Xiang v Ward - [2018] FCCA 893

FEDERAL CIRCUIT COURT OF AUSTRALIA

XIANG v WARD

[2018] FCCA 893

Catchwords:

BANKRUPTCY – Creditor’s petition – debtor’s petition filed before the matter was given a date for the final hearing – the respondent debtor sought to argue solvency as an objection to the making of a sequestration order.

COSTS – Applicant creditor and respondent debtor both made applications for costs – costs follow the event – the event is that the creditor’s petition was dismissed – applicant creditor’s application for costs allowed – respondent debtor’s application for costs refused.

Legislation:

Bankruptcy Act 1966, ss.32, 43, 109

Federal Circuit Court Act 1999 (Cth), s.79
Bankruptcy Regulations 1994 (Cth), reg.16.01
Federal Circuit Court (Bankruptcy) Rules 2016 (Cth), r.13.01
Federal Circuit Court Rules 2001 (Cth)

Cases cited:

Yates Property Corp Pty Ltd v John Boland & Ors [1997] FCA 760; (1997) 147 ALR 685

Re Kimberley John Hughes v Western Australian Cricket Association & Ors [1986] FCA 382
Minister for Immigration & Ethnic Affairs (Cth); Ex Parte Lai Qin[1997] HCA 6; (1997) 186 CLR 622
Cummings v Lewis (Wilcox J, Federal Court of Australia, 29 May 1992, unreported)
Re Skase ex parte Donnelly[1992] FCA 429; (1992) 37 FCR 509
De Robillard v Carver [2007] FCAFC 73; (2007) 159 FCR 38
Re Donald Ian Hankey Ex parte: Noel Austin Kratzmann [1986] FCA 280; (1986) 66 ALR 702

Applicant:

YOUFA XIANG

Respondent:

PETER LUSCOMBE WARD

File Number:

SYG 2459 of 2016

Judgment of:

Judge Nicholls

Hearing date:

Matter decided on the papers

Date of Last Submission:

8 September 2017

Delivered at:

Sydney

Delivered on:

16 April 2018

REPRESENTATION

Solicitors for the Applicant:

Mr D M Junn of Dixon Holmes Lawyers

Solicitors for the Respondent:

Mr J F Merewether of Merewether & Co Solicitors

ORDERS

The respondent debtor’s application for costs is dismissed.
The respondent debtor pay the applicant creditor’s costs as agreed or as assessed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 2459 of 2016

YOUFA XIANG

Applicant

And

PETER LUSCOMBE WARD

Respondent

REASONS FOR JUDGMENT

This judgment concerns two applications for costs arising from the following circumstances.
On 12 September 2016 Mr Youfa Xiang filed a creditor’s petition in this Court which sought a sequestration order under s.43 of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”), against the estate of Mr Peter Luscombe Ward. Mr Xiang petitioned that Mr Ward owed him an amount of $727,812.71 pursuant to a judgment debt obtained by him in the District Court of New South Wales. Mr Xiang was represented by Dixon Holmes Lawyers.
The creditor’s petition was accompanied by an affidavit of service of Caitlin Zou, Legal Secretary, made on 5 September 2016.
On 12 October 2016, Mr Ward (represented by Merewether & Co Solicitors) filed a “Notice Stating Grounds of Opposition” (“the notice”) to the creditor’s petition. In essence, the notice denied that an act of bankruptcy had occurred, as the bankruptcy notice giving rise to the creditor’s petition, had not been properly served in accordance with…

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 Xiang v Ward

Details

AGLC: Xiang v Ward [2018] FCCA 893
Case: [2018] FCCA 893
Decision Date: 16 April 2018

CaseChat Overview and Summary

In *Xiang v Ward*, the applicant creditor sought to have the respondent debtor declared bankrupt by way of a creditor's petition. The respondent debtor subsequently filed a debtor's petition before the creditor's petition was listed for a final hearing. The respondent sought to rely on solvency as an objection to the making of a sequestration order.

The primary legal issue before the court was whether to make a sequestration order given the debtor's petition had been filed after the creditor's petition. A secondary issue concerned the costs of the proceedings, with both parties seeking orders in their favour.

Judge Nicholls reasoned that the filing of a debtor's petition under section 54 of the *Bankruptcy Act 1966* (Cth) automatically stayed any proceedings by a creditor for the sequestration of the debtor's estate. Consequently, the creditor's petition could not proceed. The court noted that the event in the costs application was the dismissal of the creditor's petition. Accordingly, the applicant creditor's application for costs was allowed, and the respondent debtor's application for costs was refused.

Orders