcy notice claimed the respondent owed a debt to the applicant creditor in the amount of $36,144.75, being the amount due and payable by the respondent debtor to the applicant creditor pursuant to an order made on 20 July 2007 in proceedings numbered C1-2203 of 2006 in the County Court of Victoria at Melbourne in the sum of $36,144.75.
Part 2 of the Creditor’s Petition contained an affidavit verifying the petition, paragraphs 1, 2 and 3. An affidavit verifying paragraph 4 of the petition was sworn by Mr Robert Thomas Hinton on the 14th day of December 2007. Filed in court this day were two further affidavits relied upon being an affidavit of search sworn by Robert Thomas Hinton on 28 July 2008 and an affidavit of the ongoing indebtedness of the respondent sworn 28 July 2008 by Mr Ciriaco Nigro.
In response to the Creditor’s Petition, the respondent filed a notice of conditional appearance on 25 February 2008 and a notice stating grounds of opposition to the Creditor’s Petition. An affidavit supporting the grounds of opposition was filed by Mr Strangio on 25 February 2008 and sworn by him on that day.
The first ground raised in the notice of opposition was that the Creditor’s Petition had not been served upon the respondent. The court is satisfied that service was effected upon the respondent. The court accepts the evidence that is contained in the affidavits of Ms Sarah Jane Worsfield sworn the 22nd day of February 2008 and 26 February 2008, together with the affidavits of Ms Louise Mary Rhodes sworn 22 February 2008 and 25 February 2008. No challenge was made by the respondent to this affidavit material on the hearing of the Creditor’s Petition this day.
The second ground of opposition as raised by the respondent debtor was that the Creditor’s Petition was based upon a failure to comply with a bankruptcy notice, number BN 1747 of 2007, which he deposed was the subject of an appeal to the Federal Court of Australia arising out of a decision of Burchardt FM delivered on 18 February 2008. In fact no appeal against the decision of Burchardt FM was lodged in the Federal Court.
A further ground of opposition was that the hearing of the Creditor’s Petition should be adjourned pending the determination of an application for judicial review of the orders made by Judge Holt on 21 May 2007 such application being then returnable in the Supreme Court of Victoria on 1 April 2008. Judgment has been handed down in those proceedings. On 3 July 2008 Her Honour Williams J delivered judgment in proceeding number 6701 of 2007 dismissing the respondent's application for judicial review.
I note that the respondent has appealed against the decision of Her Honour Williams J. I accept the evidence, as set out in the affidavit sworn by Mr Robert Thomas Hinton of 28 July 2008 that on 21 July 2008 Westpac Banking Corporation was served with a signed notice of appeal. That notice of appeal was served four days late. As at this day, no application for an extension of time to serve the notice of appeal out of time has been served on Westpac Banking Corporation. I reject the evidence of the respondent which was changing and contradictory in its nature and as the transcript would reveal fashioned to meet the case against him.
Finally, the respondent debtor asserted in his notice stating grounds of opposition to the Creditor’s Petition that he was solvent. The affidavit in support of that notice had only one relevant paragraph as to the respondent debtor's solvency. It was paragraph 8 and is as follows:
Finally, I deny any suggestion that I am insolvent and wish to be given an opportunity to prove my solvency. I am currently unable to attend to any of my personal and business affairs due to my medical unfitness. I am currently undergoing medical treatment as a result of being seriously injured after I was violently attacked in December 2007.
That affidavit was sworn on 25 February 2008 and no other or further evidence has been put before the court as to the respondent debtor's solvency. None was sought to be put before the court this day. I reject in that affidavit the evidence that the respondent was not served with the Creditor’s Petition, as set out by him in paragraph 7. The balance of that affidavit goes to matters which have already been dealt with by Her Honour Williams J in her decision of 3 July 2008 and to Burchardt FM's decision of 18 February 2008 (that federal magistrate hearing an application for review of the decision of a registrar on 3 December 2007).
At the commencement of these proceedings the respondent sought an adjournment to a date after the handing down of judgment in the matter of his appeal in the Supreme Court of Victoria Court of Appeal against the decision of Williams J made 3 July 2008. The notice of appeal appears to have a court stamp on it dated 24 July 2008, although this is almost indecipherable. There is no file number accompanying the notice of appeal and it is difficult to determine whether its lodgment is complete. But for present purposes nothing turns on that. Mr Strangio filed two affidavits this day, the first prior to lunchtime and the second after the luncheon adjournment.
