Bhagat v Global Custodians Ltd [2002] FCAFC 331

FEDERAL COURT OF AUSTRALIA

Bhagat v Global Custodians Ltd [2002] FCAFC 331 BANKRUPTCY – application to set aside sequestration order – where trial judge made sequestration order on creditor's petition based on failure to comply with bankruptcy notice – whether trial judged erred in making sequestration order – where allegations of fraud made against petitioning creditor – whether denial of natural justice or miscarriage of justice in making of sequestration order by reason of alleged fraud – where particulars of fraud not given – where allegations of fraud already ventilated and determined in previous proceedings.

Wentworth v Rogers (No 5) (1986) 6 NSWLR 534, applied HARI BHAGAT v GLOBAL CUSTODIANS LTD N 496 of 2002 MOORE, MADGWICK & GOLDBERG JJ 6 NOVEMBER 2002 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 496 of 2002

BETWEEN: HARI BHAGAT

Appellant

AND: GLOBAL CUSTODIANS LTD

Respondent

JUDGE: MOORE, MADGWICK & GOLDBERG JJ

DATE OF ORDER: 6 NOVEMBER 2002

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The appellant pay the respondent's costs of and incidental to the appeal. 3. The three motions filed by the appellant on 4 November 2002 be dismissed with costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 496 of 2002

BETWEEN: HARI BHAGAT

Appellant

AND: GLOBAL CUSTODIANS LTD

Respondent

JUDGE: MOORE, MADGWICK & GOLDBERG JJ

DATE: 6 NOVEMBER 2002

PLACE: SYDNEY

REASONS FOR JUDGMENT THE COURT: 1 In 1998 the appellant, ("Mr Bhagat"), who appeared without legal representation, commenced action No 3398 of 1998 in the Equity Division of the Supreme Court of New South Wales against a number of defendants, one of whom was the respondent petitioning creditor in this proceeding, Global Custodians Ltd ("Global"). In that proceeding Mr Bhagat sought damages from the defendants for the tort of abuse of process. An application was made in that proceeding by the defendants for the summary dismissal of the proceeding on the ground that no causes of action were disclosed. On 13 April 2000 Young J, having given Mr Bhagat a number of opportunities to plead acceptable causes of action, ordered that the further amended statement of claim be struck out and that Mr Bhagat's claim against Global and most of the other defendants be dismissed and he ordered that Mr Bhagat pay Global's and the other successful defendants' costs on an indemnity basis. Global's costs were subsequently taxed in the sum of $64,689.93 and on 1 May 2001 a judgment was entered in Global's favour in that amount with effect from 13 April 2000. 2 Mr Bhagat sought leave to appeal from the order dismissing the proceeding from the New South Wales Court of Appeal and that leave was refused. The appellant sought special leave to appeal to the High Court and that application has not proceeded to a hearing. 3 On 9 May 2001 Global served a bankruptcy notice on Mr Bhagat which required him within twenty‑one days after service of the notice to pay the amount of the judgment debt (the costs order) or to make an arrangement to the satisfaction of Global for settlement of the debt. Mr Bhagat filed an application to set aside the bankruptcy notice on 24 May 2001 and filed a further application attacking the bankruptcy notice on 4 July 2001. On 24 July 2001 Beaumont J declined to set aside the bankruptcy notice but granted Mr Bhagat an extension of time for compliance with the bankruptcy notice up to and including 14 August 2001. Mr Bhagat did not comply with the bankruptcy notice. 4 Mr Bhagat applied for leave to appeal against the order made by Beaumont J and on 13 March 2002 a Full Court of the Federal Court refused the application for leave to appeal: Bhagat v Global Custodians Ltd [2002] FCAFC 51. 5 On 16 August 2001 Global presented a creditor's petition seeking an order that the estate of Mr Bhagat be sequestrated, the act of bankruptcy relied upon being Mr Bhagat's failure to comply with the bankruptcy notice. The petition came on for hearing before Branson J. On 24 May 2002 her Honour ordered that the estate of Mr Bhagat be sequestrated and on 31 May 2002 her Honour published her reasons for judgment. 6 Mr Bhagat now appeals against the order of Branson J on 24 May 2002 sequestrating his estate.