Dellios v Zegarac (No 2) [2006] FCA 1831

FEDERAL COURT OF AUSTRALIA

Dellios v Zegarac (No 2) [2006] FCA 1831 PAUL DELLIOS (TRADING AS DELLIOS WEST AND CO) v SLAVICA ZEGARAC VID 159 of 2006 MARSHALL J 15 DECEMBER 2006 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA

VICTORIADISTRICT REGISTRY 159 OF 2006

BETWEEN: PAUL DELLIOS (TRADING AS DELLIOS WEST AND CO)

Applicant Creditor

AND: SLAVICA ZEGARAC

Respondent Debtor

JUDGE: Marshall J

DATE OF ORDER: 15 December 2006

WHERE MADE: MELBOURNE

THE COURT ORDERS THAT:

1. The application to review Registrar Mussett's decision of 18 May 2006 is dismissed.

2. The respondent debtor pay the applicant creditor's and the trustees' costs of the review application, which are to be considered as costs in the bankruptcy.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIADISTRICT REGISTRY 159 OF 2006

BETWEEN: PAUL DELLIOS (TRADING AS DELLIOS WEST AND CO)

Applicant Creditor

AND: SLAVICA ZEGARAC

Respondent Debtor

JUDGE: Marshall J

DATE: 15 December 2006

PLACE: MELBOURNE

REASONS FOR JUDGMENT 1 The Court convened at the scheduled time of 10.15am this morning to hear an application by the respondent debtor, Ms Zegarac, to set aside a sequestration order made by Registrar Mussett on 18 May 2006. The respondent debtor failed to appear at the scheduled time. The matter was called on and the respondent debtor was called outside the court on three occasions. There was no appearance by the respondent debtor and the matter proceeded. In the absence of the respondent debtor, the Court heard submissions from the counsel for the applicant creditor. 2 The Court formed the view that the respondent debtor's application should be dismissed and that the sequestration order should be confirmed. The material disclosed that: · the applicant creditor has obtained a final judgment; · a bankruptcy notice has been served; · the respondent debtor applied to have the bankruptcy notice set aside but the application was dismissed by Federal Magistrate Phipps; · on Wednesday, 13 December 2006, I refused leave to appeal that judgment of Phipps FM; and · the respondent debtor failed to comply with the bankruptcy notice within 21 days. 3 The affidavit material before the Court disclosed that Ms Zegarac is insolvent. There is additional material since the proceeding before Registrar Mussett which indicates that, as at the time of the order of Registrar Mussett, Ms Zegarac was insolvent. There was no material indicating that anything in that regard has changed. Accordingly, the Court ordered that the application to review Registrar Mussett's decision of 18 May 2006 was dismissed. The Court also ordered the respondent debtor pay the applicant creditor's and the trustee's costs of the application and it was noted that the costs are costs in the bankruptcy. 4 As I was leaving the court after making these orders, I observed the respondent debtor enter the court. I waited in chambers for a request to return. Events occurred which I construed as a request to return and I returned to court. 5 As orders had already been made, I allowed the respondent debtor to apply to re-open the proceeding. Ms Zegarac submitted that I should re-open the proceeding as she could prove that the judgment debt on which her bankruptcy is based was obtained by fraud. 6 I decline to grant leave to re-open the proceeding. After hearing the submissions of the respondent debtor, I am not satisfied that the judgment of Magistrate Cashmore made on 26 April 2005 at Heidelberg Magistrates Court was obtained by fraud. The respondent debtor submits that Cashmore M made an error in his judgment. Accepting for the purposes of the argument, without conceding it to be so, that his Honour did make an error in his judgment, that is not the same as proving the judgment was obtained by fraud. 7 There is no evidence before me that the judgment was obtained by fraud. The evidence before me suggests that: · there were various versions of various relevant events before the Magistrate; · Ms Zegarac had very strong reasons to believe that her version of events was correct; · Mr Dellios had a contrary belief; and · the Magistrate chose to find in favour of Mr Dellios. 8 This is not the same as the judgment being obtained by fraud. The Court orders that leave to re-open the proceeding is refused. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.