Williams v Workcover Corporation of SA

[2014] FCCA 210

FEDERAL CIRCUIT COURT OF AUSTRALIA

WILLIAMS v WORKCOVER CORPORATION OF SA [2014] FCCA 210

Catchwords:
BANKRUPTCY – Review of Registrar’s decision – application for review dismissed – sequestration order affirmed.

Legislation:

Bankruptcy Act 1966 (Cth), ss.43, 44(1)(a) & (c), 47(1) & 109

Federal Circuit Court (Bankruptcy) Rules 2006 (Cth), rr.4.02(2), 4.04(1)(a) & 4.05

Applicant: TERENA KIM WILLIAMS

Respondent: WORKCOVER CORPORATION OF SOUTH AUSTRALIA

File Number: ADG 167 of 2013

Judgment of: Judge Simpson

Hearing date: 24 January 2014

Date of Last Submission: 24 January 2014

Delivered at: Adelaide

Delivered on: 24 January 2014 (ex tempore)

REPRESENTATION

The Applicant: In person

Counsel for the Respondent: Mr S Thomas

Solicitors for the Respondent: Hudson Lawyers

ORDERS

1. The application for review of the Registrar’s decision of 2 December 2013 is dismissed.

2. The sequestration order of Registrar Bochner of 2 December 2013 is affirmed.

3. The costs of Workcover Corporation of SA of and incidental to the Application for Review be taxed and paid in accordance with s.109 of the Bankruptcy Act 1966 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT ADELAIDE

ADG 167 of 2013

TERENA KIM WILLIAMS

Applicant

And

WORKCOVER CORPORATION OF SOUTH AUSTRALIA

Respondent

REASONS FOR JUDGMENT

(Settled ex tempore reasons)

1. I have before me an application for review brought by Terena Kim Williams on 23 December 2013.  The review is of a decision of Registrar Bochner made on 2 December 2013, at which time the learned Registrar made a sequestration order against the estate of Ms Williams and ordered that she pay the applicant creditor’s costs. 

2. The applicant creditor, Workcover Corporation, seeks orders that the application for review be dismissed and that there be a continuation of the sequestration order made under s.43 of the Bankruptcy Act1966 (Cth) (“the Act”) against the estate of Ms Williams.

3. The application for review says in relation to the ‘Orders Sought to be Reviewed’:

   “On 3 December, I received a phone call from BRI Ferrier informing me that, as from 2 December, I was bankrupt.  I never received any correspondence regarding the hearing or date so I was not able to represent myself.  Workcover and/or Hudson Lawyers were court ordered to inform me of the hearing date but did not comply.”

   The applicant says in the section of the application for review concerning the orders sought:

   “May I request the previous order to be annulled and have the opportunity to seek legal advice and representation?  I would appreciate any help in this matter.”

4. It is unnecessary for the applicant to seek an order that the order made by Registrar Bochner be annulled as the review today is a hearing de novo and gives the applicant the opportunity of putting whatever submissions she wishes.  It was unfortunate that the applicant was not able to attend on the occasion when the sequestration order was made, however, there is no prejudice to her as we are having a hearing de novo and she has the opportunity of putting her case.

5. The applicant relied on her affidavit that was filed on 20 January 2014.  In the affidavit she stated:

   “On 3 December 2013, I received a phone call from my bookkeeper stating that she had just received a phone call from BRI Ferrier notifying her that I had been made bankrupt by court order on 2 December 2013.  I was not informed of the court date by Workcover Corporation, so I was not able to represent myself at the proceedings.  I have since found out that, under court order, Workcover Corporation tried to contact me by email but, when both emails bounced back, I had no further correspondence from them.  When reading up about bankruptcy on the Australian Court website, the description was stated as “bankruptcy is a process where people who cannot pay their debts give up their assets and control of their finances either by agreement or court order in exchange for protection from legal action by their creditors.”  I have the majority of the money owing together and will be depositing it the trustee’s allotted bank account before I am due back in court and, within a month, I will have the remainder of the money to pay out this debt.  If I could pour all the money from my business into the debt, I would, but I still need to pay rent, wages and material costs so I can keep my business running, so in turn can pay my debts.  I have the means to pay my debts but I will be very restricted with a bankruptcy order attached to me and my business.  I have new contracts coming up but, in good faith, I cannot hope to sign them while I am bankrupt.  Thank you for your consideration in the matter.”

6. As will be seen, what the applicant says in this affidavit, and the submissions that she put, do not really assist her case. 

7. She handed up, and with the consent of the respondent, I received, certain tax invoices that indicate that there were debts owed to her business, Metal Erections.  The applicant believed that these debts strengthened her case to have the petition dismissed.

8. The petition relies on an act of bankruptcy, namely, Ms Williams’ failure to comply on or before 29 May 2013 with the requirements of a bankruptcy notice served on her on 8 May 2013, or to satisfy the Court that she had a counterclaim, set-off or cross-demand equal to or more than the sum claimed in the bankruptcy notice, being a counterclaim, set-off or cross-demand that she could not have set up in the action in which the judgment referred to in the bankruptcy notice was obtained.

9. I note the following matters; firstly, the debt relied upon is presently for $6,064.79. There is, in addition, a further liability to pay costs of $5,995.65. The debt, on any view of the matter, is greater than the amount specified in s.44(1)(a) of the Act.

10. Secondly, the date of the act of the bankruptcy is 29 May 2013. The petition was presented on 11 June 2013 and, therefore, was within the six months of the act of bankruptcy as is required by s.44(1)(c) of the Act.

11. Thirdly, the creditor’s petition has been verified by an affidavit of Scott Dienelt, a Senior Recovery Officer with the applicant, sworn 6 June 2013, and contained within the creditor’s petition. Mr Dienelt’s affidavit proves the matters referred to in s.47(1) of the Act and r.4.02(2) of the Federal Circuit Court (Bankruptcy) Rules 2006 (Cth) (“the Rules”).

12. Fourthly, an affidavit of Larissa Mazzone, a paralegal, which was sworn on 24 January 2014, was tendered.  That affidavit proves that on 24 January 2014, a search was carried out of the National Personal Insolvency Index.  She says in her affidavit that, as a result of the search, she was able to say that there were no references in the index to the respondent debtor other than the bankruptcy of the respondent that was a result of the order of the Federal Circuit Court made on 2 December 2014, which is currently the subject of the respondent’s application for review.  She continues in her affidavit:

    “There were no details of a debt agreement in relation to the debt on which the applicant creditor relies in the Index on the day of the petition being presented – ”

    She annexed copies of the relevant extracts from the Index. This affidavit proves the matters required by s.47(1) of the Act and r.4.04(1)(a) of the Rules.

13. Fifthly, I find that an act of bankruptcy occurred as a result of the respondent’s non-compliance with the bankruptcy notice referred to in the petition and that the bankruptcy notice relied upon for the judgment debt had been properly served on the respondent. 

14. Finally, I am satisfied on the basis of the material before me that the respondent was properly served with the petition, along with the supporting affidavits and a copy of the trustee’s consent to act as is required by r.4.05 of the Rules.

15. I am satisfied in this case that the review should be dismissed. 

16. I am also satisfied that it is appropriate that there be a sequestration order.  In those circumstances, the appropriate order is that I dismiss the application and affirm the learned Registrar’s decision.  There will be orders to that effect. 

17. I make the orders to be found at the beginning of these reasons.

I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Judge Simpson

Associate: 

Date:  12 February 2014