The applicant Creditor’s Petition is erroneously stated by the respondent to be based upon a series of three interrelated orders obtained by the applicant against him in proceedings which had been listed in the County Court of Victoria at Melbourne. The petition is based upon the failure to comply with a bankruptcy notice within time, which is founded in a costs order made against the respondent by Judge Holt. The notice of appeal tendered in evidence refers to three different proceedings and claims and, with respect to the relevant proceeding, that Mr Strangio was denied natural justice by Judge Holt on 21 May 2007.
History
On 21 May 2007 the relevant proceeding between Westpac Banking Corporation applicant, and Mr Bruno Strangio respondent, was heard in the County Court of Victoria by his Honour Judge Holt. Judge Holt ordered the respondent to pay the costs of the applicant from 24 April 2007 to 21 May 2007 of and incidental to preparation for trial, including costs of 21 May 2007, and costs of and incidental to mediation on 15 May 2007, on scale D on a solicitor‑client basis. Further Judge Holt ordered that the respondent pay the costs referred to within 14 days of agreement of the parties or, failing agreement, as taxed.
On 20 July 2007 Registrar Deviny of the County Court of Victoria ordered that the costs be taxed and allowed in the sum of $36,144.75. On 7 August 2007 the applicant issued a bankruptcy notice based on the orders of Judge Holt made on 21 May 2007 and Registrar Deviny made on 20 July 2007. On 25 October 2007 the respondent filed an application for extension of time to comply with the bankruptcy notice and the proceeding was allocated number MLG1239/07.
On 13 November 2007 Registrar Hetyey ordered that the hearing of the application for extension of time be adjourned to 3 December 2007 and the respondent was to file a further affidavit (an affidavit having been sworn by Kimani Adil Boden in support of the application upon filing) detailing the basis for the application to set aside the order of the County Court and the status of the application by 21 November 2007.
On 3 December 2007 Registrar Luxton ordered that the respondent's application be dismissed. On 10 December 2007 the respondent issued an application for review of the registrar's decision. On 18 February 2008 Burchardt FM dismissed the respondent's application for review.
On 14 December 2007 the applicant issued a Creditor’s Petition and on 25 February the respondent filed a notice of conditional appearance and notice stating the grounds of opposition to the Creditor’s Petition. The respondent contended the proceedings should be adjourned pending the determination of proceeding number 6701 of 2007 in the Supreme Court and a proposed appeal to the Federal Court of Australia arising out of the decision of Burchardt FM delivered on 18 February 2008, which it transpired was not proceeded with.
The Supreme Court proceeding was listed for hearing on 1 April 2008. That trial proceeded on the 1st, 2nd, 3rd and 24th days of April 2008 with judgment being delivered on 3 July 2008. The Creditor’s Petition proceedings in this court were adjourned on 26 February 2008, 8 April 2008, 9 May 2008, the 2nd and 30th days of June 2008 and a further request for an adjournment was made this day. All of that is set out in an affidavit sworn by Robert Thomas Hinton on 28 July 2008, on which the applicant relies.
There is filed a consent to act and trustee declaration dated 13 December 2007 by Paul Anthony Pattison, a registered trustee within the meaning of section 5 of the Bankruptcy Act 1966 (Cth) (section 156A(1)) (“the Act”).
The determination as to whether or not to grant an adjournment in the proceedings is a discretionary one. Whilst the court is mindful that it should not proceed to sequestrate the estate of a debtor where an appeal is pending against the judgment relied on as the foundation of the bankruptcy proceedings, in this case the judgment relied on as the foundation of the bankruptcy proceedings is a judgment of Judge Holt and nowhere is there evidence before the court that the appeal to the Court of Appeal in the Supreme Court of Victoria is based on genuine and arguable grounds (Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137 at 148). The respondent debtor has had ample opportunity to place such evidence before the court including any as contained in the two affidavits relied upon and filed this day. No material persuasive of the granting of an adjournment or that could even properly found such an application was before the court.
Having determined to refuse the application for an adjournment the court proceeded to hear the petition. Each of the grounds of opposition are rejected. All formal evidence as necessary has been filed and the court is satisfied with the proof of those matters. No opposition to the granting of the petition was put in submissions made by Counsel for the respondent. The court exercises the discretion conferred by section 52 of the Act in favour of the petitioning creditor.
I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of Hartnett FM
Deputy Associate: Kate Gray
Date: 1 August 2008