Curtis v Dimitriou [2012] FCA 604

FEDERAL COURT OF AUSTRALIA

Curtis v Dimitriou [2012] FCA 604 Citation: Curtis v Dimitriou [2012] FCA 604

Parties: PAUL ANTHONY CURTIS v GEORGINA DIMITRIOU

File number: NSD 562 of 2012

Judge: COWDROY J

Date of judgment: 30 May 2012

Cases cited: Rigg v Baker [2006] 155 FCR 531

Date of hearing: 30 May 2012

Place: Sydney

Division: GENERAL DIVISION

Category: No Catchwords

Number of paragraphs: 15

Solicitor for the Applicant: Paul A Curtis & Co

Counsel for the Respondent: Ms P Clingan

Solicitor for the Respondent: LBC Lawyers

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 562 of 2012

BETWEEN: PAUL ANTHONY CURTIS

Applicant

AND: GEORGINA DIMITRIOU

Respondent

JUDGE: COWDROY J DATE OF ORDER: 30 MAY 2012 WHERE MADE: SYDNEY

THE COURT ORDERS THAT:

1. A sequestration order be made against the estate of Georgina Dimitriou. 2. The Applicant's creditor's costs be taxed and paid from the estate of the Respondent debtor in accordance with the Bankruptcy Act 1966 (Cth). The Court notes that the date of bankruptcy is 21 December 2011. Note: Settlement and entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 562 of 2012

BETWEEN: PAUL ANTHONY CURTIS

Applicant

AND: GEORGINA DIMITRIOU

Respondent

JUDGE: COWDROY J DATE: 30 MAY 2012 PLACE: SYDNEY

EX TEMPORE JUDGMENT 1 The petitioning creditor by creditors petition dated and filed 18 April 2012 seeks a sequestration order against the estate of the respondent, Georgina Dimitriou. The petition is founded upon an act of bankruptcy, namely the failure by the respondent to comply on or before 21 December 2011 with the requirements of a bankruptcy notice which had been served on her on 4 October 2011, and the failure of the respondent to satisfy the Court that she had a counter-claim, set-off or cross-demand which she could have set up in the action in which judgment was obtained. 2 The judgment relied upon to found the bankruptcy notice was a judgment obtained in the Supreme Court of New South Wales on 29 July 2011. The amount in that judgment exceeds $35,000. The bankruptcy notice relying upon that debt was issued on 15 August 2011. As I have said, the bankruptcy notice was served on 4 October 2011, as is evidenced by the affidavit of Stephen John Goodwin sworn on 17 October 2011. 3 The petition is supported by an affidavit verifying the creditor's petition, sworn by Paul Anthony Curtis on 18 April 2012. The affidavit of search is of Luke William English dated 22 May 2012. An affidavit of Paul Anthony Curtis sworn 23 May 2012 verifies the amount of the judgment debt is still outstanding. The evidence of the service of the petition is that contained in the affidavit of Patrick White sworn on 14 May 2012. The petition was served, as is verified by the affidavit, on 3 May 2012. Prima facie, the applicant is entitled to a sequestration order against the estate of the respondent. 4 As appears from the court file in proceedings NSD 2045 of 2011, the respondent filed an application on 17 November 2011 seeking an order that Bankruptcy Notice BN 6030/2011, which was served upon her, be set aside. On 7 December 2011 Registrar Hedge ordered that time for compliance be extended up to and including 21 December 2011. The application to set aside the bankruptcy notice was dismissed by Registrar Hedge on 22 December 2011. 5 On 23 May 2012 the respondent appeared and provided a notice of appearance, and also a Notice Stating Grounds of Opposition to the making of a sequestration order. The material in support of the opposition is that contained in two affidavits of the debtor, one sworn 23 May 2012. That affidavit contains information concerning the respondent's health and in summary medical evidence is provided which suggests that the respondent, who is seeking to have the petition set aside and dismissed, is suffering from a medical condition but there is no evidence that the condition is in any way life threatening or debilitating. 6 This affidavit also records that the respondent opposes the making of a sequestration order and has taken issue with the basis upon which the bill of costs which founded the claim which ultimately led to the judgment was erroneous. However, despite the claims in the affidavit, it is quite clear from the certificate issued by the Supreme Court that judgment has been entered for the amount of $35,352.32. 7 The second affidavit of the respondent is sworn on 28 May 2012. In this affidavit the respondent sets out her assets. The assets comprise real estate and include as an asset some outstanding claim in the 'Industrial Relations Court' which is said to have a value of $487,000 and an estimated $1.8 million plus damages which is said to be owing by the petitioning creditor to the debtor. The liabilities are also set out but they are confined mainly to mortgages over three properties in the name of the debtor. 8 There is an assertion in the affidavit sworn on 23 May 2012 that proceedings have been instituted against the petitioning creditor in the Supreme Court of New South Wales General Division for Professional Negligence. Attached to the affidavit is a statement of claim which does not bear any stamp that it has been filed. It has been dated 22 May 2012 and signed, apparently by the respondent's solicitor, who verifies that her claim is correct. The petitioning creditor, however, has had no notice that any claim has been filed in the Supreme Court. 9 On an application such as the present the Court must consider one question, and that is whether a sequestration order ought not to be made once the petitioning creditor has established prima facie the entitlement to such order. 10 In this case the respondent submits that no such order should be made in view of the pending litigation against the petitioning creditor. Secondly, the respondent claims she has assets which are said to be approximately $4.4 million. This sum of course includes an estimated damage entitlement against the petitioning creditor of $1.8 million plus damages, whatever that might be, together with an unresolved claim in the 'Industrial Relations Court' which is said to have a value of $487,000. 11 The only question for the Court to determine is whether the debtor can pay her debts as they fall due. In this instance, the Court observes that there is a Supreme Court judgment which is current against the debtor. No steps have been taken by the debtor to appeal that judgment. No attempts have been made by the debtor to have that judgment set aside. Rather, only after service of the petition has the debtor sought to institute proceedings in the Supreme Court which may or may not yet have been instituted in fact. 12 In Rigg v Baker [2006] 155 FCR 531 the Full Court of this court considered whether a sequestration order should not have been made against a party who had pending before the Court of Appeal an appeal against a decision against her by the primary judge of the Supreme Court. By majority, the Full Court found that such fact was insufficient to constitute a reason for not making the sequestration order. At paragraph 74 in his decision French J, as he then was, said: In the circumstances, it was not open to his Honour to conclude that a sequestration order ought not to have been made. 13 In the present circumstances the Court is satisfied that this is an instance in which a sequestration order should be made for the reasons I have already announced. Namely, there is a current and existing judgment of a superior court, there has been no appeal from that judgment, there has been no application to otherwise set that judgment aside. On the evidence before the Court the creditor is entitled to a sequestration order. Based upon the authority of Rigg v Baker the fact that the debtor may now be contemplating commencing proceedings against the petitioning creditor for damages is not a sufficient reason not to make the order. In other words, to adopt the observations of French J, it is not open to me as a judge, in view of the evidence, to conclude that a sequestration order should not be made. 14 The Court notes that there is also evidence that a supporting creditor has indicated support for the making of the petition, but since the petitioning creditor is proceeding with the petition there is no further need at this stage to pay regard to that creditor. 15 Accordingly, the Court orders that a sequestration order be granted in respect of the estate of Georgina Dimitriou, and secondly that the costs of the petitioning creditor be paid out of the estate of the bankrupt. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy.