Velissaris v Esanda Finance Corp Ltd [2000] FCA 189

FEDERAL COURT OF AUSTRALIA

Velissaris v Esanda Finance Corp Ltd [2000] FCA 189 Bankruptcy Act 1966 s 52 Ginnane v Diners Club Ltd (1993) 42 FCR 90 referred Bloch v Bloch (1981) 180 CLR 390 referred Sali v SPC Ltd (1993) 116 ALR 625 referred Abalos v Australian Postal Commission (1990) 171 CLR 167 referred CONSTANTINOS VELISSARIS v ESANDA FINANCE CORPORATION LIMITED V 592 OF 1999 TAMBERLIN, SUNDBERG and FINKELSTEIN JJ 25 FEBRUARY 2000 MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY V 592 OF 1999

BETWEEN: CONSTANTINOS VELISSARIS

APPELLANT

AND: ESANDA FINANCE CORPORATION LIMITED

(ACN 004 346 043)

RESPONDENT

JUDGE: TAMBERLIN, SUNDBERG and FINKELSTEIN JJ

DATE OF ORDER: 25 FEBRUARY 2000

WHERE MADE: MELBOURNE

THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The respondent's costs be deemed to be its costs of the petition. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY V 592 OF 1999

BETWEEN: CONSTANTINOS VELISSARIS

APPELLANT

AND: ESANDA FINANCE CORPORATION LIMITED

(ACN 004 346 043)

RESPONDENT

JUDGE: TAMBERLIN, SUNDBERG and FINKELSTEIN JJ

DATE: 25 FEBRUARY 2000

PLACE: MELBOURNE

EX‑TEMPORE REASONS FOR JUDGMENT THE COURT: 1 On 1 October 1999 Weinberg J dismissed the appellant's motion seeking review of a decision of a Registrar that substituted service of a bankruptcy notice directed to the appellant might be effected at premises at 19 Clarence Street, Brunswick, and made a sequestration order against the appellant on the respondent's petition. The act of bankruptcy relied on was the appellant's failure to comply with the bankruptcy notice which required him to pay the respondent the sum of $101,846.41, being the amount of a judgment obtained by the respondent in the County Court ($101,063.28) plus costs together with interest ($783.13). 2 The appellant contended before the primary judge that the order for substituted service should not have been made, and that the mode of substituted service did not in fact bring the bankruptcy notice to his attention. He claimed that he did not learn of its existence until mid‑July 1999. The primary judge instructed himself in accordance with the decision of the Full Court in Ginnane v Diners Club Ltd (1993) 42 FCR 90 at 92 that, as a general rule, before substituted service is ordered, the Court must be satisfied that abnormal difficulties exist in effecting personal service on the debtor and that there is a reasonable probability that the debtor will be informed of the document as a result of the substituted form of service. 3 His Honour summarized the evidence before him substantially as follows. There had been some fifteen separate attempts to serve the appellant at his last known address, 19 Clarence Street, Brunswick, prior to the application for substituted service. Each was unsuccessful. There was evidence linking the appellant to the Clarence Street address throughout the period of attempted service. The evidence included a statement by him in a court document filed in October 1998 in which he gave his address as 19 Clarence Street, Brunswick. There were also documents emanating from the appellant's former legal advisers ascribing that address to him. A process server, Allan Maxwell Tanner, gave evidence that he confronted the appellant personally at the Clarence Street address. Mr Tanner attempted to serve the bankruptcy notice on the appellant on 5 July 1998 at that address, but the appellant evaded service by denying his true identity and claiming to be merely a boarder. Another process server, Dominic Crupi, said that he served the creditor's petition (which had annexed to it the bankruptcy notice) on the appellant at the Clarence Street address on 10 July 1999, though again the appellant denied his true identity. Both witnesses identified the appellant in court, as well as having identified him previously from photographs. The appellant denied having been present at the address on either occasion. He claimed to have had no knowledge of the bankruptcy notice until mid‑July 1999 when its existence was, in some way, drawn to his attention by a person whom he did not call to give evidence. 4 The primary judge preferred the evidence of the process servers to that of the appellant. He said their testimony was supported by a body of circumstantial evidence linking the appellant with the premises throughout the whole of 1998 and 1999. His Honour found that the appellant was present at the address on 5 July 1998 when Mr Tanner sought to serve him with the bankruptcy notice. He was also satisfied that he was served personally with the creditor's petition and accompanying bankruptcy notice on 10 July 1999. On the basis of these findings the primary judge was satisfied that the respondent satisfied the requirements for an order for substituted service identified in Ginnane, and dismissed the motion. 5 There was no dispute before the primary judge that the amount owing to the respondent remained due and payable. The appellant conceded that he could not pay that sum at present or in the immediate future. However, he submitted that no sequestration order should be made because he had various claims available to him against the respondent and other entities including Westpac Banking Corporation. These claims were said to be related in various ways to the proceeding which gave rise to the judgment debt relied on in the bankruptcy notice. Westpac has sued the appellant for a very large sum. He asserts a counterclaim which exceeds the amount of the claim. The primary judge concluded that it was most unlikely that that proceeding would be heard in the very near future. His Honour said: