Ray v Perrett (No. 5) [2008] FCA 421

FEDERAL COURT OF AUSTRALIA

Ray v Perrett (No. 5) [2008] FCA 421

GREG RAY v PAUL PERRETT

NSD 1975 of 2007

GRAHAM J

27 MARCH 2008

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 1975 of 2007

BETWEEN: GREG RAY

Applicant

AND: PAUL PERRETT

Respondent

JUDGE: GRAHAM J DATE OF ORDER: 27 MARCH 2008

WHERE MADE: SYDNEY

THE COURT:

1. Orders that a sequestration order be made against the estate of Paul Perrett. 2. Orders that the applicant creditor's costs be taxed and paid from the estate of the respondent debtor in accordance with the Bankruptcy Act 1966 (Cth). 3. Notes that the date of the act of bankruptcy was 9 June 2007. 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 NSD 1975 of 2007

BETWEEN: GREG RAY

Applicant

AND: PAUL PERRETT

Respondent

JUDGE: GRAHAM J

DATE: 27 MARCH 2008

PLACE: SYDNEY

REASONS FOR JUDGMENT 1 The matter presently before the Court is a Creditor's Petition filed 12 July 2007 in the Federal Magistrates Court of Australia, in proceedings SYG2163 of 2007. That proceeding was transferred into this Court by an order made by Federal Magistrate Raphael on 2 October 2007. The Creditor's Petition is in the form required by rule 4.02 of the Federal Court (Bankruptcy) Rules 2005, being Form 6. The act of bankruptcy relied upon by the applicant was non-compliance with the requirements of a 21 day bankruptcy notice, which was served on the respondent, Paul Perrett, on 19 May 2007. 2 Section 41(6A) of the Bankruptcy Act 1966 (Cth) ("the Bankruptcy Act") empowers the Court to extend the time for compliance with a bankruptcy notice where before the expiration of the time fixed for compliance an application has been made to the Court to set aside the bankruptcy notice. Two such applications were made in respect of the bankruptcy notice in the present case. The first was made in the Federal Magistrates Court of Australia in Victoria in proceedings MLG774 of 2007. That application was dismissed by Registrar Mussett on 21 June 2007. The second application was made in the Federal Magistrates Court of Australia in New South Wales in proceedings SYG2160 of 2007. That application was dismissed by Registrar Lackenby in the Federal Magistrates Court of Australia on 17 August 2007. 3 There is no evidence to suggest that the time for compliance with the bankruptcy notice in this case was extended in either proceeding MLG774 of 2007 or proceeding SYG2160 of 2007. The bankruptcy notice which was served on the respondent on 19 May 2007 recorded the claim of the applicant that the respondent owed him $7797.75, being the total amount owing by the respondent to the applicant under judgments in the Local Court of New South Wales, firstly in proceedings 2471 of 2007, where the amount of the judgment was $6726.60, and secondly in proceedings 2472 of 2007, in which the amount of the judgment was $1071.15. 4 I am satisfied that neither judgment in the Local Court of New South Wales has been stayed, and am further satisfied that the respondent failed to comply with the requirements of the notice, or satisfy the Court that he had a counter-claim, set-off or cross-demand equal to or exceeding the amount of the judgment debts, being a counter-claim, set-off or cross-demand which he could not have set up in the proceedings in which the judgments were obtained. I am satisfied that the respondent committed an act of bankruptcy on 9 June 2007. I am satisfied that at the time when the act of bankruptcy was committed, the respondent was ordinarily resident in Australia and had a dwelling house in Australia. 5 In the circumstances it is open to the Court to make a sequestration order against the estate of the respondent founded on that act of bankruptcy. 6 On 17 August 2007 Registrar Lackenby sitting in the Federal Magistrates Court of Australia made orders for substituted service as follows: 1. Personal service of the petition be dispensed with. 2. A signed and sealed copy of the petition and copies of the affidavits verifying the petition, any affidavit of service of the bankruptcy notice, together with any consent of a registered trustee and a sealed copy of this order, be sent by prepaid ordinary post addressed to the respondent debtor at 159 Narrowneck Rd, Katoomba NSW 2780; and 3. A signed and sealed copy of the petition and copies of the affidavits verifying the petition, any affidavit of service of the bankruptcy notice, together with any consent of a registered trustee and a sealed copy of this order, be sent by prepaid ordinary post addressed to the respondent debtor at 8/369 Glebe Point Road, Glebe NSW 2037. 4. The petition shall be deemed to be served on the respondent debtor 5 days after service in accordance with order 2 or order 3 which ever is the later. … 7 On 18 September 2007 the said orders for substituted service were amended by Registrar Hedge sitting in the Federal Magistrates Court of Australia. A new paragraph 3A was added as follows: 3A. A copy of the creditors petition, affidavits in support, any consent of trustee, a sealed copy of the order of 17 August 2007 and a sealed copy of this order be served on the debtor by faxing to Phone no: 4782 1717 by c.o.b. [which I understand to mean "close of business"] 19 September 2007. Paragraph 4 was varied to read: 4. The petition shall be deemed to be served on the respondent debtor 2 days after service in accordance with order 2 or 3 or 3A whichever is the latest. A further order No. 5 relating to the adjourned hearing of the petition was also varied. 8 Maureen Therese O'Connor, a solicitor in the employ of Freehills Solicitors, the solicitors for the applicant, affirmed an affidavit in which she deposed that on 19 September 2007 Freehills had posted two letters by ordinary prepaid post to the respondent. The first such letter was posted to the respondent at 159 Narrowneck Road, Katoomba NSW 2780, and the second to the respondent at 8/369 Glebe Point Road, Glebe NSW 2037. 9 Ms O'Connor further deposed that on 19 September 2007 Freehills sent a facsimile to the respondent which attached a copy of each of the documents referred to in paragraph 5 of her affidavit, being a sealed copy of the Creditor's Petition, a copy of the sealed affidavit of service of the bankruptcy notice of Michael John Kuncio dated 30 May 2007; a copy of the sealed affidavit of Greg Ray, dated 20 August 2007 verifying the Creditor's Petition; a sealed copy of the orders made by Registrar Lackenby on 17 August 2007; a sealed copy of the orders made by Registrar Hedge on 18 September 2007 and a copy of a Federal Magistrates Court of Australia Fact Sheet with a map showing the location of the John Maddison Tower. 10 The applicant affirmed an affidavit of debt on 26 March 2008 which deposed to the fact that the debt of $7797.75, upon which he relied as set out in the Creditor's Petition, was still owing. On 27 March 2008 William Robert Potter, another solicitor in the employ of Freehills affirmed an affidavit in which he deposed to conducting a search of the National Personal Insolvency Index and to the fact that there were no details of a debt agreement in relation to the debt on which the applicant relied in the index on the day when the petition was presented. 11 I am satisfied that the applicant has established the matters stated in the petition, that the petition was duly served and that the debts on which the applicant relied are still owing. In the circumstances I am of the opinion that a sequestration order should be made against the estate of the respondent. 12 A notice stating grounds of opposition to the Creditor's Petition was filed on 26 September 2007 in the Federal Magistrates Court of Australia by a Peter Alexander Gargan on behalf of the respondent. 13 No objections were raised to any of the affidavits upon which the applicant sought to rely. There was apparently no requirement for any of the deponents to attend for cross-examination. None of the documents tendered by the applicant were the subject of objection, and no submissions were put by the respondent in opposition to the making of a sequestration order on the Creditor's Petition. 14 The notice stating grounds of opposition to the petition, filed 26 September 2007, referred to issues under the Currency Act 1965 (Cth), the Constitution of the Commonwealth of Australia, the Habeas Corpus Act 1640 16 Cha. I c. 10, s 4A of the Crimes Act 1914 (Cth) and various other matters. The respondent did not seek to argue any of those matters as being relevant to the issue as to whether or not a sequestration order should be made.